As part of the acquisition, Holloway has entered into an agreement with the seller of the property pursuant to which the seller has agreed to use the Westmark hotel exclusively for all its accommodation needs in Whitehorse.
HALIFAX – Holloway Lodging Corporation announced that it has acquired the Westmark hotel located in Whitehorse, Yukon for a purchase price of $9.8 million. The purchase price implies a cap rate of approximately 15% based on estimated net operating income for the first full year following acquisition.
The Westmark hotel is located in Whitehorse, which is the capital of the Yukon Territory. The Whitehorse economy is driven principally by tourism, retail activity, government services and, to a lesser extent, mining. The property has 180 rooms, a restaurant and lounge and 7,000 square feet of function space.
As part of the acquisition, Holloway has entered into an agreement with the seller of the property pursuant to which the seller has agreed to use the Westmark hotel exclusively for all its accommodation needs in Whitehorse. The agreement has an initial term of three years, is renewable and provides for room rate increases each year. It is anticipated that the seller will provide approximately 20% of the Westmark’s total room nights in 2016 and subsequent years.
Michael Rapps, Holloway’s Chairman, stated “The Westmark hotel is our second property in Whitehorse. The acquisition was completed at an attractive cap rate, at a price substantially below the property’s replacement cost and further diversifies Holloway outside of oil and gas markets. Moreover, we have negotiated an agreement with the seller that provides the hotel with significant base business in coming years. We expect both our Whitehorse hotels to perform well given the low Canadian dollar and the city’s focus on tourism.”
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