VANCOUVER, British Columbia, Aug. 06, 2025 (GLOBE NEWSWIRE) — American Hotel Income Properties REIT LP (“AHIP“, or the “Company“) (TSX:HOT, TSX:HOT, TSX:HOT), today announced its financial results for the three and six months ended June 30, 2025.
All amounts presented in this news release are in United States dollars (“U.S. dollars“) unless otherwise indicated.
2025 SECOND QUARTER HIGHLIGHTS
- Diluted FFO per unit(1) and normalized diluted FFO per unit(1) were $0.06 for the second quarter of 2025, compared to $0.12 and $0.10 respectively, for the same period of 2024.
- ADR(1) increased 2.2% to $140 for the second quarter of 2025, compared to $137 for the same period of 2024.
- Occupancy(1) was 75.7% for the second quarter of 2025, an increase of 30 bps compared to 75.4% for the same period of 2024.
- RevPAR(1) increased by 2.9% to $106 for the second quarter of 2025, compared to $103 for the same period of 2024.
- Same property NOI was $15.1 million for the second quarter of 2025, a decrease of 5.4% compared to $15.9 million for the same period of 2024.
- Same property NOI margin was 32.9% for the second quarter of 2025, a decrease of 150 bps compared to 34.4% for the same period of 2024.
- Completed the dispositions of eight hotel properties during the quarter for total gross proceeds of $32.2 million at a blended Cap Rate of 6.9% on 2024 annual hotel EBITDA.
- AHIP has no debt maturities until the fourth quarter of 2026.
- AHIP intends to continue its strategy to sell hotel properties to enhance liquidity, reduce debt and manage future financial obligations with approximately 20 hotels currently being marketed.
“AHIP continues to make significant progress on our plan to reduce debt and high-grade the portfolio through asset sales and loan refinancings,” said Jonathan Korol, CEO. “In 2025, AHIP completed the dispositions of 11 hotel properties for total gross proceeds of $73.5 million. AHIP currently has 2 further hotel properties under purchase and sale agreements for estimated total gross proceeds of $25.2 million.”
“Dispositions completed and under contract in 2024 and 2025 have a combined Cap Rate(1) of 7.3%, demonstrating value beyond AHIP’s current trading levels on its remaining assets. AHIP currently has approximately 20 hotels being marketed. While it is too early to make any conclusions about value, we are seeing strong interest in most of the properties we have in the market.”
“With the recently completed asset sales and refinancings, AHIP has sufficient time with a stable cash position to consider alternatives to address these future obligations in an orderly manner. AHIP has no debt maturing until the fourth quarter of 2026. Alternatives may include further hotel sales, or full or partial recapitalization of the Series C Shares and/or the Debentures or a combination thereof. We will be considering all opportunities to deliver value to unitholders.”
(1) Non-IFRS and other financial measures. See “NON-IFRS AND OTHER FINANCIAL MEASURES” section of this news release.
INITIATIVES TO STRENGTHEN FINANCIAL POSITION AND IMPROVE UNITHOLDER VALUE
The Board of Directors (the “Board“), together with management, have implemented a plan to strengthen AHIP’s financial position and to improve unitholder value. Certain initiatives, and progress made to date, are outlined below.
ADDRESSING 2026 BALANCE SHEET OBLIGATIONS
In 2024, AHIP made significant progress on its plan to reduce debt and improve the quality of its portfolio through asset sales and loan refinancings. AHIP disposed of 16 hotel properties in 2024 for total gross proceeds of $165.2 million, which has improved the overall portfolio asset quality with pro forma increases in RevPAR, NOI margin and EBITDA per hotel, while also significantly reducing leverage. In the first half of 2025, AHIP completed the disposition of 11 hotel properties for total gross proceeds of $73.4 million and two loan refinancings for total gross proceeds of $144.3 million. The net proceeds from these sales along with a portion of the proceeds from the recent loan refinancings, were used to repay the CMBS loans secured by those properties. Of the 9 hotel properties under purchase sale and agreements at the end of the first quarter of 2025, AHIP completed the disposition of 8 hotel properties for total gross proceeds of $32.2 million. The net proceeds from these sales were used to repay a CMBS loan secured by these properties. The remaining hotel property under a purchase and sale agreement is expected to close in the third quarter of 2025.
