American Hotel Income Properties REIT LP (TSX:HOT.UN) completed the acquisition of Embassy Suites Phoenix-Tempe and The Embassy Suites Dallas - DFW International Airport South from Sunstone (No. 3) Limited Partnership and Sunstone (No. 4) Limited Partnership.
January 06, 2017
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American Hotel Income Properties REIT LP (TSX:HOT.UN) entered into a conditional purchase and sale agreement to acquire Embassy Suites Phoenix-Tempe and The Embassy Suites Dallas - DFW International Airport South from Sunstone (No. 3) Limited Partnership and Sunstone (No. 4) Limited Partnership for $58.2 million on May 31, 2016. Sunstone Realty Advisors owns Embassy Suites in Dallas through Sunstone U.S. Opportunity (No. 4) Realty Trust and Embassy Suites Portfolio in Tempe through Sunstone U.S. Opportunity (No. 3) Realty. As part of the consideration, American Hotel will issue $17.8 million in its units on the closing date and will assume $19 million mortgage on Embassy Suites Portfolio in Dallas. The price for 529 room hotel portfolio is $110,000 per room. In related transactions, American Hotel agreed to acquire Multi-Hotel Branded Portfolio and Rail Crew Hotels and also entered into an agreement with a syndicate of underwriters to raise CAD 90 million ($69.88 million) in units offering. American Hotel will partially fund the deal with $13 million in cash proceeds from the CAD 90 million ($69.88 million) offering and AHIP would obtain a new, 10-year, $13.5 million mortgage on the Arizona property with an expected interest rate under 4.90%.
The deal is subject to satisfactory completion of due diligence, approval by American Hotel Board of Directors and negotiation of formal legal documents and issuance of consideration shares are subject to the prior approval of the Toronto Stock Exchange. The deal was approved by the independent members of the board of directors of AHIP's general partner. The deal is expected to occur in late August or early September 2016. As on December 5, 2016, American Hotel Income Properties REIT LP entered into an agreement with a syndicate of underwriters to sell on a bought deal basis to raise $75.14 million (CAD 100 million). American Hotel Income Properties plans to use part of the proceeds for the acquisition. James Speakman of Clark Wilson LLP acted as legal advisor for Sunstone. Duncan J. Reid of Farris, Vaughan, Wills & Murphy LLP acted as legal advisor for American Hotel Income Properties. Brandon Grajewski of First American Title Insurance Company acted as escrow agent in the transaction. Currency conversions were done through www.oanda.com as of July 5, 2016.
American Hotel Income Properties REIT LP (TSX:HOT.UN) completed the acquisition of Embassy Suites Phoenix-Tempe and The Embassy Suites Dallas - DFW International Airport South from Sunstone (No. 3) Limited Partnership and Sunstone (No. 4) Limited Partnership on January 6, 2017.
American Hotel Income Properties REIT LP is a Canada-based limited partnership company that invests in hotel real estate properties across the United States. The principal business of the Company is to issue limited partnership units (Units) and to acquire and hold shares of American Hotel Income Properties REIT Inc. (the U.S. REIT). The U.S. REIT is engaged in acquiring and owning hotel real estate properties in the United States. The Company is engaged primarily in growing a portfolio of branded, select-service hotels in larger secondary markets with diverse and stable demand generators. Its branded, select-service hotels are located in secondary metropolitan markets. Its hotels operate under brands affiliated with Marriott, Hilton, IHG and Choice Hotels through license agreements. It owns about 70 branded hotels with a total of 7,917 guestrooms located in 22 states across the United States.
American Hotel Income Properties REIT LP (TSX: HOT.UN) completed the acquisition of Embassy Suites Phoenix-Tempe and The Embassy Suites Dallas - DFW International Airport South from Sunstone (No. 3) Limited Partnership and Sunstone (No. 4) Limited Partnership.