American Hotel Income Properties REIT LP Reports Q4 2025 Results, Improved Balance Sheet and Demonstrated Hotel Value
VANCOUVER, British Columbia, March 30, 2026 (GLOBE NEWSWIRE) -- 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 months and year ended December 31, 2025.
All amounts presented in this news release are in United States dollars (“U.S. dollars”) unless otherwise indicated.
2025 FOURTH QUARTER HIGHLIGHTS
- Same Property ADR(1) was $137 for the fourth quarter of 2025 an increase of 1.5% compared to the same period of 2024.
- Same Property Occupancy(1) was 68.9% for the fourth quarter of 2025, a decrease of 100 bps compared to the same period of 2024.
- Same Property RevPAR(1) was $94 for the fourth quarter of 2025, consistent with the same period of 2024.
- Same property NOI was $7.2 million for the fourth quarter of 2025, a decrease of 22.3% compared to $9.2 million for the same period of 2024.
- Same property NOI margin was 19.7% for the fourth quarter of 2025, a decrease of 560 bps compared to 25.3% for the same period of 2024.
- RevPAR increased by 3.7% to $94 for the fourth quarter of 2025, compared to $91 for the same period of 2024.
- Diluted FFO per unit and normalized diluted FFO per unit were ($0.07) for the fourth quarter of 2025, compared to nil for the same period of 2024.
- Revenue decreased 25.6% to $40.5 million for the fourth quarter of 2025, compared to $54.4 million for the same period of 2024.
- NOI decreased 48.9% to $6.4 million for the fourth quarter of 2025, compared to $12.4 million for the same period of 2024.
- On March 13, 2026, AHIP redeemed $25.0 million of the $50.0 million Series C Shares.
“AHIP continues to make progress on our plan to reduce debt and high-grade the portfolio through asset sales and loan refinancings,” said John O’Neill, CEO. “In 2025 and early 2026, AHIP completed the dispositions of 19 hotel properties for total gross proceeds of $169.2 million. AHIP currently has eight further hotel properties under purchase and sale agreements for estimated total gross proceeds of $137.3 million which are expected to close by the end of the second quarter 2026.”
“Dispositions completed in 2025 have a combined Cap Rate(1) of 7.6%, demonstrating value beyond AHIP’s current
unit price for its current portfolio.”
“At the end of 2025, AHIP had $36 million in cash and no debt maturing until the fourth quarter of 2026. With a portion of this cash, AHIP redeemed $25 million of Series C Shares in March of 2026. To increase unitholder value, we are evaluating potential additional hotel sales. With closing of hotels currently under contract, expected refinancing of unencumbered properties, and additional planned hotel sales, we plan to be in a position to redeem the remainder of the Series C Shares and the convertible debentures in 2026.”
INITIATIVES TO STRENGTHEN FINANCIAL POSITION AND IMPROVE UNITHOLDERVALUE
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 sixteen hotel properties in 2024 for total gross proceeds of $165.2 million, which has improved the overall portfolio asset quality while also significantly reducing leverage. In 2025, AHIP completed the disposition of eighteen hotel properties for total gross proceeds of $160.9 million and two loan refinancings for total gross proceeds of $144.3 million. The net proceeds from these sales along with a portion of the proceeds from the 2025 loan refinancings, were used to repay the CMBS loans secured by those properties and a portion of the Portfolio Loan. These transactions significantly improved the overall duration of AHIP’s outstanding loans and increased AHIP’s cash balance.
AHIP has no secured debt maturing until the fourth quarter of 2026, with a $22.3 million CMBS loan maturing in November 2026. AHIP is currently marketing each hotel in this portfolio for sale. Effective January 28, 2026, the dividend rate on the $50.0 million outstanding 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 now apply which may reduce AHIP’s flexibility until such time as the Series C Shares have been fully redeemed. On March 13, 2026, AHIP redeemed $25.0 million of the Series C Shares, which results in a remaining amount of $25.0 million. AHIP’s 6.0% unsecured subordinated convertible debentures (the “Debentures”) mature on December 31, 2026.
