Crombie REIT Announces $161.6 Million Portfolio Disposition

NEW GLASGOW, NS, April 11, 2019 /CNW/ - Crombie Real Estate Investment Trust ("Crombie") (TSX: CRR.UN) announces today that it has entered into an agreement of purchase and sale to sell an 89% non-managing interest in a 26 property portfolio ("Portfolio") for an aggregate purchase price of approximately $161.6 million ("the "Disposition" or "Transaction") to a U.S. Private Equity group ("Buyer").

Crombie will retain an 11% ownership interest and will continue to manage and operate the properties. The Buyer has waived due diligence conditions on the Transaction, with the potential to waive on the acquisition of an additional three properties for a total of 29 properties. The aggregate purchase price for the 89% interest in the 29 property portfolio is approximately $190.9 million.

This transaction is part of Crombie's previously announced plan to recycle capital from the sale of certain non-core, and/or lower growth assets. None of the assets subject to the Transaction are included in Crombie's mixed use development pipeline.

"This transaction is another example of our team's solid execution against strategy," said Don Clow, President and CEO. "Such partial dispositions at pricing in line with IFRS fair values highlight the quality and value of our portfolio and demonstrate our attractiveness as a strong managing partner."

Highlights of the Transaction include:

• The aggregate selling price is in line with IFRS fair values.
• All the properties are subject to long term leases with Sobeys.
• Improves the REIT's urban concentration as 100% of the Transaction properties are in secondary and tertiary markets.
• Crombie will head lease the properties from a new jointly owned nominee with terms that mirror the terms of the Sobeys leases.
• As partial consideration for the Transaction, the Buyer will assume an 89% interest in 10 mortgages which will be assigned to the new jointly owned nominee with Crombie remaining as guarantor until mortgage maturity.
• Proceeds to Crombie net of mortgage assumptions and transaction costs are estimated to be approximately $107.8 million, or approximately $123.6 million if the additional three properties close.
• Use of proceeds will be directed towards pursuing our value creating mixed use major development pipeline, funding of capital investments in Sobeys occupied properties, repaying existing indebtedness and general trust purposes.
• The 26 property Transaction is expected to close on or about April 25, 2019 subject to receipt of Competition Act approval and other customary conditions. The additional three properties, should conditions be waived, are expected to close on or shortly after April 25, 2019.

The Disposition includes approximately 883,167 square feet of primarily free-standing grocery anchored properties in secondary and tertiary markets.

Property Portfolio details:

BMO Capital Markets Real Estate Inc. is acting as exclusive advisor to Crombie REIT on this transaction.

About Crombie REIT
Crombie Real Estate Investment Trust ("Crombie") is an unincorporated, open-ended real estate investment trust established under, and governed by, the laws of the Province of Ontario. Crombie is one of the country's leading national retail property landlords with a strategy to own, operate and develop a portfolio of high quality grocery- and drugstore-anchored shopping centres, freestanding stores and mixed use developments primarily in Canada's top urban and suburban markets. More information about Crombie can be found at www.crombiereit.com.

Forward-looking Information
This news release contains forward-looking statements that reflect the current expectations of management of Crombie about Crombie's future results, performance, achievements, prospects and opportunities. Wherever possible, words such as "may", "will", "estimate", "anticipate", "believe", "expect", "intend" and similar expressions have been used to identify these forward-looking statements.  These statements reflect current beliefs and are based on information currently available to management of Crombie. Forward-looking statements necessarily involve known and unknown risks and uncertainties. A number of factors, including those discussed in the 2018 annual Management Discussion and Analysis under "Risk Management", could cause actual results, performance, achievements, prospects or opportunities to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and a reader should not place undue reliance on the forward-looking statements. There can be no assurance that the expectations of management of Crombie will prove to be correct. Readers are cautioned that such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from these statements. Crombie can give no assurance that actual results will be consistent with these forward-looking statements. Specifically, this document includes, forward-looking statements regarding the anticipated timing for completion of pending co-ownership transactions, and statements regarding Crombie's intended use of proceeds from completed and pending dispositions, which may depend on Crombie's financial requirements at the time proceeds are received.

SOURCE Crombie REIT