WINNIPEG, April 30, 2012 /CNW/ - Temple Real Estate Investment Trust (TSX Venture: TR.UN) ("Temple REIT") announced today it has agreed to acquire the following two properties:
|(i)||Inn at the Quay, a full-service hotel located at 900 Quayside Drive in New Westminster, British Columbia, for a price of $17,325,000, subject to the customary closing adjustments; and|
|(ii)||Clearwater Suites Timberlea, an extended-stay building located at 118 Millenium Drive in the Timberlea area of Fort McMurray, Alberta, for a purchase price of $30.5 million, subject to customary closing adjustments.|
Inn at the Quay
Inn at the Quay consists of a ten-storey, 126-room, waterfront hotel located in the high-density area of downtown New Westminster overlooking the Fraser River. Inn at the Quay is the only major hotel in New Westminster and is a popular venue for corporate functions and weddings. The hotel features a variety of amenities including:
- 172-seat restaurant under lease to The Boathouse Restaurant (a west coast restaurant chain);
- approximately 4,000 square feet of meeting space;
- 150 surface and parkade stalls; and
- other amenities include a fitness centre, whirlpool, sauna and business centre.
Inn at the Quay underwent a $2.2 million ($17,500 per room) renovation program during 2010/11 which included a complete guest room refurbishment and upgrades throughout the front-of-house and meeting spaces.
Based on the 2012-2013 forecasted net income, the acquisition price of $17,325,000 million represents an estimated capitalization rate of 11%. The acquisition will be financed with a first mortgage loan in the amount of $12.1 million and the balance in cash. The first mortgage loan will bear interest at a rate of 5.0% for a five-year term and has a 20-year amortization. The acquisition is expected to close during May 2012.
Clearwater Suites Timberlea
Clearwater Suites Timberlea consists of a four-storey, 66-suite extended-stay building, with a 93-stall underground parkade on a 3.78 acre site and is comprised of six one-bedroom and 60 two-bedroom suites. The new property will be managed by Atlific Hotels and Resorts as a satellite of Clearwater Suites Hotel. Clearwater Suites Hotel is another of Temple REIT's extended-stay hotels in downtown Fort McMurray and is the highest income producing property in Temple REIT's portfolio,
Based on the 2012-2013 forecasted net income, the acquisition price of $30,500,000 million represents an estimated capitalization rate of 11%. The purchase price will be satisfied by Temple REIT assuming the existing 5.375% mortgage debt in the amount of approximately $18,650,000, with the balance to be paid in cash.
The vendor of the property is Lanesborough Real Estate Investment Trust ("Lanesborough REIT"). Mr. Arni Thorsteinson is the Chief Executive Officer and a trustee of both Temple REIT and Lanesborough REIT. The proposed acquisition of the property was approved by the independent trustees of Temple REIT. Mr. Thorsteinson abstained from voting on the proposed property acquisition. An independent third party appraisal was obtained which supports the purchase price to be paid by Temple REIT for the property.
The acquisition is scheduled to close as of May 1, 2012 and is subject to final regulatory approval, the receipt of mortgagee approval of Temple REIT's assumption of the existing mortgage loan in respect of the property and customary closing conditions.
About Temple REIT
TREIT 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, TR.DB.D and TR.DB.S (convertible debentures). The objective of TREIT is to provide Unitholders with stable cash distributions from investment in a geographically diversified Canadian 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 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 all at.
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]