Summit Hotel Properties (NYSE: INN) (“the Company”) announced today it has closed on the joint venture transaction for the acquisition of a 252-room Holiday Inn Express® property (the “Hotel”) located on Fisherman’s Wharf in San Francisco, CA.
The Company has acquired the Hotel from an unaffiliated seller for a purchase price of $60.5 million through a joint venture with an affiliate of IHG (InterContinental Hotels Group). The Hotel joins the 10 IHG-branded hotels in the Company’s portfolio, including the Holiday Inn Atlanta-Gwinnett Place and the Staybridge Suites Denver that were previously acquired under our current sourcing agreement. The joint venture gives the Company an approximate 80% ownership interest in the Hotel, which will be operated under a long-term IHG management agreement. The Company currently expects the joint venture to spend an aggregate of approximately $3.0 million for improvements at the Hotel within the next 12 months. The Company anticipates a post-renovation estimated NTM EBITDA multiple for the Hotel in the range of 11.0x to 12.0x based on management’s current estimate of EBITDA.
“We are excited about the opportunity to enter the San Francisco market,” said Dan Hansen, president and CEO of the Company. “We are also very pleased that our relationship with IHG has provided us with the opportunity to source quality acquisitions like this and we expect to continue our growth with them.”
The Hotel is perfectly positioned in the heart of the wharf district in the midst of the bustling waterfront area. Leisure guests can spend a sunny day at Pier 39, take a tour of Alcatraz or grab a ride on one of San Francisco’s iconic trolleys. Fisherman's Wharf also offers souvenir shopping and world-class seafood. Business travelers will enjoy the proximity to the corporate offices of Levi Strauss, Williams-Sonoma, Diversity Alliance and others in nearby downtown San Francisco. The Hotel's location is also near the Financial District, Art Institute and Academy of Art University. And, all guests are able to enjoy the complimentary Express Start® breakfast bar option before beginning their day.
“The strategic relationship with Summit Hotel Properties continues to drive value for our business in strong US market such as San Francisco. We are pleased to see the completion of this transaction and start of a new long-term management agreement for our successful Holiday Inn Express brand,” said Kirk Kinsell, president, Americas, IHG. “This joint venture purchase with Summit is yet another example of us delivering consistently on our asset strategy, as well as working with high quality ownership groups who have confidence in our brands and management expertise.”
Features of the Hotel are in line with the $1 billion Holiday Inn® brand family’s global brand relaunch, which was the largest project of its kind ever in the hospitality industry. The relaunch program has created a more contemporary brand image, including redesigned logo and signage, as part of the drive to increase the portfolio’s quality and consistency around the world. Business and leisure guests to a Holiday Inn Express hotel will enjoy signature details in areas that were a key focus of the relaunch including: arrival and welcome services, guestroom and guest bath comfort.
About Summit Hotel Properties, Inc.:
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 February 13, 2013, the Company’s hotel portfolio consisted of 87 hotels, containing a total of 9,635 guestrooms, located in 22 states.
This press release contains statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are based upon the Company’s expectations, but these statements are not guaranteed to occur. Investors should not place undue reliance upon forward-looking statements. These statements relate to, among other things, the Company’s pending acquisitions, the availability of funding for the pending acquisitions and the expected increase in the maximum borrowing availability under the Credit Facility. No assurance can be given that the acquisitions will be completed when expected, on the terms described or at all, or that maximum borrowing availability under the Credit Facility will be increased. These actions are subject to numerous conditions, many of which are beyond the control of the Company, including, without limitation, general economic conditions, market conditions and other factors, including those set forth in the Risk Factors section of the Company’s periodic reports and other documents filed with the Securities and Exchange Commission (the “SEC”).Copies are available on the SEC’s website, www.sec.gov. The Company undertakes no obligation to update these statements after the date of this release.
About Holiday Inn Express®
Holiday Inn Express hotels are modern hotels for value-oriented travelers. Fresh, clean and uncomplicated, Holiday Inn Express hotels offer competitive rates for both business and leisure travelers. Guests Stay Smart® at Holiday Inn Express hotels where they enjoy a free hot Express Start® Breakfast Bar, free high-speed internet access and free local phone calls (US and Canada only). There are currently more than 2,000 Holiday Inn Express hotel locations around the globe. For more information about Holiday Inn Express hotels or to book reservations, call 1-800-HOLIDAY or visit www.hiexpress.com.
IHG® (InterContinental Hotels Group) [LON:IHG, NYSE:IHG (ADRs)] is a global organization with nine hotel brands including InterContinental® Hotels & Resorts, Hotel Indigo®, Crowne Plaza® Hotels & Resorts, Holiday Inn® Hotels & Resorts, Holiday Inn Express®, Staybridge Suites®, Candlewood Suites®, as well as our two newest brands, EVEN™ Hotels and HUALUXE™ Hotels and Resorts. IHG also manages Priority Club® Rewards, the world’s first and largest hotel loyalty program with over 69 million members worldwide.
IHG franchises, leases, manages or owns over 4,500 hotels and more than 672,000 guest rooms in nearly 100 countries and territories. With more than 1,000 hotels in its development pipeline, IHG expects to recruit around 90,000 people into additional roles across its estate over the next few years.
InterContinental Hotels Group PLC is the Group’s holding company and is incorporated in Great Britain and registered in England and Wales.
Visit www.ihg.com for hotel information and reservations and www.priorityclub.com for more on Priority Club Rewards. For our latest news, visit www.ihg.com/media,www.twitter.com/ihg, www.facebook.com/ihg or www.youtube.com/ihgplc.