Lakeview Hotel REIT Reports 3rd Quarter Financial Results

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WINNIPEG, Nov. 29, 2012 /CNW/ - Lakeview Hotel Real Estate Investment Trust ("Lakeview REIT") is pleased to report its financial results for the quarter ended September 30, 2012.  The following comments in regard to the financial results should be read in conjunction with the September 30, 2012 financial statements and Management Discussion and Analysis which are available on the SEDAR website www.sedar.com and the Lakeview REIT website www.lakeviewreit.com.

Management anticipated, as discussed in the previous quarterly Management's Discussion and Analysis, that third quarter revenues would be flat or down from the third quarter of 2011 related to lower than expected levels of drilling activity in Western Canada.  Room revenues did in fact decline by 4.7% or $475,132.  Total revenues for the REIT, however, were only down by 1.4% or $161,579 as Food & Beverage and Other revenues increased over the third quarter in the previous year.

While revenues were down marginally, lower operating costs resulted in quarterly increases in Net Income ($780,788 vs. $313,177 in the third quarter of 2011), Adjusted Funds From Operations ($1,362,387 vs. $988,992 in the third quarter of 2011), and Distributable Income ($1,593,462 vs. $1,425,791 in the third quarter of 2011).  Adjusted Funds From Operations year to date has increased by $1,528,637 to $2,513,689 when compared to the same nine month period in the previous year.

Fourth quarter revenues are expected to be lower than in the fourth quarter of 2011.  Occupancies in markets dependent upon gas drilling activity are primarily responsible for the anticipated overall decline in revenues.  Activity in these markets was quite robust in the fourth quarter of 2011.  Hotels in Edson and Hinton, Alberta and Fort Nelson, British Columbia are expected to see significantly weaker results when compared to last year.  While recoveries in these markets are expected, it is difficult at this time to forecast exactly when the recoveries may occur.

While visibility in drilling related markets remains uncertain, management expects the REIT to remain cash flow positive in 2013.  Strong improvements in operating results, related to various drivers, are expected in several markets including Calgary, Drayton Valley, Fort Saskatchewan and Slave Lake, Alberta; Prince George, British Columbia; and Fredericton, New Brunswick.  Management also anticipates the REIT will receive increased licensing royalties in 2013 from properties outside REIT ownership as new licensed Lakeview hotels are expected to open during the year.

Management expects Unitholders of Lakeview Hotel REIT will approve converting the REIT to a corporation next month.  The conversion will allow distributions in the form of dividends to flow more tax efficiently to owners when a resumption of distributions becomes possible.

Following is a comparison of the operating results for the three and nine months ended September 30, 2012 and the comparable period in 2011:

Lakeview REIT is a real estate investment trust, which is listed on the TSX Venture Exchange under the symbol "LHR.UN".  Lakeview REIT receives income from ownership, management and licensing of hotel properties.  For further information on Lakeview REIT please visit our website www.lakeviewreit.com.

The TSX Venture Exchange nor its Regulation Service Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. 

SOURCE: Lakeview Hotel Real Estate Investment Trust