Condor Hospitality Trust To Sell Entire Hotel Portfolio To Blackstone

Condor Hospitality Trust, which took a beating during the coronavirus pandemic, has struck a deal with Blackstone Real Estate Partners to sell its entire portfolio of hotels for $305M to the investor in an all-cash transaction.

Condor also announced that its board of directors unanimously adopted a plan to liquidate as soon as the sale of the portfolio closes, pending shareholder approval. Condor will distribute proceeds from the sale of the portfolio to the shareholders in one or more installments.

The sale to Blackstone comes roughly a year after an attempt by Condor to sell to NexPoint Hospitality Trust fell through. Under the terms of that deal, Canadian REIT NexPoint would have paid $318M for the Bethesda, Maryland-based Condor.

Condor owns 15 properties totaling 1,908 rooms in eight states, including Texas, Florida and other parts of the Southeast. Five of its properties are Home2 Suites, and other brands include Aloft, Fairfield Inn, Hampton Inn, Hotel Indigo and SpringHill Suites.

"The portfolio is complementary to our existing select service hotels and is demonstrating strong performance, which we look forward to building on as travel continues to recover,” Blackstone Real Estate Partners Managing Director Scott Trebilco said in a statement.

Condor hasn't recovered from the loss of business beginning in early 2020, though its revenues are higher so far this year than last. For the six months ended June 30, its revenue was about $23.7M, up from $18M during the same period in 2020. However, the company lost about $11.9M in the first half of 2021, compared with $9.2M in the first half of 2020.

Condor said in an August filing with the Securities and Exchange Commission that it believes the pandemic has had and will continue to have a material negative impact on the hospitality industry, and thus on its financial results and liquidity.

"Such negative impact may continue beyond the containment of the pandemic," the company said.

For the giant Blackstone, this hospitality deal is relatively small. In June, along with Starwood Capital Group, the investor finalized the acquisition of Extended Stay America in a deal valued at about $6B.