American Hotel Income Properties REIT LP Announces Purchase of Land Associated with Maryland Hotel
VANCOUVER, April 2, 2019 /CNW/ - American Hotel Income Properties REIT LP ("AHIP", the "Company") (TSX: HOT.UN, TSX: HOT.U, TSX: HOT.DB.U) is pleased to announce that it has exercised its option to buy out the ground lease associated with its Fairfield Inn & Suites White Marsh hotel in Baltimore, Maryland, and has completed the purchase of land for US$1.9 million plus closing costs. This acquisition is expected to increase AHIP's cash flow by approximately US$165,000 annually, through the elimination of lease payments previously expensed for this property.
"The option to purchase this land was a great opportunity to ensure the long-term security and optionality of our Fairfield Inn & Suites White Marsh property," said John O'Neill. "By removing the monthly lease expense for this land from our operations, this investment is expected to result in an annual cash-on-cash yield of approximately 8.7%."
The 116-room Fairfield Inn & Suites White Marsh was acquired by AHIP in June 2017, alongside 17 other properties along the U.S. eastern seaboard. It is the only hotel AHIP owns that was subject to a ground lease; one other hotel is subject to an air rights lease. With the purchase of this land, 99% of AHIP's hotels are now located on owned property.
ABOUT AMERICAN HOTEL INCOME PROPERTIES REIT LP
American Hotel Income Properties REIT LP (TSX: HOT.UN, TSX: HOT.U, TSX: HOT.DB.U), or AHIP, is a limited partnership formed to invest in hotel real estate properties located in the United States. AHIP currently has 112 hotels, and is engaged in growing its portfolio of premium branded, select-service hotels in larger secondary markets that have diverse and stable demand. AHIP hotels operate under brands affiliated with Marriott, Hilton, IHG, Wyndham and Choice Hotels through license agreements. The Company's long-term objectives are to build on its proven track record of successful investment, deliver reliable and consistent U.S. dollar denominated distributions to unitholders, and generate value through the continued growth of its diversified hotel portfolio. More information is available at www.ahipreit.com.
FORWARD-LOOKING INFORMATION
Certain statements in this news release may constitute "forward-looking information" or "financial outlook" within the meaning of applicable securities laws (collectively, "forward-looking information"). Forward-looking information involves known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements or industry results, to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward-looking information. Forward-looking information generally can be identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "feel", "intend", "may", "plan", "predict", "project", "subject to", "will", "would", and similar terms and phrases, including references to assumptions. Some of the specific forward-looking information referred to in this news release includes, but is not limited to, statements with respect to: AHIP's expectation that the purchase of this land will increase its cash flow by approximately US$165,000 annually and result in an annual cash-on-cash yield of approximately 8.7%; and AHIP's long-term objectives.
Forward-looking information is based on a number of key expectations and assumptions made by AHIP, including, without limitation: AHIP will realize the intended benefits from an increase in cash flow arising from this land purchase; AHIP will continue to benefit from its diversified portfolio of hotel properties and strong brand partners; a reasonably stable North American economy and stock market; the continued strength of the U.S. lodging industry; capital markets will provide AHIP with readily available access to equity and/or debt financing on terms acceptable to AHIP; and the value of the U.S. dollar. 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 involves significant risks and uncertainties and should not be read as guarantees of future performance or results. Those risks and uncertainties include, among other things, risks related to the possibility that: AHIP will not realize the intended benefits from an increase in cash flow arising from this land purchase; and AHIP may not realize any of its long term objectives contemplated in this news release or otherwise. Management believes that the expectations reflected in the forward-looking information contained in this news release are based upon reasonable assumptions and information currently available; however, management can give no assurance that actual results will be consistent with the forward-looking information. Additional information about risks and uncertainties is contained in AHIP's MD&A dated March 5, 2019 and annual information form for the year ended December 31, 2018, copies of which are available on SEDAR at www.sedar.com.
To the extent any forward-looking information or statements in this presentation constitute a "financial outlook" within the meaning of securities laws, such information is being provided to assist investors in understanding the expected financial impact on AHIP of the transaction described in this news release.
The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. Forward-looking information reflects management's current beliefs and is based on information currently available to AHIP. The forward-looking information is made as of the date of this news release and AHIP assumes no obligation to update or revise such information to reflect new events or circumstances, except as may be required by applicable law.
SOURCE American Hotel Income Properties REIT LP
Jamie Kokoska, Director, Investor Relations, Phone: 604-670-6242, Email: [email protected]
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