Artis REIT announces acquisition of $213.1 million of properties in Alberta & British Columbia



    WINNIPEG, June 12 /CNW/ - Artis Real Estate Investment Trust ("Artis" or
the "REIT") announced today that it has entered into agreements with respect
to the acquisition of properties (the "Proposed Acquisitions") for a total
purchase price of $213.1 million. The proposed acquisitions are located in
Alberta and B.C.
    The total purchase price represents a weighted-average going-in
un-levered cash return ("Capitalization Rate") of 6.6%. Artis anticipates the
proposed acquisitions will close in June and July of 2007. The proposed
acquisitions include: (i) two industrial buildings in Edmonton, Alberta; (ii)
a four-building Class A retail complex in Nanaimo, BC; (iii) the Class A
TransAlta Headquarters Building in Calgary, Alberta and (iv) a retail power
centre located in Powell River, BC. The purchase prices for the proposed
acquisitions will be satisfied by a combination of cash on hand and mortgage
financing.
    "We are extremely pleased to announce these high quality acquisitions
and, in particular, to be strengthening our presence in the vibrant BC
market," said Armin Martens, CEO of Artis REIT. "Each of the proposed
acquisitions will be immediately accretive to our unitholders and additionally
offers potential future upside; management estimated the average in-place
rents are approximately 25% below current market lease rates."

    
                            Proposed Acquisitions


    -------------------------------------------------------------------------
                                      Gross Leasable
                    Property                    Area             Year Built/
    Property            Type  Location (000's sq.ft.) Occupancy  Redeveloped
    -------------------------------------------------------------------------

    Edmonton      Industrial  Edmonton,
    Industrial(1)  Class A&B        AB            38      100.0%   1976/2004

                    Retail &
    Nanaimo          Class A   Nanaimo,
    Portfolio(1)      Office        BC           159      100.0%   1991/1994

    TransAlta         Office   Calgary,
    Place(1)         Class A   Alberta           336      100.0%  1965/2000+


                     Class A    Powell
    Powell River      Retail,    River,                            1981/1996
    Portfolio(2) Residential        BC           291       97.5%       /2006
    -------------------------------------------------------------------------

    Total                                        824       98.4%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) unconditional purchase and sale agreements
    (2) conditional purchase and sale agreement
    

    "Artis is adding long term, stable credit-rated lease income to the
portfolio with these acquisitions and will increase the weighted-average lease
term to maturity across the portfolio," said Mr. Martens. "We are pleased to
note that over 83% of the tenants are government and/or national credit worthy
tenants."

    Edmonton Industrial - Edmonton, Alberta

    Artis has entered into an unconditional agreement to purchase two Class B
flex-industrial buildings in northwest Edmonton, Alberta, totaling
37,700 square feet. The buildings are currently 100% occupied, with almost 50%
of the tenants considered national, credit worthy tenants.

    Nanaimo Portfolio - Nanaimo, B.C.

    Artis has entered into an unconditional agreement to purchase the Windley
Portfolio, a newly built Class A office and retail complex located in the
Woodgrove commercial district of Nanaimo and an unconditional option to
acquire the Leon's/United Furniture Warehouse property, also in Nanaimo. With
a trading market of over 120,000 people, Nanaimo is the second largest City on
Vancouver Island.
    The Nanaimo properties are comprised of approximately 159,000 square feet
of office and retail gross leasable area ("GLA"). Tenants include HSBC Bank,
Canadian Western Bank, ICBC, Vancouver Island Health Authority and BCBC; the
Leon's Furniture and United Furniture Warehouse building closing may be
delayed until late 2007. Over 90% of the tenants are government or national
credit worthy tenants.

    TransAlta Place - Calgary, Alberta

    Artis has entered into an unconditional agreement to purchase TransAlta
Place, a three building Class A office complex occupying a full block of prime
beltline space in Calgary. It is bordered by Centre Street and 1st Street SW
and by 11th and 12th Avenue. The total building area comprises approximately
336,000 square feet of GLA. The parking stall ratio is one parking stall per
1,000 square feet of GLA; 298 parking stalls are underground plus an
additional 15 surface stalls. The property was originally built in 1983, has
been well-maintained and is in excellent condition. Since 2000 alone, over
$18M has been invested by the tenant in building upgrades and improvements.
The complex is home to the world headquarters of TransAlta Corporation,
Canada's largest non-regulated electric generating and marketing company.
TransAlta Corporation (TSX: TA and NYSE:   TAC) provides a strong covenant, with
over $7.5 billion in assets and market capitalization in excess of
$5.1 billion.
    TransAlta Corporation is in the fourth year of a 20 year (2023), care
free and fully net lease to the Landlord. No property management or asset
management fees will be incurred by Artis with this property. The tenant also
has two consecutive renewal options, each for a five year term, at the then
prevailing market rates. Management estimates the in-place rent to be between
$10 - 12 psf below today's market rent.

    Powell River Town Centre - Powell River, B.C.

    Artis has entered into a conditional agreement to purchase Powell River
Town Centre. Powell River Town Centre is the dominant retail mall and newly
built box retail complex in Powell River, B.C. It enjoys an outstanding tenant
roster, including Wal-Mart, Overwaitea, Staples, Shoppers Drug Mart, Canadian
Tire, Rona's, Mark Work Wearhouse, A & W, CIBC, Starbucks and Coles. The total
building area comprises approximately 291,000 square feet of GLA, with a
parking stall ratio of four parking stalls per 1,000 square feet of GLA. The
portfolio also includes a new residential complex comprised of 47 rental
units, currently fully leased.
    Powell River and its surrounding communities are located approximately
135 kilometres north of Vancouver on B.C.'s "Sunshine Coast". Powell River
itself has a large, newer hospital facility and boasts schools, shopping,
restaurants and other amenities that service the surrounding communities.
Powell River region's economic base is founded on forestry, fishing, mining,
agriculture and tourism. The region has experienced steady population growth
and strong demand in housing sales and housing starts in recent years,
becoming a popular retirement destination.

    Artis is a growth-oriented real estate investment trust focused
exclusively on commercial properties located in primary and growing secondary
markets in western Canada, particularly in Alberta. 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. Including
the proposed acquisitions, Artis will have acquired approximately $870 million
of commercial property; approximately 16.2% in Manitoba, 9.6% in Saskatchewan,
64.0% in Alberta, and 10.2% in B.C. The portfolio will consist of
54 properties, comprising approximately 4.8 million square feet of leasable
area (37.9% retail, 49.0% office and 13.1% 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.

    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. Such risk factors include, but
are not limited to, risks associated with real property ownership,
availability of cash flow, general uninsured losses, future property
acquisitions, environmental matters, tax related matters, debt financing,
unitholder liability, potential conflicts of interest, potential dilution,
reliance on key personnel, changes in legislation and proposed changes in the
tax treatment of trusts. 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.

    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 of the REIT, or Mr. Jim Green, Chief Financial Officer of
the REIT, at (204) 947-1200


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