Lodging Fund REIT III, Inc.: M&A transaction — Lodging Fund REIT III buys Holiday Inn Express Wichita for $7.4M; upsizes credit line to $7.5M

Lodging Fund REIT III, Inc.

Acquired 84-room Holiday Inn Express & Suites Wichita Airport for $7.4M; funded with $5.6M loan, $0.5M cash, and 121,762 Series T OP units.
New $5.6M term loan with Choice Financial Group: fixed 6.41%, matures Dec 2027, interest-only through June 2024 then 25-year amortization.
Amended A-1 Line of Credit (related party): increased from $5.0M to $7.5M, maturity extended to Dec 31, 2023, secured by 750,000 unissued common units.
Entered 5-year management agreement with KAJ Hospitality; fees 2% of revenues (first 3 yrs) then 3%, plus $14/room accounting fee.
Corey Maple (CEO) personally guaranteed 50% of the new $5.6M loan principal.

item 1.01 item 2.01 item 2.03

Key facts

Extracted from this filing and checked against the source text.

Debt Financings SEC 8-K Item 2.03/2.04 confidence 0.9

Lodging Fund REIT III, Inc. incurred term loan of $5.6 million at 6.41% per annum maturing December 21, 2027.

Instrument: term loan
Principal: $5.6 million
Rate: 6.41% per annum
Maturity: December 21, 2027
Event: incurrence

Exact text from the filing

In connection with the contribution of the Wichita HIEX to the Operating Partnership, and pursuant to the Loan Agreement, effective as of December 22, 2022 (the “Wichita HIEX Loan Agreement”), the LF3 Wichita Airport, LLC and Wichita HIEX TRS Subsidiary (collectively, the “Wichita HIEX Borrower”) entered into a new $5.6 million term loan with the Wichita HIEX Lender, which is secured by the Wichita HIEX (the “Wichita HIEX Loan”). The Wichita HIEX Loan is evidenced by a promissory note and has a fixed interest rate of 6.41% per annum. The Wichita HIEX Loan matures December 21, 2027.

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M&A Transactions SEC 8-K Item 2.01/5.01 confidence 0.9

Lodging Fund REIT III, Inc. completed an acquisition involving Wichita Airport Hospitality, LLC for $7,400,000 plus closing costs (closed 2022-12-22).

Action: acquisition
Counterparty: Wichita Airport Hospitality, LLC
Consideration: $7,400,000 plus closing costs
Closing: 2022-12-22

Exact text from the filing

The Wichita HIEX Contributor is not affiliated with the Company or the Advisor. The aggregate consideration for the Wichita HIEX under the Wichita HIEX Contribution Agreement is $7,400,000 plus closing costs, subject to adjustment as provided in the Wichita HIEX Contribution Agreement. The consideration consists of the origination of a new loan by subsidiaries of

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Material Agreements SEC 8-K Item 1.01/1.02 confidence 0.9

Lodging Fund REIT III, Inc. amended Change in Terms Amendment with Legendary A-1 Bonds, LLC valued at $7.5 million (effective 2022-12-15).

Action: amendment
Agreement: credit facility
Counterparty: Legendary A-1 Bonds, LLC
Value: $7.5 million
Effective: 2022-12-15

Exact text from the filing

On December 15, 2022, the Operating Partnership, the Company and the A-1 Lender entered into a Change in Terms Amendment (the “Amendment”) in connection with the Loan. The Amendment extends the maturity date of the A-1 Line of Credit from December 31, 2022 to December 31, 2023. Additionally, the A-1 Line of Credit was increased to $7.5 million.

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Source: SEC EDGAR

accession 0001558370-22-019039

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