AHIP to Acquire $191M Hospitality Portfolio

The company will finance the acquisition with the proceeds of a recent $215 million disposition and a new loan.
The largest hotel in the portfolio, the 120-key Courtyard St. Paul Woodbury in Woodbury, Minn. Image via Google Street View

American Hotel Income Properties has reached an agreement to purchase 12 premium-branded hotels for $191 million. The portfolio totals 1,203 guestrooms across Texas and the Midwest. The seller is Aimbridge Hospitality, according to public records.

AHIP plans to finance the acquisition using the net proceeds from the sale of its Economy Lodging Portfolio along with a $105 million loan. The mortgage matures in five years and will bear interest at less than 4 percent.

The capitalization rate on the hotels is approximately 8 percent. AHIP will buy the assets at nearly $159,000 per guestroom. The deal is expected to close before the end of the year, bringing the company’s portfolio to 8,887 keys in 79 properties.

Aimbridge will continue managing the properties, following the close of the deal. In September, the firm announced plans to merge with Interstate Hotels by the end of the year.

The portfolio’s assets are located in Texas, Minnesota, Pennsylvania, Michigan and North Dakota. The 12 acquisitions include six Marriot- and five Hilton-branded properties, as well as one IHG hotel. All the buildings were constructed in the past five years and require no major improvements.

The transaction comes on the heels of AHIP’s sale of its Economy Lodging portfolio to VCM Ltd., an affiliate of Vukola Capital Management. The $215.5 million portfolio sale closed in November and included 45 hotels nationwide. The company plans to focus on growing its premium-branded select-service portfolio over the long term.