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MISSISSAUGA, ON, April 3, 2018 /CNW/ - R&R Real Estate Investment Trust (the "REIT") (TSXV: RRR.UN) today announced that it has, through certain of its subsidiaries, entered into an agreement to sell three of its hotel properties (the "Disposition Properties") for an aggregate price of US$10.2 million (the "Disposition"), subject to adjustment, to The Siegel Group Nevada, Inc., an arm's length third party (the "Purchaser"). The net proceeds of the Disposition, expected to be approximately US$9.2 million, are anticipated to be used to repay outstanding indebtedness of the REIT.
The Disposition Properties consist of three economy extended-stay hotels located in the United States that are currently indirectly owned by the REIT, comprising an aggregate of 335 rooms. Two of the Disposition Properties operate under the HomeTowne Studios brand and the remaining Disposition Property operates under the HomeTowne Suites brand. The Disposition Properties are located in Montgomery, Alabama, Gautier, Mississippi and Alexandria, Louisiana.
Following the Disposition, the REIT's portfolio will be comprised of seven hotel properties located in six states across the United States, representing an aggregate of 817 rooms.
The Disposition will be completed pursuant to a purchase and sale agreement among certain subsidiaries of the REIT and the Purchaser (the "Purchase Agreement") and will be conditional upon the completion of diligence to the Purchaser's satisfaction and other customary closing conditions. The Purchase Agreement also contains customary provisions for transactions of this nature, including representations, warranties, covenants and indemnities provided by the parties to the Purchase Agreement.
Assuming all conditions to the completion of the Disposition are satisfied or waived, the Disposition is expected to occur in July, 2018. Pursuant to the terms of the Purchase Agreement, the Purchaser may close on the acquisition of each individual hotel property on separate dates, provided adequate notice is delivered to the REIT, the Purchaser closes on the Gautier property first, all applicable closing conditions are satisfied or waived, and closing on all Disposition Properties is completed by July, 2018.
Forward Looking Statements
Certain statements contained in this press release constitute forward-looking information within the meaning of Canadian securities laws. Forward looking information may relate to future results, performance, achievements, events, prospects or opportunities for the REIT or the real estate industry and may include statements regarding the completion of the Disposition. In some cases, forward-looking information can be identified by such terms such as "may", "will", "occur", "expect", or the negative thereof or other similar expressions concerning matters are not historical facts.
Forward-looking statements necessarily involve known and unknown risks and uncertainties, that may be general or specific and which give rise to the possibility that expectations, predictions or conclusions will not prove to be accurate, assumptions may not be correct and objectives, strategic goals and priorities will not be achieved. A variety of factors, many of which are beyond the REIT's control, affect the operations, performance and results of the REIT and its business, and could cause actual results to differ materially from current expectations of anticipated events. These factors include, but are not limited to, the risks discussed in the REIT's materials filed with Canadian securities regulatory authorities from time to time on www.sedar.com, risks related to the Disposition and risks related to the REIT and its business. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements as there can be no assurance actual results will be consistent with such forward-looking statements.
Information contained in forward-looking statements is based upon certain material assumptions that were applied in drawing a conclusion, including management's perceptions of historical trends, current conditions and expected future developments, including the closing of the Disposition. While management considers these assumptions to be reasonable based on currently available information, they may prove to be incorrect. The forward-looking statements made in this press release are dated, and relate only to events or information, as of the date of this press release. Except as specifically required by law, the REIT undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
About R&R REIT
R&R REIT is an open-ended real estate investment trust focused on increasing unitholder value through the acquisition and ownership of hotel properties located in the United States.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE R&R Real Estate Investment Trust
For further information: please contact Bob Choo, Chief Financial Officer, R&R Real Estate Investment Trust, at 905-206-7102 or e-mail [email protected]