Marwest Apartment REIT Provides Further Details on its Proposed Qualifying Transaction and Announces Annual General and Special Meeting of Unitholders

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WINNIPEG, MB, April 1, 2021 /CNW/ - Marwest Apartment Real Estate Investment Trust ("Marwest Apartment REIT" or the "REIT") (TSXV: MAR.P), a capital pool company (as defined under Policy 2.4 – Capital Pool Companies (the "CPC Policy") of the TSX Venture Exchange (the "TSXV")), is pleased to announce that is has called an annual general and special meeting (the "Meeting") of its holders ("Unitholders") of Class A trust units ("Units" or "Trust Units") to be held at 9:00 a.m. (Winnipeg time) on April 30, 2021 at the offices of MLT Aikins LLP in Winnipeg, Manitoba for the purpose of electing trustees of the REIT for the ensuing year, re-appointing the auditors of the REIT and to consider and, if deemed advisable, approve various resolutions relating to the REIT's proposed qualifying transaction (the "Qualifying Transaction") under the CPC Policy, as more particularly described below. The REIT has established April 1, 2021 as the record date for determining Unitholders who will be entitled to receive notice and to attend and vote at the Meeting.

The REIT is also pleased to announce further particulars with respect to the proposed Qualifying Transaction to be carried out pursuant to the terms of a qualifying transaction agreement dated February 15, 2021 (the "Qualifying Transaction Agreement") among the REIT and certain supporting security holders of the Target LPs (as defined below), which was previously announced by the REIT by press release dated February 16, 2021.

Target LPs and Target Properties

The proposed Qualifying Transaction involves, among other things, the REIT's indirect acquisition of two limited partnerships (the "Target LPs") owning an aggregate of two multi-family residential properties comprising a total of 251 suites in Winnipeg, Manitoba (the "Target Properties").

The first Target LP is Marwest Apartments I L.P. ("Kenwood LP"), a Manitoba limited partnership which owns "Kenwood Court", a property consisting of two (2) three-storey buildings comprising 103 units located at 333-337 Warde Avenue in Winnipeg, Manitoba (the "Kenwood Property").  Constructed in 2006, the Kenwood Property has a suite mix of 101 two-bedroom suites and two (2) three-bedroom suites.

The second Target LP is Marwest Apartments VII L.P. ("Brio LP"), a Manitoba limited partnership which owns two complexes comprising a total of 148 units located at 160 Eaglewood Drive ("Brio I") and 140 Eaglewood Drive ("Brio II") in Winnipeg, Manitoba (the "Brio Property").  Constructed in 2018, Brio I consists of five (5) two-storey buildings comprising of 74 units located at 160 Eaglewood Drive in Winnipeg.  Constructed in 2019, Brio II consists of five (5) two-storey buildings comprising 74 units located at 140 Eaglewood Drive in Winnipeg, Manitoba.  The suite mix of the Brio Property is comprised of 40 one-bedroom suites, 58 two-bedroom suites, 44 three-bedroom suites and six (6) four-bedroom suites.

The only material assets and liabilities of Kenwood LP relate to the Kenwood Property. As of March 31, 2021, the sole mortgage loan secured against the Kenwood Property will have a remaining principal amount of $12,507,853.  It is on a 10-year term expiring on May 1, 2030, bearing interest at a fixed annual rate of 1.71%, and is amortized over a 25-year period.

The only material assets and liabilities of Brio LP for which the REIT will be responsible for relate to the Brio Property. There are two first charge mortgage loans, one secured against Brio I and the other secured against Brio II. As of March 31, 2021 the mortgage loan secured against Brio I will have a remaining principal amount of $12,949,717. It is on a 5-year term expiring on October 1, 2023, bearing interest at a fixed annual rate of 4.014%, and is amortized over a 30-year period.  As of March 31, 2021 the mortgage loan secured against Brio II will have a remaining principal amount of $17,170,695.  It is on a 10.5-year term expiring on June 1, 2030, bearing interest at a fixed annual rate of 2.62%, and is amortized over a 40-year period.

