HOT.U American Hotel Income Properties REIT LP

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 ended March 31, 2025.

All amounts presented in this news release are in United States dollars (“U.S. dollars”) unless otherwise indicated.

2025 FIRST QUARTER HIGHLIGHTS

• Completed the dispositions of three hotel properties for total gross proceeds of $41.2 million at a blended Cap Rate(1) of 6.9% on 2024 annual hotel EBITDA(1).
• Completed two refinancings for total gross proceeds of $144.3 million which resulted in the full repayment of AHIP’s senior credit facility which was comprised of the Credit Facility Revolver and Credit Facility Term Loan (defined below).
• Diluted FFO per unit(1) and normalized diluted FFO per unit(1) were $(0.02) for the first quarter of 2025, compared to $0.03 and $0.02 respectively for the same period in the prior year.
• ADR(1) increased 3.1% to $135 for the first quarter of 2025, compared to $131 for the same period of 2024.
• Occupancy(1) was 67.9% for the first quarter of 2025, an increase of 150 bps compared to 66.4% for the same period of 2024.
• RevPAR(1) increased 5.7% to $92 for the first quarter of 2025, compared to $87 for the same period of 2024.
• Same property NOI(1) was $12.4 million for the first quarter of 2025, a decrease of 2.8% compared to $12.7 million for the same period of 2024.
• Same property NOI margin(1) was 27.7% for the first quarter of 2025, a decrease of 120 bps compared to 28.9% for the same period of 2024.
• AHIP has no debt maturities until the fourth quarter of 2026 assuming the properties currently under contract for sale close as expected.
• AHIP intends to continue its strategy to sell hotel properties to enhance liquidity, reduce debt and manage future financial obligations.

“AHIP continues to make significant progress on our plan to reduce debt and high-grade the portfolio through asset sales and loan refinancings,” said Jonathan Korol, CEO. “In 2025, AHIP completed the dispositions of 3 hotel properties for total gross proceeds of $41.2 million, and AHIP has 9 hotel properties under purchase and sales agreements for estimated total gross proceeds of $49.7 million. AHIP also completed several refinancings in the first quarter for total gross proceeds of $144.3 million which resulted in the full repayment and termination of AHIP’s senior credit facility.”

“Dispositions completed and under contract in 2024 and 2025 have a combined Cap Rate(1) of 6.9%, demonstrating value beyond AHIP’s current trading levels on its remaining assets. As a result of our disposition and refinancing efforts, AHIP will have no debt maturing until the fourth quarter of 2026. This time is valuable as we navigate the uncertainty in the macroeconomic environment impacting operating performance and the transaction market.”

“Over the next 12 – 18 months, AHIP’s objective is to address the Series C Preferred Shares and the Convertible Debentures. With the recently completed asset sales and refinancings, AHIP has sufficient time with a stable cash position to consider alternatives to address these future obligations in an orderly manner. Alternatives may include further hotel sales, or full or partial recapitalization of Convertible Debentures and/or Series C Shares or a combination thereof. We will be considering all strategic opportunities to deliver value to unitholders.”

INITIATIVES TO STRENGTHEN FINANCIAL POSITION AND PRESERVE UNITHOLDER VALUE

The Board of Directors (the “Board”), together with management, have implemented a plan to strengthen AHIP’s financial position and to preserve unitholder value. Initiatives, and progress made to date, are outlined below.

2025 REFINANCING AND REPAYMENT OF RCF AND TERM LOANS

On December 3, 2024, AHIP satisfied the conditions in the credit agreement governing its then senior credit facility (the “Sixth Amendment”) for the extension of the maturity date for the revolving credit facility (the “Credit Facility Revolver” or “RCF”) and term loans governed thereby (“Credit Facility Term Loan”).

On January 27, 2025, AHIP completed an interest only, CMBS refinancing for five hotel properties for total gross proceeds of $43.0 million (the “CMBS Loan”). The CMBS Loan has a five-year term and bears interest at a fixed annual interest rate of 7.63%. Four of the five hotel properties secured by the CMBS Loan were previously secured under the Sixth Amendment and the fifth hotel property was unencumbered prior to the completion of this CMBS Loan. The aggregate balance of the RCF and Credit Facility Term Loan was reduced to $89.3 million as a result of the pay down following the completion of this new CMBS Loan as well as the application of a portion of the net proceeds from previously announced hotel dispositions that closed in December 2024.

