AUSTIN, Texas, Oct. 1, 2018 /PRNewswire/ -- Summit Hotel Properties, Inc. (NYSE: INN) (the "Company") reported today that it has completed the acquisition of the 150-guestroom Residence Inn by Marriott Boston Watertown and the previously announced sale of the 148-guestroom Hyatt Place Fort Myers/at the Forum.
"We are thrilled with the acquisition of the Residence Inn by Marriott Boston Watertown, which represents a continuation of our capital allocation strategy by acquiring an exceptionally well-located hotel in a vibrant market," said Chairman, President and Chief Executive Officer Daniel P. Hansen. "With the completion of the sale of the Hyatt Place Fort Myers, our capital recycling program has generated $107 million of gross proceeds year-to-date at a blended capitalization rate of 7.7%, including estimated capital expenditures. We have successfully redeployed a portion of these proceeds through this off-market transaction into a high-quality asset with a superior RevPAR, EBITDA margin and going-in yield than the hotels that were sold. This acquisition will further enhance our diversified portfolio of premium-branded hotels with efficient operating models and will lead the portfolio in absolute RevPAR and hotel EBITDA margin."
On September 12, 2018, the Company completed the acquisition of the 150-guestroom Residence Inn by Marriott Boston Watertown for a purchase price of $71.0 million, or approximately $473,000 per key. Opened in August 2016, the hotel will require very limited capital expenditures, and the Company estimates a capitalization rate of 8.1 percent based on management's current estimate of the hotel's forward twelve-month net operating income. The Company estimates that the hotel will contribute approximately $1.7 million of EBITDAre through the remainder of 2018.
Located in the emerging submarket of Watertown near Cambridge, along the Charles River in Boston and adjacent to the new mixed-use development known as "Arsenal Yards," the Residence Inn by Marriott Boston Watertown is uniquely positioned to capture business from a large and diverse demand base. Prestigious universities such as Harvard, MIT, Boston University, Boston College, and Tufts University are within a few miles of the hotel and Kendall Square, Boston's premier tech hub and home to tech giants Microsoft, Facebook, Google, and Amazon as well as small startups and biotech companies, are in close proximity as well. The hotel is across the street from the transformative redevelopment of Arsenal Yards, which will provide an additional 200,000 square feet of office space, 425 residences, and 250,000 square feet of retail, including a luxury movie theater, numerous restaurants and shops, and a grocery store. In addition, the hotel's location, approximately six miles from downtown Boston, will allow the hotel to garner demand from one of the nation's strongest convention markets.
On September 28, 2018, the Company completed the sale of the 148-guestroom Hyatt Place Fort Myers/at the Forum located in Fort Myers, FL for a total sales price of $16.5 million, or approximately $111,000 per key. The sales price, plus estimated foregone capital improvements, represents a capitalization rate of 7.5 percent based on the hotel's net operating income for the twelve months ended August 31, 2018. The Company included the sale of this hotel in its updated 2018 guidance provided on August 1, 2018 and estimates that the hotel would have contributed approximately $0.3 million of EBITDAre from the sale date through the remainder of 2018.
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 October 1, 2018, the Company's portfolio consisted of 77 hotels with a total of 11,659 guestrooms located in 26 states.
For additional information, please visit the Company's website, www.shpreit.com and follow the Company on Twitter at @SummitHotel_INN.
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 Company's ability to realize financial and operational synergies; projections of revenues and expenses or other financial items; descriptions of the Company's plans or objectives for future operations; forecasts of EBITDAre; 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, 2017, 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.
SOURCE Summit Hotel Properties, Inc.