Lakeview Hotel REIT Reports 3rd quarter Financial Results

/NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTIBUTION TO U.S. NEWS WIRE SERVICES/

WINNIPEG, Nov. 29 /CNW/ - Lakeview Hotel Real Estate Investment Trust ("Lakeview REIT") is pleased to report its financial results for the quarter ended September 30, 2010.  The following comments in regard to the financial results should be read in conjunction with the September 30, 2010 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.

Lakeview REIT experienced its strongest quarterly results since 2008.  Revenue Per Available Room increased from $64.43 in the third quarter of 2009 to $71.13 in the third quarter of 2010.  As a result, Lakeview REIT enjoyed an 8.99% increase in total revenues in the third quarter when compared to the third quarter of 2009.

Other performance measures also showed significant improvement.  Adjusted Funds From Operations for the quarter were $793,029 versus -$94,481 in third quarter 2009.  Distributable Income increased from $273,932 in the third quarter of 2009 to $1,208,354 in the third quarter of 2010.

Lakeview REIT has seen a slow and steady improvement in operating results since early in 2010.  Revenues remain below the levels they were at when the market had peaked, but the reversal of the downward trend is encouraging and is expected to continue.  An expected strong winter drilling season bodes well for continued improvements in year-over-year operating results for the fourth quarter of 2010 and into the first quarter of 2011.

Following is a comparison of the operating results for the three and nine months ended September 30, 2010 and the three and six months ended September 30, 2009:

		Three months ended		Nine months ended
		September 30		September 30
		2010	2009	2010	2009
Hospitality Revenue
	Room	8,814,503	7,971,535	23,157,362	23,322,006
	Food & Beverage	667,594	707,895	2,080,165	2,212,330
	Other	362,568	353,354	1,124,322	1,364,955
Total Revenue		9,844,665	9,032,784	26,361,849	26,899,291
Expenses		12,192,071	10,562,138	32,694,039	32,149,120
Net Income (Loss) before future income tax expense		(2,347,406)	(1,529,354)	(6,332,190)	(5,249,829)
Basic and diluted income (loss) before income tax per unit		(0.120)	(0.078)	(0.324)	(0.270)
Future (Income Tax Expense) Recovery (1)		-	-	-	-
Net Income (Loss)		(2,347,406)	(1,529,354)	(6,332,190)	(5,249,829)
Basic and Diluted Income (Loss) per Unit		(0.120)	(0.078)	(0.324)	(0.270)
Reconciliation to funds from Operations
Add (deduct)
Amortization of income properties		1,636,127	1,670,341	4,993,624	5,013,603
Amortization of franchise fees and licenses		8,734	8,733	26,202	48,407
Provision for impairment of note receivable		1,396,062	-	1,396,062	-
Compensation Costs of Unit Options		124,000	-	124,000	-
Distributions from Lakeview Flag Licensing General Partnership		362,600	122,500	411,600	419,930
Income from Lakeview Flag Licensing General Partnership		(154,583)	(147,640)	(397,687)	(478,938)
Future income tax expense (recovery)		-	-	-	-
Funds from Operations (FFO)		1,025,534	124,580	221,611	(246,827)
Basic and diluted funds from Operations per unit		0.052	0.006	0.011	(0.013)
Contributions to reserve account		(232,505)	(219,061)	(570,879)	(602,260)
Adjusted funds from Operations (AFFO)		793,029	(94,481)	(349,268)	(849,087)
Basic and diluted adjusted funds from Operations per unit		0.041	(0.005)	(0.018)	(0.044)
Reconciliation to distributable income
Accretion on debt component of convertible debentures		300,465	266,540	868,532	771,275
Accretion of debentures		51,717	46,543	151,150	136,028
Accretion of mortgages payable		63,143	55,330	190,138	159,992
Decretion of mortgages receivable		-	-	-	56,877
Loss on settlement of mortgages receivable		-	-	-	98,244
Distributable income		1,208,354	273,932	860,552	373,329
Basic and diluted distributable income per units		0.062	0.014	0.044	0.019
Distributions		0	0	0	192,748

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.

%SEDAR: 00020441E

For further information:

Keith Levit, President, or Avrum Senensky, Executive Vice President
Tel: [phone], Fax: [phone], Email [email protected]