VANCOUVER, Nov. 26, 2014 /PRNewswire/ - American Hotel
Income Properties REIT LP ("AHIP") (TSX: HOT.UN; OTCQX:
AHOTF) today announced the completion of its previously announced
acquisition of a portfolio of four branded hotel properties (the
"Acquisition Properties") located in North Carolina and Florida for an aggregate purchase price of
US$41.0 million (or approximately
$116,000 per room), excluding
US$2.5 million for brand mandated
property improvement plans (the "PIPs") and before customary
closing and post-acquisition adjustments.
The Acquisition Properties contain a total of 353 guestrooms and
are comprised of three Marriott branded properties (a 94-room
Courtyard by Marriott hotel in Statesville, North Carolina, an 83-room
Fairfield Inn & Suites hotel in Melbourne, Florida and a 96-room Fairfield Inn
& Suites hotel in Titusville,
Florida) and one Hilton branded property (an 80-room Hampton
Inn in Statesville, North
Carolina). The properties are all located along major
U.S. Interstate Highways near transportation hubs and other
significant demand generators.
AHIP funded the purchase price for the acquisition and the
financing of the PIPs using a combination of cash on hand and a new
US$26.1 million CMBS mortgage. The
new CMBS mortgage will be for a 10-year term, interest-only for the
first seven years and will carry a fixed interest rate of 4.27% for
the entire term. The lender has also provided an FF&E reserve
waiver for the first 24 months.
Robert O'Neill, AHIP's Chief
Executive Officer, commented: "These high-quality and
well-maintained properties have been purchased at a price below our
estimate of replacement cost in strong transportation-oriented
markets with solid underlying fundamentals. We intend to capitalize
on the ongoing growth in the U.S. hotel industry and continue to
utilize the availability of low cost CMBS financing to fund a
steady pipeline of acquisitions and provide stable distributions to
our unitholders. After the completion of this accretive
transaction, I am pleased to report that we have successfully
deployed the cash proceeds from the October
2014 bought deal unit offering."
The Acquisition Properties will be managed for AHIP by its
exclusive hotel manager, Tower Rock Hotels & Resorts Inc., a
wholly owned subsidiary of O'Neill Hotels & Resorts Ltd.
Forward-Looking Information
Certain statements contained in this news release may constitute
forward-looking statements. Forward-looking statements are often,
but not always, identified by the use of words such as
"anticipate", "plan", "expect", "may", "will", "intend", "should",
and similar expressions. These statements involve known and unknown
risks, uncertainties and other factors that may cause actual
results or events to differ materially from those anticipated in
such forward-looking statements. Forward-looking statements in this
news release include, without limitation, the following: references
to the purchase and closing costs of the Acquisition Properties;
local lodging demand generators; the completion and estimated costs
of the PIPs; the degree to which the Acquisition Properties are
accretive; the future growth of the local lodging markets and the
U.S. hotel industry overall; the availability of accretive
acquisition opportunities; and future availability of low cost CMBS
financing.
Forward-looking information is based on a number of key
expectations and assumptions made by AHIP, including, without
limitation: a reasonably stable North American economy and stock
market and the ability to successfully integrate the Acquisition
Properties. Although the forward-looking information contained in
this news release is based on what AHIP's management believes to be
reasonable assumptions, AHIP cannot assure investors that actual
results will be consistent with such information.
Forward-looking information reflects current expectations of
AHIP's management regarding future events and operating performance
as of the date of this news release. Such information involves
significant risks and uncertainties, should not be read as
guarantees of future performance or results, and will not
necessarily be accurate indications of whether or not such results
will be achieved. Actual results could differ materially from those
currently anticipated due to a number of factors and risks. These
include, without limitation, those factors that can be found under
"Risk Factors" in AHIP's Annual Information Form dated March 26, 2014.
The forward-looking statements contained herein represent AHIP's
expectations as of the date of this news release, and are subject
to change after this date. AHIP assumes no obligation to update or
revise any forward-looking statements whether as a result of new
information, future events or otherwise, except as required by
applicable law.
About American Hotel Income Properties REIT LP
AHIP is a limited partnership formed under the Limited
Partnerships Act (Ontario) to
invest in hotel real estate properties located substantially in
the United States and is engaged
primarily in the railroad employee accommodation,
transportation-oriented, and select-service lodging sectors. AHIP's
properties are mostly located in secondary and tertiary markets in
close proximity to railroads, airports, highway interchanges, and
other demand generators. AHIP currently owns 60 hotels including 37
hotels serving the U.S. rail industry pursuant to long-term railway
contracts and 23 hotels affiliated with leading national and
international hotel brands. AHIP's long-term objectives are to: (i)
generate stable and growing cash distributions from hotel
properties substantially in the U.S.; (ii) enhance the value of its
assets and maximize the long-term value of the hotel properties
through active management; and (iii) expand its asset base and
increase its AFFO per unit through an accretive acquisition
program, participation in strategic development opportunities and
improvements to its properties through targeted value-added capital
expenditure programs.
Additional information relating to AHIP, including its other
public filings, is available on SEDAR at www.sedar.com and on
AHIP's website at www.ahipreit.com.
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT
ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS
RELEASE.
SOURCE American Hotel Income Properties REIT LP