Hospitality Properties Trust says Wyndham fails to pay rent on 27 hotels

By Carlise Newman

Chicago, April 2 - Hospitality Properties Trust said Wyndham International Inc. failed to pay rent due on April 1.

Hospitality Properties Trust added that it is unclear whether Wyndham has decided to withhold the rents because it is unable to pay or as a negotiating tactic in order to seek changes in the lease terms.

Wyndham could not be reached for comment by press time.

Hospitality Properties Trust owns 27 hotels that are leased to Wyndham under two combination leases: one for 15 Summerfield by Wyndham hotels, which requires a minimum rent of $2,083,333 per month; and another for 12 Wyndham hotels, which requires a minimum rent of $1,527,083 per month.

Hospitality Properties Trust was holding security deposits for both leases totaling $33.3 million. The notice of default which Hospitality Properties Trust forwarded to Wyndham Wednesday announced that Hospitality Properties Trust will retain these deposits against the damages it may incur under the leases for lost rent or otherwise.

Each of the two leases from Hospitality Properties Trust is a "bankruptcy remote" subsidiary of Wyndham. The franchise and management contracts for all 27 of the hotels are subordinated to Wyndham's lease obligations to Hospitality Properties Trust. Accordingly, Hospitality Properties Trust has the right to rebrand these hotels.

Hospitality Properties Trust is a real estate investment trust headquartered in Newton, Mass. Hospitality Properties Trust owns 251 hotels located throughout the United States.

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