Summit Grabs Six Hotels in Deals Totaling $170M
- May 31, 2013
During the period between the closing of its initial public offering in February 2011 and the end of 2012, Summit Hotel Properties Inc. amassed a portfolio of 24 properties, and with the recent purchase of six assets for an aggregate $170.1 million, there appears to be no end in sight to the company’s shopping spree.
“These acquisitions squarely hit the marks of our simple strategy; top brands in top markets,” Dan Hansen, president & CEO of Summit, said in a prepared statement.
Summit added 786 guestrooms to its collection in one fell swoop with the $153 million purchase of four hotels from White Lodging Services Corp. The deal took the lodging REIT to new territory, literally. The 135-guestroom Fairfield Inn & Suites by Marriott and the 198-guestroom SpringHill Suites by Marriott in Louisville, Ky., mark Summit’s debut in the southern city. The company made its entrée into Indianapolis with the remaining two properties, a 156-guestroom SpringHill Suites by Marriott and a 297-guestroom Courtyard by Marriott.
In addition to completing the White Lodging transaction, Summit just snapped up a Holiday Inn Express & Suites in Minnetonka, Minn., and a Hilton Garden Inn in neighboring Eden Prairie, for a total of $17.1 million, thereby increasing its presence in metropolitan Minneapolis by 190 guestrooms.
And evidently, there’s more to come. In research released just days ago, wealth management and private equity firm Robert W. Baird & Co. notes that Summit’s outlook remains solid and that it expects the REIT to carry on buying assets in both one-off and portfolio deals.
“Summit continues to grow its portfolio and is gradually moving toward more urban, higher-growth assets similar to its recent acquisitions in downtown Indianapolis and Louisville,” Michael Bellisario, research analyst with R.W. Baird, told Commercial Property Executive. “The company has a full pipeline and is still seeing limited competition from other buyers, which has allowed Summit to acquire properties at attractive yields.”
Other additions to Summit’s rapidly expanding group of hotels this year include the 252-room Holiday Inn Express property on San Francisco’s Fisherman’s Wharf, which the REIT picked up for $60.5 million through a joint venture, and a three-property portfolio of Hyatt hotels that came with a price tag of $36.1 million. Summit also entered into a definitive agreement to become the new owner of five assets in metropolitan New Orleans in a deal valued at $135 million.