SOURCE: American Hotel Income Properties REIT LP

American Hotel Income Properties REIT LP

June 02, 2016 20:31 ET

American Hotel Income Properties REIT LP Completes 24-Room Expansion of 100% Occupied Oak Tree Inn Hotel in Hermiston, Oregon

VANCOUVER, BC --(Marketwired - June 02, 2016) - American Hotel Income Properties REIT LP ("AHIP") (TSX: HOT.UN) (OTCQX: AHOTF) announced today the completion of its previously reported 24-room expansion at the existing, high occupancy, 62-room Oak Tree Inn hotel located in Hermiston, Oregon (the "Hermiston Property") for a total purchase price of US$1.9 million. AHIP funded the acquisition with cash-on-hand, its revolving line of credit and the issuance of US$900,000 (or 114,511 units) in AHIP units from treasury. The units were issued at Cdn$10.27 per unit, which represents the 5-day volume-weighted average trading price of the units on the Toronto Stock Exchange as of the close of trading on June 1, 2016.

The expansion is part of AHIP's railway growth strategy of constructing additional guestrooms at existing, high-occupancy Oak Tree Inn hotels. The 24-room expansion, which includes 15 extended-stay suites, was initiated in response to the high utilization level of the Hermiston Property by a railway customer and to provide additional capacity for commercial guests. The expansion was constructed by SunOne Developments Inc. ("SunOne") pursuant to a Development Agreement with one of AHIP's indirect subsidiaries. SunOne is also constructing a 24-room expansion at the Oak Tree Inn hotel in North Platte, Nebraska, which is home to the world's largest rail yard.

Rob O'Neill, Chief Executive Officer of AHIP commented, "We are extremely pleased that strong rail activity continues to support the Hermiston Property, where average occupancy during the trailing twelve months exceeded 100%. This expansion provides additional capacity to accommodate rail crew demand and is also expected to attract extended stay, commercial guests." Mr. O'Neill continued, "AHIP's organic growth strategy is well underway with four 24-room expansions completed thus far, and an additional 24 guestrooms scheduled to open at our North Platte, Nebraska location this summer."

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 expansion of the North Platte Oak Tree Inn hotel and the expected completion timing therefor; and the future performance of the Hermiston Property and any other expanded Oak Tree Inn hotels.

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 successfully integrate the expanded Hermiston Property and North Platte 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 May 11, 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
    Suite 1660 - 401 West Georgia Street
    Vancouver, B.C. V6B 5A1
    Phone: 604-630-3134
    Email: agreig@ahipreit.com