EX-99.1
7
tm222868d1_ex99-1.htm
EXHIBIT 99.1
Exhibit 99.1
NEWS RELEASE
Summit Hotel Properties Completes Acquisition
of NewcrestImage Portfolio
Austin, Texas, January 13, 2022
- - -
Summit
Hotel Properties, Inc. (NYSE: INN) (the "Company" or "Summit") today announced that it has completed an initial
closing of the previously announced portfolio acquisition through its existing joint venture with GIC from affiliates of NewcrestImage.
The initial closing included 26 of the 27 hotels totaling 3,533 guestrooms, two parking structures, and various financial incentives.
The remaining hotel to be acquired is the currently under construction 176-guestroom Canopy by Hilton New Orleans which is nearing completion,
and the joint venture expects to close on the acquisition of the hotel during the first quarter 2022 (collectively with the initial closing
referred to as the "Transaction").
The total consideration for the Transaction is
comprised of $776.5 million, or $209,000 per key, for the 27-hotel portfolio, $24.8 million for the two parking structures, and $20.7
million for the various financial incentives. The Transaction is expected to be immediately accretive to adjusted FFO per share, generate
a stabilized net operating income yield of 8.0% to 8.5% including future capital investment and excluding any ancillary joint venture
fees earned by Summit, and be leverage neutral to the Company's balance sheet while preserving existing liquidity of nearly $450
million.
Capital Structure and Financing
Upon closing of the Transaction, the Company will
fund its 51% equity contribution with a combination of common operating partnership units and preferred operating partnership units. The
Company will issue 15.865 million common operating partnership units valued at $160 million to seller affiliates, based on the 10-day
trailing VWAP of $10.0853 per unit as of November 2, 2021. The Company will also issue $50 million worth of newly designated 5.25% Series
Z Preferred Units. The preferred operating partnership units will be entitled to distributions at a rate of 5.25% per annum, may be redeemed
by the holder on the 10
th
or 11
th
anniversary of the issuance date and may be called by the Company at any time
after the 5
th
anniversary of the issuance date. GIC's 49% equity contribution will be in the form of cash.
The Company has secured a $410 million financing
commitment from Bank of America and Wells Fargo Bank which will be the primary debt financing for the Transaction. The term loan has a
four-year initial term with a one-year extension option, subject to certain conditions. The loan is interest-only and provides for a floating
interest rate equal to SOFR + 2.86%.
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Portfolio Asset Listing
PROPERTY NAME
MSA
STATE
KEYS /
SPACES
YEAR
BUILT
AC Hotel by Marriott Houston Downtown
Houston
TX
195
2019
AC Hotel by Marriott Oklahoma City Bricktown
Oklahoma City
OK
142
2017
AC Hotel by Marriott Dallas Downtown
Dallas
TX
128
2017
Residence Inn by Marriott Dallas Downtown
Dallas
TX
121
2017
AC Hotel by Marriott Frisco Station
Dallas
TX
150
2019
Residence Inn by Marriott Frisco Station
Dallas
TX
150
2019
Canopy by Hilton Frisco Station
Dallas
TX
150
2020
Canopy by Hilton New Orleans
(1)
New Orleans
LA
176
2021
Courtyard by Marriott Amarillo Downtown
Amarillo
TX
107
2010
Courtyard by Marriott Grapevine
Dallas
TX
181
2013
TownePlace Suites by Marriott Grapevine
Dallas
TX
120
2013
Embassy Suites by Hilton Amarillo Downtown
Amarillo
TX
226
2017
Hampton Inn & Suites by Hilton Dallas Downtown
Dallas
TX
176
2016
Hilton Garden Inn by Hilton College Station
Bryan-College Stn
TX
119
2013
Hilton Garden Inn by Hilton Longview
Longview
TX
122
2015
Hilton Garden Inn by Hilton Grapevine
Dallas
TX
152
2021
Holiday Inn Express & Suites Grapevine
Dallas
TX
95
2000
Holiday Inn Express & Suites Oklahoma City Bricktown
Oklahoma City
OK
124
2015
Homewood Suites by Hilton Midland
Midland-Odessa
TX
118
2014
Hyatt Place Dallas Grapevine
Dallas
TX
125
2000
Hyatt Place Dallas Plano
Dallas
TX
127
1998
Hyatt Place Lubbock
Lubbock
TX
125
2016
Hyatt Place Oklahoma City Bricktown
Oklahoma City
OK
134
2018
Residence Inn by Marriott Tyler
Tyler
TX
119
2014
SpringHill Suites by Marriott Dallas Downtown
Dallas
TX
148
1997
SpringHill Suites by Marriott New Orleans
New Orleans
LA
74
2018
TownePlace Suites by Marriott New Orleans
New Orleans
LA
105
2018
Total Hotel Portfolio
3,709
Dallas Parking Structure
Dallas
TX
335
2019
Frisco Parking Structure
Dallas
TX
667
2019
Total Parking
1,002
Total NCI Portfolio
3,709 / 1,002
(1)
Canopy by Hilton New Orleans is still under construction and expected to open and acquired in Q1 2022.
