WINNIPEG, Nov. 22, 2012 /CNW/ - Temple Real Estate Investment Trust ("Temple REIT") (TSX: TR.UN) announced today it has agreed to acquire a 50% beneficial co-ownership interest in the Holiday Inn South in Winnipeg, MB (the "Hotel") for $5.5 million. The 11 storey, full-service Hotel is located at 1330 Pembina Highway, a major north-south thoroughfare in the southern quadrant of Winnipeg, serving the new Investors Group Stadium at the University of Manitoba.
The Hotel contains 170 guestrooms, 7,500 square feet of banquet and meeting facilities, restaurant, lounge, indoor swimming pool, whirlpool, fitness area and business centre. The Hotel is ideally suited for both business and leisure travel.
Based on the forecasted net income for 2013, the $5.5 million purchase price represents a capitalization rate of approximately 10%. The acquisition will be financed by the assumption of 50% of the existing first mortgage loan in the amount of $2.4 million and the balance in cash. The first mortgage loan bears interest at prime plus 1.75%. The acquisition is scheduled to close on November 30, 2012.
Subsequent to acquisition, the Hotel is scheduled to undergo a capital expenditure program at an estimated total cost of $2.5 million consisting primarily of guest room and lobby/corridor refurbishment.
The transaction will be completed by Temple REIT acquiring the 50% beneficial interest in the Hotel that is currently owned by unrelated third parties. Lake Louise Limited Partnership ("LLLP") owns the remaining 50% beneficial co-ownership interest. 2668921 Manitoba Ltd. ("2668921") owns 23% of LLLP. 2668921 is a "related party" of Temple REIT by virtue of the fact that all of its shares are owned by the spouse of Mr. Arni Thorsteinson, the Chief Executive Officer and a trustee of Temple REIT and Mr. Thorsteinson is the President of 2668921. 2668921 is also the parent company of Shelter Canadian Properties Limited, the asset manager of Temple REIT. Temple expects to offer to acquire the remaining 50% ownership of the Holiday Inn South in 2013, subject to any regulatory approvals.
The independent trustees of Temple REIT have approved the transaction. Mr. Thorsteinson abstained from voting on the resolution approving the transaction.
Temple REIT is a real estate investment trust, which is listed on the Toronto Stock Exchange under the symbols TR.UN (trust units), TR.DB.B, TR.DB.C, TR.DB.D, TR.DB.E and TR.DB.S (convertible debentures). The objective of Temple REIT is to provide Unitholders with stable cash distributions from investment in a diversified portfolio of hotel properties and related assets. For further information on Temple REIT, please visit our website at www.treit.ca.
This press release contains certain statements 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.
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 REIT
For further information:
Arni Thorsteinson, Chief Executive Officer, or Gino Romagnoli, Investor Relations
Tel: (204) 475-9090, Fax: (204) 452-5505, Email: firstname.lastname@example.org