American Hotel Income Properties to buy 18-property Marriott, Hilton portfolio

The Hilton Garden Inn Baltimore White Marsh, one of the properties included in the portfolio sale.

American Hotel Income Properties, a real estate investment trust with its headquarters in Vancouver, Canada, announced it is closing on the acquisition of 18 Marriott and Hilton hotels.

The portfolio is located throughout Maryland, New Jersey, New York, Connecticut and Pennsylvania, and is being purchased for roughly $407.4 million. Overall, 10 Marriott-branded hotels and eight Hilton-branded hotels are included in the sale. Of the Marriott properties, five are Residence Inns, two are Springhill Suites hotels, one each are Courtyard, Fairfield Inn and Suites and Towneplace Suites properties, totaling 1,206 guestrooms. The eight Hilton properties are four Homewood Suites, two Hampton Inns and two Hilton Garden Inns, totaling 981 guestrooms.

AHIP’s exclusive hotel management partner, One Lodging Management, will manage the portfolio. One Lodging Management is a wholly-owned subsidiary of O’Neill Hotels and Resorts.

Once completed, the transaction will increase AHIP’s total guestroom portfolio by more than 23 percent. After the acquisition, the company will own 113 hotels in 33 states. 

AHIP is funding its purchase through a combination of the net proceeds from a recent public offering of $200.9 million, as well as $48.9 million in convertible debentures and a commercial mortgage-backed securities loan worth an estimated $236.2 million, packaged into four pools.

“We had to raise the equity in Canada and the debt’s being raised in the United States,” Rob O’Neill, CEO of AHIP, said in a statement. “That will leave us with approximately $25 million in equity for future projects or acquisitions, and we’ll turn our attention to that once we’ve closed this current transaction, which we’re working hard on doing.”

O’Neill said that the portfolio was owned by a private equity company in conjunction with a large university endowment fund.