An anonymous trustee reports

MELCOR REIT ANNOUNCES COMMENCEMENT OF STRATEGIC REVIEW PROCESS AND SUSPENSION OF DISTRIBUTION

Melcor Real Estate Investment Trust has taken steps to strengthen its financial position and maximize unitholder value, including commencement of a strategic review process and a suspension of its monthly distribution.

Strategic review process

The board of trustees of Melcor REIT has established an independent committee to oversee a broad-based strategic review with a focus on unlocking unitholder value. The independent committee will retain a financial adviser to evaluate a broad range of strategic alternatives to maximize unitholder value. DLA Piper (Canada) LLP has been retained as legal counsel to the independent committee.

There can be no assurance that the strategic review process will result in the REIT pursuing or consummating any transaction or alternative, nor any assurance as to its outcome or timing. The independent committee has not set a completion date for the culmination of the strategic review process and the REIT does not intend to comment further on the review until it determines that additional disclosure is appropriate or required.

Distribution suspension

In the normal course, the REIT reassesses its distribution policy. In light of the uncertainties surrounding the current capital and property market conditions, management and the board carefully conducted a comprehensive review of the REIT's capital structure and operations in order to ensure the long-term viability of the REIT's cash flow and preserve value for its unitholders. As a result, the REIT has determined that a suspension of the distribution is warranted at this time.

The board believes this decision is prudent and in the best interests of the REIT and its unitholders. The distribution suspension is expected to enable the REIT to retain approximately $1.2-million of cash, monthly, improving the REIT's financial flexibility as it continues advancing its short- and long-term objectives. The board and management will continue to monitor the REIT's financial performance, operating environment and strategic review process to determine an appropriate time to provide additional clarity on cash flows or to reinstate a regular cash distribution.

2023 annual results

Melcor REIT results for the fourth quarter and year ended Dec. 31, 2023, are scheduled to be released on March 5, 2024. Management will host a conference call at 11 a.m. ET (9 a.m. MT) on March 6, 2024.

Conference call details:

Toronto and area:   1-416-915-3239

Toll-free:   1-800-319-4610

Webcast and replay

The call will also be webcast (listen only) on-line. A replay of the call will be available shortly after the call is concluded.

About Melcor Real Estate Investment Trust

Melcor REIT is an unincorporated, open-ended real estate investment trust. Melcor REIT owns, acquires, manages and leases quality retail, office and industrial income-generating properties in Western Canada. Its portfolio is currently made up of interests in 38 properties representing approximately 3.15 million square feet of gross leasable area located across Alberta and in Regina, Sask., and Kelowna, B.C.

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