VANCOUVER, Jan. 8, 2016 /CNW/ - American Hotel Income Properties REIT LP ("AHIP") (TSX: HOT.UN; OTCQX: AHOTF) announced today the completion of its previously announced acquisition of a 133-room rail crew hotel located in Lincoln, Nebraska (the "Lincoln Property") for an aggregate purchase price of US$3.9 million, including approximately US$1.2 million of planned capital expenditures and excluding closing and post-acquisition adjustments. The Lincoln Property was acquired at a trailing twelve month capitalization rate of approximately 14% after all management fees and an FF&E reserve excluding renovation costs (or approximately 10% after renovation costs are included). The planned renovations include conversion of the property to an industry leading Oak Tree Inn rail crew hotel including the addition of "Dark and Quiet" guestrooms, common area upgrades, new signage and new property management systems. AHIP funded the purchase of the Lincoln Property with cash on-hand and expects to refinance the property with a conventional mortgage during the first quarter of 2016.
Mr. Rob O'Neill, Chief Executive Officer of AHIP, commented, "I am pleased to announce the completion of this acquisition for less than US$30,000 per key fully refurbished, which is well below replacement cost." Mr. O'Neill continued, "AHIP continues to actively pursue accretive opportunities to build on its relationship with key railway clients to create a reliable cash flow stream for unitholders."
AHIP's diversified portfolio now consists of 80 hotels totaling 7,048 guestrooms with 45 rail crew hotels totaling 3,718 guest rooms and 35 branded hotels totaling 3,330 guestrooms.
The Lincoln Property will be managed by TR Lodging Enterprises 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, references to the cost and scope of the planned capital expenditures for the Lincoln Property; estimated replacement costs; post-acquisition adjustments to the purchase price of the Lincoln Property; the refinancing of the purchase price with new debt financing; the expected capitalization of the Lincoln Property; future accretive opportunities; the future performance of any Oak Tree Inn hotels and the reliability of future cash flows.
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 mortgage financing to refinance the Lincoln Property, the timing and scope of renovation work required to convert the Lincoln Property to Oak Tree Inn standards and the ability to successfully complete such work, the ability to successfully integrate the Lincoln Property 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 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 November 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 rail crew lodging, 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'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]