In what could be viewed as another indication that the lodging industry recovery is headed in the right direction, hotel transaction activity continues to gain momentum as evidenced by two recent portfolio deals within the last week.
Summit Hotel Properties, Inc. late last week announced that it had entered into a definitive contribution and purchase agreement to acquire a 27-hotel portfolio from NewcrestImage. The total consideration for the transaction is comprised of $776.5 million, or $209,000 per key, for the 27-hotel portfolio, plus an additional $24.8 million for the two parking structures and $20.7 million for the various financial incentives.
Jonathan P. Stanner, President and CEO, Summit Hotel Properties, touted the potential upside of the industry and how the acquisition plays into the recovery and complements the company’s portfolio.
“The announcement reinforces our optimism about the outlook for our business and validates our unique ability to source and pursue a broad range of capital alternatives and external growth opportunities given our strong liquidity profile, well- positioned balance sheet, and overall resilient portfolio,” he stated.
The portfolio that Summit is acquiring is comprised of largely select-service assets in the Sunbelt, an area where the company didn’t previously have a strong presence.
“We are thrilled to announce this transformational investment opportunity for the acquisition of 27 hotels that are complementary to our existing portfolio of high-quality, well-located assets and significantly expands our presence in high-growth Sun Belt markets,” said Stanner.
Meanwhile, earlier today PM Hotel Group announced its merger with Paramount Management Associates. With the addition of Paramount’s 9 properties, the combined company will manage a portfolio of 70 branded and independent properties across 22 states.
The union pairs the strengths of each organization, producing enhanced synergies, support, and expertise, according to PM Hotel Group. The company believes its expanded footprint and resources will position it to deliver greater returns to owners while curating exceptional guest experiences.
“This merger presented us with the opportunity to do something truly transformational. Relationships, with our owners, associates, and partners, have always been our focus. Now with the people and scale of our combined portfolio we are positioned to leverage our size for greater success,” stated Joseph Bojanowski, President and CEO of PM Hotel Group.
He added that, “Paramount’s senior executives bring exceptional operational and acquisition expertise that further enhances our team and positions us for continued strategic growth.”
The newly merged company will operate as PM Hotel Group with headquarters in Chevy Chase, MD.