VANCOUVER, July 2, 2015 /CNW/ - American Hotel Income Properties REIT LP ("AHIP") (TSX: HOT.UN; OTCQX: AHOTF) announced today increased room commitments at the recently acquired 50-room Oak Tree Inn hotel located in Glendive, Montana (the "Glendive Property"). The railway customer at the Glendive Property is taking their daily room commitment from 40 guestrooms to 55 guestrooms. In order to accommodate this increased demand, AHIP has entered into an agreement with SunOne Developments Inc. ("SunOne") to construct a 24-room expansion at the Glendive Property for a total purchase price of US$2.8 million. The expansion is part of AHIP's previously announced railway growth strategy of constructing additional guestrooms at existing, high occupancy Oak Tree Inn railway hotels.
The Glendive Property is currently operating at high occupancy levels and is secured by a long-term railway contract. The expansion is expected to generate a double-digit year one return on equity and will be immediately accretive to unitholders. Construction will commence right away with completion targeted for late-2015.
Mr. Rob O'Neill, Chief Executive Officer of AHIP commented, "We are delighted to announce that increased rail activity has generated demand for additional guestrooms. The expansion provides AHIP with the opportunity to capture both rail and transient demand. The guestrooms will be purpose built to industry leading Oak Tree Inn standards and will also feature additional amenities to accommodate higher-rated extended stay guests. The Glendive Property expansion and the previously announced expansion in Dexter, Missouri are expected to add another 48 rooms to the rail portfolio by the end of the year. We continue to evaluate various accretive growth opportunities for the Oak Tree Inn portfolio."
Mr. O'Neill continued, "I am also pleased to advise that the previously announced multi-year 50-room daily room commitment at the AHIP-owned Holiday Inn Oklahoma City Airport will welcome its first railway customers on July 15, 2015."
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 references to the following: the proposed expansion of the Glendive Property and the expected completion timing therefor; the increase of the minimum room guarantee at the Glendive Property; the return on equity expected to be generated by the proposed expansion of the Glendive Property; the expectation that the proposed expansion of the Glendive Property will be immediately accretive to unitholders; future occupancy of the Glendive Property; the expansion of the Oak Tree Inn hotel in Dexter Missouri; expansions of other Oak Tree Inn hotels and the multi-year contract at the Holiday Inn.
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, the ability to successfully integrate the Glendive Property and expectations and assumptions related to the expected return on equity and accretion from the expansion of the Glendive Property. 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 May 13, 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 railroad employee accommodation, transportation-oriented, and select-service lodging sectors. AHIP's properties 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 owns hotels serving the U.S. rail industry pursuant to long-term railway contracts and 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
For further information:
Andrew Greig, Investor Relations
American Hotel Income Properties REIT LP
Suite 1660 - 401 West Georgia Street
Vancouver, BC V6B 5A1
Email: [email protected]