Mr. Ian Robertson reports

NORTHWEST HEALTHCARE PROPERTIES REIT PROVIDES ADDITIONAL INFORMATION REGARDING PROPOSED COMBINATION TRANSACTION

Northwest Healthcare Properties Real Estate Investment Trust has provided additional information regarding its proposal to combine with Northwest International Healthcare Properties Real Estate Investment Trust (NWI) and create a leading global diversified health care real estate investment trust with over $2-billion of assets. The proposed transaction is described in detail in the joint management information circular of NWH and NWI dated April 7, 2015, and this news release is incorporated by reference into the circular as further information provided by NWH (and not, for clarity, NWI).

This update is being provided by NWH at the request of staff of the Ontario Securities Commission (OSC). OSC staff is of the view that the document prepared by Brookfield Financial Corp. entitled "Presentation to the Special Committee (1 of 2) -- Project Global: Preliminary Valuation and Financial Analysis," marked "draft" and dated July 15, 2014, and presented to the then committee of independent trustees of NWH, being Michael Knowlton (chair), Dr. Martin Barkin and Elisabeth Stroback (prior independent committee) constitutes a "prior valuation" of the NWH and NWI units for the purposes of Multilateral Instrument 61-101. OSC staff has requested that NWH file the Brookfield report on SEDAR, provide a summary of the Brookfield report in this update and deliver the report to NWH's current financial adviser, Canaccord Genuity Corp., for reconsideration of the Canaccord Genuity formal valuation and fairness opinion (as defined in the circular). OSC staff also requested that NWH's current committee of independent trustees, being Brian Petersen (chair), Dr. Barkin and Colin Loudon (NWH independent committee) reconsider their recommendation of the transaction on the basis that the Brookfield report and all other work product of Brookfield is material information relating to the transaction.

Independent committee and NWH board of trustees reaffirm recommendation of the transaction

The NWH independent committee, together with its financial adviser, Canaccord Genuity, carefully reviewed and considered the Brookfield report and certain other work product of Brookfield. Canaccord Genuity confirmed that its previous analysis and conclusions remain unchanged, and continues to be of the opinion that the consideration to be paid by NWH to NWI unitholders pursuant to the transaction is fair from a financial point of view, to the NWH unitholders, other than NWI. The NWH independent committee continues to support the strategic rationale for the transaction and reaffirmed its unanimous recommendation of the transaction to the board of trustees of NWH, which reaffirmed its recommendation that NWH unitholders vote in favour of the transaction.

Engagement of original financial adviser

As stated in the circular, the prior independent committee first retained an independent financial adviser in February, 2014. The prior independent committee wanted a financial adviser with experience with real estate valuations and with international real estate operations. After considering several firms, the prior independent committee hired Brookfield. The mandate for Brookfield was to prepare a financial analysis and valuation for each of NWH and NWI, an assessment of the pro forma financial impact of a transaction to the holders of units of NWH (other than NWI), and, if requested, to prepare and deliver a formal valuation in accordance with MI 61-101 and a fairness opinion as to the consideration that may be offered pursuant to a transaction involving NWI.

In May, 2014, NWI proposed a transaction that contemplated an all-unit combination, whereby NWH would acquire all the units of NWI at a price of $2.25 per unit and NWH would issue units to NWI at a price of $10 per unit, implying an exchange ratio of 0.2250 NWH unit for each unit of NWI. The prior independent committee requested that Brookfield prepare a preliminary valuation for each of NWH and NWI, and provide an assessment of the pro forma financial impact of the 2014 proposed transaction.

On July 15, 2014, Brookfield met with and presented to the prior independent committee the Brookfield report, which is summarized below. A complete copy of the Brookfield report is now available on SEDAR. Additional supporting detail to the Brookfield report was provided to the prior independent committee in an accompanying presentation document, which has not been filed on SEDAR as it contains commercially sensitive information.

Brookfield determined its preliminary valuation ranges, as at June 30, 2014, to be $9.71 to $10.92 per NWH unit and $1.20 to $1.45 per NWI unit. The exchange ratio implied at the midpoint of Brookfield's value range was 0.1285 NWH unit for each unit of NWI. At the July 15 meeting, Brookfield communicated to the prior independent committee that it would not be able to support the 2014 proposed transaction. Brookfield made this determination based on the exchange ratio offered (namely, 0.2250 NWH unit for each unit of NWI) being materially above the exchange ratio range implied by Brookfield's valuation. Brookfield further determined that the 2014 proposed transaction would be marginally accretive to each of NWH and NWI unitholders on an adjusted-funds-from-operations basis, materially dilutive to NWH's net asset value per unit and materially accretive to NWI's net asset value per unit. Brookfield also noted for the prior independent committee that the 2014 proposed transaction would result in a premium of about 10 per cent to NWI's then trading price and 0 per cent to NWH's then trading price, while the ownership of Northwest Value Partners (being the controlling shareholder of NWI) would increase from an effective 19-per-cent interest in NWH to a de facto blocking position of 37 per cent.

