Wednesday, December 11, 2024
Summit Lodge Properties, in collaboration with GIC by their three way partnership, has revealed plans to amass two properties: the 250-room Hampton Inn Boston – Logan Airport and the 149-room Hilton Backyard Inn Tysons Nook. The entire buy value for these acquisitions is $96 million, averaging roughly $241,000 per room. The deal represents an 8.8% capitalization fee based mostly on projected 2024 web working earnings, with no main capital expenditures anticipated till the fourth quarter of 2026.
“We are excited to announce the pending acquisition of the Hampton Inn Boston – Logan Airport and Hilton Garden Inn Tysons Corner through our joint venture with GIC. These two premium-branded hotels are located in high barrier-to-entry, gateway city submarkets and generate RevPAR, EBITDA margin and EBITDA per key metrics that are accretive to our existing portfolio of high-quality hotels. The purchase price represents an attractive going-in yield and a significant discount to estimated replacement cost,” mentioned Jonathan P. Stanner, the Firm’s President and Chief Government Officer. “The transaction represents the continuation of our successful capital allocation strategy and has been facilitated by recent asset sales which generated nearly $150 million of proceeds and eliminated approximately $50 million of near-term capital expenditures,” continued Mr. Stanner.
Hampton Inn Boston – Logan Airport
Positioned simply 2.5 miles from Boston Logan Worldwide Airport and fewer than a 10-minute drive from Downtown Boston, the Hampton Inn Boston – Logan Airport is completely positioned to cater to a various mixture of vacationers. Boston, identified for its vibrant company, group, schooling, healthcare, and leisure sectors, is among the many most strong lodging markets within the U.S.
In 2023, Boston Logan Worldwide Airport served over 40 million passengers and is presently present process a $2 billion modernization challenge to accommodate rising journey demand. This multi-year funding will possible improve the lodge’s future efficiency.
The Hampton Inn Boston – Logan Airport options 250 guestrooms and a 368-space surface-level car parking zone, a part of which is leased to a third-party parking operator. This association supplies the lodge with a sturdy and important ancillary income stream, additional strengthening its monetary outlook.
Hilton Backyard Inn Tysons Nook
The Hilton Backyard Inn Tysons Nook is positioned in Vienna, Virginia, inside Fairfax County, simply 11 miles west of Washington, D.C. It’s the closest Hilton-branded select-service property to Hilton’s world headquarters. Tysons Nook is a distinguished enterprise district in Virginia, internet hosting 5 Fortune 500 corporations and one of many largest procuring and mixed-use developments within the U.S.—Tysons Nook Heart. The world boasts annual visitation spending of $2.4 billion and a compounded annual employment development fee of 14% since 2010.
The lodge’s strategic location and proximity to important company and retail hubs make it a sexy funding, positioning it to capitalize on the regular inflow of enterprise and leisure vacationers.
Financing and Transaction Particulars
The acquisition might be financed by a mixture of money readily available and a $50 million time period mortgage secured by exercising a portion of the accordion choice on the GIC three way partnership’s present $200 million credit score facility. The mortgage will carry an rate of interest of SOFR + 210 foundation factors and has a completely prolonged maturity date of September 2028.
Summit’s estimated $24 million fairness contribution for its 51% stake within the transaction will primarily come from the online proceeds of its latest sale of the 4 Factors by Sheraton San Francisco Airport, in addition to money reserves. This leverage-neutral method ensures that the transaction aligns with the corporate’s broader monetary technique.
The transaction, valued at $96 million, is anticipated to shut within the fourth quarter of 2024, although Summit notes there aren’t any assurances that the deal might be finalized on the proposed phrases or timeline.
Strategic Progress and Market Positioning
With these acquisitions, Summit Lodge Properties continues to strengthen its portfolio with strategically positioned property in high-demand markets. The Hampton Inn Boston – Logan Airport and the Hilton Backyard Inn Tysons Nook not solely present enticing in-place yields but additionally align with the corporate’s imaginative and prescient of driving long-term worth for shareholders by strategic investments.
These acquisitions mark one other step ahead in Summit’s development trajectory, capitalizing on alternatives in two of the nation’s most dynamic markets.
