ARA H-Trust sells hotel in Oklahoma for US$8m
The REIT sold the property to Bhanumati LLC.
ARA US Hospitality Trust (ARA H-Trust) will sell Hyatt Place Oklahoma City Airport (HPOKC) in Oklahoma City, United States, to Bhanumati LLC for US$8.0m.
In a bourse filing, ARA H-Trust said the consideration price for the property is subject to closing adjustments per the purchase and sale agreement (PSA).
HPOKC is a select-service hotel located at 1818 South Meridian Avenue, Oklahoma City, Oklahoma, United States. The hotel has 126 rooms.
The hotel is also amongst the oldest and smallest assets within ARA H-Trust’s portfolio, accounting for only 1.2% of its total portfolio value as of 31 December 2022.
“As the hotel is located in a market with declining economic conditions exacerbated by the COVID-19 pandemic, it is anticipated to have a long road to recovery as compared to the other hotels in the portfolio. Being one of the oldest assets in the portfolio, the property is also envisaged to require sizable capital expenditure outlays relative to its value over the next few years,” ARA H-Trust said.
The divestment of the property will help strengthen ARA H-Trust’s balance sheet.
The trust said it plans to redeploy the capital freed from the divestment by either acquiring accretive, higher-yield properties, to generate stable and growing distributions to Stapled Securityholders or pare down existing bank borrowings to improve the portfolio’s average leverage ratio and increase debt headroom.