Service Properties Trust closed the sale of 66 hotels, totaling 8,294 guest‑room keys, for approximately $534 million in gross proceeds during the fourth quarter of 2025. The transaction brings the year‑to‑date total of hotels sold to 112, with 14,631 keys, generating about $859 million in gross proceeds so far this year.
The company also redeemed $300 million of its $400 million outstanding unsecured senior notes due February 2027. The redemption, scheduled for January 16 2026, was executed at the principal amount plus accrued and unpaid interest and will be funded with the proceeds from the completed hotel sales.
SVC’s CEO, Chris Bilotto, said, “In 2025, we made strong progress on our strategic priorities, successfully selling non‑core, focused‑service hotel assets and reallocating capital to strengthen our balance sheet.” The sale is part of a broader strategy to shift from a hotel‑heavy portfolio toward a net‑lease‑focused model, reducing leverage and improving cash‑flow predictability. After the sales, net‑lease assets now account for more than 70 % of the company’s EBITDA.
The Q3 2025 earnings report highlighted a miss on EPS, driven by a decline in hotel EBITDA and pre‑closing disruption, including fire‑related incidents. The hit to hotel earnings also contributed to a decline in Funds From Operations and adjusted EBITDA, underscoring the short‑term impact of the divestiture on operating performance.
Analysts have maintained a “Hold” rating on the stock, with a consensus price target of $2.75. While the market acknowledges the company’s deleveraging progress, the earnings miss and the ongoing transition to a net‑lease model remain key focus points for investors.
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