Summit buys 10 US hotels for $114.6 million

Summit Hotel Properties announced on Wednesday that it has entered into agreements to buy 10 U.S. hotels for a total of US$114.6 million.

The purchase includes eight unencumbered hotels containing an aggregate of 1,043 guestrooms from certain affiliates of Hyatt Hotels Corp., Chicago, for US$87.4 million.

Summit also entered into an agreement to purchase a 98-room Hilton Garden Inn Fort Worth North, located in Fort Worth, Texas, for a purchase price of US$7.2 million and an agreement to purchase the 178-room Residence Inn Salt Lake City – City Center for a purchase price of US$20 million, the latter of which will be funded in part by assuming US$14.1 million of existing mortgage debt with a fixed interest rate of 6.11% per annum and maturing in January 2016.

Summit Hotel Properties Inc., Sioux Falls, South Dakota, said it expects to complete the purchases in the fourth quarter. To raise funds for the purchase, the REIT has launched an offering of 10 million shares.

The eight hotels purchased from Hyat are primarily in suburban locations and include:

  • 127-room Hyatt Place Phoenix – North
  • 151-room Hyatt Place Chicago/Lombard/Oak Brook, located in Lombard, Illinois
  • 127-room Hyatt Place Dallas/Arlington, located in Arlington, Texas
  • 127-room Hyatt Place Scottsdale/Old Town, located in Scottsdale, Arizona
  • 135-room Hyatt Place Denver Tech Center, located in Englewood, Colorado
  • 135-room Hyatt House Denver Tech Center, located in Englewood, Colorado
  • 127-room Hyatt Place Denver – South/Park Meadows, located in Lone Tree, Colorado
  • 123-room Hyatt Place Baltimore/Owings Mills, located in Owings Mills, Maryland

Summit said that for the 12-month period ended June 30, on a weighted-average basis, the eight Hyatt hotels had an occupancy of 74%, an ADR of US$96.42 and RevPAR of US$71.35. Summit plans to enter into a management agreement for the eight hotels with Hyatt affiliate Select Hotels Group LLC.

“This acquisition is a result of our great relationship with Hyatt and we look forward to exploring future opportunities and continuing to grow that relationship,” said Dan Hansen, Summit president and CEO.