VANCOUVER, Oct. 29, 2014 /CNW/ - American Hotel Income Properties REIT LP ("AHIP") (TSX: HOT.UN; OTCQX: AHOTF) today announced the acquisition of a new 50-room Oak Tree Inn and Penny's Diner in Glendive, Montana for a total purchase price of approximately US$4.9 million. The acquisition was financed by a combination of: (i) approximately US$800,000 from cash on hand and debt financing of approximately US$3.1 million through a draw on AHIP's construction facility; (ii) the offset of approximately US$600,000 in mezzanine loans owed by SunOne Developments Inc. ("SunOne") to AHIP; and (iii) the issuance of US$400,000 (or 43,016 units) in AHIP units from treasury. The units were issued at Cdn$10.45 per unit.
Mr. Robert O'Neill, Chief Executive Officer of AHIP commented, "This is the second of four previously announced development properties for railway clients to be completed by SunOne. We are pleased with this high quality addition to our Oak Tree Inn portfolio. SunOne met all of our expectations on the basis of cost, timing, and quality. The property is secured by a 10-year railway agreement with room guarantees of 78% over the contract term and will begin operations immediately".
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 railway 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.
This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects AHIP's current expectations regarding future events. Events such as the completion of the other previously announced development properties to be completed by SunOne and the future performance of the property are subject to a number of risks and uncertainties, many of which are beyond AHIP's control, and could cause actual results and events to differ materially from those that are disclosed in, or implied by, such forward-looking information.
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
For further information: Andrew Greig, Investor Relations, American Hotel Income Properties REIT LP, Suite 1660 - 401 West Georgia Street, Vancouver, B.C., V6B 5A1, Tel: 604-633-2857, Email: [email protected]