VANCOUVER, BC--(Marketwired - December 05, 2016) - American Hotel Income Properties REIT LP ("AHIP") (TSX: HOT.UN) (OTCQX: AHOTF) announced today the renewal of six rail crew lodging contracts (the "Contract Renewal") with its largest railway customer for a term of six years, effective December 1, 2016.
CONTRACT RENEWAL HIGHLIGHTS
- The Contract Renewal encompasses three contracts maturing in 2016 and three contracts maturing in 2017, which cover six Oak Tree Inn hotels with a total of 432 guestrooms, or 11.1% of AHIP's total rail crew guestrooms.
- The term of the renewed contracts commenced on December 1, 2016 and will expire on November 30, 2022.
- The Contract Renewal increases the weighted average remaining term of AHIP's rail crew lodging agreements by 18% from 3.9 years to 4.6 years.
Mr. Ian McAuley, President of AHIP commented, "The length of the contract renewals is important as it signifies the vital role which the Oak Tree Inn hotels play in the future business plans of our largest railway customer. The renewed contracts provide for increased daily rates coupled with annual cost of living rate escalators and enhanced diner and transportation subsidies."
Mr. Rob O'Neill, Chief Executive Officer of AHIP also commented, "The renewal builds on our long standing relationship with our key railway customer and will continue to provide a reliable cash flow stream for our unitholders."
The Oak Tree Inn hotels covered by the Contract Renewal are managed by Tower Rock Hotels & Resorts Inc., a wholly-owned subsidiary of O'Neill Hotels & Resorts Ltd.
AHIP's portfolio is currently comprised of 91 hotels totaling 8,156 guestrooms, which includes 46 rail hotels totaling 3,893 guestrooms and 45 branded hotels totaling 4,263 guestrooms.
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: increased daily rates; annual cost of living rate escalators; the role of AHIP's Oak Tree Inn hotels in the future business plans of its largest railway customer; the expected impact of the Contract Renewal on AHIP, including, without limitation, providing AHIP with a reliable cash flow stream.
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, and AHIP continuing to maintain strong relationships with its railway partners. 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 November 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'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.
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