AUSTIN, Texas--(BUSINESS WIRE)--
Summit Hotel Properties, Inc. (NYSE: INN) (the “Company”) today
announced that it has four hotel properties, containing an aggregate of
503 guestrooms, under contract to acquire.
The Company announced that it has entered into definitive agreements to
acquire a portfolio of three Southern California hotels containing an
aggregate of 321-guestrooms for a purchase price of approximately $59.0
million. The Company expects to implement approximately $2.9 million in
capital improvements to the portfolio. The Company anticipates a
post-renovation estimated NTM capitalization rate for the portfolio in
the range of 8.25 percent to 9.0 percent based on management’s current
estimate of net operating income.
“These top quality assets in high barrier to entry markets provide
significant expansion of our west coast presence,” said Company
President and CEO Dan Hansen. “We welcome the opportunity to work with a
new, high quality management team and continue to improve their
performance.”
The Company plans to acquire the 98-guestroom Hampton Inn located in
Santa Barbara (Goleta), CA. This hotel was built in 2007 and has several
large corporate demand generators including Raytheon and the US Postal
Service. The government and educational institutes, such as Vandenberg
Air Force Base and the University of California Santa Barbara, drive
additional demand. The hotel has strong leisure demand and is expected
to add to it with the addition of marketing dollars from the city as
well as the improving economy.
The second property is a 115-guestroom Hampton Inn & Suites located in
Ventura (Camarillo), CA. The hotel was built in 2004 and recently added
The Lodging Association to the community. There is a strong focus in the
community to bring additional leisure demand to the area. There are also
several large corporate demand generators including Verizon and Lockheed
Martin.
The third property is a 108-guestroom Hampton Inn & Suites located in
San Diego (Poway), CA. Built in 2008, the hotel has both strong weekday
business demand and weekend leisure demand. The Poway Business Park has
grown consistently since its inception in 2007 and continued expansion
is expected.
The Company anticipates assuming approximately $12.1 million in mortgage
debt associated with the acquisition of the Southern California
portfolio. The loan bears a fixed interest rate of 6.13% and has a
maturity date of November 11, 2021.
The Company also announced that it has entered into a definitive
agreement to acquire a 182-guestroom Hilton Garden Inn located in
Houston, TX, for a purchase price of approximately $37.5 million. The
Company expects to implement approximately $3.1 million in capital
improvements to the hotel. The Company anticipates a post-renovation
estimated NTM capitalization rate in the range of 8.25 percent to 9.0
percent based on management’s current estimate of net operating income.
“I have watched and admired this hotel for many years. We look forward
to continuing the legacy of strong performance through capital
investment and by working with a well-respected management team. This
will be a great addition to our portfolio,” said Company President and
CEO Dan Hansen.
The Hilton Garden Inn is located in the heart of the Houston Galleria
and is surrounded by over 2,000 businesses as well as a lively mix of
restaurants and shops. The hotel is within walking distance to the
prominent Galleria Mall offering excellent shopping and dining
experiences.
The Company anticipates assuming approximately $17.9 million in mortgage
debt associated with the acquisition of the Hilton Garden Inn. The loan
bears a fixed interest rate of 6.22% and has a maturity date of November
01, 2016.
The Company expects to complete these acquisitions in the fourth quarter
of 2013. Certain acquisitions remain subject to satisfactory completion
of the Company’s due diligence, including lender consent, and
satisfaction of customary closing conditions. The Company can give no
assurances that the acquisitions will be consummated.
The Summit executive team is hosting its Institutional Investor and
Analyst Conference today in Minneapolis, Minnesota. The executive
management team will present on the Company’s premium select-service
portfolio as well as the strength and success of their clustering
strategy. The presentation will be followed by a property tour of both
the urban and suburban clusters in the Minneapolis market. A copy of the
presentation will be available on the Company’s website, www.shpreit.com,
in the Investor Relations section.
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 September 24, 2013, the
Company’s portfolio consisted of 93 hotels with a total of 10,976
guestrooms located in 24 states.
Forward Looking Statements
This press release contains statements that are “forward-looking
statements” within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Act of 1934, as
amended, pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements are
generally identifiable by use of forward-looking terminology such as
“may,” “will,” “should,” “potential,” “intend,” “expect,” “seek,”
“anticipate,” “estimate,” “approximately,” “believe,” “could,”
“project,” “predict,” “forecast,” “continue,” “plan” or other similar
words or expressions. Forward-looking statements are based on certain
assumptions and can include future expectations, future plans and
strategies and financial and operating projections or other
forward-looking information. These forward-looking statements are
subject to various risks and uncertainties, not all of which are known
to the company and many of which are beyond the company’s control, which
could cause actual results to differ materially from such statements.
These risks and uncertainties include, but are not limited to, the state
of the U.S. economy, supply and demand in the hotel industry and other
factors as are described in greater detail in the company’s filings with
the Securities and Exchange Commission, including, without limitation,
the company’s Annual Report on Form 10-K for the year ended December 31,
2012. Unless legally required, the company disclaims any obligation to
update any forward-looking statements, whether as a result of new
information, future events or otherwise.
Summit Hotel Properties, Inc.
Stuart J. Becker, Chief
Financial Officer, 512-538-2300
Source: Summit Hotel Properties, Inc.