I have the same problem on Artful. Here's the journal when trying to
activate the hotspot (connection name is "Hotspot"):

Nov 29 18:57:14 vesho systemd[1]: Reloading OpenBSD Secure Shell server.
Nov 29 18:57:14 vesho sshd[1245]: Received SIGHUP; restarting.
Nov 29 18:57:14 vesho systemd[1]: Reloaded OpenBSD Secure Shell server.
Nov 29 18:57:14 vesho sshd[1245]: Server listening on 0.0.0.0 port 22.
Nov 29 18:57:14 vesho sshd[1245]: Server listening on :: port 22.
Nov 29 18:57:23 vesho wpa_supplicant[1439]: p2p-dev-wlp2s0: 
CTRL-EVENT-REGDOM-CHANGE init=BEACON_HINT type=UNKNOWN
Nov 29 18:57:24 vesho systemd[1]: Reloading OpenBSD Secure Shell server.
Nov 29 18:57:24 vesho sshd[1245]: Received SIGHUP; restarting.
Nov 29 18:57:24 vesho systemd[1]: Reloaded OpenBSD Secure Shell server.
Nov 29 18:57:24 vesho sshd[1245]: Server listening on 0.0.0.0 port 22.
Nov 29 18:57:24 vesho sshd[1245]: Server listening on :: port 22.
Nov 29 18:57:26 vesho NetworkManager[1040]: <info>  [1511974646.0567] keyfile: 
update /etc/NetworkManager/system-connections/Hotspot 
(6d467c9a-09c0-4c0e-a7e6-6ee4c7e1cdf2,"Hotspot")
Nov 29 18:57:26 vesho NetworkManager[1040]: <info>  [1511974646.0574] audit: 
op="connection-update" uuid="6d467c9a-09c0-4c0e-a7e6-6ee4c7e1cdf2" 
name="Hotspot" 
args="802-11-wireless-security.key-mgmt,802-11-wireless-security.psk-flags" 
pid=26521 uid=1000 result="success"
Nov 29 18:57:29 vesho NetworkManager[1040]: <info>  [1511974649.9915] device 
(wlp2s0): disconnecting for new activation request.
Nov 29 18:57:29 vesho NetworkManager[1040]: <info>  [1511974649.9916] device 
(wlp2s0): state change: activated -> deactivating (reason 'new-activation', 
internal state 'managed')
Nov 29 18:57:29 vesho NetworkManager[1040]: <info>  [1511974649.9942] audit: 
op="connection-activate" uuid="6d467c9a-09c0-4c0e-a7e6-6ee4c7e1cdf2" 
name="Hotspot" pid=3181 uid=1000 result="success"
Nov 29 18:57:29 vesho NetworkManager[1040]: <info>  [1511974649.9963] device 
(wlp2s0): state change: deactivating -> disconnected (reason 'new-activation', 
internal state 'managed')
Nov 29 18:57:29 vesho avahi-daemon[967]: Withdrawing address record for 
2001:470:1f09::XXXX on wlp2s0.
Nov 29 18:57:29 vesho avahi-daemon[967]: Leaving mDNS multicast group on 
interface wlp2s0.IPv6 with address 2001:470:1f09::XXXX.
Nov 29 18:57:30 vesho avahi-daemon[967]: Joining mDNS multicast group on 
interface wlp2s0.IPv6 with address 2001:470:1f09::XXXX.
Nov 29 18:57:30 vesho avahi-daemon[967]: Withdrawing address record for 
2001:470:1f09::XXXX on wlp2s0.
Nov 29 18:57:30 vesho avahi-daemon[967]: Leaving mDNS multicast group on 
interface wlp2s0.IPv6 with address 2001:470:1f09::XXXX.
Nov 29 18:57:30 vesho NetworkManager[1040]: <info>  [1511974650.0110] dhcp4 
(wlp2s0): canceled DHCP transaction, DHCP client pid 27865
Nov 29 18:57:30 vesho NetworkManager[1040]: <info>  [1511974650.0110] dhcp4 
(wlp2s0): state changed bound -> done
Nov 29 18:57:30 vesho avahi-daemon[967]: Joining mDNS multicast group on 
interface wlp2s0.IPv6 with address fe80::fb7e:9fad:d4f7:113a.
Nov 29 18:57:30 vesho kernel: wlp2s0: deauthenticating from b8:a3:86:b2:52:60 
by local choice (Reason: 3=DEAUTH_LEAVING)
Nov 29 18:57:30 vesho wpa_supplicant[1439]: wlp2s0: CTRL-EVENT-DISCONNECTED 
bssid=b8:a3:86:b2:52:60 reason=3 locally_generated=1
Nov 29 18:57:30 vesho systemd-networkd[792]: wlp2s0: Lost carrier
Nov 29 18:57:30 vesho systemd-timesyncd[781]: Network configuration changed, 
trying to establish connection.
Nov 29 18:57:30 vesho avahi-daemon[967]: Registering new address record for 
fe80::fb7e:9fad:d4f7:113a on wlp2s0.*.
Nov 29 18:57:30 vesho avahi-daemon[967]: Withdrawing address record for 
fe80::fb7e:9fad:d4f7:113a on wlp2s0.
Nov 29 18:57:30 vesho avahi-daemon[967]: Leaving mDNS multicast group on 
interface wlp2s0.IPv6 with address fe80::fb7e:9fad:d4f7:113a.
Nov 29 18:57:30 vesho avahi-daemon[967]: Interface wlp2s0.IPv6 no longer 
relevant for mDNS.
Nov 29 18:57:30 vesho avahi-daemon[967]: Withdrawing address record for 
172.18.1.122 on wlp2s0.
