Plymouth Realty Capital Corp. agrees to purchase New Jersey Hotel as its Qualifying Transaction

Agrees to Purchase Two Additional U.S. East Coast Hotels

BOSTON, MA, Dec. 3, 2013 /CNW/ - Plymouth Realty Capital Corp. ("Plymouth") (TSXV: PH.P), a capital pool company, announces today that it has entered into an assignment of an existing hotel purchase and sale agreement dated as of December 2, 2013 to purchase a "Hampton Inn" branded hotel property located in New Jersey (the "Initial Property") for a purchase price of approximately US$8.5 million, excluding closing costs and adjustments and funding for brand mandated property improvement plan, as its "Qualifying Transaction" (as that term is defined in TSX Venture Exchange ("TSXV") Policy 2.4 - Capital Pool Companies).  Plymouth intends to satisfy the purchase price from the proceeds of a new mortgage financing on the Initial Property in the principal amount of approximately US$6.5 million, with the remainder of the purchase price to be paid in cash from the proceeds of the concurrent Financing (as defined below).  Including the property improvement plan funding and closing costs and adjustments, the aggregate cost to Plymouth for the Initial Property is approximately US$10.3 million.

The seller (the "Initial Property Seller") of the Initial Property is Flemington Investors, LP, a Pennsylvania limited partnership, which is unrelated to Plymouth or any of its directors and officers.   As such, the acquisition will not be a Non-Arm's Length Qualifying Transaction (as that term is defined in TSXV Policy 2.4) and approval of the Plymouth shareholders will not be required.  The directors, officers and senior management of Plymouth will remain unchanged upon completion of the acquisition of the Initial Property.

Plymouth has entered into an engagement letter with M Partners Inc. pursuant to which M Partners has agreed to, among other things, act as lead agent with respect to an equity private placement financing (the "Financing"), on a commercially reasonably best efforts basis, to be undertaken by Plymouth in order to fund, at a minimum, the cash portion of the above-noted purchase price, and depending on the market conditions, to fund the acquisition of two additional U.S. hotel properties noted below.

On closing of the acquisition of the Initial Property, Plymouth anticipates meeting the "Tier 2" initial listing requirements of the TSXV.  Closing is currently anticipated to be in the first quarter of 2014.

The acquisition of the Initial Property is intended to form part of a series of transactions which will cumulate in the effective conversion of Plymouth into a real estate investment trust with an internalized executive management platform.  It is also anticipated that an effective share consolidation will occur as part of such conversion.

Additional Proposed Hotel Purchases

Plymouth also announces that it has entered into two other assignments of existing hotel purchase and sale agreements dated as of December 2, 2013 to purchase two additional "Hampton Inn" branded hotel properties located in Florida and Massachusetts (the "Additional Properties", and together with the Initial Property, the "Properties") for an aggregate purchase price of approximately US$18.45 million, excluding closing costs and adjustments and funding for brand mandated property improvement plans.  Plymouth intends to satisfy the aggregate purchase price from the proceeds of new mortgage financing on the Additional Properties in the aggregate principal amount of approximately US$13.3 million, with the remainder of the aggregate purchase price to be paid in cash from any excess proceeds raised from the Financing not required to close the Initial Property.  Including the property improvement plan funding and closing costs and adjustments, cash proceeds of approximately US$2.5 million and US$5.2 million are required to close the Florida hotel acquisition and the Massachusetts hotel acquisition respectively.  If there is insufficient excess cash proceeds from the Financing to fund the cash portion of the aggregate purchase price for the Additional Properties, then Plymouth may choose to either close on the Florida hotel acquisition only or neither at all, but it cannot choose to close on the Massachusetts hotel acquisition only.

The seller of the Florida Property is Oikon Hotels Niceville, LLC, a limited liability company governed by Florida laws, and the seller of the Massachusetts Property is Toole Properties 2006 Inc., a corporation governed by Massachusetts law.  Both sellers are not related to Plymouth or any of its directors and officers, nor are they related to the Initial Property Seller or to each other.

Assessment and Description of the Properties

Independent appraisals are being obtained to determine the market value of the Initial Property as well as the Additional Properties.

The following table highlights information about the Properties:

Hotel Location	Brand	Class	Year Built	Rooms	NOI (LTM)	NOI Cap Rate	Occ. (LTM)	ADR   (LTM)	RevPAR (LTM)
Flemington, NJ	Hampton Inn	Upscale Limited Service	2001	83	$612,965	7.2%	67.8%	US$118.13	US$80.09
Niceville, FL	Hampton Inn	Upscale Limited Service	2001	56	$447,437	7.3%	75.5%	US$109.20	US$82.41
Lenox, MA	Hampton Inn & Suites	Upscale Limited Service	2008	79	$1,257,802	10.2%	75.0%	US$156.37	US$117.22

Note:  LTM = last 12 months ended October 31, 2013.  See also "Non-IFRS Measure".

