Published on : Saturday, January 9, 2016
American Hotel Income Properties REIT LP announced today the completion of its previously announced acquisition of a 133-room rail crew hotel located in Lincoln, Nebraska 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. 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.