Target LP Historical Financial Information

The following is a summary of the aggregate assets, liabilities, revenues and net profits / losses of the Target LPs as at and for the fiscal years ended December 31, 2020 and December 31, 2019:

Target LPs	December 31, 2020 (audited)	December 31, 2019 (audited)_
Assets	$57,469,192	$57,888,279
Liabilities	$43,096,517	$43,876,534
Revenues	$4,458,523	$3,896,858
Net Profit / Loss	$1,300,729	$2,049,403

Separate audited annual financial statements of the Target LPs for the fiscal years ended December 31, 2020 and December 31, 2019 will be included in the management information circular to be sent to Unitholders in connection with the Meeting. 

Qualifying Transaction

Subject to various conditions of closing, the REIT, through a subsidiary limited partnership (the "Partnership") that will be wholly-owned by the REIT immediately prior to the closing of the Qualifying Transaction, has agreed to acquire:

(a)	all of the issued and outstanding limited partnership units ("Kenwood LP Units") of Kenwood LP from the holders thereof (each, a "Kenwood LP Unitholder" and, collectively, the "Kenwood LP Unitholders"), for an aggregate purchase price of $8,192,147 (the "Aggregate Kenwood LP Purchase Price").  The Aggregate Kenwood LP Purchase Price reflects the value attributed to the Kenwood Property by the Kenwood LP Unitholders who are parties to the Qualifying Transaction Agreement in the amount of  $20,700,000.00, less the existing mortgage indebtedness on the Kenwood Property as at March 31, 2021 in the amount of $12,507,853; and
(b)	all of the issued and outstanding limited partnership units ("Brio LP Units") of  Brio LP from the holders thereof (each, a "Brio LP Unitholder" and, collectively, the "Brio LP Unitholders") for an aggregate purchase price of $3,379,588 (the "Aggregate Brio LP Purchase Price"), which reflects the value attributed to the Brio Property by the Brio LP Unitholders who are parties to the Qualifying Transaction Agreement in the amount of $33,500,000.00, less the existing aggregate mortgage indebtedness in respect of the Brio Property as at March 31, 2021 in the amount of $30,120,412.

The Aggregate Kenwood LP Purchase Price and the Aggregate Brio LP Purchase Price (collectively, the "Aggregate Purchase Price") will be satisfied entirely through the issuance of Class B limited partnership units ("Exchangeable LP Units") of the Partnership at a deemed value of $1.00 per Exchangeable LP Unit or, in the case of holders of Kenwood LP Units or Brio LP Units who are individuals and do not transfer their Kenwood LP Units or Brio LP Units to a taxable Canadian corporation prior to closing, in trust units of the REIT ("Trust Units") at a deemed value of $1.00 per Trust Unit.  An aggregate of 11,571,736 Exchangeable LP Units and/or Trust Units will be issued in satisfaction of the Aggregate Purchase Price. Each Exchangeable LP Unit will entitle the holder thereof to exchange it at any time for one Trust Unit and will be accompanied by a special voting unit (a "Special Voting Unit") of the REIT entitling the holder thereof to receive notice of, attend and vote at meetings of holders of Trust Units (and Special Voting Units).  Each Kenwood LP Unitholder and each Brio LP Unitholder receiving Exchangeable LP Units will be entitled to elect to "roll in" their Kenwood LP Units or Brio LP Units to the Partnership on a tax-deferred basis by way of a joint election with the Partnership under the Income Tax Act (Canada).

The Partnership will also acquire all of the shares of the general partners of the Target LPs for a nominal sum.

Non-Arm's Length Qualifying Transaction

The Qualifying Transaction is a "related party transaction" within the meaning of TSXV Policy 5.9 ("TSXV Policy 5.9") and a Non-Arm's Length Qualifying Transaction within the meaning of the CPC Policy and closing is subject to receipt of Unitholder approval, including on a "majority of the minority" basis, at a special meeting of Unitholders.

Marwest Asset Management Inc. ("Marwest") a company controlled by Mr. William Martens, Chief Executive Officer and a trustee, and Mr. Armin W. Martens, Executive Vice-President, Cornelius W.V. Martens and Karl Martens and owned equally by their respective families (collectively, the "Marwest Management Group"), and the REIT will enter into an asset management and property management agreement (the "Management Agreement") effective on the closing of the Qualifying Transaction.