On March 7, 2025, AHIP completed an interest only, non-recourse debt refinancing and repayment in full of the RCF and Credit Facility Term Loan. The initial gross loan proceeds were $85.0 million secured against 11 hotel properties, with additional advances of up to $41.0 million available, comprised of $16.3 million upon the addition of a further hotel property and up to $24.7 million for renovations and improvements to these 12 hotel properties (the “Portfolio Loan”).

AHIP used the initial net proceeds from the Portfolio Loan to fully repay the outstanding balance of the RCF and the Credit Facility Term Loan and these facilities have been terminated. The initial 11 hotel properties secured by the Portfolio Loan were previously secured under the Sixth Amendment. The Portfolio Loan had an initial principal amount of $85.0 million, a two-year term with the option to extend the term for another one-year period subject to the satisfaction of certain conditions, and bears interest at SOFR plus 4.65% per annum.

On March 27, 2025, AHIP added the further hotel property to the Portfolio Loan with additional gross loan proceeds of $16.3 million which results in a current loan balance of $101.3 million. The net proceeds from this refinancing and the dispositions of three hotel properties in March 2025 were used to fully repay the CMBS mortgage loan of $55.2 million secured by these 4 hotel properties. To address the variable rate exposure of the Portfolio Loan, AHIP entered into a derivative contact which provides for a maximum one month SOFR rate of 4.03% on a notional value of $100.0 million for a one year period from May 2025 to May 2026.

For further details, see a copy of the agreement governing the Portfolio Loan, which has been filed under AHIP’s profile on SEDAR+ at www.sedarplus.com.

ADDRESSING 2026 BALANCE SHEET OBLIGATIONS

In 2024, AHIP 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 16 hotel properties in 2024 for total gross proceeds of $165.2 million, which has improved the overall portfolio asset quality with pro forma increases in RevPAR, NOI margin and EBITDA per hotel, while also significantly reducing leverage. In the first quarter of 2025, AHIP completed the disposition of three hotel properties for total gross proceeds of $41.2 million. The net proceeds from these sales along with the proceeds from the recent loan refinancings, were used to repay the CMBS loan secured by those properties. AHIP has nine additional properties under purchase and sale agreements, eight of which are being sold to address a forthcoming CMBS loan maturity secured by those eight properties. The sale of these eight properties is expected to close in the second quarter of 2025. The sale of the nineth property is anticipated to close in the fourth quarter of 2025.

Excluding the CMBS loan secured by the eight aforementioned properties, AHIP has no debt maturing until the fourth quarter of 2026. However, effective January 28, 2026, the dividend rate on the $51.6 million outstanding Series C Shares increases from 9.0% to 14.0% per annum and certain other provisions under the Investor Rights Agreement will be triggered on such date, which will reduce AHIP’s operational flexibility if the Series C Shares have not been fully redeemed as of such date. AHIP’s 6.0% unsecured subordinated convertible debentures (the “Convertible Debentures”) are due December 31, 2026. Accordingly, over the next 12 – 18 months, AHIP’s objective is to raise sufficient capital to address the redemption of the Series C Shares and the Convertible Debentures.

With the recently completed asset sales and refinancings, AHIP has sufficient time with a stable cash position to consider alternatives to address these future obligations in an orderly manner. Alternatives may include further hotel sales, full or partial recapitalization of Convertible Debentures and/or Series C Shares or a combination thereof. Regarding potential dispositions, AHIP intends to bring approximately 20 additional hotels to market in 2025. Over the coming months, AHIP will assess which of the marketed hotels will provide the most attractive combination of certainty, valuation and net proceeds to address these future obligations. The number of potential hotel dispositions will be dependent on, among other things, regional market factors, hotel performance, hotel size, nature and value of offers and whether or not any portion of the Series C Preferred Shares or Convertible Debentures are recapitalized.

2025 FIRST QUARTER REVIEW

FINANCIAL AND OPERATIONAL HIGHLIGHTS

For the three months ended March 31, 2025, ADR increased 3.1% to $135, and occupancy increased by 150 bps to 67.9%. Overall, improved ADR and occupancy resulted in an increase of 5.7% in RevPAR to $92, compared to the three months ended March 31, 2024. The improved performance is primarily attributable to higher demand for business travel and leisure, and the disposition of hotel properties with lower-than-average portfolio RevPAR.

