/NOT FOR DISTRIBUTION ON U.S. WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
HALIFAX, Jan. 12, 2012 /CNW/ - Holloway Lodging Real Estate Investment Trust (TSX: HLR.UN HLR.DB.A) ("Holloway" or the "REIT") announces that it has closed the previously announced sale of its leasehold interest in the 5 Calgary Downtown Suites hotel located in Calgary, Alberta. Holloway expects to record a gain on the sale of approximately $2.8 million. Holloway received net proceeds from the sale (after mortgage repayment and estimated closing costs) of approximately $6.9 million and anticipates receiving an additional $0.5 million upon the release of a holdback for certain contingencies associated with the sale.
Under the terms of the REIT's secured credit facility, the REIT is required to apply at least 75% of the net proceeds resulting from this hotel sale to the repayment of amounts outstanding under the secured credit facility. The REIT expects to repay $5.5 million of debt outstanding under this facility using the net sale proceeds.
ABOUT HOLLOWAY LODGING REAL ESTATE INVESTMENT TRUST
Holloway is a real estate investment trust focused on acquiring, owning and operating select and limited service lodging properties and a small complement of full service hotels primarily in secondary, tertiary and suburban markets. Holloway owns 19 hotels with 1,881 rooms. Holloway's units and convertible debentures trade on the Toronto Stock Exchange under the symbols HLR.UN and HLR.DB.A, respectively.
This press release contains forward-looking information within the meaning of applicable securities laws. Forward-looking information may relate to the REIT's future outlook and anticipated events or results and may include statements regarding the future financial position, business strategy, financial results and plans and objectives of the REIT, including, in particular, the amount and use of the proceeds from the sale of the 5 Calgary Downtown Suites hotel, the release of the holdback associated with the sale and the anticipated gain on sale. In some cases, forward-looking information can be identified by terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward-looking information is subject to certain factors, including risks and uncertainties, that could cause actual results to differ materially from what the REIT currently expects and there can be no assurance that such statements will prove to be accurate. Some of these risks and uncertainties are described under "Risk Factors" in Holloway's annual information form for the year ended December 31, 2010 which is available on the REIT's profile on the SEDAR website at www.sedar.com. The REIT does not intend to update or revise any such forward-looking information should its assumptions and estimates change.
Michael Rapps, Chairman and Interim Chief Financial Officer of the REIT at (416) 855-1925.