VANCOUVER, British Columbia, July 19, 2024 (GLOBE NEWSWIRE) -- American Hotel Income Properties REIT LP (“AHIP”, or the “Company”) (TSX: HOT.UN, TSX: HOT.U, TSX: HOT.DB.V ), today announced that AHIP and certain of its subsidiaries are in a dispute with hotel manager ONE Lodging Holdings LLC, itself a subsidiary of Aimbridge Hospitality, and various of its own subsidiaries (collectively, “Aimbridge”) related to Aimbridge’s mismanagement of AHIP’s hotel portfolio.
Earlier this month, AHIP delivered a detailed notice of default (the “Default Notice”) to Aimbridge providing notice that Aimbridge is in material default of the Master Hotel Management Agreement dated February 20, 2013, as amended (the “Master HMA”) and the individual hotel management agreements made thereunder (the “Individual HMAs”, and together with the Master HMA, the “HMAs”). Aimbridge’s management failures, arising in part from a lack of leadership consistency and recurring organizational instability, have caused AHIP material economic harm.
Pursuant to the dispute resolution procedure called for in the contract between the parties, AHIP also delivered a notice of appointment referring the matters set forth in the Default Notice to an independent expert for a determination that Aimbridge is in default of the Master HMA entitling AHIP to terminate the HMAs and recover damages.
AHIP is now in receipt of a notice of civil claim (the “Claim”) filed by Aimbridge in the Supreme Court of British Columbia. Aimbridge is claiming, amongst other things, that the matters identified in the appointment notice must be resolved by the courts of British Columbia notwithstanding the agreed dispute resolution procedure. AHIP believes the Claim is meritless and intended solely to delay the prompt determination of Aimbridge’s material defaults as mandated by the agreed dispute resolution procedure in the HMAs. AHIP intends to vigorously oppose the Claim and to seek resolution of, and compensation for, the matters set forth in the Default Notice.
Notwithstanding the dispute, AHIP’s entire portfolio of premium branded, select-service hotels continue to be in operation and AHIP remains focused on creating long-term value for its Unitholders.
ABOUT AMERICAN HOTEL INCOME PROPERTIES REIT LP
American Hotel Income Properties REIT LP (TSX: HOT.UN, TSX: HOT.U, TSX: HOT.DB.V), or AHIP, is a limited partnership formed to invest in hotel real estate properties across the United States. AHIP’s portfolio of premium branded, select-service hotels are located in secondary metropolitan markets that benefit from diverse and stable demand. AHIP hotels operate under brands affiliated with Marriott, Hilton, IHG and Choice Hotels through license agreements. AHIP’s long-term objectives are to build on its proven track record of successful investment, deliver monthly U.S. dollar denominated distributions to unitholders, and generate value through the continued growth of its diversified hotel portfolio. More information is available at www.ahipreit.com.
FORWARD-LOOKING INFORMATION
Certain statements in this news release may constitute “forward-looking information” within the meaning of applicable securities laws. Forward-looking information generally can be identified by words such as “anticipate”, “believe”, “continue”, “expect”, “estimates”, “intend”, “may”, “outlook”, “objective”, “plans”, “should”, “will” and similar expressions suggesting future outcomes or events. Forward-looking information includes, but is not limited to, statements made or implied relating to the objectives of AHIP, AHIP’s strategies to achieve those objectives and AHIP’s beliefs, plans, estimates, projections and intentions and similar statements concerning anticipated future events, results, circumstances, performance, or expectations that are not historical facts. Forward-looking information in this news release includes, but is not limited to, statements with respect to: AHIP’s intention to vigorously oppose the Claim and seek resolution of, and compensation for, the matters set forth in the Default Notice; AHIP’s belief that the Claim is meritless and intended solely to delay the prompt determination of Aimbridge’s material defaults as mandated by the agreed dispute resolution procedure in the HMAs; AHIP remaining focussed on creating long-term value for its Unitholders, and AHIP’s other stated long-term objectives.
Although the forward-looking information contained in this news release is based on what AHIP’s management believes to be reasonable assumptions, AHIP cannot assure investors that actual results will be consistent with such information. Forward-looking information is based on a number of key expectations and assumptions made by AHIP, including, without limitation: AHIP will be successful in opposing the Claim and will resolve the matters set out in the Default Notice in a manner that is acceptable to AHIP; and AHIP will achieve its long term objectives.
Forward-looking information involves significant risks and uncertainties and should not be read as a guarantee of future performance or results as actual results may differ materially from those expressed or implied in such forward-looking information, accordingly undue reliance should not be placed on such forward-looking information. Those risks and uncertainties include, among other things, risks related to: the outcome of the Claim, the Default Notice and the dispute resolution procedures under the HMAs cannot be predicted, and may be determined in a manner unfavorable to AHIP, which may have a substantial negative impact on AHIP’s financial position and results of operations; AHIP may incur significant costs in relation to the Claim, regardless of its merit, the Default Notice and the dispute resolution procedures under the HMAs and may be ordered to pay damages and costs in any such proceedings; the outcome of the Claim may be subject to appeal; if Aimbridge is removed, the financial terms of the engagement of any replacement hotel manager cannot be determined at this time and could less advantageous to AHIP than the terms of the HMAs, and AHIP may suffer some operational disruption in the course of any replacement of Aimbridge; and AHIP may not achieve its long term objectives. Management believes that the expectations reflected in the forward-looking information are based upon reasonable assumptions and information currently available; however, management can give no assurance that actual results will be consistent with the forward-looking information contained herein. Additional information about risks and uncertainties is contained in AHIP’s management’s discussion and analysis for the three months ended March 31, 2024 and 2023, and AHIP’s annual information form for the year ended December 31, 2023, copies of which are available on SEDAR+ at www.sedarplus.com.
The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. Forward-looking information reflects management's current beliefs and is based on information currently available to AHIP. The forward-looking information is made as of the date of this news release and AHIP assumes no obligation to update or revise such information to reflect new events or circumstances, except as may be required by applicable law.
For additional information, please contact:
Investor Relations
ir@ahipreit.com
