Summit Hotel Properties, Inc. (NYSE: INN) today announced that it recently completed the acquisition of the Hampton Inn located in Boston (Norwood), Mass. and the Hotel Indigo located in Asheville, N.C. for an aggregate purchase price of $59.0 million.
The Company acquired the 139-guestroom Hampton Inn located in Boston (Norwood), Mass. on June 18, 2015 for a total purchase price of $24.0 million and has entered into a management agreement with Interstate Hotels & Resorts. The Company plans to spend approximately $2.3 million on capital improvements at the property during the latter part of 2016, which will include the conversion to a Hampton Inn & Suites by Hilton, and anticipates an estimated forward capitalization rate in the range of 8.0 percent to 8.5 percent based on management's current estimate of the hotel's 2016 net operating income. The Company currently estimates the hotel will contribute approximately $1.2 million of earnings before interest, taxes, depreciation and amortization ("EBITDA") through the balance of 2015.
"We are thrilled with our acquisition of the Hampton Inn in the growing suburb of Boston. Norwood, with its proximity to downtown Boston, coupled with its great area amenities and direct commuter train service into the city, is a wonderful addition to our portfolio," said Daniel P. Hansen, President and Chief Executive Officer. "We see strong upside potential in the property with the planned renovation and conversion to a Hampton Inn & Suites in a market with limited supply growth and strong demand generators."
The Company also acquired the 115-guestroom Hotel Indigo located in the heart of downtown Asheville, N.C. on June 30, 2015 for a total purchase price of $35.0 million and entered into a management agreement with Interstate Hotels & Resorts. The Company plans to spend approximately $0.4 million on capital improvements during the next twelve months and anticipates an estimated forward capitalization rate in the range of 8.0 percent to 8.5 percent based on management's current estimate of the hotel's 2016 net operating income. The Company currently estimates the hotel to contribute approximately $1.8 million of EBITDA through the balance of 2015.
"Our team is extremely pleased with the acquisition of the Hotel Indigo centrally located in the vibrant Asheville market," commented Hansen. "The Asheville market thrives on tourism and leisure demand, as well as several economic drivers such as health care, advanced manufacturing and retail trade, which makes this diverse and highly desirable market a perfect addition to our portfolio."
The acquisitions were funded by advances on the Company's senior unsecured credit facility.
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 July 8, 2015, the Company's portfolio consisted of 93 hotels with a total of 11,933 guestrooms located in 23 states.
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