INVESTOR PRESENTATION December 4, 2019 TSX: HOT.UN (CAD$) | TSX: - - PowerPoint PPT Presentation

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INVESTOR PRESENTATION December 4, 2019 TSX: HOT.UN (CAD$) | TSX: - - PowerPoint PPT Presentation

INVESTOR PRESENTATION December 4, 2019 TSX: HOT.UN (CAD$) | TSX: HOT.U (US$) | TSX: HOT.DB.U (Debentures) Forwardlookingstatements This corporate update is a summary and should be read together with the more detailed information, financial


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INVESTOR PRESENTATION

TSX: HOT.UN (CAD$) | TSX: HOT.U (US$) | TSX: HOT.DB.U (Debentures)

December 4, 2019

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Forwardlookingstatements

This corporate update is a summary and should be read together with the more detailed information, financial data and statements made available by American Hotel Income Properties REIT LP (the “REIT”). This corporate update contains forward- looking statements which reflect management’s expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance and business prospects and opportunities of the REIT. The words “plans”, “expects”, “scheduled”, “estimates”, “intends”, “anticipates”, “projects”, “believes” or variations of such words and phrases or statements to the effect that certain actions, events or results “may”, “will”, “could”, “would”, “might”, “occur”, “be achieved” or “continue” and similar expressions identify forward-looking statements. Some of the specific forward- looking statements in this corporate update include, but are not limited to, statements with respect to the ability of the REIT to execute its growth strategies; the expected tax treatment of the REIT and of the REIT’s distribution to Unitholders; the expected growth in the U.S. lodging industry and trends; and other considerations which are outlined in the REIT’s Annual Information Form dated March 22,

  • 2019. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered

reasonable by management of the REIT as of the date of this corporate update, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The REIT’s estimates, beliefs and assumptions, which may prove to be incorrect, include the various assumptions set forth herein, including, but not limited to the REIT’s future growth potential, results of operations, future prospects and opportunities, industry trends remaining unchanged, no change in legislative or regulatory matters, future levels of indebtedness, the tax laws as currently in effect remaining unchanged, the continual availability of capital and the current economic conditions remaining

  • unchanged. When relying on forward-looking statements to make decisions, the REIT cautions readers not

to place undue reliance on these statements, as forward-looking statements involve 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 the times at or by which such performance or results will be

  • achieved. A number of factors could cause actual results to differ materially from the results discussed

in the forward-looking statements, including, but not limited to, the factors discussed under the “Risk Factors” in the REIT’s latest Management’s Discussion and Analysis. The forward- looking information contained herein is made as of December 4, 2019 and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update or revise such information. Allfigur urespresen ented edarein inU.S.doll llars,unless ssother erwise sestated ed. Courtyard Wall Township, New Jersey

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Cover image: Hampton Inn & Suites Corpus Christi (TX)

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Company overview

79 Hotels; 8,887 Guestrooms 22 States; 51 Cities 15 hotel brands operated through 5brand families

American Hotel Income Properties REIT LP (“AHIP”)

▪ Invests in high-quality premium branded hotel properties, primarily in the Upper-midscale to Upper-Upscale chain scale segments, including such brands as Embassy Suites, Residence Inn, Hampton Inn and Holiday Inn Express ▪ Hotels are located across the U.S., primarily in larger secondary markets (such as Cincinnati or Baltimore) that benefit from multiple demand generators (i.e. business parks, sports arenas, medical centres)

Properties were purchased below replacement cost, with an average trailing 8% cap rate using long-term fixed-rate debt.

CURRENT PORTFOLIO:

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Summary of key information (as at Q3 2019)

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Canadian dollar TSX ticker HOT.UN (trades in CAD$, monthly distributions paid in USD) US dollar TSX ticker HOT.U (trades in USD$, monthly distributions paid in USD) Units outstanding 78,122,528 (unit outstanding) Convertible Debentures HOT.DB.U (5.0% interest paid semi-annually in USD) Market Cap C$530 million (As at December 3, 2019) Debt to Gross Book Value 54.1% Monthly USD cash distribution USD$0.054 FFO Payout Ratio (Rolling 4-quarters, as at Q3 2019) 92.0% Target FFO Run-rate Payout Ratio Approximately 72% (at the completion of AHIP’s hotel renovation program)

All information as of September 30, 2019 unless otherwise noted.

