True North Apartment REIT announces completion of previously announced acquisition of 2,076 suite property portfolio and conversion of subscription receipts issued in $57.5 million public offering

/NOT FOR DISTRIBUTION IN THE U.S. OR OVER U.S. NEWSWIRES/

TORONTO, Oct. 1, 2012 /CNW/ - True North Apartment Real Estate Investment Trust (the "REIT") (TSXV: TN.UN) announced today that it has completed its previously announced acquisition ("Acquisition") of a portfolio of 26 properties (the "Acquisition Properties") comprising an aggregate of 2,076 suites located in Ontario, New Brunswick and Nova Scotia. The REIT has acquired the property portfolio by acquiring control of Blue-Starlight LP, an entity controlled by Daniel Drimmer, the Chair of the board of trustees of the REIT, as well as a principal holder of voting securities of the REIT.

The purchase price for the Acquisition Properties of $138.95 million was satisfied by a combination of (i) $51.9 million in cash, (ii) the assumption of approximately $58.6 million of mortgage debt, (iii) $13.4 million of new mortgage debt, and (iv) the issuance of 3,512,878 Class B units of Blue-Starlight LP to Mustang-Master LP (controlled by Mr. Drimmer) and subsidiaries of Mustang-Master LP (each such unit to be issued at a deemed price of $4.27 for an aggregate amount of $15 million). The Class B units are economically equivalent to and exchangeable for trust units of the REIT ("Units") and are accompanied by special voting units of the REIT (which provide the holder thereof with equivalent voting rights in respect of the REIT to holders of Units).

As the Acquisition was considered a "related party transaction" under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions, the REIT was required to obtain prior approval of the Acquisition (the "Unitholder Approval") by a majority of the minority unitholders of the REIT at a special meeting (the "Special Meeting") of unitholders of the REIT ("Unitholders"). The Special Meeting was held on Friday, September 28, 2012, whereby, among other things, the Acquisition received the requisite Unitholder Approval, with Unitholders holding an aggregate of approximately 99% of the outstanding Units (excluding Mr. Drimmer) voting in favour.

In order to finance the cash component of the purchase price of the Acquisition and the costs in connection with the Acquisition, the REIT previously completed a "bought deal" public offering (the "Offering") of 13,466,500 subscription receipts (the "Subscription Receipts"), including 1,756,500 Subscription Receipts issued upon exercise of the over-allotment option granted to the Underwriters (as defined below). Each Subscription Receipt was sold at a price of $4.27, for aggregate gross proceeds of approximately $57.5 million and entitled the holder thereof to receive one Unit upon completion of the acquisition by the REIT of the Acquisition Properties without payment of any additional consideration. The Offering involved a syndicate of underwriters (the "Underwriters") co-led by CIBC and Raymond James Ltd. Contemporaneously with the closing of the Acquisition, one Unit was issued in exchange for each outstanding Subscription Receipt issued in connection with the Offering, resulting in the issuance of an aggregate of 13,466,500 Units.

Trading of the Subscription Receipts has been halted and the TSXV has advised that the Subscription Receipts will be de-listed at the close of trading today.

An amount per Subscription Receipt equal to the amount per Unit of any cash distributions made by the REIT for which record dates have occurred during the period that the Subscription Receipts were outstanding has become payable in respect of each Subscription Receipt, namely $0.233 per Subscription Receipt held as of record on September 30, 2012, and will be paid on October 15, 2012.

At the Special Meeting, the Unitholders also elected two additional trustees, namely Leslie Veiner, the REIT's Chief Executive Officer and Graham L. Rosenberg.

As previously announced, in accordance with the compensation package relating to Mr. Veiner's position as the Chief Executive Officer, the REIT has granted Mr. Veiner, effective as of the close of the Acquisition, 300,000 Options to subscribe for up to 300,000 Units for a period of five years, at an exercise price of $4.64 all in accordance with the REIT's Employee Unit Option Plan.The Options will vest over a three year period commencing October 1, 2013.

About the REIT
The REIT is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. Additional information concerning the REIT may be obtained from the management information circular dated May 4, 2012 of Wand Capital Corporation and is available at www.sedar.com.

The REIT focuses on a long-term strategy to generate stable cash distributions on a tax-efficient basis for unitholders. The REIT intends to actively look for opportunities to expand its asset base and increase its distributable cash flow through acquisitions of additional multi-suite residential rental properties across Canada, the United States and other jurisdictions where opportunities may arise.

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

SOURCE: True North Apartment Real Estate Investment Trust

Leslie Veiner
Chief Executive Officer
[phone]

or

Martin Liddell
Chief Financial Officer and Secretary
[phone]