AUSTIN, Texas, May 12, 2022 /PRNewswire/ -- 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 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.
For additional information, please visit the Company's website, www.shpreit.com, and follow on Twitter at @SummitHotel_INN.
Forward-Looking Statements
This press release contains statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "potential," "intend," "expect," "seek," "anticipate," "estimate," "approximately," "believe," "could," "project," "predict," "forecast," "continue," "plan," "likely," "would" or other similar words or expressions. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections or other forward-looking information. Examples of forward-looking statements include the following: the Company's ability to realize financial and operational synergies; projections of revenues and expenses or other financial items; descriptions of the Company's plans or objectives for future operations; forecasts of EBITDAre; and descriptions of assumptions underlying or relating to any of the foregoing expectations regarding the timing of their occurrence. These forward-looking statements are subject to various risks and uncertainties, not all of which are known to the Company and many of which are beyond the Company's control, which could cause actual results to differ materially from such statements. These risks and uncertainties include, but are not limited to, the state of the U.S. economy, supply and demand in the hotel industry, and other factors as are described in greater detail in the Company's filings with the Securities and Exchange Commission ("SEC"). Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.
For information about the Company's business and financial results, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of the Company's Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC, and its quarterly and other periodic filings with the SEC. The Company undertakes no duty to update the statements in this release to conform the statements to actual results or changes in the Company's expectations.
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SOURCE Summit Hotel Properties, Inc.
