Gulf Coast hotels part of $1.8B deal

A onetime real estate investment trust has parted ways with all but 10 of its 126 hotels, in a cash and debt deal worth $1.8 billion.

That sale from W2007 Grace Acquisition I included six hotels in the Gulf Coast region, which collectively sold for $77.3 million. Those hotels were:

• Hyatt Place Tampa Airport/Westchase, 4811 W. Main St., Tampa, for $19.6 million;

• Residence Inn-Tampa Sabal Park, 9719 Princess Palm Ave., Tampa, for $15 million;

• Residence Inn-Sarasota Bradenton-Marriott, 1040 University Parkway, Sarasota, for $12.3 million;

• Courtyard Sarasota Bradenton Airport, 850 University Parkway, Sarasota, for $10.6 million;

• Residence Inn Fort Myers, 2960 Colonial Blvd., Fort Myers, for $10.4 million;

• Residence Inn Tampa North, 13420 N. Telecom Parkway, Temple Terrace, for $9.4 million.

The portfolio buyer was American Realty Capital Hospitality Trust, a REIT subsidiary of AR Capital of New York, looking to raise $2 billion to invest in hotels.

As part of the deal, American Realty paid $230 million in cash, and assumed $903.9 million in debt, according to a prospectus filed March 11 by the REIT. The remaining $447.1 million was paid out as an ownership stake in the new portfolio held by the seller, W2007 Grace Acquisition I.

Since American Realty went to the market in January 2014, the REIT has sold 13.8 million shares, raising $345 million through the end of February. American Realty tells investors it still has 66.2 million shares available, valued at just under $1.7 billion.

Goldman Sachs acquired the REIT Equity Inns in 2007, renaming it W2007 Grace Acquisition I. The move was controversial because the acquisition no longer required Goldman to publicly file financial statements with the U.S. Securities and Exchange Commission. The deal to acquire the American Realty hotels was first announced last June, but closed earlier this month.

Over the years, some preferred W2007 shareholders tried to force Goldman to make financial statements public again, but were unsuccessful. W2007 says in its SEC filing announcing this deal that it would not distribute any proceeds to existing shareholders, and instead use net proceeds for “general corporate purposes,” including paying off liabilities and retiring outstanding debt.