Summit Hotel Properties Acquires Hampton Inn & Suites for $53 Million in Downtown Austin
- Sep 22, 2014
Summit Hotel Properties announced the acquisition of the Hampton Inn & Suites, the first property owned by the company in Austin, the home of their corporate offices. The new addition is located downtown, just one block from the Austin Convention Center and Lady bird Lake, in the central district. Summit Hotel Properties, Inc. has a portfolio consisted of 91 hotels, encompassing 11,589 guestrooms in 21 states.
“We are thrilled with the acquisition of our first property in the robust and dynamic Austin market,” says company President and CEO Dan Hansen. “The Hampton Inn & Suites is a wonderful addition to our portfolio in one of the fastest growing cities in the country.”
Hampton Inn & Suites was built in 2002; it has 209 guestrooms displayed on 16 stories. The acquisition price was of $53 million and entered into a management agreement with Interstate Hotels & Resorts. Additionally, Summit Hotel Properties estimates costs of approximately $2.4 million in capital improvements over the following year. After renovation, the company anticipates next twelve month capitalization rate in the range of 8 percent to 8.5 percent based on management’s current projection of future net operating income. Furthermore, Summit Hotel Properties estimates the hotel to generate $1.4 million of adjusted earnings before interest, taxes, depreciation, and amortization through the balance of 2014.
Besides being known as the Live Music Capital of the World®, Austin includes Austin City Limits Music Festival, South by Southwest, Formula 1, and the University of Texas Longhorn football, and continues to see increases in demand from large corporate accounts, convention business and leisure. The city already hosts headquarters or regional offices of many Fortune 500 companies, including Apple Inc., eBay, Google, IBM, Texas Instruments, Whole Foods, and Dell.