NEW YORK CITY—American Realty Capital Hospitality Trust has completed its acquisition of 10 hotels from Summit Hotel Properties, a publicly-traded hotel real estate investment trust. The portfolio sold for a purchase price of just over $150 million.
The transaction represents the first 10 of 26 hotels that ARC Hospitality will be acquiring from Summit for a total purchase price of over $347 million. ARC Hospitality already has another 18 hotels under contract with unrelated sellers for more than $392 million. ARC Hospitality intends to close on all of the acquisitions during the next eight months, for an aggregate of 44 hotels.
The initial 10 hotels all are branded Marriott International and Hilton Hotels & Resorts properties and are located in Baton Rouge, LA; Flagstaff, AZ; Fort Wayne, IN; Medford, OR; and El Paso, TX. The acquisition increases ARC Hospitality's lodging portfolio to 132 hotels totaling 16,014 rooms across 32 states.
“We are delighted to acquire these high-quality, stabilized lodging properties with strong brand affiliations from Summit,” says Jonathan Mehlman, CEO of ARC Hospitality. “This transaction shows that we are continuing to execute our focused strategy of acquiring market-leading select service hotels with strong brands and durable cash flows. We look forward to continuing to work with Dan Hansen and his management team on closing the additional hotel properties we have under contract.”
Adds CFO Edward Hoganson, “These 10 hotels all have delivered robust year-over-year financial performance, and possess strong operating fundamentals that we expect will continue to drive our future growth.
ARC Hospitality financed the acquisition of these hotels with a draw on its $450 million term loan facility, which was co-arranged by Deutsche Bank AG New York Branch, Deutsche Bank Securities and BMO Capital Markets.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
