Hotels in Longview and Tyler are among 27 that Austin-based Summit Hotel Properties will acquire from NewcrestImage, a company with Longview ties.
Newcrest Image, which has headquarters in Frisco, got its start in Longview as Image Hospitality. Newcrest opened its remaining property in Longview, the Hilton Garden Inn, in 2015. It was the first in the city in many years to offer guests not just a place to sleep, but a full-service restaurant and conference and event spaces as well. That hotel, along with the Newcrest’s Residence Inn by Marriott in Tyler, are among the properties in the total $822 million transaction.
The acquisition consists of hotels with 3,709 guest rooms, two parking structures in the Dallas area and other incentives, according to information released by the two companies. Closing is expected later this year or early in the first quarter of 2022.
Summit, a publicly traded company, is completing the deal through an existing joint venture with GIC, Singapore’s state-owned investment fund. Summit’s portfolio consists of 73 hotels, 61 of which are wholly owned, with a total of 11,398 guest rooms in 23 states. When this acquisition is finalized, it will have 100 hotels, 61 of which are wholly owned, and a total of 15,107 guest rooms in 24 states.
"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 Jonathan P. Stanner, Summit’s president and CEO, in a prepared statement. “We have creatively structured the transaction with the issuance of both common and preferred operating partnership units and continued our partnership with GIC, which will preserve nearly all our existing liquidity of approximately $450 million. We expect the transaction to be immediately accretive to earnings and leverage-neutral to our balance sheet leaving us ample investment capacity to continue to grow our 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."
As part of the deal, NewcrestImage will maintain its East Texas ties by becoming one of Summit’s largest shareholders. NewcrestImage will be able to nominate one director to Summit’s board of directors when the deal closes.
“NewcrestImage has assembled a collection of high-quality distinctive Marriott, Hilton, Hyatt, and IHG hotel properties throughout the Sun Belt region, which will be a great addition to Summit's portfolio,” said Mehul Patel, managing partner and CEO of NewcrestImage. “As we will become one of Summit's largest shareholders, we have confidence in Summit as one of the industry's leading owners with a highly regarded public platform.
"We believe the two portfolios create an excellent combination of hotels that have tremendous growth potential and are well-positioned to create long-term shareholder value as the lodging recovery continues.”