NOI and normalized NOI(1) were $12.7 million for the three months ended March 31, 2025, decreases of 22.1% and 22.5%, respectively, compared to NOI and normalized NOI of $16.3 million and $16.4 million for the three months ended March 31, 2024. The decrease in NOI was primarily due to the disposition of the 16 hotel properties completed in 2024 and the 3 hotel properties in the three months ended March 31, 2025.

NOI margin was 26.1% for the three months ended March 31, 2025, an increase of 120 bps compared to 24.9% for the same period in the prior year. The increase in NOI margin was due to disposal of underperforming hotels in 2024 offset by higher operating expenses as a result of general cost inflation, utilities and repair and maintenance expenses.

Diluted FFO per unit and normalized diluted FFO per unit for the three months ended March 31, 2025, were $(0.02) compared to diluted FFO per unit of $0.03 and normalized diluted FFO per unit of $0.02 for the three months ended March 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 and higher operating expenses on same properties, partially offset by lower corporate and administrative expenses in the current year.

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	Q1 2025			Q4 2024			Q3 2024			Q2 2024			Q1 2024
ADR	$136			$132			$138			$140			$136
Change compared to same period in prior year - bps increase/(decrease)	-%			1.4%			1.2%			2.3%			(1.1%)
Occupancy	68.8%			69.6%			73.9%			76.0%			66.8%
Change compared to same period in prior year - bps increase/(decrease)	200			214			52			107			95
RevPAR	$93			$92			$102			$106			$91
Change compared to same period in prior year - bps increase/(decrease)	2.2%			4.6%			1.9%			3.8%			0.3%
NOI	$12,352			$11,855			$16,446			$17,319			$12,707
Change compared to same period in prior year - bps increase/(decrease)	(2.8%)			(2.5%)			0.2%			0.6%			(4.1%)
NOI Margin	27.7%			25.3%			32.0%			34.1%			28.9%
Change compared to same period in prior year - bps increase/(decrease)	(120)			(186)			(52)			(96)			(198)

In the first quarter of 2025, same property ADR was $136, which is comparable to the same period in the prior year. Same property occupancy increased by 200 bps to 68.8% in the current quarter, compared to the same period of 2024. The increase in occupancy is primarily attributable to higher demand for extended stay and select service properties. Overall, the ADR and improved occupancy contributed to an increase of 2.2% in RevPAR.

Same property NOI decreased by 2.8% and same property NOI margin decreased by 120 bps in the current quarter, compared to the same period in 2024. The decrease in same property NOI and NOI margin was driven by a decline in government group travel, representing approximately 16% of total government revenue, due to U.S. government travel restrictions introduced during the first quarter. Additionally, higher operating expenses contributed to the decline, including higher utility and snow removal costs due to colder weather and greater snowfall in the Midwest and Northeast compared to the prior year, as well as general cost inflation and elevated repair and maintenance expenses.

LEVERAGE AND LIQUIDITY

KPIs	Q1 2025		Q4 2024		Q3 2024		Q2 2024		Q1 2024
					Restated		Restated		Restated
Debt-to-GBV	48.7%		49.3%		50.0%		52.2%		52.4%
Debt-to-EBITDA	7.9x		8.0x		9.2x		9.7x		9.6x

Debt to gross book value(1) was 48.7% as at March 31, 2025, a decrease of 60 bps compared to December 31, 2024. Debt to EBITDA(1) as at March 31, 2025 was 7.9x, a decrease of 0.1x compared to December 31, 2024. The change in debt to gross book value and debt to EBITDA ratios was driven by the use of net proceeds from completed dispositions to reduce outstanding debt.

As at March 31, 2025, AHIP had an unrestricted cash balance of $17.8 million compared to $27.8 million as at December 31, 2024. The reduction in cash was primarily due to net outflows from completed refinancings and debt repayment, which resulted in one property becoming unencumbered as of March 31, 2025. As at March 31, 2025, AHIP held a restricted cash balance of $30.5 million and had an additional $24.7 million available under the Portfolio Loan for capital improvements related to the properties secured by the loan.

