Holloway Lodging Reit Announces Acquisition of Holiday Inn Express® in Stellarton, Nova Scotia
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HALIFAX, Nov. 30, 2012 /CNW/ - Holloway Lodging Real Estate Investment Trust (TSX: HLR.UN) ("Holloway") is pleased to announce that it has acquired a 90% interest in the Holiday Inn Express® hotel located in Stellarton, Nova Scotia for a purchase price of $7.9 million, net of cash acquired. Holloway paid cash on closing of $2.4 million and assumed its pro rata share of the hotel's mortgage. Holloway funded the cash purchase price using cash on hand and its credit line. Holloway expects to receive a distribution of the hotel's excess cash shortly after closing.
The purchase price, net of cash acquired, implies a cap rate of 10.3% on trailing twelve-month net operating income and 11.0% on estimated 2013 net operating income. Holloway intends to refinance the hotel's mortgage in the coming months, which will meaningfully increase the hotel's cash flow.
The Holiday Inn Express® hotel is located in Stellarton, Nova Scotia and is the leading hotel in the market. The hotel was built in 2008 and has 125 rooms, 3,000 square feet of meeting space, a pool and indoor waterslide and a fitness facility.
Michael Rapps, Holloway's Chairman, stated "This acquisition is another milestone for Holloway as it is our first acquisition since completing our balance sheet restructuring. More importantly, this acquisition is accretive to Holloway on a net asset value basis and a cash flow basis and furthers our goal of growing our net asset value per share. We expect this property to contribute close to $1.0 million of net operating income in 2013."
ABOUT HOLLOWAY LODGING REAL ESTATE INVESTMENT TRUST
Holloway is a real estate investment trust focused on acquiring, owning and operating select and limited service lodging properties and a small complement of full service hotels primarily in secondary, tertiary and suburban markets. Holloway owns 18 hotels with 1,790 rooms. Holloway's trust units trade on the TSX under the symbol HLR.UN.
This press release contains forward-looking information within the meaning of applicable securities laws. Forward-looking information may relate to Holloway's future outlook and anticipated events or results and may include statements regarding Holloway's future financial position, business strategy, financial results, plans and objectives, including in particular financial and operating results of the Holiday Inn Express® hotel located in Stellarton, Nova Scotia, the payment of any cash distributions from such property after closing and Holloway's ability to refinance the mortgage on such property after closing and the expected cash flow impact of such refinancing. In some cases, forward-looking information can be identified by terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward-looking information is subject to certain factors, including risks and uncertainties, that could cause actual results to differ materially from what the REIT currently expects and there can be no assurance that such statements will prove to be accurate. Some of these risks and uncertainties are described under "Risk Factors" in Holloway's annual information form for the year ended December 31, 2011 which is available on the REIT's profile on the SEDAR website at www.sedar.com. The REIT does not intend to update or revise any such forward-looking information should its assumptions and estimates change.
SOURCE HOLLOWAY LODGING REAL ESTATE INVESTMENT TRUST