/NOT FOR DISTRIBUTION ON U.S. WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
HALIFAX, April 11, 2016 /CNW/ - Holloway Lodging Corporation (TSX: HLC, HLC.DB, HLC.DB.A) ("Holloway") is pleased to announce that it has acquired the Westmark® hotel located in Whitehorse, Yukon for a purchase price of $9.8 million. The purchase price implies a cap rate of approximately 15% based on estimated net operating income for the first full year following acquisition.
The Westmark hotel is located in Whitehorse, which is the capital of the Yukon Territory. The Whitehorse economy is driven principally by tourism, retail activity, government services and, to a lesser extent, mining. The property has 180 rooms, a restaurant and lounge and 7,000 square feet of function space.
As part of the acquisition, Holloway has entered into an agreement with the seller of the property pursuant to which the seller has agreed to use the Westmark hotel exclusively for all its accommodation needs in Whitehorse. The agreement has an initial term of three years, is renewable and provides for room rate increases each year. It is anticipated that the seller will provide approximately 20% of the Westmark's total room nights in 2016 and subsequent years.
Michael Rapps, Holloway's Chairman, stated "The Westmark hotel is our second property in Whitehorse. The acquisition was completed at an attractive cap rate, at a price substantially below the property's replacement cost and further diversifies Holloway outside of oil and gas markets. Moreover, we have negotiated an agreement with the seller that provides the hotel with significant base business in coming years. We expect both our Whitehorse hotels to perform well given the low Canadian dollar and the city's focus on tourism."
ABOUT HOLLOWAY LODGING CORPORATION
Holloway is a real estate corporation focused on acquiring, owning and operating select and limited service lodging properties and a small complement of full service hotels primarily in secondary, tertiary and suburban markets. Holloway owns 36 hotels with 4,153 rooms. Holloway's shares and debentures trade on the TSX under the symbols HLC, HLC.DB and HLC.DB.A.
This press release contains forward-looking information within the meaning of applicable securities laws. Forward-looking information may relate to Holloway's future outlook and anticipated events or results and may include statements regarding Holloway's future financial position, business strategy, financial results, plans and objectives. In some cases, forward-looking information can be identified by terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward-looking information is subject to certain factors, including risks and uncertainties, that could cause actual results to differ materially from what Holloway currently expects and there can be no assurance that such statements will prove to be accurate. Some of these risks and uncertainties are described under "Risk Factors" in Holloway's annual information form for the year ended December 31, 2015 which is available on Holloway's profile on the SEDAR website at www.sedar.com. Holloway does not intend to update or revise any such forward-looking information should its assumptions and estimates change.
SOURCE Holloway Lodging Corporation
For further information: please contact Michael Rapps, Chairman, at (416) 855-1925 or Jane Rafuse, Chief Financial Officer, at (902) 443-5101.