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A strategy focused on sustainable returns

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How our business and strategy has evolved

Courtyard Wall Township, New Jersey

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Strategy focused on long-term returns

Shift to higher-quality, premium branded hotels

  • Focused specifically on growing
  • ur portfolio of premium

branded, select-service hotels in secondary markets (U.S. cities

  • utside of the top 25 markets)
  • Hotels in these regions often

benefit from multiple demand generators

  • Diverse, recognized hotel brands

Capital Recycling

  • In the past year AHIP has sold 48

hotels that no longer met our long- term strategy, such as the Economy Lodging portfolio.

  • On December 3, 2019, AHIP acquired

12 additional Premium Branded hotels that are on average only four years in age.

  • Actively reviewing other opportunities

to enhance our hotel portfolio through other capital recycling or growth opportunities 6

Focused Asset Management

  • Expanded asset management

team continuously evaluates hotel performance and market positioning, to ensure our third- party hotel manager delivers the best possible performance AHIP’s strategy is focused on generating sustainable, growing cash flows from proven hotel properties, to deliver long-term value to our unitholders through monthly distributions and unit price appreciation. Key to achieving this are three core activities:

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Recent sale of Economy Lodging portfolio

On November 28, 2019, AHIP sold its 45 Economy Lodging hotels to Vukota Capital Management (“VCM”) for US$215.5 million, excluding adjustments

  • All rail crew lodging contracts associated with these hotels have also be transferred to the new owners
  • All hotels sold were classified as Economy hotels and are licensed under the Baymont Inn & Suites,

Days Inn, Super 8 or Travelodge brands (Wyndham brands)

  • The sale has simplified AHIP’s business structure and allows management to focus exclusively on

growing and driving performance of its growing Premium Branded hotel portfolio

  • Proceeds from the sale were redeployed towards the acquisition of additional higher-quality Premium

Branded hotels 7

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Acquisition of 12 Premium Branded hotels for US$191 million

On December 3, 2019, AHIP acquired 12 Premium Branded hotels for $191 million excluding closing and post-closing adjustments

  • Purchasing cap rate of approximately 8%, based on trailing 12 months of

net operating income and AHIP’s cost structure

  • The hotels, all built in the last five years, were acquired below

replacement cost at $158,800/key

  • 12 hotel properties represent 1,203 guestrooms
  • Properties are in midscale to upscale chain scale segments and franchised

under Marriott, Hilton or IHG flags

  • Portfolio adds greater geographic diversification to AHIP’s portfolio,

growing our exposure in the U.S. Midwest and Texas (10 of the 12 hotels are located in new markets for AHIP)

  • All hotels are located in secondary metropolitan markets with multiple

demand generators

  • AHIP has used net proceeds from the sale of its Economy Lodging

portfolio, alongside a $105 million new fixed rate term loan to finance the acquisition 8

Why grow in Pittsburgh? CBRE now lists Pittsburgh as having the second highest long-term RevPAR growth expectations (until 2024) of all U.S. markets, following

  • nly San Francisco.

Why expand in Texas? The markets the six Texas hotels are located in all benefit from multiple demand generators, or are strategically located:

Corpus pus Christi sti – near the expandingport Houston ston– largeeconomic center Midland dland– locatedacross the street from a newly established10,000 sq. ft.corporate headoffice San Angel gelo – Near military base, medical centers, agricultural auctions, in additional to government agencies, oil and gas firms, and agricultural research centers.

