Lodging Enterprises Sold to AHIP for $127M

Kansas-based Lodging Enterprises has been sold to American Hotel Income Properties REIT LP (AHIP), led by Canadian hotel veteran Rob O’Neill of Vancouver, B.C., for $127 million. Jones Lang LaSalle’s Hotels & Hospitality Group arranged the sale, led by managing directors Al Calhoun and Mark Fair. Terms of the deal were not disclosed, but AHIP did note that Lodging Enterprises will continue to manage the hotels.

American Hotel Income Properties REIT, launched its initial public offering last month raising nearly $86 million. The offering was underwritten by a syndicate of underwriters co-led by Canaccord Genuity Corp. and National Bank Financial Inc., and included TD Securities Inc., BMO Nesbitt Burns Inc., CIBC World Markets Inc., Scotia Capital Inc., Dundee Securities Ltd., GMP Securities L.P., Macquarie Capital Markets Canada Ltd., Burgeonvest Bick Securities Limited and Haywood Securities Inc.

Robert O'Neill, Chief Executive Officer of AHIP, commented that, "We are excited about the initial public offering of American Hotel Income Properties REIT LP. The initial portfolio of hotel properties represents a unique and stable platform upon which we intend to further develop AHIP's considerable potential."

Lodging Enterprises owns and operates 32 proprietary branded hotels in 19 states and 24 proprietary branded diners. The sale also includes a large development pipeline of hotels under construction and long-term guaranteed room night contracts with three of the largest Class I U.S. freight railroad companies, according to a Hotels Magazine report. The hotel properties have agreements with several of the largest U.S. railroad operators, Union Pacific Corp., Burlington Northern Santa Fe LLC and CSX Corp., as well as Canadian Pacific Railway Limited, to provide lodging accommodations for railroad employees under contracts stipulating guaranteed minimum occupancies, which provide the REIT with recurring revenue, according to a CoStar report.

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