HOTEL DISPOSITIONS
2025 Hotel Dispositions
AHIP completed the disposition of the following eighteen hotels in 2025: Homewood Suites Allentown Bethlehem Airport in Bethlehem, PA, Residence Inn Arundel Mills BWI Airport in Hanover, MD, TownePlace Suites Arundel Mills BWI Airport in Hanover, MD, Hampton Inn Chickasha and Holiday Inn Express & Suites Chickasha in Chickasha, OK, Holiday Inn Express & Suites Dubuque West in Dubuque, IA, Holiday Inn Express & Suites Nevada in Nevada, MO, Holiday Inn Express & Suites Mattoon in Mattoon, IL, Holiday Inn Express & Suites Emporia in Emporia, KS, Holiday Inn Express & Suites Jacksonville in South Jacksonville, IL, Holiday Inn Express & Suites Bethany in Bethany, OK, Homewood Suites Kalamazoo Portage in Portage, MI, Residence Inn Baltimore White Marsh in Baltimore, MD, Fairfield Inn & Suites Asheboro in Asheboro, NC, Courtyard Woodbury and Residence Inn St Paul Woodbury in Woodbury, MN, Staybridge Suites Tampa in Tampa, FL and Holiday Inn Express & Suites Sarasota in Sarasota, FL.
The 2025 dispositions were for total gross proceeds of $160.9 million. After adjusting for an industry standard 4% FF&E reserve, the combined sales price for these hotels represents a blended Cap Rate(1) of 7.6% on 2024 annual hotel EBITDA(1). The net proceeds from these dispositions were used to repay certain CMBS mortgage loans and added to AHIP’s cash balances.
AHIP’s enterprise value(1) as at December 31, 2025 reflects an implied Cap Rate(1) of 8.7% on 2025 annual hotel EBITDA(1) for the portfolio of 31 hotel properties, based on the Canadian dollar closing price of $0.51 per unit on the TSX on December 31, 2025, and converted to US dollars at a foreign exchange rate of CDN$1.37 to US$1.
2026 Hotel Dispositions
In 2026, AHIP completed the disposition of the TownePlace Suites Pittsburgh Airport Robinson Township in Pittsburgh, PA for gross proceeds of $8.3 million. After adjusting for an industry standard 4% FF&E reserve, this sale represents a Cap Rate(1) of 9.0% on 2025 annual hotel EBITDA(1).
AHIP currently has the following hotels under purchase and sale agreements: Holiday Inn Express & Suites Fort Myers in Fort Myers, FL; Springhill Suites Arundel Mills BWI Airport in Hanover, MD; Hilton Garden Inn Baltimore White Marsh in Baltimore, MD; Homewood Suites Dover Rockaway in Dover, NJ; Homewood Suites Allentown West Fogelsville Allentown in PA; Embassy Suites Tempe in Tempe, AZ; Embassy Suites Cleveland Rockside in Independence, OH; and Embassy Suites Columbus Dublin in Dublin, OH. These contracts represent $137.3 million in total gross proceeds. After adjusting for an industry standard 4% FF&E reserve, the combined contract price for these eight hotel properties represents a blended Cap Rate(1) of 7.2% on 2025 annual hotel EBITDA(1).
2025 REVIEW
FINANCIAL AND OPERATIONAL HIGHLIGHTS
For the year ended December 31, 2025, ADR increased 3.5% to $138, and occupancy increased by 100 bps to 71.9%, compared to the year ended December 31, 2024. Overall, improved ADR and occupancy resulted in an increase of 4.9% in RevPAR to $99, compared to the year ended December 31, 2024. The improved performance is attributable to the disposition of hotel properties with lower-than-average portfolio RevPAR.
NOI and normalized NOI were $49.3 million for the year ended December 31, 2025, decreases of 32.8% and 33.3%, respectively compared to NOI of $73.4 million and $73.9 million for the year ended December 31, 2024. The decrease in NOI and normalized NOI was primarily due to the disposition of the eighteen hotel properties completed in 2025.
