Flagship Communities Real Estate Investment Trust Files Final Prospectus for Initial Public Offering of Trust Units

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

TORONTO, Sept. 28, 2020 /CNW/ - Flagship Communities Real Estate Investment Trust (the "REIT") announced today that it has filed, and obtained a receipt for, a final long-form prospectus for its initial public offering (the "Offering") of trust units of the REIT ("Units") with the securities regulatory authorities in each of the provinces and territories of Canada. The Units will be issued at a price of US$15.00 per Unit (the "Offering Price") for gross proceeds from the Offering of US$93,750,000.

The Offering is being underwritten by a syndicate of underwriters co-led by Canaccord Genuity Corp. and BMO Capital Markets and including CIBC World Markets Inc., National Bank Financial Inc., RBC Dominion Securities Inc., Scotia Capital Inc., TD Securities Inc., Echelon Wealth Partners Inc. and Industrial Alliance Securities Inc. (collectively, the "Underwriters"). The REIT has granted to the Underwriters an over-allotment option, exercisable in whole or in part at any time for a period of 30 days following the closing of the Offering, to purchase up to an additional 937,500 Units at the Offering Price which, if exercised in full, would increase the total gross proceeds of the Offering to US$107,812,500.

The REIT is a newly created, unincorporated, open-ended real estate investment trust established 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 (the "Initial Communities"), comprising 8,255 lots located in the following four contiguous states: Kentucky, Indiana, Ohio and Tennessee and a fleet of approximately 600 manufactured homes for lease to residents of the Initial Communities (together with the Initial Communities and certain ancillary and head office assets, the "Initial Portfolio"). Upon closing of the Offering, the REIT will be internally managed by an executive management team with more than 50 years of combined manufactured housing industry experience. The net proceeds of the Offering will be used by the REIT to fund the cash component of the acquisition of the Initial Portfolio, to repay certain secured indebtedness, for capital expenditure reserves, to fund transaction costs associated with the closing of the Offering and for general business purposes. The net proceeds of the over-allotment option, if exercised, will be used by the REIT to fund future acquisitions and for general business purposes.

The REIT initially intends to make its first distribution on November 16, 2020 for the period from closing of the Offering to October 31, 2020 in the amount of US$0.0329 per Unit (assuming that closing occurs on October 7, 2020). The REIT intends to make subsequent monthly distributions in the estimated amount of US$0.0425 per Unit thereafter, reflecting an expected initial annual cash distribution yield of 3.4%.

The Toronto Stock Exchange (the "TSX") has conditionally approved the listing of the Units under the symbol "MHC.U". Listing of the Units is subject to the REIT fulfilling all of the requirements of the TSX.  

This Offering is only being made to the public by prospectus. A prospectus containing important information relating to these securities has been filed with securities commissions or similar authorities in each of the provinces and territories of Canada. Copies of the prospectus may be obtained from any of the Underwriters and is available on SEDAR at www.sedar.com. Investors should read the prospectus before making an investment decision.

The Offering is expected to close on October 7, 2020, subject to customary closing conditions. Completion of the Offering is subject to the receipt of customary approvals, including regulatory approvals.

No securities regulatory authority has either approved or disapproved the contents of this news release. The Units have not been and will not be registered under the United States Securities Act of 1933 (the "U.S. Securities Act"), as amended, or any state securities laws, and may not be offered, sold or delivered, directly or indirectly, in the United States or to, or for the account or benefit of, "U.S. persons" (as defined in Regulation S under the U.S. Securities Act, as amended) except pursuant to certain exemptions from the registrations requirements of the U.S. Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the Units in the United States or to, or for the account or benefit of, U.S. persons.

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 Offering, the closing of the Offering and the timing thereof, the use of proceeds of the Offering, anticipated distributions, timing and yield thereof and the listing of the Units on the TSX. 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's current expectations that: inflation will remain relatively low; interest rates will remain relatively stable; tax laws remain unchanged; conditions within the U.S. manufactured housing communities industry, including competition for acquisitions, will be consistent with the current climate; the Canadian and U.S. capital and financial markets will provide the REIT with access to equity and/or debt at reasonable rates when required, notwithstanding the ongoing economic downturn; and the current members of management will continue their involvement with the REIT. 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 final long-form prospectus, 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]