Subversive Real Estate Acquisition REIT LP Announces Completion of U.S.$200,000,000 Initial Public Offering

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

TORONTO, Jan. 8, 2020 /CNW/ - Subversive Real Estate Acquisition REIT LP (the "REIT LP") is pleased to announce the closing (the "Closing") of its initial public offering (the "Offering") of 20,000,000 Class A restricted voting units of the REIT LP (the "Class A Restricted Voting Units") at an offering price of U.S.$10.00 per Class A Restricted Voting Unit, for gross proceeds of U.S.$200,000,000. The REIT LP has granted the Underwriters (as defined below) an over-allotment option (the "Over-Allotment Option") to purchase up to an additional 3,000,000 Class A Restricted Voting Units on the same terms and conditions, exercisable in whole or in part, by the Underwriters up to 30 days following Closing. The gross proceeds from the Offering were (and the gross proceeds from any exercise of the Over-Allotment Option will be) deposited into an escrow account pending completion of a Qualifying Transaction (as defined in the Final Prospectus) by the REIT LP and will only be released upon certain prescribed conditions, as further described in the REIT LP's final prospectus dated December 23, 2019 (the "Final Prospectus"). The Offering was distributed by Canaccord Genuity Corp. and Echelon Wealth Partners Inc. (the "Underwriters").   

Each Class A Restricted Voting Unit is comprised of a restricted voting unit of the REIT LP (a "Restricted Voting Unit") and one (1) right (a "Right") of the REIT LP. Each Right represents the entitlement to receive, for no additional consideration, one-eighth (1/8) of one Restricted Voting Unit (following the closing of a Qualifying Transaction, which at such time will represent one-eighth (1/8) of one Limited Partnership Unit). The Class A Restricted Voting Units are intended to begin trading today promptly after the Closing on the Neo Exchange Inc. (the "Exchange") under the symbol "SVX.UN". The Restricted Voting Units and the Rights comprising the Class A Restricted Voting Units will initially trade as a unit but it is anticipated that the Restricted Voting Units and the Rights will begin trading separately on February 18, 2020, subject to the REIT LP fulfilling all of the listing requirements of the Exchange, under the symbols "SVX.U" and "SVX.RT.U", respectively. Prior to any Qualifying Transaction, the Restricted Voting Units may only be redeemed upon certain prescribed events. Restricted Voting Units will be redeemable for a pro-rata portion of the amount then held in the escrow account, net of taxes payable and other prescribed amounts.

The REIT LP is newly-established Ontario limited partnership for the purpose of effecting an acquisition of one or more real estate businesses and/or assets within a specified period of time. Subversive Real Estate Acquisition REIT (GP) Inc., a newly formed company incorporated under the laws of the Province of British Columbia, is the general partner of the REIT LP (the "General Partner"). The REIT LP is a special purpose acquisition corporation for purposes of the rules of the Exchange. The REIT LP intends to focus its search for target real estate businesses and/or assets that are involved in the cannabis industry and/or related sectors; however, it is not limited to the acquisition of cannabis-related real estate businesses and/or assets or to a particular geographic region and may acquire other classes of real estate businesses and/or assets and/or non-real estate businesses or assets for purposes of completing its Qualifying Transaction. The REIT LP is targeting a Qualifying Transaction that will aggregate a portfolio of properties with an estimated aggregate enterprise value of between U.S.$200 million and U.S.$650 million.

The General Partner's management team and board of directors is comprised of: Michael Auerbach (Executive Chairman and director), Richard Acosta (Chief Executive Officer and director) Michael Miller (Chief Financial Officer), Eric Clarke (Chief Operating Officer), Leland Hensch (director), Omar Mangalji (director), Scott Baker (director), Octavio Boccalandro (director), Anne Sullivan (director) and Craig Hatkoff (director).

The sponsors of the REIT LP are Subversive Real Estate Acquisition Sponsor Corp. ("Subversive Sponsor"), Inception Altanova Sponsor, LLC ("Inception Sponsor") and CG Investments Inc. IV ("CG IV") (collectively, the "Sponsors"). Subversive Sponsor is controlled by certain officers and directors of the General Partner. Inception Sponsor is owned by certain officers and directors of Inception Altanova, LLC, an affiliate of The Inception Companies and is controlled by certain officers and directors of the General Partner.   