NOI margin was 26.3% for the year ended December 31, 2025, a decrease of 230 bps compared to 28.6% for the same period of 2024. The decrease in NOI margin was due to higher operating expenses as a result of general cost inflation, and repair and maintenance expenses partially offset by the disposal of underperforming hotels. Included in the fourth quarter of 2025 is a one-time non-cash expense of $1.3 million related to a reduction of other accounts receivable. This reduction is attributable to a change in the estimate for collectability of certain items from 2024 and earlier.
Diluted FFO per unit and normalized diluted FFO per unit for the year ended December 31, 2025, was nil compared to diluted FFO per unit of $0.21 and normalized diluted FFO per unit of $0.19 for the year ended December 31, 2024. The decrease in diluted FFO per unit and normalized diluted FFO per unit was mainly due to lower NOI as a result of sold properties, higher operating expenses on same properties, one time settlement under an employment agreement and finance costs related to the early repayment of CMBS loans and Portfolio Loan for properties sold during the year, partially offset by a reduction in the weighted average number of Units outstanding.
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 | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | ||||||||||
| ADR | $ | 137 | $ | 143 | $ | 143 | $ | 139 | $ | 135 | |||||
| Change compared to same period in prior year - % increase/(decrease) | 1.5 | % | 0.7 | % | (1.5 | %) | (0.7 | %) | 0.4 | % | |||||
| Occupancy | 68.9 | % | 74.7 | % | 75.7 | % | 68.9 | % | 69.9 | % | |||||
| Change compared to same period in prior year - bps increase/(decrease) | (100 | ) | 90 | (141 | ) | 120 | 209 | ||||||||
| RevPAR | $ | 94 | $ | 107 | $ | 108 | $ | 96 | $ | 94 | |||||
| Change compared to same period in prior year - % increase/(decrease) | - | % | 1.9 | % | (3.3 | %) | 1.0 | % | 3.5 | % | |||||
| NOI | $ | 7,173 | $ | 11,847 | $ | 13,901 | $ | 10,192 | $ | 9,233 | |||||
| Change compared to same period in prior year - % increase/(decrease) | (22.3 | %) | (8.4 | %) | (7.2 | %) | (5.4 | %) | (5.6 | %) | |||||
| NOIMargin | 19.7 | % | 28.9 | % | 33.7 | % | 28.2 | % | 25.3 | % | |||||
| Change compared to same period in prior year - bps increase/(decrease) | (560 | ) | (340 | ) | (175 | ) | (159 | ) | (248 | ) |
In the fourth quarter of 2025, same property ADR was $137, an increase of 1.5% compared to the same period in 2024. Same property occupancy decreased by 100 bps to 68.9% in the current quarter, compared to the same period in 2024. The increase in ADR is primarily attributable to improved business travel, partially offset by a reduction in group travel, with particular strength in oil gas markets in Texas. Overall, the increase in ADR was offset by decrease in occupancy resulting in a consistent RevPAR.
Same property NOI decreased by 22.3% and same property NOI margin decreased by 560 bps in the current quarter, compared to the same period in 2024. The decrease in same property NOI and NOI margin was primarily driven by increases in electricity costs, sales and marketing and maintenance expenses. Included in the fourth quarter of 2025 is a one-time non-cash expense of $1.3 million related to a reduction of other accounts receivable. This reduction is attributable to a change in the estimate for collectability of certain items from 2024 and earlier.
LEVERAGE AND LIQUIDITY
| KPIs | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | |||||
| Debt-to-GBV(1) | 48.7 | % | 48.7 | % | 48.7 | % | 48.7 | % | 49.3 | % |
| Debt-to-EBITDA(1) | 9.4x | 9.1x | 8.1x | 7.9x | 8.0x |
(1) See “Non-IFRS and Other Financial Measures”
Debt to gross book value was 48.7% as at December 31, 2025, a decrease of 60 bps compared to December 31, 2024. Debt to EBITDA as at December 31, 2025 was 9.4x, an increase of 1.4x compared to December 31, 2024. The change in debt to gross book value and debt to EBITDA ratios was driven by net proceeds from completed dispositions used to reduce outstanding debt.
