Calloway Real Estate Investment Trust

Calloway Real Estate Investment Trust

March 10, 2005 15:53 ET

Calloway Acquires 8 Properties


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: CALLOWAY REAL ESTATE INVESTMENT TRUST

TSX SYMBOL: CWT.UN
TSX SYMBOL: CWT.DB

MARCH 10, 2005 - 15:53 ET

Calloway Acquires 8 Properties

CALGARY, ALBERTA--(CCNMatthews - March 10, 2005) - Calloway Real Estate
Investment Trust (TSX:CWT.UN) (TSX:CWT.DB) announced that it has
completed the second phase of its previously announced acquisition (the
"Acquisition") from the Wal-Mart-FirstPro Realty Co-ownership (the
"Co-ownership"), comprising eight shopping centres with a total of
approximately 1,497,691 rentable square feet of leased area (Calloway's
interest) (the "Centres") and connected undeveloped lands with the
potential for approximately 177,682 square feet of future retail space
(Calloway's interest) (the "Undeveloped Lands"), of which 30,390 square
feet of the Undeveloped Lands is leased and under construction.

As a result of the completion of the acquisition described above,
Calloway intends to increase it's monthly distribution for the month of
April 2005 by approximately 8% to 11.333 cents per trust unit,
representing $1.36 per unit on an annualized basis, or a 10 cents per
unit annualized increase.

The total consideration (including Calloway's costs) paid for the
Centres and the Undeveloped Lands was approximately $230 million which
was satisfied:

(a) by way of a vendor take back mortgage to the Co-ownership in the
amount of approximately $6.0 million, which is interest free and relates
to the Undeveloped Lands; and

(b) by the payment of the balance in cash.

Calloway funded the cash component of the Acquisition, in part, by
borrowing approximately $155.2 million secured by fixed rate mortgage
financing on seven of the Properties at a weighted average interest rate
of 5.64% and an average term of 15.3 years. The remaining cash component
was funded from the proceeds of the private placement of Subscriptions
Receipts closed by Calloway on February 24, 2005. These Subscription
Receipts were converted into 3,101,000 units of Calloway concurrently
with the closing of the Acquisition. There are currently approximately
36.6 million units of Calloway issued and outstanding.

Michael Storey, President of Calloway, said, "The Acquisition conforms
with Calloway's strategy of focusing on high quality retail properties.
Fully 97.7% of our revenue will now come from retail properties and
34.2% continues to be generated from Wal-Mart, our major tenant, whose
average remaining initial lease term is approximately 16 years. In
addition to Wal-Mart, other national retailers are well represented in
our centres, including Loblaws, Canadian Tire, Home Depot, Reno Depot,
Best Buy/Future Shop, Mark's Work Wearhouse, Winners, Staples/Business
Depot, Home Outfitters and Reitmans. Going forward we anticipate that we
will continue our path of aggressive growth."

Calloway's portfolio is now comprised of approximately 8.8 million
square feet and an enterprise value of over $1.4 billion. We will
continue to build Calloway for the long term. The weighted average age
of our buildings is only approximately 5 years. Over 64% of our term
mortgage financing matures after 2013, with no more than 6.7% of the
total term mortgage financing maturing within any one of the next nine
years. In addition, over 90% of total mortgages and loans payable is
represented by term mortgage financing. Not only has this strategy
enabled us to deliver higher returns to unitholders by way of increasing
distributions, but we expect this strategy will deliver a sustainable
and growing source of income and distributions to our unitholders in the
future.

Calloway Real Estate Investment Trust is an unincorporated closed-end
real estate investment trust focused on the acquisition of high quality
retail properties.

This press release contains "forward looking statements" subject to
various significant risks and uncertainties which may cause actual
results, performances or achievements of Calloway to be materially
different from any future results, performances or achievements
expressed or implied by such forward looking statements. Such risk
factors include, but are not limited to, risks associated with real
property ownership, availability of cash flow, restrictions on
redemption, general uninsured losses, future property acquisitions,
environmental matters, tax related matters, debt financing, Unitholder
liability, potential conflicts of interest, potential dilution, and
reliance on key personnel. Calloway cannot assure investors that actual
results will be consistent with these forward looking statements and
Calloway assumes no obligation to update or revise them to reflect new
events or circumstances.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Calloway Real Estate Investment Trust
    J. Michael Storey
    President and Chief Executive Officer
    (403) 266-6437
    (403) 266-6522 (FAX)
    Website: www.callowayreit.com
    The Toronto Stock Exchange neither approves nor disapproves of the
    contents of this Press Release.