In addition to owning 100% of the shares of the general partner of Kenwood LP and 50% of the shares of the general partner of Brio LP, members of the Marwest Management Group and other members of the Martens family (the "Marwest Group") own an aggregate of 125 Kenwood LP Units, representing 30.34% of the outstanding Kenwood LP Units and an aggregate of 6,000 Brio LP Units, representing 50% of the outstanding Brio LP Units, all of which will be sold to the Partnership in consideration for Exchangeable LP Units and Trust Units. 

Name	Relationship	Ownership % of Kenwood LP	Ownership % of Brio LP	Exchangeable LP Units/Trust Units eligible to receive
TESC Enterprises Inc.	Owned by immediate family members and Associates of Cornelius W.V. Martens	6.07%	12.5%	919,509
WCM Holdings Inc.	Owned by William Martens	9.71%	7.5%	1,048,802
Jakorp Investments Inc.	Owned by Karl Martens	0%	5.0%	168,965
Colorado Enterprises Inc.	Owned by immediate family members of William Martens	4.85%	0%	397,677
Mann Realty Advisors Inc. (1)	Owned by immediate family members of Armin W. Martens and Karl Martens and Associates of such family members	0%	5.0%	168,965
VEM Holdings Inc.	Owned by an immediate family member of William Martens	9.71%	5.0%	964,319
Zugspitze Holdings Ltd.	Owned by Armin W. Martens	0%	5.0%	168,965
Marwest Apartments VI G.P.	50% owned by Associates of William Martens, Armin W. Martens, Cornelius W.V. Martens and Karl Martens	0%	>0.01%	282
Corwin Investments Inc.	Owned by an immediate family member of Armin W. Martens	0%	5.0%	168,965
Rick Jansen	Immediate family member of  Armin W. Martens	0%	5.0%	168,965

(1)	Each of Armin W. Martens and Karl Martens are also beneficiaries of a discretionary trust that holds an indirect interest in Mann Realty Advisors Inc.

As a result of the Qualifying Transaction:

(a)	in the event of the completion of a private placement of a minimum of 500,000 Trust Units, without factoring in any purchases by the Marwest Group thereunder, the Marwest Group will control and/or beneficially own approximately 4,915,273 Trust Units and Exchangeable LP Units representing approximately 35.43% of the issued and outstanding Trust Units on a fully diluted basis (assuming the exchange of all Exchangeable LP Units); and
(b)	in the event of the completion of a private placement of a maximum of 1,000,000 Trust Units, without factoring in any purchases by the Marwest Group thereunder, the Marwest Group will control and/or beneficially own approximately 4,915,273 Trust Units and Exchangeable LP Units, representing approximately 34.20% of the issued and outstanding Trust Units on a fully diluted basis (assuming the exchange of all Exchangeable LP Units).

No finder's fee or commission will be paid as consideration for identifying the Target LPs and no deposit, advance or loan was paid or will be paid to the Target LPs or any Kenwood LP Unitholder or Brio LP Unitholder in connection with the Qualifying Transaction.

Independent Trustee Review and Approval Process

Mr. Luke Cain and Ms. Kim Riley, the independent trustees of the REIT as at the date of the Qualifying Transaction Agreement, negotiated and approved the terms of the Qualifying Transaction Agreement and the key terms of the agreements to purchase the Kenwood LP Units and Brio LP Units and the Management Agreement.

Independent Appraisals of Target Properties

Although the REIT was not required to obtain a formal valuation (within the meaning of TSXV Policy 5.9) of the Kenwood LP Units or the Brio LP Units, the REIT obtained an independent appraisal for each of the Kenwood Property and the Brio Property which support the consideration to be paid for Kenwood LP and Brio LP. The independent appraisals are subject to customary assumptions, qualifications and limitations and will be summarized in the management information circular to be prepared in connection with the annual and special meeting of unitholders to be called for the purpose of approving the Qualifying Transaction.