In preparing its preliminary valuation and financial analysis, Brookfield reviewed and considered, among other things, NWI's and NWH's public filings, non-public information including property appraisals and financial projections on a property-by-property basis, discussions with senior management of both NWH and NWI, and such other industry and financial market information, investigations and analyses as it considered relevant in the circumstances.

Brookfield prepared its preliminary valuation pursuant to and as intended by MI 61-101; however, Brookfield was not asked to, nor did it prepare a formal written valuation report or a formal written opinion as to the fairness, from a financial point of view, of the consideration in connection with the 2014 proposed transaction. In its determination of fair market value, Brookfield considered various valuation methodologies, including a net asset value (NAV) analysis, a precedent transaction analysis and comparable public company trading analysis. In the case of NWH, Brookfield relied primarily on an NAV analysis and secondarily on a precedent transactions analysis. While Brookfield also considered a comparable public company trading analysis, it placed little to no reliance on this approach as no control premia are implicit in trading values generally. In the case of NWI, Brookfield relied primarily on an NAV analysis for the Brazilian and German portfolios, and used its en bloc value range of $9.71 to $10.92 per NWH unit for NWI's 26-per-cent interest in NWH. In the case of NWI's 24-per-cent interest in Vital Healthcare Property Trust, Brookfield relied primarily on publicly available information as very limited non-public data were provided on this particular asset. While Brookfield considered precedent transaction analysis and comparable trading analysis for NWI, it did not rely on these methodologies given the lack of direct comparability to NWI and the fact that NWI was TSX Venture Exchange listed with a very small public float, was highly illiquid, and had little to no capital markets research and institutional following. Brookfield also determined the fair market value of financial debt by making certain mark-to-market adjustments, capitalized the obligation associated with general and administrative expenses, and determined the net realizable value of other assets and liabilities in arriving at its value range per unit for each of NWH and NWI.

Following delivery of the Brookfield report on July 15, 2014, Brookfield met with representatives of NWI and its financial advisers on several occasions to compare facts, assumptions, valuation approaches and valuation judgments in connection with Brookfield's preliminary valuation and financial analysis. Brookfield stated that the consequence of such meetings did not result in any material change to Brookfield's perspectives, analyses, opinion or valuation.

Additionally, over the course of mid-July to late September, Brookfield was asked to assess various alternative transactions and transaction structures, including one proposed by NWI that contemplated the purchase by NWH of certain assets and liabilities of NWI; however, the parties were unable to agree on the terms of any potential transaction.

Brookfield ceased providing services to the prior independent committee in late September, 2014, when NWH and NWI were unable to agree on the terms of a potential transaction, and, following changes to the composition of the prior independent committee, Brookfield's engagement was formally terminated in late November, 2014.

Changes to independent committee and to financial adviser

As noted above, by late September, 2014, NWH and NWI had not reached agreement on a transaction. There were a number of outstanding issues, including support for projected financial results, and refinancing plans that were under way but not complete. Both sides were seeking clarity on a number of issues where the necessary information was not yet available and the negotiations ended. Between then and the end of 2014, two trustees, Ms. Stroback and Mr. Knowlton, resigned from the NWH board of trustees and the prior independent committee, and were replaced by Mr. Petersen in October, 2014, and Mr. Loudon in December, 2014. Both Ms. Stroback and Mr. Knowlton cited time constraints when they resigned. Dr. Barkin has been a member of NWH's committee of independent trustees since its establishment in February, 2014. There have been no materially contrary views among the members of either the prior independent committee or the NWH independent committee, and no material disagreements between the NWH board of trustees (the NWI representatives abstaining), and either the prior independent committee or the NWH independent committee.

When Mr. Petersen became chair of the NWH independent committee in November, 2014, he and Dr. Barkin determined that they would prefer a new financial adviser and that they would take a fresh look at a possible transaction with NWI. After considering several candidates, Canaccord Genuity was retained given its significant experience in Canadian capital markets and combination transactions of this nature. During the period from November, 2014, to March, 2015, the NWH independent committee and its financial and legal advisers conducted significant due diligence on NWI, including site visits to Brazil and Germany.

NWH independent committee's review of Brookfield work product

The NWH independent committee discussed the July 15, 2014, Brookfield work product as part of its deliberations in recommending the transaction be approved by the NWH board of trustees on March 10, 2015. Based on this review of the Brookfield work product and, with advice of its legal adviser, the NWH independent committee concluded that the Brookfield work product (including the Brookfield report), individually or when taken as a whole, did not constitute a prior valuation that was required to be disclosed.

