VANCOUVER, Oct. 29, 2015 – American Hotel Income Properties REIT LP ("AHIP") (TSX: HOT.UN; OTCQX: AHOTF) announced today that it has agreed to acquire through its subsidiaries a 70-room hotel located in Fort Scott, Kansas (the "Fort Scott Property") secured by a new multiyear rail crew lodging contract. The Fort Scott Property is being acquired for an aggregate purchase price of US$3,315,000 including planned capital expenditures and excluding closing and post-acquisition adjustments.
ACQUISITION HIGHLIGHTS
- The Fort Scott Property is being acquired for approximately US$47,400 per guest room, which is below management's estimate of replacement cost. After completion of the transaction, the Fort Scott Property will be renovated to industry-leading Oak Tree Inn standards.
- The Fort Scott Property is secured by a new multiyear rail crew lodging contract with one of the largest railway companies in the United States, which guarantees in excess of 85% of the available guestrooms. AHIP currently owns eight Oak Tree Inn hotels servicing this railway company.
- The investment is expected to be immediately accretive to adjusted funds from operations ("AFFO") per unit.
- AHIP will fund the purchase of the Fort Scott Property with cash on hand, and expects to refinance this acquisition with a new mortgage following completion of the transaction.
- This transaction is expected to be completed by November 13, 2015, subject to customary closing conditions and documentation.
Mr. Rob O'Neill, Chief Executive Officer of AHIP commented, "We are pleased to announce this conversion opportunity where we will acquire an existing hotel at well below replacement cost and renovate it to industry-leading "Dark and Quiet" standards that satisfy the needs of our rail crew clientele. We expect this acquisition to be immediately accretive to AFFO as we continue to execute our strategy of owning the largest and highest quality chain of rail crew lodging properties in the United States."
Upon completion of the Fort Scott Property acquisition, AHIP's portfolio will consist of 79 hotels totaling 6,892 guest rooms with 44 rail crew hotels totaling 3,561 guest rooms and 35 branded hotels totaling 3,331 guest rooms.