Management Agreement

Pursuant to the Management Agreement, Marwest will be appointed to provide asset management services and property management services to the REIT for an initial term of 10 years, with five (5) year successive renewals thereafter, subject to earlier termination in accordance with its terms. 

Pursuant to the Management Agreement, Marwest will be entitled to appoint the executive officers of the REIT from time to time. The Management Agreement will also provide Marwest with the right to nominate the Chief Executive Officer to the board of trustees of the REIT and one (1) additional trustee where Marwest and its ownership group own 10% or more of the outstanding voting securities of the REIT and the board of trustees is comprised of five (5) members or more.

The Management Agreement entitles Marwest to receive, in its capacity as asset manager: (i) commencing when the REIT completes its first acquisition following the completion of the Qualifying Transaction, an annual base asset management fee equal to 0.25% of the Gross Book Value (as defined in the REIT's declaration of trust), payable monthly; (ii) commencing with the REIT's first acquisition following the completion of the Qualifying Transaction, an acquisition fee in respect of property acquisitions based on a sliding scale of between 1.0% of the purchase price and 0.5% of the purchase price; (iii) commencing for the fiscal year ended December 31, 2023, an incentive fee equal to 15% of the year-over-year increase in adjusted funds from operations (AFFO) per unit from the AFFO per unit as at the end of the prior year, multiplied by the  number of outstanding units (subject to an annual cap in a fiscal year equal to 100% of the base asset management fee payable in the applicable fiscal year); and (iv) a construction management fee equal to 5.0% of hard construction costs up to $1 million and 4.0% of hard constructions costs above $1 million. The construction management fee is subject to a tender process and periodic review by the independent trustees of the REIT. The Management Agreement also entitles Marwest to receive a fee equal to 4.0% of gross revenues as a property management fee.

The Management Agreement may be terminated by the REIT in respect of asset management and/or property management services in certain circumstances, including: (i) at the end of the initial term or each renewal term for cause and with the approval of a majority of the independent trustees; or (ii) upon a decision by a majority of the independent trustees to internalize services at any time (including during a term) after the REIT reaches $750 million in market capitalization, provided that the REIT enters into executive contracts with each of the REIT's executive officers on market terms, and in either case upon payment of a fee equal to the 12 months trailing fees paid in respect of the terminated services.

Marwest may terminate the agreement upon a defined change of control of the REIT and in such event shall be entitled to a termination payment equal to three (3) times the 12 months trailing fees.

Subject to approval of disinterested unitholders, the REIT will reserve Trust Units equal to 10% of the issued and outstanding Trust Units and Exchangeable LP Units upon the completion of the Qualifying Transaction for the issuance to Marwest, which will have the right to elect to receive up to 50% of any payment of its annual base asset management fee and up to 50% of any payment of any incentive fee in Trust Units, at a price equal to the twenty-day volume-weighted average trading price of the Trust Units on the payment date (the "20-Day VWAP"), provided that until the market capitalization of the Trust Units reaches $20 million, the price shall be the greater of the 20-Day VWAP and the price that Trust Units were issued at the last public offering or private placement of Trust Units.

To secure an acquisition pipeline, the REIT may from time to time provide real estate entities owned or controlled by Marwest or other companies comprising the Marwest Group of Companies with mezzanine loans in respect of development properties.  The terms and conditions of any mezzanine loan and the rights granted to the REIT in connection with any such loan will be negotiated between the independent trustees of the REIT and Marwest at the time that a mezzanine loan is agreed to and will be subject to all applicable regulatory and unitholder approvals.

Executive Officers of the REIT and of Marwest

Following the Qualifying Transaction, William Martens will continue as Chief Executive Officer of the REIT, Armin W. Martens will continue as Executive Vice-President of the REIT and Jennifer Nazimek will continue as Chief Financial Officer of the REIT.  Mr. Cornelius W.V. Martens, an executive officer of Marwest, will provide assistance to the executive officers of the REIT, including with respect to investor relations.

