Holloway Lodging Corporation (Holloway) – a real estate corporation focused on acquiring, adding value and operating select service hotels and managing hotels for third parties – has sold the Days Inn and Travelodge hotels located in Moncton, N.B.
The sale price for the hotels was $14 million representing a cap rate of approximately 9.3 per cent and a price per room of $62,000.
According to a press release, Holloway estimates that it will record a gain on sale of approximately $2.5 million in the first quarter of 2019 (after also reversing a $0.7 million impairment on one of the properties in the fourth quarter of 2018). Holloway does not anticipate paying any tax on the sale of this property.
Holloway received approximately $5.9 million of proceeds after closing costs, the repayment of $6.7 million of mortgages secured by the properties and the provision of a $1.0 million second mortgage secured by the properties. Holloway expects to use the net sale proceeds to reduce amounts drawn under its revolving credit facility.
Holloway owns 28 hotels with 3,121 rooms.