VANCOUVER, BC / ACCESS Newswire / November 13, 2026 / American Hotel Income Properties REIT LP ("AHIP", or the "Company") (TSX:HOT.UN)(TSX:HOT.U)(TSX:HOT.DB.V), today announced its financial results for the three and nine months ended September 30, 2026.
All amounts presented in this news release are in United States dollars ("U.S. dollars") unless otherwise indicated.
2026 THIRD QUARTER HIGHLIGHTS
- Same Property ADR(1) was $155 for the third quarter of 2026 an increase of 5.4% compared to $147 for the same period of 2025.
- Same Property Occupancy(1) was 80.1% for the third quarter of 2026, an increase of 410 bps compared to 76.0% for the same period of 2025.
- Same Property RevPAR(1) was $124 for the third quarter of 2026, an increase of 11.7% compared to $111 for the same period of 2025.
- Same Property NOI(1) was $10.1 million for the third quarter of 2026, an increase of 23.5% compared to $8.2 million for the same period of 2025.
- Same Property NOI margin(1) was 36.7% for the third quarter of 2026, an increase of 390 bps compared to 32.8% for the same period of 2025.
- RevPAR(1) increased by 15.1% to $122 for the third quarter of 2026, compared to $106 for the same period of 2025.
- Revenue decreased 41.2% to $28.0 million for the third quarter of 2026, compared to $47.6 million for the same period of 2025 due to property sales completed after the third quarter of 2025.
- NOI(1) decreased 25.9% to $9.5 million for the third quarter of 2026, compared to $12.9 million for the same period of 2025 due to property sales.
- NOI margin(1) was 34.1% for the third quarter of 2026, an increase of 700 bps compared to the same period of 2025.
- At September 30, 2026 AHIP had an unrestricted cash balance of $42.2 million.
- AHIP is continuing a strategic review to maximize unitholder value, which is expected to include additional hotel sales to enhance liquidity, reduce debt, and manage future financial obligations.
"AHIP achieved a strong operational quarter with broad improvements including; RevPAR growth of 15.1% and 700 basis point increase in NOI margin to 34.1%," said John O'Neill, CEO. "AHIP also continues to progress the plan to reduce debt and high-grade the portfolio through asset sales. During the third quarter of 2026, AHIP completed the disposition of one hotel property for total gross proceeds of $11.1 million. AHIP currently has nine additional hotel properties under purchase and sale agreements for estimated total gross proceeds of $137.3 million which are expected to close during Q4 2026 and Q1 2027."
"At the end of September 2026, AHIP had $42 million in cash. With closings of hotels currently under contract, AHIP plans to be in a position to redeem the convertible debentures."
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.
REVIEW OF STRATEGIC ALTERNATIVES
On May 4, 2026, AHIP announced that its Board initiated a review of strategic alternatives (the "Strategic Review") to maximize unitholder value. During the Strategic Review, the Board will analyze and evaluate a range of alternatives. AHIP retained Robert W. Baird & Co. Incorporated ("Baird") as financial advisor to advise AHIP in connection with its Strategic Review.
AHIP continues to make progress since the review was announced, but has not yet established a definitive timeline to complete the Strategic Review or any potential transaction. There can be no assurance that the engagement of Baird or the Strategic Review will result in any transaction or initiative or, if a transaction or initiative is undertaken, as to the terms or timing of such a transaction or initiative. AHIP does not currently intend to disclose further developments in connection with or arising from the Strategic Review or in connection with any transaction, initiative or related matter, unless and until it is determined that disclosure is necessary or appropriate.
ADDRESSING 2026 BALANCE SHEET OBLIGATIONS
AHIP has 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 eighteen hotel properties in 2025 for total gross proceeds of $160.8 million and twelve hotel properties to date in 2026 for total gross proceeds of $166.5 million, which has improved the overall portfolio asset quality, while also significantly reducing total debt. AHIP also completed two loan refinancings in 2025 for total gross proceeds of $144.3 million and two loan financings in 2026 for gross proceeds of $37.0 million. The net proceeds from these sales along with a portion of the proceeds from the loan refinancings, were used to repay the CMBS loans secured by those properties, a portion of the Portfolio Loan, add to AHIP's cash balance and to redeem $25.0 million of the outstanding Series C Shares.
AHIP had a $22.3 million CMBS loan maturing in November 2026. The hotels securing this CMBS loan were sold between October 6, 2026 and October 14, 2026, resulting in full repayment of the CMBS loan. AHIP's 6.0% unsecured subordinated convertible debentures (the "Debentures") mature on December 31, 2026. Effective January 28, 2026, the dividend rate on the Series C Preferred Shares of U.S. Subsidiary Inc. ("Series C Shares") increased from 9.0% to 14.0% per annum and certain other provisions under the Investor Rights Agreement with the holders of the Series C Shares apply which may reduce AHIP's flexibility until such time as the Series C Shares have been fully redeemed. On January 28, 2027, the dividend rate would increase to 16.5%. On March 13, 2026, AHIP redeemed $25.0 million of the $50.0 million stated face value of the Series C Shares, which results in a remaining $25.0 million stated face value.
