/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES
OR FOR DISSEMINATION IN THE UNITED
STATES/
MISSISSAUGA, ON, Aug. 1, 2018 /CNW/ - R&R Real Estate
Investment Trust (the "REIT") (TSXV: RRR.UN) today announced that
it has completed its previously announced acquisition (the
"Acquisition") of a portfolio of five economy extended-stay hotels
(the "Acquisition Properties") comprising 656 rooms located in
the United States. The REIT
acquired the Acquisition Properties from entities (the "Vendors")
controlled by Majid Mangalji,
Executive Chairman and Trustee of the REIT and the largest
beneficial unitholder of the REIT (on a fully diluted basis), and
Michael Klingher, President and
Chief Executive Officer of the REIT.
The total cost for the Acquisition Properties was approximately
US$32.1 million (including closing
costs) and was satisfied by a combination of: (i) the assumption of
approximately US$20.5 million
aggregate principal amount of existing mortgage debt relating to
the Acquisition Properties; (ii) the issuance to the Vendors of
approximately US$11 million
(C$14.4 million) of Class B limited
partnership units (the "Class B LP Units") of newly-formed limited
partnerships that hold the Acquisition Properties (economically
equivalent to and exchangeable for units of the REIT), at a price
of C$0.20 per Class B LP Unit, and
attached special voting units in the REIT; and
(iii) approximately US$0.6
million in cash.
Following the Acquisition and the completion of the REIT's
previously announced disposition of three hotel properties to an
arm's length third party, the REIT's portfolio is now comprised of
12 hotel properties located in nine states across the United States, representing an aggregate
of 1,473 rooms.
Michael Klingher, President and
Chief Executive Officer of the REIT, acquired 17,818,979 Class
B LP Units and special voting units of the REIT as a result of the
Acquisition. Prior to the closing of the Acquisition, Mr. Klingher
was the beneficial owner of 9,331,857 voting units of the REIT,
representing approximately 6.6% of outstanding voting units of the
REIT. Immediately following closing of the Acquisition, Mr.
Klingher was the beneficial owner of 27,150,836 voting units,
representing approximately 12.7% of outstanding voting units of the
REIT.
This press release is being issued in compliance with the
requirements of National Instrument 62-103 – The Early Warning
Report System and Related Take-Over Bid and Insider Reporting
Issues. A copy of the early warning reports to be filed by Mr.
Klingher in connection with the transaction described herein
will be available on the REIT's SEDAR profile at www.sedar.com and
can also be obtained by contacting Bob
Choo, Chief Financial Officer, R&R Real Estate
Investment Trust, by phone at 905-206-7102, by mail at 5090
Explorer Drive, Suite 700, Mississauga,
Ontario L4W 4T9 or by e-mail at bob.choo@whg.com.
About R&R REIT
R&R REIT is an open-ended real estate investment trust
focused on increasing unitholder value through the acquisition and
ownership of hotel properties located in the United States.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE R&R Real Estate Investment Trust