TRANSACTION VALUE COMPONENTS ($000s)
VALUE
PER KEY
Hotel Portfolio
27 Hotels / 3,709 Guestrooms
$
776,500
$
209
Parking Structures
2 Structures / 1,002 Parking Spaces
24,800
-
Subtotal
$
801,300
Financial Incentives
(1)
20,700
-
Total
$
822,000
(1)
The value of the financial incentives reflects the net present value of the future expected cash flows.
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Board Composition
Effective January 13, 2022, Mehul Patel, Managing
Partner and Chief Executive Officer of NewcrestImage, was appointed as a director to the Company's Board of Directors.
Advisors
BofA Securities, Inc. is acting as financial advisor
and Hunton Andrews Kurth is acting as legal counsel to the Company on the Transaction. Goodwin Procter, Munsch Hardt Kopf & Harr,
Haynes and Boone, and Colven & Tran are acting as legal counselors to NewcrestImage.
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 January 13, 2022, the Company's portfolio consisted of 100 hotels, 61 of which are wholly owned,
with a total of 15,051 guestrooms located in 24 states. Upon closing of the Canopy by Hilton New Orleans, the Company's portfolio
will consist of 101 hotels, 61 of which are wholly owned, with a total of 15,227 guestrooms located in 24 states.
About NewcrestImage
NewcrestImage has become one of the leading hotel companies in America
having transacted over 184 hotels throughout its history. It is known and respected for its unique properties and for repeatedly developing
bold award-winning projects that have transformed the hospitality industry. Many of the notable properties include dual-brand hotels,
the adaptive re-use of historic buildings, and "lifestyle hotel campus", which creates vibrant mixed-use neighborhoods.
Contact:
Adam Wudel
SVP - Finance & Capital Markets
Summit Hotel Properties, Inc.
(512) 538-2325
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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, 2020, 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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EX - 99 . 1 7 tm222868d1 _ ex99 - 1 . htm EXHIBIT 99 . 1 Exhibit 99 . 1 NEWS RELEASE Summit Hotel Properties Completes Acquisition of NewcrestImage Portfolio Austin , Texas , January 13 , 2022 - - - Summit Hotel Properties , Inc . ( NYSE : INN ) ( the " Company " or " Summit " ) today announced that it has completed an initial closing of the previously announced portfolio acquisition through its existing joint venture with GIC from affiliates of NewcrestImage . The initial closing included 26 of the 27 hotels totaling 3,533 guestrooms , two parking structures , and various financial incentives . The remaining hotel to be acquired is the currently under construction 176 - guestroom Canopy by Hilton New Orleans which is nearing completion , and the joint venture expects to close on the acquisition of the hotel during the first quarter 2022 ( collectively with the initial closing referred to as the " Transaction " ) . The total consideration for the Transaction is comprised of $ 776.5 million , or $ 209,000 per key , for the 27 - hotel portfolio , $ 24.8 million for the two parking structures , and $ 20.7 million for the various financial incentives . The Transaction is expected to be immediately accretive to adjusted FFO per share , generate a stabilized net operating income yield of 8 . 0 % to 8 . 5 % including future capital investment and excluding any ancillary joint venture fees earned by Summit , and be leverage neutral to the Company 's balance sheet while preserving existing liquidity of nearly $ 450 million . Capital Structure and Financing Upon closing of the Transaction , the Company will fund its 51 % equity contribution with a combination of common operating partnership units and preferred operating partnership units . The Company will issue 15.865 million common operating partnership units valued at $ 160 million to seller affiliates , based on the 10 - day trailing VWAP of $ 10.0853 per unit as of November 2 , 2021 . The Company will also issue $ 50 million worth of newly designated 5 . 25 % Series Z Preferred Units . The preferred operating partnership units will be entitled to distributions at a rate of 5 . 