US-based hotel investment company Summit Hotel Properties, through its joint venture (JV) with GIC, has completed the acquisition of the 120-key Residence Inn Scottsdale North for an estimated value of $29m.
The hotel is near several hiking and biking trails and tourist attractions besides shopping, dining and entertainment destinations.
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Furthermore, the property is close to major employers, healthcare facilities, the Scottsdale Airport and Airpark, as well as a range of training, medical, research facilities and other extended-stay businesses.
Summit Hotel Properties expects Residence Inn Scottsdale North to yield between an 8% and 8.5% capitalisation rate on full-year estimated 2023 net operating income.
The company earlier sold four wholly owned hotels comprising 467 bedrooms for a gross sales price of $28.1m.
The four hotels sold are Hyatt Place Chicago/Lombard/Oak Brook, Hyatt Place Chicago/Hoffman Estates, Hilton Garden Inn Minneapolis/Eden Prairie and Holiday Inn Express and Suites Eden Prairie – Minnetonka.
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By GlobalDataSummit Hotel Properties used a portion of the net proceeds generated from the recently concluded four-hotel portfolio sale to fund its 51% interest in this JV transaction.
Due to the transaction, the company will also forgo thorough renovations estimated to cost $21m.
Part of the sale proceeds were also used to cut down the outstanding balance of the company’s unsecured revolving credit facility.
