LREIT completes sale of two properties

Tuesday, May 17, 2016

Lanesborough Real Estate Investment Trust (LREIT) announced that it has completed the sale of the following two properties, with an effective date of May 1, 2016:

  • Willowdale Gardens, an 88-suite apartment property located in Brandon, Manitoba, was sold for $9 million. The sale resulted in net cash proceeds to LREIT, after repayment of the first mortgage loan and the standard closing costs and adjustments, of approximately $5.95 million. Willowdale Gardens was acquired by LREIT in 2006 for $4.3 million.
  • Beck Court, a 120-suite apartment property located in Yellowknife, NWT, was sold for $23 million. The sale resulted in net cash proceeds to LREIT of approximately $3.4 million after the assumption by the purchaser of the existing first mortgage loan in the amount of $15.6 million and vendor take-back financing provided by LREIT in the amount of $4 million. The vendor take-back financing bears interest at 4%, with monthly interest only payments and a six-year term. Beck Court was acquired by LREIT in 2004 for $14.3 million.

The total net cash proceeds in the approximate amount of $9.35 million were used to fully repay a $5.4 million second mortgage loan, which had a secured charge on Willowdale Gardens, and to pay down the revolving loan by $3.95 million.

As part of the sale agreement for both properties, LREIT and the purchaser have agreed that, in the event that either property is re-sold within a 24-month period, LREIT will share equally in any profit that is realized as a result of such sale.

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