HOTEL DISPOSITIONS

2025 Hotel Dispositions Summary

Hotel	Location	Gross Proceeds (millions of dollars)		Keys	Gross proceeds per key		Cap Rate (1)on 2024 annual hotel EBITDA	Actual/Estimated Closing Date
Completed Dispositions:
Homewood Suites Allentown Bethlehem Airport	Bethlehem, Pennsylvania	$11.7		113	$104,000		7.5%	March 27, 2025
Residence Inn Arundel Mills BWI Airport	Hanover, Maryland	$18.0		131	$137,000		8.5%	March 27, 2025
TownePlace Suites Arundel Mills BWI Airport	Hanover, Maryland	$11.5		109	$106,000		3.9%	March 27, 2025
Total completed in Q1 2025		$41.2		353	$117,000		6.9%
Dispositions Under Contract:
Hampton Inn Chickasha	Chickasha, Oklahoma	$4.0		63	$63,000		5.2%	Q2 2025
Holiday Inn Express & Suites Oklahoma City Bethany	Bethany, Oklahoma	$1.9		69	$28,000		(12.7%)	Q2 2025
Holiday Inn Express & Suites Chickasha	Chickasha, Oklahoma	$4.4		62	$71,000		4.3%	Q2 2025
Holiday Inn Express & Suites Dubuque West	Dubuque, Iowa	$3.0		87	$34,000		16.6%	Q2 2025
Holiday Inn Express & Suites Nevada	Nevada, Missouri	$5.2		68	$76,000		10.1%	Q2 2025
Holiday Inn Express & Suites Mattoon	Mattoon, Illinois	$4.0		69	$58,000		9.8%	Q2 2025
Holiday Inn Express & Suites Emporia	Emporia, Kansas	$5.9		68	$87,000		11.4%	Q2 2025
Holiday Inn Express & Suites Jacksonville	South Jacksonville, Illinois	$3.9		69	$57,000		(0.4%)	Q2 2025
Homewood Suites Kalamazoo Portage	Portage, Michigan	$17.4		97	$179,000		6.9%	Q4 2025
Total under contract		$49.7		652	$76,000		6.9%
Total completed and under contract		$90.9		1,005	$90,000		6.9%

(1)See “Non-IFRS and Other Financial Measures”

During the three months ended March 31, 2025, AHIP completed the dispositions of 3 hotel properties for total gross proceeds of $41.2 million. After adjusting for an industry standard 4% FF&E reserve, the combined sales price for the three hotel properties sold in Q1 2025 represents a blended Cap Rate of 6.9% on 2024 annual hotel EBITDA. The net proceeds from these dispositions were used to repay certain CMBS mortgage loans. AHIP’s enterprise value as at March 31, 2025 reflects an implied Cap Rate of 9.4% on 2024 annual hotel EBITDA for the portfolio of 46 hotel properties, based on the Canadian dollar closing price of CDN$0.58 per unit on the TSX on March 31, 2025 and converted to US dollars at a foreign exchange rate of CDN$1.43 to USD$1.

As of the date of this news release, AHIP has 9 hotel properties under purchase and sales agreements for estimated total gross proceeds of $49.7 million. Eight of these nine dispositions are currently estimated to close in the second quarter of 2025 and one disposition is estimated to close in the fourth quarter of 2025. AHIP intends to use the net proceeds from these dispositions to repay certain CMBS mortgage loans and a portion of the Portfolio Loan.

CAPITAL IMPROVEMENTS

AHIP’s capital projects include hotel brand mandated property improvement plans (“PIPs”) and FF&E improvements. Select projects may generate positive return on investment through the refreshment and upgrade of guest-facing items, ensuring that each property maintains its competitive advantage in the marketplace. AHIP currently has four hotel projects in the design phase for future renovations.

The 2025 capital plan is estimated to include $6.9 million in PIPs and $7.5 million in FF&E improvements, which will be funded through existing restricted cash and cash flow from operating activities. Actual capital spend on PIPs and FF&E was $0.1 million and $2.4 million, respectively, for the three months ended March 31, 2025. The majority of this capital spend will be funded through restricted cash contributed by AHIP in prior periods.

