Real estate investment trust (REIT) Service Properties Trust has sent a notice of payment shortfall to Marriott International, the company said Thursday.
The REIT is requesting $11 million to cover the balance due between the payments it has received to date from Marriott and 80% of the priority returns due the company for the eight months ending in August.
Marriott has 10 days from receipt of the letter to make the payment, or Service Properties Trust will have the right to terminate its agreement with Marriott, according to the REIT.
The agreement covers 122 hotels in 31 states: two Marriott properties, two SpringHill Suites, 12 TownePlace Suites, 35 Residence Inns and 71 Courtyards.
If Marriott does not make the payment and Service Properties Trust terminates the agreement, the company plans to transition management and branding of the 122 hotels to Sonesta International Hotels Corporation.
This notice and potential transfer of properties to Sonesta comes one month after InterContinental Hotels Group defaulted on payment to Service Properties Trust and lost 103 hotels to Sonesta.
This report was originally published in Business Travel News.