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TheStreet Open House

Summit Hotel Properties Reports Second Quarter Results

Stocks in this article: INN

Year-to-Date Highlights For the six-months ended June 30, 2012, pro forma RevPAR increased 9.5 percent to $66.21 as a result of ADR growth of 2.9 percent to $95.48 and a 6.4 percent increase in occupancy to 69.3 percent. RevPAR improvement was the result of the recent rebranding of 10 hotels, positive effect of recent renovations to an additional 10 hotels and general economic improvement in some of the Company’s markets. Adjusted EBITDA was $25.4 million for the first six-month period of 2012, a 27.2 percent increase over the same period in 2011.

Subsequent Events On July 2, 2012, the Company purchased the 96 room Residence Inn by Marriott in Dallas (Arlington), TX. Including purchase price and anticipated improvements the Company acquired the hotel for $15.5 million. This is the second hotel acquired by the Company in the Dallas, TX sub-market of Arlington. Since its IPO in February, 2011, the Company has acquired 12 additional hotels, adding 1,336 additional guestrooms to its portfolio.

On July 16, 2012, the Company completed the conversion of its previously branded Comfort Suites in Fort Worth, TX into a 70 room Fairfield Inn and Suites by Marriott. This conversion completes the rebranding of all eleven of the Company’s former Choice Hotels International branded hotels.

On August 3, 2012, the Company expanded its capacity under its $125 million Senior Secured Revolving Credit Facility to $112.0 million by pledging three additional hotels under the borrowing base. The additional collateral pledged includes: 1) 96 room Residence Inn – Dallas (Arlington), TX, 2) 103 room Courtyard by Marriott – Dallas (Arlington), TX, and 3) 90 room Courtyard by Marriott – El Paso, TX. Following the increased availability under its credit facility the Company continues to have seven unencumbered hotels.

“We have been very active in executing on our strategy of deploying capital in the top fifty U.S. markets,” noted Dan Hansen. “In addition to acquiring the best brands in markets that align with our growth strategy, we have been successful in selling hotels and land parcels in markets that no longer meet our investment criteria.”

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