Overland Announces Finalization of Bridge Facility and Completion of Due Diligence



    HALIFAX, June 8 /CNW/ - Overland Realty Limited (TSX-V - OVL) Overland
Realty Limited ("Overland") announced today that it has finalized a Bridge
Financing Facility to be utilized in the purchase of two arms-length portfolio
acquisitions previously announced on March 13, 2007. In addition, Overland is
pleased to announce that it has completed all material aspects of its due
diligence on the two portfolios, known as Greenarm and GDPI, and, with the
associated bridge financing, anticipates closing the transactions in the
coming weeks.
    Overland has entered into a commitment letter with KingSett Real Estate
Mortgage LP No. 3 (the "Lender"), for the provision of a $19,000,000 bridge
financing facility (the "Facility"). The term of the Facility is
twenty-four (24) months from advance of the loan and is interest bearing at a
rate of 10.4% per annum compounded and payable monthly, with principal payable
at maturity. As part of the commitment, Overland is required to pay Lender's
Fees in the amount of 1% of the loan amount upon advance, and 1% within the
earlier of twelve (12) months of the advance, or proportionally on any partial
prepayment of the Facility. The Facility may be prepaid at any time, with a
minimum interest amount of six (6) months less any interest paid to such date
on any prepaid amounts. After the sixth month anniversary of the loan, there
are no restrictions or minimum interest requirements on prepayment.
    The Bridge Financing Facility carries with it industry standard covenants
for a loan of this nature, including a negative pledge against the redemption
of shares, shareholders loans, or any other potential non-arms length
compensation to insiders outside the ordinary course; minimum debt service
coverage ratios; maintenance of operating covenants on the use of any future
equity proceeds; and restrictions on proceeds of sale and further
encumbrances. The security for the loan includes all material real property
assets of Overland, and the associated hypothecation and assignment of
subsidiary shares. The loan is intended to be advanced upon the closing of the
Greenarm and GDPI portfolio transactions.
    The company has also completed all material aspects of its due diligence
review as provided for under the terms of the Purchase and Sale Agreements for
the Greenarm and GDPI portfolios. Based on the review, Overland anticipates
closing the transactions within the coming weeks. A summary of the assets
being acquired is as follows:

    Greenarm Portfolio:

    The portfolio involves the purchase of Greenarm Corporation, Greenarm
Management Limited, the remaining 50% interest in Valley Office Ltd. not
currently held by Greenarm Corporation, the purchase of Carriage Place and the
30% interest in Priestman Centre as asset purchases (collectively the
"Greenarm Portfolio") for a combined total consideration of $44,400,000,
comprised of cash, vendor take-back financing, Overland common shares and
assumed debt. As part of the transaction, Overland will obtain $3,400,000 in
vendor take-back financing secured by a subordinate debenture issued by
Overland, which shall be without interest whatsoever, for a term ending
twenty-four months from closing.
    In addition, the company has provided notice of its intent to issue
2,916,667 common shares in Overland to Berak Investments Inc., one of the
Vendor companies controlled by Mr. Earl Brewer; at an issue price as
previously announced, of $0.60 per share for total consideration of
$1,750,000. As a result, following the transaction, Mr. Brewer will own,
directly or indirectly, approximately 15% of the company's outstanding common
shares. Upon closing, the Vendor corporations will collectively remit a
$900,000 reserve to be held on behalf of the Purchaser for use in future
capital costs and tenant improvements. In connection with the purchase,
Overland will be assuming the existing mortgage obligations of the Greenarm
Portfolio which have an outstanding balance as at June 1, 2007 of
approximately $23,700,000, and a weighted average term and amortization of
6.45 years and 20.62 years respectively. The weighted average interest rate on
the assumed mortgages is 6.52%.

    The material assets being purchased in the Greenarm Portfolio are as
    follows:

    Barker House, 570 Queen St., Fredericton - the 70,225 square foot A-class
office complex is located in the heart of downtown Fredericton. Completed in
1990, this six-storey re-enforced concrete office building is currently 95.6%
leased. The primary tenants for Barker House include Grant Thornton, McInnes
Cooper and the building's largest tenant, the Federal Government (ACOA) who
account for 35.7% of the rentable area.

    Phoenix Square, 371 Queen St., Fredericton - the 32,000 square foot
A-class office building incorporates an historic structure in a modern complex
comprised of curtain wall and stucco exterior and was completed in 1988. The
four-storey building is situated adjacent to City Hall and is currently 84.6%
occupied. Cox & Palmer accounts for 47.2% of the rentable area while RBC
Dominion Securities and London Life are the other primary tenants.

