InnVest REIT announces closing of offering of $200 million of subscription receipts and $70 million of extendible convertible unsecured subordinated debentures


    TORONTO, Aug. 3 /CNW/ - InnVest Real Estate Investment Trust ("InnVest")
announced today that it has closed its previously announced public offering of
16,195,000 subscription receipts (the "Subscription Receipts") at a price of
$12.35 per Subscription Receipt for gross proceeds of approximately $200
million and $70 million aggregate principal amount of 5.85% extendible
convertible unsecured subordinated debentures (the "Extendible Debentures").
The Subscription Receipts and Extendible Debentures were primarily sold to a
syndicate of underwriters led by RBC Capital Markets and Scotia Capital Inc.,
with approximately $6 million of the Subscription Receipts sold to Maple Leaf
Investment Holdings L.P., an affiliate of the manager of InnVest's existing
hotel portfolio. The gross proceeds to InnVest from the offering totaled
approximately $270 million.
    The net proceeds from the offering, along with debt financing, will be
used to finance InnVest's portion of the previously announced take-over bid
for all of the outstanding units of Legacy Hotels Real Estate Investment Trust
("Legacy") at a price of $12.60 per unit. Such take-over bid will be effected
by LGY Acquisition LP, a newly-formed limited partnership, approximately 26%
owned by InnVest and approximately 74% owned by Cadbridge Investors LP, a
joint venture entity between affiliates of Cadim Inc., a subsidiary of the
Caisse de Dépôt et placement du Québec, and Westmont Hospitality Group. It is
expected that an offer and circular relating to the take-over bid will be
mailed shortly. Upon the successful completion of the acquisition of 100% of
Legacy's outstanding units, InnVest and Cadbridge will reorganize Legacy's
assets such that InnVest will become the owner of the following eleven hotels:
Fairmont Palliser Calgary, Sheraton Suites Calgary Eau Claire, Delta Calgary
Airport, Fairmont Hotel Macdonald, Delta Winnipeg, Delta Ottawa Hotel and
Suites, Delta Centre-Ville Montréal, Delta Beauséjour Moncton, Delta Prince
Edward Island, Delta Barrington Halifax and the Delta Halifax. As a result,
InnVest's hotel portfolio will increase to 147 properties, totaling 19,265
rooms across Canada.

    The securities offered have not been and will not be registered under the
United States Securities Act of 1933, as amended, and accordingly will not be
offered, sold or delivered, directly or indirectly within the United States,
its possessions and other areas subject to its jurisdiction or to, or for the
account or for the benefit of a U.S. person, except pursuant to applicable
exemptions from the registration requirements.

    InnVest REIT holds Canada's largest hotel portfolio together with an
interest in Choice Hotels Canada Inc., the largest franchisor of hotels in
Canada. The hotel portfolio currently comprises 136 hotel properties, with
15,593 guest rooms, operated under internationally recognized franchise brands
such as Comfort Inn(R), Holiday Inn(R), Quality Suites/Inn(R), Raddisson(R),
Delta(R), Travelodge(R), Hilton(R) and Best Western(R). InnVest's trust units
and outstanding convertible debentures trade on the Toronto Stock Exchange
(the "TSX") under the symbols INN.UN, INN.DB.A and INN.DB.B, respectively. The
Subscription Receipts and Extendible Debentures commenced trading on the TSX
today under the symbols INN.R, and INN.DB.C, respectively.

    Forward Looking Statements
    Statements contained in this press release that are not historical facts
are forward-looking statements which involve risk and uncertainties which
could cause actual results to differ materially from those expressed in the
forward-looking statements. Among the key factors that could cause such
differences are failure to satisfy the conditions of the take-over bid, real
estate investment risks, hotel industry risks and competition. These and other
factors are discussed in InnVest's 2006 annual information form which is
available at InnVest disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, unless required to do
so by applicable securities law.

    %SEDAR: 00018005E

For further information:

For further information: Kenny Gibson, President and Chief Executive
Officer, Tel: (905) 206-7100, Fax: (905) 206-7114; Tamara Lawson, Chief
Financial Officer and Secretary, Tel: (905) 206-7100, Fax: (905) 206-7114;

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InnVest Real Estate Investment Trust

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