/THIS PRESS RELEASE IS NOT FOR DISSEMINATION OVER UNITED STATES
TORONTO, Jan. 30 /CNW/ - IPC US Real Estate Investment Trust (the "REIT")
(TSX: US$:IUR.U, C$:IUR.UN) today announced that its Board of Trustees
approved a process to solicit proposals to acquire or merge with the REIT. RBC
Capital Markets and Banc of America Securities Canada Co. have been retained
by the REIT to act as its financial advisors.
"Our primary objective since the REIT's initial public offering in
December 2001 has always been to deliver value to our unitholders. We have
worked hard and have assembled a high quality, class A office portfolio in
mid- to large-sized U.S. cities," said The Hon. Donald S. Macdonald, Chairman
of the Board. "In August 2006, the REIT announced that it had initiated a
review of its property investments with the intention to take advantage of
favourable market conditions to dispose of some of the REIT's non-core
holdings. As a result of such review and taking into consideration the strong
demand for high quality U.S. real estate, the Board has decided to seek
proposals for the sale or merger of the REIT as a whole at this time,"
continued The Hon. Mr. Macdonald.
The REIT invests exclusively in U.S. commercial real estate, with
ownership interests in, and management of, 35 office properties totaling
10.1 million square feet. The portfolio consists of well-located,
well-maintained and well-managed class A office buildings. Tenants include
many of America's largest and most respected organizations. The properties
have well-staggered lease and debt maturity profiles, and are well-positioned
to benefit from a continuing recovery in the U.S. office market.
"Despite consistently strong growth, significant improvement in the
quality of the assets and regular increases in distributions, the trading
price of the REIT's units has, until recently, underperformed relative to
other Canadian and U.S. REITs," said Gary Goodman, President and Chief
Executive Officer of the REIT. "Our trading price, however, has appreciated
approximately 25% since the beginning of November 2006 which increase we
attribute to a number of factors, including:
- the announcement of a series of profitable transactions such as the
sales of the State Street Financial Center in Boston and 2100 Ross
Avenue in Dallas, and the repayment of the preferred equity
investment in Prime Group Realty Trust;
- the increase in the US dollar relative to the Canadian dollar, which
has a positive impact on the REIT as all of its assets and income are
in the United States; and
- analysts' reports that have created an expectation in the marketplace
over the past several months that the REIT is a prime takeover
"Given that institutional and private equity demand for quality,
commercial real estate has continued to increase over the last several months,
we believe that this is an opportune time to undertake this process in an
effort to crystalize value for our unitholders," continued Mr. Goodman.
The REIT has regional offices in Pennsylvania, New York and Florida as
well as a fully integrated operational platform based in Louisville, Kentucky.
With a staff of approximately 200 employees (including property employees) who
are specialized in property management and leasing services, the existing
management platform can accommodate the acquisition of up to an additional 10
million square feet of space with minimal impact on costs.
"Over the last five years, through the tremendous contribution of its
dedicated and experienced employees, the REIT has successfully assembled an
attractive and diversified portfolio of office properties across the United
States combined with long-term financing at historically low interest rates,"
said The Hon. Mr. Macdonald. "We believe that a portfolio of the size and
quality being offered, together with its excellent operating platform,
presents an attractive investment opportunity for U.S. and international
PRF Holdings Inc., the company through which Paul Reichmann family
members own the equivalent of a 13.4% interest in the REIT, has indicated to
the Board of Trustees that it is supportive of the process.
There can be no assurance that a transaction or other material
development will result from the process initiated by the Board of Trustees.
Further announcements will be made by the REIT as circumstances so warrant.
About IPC US REIT
IPC US REIT is the only real estate investment trust in Canada that
invests exclusively in U.S. commercial real estate. The REIT beneficially owns
an 86.6% interest in IPC (US), Inc. which has ownership interests in a
portfolio of 35 office buildings comprising a total of 10.1 million square
feet of rentable space. The units of the REIT are listed on the Toronto Stock
Exchange under the symbol "IUR.UN" for Canadian dollar quoted units and
"IUR.U" for US dollar quoted units. For more information on the REIT, please
visit the REIT's website at www.ipcreit.com.
Forward Looking Statements
Certain statements in this press release are "forward-looking statements"
that reflect management's expectations relating to the REIT's operations and
opportunities. Such forward-looking statements reflect management's current
beliefs and are based on information currently available to the REIT.
Forward-looking statements involve significant risks and uncertainties, should
not be read as guarantees of future performance or results, and will not
necessarily be accurate indications of whether or not or the times at or by
which such performance or results will be achieved. A number of factors could
cause results to differ materially from the results discussed in the
forward-looking statements. Further, a forward-looking statement speaks only
as of the date on which such statement is made. The REIT disclaims any
obligations to update these forward-looking statements.
For further information:
For further information: Unitholders: IPC US Real Estate Investment
Trust, Gary Goodman, President and Chief Executive Officer, Tel: (416)
929-1950, Fax: (416) 929-5314, E-mail: firstname.lastname@example.org;
Inquiries (Principals Only): RBC Capital Markets, Tel: (416) 842-8921; Banc of
America Securities Canada Co., Tel: (416) 349-5257