LANESBOROUGH REIT ANNOUNCES APPROVAL OF A PROPOSED TRANSACTION TO RESTRUCTURE ITS CONVERTIBLE DEBENTURES

WINNIPEG, MB, Feb. 11, 2022 /CNW/ - Lanesborough Real Estate Investment Trust ("LREIT") (TSXV: LRT.UN) today announces that the holders ("Debentureholders") of the outstanding 5.00% Series G redeemable subordinated secured debentures due June 30, 2022 (the "Debentures") voting at the special meeting of the Debentureholders held today approved an extraordinary resolution approving the exchange of the Debentures, and all the accrued or unpaid interest owing thereon from and including January 1, 2016 to but not including the closing date of the transaction, for trust units in the capital of LREIT (the "Trust Units") (collectively, the "Exchange Transaction").

The current terms of the Debentures are set forth in the first supplemental trust indenture between LREIT and CIBC Mellon Trust Company (the "Indenture Trustee") dated as of October 28, 2011, as amended by the second supplemental trust indenture between LREIT and the Indenture Trustee dated as of June 17, 2014, as amended by the third supplemental trust indenture between LREIT and the Indenture Trustee dated as of June 22, 2016 (collectively, the "Trust Indenture"), which replaced the original trust indenture between LREIT and the Indenture Trustee dated as of December 8, 2006. A copy of the Trust Indenture is posted for public access on LREIT's SEDAR profile at www.sedar.com.

LREIT will enter into a supplemental indenture to the Trust Indenture with the Indenture Trustee, to effect the Exchange Transaction.

The Exchange Transaction

Pursuant to the Exchange Transaction, the Debentures will be settled and all claims of the Debentureholders thereunder will be extinguished in exchange for Trust Units, including the payment, in the form of Trust Units, of the accrued and unpaid interest owing on the Debentures on the closing date of the Exchange Transaction on the basis of a deemed price of $0.05 per Trust Unit. The closing of the Exchange Transaction is expected to be on or about February 15, 2022. It is anticipated that the amount of principal and interest owing on the Debentures as at February 15, 2022 will be approximately $33,000,000.

Upon completion of the Exchange Transaction, the current Debentureholders, as of the date hereof, will hold approximately 96.98% of the issued and outstanding Trust Units. Accordingly, the Exchange Transaction will effectively transfer control of LREIT from the current holders of Trust Units to the Debentureholders.

Key Steps to the Exchange Transaction

LREIT has applied to the TSXV for approval of the listing of the Trust Units to be issued as a result of the Exchange Transaction. The listing is subject to LREIT satisfying all of the requirements of the TSXV. The Trust Units will continue to trade on the TSXV under the symbol "LRT.UN". LREIT will apply to have the Debentures delisted following the completion of the Exchange Transaction.

Further information about the Exchange Transaction is described in the information circular dated November 22, 2021 to Debentureholders with respect to the Exchange Transaction, as well as in other LREIT continuous disclosure filings available on SEDAR (www.sedar.com).

ABOUT LREIT

LREIT is a real estate investment trust, which is listed on the TSX Venture Exchange under the symbols LRT.UN (Trust Units) and LRT.DB.G (Series G Debentures). For further information on LREIT, please visit our website at www.lreit.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Certain statements contained in this press release are "forward-looking statements" that reflect the expectations of management regarding the Exchange Transaction. Readers are cautioned not to place undue reliance on forward-looking information. All statements other than statements of historical fact contained herein are forward-looking statements. Forward­ looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. Forward­ looking statements involve significant risks and uncertainties. A number of factors that could cause actual results to differ materially from the results discussed in forward-looking statements are discussed in LREIT's management discussion and analysis for the six-month period ended September 30, 2021 available on SEDAR at www.sedar.com. Although the forward-looking statements contained herein are based upon what management believes to be reasonable assumptions, LREIT cannot assure investors that actual results will be consistent with these forward-looking statements.

The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. Forward-looking statements are made as of the date hereof, or such other date specified in such statements, and neither LREIT nor any other person assumes any obligation to update or revise such forward-looking statements to reflect new information, events or circumstances, except as expressly required by applicable securities law.

SOURCE Lanesborough Real Estate Investment Trust