As noted above the Board is currently conducting the Strategic Review through which the Board is considering a range of alternatives, which is expected to include additional asset sales. The number of potential hotel dispositions will be dependent on the outcome of the Strategic Review as well as; regional market factors, hotel performance, nature and value of any offers and whether any portion of the remaining Series C Shares and/or Debentures are recapitalized. With closings of hotels currently under contract and additional planned hotel sales, AHIP plans to be in a position to redeem the remainder of the Series C Shares and the Debentures. The timing of such redemptions will be dependent on the timing of the completion of the sale of hotels currently under contract and any further asset sales.
HOTEL DISPOSITIONS
2026 Hotel Dispositions
During the nine months ended September 30, 2026, AHIP completed the dispositions of nine hotel properties for total gross proceeds of $145.1 million. After adjusting for an industry standard 4% FF&E reserve, the combined sales price for the nine hotel properties sold in the nine months ended September 30, 2026, represents a blended Cap Rate of 7.4% on 2025 annual hotel EBITDA. The net proceeds from these dispositions were used to repay certain CMBS mortgage loans and certain Portfolio Loans and added to AHIP's cash balances.
As at the date of this news release, AHIP has nine hotel properties under purchase and sale agreements ("PSAs") of which six are classified as held for sale. These sales are expected to close during the fourth quarter of 2026 and first quarter of 2027. Upon closing, these sales would represent total gross proceeds of $137.3 million at a blended Cap Rate of 8.9% on 2025 annual hotel EBITDA. The net proceeds from the sale of these hotels will initially be added to unrestricted cash with the final use subject to the outcome of the Strategic Review.
NORMAL COURSE ISSUER BID AND AUTOMATIC SECURITIES PURCHASE PLAN
In December 2025, the TSX approved AHIP's notice of intention to make a normal course issuer bid (the "2026 NCIB"). The notice provides that AHIP may, during the twelve-month period commencing December 30, 2025 and ending December 29, 2026, purchase up to 6,801,276 Units trading under the symbols HOT.UN and HOT.U, representing 10% of the "public float" (as defined in the TSX Company Manual) as of December 22, 2025. AHIP also entered into an Automatic Securities Purchase Plan ("ASPP") with a designated broker. The ASPP allows for the purchase of Units under the 2026 NCIB when AHIP would ordinarily not be permitted to purchase Units due to regulatory restrictions and customary self-imposed blackout periods.
As of the date of this news release, AHIP had purchased 2.5 million Units for CAD$1.4 million under the 2026 NCIB at an average purchase price per Unit of CAD$0.56, of which 2.4 million Units have been cancelled.
2026 THIRD QUARTER REVIEW
FINANCIAL AND OPERATIONAL HIGHLIGHTS
For the three months ended September 30, 2026, ADR increased 9.2% to $154, and occupancy increased by 410 bps to 79.2%, compared to the three months ended September 30, 2025. Overall, improved ADR and occupancy resulted in an increase of 15.1% in RevPAR to $122, compared to the three months ended September 30, 2025. The improved performance is primarily attributable to improvements in same property RevPAR as a result of improved market conditions and revenue management.
NOI was $9.5 million for the three months ended September 30, 2026, a decrease of 25.9%, compared to NOI of $12.9 million for the three months ended September 30, 2025. The decrease in NOI was primarily due to the disposition of the eighteen hotel properties completed in 2025 and nine hotel properties completed in 2026, partially offset by a 23.5% or $1.9 million increase in same property NOI.
NOI margin was 34.1% for the three months ended September 30, 2026, an increase of 700 bps compared to 27.1% for the same period of 2025. The increase in NOI margin was due to higher revenue from growth in occupancy and RevPAR and disposition of hotels with lower-than-average portfolio RevPAR, partially offset by higher operating expenses as a result of increases in room labour expenses, utilities, and maintenance expenses.
Diluted FFO per unit for the three months ended September 30, 2026, was ($0.01) compared to diluted FFO per unit of $0.02 for the three months ended September 30, 2025. The decrease in diluted FFO per unit was mainly due to lower NOI as a result of sold properties partially offset by increase in same property NOI from revenue growth.
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 | Q3 2026 | Q2 2026 | Q1 2026 | Q4 2025 | Q3 2025 | |||||||||||||||
ADR | $ | 155 | $ | 149 | $ | 137 | $ | 139 | $ | 147 | ||||||||||
Change compared to same period in prior year - % increase/(decrease) | 5.4 | % | 1.4 | % | 1.4 | % | 2.9 | % | 0.0 | % | ||||||||||
Occupancy | 80.1 | % | 79.4 | % | 69.4 | % | 69.9 | % | 76.0 | % | ||||||||||
Change compared to same period in prior year - bps increase/(decrease) | 410 | 250 | (230 | ) | (158 | ) | 85 | |||||||||||||
RevPAR | $ | 124 | $ | 118 | $ | 95 | $ | 97 | $ | 111 | ||||||||||
Change compared to same period in prior year - % increase/(decrease) | 11.7 | % | 4.4 | % | (1.9 | %) | 0.6 | % | 1.2 | % | ||||||||||
NOI | $ | 10,087 | $ | 9,315 | $ | 5,313 | $ | 4,885 | $ | 8,170 | ||||||||||
Change compared to same period in prior year - % increase/(decrease) | 23.5 | % | 1.7 | % | (17.8 | %) | (20.6 | %) | (7.7 | %) | ||||||||||
NOI Margin | 36.7 | % | 35.9 | % | 25.7 | % | 22.8 | % | 32.8 | % | ||||||||||
Change compared to same period in prior year - bps increase/(decrease) | 390 | (120 | ) | (504 | ) | (585 | ) | (349 | ) |
In the third quarter of 2026, same property ADR was $155, an increase of 5.4% compared to the same period in 2025. Same property occupancy increased by 410 bps to 80.1% in the current quarter, compared to the same period in 2025. The increase in same property ADR is primarily attributable to improved retail segment and government travel.
