Summit Hotel Properties, Inc. (NYSE:INN) (the “Company”), a real estate investment trust (REIT) specializing in the ownership of premium-branded hotels in the upscale and upper midscale segments, today announced recent property acquisitions and dispositions as well as an interest rate swap agreement.
Acquisitions and Dispositions
- A 112-room Hilton Garden Inn property in Nashville (Smyrna), TN for a purchase price of $12.0 million including planned property improvements. The Company anticipates a post-renovation estimated NTM capitalization rate in the range of 8 to 9 percent.
- A 103-room Courtyard by Marriott in Arlington, TX for a purchase price of $15.25 million including planned property improvements. The Company anticipates a post-renovation estimated NTM capitalization rate in the range of 8 to 9 percent.
In addition to these acquisitions, the Company completed the sale of three assets in Twin Falls, ID; Holiday Inn Express, Hampton Inn and AmericInn. The hotels were sold at an economic cap rate in the range of 8.5 to 9 percent on a trailing twelve month basis. The net proceeds from the aggregate sale price of approximately $16.5 million will be applied to outstanding debt.
“We are continuing our strategy of recycling capital and transforming our portfolio,” said Dan Hansen, Company president and CEO. “These acquisitions and dispositions demonstrate the commitment to our shareholders on delivering top brands in top markets and creating great value for our investors.”
Interest Rate Swap Agreement
In addition to the recently announced improvements made to the Company’s senior secured revolving credit facility, the Company entered into three interest rate swap agreements that fixed 90-day LIBOR on $29.7 million of its variable rate debt with General Electric Capital Corporation. On May 4, the company had fixed LIBOR, at a weighted average rate of 1.137%, on $29.7 million of its variable rate debt through three interest rate swap agreements. After accounting for the three interest rate swap agreements, the company's total debt had a weighted average effective interest rate of 5.3% and fixed interest rates on 80% of its term debt as of March 31, 2012.