TORONTO, ONTARIO--(Marketwire - Jan. 21, 2013) -

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True North Commercial Real Estate Investment Trust (the "REIT") (TSX VENTURE:TNT.UN) announced today that it has agreed to acquire (collectively, the "Acquisitions") five office and retail properties (collectively, the "Acquisition Properties") in a series of transactions for an aggregate purchase price of approximately $144.7 million, subject to customary adjustments. The Acquisition Properties comprise a total of 561,882 square feet of office and retail space and are located in the provinces of Ontario, Alberta, and New Brunswick.

Highlights

• The REIT has agreed to acquire five office and retail properties for an aggregate purchase price of approximately $144.7 million
• The Acquisition Properties are comprised of approximately 91% office space and 9% retail space, and total 561,882 rentable square feet
• The Acquisition Properties have a high quality tenant base, with approximately 88% of gross revenue represented by government or credit rated tenants
• The REIT will partially finance the Acquisitions through the sale, on a bought deal basis, of 14.5 million units of the REIT (the "Units") at a price of $3.83 per Unit (the "Offering Price"), representing a distribution yield of 7.75%, and a concurrent $3 million private placement of Units at a price equal to the Offering Price
• Upon completion of the Acquisitions, the REIT is expected to have a debt to gross book value of approximately 65%

Daniel Drimmer, the REIT's President, Chief Executive Officer and Chairman of the Board of Trustees, stated, "We are very pleased with these strategic acquisitions, which fit our stated strategy of initially focusing on secondary markets. This strategy should allow us to acquire quality properties at competitive capitalization rates that are accretive to adjusted funds from operations. Furthermore, the strong tenant base of the acquired properties will contribute to the overall quality of the REIT's portfolio. Following the closing of these acquisitions, it is expected that approximately 87% of the REIT's aggregate portfolio gross revenue will be represented by government or credit rated tenants."

Management expects that, after giving effect to the Acquisitions, the Offering (as defined below) and the Private Placement (as defined below), the transaction will be accretive to the REIT's fully-diluted funds from operations ("FFO") and adjusted funds from operations ("AFFO") on a per Unit basis. In addition, the first distribution to be paid by the REIT will be for the period from the closing of the qualifying transaction of Tanq Capital Corporation, a predecessor corporation to the REIT, to January 31, 2013, and will be paid on February 15, 2013, in the amount of $0.03832 per Unit. The REIT intends to make subsequent monthly distributions, initially in the estimated amount of $0.02475 per Unit, commencing March 15, 2013 for the month ended February 28, 2013, subject to the discretion of the Board of Trustees of the REIT, which represents a yield of approximately 7.75%, and an approximate 96% payout ratio on AFFO.

The Acquisitions

The REIT will acquire the Acquisition Properties for an aggregate purchase price of approximately $144.7 million at an implied capitalization rate of approximately 7.4%. The purchase price will be satisfied by a combination of approximately $50.1 million in cash and approximately $94.6 million of new mortgage debt (including a vendor take-back mortgage in the amount of approximately $1.7 million in respect of one of the Acquisition Properties). The new mortgages and vendor take-back mortgage are expected to have a weighted average interest rate of approximately 3.5% and a weighted average term to maturity of approximately five years. Upon completion of the Acquisitions, management expects the REIT's debt to gross book value will be approximately 65%.

The REIT retained CBRE Limited and Linnell Taylor Lipman & Associates Ltd. to prepare independent appraisals of the Acquisition Properties. The independent appraisals, which had effective dates ranging from November 22, 2012 to January 7, 2013, indicate the estimated aggregate value of the Acquisition Properties is $156.9 million, approximately $12.2 million or 8.4% above the aggregate purchase price. The independent appraisals state the appraisals and analyses were performed in accordance with Canadian Appraisal Standards and are subject to a number of assumptions and limitations. A summary of the independent appraisals will be available at [ www.sedar.com ] in conjunction with the Offering described below.

Each Acquisition will be completed pursuant to a separate acquisition agreement (collectively, the "Acquisition Agreements") and is conditional upon the satisfaction of customary conditions, including final approval of the TSX Venture Exchange (the "TSXV"). The Acquisition Agreements each contain customary provisions for transactions of a similar nature, including representations, warranties and covenants of the parties. A copy of each of the Acquisition Agreements will be available at [ www.sedar.com ]. Completion of each of the Acquisitions is expected to occur on or about February 12, 2013.

In connection with the acquisition (the "Carlingview Acquisition") of the Carlingview Property (as defined below), the REIT has entered into an agreement with an entity that is wholly-owned by Daniel Drimmer, the President, Chief Executive Officer and Chairman of the Board of Trustees of the REIT. The Carlingview Acquisition constitutes a "related party transaction" under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Pursuant to Section 5.5(a) and 5.7(1)(a) of MI 61-101, the REIT is exempt from obtaining a formal valuation and minority approval of the REIT's unitholders for the Carlingview Acquisition.

