MR.UN Melcor Real Estate Investment Trust

Melcor Real Estate Investment Trust (Melcor REIT - TSX: MR.UN) today announced the expiration of the “go shop” period provided in the previously-announced arrangement agreement dated November 24, 2024 (the “Arrangement Agreement”). Melcor REIT further announced that the REIT has completed the sale of Melcor Crossing in Grande Prairie, AB, which was listed for sale in March 2024. Melcor Crossing is a multi-building open retail power centre containing 283,000 square feet of gross leasable area developed on a 33.3-acre site. The property sold for $48.0 million ($170/sf), resulting in net cash proceeds of $16.3 million after closing costs, working capital adjustments and mortgage repayment. Cash proceeds will be used to pay down the backstop loan agreement, in accordance with its terms, with the remaining proceeds used to pay down the line of credit. A preliminary analysis prepared by the REIT indicates the sale could result in recapture of tax depreciation, resulting in additional taxable income to be allocated to unitholders. For an estimate of how this might impact taxable income, please refer to the REIT’s management information circular dated October 25, 2024 available on SEDAR+ at www.sedarplus.ca.

Go-Shop Expiry

The 90 day “go-shop” period (the “Go-Shop Period”) provided for in the previously announced Arrangement Agreement expired at 11:59 p.m. MT on February 24, 2025 with no superior proposal having been received.

Pursuant to the terms of the Arrangement Agreement, Melcor Developments Ltd. (“Melcor”) has committed to acquire its unowned equity interest (approximately 45%) in Melcor REIT Limited Partnership (“REIT LP”) for $5.50 per unit in cash consideration (the “REIT LP Sale”). Melcor’s unowned equity interest in REIT LP comprises all REIT LP’s outstanding Class A LP Units (approximately 13.0 million units). In accordance with the arrangement (the “Arrangement”), the REIT will use the proceeds from the REIT LP Sale to repurchase and cancel all of the REIT’s outstanding participating trust units (“Trust Units”). The Arrangement Agreement amends and restates the original arrangement agreement (the “Original Arrangement Agreement”) entered into among the REIT, Melcor and Melcor REIT GP Inc. on September 12, 2024.

Following the announcement of the Arrangement, and in accordance with the terms of the Arrangement Agreement, the REIT initiated a "go-shop" process with its financial advisor, BMO Capital Markets (“BMO”), by soliciting third-party interest in submitting an acquisition proposal that is superior to the Arrangement. The Go-Shop Period was in addition to the 30-day go-shop period that expired in October 2024 in connection with the Original Arrangement Agreement.

As the Go-Shop Period has ended, the "no-shop" provisions in the Arrangement Agreement are now in effect. These provisions limit the REIT and its representatives from initiating or engaging in discussions or negotiations regarding any alternative acquisition proposal, subject to customary “fiduciary out” provisions, pursuant to which, among other things, the REIT may, subject to certain requirements, engage with a person that submits a bona fide unsolicited Acquisition Proposal (as such term is defined in the Arrangement Agreement) which constitutes, or could reasonably be expected to constitute or lead to, a Superior Proposal (as such term is defined in the Arrangement Agreement) if consummated in accordance with its terms.

The Arrangement remains subject to the satisfaction of customary closing conditions, including obtaining the required approvals (“Unitholder Approval”) from the holders of Trust Units and special voting units of the REIT at the special meeting to consider the Arrangement, scheduled to be held on April 11, 2025 (the “Meeting”), and receiving court approval. It is anticipated that the Arrangement will be completed in the second quarter of 2025. The Management Information Circular (the “Circular”) and related materials for the Meeting will be available under the REIT’s profile on SEDAR+ at www.sedarplus.ca.

About Melcor REITMelcor 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 34 properties representing approximately 2.8 million square feet of gross leasable area located across Alberta and in Regina, Saskatchewan. For more information, please visit www.melcorREIT.ca.

Forward Looking Statements

This news release includes forward-looking information within the meaning of applicable Canadian securities laws. In some cases, forward-looking information can be identified by the use of words such as “may”, “will”, “should”, “expect”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “continue”, and by discussions of strategies that involve risks and uncertainties, certain of which are beyond Melcor's and the REIT’s control. In this news release, forward-looking information includes, among other things, statements relating to expectations with respect to the timing and outcome of the Arrangement and the anticipated benefits of the Arrangement to the parties and their respective security holders, the timing of the Meeting and the results thereof, the likelihood of receipt of a superior proposal, the use of proceeds from the sale of Melcor Crossing, and the tax implications of the Melcor Crossing sale, including recapture of tax depreciation and estimated taxable income allocated to unitholders. The forward-looking information is based on certain key expectations and assumptions made by each of Melcor and the REIT, including with respect to the structure of the Arrangement and all other statements that are not historical facts. The timing and completion of the Arrangement is subject to customary closing conditions, termination rights and other risks and uncertainties including, without limitation, required regulatory, court, and unitholder approvals. Although management of each of Melcor and the REIT believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that any transaction, including the Arrangement, will occur or that it will occur on the timetable or on the terms and conditions contemplated in this news release. The Arrangement could be modified, restructured or terminated. Readers are cautioned not to place undue reliance on forward-looking information. Additional information on these and other factors that could affect Melcor and the REIT are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR+ website (www.sedarplus.ca).

By its nature, such forward-looking information necessarily involves known and unknown risks and uncertainties that may cause actual results, performance, prospects and opportunities in future periods of Melcor and the REIT to differ materially from those expressed or implied by such forward-looking statements. Furthermore, the forward-looking statements contained in this news release are made as of the date of this news release and neither Melcor, nor the REIT nor any other person assumes responsibility for the accuracy and completeness of any forward-looking information, and no one has any obligation to update or revise any forward-looking information, whether as a result of new information, future events or such other factors which affect this information, except as required by law.

Contact Information:
Investor Relations
Tel: 1.780.945.4795
ir@melcorREIT.ca

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