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Acquisition of 12 Premium Branded hotels

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Courtyard Bismark North (ND) Courtyard St. Paul Woodbury (MN) Fairfield Inn & Suites Pittsburgh Airport Robinson Township (PA)

Growing our presence in the U.S. Midwest, with these six properties:

Towneplace Suites Pittsburgh Airport Robinson Township (PA) Residence Inn St. Paul Woodbury (MN) Homewood Suites Kalamazoo Portage (MI)

1.7 years old | 120 guestrooms 3.9 years old | 97 guestrooms 4.0 years old | 103 guestrooms 3.0 years old | 116 guestrooms 5.0 years old | 89 guestrooms 3.3 years old | 93 guestrooms

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Acquisition of 12 Premium Branded hotels

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Hampton Inn & Suites Corpus Christi (TX) Residence Inn San Angelo (TX) Home2 Suites San Angelo (TX) Home2 Suites Midland (TX) Staybridge Suites Midland (TX) Home2 Suites Houston Willowbrook(TX)

Growing our presence in Texas, with these six properties:

4.0 years old | 101 guestrooms 4.0 years old | 92 guestrooms 4.0 years old | 98 guestrooms 3.1 years old | 108 guestrooms 4.2 years old | 93 guestrooms 4.7 years old | 93 guestrooms

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Focused on U.S. secondary markets

Hotels located in secondary metropolitan markets across the U.S. (such as Cincinnati or Columbus)

  • Acquisition of 12 additional hotels further diversifies AHIP’s geographic exposure in the Midwest and Texas

AHIP’S PREMIUM BRANDED HOTELS 12 RECENTLY ACQUIRED HOTELS ADDED TO AHIP’S PORTFOLIO

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Consistent with AHIP’s investment strategy, all properties are strategically located within or near: ▪ Larger population centers ▪ Transportation corridors ▪ Demand generators

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Quality branded hotel portfolio

AHIP has strategically grown its Premium Brandedportfolio since its IPO with a focus on:

  • Increasing the size of its properties and improving the quality of earnings,
  • Purchasing hotels in larger markets, and,
  • Geographically diversifying its asset base

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HOTEL PORTFOLIO EVOLUTION Portfolio composition (by NOI) RevPAR $46.15¹ $73.29 $76.80 $97.00 ADR $56.52¹ $96.43 $114.58 $128.00 Portfolio size 32 hotels / 2,565 rooms 112 hotels / 11,523 rooms 67 hotels / 7,684 rooms 12 hotels / 1,203 Average # of rooms per hotels 80 103 115 100

For period: IPO to Dec. 31, 2013 Year ended Dec. 31, 2018

Premium Branded Economy Lodging (i.e. “Rail hotels”)

100% Economy Lodging 79.9%

20.1% AHIP’s established67 Premium Branded hotels

(TTM Sept. 30, 2019)

100% % Premium emium Bran anded ded 12 hotels recently acquired

(TTM Sept. 30, 2019)

100% % Premium emium Bran anded ded

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Upper midscale to Upper upscale select-service hotels

13 Select-service hotels generally benefit from higher margins than luxury hotels, by operating newer, more efficient hotels than many full-service properties. AHIP focuses its portfolio on hotels that are franchised under some of the world’s leading hotel brands – through Marriott, Hilton and Intercontinental Hotel Group (IHG).

AHIP’S PREMIUM BRANDED HOTELS OPERATE UNDER THE FOLLOWING BRANDS:

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Dedicated Asset Management team

Continuous review and oversight of each hotel property ensures our properties are best positioned as possible

  • Asset management team members monitor,

forecast and continuously review

  • We are in contact with our hotel manager to

determine what is working well or not working

  • Ensures that we pinpoint activities that drive

performance and benchmark them for other properties, while also ensuring immediate issues are quickly addressed

Modeling and forecasting returns from hotel renovations (PIPs) help us best allocate capital

  • Asset Management team routinely review the

condition of our hotels, their market position, and forecasted PIP requirements to ensure we allocate

  • ur capital in a way that generates the highest

returns, while meeting our brand standards. AHIP’s asset management team is responsible for

  • verseeing our third-party hotel manager –Aimbridge

Hospitality

  • Participate in weekly property update calls
  • Review revenue management strategies to ensure they are

driving optimal results for our properties

  • Continuously advocate for expense reduction wherever possible,

through shared resources, group buying, productivity

  • Oversight of capital investment program

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Aimbridge Hospitality: Benefits of a large hotel manager

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In April 2018, Aimbridge Hospitality assumed all hotel management responsibilities On October 25, 2019, Aimbridge merged with Interstate Hotels and Resorts, positioning them as the largest independent hotel management company in the U.S., managing more than 1,400 hotels

