Condor Hospitality Closes 7th Legacy Hotel Sale Of 2017

Condor Hospitality Trust, Inc. (NYSE:CDOR) announced the sale of a non-core 176-room legacy hotel — Days Inn — located at 200 John Wesley Blvd., Bossier City, LA, for $1.4 million. This marks the company’s seventh legacy hotel sale of 2017, a move that comes as part of its capital recycling efforts.

Per Bill Blackham, Condor’s chief executive officer, the sale of Days Inn enabled the company to achieve its target of disposing seven legacy hotel assets during 2017. Notably, Condor Hospitality, which specializes in investment and ownership of upper midscale and upscale, premium-branded select-service, extended stay and limited-service hotels, has reaped approximately $24.1 million in gross proceeds from the sale of seven hotels, year to date. It plans to apply the proceeds to outstanding debt on its $150-million secured credit facility.

The move to sale non-core assets is a strategic fit, as it offers the company scope to apply the proceeds to the existing debt, and in turn, enjoy flexibility in the acquisition of additional superior hotels. Hence, the capital-recycling initiatives are anticipated to help the company achieve a favorable portfolio mix.

Currently, Condor has just six remaining legacy assets. Of these, four have been labelled as held for sale, following the recent buyout of the Fairfield Inn & Suites El Paso and the Residence Inn Austin hotels. By year end, it plans to either sell off these additional legacy hotels or retain the same under contract for sale. This is a notable achievement when compared with 55 such hotels which the company had at the beginning of 2015.

On the other hand, Condor has also been beefing up its portfolio with high-quality hotel acquisitions. In fact, with the acquisition of the two Marriott-branded hotels — Fairfield Inn & Suites El Paso Airport and the Residence Inn Austin Airport — the company has accomplished around $240 million of buyouts, denoting 12 high-quality premium-branded select-service hotels, comprising 1,593 rooms in aggregate, since fourth-quarter 2015.

However, shares of Condor Hospitality have underperformed the industry it belongs to, in the past three months. This Zacks Rank #3 (Hold) company’s shares have declined 4.7%, while the industry fell 0.2% during this time frame.



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