MELCOR REIT COMPLETES $46 MILLION CONVERTIBLE DEBENTURE PUBLIC OFFERING

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 $46.0 million aggregate principal amount of 5.10% convertible unsecured subordinated debentures (the “Debentures”), including gross proceeds of $6.0 million from the exercise of the over-allotment option in full. The Offering was underwritten by a syndicate of underwriters (the “Underwriters”) led by CIBC Capital Markets, and included RBC Capital Markets, BMO Nesbitt Burns Inc., Desjardins Securities Inc., National Bank Financial Inc., Scotia Capital Inc., TD Securities Inc. and Canaccord Genuity Corp. CIBC Capital Markets was the bookrunner on the transaction. The Debentures will commence trading today on the Toronto Stock Exchange (“TSX”) under the symbol “MR.DB.B”.

The Debentures bear an interest rate of 5.10% per annum, payable semi-annually in arrears on June 30 and December 31 in each year commencing December 31, 2019. The Debentures will be convertible at the option of the holder into Units at a conversion rate of 112.3596 Units per $1,000 principal amount of Debentures, which is equal to a conversion price of $8.90 per Unit. The maturity date for the Debentures is December 31, 2024.

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 partially satisfy the purchase price of a multi-building open retail power centre containing 283,235 square feet of gross leasable area (“GLA”) developed on a 33.3-acre site located in Grande Prairie, Alberta (the “Acquisition”) and related transaction costs. The balance of the purchase price for the Acquisition will be funded by a combination of proceeds of the Concurrent Private Placement and a draw on the REIT’s revolving credit facility. Following the closing of the Acquisition, the REIT intends to obtain approximately $35.6 million of new mortgage financing (the “Post-Acquisition Mortgage Financing”) in respect of the Acquisition property.

Also as previously announced, In connection with the Acquisition, Melcor REIT Limited Partnership (the “Partnership”) will issue to Melcor Developments Ltd. (“Melcor”), on a private placement basis, Class B LP Units for an aggregate subscription price equal to $10 million (the “Concurrent Private Placement”). Each such Class B LP Unit will have an issue price equal to a 1.5% premium to the 5-day VWAP of the trust units of the REIT on the TSX as at the end of trading on the trading day immediately prior to closing of the Acquisition.  The completion of the Concurrent Private Placement is conditional upon the successful completion of the Acquisition.

Also as previously announced, the REIT intends to redeem in full (the “Redemption”) its series 5.50% coupon $34.5 million aggregate principal amount convertible debentures currently outstanding and scheduled to mature on December 31, 2019 (the “2014 Debentures”). The REIT intends to provide a formal notice of redemption to holders of the 2014 Debentures following the Closing of the Acquisition and the funding of the Post-Acquisition Mortgage Financing.  The Redemption will be funded by the net proceeds received from the Post-Acquisition Mortgage Financing.

The Acquisition is expected to close on or about November 12, 2019 and is subject to the satisfaction of customary closing conditions. The Acquisition is subject to certain conditions and there can be no assurance as to when the Acquisition will close or that the Acquisition will be completed on its terms or at all. The REIT continues to actively pursue acquisition and investment opportunities in the ordinary course.

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 in western Canada. Its portfolio is currently made up of interests in 38 properties representing approximately 2.93 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 issuance of Class B LP Units to Melcor, the Post-Acquisition Mortgage Financing and the expected terms and closing dates thereof, 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.

Contact Information:

Investor Relations
Nicole Forsythe
Director, Corporate Communications
Tel: 1.855.673.6931
ir@melcorREIT.ca