Summit Hotel (INN) Acquires Five Hotels For $163M From Xenia
Zacks Investment Research | Jun 22, 2017 09:55PM ET
Summit Hotel Properties, Inc. (NYSE:INN) recently enhanced its portfolio with the acquisition of five hotels, comprising 812-guestroom, from Xenia Hotels & Resorts, Inc. (NYSE:XHR) , for $163 million or around $201,000 per key. The hotels are positioned in prime locations and markets with solid strength, giving scope to Summit Hotel to boost its profitability.
The acquired portfolio includes the 203-guestroom Courtyard Fort Worth Downtown/Blackstone, the 123-guestroom Courtyard Kansas City Country Club Plaza and the 182-guestroom Courtyard Pittsburgh Downtown. Also, it comprised the 116-guestroom Hampton Inn & Suites Baltimore Inner Harbor, and the 188-guestroom Residence Inn Baltimore Downtown/Inner Harbor.
Notably, the total purchase price marked an 11.1x multiple on the hotels' combined trailing twelve month EBITDA as of April 2017. Furthermore, the portfolio generated revenue per available room (RevPAR) of $115.52 during the same period, per the company’s earlier press release which revealed about this buyout deal.
With this five-hotel portfolio acquisition, Summit Hotel Properties continues its strategy of owning premium-branded upscale hotels with efficient operating models. The company’s portfolio is also diversified in terms of geography. In fact, as of Jun 21, 2017, the company had 81 hotels in its portfolio, with a total of 11,608 guestrooms in 24 states.
Moreover, Summit Hotel Properties is a consistent performer, having beaten the Zacks Consensus Estimate in terms of funds from operations (“FFO”) per share in each of the trailing four quarters, with an average beat of 13.21%.
Currently, Summit Hotel Properties carries a Zacks Rank #3 (Hold). Also, over the past three months, shares of Summit Hotel climbed 23.2% and outperformed the Zacks categorized Original post
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