Same property NOI increased by 23.5% compared with the same period in 2025 and same property NOI margin increased by 390 bps in the current quarter. These changes resulted from higher RevPAR, ADR and occupancy partially offset by higher operating expenses as a result of higher room labour expenses, utilities and maintenance expenses.
LEVERAGE AND LIQUIDITY
KPIs | Q3 2026 | Q2 2026 | Q1 2026 | Q4 2025 | Q3 2025 | |||||||||||||||
Debt-to-GBV(1) | 53.1 | % | 51.1 | % | 50.1 | % | 48.7 | % | 48.7 | % | ||||||||||
Debt-to-EBITDA(1) | 10.7 | x | 8.9 | x | 10.4 | x | 9.4 | x | 9.1 | x |
(1) See "Non-IFRS and Other Financial Measures"
Debt to gross book value was 53.1% as at September 30, 2026, an increase of 440 bps compared to December 31, 2025. Debt to EBITDA as at September 30, 2026 was 10.7x, an increase of 1.3x compared to December 31, 2025. The change in debt to gross book value and debt to EBITDA ratios was driven by reduction in unrestricted cash balances following the Series C Share redemption of $25.0 million and use of net proceeds from completed dispositions to reduce outstanding debt.
As at September 30, 2026, AHIP had an unrestricted cash balance of $42.2 million compared to $36.4 million as at December 31, 2025. The increase in cash was primarily due to the sale of hotel properties and loan refinancings, offset by the $25.0 million Series C Share redemption. As at September 30, 2026, AHIP held a restricted cash balance of $15.2 million and had an additional $24.4 million available under the Portfolio Loan, Portfolio Loan II and Portfolio Loan III for capital improvements related to the properties secured by the loans. The $24.4 million is available to be drawn as eligible PIP construction costs are incurred and completed, in accordance with the terms of the loan agreements.
On August 13, 2026, AHIP completed an interest only, non-recourse debt financing. The initial gross loan proceeds were $12.1 million secured against one hotel property, with additional advances of up to $7.0 million available for renovations and improvements to the one hotel property (the "Portfolio Loan III"). The loan has a two-year term with the option to extend the term for another one-year period subject to the satisfaction of certain conditions, and bears interest at SOFR plus 5.50% per annum. The initial net proceeds increased cash balances during the third quarter of 2026.
CAPITAL IMPROVEMENTS
AHIP's capital projects include hotel brand mandated property improvement plans ("PIPs") and FF&E improvements. Select projects may generate positive return on investment through the refreshment and upgrade of guest-facing items, ensuring that each property remains competitive in the marketplace. AHIP currently has one hotel project in the construction phase, one hotel project in the pre-construction phase, and two hotel projects in the design phase for future renovations. AHIP completed one hotel renovation project during the second quarter of 2026 in South Hill, VA and has substantially completed one hotel renovation project during the third quarter of 2026 in Emporia, VA.
AHIP's 2026 capital expenditures are estimated at $3.2 million in PIPs and $4.0 million in FF&E improvements. PIP expenditures have been revised down from the prior estimate of $6.9 million mainly due to the planned disposition of certain hotels. PIP and FF&E expenditures will be funded through existing restricted cash and cash flow from operating activities. Actual capital spend on PIPs and FF&E was $2.8 million and $2.2 million, respectively, for the nine months ended September 30, 2026.
