Residence Inn by Marriott Boston Watertown

WATERTOWN, MA—Summit Hotel Properties has acquired the 150-room Residence Inn by Marriott Boston Watertown for $71 million or at approximately $473,000 per key.

The Austin, TX-based hotel REIT also reports that it has closed on the sale of the 148-room Hyatt Place Fort Myers/at the Forum in Fort Myers, FL for $16.5 million or approximately $111,000 per key.

“We are thrilled with the acquisition of the Residence Inn by Marriott Boston Watertown, which represents a continuation of our capital allocation strategy by acquiring an exceptionally well-located hotel in a vibrant market,” says Summit Hotel Properties chairman, president and CEO Daniel P. Hansen. “With the completion of the sale of the Hyatt Place Fort Myers, our capital recycling program has generated $107 million of gross proceeds year-to-date at a blended capitalization rate of 7.7%, including estimated capital expenditures.”

He adds that the firm successfully redeployed a portion of those proceeds through the off-market purchase of the Residence Inn by Marriott Boston Watertown that he says has a “superior RevPAR, EBITDA margin and going-in yield than the hotels that were sold. This acquisition will further enhance our diversified portfolio of premium-branded hotels with efficient operating models and will lead the portfolio in absolute RevPAR and hotel EBITDA margin.”

The deal for the Residence Inn by Marriott Boston Watertown located near Arsenal Yards, closed on Sept. 12. The hotel opened in August 2016 and will require very limited capital expenditures, the company reports. Summit estimates a capitalization rate of 8.1% based on management's current estimate of the hotel's forward 12-month net operating income.

The sale of the Hyatt Place Fort Myers/at the Forum closed on Sept. 28 and calculated out to approximately $111,000 per key,

Summit Hotel Properties' current portfolio (as of Oct. 1) consists of 77 hotels with a total of 11,659 guest rooms located in 26 states.