AUSTIN – (Realty News Report) – Austin-based Summit Hotel Properties has agreed to acquire 27 hotels located in Texas and nearby states from Dallas-based NewcrestImage for $822 million.
The portfolio comprises 3,709 guestrooms, representing an average price of $209,000 per room.
The acquisition includes the 195-room AC Hotel by Marriott Houston Downtown at 723 Main at Rusk Street. The AC Hotel is a redevelopment of a 107-year-old, 10-story building that NewcrestImage acquired from Boxer Property in 2016.
Summit, a publicly traded hotel real estate investment trust (REIT), will expand its holdings to approximately 15,000 rooms across about 100 hotels in 42 markets nationwide once the transaction closes, expected late in 2021 or in early 2022.
“These 27 hotels are complementary to our existing portfolio of well-located, high-quality assets and significantly expand our presence in high-growth Sun Belt markets,” said Summit CEO Jonathan P. Stanner. “We structured the transaction creatively with the issuance of both common and preferred operating partnership units and continued our partnership with GIC, which preserves nearly all our existing liquidity of roughly $450 million.”
Under the terms of the deal, NewcrestImage will have the right to nominate one director to Summit’s Board of Directors at closing.
“NewcrestImage has assembled a collection of high-quality, distinctive Marriott, Hilton, Hyatt and IHG properties across the Sun Belt, which will be a great addition to Summit’s portfolio,” said Mehul Patel, Managing Partner and CEO of NewcrestImage. “As we will become one of Summit’s largest shareholders, we have confidence in Summit as one of the industry’s leading owners with a highly regarded public platform.”
Aimbridge Hospitality will operate the 27 hotels, which are situated in the Dallas area, New Orleans, Oklahoma City, Amarillo, Midland, Odessa, Tyler, Longview, Bryan–College Station, Lubbock and Houston.
GIC, the sovereign wealth fund of Singapore, will provide an equity contribution of $208 million in cash. Summit also secured a $410 million financing commitment from Bank of America and Wells Fargo, which will serve as the primary debt financing for the acquisition.
Nov. 4, 2021 Realty News Report Copyright 2021
Image: Courtesy NewcrestImage
File: Austin Firm Buys 27 Hotels
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File: Austin Firm Buys 27 Hotels for $822 million. Summit Hotels. NewcrestImage