Summit Hotel Properties, Inc. (INN - Free Report) , a real estate investment trust (REIT), recently acquired a portfolio of eight Hyatt hotels spread across diverse locations for $87.4 million. The portfolio comprising 1,043 guest rooms was purchased from the affiliates of Hyatt Hotels Corporation (H - Free Report) . The acquisition was partially funded from a just-concluded secondary offering
Recently in October 2012, Summit Hotels announced the pricing of 12 million shares at $8.15 each to enhance its liquidity. In this offering, the underwriters fully exercised an option to purchase up to an additional 1.8 million shares. The offering size was increased by 20% to 12 million shares and the total number of shares eventually sold was 13.8 million.
Through this strategic initiative, the company expects to enhance the quality of its portfolio and expects it to be accretive to earnings going forward. At the end of the second quarter 2012, the company had $11.6 million in cash and cash equivalents. For the twelve-month period ended June 30, 2012, the hotels in the Hyatt Portfolio had occupancy of 74.0%, at an average daily rate (ADR) of $96.42 and revenue per available room (RevPAR) of $71.35.
Summit Hotel is focused on the acquisition and ownership of premium-branded hotels in the upscale and upper mid-scale segments of the lodging industry. Presently, the company’s hotel portfolio consists of 81 hotels with a total of 8,576 guestrooms located in 21 states.
Summit Hotel currently retains a Zacks #5 Rank, which translates into a short-term Strong Sell rating. We also have a long-term Neutral recommendation on the stock. One of its competitors, Host Hotels & Resorts Inc (HST - Free Report) holds a Zacks #2 Rank, which translates into a short term Buy rating.