AUSTIN--Summit Hotel Properties has added and deducted one hotel each from its portfolio.
The Austin-based REIT has acquired a Hilton Garden Inn in Houston—its second in the city—and the sold a Hampton Inn hotel located in Fort Smith, Ark.
“We are very pleased with the acquisition of our second property in the Houston market,” said president and CEO Dan Hansen. “This high-yielding asset in a market with multiple demand generators makes it a perfect addition to our portfolio. We see great opportunity for our asset management team to create additional value through operational improvements and believe this asset will create tremendous near-term and long-term shareholder value.”
The company acquired the 190-guestroom Hilton on August 15 for a total purchase price of $36.0 million, and entered into a management agreement with American Liberty Hospitality Inc. Built in 2008, the company anticipates spending approximately $3.2 million in capital improvements over the next year. The company anticipates an estimated post-renovation NTM capitalization rate in the range of 8 percent to 8.5 percent based on management's current estimate of future net operating income. And the company expects the hotel to generate approximately $1.1 million of adjusted earnings before interest, taxes, depreciation and amortization in 2014.
Summit sold the Hampton Inn for a total sales price of $8.8 million, and marks the company's exit from the Fort Smith market.
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