SELECTED INFORMATION
Three months ended September 30 | Nine months ended September 30 | |||||||||||||||
(thousands of dollars, except per Unit amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
Revenue | 27,977 | 47,573 | 95,441 | 147,333 | ||||||||||||
Income from operating activities | 7,628 | 7,319 | 18,173 | 25,844 | ||||||||||||
Loss and comprehensive loss | (8,817 | ) | (25,725 | ) | (17,438 | ) | (55,501 | ) | ||||||||
NOI(2) | 9,548 | 12,879 | 27,010 | 42,997 | ||||||||||||
NOI Margin(2) | 34.1 | % | 27.1 | % | 28.3 | % | 29.2 | % | ||||||||
Hotel EBITDA (1) | 8,598 | 11,612 | 24,315 | 39,318 | ||||||||||||
Hotel EBITDA Margin (1) | 30.7 | % | 24.4 | % | 25.5 | % | 26.7 | % | ||||||||
EBITDA (1) | 7,146 | 10,007 | 19,006 | 33,914 | ||||||||||||
EBITDA Margin (1) | 25.5 | % | 21.0 | % | 19.9 | % | 23.0 | % | ||||||||
Cashflow from operating activities | 1,999 | (117 | ) | (6,365 | ) | 7,955 | ||||||||||
Dividends declared to Series C holders | 894 | 1,150 | 2,965 | 3,482 | ||||||||||||
FFO diluted (1) | (573 | ) | 1,710 | 541 | 5,114 | |||||||||||
FFO per unit - diluted (1) | (0.01 | ) | 0.02 | 0.01 | 0.06 | |||||||||||
AFFO diluted (1) | (1,391 | ) | (917 | ) | (2,624 | ) | (2,343 | ) | ||||||||
AFFO per unit - diluted (1) | (0.02 | ) | (0.01 | ) | (0.04 | ) | (0.03 | ) | ||||||||
| (1)See "Non-IFRS and Other Financial Measures" (2)NOI and NOI margin included the IFRIC 21 property taxes adjustment. | ||||||||||||||||
(thousands of dollars) | September 30, 2026 | December 31, 2025 | ||||||
Total assets | 311,783 | 470,606 | ||||||
Total liabilities | 252,512 | 365,538 | ||||||
Total non-current liabilities | 111,154 | 203,480 | ||||||
Term loans, Portfolio Loan, Portfolio Loan II and Portfolio Loan III | 110,956 | 224,832 | ||||||
Debt to gross book value (1) | 53.1 | % | 48.7 | % | ||||
Debt to EBITDA (times) (1) | 10.7 | 9.4 | ||||||
Interest coverage ratio (times) (1) | 1.1 | 1.4 | ||||||
Term loans, Portfolio Loan, Portfolio Loan II and Portfolio Loan III: | ||||||||
Weighted average interest rate | 7.11 | % | 6.33 | % | ||||
Weighted average term to maturity (years) | 1.8 | 1.3 | ||||||
Number of rooms | 2,303 | 3,785 | ||||||
Number of properties | 22 | 31 | ||||||
Number of restaurants | 5 | 9 | ||||||
(1) See "Non-IFRS and Other Financial Measures" | ||||||||
2026 THIRD QUARTER OPERATING RESULTS
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||
(thousands of dollars) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
ADR (1) | 154 | 141 | 147 | 139 | ||||||||||||
Occupancy (1) | 79.2 | % | 75.1 | % | 74.4 | % | 72.7 | % | ||||||||
RevPAR (1) | 122 | 106 | 109 | 101 | ||||||||||||
Revenue | 27,977 | 47,573 | 95,441 | 147,333 | ||||||||||||
Operating expenses | 13,902 | 25,950 | 50,665 | 79,230 | ||||||||||||
Energy | 1,294 | 2,372 | 4,804 | 6,919 | ||||||||||||
Property maintenance | 1,700 | 2,976 | 6,205 | 9,185 | ||||||||||||
Property taxes, insurance and ground lease | 1,533 | 3,396 | 6,757 | 9,002 | ||||||||||||
Total expenses | 18,429 | 34,694 | 68,431 | 104,336 | ||||||||||||
NOI(2) | 9,548 | 12,879 | 27,010 | 42,997 | ||||||||||||
NOI Margin %(2) | 34.1 | % | 27.1 | % | 28.3 | % | 29.2 | % | ||||||||
Depreciation and amortization | 1,920 | 5,560 | 8,837 | 17,153 | ||||||||||||
Income from operating activities | 7,628 | 7,319 | 18,173 | 25,844 | ||||||||||||
Other expenses | 16,445 | 37,023 | 35,611 | 80,257 | ||||||||||||
Current income tax expense | - | 3 | - | 32 | ||||||||||||
Deferred income tax expense (recovery) | - | (3,982 | ) | - | 1,056 | |||||||||||
Loss and comprehensive loss | (8,817 | ) | (25,725 | ) | (17,438 | ) | (55,501 | ) | ||||||||
(1) See "Non-IFRS and Other Financial Measures"
(2) NOI and NOI margin included the IFRIC 21 property taxes adjustment.
For the nine months ended September 30, 2026, ADR, occupancy and RevPAR all increased compared to the same period in the prior year. The improved performance is primarily attributable to revenue growth from retail and government demand, and disposition of hotel properties with lower-than-average portfolio RevPAR. Revenue in the current quarter decreased by 41.2% compared to the same period in the prior year. The decrease in revenue was due to the disposition of eighteen hotel properties completed in 2025 and nine hotel properties in 2026, partially offset by same property revenue growth.
For the three months ended September 30, 2026, NOI decreased by 25.9% and NOI margin increased by 700 bps, respectively, compared to the same period in the prior year. The decrease in NOI was primarily due to the disposition of eighteen hotel properties in 2025 and nine hotel properties in 2026. The increase in NOI margin was due to higher revenue from growth in occupancy and RevPAR and disposition of hotels with lower-than-average portfolio RevPAR, partially offset by higher operating expenses as a result of increases in room labour expenses, utilities, and maintenance expenses.
