InterRent Real Estate Investment Trust
TSX : IIP.UN

InterRent Real Estate Investment Trust

July 28, 2009 10:10 ET

InterRent REIT Announces Proposed $8 Million to $14 Million Financing, Property Management Agreement and Proposed Trustee Changes

TORONTO, ONTARIO--(Marketwire - July 28, 2009) - InterRent Real Estate Investment Trust (TSX:IIP.UN) ("InterRent") is pleased to announce that it has agreed to complete a best-efforts, non-brokered private placement (the "Offering") of a minimum of 5,333,333 trust units of InterRent (the "Units") and a maximum of 9,333,333 Units, at a price of $1.50 per Unit, to institutional and high net worth investors. No current insiders of InterRent are participating in the Offering and no new insiders will be created as a result of the Offering; and, it is not expected that the Offering will materially affect the control of InterRent.

Subject to the receipt of all regulatory approvals, InterRent expects that the minimum offering of at least 5,333,333 Units will be completed on or before July 30, 2009 (the "Initial Closing"). Additional Units, which may be sold as part of the maximum offering, will be issued in one or more additional tranches on a best efforts basis, on or prior to September 4, 2009. InterRent currently has 19,041,141 units issued and outstanding, and accordingly, the minimum offering represents approximately 28.0% of such units and the maximum offering represents approximately 38.3% of such units. The Units are subject to a hold period and may not be sold, transferred or otherwise traded for four months and one day from the relevant closing date. InterRent intends to use the net proceeds of the Offering for working capital purposes. Although CLV Group Inc. ("CLV Group") is not participating in the Offering, its principal, Mike McGahan, intends to subscribe for approximately $700,000 of Units, representing less than 9% of the minimum offering and 5% of the maximum offering.

Concurrent with the Initial Closing, InterRent intends to enter into a property management agreement (the "Management Agreement") with CLV Group. The Management Agreement, which is subject to finalization, will have an initial term of one year, will be on industry standard terms and will only be amended with the prior approval of InterRent's independent trustees. CLV Group is one of the largest and most experienced private property management firms in Ottawa and already manages all of InterRent's 14 properties in the Ottawa region (representing approximately 17.5% of InterRent's 81 properties).

It is expected that, following closing of the Offering, InterRent will set a new record date and meeting date for its annual and special meeting of unitholders (the "Meeting"), to be held prior to September 30, 2009. Accordingly, each of the investors acquiring Units pursuant to the Offering will be entitled to vote at the Meeting.

InterRent is also pleased to announce a proposed new slate of trustees to be nominated for election at the Meeting. The proposed nominees for election as trustees are: Mike McGahan, Jacie Levinson, Dave Nicholds, Paul Bouzanis, Michael Newman, Maurice Kagan and Victor Stone. Mr. McGahan is the CEO, sole director and shareholder of CLV Group, while Mr. Newman is currently the CEO and an existing trustee of InterRent. Each of the other nominees is independent of each of InterRent and CLV Group. Each of the proposed nominees offers many years of experience and background in the multi-residential industry.

It is expected that each of InterRent's trustees and officers, who collectively hold 9.8% of InterRent's currently outstanding units (which will represent 7.6% of the outstanding units after giving effect to the minimum offering and 6.5% of the outstanding units after giving effect to the maximum offering), will enter into voting support agreements pursuant to which they will each agree to vote for the aforementioned nominees at the Meeting and for management's nominees for the next 36 months. It is also currently expected that some or all of such trustees and officers will provide a right of first refusal to CLV Group in respect of their Units.

These transactions are the product of InterRent's process to maximize unitholder value originally announced on March 11, 2009. The special committee of InterRent considered various proposals and the board of trustees of InterRent concluded that a significant financing on attractive terms, combined with changes to the existing board of trustees and the introduction of a proven, experienced management group for InterRent's entire property portfolio was the best alternative to position the business for profitable growth in the future.

The Offering and the transactions described herein are subject to the receipt of all regulatory approvals, including that of the Toronto Stock Exchange. There can be no assurance that the Offering and the transactions described herein will be completed on the terms described herein, or at all. InterRent will provide a further, detailed press release following the Initial Closing.

About InterRent

InterRent is a rapidly expanding, growth oriented real estate investment trust engaged in building unitholder value through the accretive acquisition, ownership and operation of strategically located income producing multi-residential real estate, with 4,033 apartment suites under ownership.

Forward Looking Statements

This news release contains "forward-looking statements" within the meaning applicable Canadian securities legislation. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "anticipated", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". This news release includes forward looking statements with respect to the proposed Offering, the proposed Management Agreement and the proposed new slate of trustees. In addition to the risks that the Offering may not close on the terms disclosed in this news release, or at all, the Management Agreement may not be finalized, and the new slate of trustees may not be elected at InterRent's upcoming unitholders' meeting. In addition, InterRent is subject to significant risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements contained in this news release. A full description of these risk factors can be found in InterRent's publicly filed information which may be located at www.sedar.com. InterRent cannot assure investors that actual results will be consistent with these forward looking statements and InterRent assumes no obligation to update or revise the forward looking statements contained in this news release to reflect actual events or new circumstances, except as required by applicable law.

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