Flagship Communities Real Estate Investment Trust Announces Full Exercise and Closing of Over-Allotment Option and Initial Cash Distribution

/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES./

TORONTO, Oct. 22, 2020 /CNW/ - Flagship Communities Real Estate Investment Trust (the "REIT") (TSX: MHC.U) announced today that, in connection with the initial public offering (the "IPO") of trust units (the "Units") of the REIT, the over-allotment option granted to the syndicate of underwriters co-led by Canaccord Genuity Corp. and BMO Capital Markets to purchase up to 937,500 additional Units at US$15.00 per Unit was exercised in full, generating additional gross proceeds to the REIT of US$14,062,500 (the "Over-Allotment Option"). The sale of the additional Units today brings the REIT's aggregate gross IPO proceeds to US$107,812,500. The net proceeds from the exercise of the Over-Allotment Option will be used by the REIT to fund future acquisitions and for general business purposes. Following the closing of the Over-Allotment Option, there are 11,921,953 Units and class B units of the REIT's subsidiary, Flagship Operating, LLC, issued and outstanding.

The REIT also announced today that its initial cash distribution following the IPO will be in the amount of US$0.0329 per Unit. The initial distribution will be for the period from October 7, 2020 (the closing date of the initial public offering) to October 31, 2020, to be paid on or about November 16, 2020, to holders of Units of record as of the close of business on October 30, 2020. The REIT currently intends to make subsequent monthly distributions in the estimated amount of US$0.0425 per Unit commencing on or about December 15, 2020, representing US$0.51 per Unit on an annual basis.

Distributions paid to Canadian unitholders (and other non-U.S. unitholders) generally will be subject to U.S. withholding tax. For a general summary of the taxation of distributions paid to Canadian unitholders, including information regarding U.S. withholding tax, please see the "Certain Canadian Federal Income Tax Considerations", "Certain U.S. Federal Income Tax Considerations" sections, and "Risk Factors – Tax-Related Risks", of the REIT's prospectus dated September 28, 2020, a copy of which is available on the SEDAR website at www.sedar.com. Unitholders should consult their own tax advisors for advice with respect to the tax consequences of receiving a distribution from the REIT in their own circumstances.

About Flagship Communities Real Estate Investment Trust

Flagship Communities Real Estate Investment Trust is a newly-created, internally-managed, unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. The REIT has been formed to own and operate a portfolio of 45 income-producing manufactured housing communities comprising 8,255 lots located in Kentucky, Indiana, Ohio and Tennessee, and a fleet of approximately 600 manufactured homes for lease to residents of such housing communities.

Forward-Looking Statements

This press release contains statements that include forward-looking information within the meaning of Canadian securities laws. These forward-looking statements reflect the current expectations of the REIT regarding future events, including statements concerning the intended monthly distributions of the REIT and the REIT's intended use of proceeds of the Over-Allotment Option. In some cases, forward-looking statements can be identified by terms such as "may", "will", "could", "occur", "expect", "anticipate", "believe", "intend", "estimate", "target", "project", "predict", "forecast", "continue", or the negative thereof or other similar expressions concerning matters that are not historical facts. Material factors and assumptions used by management of the REIT to develop the forward-looking information include, but are not limited to, the REIT having sufficient cash to pay its distributions. While management considers these assumptions to be reasonable based on currently available information, they may prove to be incorrect.

Although management believes the expectations reflected in such forward-looking statements are reasonable and represent the REIT's internal expectations and beliefs at this time, such statements involve known and unknown risks and uncertainties and may not prove to be accurate and certain objectives and strategic goals may not be achieved. A variety of factors, many of which are beyond the REIT's control, could cause actual results in future periods to differ materially from current expectations of events or results expressed or implied by such forward-looking statements, such as the risks identified in the REIT's final prospectus available at www.sedar.com, including under the heading "Risk Factors" therein. Readers are cautioned against placing undue reliance on forward-looking statements. Except as required by applicable Canadian securities laws, the REIT undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made.

SOURCE Flagship Communities Real Estate Investment Trust

Eddie Carlisle, Chief Financial Officer, Flagship Communities Real Estate Investment Trust, Tel: [phone]