VANCOUVER—American Hotel Income Properties REIT LP (AHIP), based here, has agreed to acquire through its subsidiaries a portfolio of four branded hotel properties located in North Carolina and Florida for $41 million.
The properties contain 353 total guestrooms and are being acquired for approximately $123,000 per guestroom inclusive of the cost of the PIPs. The four select-service hotels consist of three Marriott-branded properties (a 94-room Courtyard hotel in Statesville, NC; an 83-room Fairfield Inn and Suites in Melbourne, FL; and a 96-room Fairfield Inn and Suites in Titusville, FL) and one Hilton-branded property (an 80-room Hampton Inn in Statesville, NC). They are located along major U.S. interstate highways near transportation hubs and other generators.
AHIP will fund the purchase price, including the PIPs, using a combination of cash on hand and a new, $26.1 million CMBS mortgage. The new CMBS mortgage will be for a 10-year term, interest-only for the first seven years with an expected fixed interest rate of 4.3% for the entire term.
Robert O’Neill, AHIP’s CEO, said, “This investment is consistent with our stated growth strategy targeting acquisitions of transportation-oriented and branded, select-service hotels located in secondary markets in the United States close to major demand generators.”
He added, “Statesville, NC, is an important transportation hub given its location at the intersections of I-77 and I-40 and proximity to numerous manufacturing and distribution centers. Melbourne and Titusville are both located on the I-95 corridor on Florida’s Space Coast. The two Florida hotels will benefit from the Kennedy Space Center, Cape Canaveral Air Force Station and Port Canaveral, along with leisure demand generators.”
The acquisition properties will be managed for AHIP by its hotel manager, Tower Rock Hotels & Resorts Inc., a wholly owned subsidiary of O’Neill Hotels & Resorts Ltd.
“The availability of long-term, low-cost, fixed-rate CMBS debt with a significant interest-only period highlights a key aspect of our conservative approach to leverage, aimed at providing highly stable returns to AHIP’s unitholders,” said O’Neill. “During the past 12 months, we have acquired 23 branded hotels totaling 2,347 guestrooms in order to participate in the growing U.S. lodging industry.”