Calloway Real Estate Investment Trust
TSX : CWT.UN

Calloway Real Estate Investment Trust

June 16, 2008 10:11 ET

Calloway REIT Announces Closing of Purchase of $371 Million Property Portfolio

TORONTO, ONTARIO--(Marketwire - June 16, 2008) -

NOT FOR DISSEMINATION OVER UNITED STATES NEWSWIRE.

Calloway REIT (TSX:CWT.UN) announced today that it has closed the previously announced acquisition of 6 new, large-scale, unenclosed shopping centres, totaling approximately 1.7 million square feet on completion, for total consideration of approximately $371 million from SmartCentres and Wal-Mart Canada Corp. The initial investment is approximately $285 million, including transaction costs, with a further $86 million over the next three years as additional space is built and occupied in the centres.

Simon Nyilassy, Calloway's President and CEO, said, "We are about retail centres offering value to Canadians." Nyilassy added, "These six new acquisitions affirm our commitment to continually grow Calloway in this space."

The 6 centres will generate net rents of approximately $18.7 million per annum on initial closing and approximately $25.9 million per annum on completion, representing a 10% increase over Calloway's current annual net rents. Alongside Wal-Mart, other national retailers operating in the centres include Canadian Tire, Home Depot, Home Outfitters, Reitmans and Best Buy. Details of the properties are set out in Schedule A. The weighted average lease terms of the portfolio is 15.2 years.

Calloway financed the transaction with approximately $123 million of mortgage debt and acquisition loans against the acquired properties, the issuance to Mr. Mitchell Goldhar, or affiliated companies owned by Mitchell Goldhar, of 707,173 units of a subsidiary limited partnership, exchangeable into Calloway REIT units on a one for one basis, representing approximately $14.3 million of the purchase price, a further $22 million in additional mortgage financing placed on properties currently owned by Calloway and the balance with cash resources. As a result of the transaction, Mr. Mitchell Goldhar will increase his equity interest in Calloway from approximately 23.3% to 23.8%.

The 6 properties include one in which Calloway acquired a leasehold interest. The term of the ground lease is 49 years with an option to acquire the freehold interest at the end of the lease term.

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.



SCHEDULE A
PROPERTY DETAILS
Rentable Area (Sq. Ft.)

Upon Year
Property Location Closing Completion Occupancy Built Major Retailers
----------------------------------------------------------------------------
Ontario -
Golden
Horseshoe

Scarborough (W) Eglinton 272,508 396,566 100% 2006 Wal-Mart
SmartCentre(2) Ave. E &
Warden
Ave.,
Toronto,
ON

Burlington (N) Dundas 129,760 163,381 100% 2004 Wal-Mart
SmartCentre(3) St. &
Appleby
Line,
Burling-
ton, ON

Ontario -
Other

Orleans Innes Rd. 370,738 382,934 100% 2005 Wal-Mart, Cana-
SmartCentre & Mer dian Tire(1),
Bleue Rd., Home Outfitters,
Ottawa, ON Future Shop

Quebec

Sherbrooke Autoroute 149,295 200,647 100% 2005 Wal-Mart, Cana-
SmartCentre 410 & dian Tire(1),
Autoroute Home Depot(1),
55, Mark's Work
Sherbrooke, Wearhouse
QC

British
Columbia -
Vancouver

Surrey (W) 88th Ave. 183,298 240,008 100% 2004 Wal-Mart
SmartCentre & 124 th
St.,
Surrey, BC

Saskatchewan

Saskatoon (S) Melville 276,894 338,014 100% 2007 Wal-Mart, Home
SmartCentre St. & Depot(1),
Clarence Mark's Work
Ave., Wearhouse
Saskatoon,
SK

--------------------

1,382,493 1,721,550

--------------------

(1) Site is owned by others and no rent is paid to vendor by it.
(2) Includes leasehold interest for 40% and freehold interest for 60% -
Calloway may prepay annual lease payments due over 49 years.
(3) Wal-Mart store - Calloway already owns the balance of the centre.

Contact Information

  • Calloway REIT
    Simon Nyilassy
    President and Chief Executive Officer
    (905) 326-6400 ext. 7649
    (905) 326-0783 (FAX)
    or
    Calloway REIT
    Bart Munn
    Chief Financial Officer
    (905) 326-6400 ext. 7631
    (905) 326-0783 (FAX)