AUSTIN, Texas, Nov. 13, 2017 /PRNewswire/ -- Summit Hotel
Properties, Inc. (NYSE: INN) ("Summit" or the "Company") today
announced that it has entered into definitive agreements to acquire
four hotels totaling 652 guestrooms for an aggregate purchase price
of $164 million, or approximately
$252,000 per key. The portfolio
includes the 207-guestroom Courtyard New Haven at Yale, the 148-guestroom Hilton Garden Inn
Boston/Waltham, the 175-guestroom Residence Inn Cleveland Downtown,
and the 122-guestroom Homewood Suites by Hilton Tucson/St. Philip's
Plaza University. The aggregate purchase price represents a 12.1x
multiple on the hotels' combined trailing twelve-month EBITDA as of
September 2017, and the portfolio
achieved RevPAR of $124 during that
same period.
"We are thrilled with the opportunity to acquire this portfolio
of four exceptionally well-located hotels where we see considerable
long-term value. All four hotels are located in strong markets,
three of which are new for Summit and further enhance our
geographic diversification. The properties are clear market leaders
as the portfolio achieved an average RevPAR index of 122.3 for the
twelve-month period ended September
2017," said Daniel P. Hansen,
the Company's Chairman, President and Chief Executive Officer. "The
off-market transaction will bring our year-to-date acquisition
activity to nearly $600 million as we
continue to grow our portfolio with a prudent capital allocation
strategy focused on acquiring premium-branded upscale hotels with
efficient operating models while maintaining a geographically
diversified portfolio," commented Mr. Hansen.
The Company estimates a capitalization rate, including planned
capital expenditures, of 7.8% based on management's current
estimate of the hotel's net operating income in 2018. In
conjunction with the anticipated acquisitions, Summit will enter
into new franchise agreements with the respective franchisors for
the hotels and expects to spend approximately $7.0 to $9.0 million in capital improvements over
the next two years.
The closing of the transactions is subject to the satisfaction
of certain customary closing conditions and is expected to occur
before the end of November 2017.
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 November 13,
2017, the Company's portfolio consisted of 79 hotels with a
total of 11,590 guestrooms located in 24 states.
For additional information, please visit the Company's website,
www.shpreit.com and follow the Company 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 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
anticipated closing date of the acquisitions; projections of the
acquisitions' net operating income and capital expenditures for
2018; and descriptions of the Company's plans to enter into
franchise agreements and make capital improvements with respect the
acquisitions. 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 information contained in this press
release, whether as a result of new information, future events or
otherwise.
Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures
as defined under Securities and Exchange Commission (SEC) rules and
regulations. These measures are not in accordance with, or an
alternative to, measures prepared in accordance with U.S. generally
accepted accounting principles("GAAP"), and may be different from
non-GAAP measures used by other companies. In addition, these
non-GAAP measures are not based on any comprehensive set of
accounting rules or principles. Non-GAAP measures have limitations
in that they do not reflect all of the amounts associated with the
hotel's results of operations determined in accordance with
GAAP.
The Company has not provided a reconciliation of the trailing
twelve month EBITDA to net income, the most comparable GAAP
measure, for the prospective acquisitions, because the information
required to prepare the reconciliation, such as depreciation and
amortization expense, is not available from the seller.
The EBITDA and net operating income information provided in this
press release was obtained from the seller during the due diligence
process and has not been adjusted by us or audited or reviewed by
the Company's independent auditors.
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SOURCE Summit Hotel Properties, Inc.