UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT
REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
July 30, 2015
Date
of report (Date of earliest event reported)
Condor
Hospitality Trust, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Maryland
(State or Other
Jurisdiction
of Incorporation)
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1-34087 |
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52-1889548 |
(Commission
File Number) |
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(IRS Employer
Identification No.) |
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1800 West Pasewalk Avenue, Suite 200 |
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Norfolk, NE |
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68701 |
(Address of Principal Executive Offices) |
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(Zip Code) |
(402) 371-2520
(Registrants Telephone Number, Including Area Code)
Supertel Hospitality, Inc.
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any
of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01. |
Regulation FD Disclosure |
At an investor meeting on July 30, 2015, Condor
Hospitality Trust, Inc. (the Company) will reference a slide presentation, a copy of which is furnished as Exhibit 99.1 to this report. Exhibit 99.1 is being furnished in accordance with Regulation FD of the Securities and Exchange
Commission.
The information in this Item 7.01 is being furnished and shall not be deemed filed for the purpose of
Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in this Item 7.01 shall not be incorporated by reference into any registration statement or other
document pursuant to the Securities Act of 1933, as amended.
Item 9.01. |
Financial Statements and Exhibits. |
Important Information
The exchange offer for the outstanding shares of Series A preferred stock and Series B preferred stock has not yet commenced. The communication by this filing
of the investor presentation is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell shares of the Company, nor is it a substitute for the issuer tender offer materials that the Company will file
with the Securities and Exchange Commission (SEC) upon commencement of the exchange offer. At the time the exchange offer is commenced, the Company will file issuer tender offer materials on Schedule TO with the SEC with respect to the
exchange offer. The exchange offer materials (including an Offer to Exchange, a related Letter of Transmittal and any other required tender offer documents) will contain important information. Holders of shares of Series A preferred stock and Series
B preferred stock are urged to read these documents when they become available because they will contain important information they should consider before making any decision regarding tendering their securities. The Offer to Exchange, the related
Letter of Transmittal and certain other tender offer documents will be made available to all holders of shares of Series A preferred stock and Series B preferred stock at no expense to them. The exchange offer materials will be made available for
free at the SECs website at www.sec.gov. Additional copies, when available, will be available for free at the Companys website at www.condorhospitality.com or by contacting Investor Relations, Condor Hospitality Trust, Inc., 309 North
Fifth Street, Norfolk, NE 68701.
In connection with a special meeting of shareholders, the Company will file a proxy statement with the SEC. Investors
and security holders are urged to read the proxy statement and other relevant documents filed with the SEC, when they become available, because they will contain important information about the proposed transaction.
Investors and security holders may obtain free copies of these documents, when they become available, and other
documents filed with the SEC at www.sec.gov. Additional copies, when available, will be available for free at the Companys website at www.condorhospitality.com or by contacting Investor Relations, Condor Hospitality Trust, Inc., 309 North
Fifth Street, Norfolk, NE 68701.
Participants
The
Company and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of the Company in connection with a special meeting. Information regarding the officers and directors of the
Company is available in the Companys definitive proxy statement for the annual meeting held on June 10, 2015 and its Annual Report on Form 10-K for the fiscal year ended December 31, 2014.
Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or
otherwise, will be contained in the proxy statement and other relevant materials to be filed with the SEC. Investors should read the proxy statement carefully when it becomes available before making any voting or investment decisions. You may obtain
free copies of these documents from the Company using the sources indicated above.
Forward Looking Statement
Certain matters within this Current Report on Form 8-K and the furnished exhibit are discussed using forward-looking language as specified in the Private
Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement. These
risks are discussed in the Companys filings with the Securities and Exchange Commission.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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Condor Hospitality Trust, Inc. |
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Date: July 30, 2015 |
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By: |
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/s/ J. William Blackham |
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Name: |
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J. William Blackham |
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Title: |
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President and Chief Executive Officer |
EXHIBIT INDEX
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Exhibit |
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Description |
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99.1 |
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Slide presentation |
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Exhibit 99.1
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Exhibit 99.1
Courtyard by Marriott Hotel Indigo
by IHG SpringHill Suites by Marriott
(Jacksonville, FL) (Atlanta, GA) (San Antonio, TX)
Condor Hospitality Trust, Inc.
