TORONTO, Sept. 2, 2015 /CNW/ - InnVest Real Estate Investment Trust ("InnVest") (TSX:INN.UN) announced today that it has completed the previously-announced acquisition of the Hotel Saskatchewan located in downtown Regina for a net purchase cost of approximately $37.0 million, or $163,000 per room. The purchase will be satisfied with available cash on hand following the $48.3 million equity raise in July and capacity under InnVest's existing credit facility. InnVest expects to obtain post-closing long-term mortgage financing at approximately 50% of the purchase price and anticipated capital expenditures.
The 224-room hotel is undergoing repositioning and a re-branding to the prestigious Marriott Autograph Collection of properties. As part of the acquisition, the REIT plans to invest approximately $13.0mm in renovation capital, of which, an estimated $6 million will be spent post-closing.
Opened in 1927, the Hotel Saskatchewan is a full-service, upscale property featuring a restaurant & lounge, tea room, 14,000 square feet of meeting space, and 3,600 square feet of leased commercial space. Regina remains one of Canada's fastest growing municipal economies and is home to a number of large corporations and government agencies.
InnVest believes the purchase of the Hotel Saskatchewan offers numerous benefits consistent with strategy:
- The hotel is an iconic, highly visible, upscale asset in the heart of a Canadian urban centre. This is complementary to a high quality national platform such as InnVest.
- The asset acquisition price is significantly below replacement cost for this type of asset.
- The purchase expands InnVest's relationship with Marriott to an eighth property.
- This addition further diversifies InnVest's holdings by geography, by asset class, by brand and manager;
- The Hotel Saskatchewan is the top positioned asset amongst all competitors in the Regina market;
- The acquisition projects accretion to 2016 adjusted funds from operations ("AFFO") per unit.
Drew Coles, InnVest's President and Chief Executive Officer, stated: "We are thrilled to complete such an important acquisition. This iconic hotel addition to the portfolio is InnVest's fourth hotel purchase in the last nine months. The acquisition fits our objective of enhancing our portfolio quality, scale and diversification. This asset is a perfect fit for InnVest's unrivaled national platform. We feel very excited about working more with Marriott and the Autograph brand. This purchase further fortifies InnVest as the leading owner of hotels in the Canadian lodging industry."
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.
InnVest Real Estate Investment Trust is an unincorporated open-ended real estate investment trust which owns a portfolio of 111 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.
SOURCE InnVest Real Estate Investment Trust
For further information: Denise Achonu, Vice President, Finance, Tel: (416) 607 2333, Website: www.innvestreit.com