VANCOUVER, BC--(Marketwired - November 30, 2016) - 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 six branded, select-service hotels (the "Acquisition Properties") located in Tampa, Orlando, Sarasota and Fort Myers, Florida for an aggregate purchase price of US$61.0 million excluding approximately US$10.6 million for brand-mandated property improvement plans (the "PIPs") and before customary closing and post-acquisition adjustments.
The Acquisition Properties have a total of 559 guest rooms and were acquired for less than management's estimate of replacement cost. The Acquisition Properties include a 111-room Holiday Inn Express & Suites hotel located in Fort Myers, a 101-room Holiday Inn Express & Suites hotel located in Sarasota, a 100-room Staybridge Suites hotel located in Tampa, an 86-room Wingate by Wyndham hotel located in Tampa, an 81-room Courtyard by Marriott hotel located in Tampa and an 80-room Fairfield Inn & Suites hotel located in Orlando. The six hotels are strategically located in larger population centres on Florida's west coast and in central Florida, near major transportation corridors and close to a variety of manufacturing, military, information-technology, medical, education, sports and leisure demand generators.
AHIP funded the purchase price and the PIPs with cash on hand from its July 2016 unit offering and a new US$37.0 million commercial mortgage backed securities ("CMBS") loan. The new mortgage is secured by five hotel properties, has a 10-year term, and has a fixed interest rate of 4.99%. The lender has also agreed to provide an FF&E reserve waiver for two years.
AHIP's portfolio now consists of 90 hotels totaling 8,052 guest rooms with 45 branded hotels totaling 4,263 guest rooms and 45 rail hotels totaling 3,789 guest rooms.
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.
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 following: closing and post-acquisition adjustments to the purchase price for the Acquisition Properties; the estimated costs of PIPs for the Acquisition Properties; and the management of the Acquisition Properties by AHIP's exclusive hotel manager, Tower Rock Hotels & Resorts Inc.
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 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 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 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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