Summit Hotel Properties Agrees to Sell Two Dallas-Area Hotels for $19M in Continued Real Estate Disposition Strategy

Summit Hotel Properties, Inc. (NYSE: INN) has entered into a purchase and sale agreement to sell two wholly-owned hotels in the Dallas (Arlington South), Texas market for a combined price of $19.0 million, the Austin-based real estate investment trust announced April 30, 2026, alongside its first quarter 2026 earnings results.

The transaction involves the 103-guestroom Courtyard by Marriott, Dallas (Arlington South), TX and the 96-guestroom Residence Inn, Dallas (Arlington South), TX. The $19.0 million sales price represents a 5.0% capitalization rate based on net operating income for the trailing twelve months ended March 31, 2026, and after consideration of foregone near-term required capital expenditures. The transaction is expected to close in the third quarter of 2026.

Strategic Capital Recycling

The Dallas disposition continues Summit Hotel Properties' broader portfolio optimization strategy. Since 2023, the company and its affiliates have sold, or are under contract to sell, 15 hotels for a combined sales price of approximately $218 million at a blended capitalization rate of approximately 4.6%, inclusive of an estimated $68 million of foregone capital needs, based on the trailing twelve-month net operating income at the time of each sale.

The combined RevPAR for the sold hotels was $86, representing roughly a 30% discount to the company's current pro forma portfolio RevPAR of $126.57.

"We also continue to successfully allocate capital as we entered into an agreement to sell two wholly-owned assets for $19 million at an implied capitalization rate of 5.0 percent, inclusive of foregone capital investment needs, and repurchased an additional 1.4 million shares during the quarter," said Jonathan Stanner, President and Chief Executive Officer of Summit Hotel Properties.

In a separate transaction completed in February 2026, the company sold the 122-guestroom Hilton Garden Inn Longview, Texas — owned through its joint venture with GIC — for $12.3 million, representing a 6.8% capitalization rate based on net operating income for the trailing twelve months ended January 31, 2026.

First Quarter 2026 Operating Performance

Summit Hotel Properties reported total revenues of $185.1 million for the first quarter of 2026, compared to $184.5 million in the same period of 2025. Net loss attributable to common stockholders widened to $10.4 million, or $0.10 per diluted share, compared to a net loss of $4.7 million, or $0.04 per diluted share, in the first quarter of 2025.

On a pro forma basis, RevPAR increased 0.2% to $126.57, driven by a 1.5% increase in average daily rate to $176.85, while occupancy declined 1.3% to 71.6%. Pro forma hotel EBITDA decreased to $63.4 million from $65.1 million in the same period of 2025, with hotel EBITDA margin compressing 146 basis points to 34.4%.

Adjusted FFO for the quarter was $25.5 million, or $0.21 per diluted share, compared to $27.4 million, or $0.22 per diluted share, in the first quarter of 2025.

Despite the year-over-year declines, management highlighted sequential improvement within the quarter. "Operating fundamentals improved meaningfully in the first quarter as positive RevPAR growth in the quarter exceeded our expectations by over 200 basis points. Encouragingly, we experienced sequential improvements in demand within the quarter culminating with March RevPAR growth of over 4%," Stanner said.

Balance Sheet and Capital Markets Activity

The company fully repaid its $287.5 million 1.5% Convertible Notes on February 17, 2026, utilizing its $275.0 million Delayed Draw Term Loan and Corporate Revolver.

As of March 31, 2026, Summit Hotel Properties carried outstanding debt of approximately $1.1 billion on a pro rata basis, with a weighted average interest rate of 5.53%. Approximately 50% of outstanding debt, or $539.2 million, carried a fixed interest rate following interest rate derivative agreements, while the remaining $545.0 million carried a variable rate. The company held unrestricted cash and cash equivalents of $34.8 million and reported no debt maturities until 2028.

During the first quarter, the company repurchased 1.4 million common shares under its share repurchase program for an aggregate purchase price of $6.0 million, or a weighted average price of approximately $4.17 per share. Since the inception of the program in 2025, Summit has repurchased approximately 5.0 million shares — approximately 4% of total shares outstanding — at an average price of $4.26 per share. As of March 31, 2026, approximately $28.6 million remained available under the repurchase program.

Updated 2026 Outlook

Based on first quarter results and recent operating trends, Summit Hotel Properties raised the low end and implied midpoint of its full-year 2026 guidance ranges. The company now projects pro forma RevPAR growth of 0.5% to 3.0%, Adjusted EBITDAre of $170 million to $181 million, and Adjusted FFO of $90 million to $102 million, or $0.75 to $0.85 per diluted share.

The updated outlook is based on the 94 lodging assets owned as of March 31, 2026, including the two Dallas (Arlington South) hotels under the pending sale agreement. The company noted the sale is expected to close in the third quarter and will result in approximately $500,000 of foregone hotel EBITDA from the closing date through year-end, which is not reflected in the updated guidance ranges. No additional acquisitions, dispositions, share repurchases, or capital markets activities are assumed in the full-year 2026 outlook.

"These positive trends have continued into the second quarter as rate-driven revenue growth has been broad based across markets and segments of our portfolio. Our outlook for the remainder of the year is increasingly positive as we approach what is expected to be a robust summer of travel demand, highlighted by a record setting special events calendar," Stanner added.

As of April 30, 2026, Summit Hotel Properties' portfolio consisted of 94 assets — 52 of which are wholly owned — with a total of 14,226 guestrooms located across 24 states.

On April 23, 2026, the company declared a quarterly cash dividend of $0.08 per share on its common stock, representing an annualized dividend yield of 6.4% based on the closing price of shares on April 29, 2026. Dividends are payable on May 29, 2026, to holders of record as of May 15, 2026.

This article contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected.

Sources: Summit Hotel Properties First Quarter 2026 Results Press Release