Edit
Mergers & Acquisitions

TravelCenters of America Sale-Leaseback Update

Completes two more transactions under HPT agreement

WESTLAKE, Ohio --TravelCenters of America LLC (TA)—which entered into an agreement in June with landlord Hospitality Properties Trust (HPT) for sale-leaseback transactions for 30 travel centers—has completed two transactions. TravelCenters of America (TA) Hospitality Properties Trust (HPT)

On Sept. 23, 2015, HPT purchased from TA two travel centers and certain assets at another travel center that it leases from HPT for $51.5 million, and HPT leased back the two travel centers and assets to TA.

In a filing with the U.S. Securities & Exchange Commission (SEC), in all, the transactions have included:

  • On June 9, 2015, the prior lease was amended and restated into four new leases. The initial terms for the leases end on Dec. 31, 2026, 2028, 2029 and 2030, respectively. Each of the leases grants TA two renewal options of 15 years each.
  • On June 9, 2015, HPT purchased from TA, for $183.4 million, 10 travel centers TA owned and certain assets it owned at eight properties it leased from HPT under the prior lease. HPT leased back these properties to TA. Its annual rent increased by $15.8 million as a result of the sale and leaseback of properties completed on June 9, 2015.
  • On June 9, 2015, TA purchased from HPT, for $45 million, five travel centers that it previously leased from HPT under the prior lease. TA’s annual rent decreased by $3.9 million as a result of its completion of the purchase of these properties.
  • On June 16, 2015, HPT purchased from TA, for $24.4 million, one travel center TA owned and certain assets it owned at another travel center that it leases from HPT, and HPT leased back the travel center and assets to TA. The annual rent increased by $2.1 million as a result of the sale and leaseback of the travel center and assets completed on June 16, 2015.
  • On June 23, 2015, HPT purchased from TA, for $20.1 million, one travel center TA owned and certain assets it owned at another travel center that it leases from HPT, and HPT leased back the travel center and assets to TA. The annual rent increased by $1.7 million as a result of the sale and leaseback of the travel center and assets completed on June 23, 2015.
  • On Sept. 23, 2015, HPT purchased from TA, for $51.5 million, two travel centers TA owned and certain assets it owned at another travel center that it leases from HPT, and HPT leased back the two travel centers and assets to TA. The annual rent increased by $4.4 million as a result of the sale and leaseback of the travel center and assets completed on Sept. 23, 2015.

After completing these transactions, TA leased a total of 153 properties from HPT.

This information does not reflect adjustments related to the sale and leaseback of the five properties TA expects to sell to HPT after it has completed the construction of travel centers at those properties, the SEC filing said. And it does not reflect adjustments to rent payable to HPT as a result of TA’s sales to HPT during those periods of improvements at properties that it leases from HPT, for periods prior to the dates HPT purchased such improvements. Such improvements totaled $66.1 million during 2014 and $40.4 million during the six months ended June 30, 2015, and, in accordance with the leases, annual minimum rent at the time HPT purchased these improvements was increased by 8.5% of the amount of the improvements purchased by HPT.

TA said that no adjustments have been made to reflect the results of operations for periods prior to its acquisitions of the travel centers and convenience stores that it acquired from parties other than HPT during these periods, or to eliminate the one-time acquisition costs related to such acquisition activities.

For the eight-month period ended Aug. 31, 2015, TA incurred approximately $2.6 million of acquisition costs, it said.

TA's travel centers operate under the TravelCenters of America, TA, Petro Stopping Centers and Petro brand names and offer diesel and gasoline fueling, restaurants, truck repair facilities, travel/convenience stores and other services; 252 travel centers are located in 43 states and Canada: 176 operated under TA brand and 76 under Petro brand (includes 25 owned or leased by franchisees). TA also operates retail gasoline stations and convenience stores principally under the Minit Mart brand name. It has 454 Minit Mart locations, including 202 standalone c-stores owned or under agreement as of Aug. 18, 2015, whether Minit Mart branded or not, that are part of TA or Petro travel centers.

Newton, Mass.-based Hospitality Properties Trust is a lodging and travel center real-estate investment trust (REIT).

Related Content

Trending

More from our partners