VANCOUVER — Vancouver-based American Hotel Income Properties REIT LP (AHIP) has been busy, announcing in late August the acquisition of five U.S. railway hotels for almost $44.8 million USD and in early August completing a previously announced deal to buy three Marriott-branded hotels in Ocala, Fla., for $30.8 million USD.
Housing 586 total guestrooms, the five railway lodging facilities include a 160-room hotel in Belen, N.M.; a 156-room hotel in Gillette, Wyo.; a 118-room hotel in Ravenna, Neb.; a 96-room hotel in Guernsey, Wyo.; and a 56-room hotel in Edgemont, S.D.
The railway portfolio is secured by long-term lodging contracts with one of the U.S.’s top three railway companies, which guarantee in excess of 80-per-cent of the available guestrooms for terms averaging nine years. AHIP presently owns three Oak Tree Inn hotels that are contracted with this railway company.
Upon completion of the railway property acquisition, expected by late September, AHIP’s portfolio will consist of 78 hotels totaling 6,798 guestrooms, with 43 rail hotels totaling 3,467 guestrooms and 35 branded hotels totaling 3,331 guestrooms.
“Upon completion of this transaction, AHIP will have more than doubled its locations with a key railway client and will be its sole dedicated crew lodging provider, building on our Oak Tree Inn’s tradition of providing “dark and quiet” room stays for railway companies and their employees,” said AHIP CEO Rob O’Neill, in a release.
“Negotiations are also underway with this railway client for two additional, previously announced property conversions, totaling 250 guestrooms, in Mississippi and Kansas. Upon the expected completion of these transactions, these seven rail initiatives are expected to provide further scale and stability to our rail portfolio through diversification of railway clients and longer-term contracts,” said O’Neill.
Also on the books is the addition of guestrooms to the company’s railway hotels in Dexter, Mo., and Glendive, MT, chief financial officer Azim Lalani told CLN. Construction is underway on those expansions, with completion expected by the end of the year and early 2016, respectively.
The railway portfolio will be managed for AHIP by its exclusive hotel manager, TR Lodging Enterprises Inc., a wholly owned subsidiary of Tower Rock Hotels & Resorts Ltd.
The three Marriott select-service properties in Ocala, in north-central Florida, feature a total of 352 guestrooms and include a 169-room Courtyard, a 96-room Fairfield Inn & Suites and an 87-room Residence Inn. Franchised by Marriott International, the three hotels are located on a transportation corridor near major demand generators.
“The properties complement our existing Marriott-branded Florida hotels in Melbourne and Titusville, and further diversify our portfolio,” said O’Neill. In total, AHIP now has 12 Marriott-branded, select-service hotels in its portfolio.
The newly acquired Marriott properties will be managed for AHIP by Tower Rock Hotels & Resorts Inc.
Going forward, AHIP plans to target select-service Marriott, Hilton and IHG properties in primary and secondary U.S. markets, said Lalani.
AHIP has also bolstered its senior executive ranks, announcing in July that Ian McAuley, co-founder and president of Superior Lodging Corp., was named executive vice-president, asset management, effective Sept 1.
McAuley will oversee and interface with Tower Rock Hotels & Resorts Inc. on property operating performance, capital investments, risk management and brand relations for AHIP’s portfolio of 70 Oak Tree Inn and branded hotels.