Edgefront REIT announces $36.7 million of property acquisitions, filing of a preliminary short form prospectus and June distribution

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CALGARY, May 30, 2014 /CNW/ - Edgefront Real Estate Investment Trust (the "REIT") (TSXV: ED.UN) announced today that it has agreed to acquire (the "Acquisition") three income producing industrial properties (the "Acquisition Properties") in Alberta controlled by TriWest Capital Partners through two of its portfolio companies, Triple M Housing Ltd. and Northern Mat & Bridge Limited Partnership, for an aggregate purchase price of approximately $36.7 million, representing a weighted average going-in capitalization rate of approximately 8.2%.

The purchase price will be satisfied by a combination of cash from a proposed $20 million public offering of trust units (the "Units") of the REIT and from a draw under the REIT's existing $45 million revolving credit facility, which is expected to be amended to $60 million (of which $5 million will be non-revolving).

The Acquisition

• The Acquisition Properties comprise an aggregate of 277,748 square feet of gross leasable area on 57.2 acres of land located in Lethbridge, Clairmont and Rycroft, Alberta.
• Currently 100% owner-occupied and represent industrial real estate that is mission critical to their businesses.
• The Acquisition Properties are being acquired on a sale-leaseback basis from the tenant owners for 15 year lease terms for the Lethbridge and Rycroft properties and a 10 year lease term for the Clairmont property.
• The leases will be "triple net", with the tenants responsible for all operating costs and maintenance of the properties, and have embedded rent escalations based on increases in CPI.

The following table summarizes certain information about the Acquisition Properties:

Property Address	Property Use	Year Built and/or Renovated	Rentable Area (Square Feet)	Land (Acres)	Occupancy	Tenant	Lease Expiry Year
3501 Giffen Road North & 3711 - 36 Street North, Lethbridge, AB	Manufacturing Facility, Office and Storage Area	2008-2012	229,000	31.4	100%	Triple M^(1)	2029
8001 - 99 Street, Clairmont, AB	Office and Warehouse	2014	26,638	9.7	100%	Northern Mat^(2)	2024
4301 – 45 Avenue, Rycroft, AB	Manufacturing Facility	1993 & 2014	22,110	16.1	100%	Northern Mat^(3)	2029
Total			277,748	57.2

Notes:
(1)	15 year lease with Triple M, with three, 5 year renewal options. The net minimum rent payable by Triple M will be an aggregate annual amount of $1,871,410. Rent will be fixed for the first two years, with annual Consumer Price Index increases thereafter.
(2)	10 year lease with Northern Mat, with two, 5 year renewal options. The development is scheduled for completion prior to Closing, at which time the lease will commence. The net minimum rent payable by the tenant will be an amount of $722,500 for the first year of the lease. After the first year of the lease, rent will be subject to annual increases based on increases (if any) in the Consumer Price Index (All Items) for Canada during the immediately prior year.
(3)	15 year lease with Northern Mat, with two, 5 year renewal options. The net minimum rent payable by the tenant will be an amount of $410,000 for the first year of the lease. After the first year of the lease, rent will be subject to annual increases based on increases (if any) in the Consumer Price Index (All Items) for Canada during the immediately prior year.

The Acquisition will be completed pursuant to acquisition agreements entered into between each of Triple M Housing Ltd. and Northern Mat & Bridge Limited Partnership and certain subsidiary entities of the REIT. The Acquisition will be conditional upon the receipt of all necessary consents and waivers from all third parties relating to the Acquisition, including in respect of the required debt financing, the unitholders of the REIT and the TSXV, and the satisfaction of certain other customary conditions including satisfactory due diligence.

The Acquisition (and related transactions) is a transaction between, among others, the REIT and portfolio companies within TriWest Capital Partners.  RTL-Westcan Holdings Limited Partnership ("RTL-Westcan") currently holds an approximately 60% economic and voting interest in the REIT on a fully-diluted basis through the ownership of 11,794,358 Units. Members of the TriWest Capital Partners investment team control the general partner of RTL-Westcan LP which in turn, controls and manages RTL-Westcan LP. Further, Messrs. Cody Church, Chad Danard and Lorne Jacobson, three REIT trustees, are senior executives of TriWest Capital Partners.  As such, the Acquisition constitutes a "related party transaction" under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Pursuant to MI 61-101, the REIT is required to obtain prior approval of the Acquisition by a majority of the minority Unitholders at a special meeting (the "Special Meeting"), which will be scheduled for late June 2014. Pursuant to Section 5.5(b) of MI 61-101, the REIT is exempt from obtaining a formal valuation for the Acquisition as the REIT's securities are not listed for trading on any of the stock exchanges specified in that Section. The REIT has nevertheless obtained independent appraisals of each of the Acquisition Properties prepared by Cushman & Wakefield, Inc. The independent appraisals indicate that the estimated aggregate market value of the Acquisition Properties as at April 23, 2014 was approximately $38.7 million. The independent appraisals state that the appraisals and analyses were performed in accordance with Canadian appraisal standards and are subject to a number of assumptions and limitations.

The independent trustees of the REIT have approved the Acquisition, and unanimously recommended to the Board of Trustees that it recommend that Unitholders vote in favour of the Acquisition at the Special Meeting. The Board of Trustees has also approved the Acquisition and unanimously resolved to recommend that Unitholders vote in favour of the Acquisition at the Special Meeting.

The Offering

In order to finance a portion of the purchase price for the Acquisition Properties, the REIT has filed a preliminary short form prospectus with the securities regulatory authority in each of the provinces of Canada, other than Quebec, for a proposed public offering of Units for gross proceeds of approximately $20 million.

The Offering is being made on a "marketed" underwritten basis through a syndicate of underwriters co-led by Dundee Securities Ltd. and Scotiabank, and including National Bank Financial Inc., TD Securities Inc., Desjardins Securities Inc. and GMP Securities L.P.

The preliminary short form prospectus contains important information relating to the securities and the Acquisition and is still subject to completion or amendment. The preliminary short form prospectus is available on SEDAR at www.sedar.com under the REIT's profile. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final short form prospectus has been issued.

June Distribution Declared

The REIT will make a cash distribution in the amount of $0.01333 per Unit, representing $0.16 per Unit on an annualized basis, payable July 15, 2014 to unitholders of record as of June 30, 2014. Subscribers of Units under the proposed $20 million public offering noted above will not be entitled to participate in this June distribution.

The REIT has adopted a distribution reinvestment plan ("DRIP") whereby residents of Canada may elect to have all or a portion of the cash distributions of the REIT automatically reinvested in additional units of the REIT. Eligible unitholders who so elect will receive a bonus distribution equal to 3% of each distribution that was reinvested by them under the DRIP, which bonus distribution will also be reinvested in units. Full details with respect to the DRIP can be found on the REIT's website at www.edgefrontreit.com.

About the REIT

Edgefront REIT is a growth oriented real estate investment trust focused on increasing unitholder value through the acquisition, ownership and management of industrial properties located in primary and secondary markets in North America, with an initial focus on Western Canada. Edgefront REIT currently owns a portfolio of 12 properties comprising approximately 470,000 square feet of rentable area.

The REIT has approximately 19,464,023 units issued and outstanding. Additionally, there are 360,000 Class B LP units of Edgefront Limited Partnership issued and outstanding.

The TSXV has in no way passed upon the merits of the proposed Acquisition and has neither approved nor disapproved the contents of this press release.  Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

This press release contains forward-looking information within the meaning of Canadian securities laws.  Such information includes, without limitation, information regarding the completion of the Acquisition.  Although the REIT believes that such information is reasonable, it can give no assurance that such expectations will prove to be correct.

Forward looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events.  The REIT cautions investors that any forward-looking information provided by the REIT is not a guarantee of future results or performance, and that actual results may differ materially from those in forward looking information as a result of various factors, including, but not limited to: the REIT's ability to complete the Acquisition; the state of the real estate sector in the event the Acquisition is completed; the REIT's ability to secure the necessary financing or to be fully able to implement its business strategies and other risks and factors that the REIT is unaware of at this time.  The reader is referred to the REIT's preliminary short form prospectus for a more complete discussion of risk factors relating to the REIT and their potential effects, available on SEDAR at www.sedar.com.

The securities offered have not and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any U.S. State securities laws and may not be offered, sold, or delivered directly or indirectly, within the United States or its territories or possessions or to or for the account of any U.S. person (as defined in Regulation S under the U.S. Securities Act) other than pursuant to an available exemption from the registration requirements of the U.S. Securities Act. This press release does not constitute an offer to sell or a solicitation of an offer to buy any such securities within the United States, or its territories or possessions, or to or for the account of any U.S. person.

SOURCE: Edgefront Real Estate Investment Trust

Please contact Kelly C. Hanczyk, President and CEO at [phone] or Rob Chiasson, CFO at [phone]