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Dream Alternatives Acquires a 10% Equity Interest in the Hard Rock Hotel & Casino in Las Vegas

TORONTO, April 02, 2018 (GLOBE NEWSWIRE) -- DREAM HARD ASSET ALTERNATIVES TRUST (TSX:DRA.UN) ("Dream Alternatives", "we" or the "Trust") is pleased to report that it has recently completed the acquisition of the Hard Rock Hotel & Casino in Las Vegas, Nevada as part of a consortium of partners, led by Juniper Capital Partners and Fengate Real Estate Asset Investments. The partnership plans to open a re-conceptualized and revitalized property, the Virgin Hotels Las Vegas, in the late fall of 2019. Virgin Hotels, the lifestyle brand established by Virgin Group founder Sir Richard Branson, is also part of the consortium of investing partners, alongside other private investors.

The property is located in Las Vegas on 30 acres of land and is situated 1 mile east of the strip and 2 miles from the McCarron airport. Located at 4455 Paradise Road, the property will continue full service operations under the Hard Rock flag until it opens as a Virgin Hotels hotel. Guest rooms, restaurants and public spaces will undergo a facelift with the final product being a showcase of Virgin's signature sleek and stylish design with an eclectic mix of social spaces.

On closing of the transaction, Dream Alternatives contributed US$29.0 million for an approximate 10% equity investment in the partnership, which was used to fund the purchase price for the hotel, including transaction costs, and will also be used to fund the planned capital expenditures required to convert the property to the Virgin Hotels Las Vegas. The investment is expected to provide the Trust with strong after-tax net income and cash distributions with value upside to DAT’s net asset value (NAV) per unit in line with its investment strategy.

The current timeline for the property contemplates a renovation start date in November 2018, with the completion slated for late fall of 2019.

“The acquiring group of the hotel consists of very successful investors with deep experience in hotels and rebranding,” said Michael Cooper, Portfolio Manager. “The asset has been acquired at a substantial discount to replacement cost and we believe the strong Virgin brand and their customer focus are likely to result in increases in both room and ancillary revenues. As a result, we expect stable cash flow post the rebranding, resulting in an attractive return over our holding horizon.”

The hotel will feature 1504 well-appointed chambers, suites and penthouses; a 60,000 square foot, fully-renovated casino, multiple pools over five acres, world-class restaurants, lounges and bars, including new nightlife venues and the Virgin brand’s flagship space, the Commons Club, as well as numerous meeting and convention spaces. For the complete press release by Virgin Hotels, please see link.

Year to date in 2018, Dream Alternatives has successfully invested $65.9 million of capital into new loans and development investments, including the Hard Rock Hotel. The new loans have an average yield of over 10.0% and the new development investments were underwritten at IRR’s of between 20-30%. With the pipeline currently in place, by the time of the Trust’s first quarter 2018 earnings release, it is expected that the repositioning of the Trust’s portfolio into long term investments will be substantially completed.

About Dream Alternatives

Dream Alternatives provides an opportunity for unitholders to invest in hard asset alternative investments, including real estate and real estate development, managed by an experienced team with a successful track record in these areas. The objectives of the Trust are to build and maintain a growth-oriented portfolio, provide predictable cash distributions to unitholders on a tax efficient basis and grow and reposition the portfolio to increase net asset value (NAV) per unit over time. As at December 31, 2017, Dream Alternatives had over $850 million of assets and $600 million of equity on its balance sheet.

For more information, please visit: www.dreamalternatives.ca and www.dream.ca

DREAM ALTERNATIVES

Michael J. Cooper Pauline Alimchandani Kim Lefever
Portfolio Manager Chief Financial Officer Investor Relations
416 365-5145 416 365-5992 416 365-6339
mcooper@dream.ca palimchandani@dream.ca klefever@dream.ca

Forward Looking Information
This press release may contain forward-looking information within the meaning of applicable securities legislation, including statements relating to our objectives, strategies to achieve those objectives, our beliefs, plans, estimates, projection and intentions, and similar statements concerning development plans and timelines for the hotel and expected returns post-conversion as well as statements regarding our pipeline, Q1 performance and the repositioning of our portfolio. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Trust’s control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward looking information. These risks and uncertainties include, but are not limited to: general and local economic and business conditions including foreign exchange rates, employment levels, future hotel performance, regulatory risks, environmental risks, consumer confidence, the financial condition of customers, tenants and borrowers, adverse weather conditions and reliance on key clients, customers, partners and personnel, inflation and competition. All forward-looking information in this press release speaks as of April 2, 2018. The Trust does not undertake to update any such forward looking information whether as a result of new information, future events or otherwise. Additional information about these assumptions and risks and uncertainties is disclosed in filings with securities regulators filed on SEDAR (www.sedar.com). These filings are also available at the Trust’s website at www.dreamalternatives.ca

Source:Dream Hard Asset Alternatives Trust