AHIP has no secured debt maturing until the fourth quarter of 2026, with a $22.3 million CMBS loan maturing in November 2026 and a $30.6 million CMBS loan maturing in December 2026. Effective January 28, 2026, the dividend rate on the $50.0 million outstanding Series C Preferred Shares of U.S. REIT (“Series C Shares“) increases from 9.0% to 14.0% per annum and certain other provisions under the Investor Rights Agreement with HCI-BGO Victoria JV LP (the “Investor“) will be triggered on such date, which will reduce AHIP’s operational flexibility if the Series C Shares have not been fully redeemed as of such date. AHIP’s 6.0% unsecured subordinated convertible debentures (the “Debentures“) are due December 31, 2026.
With the recently completed asset sales and refinancings, AHIP is in a stable cash position and has sufficient time to consider alternatives to address these future obligations in an orderly manner. Alternatives may include further hotel sales, full or partial recapitalization of the Series C Shares and/or the Debentures or a combination thereof. Regarding potential dispositions, AHIP currently has approximately 20 additional hotels being marketed. Over the remainder of 2025, AHIP will assess which of the marketed hotels will provide the most attractive combination of certainty, valuation and net proceeds to address these future obligations. The number of potential hotel dispositions will be dependent on, among other things, regional market factors, hotel performance, hotel size, nature and value of offers and whether any portion of the Series C Shares and/or the Debentures are recapitalized.
2025 SECOND QUARTER REVIEW
FINANCIAL AND OPERATIONAL HIGHLIGHTS
For the three months ended June 30, 2025, ADR increased 2.2% to $140, and occupancy increased by 30 bps to 75.7%, compared to the three months ended June 30, 2024. Overall, improved ADR and occupancy resulted in an increase of 2.9% in RevPAR to $106, compared to the three months ended June 30, 2024. The improved performance is primarily attributable to the disposition of hotel properties with lower-than-average portfolio RevPAR.
NOI and normalized NOI were $17.4 million for the three months ended June 30, 2025, a decrease of 30.5%, compared to NOI and normalized NOI of $25.1 million for the three months ended June 30, 2024. The decrease in NOI was primarily due to the disposition of the 16 hotel properties completed in 2024 and the 11 hotel properties in the six months ended June 30, 2025.
NOI margin was 34.1% for the three months ended June 30, 2025, a decrease of 100 bps compared to 35.1% for the same period of 2024. The decrease in NOI margin was due to higher operating expenses as a result of general cost inflation, utilities and repair and maintenance expenses offset by the disposal of underperforming hotels in 2024.
Diluted FFO per unit and normalized diluted FFO per unit for the three months ended June 30, 2025, was $0.06 compared to diluted FFO per unit of $0.12 and normalized diluted FFO per unit of $0.10 for the three months ended June 30, 2024. The decrease in diluted FFO per unit and normalized diluted FFO per unit was mainly due to lower NOI as a result of sold properties and higher operating expenses on same properties, partially offset by lower corporate and administrative expenses in the current year.
While RevPar on a same property basis declined in the second quarter, management expects this measure to improve on a year over year basis for the balance of the year. This will be accompanied by continued challenges with margins due to elevated costs. In July 2025, ADR was $143, the same as July 2024. Occupancy increased 180bps to 76.8% in July 2025, compared to 75% for the same period of 2024. RevPAR increased to $110 in July 2025, compared to $107 for the same period of 2024.
SAME PROPERTY KPIs
The following table summarizes key performance indicators (“KPIs“) for the portfolio for the five most recent quarters with a comparison to the same period in the prior year on a same-property basis.
| KPIs | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 |
| ADR | $140 | $139 | $134 | $140 | $141 |
| Change compared to same period in prior year – % increase/(decrease) | (0.7%) | (0.6%) | 1.0% | 1.5% | 2.4% |
| Occupancy | 76.4% | 69.7% | 70.5% | 74.6% | 76.7% |
| Change compared to same period in prior year – bps increase/(decrease) | (30) | 218 | 256 | 71 | 126 |
| RevPAR | $107 | $97 | $94 | $104 | $108 |
| Change compared to same period in prior year – % increase/(decrease) | (0.9%) | 2.6% | 4.8% | 2.4% | 4.1% |
| NOI | $ 15,073 | $ 12,466 | $ 11,223 | $ 15,396 | $ 15,927 |
| Change compared to same period in prior year – % increase/(decrease) | (5.4%) | (2.3%) | (2.2%) | 0.6% | 1.3% |
| NOI Margin | 32.9% | 28.9% | 26.0% | 32.5% | 34.4% |
| Change compared to same period in prior year – bps increase/(decrease) | (150 ) | (105) | (186) | (61) | (87) |
In the second quarter of 2025, same property ADR was $140, a decrease of 0.7% compared to the same period in 2024. Same property occupancy decreased by 30 bps to 76.4% in the current quarter, compared to the same period in 2024. The decrease in occupancy is primarily attributable to weaker group and government demand, along with localized challenges. Overall, the decrease in ADR and occupancy resulted in a 0.9% decrease in RevPAR.
