Star Metro - American Hotel Income Properties REIT LP Reports Q3 2026 Results

INITIATIVES TO STRENGTHEN FINANCIAL POSITION AND IMPROVE UNITHOLDER VALUE

The Board of Directors (the "Board"), together with management, have implemented a plan to strengthen AHIP's financial position and to improve unitholder value. Certain initiatives, and progress made to date, are outlined below.

REVIEW OF STRATEGIC ALTERNATIVES

On May 4, 2026, AHIP announced that its Board initiated a review of strategic alternatives (the "Strategic Review") to maximize unitholder value. During the Strategic Review, the Board will analyze and evaluate a range of alternatives. AHIP retained Robert W. Baird & Co. Incorporated ("Baird") as financial advisor to advise AHIP in connection with its Strategic Review.

AHIP continues to make progress since the review was announced, but has not yet established a definitive timeline to complete the Strategic Review or any potential transaction. There can be no assurance that the engagement of Baird or the Strategic Review will result in any transaction or initiative or, if a transaction or initiative is undertaken, as to the terms or timing of such a transaction or initiative. AHIP does not currently intend to disclose further developments in connection with or arising from the Strategic Review or in connection with any transaction, initiative or related matter, unless and until it is determined that disclosure is necessary or appropriate.

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 eighteen hotel properties in 2025 for total gross proceeds of $160.8 million and twelve hotel properties to date in 2026 for total gross proceeds of $166.5 million, which has improved the overall portfolio asset quality, while also significantly reducing total debt. AHIP also completed two loan refinancings in 2025 for total gross proceeds of $144.3 million and two loan financings in 2026 for gross proceeds of $37.0 million. The net proceeds from these sales along with a portion of the proceeds from the loan refinancings, were used to repay the CMBS loans secured by those properties, a portion of the Portfolio Loan, add to AHIP's cash balance and to redeem $25.0 million of the outstanding Series C Shares.

AHIP had a $22.3 million CMBS loan maturing in November 2026. The hotels securing this CMBS loan were sold between October 6, 2026 and October 14, 2026, resulting in full repayment of the CMBS loan. AHIP's 6.0% unsecured subordinated convertible debentures (the "Debentures") mature on December 31, 2026. Effective January 28, 2026, the dividend rate on the 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 with the holders of the Series C Shares apply which may reduce AHIP's flexibility until such time as the Series C Shares have been fully redeemed. On January 28, 2027, the dividend rate would increase to 16.5%. On March 13, 2026, AHIP redeemed $25.0 million of the $50.0 million stated face value of the Series C Shares, which results in a remaining $25.0 million stated face value.

As noted above the Board is currently conducting the Strategic Review through which the Board is considering a range of alternatives, which is expected to include additional asset sales. The number of potential hotel dispositions will be dependent on the outcome of the Strategic Review as well as; regional market factors, hotel performance, nature and value of any offers and whether any portion of the remaining Series C Shares and/or Debentures are recapitalized. With closings of hotels currently under contract and additional planned hotel sales, AHIP plans to be in a position to redeem the remainder of the Series C Shares and the Debentures. The timing of such redemptions will be dependent on the timing of the completion of the sale of hotels currently under contract and any further asset sales.

HOTEL DISPOSITIONS

2026 Hotel Dispositions

During the nine months ended September 30, 2026, AHIP completed the dispositions of nine hotel properties for total gross proceeds of $145.1 million. After adjusting for an industry standard 4% FF&E reserve, the combined sales price for the nine hotel properties sold in the nine months ended September 30, 2026, represents a blended Cap Rate of 7.4% on 2025 annual hotel EBITDA. The net proceeds from these dispositions were used to repay certain CMBS mortgage loans and certain Portfolio Loans and added to AHIP's cash balances.

As at the date of this news release, AHIP has nine hotel properties under purchase and sale agreements ("PSAs") of which six are classified as held for sale. These sales are expected to close during the fourth quarter of 2026 and first quarter of 2027. Upon closing, these sales would represent total gross proceeds of $137.3 million at a blended Cap Rate of 8.9% on 2025 annual hotel EBITDA. The net proceeds from the sale of these hotels will initially be added to unrestricted cash with the final use subject to the outcome of the Strategic Review.

NORMAL COURSE ISSUER BID AND AUTOMATIC SECURITIES PURCHASE PLAN

In December 2025, the TSX approved AHIP's notice of intention to make a normal course issuer bid (the "2026 NCIB"). The notice provides that AHIP may, during the twelve-month period commencing December 30, 2025 and ending December 29, 2026, purchase up to 6,801,276 Units trading under the symbols HOT.UN and HOT.U, representing 10% of the "public float" (as defined in the TSX Company Manual) as of December 22, 2025. AHIP also entered into an Automatic Securities Purchase Plan ("ASPP") with a designated broker. The ASPP allows for the purchase of Units under the 2026 NCIB when AHIP would ordinarily not be permitted to purchase Units due to regulatory restrictions and customary self-imposed blackout periods.

As of the date of this news release, AHIP had purchased 2.5 million Units for CAD$1.4 million under the 2026 NCIB at an average purchase price per Unit of CAD$0.56, of which 2.4 million Units have been cancelled.

2026 THIRD QUARTER REVIEW

FINANCIAL AND OPERATIONAL HIGHLIGHTS

For the three months ended September 30, 2026, ADR increased 9.2% to $154, and occupancy increased by 410 bps to 79.2%, compared to the three months ended September 30, 2025. Overall, improved ADR and occupancy resulted in an increase of 15.1% in RevPAR to $122, compared to the three months ended September 30, 2025. The improved performance is primarily attributable to improvements in same property RevPAR as a result of improved market conditions and revenue management.

