Slate Retail REIT Announces C$40 Million Bought Deal Equity Offering, C$10 Million Private Placement and US$201 Million Acquisition of Slate U.S. Opportunity (No. 3) Realty Trust

TORONTO, ONTARIO--(Marketwired - Feb. 25, 2015) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES

Slate Retail REIT (the "REIT") (TSX:SRT.UN)(TSX:SRT.U) announced today that it has entered into an agreement to sell to a syndicate of underwriters led by joint-bookrunners CIBC and GMP Securities (the "Underwriters"), on a bought deal basis, 3,077,000 class U trust units of the REIT (the "Units") at a price of C$13.00 per Unit or US$10.47 per Unit (the "Offering Price") for gross proceeds of approximately C$40 million (the "Public Offering"). The REIT has also granted the Underwriters an overallotment option to purchase up to an additional 461,550 Units on the same terms and conditions, exercisable at any time, in whole or in part, up to 30 days after the closing of the Public Offering (the "Over-Allotment Option").

Concurrently with the Public Offering, certain investors will acquire 769,230 Units at the Offering Price for gross proceeds of C$10 million (the "Private Placement"). Slate Asset Management LP, the manager of the REIT (the "Manager"), will subscribe for C$5 million of the Private Placement representing 10% of the gross proceeds of the Public Offering and Private Placement.

Proceeds of the Public Offering and Private Placement will be used to repay amounts drawn under the REIT's credit facilities which were used to partially fund previous acquisitions, for future acquisitions and for general trust purposes.

In addition, the REIT and Slate U.S. Opportunity (No. 3) Realty Trust ("SUSO 3") announced today that they have entered into an agreement for the REIT to acquire SUSO 3's assets in a US$195 million transaction (7.3% cap rate and US$130 per square foot). The REIT will issue Units to SUSO 3 at the Offering Price as consideration for the acquisition. In connection with closing the acquisition, SUSO 3 will also make a special distribution of its remaining cash balance, estimated to be approximately US$6 million to current investors, for total proceeds to current SUSO 3 investors of $201 million less debt. The proposed acquisition of SUSO 3 by the REIT is supported by the board of trustees of the REIT and SUSO 3 and both have formed independent committees to review it on behalf of the unitholders.

The deal is accretive to the REIT's AFFO per unit and provides SUSO 3 holders with a total return in excess of 20%, varying depending on the currency of their original investment.

Thomas Farley, Chairman of the REIT and the REIT's special committee for the SUSO 3 transaction said, "We are pleased to announce the proposed transaction as it demonstrates the REIT's ability to grow accretively via strategic acquisitions. The SUSO 3 acquisition increases the REIT's size to over US$900 million and is accretive to AFFO per unit. Along with the SUSO 3 acquisition, the public equity raise and private placement will provide the REIT with additional capital to continue executing on its business plan."

Peter Tesché, Chairman of SUSO 3's special committee added, "The proposed transaction is positive for SUSO 3 unitholders. The deal provides holders with liquidity through ownership in a listed REIT and a special cash distribution, a tax efficient equity rollover, monthly distributions, an investment into a larger more diversified portfolio and an attractive return on their original investment. The deal is also consistent with SUSO 3's disclosed strategy."

Impact of the Acquisition on the REIT's Portfolio

The acquisition will increase the scale of the REIT's property portfolio, while further diversifying its tenant base and extending its weighted average lease term:

	Current		SUSO3		Pro Forma
Number of Properties	43		13		56
% of Properties Grocery Anchored	100	%	100	%	100	%
GLA	5,112,023		1,512,482		6,624,505
Occupancy	95.9	%	93.9	%	95.5	%
Weighted Average Lease Term	5.5		6.5		5.7

Since the REIT's formation in April 2014, the REIT has acquired 14 grocery anchored shopping centres, for US$196 million representing 1.6 million square feet of GLA at an average price per square foot of US$125. If the proposed acquisition of SUSO 3 is completed, the REIT's portfolio will grow to 56 properties with 6.6 million square feet of GLA. Following closing of the acquisition, the REIT will have a debt-to-GBV of approximately 53.5% and total assets exceeding US$900 million.

SUSO 3 Acquisition

SUSO 3 consists of 13 grocery anchored shopping centres with 1.5 million square feet of GLA. The portfolio is 93.9% occupied and has a weighted average lease term of 6.5 years.

As described above, the REIT will issue Units to SUSO 3 at the Offering Price as consideration for its acquisition of SUSO 3's assets. In connection with closing the acquisition, SUSO 3 will distribute such REIT Units to SUSO 3's unitholders in a "qualifying exchange" for income tax purposes and will make a special distribution of SUSO 3's remaining cash balance. The number of Units to be received by each unitholder of SUSO 3 and the special distribution per unit will vary depending on the class of SUSO 3 unit held.