The following table highlights selected unaudited financial information about the Properties as at and for the year ended December 31, 2012:

(Unaudited)	Initial Property	Florida Property	Massachusetts Property
Total Revenue	$2,536,405	$1,722,074	$3,389,456
Total Operating Expenses	$1,672,507	$1,147,253	$2,227,666
Income from Operations	$863,898	$574,821	$1,416,611
Net Income	$474,290	$246,950	$1,161,790

Total Capitalization

As of the date hereof, Plymouth has 6,525,000 common shares issued and outstanding, 652,500 incentive options exercisable at $0.10 per share and 353,250 agent's options exercisable at $0.10 per share.  Upon completion of the acquisition of the Initial Property, as well as the Additional Properties, the capitalization of Plymouth will give effect to the Financing and the new mortgage financings being obtained by Plymouth.

Management Agreement

Plymouth is expected to enter into property management arrangements with Oxford Hotels & Resorts, LLC ("Oxford") pursuant to which Oxford will become the property manager of the Properties. Oxford is not related to any of Plymouth's directors and officers.   Oxford will be entitled to receive a 4% fee for its property management services calculated on the basis of the Properties' aggregate gross revenue.

Conditions of Completion

The acquisition of the Initial Property, as well as the Additional Properties, will be subject to receipt of all necessary regulatory and other approvals, including the TSXV as well as the mortgage lenders and the brand owner.  For clarity, the acquisition of the Initial Property is not conditional upon the acquisition of the Additional Properties.  In addition, the acquisition of the Properties is subject to certain closing conditions, including completion of satisfactory due diligence and the Financing.

Sponsorship

Sponsorship of a qualifying transaction of a capital pool company is required by the TSXV unless an exemption from the sponsorship requirement is available.  Plymouth intends to seek a waiver from the TSXV of the sponsorship requirement but if such waiver is not obtained, Plymouth will then retain a qualified sponsor.

Trading Halt

Plymouth's common shares are currently halted and Plymouth anticipates they will remain halted until the documentation required by the TSXV for the proposed transaction can be provided to the TSXV.

About Plymouth

Plymouth is currently designated as a Capital Pool Company by the TSXV.  The company has not commenced commercial operations and has no assets other than cash.  Upon completion of its "Qualifying Transaction", Plymouth intends to carry on business as an owner and operator of hotel real estate properties located in the United States and at an appropriate time in the future, intends to carry on such business as a real estate investment trust with an internalized executive management platform.

Cautions Regarding Future Plans and Forward Looking Information

Completion of the proposed transaction is subject to a number of conditions, including but not limited to TSXV acceptance and if applicable pursuant to TSXV requirements majority of the minority approval.  Where applicable, the transaction cannot close until the required shareholder approval is obtained.  There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the proposed transaction may not be accurate or complete and should not be relied upon.  Trading in the securities of Plymouth should be considered highly speculative.

The TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.  Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

This press release contains forward-looking information within the meaning of Canadian securities laws.  Such information includes, without limitation, information regarding the completion of the proposed transaction and the business strategies of Plymouth.  Although Plymouth believes that such information is reasonable, it can give no assurance that such expectations will prove to be correct.

Forward looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events.  Plymouth cautions investors that any forward-looking information provided by Plymouth is not a guarantee of future results or performance, and that actual results may differ materially from those in forward looking information as a result of various factors, including, but not limited to: Plymouth's ability to complete the proposed transaction; the state of the real estate sector in the event the proposed transaction is completed; recent market volatility; Plymouth's ability to secure the necessary financing or to be fully able to implement its business strategies and other risks and factors that Plymouth is unaware of at this time.  The reader is referred to Plymouth's initial public offering prospectus and other continuous disclosure documents for a more complete discussion of risk factors relating to Plymouth and their potential effects, copies of which may be accessed through Plymouth's page on SEDAR at www.sedar.com.  This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there by any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Non-IFRS Measure

This press release uses the term "NOI", which stands for net operating income.  NOI is not a measure recognized under IFRS and does not have a standardized meaning prescribed by IFRS.  It is a supplemental measure of performance for issuers.  Plymouth believes that NOI is an important measure of operating performance and is useful in assessing the company's property operating performance on an unlevered basis.  The IFRS measurement most directly comparable to NOI is net income and NOI should not be construed as an alternative to net income determined in accordance with IFRS as an indicator of the company's performance.

 

SOURCE: Plymouth Realty Capital Corp.

please contact Jeff Witherell, CEO of Plymouth Realty Capital Corp. at [phone].