Summit Lodge Properties Completes Acquisition of NewcrestImage Portfolio

Austin, Texas, January 13, 2022 /PRNewswire/ — Summit Hotel Properties, Inc. (NYSE: INN) (the “Company” or “Summit”) announced today that it has completed a first closing of the previously announced portfolio acquisition through its existing joint venture with GIC of NewcrestImage affiliates. The first deal included 26 of the 27 hotels with a total of 3,533 guest rooms, two parking garages and various financial incentives. The remaining hotel to be acquired is the 176-room Canopy by, currently under construction Hilton New Orleans which is nearing completion and the Joint Venture expects to complete the acquisition of the hotel in the first quarter of 2022 (collectively referred to as the “Transaction” together with the initial closing).

The total consideration for the transaction consists of $776.5 million, or $209,000 per key, for the 27 hotel portfolio, $24.8 million for the two car parks and $20.7 million for the various financial incentives. The transaction is expected to be immediately accretive to adjusted FFO per share, generating a stabilized net operating income yield of 8.0% to 8.5%, including future capital investments and excluding additional joint venture fees earned by Summit , and neutral leverage for the company’s balance sheet while preserving existing liquidity from just under 450 million dollars.

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 160 million dollars to sellers affiliates based on 10-day trailing VWAP of $10.0853 per unit November 2, 2021. The company will also issue 50 million dollars worth of newly designated 5.25% Series Z Preferred Units. The shares of the Preferred Operating Partnership are entitled to dividends at a rate of 5.25% per annum, are redeemable by the holder on the 10th or 11th anniversary of the date of issue and are callable by the Company at any time after the 5th anniversary of the date of issue. GIC’s 49% capital contribution will be in the form of cash.

The company has a $410 million Funding commitments from Bank of America and Wells Fargo Bank, which will be the primary debt financing for the transaction. The term loan has an initial term of four years with a one-year extension option subject to certain conditions. The loan is interest-free and has a variable interest rate of SOFR + 2.86%.

Portfolio asset listing

Board composition

Effective January 13, 2022, Meul Patel, Managing Partner and Chief Executive Officer of NewcrestImage, has been appointed as a director to the company’s board of directors.

advisor

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 counsel 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 by the Company, with a total of 15,051 guest rooms in 24 states. By closing the canopy Hilton New Orleans, the Company’s portfolio will consist of 101 hotels, 61 of which will be wholly owned by the Company, with a total of 15,227 guest rooms in 24 states.

About NewcrestImage

NewcrestImage has grown into one of America’s leading hotel companies, having processed over 184 hotels throughout its history. It is known and respected for its unique attributes 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 reuse of historic buildings, and the “lifestyle hotel campus” that creates vibrant mixed-use neighborhoods.

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, under the Safe Harbor Provisions of the Private Securities Litigation Reform Act 1995. Forward-looking statements are generally identifiable by the use of forward-looking terminology such as “may”, “will”, “should”, “potential”, “intend”, “expect”, “”. seek”, “anticipate”, “estimate”, “approximately”, “believe”, “could”, “forecast”, “predict”, “predict”, “continue”, “plan”, “probably”, “would” or other similar words or phrases. Forward-looking statements are based on certain assumptions and may include future expectations, future plans and strategies, financial and operational projections or other forward-looking information. Examples of forward-looking statements include: the Company’s ability to realize financial and operational synergies; projections of income and expenditure or other financial items; descriptions of the company’s plans or goals for future operations; forecasts of EBITDAre; and descriptions of assumptions underlying or relating to the foregoing expectations, as to when they occur. These forward-looking statements are subject to various risks and uncertainties, all of which are not known to the Company and many of which are beyond the Company’s control, which could cause actual results to differ materially from these statements. These risks and uncertainties include, but are not limited to, the state of the US economy, supply and demand in the hotel industry and other factors more fully described in the Company’s filings with the Securities and Exchange Commission (“SEC”). ). Except as required by law, the Company disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

Information regarding the Company’s business and financial results is contained in 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 current year December 31, 2020, filed with the SEC, and its quarterly and other periodic filings with the SEC. The Company undertakes no obligation to update the statements in this press release to conform the statements to actual results or any change in the Company’s expectations.

SOURCE Summit Hotel Properties, Inc.