Hospitality Investors Trust Inc. is nearing a deal that would hand control of the debt-laden hotel operator to Brookfield Asset Management as part of a pre-packaged bankruptcy, Bloomberg News reported. HIT, which owns about 100 hotels across the U.S., has been getting advice from law firm Proskauer Rose and investment bank Jefferies Financial Group Inc. on the restructuring talks. The real estate investment trust said in a regulatory filing last week that it was negotiating with Brookfield, its largest investor, over a potential chapter 11 filing. Hospitality Investors Trust is the latest U.S. hotel operator to consider bankruptcy after the COVID-19 pandemic spurred a slowdown in global travel. REIT Eagle Hospitality Trust filed for chapter 11 earlier this year, as have several individual hotels across the country. The REIT owns older hotels with Marriott International Inc., Hilton Worldwide Holdings Inc. and Hyatt Hotels Corp. branding. Its top markets by room are Orlando, Florida, Atlanta, and West Palm Beach/Boca Raton, Florida, according to its website and annual report. Hospitality Investors Trust no longer has sufficient cash fund its obligations and Brookfield is the only likely provider of additional liquidity, according to its 2020 annual report. Brookfield holds all of its preferred equity, worth about $441 million, and Hospitality Investors Trust converted the cash payment to payment-in-kind in December to preserve liquidity. Read more.
Hotel debtors were the focus of a session at ABI’s Annual Spring Meeting going on now through April 22. Register today to access live programming, replays of past sessions and tap in to unparalleled networking.
