Mr. Joshua Gotlib reports

GO RESIDENTIAL REIT TO ACQUIRE STRATEGIC PORTFOLIO OF 27 PROPERTIES FROM H&R REIT, CREATING A PREMIER NEW YORK METRO AREA AND SUNBELT REGION FOCUSED RESIDENTIAL REIT POSITIONED FOR GROWTH

GO Residential Real Estate Investment Trust has arranged a transformational transaction with H & R Real Estate Investment Trust to acquire 27 properties valued at approximately $2.8-billion (U.S.) from H & R for total consideration of 134,208,643 newly issued trust units of GO and approximately $30-million (U.S.) in cash, plus the assumption of approximately $550-million (U.S.) in H & R debentures and approximately $1.1-billion (U.S.) in property-level debt. The transaction will create Canada's second-largest publicly traded residential REIT by enterprise value and is expected to close in Q4 2026, subject to customary closing conditions.

Transaction highlights and strategic rationale:

• Transformational scale: creates the second-largest publicly-traded residential REIT in Canada and seventh-largest publicly traded residential REIT across the United States; larger scale drives cost-efficiency opportunities, margin expansion initiatives and strengthens organizational capabilities;
• Portfolio diversification: significantly diversifies New York concentration by adding a high-quality 23-property Sunbelt portfolio in markets (Tampa, Dallas, Orlando, Miami, Raleigh, Austin and Charlotte) with superior employment growth and economic momentum;
• High-quality, luxury portfolio: trophy New York assets complemented by attractive Class A Sunbelt properties; after transaction completion, GO will continue to have among the highest average monthly rental rates of any public residential REIT in Canada or the United States;
• Earnings accretive: expected to be accretive to GO's FFO (funds from operations) and AFFO (adjusted funds from operations) adjusted per unit, with approximately $15-million in annualized synergies expected to be realized through margin enhancement initiatives;
• Strengthened balance sheet: pro forma debt to EBITDA (earnings before interest, taxes, depreciation and amortization) decreases by more than approximately two times at close, with further potential improvement from synergies and income support, while intending to preserve investment-grade credit rating;
• Greater investor liquidity: expanded unit float by approximately four times, which is anticipated to enhance trading liquidity and broaden GO's institutional investor appeal.

This transformational transaction will increase the number of properties under management nearly fourfold and establishes GO as a pure play luxury residential REIT with unmatched New York and Sunbelt scale and exposure -- a materially different and more competitive platform than GO is today.

"We have built one of the highest-quality luxury residential portfolios in New York City, and this transaction takes that foundation and adds Sunbelt scale, balance sheet strength and earnings growth -- transforming GO into one of Canada's largest publicly traded residential REITs. It will be a platform with a greater opportunity set and competing for a different category of investor," said Joshua Gotlib, chief executive officer of GO Residential. "We are acquiring best-in-class assets at an attractive basis, and we are doing it in a way that makes GO financially stronger and more diverse, consistent with our long-term strategy."

Meyer Orbach, chairman of GO Residential, added: "The board has unanimously concluded that this transaction is in the best interests of GO. It addresses, in a single step, the issues that have limited GO's valuation -- concentration, leverage and scale -- while preserving the quality and integrity of the portfolio our team has assembled."

A new peer set and attractive relative characteristics

Upon closing, GO will own approximately 13,300 suites across 35 residential properties in eight U.S. markets, establishing it as the second-largest publicly traded residential REIT in Canada. This scale repositions GO within the universe of North American residential REITs -- a peer group with increased unitholder trading liquidity and commanding stronger valuation multiples, broader analyst coverage, and deeper institutional ownership than the smaller-capitalization segment GO currently occupies.

GO's pro forma portfolio, combining New York luxury high-rise with Sunbelt and Class A mid-rise assets, offers a differentiated mix of assets that compares favourably within this peer set: premium asset quality, exposure to two of the most structurally supported housing markets in the New York and Sunbelt regions, and a management team with a demonstrated record of growth.

The combined platform will have increased scale and an expanded equity float, which may support index inclusion over time, positioning the combined platform to trade in line with its North American residential REIT peers over time.

Geographic diversification into high-growth Sunbelt markets

GO's existing portfolio is concentrated in New York, a world-class market but one that can create idiosyncratic risk. The 23-property Sunbelt portfolio to be acquired from H & R -- complemented by a 50-per-cent interest in a mixed-use residential asset in Miami, a 50-per-cent interest in a luxury high-rise multifamily complex in New York, a Class A office tower in New York, and a mixed-use commercial and office asset in Dallas that houses Lantower's operational headquarters -- meaningfully shifts GO's geographic profile.

The Sunbelt markets in which these properties are located continue to benefit from an occupancy recovery that is supported by above-average employment growth, net in-migration and favourable regulatory environments for multifamily housing. The transaction diversifies around GO's core New York presence, producing a portfolio in which both GO's existing strengths and new high-growth markets contribute to the overall earnings trajectory.