Investor Presentation July 2015
Note: Hotels
profiled above are currently under contract.
Safe Harbor Statement
All statements made today,
other than statements of historical fact, are or may be deemed to be forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can
be identified by words such as anticipate, intend, plan, goal, seek, believe, project, estimate, expect, strategy,
future, likely, may, should, will and similar references to future periods. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are
based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking
statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ
materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from
those indicated in the forward-looking statements are discussed throughout the documents we have filed with the Securities and Exchange Commission (the SEC), including the factors discussed under the headings Risk Factors in
our Preliminary Proxy Statement filed with the SEC on July 23, 2015 and Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2014.
1
Executive Summary
New Management with a Proven
Track Record in the Public Markets
Significant Progress in the Transition to Upscale Select Service with More
to Come Balance Sheet Restructuring Allows the Company to Act on a Robust Pipeline Institutional Investor Support Critical for Rapid Growth from a Small Base
2
Condor Strategic Vision
One of the only publicly
traded REITs focused primarily on growing a portfolio of premium-branded select service hotels located outside the top 20 US MSAs We are intently focused on executing our new strategic plan and transforming our company into the acquirer of choice
for premium-branded select service assets in MSAs 20 100 and intend to have the highest concentration of our portfolio in MSAs 20 50 We have made tremendous progress since Mr. Blackhams arrival in March 2015 to speed up the
disposition of our legacy economy hotels, restructure the balance sheet, put hotels that fit our new strategic vision under contract in off-market transactions and begin the process by which we will fund our anticipated rapid growth
December 31, 2007 Pro Forma (1) 3 5 Year Plan
3.8% 13.0% 10.0%
Economy
Economy Midscale
Scale 18.6% 3.0% Upper Midscale
Upper Midscale 52.5% 45.0% Upper Midscale
Chain
Breakdown 77.6% 31.5% Midscale 45.0%
Midscale Upscale Upscale
Total Rooms: 10,135 Total Rooms: 3,677 Total Rooms: 10,000+
(1) As of July 28, 2015 pro forma for the addition of the SpringHill Suites San Antonio, Hotel Indigo
Atlanta and Courtyard Jacksonville and sale of hotels currently under contract.
3
Our Differentiated Strategy (1)
Our strategy
largely avoids the crowded trades chased by our peers, positioning us for outperformance
% of Rooms in Top 10
MSAs % of Rooms in Top 20 MSAs
100% 100% 92.6%
83.5%
75% 75%
59.6% 57.9% 54.1% 50.9%
50% 44.5% 40.7% 40.4% 50% 42.3%
29.6% 25.3%
25% 25%
0% 0%
HT RLJ NRF CLDT APLE INN HT CLDT NRF RLJ INN APLE
Courtyard, Residence Inn, HGI and Homewood Courtyard, Residence Inn, HGI, Homewood and Hampton
100% 87.8% 100% 94.4% 87.8%
81.1% 75.1%
75% 61.5% 75%
50% 43.8% 50% 48.4% 47.5% 47.1%
32.9% 31.3%
25% 25%
0% 0%
NRF CLDT APLE RLJ HT INN NRF CLDT APLE RLJ HT INN
(1) Data per SNL Financial as of July 24, 2015. Each portfolio is pro forma for announced acquisitions and
dispositions. Room count is on a weighted basis by ownership interest in each asset. Hotels with unavailable room counts or
ownership interests by the REIT are not included. NRFs portfolio weightings are based on net book value per hotel as many room counts for NRFs hotels are unavailable.