Nov 29 18:57:30 vesho avahi-daemon[967]: Leaving mDNS multicast group on 
interface wlp2s0.IPv4 with address 172.18.1.122.
Nov 29 18:57:30 vesho avahi-daemon[967]: Interface wlp2s0.IPv4 no longer 
relevant for mDNS.
Nov 29 18:57:30 vesho wpa_supplicant[1439]: p2p-dev-wlp2s0: 
CTRL-EVENT-REGDOM-CHANGE init=CORE type=WORLD
Nov 29 18:57:30 vesho NetworkManager[1040]: <info>  [1511974650.0494] device 
(wlp2s0): Activation: starting connection 'Hotspot' 
(6d467c9a-09c0-4c0e-a7e6-6ee4c7e1cdf2)
Nov 29 18:57:30 vesho NetworkManager[1040]: <warn>  [1511974650.0515] 
sup-iface[0x55ee1ea4a020,wlp2s0]: connection disconnected (reason -3)
Nov 29 18:57:30 vesho systemd[1]: Starting 
systemd-resolved-update-resolvconf.service...
Nov 29 18:57:30 vesho NetworkManager[1040]: <info>  [1511974650.0524] device 
(wlp2s0): supplicant interface state: completed -> disconnected
Nov 29 18:57:30 vesho NetworkManager[1040]: <info>  [1511974650.0543] device 
(wlp2s0): state change: disconnected -> prepare (reason 'none', internal state 
'managed')
Nov 29 18:57:30 vesho nm-dispatcher[27505]: req:4 'down' [wlp2s0]: new request 
(2 scripts)
Nov 29 18:57:30 vesho nm-dispatcher[27505]: req:4 'down' [wlp2s0]: start 
running ordered scripts...
Nov 29 18:57:30 vesho NetworkManager[1040]: <info>  [1511974650.0596] device 
(wlp2s0): state change: prepare -> config (reason 'none', internal state 
'managed')
Nov 29 18:57:30 vesho systemd[1]: Started 
systemd-resolved-update-resolvconf.service.
Nov 29 18:57:30 vesho NetworkManager[1040]: <info>  [1511974650.0707] device 
(wlp2s0): Activation: (wifi) connection 'Hotspot' requires no security.  No 
secrets needed.
Nov 29 18:57:30 vesho NetworkManager[1040]: <info>  [1511974650.0707] Config: 
added 'ssid' value 'veshoing'
Nov 29 18:57:30 vesho NetworkManager[1040]: <info>  [1511974650.0708] Config: 
added 'mode' value '2'
Nov 29 18:57:30 vesho NetworkManager[1040]: <info>  [1511974650.0708] Config: 
added 'frequency' value '5190'
Nov 29 18:57:30 vesho NetworkManager[1040]: <info>  [1511974650.0708] Config: 
added 'freq_list' value '5190'
Nov 29 18:57:30 vesho NetworkManager[1040]: <info>  [1511974650.0708] Config: 
added 'key_mgmt' value 'NONE'
Nov 29 18:57:30 vesho systemd[1]: Starting 
systemd-resolved-update-resolvconf.service...
Nov 29 18:57:30 vesho kernel: IPv6: ADDRCONF(NETDEV_UP): wlp2s0: link is not 
ready
Nov 29 18:57:30 vesho wpa_supplicant[1439]: wlp2s0: Failed to start AP 
functionality
Nov 29 18:57:30 vesho kernel: IPv6: ADDRCONF(NETDEV_UP): wlp2s0: link is not 
ready
Nov 29 18:57:30 vesho kernel: IPv6: ADDRCONF(NETDEV_UP): wlp2s0: link is not 
ready
Nov 29 18:57:30 vesho systemd[1]: Started 
systemd-resolved-update-resolvconf.service.
Nov 29 18:57:30 vesho systemd-timesyncd[781]: Synchronized to time server 
91.189.89.198:123 (ntp.ubuntu.com).
Nov 29 18:57:30 vesho systemd-timesyncd[781]: Network configuration changed, 
trying to establish connection.
Nov 29 18:57:30 vesho kernel: IPv6: ADDRCONF(NETDEV_UP): wlp2s0: link is not 
ready
Nov 29 18:57:30 vesho wpa_supplicant[1439]: wlp2s0: Failed to start AP 
functionality
Nov 29 18:57:30 vesho systemd[1]: Starting 
systemd-resolved-update-resolvconf.service...
Nov 29 18:57:30 vesho systemd[1]: Started 
systemd-resolved-update-resolvconf.service.
Nov 29 18:57:30 vesho systemd-timesyncd[781]: Synchronized to time server 
91.189.89.198:123 (ntp.ubuntu.com).
Nov 29 18:57:54 vesho NetworkManager[1040]: <warn>  [1511974674.9480] device 
(wlp2s0): Activation: (wifi) Hotspot network creation took too long, failing 
activation
Nov 29 18:57:54 vesho NetworkManager[1040]: <info>  [1511974674.9481] device 
(wlp2s0): state change: config -> failed (reason 'supplicant-timeout', internal 
state 'managed')
Nov 29 18:57:54 vesho NetworkManager[1040]: <warn>  [1511974674.9492] device 
(wlp2s0): Activation: failed for connection 'Hotspot'
Nov 29 18:57:54 vesho NetworkManager[1040]: <info>  [1511974674.9504] device 
(wlp2s0): state change: failed -> disconnected (reason 'none', internal state 
'managed')
Nov 29 18:57:54 vesho kernel: IPv6: ADDRCONF(NETDEV_UP): wlp2s0: link is not 
ready

