AUSTIN, Texas, June 14, 2022— Summit Hotel Properties, Inc. (NYSE: INN) (the “Company”) today announced that it has completed the previously announced acquisition of the dual-branded 264-guestroom AC Hotel by Marriott & Element Miami Brickell (the “Brickell Hotels”).
The Company’s initial purchase option was based on a gross hotel valuation of $89.0 million, or $337,000 per key, and the Company funded its 90% equity interest totaling $38 million with the conversion of the previously funded $30 million mezzanine construction loan, which earned 9% cash interest during the loan term, and $8 million in cash. The transaction was financed with the assumption of a $47 million mortgage loan that has an interest rate of 1-Month Term SOFR + 300 basis points and maturity date of June 30, 2025. The Company projects that the Brickell Hotels will generate a combined hotel EBITDA yield between 8.0% and 9.0% for the full year 2022.
The project was developed by an affiliate of Robert Finvarb Companies, LLC, an established Miami-based developer, who will remain the Company’s joint venture partner with a 10% equity interest in the Brickell Hotels. A $10 million letter of credit that supported the equity purchase option was released and the Company will retain the option to acquire the remaining 10% equity interest of the Brickell Hotels in December 2026.