|By PR Newswire||
|February 17, 2014 05:27 PM EST||
VANCOUVER, Feb. 17, 2014 /PRNewswire/ - American Hotel Income Properties REIT LP ("AHIP") (Toronto Stock Exchange: HOT.UN; OTCQX: AHOTF) announced today that it has agreed to acquire, through its subsidiaries, four hotel properties located in Virginia (the "Acquisition Portfolio") for an aggregate purchase price of approximately US$37.1 million, including up to US$1.6 million for defeasance of existing debt, and excluding post-acquisition adjustments and brand mandated property improvement plans.
The Acquisition Portfolio will be purchased at a weighted average going-in capitalization rate of approximately 10.0%, after inclusion of all hotel management fees, administration fees and brand franchise fees, or approximately US$92,060 per room (excluding brand mandated property improvement plans to upgrade furniture, fixtures and equipment, which AHIP expects to be approximately US$6.0 million). Including the property improvement plans and closing costs, the aggregate cost to AHIP for the Acquisition Portfolio is expected by management to be approximately US$44.5 million.
- Quality portfolio of four select-service hotel properties located in Harrisonburg, Emporia, and South Hill, Virginia
- The properties operate under well-established, leading national hotel brands: Hampton Inn (Hilton) and Fairfield Inn & Suites (Marriott)
- The Acquisition Portfolio has stable historical operating metrics and all four properties are located in close proximity to Interstate highway exits
- The Harrisonburg University hotel is close to James Madison University, which has approximately 20,000 students enrolled
- AHIP's pro forma payout and leverage ratios remain conservative after giving effect to the Acquisition Portfolio, at approximately 73.4% on projected 2014 AFFO of the Acquisition Portfolio and a projected debt to gross book value of approximately 51.2%
- Expected by to be immediately accretive to AFFO per unit
- The total acquisition price including budgeted property improvement plan costs of the Acquisition Portfolio are significantly below the as-stabilized appraised value of US$45.8 million as determined by a third party appraiser, and management's estimate of replacement cost
- Finance with a first mortgage of up to US$24.5 million, bearing an anticipated weighted average interest rate of approximately 4.85%, fixed for 10 years, with the remainder financed with cash from the bought deal offering that closed on October 31, 2013
- The transaction is expected to close in mid-March, 2014
Rob O'Neill, AHIP's CEO commented, "We are very pleased to announce this acquisition, which is consistent with our stated growth strategy as outlined at the time of AHIP's initial public offering, targeting acquisitions of transportation-oriented and select and limited-service hotels, located in secondary markets in the United States in close proximity to railroads, airports, highway interchanges, and other transportation hubs and demand generators. This acquisition represents another opportunity for AHIP to purchase a high quality, well-maintained portfolio at a price that is below our estimate of its replacement cost. We expect this acquisition to be immediately accretive to our AFFO per unit."
The Acquisition Portfolio
The Acquisition Portfolio is comprised of an aggregate of 403 guest rooms and consists of three hotels under the "Hampton Inn" flag (a Hilton brand), and one hotel under the "Fairfield Inn & Suites" flag (a Marriott brand). The properties are located in Harrisonburg, Emporia and South Hill, Virginia, near transportation hubs and other major demand generators such as James Madison University, manufacturing facilities, distribution centres and medical centres. The properties cater primarily to corporate travelers seeking select-service lodging. The following table sets out certain key characteristics of the Acquisition Portfolio:
|Hampton Inn University||Harrisonburg, Virginia||1988||160||67.90%||$99.55||$67.61|
|Hampton Inn South||Harrisonburg, Virginia||2008||90||75.20%||$90.32||$67.94|
|Hampton Inn||Emporia, Virginia||2005||85||77.00%||$90.79||$69.95|
|Fairfield Inn & Suites||South Hill, Virginia||2007||68||80.50%||$81.66||$65.73|
|Total / Weighted Average||403||73.60%||$92.21||$67.86|
AHIP is also purchasing land adjacent to two of the properties for US$0.1 million, primarily to serve as a buffer to adjacent businesses.
