/C O R R E C T I O N from CNW -- Milestone Apartments REIT/

In the news release, Milestone Urges Unitholders to Vote "For" the Proposed Transaction with Starwood, issued 22-Feb-2017 by Milestone Apartments REIT over CNW, in the table column "What ISS Overlooked" in the "Robust Process" row, the text from the row beneath was inadvertently duplicated by CNW, as incorrectly transmitted. The complete, corrected release follows:

Milestone Urges Unitholders to Vote "For" the Proposed Transaction with Starwood

Comments on ISS Report

DALLAS, Feb. 22, 2017 /CNW/ - Milestone Apartments Real Estate Investment Trust (TSX: MST.UN) ("Milestone" or the "REIT") today issued the following statement in response to a recent report by Institutional Shareholder Services ("ISS") regarding the REIT's proposed transaction with Starwood Capital Group ("Starwood"):

Milestone stated: "While we are pleased that Glass Lewis recognized that Starwood's all-cash offer provides Milestone unitholders with a compelling valuation as well as the opportunity to crystallize value in an uncertain market, we are disappointed that ISS did not reach the same conclusion, which is contrary to the support we have received from many unitholders. Milestone's management team is comprised of seasoned real estate executives with an average of more than two decades of experience in the U.S. multi-family space, and with deep knowledge of the industry and the institutions who invest in the REIT's asset class. Based on its comprehensive understanding of its own assets and the overall multi-family real estate industry, the fact that to date no alternative bidder has emerged and its desire to maximize value for its investors, Milestone urges unitholders to vote FOR the US$16.15 in cash for each Milestone unit offered in the Starwood transaction."

Milestone also noted the ISS analysis overlooked key facts about its business, the merits of the transaction and market environment:






What Glass Lewis Got Right i

What ISS Overlooked

Attractive Premium and Fair Valuation

"Based on our own analyses, the valuation metrics referenced by the REIT and the fairness opinions of the two financial advisors, we believe the purchase price is fair and acceptable for Milestone unitholders …We ultimately see reasonable assurance for unitholders that the offer likely represents the best available for the REIT at this time."

The attractive premium to Milestone's book value per apartment unit of approximately 10% is consistent with premiums for recent comparable precedent transactions. BMO Capital Markets and National Bank Financial have both provided opinions that the US$16.15 per unit is fair to Milestone's unitholders from a financial point of view.

Robust
Process

"The Milestone board conducted a thorough review of strategic and transaction alternatives…We believe the Milestone board and special committee appropriately considered the REIT's strategic and financial alternatives after being approached on an unsolicited basis regarding a potential sale of the REIT."

The Milestone Board and special committee engaged in a comprehensive process to maximize value for the REIT's unitholders. Since the REIT's IPO in 2013, Milestone has received several unsolicited approaches regarding a sale, but none of these discussions resulted in a compelling offer until discussions with Starwood. Of note is the ability of the REIT to consider superior proposals over the Starwood offer, but to date no bidder has emerged with any alternative proposal to the Starwood offer.

Transaction Represents Best Alternative for All Unitholders

"Starwood is able to offer greater value than other parties due to its geographic overlap with Milestone's assets, focus on the mid-market apartment segment, access to capital, and capacity to make a purchase of this size."

 

Given that management has a combined approximately 13% economic interest in the REIT (the majority of which is not subject to any lockup provisions) and that the majority of the management team will not have a continuing role following the completion of the transaction, the interests of management are clearly aligned with those of unitholders.

Crystallizing Value Amid Market Uncertainties

"…In the face of potentially negative headwinds on the horizon, and the time- and risk-adjusted value that could reasonably be expected to accrue to unitholders under various alternatives…the acquisition is in the best interests of the REIT and its unitholders at this time."

In its recommendation, ISS does not adequately account for the magnitude of potential market headwinds including: decelerating multifamily rental rate growth, expanding capitalization rates amid rising interest rates, growing competition, and depreciation of the U.S. dollar. These risks increase the probability for a slower growth environment going forward.

 

Your vote is extremely important. Following the unanimous recommendation of the Special Committee of Milestone's Board of Trustees, Milestone's Board of Trustees unanimously recommends that unitholders vote FOR the Transaction Proposal with Starwood. Unitholders are reminded every vote counts regardless of how many units they own and to vote their proxies by 10:00 a.m. (Toronto time) on March 3, 2017.

If you have any questions, please contact Kingsdale Advisors at 1-866-851-3215 toll-free in North America, or 416-867-2272 outside North America or by email at contactus@kingsdaleadvisors.com.

About Milestone Apartments REIT

The REIT is an unincorporated, open-ended real estate investment trust that is governed by the laws of Ontario. The REIT's portfolio consists of 78 multifamily garden-style residential properties, comprising 24,061 apartment units that are located in 16 major metropolitan markets throughout the Southeast and Southwest United States. The REIT is the largest real estate investment trust listed on the TSX focused solely on the United States multifamily sector. Milestone's vertically integrated platform employs more than 1,200 employees and manages more than 50,000 apartment units across the United States. For more information, please visit www.milestonereit.com.

Milestone Forward-Looking Information
This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to the business of the REIT and the environment in which it operates. Forward-looking statements are identified by words such as "believe", "anticipate", "expect", "intend", "plan", "will", "may" and other similar expressions.  They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

___________________
i Permission to use quotations neither sought nor obtained.

SOURCE Milestone Apartments REIT

For further information: Canada: Ian Robertson, Kingsdale Advisors, Executive Vice President, Communication Strategy, Direct: 416-867-2333, Cell: 647-621-2646, Email: irobertson@kingsdaleadvisors.com; United States: Matthew Sherman, Alyssa Cass, Joele Frank, Wilkinson Brimmer Katcher, Direct: 212-355-4449

RELATED LINKS
www.milestonereit.com

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