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MISSISSAUGA, ON, Aug. 1, 2018 /CNW/ - R&R Real Estate Investment Trust (the "REIT") (TSXV: RRR.UN) today announced that it has completed its previously announced acquisition (the "Acquisition") of a portfolio of five economy extended-stay hotels (the "Acquisition Properties") comprising 656 rooms located in the United States. The REIT acquired the Acquisition Properties from entities (the "Vendors") controlled by Majid Mangalji, Executive Chairman and Trustee of the REIT and the largest beneficial unitholder of the REIT (on a fully diluted basis), and Michael Klingher, President and Chief Executive Officer of the REIT.
The total cost for the Acquisition Properties was approximately US$32.1 million (including closing costs) and was satisfied by a combination of: (i) the assumption of approximately US$20.5 million aggregate principal amount of existing mortgage debt relating to the Acquisition Properties; (ii) the issuance to the Vendors of approximately US$11 million (C$14.4 million) of Class B limited partnership units (the "Class B LP Units") of newly-formed limited partnerships that hold the Acquisition Properties (economically equivalent to and exchangeable for units of the REIT), at a price of C$0.20 per Class B LP Unit, and attached special voting units in the REIT; and (iii) approximately US$0.6 million in cash.
Following the Acquisition and the completion of the REIT's previously announced disposition of three hotel properties to an arm's length third party, the REIT's portfolio is now comprised of 12 hotel properties located in nine states across the United States, representing an aggregate of 1,473 rooms.
Michael Klingher, President and Chief Executive Officer of the REIT, acquired 17,818,979 Class B LP Units and special voting units of the REIT as a result of the Acquisition. Prior to the closing of the Acquisition, Mr. Klingher was the beneficial owner of 9,331,857 voting units of the REIT, representing approximately 6.6% of outstanding voting units of the REIT. Immediately following closing of the Acquisition, Mr. Klingher was the beneficial owner of 27,150,836 voting units, representing approximately 12.7% of outstanding voting units of the REIT.
This press release is being issued in compliance with the requirements of National Instrument 62-103 – The Early Warning Report System and Related Take-Over Bid and Insider Reporting Issues. A copy of the early warning reports to be filed by Mr. Klingher in connection with the transaction described herein will be available on the REIT's SEDAR profile at www.sedar.com and can also be obtained by contacting Bob Choo, Chief Financial Officer, R&R Real Estate Investment Trust, by phone at 905-206-7102, by mail at 5090 Explorer Drive, Suite 700, Mississauga, Ontario L4W 4T9 or by e-mail at firstname.lastname@example.org.
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@example.com