Minto Apartment REIT Announces $75 Million Bought Deal Public Offering of Trust Units and Provides an Update on Its Growth Initiatives

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

OTTAWA, ON, Oct. 20, 2021 /CNW/ - Minto Apartment Real Estate Investment Trust (TSX: MI.UN) (the "REIT") announces that it has entered into an agreement to issue 3,300,000 trust units of the REIT (the "Units") from treasury on a bought deal basis at a price of $22.85 per Unit (the "Offering Price") to a syndicate of underwriters bookrun by TD Securities Inc. and BMO Capital Markets (the "Underwriters") for gross proceeds of approximately $75 million (the "Offering"). In addition, the REIT has granted the Underwriters an option, exercisable in whole or in part at any time up to 30 days following closing of the Offering, to purchase up to an additional 495,000 Units at the Offering Price (the "Over-Allotment Option") which, if exercised in full, would increase the gross proceeds of the Offering to approximately $86 million.

The REIT intends to use the net proceeds of the Offering, including from any exercise of the Over-Allotment Option, to fund its equity requirement for the acquisition of Le Hill-Park in downtown Montreal, the previously announced convertible development loans on the Beechwood project in Ottawa, Ontario ("Beechwood") and Phase I of Lonsdale Square in North Vancouver, British Columbia ("Lonsdale Square") and to pay down a portion of the amount outstanding on its credit facility providing financial capacity for future acquisitions.

The Units will be offered in each of the provinces and territories of Canada pursuant to a prospectus supplement to the REIT's base shelf short form prospectus dated December 8, 2020, to be filed with Canadian securities regulators. The Offering is expected to close on or about October 29, 2021 and is subject to certain conditions including, but not limited to, the approval of the Toronto Stock Exchange.

The Units have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, (the "1933 Act") 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 1933 Act), except pursuant to an exemption from the registration requirements of the 1933 Act. This press release does not constitute an offer to sell or a solicitation of an offer to buy any Units in the United States or to, or for the account or benefit of, U.S. persons.

Growth initiatives update
The REIT also announces that it has agreed to acquire Le Hill-Park, a 20 storey multi-residential rental property comprising a total of 261 suites (the "Acquisition"), located at 4530 Chemin de la Côte-des-Neiges in downtown Montréal, Québec ("Le Hill-Park"). Le Hill-Park is centrally located and is in close proximity to the Université de Montréal, McGill University, three major hospitals, and the Côte-des-Neiges metro station. Average sitting rents at Le Hill-Park are approximately 20% below current market rents resulting in potential revenue growth as tenants vacate suites and they are re-leased. There is also a significant repositioning opportunity as only 72 of the 261 suites have undergone a modernization program, potentially providing an additional upside of approximately 20-25% upon completion of renovation. Le Hill-Park is also located close to the REIT's existing Rockhill, Haddon Hall and Le 4300 properties, providing for potential future operating synergies. Following the acquisition of Le Hill-Park, the REIT will have ownership interests in a total of 1,793 suites in the Montréal market, representing approximately 22% of the fair market value of its portfolio.

The purchase price for Le Hill-Park is approximately $80.1 million and will be satisfied by mortgage financing of approximately $40 million with the balance to be funded from proceeds of the Offering. The acquisition of Le Hill-Park is expected to close on or about December 7, 2021. Following completion of the acquisition of Le-Hill Park and the Offering, the REIT's Debt-to-Gross Book Value ("GBV") ratio will be approximately 37.3%, assuming the Over-Allotment Option is exercised in full.

The rezoning of Beechwood to permit the development of approximately 229 residential units and 6,000 square feet of retail space was completed in Q3 2021. The project is being developed by Minto Properties Inc. ("MPI") and construction is expected to commence in Q1 2022. The REIT has committed to providing up to $51.4 million in financing for this project through a convertible development loan. As at June 30, 2021, $9.2 million of the commitment had been advanced and additional advances will be made as construction progresses. Upon stabilization, expected in Q4 2023, the REIT has the option to purchase this project at a 5% discount to its then appraised fair market value.

Construction is progressing at Phase I of Lonsdale Square, which is being developed by a 50-50 joint venture between MPI and a subsidiary of Darwin Properties Limited. The project will comprise 113 residential suites and 7,800 square feet of retail space upon completion. The excavation of the site is complete, and formwork has commenced. The REIT has committed to providing up to $14.0 million in financing to this project through a convertible development loan. As at June 30, 2021, $12.4 million of the commitment had been advanced. Upon stabilization, expected in Q4 2023, the REIT has the option to purchase this project at a 5% discount to its then appraised fair market value.

About Minto Apartment Real Estate Investment Trust
Minto Apartment Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario to own income-producing multi-residential properties located in urban markets in Canada. The REIT owns a portfolio of high-quality income-producing multi-residential rental properties located in Toronto, Montreal, Ottawa, Calgary and Edmonton. For more information on Minto Apartment REIT, please visit the REIT's website at: https://www.mintoapartments.com/.

Forward-Looking Information
This news release may contain forward-looking information within the meaning of applicable securities legislation, which reflects the REIT's current expectations regarding future events and in some cases can be identified by such terms as "will", "intends" and "expected". In particular, this news release contains forward-looking information in relation to: the Offering; the timing for completion of the proposed Acquisition and the Offering; a property that is the subject of the proposed Acquisition, the satisfaction of the conditions for completion of the proposed Acquisition and the Offering; the potential economic impact of the proposed Acquisition; and the construction and development of the project at Beechwood and Phase I of Lonsdale Square. Forward-looking information reflects management's current beliefs and is based on a number of assumptions that the REIT believes are reasonable and is subject to a number of risks and uncertainties, many of which are beyond the REIT's 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 under "Risks and Uncertainties" in the REIT's Management Discussion & Analysis dated August 12, 2021, which is available on SEDAR (www.sedar.com), as well as the ability of the REIT to complete the proposed Acquisition, including the assumed mortgage financing contemplated herein, and the Offering on terms as contemplated.  Certain information in this press release may be considered as "financial outlook" within the meaning of applicable securities legislation. The purpose of this financial outlook is to provide readers with disclosure regarding the REIT's reasonable expectations with respect to the proposed Acquisition. Readers are cautioned that the financial outlook may not be appropriate for other purposes. The REIT 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. This forward-looking information speaks only as of the date of this news release.

Non-IFRS Financial Measures
This news release contains certain financial measures which are not defined under International Financial Reporting Standards ("IFRS") and may not be comparable to similar measures presented by other real estate investment trusts or enterprises. Debt to GBV is a measure of financial position used by the REIT's management and real estate businesses. This measure is not defined by IFRS and does not have a standardized meaning prescribed by IFRS. See the REIT's Management Discussion & Analysis dated August 12, 2021 for further discussion of this and other non-IFRS financial measures.

SOURCE MINTO Real Estate Investment Trust

Julie Morin, Chief Financial Officer, Minto Apartment Real Estate Investment Trust, Tel: [phone]