Net-lease REIT Spirit MTA REIT (NYSE:SMTA) is soaring on Monday, with shares up more than 17% as of 11:45 a.m. EDT. This has nothing to do with Spirit MTA's earnings or anything related to the performance of its business. Instead, the REIT is soaring because another company has agreed to acquire all its assets.
Fellow REIT Hospitality Properties Trust (NASDAQ:HPT), which owns a portfolio of hotels and travel centers, has agreed to acquire 774 retail properties from Spirit MTA for $2.4 billion.
Spirit MTA REIT was established as a portfolio of real estate that mainly consisted of bankrupt Shopko stores in the U.S., and the main goal of the company has been to unlock value for shareholders. As this transaction would liquidate most of the company's portfolio, management felt that it was the best opportunity to do just that. And, judging by the reaction of the stock price, investors seem to agree.
There are two stories here. For Spirit MTA shareholders, it appears that a pretty nice payday is in store and that the company has mostly achieved its objective of winding down its assets.
The other story is with Hospitality Properties Trust. The addition of the Spirit MTA properties represents a major diversification of its portfolio -- as I mentioned, it owns hotels and travel centers, not net-lease retail properties like Spirit MTA. Major tenants include AMC Theaters, Academy Sports, Carmax, and more.