Choice Properties Real Estate Investment Trust Completes Acquisition of Portfolio of 10 properties from Loblaw Companies Limited

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TORONTO, May. 12, 2016 /CNW/ - Choice Properties Real Estate Investment Trust ("Choice Properties" or the "Trust") (TSX: CHP.UN) today completed the acquisition of a portfolio of 10 retail properties, including four Shoppers Drug Mart ("Shoppers") sites, and one warehouse property from certain subsidiaries of Loblaw Companies Limited (collectively, "Loblaw"), for an aggregate purchase price of approximately $117.3 million, excluding transaction costs. The acquisition was fully-funded with cash.

Highlights of Acquired Portfolio

• Expands portfolio by approximately 681,000 square feet ("sq. ft.") of gross leasable area ("GLA"), with an occupancy rate of approximately 96.5%;
• Immediately accretive acquisition with an implied capitalization rate of approximately 6.00% (6.40%, excluding the warehouse property); and
• Incremental value-add potential with a potential to develop up to 7,000 sq. ft. of incremental GLA across two Ontario properties within the next two years.

With the acquisition of these 10 properties, Choice Properties' portfolio consists of 529 properties comprising 510 retail properties, 12 warehouse properties, one office complex, one industrial property and five parcels of land, totaling approximately 42.3 million sq. ft. of GLA across Canada. Upon completion of this acquisition, the total number of Shoppers Drug Mart sites in Choice Properties' portfolio increased to 10.

Portfolio Summary

The acquired portfolio comprises approximately 681,000 sq. ft. of GLA.  As principal tenant, Loblaw represents over 96% and 99% of total GLA and stabilized NOI, respectively, of this portfolio. All Loblaw leases have an initial lease term of 15 years, with multiple renewal options ranging from four to 17 five-year renewal options and include rent escalations of approximately 7.7% every five years. 

Property Summary

Address	Banner	Year Built /	Loblaw GLA	Ancillary GLA	% Occupied
		Last Renovated
69 King St., Harrow, ON	Shoppers Drug Mart	1979 / 2015	10,671	-	100%
971 Carrick St., Thunder Bay, ON	Real Canadian Superstore	1992 / 2014	140,181	-	100%
18765 Fraser Hwy., Surrey, BC	Your Independent Grocer	2005 / 2015	41,029	-	100%
1460 East Hastings St., Vancouver, BC	no frills	2014 / --	21,060	-	100%
8121 – 118 Avenue NW, Edmonton, AB	Shoppers Drug Mart	2013 / --	10,482	-	100%
100 Westpark Blvd., Fort Saskatchewan, SK	Shoppers Drug Mart	2014 / --	17,237	-	100%
600 Notre Dame Ave., Winnipeg, MB	no frills	1995 / 2015	25,346	-	100%
3 Philip Place, Kincardine, ON	no frills	1955 / 2014	25,738	20,483	56%
9970 Main St., Lake Country, BC	Shoppers Drug Mart	2015 / --	10,192	3,432	75%
18800 Lougheed Hwy., Pitt Meadows, BC	Loblaw Warehouse	2003 / 2009	355,316	-	100%
			657,252	23,915	96.50%

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' portfolio spans approximately 42.3 million square feet of gross leasable area and consists of 529 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 portfolio, through accretive acquisitions, strategic developments and active property management.  Choice Properties' principal tenant and largest unitholder is Loblaw Companies Limited, Canada's largest retailer. Choice Properties' strong alliance with Loblaw Companies Limited 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' First Quarter 2016 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 Business Intelligence, Choice Properties Real Estate Investment Trust, t [phone], e [email protected]