Mr. Dale Noseworthy reports

KILLAM APARTMENT REIT CLOSES $98 MILLION PUBLIC OFFERING OF TRUST UNITS AND ANNOUNCES REDEMPTION OF 5.65% CONVERTIBLE DEBENTURES

Killam Apartment REIT has closed its previously announced public offering, on a bought-deal basis, of trust units to the public at a price of $12 per unit. Killam issued 8,165,000 units, including 1,065,000 units on the exercise of an overallotment option (as defined below), for gross proceeds of approximately $98-million.

The offering was made pursuant to an underwriting agreement with a syndicate of underwriters led by RBC Capital Markets and including BMO Nesbitt Burns Inc., CIBC World Markets Inc., Scotia Capital Inc., TD Securities Inc., Canaccord Genuity Corp., Raymond James Ltd., Dundee Securities Ltd., GMP Securities LP and Brookfield Financial Securities LP. The underwriters were granted the option to purchase up to an additional 1,065,000 units at the offering price to cover overallotments, if any, and for market stabilization purposes, which they exercised in full.

Killam intends to use the net proceeds from the offering to redeem the entire principal amount of its $57.5-million 5.65 per cent convertible subordinated debentures, to finance recently announced acquisitions, which will increase the portfolio of unencumbered assets, and for general trust purposes.

Redemption of 5.65 per cent convertible debentures

With the closing of the offering, Killam announced that it is exercising its right to redeem all of the outstanding debentures pursuant to the trust indenture, as supplemented, dated as of Nov. 30, 2010, between Killam and Computershare Trust Company of Canada.

The redemption date for the debentures will be July 4, 2016. The redemption payment amount will be $1,005.26 for each $1,000 principal amount of debentures, being equal to the aggregate of (i) $1,000, and (ii) all accrued and unpaid interest thereon to but excluding the redemption date, will be paid in cash on the redemption date.

The redemption price will be payable upon presentation and surrender of the debentures at Computershare Trust Company of Canada's corporate trust office.

The interest upon the principal amount of debentures called for redemption shall cease to be payable from and after the redemption date.

We seek Safe Harbor.