SELECTED INFORMATION

(thousands of dollars, except per Unit amounts)	March 31, 2025	March 31, 2024(restated)
Revenue	48,615	65,260
Income from operating activities	6,684	7,729
Loss and comprehensive loss	(22,370)	(9,530)
NOI	12,683	16,279
NOI Margin	26.1%	24.9%
Hotel EBITDA (1)	11,502	14,762
Hotel EBITDA Margin (1)	23.7%	22.6%
EBITDA (1)	9,130	12,441
EBITDA Margin (1)	18.6%	19.1%
Cashflow from operating activities	1,049	43
Dividends declared to Series C holders	1,160	1,099
FFO diluted (1)	(1,789)	2,550
FFO per unit - diluted (1)	(0.02)	0.03
Normalized FFO per unit - diluted (1)	(0.02)	0.02
AFFO diluted (1)	(4,415)	(452)
AFFO per unit - diluted (1)	(0.06)	(0.01)

(1) See “Non-IFRS and Other Financial Measures” (2) NOI and NOI margin included the IFRIC 21 property taxes adjustment   

SELECTED INFORMATION

(thousands of dollars)	March 31, 2025	December 31, 2024
Total assets	622,007	685,110
Total liabilities	461,903	501,091
Total non-current liabilities	399,700	275,501
Term loans and revolving credit facility	350,854	384,809
Debt to gross book value (1)	48.7%	49.3%
Debt to EBITDA (times) (1)	7.9	8.0
Interest coverage ratio (times) (1)	1.7	1.7
Term loans and revolving credit facility:
Weighted average interest rate	6.07%	5.72%
Weighted average term to maturity (years)	2.2	1.7
Number of rooms	5,092	5,445
Number of properties	46	49
Number of restaurants	14	14

(1) See “Non-IFRS and Other Financial Measures”

OPERATING RESULTS

	Three months ended March 31
(thousands of dollars)	2025	2024 (restated)
ADR (1)	135	131
Occupancy (1)	67.9%	66.4%
RevPAR (1)	92	87
Revenue	48,615	65,260
Operating expenses	26,601	35,618
Energy	2,686	2,910
Property maintenance	3,273	4,080
Property taxes, insurance and ground lease	3,372	6,373
Total expenses	35,932	48,981
NOI(2)	12,683	16,279
NOI Margin % (2)	26.1%	24.9%
Depreciation and amortization	5,999	8,550
Income from operating activities	6,684	7,729
Other expenses	29,377	18,992
Current income tax expense (recovery)	28	87
Deferred income tax expense (recovery)	(351)	(1,820)
Loss and comprehensive loss	(22,370)	(9,530)

(1) See “Non-IFRS and Other Financial Measures”(2) NOI and NOI margin included the IFRIC 21 property taxes adjustment.

FINANCIAL INFORMATION

This news release should be read in conjunction with AHIP’s unaudited condensed consolidated interim financial statements, and management’s discussion and analysis for the three months ended March 31, 2025 and 2024, that are available on AHIP’s website at www.ahipreit.com, and under AHIP’s profile on SEDAR+ at www.sedarplus.com.

RESTATEMENT OF PRIOR PERIODS

AHIP restated certain amounts in the 2024 comparative column in its unaudited condensed consolidated interim financial statements and management’s discussion and analysis for the three months ended March 31, 2025. The amounts included in the news release reflect the restatements retroactively. For further details, see Note 20 of the unaudited condensed consolidated interim financial statements and management’s discussion and analysis for the three months ended March 31, 2025.

Q1 2025 CONFERENCE CALL

Management will host a webcast and conference call at 10:00 a.m. Pacific time on Thursday, May 15, 2025, to discuss the financial and operational results for the three months ended March 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 news release.

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 news release.

Normalized FFO: calculated as FFO adjusting for non-recurring items. For the three months ended March 31, 2025, normalized FFO was equal to FFO as there were no non-recurring items. For the three months ended March 31, 2024, normalized FFO is calculated as FFO excluding the non-recurring insurance proceeds of $1.1 million for weather-related damage at several hotel properties in late December 2022. The most comparable IFRS measure to normalized FFO is income (loss) and comprehensive income (loss), for which a reconciliation is provided in this news release.

Normalized NOI: calculated as NOI adjusting for non-recurring items. For the three months ended March 31, 2025, normalized NOI was equal to NOI as there were no non-recurring items. For the three months ended March 31, 2024, normalized NOI included $0.1 million in business interruption insurance proceeds, respectively, related to the weather-related damage at several hotel properties in late December 2022. The most comparable IFRS measure to normalized NOI is NOI, for which a reconciliation is provided in this news release.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 news release.

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 news release.

Debt: calculated as the sum of term loans and revolving credit facility (where applicable), the face value of convertible debentures, unamortized portion of debt financing costs, lease liabilities and unamortized portion of mark-to-market adjustments. The most comparable IFRS measure to debt is total liabilities, for which a reconciliation is provided in this news release.

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 news release.