As at December 31, 2025, AHIP had an unrestricted cash balance of $36.4 million compared to $27.8 million as at December 31, 2024. The increase in cash was primarily due to net inflows from property dispositions in 2025. As at December 31, 2025, AHIP held a restricted cash balance of $23.2 million and had an additional $15.1 million available under the Portfolio Loan for capital improvements related to the properties secured by the loan. As at March 24, 2026, AHIP had an unrestricted cash balance of approximately $12.0 million and a restricted cash balance of approximately $23.5 million, with the reduction in the unrestricted cash balance being primarily attributable to the redemption of $25.0 million of Series C shares on March 13, 2026.
CAPITAL IMPROVEMENTS
AHIP’s capital projects include hotel brand mandated property improvement plans (“PIPs”) and FF&E improvements. 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’s 2025 capital expenditures were $1.9 million in PIPs and $9.0 million in FF&E improvements.
| SELECTED ANNUAL INFORMATION | ||||
| (thousandsof dollars, exceptper Unitamounts) | 2025 | 2024 | ||
| Revenue | 187,784 | 256,884 | ||
| Income from operating activities | 27,691 | 43,880 | ||
| Loss and comprehensive loss | (69,331 | ) | (42,064 | ) |
| NOI (2) | 49,348 | 73,417 | ||
| NOI Margin (2) | 26.3 | % | 28.6 | % |
| Hotel EBITDA (1) | 44,580 | 67,699 | ||
| Hotel EBITDA Margin (1) | 23.7 | % | 26.4 | % |
| EBITDA (1) | 36,698 | 59,456 | ||
| EBITDA Margin (1) | 19.5 | % | 23.1 | % |
| Cashflow from operating activities | 3,890 | 10,702 | ||
| Distributions declared per unit - basic and diluted | - | - | ||
| Distributions declared to unitholders - basic | - | - | ||
| Distributions declared to unitholders - diluted | - | - | ||
| Dividends declared to Series C holders | 4,632 | 4,920 | ||
| FFO diluted (1) | (233 | ) | 16,871 | |
| FFO per unit - diluted (1) | - | 0.21 | ||
| Normalized FFO per unit - diluted(1) | - | 0.19 | ||
| AFFO diluted (1) | (9,965 | ) | 5,330 | |
| AFFO per unit - diluted (1) | (0.13 | ) | 0.07 |
(1) See “Non-IFRS and Other Financial Measures”
(2) NOI and NOI margin included the IFRIC 21 property taxes adjustment.
| (thousandsofdollars) | December31, 2025 | December31, 2024 | ||
| Total assets | 470,606 | 685,110 | ||
| Total liabilities | 365,538 | 501,091 | ||
| Total non-current liabilities | 203,480 | 275,501 | ||
| Term loans and revolving credit facility | 224,832 | 384,809 | ||
| Debt to gross book value(1) | 48.7% | 45.9% | ||
| Debt to EBITDA (times)(1) | 9.4 | 8.0 | ||
| Interest coverage ratio (times) (1) | 1.4 | 1.7 | ||
| Term loans and revolving credit facility: | ||||
| Weighted average interest rate | 6.33 | 5.72% | ||
| Weighted average term to maturity (years) | 1.3 | 1.7 | ||
| Number of rooms | 3,785 | 5,445 | ||
| Number of properties | 31 | 49 | ||
| Number of restaurants | 9 | 14 | ||
| (1) See “Non-IFRS and Other Financial Measures” |
| 2025 OPERATING RESULTS | ||||||||
| Three Months Ended December 31 | Twelve Months Ended December 31 | |||||||
| (thousands of dollars) | 2025 | 2024 | 2025 | 2024 | ||||
| ADR (1) | 137 | 130 | 138 | 134 | ||||
| Occupancy (1) | 68.9 | % | 69.7 | % | 71.9 | % | 70.9 | % |
| RevPAR (1) | 94 | 91 | 99 | 95 | ||||
| Revenue | 40,451 | 54,375 | 187,784 | 256,884 | ||||
| Operating expenses | 25,688 | 31,156 | 104,918 | 138,714 | ||||
| Energy | 1,994 | 2,300 | 8,913 | 10,846 | ||||
| Property maintenance | 3,100 | 3,600 | 12,285 | 15,289 | ||||
| Property taxes, insurance and ground lease | 3,318 | 4,884 | 12,320 | 18,618 | ||||
| Total expenses | 34,100 | 41,940 | 138,436 | 183,467 | ||||
| NOI (2) | 6,351 | 12,435 | 49,348 | 73,417 | ||||
| NOI Margin (2) | 15.7 | % | 22.9 | % | 26.3 | % | 28.6 | % |
| Depreciation and amortization | 4,504 | 8,409 | 21,657 | 29,537 | ||||
