Summit Hotel Properties (NYSE: INN) (“the Company”) announced today it has closed on the joint venture transaction for the acquisition of a 252-room Holiday Inn Express® property (the “Hotel”) located on Fisherman’s Wharf in San Francisco, CA.
The Company has acquired the Hotel from an unaffiliated seller for a purchase price of $60.5 million through a joint venture with an affiliate of IHG ( InterContinental Hotels Group). The Hotel joins the 10 IHG-branded hotels in the Company’s portfolio, including the Holiday Inn Atlanta-Gwinnett Place and the Staybridge Suites Denver that were previously acquired under our current sourcing agreement. The joint venture gives the Company an approximate 80% ownership interest in the Hotel, which will be operated under a long-term IHG management agreement. The Company currently expects the joint venture to spend an aggregate of approximately $3.0 million for improvements at the Hotel within the next 12 months. The Company anticipates a post-renovation estimated NTM EBITDA multiple for the Hotel in the range of 11.0x to 12.0x based on management’s current estimate of EBITDA.
“We are excited about the opportunity to enter the San Francisco market,” said Dan Hansen, president and CEO of the Company. “We are also very pleased that our relationship with IHG has provided us with the opportunity to source quality acquisitions like this and we expect to continue our growth with them.”
The Hotel is perfectly positioned in the heart of the wharf district in the midst of the bustling waterfront area. Leisure guests can spend a sunny day at Pier 39, take a tour of Alcatraz or grab a ride on one of San Francisco’s iconic trolleys. Fisherman's Wharf also offers souvenir shopping and world-class seafood. Business travelers will enjoy the proximity to the corporate offices of Levi Strauss, Williams-Sonoma, Diversity Alliance and others in nearby downtown San Francisco. The Hotel's location is also near the Financial District, Art Institute and Academy of Art University. And, all guests are able to enjoy the complimentary Express Start® breakfast bar option before beginning their day.