Income tax expense is comprised of current and deferred income taxes. Current income taxes and deferred income taxes are recognized in loss and comprehensive loss, except to the extent that it relates to a business combination, or items recognized directly in equity. Current income tax is the expected tax payable or receivable on the taxable income or loss for the period using tax rates enacted or substantively enacted by the reporting date, and any adjustment to tax payable in respect of previous years. Deferred income tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
FINANCIAL INFORMATION
This news release should be read in conjunction with AHIP's unaudited condensed consolidated interim financial statements, and management's discussion and analysis for the three and nine months ended September 30, 2026 and 2025, that are available on AHIP's website at www.ahipreit.com, and under AHIP's profile on SEDAR+ at www.sedarplus.ca.
Q3 2026 CONFERENCE CALL
Management will host a webcastand conference call at 10:00a.m. Pacific time on Monday, November 16, 2026, to discuss the financial and operational results for the three and nine months ended September 30, 2026 and 2025.
To participate in the conference call, participants should register online via AHIP's website. A dial-in and unique PIN will be provided to join the call. Participants are requested to register a minimum of 15 minutes before the start of the call. An audio webcast of the conference call may be accessed on AHIP's website at www.ahipreit.com.
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,and IHG Hotels through license agreements.
More information is available at www.ahipreit.com.
NON-IFRS AND OTHER FINANCIAL MEASURES
Management believes the following non-IFRS financial measures, non-IFRS ratios, capital management measures and supplementary financial measures are relevant measures to monitor and evaluate AHIP's financial and operating performance. These measures and ratios do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. These measures and ratios are included to provide investors and management additional information and alternative methods for assessing AHIP's financial and operating results and should not be considered in isolation or as a substitute for performance measures prepared in accordance with IFRS.
NON-IFRS FINANCIAL MEASURES
FFO: FFO measures operating performance and is calculated in accordance with Real Property Association of Canada's ("REALPAC") definition. FFO - basic is calculated by adjusting income (loss) and comprehensive income (loss) for depreciation and amortization, gain or loss on disposal of property, IFRIC 21 property taxes, fair value gain or loss, impairment of property, deferred income tax, and other applicable items. FFO - diluted is calculated as FFO - basic plus the interest, accretion, and amortization on convertible debentures if convertible debentures are dilutive. The most comparable IFRS measure to FFO is income (loss) and comprehensive income (loss), for which a reconciliation is provided in this news release.
AFFO: AFFO is defined as a recurring economic earnings measure and calculated in accordance with REALPAC's definition. AFFO - basic is calculated as FFO - basic less maintenance capital expenditures. AFFO - diluted is calculated as FFO - diluted less maintenance capital expenditures. The most comparable IFRS measure to AFFO is income (loss) and comprehensive income (loss), for which a reconciliation is provided in this news release.
Hotel EBITDA: calculated by adjusting NOI for hotel management fees. The most comparable IFRS measure to hotel EBITDA is NOI, for which a reconciliation is provided in this news release.
EBITDA: calculated by adjusting NOI for hotel management fees and general administrative expenses. The sum of hotel management fees and general administrative expenses is equal to corporate and administrative expenses in the Financial Statements. The most comparable IFRS measure to EBITDA is NOI, for which a reconciliation is provided in this news release.
Debt: calculated as the sum of term loans, revolving credit facility (where applicable), Portfolio Loan, Portfolio Loan II, Portfolio Loan III, the face value of convertible debentures, unamortized portion of debt financing costs, and lease liabilities. The most comparable IFRS measure to debt is total liabilities, for which a reconciliation is provided in this news release.
Gross book value: calculated as the sum of total assets, accumulated depreciation and impairment on property, buildings and equipment, and accumulated amortization on intangible assets. The most comparable IFRS measure to gross book value is total assets, for which a reconciliation is provided in this news release.
Interest expense: calculated by adjusting finance costs for gain/loss on debt settlement, debt defeasance costs, amortization of debt financing costs, accretion of debenture liability, amortization of debenture costs, dividends on series B preferred shares, and accretion of management fee because interest expense excludes certain non-cash accounting items and dividends on preferred shares. The most comparable IFRS measure to interest expense is finance costs, for which a reconciliation is provided in this news release.
NON-IFRS RATIOS:
FFO per Unit - basic/diluted: calculated as FFO - basic/diluted divided by weighted average number of Units outstanding - basic/diluted respectively for the reporting periods.
AFFO per Unit - basic/diluted: calculated as AFFO - basic/diluted divided by weighted average number of Units outstanding - basic/diluted respectively for the reporting periods.
NOI margin: calculated as NOI divided by total revenue.
Hotel EBITDA margin: calculated as hotel EBITDA divided by total revenue.
EBITDA margin: calculated as EBITDA divided by total revenue.
Capitalization rate ("Cap Rate"): calculated as 2025 annual Hotel EBITDA for properties sold or under contract for sale in 2026, after adjusting for an industry standard 4% furniture, fixtures, and equipment ("FF&E") reserve, divided by the actual and estimated gross proceeds of the asset dispositions.
CAPITAL MANAGEMENT MEASURES:
Debt to gross book value: calculated as debt divided by gross book value. Debt to gross book value is a primary measure of capital management and leverage.
Debt to EBITDA: calculated as debt divided by the trailing twelve months ("TTM") EBITDA. Debt to EBITDA measures the amount of income generated and is available to pay down debt before covering interest, taxes, depreciation, and amortization expenses.
