(EDITOR’S NOTE: According to published reports, the property was purchased by an entity associated with BioMed Realty.)
AUSTIN, Texas — Summit Hotel Properties, Inc. (NYSE: INN) (the “Company”) today announced that it has completed the previously announced disposition of the 169-guestroom Hilton Garden Inn San Francisco Airport North for a gross sales price of $75.0 million, or $444,000 per key, through its joint venture with GIC.
The transaction represents a 1% capitalization rate based on the hotel’s net operating income after a 4% FF&E reserve for the twelve months ended March 31, 2022. The joint venture will also forego a comprehensive renovation that was scheduled for late 2022 estimated to be $7.1 million, or $42,000 per key, as a result of the sale.
The joint venture acquired the hotel in October 2019 for $58.0 million, or $343,000 per key, and the transaction will result in an estimated $20.5 million net gain on sale. Net proceeds from the transaction are estimated to be $73 million, of which the Company’s share will be equal to approximately $37 million. The Company expects to use the net sale proceeds, along with existing cash, to repay its only remaining 2022 debt maturity for $62 million.
About Summit Hotel Properties
Summit Hotel Properties, Inc. is a publicly traded real estate investment trust focused on owning premium-branded hotels with efficient operating models primarily in the Upscale segment of the lodging industry. As of May 12, 2022, the Company’s portfolio consisted of 100 hotels, 61 of which are wholly owned, with a total of 15,059 guestrooms located in 24 states.