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 amortization of mark-to-market adjustments, 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 news release.

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, 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 2024 annual hotel EBITDA, after adjusting for an industry standard 4% FF&E reserve, for the portfolio of 46 hotel properties divided by the enterprise value.

CAPITAL MANAGEMENT MEASURES:

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. In Q1 2023 and Q2 2023, the same property ADR, occupancy, RevPAR and NOI margin calculations excluded the Residence Inn Neptune and Courtyard Wall in New Jersey as these two hotels had limited availability. In Q1 2025, Q1 2024 and Q2 2024, the same property ADR, occupancy, RevPAR and NOI margin calculations excluded the same two hotels for comparison purposes. Enterprise value: is a supplementary financial measure and is calculated as the sum of (i) total debt obligations as reflected on the March 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 March 31, 2025, converted to US dollars at a foreign exchange rate of CDN$1.43 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 March 31, 2025 Statement of Financial Position.  

NON-IFRS RECONCILIATION

INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) TO FFO

	Three months ended March 31
(thousands of dollars, except per unit amounts)	2025	2024(restated)
Loss and comprehensive loss	(22,370)	(9,530)
Adjustments:
Income attributable to non-controlling interest	(1,160)	(1,099)
Depreciation and amortization	5,999	8,550
Impairment of cash-generating units	14,790	4,103
Write-off of property, building and equipment	4	-
Gain on sale of properties	1,378	(242)
IFRIC 21 property taxes adjustment	(78)	892
Change in fair value of warrants	(1)	(120)
Deferred income tax expense (recovery)	(351)	(1,820)
Loss on deconsolidation of subsidiary	-	1,816
FFO basic(1)	(1,789)	2,550
Interest, accretion and amortization on convertible debentures	-	-
FFO diluted(1)	(1,789)	2,550
FFO per unit – basic(1)	(0.02)	0.03
FFO per unit – diluted(1)	(0.02)	0.03
Non-recurring items:
Other income	-	(1,102)
Measurements excluding non-recurring items:
Normalized FFO diluted(1)	(1,789)	1,448
Normalized FFO per unit – diluted(1)	(0.02)	0.02
Weighted average number of units outstanding:
Basic (000’s)	78,743	79,045
Diluted (000’s)(2)	80,667	79,930

(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 months ended March 31, 2025, and the three months ended March 31, 2024, excluded the convertible debentures because they were anti-dilutive.

RECONCILIATION OF FFO TO AFFO

	Three months ended March 31
(thousands of dollars, except per Unit amounts)	2025	2024(restated)
FFO basic (1)	(1,789)	2,550
FFO diluted (1)	(1,789)	2,550
Maintenance capital expenditures	(2,626)	(3,002)
AFFO basic (1)	(4,415)	(452)
AFFO diluted (1)	(4,415)	(452)
AFFO per unit - basic (1)	(0.06)	(0.01)
AFFO per unit - diluted (1)	(0.05)	(0.01)
Measurements excluding non-recurring items:
AFFO diluted (1)	(4,415)	(1,554)
AFFO per unit - diluted (1)	(0.05)	(0.02)

(1) See “Non-IFRS and Other Financial Measures”

DEBT TO GROSS BOOK VALUE

(thousands of dollars)	March 31, 2025		December 31, 2024
Debt	436,526		476,552
Gross Book Value	896,659		967,433
Debt-to-Gross Book Value	48.7%		49.3%

(thousands of dollars)	March 31, 2025	December 31, 2024
Term loans and revolving credit facility	381,393	423,949
2026 debentures (at face value)	49,730	49,730
Unamortized portion of debt financing costs	4,656	2,177
Lease liabilities	747	696
Debt	436,526	476,552

(thousands of dollars)	March 31, 2025	December 31, 2024
Total assets	622,007	685,110
Accumulated depreciation and impairment on property, buildings and equipment	267,916	275,424
Accumulated amortization on intangible assets	6,586	6,899
Gross Book Value	896,509	967,433

DEBT TO EBITDA

(thousands of dollars)	March 31, 2025	December 31, 2024
Debt	436,526	476,552
EBITDA (trailing twelve months)	55,253	59,456
Debt-to-EBITDA (times)	7.9x	8.0x

INTEREST COVERAGE RATIO

(thousands of dollars)	March 31, 2025	December 31, 2024
EBITDA (trailing twelve months)	55,253	59,456
Interest expense (trailing twelve months)	33,378	35,572
Interest Coverage Ratio (times)	1.7x	1.7x

