VANCOUVER, Oct. 13, 2015 /CNW/ - 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, 109-room Oak Tree Inn and Penny's Diner located in Dexter, Missouri (the "Dexter Property") for a total purchase price of a US$2.3 million. AHIP is funding the expansion with cash on hand and the issuance of US$300,000 in AHIP units from treasury. The units are being issued at the 5-day volume-weighted average trading price.
The expansion is part of AHIP's previously announced growth strategy of constructing additional guestrooms at existing, high-occupancy Oak Tree Inn railway hotels. The Dexter Property, which currently has over 100% occupancy, is the first location to get the additional guestrooms. The expansion was completed by SunOne Developments Inc. ("SunOne") pursuant to the Master Development Agreement. SunOne is also presently constructing a 24-room expansion at the Oak Tree Inn in Glendive, Montana (the "Glendive Property"), which is expected to be delivered by year end.
Mr. Rob O'Neill, Chief Executive Officer of AHIP commented, "Our organic growth strategy is enabling AHIP to capture additional demand at existing, high-occupancy railway hotels. The Dexter Property is immediately benefitting from the increased room capacity and the Glendive Property expansion will also drive increased revenues at that hotel. Management has identified three additional existing Oak Tree Inn locations that may be suitable candidates for expansion in 2016. All new guestrooms will be purpose built to industry leading Oak Tree Inn standards and are expected to be immediately accretive to unitholders."
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 payment in AHIP units, the completion timing of the Glendive Property and the potential completion timing of expansions of any other Oak Tree Inn hotels, the capture of additional demand and the generation of additional revenue at Oak Tree Inn hotels 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 expansion of the Glendive Property and any additional Oak Tree Inn expansions, the ability to successfully integrate the Dexter Property and the Glendive Property, and expectations and assumptions related to the 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 August 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 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 currently owns 78 hotels including 43 hotels serving the U.S. rail industry pursuant to long-term railway 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
For further information: Andrew Greig, Investor Relations, American Hotel Income Properties REIT LP, Suite 1660 - 401 West Georgia Street, Vancouver, B.C. V6B 5A1, Phone: 604-630-3134, Email: [email protected]