WINNIPEG, July 30, 2014 /CNW/ - Temple Hotels Inc. ("Temple") (TSX: TPH) announced today that it has agreed to acquire Hilton Garden Inn Toronto Airport West ("HGI") in Mississauga ON for $25.07 million and the TownePlace Suites by Marriott ("TPS") in Sudbury, ON for $18 million. Both purchase prices are subject to customary closing costs and adjustments.
Hilton Garden Inn Toronto Airport West
HGI is a focused-service hotel located at 1870 Matheson Boulevard in Mississauga, ON, which is situated within the Airport Corporate Centre business park approximately six miles from Toronto's Pearson International Airport. The nine-story hotel opened in 2009 and is comprised of 152 guestrooms. HGI features a restaurant, bar/lounge, 3,500 square feet of function space for up to 250 people, indoor pool with whirlpool, fitness room, business centre, 24-hour convenience store and 145 parking spaces. HGI holds a Canadian Automobile Association 3-Star rating and is a leading performer in the competitive set of hotels in the sub-market area.
Based on the 2015 forecasted net income, the acquisition price of $25.07 million represents an estimated capitalization rate of 8.7%. The acquisition will be financed by the assumption of a first mortgage loan in the amount of $13.53 million and the balance in cash. The first mortgage loan bears interest at a rate of 4.2%, with an approximate 18-year amortization, and matures on June 30, 2017.
TownePlace Suites by Marriott
TPS is an all-suite extended-stay hotel located at 1710 The Kingsway in Sudbury, ON, which is the largest city in Northern Ontario by population. The six-story hotel opened in 2010 and is comprised of 105 suites. TPS features a breakfast room, bar/lounge, 1,935 square feet of function space, indoor pool with whirlpool, fitness room, business centre, gift shop and 106 parking spaces. TPS is centrally located and is a leading performer in the market.
Based on the 2015 forecasted net income, the acquisition price of $18 million represents an estimated capitalization rate of 10.1%. The acquisition will be financed by the assumption of a first mortgage loan in the amount of $9.46 million and the balance in cash. The first mortgage loan bears interest at a rate of 4.59%, with an approximate 18-year amortization, and matures on July 28, 2017.
The acquisitions are scheduled to close on August 1, 2014.
With the acquisition of HGI and TPS Temple now owns seven hotels in Ontario, including two hotels in which Temple has a 50% ownership, comprising a total of 855-guestrooms.
Temple is a real estate investment company listed on the Toronto Stock Exchange under the symbols TPH (common shares), TPH.DB.C, TPH.DB.D, TPH.DB.E and TPH.DB.F (convertible debentures). The objective of Temple is to provide shareholders with stable cash dividends from investment in a diversified portfolio of hotel properties and related assets. For further information on Temple, please visit our website at www.templehotels.ca.
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 at all.
The Toronto Stock Exchange 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.
SOURCE: Temple Hotels Inc.
For further information:
Arni Thorsteinson, Chief Executive Officer, or Gino Romagnoli, Executive Vice President
Tel: (204) 475-9090, Fax: (204) 452-5505, Email: [email protected]