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https://bugs.launchpad.net/bugs/1579512

Title:
  Hotspot Access Point mode fails for 802.11a (5GHz) band

Status in NetworkManager:
  Incomplete
Status in network-manager package in Ubuntu:
  Triaged

Bug description:
  On a clean 16.04 amd64 install a Managed mode Access Point 'Hotspot'
  fails to initialize when the frequency band is set to 802.11a 5GHz.
  "Automatic" or "2.4GHz" both work (using 802.11g).

  $ lspci -nnk -s 02:00.0
  02:00.0 Network controller [0280]: Intel Corporation Wireless 7265 
[8086:095a] (rev 59)
          Subsystem: Intel Corporation Dual Band Wireless-AC 7265 [8086:5100]
          Kernel driver in use: iwlwifi
          Kernel modules: iwlwifi

  $ journalctl -u NetworkManager.service
  ...
  [1462706989.5477] (wlp2s0): using nl80211 for WiFi device control
  [1462706989.5562] device (wlp2s0): driver supports Access Point (AP) mode
  ...
  [1462708489.5782] Config: added 'ssid' value 'TJ'
  [1462708489.5782] Config: added 'mode' value '2'
  [1462708489.5782] Config: added 'frequency' value '5180'
  [1462708489.5783] Config: added 'freq_list' value '5035 5040 5045 5055 5060 
5080 5170 5180 5190 5200 5210 5220 5230 5240 5250 5260 5280 5290 5300 5320 5500 
5520 5540 5560 5580 5600 5620 5640 5660 5680 5700 5745 5760 5765 5785 5800 5805 
5825 4915 4920 4925 4935 4945 4960 4980'
  [1462708489.5783] Config: added 'key_mgmt' value 'WPA-PSK'
  [1462708489.5783] Config: added 'psk' value '<omitted>'
  [1462708489.5966] sup-iface[0x16a8ac0,wlp2s0]: config: set interface ap_scan 
to 2
  [1462708515.0203] device (wlp2s0): Activation: (wifi) Hotspot network 
creation took too long, failing activation
  [1462708515.0204] device (wlp2s0): state change: config -> failed (reason 
'supplicant-timeout') [50 120 11]
  [1462708515.0207] manager: NetworkManager state is now DISCONNECTED
  ...

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