Summit Hotel Properties, Inc. (NYSE: INN) today announced that it has closed on three previously announced acquisitions and completed the disposition of five hotels.
The Company has closed on three previously announced acquisitions, the 213-guestroom Hyatt Place located in Minneapolis, MN, the 182-guestroom Hilton Garden Inn located in Houston, TX and the 98-guestroom Hampton Inn located in Santa Barbara (Goleta), CA.
The Company acquired the recently completed 213-guestroom Hyatt Place located in downtown Minneapolis on December 31, 2013 for a total purchase price of $32.6 million and entered into a management agreement with a Hyatt affiliate. The Company had previously funded $20.3 million (plus accrued interest) in the form of a first lien mortgage loan and completed the acquisition with an additional $12.0 million cash funded. The Company anticipates an estimated forward capitalization rate in the range of 8.00 percent to 9.00 percent based on management's current estimate of the Hotel's 2015 stabilized net operating income.
"We are thrilled with the completion of the Hyatt Place in downtown Minneapolis. The combination of location and amenities that this hotel provides make it a perfect addition to our portfolio and will create tremendous near-term and long-term shareholder value," said Company President and CEO Dan Hansen. "Seeing what began as just a vision several years ago come to fruition is an outstanding example of the hard work and dedication by our team. We look forward to the continued growth of our relationship with the Hyatt brand and further expansion of our presence in Minneapolis and other urban and densely populated suburban markets."
On January 9, 2014 the Company acquired the 182-guestroom Hilton Garden Inn located in Houston, TX for a purchase price of $37.5 million, which included $17.9 million in assumed mortgage debt. The hotel was built in 2005 and the Company anticipates spending approximately $3.1 million in capital improvements over the next twelve months. The Company anticipates a post-renovation estimated NTM capitalization rate in the range of 8.75 percent to 9.50 percent based on management's current estimate of net operating income.
On January 10, 2014 the Company acquired the 98-guestroom Hampton Inn located in Santa Barbara (Goleta), CA for a purchase price of $27.9 million, which included $12.0 million in assumed mortgage debt and $3.7 million in Summit Hotel OP, LP common units. The hotel was built in 2007 and the Company anticipates spending approximately $0.4 million in capital improvements over the next twelve months. The Company anticipates a post-renovation estimated NTM capitalization rate in the range of 8.00 percent to 9.00 percent based on management's current estimate of net operating income.
The Company has closed on the following five previously announced dispositions: the 60-guestroom AmericInn Hotel & Suites and the 63-guestroom Fairfield Inn located in Salina, KS, the 63-guestroom Fairfield Inn and the 63-guestroom Hampton Inn located in Boise, ID and the 58-guestroom Holiday Inn Express located in Emporia, KS. The Company sold the five hotels for a total sale price of $12.0 million.
"Our recent acquisitions and completed dispositions of hotels we no longer see as strategic demonstrate our fastidious approach to creating shareholder value through building our best-in-class portfolio of premium select-service hotels with strong growth profiles in the best markets nationwide," said Hansen. "Our thoughtful, disciplined and consistent approach to growing and enhancing our portfolio reinforces our core principle that we, as a Company, are creating long-term shareholder value."
About Summit Hotel Properties
Summit Hotel Properties, Inc. is a publicly traded real estate investment trust focused primarily on acquiring and owning premium-branded select-service hotels in the upscale and upper midscale segments of the lodging industry. As of January 14, 2013, the Company's portfolio consisted of 90 hotels with a total of 11,188 guestrooms located in 22 states.
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