The directors and executive officers of Marwest are William Martens (Director and Chief Executive Officer), Armin W. Martens (Director and Executive Vice-President), Jennifer Nazimek (Chief Financial Officer), Cornelius W.V. Martens (Executive Vice-President) and Karl Martens (Executive Vice-President).

Trustees of the REIT

The current Trustees, being Mr. William Martens, Mr. Cornelius Martens, Mr. Luke Cain and Mr. Jason Pellaers will be nominated for re-election as Trustees for the ensuing year.

The following are biographies of all of the executive officers and Trustees of the REIT:

William Martens – Winnipeg, Manitoba – Trustee and Chief Executive Officer

Mr. William Martens, age 45, of Winnipeg, Manitoba, is a director and executive officer of various companies comprising the Marwest Group of Companies, including Marwest Management Canada Ltd., a property management company, Marwest Construction Ltd., a construction company, as well as various corporations which act as general partners of limited partnerships sponsored by the Marwest Group of Companies focused on the acquisition and/or development of multi-family residential properties, assisted living retirement residences and commercial properties. Mr. William Martens also worked in the commercial real estate financing industry for five years. William Martens has extensive experience in the real estate industry as a result of his senior roles at the Marwest Group of Companies since 2015 and obtained a Bachelor of Commerce (Honours) degree from the University of Manitoba.

Jennifer Nazimek – Winnipeg, Manitoba  – Chief Financial Officer and Corporate Secretary

Ms. Jennifer Nazimek, age 42, of Winnipeg, Manitoba, is the Chief Financial Officer of various companies comprising the Marwest Group of Companies, including Marwest Management (Canada) Ltd., a property management company, Marwest Construction Ltd., a construction company, as well as various corporations which act as general partners of limited partnerships sponsored by the Marwest Group of Companies focused on the acquisition and/or development of multi-family residential properties, assisted living retirement residences and commercial properties. Ms. Nazimek holds a Chartered Professional Accountant and Chartered Accountant designation. Ms. Nazimek has extensive experience in the real estate industry as a result of her role as Chief Financial Officer of the Marwest Group of Companies and obtained a Bachelor of Commerce (Honours) degree from the University of Manitoba.

Armin W. Martens – Winnipeg, Manitoba – Executive Vice-President

Mr. Armin W. Martens, age 35, of Winnipeg, Manitoba is a director and executive officer of various companies comprising the Marwest Group of Companies, including Marwest Management Canada Ltd., a property management company, Marwest Construction Ltd., a construction company, as well as various corporations which act as general partners of limited partnerships sponsored by the Marwest Group of Companies focused on the acquisition and/or development of multi-family residential properties, assisted living retirement residences and commercial properties. Armin W. Martens has extensive experience in the real estate industry as a result of his senior roles at the Marwest Group of Companies since 2010. Armin W. Martens holds a Bachelor of Business Administration degree from Trinity Western University.

Cornelius Martens – Winnipeg, MB – Trustee

Mr. Cornelius Martens, age 79, of East St. Paul, Manitoba graduated from the University of Manitoba with a Bachelor of Science degree in Civil Engineering in 1965. In 1968, together with his father, he incorporated the first company which comprised the group of companies known today as the Marwest Group of Companies. The Marwest Group of Companies is engaged in the development, construction and management of income producing properties, including office buildings, shopping centers, residential and mixed use properties. Since its incorporation until 2015, Mr. Martens served as President and Chief Executive Officer of the various companies comprising the Marwest Group of Companies.  He is currently the President and Chief Executive Officer of Marwest Properties Ltd.  He is also a co-founder and past Executive Vice-President of Artis Real Estate Investment Trust.  Mr. Martens was a trustee of Artis Real Estate Investment Trust from its inception in 2004 until May 2019. Cornelius Martens has extensive experience in the real estate industry as a result of his senior roles at the Marwest Group of Companies and Artis Real Estate Investment Trust.

