American Resort Revenue Properties REIT LP Publicizes Strategic Inclinations

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VANCOUVER, British Columbia, Sept. 03, 2024 (GLOBE NEWSWIRE) — American Resort Revenue Properties REIT LP (“AHIP”, or the “Firm”) (TSX: HOT.UN, TSX: HOT.U, TSX: HOT.DB.V), as we speak introduced additional progress on leverage discount by means of strategic tendencies.

All quantities offered on this information launch are in United States {dollars} (“U.S. {dollars}”) except in any other case indicated.

On September 2, 2024, the Board of Administrators (the “Board”) accepted the tendencies of 5 resort properties with whole gross proceeds of $45.9 million. These properties embrace two motels in Statesville, North Carolina, and one resort in every of Melbourne, Florida, Kingsland, Georgia and Houston, Texas. Every disposition is topic to a binding settlement which was entered into following the conclusion of AHIP’s beforehand disclosed advertising and marketing course of for the properties. AHIP has acquired whole non-refundable deposits of $4.7 million underneath such agreements, and the tendencies are at present anticipated to shut within the fourth quarter of 2024.

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The tendencies replicate a worth per key ⁽¹⁾ of $103 thousand primarily based on gross proceeds. AHIP’s present enterprise worth per key ⁽¹⁾ is $95 thousand, primarily based on the U.S. greenback closing value of US$0.35 per unit on the TSX on August 30, 2024. After adjusting for an business normal 4% furnishings, fixtures, and tools (“FF&E”) reserve, the mixed gross sales value for these properties represents a blended Cap Fee ⁽¹⁾ of 6.9% on 2023 annual resort EBITDA ⁽¹⁾. AHIP’s present enterprise worth ⁽¹⁾ displays an implied Cap Fee of 8.4% on 2023 annual resort EBITDA, primarily based on the U.S. greenback closing value of US$0.35 per unit on the TSX on August 30, 2024. After adjusting for the anticipated future capital expenditure necessities, these gross sales signify a blended Cap Fee of 5.5% on 2023 annual resort EBITDA.

The tendencies of the 5 resort properties convey the entire gross proceeds of the resort properties, which have been disposed or are at present underneath agreements for tendencies in 2024 to $162.0 million. These gross sales are a key element of the Firm’s beforehand introduced plan to deal with 2024 mortgage maturities and cut back leverage. Particularly, AHIP intends to make use of proceeds from the disposition of those 5 resort properties to repay the CMBS mortgage debt secured towards three of the properties and to pay down the time period loans which kind a part of AHIP’s senior credit score facility (the “Credit score Facility”), as mentioned additional beneath. Two of the 5 properties kind a part of the borrowing base for the Credit score Facility; accordingly, the proceeds from the sale of such properties will probably be used solely to pay down the excellent time period loans underneath such facility.

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“We’re happy to announce additional progress on our 2024 plan to show resort property worth and handle our mortgage maturities.” mentioned Jonathan Korol, CEO. “These tendencies replicate robust demand within the resort transaction market at values accretive to our present unit value. The streamlined portfolio is predicted to generate each greater RevPAR and margins after the tendencies are accomplished. Additional, the completion of the tendencies of the 5 resort properties will permit the Firm to fulfill a key requirement to increase the maturity of our senior credit score facility.”

The steadiness of AHIP’s Credit score Facility, which is comprised of a revolving credit score facility and time period loans, was $182.5 million as of June 30, 2024, with a maturity date of December 3, 2024. The Credit score Facility contains an possibility to increase the maturity to June 2025, topic to a few major circumstances: (i) discount of the mixture most facility measurement to $148.2 million from and after December 3, 2024; (ii) acquiring up to date value determinations for the remaining properties underneath the Credit score Facility so as to decide the worth of such properties for functions of setting the utmost borrowing availability underneath the Credit score Facility which is ready primarily based on a most mortgage to worth ratio of 67.5%; and (iii) compliance with the phrases of the settlement governing the Credit score Facility on the time of the extension which incorporates amongst different issues compliance with monetary covenants together with payout ratio and glued cost protection ratio. Topic to the completion of the tendencies of the 5 resort properties, the mixture Credit score Facility steadiness is predicted to be lowered to roughly $135.0 million, which can permit the Firm to fulfill one of many three major necessities to increase the maturity of the Credit score Facility to June 2025.

