AUSTIN, TX – Summit Hotel Properties, Inc today announced that it has entered into multiple purchase and sale agreements with affiliates of American Realty Capital Hospitality Trust, Inc for the sale of 26 hotels, for a combined price of approximately $351.4 million. The total sales price represents a capitalization rate in the mid 7 percent range based on trailing twelve month net operating income as of March 31, 2015, which includes planned capital improvements at the properties.
“We are very excited at the opportunity to recycle capital on a larger scale. This proposed transaction will enable us to continue to improve our asset mix and upgrade our portfolio with additional accretive acquisitions with strong growth profiles and diverse demand generators. Recycling capital to create long-term value for our shareholders is a proven strategy for us and one we consider to be a core strength,” commented Summit’s President and CEO, Dan Hansen.
Based on trailing twelve month hotel EBITDA, the 26 hotels, containing 2,793 guestrooms, represent approximately 19.6 percent of the Company’s pro forma hotel EBITDA. The trailing twelve month RevPAR among the 26 properties of $81.30 was 19.7 percent below the pro forma RevPAR for the remaining 64 hotels of $101.26 as of March 31, 2015.
“Through this transformational transaction, we expect to completely deploy the disposition proceeds into acquisitions that will continue to improve our portfolio and provide future growth for our shareholders,” said Hansen.
The Company has identified a robust pipeline of acquisitions and has approximately $100 million of acquisitions under contract, which are estimated to close prior to the first tranche of dispositions in September 2015.
The sale of the properties is scheduled to close in three separate tranches, with the current estimated sale dates in September 2015, October 2015 and January 2016. The agreements are subject to customary and standard closing conditions.
Those hotels included in the agreements for sale are as follows:
LOCATION ROOMS
ESTIMATED SALE
DATE
Hampton Inn – Medford, OR 75 Sep-15
DoubleTree – Baton Rouge, LA 127 Sep-15
Fairfield Inn & Suites – Baton Rouge, LA 78 Sep-15
SpringHill Suites – Baton Rouge, LA 78 Sep-15
TownePlace Suites – Baton Rouge, LA 90 Sep-15
Hampton Inn & Suites – El Paso, TX 139 Sep-15
Hampton Inn – Ft. Wayne, IN 118 Sep-15
Residence Inn – Ft. Wayne, IN 109 Sep-15
Courtyard – Flagstaff, AZ 164 Sep-15
SpringHill Suites – Flagstaff, AZ 112 Sep-15
Residence Inn – Jackson, MS 100 Oct-15
Holiday Inn Express – Vernon Hills, IL 119 Oct-15
Courtyard – Germantown, TN 93 Oct-15
Courtyard – Jackson, MS 117 Oct-15
Fairfield Inn & Suites – Germantown, TN 80 Oct-15
Residence Inn – Germantown, TN 78 Oct-15
Aloft – Jacksonville, FL 136 Oct-15
Staybridge Suites – Ridgeland, MS 92 Oct-15
Homewood Suites – Ridgeland, MS 91 Oct-15
Courtyard – El Paso, TX 90 Oct-15
Fairfield Inn & Suites – Spokane, WA 84 Jan-16
Fairfield Inn & Suites – Denver, CO 160 Jan-16
SpringHill Suites – Denver, CO 124 Jan-16
Hampton Inn – Ft. Collins, CO 75 Jan-16
Fairfield Inn & Suites – Bellevue, WA 144 Jan-16
Hilton Garden Inn – Ft. Collins, CO 120 Jan-16
2,793
WHAT TO TAKE AWAY FROM THIS ARTICLE:
- Recycling capital to create long-term value for our shareholders is a proven strategy for us and one we consider to be a core strength,” commented Summit's President and CEO, Dan Hansen.
- The Company has identified a robust pipeline of acquisitions and has approximately $100 million of acquisitions under contract, which are estimated to close prior to the first tranche of dispositions in September 2015.
- The total sales price represents a capitalization rate in the mid 7 percent range based on trailing twelve month net operating income as of March 31, 2015, which includes planned capital improvements at the properties.
