Summit Hotel Properties Portfolio Transformation Continues

ANNOUNCES SALE OF SIX PROPERTIES FOR $108.3 MILLION

REINSTATES PURCHASE AGREEMENT TO SELL 10 PROPERTIES FOR $89.1 MILLION

ACQUIRES TWO HOTELS FOR $109.0 MILLION

Feb 16, 2016, 16:35 ET from Summit Hotel Properties, Inc.

AUSTIN, Texas, Feb. 16, 2016 /PRNewswire/ -- Summit Hotel Properties, Inc. (NYSE: INN) ("the Company") announced today the completion of the sale of six hotels with a total of 707 guestrooms to affiliates of American Realty Capital Hospitality Trust, Inc. ("ARCH") for an aggregate selling price of $108.3 million on February 11, 2016 (the "February Closing") as follows:

LOCATION

ROOMS

Fairfield Inn & Suites - Spokane, WA

84

Fairfield Inn & Suites - Denver, CO

160

SpringHill Suites - Denver, CO

124

Hampton Inn - Ft. Collins, CO

75

Fairfield Inn & Suites - Bellevue, WA

144

Hilton Garden Inn - Ft. Collins, CO

120

707

 

The sales proceeds were used to complete certain reverse like-kind exchanges under Section 1031 of the Internal Revenue Code to defer otherwise taxable gains of approximately $74.0 million and to pay down the Company's $300.0 million unsecured revolving credit facility by $105.0 million, resulting in an outstanding balance of $40.0 million.

"This sale represents another notable success for us in executing on our capital recycling strategy and is particularly significant given the current volatile market conditions.  It demonstrates our commitment to value creation and our ability to be creative in achieving our goals," commented Dan Hansen, the Company's President and Chief Executive Officer.

Reinstated Purchase Agreement On February 11, 2016, the Company also reinstated the purchase and sale agreement with affiliates of ARCH (the "ARCH Affiliate") for the sale of the following 10 hotels with a total of 996 guestrooms at the original selling price of $89.1 million (the "Reinstated Purchase Agreement"):

LOCATION

ROOMS

Residence Inn - Jackson, MS

100

Holiday Inn Express - Vernon Hills, IL

119

Courtyard - Germantown, TN

93

Courtyard - Jackson, MS

117

Fairfield Inn & Suites - Germantown, TN

80

Residence Inn - Germantown, TN

78

Aloft - Jacksonville, FL

136

Staybridge Suites - Ridgeland, MS

92

Homewood Suites - Ridgeland, MS

91

Courtyard - El Paso, TX

90

996

The transaction was previously canceled just prior to its originally scheduled closing date of December 29, 2015 and ARCH forfeited its $9.1 million earnest money to the Company as liquidated damages upon termination of the transaction.  The Reinstated Purchase Agreement requires the ARCH Affiliate to deposit $7.5 million of new earnest money with an escrow agent to support the closing of the reinstated sale on or before December 30, 2016.  The $7.5 million earnest money deposit is non-refundable to the ARCH Affiliate except in limited circumstances.

Execution of $27.5 Million Loan Agreement On February 11, 2016, the Company entered into a $27.5 million loan with ARCH and $20.0 million of the loan proceeds were applied towards the purchase price of the six hotels sold in the February Closing and $7.5 million of the loan proceeds were applied towards the new earnest money deposit required by the Reinstated Purchase Agreement. The loan has an initial maturity date of February 11, 2017 and two one-year extension options that may be exercised by ARCH subject to certain conditions.

Acquisition of Two Hotels for $109.0 Million On January 19, 2016, the Company acquired the 226-guestroom Courtyard by Marriott® located in Nashville, Tennessee, for a total purchase price of $71.0 million and entered into a management agreement with Interstate Hotels & Resorts.  The Company plans to spend approximately $0.3 million on capital improvements at the property in 2016, and estimates a capitalization rate, including planned capital expenditures, in the range of 8.25 percent to 8.75 percent based on management's current estimate of the hotel's 2016 net operating income.  The hotel is located in the vibrant Midtown neighborhood near many of the area's finest restaurants and entertainment venues as well as Vanderbilt University, the Ryman Auditorium, and Bridgestone Arena.  In addition, the hotel benefits from proximity to Music City Center, Historic 2nd Avenue, Country Music Hall of Fame, Nissan Stadium, Nashville Convention Center and Centennial Sportsplex all located less than a mile away.

On January 20, 2016, the Company acquired the 160-guestroom Residence Inn by Marriott® located in Atlanta, Georgia, for a total purchase price of $38.0 million and entered into a management agreement with Interstate Hotels & Resorts.  The Company anticipates limited capital improvements in 2016, and estimates a capitalization rate in the range of 8.25 percent to 8.75 percent based on management's current estimate of the hotel's 2016 net operating income.  The hotel is located in the heart of Atlanta's diverse Midtown neighborhood and conveniently located near the High Museum of Art, Alliance Theatre, Atlantic Station, Center Stage, and the Fox Theatre.

About Summit Hotel Properties Summit Hotel Properties, Inc. is a publicly-traded real estate investment trust focused primarily on owning premium-branded, select-service hotels in the Upscale and Upper-midscale segments of the lodging industry.  As of February 16, 2016, the Company's portfolio consisted of 83 hotels with a total of 11,099 guestrooms located in 23 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 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 Company's ability to realize embedded growth from the deployment of renovation capital; projections of the Company's revenues and expenses, capital expenditures or other financial items; descriptions of the Company's plans or objectives for future operations, acquisitions, dispositions, financings or services; forecasts of the Company's future financial performance and potential increases in average daily rate, occupancy, RevPAR, room supply and demand, FFO and AFFO; the Company's outlook with respect to pro forma RevPAR, pro forma RevPAR growth, RevPAR, RevPAR growth,  AFFO,  AFFO per diluted unit and renovation capital deployed; and descriptions of assumptions underlying or relating to any of the foregoing expectations regarding the timing of their occurrence. 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 any forward-looking statements, whether as a result of new information, future events or otherwise.

For information about the Company's business and financial results, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of the Company's Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC, and its quarterly and other periodic filings with the SEC. The Company undertakes no duty to update the statements in this release to conform the statements to actual results or changes in the Company's expectations.

Logo - http://photos.prnewswire.com/prnh/20150708/233320LOGO

 

SOURCE Summit Hotel Properties, Inc.



RELATED LINKS

http://www.shpreit.com