SOURCE: American Hotel Income Properties REIT LP

American Hotel Income Properties REIT LP

April 01, 2016 06:00 ET

American Hotel Income Properties REIT LP Announces the Addition of 24 Guestrooms at the High Occupancy Oak Tree Inn Hotel in Hearne, Texas and a Corporate Update

VANCOUVER, BC--(Marketwired - April 01, 2016) - American Hotel Income Properties REIT LP ("AHIP") (TSX: HOT.UN) (OTCQX: AHOTF) announced today the acquisition of its previously announced 24-room expansion at the existing, high occupancy, 116-room Oak Tree Inn hotel and Penny's Diner located in Hearne, Texas (the "Hearne Property") for a total purchase price of US$2.4 million. AHIP funded the acquisition with cash-on-hand and the issuance of US$475,000 (or 59,088 AHIP units) from treasury. The units were issued at Cdn$10.44 per unit, which represents the five-day volume-weighted average trading price.

The expansion continues AHIP's previously announced railway growth strategy of constructing additional guestrooms at existing, high occupancy Oak Tree Inn hotels. The Hearne Property currently has a 98% rail crew room guarantee and the 24-room expansion will provide capacity to accommodate additional rail crew and commercial demand as the railway customer continues its major expansion of the local rail yard. The 24 guestrooms were constructed by SunOne Developments Inc. ("SunOne") pursuant to a Master Development Agreement. SunOne is also constructing two additional 24-room expansions of the Oak Tree Inn hotels located in Hermiston, Oregon and North Platte, Nebraska, which are scheduled to be completed over the next four months.

CORPORATE UPDATE

AHIP announced today that due to other personal commitments, Mr. Peter Armstrong has notified the Board of his intention not to seek re-election as a director at AHIP's upcoming annual and special meeting (the "Annual Meeting") to be held on May 12, 2016. AHIP also announced that upon the recommendation of the Nominating and Governance Committee, the Board has nominated Mr. Charles (Chuck) W. van der Lee to stand for election at the Annual Meeting along with the incumbent Board members.

"Peter has made an enormous contribution as one of our founding unitholders and the lead independent director," stated AHIP President Mr. Rob O'Neill. "His wisdom, knowledge and guidance has been instrumental in helping to build AHIP from the ground up to its current position of owning 80 hotels across the United States. His leadership on the Board was invaluable and I wish him all the best on his endeavors," continued Mr. O'Neill.

Mr. van der Lee is currently the principal owner, President and Chief Executive Officer of Papa M Pizza Canada Inc. From May 1990 to September 2009, Mr. van der Lee served as President and Chief Executive Officer of Rogers Retail (a division of Rogers Communications Inc.) and during his tenure he was responsible for expanding the network of company stores from 33 to over 400 locations. From 2004 to 2015, Mr. Van der Lee also served as an independent director of Amica Mature Lifestyles Inc. culminating in the successful sale of this company in late 2015. Mr. van der Lee graduated with a Bachelor of Commerce Degree in Business Administration from the University of Alberta.

"We are very fortunate that someone of Chuck van der Lee's impressive credentials has agreed to join AHIP's Board. Mr. van der Lee's strong background and knowledge of public markets and customer focused businesses will be of great benefit as AHIP continues to grow its portfolio," noted Mr. O'Neill.

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, references to: the announced expansions of the Hermiston and North Platte Oak Tree Inn hotels and the expected completion timing therefor; and the future performance of any expanded Oak Tree Inn hotels; the expected date of the Annual Meeting and the intention to continue to grow AHIP's hotel portfolio.

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 financing to fund the expansions of the Hermiston and North Platte Oak Tree Inn hotels, the ability to successfully integrate the expanded Hearne Property, and expectations and assumptions related to the expected return on equity and accretion from the expansion of any Oak Tree Inn hotels. 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 17, 2016 and under "Risks and Uncertainties" in AHIP's Management's Discussion and Analysis dated March 7, 2016, 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 rail crew accommodation, transportation-oriented, and select-service lodging sectors. AHIP's hotels 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 80 hotels including 45 hotels serving the U.S. rail industry pursuant to long-term rail crew contracts and 35 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.

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Contact Information

  • FOR FURTHER INFORMATION, PLEASE CONTACT:
    Andrew Greig
    Investor Relations
    American Hotel Income Properties REIT LP
    Phone: 604-630-3134
    Email: agreig@ahipreit.com