American Hotel Income Properties (AHIP) has completed the acquisition of nine branded select-service hotel properties, the ‘Acquisition Properties’ for $53.5m.
The amount does not include $3.5m for proposed property improvement plans, which is expected to be completed within the next 30 months.
The Acquisition Properties are franchised by Hilton Hotels & Resorts, Carlson Rezidor Hotel Group and Intercontinental Hotels Group and are located across five states with a total of 632 guest rooms.
AHIP also highlighted the properties are approximately five years old and are located in major demand generators.
The company said that funding for the acquisition and property improvement was generated from cash on hand and $32m worth of commercial mortgage-backed securities (CMBS) mortgage.
AHIP will have to pay interest for the first seven years, after which it will be amortised over a 30-year period for the remaining three years.
AHIP CEO Rob O’Neill said: "We intend to capitalise on the ongoing growth in the US hotel industry and continue to utilise the availability of low cost CMBS financing to fund a steady pipeline of accretive acquisitions and provide stable returns and deliver value to AHIP’s unit holders.
"Our hotel manager has carefully planned and implemented a successful transition of all nine properties on the same day. We look forward to the implementation of value enhancement opportunities over the coming quarters."