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​ARC Hospitality Trust Acquires 10 Hotels for $150 Million

American Realty Capital Hospitality Trust Inc., a publicly registered non-traded real estate investment trust sponsored by AR Capital, has completed the acquisition of 10 hotels for a purchase price of $150.1 million from Summit Hotel Properties (NYSE:INN), a publicly-traded hotel real estate investment trust.

The transaction represents the first 10 of 26 hotels that the company announced it will be acquiring from Summit for a total purchase price of $347.4 million. In addition, ARC Hospitality currently has another 18 hotels under contract with unrelated sellers for $392.4 million. ARC Hospitality intends to close on all of the acquisitions during the next eight months consistent with previous announcements, for an aggregate of 44 hotels.

The 10 hotels are all branded with Marriott International and Hilton Hotels & Resorts and are located in Baton Rouge, Louisiana; Flagstaff, Arizona; Fort Wayne, Indiana; Medford, Oregon; and El Paso, Texas. The acquisition increases ARC Hospitality’s current lodging portfolio to 132 hotels totaling 16,014 rooms across 32 states.

Jonathan P. Mehlman, chief executive officer of ARC Hospitality, commented, “This transaction shows that we are continuing to execute our focused strategy of acquiring market-leading select service hotels with strong brands and durable cash flows.”

The management of the properties will be divided among the company’s affiliated hotel operator, Crestline Hotels & Resorts, and Interstate Hotels & Resorts, which currently operates several of the hotels that are being acquired from Summit.

The REIT financed the acquisitions with a draw on its $450 million term loan facility, which was co-arranged by Deutsche Bank AG New York Branch, Deutsche Bank Securities, Inc. and BMO Capital Markets.

ARC Hospitality is a publicly registered, non-traded real estate investment trust that focuses on acquiring stable, institutional quality and strategically located lodging properties in North America branded by premium national hotel brands.