STARLIGHT U.S. RESIDENTIAL (MULTI-FAMILY) INVESTMENT LP ANNOUNCES COMPLETION OF REORGANIZATION TRANSACTION

/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ALL AMOUNTS IN THIS PRESS RELEASE ARE IN THOUSANDS OF UNITED STATES ("U.S.") DOLLARS OR UNLESS OTHERWISE STATED. ALL REFERENCES TO "C$" ARE TO CANADIAN DOLLARS./

TORONTO, Dec. 30, 2025 /CNW/ - Starlight U.S. Residential (Multi-Family) Investment LP (TSXV: SURF.A) ("SURF LP" or "LP"), announced today that is has successfully completed the previously announced reorganization transaction (the "Reorganization") for Starlight U.S. Residential Fund (the "Fund") following the approval by TSX Venture Exchange (the "TSXV"), applicable lenders and the unitholders of Starlight U.S. Residential Fund (the "Unitholders"), respectively. 

Pursuant to the approved terms of the Reorganization, Unitholders will receive Canadian dollar denominated Class A units of Starlight U.S. Residential (Multi-Family) Investment LP (the "LP Units") with each Unitholder receiving LP Units based on the applicable exchange ratios set out below. The final record date for the conversion of existing Fund classes of units ("Units") to LP Units was December 18, 2025 ("Record Date"), upon which the Due Bill Period (as defined below) commenced.     

Class of Units	Current # of Units Outstanding	Exchange Ratio^(1)	Final Total of SURF LP Class A Units
Class A	3,401,547	1.000000	3,401,547
Class C	3,425,750	1.055410	3,615,565
Class D	12,267,811	1.000000	12,267,811
Class F	5,282,021	1.031660	5,449,250
Class I	3,500,000	1.055410 + Class I Management Fee Reduction Amount	4,459,004^(2)
Class E	658,800	1.289761	849,694
Class G	1,429,785	1.25018	1,787,489
Class U	602,377	1.25018	753,080
Total	30,568,091		32,583,440

(1)

The exchange ratio for Class E, Class G and Class U units includes a foreign currency factor based on the USD/CAD exchange rate at the time of closing of the Fund's initial public offering of 1.25018.

(2)

The existing Class I Units of the Fund were previously entitled to receive an additional distribution on termination of the Fund equal to the accrued management fee reduction associated with the Class I Units (the "Class I Management Fee Reduction Amount"). Pursuant to the Reorganization, the outstanding Class I Management Fee Reduction Amount of C$395,700 was settled in additional LP Units, in the amount of 765,069 LP Units.

The limited partnership agreement of SURF LP ("LPA") has been amended and restated on the date hereof (the "Reorganization Date") to reflect, where applicable, the terms of the Fund's existing declaration of trust and SURF LP has become a reporting issuer with the LP Units listed on the TSXV under ticker "SURF.UN". In addition, the term of SURF LP is set expire on November 15, 2029, being three years from the prior expiry of the Fund in November 15, 2026. As a result of the Reorganization, SURF LP now carries on the multi-family business previously carried on by the Fund. Following completion of the Reorganization and the cancellation of all units of the Fund ("Units"), the Fund has ceased to be a reporting issuer. The Fund's Class A and Class U Units were previously delisted from the TSXV effective at the close of business on December 23, 2025. The LP Units are expected to commence trading under the symbol "SURF.UN" at the open of the market on or about December 31, 2025. SURF LP has been admitted to the TSXV as a "Tier 2" issuer.

As previously announced, the TSXV implemented due bill trading for Reorganization, with due bills attached to underlying listed securities from the Record Date (December 18, 2025), until the close of trading on the Reorganization Date (December 30, 2025) (the "Due Bill Period"). Buyers of Units during the Due Bill Period were entitled to receive LP Units, provided they remained holders on the Reorganization Date. Unitholders entitled to receive the LP Units should expect receipt on or about December 31, 2025, being the due bill redemption date. Unitholders prior to the Due Bill Period who do not purchase or sell units during the Due Bill Period will not have their applicable LP Units impacted by the due bill process.

