Mr. Kelly Hanczyk reports

EDGEFRONT REIT TO INCREASE MARKET CAP BY $12.3 MILLION THROUGH PROPERTY ACQUISITIONS

Edgefront Real Estate Investment Trust has entered into conditional agreements to acquire two industrial properties for a total purchase price of approximately $16-million, to be satisfied by the issuance to the vendors of approximately $12.3-million of REIT equity at an issue price of $1.90 per unit and $3.7-million in cash. The REIT has also completed the sale of its non-core office property in Miramichi, N.B., for a sale price of $5.65-million.

"We are extremely pleased to announce these acquisitions and the disposition of our non-core office building in New Brunswick. The vendors are all non-related, third party vendors and realize the attractiveness of becoming long-term Edgefront REIT unitholders. With these acquisitions, which will be accretive to AFFO (adjusted funds from operations) per unit, Edgefront will grow its market cap by approximately $12.3-million without the need to raise equity in the public markets. Additionally, because the majority of the purchase price is being settled in units, proceeds from mortgage financing on the properties will provide the REIT cash available to complete additional transactions in the near future. We are currently in negotiations with additional vendors and hope these are the first in a series of deals that we complete this year," stated Kelly Hanczyk, the REIT's chief executive officer.

Highlights

• In partial satisfaction of the total purchase price, $12.3-million of REIT equity will be issued to the vendors at $1.90 per unit, which is a premium to the current market price of the REIT units, increasing the REIT's market capitalization without the need to raise equity in the public markets.
• The two industrial properties will add 202,903 square feet of gross leasable area (GLA), expanding the REIT's property portfolio at closing to 16 commercial properties totalling approximately 921,563 square feet of GLA.
• The Barrie, Ont., acquisition (the REIT's first Ontario property) is structured as a long-term vendor-leaseback transaction, with 100-per-cent tenant occupancy and an average lease term of approximately 10 years at closing. The Kelowna property will be the first multitenant property of the REIT.
• The $16-million purchase price (which excludes closing costs) represents an attractive 7.6-per-cent going-in capitalization rate. The acquisitions are expected to be immediately accretive to the REIT's AFFO per unit.
• The REIT will put mortgages on the two properties, creating available cash to complete future transactions.

Property acquisitions

Pursuant to conditional agreements with two unrelated vendors, the REIT intends to acquire two industrial properties located in Kelowna, B.C., and Barrie, Ont., for a total purchase price (excluding closing costs) of approximately $16-million. The total purchase price will be satisfied by: (i) the issuance to the vendors of 5,470,985 REIT units and one million units of a subsidiary limited partnership of the REIT, in each case at an issue price of $1.90 per unit (which represents a premium to the current market price of the REIT units as traded on the TSX-V), for a total deemed value of approximately $12.3-million; and (ii) $3.7-million in cash to be financed from cash on hand (including from cash proceeds of the Miramichi property sale, as well as funds available under the REIT's existing line of credit).

The LP units are intended to be economically equivalent to and exchangeable for REIT units, on a one-for-one basis, and will be accompanied by special voting units of the REIT that provide their holders with equivalent voting rights to holders of REIT units.

Both acquisitions remain subject to customary closing conditions, including TSX-V and other necessary regulatory approvals. The Barrie property acquisition is also subject to completion of due diligence to the satisfaction of the REIT.

The attached table provides additional information for each of the two property acquisitions.

Property            Property use    Year built      Purchase   Equity vendor takeback    Rentable  Occupancy  Lease term
address                                 and/or         price   ($ per number of units)  area (GLA)
                                     renovated

555 Adams Rd.,        Industrial      1966 and                       $3.8-million per
Kelowna, B.C.      manufacturing          1990  $7.5-million        two million units      93,433       100%   3.8 years
455 Welham Rd.,       Industrial                                     $8.5-million per
Barrie, Ont.       manufacturing     1998/2015  $8.5-million       4.47 million units     109,470       100%    10 years

We seek Safe Harbor.