Partners Announces Refinancing of Five Properties and Debt Repayments

BARRIE, ONTARIO--(Marketwired - Nov. 3, 2014) - Partners Real Estate Investment Trust ("Partners," or "the REIT") (TSX:PAR.UN) is pleased to announce the refinancing of five properties. This refinancing will both provide Partners with the capital necessary to fund property improvements and allow for better visibility regarding the REIT's future interest costs.

The refinancing consists of first mortgages that will amount to an aggregate of $51 million on the following properties:

• Manning Crossing, Edmonton Alberta;
• King George Square, Brantford, Ontario;
• Centre le Village, Montreal, Quebec;
• Centuria Urban Village, Kelowna, British Columbia; and
• Crossing Bridge, Stittsville, Ontario

The first mortgages carry an average weighted interest rate of 3.73% and an average term to maturity of 6.9 years. Of this amount, $47 million will be used to repay both the $35 million outstanding on the REIT's $40 million credit facility and $12 million will repay other mortgages. The balance of $4 million will be allocated to projects with an anticipated high return on the investment while improving the quality of the REIT's existing property portfolio.

The refinancing also includes a $10 million line of credit that will be secured by second mortgages on a number of the refinanced properties and will bear interest at a rate of prime plus 2.0% and has a term of two years. The REIT does not anticipate requiring significant use of this line of credit within the near future.

On November 3, 2014, the REIT closed on two of the first mortgages for gross loan proceeds of $22 million, with the balance of $39 million in refinancings expected to close later in November.

The REIT is also pleased to announce that it has fully repaid its $15 million loan outstanding with Firm Capital. This loan, which was first announced on April 30, 2014, carried a 10.0% interest rate at the time of its repayment. The repayment utilized proceeds from the REIT's sale of three properties to CT REIT, a transaction fully detailed in the REIT's press release disseminated on September 26, 2014.

All of the refinancings announced today have been originated by First National LP, a wholly owned subsidiary of First National Financial (TSX:FN)(TSX:FN.PR.A). Upon completion of all of the refinancings, First National LP and its institutional partners are expected to collect an aggregate fee of $240,000, and First National LP will also collect fees for servicing certain of the new mortgages. Upon closing all of these refinancings, First National LP, which has originated mortgages previously for the REIT, will have provided mortgage financing for the REIT's current properties in the total amount of $116 million. Moray Tawse, a significant unitholder of the REIT, has an interest in First National Financial LP.

"These steps will serve to further improve Partners' financial position," stated Jane Domenico, the REIT's acting Chief Executive Officer. "In addition to both reducing our interest costs and improving our future visibility of these costs, these transactions will provide us with the capital necessary to reinvest in those portions of our portfolio that present the greatest potential returns. We appreciate the past support of Firm Capital, our credit facility syndicate, and we are excited to be working with First National, our lender in this important refinancing."

About Partners REIT

Partners REIT is a growth-oriented real estate investment trust focused on the expansion and management of a portfolio of 36 retail and mixed-use community and neighbourhood shopping centres. These properties are located in both primary and secondary markets across British Columbia, Alberta, Manitoba, Ontario, and Quebec, and comprise a total of approximately 2.5 million square feet of leasable space.

Disclaimer

Certain statements included in this press release constitute forward-looking statements, including, but not limited to, those identified by the expressions "expect", "will" and similar expressions to the extent they relate to Partners REIT. The forward-looking statements are not historical facts but reflect Partners REIT's current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Although Partners REIT believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein.