AHIP REIT buys 2 Embassy Suites for $57.6M

VANCOUVER — American Hotel Income Properties REIT LP (AHIP) announced on July 13 that it has agreed to buy the previously announced two Embassy Suites by Hilton hotels located in Dallas and Tempe, Ariz. for an aggregate purchase price of approximately U

VANCOUVER — American Hotel Income Properties REIT LP (AHIP) announced on July 13 that it has agreed to buy the previously announced two Embassy Suites by Hilton hotels located in Dallas and Tempe, Ariz. for an aggregate purchase price of approximately US$57.6 million, excluding approximately US$5.7 million in brand mandated property improvement plans (PIPs) and customary and any negotiated closing and post-acquisition adjustments.

The Embassy Suites hotels are being purchased at a weighted-average capitalization rate of approximately 8.3 per cent on trailing 12 months net operating income (after inclusion of all hotel management fees, brand franchise fees, a 4.0 per cent furniture, fixtures and equipment (FF&E) reserve contribution and PIPs).

The two hotels consist of 529 total guestrooms and are being acquired for approximately US$109,000 per guestroom, exclusive of the cost of the PIPs, which is below management's estimate of replacement cost. Embassy Suites by Hilton is an industry leading all-suite, select-service product that offers free cooked-to-order breakfasts and a complimentary evening reception.