East Texas hotels part of $822 million sale | Local

Hotels in Longview and Tyler are among the 27 hotels that Austin-based Summit Hotel Properties will acquire from NewcrestImage, a company with ties to Longview.

Newcrest Image, headquartered in Frisco, started out in Longview as Image Hospitality. Newcrest opened its remaining Longview property, the Hilton Garden Inn, in 2015. It was the first in the city in many years to offer its guests not only a place to sleep, but also a full-service restaurant as well as conference and event rooms. This hotel, along with Newcrest’s Residence Inn by Marriott in Tyler, is one of the properties in the total transaction of $ 822 million.

The acquisition includes 3,709 guest room hotels, two parking garages in the Dallas area and other incentives, according to the two companies. The closing is expected for the end of this year or the beginning of the first quarter of 2022.

Summit, a publicly traded company, is finalizing the transaction through an existing joint venture with GIC, Singapore’s state-owned investment fund. Summit’s portfolio consists of 73 hotels, 61 of which are 100% owned, with a total of 11,398 guest rooms in 23 states. When this acquisition is completed, it will have 100 hotels, 61 of which are 100% owned, and a total of 15,107 guest rooms in 24 states.

“We are pleased to announce this breakthrough investment opportunity to acquire 27 hotels that complement our existing portfolio of high quality, well-located properties and significantly expand our presence in the high-growth Sun Belt markets,” said Jonathan P. Stanner, President and Summit CEO, in a prepared statement: “We have creatively structured the transaction by issuing common and preferred operational partnership units and continuing our partnership with GIC which will preserve almost all of our existing liquidity of approximately $ 450 million. We assume that the transaction will immediately increase earnings and have no leverage on our balance sheet, so that we have sufficient investment capacity to further expand our portfolio.

“The announcement adds to our optimism about the outlook for our business and confirms our unique ability to raise and pursue a wide range of capital alternatives and external growth opportunities given our strong liquidity profile, well-positioned balance sheet and overall resilient portfolio.”

As part of the transaction, NewcrestImage will maintain its ties to East Texas by becoming one of Summit’s largest shareholders. NewcrestImage will be able to appoint a director to Summit’s board of directors when the transaction is completed.

“NewcrestImage has assembled a collection of high quality, distinctive Marriott, Hilton, Hyatt and IHG hotel properties across the Sun Belt region that will be a great addition to Summit’s portfolio,” said Mehul Patel, Managing Partner and CEO of NewcrestImage. “As we become one of Summit’s largest shareholders, we trust that Summit will be a leading owner in the industry with a highly respected public platform.

“We believe the two portfolios are an excellent combination of hotels with tremendous growth potential and are well positioned to create long-term shareholder value as the property rebound continues.”

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