The Offering

To finance the cash component of the purchase price of the Acquisitions, the REIT has agreed to sell, on a bought deal basis by way of a short-form prospectus (the "Offering"), 14,549,914 Units at a price of $3.83 per Unit for aggregate gross proceeds of $55.7 million to a syndicate of underwriters (the "Underwriters") led by Raymond James Ltd. The REIT has also granted the Underwriters an over-allotment option (the "Over-Allotment Option") to purchase up to an additional 2,182,487 Units at the Offering Price, exercisable no later than 30 days after the closing of the Offering which, if exercised in full, would bring the gross offering size to $64.1 million.

The REIT expects to file a preliminary short form prospectus relating to the issuance of the Units with the securities commissions or other similar regulatory authorities in each of the provinces and territories of Canada on or before January 25, 2013. Closing of the Offering is expected to occur on or about February 12, 2013, subject to TSXV approval.

The Private Placement

Daniel Drimmer, the President, Chief Executive Officer and Chairman of the Board of Trustees of the REIT, intends to subscribe for 783,290 Units on a non-brokered private placement basis concurrent with the Offering (the "Private Placement"). The Private Placement will be completed at the Offering Price without any commission paid to the Underwriters. As of the date hereof, Mr. Drimmer (together with his affiliates) holds an approximate 24.5% effective interest in the REIT through the ownership of, or direction or control over, 57,856 Units, 1,656,250 class B limited partnership units of True North Commercial Limited Partnership (economically equivalent to and exchangeable for Units) ("Class B LP Units") and 1,656,250 special voting units of the REIT (the "Special Voting Units"), which were issued in conjunction with the Class B LP Units to provide voting rights with respect to the REIT to the holders of the Class B LP Units. Following his subscription, it is expected that Mr. Drimmer (together with his affiliates) will hold an approximate 11.2% effective interest (or an approximate 10.2% effective interest assuming the full exercise of the Over-Allotment Option) in the REIT through his ownership of, or control or direction over, Units, Class B LP Units, and Special Voting Units.

As of January 21, 2013, there were 2,739,940 Units and 4,268,750 Class B LP Units outstanding. Following the completion of the Offering (excluding the exercise of the Over-Allotment Option) and the Private Placement there will be 22,341,894 Units outstanding (including outstanding Class B LP Units), representing a 218.8% increase.

Description of the Acquisition Properties and Post Acquisition Portfolio

The Acquisition Properties comprise a total of 561,882 rentable square feet of office and retail space, and are located in the provinces of Ontario, Alberta, and New Brunswick.

340 Laurier Avenue West, Ottawa, Ontario (the "Laurier Property")

100% occupied, with the Canadian Federal Government leasing approximately 98% of its rentable area. The Laurier Property is well maintained with high quality common area and building systems. The Laurier Property has a prominent location on a well-recognized downtown arterial road and is located within Ottawa's downtown central business district, five blocks from Parliament Hill.

Century Park Place, 855 8^thAvenue SW, Calgary, Alberta (the "Century Property")

The Century Property is located in downtown Calgary, Alberta. The Century Property is approximately 63.5% occupied by the Province of Alberta with a remaining lease term of just under five years. The building has been well-maintained and provides for 43 parking stalls in its underground parkade. The area where the Century Property is located is experiencing an increasing concentration of new developments including 8 West and the recently redeveloped University of Calgary Downtown Campus. Light rail train station is within walking distance, providing for access to public transportation.

400 Maple Grove Road, Ottawa, Ontario (the "Maple Property")

The Maple Property is fully leased to Honeywell International. The Maple Property is located near the intersection of Terry Fox Drive and Maple Grove Road in the heart of Terry Fox Business Park, one of the more desirable suburban office nodes in Ottawa. The Maple Property is located approximately 20 minutes west of the downtown core of Ottawa. Significant investment has been made by the tenant to customize the leasehold to suit specific engineering and fabrication needs.

Miramichi Business Complex, 410 King George Highway, Miramichi, New Brunswick (the "Miramichi Property")

The Miramichi Property is an office/retail facility originally constructed in 1969 as a neighbourhood retail strip plaza with major renovations completed in 1995, 1996, and 2012. Over $4 million of capital improvements were made over the last two years to facilitate the change of use for recent tenant additions, namely the Federal Government of Canada.

400 Carlingview Drive, Toronto, Ontario (the "Carlingview Property")

The Carlingview Property is 100% occupied on a recently entered into five year lease. The Carlingview Property benefits from the close proximity to Toronto Pearson International Airport and has access to highways 401, 407, 427, and 409.

While the majority of the assumed leases for the Acquisition Properties expire within five years, some of the leases are with long-standing tenants, and the major tenants for each of the Acquisition Properties have made significant capital investments on leasehold improvements.

Following completion of the Acquisitions, the REIT's expected portfolio will be comprised of the following properties:

Starlight provides advisory, asset management and administrative services to the REIT and its subsidiaries through an asset management agreement which is available at [ www.sedar.com ]. Starlight is an asset manager focused on the acquisition, ownership and management of commercial and multi-tenant residential properties across Canada and the United States. The REIT is administered and operated by Daniel Drimmer, the REIT's President and Chief Executive Officer and Tracy Sherren, the REIT's Chief Financial Officer, together with an experienced team of real estate professionals from Starlight who have diverse backgrounds in the acquisition, divestiture, financing and operation of real estate.

