Summit Hotel Properties, through its joint venture with GIC, is under contract to acquire the 250-guestroom Hampton Inn Boston-Logan Airport and the 149-guestroom Hilton Garden Inn Tysons Corner for a combined purchase price of $96.0 million. This equates to $241,000 per key, representing an 8.8% capitalization rate based on forecasted 2024 net operating income.
These premium-branded hotels are located in high barrier-to-entry, gateway city submarkets and are expected to generate RevPAR, EBITDA margin, and EBITDA per key metrics that are accretive to the company's existing portfolio. The acquisition price also represents a significant discount to estimated replacement cost, with no meaningful capital expenditures planned prior to the fourth quarter of 2026.
The transaction is expected to be financed with a mix of cash on hand and a $50 million term loan, raised in conjunction with exercising a portion of the accordion option on the GIC joint venture's existing $200 million credit facility. Summit Hotel Properties' estimated $24 million equity share will be funded primarily from net sale proceeds from the recently completed sale of the Four Points by Sheraton San Francisco Airport, making it a leverage-neutral transaction expected to close in the fourth quarter of 2024.
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