Nobel REIT completes first tranche private placement for $6,500,000, secures $9,760,000 of mortgage financing and announces agreements to acquire two properties in Saint-Laurent, QC

MONTREAL, Dec. 3, 2014 /CNW Telbec/ - (TSXV: NEL.UN) Nobel Real Estate Investment Trust ("Nobel REIT" or the "REIT") is pleased to announce the closing of the first tranche of its private placement (the "First Tranche") previously announced on November 11, 2014. The First Tranche consisted of 8,125,000 trust units of the REIT (the "Trust Units") at a price of $0.80 per Trust Unit, for gross proceeds of $6,500,000.

RFA Nobel Limited Partnership ("RFA"), an existing insider, related party, and control person of the REIT under the policies of the TSX Venture Exchange (the "Exchange") and applicable securities laws, participated for $2,500,000 of the First Tranche (the "RFA Investment").

RFA's participation in the First Tranche is considered a related party transaction under Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions (Québec) ("Regulation 61-101"). The REIT relied upon sections 5.5(a) and 5.7(1)(a) of Regulation 61-101 for exemptions from the formal valuation and minority approval requirements, respectively, under Regulation 61-101, as neither the fair market value of the Trust Units issued to RFA nor the amount of the RFA Investment exceeded 25% of the REIT's market capitalization at the time the transaction was agreed to by the parties.

The Trust Units are subject to a four-month plus one day hold period ending on April 4, 2015, pursuant to securities legislation and the policies of the Exchange. The Trust Units have not been nor will they be registered under the United States Securities Act of 1933, as amended, or state securities laws, and may not be offered or sold in the United States or to an account for the benefit of U.S. persons, absent such registration or an exemption from registration. The First Tranche remains subject to the final approval of the Exchange.

A finder's fee equal to 2% of the gross proceeds from the First Tranche was paid to Realty Financial Advisors Inc., an exempt market dealer, in connection with First Tranche.

The gross proceeds of the First Tranche will be used to complete the acquisition of the investment property at 10500 Ryan Avenue in Dorval, Québec (the "Dorval Property"), previously announced on November 11, 2014 (the "Acquisition"), and for working capital purposes, including the acquisition of the additional properties described below.

Mortgage Financing

The REIT is further pleased to announce that it anticipates that the Acquisition will close on or about December 5, 2014. In connection with the Acquisition, the REIT has entered into certain financing arrangements with MCAP Financial Corporation, as lender, providing for a mortgage loan in the amount of $9,760,000, secured by a first ranking hypothec on the Dorval Property (the "Loan").

The Loan will bear interest at a fixed rate to be set at closing, and will be for a ten-year term with a 25-year amortization period. The land on which the Dorval Property is located is currently under emphyteutic lease from an arm's length third party. An amount of $1,150,000 will be held back from the mortgage loan and set aside to cover the cost of acquiring the land from the emphyteutic lessor when the land option becomes exercisable in 2022.

Agreements to Acquire Two Additional Properties

The REIT is further pleased to announce that it has entered into agreements with arm's length vendors to  acquire properties located at 935-965 Reverchon (the "Reverchon Property") and 3490 Griffith (the "Griffith Property"), both in Saint-Laurent, Québec. Both acquisitions are conditional on the successful completion of the due diligence process and are expected to be completed on or about December 19, 2014.

The Reverchon Property, to be acquired for an aggregate purchase price of $7,850,000 (excluding acquisition costs), is a multi-tenant industrial property situated on a parcel of land of 261,565 square feet with a leasable area of 114,265 square feet. The Reverchon Property was built in 1987 and renovated in 2003. It is fully occupied and the main tenant is Sierra Flower Trading Inc.

The Griffith Property, to be acquired for an aggregate purchase price of $2,800,000 (excluding acquisition costs), is an industrial property situated on a 109,690 square feet parcel of land, with 40,665 square feet of leasable area. Built in 1969 and renovated in 2004, the Griffith Property is fully occupied and the main tenant is NCS International Company.

Early Warning Report

Pursuant to the RFA Investment, RFA acquired direct ownership 3,125,000 Trust Units, representing 11.21% of the REIT's issued and outstanding trust units on an undiluted basis following completion of the First Tranche. As a result, RFA directly owns 19,791,667 trust units of the REIT, which represents 72.62% of the REIT's issued and outstanding trust units on a partially diluted basis following completion of the First Tranche.

An early warning report of RFA (the "Early Warning Report") containing additional information with respect to the RFA Investment will be filed under the REIT's SEDAR profile at www.sedar.com. The Trust Units were acquired for investment purposes and RFA may from time to time increase or decrease its holdings of the REIT's securities, depending on market and other conditions.

About Nobel REIT

Nobel REIT is an unincorporated open-ended real estate investment trust governed by the laws of the Province of Québec. Nobel REIT has been created for the purpose of acquiring and owning income producing properties. The REIT will focus on acquiring commercial retail, mixed-used retail, and industrial and suburban office properties in the primary and secondary markets in the Province of Québec. Nobel REIT currently owns five properties located in Québec, comprising 186,955 square feet of gross leasable area.

Disclaimer – Safe Harbour Forward–Looking Statements

Forward-looking statements contained in this press release involve known and unknown risks, uncertainties and other factors that may cause actual results, performance and achievements of the REIT to be materially different from any future results, performance or achievements expressed or implied by the said forward-looking statements.

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

SOURCE: Nobel Real Estate Investment Trust

Additional information or a copy of the Early Warning Report may be obtained by contacting: Louis Lemire, CPA, CA, Chief Financial Officer, Nobel Real Estate Investment Trust, 1185, Chemin du Tremblay, Suite 230, Longueuil, Quebec, J4N 1R4, Tel: [phone]; Ben Rodney, President, RFA Nobel Limited Partnership, 360 Bay Street, Suite 1000, Toronto, Ontario, M5H 2V6, Tel: [phone]; Renmark Financial Communications Inc.: Lorraine Athaide: [email protected], Mariam Ghoneim: [email protected], Tel.: [phone] or [phone], www.renmarkfinancial.com

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