The Company anticipates assuming approximately $12.1 million in mortgage debt associated with the acquisition of the Southern California portfolio. The loan bears a fixed interest rate of 6.13% and has a maturity date of November 11, 2021.
The Company also announced that it has entered into a definitive agreement to acquire a 182-guestroom Hilton Garden Inn located in Houston, TX, for a purchase price of approximately $37.5 million. The Company expects to implement approximately $3.1 million in capital improvements to the hotel. The Company anticipates a post-renovation estimated NTM capitalization rate in the range of 8.25 percent to 9.0 percent based on management’s current estimate of net operating income.
“I have watched and admired this hotel for many years. We look forward to continuing the legacy of strong performance through capital investment and by working with a well-respected management team. This will be a great addition to our portfolio,” said Company President and CEO Dan Hansen.
The Hilton Garden Inn is located in the heart of the Houston Galleria and is surrounded by over 2,000 businesses as well as a lively mix of restaurants and shops. The hotel is within walking distance to the prominent Galleria Mall offering excellent shopping and dining experiences.The Company anticipates assuming approximately $17.9 million in mortgage debt associated with the acquisition of the Hilton Garden Inn. The loan bears a fixed interest rate of 6.22% and has a maturity date of November 01, 2016. The Company expects to complete these acquisitions in the fourth quarter of 2013. Certain acquisitions remain subject to satisfactory completion of the Company’s due diligence, including lender consent, and satisfaction of customary closing conditions. The Company can give no assurances that the acquisitions will be consummated. The Summit executive team is hosting its Institutional Investor and Analyst Conference today in Minneapolis, Minnesota. The executive management team will present on the Company’s premium select-service portfolio as well as the strength and success of their clustering strategy. The presentation will be followed by a property tour of both the urban and suburban clusters in the Minneapolis market. A copy of the presentation will be available on the Company’s website, www.shpreit.com, in the Investor Relations section. About Summit Hotel Properties Summit Hotel Properties, Inc. is a publicly traded real estate investment trust focused primarily on acquiring and owning premium-branded select-service hotels in the upscale and upper midscale segments of the lodging industry. As of September 24, 2013, the Company’s portfolio consisted of 93 hotels with a total of 10,976 guestrooms located in 24 states.