TORONTO, Aug. 26, 2015 /CNW/ - InnVest Real Estate Investment Trust ("InnVest") (TSX:INN.UN) and KingSett Real Estate Growth LP No.5 ("KingSett") announced today the completion of the previously-announced $99 million or $172,000 per room acquisition of the Courtyard by Marriott Hotel in downtown Toronto, Ontario. InnVest acquired a one-third interest in the hotel for $33.0 million, satisfied with available cash and capacity under its existing credit facility. KingSett acquired the two-thirds interest for $66.0 million.
The hotel is a select-service, upper midscale property strategically located on Yonge Street one block north of College Street in downtown Toronto. It consists of two towers situated on approximately 1.5 acres of land. Containing 575 rooms, it also offers an indoor pool and fitness facility, business centre, 14,000 square feet of meeting space, two restaurants, 4,600 square feet of retail space and a 101-space underground parking garage.
The acquisition delivers a number of strategic advantages to InnVest:
- The hotel is a highly visible asset strategically located in the high barrier-to-entry downtown Toronto market. The area is in the midst of an urbanization renaissance and the hotel is expected to benefit from the intensification and gentrification of the surrounding neighbourhoods;
- Management will be focused to improve the hotel's results through (i) onsite asset management, (ii) completing hotel renovations to improve the hotel's competitive position and (iii) engaging professional management;
- The purchase will further de-lever and strengthen InnVest's balance sheet;
- The acquisition broadens InnVest's already strong relationship with Marriott; and
- The purchase expands InnVest's portfolio diversification in a growing Canadian urban market.
"We are very pleased to be completing our second strategic acquisition with KingSett following the participation in the purchase of Toronto's landmark Fairmont Royal York Hotel earlier this year," said InnVest President and Chief Executive Officer Drew Coles. "Looking ahead, we will continue to enhance the quality, scale and diversification of our hotel portfolio, furthering InnVest as the leading hotel ownership platform in the Canadian lodging industry."
About InnVest REIT
InnVest Real Estate Investment Trust is an unincorporated open-ended real estate investment trust which owns a portfolio of 110 hotels across Canada representing over 15,000 guest rooms operated under internationally recognized brands. InnVest also holds a 50% interest in Choice Hotels Canada Inc., one of the largest franchisors of hotels in Canada. InnVest's units and convertible debentures trade on the Toronto Stock Exchange (the "TSX") under the symbols INN.UN, INN.DB.E, INN.DB.F and INN.DB.G.
About KingSett Capital
KingSett Capital is Canada's leading private equity real estate investment business, co-investing with institutional and high net worth individuals, using active management to deliver premium risk weighted returns. KingSett invests through its Growth, Income and Mortgage funds and has over $5 billion of assets under management.
Forward Looking Statements
Statements contained in this press release that are not historical facts are forward-looking statements. These forward-looking statements are based on current expectations of management and involve risks and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. Among the key factors that could cause such differences are InnVest's available sources of funds, real estate investment risks, hotel industry risks and competition. In making such forward-looking statements, management has relied upon a number of material factors and assumptions. Although management of InnVest believes that the expectations with respect to such forward-looking statements are reasonable, such forward-looking statements are subject to known and unknown risks and uncertainties and, accordingly, there can be no assurance that such expectations will prove to be correct. Readers are cautioned that the foregoing list is not exhaustive. The forward-looking statements included herein are made as of the date hereof and InnVest disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by applicable securities law.
SOURCE InnVest Real Estate Investment Trust
For further information: Denise Achonu, Vice President, Finance, Tel: (416) 607 2333, Website: www.innvestreit.com