Summit Hotel Properties, Inc. INN (the “Company”) today announced the closing of three additional hotel acquisitions:
- 178-room Residence Inn by Marriott in Salt Lake City, UT for a purchase price of $20.0 million. The Company anticipates a post-renovation estimated NTM EBITDA multiple in the range of 10.5x to 11.5x based on management's current estimate of EBITDA. The Company expects to spend approximately $6.5 million for improvements at this hotel. The acquisition of this property was announced September 26, 2012 concurrent with the Company's offering of common stock and the purchase closed on 12/21/2012.
- 122-room Hyatt Place in Long Island (Garden City), NY for a purchase price of $31.0 million. The Company anticipates a post-renovation estimated NTM EBITDA multiple in the range of 11.0x to 12.0x based on management's current estimate of EBITDA. The Company expects to spend approximately $305,000 for improvements at this hotel. The purchase of this hotel closed 12/27/2012.
- 138-room Hampton Inn & Suites in Tampa, FL for a purchase price of $20.8 million. The Company anticipates a post-renovation estimated NTM EBITDA multiple in the range of 10.5x to 11.5x based on management's current estimate of EBITDA. The Company expects to spend approximately $2.0 million for improvements at this hotel. The purchase of this hotel closed 12/27/2012.
- The Company also announced today the closing on December 11, 2012 of the sale of the 92-room Courtyard by Marriott hotel in Missoula, Montana for a price of $7.65 million.
Improvements at these hotels are anticipated to occur within the next 18 months. These improvements are expected to be funded with available cash or additional borrowings under the Company's senior secured revolving credit facility.
The Long Island, NY Hyatt Place and Tampa, FL Hampton Inn & Suites were acquired from OTO Development, LLC, (“OTO”). OTO is a growing developer and operator of select service hotels licensed from industry leaders Hilton, Marriott and Hyatt. The Company has been recognized numerous times by its franchisor affiliates as an outstanding developer and operator of select service hospitality product. OTO currently manages 34 hotels in nine states.
“Our pipeline is massive and we continue to find top brands in top markets at great capitalization rates that are accretive to our portfolio,” said Dan Hansen, president and CEO of the Company. “Our portfolio continues to improve through the consistent execution of our strategy.”
The Company also announced further consolidation into the executive office in Austin, Texas. Company President and CEO Dan Hansen, Chief Operating Officer Craig Aniszewski, Chief Financial Officer Stuart Becker and Chief Accounting Officer Troy Hester are all located in Austin. The Sioux Falls, South Dakota office remains open with key accounting and administrative personnel.
About Summit Hotel Properties, Inc.
Summit Hotel Properties, Inc. is a self-advised real estate investment trust focused on acquiring and owning premium-branded select-service hotels in the upscale and upper midscale segments. As of January 2, 2013, the Company's hotel portfolio consisted of 84 hotels, containing a total of 9,019 guestrooms, located in 21 states.
This press release contains statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are based upon the Company's expectations, but these statements are not guaranteed to occur. Investors should not place undue reliance upon forward-looking statements. These statements relate to, among other things, the Company's pending acquisitions, the availability of funding for the pending acquisitions and the expected increase in the maximum borrowing availability under the Credit Facility. No assurance can be given that the acquisitions will be completed when expected, on the terms described or at all, or that maximum borrowing availability under the Credit Facility will be increased. These actions are subject to numerous conditions, many of which are beyond the control of the Company, including, without limitation, general economic conditions, market conditions and other factors, including those set forth in the Risk Factors section of the Company's periodic reports and other documents filed with the Securities and Exchange Commission (the “SEC”).Copies are available on the SEC's website, www.sec.gov. The Company undertakes no obligation to update these statements after the date of this release.
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