NOI was $9.5 million for the three months ended September 30, 2026, a decrease of 25.9%, compared to NOI of $12.9 million for the three months ended September 30, 2025. The decrease in NOI was primarily due to the disposition of the eighteen hotel properties completed in 2025 and nine hotel properties completed in 2026, partially offset by a 23.5% or $1.9 million increase in same property NOI.

NOI margin was 34.1% for the three months ended September 30, 2026, an increase of 700 bps compared to 27.1% for the same period of 2025. The increase in NOI margin was due to higher revenue from growth in occupancy and RevPAR and disposition of hotels with lower-than-average portfolio RevPAR, partially offset by higher operating expenses as a result of increases in room labour expenses, utilities, and maintenance expenses.

Diluted FFO per unit for the three months ended September 30, 2026, was ($0.01) compared to diluted FFO per unit of $0.02 for the three months ended September 30, 2025. The decrease in diluted FFO per unit was mainly due to lower NOI as a result of sold properties partially offset by increase in same property NOI from revenue growth.

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.

In the third quarter of 2026, same property ADR was $155, an increase of 5.4% compared to the same period in 2025. Same property occupancy increased by 410 bps to 80.1% in the current quarter, compared to the same period in 2025. The increase in same property ADR is primarily attributable to improved retail segment and government travel.

Same property NOI increased by 23.5% compared with the same period in 2025 and same property NOI margin increased by 390 bps in the current quarter. These changes resulted from higher RevPAR, ADR and occupancy partially offset by higher operating expenses as a result of higher room labour expenses, utilities and maintenance expenses.

LEVERAGE AND LIQUIDITY

⁽¹⁾ See "Non-IFRS and Other Financial Measures"

Debt to gross book value was 53.1% as at September 30, 2026, an increase of 440 bps compared to December 31, 2025. Debt to EBITDA as at September 30, 2026 was 10.7x, an increase of 1.3x compared to December 31, 2025. The change in debt to gross book value and debt to EBITDA ratios was driven by reduction in unrestricted cash balances following the Series C Share redemption of $25.0 million and use of net proceeds from completed dispositions to reduce outstanding debt.

As at September 30, 2026, AHIP had an unrestricted cash balance of $42.2 million compared to $36.4 million as at December 31, 2025. The increase in cash was primarily due to the sale of hotel properties and loan refinancings, offset by the $25.0 million Series C Share redemption. As at September 30, 2026, AHIP held a restricted cash balance of $15.2 million and had an additional $24.4 million available under the Portfolio Loan, Portfolio Loan II and Portfolio Loan III for capital improvements related to the properties secured by the loans. The $24.4 million is available to be drawn as eligible PIP construction costs are incurred and completed, in accordance with the terms of the loan agreements.

On August 13, 2026, AHIP completed an interest only, non-recourse debt financing. The initial gross loan proceeds were $12.1 million secured against one hotel property, with additional advances of up to $7.0 million available for renovations and improvements to the one hotel property (the "Portfolio Loan III"). The loan has 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 5.50% per annum. The initial net proceeds increased cash balances during the third quarter of 2026.

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 remains competitive in the marketplace. 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 completed one hotel renovation project during the second quarter of 2026 in South Hill, VA and has substantially completed one hotel renovation project during the third quarter of 2026 in Emporia, VA.

AHIP's 2026 capital expenditures are estimated at $3.2 million in PIPs and $4.0 million in FF&E improvements. PIP expenditures have been revised down from the prior estimate of $6.9 million mainly due to the planned disposition of certain hotels. PIP and FF&E expenditures will be funded through existing restricted cash and cash flow from operating activities. Actual capital spend on PIPs and FF&E was $2.8 million and $2.2 million, respectively, for the nine months ended September 30, 2026.

SELECTED INFORMATION

2026 THIRD QUARTER OPERATING RESULTS

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

For the nine months ended September 30, 2026, ADR, occupancy and RevPAR all increased compared to the same period in the prior year. The improved performance is primarily attributable to revenue growth from retail and government demand, and disposition of hotel properties with lower-than-average portfolio RevPAR. Revenue in the current quarter decreased by 41.2% compared to the same period in the prior year. The decrease in revenue was due to the disposition of eighteen hotel properties completed in 2025 and nine hotel properties in 2026, partially offset by same property revenue growth.

For the three months ended September 30, 2026, NOI decreased by 25.9% and NOI margin increased by 700 bps, respectively, compared to the same period in the prior year. The decrease in NOI was primarily due to the disposition of eighteen hotel properties in 2025 and nine hotel properties in 2026. The increase in NOI margin was due to higher revenue from growth in occupancy and RevPAR and disposition of hotels with lower-than-average portfolio RevPAR, partially offset by higher operating expenses as a result of increases in room labour expenses, utilities, and maintenance expenses.

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.

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 and nine months ended September 30, 2026 and 2025, that are available on AHIP's website at www.ahipreit.com, and under AHIP's profile on SEDAR+ at www.sedarplus.ca.

Q3 2026 CONFERENCE CALL

Management will host a webcastand conference call at 10:00a.m. Pacific time on Monday, November 16, 2026, to discuss the financial and operational results for the three and nine months ended September 30, 2026 and 2025.

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.

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.

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, revolving credit facility (where applicable), Portfolio Loan, Portfolio Loan II, Portfolio Loan III, 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 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, debt defeasance costs, 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 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.

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 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.

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 labour 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 results 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 2025.