| Income from operating activities | 1,847 | 4,026 | 27,691 | 43,880 | ||||
| Other expenses | 15,757 | 25,159 | 96,014 | 77,841 | ||||
| Current income tax recovery | - | (66 | ) | (48 | ) | (19 | ) | |
| Deferred income tax expense (recovery) | - | 9,531 | 1,056 | 8,122 | ||||
| Loss and comprehensive loss | (13,830 | ) | (30,598 | ) | (69,331 | ) | (42,064 | ) |
(1) See “Non-IFRS and Other Financial Measures”
(2) NOI and NOI margin included the IFRIC 21 property taxes adjustment
For the three and twelve months ended December 31, 2025, ADR, and RevPAR increased compared to the same period in the prior year. Occupancy decreased for the current quarter but increased for the twelve months ended December 31, 2025. The US government shutdown in October 1, 2025 to November 12, 2025 was disruptive to travel in the United States and impacted occupancy in AHIP assets including the industry as a whole.
The overall improved performance is primarily attributable to the disposition of hotel properties with lower-than-average portfolio RevPAR. Revenue in the current quarter decreased by 26.9% compared to the same period in the prior year. The decrease in revenue was due to the disposition of six and eighteen hotel properties completed, respectively, during the three and twelve months ended December 31, 2025.
For the three and twelve months ended December 31, 2025, NOI decreased by 48.9% and 32.8%, and NOI margin decreased by 720 bps and 230 bps, respectively, compared to the same period in the prior year. The decrease in NOI was primarily due to the disposition of sixteen hotel properties in 2024 and eighteen hotel properties in 2025. The decrease in NOI margin was largely driven by higher operating expenses as a result of general cost inflation, repair and maintenance expenses, partially offset by disposition of hotels with lower than average NOI margin. Included in the fourth quarter of 2025 is a one-time non-cash expense of $1.3 million related to a reduction of other accounts receivable. This reduction is attributable to a change in the estimate for collectability of certain items from 2024 and earlier.
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.
FINANCIALINFORMATION
This news release should be read in conjunction with AHIP’s audited financial statements, and management’s discussion and analysis for the three and twelve months ended December 31, 2025 and 2024, that are available on AHIP’s website at www.ahipreit.com, and under AHIP’s profile on SEDAR+.
Q4 2025 CONFERENCE CALL
Management will host a webcast and conference call at 10:00 a.m. Pacific time on Tuesday, March 31, 2026, to discuss the financial and operational results for the three months and year ended December 31, 2025 and 2024.
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.
AHIP’s long-term objectives are to increase the value of its hotel properties through operating excellence, active asset management and value-adding capital expenditures and increase unitholder value and distributions to unitholders. 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 MD&A.
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 MD&A.
Normalized FFO:calculated as FFO adjusting for non-recurring items. For the three months ended December 31, 2024, normalized FFO is calculated as FFO excluding the non-recurring property damage insurance adjustment of $0.1 million recorded in the same period. For the twelve months ended December 31, 2024, normalized FFO is calculated as FFO excluding the non-recurring property damage insurance proceeds of $1.5 million recorded in the same period. For the three and twelve months ended December 31, 2025, normalized FFO was equal to FFO as there were no non-recurring items. The most comparable IFRS measure to normalized FFO is income (loss) and comprehensive income (loss), for which a reconciliation is provided in this MD&A.
