Northern Property REIT to Create $3 Billion National Multi-Family REIT Through Acquisition of True North Apartment REIT and $535MM Multi-Family Portfolio from Starlight Investments Ltd. - Property Vista

August 18, 2015

Northern Property REIT to Create $3 Billion National Multi-Family REIT Through Acquisition of True North Apartment REIT and $535MM Multi-Family Portfolio from Starlight Investments Ltd.

Monday, August 10, 2015

Northern Property Real Estate Investment Trust and True North Apartment Real Estate Investment Trust announced the creation of Canada’s third-largest publicly-traded multi-family REIT.

NPR will acquire True North through a plan of arrangement whereby True North unitholders will receive 0.3908 NPR trust units for each of their True North trust units, representing a premium of 16.4 per cent over the closing price of True North units on Friday, August 7.

In addition, NPR has agreed to acquire a 4,650 suite, multi-family portfolio from Starlight Investments Ltd. as well as from a joint venture between the Public Sector Pension Investment Board and Starlight for an aggregate purchase price of $535 million to be satisfied by the payment of cash, the assumption of debt, and the issuance of NPR trust units and class B limited partnership units, which are economically equivalent to and exchangeable for trust units of NPR. As part of the transactions, NPR will change its name to Northview Apartment Real Estate Investment Trust to reflect the new national character of Northview’s portfolio and its future growth strategy.

Mr. Cook, President and CEO of NPR commented, “We are excited about creating a leading multi-family Canadian REIT. Northview’s national platform and diverse portfolio will provide unitholders of both NPR and True North with a unique opportunity to build a great Canadian business. This transformative transaction builds upon the solid financial results released by NPR last week and will provide NPR unitholders with improved access to capital and opportunities for growth outside our traditional mid-market communities.”

“This acquisition immediately creates value for True North unitholders and accelerates our goal of creating scale,” said Mr. Veiner, President and Chief Executive Officer of True North. “Over the long-term, this transformative transaction will benefit our unitholders through enhanced access to capital which, along with reduced leverage and a lower payout ratio, will result in increased financial stability.”

Mr. Cook will serve as President and Chief Executive Officer of Northview, and Mr. Veiner will join Northview as Chief Operating Officer, bringing significant industry experience in the central Canadian market and continuity to management of the True North portfolio.

In connection with the closing of the transactions, Starlight will enter into a transitional service agreement with Northview to provide certain support services with respect to the newly acquired properties located in Ontario, Quebec, New Brunswick and Nova Scotia. Under the terms of this agreement, Northview will pay an annual service fee of 0. 125 per cent of the value of the properties acquired in those provinces for a period of three years, with two one-year extension options in favour of Northview. This transitional service agreement may be terminated early by Northview in respect of the New Brunswick and Nova Scotia properties after two years. The service fee in the first year following completion of the transactions is expected to be approximately $1.6 million. The agreement also contemplates a fee payable by Northview in the event that it acquires properties sourced by Starlight (including those acquired as part of the Institutional Portfolio), other than those which are wholly-owned by Starlight.

Following the completion of the transactions, the Northview Board of Trustees will be comprised of ten members. Pursuant to an agreement to be entered into between Northview and Mr. Drimmer, Mr. Drimmer will have the right to nominate two Trustees to the Board of Northview, one of whom must be independent pursuant to Canadian securities laws. Upon closing, Mr. Drimmer and Mr. Graham Rosenberg will join the Northview Board along with NPR’s existing Trustees, with Mr. Douglas H. Mitchell continuing to serve as Chairman of the Board.

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Jack Beaton Sterling Karamar, Property Management
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