4
New Leadership
Bill Blackham
President & CEO
Long and accomplished track record creating and growing public Eagle Total Return
from IPO to Sale vs. Peer Indices (1)
and private companies, raising capital and building strong
management teams
70% 67.8%
Former President and CEO of Eagle
Hospitality Properties Trust
(Eagle), an NYSE-listed hotel REIT
60%
As President and CEO, Mr. Blackham authored and 53.1%
implemented Eagles business plan that led Eagles growth
from the September 2004 IPO through the sale to an 50% 47.7%
Apollo Global Management affiliate in August 2007
During Mr. Blackhams tenure, Eagle acquired more than 40%
$225 million of hotel assets, growing to an enterprise value
of nearly $700 million prior to the sale 30%
Eagle generated a compounded annual return
approaching 20% during its tenure in the public markets 20%
Holds an MBA from the Wharton School at the University of
Pennsylvania and a BS from the Boston College Carroll School of 10%
Management and has been actively involved throughout his
career in various professional organizations, including the
National Association of Real Estate Investment Trusts (NAREIT) 0%
and the Urban Land Institute (ULI) Eagle SNL US REIT RMS
Hotel Index
(1) Data shows total return from September 30, 2004, Eagles IPO date, to August 15, 2007, the date that Eagle was taken private by an Apollo Global Management affiliate and
is per SNL Financial.
5
Organizational Chart
Board of Directors
James H. Friend (Chairman) CEO, Friend Development Group Daniel R. Elsztain COO &
Trustee, IRSA Kelly A. Walters Former President & CEO, Condor Hospitality Trust
J. William
Blackham President & CEO, Condor Hospitality Trust Donald J. Landry President & Owner, Top Ten George R. Whittemore Former President & CEO, Condor Hospitality Trust
Daphne Dufresne Managing Director, RLJ Equity Partners John M. Sabin CFO, Revolution LLC and the Case Family
Office John M. Dinkel President, Dinkel Implement
President & CEO
Corporate
Administrative &
Operations Assistant
Assistant Vice Director of Corporate
Senior Vice President Senior Vice President Vice President
President Human In-House Counsel Communications /
& CFO & COO Acquisitions (2)
Resources
Investor Relations
AVP / Capital
Treasury & Capital Corporate Finance Acquisitions Manager
Vice President & CAO Expenditures Asset Manager(s) (3)
Markets Manager (3) Manager & Analyst (1) & Analyst (2)
Managers
Financial Analyst Controller
Controller(s) (3) Hotel Management Hotel Management Hotel Management
Company Company Companies (1)(2)(3)
Corporate Senior Corporate Hotel Management Hotel Management
Financial Accountant
Accountants (3) Accountant Company Company
(1) Position / contract to be added in 2015.
(2) Position / contract to be added in 2016.
(3)
Position / contract to be added based on company growth.
6
Condor History Then and Now
2008
Start of the Great Recession 2012 Transformation Begins 2014 Evaluation of Strategic Alternatives
Economy portfolio suffers significant margin IRSA funded $30 million Series C convertible Condor evaluates several
proposed reverse
compression preferred equity commitment mergers and structured investment offers
before deciding to pursue a rights offering
Debt service coverage ratio falls below 1.0x Reorganized the Board of Directors, established
an Investment Committee chaired by Don Landry Rights offering raises $2.9 million
and acquired the Hilton Garden Inn Dowell, MD
for $11.5 million CEO Kelly Walters resigns
2008
2009 2010 2011 2012 2013 2014 2015
2009 New Senior Management 2010 and 2011 Search for a 2015
New CEO and Accelerated
2013 Failed Follow-on Offering
and Strategic Plan Strategic Partner Turnaround Plan
Kelly Walters named CEO with Began search for fresh equity Went to market with a $100 Bill Blackham announced as
a restructured executive team and/or a strategic partner million follow-on offering to fund new
President & CEO
the acquisition of 8 premium-
Shift in chain scale focus from Reached an agreement with branded select service hotels Accelerated disposition plan
economy to select service IRSA in 2Q11, which was
funded by a gradual disposition followed by a lock-out and quiet Insufficient demand to close Exchange offer for Series A,
B
of the legacy economy portfolio period during due diligence (1) identified acquisitions; PSAs and C
preferreds for common
terminated after the deal fails
Common dividend suspended 3 premium-branded select
Preferred dividends suspended service hotels under contract
(1) IRSA collectively refers to IRSA Inversiones y Representaciones Sociedad Anónima and Real Estate
Strategies, L.P. (RES), an affiliate of IRSA Inversiones y Representaciones Sociedad Anónima.
