Since June 1997, Wyndham International affiliates have leased and managed the six properties. Under the restructured agreement, Innkeepers will end the Wyndham leases with no cash consideration and enter into new leases, with the same financial terms as the existing leases, with Innkeepers' taxable REIT subsidiaries. The taxable REIT subsidiaries then will enter into franchise agreements with Wyndham for the five Summerfield Suites by Wyndham. These five leases are anticipated to be terminated April 1.
The Sunrise Suites lease was terminated March 1. Under the new agreement, it will stay in Wyndham's central reservations system.
"The lease restructuring with Innkeepers allows us to continue our strong partnership through a mutually beneficial financial structure, while maintaining the five Summerfield Suites properties in our brand portfolio," Fred J. Kleisner, chairman and CEO of Wyndham, says in a statement.
The taxable REIT subsidiaries will also enter into a management agreement for the six hotels with Innkeepers Hospitality Management Inc. That company's owner is Jeffrey H. Fisher, CEO, president and chairman of the board of trustees of Innkeepers USA Trust. When the restructuring is completed, Innkeepers Hospitality Management will manage all of Innkeepers USA Trust's hotel properties.
"The restructuring of our relationship with Wyndham completes Innkeepers' vision of capturing all of the cash flow available from a hotel property via the TRS structure and consolidating our management with another proven manager just as we head into what is predicted by many to be a recovery in the hotel markets," Fisher says in the statement. "Additionally, we have further positioned ourselves to gain more control over those assets.
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