Normalized NOI:calculated as NOI adjusting for non-recurring items. For the twelve months ended December 31, 2024, normalized NOI included the non-recurring insurance proceeds of $0.5 million for business interruption claims. For the three and twelve months ended December 31, 2025, normalized NOI was equal to NOI as there were no non-recurring items. The most comparable IFRS measure to normalized NOI is NOI, for which a reconciliation is provided in this MD&A.
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 MD&A.
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 MD&A.
Debt: calculated as the sum of term loans, revolving credit facility (where applicable) and Portfolio Loan, 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 MD&A.
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 MD&A.
Interest expense: calculated by adjusting finance costs for gain/loss on debt settlement, 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 MD&A.
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.
Normalized FFO per unit – basic/diluted: calculated as normalized 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 2024 annual hotel EBITDA, for properties sold in 2025 and 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.
Implied capitalization rate (“Implied Cap Rate”): calculated as 2025 annual hotel EBITDA, after adjusting for an industry standard 4% FF&E reserve, for the portfolio of 31 hotel properties divided by the enterprise value.
CAPITAL MANAGEMENTMEASURES:
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 labor 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 result 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 2024.
Enterprise value: is a supplementary financial measure and is calculated as the sum of (i) total debt obligations as reflected on the December 31, 2025 Statement of Financial Position (ii) AHIP’s market capitalization (which is calculated as the Canadian dollar closing price of the units on the TSX as of December 31, 2025, converted to US dollars at a foreign exchange rate of CDN$1.37 to US$1, multiplied by the total number of units issued and outstanding as at such date), and (iii) face value of series C preferred shares, less (iv) the amount of cash and cash equivalents reflected on the December 31, 2025 Statement of Financial Position.
NON-IFRS RECONCILIATION
INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) TO FFO
| Three Months Ended December 31 | Twelve Months Ended December 31 | |||||||
| (thousands of dollars, except per unit amounts) | 2025 | 2024 | 2025 | 2024 | ||||
| Income (loss) and comprehensive income (loss) | (13,830 | ) | (30,598 | ) | (69,331 | ) | (42,064 | ) |
Adjustments: | ||||||||
| Income attributable to non-controlling interest | (1,150 | ) | (1,533 | ) | (4,632 | ) | (4,920 | ) |
| Depreciation and amortization | 4,504 | 8,409 | 21,657 | 29,537 | ||||
| Impairment of cash-generating units | 3,808 | 19,588 | 41,692 | 30,990 | ||||
| Write-off of property, building and equipment | 1,453 | (1,306 | ) | 1,772 | (1,118 | ) | ||
| Loss (gain) on sale of properties | (877 | ) | (4,248 | ) | 7,300 | (5,595 | ) | |
| IFRIC 21 property taxes adjustment | 711 | 481 | - | - | ||||
| Change in fair value of financial instruments | 34 | (5 | ) | 253 | (139 | ) | ||
| Gain on convertible debt conversion | - | - | - | (245 | ) | |||
| Deferred income tax expense (recovery) | - | 9,531 | 1,056 | 8,122 | ||||
| Loss on deconsolidation of subsidiary | - | (504 | ) | - | 2,303 | |||
| FFO basic(1) | (5,347 | ) | (185 | ) | (233 | ) | 16,871 | |
| FFO diluted(1) | (5,347 | ) | (185 | ) | (233 | ) | 16,871 | |
| FFO per unit – basic(1) | (0.07 | ) | - | - | 0.21 | |||
| FFO per unit – diluted(1) | (0.07 | ) | - | - | 0.21 | |||
| Non-recurring items: | ||||||||
| Other income | - | 123 | - | (1,468 | ) | |||
| Measurements excluding non-recurring items: | ||||||||
| Normalized FFO diluted(1) | (5,347 | ) | (62 | ) | (233 | ) | 15,403 | |
| Normalized FFO per unit – diluted(1) | (0.07 | ) | - | - | 0.19 | |||