Benefits of working with a large hotel manager:

  • Stronger purchasing power
  • Deeper talent pools
  • More powerful technology and reporting systems
  • Aimbridge has long-standing and deep-seeded relationships with many of the

brands AHIP’s hotels are licensed with

On November 7, 2019, AHIP announced that it had negotiated new contract terms with Aimbridge that are expected to strengthen AHIP’s margins, cash flow and growth potential over the next several years

  • Reduced management fees (of 2.5% of revenue) for existing hotels until December 31, 2021
  • Reduced management fees (of 2.0% – 2.5% of revenue) for newly acquired hotels for 5 years

(from date of acquisition)

  • Capped property accounting and revenue management costs
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Financial Performance

TTM as at Q3 2019

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Embassy Suites Cincinnati – Lobby Renovation

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$0.76 $0.71

Q3 2018 Q3 2019

TTM FFO PER UNIT

12-month trailing figures (as at quarter end)

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* Trailing 12 month metrics are based on performance as reported at each quarter end

(USD$)

Hotels REITs are more seasonal than other real estate sectors with Q2 and Q3 seasonally stronger AHIP is best reviewed and evaluated on a TTMor annual basis to account for seasonal changes

  • AHIP’s revenue and NOI/EBITDA margins are typically much higher in Q2 and Q3 than in Q1 and Q4

$154.4 $164.8 $168.9 $173.5 $195.1 $220.0 $265.8 $303.7 $323.1 $343.5 $341.2 $338.6 $338.0 $338.2 $338.7

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019

TTM Revenue (USD$ millions)

$45.0 $49.0 $50.7 $52.4 $58.5 $65.8 $81.4 $89.8 $93.3 $101.0 $96.8 $93.8 $94.1 $94.0 $93.2

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019

TTM EBITDA (USD$ millions)

$30.9 $33.8 $34.9 $36.6 $41.0 $45.0 $54.3 $58.6 $58.3 $61.9 $58.9 $55.6 $55.7 $55.7 $54.9

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019

TTM FFO (USD$ millions)

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Fiscal year performance (USD$)

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ANNUAL RESULTS 2017

12 months ended December 31, 2017

2018

12 months ended December 31, 2018 TTM Q3 2019 12 months ended

  • Sept. 30, 2019

Number of Guestrooms

11,708 11,523 11,524

Revenue (‘000)

$303,710 $338,561 $338,652

EBITDA (‘000)

$89,761 $93,839 $93,452

EBITDA Margin

29.6% 27.7% 27.6%

FFO per diluted unit

$0.82 $0.70 $0.71

Debt/Gross Book Value

53.9% 53.6% 54.1%

WA Loan Interest Rate

4.61% 4.65% 4.64%

WA Loan Term

7.6 years 6.4 years 5.7 years

Wingate Tampa, Florida Residence Inn Mount Laurel, NJ

AHIP’s performance is best reviewed on an annual or trailing 12-month basis, to account for seasonal differences that materially affect quarter results

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Well positioned for today’s economic environment

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Evaluating our external environment

Springhill Suites Arundel Mills (Baltimore)

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U.S. hotel sector growth forecast

STR1 forecasts for 2019 and 2020:

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¹ STR Forecasts provided November 19, 2019 for total United States hotel sector

STR Forecasts for U.S. hotel sector1

Metric 2019 Forecast 2020 Forecast Supply 2.0% 2.0% Demand 1.8% 1.5% Occupancy

  • 0.2%
  • 0.4%

ADR 1.0% 0.9% RevPAR 0.8% 0.5%

RevPAR growth that is driven by rising ADR should contribute to margin expansion

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Well positioned for changing economic conditions

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Guestroom rates can change daily (ability to mitigate any inflationary risk)

▪ Unlike other REIT sectors where revenue is derived from long-term leases, hotel REITs provide a natural inflationary hedge due to the daily pricing adjustments of guestroom rates ▪ Useful in offsetting cost pressures in inflationary times ▪ Yield management allows our hotel manager to price rooms inventory according to daily changes in demand and room rate trends