Concurrent with Closing and for investment purposes, the Sponsors each purchased class B units ("Class B Units") at an offering price of U.S.$10.00 per Class B Unit. Each Class B Unit consists of 1/100 of a proportionate voting unit of the REIT LP (a "Proportionate Voting Unit") and one Right of the REIT LP. Subversive Sponsor purchased 322,000 Class B Units, CG IV purchased 138,000 Class B Units, and Inception Sponsor purchased 52,000 Class B Units.  On December 31, 2019, the Founders (as defined in the Final Prospectus) privately purchased 58,820 proportionate voting units ("Founders' Proportionate Voting Units") for an aggregate price of U.S.$25,000, or approximately U.S.$0.425 per Founders' Proportionate Voting Unit (before taking into account the proportionate voting units forming part of the Class B Units) for investment purposes. Assuming the separation of the Class B Units, (i) Subversive Sponsor will hold 38,637 Proportionate Voting Units and 322,000 Rights, (ii) CG IV will hold 16,560 Proportionate Voting Units and 138,000 Rights, and (iii) Inception Sponsor will hold 6,143 Proportionate Voting Units and 52,000 Rights. As of the date hereof, Subversive Sponsor's holdings represent an approximate 60.4% interest in the Proportionate Voting Units, CG IV's holdings represent an approximate 25.9% interest in the Proportionate Voting Units, and Inception Sponsor's holdings represent an approximate 9.6% interest in the Proportionate Voting Units. 

Assuming that all the Proportionate Voting Units convert into Limited Partnership Units and no Rights have been exercised, (i) Subversive Sponsor will hold 3,863,700 Limited Partnership Units (or 3,903,950 Limited Partnership Units assuming the exercise of the Rights held by Subversive Sponsor), (ii) CG IV will hold 1,656,000 Limited Partnership Units (or 1,673,250 Limited Partnership Units assuming the exercise of the Rights held by CG IV), and (iii) Inception Sponsor will hold 614,300 Limited Partnership Units (or 620,800 Limited Partnership Units assuming the exercise of the Rights held by CG IV), representing a 14.6% (or 14.8% on a partially-diluted basis), 6.3% (or 6.3% on a partially-diluted basis), and 2.3% (or 2.4% on a partially-diluted basis) interest in the Limited Partnership Units, respectively. A report on the acquisitions by Subversive Sponsor and CG IV will be filed with the applicable securities commissions using the System for Electronic Document Analysis and Retrieval (SEDAR) and will be available for viewing on the REIT LP's profile at www.sedar.com.

The Sponsors each acquired their position in the REIT LP for investment purposes. The Sponsors intend to purchase up to an additional 15,000 Class B Units, depending on whether the Over-Allotment Option is exercised in whole or in part. Our Founders, which includes the Sponsors, are restricted from selling Class B Units and Founders' Proportionate Voting Units, as applicable, and as described in the Final Prospectus. Our Founders may purchase and/or sell any Class A Restricted Voting Units they acquire from time to time, subject to applicable law. In connection with the Offering, and as Sponsors to the REIT LP, the Sponsors entered into certain material agreements, all as described in the Final Prospectus.

The REIT LP head office is located at 135 Grand Street, 2nd Floor, New York, New York 10013 and the registered office is located at 333 Bay Street, Suite 3400, Toronto, Ontario, M5H 2S7, Canada.

Goodmans LLP is legal counsel to the REIT LP. Blake, Cassels & Graydon LLP is legal counsel to the Underwriters.

This press release is not an offer of securities for sale in the United States, and the securities may not be offered or sold in the United States absent registration or an exemption from registration. The securities have not been and will not be registered under the United States Securities Act of 1933. Copies of the final prospectus will be available on SEDAR at www.sedar.com.

Subversive Real Estate Acquisition REIT LP

Subversive Real Estate Acquisition REIT LP is a newly established limited partnership formed under the Limited Partnerships Act (Ontario) for the purpose of effecting, directly or indirectly, an acquisition of one or more businesses or assets, by way of a merger, amalgamation, arrangement, equity exchange, asset acquisition, equity purchase, reorganization, or any other similar business combination.

Forward-Looking Statements

This press release may contain forward-looking information within the meaning of applicable securities legislation, which reflects the Sponsors' and the REIT LP's current expectations regarding future events. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Sponsors' or the REIT LP's control, which 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 "Risk Factors" in the final prospectus of the REIT LP dated December 23, 2019. Neither the Sponsors nor the REIT LP 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.

SOURCE Subversive Real Estate Acquisition REIT LP

Subversive Real Estate Acquisition REIT LP, Richard Acosta, Chief Executive Officer of Subversive Real Estate Acquisition REIT (GP) Inc., [email protected].