The proposed acquisition of SUSO 3 by the REIT is supported by the board of trustees of each of the REIT and SUSO 3 and both have formed independent committees to review it on behalf of their unitholders. Completion of the transaction is subject to the completion of due diligence on behalf of such committees (including receipt by the REIT of a formal valuation in respect of SUSO 3), approval of the unitholders of each of the REIT and SUSO 3 in accordance with Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions and the rules of the Toronto Stock Exchange, approval of the Toronto Stock Exchange, and other customary closing conditions. Upon completion of the aforementioned due diligence, circulars will be sent to REIT unitholders and SUSO 3 unitholders with further details on the transaction and will be followed by unitholder votes of both parties. Subject to satisfaction of the conditions to closing, it is anticipated that the transaction will be completed in the second quarter of 2015.

The Manager will not earn an acquisition fee on the transaction. The Manager supports the acquisition as an investor in both entities but as an interested party is not eligible to vote its units. Post the Public Offering, Private Placement and acquisition of SUSO 3, the manager will own 6.2% of the REIT.

The Public Offering and Private Placement

The Units issued in the Public Offering will be offered by way of a short form prospectus to be filed with the securities commissions and other similar regulatory authorities in each of the provinces and territories of Canada. The Public Offering and Private Placement are 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, as applicable and are not contingent on the closing of the acquisition of SUSO 3.

The Units issued in the Public Offering and the Private Placement 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 Slate Retail REIT

Slate Retail REIT is an open-ended real estate investment trust focused on U.S. grocery-anchored real estate. The REIT's portfolio includes 43 properties located primarily across the top 50 U.S. metro markets. The REIT is focused on maximizing value through internal organic rental growth and strategic acquisitions. For more information, please visit www.slateretailreit.com.

About Slate U.S. Opportunity (No. 3) Realty Trust

Slate U.S. Opportunity (No. 3) Realty was established for the primary purpose of indirectly acquiring, owning and leasing a portfolio of diversified revenue-producing commercial real estate properties in the U.S. with a focus on anchored retail properties. SUSO 3 indirectly owns a portfolio of 13 properties.

About Slate Asset Management

Slate Asset Management LP is a leading real estate investment platform with over $2.3 billion in assets under management. Slate is a value-oriented company and a significant sponsor of all its private and publicly-traded investment vehicles, which are tailored to the unique goals and objectives of its investors. The firm's careful and selective investment approach creates long term value with an emphasis on capital preservation and outsized returns. Slate is supported by exceptional people, flexible capital and a proven ability to originate and execute on a wide range of compelling investment opportunities. More information is available at www.slateam.com.

Cautionary Statements Regarding Forward-Looking Statements

This press release contains forward-looking statements with respect to the REIT and SUSO 3 and their respective operations, strategy, financial performance and financial condition, as well as with respect to the Public Offering, the Private Placement and the SUSO 3 Acquisition. These statements generally can be identified by the use of forward-looking words such as "forecast", "may", "will", "would", "expect", "estimate", "anticipate", "intend", "believe" or "continue" or the negative thereof or similar variations. Some of the specific forward-looking statements in this press release include, but are not limited to, statements with respect to the closing of the transactions contemplated herein and the effect of the transactions contemplated herein on the financial performance of the REIT or SUSO 3. The actual results of the transactions and the performance of the REIT or SUSO 3 discussed herein could differ materially from those expressed or implied by such statements. Accordingly, readers should not place undue reliance on forward-looking statements. These cautionary statements qualify all forward-looking statements attributable to the REIT or SUSO 3 and persons acting on its behalf. See the risk factors in the public filings of the REIT or SUSO 3, as applicable. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, the failure to receive any required approvals or consents in connection with the SUSO 3 Acquisition, the failure to realize expected benefits from the SUSO 3 Acquisition, the failure of the REIT to satisfy the conditions of the Public Offering or Private Placement or otherwise close the Public Offering or Private Placement and changes in securities or other laws or regulations or the application thereof. The cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf. The assumptions made in making forward-looking statements are referred to in the public filings of the REIT or SUSO 3, as applicable. The assumptions made in making forward-looking statements in this press release also include the assumption that the REIT or SUSO 3, as applicable, will be in a position to satisfy the conditions in respect of the SUSO 3 Acquisition, the Public Offering and the Private Placement and complete those transactions.

Unless otherwise stated, all forward-looking statements speak only as of the date of this press release. Except as required by applicable law, the REIT and SUSO 3 specifically disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. Additional information about these assumptions and risks and uncertainties is contained in the filings of the REIT or SUSO 3, as applicable with securities regulators, including its latest financial statements and management information circular, copies of which may be obtained on the SEDAR website at www.sedar.com.