NewcrestImage sells 15 North Texas lodges as a part of $822 million deal

One of the best known and fastest growing hotel companies in North Texas is selling more than two dozen of its properties valued at $ 822 million.

Grapevine-based NewcrestImage owns and operates more than 30 hotels nationwide, including 15 in the Dallas-Fort Worth area.

NewcrestImage is selling 27 of its hotels to Summit Hotel Properties Inc., an Austin-based real estate fund.

More than 3,700 hotel rooms are included in the transaction.

In addition to the hotels in North Texas, the other hotels are located in Oklahoma City, New Orleans, Amarillo, Midland-Odessa, Tyler, Longview, Bryan-College Station, Lubbock, and Houston.

Summit Hotel Properties is buying the hotels in partnership with Singapore-based investor GIC.

The big hotel sale doesn’t include two historic NewcrestImage-owned properties – the 325-room Magnolia Hotel in downtown Dallas and the 164-room Sinclair in downtown Fort Worth.

NewcrestImage bought the Sinclair in September and acquired the landmark Magnolia Building in Dallas in March using a new $ 100 million mutual fund.

“NewcrestImage has assembled a collection of high quality, distinctive Marriott, Hilton Hyatt and IHG hotel properties across the Sun Belt region that will be a great addition to Summit’s portfolio,” said Mehul Patel, Managing Partner and Chief Executive of NewcrestImage , in a opinion. “As we become one of Summit’s largest shareholders, we trust Summit to be a leading owner in the industry with a highly respected public platform.

“We believe the two portfolios are an excellent combination of hotels with tremendous growth potential and are well positioned to create long-term shareholder value as the property rebound continues.”

As part of the transaction, Summit will provide NewcrestImage operational partnership units valued at $ 160 million. Summit will also spend $ 50 million in new Preferred Partnership units.

Investment partner GIC is contributing $ 208 million in cash, and Summit has arranged $ 410 million in funding from Bank of America and Wells Fargo Bank. The transaction is expected to close by the end of this year or early 2022.

The purchase includes three new Marriott and Hilton branded hotels in the $ 1.8 billion Frisco Station development on Dallas North Tollway. A new Hilton Garden Inn that NewcrestImage just opened in Grapevine is also going to the Summit.

The purchase includes the new AC Hotel in Frisco.(NewcrestImage)

The hotel sale is one of the largest such US transactions since the beginning of the COVID-19 pandemic, which has hit the hospitality industry significantly.

While hotel bookings have rebounded this year, business has not fully recovered to what it was before the pandemic.

Even with the pandemic, North Texas is leading the country in hotel construction, with 147 new properties on the way.

The acquisition of NewcrestImage “complements our existing portfolio of high quality, well-located assets and significantly expands our presence in high-growth Sun Belt markets,” said Summit CEO Jonathan P. Stanner in a statement.

Stanner said the purchase “adds to our optimism about the prospects for our business.” Summit Hotel Properties is a real estate fund with stakes in 73 hotels with 11,398 rooms in 23 states.

Summit announced that Plano-based Aimbridge Hospitality will manage all 27 hotels it will buy from NewcrestImage.