Hospitality REIT Bails on $351M Deal at the Last Minute
The REIT American Realty Capital Hospitality Trust (ARC Hospitality) canceled its planned $351M Dec. 29 deal for 10 properties (996 total rooms) from Summit Hotels, after ARC Hospitality’s sponsor, AR Capital, stopped raising cash for the REIT in November.
This isn’t the first time that pesky lack of cash got in the way of the REITs purchases—ARC Hospitality had to cancel a Dec. 15 deal for five Wheelock Street Capital hotels, forfeiting $10M in cash it had already put down. (Ouch.)
That wasted cash could be a serious headache. The REIT said in a federal filing that the cancellations “could have a material adverse effect on our financial condition and results of operations and our ability to pay distributions from cash flow from operations.” [CoStar]