Boston, MA 09/10/2014 (wallstreetpr) – The ongoing competition in the hotel industry is not hidden from anyone. People have more money than ever, so they are not afraid of spending money on quality things. The only thing that they want is good quality and excellent service quality. All the hotels around the world are trying hard to upscale their quality to attract more and more customers. In this series, Summit Hotel Properties Inc (NYSE:INN) has decided to acquire Hilton Garden Inn; one of the well-known hotel chains of the world.
Insights Of The Acquisition:
Summit Hotel Properties Inc (NYSE:INN) will take over the Hilton Garden Inn, which is located in Energy Corridor of Houston, Texas. At the same time, it will also execute disposition of Hampton Inn, which is located in Fort Smith, Arkansas. It is the second time when INN has acquired any Hilton Garden Inn in the Houston area. As per the information revealed by the management of INN, the Hilton Garden was acquired on Augusts 15, 2014 in a total sum of $36.0 million. With this transaction, INN entered into a management agreement with American Liberty Hospitality, Inc.
The building of Hilton Garden was built six years ago in 2008. After the acquisition, Summit Hotel Properties Inc (NYSE:INN) is expecting at least $3.2 million worth expenses on various capital improvements over the next twelve months. The management expects a post-renovation capitalization rate of 8%-8.5% on the basis of current estimates of future net operating income. INN is extremely happy with this transaction and expects to generate around $1.1 million worth of earnings before interest, tax, depreciation and amortization in the current year.
Along with this acquisition, Summit Hotel Properties Inc (NYSE:INN) also announced the disposition of beautiful Hampton Inn on September 9, 2014. INN will get $8.8 million from the sales transaction of lavish 178-guestroom hotel. It was the last property that INN had in Fort Smith market. The INN management thinks that, if Hampton INN were not sold out, then it would have generated around $0.2 million over the remaining part of 2014.
