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Summit Hotel Properties, Inc. (NYSE: INN) (the “Company”) today announced that it has four hotel properties, containing an aggregate of 503 guestrooms, under contract to acquire.
The Company announced that it has entered into definitive agreements to acquire a portfolio of three Southern California hotels containing an aggregate of 321-guestrooms for a purchase price of approximately $59.0 million. The Company expects to implement approximately $2.9 million in capital improvements to the portfolio. The Company anticipates a post-renovation estimated NTM capitalization rate for the portfolio in the range of 8.25 percent to 9.0 percent based on management’s current estimate of net operating income.
“These top quality assets in high barrier to entry markets provide significant expansion of our west coast presence,” said Company President and CEO Dan Hansen. “We welcome the opportunity to work with a new, high quality management team and continue to improve their performance.”
The Company plans to acquire the 98-guestroom Hampton Inn located in Santa Barbara (Goleta), CA. This hotel was built in 2007 and has several large corporate demand generators including Raytheon and the US Postal Service. The government and educational institutes, such as Vandenberg Air Force Base and the University of California Santa Barbara, drive additional demand. The hotel has strong leisure demand and is expected to add to it with the addition of marketing dollars from the city as well as the improving economy.
The second property is a 115-guestroom Hampton Inn & Suites located in Ventura (Camarillo), CA. The hotel was built in 2004 and recently added The Lodging Association to the community. There is a strong focus in the community to bring additional leisure demand to the area. There are also several large corporate demand generators including Verizon and Lockheed Martin.
The third property is a 108-guestroom Hampton Inn & Suites located in San Diego (Poway), CA. Built in 2008, the hotel has both strong weekday business demand and weekend leisure demand. The Poway Business Park has grown consistently since its inception in 2007 and continued expansion is expected.