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

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BRAMPTON, ON, May 6, 2014 /CNW/ - Choice Properties Real Estate Investment Trust ("Choice Properties" or the "Trust") (TSX: CHP.UN) today completed an acquisition of a portfolio of 20 retail properties from certain subsidiaries of Loblaw Companies Limited (collectively, "Loblaw"). The aggregate purchase price for the portfolio was approximately $200 million, excluding transaction costs.

Highlights of Acquired Portfolio:

• Expands portfolio by more than 1.2 million square feet ("sq. ft.") of Gross Leasable Area ("GLA"), with an occupancy rate of 97.9%;
• Located across Canada and consists of 14 Loblaw bannered stand-alone supermarkets and 6 Loblaw-anchored retail sites with other ancillary tenants;
• Offers potential for intensification and future re-development, including the potential to develop 20,000 to 40,000 sq. ft. of incremental GLA within five years; and
• Immediately accretive with an estimated stabilized net operating income ("NOI") of approximately $13 million, representing an overall year-one capitalization rate of 6.50%.

"We are pleased to announce the accretive acquisition of a portfolio of high-quality, retail properties that are located across Canada and provide the potential for future site intensification and rental growth. The acquisition of these properties represents a key component of our growth strategy and is a strong fit with our existing portfolio," said John Morrison, President and Chief Executive Officer, Choice Properties. "We remain focused on driving growth and creating value through development, acquisitions and active management."

With the completion of this acquisition, Choice Properties' portfolio consists of 456 properties comprising 444 retail properties, nine warehouse properties, one office complex, one industrial property and one parcel of land, totaling approximately 37.6 million square feet across Canada.

The acquisition was funded through the issuance of 11,259,208 Class B LP Units of Choice Properties Limited Partnership, which has a total dollar value of $119.6 million and the balance was settled in cash. Class B LP Units of Choice Properties Limited Partnership are exchangeable into, and economically equivalent to, units of the Trust. With the completion of this transaction Loblaw's and George Weston Limited's effective ownership interests in the Trust are 82.6% and 5.4%, respectively.

Portfolio Summary:

The portfolio comprises 1.2 million sq. ft. of GLA across Canada with an average building age of 16 years, in line with the average age of the Trust's existing portfolio.  As principal tenant, Loblaw represents 89.3% of total GLA with a lease term of 15 years for all Loblaw food stores.  The remaining GLA of ancillary space is 80.8% occupied.

Property Summary:

Address	Property Class	Banner	Year Built	Loblaw GLA	Ancillary GLA	% Occupied
62 Prince Rupert St., Stephenville, NF	Retail	Dominion	2000	39,310	6,363	100%
1160 Boul Louis-XIV, Charlesbourg, QC	Retail	Maxi	1990	36,422	-	100%
10455 Boul. Saint-Laurent, Montreal, QC	Retail	Provigo	1986	17,841	-	100%
227 Main St., Delhi, ON	Retail	Your Independent Grocer	2006	18,344	-	100%
177 Highway #108 N., Elliot Lake, ON	Retail	no frills	2008	32,644	-	100%
160 Main St., Hagersville, ON	Retail	no frills	2004	12,213	-	100%
1521 Highway 11 W., Hearst, ON	Retail	Your Independent Grocer	2007	50,369	-	100%
960 Hamilton Rd., London, ON	Retail	no frills	1980	20,260	-	100%
55 Scott St., New Liskeard, ON	Retail	Your Independent Grocer	1993	49,642	7,000	100%
230 George St. N., Peterborough, ON	Retail	no frills	2001	35,325	-	100%
780 Queen St. E., St. Mary's, ON	Retail	Your Independent Grocer	2007	38,759	-	100%
10 Lower Jarvis St., Toronto, ON	Retail	Loblaws and Joe Fresh	1998	78,425	-	100%
5335 - 55^th St., Cold Lake, AB	Retail	no frills	1999	28,561	-	100%
6904 - 99^th St., Edmonton, AB	Retail	Real Canadian Wholesale Club	1994	55,660	56,718	100%
1502 Columbia Ave., Castlegar, BC	Retail	no frills	1997	26,187	30,849	75%
1401 Alaska Ave., Dawson Creek, BC	Retail	no frills	2002	29,711	10,212	74%
2155 Ferry Ave., Prince George, BC	Retail	Real Canadian Superstore	1995	139,265	-	100%
14650 - 104^th Ave., Surrey, BC	Retail	Real Canadian Superstore	2002	147,420	-	100%
1578 Regent Ave. W., Winnipeg, MB	Retail	Real Canadian Superstore	2000	139,695	-	100%
1725 Ellice Ave., Winnipeg, MB	Retail	Real Canadian Wholesale Club	1995	58,600	15,411	100%
				1,054,653	126,553

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 37.6 million square feet of gross leasable area and consists of 456 properties primarily focused on supermarket-anchored shopping centres, stand-alone supermarkets and other retail properties. 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 and lender. 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 Section 12 "Enterprise Risks and Risk Management" in the MD&A section of Choice Properties' First Quarter 2014 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]