Service Properties Trust (Nasdaq: SVC) is a publicly traded real estate investment trust (REIT).
SVC invests in two asset categories: hotels and service-focused retail net lease properties, to
provide diversification and stability to SVC’s cash flows.
Strong diverse portfolio of hotel assets:
- SVC’s hospitality portfolio of 221 hotels is weighted toward
extended stay properties, which generally have lower fixed costs
and higher margins relative to full service hotels.
- Typically in near-urban locations with solid demand drivers and in
46 states, Washington, D.C., Puerto Rico and Canada, SVC’s
geographic diversity is structured to mitigate specific market risk.
- 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.
Defensively positioned service-focused retail net lease properties:
- SVC’s portfolio of more than 750 service-focused retail net lease properties totals over 13 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.
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 $36 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:
- Approximately $11 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.