Leben REIT Announces Strategic Sale of Property Portfolio to Whiterock REIT for $80 Million

    CALGARY, July 7 /CNW/ - Leben Real Estate Investment Trust ("Leben")
today announced that it has entered into a binding agreement (the "Whiterock
Agreement") with Whiterock Real Estate Investment Trust ("Whiterock REIT");
pursuant to which Leben agreed to sell eight of Leben's nine properties for
the sum of approximately $80,000,000 subject to standard closing adjustments.
    Pursuant to the Whiterock Agreement, $22,800,000 of the purchase price
will be paid by the issuance by Whiterock REIT of: (a) an aggregate of
991,304 units of Whiterock REIT ("Whiterock Unit") at a price of $11.50 per
Whiterock Unit ($11,400,000); and (b) a 6% $11,400,000 principal amount
unsecured convertible debenture ("Whiterock Debenture") maturing four years
from the date of issuance. The remaining purchase price will be cash and
assumption/retirement of debt.
    The eight properties are being acquired by Whiterock REIT as a collective
portfolio purchase and totals approximately 341,000 square feet of real estate
(approximately 54% office, 30% industrial, and 16% retail). In total, these
assets are currently 99% leased with a 5.7 year average remaining lease term.
Current existing leases are on average 20% below market rates. The purchase
price of approximately $80 million, excluding closing and transaction costs,
represents a going-in capitalization rate of approximately 7.0%. In addition
to the private placement of new units and new convertible unsecured
subordinated debentures to Leben REIT totalling $22.8 million, the balance of
the purchase price will be provided by new and assumed mortgages and cash.
Leben management has been able to obtain the approval of approximately 75% of
the unitholders, nullifying the necessity of a unitholder vote.
    The Whiterock Debenture will pay interest quarterly and may be converted
at any time after twelve months from the date of issuance into Whiterock Units
at a conversion price of $13.22 per Whiterock Unit. The Whiterock Units and
Whiterock Debenture will be subject to a four month restricted period.
    In commenting on this strategic sale, Leben's CEO, Shariff Chandran
commented "Whiterock REIT has a strong operating platform with a management
team that has demonstrated the ability to create unitholder value. Whiterock's
strong tenant base, which is heavily weighted towards Ontario and Quebec,
coupled with the existing long-term leasing profile, provides stable and
growing cash flows. The strategic sale of assets to Whiterock will provide
Leben with an initial 9.2% ownership in Whiterock with an additional 8%
following the conversion of the debentures. In addition, the Leben assets
provide Whiterock with a solid platform to enhance Whiterock's ability to
expand into the high growth, Western Canadian market. The consummation of this
transaction will provide Leben unitholders with publicly traded securities
that provide liquidity on a tax deferred basis in an entity with a
geographically diversified portfolio. We are confident in Whiterock's
management team and will continue to support their growth in Western Canada."
    Whiterock Units are listed and posted for trading on the TSX Exchange and
information on Whiterock REIT and the Whiterock Units (trading symbol: WRK.UN)
is available to the public at www.tsx.com. The continuous disclosure record of
Whiterock REIT is available to the public at www.sedar.com, including the
audited consolidated financial statements and Management's Discussion and
Analysis ("MD&A") for the year ended December 31, 2007 and the unaudited
consolidated financial statements and MD&A for the three months ended
March 31, 2008; the Annual Information Form dated March 20, 2008; the
Management Information Circular dated June 4, 2008; news releases (including
the news release dated June 23, 2008 announcing the Whiterock Agreement), and
the material change reports and material agreements (including the Whiterock
Agreement). Whiterock REIT posts information on its website at
    Leben will commence receiving monthly cash distributions on the Whiterock
Units on August 15, 2008 along with quarterly debenture interest commencing
October 15, 2008, accruing from the date of closing on the sale to Whiterock
REIT. Monthly cash distributions to unitholders of Leben will recommence
beginning on August 15, 2008.
    Should any Unitholder have any questions or concerns regarding the sale,
please do not hesitate to contact Leben at info@lebenreit.com.

For further information:

For further information: info@lebenreit.com

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