TKO LLC, a hotel investment firm based in Aberdeen, South Dakota, said on 9 October that it has submitted a formal written offer to buy the entire hotel portfolio of Service Properties Trust (SVC) for $2.0 billion in cash. SVC, a Nasdaq-listed real estate investment trust managed by The RMR Group, confirmed receipt of the proposal a few hours later and described it as unsolicited.

In its statement, SVC said that before receiving the proposal it had no prior contact from TKO. It said its Board of Trustees will review and consider the proposal in deciding on the course of action it believes is in the best interests of the company and its shareholders. SVC gave no timetable and no view on the price.

What is on the table

SVC’s own description of its business, as of 30 June 2026, lists 93 hotels with more than 21,000 guest rooms across the United States, Puerto Rico and Canada, alongside 745 service-focused retail net lease properties with more than 13.5 million square feet. The trust says it has $9.7 billion invested across the two asset classes.

TKO’s announcement says the deal would be all cash and is subject to negotiation with and approval by SVC’s board, definitive documentation and customary closing conditions. The release states that there is no assurance a transaction will be agreed or completed.

TKO’s argument

TKO’s case is addressed to SVC shareholders as much as to the board. It says SVC shares closed at $6.49 on 6 October 2026, down more than 50% over the previous twelve months, and that the $2.0 billion price for the hotels alone exceeds SVC’s entire market capitalisation. It argues that the proceeds would let SVC retire more than 40% of its outstanding debt and become a net lease retail REIT without hotels. TKO puts the annual EBITDA of the net lease portfolio at more than $500 million. Those are TKO’s figures and characterisations, not SVC’s.

TKO acknowledges that SVC management has set out a strategy of selective portfolio streamlining instead of a full exit from lodging. It says it is making the proposal because it believes a certain cash price is worth more than the risk-adjusted value of carrying out that strategy over several years.

What is not disclosed

TKO describes itself as a hospitality-focused investment company that acquires, repositions and operates hotels across the United States. Its release does not say how the $2.0 billion would be funded, whether it has equity partners or lenders committed, or how many hotels it currently owns. It says it has engaged legal and financial advisers but does not name them. SVC’s statement names no advisers either.

Neither side has said what would happen to the brand and management agreements attached to the hotels. SVC said a copy of TKO’s proposal letter is attached to its release.

THD’s reading

The following points are THD analysis, not statements by either company.

  • The implied price per room is low. Dividing $2.0 billion by SVC’s 30 June count of more than 21,000 rooms gives roughly $95,000 a room, or about $21.5 million a hotel. That is THD arithmetic on a portfolio whose composition may have changed since June, and it says nothing about the capital the hotels need.
  • Proof of funds is the first test. An all-cash offer from a buyer that discloses no funding sources carries little weight until that changes. Owners and brokers should treat this as a public proposal, not a pending deal.
  • Operators and brands have something at stake. A single buyer for 93 hotels would become one of the larger counterparties for whichever brands and managers hold those contracts. Any party with agreements in the portfolio should check its change of ownership clauses now.
  • The public approach is itself the tactic. By publishing the offer and quoting SVC’s share price, TKO is asking shareholders to press the board. The board’s response, and whether other bidders appear, will show how the market values large US hotel portfolios.