OSC staff has requested that the NWH independent committee undertake a complete review of the Brookfield work product (including the Brookfield report) with a view to confirming whether the entirety of the information changes in any way its recommendation with respect to the transaction. The NWH independent committee undertook such a review commencing on April 17, 2015, which was completed on April 27, 2015, and has noted the following:

• The terms and structure of a potential transaction between NWH and NWI were very fluid throughout 2014. The Brookfield work product was prepared at a point in time based on a certain proposal that was being discussed at that time which did not reflect identical terms to the transaction.
• The Brookfield report was prepared in July, 2014, with an effective valuation date of June 30, 2014. The events which have taken place subsequent to June 30, 2014, include:
  • NWI completed the acquisition of a portfolio of properties in Germany.
  • NWI completed an approximately $38-million bought-deal convertible debenture financing on better terms than previous offerings.
  • NWI completed an approximately $30-million bought-deal equity financing at $2.15 per unit, which increased NWI's liquidity substantially.
  • NWI refinanced all loans that were maturing in 2014 and announced the entering into of new long-term financing arrangements in Brazil.
  • The Canadian dollar appreciated relative to the Brazilian currency.
  • NWI terminated its external management agreement and internalized management.
  • NWI announced positive financial results for Vital Healthcare Property Trust for the six-month period ended Dec. 31, 2014.
  • There was a material increase in the trading price of the units of Vital Healthcare Property Trust.
  • NWH acquired properties from Northwest Value Partners as well as its development platform.
• In the July 15, 2014, presentation, Brookfield noted that a number of material items were outstanding, and the NWH independent committee understood that they were to be completed prior to finalizing its opinion. The Brookfield work product dated July 17, 2014, July 24, 2014, and July 25, 2014, contained revised values ranging from $1.28 to $1.56 per unit of NWI, which to the NWH independent committee indicated that the values in the July 15, 2014, presentation were not final.
• The Brookfield valuation conclusions were based primarily on an NAV approach. Reference was made to other valuation approaches, but there was no indication of how such approaches were factored into the calculation. All value conclusions in the Brookfield work product related solely to its NAV calculations.
• In discussion with Canaccord Genuity, the NWH independent committee concluded that NAV should generally be a factor, but not the only valuation methodology considered in determining fair market value. Since NAV is a static analysis as at a point of time, the capital markets often value REIT units at premiums or discounts to NAV, taking into account various factors including: growth prospects, scale, asset class, geographic exposure, access to capital, lease structure and strength of management among other macroeconomic and company-specific considerations. Similarly, in strategic transactions where entities are acquiring REITs, a premium to NAV, specific to the REIT being acquired, is often paid to reflect the platform value of the business being acquired, in addition to the assets.
• The calculation of NAV prepared by Canaccord Genuity as at March 10, 2015, was generally consistent with those prepared by Brookfield as at June 30, 2014. Canaccord Genuity's analysis is set out in the revised Canaccord Genuity formal valuation and fairness opinion, which is available on SEDAR and should be read in its entirety.

Canaccord Genuity formal valuation and NWH fairness opinion

Upon engagement, Canaccord Genuity was not provided with any of the Brookfield work product. The NWH independent committee was comfortable that the Brookfield work product was not necessary for Canaccord Genuity to prepare its formal written valuation and that it was not relevant given the number of changes that had occurred since August/September of 2014.

In light of OSC staff's view that the Brookfield work product should have been provided to Canaccord Genuity, the NWH independent committee has provided the Brookfield work product to Canaccord Genuity for the purposes of considering whether any revisions to the Canaccord Genuity formal valuation and fairness opinion delivered on March 10, 2015, were required. Canaccord Genuity has revised the Canaccord Genuity formal valuation and fairness opinion as at April 27, 2015, to reflect its review of the Brookfield work product, and has confirmed that its previous analysis and conclusions remain unchanged.

Based upon and subject to the analysis contained in the revised Canaccord Genuity formal valuation, in addition to such other factors that it considered relevant, Canaccord Genuity continues to be of the opinion that, as of March 10, 2015, the fair market value of the NWH units was in the range of $10.25 to $11.75 per NWH unit, and the fair market value of the NWI units was in the range of $2.15 to $2.40 per NWI unit.

Based upon and subject to the assumptions, qualifications and limitations set out in the revised Canaccord Genuity formal valuation, and such other matters as Canaccord Genuity considered relevant, Canaccord Genuity continues to be of the opinion that, as of March 10, 2015, the consideration to be paid by NWH to NWI unitholders pursuant to the transaction is fair, from a financial point of view, to NWH unitholders, other than NWI.

The revised Canaccord Genuity formal valuation and fairness opinion have been filed on SEDAR.

Reaffirmed recommendation by the NWH independent committee and NWH board of trustees

After carefully considering the work completed by Brookfield, the revised Canaccord Genuity formal valuation and fairness opinion, and consultation with its independent legal and financial advisers, the NWH independent committee unanimously recommended that the NWH board of trustees confirm that the transaction is in the best interests of NWH.

After careful consideration, and based upon the unanimous recommendation of the NWH independent committee, the NWH board of trustees unanimously confirmed (with Paul Dalla Lana and Bernard Crotty declaring their interests in the transaction and abstaining from voting) that the transaction is in the best interests of NWH and continues to recommend that NWH voting unitholders vote for the transaction.

NWI has advised NWH that it does not agree with certain statements relating to NWI in this press release and the Brookfield report.

Further information

NWH and NWI have retained Kingsdale Shareholder Services to provide strategic advisory services and act as proxy solicitation agent for the transaction. Unitholders with questions should contact Kingsdale at 1-877-659-1822 toll-free in North America or collect at 1-416-867-2272 outside of North America, or by e-mail.

We seek Safe Harbor.