Interest coverage ratio: calculated as TTM EBITDA divided by interest expense for the trailing twelve months. The interest coverage ratio is a measure of AHIP's ability to service the interest requirements of its outstanding debt.
SUPPLEMENTARY FINANCIAL MEASURES:
Occupancy is a major driver of room revenue as well as food and beverage revenues. Fluctuations in occupancy are normally accompanied by fluctuations in most categories of variable hotel operating expenses, including housekeeping and other labour costs. Higher ADR increases room revenue with limited impact on hotel operating expenses. Increase in RevPAR attributable to increase in occupancy may reduce EBITDA and EBITDA margins, while increase in RevPAR attributable to increase in ADR typically results in increases in EBITDA and EBITDA margins.
Occupancy: calculated as the total number of hotel rooms sold divided by the total number of rooms available for the reporting periods. Occupancy is a metric commonly used in the hotel industry to measure the utilization of hotels' available capacity.
Average daily rate ("ADR"): calculated as total room revenue divided by total number of rooms sold for the reporting periods. ADR is a metric commonly used in the hotel industry to indicate the average revenue earned per occupied room in a given time period.
Revenue per available room ("RevPAR"): calculated as occupancy multiplied by ADR for the reporting periods.
Same property ADR, occupancy, RevPAR, and NOI margin: measured for properties owned by AHIP for both the current reporting periods and the same periods in 2025.
NON-IFRS RECONCILIATION
INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) TO FFO
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||
(thousands of dollars, except per unit amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
Loss and comprehensive loss | (8,817 | ) | (25,725 | ) | (17,438 | ) | (55,501 | ) | ||||||||
Adjustments: | ||||||||||||||||
Income attributable to non-controlling interest | (894 | ) | (1,150 | ) | (2,965 | ) | (3,482 | ) | ||||||||
Depreciation and amortization | 1,920 | 5,560 | 8,837 | 17,153 | ||||||||||||
Impairment of cash-generating units | 5,744 | 23,094 | 13,262 | 37,884 | ||||||||||||
Write-off of property, building and equipment | - | 315 | - | 319 | ||||||||||||
Loss (gain) on sale of properties | 1,563 | 3,319 | (1,507 | ) | 8,177 | |||||||||||
IFRIC 21 property taxes adjustment | (89 | ) | 147 | 309 | (711 | ) | ||||||||||
Change in fair value of financial instruments | - | 132 | 43 | 219 | ||||||||||||
Deferred income tax expense (recovery) | - | (3,982 | ) | - | 1,056 | |||||||||||
FFO basic(1) | (573 | ) | 1,710 | 541 | 5,114 | |||||||||||
Interest, accretion and amortization on convertible debentures | - | - | - | - | ||||||||||||
FFO diluted(1) | (573 | ) | 1,710 | 541 | 5,114 | |||||||||||
FFO per unit - basic(1) | (0.01 | ) | 0.02 | 0.01 | 0.07 | |||||||||||
FFO per unit - diluted(1) | (0.01 | ) | 0.02 | 0.01 | 0.06 | |||||||||||
Weighted average number of units outstanding: | ||||||||||||||||
Basic (000's) | 71,399 | 76,785 | 71,664 | 77,846 | ||||||||||||
Diluted (000's)(2) | 73,716 | 80,799 | 73,980 | 80,562 | ||||||||||||
(1) See "Non-IFRS and Other Financial Measures"
(2) The calculation of FFO diluted, FFO per unit - diluted, weighted average number of units outstanding - diluted for the three and nine months ended September 30, 2026, and the three and nine months ended September 30, 2025, excluded the convertible debentures because they were anti-dilutive.