Hilton Garden Inn White Marsh

Secondary market locations are better positioned for recessionary periods

▪ AHIP hotels are located in secondary markets that often benefit from multiple demand generators (such as hospitals and universities), as opposed to tourism-led markets (which often experience the most performance volatility) ▪ Business travellers often downgrade from luxury hotels to mid-scale hotels (such as AHIP’s hotels) in challenging economic periods ▪ As hotels are operating businesses, AHIP’s hotel manager has the ability to adjust certain variable expenses compared to

  • ther real estate sectors
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Debt structure shields AHIP from rising interest rates

Leveraged to growing economy, not interest rates Long-term, fixed rate debt structure shields AHIP from short-term changes in interest rates

▪ Majority of AHIP’s debt is fixed rate ▪ No significant debt maturities until June 2022

Hilton Garden Inn White Marsh

DEBT MATURITY LADDER (As at December 3, 2019, USD$ millions)

$0 $50 $100 $150 $200 2019 2020 2021 2022 2023 2024 2025 2026 2027 Loans and Mortgages Convertible Debentures

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Driving stronger performance

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What are we doing to strengthen

  • ur business?

Residence Inn, Ocala, Florida

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Driving long-term returns and cash flow

Focusing entirely on growing our portfolio of Premium Branded hotel properties

In the past year AHIP has sold economy 48 hotels that no longer fit the Company’s long-term strategy

Reinvested the proceeds from hotel sales into 12 newer, higher-quality hotels to expand our purely Premium Branded portfolio of hotels

Driving RevPAR (Revenue per available room) growth through:

Revenue management (yield management)

Hotel upgrades and renovations (PIP projects)

Strong market position within our hotel markets, with an average Premium Branded hotel RevPAR index of more than 100%

  • f our fair market share (Q3 2019: 117.6, with 100 representing ‘fair share’)

Investing in our hotels to make them best in class and drive higher market share and demand

During 2019, AHIP expects to invest $25 million of capital in 10 Premium Branded hotel renovations

Five hotels have already completed their renovations in 2019

  • Approx. $14 million of pre-funded hotel upgrades/renovations (referred to as Property Improvement Plans, or PIPs) were

completed during 2018 for Premium Branded hotels

Implemented an Internal asset management team

Overseeing and enhancing the performance of the hotel portfolio to drive stronger returns for unitholders

Working closely with AHIP’s external hotel manager, the Asset Management team monitors the supply and demand dynamics of specific hotel markets to ensure that each property is consistently well positioned to maximize profitability

Developing long-term strategic plans for each hotel property, including all hotel renovations and capital recycling

Focus on margin expansion, with oversight regarding cost containment initiatives

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2019 hotel renovations and upgrades

Residence Inn Chattanooga near Hamilton Place (TN) – approx. $1.5 million

  • COMPLETED AUGUST 2019

Updated all guestroom furniture, artwork, window treatments, carpeting and wall finishings

Modernized the lobby and meeting rooms, with new carpeting, wall finishings, drapery, and lighting.

Expanded and renovated the fitness center, and updated with all-new exercise equipment

Homewood Suites Bethlehem (PA) –

  • approx. $1.9 million

COMPLETED JULY 2019

Complete transformation of the lobby

All guest suites remodeled with new furniture and soft goods, new TVs, and new wall finishings

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The renovated lobby of the Residence Inn Chattanooga The renovated lobby of the Residence Inn Chattanooga

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2019 hotel renovations and upgrades

Embassy Suites Phoenix Tempe (AZ) –

  • approx. $4.2 million
  • COMPLETED JULY 2019

Complete guestroom remodeling, including new wall finishings, carpeting/flooring, furniture and electronics

Fairfield Inn & Suites Jacksonville (FL) – approx. $0.9 million

COMPLETED JULY 2019

Updates to the lobby, all guestrooms, corridors and public areas

Homewood Suites Allentown (PA) –

  • approx. $2.2 million

COMPLETED JULY 2019

Complete transformation of the lobby

All guest suites remodeled with new furniture and soft goods, new TVs, and new wall finishings

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Updated guestroom at the Embassy Suites Phoenix Tempe Updated lobby of the Homewood Suites Allentown

