H&R REIT AND K2 ANNOUNCE EXECUTION OF SUPPORT AGREEMENT
TORONTO, April 25, 2023 /CNW/ - H&R Real Estate Investment Trust ("H&R" or "the REIT") (TSX: HR.UN) today announced that it has entered into a support agreement (the "Support Agreement") with the K2 Principal Fund L.P. and K2 & Associates Investment Management Inc. (collectively, "K2"), a significant unitholder of H&R. Among other stipulations in the Support Agreement, K2 has withdrawn its four nominees who were slated to stand for election at the upcoming meeting of unitholders scheduled for June 15, 2023 (the "Meeting").
K2 has also agreed with H&R to support the election of two additional, mutually agreed upon, independent trustees to H&R's Board of Trustees, Lindsay Brand and Leonard Abramsky, with the size of the Board increasing by two to 10 trustees, and has also agreed to vote in favour of the balance of the trustees slated for re-election. Subject to her election as a trustee at the Meeting, Mrs. Brand will be appointed to the Compensation, Environmental, Social & Governance and Nominating Committee.
"We are pleased to reach an agreement with K2 and with the addition of two additional, highly qualified candidates to serve on H&R's Board of Trustees," said H&R Executive Chairman Tom Hofstedter. "K2 has expressed strong support for our transformational repositioning strategy, which helped to make H&R a top performing REIT last year. We will continue to drive further momentum as we execute on our plans to deliver value to unitholders. On behalf of my fellow trustees, I look forward to welcoming Mrs. Brand and Mr. Abramsky to the Board and working with them."
The nomination of two additional, independent trustees follows the appointment of Donald Clow to the Board in March 2023, and marks another milestone in a board renewal process that began in 2017. Upon election of Mrs. Brand and Mr. Abramsky, all eight of the REIT's independent trustees will have joined the Board within the last three years, and 40 percent of the Board will be comprised by women.
"As a significant unitholder of H&R, we appreciate the Board and management's willingness to engage in a constructive dialogue," said Shawn Kimel, Chief Investment Officer and Chairman of K2. "We welcome the addition of Mrs. Brand and Mr. Abramsky to serve on the Board of Trustees and we will continue to closely engage with management and the Board of Trustees to drive unitholder value."
Mrs. Brand is an experienced real estate industry executive and investor who most recently served as Chief Investment Officer (CIO) at Dream Unlimited Corp., one of Canada's leading real estate companies. In her role as CIO, Mrs. Brand led over $2 billion of acquisitions and structured over $3 billion of development partnerships. Prior to the Dream Group of Companies, Mrs. Brand was employed by Canadian Imperial Bank of Commerce holding positions in their Real Estate Commercial Banking Group and their Corporate Development Group. She currently serves on the board of True North Commercial REIT and is a trustee of the Jewish Foundation of Greater Toronto. Mrs. Brand holds a Bachelor of Arts & Honours Business of Administration (HBA) from the Richard Ivey School of Business and a Masters of Science in Real Estate Development from Columbia University.
Mr. Abramsky is the Founder and President of The Dunloe Group Inc., a real estate investment company. Previously, he was a Managing Partner of Brookfield Financial Corp, where he held positions of increasing responsibility in a number of areas including the active trading and financing of all forms of commercial property, and also oversaw its international expansion. Mr. Abramsky's extensive real estate background also includes serving as a former Director of Rouse Properties Inc. Mr. Abramsky currently serves on the boards of First Capital REIT and Dream Residential REIT. He holds a Bachelor of Science in Real Estate and Investment Finance from Boston University.
The Support Agreement also sets out customary restrictions and voting covenants for K2 and will be filed on SEDAR.
H&R REIT is one of Canada's largest real estate investment trusts with total assets of approximately $11.4 billion as at December 31, 2022. H&R REIT has ownership interests in a North American portfolio comprised of high-quality residential, industrial, office and retail properties comprising over 28.7 million square feet.
Founded in December of 2000, The K2 Principal Fund L.P. has a broadly diversified Canadian and U.S. portfolio and is the flagship fund of K2 & Associates Investment Management Inc. K2 are active managers and seek out best in class companies who drive optimal return on capital. For more information about K2, visit www.k2.ca.
Certain information in this news release contains forward-looking information within the meaning of applicable securities laws (also known as forward-looking statements) including, among others, statements made or implied relating to H&R's Transformational Strategic Repositioning Plan, H&R's objectives, beliefs, plans, estimates, targets, projections and intentions and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by words such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans", "project", "budget" or "continue" or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect H&R's current beliefs and are based on information currently available to management. Forward-looking statements are provided for the purpose of presenting 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.
These statements are not guarantees of future performance and are based on H&R's estimates and assumptions that are subject to risks, uncertainties and other factors including those risks and uncertainties discussed in H&R's materials filed with the Canadian securities regulatory authorities from time to time, which could cause the actual results, performance or achievements of H&R to differ materially from the forward-looking statements contained in this news release. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking statements include assumptions relating to the general economy, including the effects of increased inflation; debt markets continue to provide access to capital at a reasonable cost, notwithstanding rising interest rates; and assumptions concerning currency exchange and interest rates. Additional risks and uncertainties include, among other things, risks related to: real property ownership; the current economic environment; credit risk and tenant concentration; lease rollover risk; interest rates and other debt-related risk; development risks; residential rental risk; capital expenditures risk; currency risk; liquidity risk; risks associated with disease outbreaks; cyber security risk; financing credit risk; ESG and climate change risk; co-ownership interest in properties; general uninsured losses; joint arrangements and investment risks; dependence on key personnel and succession planning; potential acquisition, investment and disposition opportunities and joint venture arrangements; potential undisclosed liabilities associated with acquisitions; competition for real property investments; Unit price risk; potential conflicts of interest; availability of cash for distributions; credit ratings; ability to access capital markets; dilution; unitholder liability; redemption right risk; risks relating to debentures; tax risk; additional tax risks applicable to unitholders; investment eligibility; and statutory remedies. H&R cautions that these lists of factors, risks and uncertainties are not exhaustive. Although the forward-looking statements contained in this news release are based upon what H&R believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements.
Readers are also urged to examine H&R's materials filed with the Canadian securities regulatory authorities from time to time as they may contain discussions on risks and uncertainties which could cause the actual results and performance of H&R to differ materially from the forward-looking statements contained in this news release. All forward-looking statements in this news release are qualified by these cautionary statements. These forward-looking statements are made as of today and H&R, except as required by applicable Canadian law, assumes no obligation to update or revise them to reflect new information or the occurrence of future events or circumstances.
Additional information regarding H&R REIT is available at www.hr-reit.com and on www.sedar.com
SOURCE H&R Real Estate Investment Trust
Philippe Lapointe, President, 1-214-421-4000; Larry Froom, Chief Financial Officer, 416-635-7520, or email [email protected]
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