Calloway Real Estate Investment Trust

Calloway Real Estate Investment Trust

April 16, 2007 18:11 ET

Calloway Real Estate Investment Trust Announces U.S. Investment

TORONTO, ONTARIO--(CCNMatthews – April 16, 2007) –

Attention Business Editors:

Calloway Real Estate Investment Trust (TSX:CWT.UN) revealed today plans for its first investment in an international market.

Calloway is negotiating the acquisition of two retail centres in the State of Oregon, which will comprise approximately 500,000 square feet of retail space upon completion by the developer, SmartCentres of Toronto.

The centres will be located in Portland (centre size: 240,000 square feet), the largest city in the State with a population of over 500,000, and in Albany (centre size: 260,000 square feet) a growing community of over 40,000. The centres will be developed by and managed from the conveniently located SmartCentres office in Richmond, B.C. Completion of the developments is anticipated by early 2010. The developments will be anchored by large format retailers who will provide a focal point to draw consumers to the centres.

Mr. Simon Nyilassy, President and CEO of Calloway said, "Calloway's formula of investing in newly constructed, large scale centres that provide a value-oriented shopping experience to the local community has worked well for us in Canada. We believe this formula can be applied successfully elsewhere and we are pleased to be able to work with SmartCentres, our primary Canadian development relationship, to take our first step in this regard." He also said "Calloway's investments outside Canada will be planned in manageable steps in a way that we can properly execute all of the details. We will also ensure maintenance of our status as a tax-exempt entity under the recently announced rules governing taxation of trusts. These rules provide the latitude for over $1 billion in foreign investments."

Mr. Nyilassy further stated, "We believe the SmartCentres brand and its approach to shopping centre development will work exceptionally well in international markets. Both Calloway's and SmartCentres' major tenant base is comprised of international retailers."

Calloway anticipates an initial investment of U.S. $10 million in approximately 50 acres of land. Upon completion, an aggregate investment of approximately U.S. $35 million is expected. It is anticipated that the additional investments will be made on an 'earn-out' basis and should provide Calloway with a pre-negotiated return in the first year of completion, in the range of 6.2% to 6.4%.

This press release contains "forward looking statements" subject to various significant risks and uncertainties which may cause actual results, performances and 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 acquisition, 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.

Contact Information

  • Calloway Real Estate Investment Trust
    Simon Nyilassy
    President and Chief Executive Officer
    (905) 326-6400