Austin Firm Buys 27 Hotels for $822 Million

AUSTIN – (Realty News Report) – Austin-based Summit Hotel Properties has agreed to acquire 27 hotels in Texas and surrounding states from Dallas-based NewcrestImage for $822 million.

The hotel portfolio totaling 3,709 guestrooms, was acquired for $209,000 per key.

Included in the sale is the 195-room AC Hotel by Marriott Houston Downtown, 723 Main at Rusk Street. The AC Marriott is a redevelopment of a 107-year-old, 10-story building that was acquired from Boxer Property in 2016.

Summit is a hotel real estate investment trust, or REIT, that will have a portfolio of15,000 keys across 100 hotels in 42 markets across the country, upon completion of the deal, late in 2021 or early next year.

The 27 hotels “are complementary to our existing portfolio of high-quality, well-located assets and significantly expands our presence in high-growth Sun Belt markets. We have creatively structured the transaction with the issuance of both common and preferred operating partnership units and continued our partnership with GIC, which will preserve nearly all our existing liquidity of approximately $450 million,” said Summit CEO Jonathan P. Stanner.

NewcrestImage will have the right to nominate one director to Summit’s Board of Directors at closing of the transaction.

“NewcrestImage has assembled a collection of high-quality distinctive Marriott, Hilton, Hyatt, and IHG hotel properties throughout the Sun Belt region, which will be a great addition to Summit’s portfolio. 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,” said Mehul Patel, Managing Partner and CEO of NewcrestImage.

Aimbridge Hospitality will manage the 27 hotels, which are located in the Dallas area, New Orleans, Oklahoma City, Amarillo, Midland, Odessa, Tyler, Longview, Bryan-College Station, Lubbock and Houston.

Investment partner GIC of Singapore will provide an equity contribution of $208 million in cash. Summit has secured a $410 million financing commitment from Bank of America and Wells Fargo Bank which will be the primary debt financing for the transaction.

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