American Hotel Income Properties REIT LP announced the completion of the previously announced acquisition of a geographically-targeted portfolio of 18 premium branded Marriott and Hilton hotels containing 2,187 guestrooms and located in Maryland, New Jersey, New York, Connecticut and Pennsylvania (collectively, the “Eastern Seaboard Portfolio“) for approximately US$407.4 million, including brand-mandated property improvement plans (the “PIPs“).
“During the first half of 2017, we have been disciplined in our investment strategy to acquire premium branded, select-service hotels with stabilized in-place income, which are younger and well-maintained and where acquisition costs are below replacement cost,” said Rob O’Neill, CEO of AHIP. Mr. O’Neill continued, “The 23 hotels acquired in the first six months of 2017 for approximately US$589 million are all located within high barrier-to-entry secondary metropolitan markets in close proximity to major population centers in Ohio, Texas, Arizona and along the Eastern Seaboard.”
“We have continued to add value through the ongoing growth of our diversified hotel portfolio, which has delivered reliable and consistent cash flows to our unitholders,” said Ian McAuley, President of AHIP. Mr. McAuley continued, “Since AHIP’s public listing in 2013, we have delivered consistent yields for investors of approximately 8.0%, while significantly improving the quality of the portfolio.”
The Acquisition consists of ten Marriott branded hotels totaling 1,206 guestrooms (five Residence Inns, two SpringHill Suites, one Courtyard, one Fairfield Inn and Suites and one TownePlace Suites) and eight Hilton branded hotels totaling 981 guestrooms (four Homewood Suites, two Hampton Inns and two Hilton Garden Inns).
The 18 premium branded hotels were acquired for approximately US$186,000 per guestroom, inclusive of the cost of the PIPs, which is below management’s estimate of replacement cost.
The average age of the hotels is 10 years and each hotel has been recently built or renovated.
Source: American Hotel Income Properties REIT LP