Balance sheet strengthening

The transaction is structured to reduce GO's pro forma leverage and preserve GO's investment-grade credit rating, representing a meaningful improvement to GO's financial profile and long-term financing capacity. Pro forma debt to EBITDA decreases by more than approximately two times at close, with further potential improvement from synergies and income support.

A stronger balance sheet is anticipated to open access to deeper debt markets at tighter spreads, improve covenant headroom and reduce the equity dilution risk associated with future capital needs. The transaction is expected to enhance GO's long-term financing efficiency and provide improved liquidity across both debt and equity markets.

Accretive to earnings, with significant synergy potential and work force continuity

The transaction is expected to be accretive to GO Residential's stand-alone FFO and AFFO adjusted per unit. Approximately $15-million in annualized transaction synergies are expected to be realized, reflecting cost-efficiencies achievable through scale advantages across property management, procurement, corporate overhead and operational integration, all without changes to the operational teams that will manage the combined portfolio.

Enhanced trading liquidity

The transaction will expand GO's equity market capitalization float by approximately four times, which is expected to increase GO's attractiveness to institutional investors that require minimum liquidity thresholds. GO believes that such greater trading liquidity supports more efficient price discovery, reduces the liquidity discount that can affect smaller-cap REITs and positions GO to attract additional investors. Based on the pro forma market capitalization, GO Residential may qualify for index inclusion over time.

Prior to closing, GO also intends to apply for its units to trade in Canadian dollars on the Toronto Stock Exchange. The Canadian-dollar-denominated listing is a condition to the closing of the transaction.

Transaction details

The transaction consists of GO's acquisition of 27 properties from H & R: a portfolio of 23 Sunbelt properties totalling approximately 10,294 residential suites; a 50-per-cent interest in a mixed-use residential property in Miami; a 50-per-cent interest in a luxury high-rise multifamily complex in New York; a Class A office tower in New York; and a mixed-use commercial and office asset in Dallas that houses Lantower's operational headquarters.

Total consideration comprises 134,208,643 newly issued GO Residential units and approximately $30-million (U.S.) in cash. GO will also assume $300-million (Canadian) principal amount of H & R's 2.633 per cent Series S debentures due Feb. 19, 2027, and $250-million (Canadian) principal amount of H & R's 5.457 per cent Series T debentures due Feb. 28, 2029, as well as approximately $1.1-billion (U.S.) in property-level debt.

Following closing, former unitholders of H & R will indirectly own approximately 67 per cent of the units of GO Residential Operating LLC, a subsidiary of GO (OpCo), on a fully diluted basis. Current holders of GO units, together with all current holders of OpCo units, would represent approximately 33 per cent of the units of OpCo on a fully diluted basis.

In connection with closing, two new trustees nominated by H & R are expected to be added to GO's board of trustees.

The transaction is being implemented through a larger transaction (the arrangement) under an arrangement agreement among GO, H & R and 1001700058 Ontario Inc. (the purchaser), on behalf of a consortium of co-purchasers (which includes funds affiliated with Blackstone Real Estate, Crestpoint Real Estate Investments Ltd. and the Public Sector Pension Investment Board (PSP) and a company controlled by members of the family of Tom Hofstedter, executive chairman and chief executive officer of H & R (CRAL), pursuant to which GO and the purchaser (on behalf of the asset purchasers) will acquire all of the assets of H & R.

The arrangement is structured as a statutory plan of arrangement under the Business Corporations Act (Alberta) and is subject to, among other things: approval of: (i) at least 66-2/3rds per cent of votes cast by holders of H & R units and special voting units voting together; (ii) at least 66-2/3rds per cent of votes cast by holders of H & R units, special voting units and exchangeable limited partnership units of H & R Portfolio Limited Partnership voting together; and (iii) a simple majority of votes cast by holders of H & R units, Class B LP units and special voting units voting together, excluding those H & R trust units required to be excluded pursuant to Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions; approval of the transaction by a simple majority of votes cast at a special meeting of GO unitholders; court approval; regulatory approvals, including TSX conditional approval for listing of the consideration units and Competition Bureau approval of the sale of H & R's properties to the purchaser and its consortium; and satisfaction or waiver of other closing conditions.

The arrangement agreement includes customary deal protection provisions, including reciprocal customary non-solicitation covenants on the part of H & R and GO and fiduciary outs permitting the H & R board and the GO board to accept superior proposals, subject to a right to match. In addition, the arrangement agreement provides that: (a) a termination fee of approximately $102-million (representing approximately 3 per cent of H & R's equity value) is payable by H & R to the purchaser and GO if H & R accepts a superior proposal and in certain other specified circumstances; (b) a termination fee of approximately $27-million (representing approximately 3 per cent of GO's equity value) is payable by GO to H & R if GO accepts a superior proposal and in certain other specified circumstances; and (c) a reverse termination fee of $136-million (representing approximately 4 per cent of H & R's equity value) is payable by the purchaser to H & R in the event the purchaser fails to finance the cash consideration (including for portions relating to the funds being advanced by the asset purchasers for their portion of the acquired assets) and in certain other specified circumstances.

