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WINNIPEG, Aug. 27 /CNW/ - Lakeview Hotel Real Estate Investment Trust
("Lakeview REIT") announced today its financial results for the three months
ended June 30, 2008. The following comments in regards to the 2nd quarter
results should be read in conjunction with the June 30, 2008 financial
statements and Management Discussion and Analysis which have been filed with
SEDAR and will be available on the SEDAR website www.sedar.com. The financial
statements and MD&A are also available on the Lakeview REIT website
During the second quarter of 2008 Lakeview Hotel REIT acquired its 17th
hotel, the Four Points By Sheraton in Prince George, British Columbia. An
agreement was also entered into during the quarter for the REIT to acquire the
Days Inn - Ottawa Airport. The purchase was completed subsequent to the second
quarter. The Prince George and Ottawa assets will help to geographically
diversify Lakeview Hotel REIT's portfolio.
Also during the second quarter, Lakeview Hotel REIT began funding
mezzanine loans through an arrangement it has made with an independent hotel
developer pursuant to which Lakeview Hotel REIT would provide loans for a
number of hotels in British Columbia and Alberta. The arrangement has been
structured to provide Lakeview Hotel REIT with accretive cash flow, growth of
the Lakeview brand, additional licensing and management fee revenues, and a
pipeline of new hotels to acquire without exposing the REIT to ramping up risk
typically associated with new hotels. A total of $5,000,000 in mezzanine loans
has been advanced to date. On September 1st, 2008, the first hotel from this
arrangement located in Tumbler Ridge, British Columbia will begin operating as
a Lakeview Inn & Suites and commence paying license fees to Lakeview Hotel
Comparing the three months ended June 30, 2008 with the same period in
the previous year:
- Occupancy increased from 55.5% to 59.9%
- Average room rate increased from $110.26 to $120.20.
- RevPar increased from $61.24 to $71.97.
- Funds from operations (before non cash items including debt
accretions and compensation costs of unit options) increased from
$981,219 to $1,106,491.
While the results in the second quarter of 2008 were better than in the
second quarter of 2007, the second quarter of the year is historically the
weakest quarter for Lakeview Hotel REIT and distributions to Unitholders in
the quarter of $2,121,760 were in excess of Funds from Operations. As a result
distributions were made, in part, from working capital.
Lakeview Hotel REIT is anticipating stronger operating results going
forward, attributable in part to expectations of increased natural gas
drilling activity and demand for accommodations, especially at locations
proximate to the Montney shale gas formation and the Horn River Basin in
northern British Columbia. All hotels in/or proximate to the Montney shale
formation are expected to benefit from the ongoing labour intensive activities
surrounding the recovery of shale gas.
While stronger results are anticipated, Lakeview Hotel REIT will continue
to focus on prudent fiscal management for the benefit of its Unitholders and
on the balancing of its portfolio to achieve more stable operating results.
Lakeview REIT is a real estate investment trust, which is listed on the
TSX Venture Exchange under the symbol "LHR.UN". Lakeview REIT receives income
from ownership, management and licensing of hotel properties. Lakeview REIT's
objective is to provide Unitholders with stable and growing cash distributions
through an investment in an expanding portfolio of hotel properties across
Canada. For further information on Lakeview REIT please visit our website
The TSX Venture Exchange has not reviewed or approved the contents of
this press release and does not accept responsibility for the adequacy or
accuracy of its contents.
For further information:
For further information: Keith Levit, President, or Avrum Senensky, Vice
President, Finance, Tel: (204) 947-1161, Fax: (204) 957-1697, Email