SIOUX FALLS, S.D.--May 29, 2012-- Summit Hotel Properties, Inc. (NYSE:INN) (the “Company”), a real estate investment trust (REIT) specializing in the ownership of premium-branded hotels in the upscale and upper midscale segments, today announced recent property acquisitions and dispositions as well as an interest rate swap agreement.
Acquisitions and Dispositions
- A 112-room Hilton Garden Inn property in Nashville (Smyrna), TN for a purchase price of $12.0 million including planned property improvements. The Company anticipates a post-renovation estimated NTM capitalization rate in the range of 8 to 9 percent.
- A 103-room Courtyard by Marriott in Arlington, TX for a purchase price of $15.25 million including planned property improvements. The Company anticipates a post-renovation estimated NTM capitalization rate in the range of 8 to 9 percent.
In addition to these acquisitions, the Company completed the sale of three assets in Twin Falls, ID; Holiday Inn Express, Hampton Inn and AmericInn. The hotels were sold at an economic cap rate in the range of 8.5 to 9 percent on a trailing twelve month basis. The net proceeds from the aggregate sale price of approximately $16.5 million will be applied to outstanding debt.
“We are continuing our strategy of recycling capital and transforming our portfolio,” said Dan Hansen, Company president and CEO. “These acquisitions and dispositions demonstrate the commitment to our shareholders on delivering top brands in top markets and creating great value for our investors.”
Interest Rate Swap Agreement
In addition to the recently announced improvements made to the Company’s senior secured revolving credit facility, the Company entered into three interest rate swap agreements that fixed 90-day LIBOR on $29.7 million of its variable rate debt with General Electric Capital Corporation. On May 4, the company had fixed LIBOR, at a weighted average rate of 1.137%, on $29.7 million of its variable rate debt through three interest rate swap agreements. After accounting for the three interest rate swap agreements, the company's total debt had a weighted average effective interest rate of 5.3% and fixed interest rates on 80% of its term debt as of March 31, 2012.
“The improvements we have made to our debt structure demonstrate our commitment to prudent, conservative leverage,” said Hansen. “This is the proven strategy that has allowed our company, and our predecessor company, to provide a solid total return to our investors for nearly twenty years.”About Summit Hotel Properties
Summit Hotel Properties, Inc. is a self-advised real estate investment trust focused on acquiring and owning premium-branded select-service hotels in the upscale and upper midscale segments. As of May 29, 2012, the company’s hotel portfolio consisted of 72 hotels with a total of 7,407 guestrooms located in 20 states. Additional information about Summit may be found at the company’s website, www.shpreit.com.
Forward Looking Statements
This press release contains statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “seek,” “anticipate,” “estimate,” “approximately,” “believe,” “could,” “project,” “predict,” “forecast,” “continue,” “plan” or other similar words or expressions. These forward-looking statements relate to the payment of dividends. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections or other forward-looking information. These forward-looking statements are subject to various risks and uncertainties, not all of which are known to the Company and many of which are beyond the Company’s control, which could cause actual results to differ materially from such statements. These risks and uncertainties include, but are not limited to, the state of the U.S. economy, supply and demand in the hotel industry and other factors as are described in greater detail in the Company’s filings with the Securities and Exchange Commission (“SEC”), including, without limitation, the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.