INN Summit Hotel Properties Inc

Joint Venture with GIC Completes Acquisition of Residence Inn Scottsdale North

Four-Hotel Portfolio Sale Completed for $28.1 Million

AUSTIN, Texas, June 5, 2023 /PRNewswire/ -- Summit Hotel Properties, Inc. (NYSE: INN) (the "Company") today announced that it has completed the acquisition of the 120-guestroom Residence Inn Scottsdale North for $29.0 million through its joint venture with GIC. Additionally, the Company is providing an update on previously announced disposition activity.

Residence Inn Scottsdale North Acquired for $29.0 Million

On June 1, 2023, the Company completed the acquisition of the 120-guestroom Residence Inn Scottsdale North ("Hotel") for $29.0 million through its joint venture with GIC.

Located in Phoenix's high growth affluent North Scottsdale submarket among a multitude of leisure, corporate, and group demand generators, the Hotel is adjacent to TPC Scottsdale, the annual venue for the PGA Tour's WM Open, hosting more than 700,000 attendees. Camelback Mountain and the McDowell Sonoran Preserve are within 20 minutes of the Hotel and offer numerous hiking and biking trails. In addition, the Hotel is within one mile of several high-end open-air shopping, dining and entertainment attractions including the Promenade Mall, Kierland Commons, and Scottsdale Quarter which collectively offer over one-hundred dining options.

The Hotel's proximity to major employers, medical facilities, and the Scottsdale Airport and Airpark positions the Hotel to capture year-round corporate and group demand as well as a variety of training, medical, research, and other extended-stay business. Major employers in the area include Axon, Liberty Mutual, MassMutual, The Quantum Group, APL Logistics, Iron Mountain, Fender, P.F. Chang's, Republic Services, Ameriprise Financial, Vanguard, Carlisle, US Bank, Prudential, Store Capital, BMO Harris Bank, Colony Starwood Homes, BOK Financial, and many others.

Additionally, the Hotel is located directly across North Scottsdale Road from the Company's Courtyard and Springhill Suites hotels, both of which are also owned by the GIC joint venture. The addition of a third Marriott-branded hotel to the existing sales cluster will create revenue and operational synergies and the market-leading Residence Inn brand will allow the cluster to capture additional group and extended-stay opportunities.

The Company expects the Hotel to yield between an 8.0 percent and 8.5 percent capitalization rate on full year estimated 2023 net operating income. The Hotel was fully renovated in 2019 and requires minimal near-term capital expenditures. The Company funded its 51% interest in the joint venture acquisition using a portion of the net proceeds generated from the recently completed four-hotel portfolio sale.

Four-Hotel Portfolio Sale Completed For $28.1 Million

The Company completed the previously announced disposition of four wholly-owned hotels totaling 467 guestrooms for a gross sales price of $28.1 million. The portfolio of sold hotels included:

The transaction represents a 4.2 percent capitalization rate based on the aggregate net operating income of the hotels after a 4% FF&E reserve for the twelve months ended December 31, 2022. The Company will also forego comprehensive renovations that were estimated to be $21 million as a result of the sale. The aggregate gross sales price of $28.1 million, plus estimated future capital improvements, represents a 2.4 percent capitalization rate for the trailing twelve months ended December 31, 2022. Net proceeds from the sale were used to fund the Company's 51% interest in the aforementioned Residence Inn Scottsdale North joint venture acquisition and reduce the outstanding balance of the Company's unsecured revolving credit facility.

Pending Two-Hotel Portfolio Sale Contract Terminated

The Company also announced the termination of its previously announced agreement to dispose of two wholly-owned hotels totaling 283 guestrooms for a gross sales price of $50.5 million. The buyer utilized its option to terminate the non-binding agreement prior to the expiration of the due diligence period. The two hotels included:

About Summit Hotel Properties

Summit Hotel Properties, Inc. is a publicly traded real estate investment trust focused on owning premium-branded lodging properties with efficient operating models primarily in the Upscale segment of the lodging industry. As of June 5, 2023, the Company's portfolio consisted of 100 assets, 57 of which are wholly owned, with a total of 14,987 guestrooms located in 24 states.

For additional information, please visit the Company's website, www.shpreit.com, and follow the Company 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 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. These forward-looking statements relate to the payment of dividends. 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. 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, including, without limitation, the Company's Annual Report on Form 10-K for the year ended December 31, 2022. 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.

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SOURCE Summit Hotel Properties, Inc.