Two Moody National REITs Plan to Merge

By Scott Baltic, Contributing Editor

Moody National REIT I’s Homewood Suites Austin-South

Houston—Moody National REIT I Inc. and Moody National REIT II Inc. jointly announced Tuesday that, if all goes according to plan, they will merge, with REIT II acquiring REIT I. The gross merger consideration is to be $11.00 per share of common stock of REIT I before the payment of various fees and costs, but in any case no less than a net $10.25 per share.

The non-binding letter of intent between the two REITs provides that any definitive merger agreement will include go-shop and termination fee provisions.

Both entities are publicly registered, non-listed REITs that focus on select-service hotels in major U.S. markets, and both are sponsored by Moody National REIT Sponsor LLC, an affiliate of the Moody National Cos., a full-service CRE company based in Houston.

A Moody National spokesperson did not respond to Commercial Property Executive’s request for additional information.

REIT I currently holds a portfolio of 12 Marriott, Hilton and Hyatt select-service hotels in major U.S. metro areas, according to the merger announcement.

The REIT II portfolio comprises the Residence Inn Austin University in Austin, Texas, acquired in October 2015, and the Marriott SpringHill Suites Seattle Downtown, acquired in May 2016, according to the REIT’s website.

Moody’s investment approach focuses on Class A hotels on the East and West Coasts, or in the Sunbelt, with one or more demand generators nearby, such as office buildings or a major university.

In the pre-merger phase, REIT I was represented by counsel and financial advisors Vinson & Elkins LLP and FBR Capital Markets & Co., respectively, and REIT II was represented by counsel and financial advisors Venable LLP and Houlihan Lokey Capital Inc., respectively.

Back in May 2015, REIT I had entered into an agreement to acquire, for about $1.7 billion, a 149-property, 14,000-key hotel portfolio from an unidentified third party.

Image courtesy of Moody National REIT I