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AHIP announces opening of Oak Tree Inn Santa Teresa, New Mexico to be on-schedule and the renewal of two railway lodging contracts

VANCOUVER, April 10, 2014 /PRNewswire/ - American Hotel Income Properties REIT LP ("AHIP") (TSX: HOT.UN; OTCQX: AHOTF) announced today a corporate update on its railway lodging portfolio.

OPENING OF SANTA TERESA PROPERTY TO BE ON-SCHEDULE

The previously announced 56-room Oak Tree Inn hotel and Penny's Diner located in Santa Teresa, New Mexico (the "Property") is expected to open according to schedule. A ribbon cutting ceremony is due to take place at 10:00am local time on May 6, 2014, less than one month before the expected completion of the Santa Teresa Intermodal Ramp.

The Property is being constructed by SunOne Developments Inc. ("SunOne") on a 2.28 acre site in the Santa Teresa Business Centre, adjacent to the Doña Ana County Airport and approximately three miles from the railway crew change office. The Property will be managed by TR Lodging Enterprises Inc., a subsidiary of Tower Rock Hotels & Resorts Inc. Following the opening of the Property, AHIP's portfolio of dedicated railway lodging facilities will be comprised of 34 hotels with a total count of 2,655 guestrooms, and twenty-four 24-hour Penny's Diners.

"The Santa Teresa location marks the first Oak Tree Inn hotel and Penny's Diner conveyed to AHIP by SunOne" said Mr. Rob O'Neill, Chief Executive Officer. "I am extremely pleased to report that the facility is being delivered on schedule. AHIP looks forward to many more successful projects with SunOne in the future."

THREE PREVIOUSLY ANNOUNCED SUNONE DEVELOPMENT PROJECTS

The three previously announced SunOne development projects are progressing as expected: after a delay related to severe weather, construction is underway on the 25-room hotel and Penny's Diner in Brunswick, Maryland; the Wellington, Kansas site has been cleared and construction on the 110-room hotel is scheduled to commence this month; and drawings have been submitted for approval for the construction of the 50-room hotel and Penny's Diner in Glendive, Montana.

OAK TREE INN HOTEL RENEWALS, GROWTH AND BRAND UNIFORMITY

AHIP recently renewed two railway lodging contracts, at locations in New York and Kansas. Both contract renewals featured improved cost escalators.

AHIP continues to work to expand its portfolio of Oak Tree Inn hotels, the largest and highest quality chain of crew lodging facilities presently serving the U.S. freight railway industry, through new construction and the purchase and renovation of hotel properties. Negotiations are underway for both new-build and conversion opportunities, where noise, light and temperature control features required by AHIP's railway customers are installed at existing hotels. AHIP is also in various stages of negotiations with several railway clients for new lodging contracts to provide accommodations for both locomotive crew and management trainees.

AHIP's Best Western Kansas City, Kansas property was recently converted to the Oak Tree Inn brand. All of AHIP's dedicated railway facilities now operate under AHIP's proprietary Oak Tree Inn brand.

U.S. FREIGHT RAIL

The monthly Rail Time Indicators released on April 4, 2014 highlighted several positive trends in U.S. freight railway traffic. From March 2013 to March 2014, non-seasonally adjusted total carloads increased by 3.5%, carloads excluding coal increased by 4.3%, carloads excluding coal and grain increased by 2.4%, and intermodal volume increased by 9.9%. Manufacturing sales and orders, industrial output, capacity utilization, and railway employment all increased last month, while the number of railcars in storage decreased. Traffic of petroleum and petroleum products continues to increase annually in the high double-digits.

FORWARD-LOOKING INFORMATION

This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects AHIP's current expectations regarding future events. Forward-looking information is identified by the use of terms and phrases such as "anticipate", "believe", "budget", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would" and similar terms and phrases, and includes, but is not limited to, the opening date of the Santa Teresa property and its delivery on schedule, the expected completion of the Santa Teresa railway terminal and Intermodal Ramp, the construction schedule of previously announced SunOne development projects, the potential for future SunOne development projects, the new construction and the purchase and renovation of hotel properties, negotiations for new builds and conversion opportunities and negotiations for new lodging contracts to provide accommodation.

Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond AHIP's control, that could cause actual results and events to differ materially from those that are disclosed in, or implied by, such forward-looking information. Such assumptions include, but are not limited to, adherence to construction schedules by SunOne, availability of future SunOne development projects, continuing demand for new lodging facilities by AHIP's railway customers, AHIP's ability to finance the acquisition of hotel properties, and a reasonably stable North American economy and stock market. Such risks and uncertainties include, but are not limited to, risks related to a dependence on lodging contracts with railway customers, access to capital, as well as the factors discussed under "Risk Factors" in AHIP's Annual Information Form dated March 26, 2014, which is available on SEDAR at www.sedar.com and on AHIP's website at www.ahipreit.com. The forward-looking information contained herein is made as of the date of this news release and, except as expressly required by applicable law, AHIP assumes no obligation to publicly update or revise such information.

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 railway 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 U.S.; (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

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