Summit Hotel Announces Acquisition Of The Hilton Garden Inn

(RTTNews) - Summit Hotel Properties (INN) Wednesday announced the acquisition of the Hilton Garden Inn located in the Energy Corridor of Houston, Texas. and the disposition of the Hampton Inn located in Fort Smith, Arkansas. The acquisition marks the second Hilton Garden Inn owned by Summit in the Houston area.

The company acquired the 190-guestroom Hilton Garden Inn on August 15 for a total purchase price of $36.0 million and entered into a management agreement with American Liberty Hospitality, Inc.

The property was built in 2008 and the company expects spending around $3.2 million in capital improvements over the next twelve months. An estimated post-renovation next twelve month capitalization rate in the range of 8.00 percent to 8.50 percent is expected based on management's current estimate of future net operating income.

Summit Hotel expects the hotel to generate approximately $1.1 million of adjusted earnings before interest, taxes, depreciation and amortization or EBITDA in 2014.

The Hilton Garden Inn is located in the heart of the Houston Energy Corridor.

The firm also announced the completed disposition of the 178-guestroom Hampton Inn on September 9 for a total sales price of $8.8 million. This was the final property classified as held for sale by the company and completes the company's exit from the Fort Smith market.

Summit Hotel estimates the property would have contributed around $0.2 million of EBITDA during the balance of 2014.