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.
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.
Summit 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.