7
Current Geographic Footprint
A majority of our
current portfolio is spread across the Mid-Atlantic and Midwest
Portland, OR (24)
Providence, RI (38)
Buffalo, NY (50) Hartford, CT (47)
Milwaukee, WI (39)
Cleveland, OH (31)
Pittsburgh, PA (23)
Salt Lake City, UT (48) Columbus, OH (32) Baltimore, MD (20)
Sacramento, CA (27)
Denver, CO (21) Indianapolis, IN (33)
San
Jose, CA (34) Cincinnati, OH (28) Richmond, VA (45)
Kansas City, MO (29) Louisville, KY
(43) Virginia Beach, VA (37)
Raleigh, NC (46)
Las Vegas, NV (30) Charlotte, NC (22)
Nashville, TN (36)
Oklahoma City, OK
(41) Memphis, TN (42)
Birmingham, AL (49)
Current Asset
Current Asset Under Contract for Sale Austin, TX (35) Jacksonville, FL (40)
New Orleans, LA (44)
Pending Acquisition San
Antonio, TX (25) Orlando, FL (26)
MSAs 20 50 (Labeled with MSA Ranking)
Note: Portfolio as of July 28, 2015 pro forma for pending dispositions and acquisitions under contract.
8
Portfolio Detail
Year Year
Property City, State MSA Rank Rooms Acquired Property City, State MSA Rank Rooms Acquired
Wyndham Choice
Super 8 (Economy) Comfort Inn (Upper Midscale)
Super 8-Lincoln Cornhusker Lincoln, NE 155 133 1999 Comfort Suites-South Bend South Bend, IN 156 135 2005
Super 8-Creston Creston, IA NA 121 1978 Comfort Suites-Fort Wayne Fort Wayne, IN 124 127 2005
Super 8-Billings Billings, MT 246 106 2007 Comfort Inn-Morgantown Morgantown, WV 299 80 1994
Super 8-Iowa City Coralville, IA 253 84 1985 Comfort Inn-New Castle New Castle, PA 415 79 1997
Super 8-Menomonie Menomonie, WI 648 81 1997 Comfort Inn-Shelby Shelby, NC 394 76 1998
Super 8-ONeill ONeill, NE NA 72 1982 Comfort Suites-Warsaw Warsaw, IN 451 71 2005
Super 8-Pittsburg North Broadway Pittsburg, KS 702 64 1987 Comfort Inn-Chambersburg Chambersburg, PA 269 63 1997
Super 8-Burlington Kirkwood Burlington, IA 614 62 1986 Comfort Suites-Lafayette Lafayette, IN 207 62 2005
Super 8-Keokuk Keokuk, IA 524 61 1985 Comfort Suites-Marion Marion, IN 484 62 2005
Super 8-Kirksville Kirksville, MO 807 61 1986 Comfort Inn-Harlan Harlan, KY NA 61 1997
Super 8-Portage Portage, WI 85 61 1996 Comfort Inn-Rocky Mount Rocky Mount, VA 160 61 1998
Super 8-Storm Lake Storm Lake, IA 892 59 1990 Comfort Inn-Glasgow Glasgow, KY 565 60 2008
Super 8-Mount Pleasant IA Mount Pleasant, IA NA 55 1988 Comfort Inn-Solomons Beacon Marina Solomons, MD 6 60 1994
TotalSuper 8 (Economy) 1,020 Comfort Inn-Farmville Farmville, VA NA 51 1994
Days Inn (Economy) Comfort Inn-Princeton West Virginia Princeton, WV 365 50 1994
Days Inn-Bossier City Bossier City, LA 114 176 2007 TotalComfort Inn (Upper Midscale) 1,098
