WINNIPEG, Aug. 30 /CNW/ - Lakeview Hotel Real Estate Investment Trust
("Lakeview REIT") is pleased to report the financial results for the three
months ended June 30, 2007. The following comments in regard to the financial
results should be read in conjunction with the complete quarter end financial
statements and Management Discussion and Analysis which are available on the
SEDAR website www.sedar.com and on the Lakeview REIT website
Highlights for Lakeview REIT for the three months ended June 30, 2007 as
compared to the same period in the previous year include:
- Total number of properties owned by the REIT increased from 9 to 15.
Total number of rooms owned increased from 648 to 1129;
- Average room rate increased from $101.16 to $110.26;
- Total revenues increased by 62% to $6,616,648; and
- Distributions per unit were increased by 10% from $0.10 to $0.11.
Typically the second quarter of the year is the slowest period for
Lakeview REIT due primarily to changes in weather conditions. Many of the
properties owned by the REIT are located in centres in Alberta and north
eastern British Columbia that are dependent on oil and gas drilling activity
to generate room occupancies. This region experienced unusual weather
conditions with heavy snow cover during the winter and an unusually slow thaw
in the spring. The combined effect was that road travel restrictions that are
typically in place for a period of 4 to 6 weeks in this region (during which
drilling and related activities drop significantly) were much more prolonged.
When road restrictions were ultimately lifted in early June, natural gas
drilling activity continued at lower levels than in recent years, related in
part to the price of natural gas and to the cost of drilling activities in
western Canada. This had a negative impact on occupancies for the REIT during
the second quarter. As a result the second quarter, which typically would be
the weakest quarter for Lakeview REIT, was unusually weak. Adjusted Funds From
Operations were $781,733 in the second quarter of 2007 vs. $1,144,707 in the
second quarter of 2006.
Results are expected to strengthen through the balance of 2007 and into
2008 for a number of reasons including:
- Results are typically stronger in the third and fourth quarters of
the year than in the first half of the year.
- Properties acquired in the first half of the year will continue to
ramp up and stronger operating results are expected from these
properties going forward.
- The acquisition of the Lakeview Signature Inn in Calgary (formerly
the Residence Inn By Marriott) was completed in late June and the
REIT will materially benefit from the cash flow from this property
starting in the third quarter.
- Extensive renovations were made to the Lakeview Inn & Suites Fort
Saskatchewan related to the acquisition and redevelopment of the
restaurant and lounge and to general improvements to the property.
The Fort Saskatchewan hotel is currently enjoying a surge in
occupancy related primarily to the improvements that have been made.
- REIT expenses in the second quarter of 2007 were increased due to
one-time costs of conducting due diligence on a number of prospective
hotel purchases that the REIT chose not to complete as a result of
the due diligence findings.
Natural gas drilling activity and consequently hotel occupancies related
to it are expected to strengthen significantly in the fourth quarter of 2007
or early in 2008. When combined with the above mentioned factors, Lakeview
REIT anticipates a significant improvement in its AFFO payout ratio in the
Lakeview REIT currently has two properties with unfunded mortgage
commitments and an operating line of credit which provide the REIT with
approximately $30 million of additional acquisition capacity. Lakeview REIT
continues to enjoy a robust pipeline of potential acquisitions.
Lakeview REIT is pleased to confirm its regular monthly distribution. The
Trustees of Lakeview REIT have declared a distribution of $0.0367 per Unit
payable on September 28th, 2007, to Unitholders of record on August 31, 2007.
This will be Lakeview REIT's 30th consecutive distribution (the first 6
quarterly; the last 24 monthly). No changes in distribution policy are
anticipated. There are currently 19,269,423 Class A Units and Exchangeable
Units issued and outstanding.
Lakeview REIT is a real estate investment trust, which is listed on the
TSX Venture Exchange under the symbol "LHR.UN". Lakeview REIT receives income
from ownership, management and licensing of hotel properties. Lakeview REIT's
objective is to provide Unitholders with stable and growing cash distributions
through an investment in an expanding portfolio of hotel properties across
Canada. For further information on Lakeview REIT please visit our website
The TSX Venture Exchange has not reviewed or approved the contents of
this press release and does not accept responsibility for the adequacy or
accuracy of its contents.
For further information:
For further information: Keith Levit, President, or Avrum Senensky,
Investor Relations, Tel: (204) 947-1161, Fax: (204) 957-1697, Email