Service Properties Trust Unloads 66 Hotels for $534M

Service Properties Trust is thinning its hotel portfolio again, closing on the sale of 66 properties for $534 million as it races to get ahead of a looming debt wall.

The Newton, Massachusetts-based real estate investment trust sold the 66 hotels, totaling 8,300 keys, as part of a broader disposition program aimed at shoring up its balance sheet, Bisnow reported. The deal brings SVC’s hotel sales this year to 112 properties and nearly 15,000 rooms for a combined $859 million, according to the company.

The selloff comes as SVC stares down roughly $5.8 billion in debt maturities over the next five years. Beyond asset sales, the REIT recently paid down $300 million of its $400 million in unsecured senior notes due in February 2027.

The dispositions are part of SVC’s strategic pivot toward full-service, urban and leisure-oriented hotels in stronger markets, shedding assets that no longer fit the bill. The company expects to sell two more hotels for about $12 million; one deal is slated to close by year’s end and the other in January.

Not everything has gone according to plan. A separate $88 million agreement to sell seven hotels collapsed, though SVC said it plans to remarket those properties with an eye toward $90 million to $110 million in proceeds.

The pressure is rooted in fundamentals as much as the balance sheet. SVC’s revenue fell 18 percent between 2019 and 2024, underscoring the uneven rebound in parts of the lodging sector and the challenge of carrying leverage into a higher interest-rate environment.

Even after the recent sales, SVC remains a sizable owner.

The REIT has more than $10 billion invested across hotel and retail assets. As of the end of the third quarter, it owned 752 net-lease retail properties totaling more than 13.1 million square feet nationwide, alongside a hotel portfolio that includes 17 Hyatt Place properties, five Radisson Hotels & Resorts, two Country Inns & Suites by Radisson and a Crowne Plaza.

SVC is externally managed by The RMR Group, which also oversees Diversified Healthcare Trust, Office Properties Income Trust, Industrial Logistics Properties Trust and Seven Hills Realty Trust.

— Holden Walter-Warner