AUSTIN--Summit Hotel Properties has acquired its first hotel in Austin.
Despite being based in the city, the purchase of the Hampton Inn & Suites, located in downtown Austin, marks the first property owned by Summit in the home of their corporate offices.
“We are thrilled with the acquisition of our first property in the robust and dynamic Austin market,” said company president and CEO Dan Hansen. “The Hampton Inn & Suites is a wonderful addition to our portfolio in one of the fastest growing cities in the country.”
The company acquired the 209-guestroom hotel for a total purchase price of $53 million and entered into a management agreement with Interstate Hotels & Resorts. The property was built in 2002 and the company anticipates spending approximately $2.4 million in capital improvements over the next twelve months. The company estimates a post-renovation next twelve month (“NTM”) capitalization rate in the range of 8 percent to 8.5 percent, based on management's current projection of future net operating income. The xompany expects the hotel to generate approximately $1.4 million of adjusted earnings before interest, taxes, depreciation and amortization through the balance of 2014.
The 16-story Hampton Inn & Suites is located one block from the Austin Convention Center and Lady Bird Lake, in the central business district. Austin has seen continued increases in demand from large corporate accounts, convention business and strong leisure demand.
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