/NOT FOR DISTRIBUTION ON U.S. WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
HALIFAX, Oct. 15, 2012 /CNW/ - Holloway Lodging Real Estate Investment Trust (TSX: HLR.UN) ("Holloway") is pleased to announce that it has entered into a second hotel management agreement (the "Second Management Agreement") with Pacrim Hospitality Services Inc. ("Pacrim"). Highlights of the Second Management Agreement include:
- Pacrim will manage hotels acquired by Holloway in Canada going forward and, at Holloway's discretion, hotels acquired by Holloway in the United States going forward, subject to certain exceptions where a conflict of interest may exist. Holloway's current 17 hotels will continue to be managed under the terms of the existing hotel management agreement with Pacrim (the "First Management Agreement").
- Holloway will pay Pacrim a management fee equal to 2.5% of gross revenue, an accounting fee per hotel and an incentive fee if certain annual performance measures are achieved. Each of the management and accounting fees under the Second Management Agreement are lower than the First Management Agreement. No sales, purchasing, capital expenditure or other fees are payable by Holloway under the Second Management Agreement.
- The Second Management Agreement can be terminated as it applies to any hotel on 30 days' written notice by either Holloway or Pacrim at their discretion with no fee payable by either party to the other except in very limited circumstances. This compares favourably to the fixed ten-year term and mandatory termination fee payable under the First Management Agreement.
- The services to be provided by Pacrim under the Second Management Agreement are substantially similar to the services Pacrim currently provides to Holloway under the First Management Agreement.
Michael Rapps, Chairman of Holloway, stated: "Entering into the Second Management Agreement advances our strategy of selectively acquiring additional hotels. Our new agreement will result in lower fees payable by Holloway on newly acquired hotels while also providing Holloway with the flexibility to change third party managers if needed."
Holloway intends to file the Second Management Agreement under its profile on SEDAR in due course. The above summary does not purport to be a complete description of the Second Management Agreement and readers are urged to review the Second Management Agreement in its entirety once the same is filed on SEDAR.
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 17 hotels with 1,665 rooms. Holloway's trust units trade on the TSX under the symbol HLR.UN.
This press release contains forward-looking information within the meaning of applicable securities laws. Forward-looking information may relate to Holloway's future outlook and anticipated events or results and may include statements regarding Holloway's future financial position, business strategy, financial results, plans and objectives. 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, 2011 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.
SOURCE: HOLLOWAY LODGING REAL ESTATE INVESTMENT TRUST
For further information:
Michael Rapps, Chairman, at (416) 855-1925 or Jane Rafuse, Chief Financial Officer, at (902) 443-5101.