| Weighted average number of units outstanding: | ||||||||
| Basic (000’s) | 73,892 | 79,234 | 76,872 | 79,175 | ||||
| Diluted (000’s)(2) | 74,877 | 81,439 | 77,576 | 81,003 |
(1) See “Non-IFRS and Other Financial Measures”
(2) The calculation of FFO diluted, FFO per unit – diluted, normalized FFO diluted, normalized FFO per unit – diluted, weighted average number of units outstanding – diluted for the three and twelve months ended December 31, 2025, and the three and twelve months ended December 31, 2024 excluded the convertible debentures because they were anti-dilutive
RECONCILIATION OF FFO TO AFFO
| Three Months Ended December 31 | Twelve Months Ended December 31 | |||||||
| (thousands of dollars, except per Unit amounts) | 2025 | 2024 | 2025 | 2024 | ||||
| FFO basic and diluted (1) | (5,347 | ) | (185 | ) | (233 | ) | 16,871 | |
| Maintenance capital expenditures | (2,276 | ) | (3,153 | ) | 9,732 | (11,541 | ) | |
| AFFO basic and diluted (1) | (7,623 | ) | (3,338 | ) | (9,965 | ) | 5,330 | |
| AFFO per unit - basic and diluted (1) | (0.10 | ) | (0.04 | ) | (0.13 | ) | 0.07 | |
| Measurements excluding non-recurring items: | ||||||||
| AFFO diluted (1) | (7,623 | ) | (3,215 | ) | (9,965 | ) | 3,862 | |
| AFFO per unit - diluted (1) | (0.10 | ) | (0.04 | ) | (0.13 | ) | 0.05 |
(1) See “Non-IFRS and Other Financial Measures”
DEBT TO GROSS BOOK VALUE
| (thousands ofdollars) | December 31,2025 | December 31, 2024 | ||
Debt | 346,132 | 476,552 | ||
| Gross Book Value | 710,083 | 967,433 | ||
| Debt-to-Gross Book Value | 48.7 | % | 49.3 | % |
DEBT
| (thousandsofdollars) | December31,2025 | December31,2024 |
Term loans, revolving credit facility and Portfolio Loan | 293,020 | 423,949 |
| 2026 debentures (at face value) | 49,730 | 49,730 |
| Unamortized portion of debt financing costs | 2,745 | 2,177 |
| Lease liabilities | 637 | 696 |
| Debt | 346,132 | 476,552 |
GROSS BOOK VALUE
| (thousands ofdollars) | December 31,2025 | December 31, 2024 |
Total assets | 470,806 | 685,110 |
| Accumulated depreciation and impairment on property, buildings and equipment | 236,254 | 275,424 |
| Accumulated amortization on intangible assets | 3,223 | 6,899 |
| Gross Book Value | 710,083 | 967,433 |
DEBT TO EBITDA
| (thousands ofdollars) | December 31,2025 | December 31, 2024 |
Debt | 346,132 | 476,552 |
| EBITDA (trailing twelve months) | 36,698 | 59,456 |
| Debt-to-EBITDA (times) | 9.4x | 8.0x |
INTEREST COVERAGERATIO
| (thousands ofdollars) | December 31,2025 | December 31, 2024 |
| EBITDA (trailing twelve months) | 36,698 | 59,456 |
| Interest expense (trailing twelve months) | 27,018 | 35,572 |
| Interest Coverage Ratio (times) | 1.4x | 1.7x |
The reconciliation of NOI to hotel EBITDA and EBITDA is shown below:
| Three Months Ended December 31 | Twelve Months Ended December 31 | |||||||
| (thousands ofdollars) | 2025 | 2024 | 2025 | 2024 | ||||
NOI | 6,351 | 12,435 | 49,348 | 73,417 | ||||
| Management fees | (1,089 | ) | (1,211 | ) | (4,768 | ) | (5,718 | ) |
| HotelEBITDA | 5,262 | 11,224 | 44,580 | 67,699 | ||||
| General administrative expenses | (2,478 | ) | (1,599 | ) | (7,882 | ) | (8,243 | ) |
| EBITDA | 2,784 | 9,625 | 36,698 | 59,456 |
The reconciliation of NOI to normalized NOI is shown below:
| Three Months Ended December 31 | Twelve Months Ended December 31 | |||
| (thousands ofdollars) | 2025 | 2024 | 2025 | 2024 |
NOI | 6,351 | 12,435 | 49,348 | 73,417 |
| Business interruption insurance proceeds | - | - | - | 501 |
| Normalized NOI | 6,351 | 12,435 | 49,348 | 73,918 |
The reconciliation of finance costs to interest expense is shown below:
| Three Months Ended December 31 | Twelve Months Ended December 31 | |||||||
| thousands ofdollars) | 2025 | 2024 | 2025 | 2024 | ||||
| Finance costs | 8,127 | 8,732 | 33,111 | 40,160 | ||||
| Amortization of debt financing costs | (421 | ) | (767 | ) | (2,139 | ) | (2,725 | ) |
| Accretion of debenture liability | (297 | ) | (273 | ) | (1,165 | ) | (1,069 | ) |
| Amortization of debenture costs | (136 | ) | (120 | ) | (525 | ) | (473 | ) |
| Debt defeasance | (563 | ) | - | (1,580 | ) | (112 | ) | |
