AUSTIN, Texas--(BUSINESS WIRE)--
Summit Hotel Properties, Inc. (NYSE:INN) (the “Company”) today announced
that it has two hotel properties, containing an aggregate of 421
guestrooms, under contract to acquire.
The Company announced that it has entered into a definitive agreement to
acquire the 210-guestroom DoubleTree by Hilton located in San Francisco,
Calif. for a purchase price of approximately $39.0 million. The Company
expects to implement approximately $4.1 million in capital improvements
to the property prior to year-end 2014 and anticipates an estimated
forward capitalization rate in the range of 8.5 percent to 9.5 percent
based on management’s current estimate of the Hotel’s 2015 stabilized
net operating income.
The hotel was built in 2000 and is undergoing an extensive repositioning
and rebranding, converting it from a Radisson to a DoubleTree by Hilton.
Prior to acquisition, the seller will complete a portion of the
conversion and deliver the property with a DoubleTree by Hilton flag.
The Company will deploy the additional capital to complete the
repositioning prior to year-end 2014.
“We are thrilled to expand our San Francisco presence with the recently
repositioned DoubleTree by Hilton,” said Company President and CEO Dan
Hansen. “We see strong upside potential in this newly rebranded
property, located in a top market with multiple demand generators,
including both an abundant base of corporate demand as well as strong
leisure and weekend demand driven by the hotel’s close proximity to the
San Francisco International Airport and downtown area.”
The Company anticipates assuming approximately $13.1 million in mortgage
debt associated with the acquisition of the DoubleTree by Hilton. The
loan bears a fixed interest rate of 5.98% and has a maturity date of
March 08, 2016.
The Company also announced that it has entered into a definitive
agreement with Mortenson Development to acquire a 211-guestroom Hampton
Inn & Suites currently under development in Minneapolis, Minn., for a
purchase price of approximately $37.7 million. In January of 2014, the
Company issued a $13.1 million letter of credit in support of this
acquisition under its senior unsecured credit facility. This agreement
is subject to certain conditions, including the completion of the hotel
in accordance with agreed upon architectural and engineering designs,
receipt of a Hampton Inn & Suites franchise and receipt of a certificate
of occupancy.
The Hampton Inn & Suites will be the second property for the Company in
downtown Minneapolis, which will have direct access to the Minneapolis
Skyway System. The property is conveniently located near the Block E
Entertainment District, Target Center, Target Field, the Minneapolis
Convention Center and the new Vikings stadium currently under
construction. The Mayo Clinic recently announced it will open a 20,000
square-foot sports medicine facility in the current Block E Building,
which will be re-named, Mayo Clinic Square. Mayo Clinic Square will also
include the previously announced new practice facility and headquarters
for the Minnesota Timberwolves and Lynx.
“We look forward to the addition of another high quality asset to our
portfolio in a vibrant market such as downtown Minneapolis,” said
Hansen. “We are excited to be part of this development opportunity and
work with Mortenson throughout the building process.”
The Company expects to complete the San Francisco, Calif. acquisition in
the first half of 2014 and anticipates closing on the Minneapolis, Minn.
acquisition mid-year 2015. These 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.
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 March 07, 2014, the Company’s
portfolio consisted of 89 hotels with a total of 11,143 guestrooms
located in 22 states.
For additional information, please visit the Company’s website, www.shpreit.com
and follow on Twitter at @SummitHotel_INN.
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.
Dan Boyum, 512-538-2304
VP of
Investor Relations
Source: Summit Hotel Properties, Inc.