Following the closing of the Acquisition Portfolio, AHIP's portfolio will be comprised of 41 hotels located in 20 states across the United States, representing an aggregate of 3,517 rooms, excluding the four previously announced properties currently under development through SunOne Developments Inc. ("SunOne"), which represent 241 additional rooms in the aggregate.
AHIP currently owns 37 hotel properties, of which three operate under the "Hampton Inn" flag (a Hilton brand) and one operates under the "Residence Inn" flag (a Marriott brand). The remaining 33 hotels, with an aggregate of 2,642 rooms, are focused on serving railway customers (32 operate under AHIP's proprietary "Oak Tree Inn" brand and one operates under the "Best Western" brand), with approximately 61% of the total available room-nights covered under contracts containing minimum occupancy guarantees.
February Cash Distribution
AHIP also announced the cash distribution of Cdn$0.075 per limited partnership unit ("Unit") of AHIP for the period of February 1, 2014 to February 28, 2014, which is equivalent to Cdn$0.90 per Unit on an annualized basis. The distribution will be paid on March 14, 2014 to unitholders of record at the close of business on February 28, 2014. There are currently 14,437,800 Units issued and outstanding.
The policy of AHIP is to pay cash distributions on or about the 15th day of each month to the unitholders of record on the last business day of the preceding month.
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, the following: references to the purchase and closing costs of the Acquisition Portfolio; the components used in the determination of weighted average going-in capitalization rates, pro forma leverage and payout ratios; the completion and estimated costs of property improvement plans; as stabilized values of the Acquisition Portfolio; accretive effect of the Acquisition Portfolio on AFFO per unit; the expected time of closing of the transaction; the obtainment and interest rates of new mortgage financing on the Acquisition Portfolio; the development of four hotels by SunOne and the focus on acquiring additional suitable hotels in strategic locations.
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 and the ability to successfully integrate the Acquisition Portfolio. 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.
Forward-looking information reflects current expectations of AHIP's management regarding future events and operating performance as of the date of this news release. Such information involves significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, without limitation, those factors that can be found under "Risk Factors" in AHIP's Annual Information Form dated March 28, 2013 and AHIP's Management's Discussion and Analysis dated November 7, 2013.
The forward-looking statements contained herein represent AHIP's expectations as of the date of this news release, and are subject to change after this date. AHIP assumes no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.
About American Hotel Income Properties REIT LP
AHIP is a limited partnership formed under the Limited Partnerships Act (Ontario) to invest in hotel real estate properties located substantially in the United States and engaged primarily in the railroad employee accommodation, transportation and contract-focused lodging sectors. AHIP's long-term objectives are to: (i) generate stable and growing cash distributions from hotel properties substantially in the US; (ii) enhance the value of its assets and maximize the long-term value of the hotel properties through active management; and (iii) expand its asset base and increase its AFFO per Unit through an accretive acquisition program, participation in strategic development opportunities and improvements to its properties through targeted value-added capital expenditure programs.
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS RELEASE.
SOURCE American Hotel Income Properties REIT LP
Your homes and cars can be automated and self-serviced. Why can't your storage? From simply asking questions to analyze and troubleshoot your infrastructure, to provisioning storage with snapshots, recovery and replication, your wildest sci-fi dream has come true. In his session at @DevOpsSummit at 20th Cloud Expo, Dan Florea, Director of Product Management at Tintri, will provide a ChatOps demo where you can talk to your storage and manage it from anywhere, through Slack and similar services ...
Feb. 22, 2017 12:30 PM EST Reads: 1,616
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
Feb. 22, 2017 12:30 PM EST Reads: 1,452
Column Technologies exhibited at SYS-CON's @DevOpsSummit at Cloud Expo, which took place at the Javits Center in New York City, NY, in June 2016. Established in 1998, Column Technologies is a global technology solutions provider with over 400 employees, headquartered in the United States with offices in Canada, India, and the United Kingdom. Column Technologies provides “Best of Breed” technology solutions that automate the key DevOps principals and help our customers meet today’s DevOps and Dig...