    Regent Place, 1133 Regent St., Fredericton - Regent Place is situated
within the uptown business district of Fredericton, directly across from the
region's principal hospital, and in close proximity to the city's largest
retail centers. The four-storey, 85,758 square foot structure was
substantially completed in 1987, and is comprised of concrete decks and EIFS
exterior. The primary tenants of Regent Place include ADI, who account for
51.6% of the building, Delta Hotels and Investors Group. The building is
currently 95.8% occupied and contains 203 on-site parking spaces.

    Priestman Centre, 565 Priestman St., Fredericton - this building is
located at the key intersection of Priestman and Regent Streets, in immediate
proximity to the University of New Brunswick. This 34,524 square foot B-class
office building is built of pre-stressed concrete slab exterior walls and
steel framing carried over four floors. The building is currently 100%
occupied and is leased to 12 tenants including several government departments.
There are 111 on-site at-grade parking spaces in the complex.

    Carriage Place, 900 Hanwell Rd., Fredericton - located at the
intersection of Hanwell and Prospect Streets, this retail / office complex
covers a 5.6 acre site with 66,500 rentable square feet on one level and over
350 parking spaces. Completed in 1991, the building is comprised of structural
steel framing and EIFS. The building is currently 100% occupied with UPS
representing 40.6% of the occupied space. Other key tenants include the
Regional Health Authority, the Federal Government and Sport N.B.

    Castle Square, 360 Pleasant St., Miramichi - completed in 1992, Castle
Square is located within the city's downtown and principal residential
districts. The 24,450 square foot two-storey structure is comprised of steel
frame with brick siding. The primary tenants of this 100% occupied building
are TD Bank, and the Province of New Brunswick whose space represents
19,482 square feet of the total area.

    1113 - 1115 Regent St., Fredericton - 1113 Regent is a single-storey
retail/office complex completed in 1991. The 11,270 rentable square foot
structure is located across from Chalmers Hospital and is constructed of
tilt-up concrete. The Regional Health Authority accounts for 61% of the
leasable area of the building. 1115 Regent is the long-term home of Atlantic
Business College who occupy 54% of the complex. This 16,400 rentable square
foot office building was significantly redeveloped in 2004 and shares the site
with 1113 Regent. The complex is comprised of load-bearing concrete block with
exterior brick veneer. The buildings are 100% occupied.

    Bates Building, 385 Wilsey Rd., Fredericton - the Bates Building is a
31,400 square foot service-oriented office building, located within the
Fredericton Industrial Park. Constructed and expanded over several years, the
most recent addition was completed in 1995. The single-storey complex is
currently 92% occupied by 15 tenants. The largest occupants are Fairview
Plymouth Chrysler and Carmichael Brawn Ltd.

    Hilton Building, 245 Hilton Rd., Fredericton - the Hilton property is
located on 2.33 acres of land in the Fredericton Industrial Park. The
18,800 square foot single-storey structure houses a mix of service and office
tenants, including Public Works Canada. The steel framed building was
completed in 1975 and is currently 71% occupied.

    145 - 154 Main St., Fredericton - located in Fredericton North this
24,700 square foot building was completed 1970. Constructed of wood frame with
concrete foundations, the building's primary tenant is the Bank of Montreal
who represent 20% of the occupied area. Currently 90% occupied, the complex
sits on 1.09 acres of land.

    Greenarm Management Limited - The transaction includes the purchase of
Greenarm Management Limited, and the continuance of all associated management
contacts, agreements, and 29 full time staff. Greenarm Management Limited
oversees the daily property management needs of over one and a half million
square feet of space (including over 1 million square feet of space managed
for third parties). The company's 13 third-party management contracts involve
a number of significant institutional clients, including the three largest
contracts - University of New Brunswick / Saint John, Knowledge Park, and
St. Thomas University.

    Greenarm Development Partners Inc. (GDPI):

    Overland has agreed to purchase the four (4) real property assets of
Greenarm Development Partners Inc (the "GDPI Portfolio") for an aggregate
purchase price of $9,730,000, with consideration comprised of cash and assumed
debt. The GDPI portfolio consists of four properties located within the cities
of Fredericton and Saint John, NB. The properties represent over
107,000 rentable square feet and include 21 luxury apartment units, and a
3.6 acre long term land lease. Upon closing, the Vendor will remit a $520,000
reserve to be held on behalf of the Purchaser for use in future capital costs
and tenant improvements. In connection with the purchase, Overland will be
assuming the existing mortgage obligations of the GDPI Portfolio which have an
outstanding balance as at May 31, 2007 of approximately $5,490,000, and a
weighted average term and amortization of 7.8 years and 18.5 years
respectively. The weighted average interest rate on the assumed mortgages is
6.18%.

