SUMMIT HOTEL PROPERTIES COMPLETES ACQUISITION OF EMBASSY SUITES BY HILTON TUCSON / PALOMA VILLAGE
AUSTIN, Texas, Jan. 4, 2022
AUSTIN, Texas, Jan. 4, 2022 /PRNewswire/ -- Summit Hotel Properties, Inc. (NYSE: INN) (the "Company") today announced that it completed the acquisition of the 120-guestroom Embassy Suites by Hilton Tucson / Paloma Village for $25.5 million through its joint venture with GIC on December 21, 2021. The investment represents a high-quality, market-leading hotel in a rapidly growing market.
The property’s excellent location and dominant Embassy Suites brand affiliation have allowed the hotel to consistently rank at the top of its competitive set, commanding an average RevPAR Index of nearly 150% over the last five years. While occupancy and ADR in the Tucson market are historically strongest in February and March driven predominantly by leisure travel, the Embassy Suites benefits from year-round demand from a multitude of sources within the government, group, and business transient segments. The Company’s joint venture with GIC also owns the Homewood Suites by Hilton Tucson/St. Philip’s Plaza University located less than three miles south of the Embassy Suites, which will allow the Company to implement operational synergies and revenue enhancement strategies that will benefit both hotels.
Situated on nearly six acres, the Embassy Suites’ location in the Catalina Foothills places it among the highest end single family homes, shopping, and dining in Tucson and provides significant barriers to entry. The Embassy Suites was built in 2007, and since that time, no other hotels have been built within a three-mile radius. The hotel is adjacent to La Encantada – an outdoor luxury shopping center with high-quality dining options and an attractive tenant roster including Apple, Coach, Kendra Scott, Crate & Barrel, Williams Sonoma, Pottery Barn, and Lululemon, among others. Directly east of the Embassy Suites is La Paloma Country Club – a private club featuring 27 holes of Jack Nicklaus Signature Design Golf, world class tennis facilities, a resort pool complex, and a variety of dining options. Additional demand in the market is generated by the University of Arizona and its health network, government and related contracting businesses, youth sports teams, national park enthusiasts, and corporate travelers.
The joint venture acquired the property with a combination of cash and an assumed loan that has a balance of approximately $13.3 million. The loan has a fixed interest rate of 4.99% and a maturity date of June 2028. After this transaction, the Company maintains nearly $450 million of total liquidity and over $150 million of current investment capacity permitted under its current credit facility amendments to pursue future investment opportunities.
The Company expects the hotel to generate a full year 2022 net operating income yield between 7.0% and 7.5%.
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 January 4, 2022, the Company’s portfolio consisted of 74 hotels, 61 of which are wholly owned, with a total of 11,518 guestrooms located in 23 states.
For additional information, please visit the Company’s website, www.shpreit.com, and follow 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 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, 2020, 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.
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SOURCE Summit Hotel Properties, Inc.
Summit Hotel Properties, Inc.
Symbol: INN
CIK: 1497645
Exchange: NYSE
Founded: 2004 (20 years)
Type of REIT: Equity REIT
Listing Status: Public
Market Capitalization: Small-Cap
REIT Sector: Hotel, Resorts
REITRating is REITNote's Real Estate Investment Trust industry-specific rating and ranking system. The overall score is out of ten points, with ten being the best score.
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Last updated: 2024-11-21 - v1.3