Mr. James Beckerleg reports

PROREIT ANNOUNCES BINDING AGREEMENT FOR PREVIOUSLY ANNOUNCED ACQUISITION

Pro Real Estate Investment Trust has entered into a binding conditional agreement in respect of one of its previously announced acquisitions. The agreement provides that the REIT will acquire a 50-per-cent undivided interest in the property located at 1750 Jean-Berchmans-Michaud St., Drummondville, Que., for a purchase price of $3-million, representing a capitalization rate of 7.5 per cent. The REIT had previously announced the entering into of a letter of intent for the acquisition of the property.

The property is a free-standing single-tenant industrial property built in 1997 and totalling 171,119 square feet of gross leasable area on 10.75 acres of land. It is fully occupied under a long-term lease of 12 years with contracted annual rent steps, expiring in 2028. The property is well located off the Trans-Canada Highway (Route 20), north of Montreal, and offers the opportunity for building expansion in the future. The warehouse has a clear ceiling height of 24 feet.

The purchase price of $3-million is expected to be satisfied by: (i) the assumption of 50 per cent of a recently completed 4-per-cent 10-year mortgage of approximately $4-million, (ii) the issuance of approximately $900,000 of Class B limited partnership units of Pro REIT LP, a subsidiary of the REIT, at a price of $2.25 per Class B LP unit, and (iii) a cash payment of $100,000. The acquisition is subject to customary due diligence and closing conditions, including the approval of the TSX Venture Exchange, and is expected to close in the second half of February.

The vendor of the 50-per-cent undivided interest in the property is a corporation in which Shenoor Jadavji, a trustee of the REIT, indirectly owns and controls a majority interest. Peter Aghar, a trustee of the REIT, indirectly controls the remaining 50-per-cent undivided interest in the property. Upon closing of the transaction, the REIT will enter into a joint venture agreement with the co-owner. The acquisition therefore constitutes a related party transaction under Multilateral Instrument 61-101, protection of minority shareholders in special transactions. The REIT is relying on applicable exemptions from the minority approval and valuation requirements of MI 61-101 for related party transactions on the basis that the transaction has a value of less than 25 per cent of the REIT's market capitalization.

The transaction was unanimously approved by the independent trustees of the REIT, and the purchase price for the property is supported by an independent estimate of the fair market value of the property prepared by an independent appraiser under the supervision of the independent trustees of the REIT. Based on the appraisal, the market value of the property, in which the REIT will have a 50-per-cent undivided interest, is $6.55-million. In accordance with the terms of the strategic investment agreement with Lotus Crux Acquisition LP, an entity in which Mr. Jadavji and Mr. Aghar respectively have a 50-per-cent interest, a fee of $26,250 will be paid to Lotus Crux Acquisition LP in connection with the purchase of the property.

About Pro REIT

Pro REIT is an unincorporated open-ended real estate investment trust that owns a portfolio of diversified commercial real estate properties in Canada, with a focus on primary and secondary markets in Quebec, Atlantic Canada and Ontario, with selective expansion into Western Canada. Its portfolio comprises 39 properties with approximately two million square feet of commercial gross leasable area.

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