Real estate investment trust Service Properties Trust has ended its management agreement with InterContinental Hotels Group and will transfer 103 properties from IHG to Sonesta International Hotels Corporation, SPT and Sonesta announced.
The move comes one month after Service Properties Trust sent a notice of event of default and termination to IHG for the latter's failure to pay approximately $8.4 million of required property return for the month of July 2020. IHG had until Aug. 24 to make the payment plus accrued interest. In addition, IHG's priority return payment of about $17.4 million was due Aug. 1.
The effective date of the termination is Nov. 30, 2020. With the transfer, Sonesta will gain 22 full-service hotels and 81 extended-stay hotels in the United States, Canada and Puerto Rico. The transaction will increase Sonesta's portfolio to more than 160 properties in the U.S. and nearly 200 outside the United States. Destinations new to Sonesta with the transfer include Denver; Louisville; Raleigh; Salt Lake City; San Diego; Seattle; Washington, D.C.; Ontario, Canada; and San Juan, Puerto Rico.
The IHG brands affected include three InterContinental hotels, five Kimpton hotels, 11 Crown Plazas, three Holiday Inns, 20 Staybridge Suites and 61 Candlewood Suites properties. They will be reflagged as Royal Sonesta, Sonesta and Sonesta ES Suites brands.