The 12 hotels, totaling 1,203 guestrooms, are located across the United States and will significantly strengthen AHIP’s geographic presence in Texas and the Midwest.
The 12 hotels in the acquisition include six Marriott branded properties (two Courtyards, two Residence Inns, one Fairfield Inn & Suites and one TownePlace property), five Hilton branded properties (three Home2 Suites, one Hampton Inn and one Homewood Suites), and one IHG branded property (a Staybridge Suites).
Six of the new hotels are located in Texas, while the remainder are located in the Midwest (Michigan, Minnesota, North Dakota and Pennsylvania). In line with AHIP’s long-term strategy, all 12 hotels are located in metropolitan secondary markets that benefit from multiple demand generators and industries to support the local economies.
The properties have all been constructed within the past five years, are stabilized and have minimal brand mandated property improvement plans.
The transaction is expected to close during December 2019, at which point AHIP’s portfolio will consist of 79 Premium Branded hotels, representing 8,887 total guestrooms, that are licensed primarily with Marriott, Hilton and IHG.
“We’re especially pleased with the acquisition cap rate and short closing timeline for this transaction, as the cash flow from these newer hotels will minimize the dilution from the sale of the Economy Lodging portfolio. With no major capital renovations required, the hotels in this portfolio should perform without any income displacement. In addition, the improved debt financing terms we’ve secured for this transaction, including interest only payments at lower fixed interest rates, will meaningfully reduce our financing costs and drive higher cash flows. We continue to believe higher-quality properties and attractive financing terms will drive better risk-adjusted FFO accretion and create value for our unitholders over the long term,” said said John O’Neill, CEO.