Vancouver-based American Hotel Income Properties REIT (AHIP) has entered an agreement to sell its Economy Lodging portfolio for US$215.5 million to an affiliate of VCM, Ltd. (VCM). The portfolio consists of 45 Hotels.
When the acquisition closes AHIP’s portfolio will be comprised of 100 per cent Premium Branded hotels.
According to the press release, after the repayment of property mortgages and transaction closing costs, the net proceeds from the sale of approximately US$90 million will be redeployed to acquire additional hotels that are better suited to AHIP’s long-term strategy, and also used for general corporate purposes.
John O’Neill, CEO of AHIP said that following the sale of the Economy Lodging properties, the real estate investment trust will be better aligned with other U.S. hotel REIT peers.
“By owning a focused portfolio of purely mid to upscale, select-service branded hotels. We anticipate this more focused strategy will help effectively value our business in the public markets,” O’Neill added.
CIBC Capital Markets and R.W. Baird & Co. Incorporated are acting as financial advisors, and Farris LLP is acting as legal advisor, to AHIP on this transaction.
The transaction is expected to be closed in September 2019.