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2018 Embassy Suites hotel renovations and upgrades

Embassy Suites, DFW South (Irving, TX) –

  • approx. $5.2 million
  • COMPLETED AUGUST 2018

Complete atrium and lobby renovation

Modernized restaurant and lobby bar concept

Elevator replacements and modernization

Embassy Suites, Cincinnati RiverCenter (Covington, KY) – approx. $2.3 million

COMPLETED NOVEMBER 2018

Complete atrium and lobby renovation

Modernized restaurant and lobby bar concept

Guestroom corridor updates

Guestroom furniture/artwork updates

Guestroom bathroom updates

Updated public restrooms

Renovated pre-conference lobby

Embassy Suites, Columbus (Dublin, OH) –

  • approx. $2.9 million

COMPLETED JANUARY 2019

Complete atrium and lobby renovation

Modernized restaurant and lobby bar concept

Updated public restrooms

Renovated conference and boardrooms and pre- conference lobby

Guestroom bathroom updates

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Final renovated atrium and lobby bar at DFW South Renovated Trattoria restaurant at DFW South

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Embassy Suites – Cincinnati upgrades and renovations

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After Renovations:

  • 1. Front Desk
  • 2. New Atrium Bar
  • 3. Breakfast Buffet

1. 2.

3.

Prior to Renovations:

  • 1. Front Desk
  • 2. Breakfast Buffet

1. 2.

BEFORE AFTER

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Experienced Management Team

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John O’Neill

Chief Executive Officer

Azim Lalani

Chief Financial Officer

Chris Cameron

Chief Investment Officer

Bruce Pittet

SVP, Asset Management & COO

Anne Yu

Vice President, Finance

▪ Hotel industry veteran, with 30 years of experience in hotel investment, development and management ▪ Co-Founder of American Hotel Income Properties REIT LP ▪ Previously CEO of ONE Lodging – AHIP’s former external hotel manager ▪ More than 20 years of experience in financial reporting, corporate finance, operations, business valuation, taxation and risk management ▪ Senior Vice President of Operations for two TSX-listed commercial REITs ▪ Vice President of Real Estate and Risk Management at SilverBirch Hotels & Resorts ▪ Audit Manager at KPMG ▪ A Chartered Professional Accountant with more than 14 years of experience in the hotel industry ▪ Has led acquisitions, debt financing and hotel operations teams in prior roles ▪ Previously Senior Vice President at a North American hotel owner, developer and operator. ▪ Worked with AHIP on its IPO and advised AHIP during several other portfolio acquisitions since AHIP’s inception ▪ More than 30 years of hotel management, planning and operating experience across North America, with the last 20 years spent in the U.S. ▪ Has experience in, and has completed market analysis of, more than 100 U.S. hotel markets ▪ Has been a leader of multiple major property launches, turnarounds, and re-positioning initiatives ▪ Previously Senior Vice President at ONE Lodging, which is a part of Aimbridge Hospitality, where he oversaw AHIP’s hotel portfolio ▪ More than 15 years experience in financial reporting, internal controls, corporate finance and Canadian and US tax. ▪ Manager at Pricewaterhouse Coopers ▪ Controller and Manager of Financial Reporting of Sterling Shoes Inc. ▪ Controller of Ventyx Software Solutions Inc. (formerly MDSI Mobile Data Solutions Inc.)

Executive team has nearly 80 years of collective real estate investing experience

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Executing a strategy to grow a high-quality hotel portfolio

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TAKING ACTION TO DRIVE STRONGER PERFORMANCE

Investing in our hotels to make them best in class and drive higher market share and demand

  • Approximately $14 million of hotel renovations were

completed during 2018.

  • Approximately $25 million of hotel renovations will be

completed in 2019.

Actively acting on Capital Recycling opportunities

  • Sold Economy Lodging portfolio of 45 hotels (closed on
  • Nov. 26, 2019)
  • Reviewing other assets that may not fit with our

long-term strategy

Growing our Premium Branded hotel portfolio

  • Announced the acquisition of 12 additional Premium

Branded hotels that were all built in the last five years

  • Transaction expected to close during December 2019

Staybridge Suites Tampa East Embassy Suites Cincinnati

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Appendices

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  • Secondary U.S. market rationale
  • 2019 PIP schedule
  • 2018 PIP schedule (Completed)
  • Noteworthy properties

Residence Inn, Pittsburgh Cranberry Township

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Why U.S. secondary markets? Why select service Hotels?

