VANCOUVER—American Hotel Income Properties REIT LP (AHIP) has consolidated the debt and business structure of its economy lodging hotel portfolio to provide it with improved operating and tax efficiencies. AHIP has refinanced its railway portfolio term loan of approximately $19 million and obtained a $4-million mortgage for two of its recently acquired hotel properties—the Days Inn hotel in Fargo, ND, and the Baymont Inn & Suites in Whitefish, MT, through its existing syndicate of U.S. chartered banks. AHIP has also increased its secured revolving line of credit to $13.5 million to provide increased flexibility to pursue opportunistic, accretive tuck-in acquisitions, and for upcoming renovations as part of the Wyndham rebranding.
Key financing highlights:
- The new railway portfolio term loan has a seven-year term with an interest rate of LIBOR + 280 basis points and matures in March 2025.
- The Fargo and Whitefish mortgage has a five-year term with an interest rate of LIBOR + 280 basis points and matures in March 2023.
- The revolving line of credit was increased from $10 million to $13.5 million with an interest rate of LIBOR + 280 basis points and matures in March 2019.
- Economy lodging hotel loans now total approximately $110 million in aggregate with this syndicate of lenders. The consolidation of loans through this syndicate will simplify operating processes for AHIP and generate annual income tax savings.
“The addition of these loans for our economy lodging portfolio complements the long-term, fixed-rate debt for our premium-branded hotel portfolio—which has an average interest rate of 4.6% and comprises 85% of our total debt,” said Ian McAuley, president of AHIP. “In total, 97% of our debt is fixed-rate with an average term remaining of more than seven years and no significant loan maturities until June 2022, positioning AHIP well for any near-term interest rate changes.”