Luke Cain – Winnipeg, Manitoba – Trustee

Mr. Luke Cain, age 34, of Winnipeg, Manitoba, is a Senior Director of Mortgage Origination at Canada ICI Capital Corporation, one of Canada's largest and most respected commercial real estate finance firms.  Over the past five years, Mr. Cain has helped originate and fund of over $4.5 billion of new commercial mortgages. In fiscal 2020, he was responsible for approximately 150 loans, predominantly in the multi-family asset class, financing over $1.5 billion. Mr. Cain holds a B.A. (Economics) from Union College (New York), and an M.B.A. (Finance) from the University of Manitoba.  Mr. Cain has extensive experience in the real estate financing industry as a result of his senior role at Canada ICI Capital Corporation.

Jason Pellaers – Winnipeg, Manitoba – Trustee

Mr. Pellaers, age 45, of Winnipeg, Manitoba, is currently Vice-President, Finance at NFI Group Inc. ("NFI"), a TSX-listed issuer (TSX: NFI) that is a leading global bus manufacturer. In his role as Vice-President, Finance, Mr. Pellaers is responsible for NFI internal controls over financial reporting (ICFR) and NFI's external financial reporting requirements.  Mr. Pellaers works directly with the NFI audit committee in reviewing financial statements and related public disclosures.  Mr. Pellaers has played an integral role in NFI's mergers and acquisitions activity, having led two recent acquisitions by NFI and participating as a finance lead member on multiple other acquisitions.  Prior to assuming his current position in January 2017, Mr. Pellaers held other important positions at NFI, including Director of Finance since August 2010. Mr. Pellaers is a member of the Chartered Professional Accountants of Canada and is a CPA (CA) and received a Bachelor of Commerce (Honours) from the University of Manitoba in 1998.

Subject to TSXV approval,  prior to the completion of the Qualifying Transaction, Mr. Pellaers will purchase from Ms. Kim Riley (who resigned as a Trustee effective February 16, 2021 due to other professional commitments) 20,000 seed Trust Units, which will continue to held in escrow in accordance with the requirements of the CPC Policy.

Concurrent Private Placement

The REIT has engaged Canaccord Genuity Corp. (the "Agent") to conduct, on a commercially reasonable "best efforts" basis, a brokered private placement of a minimum of 500,000 Trust Units and up to a maximum of 1,000,000 Trust Units at a price of $1.00 per Trust Unit for gross proceeds of a minimum of $500,0000 and a maximum of $1,000,000 (the "Private Placement").  The net proceeds of the Private Placement will be used to fund a portion of the expenses of the Qualifying Transaction and for working capital and general purposes of the REIT.

The REIT has agreed to pay a fee to the Agent equal to seven percent (7%) of the gross proceeds of sales of Trust Units pursuant to the Private Placement.

The trustees / directors and officers of the REIT and/or of Marwest and their associates may purchase Trust Units pursuant to the Private Placement, however such purchasers are not anticipated to purchase more than 25% of the Trust Units sold pursuant to the Private Placement.

Other Terms of the Qualifying Transaction

Subject to approval of the TSXV and unitholders, the REIT proposes to adopt an Equity Incentive Plan on the closing of the Qualifying Transaction which permits the REIT to grant securities-based compensation as follows:

(i)	a fixed number of deferred trust units (accompanied by Special Voting Units) and/or restricted trust units equal to 10% of the number of Trust Units and Exchangeable LP Units outstanding immediately following the completion of the Qualifying Transaction; and
(ii)	options to purchase Trust Units in a number equal to 10% of the number of Trust Units and Exchangeable LP Units from time to time, provided that on the date of any grant of options, the number of Trust Unit underlying options, and the number of Trust Units issued or issuable pursuant to deferred units and/or restricted units, and the number of Management Fee Units, shall not exceed 20% of the issued and outstanding Trust Units on such date.

