VANCOUVER, BC--(Marketwired - June 09, 2017) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

American Hotel Income Properties REIT LP ("AHIP") (TSX: HOT.UN) (TSX: HOT.DB.U) (OTCQX: AHOTF) announced today the completion of its previously announced public offering (the "Offering"), on a bought deal basis of: (i) 19,410,000 limited partnership units (each a "Unit") at a price of Cdn$10.35 per Unit for total gross proceeds of Cdn$200,893,500; and (ii) US$48,875,000 aggregate principal amount of 5.00% convertible unsecured subordinated debentures due on June 30, 2022 (the "Debentures"). The total gross proceeds from the sale of the Units includes the partial exercise of the Unit over-allotment option of 1,050,000 Units for additional proceeds of Cdn$10,867,500. The total gross proceeds from the sale of the Debentures includes the full exercise of the Debenture over-allotment option of an additional US$6,375,000 aggregate principal amount of Debentures. The Offering is fully described in AHIP's prospectus supplement dated June 2, 2017 (the "Prospectus Supplement") to its short form base shelf prospectus dated February 16, 2017, which is available on SEDAR at www.sedar.com.

The Offering was conducted through a syndicate of underwriters co-led by CIBC Capital Markets and National Bank Financial Inc., with CIBC Capital Markets as the sole bookrunner, and included TD Securities Inc., Canaccord Genuity Corp., BMO Capital Markets, Scotiabank, RBC Capital Markets, Haywood Securities Inc. and Industrial Alliance Securities Inc.

As described in the Prospectus Supplement, AHIP intends to use the net proceeds of the Offering to: (i) partially fund the potential acquisition of a geographically targeted portfolio of 18 premium branded Marriott and Hilton hotels (the "Acquisition") containing 2,187 guestrooms and located in Maryland, New Jersey, New York, Connecticut and Pennsylvania (collectively, the "Eastern Seaboard Portfolio"); and (ii) fund working capital, potential future acquisitions and for general corporate purposes. In the event that the Acquisition does not close, the net proceeds will be used for general corporate and working capital purposes, which may include other potential future acquisitions.

Rob O'Neill, CEO said, "We are pleased to have the support of both equity and debt markets so we may continue our proven track record of successful investment, delivering reliable and consistent U.S. dollar denominated distributions to our unitholders and adding value through ongoing growth of our diversified hotels portfolio."

The Debentures are convertible at the option of the holder into Units at any time prior to maturity at a conversion price equal to US$9.25 per Unit (the "Conversion Price"). The Conversion Price of the Debentures represents a conversion rate of approximately 108.1081 Units for each US$1,000 principal amount of Debentures, subject to adjustment in accordance with the trust indenture governing the Debentures dated June 9, 2017 (the "Indenture"), a copy of which will be filed on SEDAR at www.sedar.com.

The Debentures each have a face value of US$1,000 and bear interest at a rate of 5.00% per annum payable semi-annually on June 30 and December 31 until maturity on June 30, 2022, commencing December 31, 2017. The Debentures are not redeemable by AHIP prior to June 30, 2020. On or after June 30, 2020, but prior to June 30, 2021, the Debentures are redeemable, in whole or in part, at a price equal to the principal amount plus accrued and unpaid interest, at AHIP's option, provided that the weighted average trading price of the Units is not less than 125% of the Conversion Price. On and after June 30, 2021, the Debentures are redeemable at AHIP's option, in whole or in part, at a price equal to the principal amount plus accrued and unpaid interest.

The Units sold pursuant to the Offering have been listed on the Toronto Stock Exchange ("TSX") under AHIP's existing trading symbol HOT.UN. AHIP now has 78,033,606 Units issued and outstanding. The Debentures sold pursuant to the Offering have been listed on the TSX under the trading symbol HOT.DB.U.

This news release shall not constitute an offer to sell or a solicitation of any offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and such securities may not be offered or sold within the United States absent registration under the U.S. Securities Act or an applicable exemption from the registration requirements thereunder.

FORWARD-LOOKING STATEMENTS
This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects AHIP's current expectations regarding future events. Forward-looking information is identified by the use of terms and phrases such as "anticipate", "believe", "budget", "could", "estimate", "expect", "going-in", "intend", "may", "opportunities", "plan", "potential", "predict", "project", "will", "would" and similar terms and phrases, including references to assumptions. Such information includes, but is not limited to: the use of proceeds from the Offering, including, without limitation, to partially fund the potential acquisition of the Eastern Seaboard Portfolio; AHIP's ongoing ability to make successful investments, deliver reliable and consistent U.S. dollar denominated distributions to its unitholders and add value through ongoing growth in its diversified hotels portfolio; and the filing of the Indenture on SEDAR. Actual events or results may differ materially.

Forward-looking information contained in this news release is based on certain key expectations and assumptions made by AHIP, including, without limitation: a reasonably stable North American economy and stock market; the continued strength of the U.S. lodging industry; the successful completion of the Acquisition; the ability to successfully integrate the Eastern Seaboard Portfolio into AHIP's existing portfolio of branded hotels; and capital markets will provide AHIP with readily available access to equity and/or debt financing on terms acceptable to AHIP. Although the forward-looking information contained in this news release is based upon what AHIP's management believes to be reasonable assumptions, AHIP cannot assure investors that actual events or results will be consistent with such information.

Forward-looking information reflects current expectations of management regarding future events and operating performance as of the date of this news release. Such information involves significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking information, and a description of these factors can be found under "Risk Factors" in the Prospectus Supplement, under "Risk Factors" in AHIP's Annual Information Form dated March 27, 2017 and under "Risks and Uncertainties" in AHIP's Management's Discussion and Analysis dated May 9, 2017, each of which is available on SEDAR at www.sedar.com.

The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. The forward-looking information is 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.

ABOUT AMERICAN HOTEL INCOME PROPERTIES REIT LP
AHIP is a limited partnership formed under the Limited Partnerships Act (Ontario) to invest in hotel real estate properties located substantially in the United States and engaged primarily in growing a portfolio of premium branded, select-service hotels in larger secondary markets with diverse and stable demand generators as well as long standing contractual railway customers.

AHIP's long-term objectives are to build on its proven track record of successful investment, deliver reliable and consistent U.S. dollar denominated distributions to unitholders and add value through ongoing growth of its diversified hotel portfolio.

ADDITIONAL INFORMATION
Additional information relating to AHIP, including its other public filings, is available on SEDAR at www.sedar.com and on AHIP's website at www.ahipreit.com.

THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS NEWS RELEASE.