Artis REIT announces $40 million convertible debenture offering



    
    /NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
    DISSEMINATION IN THE UNITED STATES/
    

    WINNIPEG, June 25 /CNW/ - Artis Real Estate Investment Trust ("Artis" or
the "REIT") (TSX: AX.UN) ) is pleased to announce that in connection with the
proposed public offering (the "Offering") of convertible unsecured
subordinated debentures previously announced on June 24, 2009, it has entered
into an agreement with a syndicate of underwriters led by Canaccord Capital
Corporation and CIBC World Markets Inc. and including BMO Capital Markets,
National Bank Financial Inc., RBC Capital Markets, Scotia Capital Inc., TD
Securities Inc., Blackmont Capital Inc., Desjardins Securities Inc., Macquarie
Capital Markets Canada Ltd. and Brookfield Financial Corp. (collectively, the
"Underwriters") for the purchase by the Underwriters of $40,000,000 aggregate
principal amount of Series E convertible unsecured subordinated debentures
(the "Series E Debentures").
    The Series E Debentures will bear interest at a rate of 7.50% per annum
and will be payable semi-annually on June 30 and December 31 until maturity on
June 30, 2014. The first interest payment date will be December 31, 2009. The
Series E Debentures will be convertible at the option of the holder into trust
units ("Units") of Artis at any time prior to maturity at a conversion price
equal to $9.30 per Unit (the "Conversion Price"). The Series E Debentures will
not be redeemable by Artis prior to June 30, 2012. On or after June 30, 2012,
but prior to June 30, 2013, the Series E Debentures will be redeemable, in
whole or in part, at a price equal to the principal amount plus accrued
interest, at Artis' option on a minimum of 30 days notice, provided that the
weighted average trading price of the Units is not less than 125% of the
Conversion Price. On and after June 30, 2013, the Series E Debentures will be
redeemable, in whole or in part, at a price equal to the principal amount plus
accrued interest, at Artis' option on a minimum of 30 days notice. The payment
of principal and interest on the Series E Debentures will have priority on
payment of distributions on Units, but will be subordinate in right of payment
of senior indebtedness of Artis. The Series E Debentures will rank pari passu
in right of payment with Artis' other convertible debentures.
    Artis has granted the Underwriters an over-allotment option to purchase
up to an additional $6,000,000 principal amount of Series E Debentures,
exercisable at any time up to 30 days from the closing of the Offering.
    Artis intends to use the net proceeds from the Offering to repay certain
indebtedness and for working capital purposes. Once these funds have been
deployed, Artis will have approximately $11.4 million of mortgage principal
maturing in 2009 and $58.4 million in 2010, representing 12 mortgages. Artis
expects to have approximately $90 million of unencumbered properties available
as security for the existing or a new acquisition line of credit.
    A preliminary short-form prospectus for the Offering was previously filed
with the securities commissions in each of the provinces of Canada. An amended
and restated preliminary short-form prospectus is expected to be filed with
each of the Canadian securities commissions as soon as possible.
    The Offering is expected to close on or about July 9, 2009. A copy of the
amended and restated Preliminary Prospectus will be available on SEDAR at
www.sedar.com or by contacting Canaccord Capital Corporation, 161 Bay Street,
Suite 3000, P.O. Box 516, Toronto, ON, M5J 2S1 or CIBC World Markets Inc., 161
Bay Street, 6th floor, Toronto, ON, M5J 2S8.
    The Series E Debentures and the underlying Units have not been and will
not be registered under the United States Securities Act of 1933 and
accordingly will not be offered, sold or delivered, directly or indirectly
within the United States, its possessions and other areas subject to its
jurisdiction or to, or for the account or for the benefit of a U.S. person,
except pursuant to applicable exemptions from the registration requirements.
The offering is subject to normal regulatory approvals including approval of
the Toronto Stock Exchange.

    This press release contains forward looking statements. For this purpose,
any statements contained herein that are not statements of historical fact may
be deemed to be forward looking statements. Without limiting the foregoing,
the words "expects", "anticipates", "intends", "estimates", "projects", and
similar expressions are intended to identify forward looking statements. Artis
is subject to significant risks and uncertainties which may cause the actual
results, performance or achievements of the REIT to be materially different
from any future results, performance or achievements expressed or implied in
these forward looking statements. Artis cannot assure investors that actual
results will be consistent with any forward looking statements and Artis
assumes no obligation to update or revise such forward looking statements to
reflect actual events or new circumstances. All forward looking statements
contained in this press release are qualified by this cautionary statement.

    Artis is a growth oriented real estate investment trust focused
exclusively on commercial properties located in primary and growing secondary
markets in western Canada. The REIT's goal is to provide unitholders the
opportunity to invest in high quality western Canadian office, retail and
industrial properties, as well as to provide monthly cash distributions that
are stable, tax efficient, and growing over time.
    Artis' commercial property comprises approximately 6.3 million square
feet of leasable area in 85 properties. Leasable area is approximately 30.7%
in Manitoba, 7.8% in Saskatchewan, 55.7% in Alberta, and 5.8% in B.C.; by
asset class the portfolio is 31.4% retail, 41.0% office and 27.6% industrial.
    The REIT's Distribution Reinvestment Plan ("DRIP") allows unitholders to
have their monthly cash distributions used to purchase trust units without
incurring commission or brokerage fees, and receive bonus units equal to 4% of
their monthly cash distributions. More information can be obtained at
www.artisreit.com.

    
    The Toronto Stock Exchange does not accept responsibility for the
    adequacy or accuracy of this press release.
    





For further information:

For further information: Mr. Armin Martens, President and Chief
Executive Officer, Mr. Jim Green, Chief Financial Officer or Ms. Kirsty
Stevens, Senior VP - Investor Relations, (204) 947-1250


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