GO unitholders will be asked to approve a resolution authorizing the issuance of the consideration units pursuant to the arrangement by a simple majority of votes cast at a special meeting of GO unitholders to be called in connection with the transaction. Full details of the arrangement and the transaction will be included in the meeting materials in respect of a special meeting of GO unitholders, which will be made available to GO unitholders and will also be available under GO Residential's SEDAR+ profile.

Note regarding Lantower Bayside and Lantower Sunrise: Two Sunbelt properties are presently held in a joint venture in which H & R holds approximately 30 per cent and Lantower Residential Real Estate Development Trust (No. 1) (Lantower REDT) holds approximately 70 per cent. H & R has agreed to use commercially reasonable efforts to acquire full ownership prior to closing. If that acquisition is not completed prior to closing of the transaction, GO (or a subsidiary thereof) will receive H & R's continuing approximately 30-per-cent interest in such properties and cash in lieu of Lantower REDT's interest in such properties.

Ancillary agreements

In connection with the arrangement and the acquisition of certain H & R assets by CRAL, subsidiaries of H & R that will be acquired by GO Residential will become a party to certain agreements with such entity. Pursuant to such agreements, such entity will, among other things: (i) commit to provide payments to such subsidiaries of up to an aggregate amount of approximately $51-million in the first two years following the arrangement; (ii) commit to indemnify certain subsidiaries of GO Residential for certain liabilities; and (iii) agree to bear certain costs relating to the operation of the River Landing, which CRAL will own in a joint venture with GO.

Board recommendation

The board of trustees of GO Residential, having consulted with its financial advisers and outside legal counsel, has unanimously determined that the transaction is in the best interests of GO Residential and recommends that GO unitholders vote for the transaction resolution at the special meeting. J.P. Morgan Securities LLC has provided an opinion that, subject to the assumptions, limitations and qualifications set forth therein, the consideration to be delivered by GO pursuant to the purchase agreement between GO and H & R and the plan of arrangement is fair, from a financial point of view, to GO.

Voting and support agreements

Each of GO Residential's trustees and executive officers who hold GO units, collectively owning approximately 3 per cent of GO units, has entered into a voting and support agreement with H & R and the purchaser, pursuant to which, subject to the terms and conditions set forth therein, they will vote all of their GO units in favour of the transaction resolution.

Each of the trustees and executive officers of H & R who owns trust units of H & R, special voting units and exchangeable limited partnership units of H & R Portfolio LP (Class B LP units) and companies controlled by the family of Mr. Hofstedter, collectively holding approximately 3.5 per cent of H & R trust units, 100 per cent of special voting units and 43 per cent of Class B LP units, has entered into a voting and support agreement with GO and the purchaser, pursuant to which, subject to the terms and conditions set forth therein, they will vote all of their units in favour of the arrangement.

Such voting and support agreements will be more fully described in the management information circulars to be made available to GO Residential and H & R unitholders, respectively.

Conference call

GO Residential and H & R will host a conference call on Aug. 11, 2026, at 8 a.m. ET to discuss the transaction. A copy of the presentation associated with this transaction will be available on H & R's website.

Participant numbers

United States/international:  1-646-307-1963

Canada:  647-932-3411

United States/Canada -- toll-free:  800-715-9871

Conference ID:  2312353

You may also preregister on-line.

An audio recording of the will be available for one week following the call.

United States and Canada toll-free:  800-770-2030

United States:  609-800-9909

Canada:  647-362-9199

Playback ID:  2312353

Advisers

J.P. Morgan Securities LLC acted as exclusive financial adviser to GO Residential. GO Residential engaged Blake, Cassels & Graydon LLP as Canadian counsel, Skadden, Arps, Slate, Meagher & Flom LLP as U.S. counsel, and Pryor Cashman LLP as U.S. real estate counsel.

CIBC World Markets Inc. and National Bank Financial Inc. are acting as exclusive financial advisers to H & R and the independent trustees, respectively. Miller Thomson LLP is acting as legal counsel to the independent trustees and Goulston & Storrs PC is acting as U.S. tax counsel to the independent trustees.

About GO Residential Real Estate Investment Trust

GO Residential is an internally managed, open-ended real estate investment trust established under and governed by the laws of the Province of Ontario. GO Residential has been formed to provide investors with an opportunity to invest in luxury high-rise multifamily properties located in the New York metropolitan area and other major metropolitan cities in the United States. GO Residential owns and operates a portfolio of 10 properties consisting of 3,034 luxury suites located in New York, N.Y.

We seek Safe Harbor.