AUSTIN, TEXAS — Summit Hotel Properties Inc. (NYSE: INN) has agreed to acquire a portfolio of five hotels totaling 812 guestrooms across four markets from Xenia Hotels & Resorts Inc. (NYSE: XHR).
The purchase price is approximately $163 million, or $201,000 per room. The purchase, which will be made through an undisclosed Summit affiliate, is expected to close within the next 30 days.
The portfolio includes the 203-room Courtyard Fort Worth Downtown/Blackstone; 123-room Courtyard Kansas City Country Club Plaza; 182-room Courtyard Pittsburgh Downtown; 116-room Hampton Inn & Suites Baltimore Inner Harbor; and 188-room Residence Inn Baltimore Downtown/Inner Harbor.
As of April 2017, the average evenue per available room (RevPar) across the portfolio was $115.52. The year-to-date RevPar industry average for April 2017 was $78.26, a 3 percent increase from average RevPar of $76.02 in April 2016, according to hospitality research firm STR.
“This transaction will represent the continued execution of our strategy of acquiring premium-branded hotels with efficient operating models,” says Daniel Hansen, Summit’s chairman, president and CEO. “All five of these hotels are in prime locations in strong markets and exhibit many of the upside characteristics that are important to our investment criteria.”
Coming on the heels of Xenia’s acquisition of an 815-room, Hyatt-branded hotel in Orlando, the sale reflects the company’s long-term investment strategy, according to Xenia President and CEO Marcel Verbaas.
“The completion of this transaction and our recent acquisition of the Hyatt Regency Grand Cypress represent a further refinement of our portfolio, consistent with our strategic focus on primarily owning luxury and upper upscale assets in Top 25 lodging markets and key leisure destinations,” says Verbaas.
Summit, which is based in Austin and operates 76 hotels totaling 10,705 guestrooms across 22 states, will invest between $13 million and $16 million in capital improvements to the portfolio over the next two years.
Orlando-based Xenia operates 42 hotels comprising 11,595 guestrooms across 20 states and Washington, D.C.
Summit’s stock price opened at $18.25 per share on Monday, June 5, up from $11.91 per share at this time last year. Xenia’s stock price opened at $18.14 per share on Monday, June 5, up from $16.61 per share on June 6, 2016.
— Taylor Williams