Mr. Greg Vorwaller reports

AIP REALTY TRUST ANNOUNCES AMENDMENT TO ALLTRADES PURCHASE AGREEMENT

AIP Realty Trust through its subsidiary AIP OP LP has entered into an amendment to the securities purchase agreement with 2024 ATIP Inc. dated Nov. 14, 2024, pursuant to which the trust is to acquire all of the issued and outstanding membership interests of AllTrades Industrial Properties LLC. OP LP is a Delaware limited partnership of which AIP Realty USA Inc., a subsidiary of the trust, serves as general partner.

Pursuant to the securities purchase agreement, among other things, OP LP will acquire all of the membership interests for aggregate consideration of up to $78.7-million (U.S.) payable, in part, in Series B preferred partnership units of OP LP, which were to be issued at a price equivalent to the price per Class A trust unit of the trust to be issued under a concurrent offering originally contemplated by the trust, which OP units will be convertible into Class A trust units of the trust pursuant to the terms of an exchange agreement to be entered into on closing of the AllTrades transaction.

Following the entering into of the securities purchase agreement, the trust has since elected not to pursue a concurrent offering in connection with the AllTrades transaction and instead seek alternative means of financing. As a result, the parties to the securities purchase agreement have entered into the amending agreement to amend the deemed issue price of the OP units to be 50 U.S. cents per OP unit, among other things. Pursuant to the amending agreement, the purchase price is payable as follows:

• On closing of the AllTrades transaction:
  • OP LP will pay cash consideration equal to the amount of indebtedness of AllTrades and any of its subsidiaries plus the transaction expenses to be determined as at the closing date of the AllTrades transaction; and
  • OP LP will issue to ATIP an amount equal to 25 per cent of the aggregate purchase price in OP units to be issued at a price of 50 U.S. cents per OP unit.
• The rest of the purchase price will be paid, if earned, on the first, second, third and fourth anniversaries of the closing date of the AllTrades transaction by the issuance by OP LP to AllTrades of OP units as of such anniversary dates, with such number of OP units to be issued equal to the aggregate amount of building starts, being each building approval by the board of the development of a new AllTrades-branded service industrial business suite building, and the receipt of equity financing necessary to build such building between such anniversaries multiplied by approximately $892,841 (U.S.) per building start (being the amount equal to 75 per cent of the purchase price less the final cash consideration and other applicable deductions, divided by a maximum of 44 building starts), divided by the volume-weighted average price of the units for the 30 trading days immediately preceding such payment date.

The AllTrades transaction remains subject to customary closing conditions, including approval from the TSX Venture Exchange, approval of trust unitholders (as further described below) and no material adverse effects, among others. The AllTrades transaction is anticipated to constitute a reverse takeover as defined in the policies of the TSX-V, and, accordingly, further information regarding the AllTrades transaction will be disclosed by the trust in a comprehensive news release to be filed on the trust's SEDAR+ profile.

Related-party disclosure

The trust's independent trustees have conducted a review and analysis of the AllTrades transaction and the potential benefits to the trust, and have approved proceeding with executing the amending agreement and the broader AllTrades transaction, subject to receipt of necessary unitholder and TSX-V approvals. Leslie Wulf, Bruce Hall and Greg Vorwaller have recused, and will continue to recuse, themselves from all discussions or deliberation relating to the approval of the AllTrades transaction.

The independent trustees are responsible for supervising the process to be carried out by AIP and its professional advisers in connection with the AllTrades transaction, making recommendations to the board of trustees of the trust, with Mr. Wulf, Mr. Hall and Mr. Vorwaller recusing, in respect of matters that it considered relevant with respect to the AllTrades transaction, and ensuring that AIP performs its obligations as contemplated in connection with the AllTrades transaction in compliance with the requirements of Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions), AIP's declaration of trust and applicable policies of the TSX-V.

The independent trustees have determined that, for the purposes of MI 61-101, the AllTrades transaction constitutes a related-party transaction. Each of Mr. Wulf, Mr.Hall and Mr. Vorwaller are trustees and officers of the trust and collectively own or control, directly or indirectly, approximately 17.21 per cent of the issued and outstanding units (or 4.02 per cent assuming conversion of all preferred units -- Series B convertible units of the trust). Nathan Smith is a trustee of the trust, and owns or controls, directly or indirectly, approximately 1.02 per cent of the issued and outstanding units (or 0.24 per cent assuming conversion of all preferred units) of the trust. Neither Samantha Adams nor Kobi Dorenbush owns securities of the trust. With respect to the AllTrades transaction, each of Mr. Wulf, Mr. Hall and Mr. Vorwaller are also officers of AllTrades, directors and officers of ATIP, and manager and sole owner of 100 per cent of the membership interests, and collectively own, through their ownership in ATIP, 28.43 per cent of AllTrades on a fully diluted basis or 38.95 per cent on a non-diluted basis.

The trust is eligible to rely on the exemption from obtaining a formal valuation in respect of the AllTrades transaction in accordance with Section 5.5(b) of MI 61-101 as no securities of the trust are listed or quoted on the Toronto Stock Exchange, the New York Stock Exchange, the American Stock Exchange, Nasdaq Stock Market, or a stock exchange outside of Canada and the United States other than the Alternative Investment Market of the London Stock Exchange or the Plus markets operated by Plus Markets Group PLC.

The trust will be seeking unitholder approval for a resolution in respect of the AllTrades transaction. The AllTrades transaction resolution requires the affirmative vote of not fewer than two-thirds of the votes validly cast on the AllTrades transaction resolution by disinterested unitholders present in person or represented by proxy at the special meeting of the unitholders expected to be held in the coming months, and will exclude any votes cast in respect of units or preferred units required to be excluded pursuant to MI 61-101. A copy of the amending agreement will be filed on the trust's SEDAR+ profile.

About AIP Realty Trust

AIP Realty Trust is a real estate investment trust with a growing portfolio of light industrial flex facilities focused on small businesses and the trades and service sectors in the United States. These properties appeal to a diverse range of small space users, such as contractors, skilled trades, suppliers, repair services, last-mile providers, small businesses, and assembly and distribution firms. They typically offer attractive fundamentals including low tenant turnover, stable cash flow and low capital expenditure intensity, as well as significant growth opportunities. With an initial focus on the Dallas-Fort Worth market, AIP plans to roll out this innovative property offering nationally. AIP holds the exclusive rights to finance the development of and to purchase all the completed and leased properties built across North America by its development and property management partner, AllTrades Industrial Properties Inc.

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