SINGAPORE (Nov 6): Eagle Hospitality Trust’s manager has clarified that it does have clean title to the Queen Mary Long Beach ground lease which comprises a ship and the adjacent car park.
“EH-REIT owns the leasehold interest to Queen Mary which it acquired at the time of the IPO. EH-REIT does not lease the ship from Urban Commons, but rather EH-REIT sub-leases the Queen Mary to Urban Commons with the express consent of the City of Long Beach, and… in the event of a default by Urban Commons to make required repairs at the Queen Mary, EH-REIT reserves the right to cure the default and make the repairs itself at Urban Commons expense and/or to terminate the existing master lease and enter into a new master lease with a third party,” the REIT manager says in an announcement dated Nov 6.
In addition, EHT’s manager referenced our story “Closer look at EHT’s portfolio following Nov 2 reply to SGX”, where we mentioned the prices paid by ASAP International Holdings for three of the six hotels ASAP6 Portfolio Vendors sold into the REIT.
“While ASAP’s original purchase prices for assets comprising the ASAP6 Portfolio have not been disclosed and are not known to the REIT Manager, the REIT Manager calls into question the values reported in The Edge Article, which we believe reflect the mortgage amounts at the time ASAP originally acquired certain of the Referenced Assets (and not the actual purchase prices). In this situation, the alleged purchase prices would not reflect the equity components of these transactions, thereby underestimating ASAP’s original purchase prices,” the REIT manager says.
The six hotels are: Sheraton Denver Tech Center, Crowne Plaza Dallas Near Galleria-Addison, Hilton Houston Galleria Area, Hilton Atlanta Northeast, Renaissance Woodbridge and Doubletree by Hilton Salt Lake City.
We had said: Crowne Plaza Dallas was purchased by ASAP for US$27.6 million ($37.4 million) and sold the hotel into EHT for US$50.7 million. Its adopted valuation in the REIT is US$57.8 million. ASAP acquired Renaissance Woodbridge for US$30 million and sold the property into EHT for US$67.1 million; the valuation adopted in the REIT is US$76.6 million. ASAP acquired Doubletree by Hilton Salt Lake City in 2017 for US$31.38 million, the REIT acquired it for US$53.4 million at IPO and its valuation in the REIT is US$60.9 million.
The Edge Singapore had approached EHT’s manager on the ownership and ground lease of The Queen Mary Long Beach but received no reply till the Nov 6 announcement.
