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American Hotel Income Properties REIT LP Completes Portfolio Acquisition of Four Marriott-Branded, Select-Service Hotels in Florida and Tennessee for US$47.0 Million
Marketwired
VANCOUVER, BC--(Marketwired - October 28, 2016) - American Hotel Income Properties REIT LP ("AHIP") (TSX:HOT.UN)(AHOTF) announced today the completion of its previously announced acquisition of a portfolio of four Marriott-branded, select-service hotels (the "Acquisition Properties") for an aggregate purchase price of US$47.0 million excluding approximately US$2.8 million for brand-mandated property improvement plans (the "PIPs") and before customary closing and post-acquisition adjustments.
The Acquisition Properties are located in Jacksonville and Lake City, Florida, and Chattanooga, Tennessee with a total of 374 guestrooms that have been acquired below management's estimate of replacement cost. The Acquisition Properties include a 109-room Residence Inn, two 89-room Fairfield Inn & Suites, and an 87-room TownePlace Suites. The four hotels are franchised by Marriott International and are strategically located near major transportation corridors and a variety of commercial, manufacturing and distribution demand generators.
AHIP funded the purchase price and the PIPs with cash on hand, and will be arranging mortgage financing over the next 30 days. The mortgage will be a new commercial mortgage backed securities loan with a 10-year term and a fixed interest rate of approximately 4.50%.
AHIP's portfolio now consists of 84 hotels totaling 7,493 guest rooms with 39 branded hotels totaling 3,704 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.
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 following: post-acquisition adjustments to the purchase price for the Acquisition Properties; the estimated costs of PIPs for the Acquisition Properties; the arrangement of mortgage financing for the Acquisition Properties over the next 30 days; the expected terms of the mortgage; 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 secure mortgage financing for the Acquisition Properties; 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 August 9, 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 84 hotels including 45 hotels serving the U.S. rail industry pursuant to long-term rail crew contracts and 39 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.
