AUSTIN,
Texas, Dec. 10, 2024 /PRNewswire/ -- Summit Hotel
Properties, Inc. (NYSE: INN) (the "Company"), through its joint
venture with GIC, today announced that it is under contract to
acquire the 250-guestroom Hampton Inn Boston - Logan Airport and
the 149-guestroom Hilton Garden Inn Tysons Corner for a combined
purchase price of $96.0 million, or
$241,000 per key. The purchase price
represents an 8.8% capitalization rate based on forecasted 2024 net
operating income and no meaningful capital expenditures are planned
prior to the fourth quarter of 2026.
"We are excited to announce the pending acquisition of the
Hampton Inn Boston - Logan Airport and Hilton Garden Inn Tysons
Corner through our joint venture with GIC. These two
premium-branded hotels are located in high barrier-to-entry,
gateway city submarkets and generate RevPAR, EBITDA margin and
EBITDA per key metrics that are accretive to our existing portfolio
of high-quality hotels. The purchase price represents an attractive
going-in yield and a significant discount to estimated replacement
cost," said Jonathan P. Stanner, the
Company's President and Chief Executive Officer. "The transaction
represents the continuation of our successful capital allocation
strategy and has been facilitated by recent asset sales which
generated nearly $150 million of
proceeds and eliminated approximately $50
million of near-term capital expenditures," continued Mr.
Stanner.
The Hampton Inn Boston – Logan Airport is located just 2.5 miles
from the Boston Logan International Airport and less than a
10-minute drive to Downtown Boston. Boston's diverse demand drivers including
corporate, group, education, healthcare, and leisure demand make it
one of the strongest lodging performance and investment markets in
the U.S. The Boston Logan International Airport served more
than 40 million passengers in 2023 and is currently undergoing a
multi-year modernization investment project totaling $2 billion to accommodate increasing travel
demand in and out of the region that will further benefit the hotel
going forward. The hotel features a 368-space surface-level
parking lot, a portion of which is leased to a third-party parking
operator creating a durable and meaningful ancillary revenue source
for the hotel.
The Hilton Garden Inn Tysons Corner is situated in the affluent
city of Vienna, Virginia, in
Fairfax County, just 11 miles west
of downtown Washington, D.C., and
is the closest Hilton-branded select service hotel to Hilton world
headquarters. Tysons Corner
is one of Virginia's principal
business districts and home to five Fortune 500 companies. In
addition to its preeminent office market, Tysons is home to the
Tysons Corner Center, one of the largest shopping centers and
mixed-use developments in the U.S., with annual visitation spending
of $2.4 billion and a strong
employment CAGR of 14% since 2010.
The transaction is expected to be financed with a mix of cash on
hand and a $50 million term loan
raised in conjunction with exercising a portion of the accordion
option on the GIC joint venture's existing $200 million credit facility. The term loan
will have an interest rate of SOFR + 210 basis points, and a fully
extended maturity date of September 2028. The Company's
estimated $24 million of required
equity for its 51% share of the transaction will be funded
primarily from the net sale proceeds from the recently completed
sale of the Four Points by Sheraton San Francisco Airport as well
as cash on hand. Combined with the attractive in-place yield
of the acquisition, the recently completed sale results in a
leverage-neutral transaction. The transaction is expected to
close in the fourth quarter of 2024, and the Company makes no
assurances that the transaction will be completed on the
agreed-upon terms or at all.
About Summit Hotel Properties
Summit Hotel Properties, Inc. is a publicly traded real estate
investment trust focused on owning premium-branded hotels with
efficient operating models primarily in the Upscale segment of the
lodging industry. As of December 10,
2024, the Company's portfolio consisted of 95 hotels, 53 of
which are wholly owned, with a total of 14,154 guestrooms located
in 24 states.
For additional information, please visit the Company's website,
www.shpreit.com, and follow on X 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 Exchange 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," "likely," "would" or other similar
words or expressions. Forward-looking statements are based on
certain assumptions and can include future expectations, future
plans and strategies, financial and operating projections or other
forward-looking information. Examples of forward-looking statements
include the following: the Company's ability to realize financial
and operational synergies; projections of revenues and expenses or
other financial items; descriptions of the Company's plans or
objectives for future operations; forecasts of EBITDAre; and
descriptions of assumptions underlying or relating to any of the
foregoing expectations regarding the timing of their occurrence.
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 ("SEC"). 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.
For information about the Company's business and financial
results, please refer to the "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and "Risk
Factors" sections of the Company's Annual Report on Form 10-K for
the year ended December 31, 2023,
filed with the SEC, and its quarterly and other periodic filings
with the SEC. The Company undertakes no duty to update the
statements in this release to conform the statements to actual
results or changes in the Company's expectations.
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SOURCE Summit Hotel Properties, Inc.