Winnipeg Free Press - PRINT EDITION

N.W.T. hotel sale signed

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WINNIPEG real estate entrepreneur Arni Thorsteinson's activities include him holding the position of CEO of two publicly traded entities.

One of the them, Temple Hotels Inc., owns and operates a portfolio of 26 hotels across Canada.

The other, Lanesborough Real Estate Investment Trust (LREIT), primarily owns apartment buildings mostly in Western Canada, along with a couple of commercial properties.

While Lanesborough has been selling assets to reduce debt, Temple closed a $57-million equity offering three weeks ago to make acquisitions.

So everything came together for the companies on Monday with the closing of a $21.7-million sale of an extended-stay property in Yellowknife, N.W.T., by Lanesborough to Temple.

Thorsteinson said both companies sought independent appraisals for the property. He said Lanesborough paid $15 million for the property in 2007.

Temple will invest another $4.8 million in the property to convert it from a 106-room apartment/extended-stay hotel into 100 per cent hotel with 115 rooms.

He said both companies also benefit because each also has another property in Yellowknife.

He said Temple's independent appraisal concluded the value of the property would increase to around $30 million as a hotel.

Thorsteinson said there is no issue regarding related-party transactions because he abstained from independent board votes from both companies.

An official from the TSX, where both company's shares are listed, said just because the two companies have the same CEO does not necessarily make it a related-party transaction.

The TSX spokeswoman said every board member and director is reviewed and approved by the TSX and the exchange makes sure there is strong governance in place in all its listed entities.

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition January 7, 2014 B4

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