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Summit Hotel Properties Reports Second Quarter 2013 Results

“The conversion of the Hyatt Place in downtown Minneapolis is progressing as planned. We anticipate an opening in fourth quarter of 2013 with positive effect on earnings in 2014 and beyond,” said Mr. Hansen. “We believe the downtown Minneapolis market is under-served by premium select-service offerings and thus expect great results from this hotel.”

Dispositions

During the second quarter of 2013, the Company continued its strategy of recycling capital by selling hotels that it no longer considers strategic.
  • On May 1, 2013, the Company sold the Holiday Inn Express (63-guestrooms) and the Holiday Inn (119-guestrooms) in Boise, ID for $3.0 million and $9.6 million, respectively.
  • On May 30, 2013, the Company sold the Courtyard by Marriott (96-guestrooms) in Memphis, TN for $4.2 million.

Capital Markets

During the second quarter of 2013, the Company closed on $102.1 million in debt financing including the following transactions.
  • On May 21, 2013, the Company acquired a Hilton Garden Inn in Minneapolis (Eden Prairie), MN for a total purchase price of $10.2 million, including $6.4 million in assumed mortgage debt with Wells Fargo, N.A. The loan bears interest at a fixed rate of 5.57% and has a January 1, 2016 maturity date.
  • On May 21, 2013, the Company acquired a Holiday Inn Express & Suites in Minneapolis (Minnetonka), MN for a total purchase price of $6.9 million, including $3.7 million in assumed mortgage debt with Wells Fargo, N.A. The loan bears interest at a fixed rate of 5.53% and has an October 1, 2015 maturity date.
  • On May 23, 2013, the Company closed on a $92.0 million senior secured interim loan with KeyBank National Association, as administrative agent and lender, and Regions Bank, as lender. The “Interim Loan” is associated with four recent acquisitions: the Fairfield Inn & Suites in Louisville, KY, the Courtyard by Marriott in Louisville, KY, the SpringHill Suites in Indianapolis, IN, and the Courtyard by Marriott in Indianapolis, IN. This loan bears interest at a variable rate of 1-, 2-, 3, or 6- month LIBOR plus 225 basis points or the base rate plus 125 basis points and matures on November 23, 2013 with an option for a six month extension.

Capital Investment

The Company invested $8.8 million during the second quarter of 2013 on renovations at ten properties. Projects ranged from lobby and public space improvements to complete guestroom renovations, including all furniture, soft goods, and guest bathrooms.

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