NexPoint’s $318 Million Acquisition of Condor

KeyBanc Capital Markets, Inc. acted as financial advisor to Condor. Winston & Strawn LLP and Goodmans LLP are acted as legal counsel to NexPoint and McGrath North Mullin & Kratz, PC LLO acted as legal counsel to Condor.

NexPoint Hospitality Trust (TSXV: NHT.U) (“NHT”) is a publicly traded real estate investment trust focused on acquiring, owning and operating well-located hospitality properties in the United States that offer a high current yield and in many cases, that are underperforming assets with the potential to increase in value through investments in capital improvements, a market-based recovery, brand repositioning, revenue enhancements, operational improvements, reducing expense inefficiencies, and exploiting excess land or underutilized space.

Condor Hospitality Trust, Inc. (NYSE American: CDOR) (“Condor”) is a self-administered real estate investment trust that specializes in the investment and ownership of upper midscale and upscale, premium-branded, select-service, extended-stay, and limited-service hotels in the top 100 Metropolitan Statistical Areas (“MSAs”).

The total consideration payable pursuant to the transaction is approximately US$318 million, which will be satisfied by a combination of cash and debt, including the assumption of certain debt.

NHT OP has entered into an equity commitment letter with NexPoint Advisors, L.P., pursuant to which NexPoint has agreed to provide equity financing for the purchase price payable under the Merger Agreement (the “Equity Financing”).

In addition to the Equity Financing, NHT will assume approximately US$8.65 million of in-place property level mortgage financing and expects to obtain secured financing to finance a portion of the purchase price and refinance certain debt of Condor.

Upon closing of the transaction, holders of common stock of Condor would receive US$11.10, without interest thereon, per share, holders of 6.25% Series E Preferred Stock of Condor would receive US$10.00 per share and limited partners of Condor’s operating partnership, Condor Hospitality Limited Partnership (“Condor OP”), would receive US$0.21346 per Condor OP partnership interest.

The transaction will expand NHT’s geographic footprint into Georgia, Kansas, Kentucky, Maryland, Mississippi and South Carolina and increase its presence in Florida and Texas.

????Following closing of the transaction, NHT’s gross asset value is expected to increase to approximately US$700 million.

The Winston team was led by Corporate Partner Charlie Haag (Picture) and Associate Melissa Kalka, and also includes Associate Steven Franklin; Capital Markets Partner Justin Reinus; Tax Partners Andrew Betaque and Dennis Kelly and Associates Danielle Marr and Mark Christy; Employee Benefits and Executive Compensation Partner Steve Flores and Associate Marissa Sims; and Real Estate Partner Jeff Smith and Associates Masae Ellis and Victoria Acuff.

Involved fees earner: Victoria Acuff – Winston & Strawn; Andrew Betaque – Winston & Strawn; Mark Christy – Winston & Strawn; Masae Ellis – Winston & Strawn; Steve Flores – Winston & Strawn; Steven Franklin – Winston & Strawn; Charles Haag – Winston & Strawn; Melissa Kalka – Winston & Strawn; Dennis Kelly – Winston & Strawn; Danielle Marr – Winston & Strawn; Justin Reinus – Winston & Strawn; Marissa Sims – Winston & Strawn; Jeffrey Smith – Winston & Strawn;

Law Firms: Winston & Strawn;

Clients: NexPoint Hospitality Trust;

Author: Ambrogio Visconti