/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES
OR FOR DISSEMINATION IN THE UNITED
STATES/
MISSISSAUGA, ON, Oct. 3, 2017 /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 nine economy extended-stay hotels
(the "Acquisition Properties") comprising 1,020 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 purchase price for the Acquisition Properties was
approximately US$35.1 million
(including closing costs net of operating/capital expense credits)
and was satisfied by a combination of: (i) the assumption of
approximately US$15.1 million
aggregate principal amount of existing mortgage debt relating to
the Acquisition Properties; (ii) the issuance to the Vendors of
approximately US$9.4 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;
(iii) a US$8.0 million vendor-take
back (the "VTB") loan provided by the Vendors; and
(iv) approximately US$2.6
million in cash.
Following the Acquisition, the REIT's portfolio is now comprised
of 10 hotels located in nine states across the United States, representing an aggregate
of 1,152 rooms.
Majid Mangalji, Executive
Chairman and Trustee of the REIT, acquired 50,503,793 Class B LP
Units and special voting units of the REIT as a result of this
transaction. Prior to the closing of the Acquisition, Mr. Mangalji
was the beneficial owner of 61,508,895 voting units of the REIT,
representing approximately 73.9% of outstanding voting units of the
REIT. Immediately following closing of the Acquisition, Mr.
Mangalji became the beneficial owner of 112,012,688 voting units,
representing approximately 79.3% of outstanding Voting Units.
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