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0.0 1.0 2.0 3.0 4.0 5.0 Primary Secondary Markets

Economic Outlook

  • GDP forecasts are the highest correlation to performance of the U.S. hotel industry
  • The U.S. Federal Reserve Board projects 2.0% GDP growth in 2020
  • The U.S. hotel industry continues to achieve strong performance including record occupancy levels, growing RevPAR

fueled by rising ADR Area of Opportunity 3.4M guestrooms U.S. Canada

U.S. Secondary Markets

  • Includes cities such as Cincinnati and Baltimore
  • 3.4 million guestrooms (vs 1.6 in Primary markets)
  • Deep pipeline of high quality assets
  • Strategically located within or near large population

centres (>2M pop.), transportation corridors and demand generators

Select Service Hotel Advantages

  • Higher margins with lower volatility
  • Strong consumer demand and broad appeal
  • Simple operational model; more efficient than full-

service hotels

Million guestrooms

400,000 guestrooms

Top 6 Cities Top 25 Cities

GUESTROOMS BY COUNTRY / MAJOR CITIES

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2019 Property Improvements

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Scheduled Renovation Dates

Hotel Name and and Guestroo

  • oms

Q1 2019 Q2 2019 Q3 2019 Q4 2019

Fair irfield ield Inn n & Suites Jacksonville

  • nville (89 guestrooms)

X Completed Resid idenc nce Inn Chattanooga nooga (87 guestrooms) X X Completed Homewood ewood Suites Allen entown

  • wn (108 guestrooms)

X Completed Homewood ewood Suites Bethle hlehem hem (108 guestrooms) X Completed Homewood ewood Suites Dover ver (108 guestrooms) X X X Holid iday y Inn Expr press ess Fort Myers (111 guestrooms) X X Holid iday y Inn Expr press ess Sarasot

  • ta (101 guestrooms)

X X Embassy y Suit ites es Tempe pe (224 guestrooms) X Completed Embassy y Suit ites es Clev evela eland nd (271 guestrooms) X X Completed Townep epla laceSuit ites es Chattanoog nooga (87 guestrooms) Completed

During 2019, AHIP expects to invest approx. $25 million of capital in hotel renovations. Due to the type of hotel upgrades being completed, AHIP forecasts less than $2 million of impact to NOI from renovation displacement. The following hotel properties are scheduled to undergo renovation projects in 2019:

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2018 PIP projects (Completed)

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Scheduled Renovation Dates

Hotel Name and and Guestroo

  • oms

Q1 2018 2018 Q2 2018 Q3 2018 2018 Q4 2018 2018

Embassy y Suit ites es Cinc ncinna innati i (227 guestrooms) Ongoing Ongoing Completed Embassy y Suit ites es DFW W South uth (305 guestrooms) Ongoing Ongoing Completed Hilton

  • n Garden

en Inn Whit ite e Marsh h (155 guestrooms) Completed Embassy y Suit ites es Colum umbus us (284 guestrooms) Ongoing Ongoing Completed Staybrid idge e Suit ites es Tampa pa East/Brando ndon n (100 guestrooms) Completed Resid idenc nce Inn Baltimor more e Whit ite Marsh h (131 guestrooms) Completed

The following hotel properties completed PIP projects that were valued at more than US$500,000 in 2018:

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Noteworthy hotel properties

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Embassy Suites Dallas Fort Worth (Airport South) Embassy Suites Cleveland Springhill Suites Arundel Mills (Baltimore)

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Noteworthy hotel properties

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Embassy Suites Cincinnati Embassy Suites Columbus (Dublin) Embassy Suites Phoenix Tempe

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37 www.ahipreit.com info@ahipreit.com (604)630-3134 800-925 West Georgia Street Vancouver, BC V6C 3L2Canada

Questions? Please contact us at: