Calling the deal “iconic” for the industry, Mehul Patel, managing partner/CEO, NewcrestImage, spoke exclusively with Hotel Business after the announcement that Summit Hotel Properties has entered into an agreement to purchase 27 assets from his company.
“It is a very exciting time for all of us, especially the industry, as we move forward,” he said. “It is more of an iconic partnership. I think Summit and NewcrestImage have a very strategic relationship. As part of this transaction, we are contributing our assets and NewcrestImage becomes one of the largest shareholders of Summit Hotels. This is an iconic transaction. When you look at it, we are a private company that is contributing assets to a public REIT and becoming the second-largest shareholder of Summit. That is really a monumental transaction.”
Patel views the structure of the deal as a “new beginning” for the industry, adding, “It is a unique capital structure where NewcrestImage, as a private company, is fortunate to have a publicly-traded entity like Summit Hotel Properties partnering with us, where our currency becomes much more liquid and the private institution is a capital partner to help your future growth. They are backing us up with $50 million in mezz money on future growth. It is a very unique transaction and I think the industry will really be looking at this transaction as a case study.”
Patel, who will be joining Summit’s board of directors, said that, despite selling 27 of the company’s 29 properties, NewcrestImage will continue to acquire properties and build its portfolio. “Our journey continues as it has for the past 40 years,” he said. “I have completed 183 transactions over the years and continue to develop our pipeline. We are going to continue to build them and continue to acquire assets. Our path has been changed, and it has gotten even stronger in travel. Business travel is coming back stronger than expected, so we feel really excited to have this transaction with Summit.”
Yogi Patel, corporate asset manager; Mehul Patel, chairman/CEO;
Mital Patel, managing partner; Daxesh Patel, COO, construction finance.
NewcrestImage currently has six projects in its pipeline: two projects in Cincinnati; Plano, TX; Frisco, TX; Grapevine, TX; and Seattle. “We are going to move forward with those developments and continue to focus on it,” said Patel. “We are business as usual. I don’t see anything changing for us. We will continue to follow our path and do what we have done over the decades.”
He said that they plan to continue building the brand purposefully. “We are going to continue to create a portfolio this is really complementary to future travelers and what they are looking for,” he noted. “We have always done very unique, purposeful projects in every market, with very unique designs and a purpose of a concept.”