Purchase contracts signed for Courtyard Marriott in El Paso, Texas as well as a Independent hotel in Park City, Utah
Summit Hotel Properties, Inc. (NYSE: INN), a real estate investment trust (REIT) specializing in the ownership of premium-branded hotels in the upscale and upper midscale segments, announced that the Company has closed on the previously announced acquisition of the following property:
“The independent hotel is a rebranding opportunity in a very high barrier to entry market and we have chosen IHG to brand this conversion.”
The Company also announced it has signed purchase contracts on the following properties:
The completions of these acquisitions are subject to lender approval and satisfactory completion of due diligence and other customary closing conditions.
The purchase of these properties is squarely in line with the Company’s strategy of acquiring immediately accretive properties at attractive capitalization rates and identifying rebranding opportunities to create value. It also aligns with the Company’s “clustering” strategy by grouping hotels in close geographic areas to gain efficiencies and management advantages. “The Courtyard in El Paso is next door to our existing Hampton Inn and Suites. This will allow our management team to more effectively and efficiently manage the properties to maximize return for our investors. This “clustering” strategy has worked very well for our company over the past nearly twenty years,” said Dan Hansen, Summit’s Chief Executive Officer. “The independent hotel is a rebranding opportunity in a very high barrier to entry market and we have chosen IHG to brand this conversion.”
Choice Conversions
As of March 23, 2011 Choice Hotels International removed eleven of the Company’s properties from its franchise system. The Company continues to dispute this action and remains in arbitration to resolve the matter. In the meantime, the Company immediately took action to pursue conversion of these eleven properties. “We were very pleased with the support and interest shown by all the franchises,” said Hansen, “Clearly they all saw the importance of these properties in their respective markets.”
The Company has identified brands for all hotels previously branded with Choice franchises, as shown in the table below:
| LOCATION | NEW BRAND | DATE | ||||||
| Baton Rouge, LA | DoubleTree by Hilton* | 3Q 2011 | ||||||
| Bloomington, MN | SpringHill Suites by Marriott | 6/24/2011 | ||||||
|
Boise, ID |
Holiday Inn | Completed | ||||||
| San Antonio, TX | Country Inn & Suites by Carlson | 6/22/2011 | ||||||
| Fort Smith, AR | AmericInn Hotel | Completed | ||||||
| Salina, KS | AmericInn Hotel & Suites | Completed | ||||||
| Missoula, MT | AmericInn Hotel & Suites | Completed | ||||||
| Charleston, WV | Holiday Inn Express | 9/30/2011 | ||||||
| Fort Worth, TX | Fairfield Inn & Suites by Marriott* | 4Q 2011 | ||||||
| Lakewood, CO | AmericInn Hotel & Suites | Completed | ||||||
| Twin Falls, ID | AmericInn Hotel & Suites | Completed |
* Pending final franchise approval
The Company plans to provide periodic guidance and a full report next quarter regarding assessment of both near-term and longer-term impact from these conversions. For example, the former Cambria Suites by Choice in Boise, ID was converted to a Holiday Inn on May 2, 2011. This conversion occurred with minimal capital deployed and minimal disruption. The property immediately demonstrated a significant performance improvement, posting RevPAR growth of over 25% in its first month.
