Texas REIT Pays $17.1M for Two Local Hotels
A Texas-based real estate investment trust (REIT) announced Thursday that it has closed on the acquisition of two local hotels.
Summit Hotel Properties, Inc., headquartered in Austin, said that it paid $17.1 million for the two properties: the Hilton Garden Inn in Eden Prairie and the Holiday Inn Express & Suites in Minnetonka.
The Hilton Garden Inn, located at 6330 Point Chase, has 97 guestrooms, and the Holiday Inn, located at 10985 Red Circle Drive, has 93.
Summit said that it plans to spend roughly $3.6 million over the next year on improvements to the hotels, although it didn’t specify what the improvements would be.
According to a Finance & Commerce report, Summit paid $10.2 million for the Hilton property and $6.9 million for the Holiday Inn. The sellers of the hotels are reportedly listed as FCH Eden Prairie, LLC, and FCH Minnetonka, LLC, both of which have the same address as Los Angeles-based Latitude Management Real Estate Investors.
The just-closed purchases expand Summit’s local portfolio; it already owns a Hampton Inn & Suites and a Spring Hill Suites near the Mall of America.
And Summit revealed in a recent financial report that it plans to spend $31 million by the end of the year to purchase a downtown Minneapolis hotel that’s being converted to a Hyatt Place. Finance & Commerce said the hotel is reportedly the Comfort Suites Hotel at 425 South Seventh Street.
Dan Hansen, Summit’s president and CEO, said in a statement that the company is excited to “grow our presence in Minneapolis.” He added that the recent hotel acquisitions “squarely hit the marks of our simple strategy: top brands in top markets.”
Jon Ruzicka, an associate in the Minneapolis office of Marcus & Millichap, told Finance & Commerce that the purchases are the latest sign that the Minneapolis-St. Paul hotel market is bouncing back and on its way to record performance this year.
“It’s not even in downtown Minneapolis, but it’s drawing interest from a national REIT,” Ruzicka reportedly said.
According to Finance & Commerce, New York-based Real Capital Analytics indicated that the local metro area is on track to exceed the $151.3 million in hotel sales recorded in 2012; seven sales collectively worth $87.3 were logged as of May 1.
Summit acquires and owns upscale and “upper-midscale” hotels and focuses on those with premium brands. Its portfolio now consists of 96 hotels in 24 states; together, they contain 11,223 guestrooms.