VANCOUVER, Dec. 8, 2015 /PRNewswire/ - American Hotel Income Properties REIT LP ("AHIP") (TSX: HOT.UN; OTCQX: AHOTF) announced today the completion of its previously announced 24-room expansion at the existing, high occupancy, 50-room Oak Tree Inn hotel and Penny's Diner located in Glendive, Montana (the "Glendive Property") for a total purchase price of US$2.8 million. AHIP funded the acquisition with cash-on-hand and the issuance of US$300,000 (or 38,244 units) in AHIP units from treasury. The units are being issued at Cdn$10.60 per unit, which represents the 5-day volume-weighted average trading price.
The expansion is part of AHIP's previously announced railway growth strategy of constructing additional guestrooms at existing, high occupancy Oak Tree Inn hotels. The 24-room expansion at the Glendive Property was initiated in response to an increased room guarantee from 40 to 55 rooms with the property's railway customer, and it will also provide additional capacity for non-rail guests. The recently built Glendive Property was acquired by AHIP on October 29, 2014. The additional 24 guestrooms were constructed by SunOne Developments Inc. ("SunOne") pursuant to a Master Development Agreement. SunOne is also constructing three 24-room expansions at Oak Tree Inn hotels in North Platte, Nebraska; Hermiston, Oregon; and Hearne, Texas.
Rob O'Neill, Chief Executive Officer of AHIP commented, "The Glendive Property is only one year old and has seen high occupancy levels since it opened. This expansion provides additional capacity to accommodate rail crew, rail maintenance of way and transient guests." Mr. O'Neill continued, "We expect the expansion will generate higher revenues and create value for our unitholders. AHIP's organic railway growth strategy is underway at three additional locations, which are expected to be completed by mid-2016."
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 expansions of the North Platte, Hermiston and Hearne Oak Tree Inn hotels and the expected completion timing therefor; and the future performance of any 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 secure financing to fund the expansions of the North Platte, Hermiston, and Hearne Oak Tree Inn hotels, the ability to successfully integrate the expanded Glendive 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 27, 2015 and under "Risks and Uncertainties" in AHIP's Management's Discussion and Analysis dated November 12, 2015, 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 79 hotels including 44 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.
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