The reconciliation of NOI to hotel EBITDA and EBITDA is shown below:

	Three months ended March 31
(thousands of dollars)	2025	2024(restated)
NOI	12,683	16,279
Management fees	(1,181)	(1,517)
Hotel EBITDA	11,502	14,762
General administrative expenses	(2,294)	(2,321)
EBITDA	9,208	12,441

The reconciliation of NOI to normalized NOI is shown below:

	Three months ended March 31
(thousands of dollars)	2025	2024(restated)
NOI	12,683	16,279
Business interruption insurance proceeds	-	92
Normalized NOI	12,683	16,371

The reconciliation of finance costs to interest expense is shown below:

	Three months ended March 31
(thousands of dollars)	2025	2024(restated)
Finance costs	9,790	10,845
Amortization of debt financing costs	(770)	(661)
Accretion of debenture liability	(286)	(263)
Amortization of debenture costs	(127)	(113)
Interest Expense	8,607	9,808

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 ended March 31, 2025 and 2024, available on AHIP’s website at www.ahipreit.com, and under AHIP’s profile on SEDAR+ at www.sedarplus.com.

FORWARD-LOOKING INFORMATION

Certain statements in this news release may constitute “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 management’s expectation as to the impacts on AHIP’s business of the seasonal nature of the lodging industry, inflation (including on labor and materials costs), competition and weather conditions; AHIP’s planned capital expenditures, including the estimated amount and timing of such expenditures and AHIP’s expected means of funding such expenditures; AHIP’s expectations regarding the effects of its planned capital expenditures; AHIP’s leverage and liquidity strategies and goals; 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, supply chain and other market financial and macroeconomic conditions in 2025 and the expected impacts thereof on AHIP’s financial position and performance, including on ADR, occupancy and RevPAR, NOI and NOI margins; AHIP navigating the uncertainty in the macroeconomic environment impacting operating performance and the transaction market; AHIP’s strategic initiatives and the intended outcomes thereof, including improved liquidity, addressing near-term debt maturities and providing AHIP with financial stability and preserve unitholder value; AHIP’s expectations with respect to the macroeconomic and operating environment, including certain specific expectations for the 2025 fiscal year; AHIP continuing to execute its strategy to sell hotel properties to enhance liquidity, reduce debt and manage future financial obligations; AHIP’s intended strategies for near-term debt maturities, including planned sales of assets and loan refinancing and the expected impacts thereof on AHIP’s financial performance and position; AHIP’s objective over the next 12 – 18 months to raise sufficient capital to address the redemption of the Series C Shares and the Debentures and the potential strategies for doing so; AHIP’s intention to bring approximately 20 additional hotels to market in 2025 and the factors that are expected to impact the number of hotels sold; 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) and AHIP’s expectation that following the sale of such properties AHIP will not have any debt maturities until the fourth quarter of 2026; 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, labor shortages, and supply chain disruptions will negatively impact the U.S. economy, U.S. hotel industry and AHIP’s business; the U.S. will not enter an economic recession; AHIP will continue to have sufficient funds to meet its financial obligations; AHIP’s strategies with respect to completion of capital projects, liquidity, addressing near-term debt maturities and 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 raising sufficient capital over the next 12 – 18 months to address the redemption of the Series C Shares and the Debentures; 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 2025; inflation, labor shortages, supply chain disruptions 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 renovations 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 liquidity, addressing near-term debt maturities and 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 and loan refinancings on the terms currently contemplated or in accordance with the timing currently contemplated, or at all; AHIP may not meet its objective raising sufficient capital over the next 12 – 18 months to address the redemption of the Series C Shares and the Debentures; AHIP will not sell all of the additional hotels it intends to bring to market in 2025; AHIP may not receive acceptable offers on some or all of the additional properties it intends to bring to market in 2025; AHIP may not be successful in reducing its leverage; 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 are expected to be refinanced at significantly higher interest rates; general economic conditions and consumer confidence; 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 annual information form, 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: AHIP’s 2025 capital plan; estimated proceeds from the planned disposition of certain hotel properties and the expected use thereof and impact thereon on AHIP’s financial position; and management’s expectations for certain aspects of AHIP’s financial performance for the remainder of 2025.

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.

For additional information, please contact:

Investor Relationsir@ahipreit.com