    The assets being purchased in the GDPI Portfolio are as follows:

    Regency Park, Fredericton - located within downtown Fredericton, this
mixed-use development consists of over 21,000 square feet of A-class office
space and includes 21 two and one bedroom apartment suites. Comprising six
floors, including 72 associated underground parking spaces, the complex is
built of structural concrete with masonry exterior. Completed in 1994, the
property includes BMO Nesbitt Burns at 24 % of the occupied area and Public
Works at 33% of occupied area. The residential component of the building is
currently 95% leased, while the commercial section of the structure is 89.5%
leased.

    291 Industrial Dr., Saint John - this modern industrial facility was
constructed in 1987 and is located in the region's largest industrial centre.
The 33,330 steel framed structure is clad in brick veneer and metal siding.
The single storey building is 100% leased on a long- term basis to PCL
Packaging Corporation.

    110 Crown St., Saint John - this highly visible 3.6 acre site is land
leased on a long term basis to Plaza Property Holdings. The property has
recently been improved with a 28,000 square foot Shoppers Drug Mart.

    50 & 70 Crown St., Saint John - with significant frontage on a key
arterial road, this 33,290 square foot commercial structure attracts a mix of
office and retail tenants. Completed originally in 1966, this mix of one and
two-storey structures is comprised of steel framing and brick veneer. The site
provides for significant drive-up parking and is currently 94% occupied with
the Province of New Brunswick, Bretech Engineering, and Trans Canada Credit as
the largest tenants.

    Selected Portfolio Information

    On a combined basis the portfolios have lease expirations, representing
11.9% of the area (in rentable square feet) due in the first twelve months,
representing 11% of year 1 revenue. A further 32% of the leasable area will
expire in years 2-3, 33% in years 4-5, with the remaining 23.1% expiring
beyond 5 years.
    The Greenarm and GDPI portfolios had a combined $8.3 million in property
revenue in 2006 and $3.7 million in property operating expenditures (including
property taxes, utilities, management fees, maintenance and repairs,
insurance, and similar expenses) resulting in $4.6 million in property
operating income, based on December 31, 2006 audited financial statements.
    Greenarm Management Limited reported in its 2006 audited statements,
$2.3 million in management revenue for 2006 and $15,850 in income before
taxes, which figures include $682,000 in management fee expenses paid to
related parties.
    The Greenarm and GDPI portfolios represent two distinct acquisitions;
there can be no guarantee that either transaction will close. The acquisition
remains subject to industry standard closing conditions. All disclosed pricing
excludes closing costs and customary adjustments. No finder's fees are being
paid as part of the issuance of shares, or for any other aspect of the
transaction. A Business Acquisition Report relating to these portfolio
transactions will be filed by the company and available on SEDAR within
seventy five (75) days of the closing.

    About Overland

    Overland Realty Limited is a Maritimes-based, growth-orientated real
estate corporation listed on the TSX-Venture Exchange. The company is focused
on increasing shareholder value through the acquisition, development, and
management of commercial properties in targeted Canadian markets, starting
within Atlantic Canada. Further information on Overland can be found at
www.overlandrealty.ca.

    Forward Looking Information

    This press release may contain forward looking statements. Overland is
subject to significant risks and uncertainties which may cause the actual
results, performance or achievements of Overland to be materially different
from any future results, performance or achievements expressed or implied by
the forward looking statements contained in this release. Such risk factors
include, but are not limited to, risks associated with real property
ownership, availability of cash flow, general uninsured losses, future
property acquisitions, environmental matters, tax related matters, debt
financing, potential conflicts of interest, potential dilution, reliance on
key personnel and the potential any disclosed acquisitions will not close. A
description of these risk factors can be found in Overland's most recent
Management Discussion and Analysis, which can be found at www.sedar.com.
Overland cannot assure investors that actual results will be consistent with
these forward looking statements and Overland assumes no obligation to update
or revise the forward looking statements contained in this release to reflect
actual events or new circumstances.

    The Corporation has issued and outstanding 16,387,850 common shares.

    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the  adequacy or accuracy of this release.
    %SEDAR: 00003667E




For further information:

For further information: Scott McCrea, President & CEO, (902) 474-3000,
info@overlandrealty.ca, www.overlandrealty.ca; Source: Overland Realty
Limited

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OVERLAND REALTY LIMITED

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