On June 9, 2017, American Hotel Income Properties REIT LP (AHIP) completed a bought-deal offering (the Offering) of limited partnership units (Units) and convertible debentures (Convertible Debentures).
The Offering raised gross proceeds of approximately: (i) $200.9 million through the issuance of 19,410,000 Units, which included 1,050,000 Units issued as a result of the underwriters electing to partially exercise the Unit over-allotment option; and (ii) US$48.9 million aggregate principal amount of Convertible Debentures, which included approximately US$6.4 million aggregate principal amount of Convertible Debentures as a result of the underwriters’ election to fully exercise the Convertible Debenture over-allotment option.
The Offering was conducted through a syndicate of underwriters co-led by CIBC Capital Markets and National Bank Financial Inc. and included TD Securities Inc., Canaccord Genuity Corp., BMO Capital Markets, Scotiabank, RBC Capital Markets, Haywood Securities Inc. and Industrial Alliance Securities Inc.
On June 22, 2017, AHIP completed the acquisition of a portfolio of 18 premium branded Marriott and Hilton hotels containing 2,187 guestrooms and located in Maryland, New Jersey, New York, Connecticut and Pennsylvania for an aggregate purchase price of approximately US$407.4 million, including brand-mandated property improvement plans.
AHIP funded the purchase price for the portfolio using a combination of a portion of the net proceeds from the Offering and the proceeds from four new commercial mortgage-backed securities loans in the aggregate amount of US$236.2 million.
For the Offering and the acquisition, AHIP was represented by Farris, Vaughan, Wills & Murphy LLP, with a team led by Brian Canfield that included Duncan Reid, Robert Veitch, Mathew Smith and Sean Galloway. AHIP was represented in certain US commercial real estate and senior secured financing matters by Snell & Wilmer LLP, with a team led by Joyce Wright that included Marc Currie, Angela, Perez, Ryan Konsdorf, Chris Provera and Jeff Porter. Daniel Miller of Dorsey & Whitney LLP acted as US counsel to AHIP for the Offering.
The underwriters were represented by Blake, Cassels & Graydon LLP, with a team led by William Fung that included Eric Moncik, Jordan Knowles and Patrick Severide (securities) and Chris Van Loan and Edward Miller (tax). Christopher Morgan and Annabelle Gardere (securities) and Sarah Beth Rizzo and Sarah Ralph (tax) of Skadden, Arps, Slate, Meagher & Flom LLP acted as US counsel to the underwriters for the Offering.
The previous owners of the 18 hotel properties were represented in the sale by Latham & Watkins LLP, with a team led by Gary Axelrod that included Nathan Logan and Renee Naylor.