Melcor REIT Completes $34.5 Million Public Offering of Extendible Convertible Debentures

EDMONTON, ALBERTA–(Marketwired – Dec. 3, 2014) –

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

Melcor Real Estate Investment Trust (TSX:MR.UN) (the “REIT”) announced today the successful issue and sale (the “Offering”) of $34.5 million aggregate principal amount of 5.50% extendible convertible unsecured subordinated debentures (the “Debentures”) including $4.5 million aggregate principal amount of Debentures issued pursuant the exercise of an over-allotment option. The Offering was underwritten by a syndicate of underwriters (the “Underwriters”) co-led by RBC Capital Markets and CIBC, and included TD Securities Inc., Desjardins Securities Inc., National Bank Financial Inc., Scotia Capital Inc., Canaccord Genuity Corp., Laurentian Bank Securities Inc. and Raymond James Ltd. RBC Capital Markets and CIBC were the bookrunners on the transaction.

The Debentures will commence trading today on the Toronto Stock Exchange (“TSX”) under the symbol “MR.DB”.

As previously announced, the net proceeds of the Offering (after deducting the underwriting fee and estimated Offering expenses) will be used by the REIT to finance a portion of the cash component of the purchase price of a portfolio of six commercial properties representing approximately 738,080 square feet of gross leasable area from Melcor Developments Ltd. (the ” Acquisition”) and costs related to the Acquisition, to repay other indebtedness, to finance future acquisitions and for general trust purposes. The Melco Acquisition is expected to close on or about December 18, 2014 and is subject to minority unitholder approval at a unitholder meeting scheduled to be held on December 17, 2014, final TSX approval and satisfaction of customary closing conditions, including satisfactory due diligence and lender consents.The Acquisition is subject to certain conditions and there can be no assurance that the Acquisition will be completed on its terms or at all. The REIT continues to actively pursue acquisition and investment opportunities.

The maturity date of the Debentures will initially be the date (the “Initial Maturity Date”) upon which a Termination Event (as defined below) occurs and if the completion of the Acquisition occurs prior to the occurrence of a Termination Event, the maturity date of the Debentures will be automatically extended from the Initial Maturity Date to December 31, 2019 (the “Final Maturity Date”). In the event that the completion of the Acquisition does not occur prior to the occurrence of a Termination Event, the Debentures will mature on the Initial Maturity Date and the REIT will repay to holders the aggregate principal amount of outstanding Debentures, together with accrued and unpaid interest thereon. The term “Termination Event” means the earliest to occur of any of: (i) the completion of the Acquisition not occurring on or before 5:00 p.m. (MST) on January 15, 2015; (ii) the REIT delivering to the co-lead Underwriters a written notice declaring that the Acquisition agreement has been terminated or that the REIT will not be proceeding with the Acquisition; or (iii) the REIT formally announcing to the public by way of a press release that it does not intend to proceed with the Acquisition.

About Melcor REIT

Melcor REIT is an unincorporated, open-ended real estate investment trust. Melcor REIT owns, acquires, manages and leases quality retail, office and industrial income-generating properties with exposure to high growth Canadian markets. Its portfolio is currently made up of interests in 32 properties representing approximately 1.84 million square feet of gross leasable area located across Alberta and in Regina, Saskatchewan and Kelowna, British Columbia. For more information, please visit www.melcorREIT.ca.

Forward-Looking Statements

This press release contains “forward-looking information” as defined under applicable Canadian securities law (“forward-looking information” or “forward-looking statements”) which reflect management’s expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the REIT. Statements other than statements of historical fact contained in this press release may be forward-looking information. 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 Acquisition and the expected terms and closing dates thereof; the REIT’s intended use of proceeds of the Offering; the REIT’s pursuit of acquisition and investment opportunities; and expectations, projections or other characterizations of future events or circumstances and the future economic performance of the REIT. The REIT has based these forward-looking statements on its current expectations and assumptions about future events, which may prove to be incorrect.

When relying on forward looking statements to make decisions, readers are cautioned not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results and do not take into account the effect of transactions or other items announced or occurring after the statements are made. All forward-looking information in this press release speaks as of the date of this press release. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements. The REIT does not undertake any obligation to update any such forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable law.