AUSTIN, Texas, July 8, 2015 /PRNewswire/ -- Summit Hotel Properties, Inc. (NYSE: INN) (the "Company") today announced that it recently completed the acquisition of the Hampton Inn located in Boston (Norwood), Mass. and the Hotel Indigo located in Asheville, N.C. for an aggregate purchase price of $59.0 million.
The Company acquired the 139-guestroom Hampton Inn located in Boston (Norwood), Mass. on June 18, 2015 for a total purchase price of $24.0 million and has entered into a management agreement with Interstate Hotels & Resorts. The Company plans to spend approximately $2.3 million on capital improvements at the property during the latter part of 2016, which will include the conversion to a Hampton Inn & Suites by Hilton, and anticipates an estimated forward capitalization rate in the range of 8.0 percent to 8.5 percent based on management's current estimate of the hotel's 2016 net operating income. The Company currently estimates the hotel will contribute approximately $1.2 million of earnings before interest, taxes, depreciation and amortization ("EBITDA") through the balance of 2015.
"We are thrilled with our acquisition of the Hampton Inn in the growing suburb of Boston. Norwood, with its proximity to downtown Boston, coupled with its great area amenities and direct commuter train service into the city, is a wonderful addition to our portfolio," said Daniel P. Hansen, President and Chief Executive Officer. "We see strong upside potential in the property with the planned renovation and conversion to a Hampton Inn & Suites in a market with limited supply growth and strong demand generators."
The Company also acquired the 115-guestroom Hotel Indigo located in the heart of downtown Asheville, N.C. on June 30, 2015 for a total purchase price of $35.0 million and entered into a management agreement with Interstate Hotels & Resorts. The Company plans to spend approximately $0.4 million on capital improvements during the next twelve months and anticipates an estimated forward capitalization rate in the range of 8.0 percent to 8.5 percent based on management's current estimate of the hotel's 2016 net operating income. The Company currently estimates the hotel to contribute approximately $1.8 million of EBITDA through the balance of 2015.
"Our team is extremely pleased with the acquisition of the Hotel Indigo centrally located in the vibrant Asheville market," commented Hansen. "The Asheville market thrives on tourism and leisure demand, as well as several economic drivers such as health care, advanced manufacturing and retail trade, which makes this diverse and highly desirable market a perfect addition to our portfolio."
The acquisitions were funded by advances on the Company's senior unsecured credit facility.
About Summit Hotel Properties
Summit Hotel Properties, Inc. is a publicly-traded real estate investment trust focused primarily on acquiring and owning premium-branded, select-service hotels in the upscale and upper midscale segments of the lodging industry. As of July 8, 2015, the Company's portfolio consisted of 93 hotels with a total of 11,933 guestrooms located in 23 states.
For additional information, please visit the Company's website, www.shpreit.com.
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.