Summit Hotel Properties, Inc. (NYSE: INN) today announced that it has completed the previously announced acquisition of the dual-branded 264-guestroom AC Hotel by Marriott & Element Miami Brickell.
The Company's initial purchase option was based on a gross hotel valuation of $89.0 million, or $337,000 per key, and the Company funded its 90% equity interest totaling $38 million with the conversion of the previously funded $30 million mezzanine construction loan, which earned 9% cash interest during the loan term, and $8 million in cash. The transaction was financed with the assumption of a $47 million mortgage loan that has an interest rate of 1-Month Term SOFR + 300 basis points and maturity date of June 30, 2025. The Company projects that the Brickell Hotels will generate a combined hotel EBITDA yield between 8.0% and 9.0% for the full year 2022.
The project was developed by an affiliate of Robert Finvarb Companies, LLC, an established Miami-based developer, who will remain the Company's joint venture partner with a 10% equity interest in the Brickell Hotels. A $10 million letter of credit that supported the equity purchase option was released and the Company will retain the option to acquire the remaining 10% equity interest of the Brickell Hotels in December 2026.
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 June 13, 2022, the Company's portfolio consisted of 102 hotels, 61 of which are wholly owned, with a total of 15,323 guestrooms located in 24 states.