| Loss on debt settlement | (505 | ) | (14 | ) | (1,354 | ) | (209 | ) |
| Interest Expense | 6,205 | 7,558 | 26,348 | 35,572 |
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 months and year ended December 31, 2025 and 2024, available on AHIP’s website at www.ahipreit.com, and under AHIP’s profile on SEDAR+ at www.sedarplus.com.
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 expectations with respect to inflation, labor supply, labor costs, interest rates and other market financial and macroeconomic conditions in 2026 and the expected impacts thereof on AHIP’s financial position and performance, including on ADR, occupancy and RevPAR, NOI and NOI margins; AHIP’s strategic initiatives and the intended outcomes thereof, including strengthening AHIP’s financial position and improving unitholder value; AHIP’s expectations with respect to the macroeconomic and operating environment, including certain specific expectations for the 2026 fiscal year; AHIP continuing to execute its strategy to sell hotel properties to enhance liquidity, reduce debt and manage future financial obligations; AHIP’s objective to raise sufficient capital to address the remaining Series C Shares and the Debentures and the potential strategies for doing so; AHIP’s plan, with closing of hotels currently under contract, expected refinancing of unencumbered properties and additional planned hotel sales, to be in a position to redeem the remainder of the Series C Shares and the Debentures in 2026; AHIP’s planned property dispositions, including the expected terms and timing thereof and the financial impact thereof on AHIP (including the estimated amount and uses of the proceeds from such dispositions); AHIP is evaluating potential additional hotel sales in 2026 to increase unitholder value; AHIP not having any debt maturities until the fourth quarter of 2026, and its intended means of addressing such debt maturities; the key liquidity risks facing AHIP and its planned strategies for dealing with same; AHIP remaining focused on creating long-term value for its Unitholders; and AHIP’s stated long-term objectives.
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 labor shortages, will negatively impact the U.S. economy, 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 meet its objective of generating sufficient capital 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 NCIB; that Units will trade below their value from time to time; that AHIP will complete purchases of Units pursuant to the 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; 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; and AHIP will achieve its long term objectives.
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; inflation and labor 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 labor costs; AHIP’s strategic initiatives with respect to strengthening AHIP’s financial position, addressing future financial obligations and divestures of assets may not be successful and may not achieve their intended outcomes; AHIP may not complete its currently planned divestures on the terms currently contemplated or in accordance with the timing currently contemplated, or at all; AHIP may not meet its objective of generating sufficient capital to address the remaining Series C Shares and the Debentures; 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 NCIB; the risk that the market price of the Units will be too high to permit purchases under the NCIB and/or ASPP; a failure to execute purchases under the 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 external hotel manager and 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 AIF, a copy of which is available on SEDAR+ at www.sedarplus.com.
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 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 AHIP assumes no obligation to update or revise such information to reflect new events or circumstances, except as may be required by applicable law.
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