WINNIPEG, Jan. 10, 2012 /CNW/ - Temple Real Estate Investment Trust ("Temple REIT") (TSX Venture: TR.UN) announced today it has agreed to acquire the Radisson Hotel & Suites Fort McMurray (the "Hotel") for $25.1 million, subject to the usual closing adjustments. The 5-storey Hotel, which opened in 2003, is centrally located on Gregoire Drive midway between downtown Fort McMurray and the Fort McMurray Airport. The Hotel contains 134 guestrooms, including 28 suites and an executive floor with 23 rooms. Other amenities offered by the Hotel include:
- Flexible meeting space totalling approximately 5,650 square feet, comprised of six distinct rooms, providing a variety of options for small to large corporate meetings and conferences, training sessions and social events;
- A variety of recreational amenities, including heated indoor pool with waterslide, whirlpool and 24-hour fitness room;
- 175-seat restaurant under lease to a new tenant/operator;
- 221 surface parking spaces; and
- Other facilities include a business centre, guest laundry facilities and seven staff housing units (15-bedrooms).
Temple REIT will undertake a $2.7 million capital expenditure program over approximately 18 months, consisting primarily of guest room and lobby/corridor refurbishment.
Based on the 2012 forecasted net income, the total investment in the Hotel of $27.8 million, including refurbishment, represents a capitalization rate of approximately 13%. The acquisition will be financed with a first mortgage loan in the amount of $15 million, a vendor take-back mortgage in the amount of $3 million and the balance in cash. The first mortgage loan will bear interest at an estimated rate of 5.6% for a three-year term and will have a 20-year amortization. The vendor take-back mortgage will bear interest at 10%, payable interest-only on a quarterly basis, and will mature on February 1, 2013. The acquisition is scheduled to close on February 1, 2012.
Temple REIT is a real estate investment trust, which is listed on the TSX Venture Exchange under the symbols TR.UN (trust units), TR.DB.A, TR.DB.B, TR.DB.C and TR.DB.S (convertible debentures). The objective of TREIT is to provide Unitholders with stable cash distributions from investment in a diversified portfolio of hotel properties and related assets. For further information on TREIT, 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 TSX Venture 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.
For further information:
Arni Thorsteinson, Chief Executive Officer, or Gino Romagnoli, Investor Relations
Tel: (204) 475-9090, Fax: (204) 452-5505, Email: [email protected]