American Hotel Income Properties REIT (TSE:HOT.UN) said its board’s strategic review remains ongoing as the company continues to sell hotels, refinance debt and pursue measures intended to strengthen its balance sheet and increase unitholder value.
Chief Executive Officer John O’Neill said the review, announced May 4, 2026, covers a range of alternatives intended to increase unitholder value, reduce debt and improve the company’s financial position. He said the company had made progress but had not set a definitive timetable for completing the review or a potential transaction.
Asset Sales and Capital Actions
AHIP completed dispositions of 18 hotel properties in 2025, generating total gross proceeds of $161 million. So far in 2026, it has sold eight hotels for $134 million in gross proceeds. The 2025 and 2026 dispositions carried a blended capitalization rate of 7.6%, which O’Neill said demonstrated value beyond the company’s current unit price for its remaining portfolio.
The REIT also has four additional hotels under purchase and sale agreements, with estimated total gross proceeds of about $32 million and a blended cap rate of 4.6%. Those transactions are expected to close in the third quarter.
AHIP completed two loan refinancings in 2025 totaling $144 million in gross proceeds, followed by another refinancing during the second quarter of 2026 that generated initial gross proceeds of $25 million. Net proceeds from asset sales and part of the refinancing proceeds were used to repay CMBS loans tied to sold properties, repay a portion of the portfolio loan and redeem $25 million of Series C shares.
As of June 30, the company had $21.5 million in cash. O’Neill said AHIP expects that proceeds from hotels under contract, a refinancing of an unencumbered property and further planned asset sales will position it to redeem the remaining Series C shares and convertible debentures during 2026.
The company has also repurchased more than 700,000 units in 2026 under its normal course issuer bid, at an average price of C$0.52 per unit. The Toronto Stock Exchange-approved program allows AHIP to purchase as many as 6.8 million units, or 10% of its public float, through Dec. 29, 2026.
Second-Quarter Hotel Performance
Chief Operating Officer Bruce Pittet said the company’s portfolio of 23 premium-branded select-service hotels recorded RevPAR, or revenue per available room, of $116 in the second quarter, up 4.1% from the prior year. Total portfolio revenue increased by $1.1 million.
AHIP posted year-over-year RevPAR growth for five consecutive months, supported by improved corporate travel, recovering government demand and retail-segment performance, Pittet said. Revenue from leisure-linked, negotiated and government segments rose 5%, 3% and 5%, respectively.
- Occupancy rose 206 basis points year over year to 78.5%.
- Average daily rate increased 1.3% to $147.
- The portfolio RevPAR index was 119, up 3% from a year earlier.
- Extended-stay RevPAR increased 2% to $120.
- Select-service RevPAR rose 3% to $111.
- The company’s Embassy Suites hotel recorded RevPAR of $131, up 15% year over year.
Despite revenue gains, hotel margins remained under pressure. NOI margin declined 146 basis points to 35%, as costs rose faster than revenue. Pittet cited increases in rooms non-labor and undistributed expenses, particularly repairs and maintenance and utilities.
For July, preliminary results for the 23-property portfolio showed occupancy of 80%, average daily rate of $156 and RevPAR of $125, approximately 9% above July 2025 levels.
FFO, Liquidity and Debt
Chief Financial Officer Travis Beatty said same-store revenue was $26.7 million in the second quarter, an increase of 4.5% from 2025. Diluted funds from operations were negative $0.01 per unit, compared with positive diluted FFO of $0.06 in the prior-year quarter.
Unrestricted cash declined to $21.5 million at June 30 from $36.4 million at Dec. 31, 2025, primarily because of the $25 million redemption of Series C shares. AHIP also held $14.5 million of restricted cash and had $17.4 million available under portfolio loans for capital improvements at properties securing those loans.
Debt to gross book value was 51%, up 240 basis points from year-end 2025, while debt to EBITDA declined to 8.9 times from 9.4 times.
On May 20, AHIP closed a $24.9 million interest-only, non-recourse financing secured by three hotel properties. The financing includes up to $4.3 million of additional advances for renovations and improvements. The two-year loan, which may be extended by one year subject to conditions, bears interest at SOFR plus 4.25%. AHIP used the initial net proceeds to repay a CMBS loan secured by five hotels and increase cash balances.
AHIP revised its 2026 property-improvement-plan spending estimate to $3.2 million from $6.9 million, largely due to planned hotel dispositions. Its 2026 estimate for furniture, fixtures and equipment improvements is $5 million. During the first six months of the year, AHIP spent $2.3 million on property improvement plans and $1.7 million on FF&E. The company completed the Fairfield South Hill, Virginia, renovation and began renovations at the Hampton Emporia, Virginia, during the quarter.
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.
