VANCOUVER, Jan. 23, 2015 /PRNewswire/ - American Hotel
Income Properties REIT LP ("AHIP") (TSX: HOT.UN; OTCQX:
AHOTF) announced today the commencement of a new railway growth
strategy involving the construction of additional guestrooms at
existing, high occupancy Oak Tree Inn railway hotels. The
first opportunity involves a commitment with SunOne Developments
Inc. ("SunOne") to construct a 24-room expansion at the
existing 109-room Oak Tree Inn and Penny's Diner located in Dexter,
Missouri. The existing property is currently operating at
over 100% occupancy and is secured by a long-term railway contract.
The expansion will be financed and developed in accordance with the
existing Master Development Agreement with SunOne. AHIP will
acquire the additional guestrooms for a total purchase price of
US$2.7 million, which is 95% of the
as-stabilized appraised value, as determined by a nationally
recognized appraisal company and reflects a double-digit year one
capitalization rate and expected return on equity. Management
anticipates that this expansion will be immediately accretive to
unitholders. Construction will begin immediately with
completion targeted for late-2015.
Mr. Rob O'Neill, Chief Executive
Officer of AHIP commented, "This development strategy provides AHIP
with the opportunity to capture organic growth at existing,
high-occupancy railway hotels that have adjacent available
land. A long-term railway contract currently secures all
existing guestrooms and hotel occupancy exceeds 100%. The
proposed expansion is expected to increase revenues from more
transient and railway guests. We have grown the Oak Tree Inn
railway portfolio by acquiring new-build properties, by buying and
converting existing hotels to the Oak Tree Inn standard, and we now
have an opportunity to unlock additional value from existing,
high-occupancy locations. Management has currently identified
five additional existing Oak Tree Inn locations that may be
suitable candidates for this type of expansion. The current
strength of the U.S. Dollar further supports taking advantage of
these types of highly accretive, organic development
initiatives."
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 engaged
primarily in the railway employee accommodation, transportation,
and branded lodging sectors. 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.
Additional information is available on SEDAR at www.sedar.com
and on AHIP's website at www.ahipreit.com.
FORWARD-LOOKING INFORMATION
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", "expect", "will", "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, completion of the
proposed expansion, the future performance of the Dexter property,
expansion of other Oak Tree Inn hotels, and the value of the U.S.
Dollar.
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. 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 26, 2014.
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.
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT
ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS
RELEASE.
SOURCE American Hotel Income Properties REIT LP
