Summit Hotel Properties (INN) announces $249 million JV acquisition.
Summit Hotel Properties (INN) announced today that it is under contract to acquire four hotel properties for $249 million through the company's recently formed joint venture with GIC, the sovereign wealth fund of Singapore. The purchase price represents an initial investment of $351,000/key and an 8.4% cap rate based on 2019 operating budgets. Summit also said that the partners expect to invest an additional $23 million in the properties during the first three years of ownership. The joint venture is 51% owned by Summit Properties; 49% by GIC; and has an anticipated leverage target of approximately 50%.
Two of the hotel properties are located in Portland, including the Marriott Residence Inn River Place (downtown) and Marriott Residence Inn Hillsboro. The remaining two properties are located in San Francisco's Bay Area and include the Hilton Garden Inn San Francisco Airport North and Hilton Garden Inn San Jose Milpitas.
Summit Hotel Properties is an equity REIT focusing on the ownership of upscale hotel properties. As of June 30, 2019, the portfolio included 69 properties in 24 states with an aggregate 10,715 hotel rooms. INN has a total market capitalization of approximately $2.3 billion and is a member of the S&P SmallCap 600 Index.