Legacy REIT Acquires Interest in Delta Beausejour
Moncton, New Brunswick
TORONTO, Canada, February 12, 2007. Legacy Hotels Real Estate Investment Trust ("Legacy")(TSX:LGY.UN) today announced that it has reached an agreement to acquire the fee interest in the 310-room Delta Beausejour in Moncton, New Brunswick for approximately $21.2 million plus closing costs. Legacy currently owns the leasehold interest in the property, which expires in 2015. Legacy expects to invest approximately $6.0 million in the property to renovate and reposition the hotel.
Delta Beausejour is located in Moncton's downtown core, the geographic centre of the Maritimes. Amenities include 15 meeting rooms with a total of 24,000 square feet of meeting space, an indoor pool, fitness centre and two full-service restaurants including the award-winning Windjammer Dining Room.
The acquisition is expected to be financed by a $25.0 million mortgage on the property. Incremental mortgage proceeds will be used to partially fund the capital investment program at the hotel. Closing is anticipated in March 2007. Legacy anticipates that this transaction will be immediately accretive to its earnings. Net annual lease payments on the fee interest being acquired approximated $1.7 million in 2006.
"We're pleased to have acquired this long-term position in the Delta Beausejour. Value enhancement efforts, including addressing some of our leasehold interests, has been a strategic priority for Legacy over the past year," commented Neil J. Labatte, Legacy's President and Chief Executive Officer. "Moncton represents an important and growing market in eastern Canada. Our commitment to investing capital in the asset should provide further opportunities for improved performance at the hotel."
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