Days Inn-Sioux Falls Airport Sioux Falls, SD 186 86 2008 Quality Inn (Midscale)
Days Inn-Farmville Farmville, VA NA 59 1995 Quality Inn-Danville Danville, KY 564 63 1997
Days Inn-Glasgow Glasgow, KY 565 58 2008 Quality Inn-Culpeper Culpeper, VA 6 49 1997
TotalDays Inn (Economy) 379 TotalQuality Inn (Midscale) 112
TotalWyndham 1,399 Rodeway Inn-Fayetteville (Economy) Fayetteville, NC 136 120 2005
Marriott Clarion-Cleveland (Upper Midscale) Cleveland, TN 336 59 1998
Courtyard (Upscale) TotalChoice 1,389
Courtyard-Jacksonville Jacksonville, FL 40 120 2015 Independent
SpringHill Suites (Upscale)
SpringHill Suites-San
Antonio San Antonio, TX 25 116 2015 Savannah Suites (Economy)
Savannah Suites-Greenville Greenville, SC 63 170
2006
TotalMarriott 236 Savannah Suites-Savannah Savannah, GA 141 160 2006
Hilton TotalSavannah Suites (Economy) 330
Hilton Garden Inn-Solomons Island (Upscale) Dowell, MD 6 100 2012 Supertel Inn-Creston (Economy) Creston, IA NA 41 2006
IHG Key West Inn-Key Largo (Economy) Key Largo, FL 456 40 1997
Hotel Indigo-College Park (Upscale) Atlanta, GA 9 142 2015 TotalIndependent 411
Note: Portfolio as of July 28, 2015 pro forma for the addition of the SpringHill Suites San Antonio, Hotel
Indigo Atlanta and Courtyard Jacksonville and sale of hotels currently under contract. The Super 8 Manhattan (KS), Super 8
Hays (KS), Super 8 Tomah (WI), Quality Inn Sheboygan (WI), and Savannah Suites Atlanta are currently under contract for sale.
9
Disposition Policy and Activity
Our strategic
plan calls for continued dispositions of our economy hotels and other non-core assets:
We have sold 80 hotels
since 2008 and view only 8 properties in our portfolio as long-term holds
We plan to fully exit the economy
sector in the next three years and redeploy net proceeds from those sales into Upper
Midscale and Upscale
assets that fulfill our acquisition criteria
There is a deep pool of buyers for economy hotels with access to
SBA debt that typically operate with significantly less
overhead than a REIT and view valuation in terms of
revenue multiples, which typically translates into attractive cap rates
for sellers
We are intently focused on recycling capital such that EBITDA from acquisitions is greater than EBITDA lost from
dispositions
2008 2015 YTD Dispositions (1)
($ in thousands)
80 Cumulative Disposition Value Cumulative Hotels Sold $ 200,000
Sold 60 $ 150,000 Value
Hotels 40 $ 100,000
Disposition
$160,360
$122,370
20 $100,070 $ 50,000
$78,030
Cumulative $12,000 $29,150 $40,800 $52,570 Cumulative
0 $ 0
2008 2009 2010 2011 2012 2013 2014 2015
(1) 2015 YTD as of July 28, 2015. Data per SNL Financial.
