VANCOUVER, Oct. 27,
2014 /PRNewswire/ - American Hotel Income Properties
REIT LP ("AHIP") (Toronto Stock Exchange: HOT.UN; OTCQX:
AHOTF) today announced the completion of its previously announced
acquisition (the "Acquisition") of a portfolio of three
branded hotel properties located in Amarillo, Texas (the "Texas Portfolio")
for an aggregate purchase price of US$31.4
million (or approximately $107,000 per room), excluding up to US$0.4 million for brand mandated property
improvement plans (the "PIPs") and before customary closing
and post-acquisition adjustments.
The Texas Portfolio represents a total of 293
guestrooms all located in Amarillo,
Texas and consists of the Holiday Inn Amarillo West Medical
Centre hotel (an Intercontinental Hotels Group brand), the
Fairfield Inn & Suites Amarillo Airport hotel (a Marriott
International brand) and the Sleep Inn & Suites West Medical
Centre hotel (a Choice Hotels brand). The properties are all
less than five years old and are in very good physical
condition. The properties are situated on the I-40 corridor
between Oklahoma City, Oklahoma
and Albuquerque, New Mexico and
the US-287 corridor between Dallas,
Texas and Denver,
Colorado. Amarillo is
located 260 miles west of Oklahoma
City, and is considered the regional economic center for the
Texas Panhandle as well as
Eastern New Mexico and the
Oklahoma Panhandle. The properties cater primarily to
corporate travelers seeking select-service lodging.
AHIP funded the purchase price for the
acquisition and the financing of the PIPs using a combination of
cash from AHIP's bought deal offering that closed on June 4, 2014 and a new US$16.0 million, 10 year, interest only, CMBS
mortgage with a fixed interest rate of 4.20%. The lender has
also provided an FF&E reserve waiver for the first 12
months.
Robert O'Neill,
AHIP's Chief Executive Officer, commented, "This investment is
consistent with our stated growth strategy targeting acquisitions
of transportation-oriented and select and limited-service hotels,
located in secondary markets in the
United States in close proximity to railroads, airports,
highway interchanges and other transportation hubs and demand
generators. The ten-year, 4.20% fixed interest rate CMBS financing
also highlights a key aspect of our conservative approach to
leverage, aimed at providing highly stable returns to our
unitholders."
Mr. O'Neill continued, "This high-quality and
well-maintained portfolio has been purchased at a price below our
estimate of its replacement cost, in markets that have strong
underlying fundamentals with expectations for near term
growth. We intend to capitalize on the continued growth in
the U.S. hotel industry and continue to utilize the substantial
availability of low cost CMBS financing."
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.
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, the following: references to the purchase and closing
costs of the Texas Portfolio; local lodging demand generators; the
completion and estimated costs of the PIPs; the near term growth of
the market for the Texas Portfolio and the U.S. hotel industry
overall; the availability of accretive acquisition opportunities;
and future availability of low cost CMBS financing.
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 and the ability to successfully integrate the Texas
Portfolio. 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 26, 2014, AHIP's Management's Discussion
and Analysis dated August 14, 2014
and AHIP's short form prospectus dated October 21, 2014.
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 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 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.
THE TORONTO
STOCK EXCHANGE HAS NOT REVIEWED
AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY
OF THIS RELEASE.
SOURCE American Hotel Income Properties REIT LP