Same property NOI decreased by 5.4% and same property NOI margin decreased by 150 bps in the current quarter, compared to the same period in 2024. The decrease in same property NOI and NOI margin was primarily driven by a decline in government demand and operational disruptions such as high general manager turnover and elevated labour costs.
LEVERAGE AND LIQUIDITY
| KPIs | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 |
| Restated | Restated | ||||
| Debt-to-GBV | 48.7% | 48.7% | 49.3% | 50.0% | 52.2% |
| Debt-to-EBITDA | 8.1x | 7.9x | 8.0x | 9.1x | 9.7x |
Debt to gross book value was 48.7% as at June 30, 2025, a decrease of 60 bps compared to December 31, 2024. Debt to EBITDA as at June 30, 2025 was 8.1x, an increase of 0.1x compared to December 31, 2024. The change in debt to gross book value and debt to EBITDA ratios was driven by net proceeds from completed dispositions used to reduce outstanding debt.
As at June 30, 2025, AHIP had an unrestricted cash balance of $18.6 million compared to $27.8 million as at December 31, 2024. The reduction in cash was primarily due to net outflows from completed refinancings and debt repayment, which resulted in one property becoming unencumbered during the first quarter of 2025. As at June 30, 2025, AHIP held a restricted cash balance of $25.4 million and had an additional $24.7 million available under the Portfolio Loan for capital improvements related to the properties secured by the loan.
HOTEL DISPOSITIONS
2025 Hotel Dispositions Summary
| Hotel | Location | Gross Proceeds (millions of dollars) |
Keys | Gross proceeds per key | Cap Rate (1) on 2024 annual hotel EBITDA |
Actual/Estimated Closing Date | ||
| Completed Dispositions: | ||||||||
| Homewood Suites Allentown Bethlehem Airport | Bethlehem, Pennsylvania | $11.7 | 113 | $104,000 | 7.5% | March 27, 2025 | ||
| Residence Inn Arundel Mills BWI Airport | Hanover, Maryland | $18.0 | 131 | $137,000 | 8.5% | March 27, 2025 | ||
| TownePlace Suites Arundel Mills BWI Airport | Hanover, Maryland | $11.5 | 109 | $106,000 | 3.9% | March 27, 2025 | ||
| Total completed in Q1 2025 | $41.2 | 353 | $117,000 | 6.9% | ||||
| Hampton Inn Chickasha | Chickasha, Oklahoma | $4.0 | 63 | $63,000 | 5.2% | May 22, 2025 | ||
| Holiday Inn Express & Suites Chickasha | Chickasha, Oklahoma | $4.4 | 62 | $71,000 | 4.3% | May 22, 2025 | ||
| Holiday Inn Express & Suites Dubuque West | Dubuque, Iowa | $3.0 | 87 | $34,000 | 16.6% | May 22, 2025 | ||
| Holiday Inn Express & Suites Nevada | Nevada, Missouri | $5.2 | 68 | $76,000 | 10.1% | May 22, 2025 | ||
| Holiday Inn Express & Suites Mattoon | Mattoon, Illinois | $4.0 | 69 | $58,000 | 9.8% | May 22, 2025 | ||
| Holiday Inn Express & Suites Emporia | Emporia, Kansas | $5.9 | 68 | $87,000 | 11.4% | May 22, 2025 | ||
| Holiday Inn Express & Suites Jacksonville | South Jacksonville, Illinois | $3.9 | 69 | $57,000 | (0.4%) | May 22, 2025 | ||
| Holiday Inn Express & Suites Oklahoma City Bethany | Bethany, Oklahoma | $1.8 | 69 | $28,000 | (12.7%) | June 20, 2025 | ||
| Total completed in Q2 2025 | $32.2 | 555 | $58,000 | 6.9% | ||||