SIOUX FALLS, S.D.— Summit Hotel Properties, Inc. (the “Company”) announced that it has entered into a definitive agreement to acquire a portfolio of eight unencumbered hotels containing an aggregate of 1,043 guestrooms (the “Hyatt Portfolio”) from certain affiliates of Hyatt Hotels Corporation for a purchase price of approximately $87.4 million, subject to closing prorations and adjustments.
The Company intends to enter into an agreement with Select Hotels Group, L.L.C., an affiliate of Hyatt, to operate each hotel.
The hotels in the Hyatt Porfolio include: Hyatt Place-Arlington; Hyatt Place-Park Meadows; Hyatt Place-Denver Tech Center; Hyatt House-Denver Tech Center; Hyatt Place-Owings Mills; Hyatt Place-Lombard; Hyatt Place-Phoenix; Hyatt Place-Scottsdale.
For the twelve-month period ended June 30, 2012, on a weighted-average basis, the hotels in the Hyatt Portfolio had occupancy of 74.0 percent, an average daily rate (“ADR”) of $96.42 and revenue per available room (“RevPAR”) of $71.35.
“We continue to see terrific opportunities to grow our portfolio,” said Dan Hansen, president and CEO of the Company, in an announcement. “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.”
Additional Two Hotels Under Contract
The Company also entered into an agreement to purchase a 98-room Hilton Garden Inn in Fort Worth, Texas for a purchase price of $7.2 million and an agreement to purchase a 178-room Residence Inn in Salt Lake City, Utah for a purchase price of $20.0 million. The Company intends to fund the purchase price of the Salt Lake City Residence Inn in part by assuming approximately $14.1 million of existing first mortgage debt having a fixed interest rate of 6.11 percent per annum and maturing in January 2016.
The Company expects to complete both acquisitions in the fourth quarter of 2012.
The Company expects to spend an aggregate of approximately $8.9 million for improvements at these two hotels within 18 months after closing of the acquisitions, funding the improvements with available cash or additional borrowings under the Company’s senior secured revolving credit facility.