Extension of $55M Scott's Real Estate Investment Trust Senior Loan

TORONTO, Jan. 4 /CNW/ - Scott's Real Estate Investment Trust ("Scott's REIT") announced pursuant to the press release attached hereto as Schedule A that it received an additional one-month extension on its mortgage which was originally scheduled to mature on October 1, 2010, and for which Scott's REIT had received a three-month extension at that time. The revised loan maturity is now scheduled on February 1, 2011.

The senior component of the Scott's REIT mortgage loan, with a balance of $55M, is the largest loan in the pool of mortgage loans for Real Estate Asset Liquidity Trust Commercial Mortgage Pass-Through Certificates, Series 2005-2 (the "Certificates"), issued under a short form prospectus dated October 19, 2005 (the "Prospectus").  As a result of the extension of the Scott's REIT mortgage loan, distributions to the holders of the applicable Certificates may be affected, as described in the Prospectus, including holders of the Class A-1 Certificates may not receive a distribution on the January 2011 distribution date in respect of principal related to the repayment of the principal balance of the Scott's REIT mortgage loan.

Real Estate Asset Liquidity Trust (REAL-T) was established to acquire interests in residential and commercial mortgages and to issue securities backed by such mortgages.


Attention Business Editors

     Scott's Real Estate Investment Trust extends mortgage for one month

TORONTO, Dec. 31, 2010 /CNW/ - Scott's Real Estate Investment Trust (TSX: SRQ.UN) ("Scott's REIT"), today announced that it has received a one-month extension on its mortgage that is currently scheduled to mature on January 1, 2011. The extension was granted using the same terms as the original loan - 4.9 per cent interest only, payable monthly. Scott's REIT has also obtained approval for a six-month extension from its A note holders, but is awaiting formal consent from its B note holder.

Scott's REIT anticipates that it will receive approval for the additional five months within the one month time frame. The current loan maturity is on February 1, 2011.

Scott's will pay a total extension fee of 0.5 per cent on the remaining loan balance. Only 1/6 of that fee is considered earned under the current one-month extension. Should no further extensions be provided, the remaining prepayment will be applied against the principal loan balance outstanding at that time.

Scott's REIT revenue and expenses are stable. Its tenant default rate remains low because of the REIT's focus on long-term leases and strong national brand tenant base. While Scott's REIT has many properties in this mortgage with Priszm Income Fund ("Priszm"), its recent announcement regarding a sale of restaurants should not have an impact on Scott's REIT as Priszm will remain as a guarantor on the lease along with the new owner of the restaurants if the sale is completed.

Scott's REIT has interest and is continuing its discussions with lenders to close the financing for the $65-million loan and $20-million outstanding bridge facility over the next six months. Although no assurance can be provided that this will be concluded on favourable terms, the company believes it is well advanced in negotiating the terms of the financing and is encouraged by the positive discussions to date.

About Scott's Real Estate Investment Trust
Scott's REIT (TSX: SRQ.UN) is Canada's premier small-box retail property owner with 220 properties in seven provinces across Canada. Scott's REIT's properties are well-located and geographically diverse across Canada with the majority of all properties containing long-term quadruple net leases. The REIT has approximately 75.6 per cent interest in Scott's Real Estate LP. To find out more about Scott's REIT, visit our website at http://www.scottsreit.com.

Forward-Looking Statements
This document contains certain information that may constitute forward-looking information within the meaning of securities laws. In some cases, forward-looking information can be identified by the use of terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward-looking information may relate to management's future outlook and anticipated events or results, and may include statements or information regarding future growth opportunities and potential and expected cash distributions or cash distribution levels. In particular, information regarding the REIT's monthly cash distributions and information relating to the impact of the REIT's recent acquisitions on annual revenues and interest expense is forward-looking information. Forward-looking information is based on certain factors and assumptions regarding, among other things, occupancy rates, property expense and capital expenditures. While the REIT considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward looking-information is subject to certain factors, including risks and uncertainties, which could cause actual results to differ materially from what is currently expected. Such factors include risks relating to the REIT's reliance on Priszm LP, the REIT's largest tenant, risks associated with investment in real property, competition, reliance on key personnel, financing and refinancing risks, environmental matters, tenant risks, risks related to current economic conditions and other risk factors more particularly described in the REIT's Annual Information Form for the year ended December 31, 2009. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. Other than as required by applicable Canadian securities law, the REIT does not undertake to update this information at any particular time. Additional information identifying risks and uncertainties is contained in Scott's REIT filings with the Canadian securities regulators, available at www.sedar.com.


For investor information, please contact: 

Trish Moran

For media information, please contact:

Trevor Boudreau

SOURCE Real Estate Asset Liquidity Trust

For further information:

Phillipe Bergeron, Royal Bank of Canada, (416) 974-4658

Organization Profile

Real Estate Asset Liquidity Trust

More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890