• Fri. Jun 21st, 2024

Summit Follows Up Year of Acquisitions With Glamping Expansion


Mar 1, 2023
The 11-unit Onera Fredericksburg in Fredericksburg, Texas, is the first in a series of glamping investments made by Summit Hotel Properties. (Onera Fredericksburg)


Austin, Texas-based mostly Summit Lodge Qualities is likely all-in on glamping. Soon after getting the company’s 1st “luxurious treehouse resort” late in 2022, the corporation is increasing its to start with glamping resort and establishing an additional.

Jonathan Stanner, president and CEO of the hotel-centered authentic estate investment trust, stated the corporation expects to continue developing via a strategic partnership with glamping vacation resort manufacturer Onera, which incorporates the suitable of initial refusal for their up coming 10 tasks. The organization obtained a 90% stake in a joint undertaking to purchase the Onera Fredericksburg, an 11-unit web site in Fredericksburg, Texas, in October, along with an adjacent 6.4-acre parcel for $5.2 million.

Now equally Summit’s glamping footprint and financial investment are slated to increase drastically.

“Yesterday, we announced the first growth of our following two Onera-branded assignments — the expansion of our Onera Fredericksburg web page and a newly funded mezzanine bank loan for a independent glamping web-site — equally of which are predicted to open in 2024,” Stanner reported throughout the company’s fourth-quarter and total-yr 2022 earnings connect with. “Combined with our original acquisition of the Fredericksburg residence, we expect to spend concerning $40 million and $45 million in these to start with 3 assignments, which are forecast to created mid-teens unlevered, stabilized yields. In addition, we have quite a few other thrilling initiatives beneath evaluate that attribute similar return profiles to our existing initiatives and would allow for us to continue to scale our investment in this speedily expanding segment of our sector.”

Stanner mentioned 2022 was a hectic calendar year on the acquisition entrance for Summit, “with the acquisition of a lot more than $900 million of high top quality motels.” That figured is buoyed significantly with the January 2022 closing of a $776.5 million acquisition of 27 motels from NewcrestImage.

But Summit held up its busy rate of promotions in the fourth quarter, signing two individual portfolio offers to market a overall of 6 motels.

The to start with deal for a gross selling price of $50.5 million is for the 160-place Residence Inn Atlanta Midtown/Peachtree at 17th and the 123-area Courtyard Kansas Town Region Club Plaza along with a parcel of vacant land in San Antonio. The corporation also inked a $28.1 million offer to offer four lodges: the 151-area Hyatt Position Chicago/Lombard/Oak Brook, the 126-home Hyatt Put Chicago/Hoffman Estates, the 97-space Hilton Backyard Inn Minneapolis/Eden Prairie and the 93-place Holiday getaway Inn Categorical & Suites Eden Prairie — Minnetonka.

Stanner said the six hotels underneath deal have been perfectly beneath the company’s regular efficiency stages for the two profits and revenue and had been thanks to capital investments.

“Importantly, all 6 of these accommodations are owing for major renovations and the sales would permit us to forego in close proximity to-time period money expenses of among $35 million and $40 million,” he mentioned.

The organization used $76.5 million on funds improvements in 2022 and assignments to expend among $60 million and $80 million in 2023.

Summit officers described full revenues of $172.3 million for the fourth quarter of 2022 and $675.7 million for the total yr, in accordance to its earnings launch. Income for every accessible area was up 17.9% 12 months in excess of year in the fourth quarter to $109.01 and up 37.9% for the yr to $110.91, with lodge earnings margins up 401 basis details for the year.

The enterprise described a internet loss for the calendar year of $16.9 million.

The most recent steerage from the REIT phone calls for RevPAR development among 6% and 11% in 2023.

As of push time, Summit’s stock was investing at $7.40 for each share, up 2.5% 12 months to date. The NYSE Composite was up 1.6% for the similar period of time.

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