Moody REIT I Stockholders Overwhelmingly Approve Merger

Stockholders of Moody National REIT I, a publicly registered non-traded real estate investment trust, approved the previously announced merger with affiliated non-traded REIT, Moody National REIT II, at a special meeting of stockholders held on May 24, 2017.

Nearly 91 percent of the company’s stockholders voted, with approximately 11.3 million shares voted in favor of the merger, 437,600 voted against, and 215,000 abstained.

REIT shareholders also approved an amendment to the company’s charter to delete certain provisions regarding roll-up transactions, with approximately 11.4 million shares voted in favor of the amendment, 448,700 voted against, and 214,000 abstained.

Under the merger agreement, REIT II will pay gross consideration of $11.00 per share of REIT I common stock, less certain fees and closing costs. The companies noted that Moody REIT I stockholders will receive no less than $10.25 per share.

According to the agreement, Moody REIT I stockholders have the option to receive shares of Moody REIT II common stock or cash, as long as no more than roughly 50 percent of the total net merger consideration may be paid in cash. The exchange ratio is equal to the net price per share divided by $25.00.

Moody National REIT I’s portfolio consists of 14 assets comprised of 12 hotels and two notes receivable. The hotel portion of the REIT I portfolio consists of Marriott, Hilton and Hyatt select-service hotels. Moody REIT I commenced its initial public offering in April 2009, and as of March 31, raised $133 million in investor equity through its initial public offering, follow-on offering and the sale of DRIP shares, according to Summit Investment Research. The company’s most recent net asset value per share was $10.75. Shares were originally sold for $10.00 each. The offering closed in February 2015.

Moody National REIT II is a publicly registered, non-listed REIT that acquires select-service hotels in major markets across the United States. Moody REIT II’s portfolio consists of two hotel properties. The company has raised nearly $104 million in investor equity since it broke escrow in July 2015. Shares were originally sold for $25.00, and have a current estimated net asset value of $25.04 each.

Both REITs are sponsored by Moody National REIT Sponsor, an affiliate of the Moody National Companies, a full-service commercial real estate company that includes mortgage, development, management, realty, title and insurance divisions. Founded in 1996, Moody National Companies has managed more than $2 billion in commercial real estate.

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