TORONTO, June 30, 2016 /CNW/ - InnVest Real Estate Investment Trust ("InnVest" or the "REIT") (TSX:INN.UN) announced today it has entered into a definitive agreement, with Oxford Properties Group, to acquire the leasehold interest in the Fairmont Vancouver Airport Hotel located within Vancouver's International Airport (YVR). The purchase price of $90.0 million or $233,000 per room, will be funded by first mortgage financing of 45% to 50%, cash on hand, proceeds from planned asset sales, and availability under the REIT's existing liquidity facilities. Final terms of the mortgage financing for the Fairmont Vancouver Airport Hotel acquisition are under negotiation. The anticipated forward twelve month cap rate is 7.1% with solid growth potential. The transaction is subject to customary closing conditions and is expected to be completed in the third quarter of 2016. The transaction is not dependent on, and does not affect the timing of, the previously announced offer by Bluesky Hotels & Resorts Inc. ("Bluesky") to acquire InnVest. The acquisition of the Fairmont Vancouver Airport has the support of, and has been consented to, by Bluesky. The hotel has a long-term lease on the Vancouver Airport Lands.
"The acquisition of this exceptional asset, is consistent with InnVest's high quality portfolio strategy. This hotel is ideally located in one of the busiest international airports in North America. The addition of the Fairmont Vancouver Airport enhances our geographical diversification in the strong Vancouver market and expands our relationship with Fairmont, a leader in the global hospitality industry," said InnVest President and Chief Executive Officer, Drew Coles. Today's announcement builds on our objective to become the leading growth platform in the Canadian lodging industry."
The internationally acclaimed Fairmont Vancouver Airport is one of Vancouver's foremost luxury hotels, enjoying a AAA/CAA Four Diamond award status for the past fifteen years. The Hotel has 386 spacious guest rooms and suites, and superb facility programming with a 112-seat award winning restaurant, contemporary 74-seat bar, 9,693 sq. ft. of function space, business centre and recreational amenities including an indoor lap pool, sauna, whirlpool, health club and spa. Constructed in 1999, the hotel is the only in-terminal Vancouver airport hotel.
About InnVest REIT
InnVest Real Estate Investment Trust is an unincorporated open-ended real estate investment trust which owns a portfolio of approximately 109 hotels across Canada representing over 14,500 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.
Cautionary and Forward Looking Statements
References to capitalization rate in respect of the hotel to be acquired by InnVest reflect management's appraisal of the hotel and expected net operating income of the hotel based on past results. There can be no assurance that the appraised value of the hotel is an accurate reflection of the value of the hotel as at the date hereof or on any other date. In addition, there can be no assurance that the valuation method or the capitalization rate used in appraising the hotel was appropriate for such property as at the date hereof or on any other date.
Statements contained in this press release that are not historical facts are forward-looking statements. These forward-looking statements include statements with respect to assumptions regarding the acquisition of, as well as forecasts of future results for the Fairmont Vancouver Airport Hotel. 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 and planned sources of funds, hotel divestment plans, the timing of the acquisition closing, leverage reduction plans, real estate investment risks, hotel industry risks and competition. These and other factors are discussed in InnVest's annual information form for the year ended December 31, 2015, which is available at www.sedar.com. In making such forward-looking statements, management has relied upon a number of material factors and assumptions, including with respect to: current and future financial performance of the Fairmont Vancouver Airport Hotel, the terms and conditions on which the acquisition of the Fairmont Vancouver Airport Hotel will be completed and financed, including planned proceeds from asset divestitures, and the anticipated financial impact of the acquisition on InnVest,. 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: Chantal Nappert, Vice President, Finance and Investor Relations, Tel: (416) 607-2331, Website: www.innvestreit.com