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American Hotel REIT to Acquire 12 Premium Branded Hotels for USD 191m
Monday 02 December 2019

2 December 2019 - US-based lodging REIT American Hotel Income Properties REIT LP (AHIP) (TSX: HOT.UN) (TSX: HOT.U) (TSX: HOT.DB.U) has agreed to acquire a portfolio of 12 US premium branded hotels with 1,203 guest rooms for USD 191m to strengthen AHIP's Texas and Midwestern presence in Texas and the Midwest, the company said.

The acquisition will be financed using proceeds from the sale of the Economy Lodging portfolio and a new interest-only fixed-rate term loan. The transaction is expected to close during December 2019, at which point AHIP's portfolio will consist of 79 Premium Branded hotels, representing 8,887 total guestrooms, that are licensed primarily with Marriott, Hilton and IHG.

The facility will have a five-year term with fixed interest rates less than 4%, secured by the 12 new hotel properties.

The 12 hotels in the acquisition include six Marriott branded properties, five Hilton branded properties and one IHG branded property.

Eight of the 12 hotels are all-suite products and all of these brands are complementary to AHIP's existing hotel portfolio of select-service, premium branded, upper-midscale to upper-upscale properties.

Importantly, all of the properties are already managed by Aimbridge Hospitality AHIP's exclusive hotel manager, which should ensure a seamless transition into AHIP's portfolio.

AHIP has confirmed the close of the sale of its Economy Lodging portfolio of 45 hotels to VCM Ltd. (an affiliate of Vukota Capital Management), for total gross proceeds of USD 215.5m.

In connection with closing of this transaction, AHIP has agreed that approximately USD 7m of the gross proceeds will be subject to an earn-out to be settled in the next 12 months based on the achievement of certain criteria.

American Hotel Income Properties REIT LP is a limited partnership formed to invest in hotel real estate properties located in the United States.
Date Published: 02/12/2019
Target: Portfolio of 12 US premium branded hotels with 1,203 guest rooms
Country: USA
Deal Size: 191m (USD)
Sector: Hotels/Restaurants/Casinos/Catering
Type: LBO
Financing: Cash
Status: Agreed
Buyer: American Hotel Income Properties REIT