Feb. 22, 2017 12:30 PM EST Reads: 921
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend @CloudExpo | @ThingsExpo, June 6-8, 2017, at the Javits Center in New York City, NY and October 31 - November 2, 2017, Santa Clara Convention Center, CA. Learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
Feb. 22, 2017 12:00 PM EST Reads: 2,019
Have you ever noticed how some IT people seem to lead successful, rewarding, and satisfying lives and careers, while others struggle? IT author and speaker Don Crawley uncovered the five principles that successful IT people use to build satisfying lives and careers and he shares them in this fast-paced, thought-provoking webinar. You'll learn the importance of striking a balance with technical skills and people skills, challenge your pre-existing ideas about IT customer service, and gain new in...
Feb. 22, 2017 12:00 PM EST Reads: 2,135
Wooed by the promise of faster innovation, lower TCO, and greater agility, businesses of every shape and size have embraced the cloud at every layer of the IT stack – from apps to file sharing to infrastructure. The typical organization currently uses more than a dozen sanctioned cloud apps and will shift more than half of all workloads to the cloud by 2018. Such cloud investments have delivered measurable benefits. But they’ve also resulted in some unintended side-effects: complexity and risk. ...
Feb. 22, 2017 11:30 AM EST Reads: 1,097
@DevOpsSummit at Cloud taking place June 6-8, 2017, at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long developm...
Feb. 22, 2017 11:30 AM EST Reads: 1,110
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
Feb. 22, 2017 11:15 AM EST Reads: 733
In his keynote at 19th Cloud Expo, Sheng Liang, co-founder and CEO of Rancher Labs, discussed the technological advances and new business opportunities created by the rapid adoption of containers. With the success of Amazon Web Services (AWS) and various open source technologies used to build private clouds, cloud computing has become an essential component of IT strategy. However, users continue to face challenges in implementing clouds, as older technologies evolve and newer ones like Docker c...
Feb. 22, 2017 11:15 AM EST Reads: 980
DevOps and microservices are permeating software engineering teams broadly, whether these teams are in pure software shops but happen to run a business, such Uber and Airbnb, or in companies that rely heavily on software to run more traditional business, such as financial firms or high-end manufacturers. Microservices and DevOps have created software development and therefore business speed and agility benefits, but they have also created problems; specifically, they have created software securi...
Feb. 22, 2017 11:00 AM EST Reads: 3,248
All clouds are not equal. To succeed in a DevOps context, organizations should plan to develop/deploy apps across a choice of on-premise and public clouds simultaneously depending on the business needs. This is where the concept of the Lean Cloud comes in - resting on the idea that you often need to relocate your app modules over their life cycles for both innovation and operational efficiency in the cloud. In his session at @DevOpsSummit at19th Cloud Expo, Valentin (Val) Bercovici, CTO of Soli...
Feb. 22, 2017 10:45 AM EST Reads: 384
Almost two-thirds of companies either have or soon will have IoT as the backbone of their business. Though, IoT is far more complex than most firms expected with a majority of IoT projects having failed. How can you not get trapped in the pitfalls? In his session at @ThingsExpo, Tony Shan, Chief IoTologist at Wipro, will introduce a holistic method of IoTification, which is the process of IoTifying the existing technology portfolios and business models to adopt and leverage IoT. He will delve in...
Feb. 22, 2017 10:00 AM EST Reads: 1,512
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
Feb. 22, 2017 09:45 AM EST Reads: 812
Cloud Expo, Inc. has announced today that Aruna Ravichandran, vice president of DevOps Product and Solutions Marketing at CA Technologies, has been named co-conference chair of DevOps at Cloud Expo 2017. The @DevOpsSummit at Cloud Expo New York will take place on June 6-8, 2017, at the Javits Center in New York City, New York, and @DevOpsSummit at Cloud Expo Silicon Valley will take place Oct. 31-Nov. 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Feb. 22, 2017 09:45 AM EST Reads: 1,347
In his session at @ThingsExpo, Steve Wilkes, CTO and founder of Striim, will delve into four enterprise-scale, business-critical case studies where streaming analytics serves as the key to enabling real-time data integration and right-time insights in hybrid cloud, IoT, and fog computing environments. As part of this discussion, he will also present a demo based on its partnership with Fujitsu, highlighting their technologies in a healthcare IoT use-case. The demo showcases the tracking of pati...
Feb. 22, 2017 09:29 AM EST Reads: 204