Killam Properties Inc.
TSX : KMP
TSX : KMP.DB

Killam Properties Inc.

February 01, 2007 16:01 ET

Killam Announces $40.4 Million Private Placement

HALIFAX, NOVA SCOTIA--(CCNMatthews - Feb. 1, 2007) -

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Killam Properties Inc. (TSX:KMP) (TSX:KMP.DB) is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by RBC Capital Markets and Canaccord Adams for a bought deal private placement of approximately $40.4 million of common share at a price of $2.32 per share.

Killam intends to use the proceeds from the private placement to reduce its acquisition bridge facility, which has been used to finance recent acquisitions, and to fund future growth. Killam continues to benefit from a robust acquisition pipeline and anticipates making further announcements in this regard in the near future.

The securities to be issued pursuant to this private placement by Killam have not and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or the securities laws of any state of the United States, and may not be offered or sold in the United States absent registration or an applicable exemption therefrom under the 1933 Act and the securities laws of all applicable states.

Killam recently announced the commencement of an annual dividend of $0.14 per share, payable monthly. The first monthly dividend of $0.011667 will be payable on April 16, 2007 to shareholders of record at the close of business on March 30, 2007.

In addition, management and the board of directors of Killam, with the advice of their financial and legal advisors, continue to evaluate the potential conversion from a corporation to a real estate investment trust ("REIT"). Largely as a result of pending legislative developments, this evaluation is not yet complete. A firm timeline has not been provided by the federal government with respect to the implementation of final legislation related to the proposed taxation of certain trusts and the related exemption for REITs. Killam will provide further updates to shareholders as the process evolves.

Killam Properties Inc. is a leading real estate company based in Halifax, Nova Scotia and is the largest owner and manager of multi-family residential rental properties and manufactured home communities in Atlantic Canada.

Certain statements in this report may constitute forward-looking statements. Such forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of Killam to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Killam does not undertake to update any of such forward-looking statements.

Note: The Toronto Stock Exchange has neither approved or disapproved of the information contained herein.

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