Northern Property Real Estate Investment Trust

Northern Property Real Estate Investment Trust

November 29, 2010 18:47 ET

Northern Property Real Estate Investment Trust Receives Final Court Approval for Plan of Arrangement

CALGARY, ALBERTA--(Marketwire - Nov. 29, 2010) - Northern Property Real Estate Investment Trust ("NPR") (TSX:NPR.UN) today obtained the final court approval from the Alberta Court of Queen's Bench for NPR's previously announced proposed Plan of Arrangement (the "Arrangement"). Under the Arrangement, NPR will undergo an internal reorganization (the "Reorganization") to ensure it meets the definition of a Real Estate Investment Trust ("REIT"), as defined in the Income Tax Act (Canada).

NPR held a special meeting of unitholders on Thursday, November 25, 2010 (the "Special Meeting") to consider, among other things, the Arrangement. At the Special Meeting, 99.62% of holders of NPR units and Northern Property Limited Partnership B Units ("B Units") who were present in person or by proxy at the Special Meeting voted in favour of the Arrangement.

The Reorganization will result in the creation of a stapled unit structure to be held by current NPR unitholders and holders of B Units. A new taxpaying Alberta corporation, to be known as NorSerCo Inc. ("NorSerCo"), will be created which will hold those business assets of NPR which produce revenues that do not meet the REIT criteria under the Income Tax Act (Canada) ("Non‐Qualifying Revenue"). NPR's principal assets which produce Non‐Qualifying Revenue are the day‐to‐day business operations associated with NPR's four ExecuSuite properties. The Reorganization contemplates that NorSerCo will acquire these ExecuSuite operations and will make monthly lease payments to NPR for the use of the ExecuSuite properties, which are proposed to be retained by NPR. The removal of the Non‐Qualifying Revenue associated with the ExecuSuite operations is expected to assist in preserving NPR's REIT status. NPR currently pays annual distributions of $1.53 per unit ($0.1275 monthly).

NPR expects to complete the Arrangement on or about December 31, 2010. Upon completion of the Reorganization, each unit of NPR will trade together with one common share of NorSerCo as a stapled unit (each, a "Stapled Unit") under the trading symbol "NPR.UN". NPR has received conditional listing approval from the TSX to list the Stapled Units. Upon satisfaction of the TSX listing conditions, the Stapled Units will be listed and posted for trading on the TSX.

Assuming completion of the Reorganization, it is intended that holders of Stapled Units will receive distributions from NPR and dividends from NorSerCo which together will be equal to NPR's current annual distributions per unit.


NPR is a real estate investment trust specializing primarily in residential rental properties. It is the largest residential landlord in the Northwest Territories, Nunavut and Newfoundland and Labrador and has an increasing presence in key growth markets in northern Alberta and British Columbia.


Certain information in this news release may contain forward‐looking information or statements within the meaning of applicable securities laws including, among others, statements relating to: the objectives of, and management's intentions with respect to, the Reorganization; completion of the Reorganization; NPR's and NorSerCo's intended distributions; and the tax consequences to NPR, NorSerCo and unitholders resulting from the Reorganization. Such forward‐looking information and statements reflect NPR's current beliefs and are based on information currently available to senior management. Forward‐looking information and statements are provided for the purpose of presenting information about senior management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. These statements are not guarantees of future performance and are based on NPR's estimates and assumptions that are subject to risks and uncertainties, including those described under "Risk Factors" in the management information circular for the Special Meeting, in NPR's annual information form and those discussed in NPR's materials filed with the Canadian securities regulatory authorities from time to time, which could cause the actual results and performance of NPR to differ materially from the forward‐ looking statements contained in this news release. Those risks and uncertainties include, among other things, risks related to: the tax position and consequences unique to each unitholder; the failure to obtain all approvals required to implement the Reorganization; NPR unit prices; availability of cash for distributions; credit risk and tenant concentration; interest rate and other debt related risks; tax risk; ability to access capital markets; dilution; lease rollover risk; construction risks; real property ownership; currency risk; government regulation; investment eligibility; unitholder liability; co‐ownership interest in properties; dependence on key personnel; mezzanine financing credit risk; competition for real property investments; potential conflicts of interest; redemption right; and statutory remedies. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward‐looking information and statements include that: the Income Tax Act (Canada), the regulations thereunder, all specific proposals to amend such Act or regulations publicly announced by or on behalf of the Minister of Finance (Canada) and the current published administrative policies and assessing practices of the CRA do not materially change; the general economy remains stable; interest rates are relatively stable; and equity and debt markets continue to provide access to capital. NPR cautions that this list of factors is not exhaustive. Although the forward‐looking information and statements contained in the Circular are based upon what NPR believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward‐looking statements. All forward‐looking information and statements in this news release are qualified by these cautionary statements. The forward‐looking information and statements are made only as of the date that such statements are made and NPR assumes no obligation to update or revise them to reflect new information or the occurrence of future events or circumstances, except as required by applicable law.

Contact Information

  • Northern Property Real Estate Investment Trust
    Mr. Todd Cook
    Chief Financial Officer
    (403) 531-0720