As a reminder, a final T5013 tax slip for the 2025 tax year will be issued in respect of the Fund which is expected to be issued by no later than March 31, 2026 and is expected to include a U.S. source capital loss allocated to investors on a pro-rata basis. The capital loss will reduce the adjusted cost base of Units held by investors. Furthermore, investors who acquired Units as part of the initial public offering of the Fund and have held them since such date are expected to trigger a capital loss if such Units are held until the Reorganization Date as a result of the Units being deemed to have been disposed in exchange for LP Units. Each investor should consult with their tax advisor to assess their ability to utilize any such losses incurred or allocated. For purposes of calculating any such loss on disposition of the Fund Units, the proceeds of disposition of such Unit would typically be considered to be the Fund's trading price where applicable. As a result, the proceeds of disposition typically would be: i) for Class A Units of the Fund, the Class A Unit trading price on the date of the Reorganization Date ("Class A Fair Value"); ii) for other unlisted classes of Canadian dollar denominated Units (Class C, D, F, I), the Class A Fair Value adjusted for the exchange ratio between Class A and the applicable unlisted unit class; iii) for Class U Units of the Fund, the Class U Unit trading price on the date of the Reorganization Date ("Class U Fair Value"); and iv) for other unlisted classes of United States dollar denominated Units (Class E, G), the Class U Fair Value adjusted for the exchange ratio between Class U and the applicable unlisted unit class. The Fund is not providing any tax advice to investors and investors are encouraged to speak to a tax advisor.

As a result of the Reorganization, all outstanding indebtedness of the operating subsidiaries of the Fund as at the Reorganization Date remain in place for SURF LP with terms and conditions consistent with those previously disclosed by the Fund. SURF LP also announced today that despite continuing to enter into good faith negotiations with first mortgage lender for its Sunlake Apartments property ("Sunlake" or the "Property"), SURF LP received a formal notice of an event of default (the "Notice") from the lender of the loan secured by Sunlake ("Lender"). The Fund does not agree that an event of default has occurred and is disputing the Notice.  The Notice received expresses the Lender's right to demand repayment of the borrowings secured by the Property. In the absence of a negotiated modification and extension of such loan, the Lender has the right to exercise the remedies available to it under the loan agreement, including a foreclosure of the Property. If the Notice was successfully defended by the Lender and such remedies were exercised, the Lender would be able to foreclose on the Property through a foreclosure sale process or a third party purchaser at the foreclosure sale, with the proceeds of the sale applied to amounts owed to Lender under the loan. As at the date hereof, the Lender has not exercised any such remedies and the LP continues to enter into good faith negotiations with such Lender. The LP does not expect a material impact on its net asset value as a result of any remedies the lender may exercise.

In addition, the Fund also modified the terms of its Fund-level credit facility to effectively transfer the credit facility to SURF LP with all other terms and conditions remaining consistent with those previously disclosed including the availability of up to $2,395.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release constitute forward-looking information within the meaning of Canadian securities laws and which reflect SURF LP's current expectations regarding future events, including statements relating to the Reorganization, commencement of trading of the LP Units, the tax consequences of the Reorganization and statements relating to the financing on Sunlake. Forward-looking information is provided for the purposes of assisting the reader in understanding SURF LP's financial performance, financial position and cash flows as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes.

Forward-looking statements involve known and unknown risks and uncertainties, which may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct, and that objectives, strategic goals and priorities may not be achieved. Those risks and uncertainties include, but are not limited to: the effect of the closing of the Reorganization on SURF LP's relationships with its customers, lenders, operating results and business generally; the effects of local and national economic, credit and capital market conditions, including changes in interest rates, foreign exchange rates, government regulations or in tax laws; and other risk factors described in the Fund's previously filed continuous disclosure materials, available on SEDAR+ at www.sedarplus.ca under the Fund's SEDAR+ profile.

Information contained in forward-looking information is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management's perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances.

The forward-looking information included in this press release relates only to events or information as of the date on which the statements are made in this press release. Except as specifically required by applicable Canadian securities law, SURF LP undertakes no obligation to update or revise publicly any forward-looking information, whether because of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

ABOUT STARLIGHT U.S. RESIDENTIAL (MULTI-FAMILY) INVESTMENT LP

The Fund is a "closed-end" limited partnership formed under and governed by the laws of the Province of Ontario, pursuant to an amended and restated limited partnership agreement dated December 30, 2025. SURF LP was established for the primary purpose of directly or indirectly acquiring, owning and operating a portfolio primarily composed of income-producing residential properties in the Fund's target metrics. SURF LP currently owns interests in three multi-family properties consisting of 1,029 suites.

Please visit us at www.starlightinvest.com and connect with us on LinkedIn at www.linkedin.com/company/starlight-investments-ltd-.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. 

SOURCE Starlight U.S. Residential (Multi-Family) Investment LP

Evan Kirsh, President, Starlight U.S. Residential (Multi-Family) Investment LP, [phone], [email protected]; Martin Liddell, Chief Financial Officer, Starlight U.S. Residential (Multi-Family) Investment LP, [phone], [email protected]