Conditions of Closing

The Qualifying Transaction is currently anticipated to close as soon as practicable following the Meeting held on April 30, 2021.  The completion of the Qualifying Transaction is subject to a number of closing conditions including the following:

(a)	approval of the resolution approving the Qualifying Transaction by Unitholder on a "majority of the minority" basis;
(b)	approval of the Equity Incentive Plan by a majority of votes cast by Unitholders, provided that no deferred units or restricted units may be issued unless the Equity Incentive Plan is approved by a majority of disinterested Unitholders;
(c)	approval by disinterested Unitholders of Marwest's right to: (i) elect to receive up to 50% of its base annual asset management fee and up to 50% of its incentive fee in Trust Units, and the reservation of Trust Units equal to 10% of the issued and outstanding Trust Units and Exchangeable LP Units immediately following the closing of the Qualifying Transaction; and (ii) Marwest's right to elect to receive Exchangeable Units upon an internalization of management of the REIT in accordance with the terms of the Management Agreement;
(d)	approval of disinterested Unitholders of amendments to the REIT's declaration of trust dated as of July 2, 2020 to provide Marwest with the following rights: (i) in the event that Marwest ceases to be the exclusive asset manager of the REIT for any reason, Marwest shall be entitled to require the REIT to remove "Marwest" from its name; and (ii) so long as Marwest is the asset manager of the REIT, it shall be entitled to appoint the CEO as a Trustee of the REIT and will be entitled to nominate an additional Trustee where the Marwest Asset Management Group directly or indirectly beneficially own collectively 10% or more of the outstanding voting securities of the REIT (on a non-diluted or fully-diluted basis) and where the Board of Trustees is or will be comprised of five (5) or more members;
(e)	certain lender consents; and
(f)	continued satisfactory due diligence with respect to the Kenwood Property and the Brio Property and no material adverse change occurring in the Brio LP (or the Brio Property) or the Kenwood LP (or the Kenwood Property).

Cash Distribution Policy

The Board of Trustees will consider a cash distribution policy in the future when income and liquidity allow for it. The REIT's objective is to pay a stable and sustainable cash distribution to unitholders which grows over time from a portfolio of quality multi-family residential properties.

General

In connection with the closing of the Qualifying Transaction, the REIT will apply to meet the initial listing requirements of the TSXV for a real estate issuer.  Following the Qualifying Transaction, the REIT intends to continue focusing on the acquisition of multi-family residential properties located in Western Canada, although the REIT is not excluded from investing in properties located in other jurisdictions of Canada or the United States.

In light of the concurrent brokered private placement, the REIT will be requesting a waiver of the sponsorship requirements of TSXV Policy 2.2 - Sponsorship and Sponsorship Requirements but there is no assurance that such waiver will be granted.

The REIT's head office will continue to be located at 5^th Floor, 220 Portage Avenue in Winnipeg, Manitoba.

Forward-looking Statements 

The information in this news release includes certain information and statements about management's views of future events, expectations, plans and prospects that constitute forward– looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward–looking statements. Forward–looking statements in this news release include, but are not limited to, the potential completion of a qualifying transaction and related transactions, including a private placement. Any number of factors could cause actual results to differ materially from these forward–looking statements as well as future results. Although management of the REIT believes that the expectations reflected in forward– looking statements are reasonable, it can give no assurances that the expectations of any forward– looking statements will prove to be correct. Except as required by law, the REIT disclaims any intention and assumes no obligation to update or revise any forward–looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward–looking statements or otherwise.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.

Completion of the qualifying transaction is subject to a number of conditions, including but not limited to TSX Venture Exchange approval, Unitholder approvals (including on a "majority of minority" basis) and third party agreements and consents. The qualifying transaction cannot close until the required Unitholder approvals are obtained. There can be no assurance that the qualifying transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the qualifying transaction, any information released or received with respect to the qualifying transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative. The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed qualifying transaction and has neither approved nor disapproved the contents of this press release. The Trust Units will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") and may not be offered or sold within the United States or to or for the account or benefit of U.S. persons, except in certain transactions exempt from the registration requirements of the U.S. Securities Act. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, securities of the REIT in the United States or in any other jurisdiction.

Information regarding Target LPs and Target Properties

This press release sets forth certain information relating to the Target LPs and the Target Properties.  Such information was provided by the general partners of the Target LPs.  Neither the REIT nor any other person makes any representation or warranty regarding the accuracy of such information contained in this press release and readers are cautioned not to place undue reliance on such information.

SOURCE Marwest Apartment Real Estate Investment Trust

Mr. William Martens, Chief Executive Officer, Telephone: [phone]