SVC to Unwind 77-Hotel Portfolio by 2028 in Shift to Net Lease
SVC is trading near its 52-week low of $4.99 (15% above the low).
Summary
SVC will start marketing its 77 retained hotels in 2027 and aims to sell substantially all of them by the end of 2028, completing the pivot to a pure-play triple net lease REIT. Proceeds are earmarked for debt paydown, with a stated target of no more than 5x net debt to Adjusted EBITDA. The plan lands days after the board rejected TKO LLC's $2 billion offer for the hotel portfolio and rebuffed Blackwells Capital's push to engage with bidders, so the company is now committing to a self-run disposal process instead of a single buyer. Scale matters here: the Q3 10-Q showed a $463 million nine-month loss, $271 million of impairments and only $40 million of cash, with a $650 million revolver maturing June 2027 to refinance. Flat Footed supports the board's plan, but no stake size or binding commitment was disclosed. Execution risk is the whole story — hotel sale pricing over 2027-2028 determines whether leverage actually falls to the 5x target.
At the time of this announcement, SVC was trading at $5.73 on NASDAQ in the Real Estate & Construction sector, with a market capitalization of approximately $739.9M. The 52-week trading range was $4.99 to $12.15. This news item was assessed with neutral market sentiment and an importance score of 7 out of 10. Source: Wiseek News.