RECONCILIATION OF FFO TO AFFO
Three months ended September 30 | Nine months ended September 30 | |||||||||||||||
(thousands of dollars, except per Unit amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
FFO basic (1) | (573 | ) | 1,710 | 541 | 5,114 | |||||||||||
FFO diluted (1) | (573 | ) | 1,710 | 541 | 5,114 | |||||||||||
Maintenance capital expenditures | (818 | ) | (2,627 | ) | (3,165 | ) | (7,457 | ) | ||||||||
AFFO basic (1) | (1,391 | ) | (917 | ) | (2,624 | ) | (2,343 | ) | ||||||||
AFFO diluted (1) | (1,391 | ) | (917 | ) | (2,624 | ) | (2,343 | ) | ||||||||
AFFO per unit - basic (1) | (0.02 | ) | (0.01 | ) | (0.04 | ) | (0.03 | ) | ||||||||
AFFO per unit - diluted (1) | (0.02 | ) | (0.01 | ) | (0.04 | ) | (0.03 | ) | ||||||||
(1) See "Non-IFRS and Other Financial Measures"
DEBT TO GROSS BOOK VALUE
(thousands of dollars) | September 30, 2026 | December 31, 2025 | ||||||
Debt | 242,923 | 346,132 | ||||||
Gross Book Value | 457,587 | 710,083 | ||||||
Debt-to-Gross Book Value | 53.1 | % | 48.7 | % | ||||
DEBT
(thousands of dollars) | September 30, 2026 | December 31, 2025 | ||||||
Term loans, Portfolio Loan, Portfolio Loan II and Portfolio Loan III | 190,009 | 293,020 | ||||||
2026 debentures (at face value) | 49,730 | 49,730 | ||||||
Unamortized portion of debt financing costs | 2,700 | 2,745 | ||||||
Lease liabilities | 484 | 637 | ||||||
Debt | 242,923 | 346,132 | ||||||
GROSS BOOK VALUE
(thousands of dollars) | September 30, 2026 | December 31, 2025 | ||||||
Total assets | 311,783 | 470,606 | ||||||
Accumulated depreciation and impairment on property, buildings and equipment | 143,477 | 236,254 | ||||||
Accumulated amortization on intangible assets | 2,327 | 3,223 | ||||||
Gross Book Value | 457,587 | 710,083 | ||||||
DEBT TO EBITDA
(thousands of dollars) | September 30, 2026 | December 31, 2025 | ||||||
Debt | 242,923 | 346,132 | ||||||
EBITDA (trailing twelve months) | 22,809 | 36,698 | ||||||
Debt-to-EBITDA (times) | 10.7 | x | 9.4 | x | ||||
INTEREST COVERAGE RATIO
(thousands of dollars) | September 30, 2026 | December 31, 2025 | ||||||
EBITDA (trailing twelve months) | 22,809 | 36,698 | ||||||
Interest expense (trailing twelve months) | 20,542 | 27,018 | ||||||
Interest Coverage Ratio (times) | 1.1 | x | 1.4 | x | ||||
The reconciliation of NOI to hotel EBITDA and EBITDA is shown below:
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||
(thousands of dollars) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
NOI | 9,548 | 12,879 | 27,010 | 42,997 | ||||||||||||
Management fees | (950 | ) | (1,267 | ) | (2,695 | ) | (3,679 | ) | ||||||||
Hotel EBITDA | 8,598 | 11,612 | 24,315 | 39,318 | ||||||||||||
General administrative expenses | (1,452 | ) | (1,605 | ) | (5,309 | ) | (5,404 | ) | ||||||||
EBITDA | 7,146 | 10,007 | 19,006 | 33,914 | ||||||||||||
The reconciliation of finance costs to interest expense is shown below:
Three months ended September 30 | Nine months ended September 30 | |||||||||||||||
(thousands of dollars) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
Finance costs | 5,291 | 7,567 | 18,791 | 24,984 | ||||||||||||
Amortization of debt financing costs | (406 | ) | (466 | ) | (1,079 | ) | (1,718 | ) | ||||||||
Accretion of debenture liability | (326 | ) | (298 | ) | (946 | ) | (868 | ) | ||||||||
Amortization of debenture costs | (152 | ) | (134 | ) | (439 | ) | (389 | ) | ||||||||
Debt defeasance | - | - | (1,776 | ) | (1,017 | ) | ||||||||||
Loss on debt settlement | - | (166 | ) | (209 | ) | (849 | ) | |||||||||
Interest Expense | 4,407 | 6,503 | 14,342 | 20,143 | ||||||||||||
For information on the most directly comparable IFRS measures, composition of the measures, a description of how AHIP uses these measures, and an explanation of how these measures provide useful information to investors, please refer to AHIP's management discussion and analysis for the three and nine months ended September 30, 2026 and 2025, available on AHIP's website at www.ahipreit.com, and under AHIP's profile on SEDAR+at www.sedarplus.ca.
For additional information, please contact: Investor Relations ir@ahipreit.com
FORWARD-LOOKING INFORMATION
This news release contains forward-looking information and financial outlook within the meaning of applicable securities laws. Forward-looking information and financial outlook 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 and financial outlook include, but are 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 and financial outlook in this news release include, but are not limited to, statements with respect to: AHIP's planned capital projects; AHIP's expectations with respect to the performance of its hotel portfolio; AHIP's strategic initiatives and the intended outcomes thereof, including strengthening AHIP's financial position and improving unitholder value; AHIP continuing to make progress on its plan to reduce debt and high-grade the portfolio through asset sales and loan refinancings; subject to the closings of a sufficient portion of the hotels currently under contract for sale, AHIP planning to be in a position to redeem the convertible debentures; the Strategic Review and the possibility of a transaction or initiative involving AHIP, which is expected to include further hotel sales to enhance liquidity, reduce debt and manage future financial obligations; additional hotels being under consideration for sale, and the factors that are expected to impact the number of hotels sold, including the outcome of the Strategic Review; AHIP's planned property dispositions, including the expected termsand timing thereof and the financial impact thereof on AHIP (including the estimated amountand uses of the proceedsfrom such dispositions); AHIP's intentions and expectations with respect to the 2026 NCIB and ASPP and their impact on unitholders; and the key liquidity risks facing AHIP and its planned strategies for dealing with same.