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ABOUT AMERICAN HOTEL INCOME PROPERTIES REIT LP

American Resort Revenue Properties REIT LP (TSX: HOT.UN, TSX: HOT.U, TSX: HOT.DB.V), or AHIP, is a restricted partnership fashioned to put money into resort actual property properties throughout america. AHIP’s portfolio of premium branded, select-service motels are situated in secondary metropolitan markets that profit from numerous and steady demand. AHIP motels function underneath manufacturers affiliated with Marriott, Hilton, IHG and Alternative Lodges by means of license agreements. AHIP’s long-term targets are to construct on its confirmed observe file of profitable funding, ship month-to-month U.S. greenback denominated distributions to unitholders, and generate worth by means of the continued progress of its diversified resort portfolio. Extra data is obtainable at www.ahipreit.com.

NON-IFRS AND OTHER FINANCIAL MEASURES

Administration believes the next non-IFRS monetary measures and supplementary monetary measures are related measures to observe and consider AHIP’s monetary and working efficiency. These measures shouldn’t have any standardized which means prescribed by IFRS and are due to this fact unlikely to be akin to related measures offered by different issuers. These measures are included to offer buyers and administration further data and different strategies for assessing AHIP’s monetary and working outcomes and shouldn’t be thought of in isolation or as an alternative choice to efficiency measures ready in accordance with IFRS.

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Resort EBITDA: is a non-IFRS monetary measure and calculated by adjusting web working earnings for resort administration charges.

Worth per key: is a supplementary monetary measure and calculated as whole gross proceeds divided by whole variety of resort keys/rooms of the 5 resort properties to be bought.

Blended Capitalization Fee (“Cap Fee”): is a supplementary monetary measure and calculated as whole 2023 annual resort EBITDA after adjusting for FF&E, divided by anticipated whole gross proceeds of the 5 resort properties to be bought.

Blended Cap Fee after adjusting CAPEX: is a supplementary monetary measure and calculated as whole 2023 annual resort EBITDA after adjusting for FF&E, divided by the sum of whole gross proceeds and the entire anticipated capital expenditure necessities of the 5 resort properties to be bought.

Enterprise worth: is a supplementary monetary measure and is calculated as (i) the sum of whole debt obligations as mirrored on the June 30, 2024 steadiness sheet, AHIP’s market capitalization (which is calculated because the U.S. greenback closing value of the items on the TSX as of August 30, 2024, multiplied by the entire variety of items issued and excellent), and face worth of collection C most popular shares, much less (ii) the amount of money and money equivalents mirrored on the June 30, 2024 steadiness sheet.

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Enterprise worth per key: is a supplementary monetary measure and is calculated as enterprise worth divided by the entire variety of resort keys/rooms within the portfolio.

NON-IFRS RECONCILIATION

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FORWARD-LOOKING INFORMATION

Sure statements on this information launch could represent “forward-looking data” and “monetary outlook” inside the which means of relevant securities legal guidelines. Ahead-looking data and monetary outlook typically will be recognized by phrases equivalent to “anticipate”, “imagine”, “proceed”, “anticipate”, “estimates”, “intend”, “could”, “outlook”, “goal”, “plans”, “ought to”, “will” and related expressions suggesting future outcomes or occasions. Ahead-looking data and monetary outlook embrace, however shouldn’t be restricted to, statements made or implied referring to the targets of AHIP, AHIP’s methods to realize these targets and AHIP’s beliefs, plans, estimates, projections and intentions and related statements regarding anticipated future occasions, outcomes, circumstances, efficiency, or expectations that aren’t historic details. Ahead-looking data and monetary outlook on this information launch contains, however shouldn’t be restricted to, statements with respect to: AHIP’s deliberate property tendencies, together with the anticipated phrases and timing thereof and the monetary impression thereof on AHIP; AHIP’s intent to make use of the web proceeds from its deliberate property tendencies to pay down debt; AHIP’s expectation that the deliberate property tendencies will permit it to fulfill one of many three major necessities to increase the maturity of the Credit score Facility; and AHIP’s acknowledged long-term targets.

