WINNIPEG, Oct. 28, 2013 /CNW/ - Temple Hotels Inc. ("Temple") (TSX: TPH)
announced today that it has agreed to acquire an extended-stay property
in Yellowknife, NWT, known as Nova Court, for a price of $21.68
million, subject to customary closing adjustments. The property was
built in 2007 and is located at 476 Range Lake Road, adjacent to
Stanton Territorial Hospital and in close proximity to the Yellowknife
Nova Court consists of a four-storey, 106-suite, extended-stay building,
with 88 parking spaces on a 2.37 acre site. The Nova Court
extended-stay occupancy and average daily rate for 2013 year-to-date
were 69% and $160, respectively. There is also approximately 8,300
square feet of unfinished space on the first floor, which Temple
intends to redevelop in 2014 into nine additional hotel rooms and a 750
square foot breakfast room. The estimated total cost of the new
construction and refurbishment is $4.8 million.
Based on the 2015 forecasted net income, the total investment in the
property, including new construction and refurbishment, of $26.48
million represents an estimated capitalization rate of 11.6%. The
purchase price will be satisfied by Temple assuming the existing 4.8%
first mortgage loan in the approximate amount of $8 million, with the
balance to be paid in cash.
The 2013 devolution of the political administration of the Northwest
Territories from the Government of Canada to the Northwest Territories
Government has spurred economic growth in Yellowknife and expanded the
demand for hotel accommodation. Nova Court will be Temple's second
hotel investment in Yellowknife. Temple also owns the 80-guestroom
Days Inn & Suites, centrally located on 50th Avenue in the heart of downtown Yellowknife. The addition of Nova Court
is expected to provide Temple with enhanced synergies and economy of
scale in the growing Yellowknife market.
The vendor of the property is Lanesborough Real Estate Investment Trust
("LREIT"). Mr. Arni Thorsteinson is the Chief Executive Officer and a
trustee of LREIT and the Chief Executive Officer and a director of
Temple. The proposed acquisition of the property was approved by the
independent directors of Temple. Mr. Thorsteinson abstained from voting
on the proposed property acquisition. An independent third party
appraisal was obtained which supports the purchase price to be paid by
Temple for the property.
The acquisition is scheduled to close by December 31, 2013 and is
subject to final regulatory approval.
Temple is a real estate investment company listed on the Toronto Stock
Exchange under the symbols TPH (common shares), TPH.DB.C, TPH.DB.D,
TPH.DB.E and TPH.DB.F (convertible debentures). The objective of
Temple is to provide shareholders with stable cash dividends from
investment in a diversified portfolio of hotel properties and related
assets. For further information on Temple, please visit our website at
This press release contains certain statements regarding the proposed
transaction described herein that could be considered as
forward-looking information. The forward-looking information is subject
to certain risks and uncertainties, which could result in actual
results differing materially from the forward-looking statements.
There can be no certainty that the transaction will be completed within
the timeline set forth herein or all at.
The Toronto Stock Exchange has not reviewed or approved the contents of
this press release and does not accept responsibility for the adequacy
or accuracy of this press release.
SOURCE: Temple Hotels Inc.
For further information:
Arni Thorsteinson, Chief Executive Officer, or Gino Romagnoli, Executive Vice President
Tel: (204) 475-9090, Fax: (204) 452-5505, Email: email@example.com