Choice Properties Real Estate Investment Trust Completes Acquisition of Portfolio from Loblaw Companies Limited

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TORONTO, Nov. 17, 2015 /CNW/ - Choice Properties Real Estate Investment Trust ("Choice Properties" or the "Trust") (TSX: CHP.UN) today completed the acquisition of a portfolio of five retail properties from certain subsidiaries of Loblaw Companies Limited (collectively, "Loblaw"), for an aggregate purchase price of approximately $45.6 million, excluding transaction costs.

Highlights of Acquired Portfolio

• Expands portfolio by approximately 161,000 square feet ("sq. ft.") of gross leasable area ("GLA"), with an occupancy rate of approximately 99%;
• Offers near-term intensification opportunity with a binding letter of intent from Loblaw to construct a new 15,000 sq. ft. Shoppers Drug Mart store at a yield of 8.0% at the River Road site in Ottawa, Ontario; and
• Generates incremental Net Operating Income ("NOI") of $2.6 million on a stabilized basis. Upon completion of the Shoppers Drug Mart development in Ottawa, Ontario, the implied capitalization rate of the acquired portfolio is expected to be 5.85%.

The acquired portfolio includes approximately 30,000 sq. ft. of development potential at the River Road site in Ottawa, Ontario, of which 15,000 sq. ft. will be developed as a Shoppers Drug Mart store in the near-term, as mentioned above. In addition, the portfolio includes a gas bar property adjacent to an existing Choice Properties owned sites in Yarmouth, Nova Scotia. Upon acquisition, this property was combined with the adjacent Choice Properties owned site.  The property in Aurora, Ontario is 100% leased to ancillary tenants and is shadow anchored by an adjacent Choice Properties' stand-alone Loblaw bannered food store. With the acquisition of these five properties, Choice Properties' portfolio consists of 519 properties comprising 501 retail properties, 11 warehouse properties, one office complex, one industrial property and five parcels of land, totaling approximately 41.6 million sq. ft. of GLA across Canada.

The acquisition was funded through the issuance of 1,294,701 Class B LP Units of Choice Properties Limited Partnership, which have a value of $15.2 million and the balance in cash. With the completion of this transaction, Loblaw's and George Weston Limited's effective ownership interests in the Trust are 83.0% and 5.5%, respectively.

Portfolio Summary

The acquired portfolio comprises approximately 161,000 sq. ft. of GLA.  As principal tenant, Loblaw represents over 80% and 75% of total GLA and NOI, respectively, of this portfolio, with initial lease terms of 15 years for the Loblaw food store leased space. 

Property Summary

Address	Banner	Year Built / Last Renovated	Loblaw GLA	Ancillary GLA	% Occupied
100 Starrs Rd., Yarmouth, NS	Loblaw Gas Bar	2015	1	-	100%
296 Bank St., Ottawa, ON	Your Independent Grocer	1900/2005	43,286	-	100%
671 River Rd., Ottawa, ON	Your Independent Grocer	2005/2015	69,761	-	100%
15900 Bayview Ave., Aurora, ON	N/A	2006	-	19,199	100%
985 Woodbine Ave., Toronto, ON	valu mart	1968/2014	16,450	12,322	99%
			129,498	31,521	99%

About Choice Properties Real Estate Investment Trust
Choice Properties Real Estate Investment Trust is an owner, manager and developer of well-located commercial real estate across Canada. Choice Properties' initial portfolio spans approximately 41.6 million square feet of gross leasable area and consists of 519 properties primarily focused on supermarket- and drug store-anchored shopping centres, stand-alone supermarkets and stand-alone drug stores. Choice Properties' strategy is to create value by enhancing and optimizing its property portfolio, which was built over thirty years by Loblaw, the REIT's principal tenant, and largest Unitholder. Choice Properties' strong alliance with Loblaw positions it well for future growth. For more information, visit Choice Properties' website at www.choicereit.ca and Choice Properties' issuer profile at www.sedar.com.

Forward–Looking Statements
This press release may contain forward-looking information within the meaning of applicable securities legislation, which reflects Choice Properties' 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 Choice Properties' control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed in the MD&A section of Choice Properties' Third Quarter 2015 Report to Unitholders. Choice Properties 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.

"NOI" is not a measure recognized under International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board and does not have any standardized meaning prescribed by IFRS. NOI is a supplemental measure of an issuer's performance and management believes that NOI is useful in the assessment of the REIT's operating performance for valuation purposes, and is also a relevant measure of the ability of the REIT to earn and declare distributions to Unitholders. NOI, as computed by the REIT, may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable to NOI reported by such organizations. NOI should not be construed as an alternative to comprehensive income determined in accordance with IFRS as indicators of the REIT's performance. For additional information regarding this non-IFRS measure, including the definition thereof, please refer to the REIT's most recent management's discussion and analysis of results of operations and financial condition, a copy of which is available at www.sedar.com.

SOURCE Choice Properties Real Estate Investment Trust

Kim Lee, Vice President, Investor Relations and Financial Planning & Analysis, Choice Properties Real Estate Investment Trust, t [phone], e [email protected]