VANCOUVER, Feb. 25, 2015 /PRNewswire/ - American Hotel
Income Properties REIT LP ("AHIP") (TSX: HOT.UN; OTCQX:
AHOTF) announced today the acquisition of a newly built 110-room
Oak Tree Inn hotel in Wellington,
Kansas (the "Property") from SunOne Developments Inc.
("SunOne") for a total purchase price of US$7,410,000 plus closing adjustments. The
acquisition was financed by a combination of: (i)
approximately US$1,435,000 from cash
on hand; (ii) a new US$4,725,000
mortgage on the Property; (iii) the offset of approximately
US$650,000 in mezzanine loans owed by
SunOne to a subsidiary of AHIP; and (iv) the issuance of
US$600,000 (or 66,927 units) of AHIP
units from treasury.
The new mortgage has a variable rate of the 30-day LIBOR rate
plus 3.00% with a floor interest rate of 4.00%. It has a
10-year term with a 20-year amortization schedule. The
newly-issued AHIP units were issued at Cdn$11.20 per unit, which represents the five-day
volume-weighted average trading price of the units on the Toronto
Stock Exchange.
Mr. Rob O'Neill, Chief Executive
Officer of AHIP, commented, "The new Wellington hotel will be the flagship of the
Oak Tree Inn portfolio, the highest quality chain of crew lodging
facilities presently serving the U.S. freight railway industry.
This is the fourth property delivered by SunOne to AHIP over the
past year and is secured by a long-term railway contract that
guarantees the majority of its available room nights, and also
extends its 20-year relationship with the railway in Wellington for another decade." The
Property is located in Wellington,
Kansas, which is approximately 30 miles south of
Wichita, Kansas. The new
hotel includes an existing Penny's Diner and will be managed by TR
Lodging Enterprises Inc., a wholly-owned subsidiary of O'Neill
Hotels & Resorts Ltd. The existing Wellington hotel will continue to be used in
operations. The grand opening is scheduled for Thursday March 5, 2015 with a formal ceremony
including city officials, railway representatives and other key
dignitaries.
Following this acquisition, AHIP's 61-hotel portfolio will
consist of 38 Oak Tree Inn hotels with 2,882 guestrooms and 23
branded hotels with 2,347 guestrooms franchised with leading
national and international hotel brands.
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, contract-focused,
transportation-oriented, and branded select-service lodging
sectors.
AHIP's properties are located in the
United States in close proximity to railroads, airports,
highway interchanges, and other transportation hubs and demand
generators. 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 Adjusted Funds
from Operations ("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