Partners REIT Issues Letter to Unitholders and Files Management Information Circular

BARRIE, ONTARIO--(Marketwired - June 19, 2014) - Partners Real Estate Investment Trust (the "REIT" or "Partners") (TSX:PAR.UN) announced today that it has filed and mailed to unitholders its Management Information Circular in relation to the Annual and Special Meeting to be held on July 15, 2014.

Partners' Board of Trustees has also issued a Letter to Unitholders, where it highlights the progress made towards stabilizing the REIT and renewing the Board with highly qualified and independent Trustees. It also explains how unitholder support of Partners' Trustees is now more important than ever, in light of the opportunistic New York-based hedge fund Orange Capital, LLC's ("Orange Capital", the "Dissident") ongoing attempts to coerce unitholders into ceding control of their REIT without receiving a full and fair premium in exchange for their units, voting rights and control.

Management and the Board of Trustees recommends that unitholders NOT tender to the Dissident's offer and to vote your YELLOW proxy FOR the REIT'S nominees.

If a unitholder has tendered to Orange Capital's offer, they can withdraw the units prior to the take up of the units by Orange Capital. If you have already submitted a proxy solicited by the Dissident, you may still change your vote by submitting a vote in favour of management of the REIT using Partners' YELLOW proxy - THE LATEST DATED PROXY IS THE PROXY THAT WILL BE COUNTED AT THE MEETING. For more information, contact Laurel Hill Advisory Group at 1-877-452-7184 or assistance@laurelhill.com.

The full version of the Letter to Unitholders follows:

June 16, 2014

Dear Unitholders:

Your vote at this year's Annual and Special Meeting is more important than ever. After a challenging few years under a previous management team and a substantially different Board of Trustees, Partners REIT is focused on achieving a clear set of goals. These are to:

• Stabilize the REIT's corporate governance, leadership and ownership structure,
  
  
• Complete the search for a new CEO, and
  
  
• Complete our active and ongoing review of strategic alternatives, which currently involves discussions with a number of interested parties and could result in some form of transaction, including a potential sale of the REIT, a merger, an equity investment by a third party, a recapitalization, or some form of asset sale or purchase vend-in transaction(s).
  
  

The current Trustees are either newly appointed or have been on the board for less than seven months. This group has taken decisive action to protect and enhance unitholder value by strengthening the Board, initiating a search for a new CEO, engaging independent financial advisors to explore strategic alternatives, and securing an agreement to unwind a controversial transaction - all while continuing to oversee the diligent management of Partners' strong asset portfolio.

Partners REIT is putting forward a renewed slate of Trustees comprised of highly qualified and independent individuals, plus our Acting CEO Jane Domenico who, though not independent because of her executive role, brings over 20 years of real estate expertise and deep knowledge of our asset base to the table. Jane has brought considerable experience and stability to the REIT as Acting Chief Executive Officer and will bring a valuable perspective to the Board.

Our other four nominees have all joined the Board within the past seven months and are best positioned to represent the interests of all unitholders. Marc Charlebois and I are the longest-serving Trustees. We have come to know the REIT's people, its assets, and the path forward. Marc and I have also worked tirelessly - and successfully - to secure an agreement to reverse a property transaction (the Holyrood transaction that the REIT entered into shortly after we joined the Board, as discussed more fully in the "Reasons To Vote For Partners REIT's Trustees" section of the Management Information Circular).

Stephen Dulmage and Dexter John are two outstanding recent additions to the Board. Mr. Dulmage, a chartered accountant, is an expert in financial matters, having been CFO at RBC Dominion Securities for many years, and brings a unitholder's perspective to the Board. Mr. John is a lawyer and an expert on governance matters. Both are independent of Partners and Orange Capital.

What the REIT needs now is stability. The current set of Trustees, with the help of National Bank Financial, has embarked on a strategic review process to consider all value-maximizing alternatives available to the REIT and all of its unitholders. The REIT has received multiple written non-binding expressions of interest in pursuing a transaction with the REIT. National Bank Financial believes that should the strategic review be allowed to continue to completion and without significant changes to the current circumstances, that a value enhancing transaction could be available to the REIT that would benefit all unitholders. Orange Capital's plan derails this process.

Vote Only Your YELLOW Proxy FOR Partners' Trustees

Voting the Yellow proxy FOR Partners' Trustees is the most important thing you can do to give Partners the stability it needs to realize the full value of your investment.

We are also asking unitholders NOT to tender to Orange Capital's coercive offer to buy 10% of the units at $5.00 per unit. As discussed more fully in the following pages, unitholders have greater certainty of receiving liquidity and value for their units by selling in the open market than by tendering to Orange Capital's offer. That is because Orange Capital will pro-rate any shares over 10% that may be tendered, but will keep your voting rights, unless you take further action to retrieve them, whether you get paid or not.

The Opportunist - Hedge Fund Orange Capital, LLC

But that's not the most shocking part. This is: Orange Capital is a New York-based hedge fund with approximately $1.2 billion in assets under management, but an ownership stake in your REIT of only 1,000 units, or approximately $5,000 - yes, $5,000! This quite likely makes Orange Capital one of our smallest unitholders, and yet they are purporting to run a slate of nominees to replace the entire Board.

If that strikes you as unfair and likely not in your interests, we agree.

The advance notice provisions in the REIT's Declaration of Trust require anyone seeking to nominate candidates for election to the REIT's Board of Trustees to follow certain simple rules, such as meeting certain notice deadlines and requirements. These rules are commonplace among Canadian publicly-listed companies, and have been plainly disclosed in our proxy materials for well over a year. For whatever reason Orange Capital has not complied with your REIT's advance notice requirements, yet they have gone ahead and mailed a Dissident Proxy Circular purporting to nominate a slate of Trustees for election at the July 15 Annual and Special Meeting.

Our view is that they are not permitted to take this action and we will be seeking to enforce our rights to prevent Orange from waging this costly and distracting proxy campaign.

Knowing what you know about Orange so far, the question has to be: Whose interest do you suppose Orange Capital represents? I urge you to consider the details on page 4 of the proxy circular, titled "Orange Capital's Engagement With Partners REIT." It outlines very clearly that Orange Capital has consistently and aggressively worked to serve its own interests, not yours. This is just one reason why your Board continues to recommend that you DO NOT tender to Orange Capital's latest partial offer and that you THROW AWAY any purported proxy materials they may send you.

Your Trustees Are Moving The REIT Forward

The current Trustees are working to stabilize the REIT and committed to unlocking its value for the benefit of all unitholders. We respectfully recommend that you vote FOR the REIT nominated Trustees on the YELLOW form of proxy and that you THROW OUT the proxy asking you to vote for the Orange dissident slate of trustees.

It's time to turn the page on the challenges of the past but we need your support on the YELLOW proxy in order to deliver a brighter future.

On behalf of the Board of Trustees, I thank you in advance for your support and I hope to see you at the Meeting.

Sincerely,

Joseph Feldman

Chair of the Board of Trustees

Partners Real Estate Investment Trust

About Partners REIT

Partners REIT is a growth-oriented real estate investment trust, which currently owns (directly or indirectly) 42 retail properties, well located in British Columbia, Alberta, Manitoba, Ontario, and Quebec, aggregating approximately 3.2 million square feet of leasable space. Partners REIT focuses on expanding and managing a portfolio of retail and mixed-use community and neighbourhood shopping centres located in both primary and secondary markets across Canada.

Disclaimer

Certain statements included in this press release constitute forward-looking statements. 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.