10
Disciplined Acquisitions Strategy
We intend to
grow our asset base through continued selective hotel acquisitions similar to the HGI Dowell, MD and the
three pending acquisitions that generally meet one or more of our investment criteria
We believe our ability to offer tax deferred OP units to sellers through our UPREIT structure once we recapitalize our
balance sheet will be a significant competitive advantage
Operate under leading premium franchise brands and possess key attributes such as building design and décor that is
consistent with
current brand standards
Generate NOI margins above 30%, which would be a 400+ bps increase over our legacy portfolio, at average occupancy rates
greater than
65%, the long-term average for Upscale select service hotels, and a Smith Travel Research index
occupancy greater than 100
Located outside the top coastal markets with heavy institutional competition in
submarkets in close proximity to multiple demand drivers
Constructed or underwent major renovations less than
eight years prior to our acquisition and have significant time (generally 10+ years)
remaining on the existing
franchise license
Potentially be acquired at a discount to replacement cost
Can be acquired in off-market transactions
11
Historical Financial Performance (1)
Capitalization FFO per Share and EBITDA
($ in millions)
$395 $5.84 FFO / Share EBITDA
$400 $6.00 $5.42 $30
Net Debt
$350 Series C Convertible Preferred
Equity $25
Series A and B Preferred Equity $4.00
$2.68
Market Cap $2.33
$300 $20
$270 $2.00 $1.37
$0.94
$250 $240 $15
$229
$0.00 M)
$
$197 $201 Share ($0.08) (
$200 per ($0.78) $10
$170 FFO ($ 2.00) EBITDA
$148 $147
$150 $5
($ 4.00) ($3.33)
$100 $0
$50 ($ 6.00) ($5)
$0 ($ 8.00) ($10)
2007 2008 2009 2010 2011 2012 2013 2014 1Q15 2007 2008 2009 2010 2011 2012 2013 2014 1Q15
YE YE YE YE YE YE YE YE Ann.
(1) Data per SNL Financial. 1Q15 preferred equity values include accrued dividends.
12
Balance Sheet Restructuring
Step 1: Exchange
Offer
5.38 shares of common stock for each of the 803,270 shares of Series A preferred stock outstanding,
representing, at a
price per share of $2.3254 for the common stock, a value of $12.502 for each share of the
Series A preferred stock, an
amount equal to the $10.00 per share liquidation value plus a 10% premium on the
liquidation value and unpaid dividends
prorated to September 15, 2015
13.71 shares of common stock for each of the 332,500 shares of Series B preferred stock outstanding, representing, at a
price per share of $2.3254 for the common stock, a value of $31.875 for each share of the Series B preferred
stock, an
amount equal to the $25.00 per share liquidation value plus a 10% premium on the liquidation value
and unpaid dividends
prorated to September 15, 2015
IRSA holds 3 million Series C preferred shares with a $10.00 per share liquidation value and a conversion price of
$1.60
per share
Subject to an 80% minimum, IRSA has agreed to convert its Series C preferred shares into common stock in the same
percentage that holders of the Series A and Series B preferred shares agree to exchange for common shares, and accept
common shares valued at $2.3254 for unpaid dividends
100% acceptance of the Series A and Series B Exchange Offer and full conversion of the Series C would result in the
issuance of 29,124,514 shares of common stock (1)
Assuming 100% participation in the Exchange Offer, our equity market capitalization would increase by approximately $68
million based on the Exchange Offer price of $2.3254 per share
Assuming 100% participation in the Exchange Offer, preferred equity, including accrued unpaid dividends, would be
reduced to zero from approximately $52 million at March 31, 2015
(1) Assumes the weighted average trading price of our common stock for the three trading days immediately preceding the
last trading day of the Exchange Offer period is above $2.00. Please reference page 11 of our preliminary
proxy statement filed with the SEC on July 23, 2015 for more detail.
