VANCOUVER—American Hotel Income Properties REIT has struck a deal to acquire a portfolio of 12 premium hotels for $191 million, or $158,800 per key. The seller was not announced.
The 12 hotels, totaling 1,203 guestrooms, are located across the US and will significantly strengthen the Canadian REIT’s footprint in Texas and the Midwest. The properties have all been constructed within the past five years, are stabilized and have minimal brand mandated property improvement plans. The transaction is expected to close during December 2019.
The company is funding the acquisition with proceeds from the $215.5 million sale of a 45-asst economy lodging portfolio to VCM Ltd., which is an affiliate of Vukota Capital Management, and a $105 million fixed-rate term loan. The cash flow from these newer hotels will minimize the dilution from the sale of the economy lodging portfolio, says CEO John O’Neill, in prepared remarks. “We continue to believe higher-quality properties and attractive financing terms will drive better risk-adjusted FFO accretion and create value for our unitholders over the long term.”
The 12 hotels include six Marriott branded properties (two Courtyards, two Residence Inns, one Fairfield Inn & Suites and one TownePlace property), five Hilton branded properties (three Home2 Suites, one Hampton Inn and one Homewood Suites), and one IHG branded property (a Staybridge Suites).
Six of the new hotels are located in Texas, while the remainder are located in Michigan, Minnesota, North Dakota and Pennsylvania. All 12 hotels are located in metropolitan secondary markets that benefit from multiple demand generators and industries to support the local economies, the REIT said.