25 % per annum , may be redeemed by the holder on the 10 th or 11 th anniversary of the issuance date and may be called by the Company at any time after the 5 th anniversary of the issuance date . GIC 's 49 % equity contribution will be in the form of cash . The Company has secured a $ 410 million financing commitment from Bank of America and Wells Fargo Bank which will be the primary debt financing for the Transaction . The term loan has a four - year initial term with a one - year extension option , subject to certain conditions . The loan is interest - only and provides for a floating interest rate equal to SOFR + 2 . 86 % . 1 | P a g e Portfolio Asset Listing PROPERTY NAME MSA STATE KEYS / SPACES YEAR BUILT AC Hotel by Marriott Houston Downtown Houston TX 195 2019 AC Hotel by Marriott Oklahoma City Bricktown Oklahoma City OK 142 2017 AC Hotel by Marriott Dallas Downtown Dallas TX 128 2017 Residence Inn by Marriott Dallas Downtown Dallas TX 121 2017 AC Hotel by Marriott Frisco Station Dallas TX 150 2019 Residence Inn by Marriott Frisco Station Dallas TX 150 2019 Canopy by Hilton Frisco Station Dallas TX 150 2020 Canopy by Hilton New Orleans ( 1 ) New Orleans LA 176 2021 Courtyard by Marriott Amarillo Downtown Amarillo TX 107 2010 Courtyard by Marriott Grapevine Dallas TX 181 2013 TownePlace Suites by Marriott Grapevine Dallas TX 120 2013 Embassy Suites by Hilton Amarillo Downtown Amarillo TX 226 2017 Hampton Inn & Suites by Hilton Dallas Downtown Dallas TX 176 2016 Hilton Garden Inn by Hilton College Station Bryan - College Stn TX 119 2013 Hilton Garden Inn by Hilton Longview Longview TX 122 2015 Hilton Garden Inn by Hilton Grapevine Dallas TX 152 2021 Holiday Inn Express & Suites Grapevine Dallas TX 95 2000 Holiday Inn Express & Suites Oklahoma City Bricktown Oklahoma City OK 124 2015 Homewood Suites by Hilton Midland Midland - Odessa TX 118 2014 Hyatt Place Dallas Grapevine Dallas TX 125 2000 Hyatt Place Dallas Plano Dallas TX 127 1998 Hyatt Place Lubbock Lubbock TX 125 2016 Hyatt Place Oklahoma City Bricktown Oklahoma City OK 134 2018 Residence Inn by Marriott Tyler Tyler TX 119 2014 SpringHill Suites by Marriott Dallas Downtown Dallas TX 148 1997 SpringHill Suites by Marriott New Orleans New Orleans LA 74 2018 TownePlace Suites by Marriott New Orleans New Orleans LA 105 2018 Total Hotel Portfolio 3,709 Dallas Parking Structure Dallas TX 335 2019 Frisco Parking Structure Dallas TX 667 2019 Total Parking 1,002 Total NCI Portfolio 3,709 / 1,002 ( 1 ) Canopy by Hilton New Orleans is still under construction and expected to open and acquired in Q1 2022 . TRANSACTION VALUE COMPONENTS ( $ 000 s ) VALUE PER KEY Hotel Portfolio 27 Hotels / 3,709 Guestrooms $ 776,500 $ 209 Parking Structures 2 Structures / 1,002 Parking Spaces 24,800 - Subtotal $ 801,300 Financial Incentives ( 1 ) 20,700 - Total $ 822,000 ( 1 ) The value of the financial incentives reflects the net present value of the future expected cash flows . 2 | P a g e Board Composition Effective January 13 , 2022 , Mehul Patel , Managing Partner and Chief Executive Officer of NewcrestImage , was appointed as a director to the Company 's Board of Directors . Advisors BofA Securities , Inc . is acting as financial advisor and Hunton Andrews Kurth is acting as legal counsel to the Company on the Transaction . Goodwin Procter , Munsch Hardt Kopf & Harr , Haynes and Boone , and Colven & Tran are acting as legal counselors to NewcrestImage . 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 January 13 , 2022 , the Company 's portfolio consisted of 100 hotels , 61 of which are wholly owned , with a total of 15,051 guestrooms located in 24 states . Upon closing of the Canopy by Hilton New Orleans , the Company 's portfolio will consist of 101 hotels , 61 of which are wholly owned , with a total of 15,227 guestrooms located in 24 states . About NewcrestImage NewcrestImage has become one of the leading hotel companies in America having transacted over 184 hotels throughout its history . It is known and respected for its unique properties and for repeatedly developing bold award - winning projects that have transformed the hospitality industry . Many of the notable properties include dual - brand hotels , the adaptive re - use of historic buildings , and " lifestyle hotel campus " , which creates vibrant mixed - use neighborhoods . Contact : Adam Wudel SVP - Finance & Capital Markets Summit Hotel Properties , Inc . ( 512 ) 538 - 2325 3 | P a g e 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 , 2020 , 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 . 4 | P a g e
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