Mr. Philip Fraser reports

KILLAM PROPERTIES INC. COMPLETES $97.1 MILLION IN ACQUISITIONS IN ONTARIO AND ALBERTA

Killam Properties Inc. has closed four previously announced acquisitions in Ontario and Alberta. These assets increase Killam's geographic diversification, with over 20 per cent of Killam's future net operating income now expected to be generated in Ontario and Alberta. The acquisitions were originally announced on Nov. 10, 2014.

Increased ownership interest in three Ontario properties

Killam has acquired an additional 75-per-cent interest in 180 Mill St. (127 units located in London), increasing the company's ownership to 100 per cent in this property. Killam has also acquired an additional 25-per-cent interest in Kanata Lakes Apartments (146 units located in Ottawa) and 1355 Silver Spear Rd. (199 units plus surplus land for approximately 110 additional units located in Mississauga). Killam previously owned a 25-per-cent interest in each of these two properties. An affiliate of KingSett Capital Inc. and AIMCo Realty Investors LP, a limited partnership managed by Alberta Investment Management Corp. (AIMCo), has acquired the remaining 50-per-cent interest of each of these two properties.

Killam's Ontario acquisitions, totalling $47.1-million, represent the end of Killam's joint venture with Kuwait Finance House. The acquisitions were satisfied with existing mortgage debt of $27.6-million and cash on hand following the recently completed equity raise. The capitalization rate on the acquisitions is approximately 5 per cent.

First Calgary acquisition completed

Killam has acquired a 50-per-cent interest in Grid 5 Apartments, a 307-unit building located in downtown Calgary, Alta. The acquisition represents Killam's entry into the Calgary apartment market. An affiliate of KingSett and AIMCo owns the remaining 50-per-cent interest.

Grid 5 Apartments, located at 618 5th Ave. SW, has recently completed its lease-up phase following an extensive redevelopment program. The building includes 44 bachelor units, 197 one-bedroom units and 66 two-bedroom units. The average monthly rent for the residential units is $1,390. The building also includes approximately 14,500 square feet of commercial space and five levels of parking, including 274 stalls, generating average revenue of $410 per stall per month.

The purchase price for Killam's 50-per-cent interest in Grid 5 Apartments was $50-million, representing a capitalization rate of approximately 5 per cent. This purchase price was satisfied with new mortgage debt of $30-million, a private placement of $4.5-million in common shares at an issue price of $10.56 and cash on hand.

"We are pleased to have completed these four acquisitions so soon after closing our recent equity offering," noted Philip Fraser, Killam's president and chief executive officer. "With these acquisitions, Killam has completed $160-million in acquisitions in 2014, our largest year of acquisitions since 2005.

"We are also pleased to have expanded our relationship with KingSett and AIMCo to now hold four properties together, and look forward to other opportunities in the future."

We seek Safe Harbor.