Markets
XHR

Summit Hotel (INN) Acquires Five Hotels for $163M from Xenia

An image of a person going over a financial report
Credit: Shutterstock photo

Summit Hotel Properties, Inc.INN recently enhanced its portfolio with the acquisition of five hotels, comprising 812-guestroom, from Xenia Hotels & Resorts, Inc. XHR , for $163 million or around $201,000 per key. The hotels are positioned in prime locations and markets with solid strength, giving scope to Summit Hotel to boost its profitability.

The acquired portfolio includes the 203-guestroom Courtyard Fort Worth Downtown/Blackstone, the 123-guestroom Courtyard Kansas City Country Club Plaza and the 182-guestroom Courtyard Pittsburgh Downtown. Also, it comprised the 116-guestroom Hampton Inn & Suites Baltimore Inner Harbor, and the 188-guestroom Residence Inn Baltimore Downtown/Inner Harbor.

Notably, the total purchase price marked an 11.1x multiple on the hotels' combined trailing twelve month EBITDA as of April 2017. Furthermore, the portfolio generated revenue per available room (RevPAR) of $115.52 during the same period, per the company's earlier press release which revealed about this buyout deal.

With this five-hotel portfolio acquisition, Summit Hotel Properties continues its strategy of owning premium-branded upscale hotels with efficient operating models. The company's portfolio is also diversified in terms of geography. In fact, as of Jun 21, 2017, the company had 81 hotels in its portfolio, with a total of 11,608 guestrooms in 24 states.

Moreover, Summit Hotel Properties is a consistent performer, having beaten the Zacks Consensus Estimate in terms of funds from operations ("FFO") per share in each of the trailing four quarters, with an average beat of 13.21%.

Currently, Summit Hotel Properties carries a Zacks Rank #3 (Hold). Also, over the past three months, shares of Summit Hotel climbed 23.2% and outperformed the Zacks categorized REIT and Equity Trust - Other industry's gain of 4.5%.

Stocks to Consider

Better-ranked stocks in the REIT space include Prologis, Inc. PLD , PS Business Parks, Inc. PSB and Whitestone REIT WSR . All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Prologis' estimates for second-quarter 2017 FFO per share moved north 4.0% to 78 cents, over the past 30 days.

PS Business Parks has a long-term growth rate of 5.0%.

Whitestone REIT's FFO per share estimates for 2017 inched up 1.9% to $1.05, over the past 30 days.

Note: All EPS numbers presented in this write up represent funds from operations ("FFO") per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

The Best & Worst of Zacks

Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

ProLogis, Inc. (PLD): Free Stock Analysis Report

PS Business Parks, Inc. (PSB): Free Stock Analysis Report

Whitestone REIT (WSR): Free Stock Analysis Report

Summit Hotel Properties, Inc. (INN): Free Stock Analysis Report

Xenia Hotels & Resorts, Inc. (XHR): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

XHR INN PSB WSR PLD

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More