Summit Hotel Properties (NYSE: INN
), a real estate investment trust, agreed to purchase two hotel portfolios for $114.6 million. The REIT plans to use the net proceeds from its latest public offering to finance the acquisitions, which are set to close next quarter.
In the first transaction, affiliates of Hyatt Hotels Corp. (NYSE: H) will sell eight unencumbered properties with 1,043 guestrooms for $87.4 million or $83,797 per room. The assets were built in the mid- to late-1990s and include:
- 127-room Hyatt Place-Arlington in Arlington, TX;
- 127-room Hyatt Place-Park Meadows in Lone Tree, CO;
- 126-room Hyatt Place-Denver Tech Center in Englewood, CO;
- 135-room Hyatt House-Denver Tech Center in Englewood, CO;
- 123-room Hyatt Place-Owings Mills in Owings Mills, MD;
- 151-room Hyatt Place-Lombard in Lombard, IL;
- 127-room Hyatt Place-Phoenix in Phoenix, AZ; and,
- 127-room Hyatt Place-Scottsdale in Scottsdale, AZ.
Summit will partner with Select Hotels Group LLC, an affiliate of Hyatt, to operate each hospitality property.
In the second exchange, Summit will buy the 98-room Hilton Garden Inn in Fort Worth, TX, for $7.2 million or $73,469 per key and the 178-room Residence Inn in Salt Lake City, UT, for $20 million or $112,360 per room. The REIT will fund the purchase of the Salt Lake City property in part by assuming approximately $14.1 million of existing first mortgage debt. These acquisitions are subject to franchisor and, in the case of the Residence Inn, bank approval.
Summit plans to spend around $8.9 million for improvements at the Hilton Garden Inn and Residence Inn within 18 months after closing of the deals, funding the improvements with available cash or additional borrowings under the REIT’s senior secured revolving credit facility.