Although AHIP believes that the expectations reflected in the forward-looking information and financial outlook contained in this news release are reasonable, AHIP can give no assurance that these expectations will prove to be correct. The estimates and assumptions, which may prove to be incorrect, include, but are not limited to, the various assumptions set forth in this news release as well as the following: inflation and labour shortages, will negatively impact the U.S. economy, the U.S. hotel industry and AHIP's business; AHIP will continue to have sufficient funds to meet its financial obligations; AHIP's strategies with respect to completion of capital projects, addressing future financial obligations, and divestiture of assets will be successful and achieve their intended effects; AHIP will complete its currently planned divestitures on the terms currently contemplated and in accordance with the timing currently contemplated; AHIP will successfully execute its plan to generate sufficient capital to be in a position to address the remaining Series C Shares and the Debentures; AHIP will continue in operation as a going concern for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business; the ability of AHIP to achieve the anticipated benefits of the 2026 NCIB; that Units will trade below their value from time to time; that AHIP will complete purchases of Units pursuant to the 2026 NCIB and ASPP; AHIP will continue to have good relationships with its brand partners; capital markets will provide AHIP with readily available access to equity and/or debt financing on terms acceptable to AHIP, including the ability to refinance maturing debt as it becomes due on terms acceptable to AHIP; AHIP's future level of indebtedness will remain consistent with AHIP's current expectations; the useful lives and replacement cost of AHIP's assets being consistent with management's estimates thereof; the impact of the current economic climate and the current global financial conditions on AHIP's operations, including AHIP's financing capability and asset value, will remain consistent with AHIP's current expectations; there will be no material changes to tax laws, government and environmental regulations adversely affecting AHIP's operations, financing capability, structure or distributions; and conditions in the international and, in particular, the U.S. hotel and lodging industry, including competition for acquisitions, will be consistent with the current economic climate.
Forward-looking information and financial outlook involve significant risks and uncertainties and should not be read as guarantees of future performance or results as actual results may differ materially from those expressed or implied in such forward-looking information and financial outlook, accordingly undue reliance should not be placed on such forward-looking information or financial outlook. Those risks and uncertainties include, among other things, risks related to: AHIP may not achieve its expected performance levels in 2026 or 2027; inflation and labour shortages may continue to negatively impact AHIP's financial performance and position; risk of an economic recession in the U.S.; AHIP's brand partners may impose revised service standards and capital requirements which are adverse to AHIP; PIP and other capital projects may not commence or complete in accordance with currently expected timing and may suffer from increased material and labour costs; AHIP may not complete a transaction or initiative that creates or improves unitholder value as a result of the Strategic Review or otherwise; AHIP's strategic initiatives with respect to strengthening AHIP's financial position, addressing future financial obligations and divestitures of assets may not be successful and may not achieve their intended outcomes; AHIP may not complete its currently planned divestitures on the terms currently contemplated or in accordance with the timing currently contemplated, or at all; AHIP may not execute on its plan to generate sufficient capital to be in a position to address the remaining Series C Shares and the Debentures, including the risk that AHIP may not complete sufficient asset sales in 2026 in order to be able to redeem the Debentures prior to their maturity date; AHIP may not receive acceptable offers on some or all of the properties it is currently marketing; if AHIP's strategies to address its 2026 balance sheet obligations are not successful, AHIP may not be able to continue as a going concern; there is no guarantee that monthly distributions will be reinstated, and if reinstated, as to the timing thereof or what the amount of the monthly distribution will be; AHIP may not be able to refinance debt obligations as they become due or may do so on terms less favorable to AHIP than under AHIP's existing loan agreements; refinanced loans may be refinanced at significantly higher interest rates; the failure to realize the anticipated benefits of the 2026 NCIB; the risk that the market price of the Units will be too high to permit purchases under the 2026 NCIB and/or ASPP; a failure to execute purchases under the 2026 NCIB and ASPP; general economic conditions and consumer confidence, and impacts of current international conflicts, including on the price of oil and in turn cost of travel and inflation; the growth in the U.S. hotel and lodging industry; prices for the Units and debentures; liquidity; tax risks; ability to access debt and capital markets; financing risks; changes in interest rates; the financial condition of, and AHIP's relationships with, its franchisors; real property risks, including environmental risks; the degree and nature of competition; ability to acquire accretive hotel investments; environmental matters; and changes in legislation. Additional information about risks and uncertainties is contained in this news release and in AHIP's most recently filed management's discussion and analysis and AIF, copies of which are available on SEDAR+ at www.sedarplus.ca.
To the extent any forward-looking information constitutes a "financial outlook" within the meaning of applicable securities laws, such information is being provided to investors to assist in their understanding of: AHIP's 2026 capital plan; and the estimated proceeds from the planned disposition of certain hotel properties and the expected use thereof and impact thereon on AHIP's financial position.
The forward-looking information and financial outlook contained herein is expressly qualified in its entirety by this cautionary statement. Forward-looking information and financial outlook reflect management's current beliefs and are based on information currently available to AHIP. The forward-looking information and financial outlook are made as of the date of this news release and all financial outlook has been approved by management of AHIP. AHIP assumes no obligation to update or revise such information to reflect new events or circumstances, except as may be required by applicable law.
SOURCE: American Hotel Income Properties REIT LP
View the original press release on ACCESS Newswire:
https://www.accessnewswire.com/newsroom/en/real-estate/american-hotel-income-properties-reit-lp-reports-q3-2026-results-1251306