InnVest REIT Completes IPO

InnVest Real Estate Investment Trust completed a $300 million initial public offering of units on July 26, 2002. At the same time, the REIT also issued $110 million in units and $75 million aggregate principal amount of unsecured subordinated convertible debentures to affiliates of the sponsors of the offering. The proceeds were used to acquire a portfolio of 114 hotels, comprised principally of limited service hotels, located throughout Canada and a 50 per cent interest in Choice Hotels Canada. Concurrently with the closing of the offering, the REIT entered into a $375 million term credit facility with a Canadian lender and a $25 million operating loan facility with a Canadian chartered bank, and repaid certain existing mortgage facilities.

The sponsors of the offering, affiliates of the Whitehall Group of Funds and Westmont Hospitality Group, and the REIT were represented in the transactions by Davies Ward Phillips & Vineberg LLP, with a team composed of Fiona Kelly, Mitch Finkelstein, Ken Klassen, Julie Lane, Patrick Moyer, Melanie Shishler, Jennifer Grossklaus, Brett Seifred and Christian Gauthier (corporate), John Ulmer, Neal Armstrong and Duncan Osborne (tax), David Dell, Sabrina Gherbaz, Donald Stanbury, Jeffrey Lem, Steven Martin and Brian Clark (real estate), Sarah Powell (environmental) and David Fruitman (competition).

U.S. advice to the Whitehall Funds was provided by Tony Colletta and Lauren Wainwright of Sullivan & Cromwell in New York. The Westmont Group was advised by U.S. counsel, Dan McCormick and Mark Arnold of Andrews & Kurth, Mayor, Day, Caldwell & Keeton LLP in Houston. U.S. securities law advice was provided to the sponsors and the REIT by Guy Lander and Charles Malone of Davies Ward Phillips & Vineberg in New York. Ted McDermott and Damian Rigolo of Osler, Hoskin & Harcourt LLP were special employment counsel to the REIT.

The underwriters on the initial public offering, led by RBC Capital Markets Inc. and Goldman Sachs Canada Inc., were represented by Osler, Hoskin & Harcourt with a team composed of Chris Murray, Desmond Lee, David Surat and Pei-Ching Huang (corporate), Heather McKean, Shelley Munro and Katty Habib (real estate), Jack Silverson, Judith Harris, Ronit Florence and Kim Wharram (tax) and Sean Love (environmental).

U.S. securities law advice was provided to the underwriters by Jennifer Mazin of Shearman & Sterling. The term facility lender was represented by Fred Rubinoff, Peter Quinn, Bram Green, Karsoen Ho and Jeff Johnstone of McCarthy Tétrault LLP and the operating loan lender was represented by Peter Milligan and Richard Borins of Osler, Hoskin & Harcourt.

Title insurance was provided by First Canadian Title, which insured the purchaser and both lenders. First Canadian Title was represented in-house by Heather Wink, manager, commercial closing services; Des Mackey, director, senior title counsel; Eric Maslett, director, commercial division; and John Rider, vice-president, commercial division.