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Though the forward-looking data and monetary outlook contained on this information launch is predicated on what AHIP’s administration believes to be cheap assumptions, AHIP can not guarantee buyers that precise outcomes will probably be in step with such data. Ahead-looking data and monetary outlook is predicated on plenty of key expectations and assumptions made by AHIP, together with, with out limitation: AHIP will full its deliberate property tendencies in accordance with the phrases and timing at present contemplated; AHIP will fulfill the necessities to increase the maturity of the Credit score Facility; AHIP will proceed to have adequate funds to fulfill its monetary obligations; AHIP’s methods with respect to completion of capital tasks, liquidity, addressing near-term debt maturities, divestiture of non-core property and acquisitions will probably be profitable and obtain their supposed results; capital markets will present AHIP with available entry to fairness and/or debt financing on phrases acceptable to AHIP, together with the flexibility to refinance maturing debt because it turns into due on phrases acceptable to AHIP; AHIP’s future stage of indebtedness and its future progress potential will stay in step with AHIP’s present expectations; and AHIP will obtain its long run targets.

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Ahead-looking data and monetary outlook contain important dangers and uncertainties and shouldn’t be learn as a assure of future efficiency or outcomes as precise outcomes could differ materially from these expressed or implied in such forward-looking data and monetary outlook, accordingly undue reliance shouldn’t be positioned on such forward-looking data and monetary outlook. These dangers and uncertainties embrace, amongst different issues, dangers associated to: AHIP could not full its at present deliberate property tendencies on the phrases at present contemplated or in accordance with the timing at present contemplated, or in any respect; AHIP could not fulfill the necessities to increase the maturity of the Credit score Facility; the brand new value determinations required underneath the Credit score Facility could report decrease than anticipated values which can set off paydown necessities underneath the Credit score Facility, and if such pay-downs are required, there isn’t a assure that AHIP could have adequate money available or be capable of generate adequate web proceeds to fulfill these necessities, which, with out aid from the lender, would put AHIP in default underneath the Credit score Facility; AHIP could not obtain its anticipated efficiency ranges in 2024 and past; AHIP’s strategic initiatives with respect to liquidity, addressing near-term debt maturities and offering AHIP with monetary stability is probably not profitable and should not obtain their supposed outcomes; AHIP’s methods for divesting property to cut back debt is probably not profitable; AHIP is probably not profitable in decreasing its leverage; AHIP could not be capable of refinance debt obligations as they develop into due or could achieve this on phrases much less favorable to AHIP than underneath AHIP’s present mortgage agreements; basic financial circumstances and shopper confidence; the expansion within the U.S. resort and lodging business; costs for AHIP’s items and its debentures; liquidity; tax dangers; potential to entry debt and capital markets; financing dangers; adjustments in rates of interest; the monetary situation of, and AHIP’s relationships with, its exterior resort supervisor and franchisors; actual property dangers, together with environmental dangers; the diploma and nature of competitors; potential to amass accretive resort investments; potential to combine new motels; environmental issues; elevated geopolitical instability; and adjustments in laws and AHIP could not obtain its long run targets. Administration believes that the expectations mirrored within the forward-looking data and monetary outlook are primarily based upon cheap assumptions and data at present obtainable; nonetheless, administration may give no assurance that precise outcomes will probably be in step with the forward-looking data and monetary outlook contained herein. Further details about dangers and uncertainties is contained in AHIP’s administration’s dialogue and evaluation for the three and 6 months ended June 30, 2024 and 2023, and AHIP’s annual data kind for the 12 months ended December 31, 2023, copies of which can be found on SEDAR+ at www.sedarplus.com.

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To the extent any forward-looking data constitutes a “monetary outlook” inside the which means of relevant securities legal guidelines, such data is being offered to buyers to help of their understanding of estimated proceeds from the deliberate disposition of sure resort properties and the impression thereof on AHIP’s monetary place, leverage and compliance with the phrases of the Credit score Facility.

The forward-looking data and monetary outlook contained herein is expressly certified in its entirety by this cautionary assertion. Ahead-looking data and monetary outlook replicate administration’s present beliefs and is predicated on data at present obtainable to AHIP. The forward-looking data and monetary outlook are made as of the date of this information launch and AHIP assumes no obligation to replace or revise such data to replicate new occasions or circumstances, besides as could also be required by relevant legislation.

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^{(1) Non-IFRS and different monetary measures. See “NON-IFRS AND OTHER FINANCIAL MEASURES” part of this information launch.}

For extra data, please contact:

Investor Relations
ir@ahipreit.com

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