American Hotel Income Properties REIT (TSE:HOT.UN) said it has launched a review of strategic alternatives as management continues to pursue asset sales and refinancings aimed at strengthening the company’s financial position and addressing upcoming obligations.
On the company’s first-quarter earnings call, Chief Executive Officer John O’Neill said AHIP announced on May 4, 2026, that it had initiated the strategic review “to maximize unit holder value.” The board will evaluate a range of alternatives, and the company has retained Robert W. Baird & Co. as financial advisor for the process.
So far in 2026, AHIP has sold three additional hotel properties for gross proceeds of $67 million. The company also has six more hotel properties under purchase and sale agreements, with estimated total gross proceeds of about $78 million at a blended cap rate of 5.9%. Those transactions are expected to close in the second quarter, O’Neill said.
“We believe that our units are currently trading below their underlying value based on AHIP’s assets,” O’Neill said.
Asset Sales, Refinancings and Unit Buybacks
AHIP completed two loan refinancings in 2025 for total gross proceeds of $144 million. O’Neill said net proceeds from property sales, together with a portion of refinancing proceeds, were used to repay CMBS loans secured by the sold properties, reduce a portion of the portfolio loan and redeem $25 million of outstanding Series C shares.
The company also received approval from the Toronto Stock Exchange in December 2025 for a normal course issuer bid. Under that program, AHIP may purchase up to 6.8 million units, representing 10% of the public float, during the 12-month period from Dec. 30, 2025, to Dec. 29, 2026.
O’Neill said AHIP has purchased approximately 300,000 units so far in 2026 under the issuer bid at an average price of CAD 0.48 per unit.
First-Quarter Hotel Demand Improves After Slow January
Chief Operating Officer Bruce Pittet said AHIP’s portfolio of premium-branded select-service hotels continued to show demand strength in the first quarter, which he described as traditionally the slowest demand period of the year. Revenue per available room, or RevPAR, finished at $98, up 1.4% from the prior year. Total revenue increased by $770,000 across the company’s 30-asset portfolio.
January was weaker, with RevPAR down 5.9% year over year, due to a slow ramp after the holiday period and significant winter weather. RevPAR then rose 3.2% in February and 5.4% in March, with growth continuing into April.
By customer segment, Pittet said leisure-linked revenue increased 1% year over year, while negotiated revenue rose 3%. Government revenue declined 8%, and group revenue slipped 1%. He said the partial U.S. government shutdown that began in February disrupted the TSA and affected air travel and hotel demand for part of the quarter.
For the first quarter, occupancy was 68.7%, down 27 basis points from the same period in 2025. Average daily rate rose 1.8% to $142. The portfolio RevPAR index was 116.4, up 2.4%.
Embassy Suites Segment Leads Performance
Pittet said AHIP tracks performance across three business segments: Extended Stay, Select Service and Embassy Suites. Extended Stay posted RevPAR of $98, up 2% from the prior-year quarter. Select Service RevPAR was $89, down 6% from Q1 2025.
The Embassy Suites segment was the strongest performer, with RevPAR of $111, up 13% year over year. Pittet said the segment was helped by the company’s Tempe, Arizona, and Covington, Kentucky properties.
However, margins remained under pressure. Net operating income margin fell 426 basis points to 24.1% compared with 2025. Pittet said costs outpaced revenue, with increases in rooms, non-labor and undistributed expenses. Repairs and maintenance and utilities were particular pressure points, driven by costs tied to extreme weather events.
Capital Spending and April Trends
AHIP spent $1.3 million on property improvement plans and $1 million on furniture, fixtures and equipment in the quarter. Pittet said 80% of that capital was funded through restricted cash contributed by AHIP in prior periods, resulting in a net spend of $460,000 from AHIP’s treasury.
Property improvement spending focused on renovating the Fairfield Inn & Suites in South Hill, Virginia, which was substantially complete at the end of the first quarter. The company is also preparing for a planned second-quarter renovation of the Hampton Inn in Emporia, Virginia.
Preliminary April results for what the company described as the “AHIP 28” showed occupancy of 77%, ADR of $141 and RevPAR of $108, which was 3% above April 2025 RevPAR levels.
FFO Declines as Cash Balance Falls
Chief Financial Officer Travis Beatty said same-store revenue totaled $36.2 million in the first quarter, up 2.2% from the prior year. Normalized diluted funds from operations were negative $0.03 per unit, compared with negative $0.02 in the same period last year.
Beatty also discussed AHIP’s April 17, 2026, settlement agreement with ONE Lodging Management, a subsidiary of Aimbridge Hospitality, and certain subsidiaries. He said the agreement resolved a previously disclosed dispute and achieved AHIP’s objectives of financial relief and a specific end date for Aimbridge’s management of AHIP’s portfolio. Under the settlement, AHIP made a one-time $2.3 million payment to settle a $6.2 million current liability related to deferred termination fees.
As of March 31, AHIP had unrestricted cash of $15.5 million, down from $36.4 million at Dec. 31, 2025. Beatty said the decrease was primarily due to the redemption of $25 million of the $50 million in outstanding Series C shares.
At quarter-end, AHIP had restricted cash of $22.9 million and another $13.1 million available under its portfolio loan for capital improvements tied to properties secured by the loan. Debt to gross book value was 50.1%, up 140 basis points from Dec. 31, while debt to EBITDA was 10.4 times, up 1.0 times from year-end.
Beatty said those changes reflected reduced unrestricted cash following the Series C redemption and the use of net proceeds from completed dispositions to reduce outstanding debt.
About American Hotel Income Properties REIT (TSE:HOT.UN)
American Hotel Income Properties REIT LP is a trust that invests in hotel real estate properties. The company’s primary business is owning Premium Branded hotels, which have franchise agreements with international hotel brands including Marriott, Hilton, and IHG. It generates revenue from the room, food, beverage, and other revenue. The other revenue is comprised of conference room rentals, parking revenues, and other incidental income.
