WINNIPEG, March 18 /CNW/ - Lanesborough Real Estate Investment Trust
("LREIT") (TSX: LRT.UN) announced today that it has agreed to acquire a 90%
beneficial interest of an apartment/office complex in Winnipeg, Manitoba,
known as Colony Square, for $34.2 Million, subject to the usual closing
adjustments. LREIT currently owns a 1.5% beneficial interest and is permitting
certain existing owners, who own an aggregate of 8.5% beneficial interest, to
remain as part of the ownership syndicate.
Colony Square comprises 1.89 acres located on the south side of Portage
Avenue in downtown Winnipeg across from the University of Winnipeg. The
complex consists of two apartment towers of sixteen and seventeen storeys,
respectively, a seven-storey office building and a 270-stall underground
parkade. The two apartment towers contain a total of 428 suites, comprised of
72 studio/bachelor suites, 296 one-bedroom suites and 60 two-bedroom suites.
The office building contains 80,935 square feet of leasable area, with an
additional 2,255 square feet of leasable commercial area on the main floors of
the apartment towers.
The purchase price of $34.2 Million for a 90% beneficial interest equates
to an effective $38 Million price for 100% of the property. Based on an
estimated 2009 net operating income of $2.6 Million, the purchase price
represents an estimated capitalization rate of 6.8%. The property was
appraised, effective December 1, 2007 at $38.47 Million.
The acquisition will be funded by the pro-rata assumption of a
$21 Million first mortgage loan, bearing interest at 5.5% and maturing in
April 2015, and the balance of approximately $15.3 Million from the proceeds
of upward refinanced mortgage loans on existing LREIT properties. The
acquisition is scheduled to close on October 1, 2008.
LREIT is a real estate investment trust, which is listed on the Toronto
Stock Exchange under the symbol LRT.UN. The objective of LREIT is to provide
Unitholders with stable cash distributions from investment in a geographically
diversified Canadian portfolio of quality real estate properties. There are
currently 17,547,714 trust units outstanding. For further information on
LREIT, please visit our website at www.lreit.com.
This press release contains certain statements that could be considered
as forward-looking information. The forward-looking information is subject to
certain risks and uncertainties, which could result in actual results
differing materially from the forward-looking statements.
The TSX has not reviewed or approved the contents of this press release
and does not accept responsibility for the adequacy or accuracy of this
For further information:
For further information: Arni Thorsteinson, Chief Executive Officer, or
Gino Romagnoli, Investor Relations, Tel: (204) 475-9090, Fax: (204) 452-5505,