Hotel real estate investment trust Summit Hotel Properties closed on a $275 million senior unsecured term loan it will use to repay debt.
Future proceeds will go toward Summit's outstanding $287.5 million convertible senior notes that mature in February 2026, the company said.
This refinancing means Summit faces no significant debt maturities until 2027. The term loan includes a delayed draw feature that allows Summit to maintain the 1.5% interest rate of the senior notes. It has a maturity date of March 2030, with two, one-year extensions.
Summit has been working through a disposition strategy designed to bolster its balance sheet and bring down debt.
CEO Jonathan Stanner said on the REIT's fourth-quarter earnings call with analysts that the company sold "10 hotels over the past 18 months for nearly $150 million of gross proceeds, while eliminating approximately $50 million of near-term capital needs."
William “Trey” Conkling, the REIT’s executive vice president and chief financial officer, has repeatedly cited the company's commitment to maintaining liquidity for acquisitions. Summit closed $200 million in hotel deals in 2024, including the 250-room Hampton Inn Boston-Logan Airport and the 149-room Hilton Garden Inn Tysons Corner for $96 million through its joint venture with GIC Real Estate in December.
Summit currently has approximately $320 million of pro rata total liquidity and approximately 77% pro rata fixed interest rate debt and preferred equity capital, according to a news release detailing the term loan.