Milestone Apartments REIT and MileSouth Apartment Portfolio LP Announce C$125 Million Bought Deal Equity Offering

TORONTO, ONTARIO and DALLAS, TEXAS--(Marketwired - May 14, 2015) -

NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR DISSEMINATION IN THE UNITED STATES

Milestone Apartments Real Estate Investment Trust (TSX:MST.UN) ("Milestone" or the "REIT") and MileSouth Apartment Portfolio LP ("MileSouth") today announced that they have reached an agreement with a syndicate of underwriters co-led by BMO Capital Markets and CIBC to sell an aggregate of 9,127,981 units of the REIT ("Units") comprised of 6,942,981 Units from treasury and 2,185,000 Units from MileSouth on a bought deal basis for gross proceeds of approximately C$125 million (the "Offering"). MileSouth has granted the Underwriters an option to purchase up to an additional 1,369,197 Units from MileSouth on the same terms and conditions, exercisable at any time, in whole or in part, up to 30 days after the closing of the Offering (the "Over-Allotment Option"). BMO Capital Markets is the sole bookrunner on the Offering.

It is expected that approximately C$60 million of the treasury proceeds from the Offering will be used by the REIT to repay amounts drawn under the REIT's credit facility which were used to partially fund previous acquisitions, for future acquisitions and for general trust purposes. The remaining treasury proceeds will be approximately C$35 million and are expected to be used by the REIT to redeem all of the class B limited partnership units of Milestone Multifamily Investors LP ("Class B Units") held by MileSouth. Following the redemption of Class B Units, MileSouth will hold no Class B Units. The proceeds from the secondary offering of approximately C$30 million will be paid to MileSouth. The REIT will not receive any proceeds from that portion of the Offering or the Over-Allotment Option.

Upon completion of the Offering, Milestone expects that MileSouth will own approximately 11.8 million Units, representing an approximate 17.9% ownership interest in the REIT, down from approximately 26.9%. If the Over-Allotment Option is exercised in full, Milestone expects that MileSouth will own approximately 10.4 million Units, representing an approximate 15.8% ownership interest in the REIT.

The Units will be offered in each of the provinces and territories of Canada pursuant to the REIT's base shelf prospectus dated August 27, 2014 as amended December 30, 2014. The terms of the Offering will be described in a prospectus supplement to be filed with Canadian securities regulators. The Offering is expected to close on or about May 26, 2015 and is subject to certain conditions including, but not limited to, the receipt of all regulatory approvals including the approval of the Toronto Stock Exchange (the "TSX") and securities regulatory authorities.

The Units have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, (the "1933 Act") and may not be offered, sold or delivered, directly or indirectly, in the United States, or to, or for the account or benefit of, "U.S. persons" (as defined in Regulation S under the 1933 Act), except pursuant to an exemption from the registration requirements of the 1933 Act. This press release does not constitute an offer to sell or a solicitation of an offer to buy any Units in the United States or to, or for the account or benefit of, U.S. persons.

About Milestone

Milestone is an unincorporated, open-ended real estate investment trust that is governed by the laws of Ontario. The REIT's portfolio consists of 60 multifamily garden-style residential properties, comprising 19,980 units that are located in 13 major metropolitan markets throughout the Southeast and Southwest United States. Milestone is the largest real estate investment trust listed on the TSX focused solely on the United States multifamily sector. The REIT operates its portfolio through its internal property management company, Milestone Management, LLC, which has more than 900 employees across the United States. Based in Dallas, TX, TMG Partners, L.P., an affiliate of The Milestone Group, LLC, is the external asset manager of the REIT. For more information, please visit www.milestonereit.com.

About The Milestone Group, LLC

The Milestone Group is a privately-held real estate investment management company with expertise and presence in major metropolitan markets throughout the United States. The firm has corporate offices in Dallas, Texas and New York, New York with regional acquisition and management offices across the United States. Founded in 2004, The Milestone Group has a strong track record of investing in the U.S. multifamily sector, including completion of more than US$4.5 billion in multifamily transactions. For more information, please visit www.milestonegp.com.

Forward-looking Information

This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to the business of the REIT and the environment in which it operates. Forward-looking statements are identified by words such as "believe", "anticipate", "expect", "intend", "plan", "will", "may" "estimate" and other similar expressions. These statements are based on the REIT's expectations, estimates, forecasts and projections and include, without limitation, statements regarding, the completion of the Offering, the proposed use of proceeds of the Offering and MileSouth's interest in the REIT upon completion of the Offering They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under the heading "Risk Factors" in the REIT's annual information form available at www.sedar.com. The forward-looking statements in this news release are based on certain assumptions including that the REIT will satisfy all conditions to completion of the Offering. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.