HOT.U American Hotel Income Properties REIT LP

American Hotel Income Properties REIT LP (“AHIP” or the “Company”) (TSX: HOT.UN, TSX: HOT.U, TSX: HOT.DB.U) announced today that it has entered into an agreement with a syndicate of underwriters (the “Underwriters”) led by CIBC Capital Markets and BMO Capital Markets to issue to the public on a bought deal basis, subject to regulatory approval, US$50,000,000 aggregate principal amount of convertible unsecured subordinated debentures at a price of US$1,000 per debenture with a coupon of 6.00% per annum (the “Debentures”). The Debentures will mature on December 31, 2026 and are convertible at the option of the holder into limited partnership units of AHIP (each, a “Unit” or collectively “Units”) at US$4.95 per Unit (the “Conversion Price” and collectively with all other terms, the “Offering”).

AHIP has also granted to the Underwriters an over-allotment option to purchase up to US$5,000,000 aggregate principal amount of additional Debentures, representing 10% of the size of the Offering. The over-allotment option is exercisable in whole or in part anytime for a period of up to 30 days following closing of the Offering to cover over-allotments, if any, and for market stabilization purposes.

The Debentures will be convertible at the option of the holder into Units at any time prior to maturity at the Conversion Price, which represents an approximate 30% premium to the current market price of the Units (based on an exchange rate of 1.2495 on November 10, 2021). The Conversion Price of the Debentures also represents a conversion rate of approximately 202.0203 Units for each US$1,000 principal amount of Debentures, subject to adjustment in accordance with the trust indenture governing the Debentures.

The Debentures will bear interest at a rate of 6.00% per annum and will be payable semi-annually on June 30 and December 31 until maturity on December 31, 2026, with the first payment commencing on June 30, 2022. The Debentures will not be redeemable by AHIP prior to December 31, 2024. On or after December 31, 2024, but prior to December 31, 2025, the Debentures will be redeemable, in whole or in part, at a price equal to par plus accrued and unpaid interest, at AHIP’s option, provided that the volume-weighted average trading price of the Units on the Toronto Stock Exchange (the “TSX”) is not less than 125% of the Conversion Price. On and after December 31, 2025 and prior to the maturity date, the Debentures will be redeemable, in whole or in part, at a price equal to par plus accrued and unpaid interest, at AHIP’s option.

AHIP intends to use the net proceeds from the Offering, together with cash on hand, to fund the intended redemption of the Company’s outstanding convertible unsecured subordinated debentures due on June 30, 2022, with an aggregate principal amount outstanding of US$48,875,000, trading on the TSX under the trading symbol “HOT.DB.U” (the “2022 Debentures”). Any additional net proceeds resulting from an exercise of the over-allotment option will be used, in lieu of cash on hand, to fund the aforementioned intended redemption of the 2022 Debentures, with any remainder used to partially pay down the Company’s revolving credit facility.

The closing of the Offering is expected to occur on or about November 26, 2021. The Offering is subject to customary regulatory approvals, including the TSX. The Debentures will be offered in each of the provinces of Canada by way of a short form prospectus (the “Prospectus”) to be filed with securities regulators in all provinces of Canada and may also be offered by way of private placement in the United States.

Upon completion of the Offering, it is AHIP’s intention to send a notice of redemption, effective December 31, 2021 (the “Redemption Date”), in respect of all of the outstanding 2022 Debentures, for an aggregate redemption price equal to the sum of the outstanding aggregate principal amount of the 2022 Debentures of US$48,875,000 and all accrued and unpaid interest thereon up to, but excluding, the Redemption Date. The 2022 Debentures will cease to bear interest from and after the Redemption Date. The redemption of the 2022 Debentures will be effected in accordance with the terms of the trust indenture dated June 9, 2017, between the Company and Computershare Trust Company of Canada.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

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 across the United States. AHIP's 78 premium branded, select-service hotels are located in secondary metropolitan markets that benefit from diverse and stable demand. AHIP hotels operate under brands affiliated with Marriott, Hilton, IHG and Choice Hotels through license agreements. The Company's long-term objectives are to increase the value of hotel properties through operating excellence, active asset management and investing in value-added capital expenditures, expand the hotel portfolio through selective acquisitions on an accretive basis, and increase unitholder value and distributions to unitholders. More information is available at www.ahipreit.com.

FORWARD-LOOKING INFORMATION

Certain statements contained in this news release may constitute forward-looking information as defined under applicable securities laws. Forward-looking information is often, but not always, identified by the use of words such as “anticipate”, “plan”, “expect”, “may”, “will”, “intend”, “should”, and similar expressions. Forward-looking information involves 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 information. Forward-looking information in this news release includes, without limitation statements with respect to: the closing of the Offering or the over-allotment option and the intended use of proceeds therefrom; the expected terms of the Debentures; the expected closing date for the Offering and the approval of the TSX; the intended redemption of the 2022 Debentures and expected timing thereof; 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: a reasonably stable North American economy and stock market; the continued strength of the U.S. lodging industry; the ability to successfully complete the Offering; the receipt of all necessary approvals for the Offering; the ability to successfully complete the redemption of the 2022 Debentures; 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, the Offering may be terminated upon certain stated events; regulatory and other approvals for the Offering may not be obtained; AHIP may not have sufficient funds to complete the redemption of the 2022 Debentures, as well as those risk factors that can be found under “Risk Factors” in AHIP’s Annual Information Form dated March 15, 2021 and under “Risks and Uncertainties” in AHIP’s Management’s Discussion and Analysis dated November 9, 2021, 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.

For further information, please contact:

Jonathan KorolChief Executive OfficerEmail: jkorol@ahipreit.com

Travis BeattyChief Financial OfficerEmail: tbeatty@ahipreit.com