Sonesta to franchise 114 managed properties following SVC sale

SONESTA INTERNATIONAL HOTELS will franchise 114 hotels it currently manages, following their sale by Service Properties Trust or SVC. The Massachusetts-based
REIT plans to sell 14,925 keys across 28 states for $850 million in 2025 to repay debt.

The trust plans to sell 31 Sonesta Select, 44 Sonesta ES Suites and 39 Sonesta Simply Suites, which will convert from Sonesta-managed to franchised properties upon
sale. Following the deal, Sonesta will manage 39 full-service, 14 extended-stay and six select-service hotels owned by SVC, which will retain a 34 percent stake in
Sonesta, SVC said in a statement.

“Given the slow recovery of our hotel portfolio, along with our capital improvement program and deteriorating leverage metrics, we believe it is prudent to reduce
the distribution to increase SVC’s liquidity and enhance financial flexibility,” said Todd Hargreaves, SVC’s president and chief investment officer. “The reduction
from the previous level will preserve about $127 million in liquidity annually. We also plan to sell 114 hotels to generate additional liquidity and focus the Sonesta
portfolio on full-service and select focused-service hotels. These sales are expected to reduce capital expenditures and leverage, improve portfolio performance, and
position the portfolio for the long term.”