Lanesborough REIT to sell all properties, shut down
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Hey there, time traveller!
This article was published 22/05/2024 (684 days ago), so information in it may no longer be current.
A cash-strapped investment trust is seeking to sell 11 apartment buildings and vacant land in Winnipeg.
Late Wednesday afternoon, Lanesborough Real Estate Investment Trust (LREIT) announced it’s preparing to sell its assets to a numbered company for $41.6 million.
The rental properties include: Millennium Village, Lakewood Townhomes, Whimbrel Terrace, Gannet Place, Snowbird Manor, Skyview Apartments, Lunar Apartments, Parkland Apartments, Norglen Terrace, Highland Tower and Chateau St. Michael’s.
The vacant land sits near the corner of Grant Avenue and Kenaston Boulevard.
Unit-holders can attend a meeting June 27. If two-thirds vote to approve the deal, the properties will transfer to 7254751 Manitoba Ltd.
The numbered company is controlled by Arni Thorsteinson, LREIT’s vice-chairman. The agreement would be considered a “related-party transaction.”
Thorsteinson is also president of Shelter Canadian Properties Ltd., one of the companies owed millions by LREIT.
Collectively, LREIT owes Shelter Canadian and a numbered company $159 million. It holds $201 million in liabilities.
The investment trust has been warned it won’t be able to make “significant further advances” under the numbered company’s credit facility or indefinitely defer interest payments.
The numbered company it owes is 2668921 Manitoba Ltd.
If the sale is approved, LREIT will be wound-up and terminated and the numbered company Thorsteinson heads will assume the trust’s estimated $33 million in mortgage loan debt and another $7.8 million of debt under a revolving loan facility.
LREIT would continue to owe about $139 million to businesses and $16.9 million to the lender of a mortgage loan formerly secured by the trusts’ Woodland Park property.
It wouldn’t have any more material assets and it would continue gaining costs, including its debt servicing. As such, it won’t be able to repay all of its outstanding indebtedness, including to its unitholders, it said in a news release Wednesday.
“These financial obligations and costs mean that LREIT has no ability to continue as a going concern,” it said in the release.
Bird Construction announced last week Thorsteinson would retire from its board after serving for more than three decades.