AHOTF American Hotel Income Properties REIT LP (QX)

VANCOUVER, Aug. 23, 2013 /CNW/ - American Hotel Income Properties REIT
LP ("AHIP") (Toronto Stock Exchange: HOT.UN) announced today that its
Board of Directors have approved the commitment with SunOne
Developments Inc. ("SunOne") to purchase a new 25-room Oak Tree Inn and
Penny's Diner located in Brunswick, Maryland, secured by a long-term
railway contract. The Oak Tree Inn and 24-hour Penny's Diner
(collectively, the "Brunswick Facilities") will be financed and
developed in accordance with the Master Development Agreement already
in place between SunOne and AHIP. AHIP has agreed to provide mezzanine
financing of US$0.4 million to SunOne, and upon completion, AHIP has
agreed to a total purchase price of US$2.7 million. This price is equal
to 95% of the as-stabilized appraised value, as determined by a
nationally recognized appraisal company. Based upon a first-year
budgeted net operating income projected by the appraiser, the going-in
capitalization rate is 10.7% and the expected return on equity is
12.5%. Management anticipates that its investment in the Brunswick
Facilities will be accretive to unitholders and is satisfied that all
AHIP investment criteria have been met.

The Brunswick Facilities will be constructed on a 2.14 acre site,
approximately 1.3 miles from the railway crew change office, and they
are expected to open for business by June 30, 2014. A contract has been
executed for a 10-year period with a major US railway, which has
invested more than US$69 million in its Maryland network during 2012.
Commercial lodging demand from a variety of sources is expected to
supplement railway demand and would thereby enable this Oak Tree Inn to
operate in excess of 90% occupancy.

Rob O'Neill, Chief Executive Officer, commented "We are pleased to work
with our railway client to provide a uniquely sized Oak Tree Inn, along
with a 24-hour Penny's Diner, that was economic for our client and
accretive for our Unitholders."

The Brunswick Facilities are one of the four properties previously
referred to by Mr. O'Neill in AHIP's August 8, 2013 news release. There
is an anticipated purchase price of approximately US$14.7 for the three
remaining properties currently under preliminary agreement as additions
to AHIP's portfolio.

AHIP`s portfolio is currently comprised of 32 fully operational hotel
properties, including 2,564 guest rooms and 23 diners. AHIP's
commitment to purchase the new 25-room Oak Tree Inn and Penny's Diner
at Brunswick, Maryland is in addition to the previously announced
approval for AHIP's commitment to purchase the 56-room Oak Tree Inn and
Penny's Diner scheduled to open by May 1, 2014 at Santa Teresa, New
Mexico. Along with AHIP's existing properties, both of these new
properties will be managed by TR Lodging Enterprises Inc.

Forward-Looking Information

This news release contains forward-looking information within the
meaning of applicable securities legislation, which reflects AHIP's
current expectations regarding future events. Forward-looking
information is identified by the use of terms and phrases such as
"anticipate", "believe", "budget", "could", "estimate", "expect",
"going-in", "intend", "may", "plan", "predict", "project", "will",
"would" and similar terms and phrases, and includes, but is not limited
to, the closing of the acquisition of the Brunswick Facilities, the
accretive nature of AHIP's investment in the Brunswick Facilities, the
expected occupancy level for the Brunswick Oak Tree Inn and the
anticipated purchase price for three remaining properties under
preliminary agreement. Forward-looking information is based on a number
of assumptions and is subject to a number of risks and uncertainties,
many of which are beyond AHIP's control, that could cause actual
results and events to differ materially from those that are disclosed
in, or implied by, such forward-looking information. Such assumptions
include, but are not limited to, construction of the Brunswick
Facilities not experiencing any material delays, and a reasonably
stable North American economy and stock market. Such risks and
uncertainties include, but are not limited to, budgeted net operating
income, going-in capitalization rate and expected return on equity
being materially different than projected as well as the factors
discussed under "Risk Factors" in AHIP`s Management's Discussion and
Analysis dated August 8, 2013. The forward-looking information
contained herein is made as of the date of this news release and,
except as expressly required by applicable law, AHIP assumes no
obligation to publicly update or revise such information.

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 engaged primarily in the
railroad employee accommodation, transportation and contract-focused
lodging sectors. AHIP's long-term objectives are to: (i) generate
stable and growing cash distributions from hotel properties
substantially in the US; (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 Adjusted
Funds From Operations ("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.

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