American Hotel Income Properties REIT LP Completes Acquisition of Springhill Suites Pinehurst, North Carolina and Conclusion of US$30.5 Million Hotel Portfolio Acquisition
VANCOUVER, July 11, 2014 /PRNewswire/ - American Hotel Income Properties REIT LP ("AHIP") (TSX: HOT.UN; OTCQX: AHOTF) today announced the completion of the acquisition of a 107-room Springhill Suites hotel (a brand controlled by Marriott International Inc.) located in Pinehurst, North Carolina. This hotel is the fourth and final asset to be acquired of the portfolio of four previously announced properties (the "Acquisition Properties"), which are located in North Carolina and Georgia.
The Acquisition Properties represent a total of 387 guest rooms located near transportation hubs and other major demand generators such as military bases, manufacturing facilities, medical centers, and golf and leisure attractions. The other three Acquisition Properties, acquired on July 3, 2014, included a 111-room Hampton Inn hotel (a brand controlled by Hilton Worldwide Inc.) and an 87-room Fairfield Inn & Suites hotel (a brand controlled by Marriott International Inc.), both located in Asheboro, North Carolina, and an 82-room Fairfield Inn & Suites hotel located in Kingsland, Georgia.
The Acquisition Properties were acquired for US$30.5 million before customary closing and post-acquisition adjustments, and excludes US$1.5 million for the completion of brand mandated property improvement plans ("PIPs"). The seller has contracted to perform the PIPs on a fixed-price basis. AHIP funded the purchase price for the Acquisition Properties using a combination of cash from AHIP's bought deal offering of units that closed on June 4, 2014, assumed CMBS debt on each of the Springhill Suites and the Hampton Inn properties and new CMBS debt on the two Fairfield Inn & Suites properties. The portfolio acquisition is immediately accretive to AHIP.
AHIP's hotel portfolio is now comprised of 47 hotels with an aggregate 3,959 guestrooms located across 22 U.S. states.
Rob O'Neill, AHIP's Chief Executive Officer, commented, "Since last year's initial public offering, AHIP has increased its guestroom count by 54%. Our total hotel portfolio (by total guestroom count) is now 32% branded, with seven Hilton-franchised hotels and five Marriott-franchised hotels benefitting from global distribution with leading hotel brands and some of the highest guest loyalty in the business. The building age and condition of our properties is very good, and the North Carolina and Georgia properties were acquired for less than management's estimate of replacement cost. AHIP is seeing a robust pipeline of accretive investment opportunities and plans to continue expanding its portfolio of 'best-in-class' select-service hotels in the near term, utilizing undeployed funds from its recent bought deal."
The Acquisition Properties are being 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, the following: references to local lodging demand generators; the completion of the PIPs; the availability of accretive investment opportunities; and the ability to continue to expand the property portfolio.
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 Acquisition 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 and AHIP's Short form Prospectus dated May 29, 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 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 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.
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SOURCE American Hotel Income Properties REIT LP