H&R Real Estate Investment Trust Completes $272.5 million Public Offering of Trust Units and Convertible Unsecured Subordinated Debentures


    TORONTO, June 6 /CNW/ - H&R Real Estate Investment Trust ("H&R") (TSX:
HR.UN) (TSX: HR.DB) announced today that it has successfully closed its
previously announced offering of 8,734,250 trust units ("Units"), which
includes 1,139,250 Units issued pursuant to the exercise of an over-allotment
option, at a price of $19.75 per Unit and $100 million principal amount of
6.65% convertible unsecured subordinated debentures that mature on June 30,
2013 (the "Debentures"), for total aggregate gross proceeds of
    The Units and Debentures were sold to a syndicate of underwriters led by
CIBC World Markets Inc. and RBC Capital Markets, and included Scotia Capital
Inc., BMO Nesbitt Burns Inc., TD Securities Inc., Canaccord Capital
Corporation and Desjardins Securities Inc. (the "Underwriters"). The terms of
the offering are described in the final short form prospectus of H&R dated
June 2, 2008 (the "Final Prospectus"), which was filed with Canadian
securities regulators.
    The net proceeds to H&R are intended to be used by H&R to finance
existing development projects, including the Bow Development in Calgary,
Alberta and Phase III expansion of Bell Canada's office complex in
Mississauga, Ontario, and to fund the acquisition of additional properties.
Any proceeds not initially used to fund development projects and to finance
the acquisition of additional properties will be used to reduce H&R's
indebtedness and to invest in short term instruments.
    H&R has also granted to the Underwriters an over-allotment option which
entitles the Underwriters to purchase up to an additional $15,000,000
principal amount of Debentures at any time within 30 days of the closing of
the offering.
    The securities offered under the Final Prospectus have not been, nor will
be, registered under the United States Securities Act of 1933, as amended, and
may not be offered or sold in the United States absent registration or
applicable exemption from the registration requirement of such Act.

    About H&R

    H&R REIT is a TSX-listed, open-ended real estate investment trust, which
owns a North American portfolio of 35 office, 124 industrial and 140 retail
properties comprising approximately 44.1 million square feet, with a net book
value of $4.7 billion. The foundation of H&R's success is a disciplined
strategy that leads to consistent and profitable growth.
    Additional information regarding H&R REIT is available at

    Certain information in this news release may contain forward-looking
statements within the meaning of applicable securities laws, including, among
others, statements relating to H&R's objectives, strategies to achieve those
objectives, H&R's beliefs, plans, estimates 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" or "continue" or similar expressions suggesting
future outcomes or events. Such forward-looking statements reflect H&R's
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 and
uncertainties, including those described under "Risk Factors" in the Final
Prospectus and those discussed in H&R's materials filed with the Canadian
securities regulatory authorities from time to time, which could cause the
actual results and performance of H&R to differ materially from the
forward-looking statements contained in this news release. These risks and
uncertainties include, among other things, risks related to: Unit prices;
availability of cash for distributions; development and financing relating to
the Bow Development (as defined in the Final Prospectus); credit risk and
tenant concentration; interest rate and other debt related risks; tax risk;
ability to access capital markets; dilution; lease rollover risk; construction
risks; real property ownership; currency risk; government regulation;
investment eligibility; unitholder liability; co-ownership interest in
properties; dependence on key personnel; mezzanine financing credit risk;
competition for real property investments; influence of H&R Property
Management Ltd. over H&R; potential conflicts of interest; redemption right;
statutory remedies; the tax position and consequence unique to each holder of
Units; the Proposed Reorganization (as defined in the Final Prospectus); the
failure to obtain all approvals required to implement the Proposed
Reorganization; no market for the Debentures; credit risk and prior ranking
indebtedness; absence of covenant protection; conversion following certain
transactions; value of conversion privilege; redemption prior to maturity;
inability of H&R to purchase debentures on a change of control; and dilutive
effects on holders of Units in the event of the redemption of Debentures.
Material factors or assumptions that were applied in drawing a conclusion or
making an estimate set out in the forward-looking statements include that the
general economy remains stable; interest rates are relatively stable; equity
and debt markets continue to provide access to capital; and the information
utilized by H&R to determine the tax consequences of the Proposed
Reorganization to H&R and its unitholders is accurate and remains unchanged.
H&R cautions that this list of factors is 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. All
forward-looking statements in this news release are qualified by these
cautionary statements. The forward-looking statements are made only as of the
date that such statements are made and H&R, except as required by applicable
law, assumes no obligation to update or revise them to reflect new information
or the occurrence of future events or circumstances.

For further information:

For further information: Larry Froom, Chief Financial Officer, Phone:
(416) 635-7520, Email: info@hr-reit.com

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