WINNIPEG, MB, April 30, 2012 /CNW/ - Lanesborough Real Estate Investment Trust (TSX: LRT.UN) ("LREIT") announced today that it has agreed to sell two properties known as Siena Apartments in Fort McMurray, Alberta and Clarington Arms in Bowmanville, Ontario.
Siena Apartments, located at 118 Millennium Drive in the Timberlea area of Fort McMurray, Alberta (the "Property"), is being sold for a price of $30.5 million, subject to customary closing adjustments (the "Proposed Transaction"). Siena Apartments consists of a four-storey, 66-suite extended-stay apartment building, with a 93-stall underground parkade on a 3.78 acre site and is comprised of six one-bedroom and 60 two-bedroom suites, each of which is furnished and has individual condominium title.
The purchaser of the Property is Temple Real Estate Investment Trust ("Temple REIT"), a real estate investment trust which owns and operates hotel properties. Temple REIT will operate the Property as a satellite of the Clearwater Suites Hotel which is located in downtown Fort McMurray and enjoys the highest occupancy of any hotel in Fort McMurray. The Property will be named Clearwater Suites Timberlea.
The sale price of $30.5 million will be satisfied by Temple REIT assuming the existing mortgage debt in respect of the Property in the amount of approximately $18.65 million, with the balance to be paid in cash. The sale is expected to result in net cash to LREIT of approximately $11.8 million, which will be used to repay debt. Siena was acquired by LREIT in July 2008 for $30 million.
Mr. Arni Thorsteinson is the Chief Executive Officer and a trustee of LREIT and Temple REIT. The Proposed Transaction was approved by the independent trustees of LREIT. Mr. Arni Thorsteinson abstained from voting on the Proposed Transaction. An independent third party appraisal was obtained which supports the consideration to be received by LREIT for the Property.
The Proposed Transaction is scheduled to close as of May 1, 2012 and is subject to the receipt of final regulatory approval and the receipt of mortgagee approval of Temple REIT's assumption of the existing mortgage loan in respect of the Property and customary closing conditions.
Clarington Arms, located at 65 Clarington Avenue in Bowmanville, Ontario is being sold for a price of $24 million, subject to the customary closing adjustments. Clarington Arms consists of a 126-suite, three-storey senior' housing complex, featuring supportive living care.
The sale price of $24 million will be satisfied, in part, by LREIT providing second mortgage financing to the purchaser in the amount of $7.5 million for a two year term, bearing interest at 12.5%, and the balance in cash. Net of the second mortgage loan and customary closing adjustments and expenses, the sale is expected to result in net cash to LREIT of $16 million, which will be used to repay the existing $14.75 million of mortgage debt on Clarington. Clarington was acquired by LREIT in February 2007 for $22.4 million. The sale is scheduled to close as of May 1, 2012.
LREIT is a real estate investment trust, which is listed on the Toronto Stock Exchange under the symbols LRT.UN (Trust Units), LRT.DB.G (Series G Convertible Debentures), LRT.NT.A (Second Mortgage Bonds due December 24, 2015), LRT.WT (Warrants expiring March 9, 2015) and LRT.WT.A (Warrants expiring December 23, 2015). For further information on LREIT, please visit our website at www.lreit.com.
The TSX has not reviewed or approved the contents of this press release and does not accept responsibility for the adequacy or accuracy of this press release.
This press release contains certain statements regarding the proposed transaction described herein that could be considered as forward-looking information. The forward-looking information is subject to certain risks and uncertainties, which could result in actual results differing materially from the forward-looking statements. There can be no certainty that the transaction will be completed within the timeline set forth herein or all at.
For further information:
Arni Thorsteinson, Chief Executive Officer, or Gino Romagnoli, Investor Relations
Tel: (204) 475-9090, Fax: (204) 452-5505, Email: [email protected]