13
Balance Sheet Restructuring (contd)
Step 2:
Continue accelerated disposition of economy and other non-core assets
Condor sold the Days Inn
Alexandria, VA and the Comfort Inn Alexandria, VA in July 2015 for $19.0 million and repaid
$8.3
million of 12.5% debt secured by those properties
Management is in advanced discussions with several parties
regarding the sale of multiple portfolios
Step 3: Raise new equity over time from IRSA and other institutional
capital sources to fund the acquisition of premiumbased
select service hotels that fit our acquisition
criteria
We have already raised and recycled the equity that we believe will be required to fund the
acquisition of the 116-room
SpringHill Suites San Antonio, the 142-room Hotel Indigo Atlanta and
the 120-room Courtyard Jacksonville
14
Balance Sheet Restructuring (contd)
Our
balance sheet continues to improve as we sell legacy assets, recycle capital and deal with future loan
maturities rather than incur additional expenses to obtain short-term loan renewals on to-be-sold assets
Capitalization Debt Maturity Schedule
Net Debt As of March 31, 2015:
Series C
Convertible Preferred Equity $50 $45
$200 Series A and B Preferred Equity $188 $40 $36
Common $30
$160 $147 $20
$10 $4
$107 $0 $0
$0
$120 2015 2016 2017 2018 2019+
$85
Post-Recap: (2)
$80 $50 $45
$40
$30
$33 $30
$40 $81 $20
$20 $12
$18 $10
$10 $0
$0 $0
1Q15 Post-Recap (1) 2015 2016 2017
2018 2019+
Note: Dollars in millions.
(1) As of March 31, 2015, but assumes 100% conversion of the Series A, B and C shares and accrued dividends included in the preferred equity balance for common shares at the prices
disclosed in documents filed with the SEC
(including approximately $3.5 million of accrued Series C
dividends), a common stock price of $2.3254 per share (the Exchange Offer price), repayment of the $8.3 million of debt tied to two hotels in Alexandria, VA sold in July
2015 and $30 million of new mortgage debt on the three pending acquisitions.
(2) As of March 31, 2015, but adjusted for the repayment of the $8.3 million of debt tied to two hotels in Alexandria, VA sold in July 2015, the extension of the credit facility
maturity date to 2018 and the assumption that $30 million of
debt on the three recently announced potential
acquisitions matures in 2019. Over $30 million of the $45 million of debt maturing in 2017 is secured by hotels that do not fit our long-term strategic plans.
15
Investment Highlights
Following the contemplated
recapitalization, Condor will be positioned for rapid growth from a small base
Strategic Focus on Acquisitions
in Attractive but Less Competitive Markets
Experienced Senior Management Team with a Proven Track Record
Investment Committee and Board with Significant Lodging Experience
Resumption of Covered Common Dividend to Interest New Investors
Accretive Use of Proceeds for Recycled Capital
16
Important Information
The exchange offer for the
outstanding shares of Series A preferred stock and Series B preferred stock has not yet commenced. The communication in this presentation is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell
shares of the Company, nor is it a substitute for the issuer tender offer materials that the Company will file with the Securities and Exchange Commission (SEC) upon commencement of the exchange offer. At the time the exchange offer is
commenced, the Company will file issuer tender offer materials on Schedule TO with the SEC with respect to the exchange offer. The exchange offer materials (including an Offer to Exchange, a related Letter of Transmittal and any other required
tender offer documents) will contain important information. Holders of shares of Series A preferred stock and Series B preferred stock are urged to read these documents when they become available because they will contain important information they
should consider before making any decision regarding tendering their securities. The Offer to Exchange, the related Letter of Transmittal and certain other tender offer documents will be made available to all holders of shares of Series A preferred
stock and Series B preferred stock at no expense to them. The exchange offer materials will be made available for free at the SECs website at www.sec.gov. Additional copies, when available, will be available for free at the Companys
website at www.condorhospitality.com or by contacting Investor Relations, Condor Hospitality Trust, Inc., 309 North Fifth Street, Norfolk, NE 68701.
17
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