SVC signs 15-year agreement with Sonesta

NEWTON, Massachusetts — Newton, Massachusetts-based Service Properties Trust (SVC) has signed a new 15-year management agreement with Sonesta International for 59 of the REIT’s hotels.

SVC expects to retain Sonesta’s management for an initial term expiring on July 31, 2040, with the term subject to two 10-year renewal options by Sonesta. The REIT will pay Sonesta, after payment of hotel operating expenses, a base management fee equal to 3% of gross revenues for full-service hotels and 5% for extended-stay and select-service hotels.

Additionally, the REIT is also required to pay an incentive fee equal to 20% of EBITDA; a brand promotion fee of 3.5% of gross room revenues; a loyalty fee; a centralized service fee equal to $1,100,000 per year for full service hotels and $250,000 per year for extended stay and select service hotels; and a construction management fee of 3% of construction and capital expenditures managed by Sonesta.

SVC also said that it has sold 10 hotels, entered into agreements to sell 111 hotels, and is marketing one hotel for sale as of August 29. The 122 hotels are the ones managed by Sonesta and previously identified for disposition in 2025.