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MISSISSAUGA, ON, Oct. 3, 2017 /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 nine economy extended-stay hotels (the "Acquisition Properties") comprising 1,020 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 purchase price for the Acquisition Properties was approximately US$35.1 million (including closing costs net of operating/capital expense credits) and was satisfied by a combination of: (i) the assumption of approximately US$15.1 million aggregate principal amount of existing mortgage debt relating to the Acquisition Properties; (ii) the issuance to the Vendors of approximately US$9.4 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; (iii) a US$8.0 million vendor-take back (the "VTB") loan provided by the Vendors; and (iv) approximately US$2.6 million in cash.
Following the Acquisition, the REIT's portfolio is now comprised of 10 hotels located in nine states across the United States, representing an aggregate of 1,152 rooms.
Majid Mangalji, Executive Chairman and Trustee of the REIT, acquired 50,503,793 Class B LP Units and special voting units of the REIT as a result of this transaction. Prior to the closing of the Acquisition, Mr. Mangalji was the beneficial owner of 61,508,895 voting units of the REIT, representing approximately 73.9% of outstanding voting units of the REIT. Immediately following closing of the Acquisition, Mr. Mangalji became the beneficial owner of 112,012,688 voting units, representing approximately 79.3% of outstanding Voting Units.
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: Bob Choo, Chief Financial Officer, R&R Real Estate Investment Trust, at 905-206-7102 or e-mail [email protected]