When does the ground lease for the hotel in Kalispell, MT expire for Sonesta Simply Suites?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Lease information (as lessee): During part of 2023 and as of December 31, 2022, we leased office space in Denver, CO under an operating lease that expired in November 2023. Additionally, we were the lessee on ground leases for two hotels. subject to operating leases with unrelated third parties in Seattle, WA and Kalispell, MT, respectively, that expired in February 2024 and expires in 2028, respectively. These leases generally contain fixed contractual rent changes and certain of the leases provide for operating expense reimbursements. We recognize rental expense on leases that contain fixed contractual rent changes on a straight line basis over the terms of the respective leases.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, the ground lease for the hotel in Kalispell, MT expires in 2028. The document also mentions that Sonesta was the lessee on ground leases for two hotels, with the other being in Seattle, WA, which expired in February 2024. These leases are subject to operating leases with unrelated third parties.
These leases generally include fixed contractual rent changes, and some provide for operating expense reimbursements. Sonesta recognizes rental expenses on leases with fixed contractual rent changes on a straight-line basis over the terms of the respective leases. This means the total cost is spread evenly across the lease duration.
For a potential Sonesta Simply Suites franchisee, understanding the lease terms, especially the expiration date and any rent changes, is crucial for financial planning. Knowing that the Kalispell, MT lease extends to 2028 provides a timeline for assessing the long-term viability of that location. Additionally, the mention of fixed contractual rent changes and potential operating expense reimbursements highlights factors that could impact the franchisee's operating costs and profitability.