“It is crucial for EHT to take control of the hotel properties in order to implement potential temporary arrangements in respect of the properties. Until longer-term replacement lessee(s) solutions are found, EH-REIT and the Master Lessors will continue to provide oversight of the hotels, with the hotel managers (or caretaker hotel managers) managing and/or operating the hotels under the brand name of franchisors,” the press release says.
Eagle Hospitality Trust’s manager and trustee announced on Sept 23 that they have taken the first steps in a rehabilitation plan. The trustee has issued termination notices for the master leases agreements for all 18 properties in EHT’s portfolio. At any rate, only three hotels are operational.
The master lessee is Urban Commons, and it has clearly not acted in the interests of EHT’s stapled securityholders. According to a press release by the manager and trustee, Urban Commons failed to pay the rent from January to August 2020 as per the master lease agreements (MLA) which had been announced in the prospectus. In addition, Urban Commons repeatedly failed to pay expenses such as insurance premiums and other expenses under the MLA; and it failed to prevent the termination of certain hotel management agreements by the relevant hotel manager of five hotels .
