H&R REIT ANNOUNCES CLOSING OF LANTOWER RESIDENTIAL REAL ESTATE DEVELOPMENT TRUST (NO. 1) OFFERING

TORONTO, April 3, 2024 /CNW/ - H&R Real Estate Investment Trust ("H&R" or the "REIT") (TSX: HR.UN) today announced that the previously announced initial public offering ("IPO") of Lantower Residential Real Estate Development Trust (No. 1) (the "REDT") was successfully completed, raising the maximum amount of US$52 million.

The REDT was formed to partner with H&R's subsidiary Lantower Residential on two residential development projects in Florida (the "Projects") expected to contain an aggregate of 601 units comprised as follows:

(i)	a project to develop multifamily residential rental buildings comprising 271 residential rental units sitting on 8.4 acres of land in Largo, Florida (Tampa); and
(ii)	a project to develop multifamily residential rental buildings comprising an aggregate of 330 residential rental units on 17.2 acres of land in Kissimmee, Florida (Orlando).

Development of the Projects is expected to commence shortly, with total budgeted costs for the Projects of approximately US$210 million. Construction is expected to be completed and lease-up is expected to commence in Q1 2026 for the Largo, Florida project and Q2 2026 for the Kissimmee, Florida project

Immediately following closing of the Offering, the REDT indirectly acquired an approximate 70.9% interest in the Projects, with H&R retaining an approximate 29.1% ownership interest in the Projects through Lantower Residential. The REDT and the Project are managed by affiliates of H&R.

H&R retains an option to acquire the Projects. The transaction is expected to lower cash flow requirements and leverage impact for the two development projects on H&R.

CIBC World Markets Inc. was the sole agent for the IPO.

This press release does not constitute an offer to sell or the solicitation of an offer to buy securities of the Trust in the United States, nor shall there be any sale of the securities of the Trust in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities described herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws.

About H&R REIT

H&R REIT is one of Canada's largest real estate investment trusts with total assets of approximately $10.8 billion as at December 31, 2023. H&R REIT has ownership interests in a North American portfolio comprised of high-quality residential, industrial, office and retail properties comprising over 26.9 million square feet. H&R's strategy is to create a simplified, growth-oriented business focused on residential and industrial properties in order to create sustainable long term value for unitholders. H&R plans to sell its office and retail properties as market conditions permit. H&R's target is to be a leading owner, operator and developer of residential and industrial properties, creating value through redevelopment and greenfield development in prime locations within Toronto, Montreal, Vancouver, and high growth U.S. sunbelt and gateway cities.

About Lantower Residential LP

Lantower Residential, a subsidiary of H&R REIT, is a vertically integrated multifamily real estate company based in Dallas, Texas, focused on acquiring, developing, financing, and managing multifamily communities in the U.S. Lantower Residential focuses on driving growth and maximizing value through its disciplined investment strategy and portfolio management. Lantower Residential consists of 24 residential properties in select markets in the United States comprising 8,166 residential rental units, at H&R REIT's ownership interest. In addition to hosting all capacities internally (property management, operations, accounting, human resources, marketing, asset management, etc.), Lantower Residential has an in-house development team that has over 5,000 residential rental units in the pipeline at various stages of development and construction.

Forward-looking Statements

Certain information in this news release contains forward-looking information within the meaning of applicable securities laws (also known as forward-looking statements) relating to H&R's objectives, beliefs, plans, estimates, targets, projections and intentions and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts, including with respect to H&R's future plans and targets, the REIT's ability to take advantage of value-creating opportunities, H&R's strategy to grow its exposure to residential assets in U.S. sunbelt and gateway cities, H&R's expectations with respect to the development of the Projects, the timing of construction and completion, expected construction plans and expected square footage, and estimated development costs. Forward-looking statements generally can be identified by words such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans", "project", "budget" or "continue" or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect H&R's current beliefs and are based on information currently available to management.

Forward-looking statements are provided for the purpose of presenting information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. These statements are not guarantees of future performance and are based on H&R's estimates and assumptions that are subject to risks, uncertainties and other factors including those risks and uncertainties discussed in H&R's materials filed with the Canadian securities regulatory authorities from time to time, which could cause the actual results, performance or achievements of H&R to differ materially from the forward-looking statements contained in this news release. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking statements include assumptions relating to the general economy, including the effects of increased inflation; debt markets continue to provide access to capital at a reasonable cost, notwithstanding rising interest rates; and assumptions concerning currency exchange and interest rates. Additional risks and uncertainties include, among other things, those related to: real property ownership; the current economic environment; credit risk and tenant concentration; lease rollover risk; interest rate and other debt-related risks; development risks; residential rental risk; capital expenditure risk; currency risk; liquidity risk; cyber security risk; risks associated with disease outbreaks; financing credit risk; ESG and climate change risk; co-ownership interest in properties; general uninsured losses; joint arrangement and investment risks; dependence on key personnel and succession planning; potential acquisition, investment and disposition opportunities and joint venture arrangements; potential undisclosed liabilities associated with acquisitions; competition for real property investments; potential conflicts of interest; REIT unit prices; availability of cash for distributions; credit ratings; ability to access capital markets; dilution; unitholder liability; redemption right; investment eligibility; debentures; statutory remedies; and tax risks applicable to the REIT and to unitholders. H&R cautions that these lists of factors, risks and uncertainties are not exhaustive. Although the forward-looking statements contained in this news release are based upon what H&R believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements.

Readers are also urged to examine H&R's materials filed with the Canadian securities regulatory authorities from time to time as they may contain discussions on risks and uncertainties which could cause the actual results and performance of H&R to differ materially from the forward-looking statements contained in this news release. All forward-looking statements contained in this news release are qualified by these cautionary statements. These forward-looking statements are made as of April 3, 2024 and the REIT, except as required by applicable Canadian law, assumes no obligation to update or revise them to reflect new information or the occurrence of future events or circumstances.

Additional information regarding H&R REIT is available at www.hr-reit.com and on www.sedarplus.com.

SOURCE H&R Real Estate Investment Trust

Larry Froom, Chief Financial Officer, 416-635-7520, Email [email protected]