“It is crucial for EHT to take control of the hotel properties in order to implement potential temporary arrangements in respect of the properties. Until longer-term replacement lessee(s) solutions are found, EH-REIT and the Master Lessors will continue to provide oversight of the hotels, with the hotel managers (or caretaker hotel managers) managing and/or operating the hotels under the brand name of franchisors,” the press release says.
Once the hotels are operational, they would generate urgently needed income. Over the past few months, the available funds of EHT have been decreasing in order to fund expenses, a substantial portion of which are the obligations and liabilities of the master lessees under the MLAs.
On July 23, the manager and trustee started a Request For Proposal (RFP) for a new investor to inject fresh capital in EHT as part of the restructuring and rehabilitation process.
A point of contention for any new investor is likely to be EHT’s most famous asset, Queen Mary Long Beach which was sold into EHT for US$139 million. The cost to Urban Commons was reportedly just the US$300,000 ground rent.
