Service Properties Trust (Nasdaq: SVC) is a publicly traded real estate investment trust (REIT). SVC invests in two asset categories: service-focused retail net lease properties and hotels, to provide diversification and stability to SVC’s cash flows.
Defensively positioned service-focused retail net lease properties:
- SVC’s portfolio of 752 service-focused retail net lease properties totals over 13.1 million square feet and is well diversified by geography,
tenant and industry.
- Net lease is a naturally defensive asset class with long average lease terms and low capex requirements.
- Exposure to service-based concepts aligns with consumer preferences and provides insulation from ecommerce disruption.
Diverse portfolio of hotel assets:
- SVC’s hospitality portfolio consists of 160 hotels with 29,536 rooms or suites located in 36 states, the District of Columbia, Ontario, Canada
and San Juan, Puerto Rico.
- Typically located in urban or high-density suburban locations in the vicinity of major demand generators such as urban centers, airports,
medical or educational facilities, major tourist attractions or large suburban office parks.
- SVC’s hotels are primarily operated by Sonesta International, one of the fastest growing hotel brands in the U.S., as well as Hyatt and Radisson.
External manager provides deep management expertise and significant cost benefits:
- SVC is externally managed by The RMR Group Inc. (Nasdaq: RMR), a leading U.S. alternative asset management company with approximately $39 billion
of real estate assets under management.
- RMR’s depth of management and experience in the real estate industry is a competitive advantage for SVC.
- RMR provides management services to SVC at lower costs than for similar quality services if the company was self-managed.
Strong balance sheet:
- Over $10 billion of diverse real estate assets.
- Well-laddered debt maturities for senior unsecured notes.
- SVC also owns approximately 34% of the shares of Sonesta Holdco Corporation.