ATLANTA — Summit Hotel Properties has been on an acquisitions roll, and President and CEO Jonathan Stanner says there’s still room to grow.
In late March, the real estate investment trust closed on the final property in its $822-million, 27-hotel portfolio acquisition from NewcrestImage as part of its joint venture with Singapore-based GIC. The total deal included two parking structures and other financial investments.
This portfolio is the largest acquisition the company has made through its joint venture with GIC, which it established in 2019.
With approximately $1.3 billion invested via the joint venture so far, Stanner told Hotel News Now in a video interview held during the Hunter Hotel Investment Conference that he established the joint venture “very intentionally not to have a time horizon and not to have a minimum amount of equity we need to invest or a maximum.”
This point in the economic cycle continues to be a good time to acquire hotel assets, and Stanner said Summit would “continue to be opportunistic.”
As for selling hotels, Summit is sitting in a good position with a high-quality portfolio that is desirable right now, he said.
“We own a portfolio of assets that are in good markets, they’re really good brands, they’re generally performing very well,” he said. “There’s a lot of buyers for the type of assets that we have … and there’s a lot of capital chasing this type of asset.”
Investing in the company’s current portfolio of 101 hotels is part of what keeps it attractive, Stanner said.
“Very little deferred capital and a new, well-maintained look” for hotels has always been a hallmark of Summit’s strategy, he said.
In 2021, Stanner said the company recognized the recovery beginning and decided to “accelerate some of the CapEx that we may have otherwise deferred into 2022 or 2023 into the back half of 2021 or 2022.”
Maintaining quality is important to Stanner, which can be a bit of a contrarian viewpoint, he said.
“We need to make sure we don’t run into a deferred capital issue as an industry,” he said. “You can fall into the trap of being governed by the lowest common denominator from a product perspective. For us to have a well-maintained portfolio of branded assets is great, but if our peers don’t have the same thing, it ends up pulling the entire brand down.”
Current high leisure demand also keeps Stanner confident in Summit’s strategy. A majority of the NewcrestImage portfolio is based in Sun Belt states, and leisure demand across Summit’s entire portfolio has driven the company’s performance numbers.
“We see a recovery in both [leisure and business-transient] business, we see them taking on very, very different trajectories,” he said. “And I don’t think it really changes how we think about markets or segmentation. We underwrite it differently … because we think they’re going to recover at different cadences but we haven’t written off urban hotels. We haven’t written off business travel. We just underwrite the trajectory of that recovery somewhat differently than we do on the leisure side.”
For more on Hotel News Now’s interview with Jonathan Stanner, watch the video above.