Subversive Real Estate Acquisition REIT LP Aligns Shareholder Interests and Enhances Transaction with Grant of Rights to Holders of Non-Redeemed Restricted Voting Units

-Further Aligns Interests With Investors, With Significant Benefit Upon U.S. Listing Or, If Earlier, Cannabis Legalization In U.S.- 

-Announced Qualifying Transaction Composed Of Diverse Portfolio of 15 High-Quality U.S. Based Cannabis Industrial And Retail Properties On October 7, 2020-

 -Post Transaction Close, Positioned To Offer Compelling Combination of Growth And Income Potential, With Targeted 6.5% Initial Annualized Cash Distribution Yield, As The Second Publicly Traded Cannabis REIT-

-Will Be First SPAC To Convert To REIT Upon Transaction Close-

-High Growth Cannabis Industry Expected To Reach US$30 Billion In U.S. Retail Sales By 2023-

TORONTO, Oct. 19, 2020 /CNW/ - Subversive Real Estate Acquisition REIT LP (NEO: SVX.U) (NEO: SVX.RT.U) (OTCBB: SBVRF) (the "REIT LP") today announced that it has agreed to grant an aggregate of up to 24,116,750 million contingent rights (the "Contingent Rights") to holders of restricted voting units (the "Restricted Voting Units") that are not redeemed in connection with the REIT LP's previously announced qualifying transaction and to holders of Restricted Voting Units that are issued in connection therewith, which Contingent Rights will be issued to holders of record on the day following the closing of the REIT LP's qualifying transaction (the "Closing").

The Contingent Rights will be distributed to holders of Restricted Voting Units pro rata based on the number of Restricted Voting Units held by such holder. Accordingly, if there are no redemptions of Restricted Voting Units, each holder of record will receive one Contingent Right per Restricted Voting Unit held. To the extent there are redemptions of Restricted Voting Units, each Non-Redeeming Holder will receive more than one Contingent Right per Restricted Voting Unit held, depending upon the quantum of redemptions.

On the automatic exercise of the Contingent Rights, holders will be entitled to receive, for no additional consideration, one limited partnership unit ("Limited Partnership Units") for every five Contingent Rights held, which may be subject to adjustment. The Contingent Rights will automatically be exercised by the holders thereof upon the earlier of (a) the listing of the REIT LP units on a recognized major U.S. exchange, and (b) cannabis production and sale becoming federally legal in the United States. In support of the transaction, and in connection with the issuance of the Contingent Rights, the REIT LP's founders will forfeit the equivalent of approximately four million Limited Partnerships Units in the form of proportionate voting units with a notional equity value of approximately US$40 million.

Michael Auerbach, Chief Executive Officer at Subversive Capital and Executive Chairman at the REIT LP stated, "The grant of the Contingent Rights shows the commitment of the REIT LP's founders to the success of its Qualifying Transaction, and provides a significant benefit to investors upon a future U.S. listing or cannabis becoming federally legal in the United States. We continue to believe our diverse portfolio of 15 industrial and retail properties in strategic, high growth cannabis markets, which are leased to leading operators, presents an extremely attractive opportunity for investors as the second publicly traded cannabis REIT,  with a targeted 6.5% initial annualized cash distribution yield, paid monthly, as well as a substantial growth opportunity over time."

The REIT LP has applied to list the Contingent Rights on the Neo Exchange Inc. under the symbol SVX.RT.C. The listing of the Contingent Rights is subject to the REIT LP fulfilling all of the requirements of the exchange.

The Contingent Rights will not possess any redemption or distribution rights. The Contingent Rights will expire and be worthless if they do not convert upon their terms prior to the 10^th anniversary of the Closing.

No fractional Contingent Rights will be issued. If a holder would be entitled to receive a fractional interest in a Contingent Rights, we will round down to the nearest whole number of Contingent Rights to be issued to such holder. The Contingent Rights will not be distributed if the REIT LP's qualifying transaction does not close.

For more information, the Company has posted an investor presentation and preliminary long form prospectus to its website at www.subversivecapital.com/reit.

Additionally, the Company held a conference call to discuss the Qualifying Transaction on October 9, 2020. A webcast replay of the conference call is available on the Company's website.

About Subversive Real Estate Acquisition REIT LP

Subversive Real Estate Acquisition REIT LP is a limited partnership established under the Limited Partnerships Act (Ontario) formed for the purpose of effecting, directly or indirectly, an acquisition of one or more businesses or assets, by way of a merger, amalgamation, arrangement, equity exchange, asset acquisition, equity purchase, reorganization, or any other similar business combination involving the REIT LP that will qualify as its qualifying transaction for the purposes of the rules of the Neo Exchange Inc. (the "Exchange") The REIT LP is a special purpose acquisition corporation for the purposes of the rules of the Exchange. The REIT LP's Restricted Voting Units and Contingent Rights are listed on the Exchange under the symbols "SVX.U" and "SVX.RT.U", respectively.

Forward-Looking Statements

This press release may contain forward looking information within the meaning of applicable securities legislation, which reflects the REIT LP's current expectations regarding future events. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT LP's control, that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. The REIT LP does not undertake any obligation to update such forward looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

SOURCE Subversive Real Estate Acquisition REIT LP

INVESTOR RELATIONS: Subversive Real Estate Acquisition REIT LP, [email protected]; MEDIA CONTACT: Conscious Communications Collective, Leland Radovanovic, [email protected]