VANCOUVER, June 18, 2015 /PRNewswire/ - American Hotel
Income Properties REIT LP ("AHIP") (TSX: HOT.UN; OTCQX:
AHOTF) announced today the completion of its previously announced
acquisition of a portfolio of nine branded, select-service hotel
properties (the "Acquisition Properties") for an aggregate
purchase price of US$53.5 million
excluding US$3.5 million for brand
mandated property improvement plans (the "PIPs") to be
completed over the next 30 months and before customary closing and
post-acquisition adjustments.
The Acquisition Properties are located in five states with a
total of 632 guestrooms and are approximately five years old.
The hotels are franchised by major global brands including
Intercontinental Hotels Group, Hilton Hotels & Resorts and
Carlson Rezidor Hotel Group and are situated along major U.S.
Interstate Highways near transportation hubs and other major demand
generators.
AHIP funded the purchase price and the PIPs using a combination
of cash on hand and a new US$32.0
million commercial mortgage-backed securities
("CMBS") mortgage. The new mortgage will be for a 10-year
term, interest-only for the first seven years and then amortized
over a 30-year period for the remaining three years. The mortgage
has a fixed interest rate of 4.24% for the entire term and the
lender has agreed to provide an FF&E reserve waiver for the
first 24 months.
Rob O'Neill, AHIP's Chief
Executive Officer, commented, "We are pleased to acquire these
high-quality, newer assets in strong transportation-oriented
markets with solid underlying fundamentals at prices well below
replacement cost. 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 accretive
acquisitions and provide stable returns and deliver value to AHIP's
unitholders. Our hotel manager has carefully planned and
implemented a successful transition of all nine properties on the
same day. We look forward to the implementation of value
enhancement opportunities over the coming quarters."
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 post-acquisition adjustments to the purchase price for the
Acquisition Properties; the cost and completion timing for the
PIPs; the terms of the new CMBS mortgage for the Acquisition
Properties; the future growth of the U.S. hotel industry; the
future availability of low cost CMBS financing; the availability of
accretive acquisition opportunities; and the implementation of
value enhancement opportunities at the Acquisition Properties.
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, the continued strength of the U.S. lodging industry, the
ability to secure CMBS financing, the ability to successfully
integrate the Acquisition Properties and expectations and
assumptions related to capitalization rates, fees and reserves and
replacement costs for the Acquisition Properties, as applicable.
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 27, 2015 and under "Risks and
Uncertainties" in AHIP's Management's Discussion and Analysis dated
May 13, 2015, both of which are
available on SEDAR at www.sedar.com.
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
the United States in close
proximity to railroads, airports, highway interchanges, and other
demand generators. AHIP currently owns 70 hotels including 38
hotels serving the U.S. rail industry pursuant to long-term railway
contracts and 32 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
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 NEWS
RELEASE.
SOURCE American Hotel Income Properties REIT LP