Starlight has strategically developed strong relationships with local property managers in key geographic markets, resulting in its ability to enhance the value of the REIT's assets and maximize long-term Unit value.

Grant of Options

Concurrently with the closing of the Offering, the REIT intends to grant options (the "Options") to acquire an aggregate of 855,000 Units to certain officers and trustees of the REIT and certain employees of Starlight, the REIT's asset manager. The Options will be granted pursuant to the REIT's unit option plan at an exercise price equal to the greater of the Discounted Market Price (as defined in the REIT's unit option plan) and the Offering Price. Each Option will entitle the holder to purchase one Unit for a period of five years from the date of grant. The Options will vest equally over a three-year period, commencing on the first anniversary of the date of grant. The grant of the options will be subject to TSXV approval.

Distribution Reinvestment Plan

The REIT has implemented a distribution reinvestment plan ("DRIP") effective as of January 1, 2013, which allows unitholders of the REIT the opportunity to acquire additional Units at a 3% discount to the weighted average closing price of the Units, for the five trading days immediately preceding the date of distribution declared by the REIT in respect of the Units. The REIT will determine for each distribution payment date the amount of new equity, if any, that will be made available under the DRIP on that date. No assurances can be made that new Units will be made available under the DRIP on a regular basis, or at all. The DRIP provides an efficient and cost-effective way for the REIT to issue additional equity to existing unitholders. It is expected that all trustees and officers of the REIT will enrol in the DRIP.

Forward-Looking Statements

Certain statements contained in this press release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking statements are provided for the purposes of assisting the reader in understanding the REIT's financial position and results of operations as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Forward-looking information may relate to the REIT's future outlook and anticipated events, including completion of the Acquisitions, the Offering and the Private Placement, or other financial or operating results and may include statements regarding the financial position, business strategy, budgets, financing rates and costs, the capitalization rate attributable to the Acquisitions, taxes and plans and objectives of or involving the REIT. Particularly, statements regarding future results, performance, achievements, prospects or opportunities for the REIT or the real estate industry are forward-looking statements. In some cases, forward-looking information can be identified by terms such as "may", "might", "will", "could", "should", "would", "occur", "expect", "plan", "anticipate", "believe", "intend", "seek", "aim", "estimate", "target", "project", "predict", "forecast", "potential", "continue", "likely", "schedule", or the negative thereof or other similar expressions concerning matters that are not historical facts.

Forward-looking statements necessarily involve known and unknown risks and uncertainties, that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, assumptions may not be correct and objectives, strategic goals and priorities will not be achieved. A variety of factors, many of which are beyond the REIT's control, affect the operations, performance and results of the REIT and its business, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to, the risks discussed in the REIT's materials filed with Canadian securities regulatory authorities from time to time on [ www.sedar.com ]. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements as there can be no assurance that actual results will be consistent with such forward-looking statements.

Information contained in forward-looking statements is based upon certain material assumptions, including management's perceptions of historical trends, current conditions and expected future developments, including the closing of the Offering, the Acquisitions and the Private Placement, and the grant of the Options, as well as other considerations that are believed to be appropriate in the circumstances, such as: the Canadian economy will remain stable over the next 12 months; inflation will remain relatively low; interest rates will remain stable; conditions within the real estate market, including competition for acquisitions, will be consistent with the current climate; the Canadian capital markets will continue to provide the REIT with access to equity and/or debt at reasonable rates when required; Starlight will continue its involvement as asset manager of the REIT in accordance with its current asset management agreement; and the risks identified or referenced above, collectively, will not have a material impact on the REIT. While management considers these assumptions to be reasonable based on currently available information, they may prove to be incorrect.

The forward-looking statements made in this press release are dated, and relate only to events or information, as of the date of this press release. Except as specifically required by law, the REIT undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

Non-IFRS Financial Measures

Certain terms used in this press release such as FFO, AFFO and net operating income ("NOI") are not measures defined under International Financial Reporting Standards ("IFRS") as prescribed by the International Accounting Standards Board, do not have standardized meanings prescribed by IFRS and should not be construed as alternatives to profit/loss, cash flow from operating activities or other measures of financial performance calculated in accordance with IFRS. NOI, FFO and AFFO as computed by the REIT are unlikely to be comparable to similar measures as reported by other trusts or companies in similar or different industries.

NOI is a measure of operating performance based on income generated from the properties of the REIT. Management considers this non-IFRS measure to be an important measure of the REIT's operating performance and uses this measure to assess the REIT's property operating performance on an unlevered basis.

FFO is a measure of operating performance based on the funds generated from the business of the REIT before reinvestment or provision for other capital needs. Management considers this non-IFRS measure to be an important measure of the REIT's operating performance.

AFFO is calculated as FFO subject to certain adjustments. Management considers the non-IFRS measure to be an important performance measure to determine the sustainability of future distributions paid to holders of Units after provision for capital improvements. AFFO should not be interpreted as an indicator of cash generated from operating activities as it does not consider changes in working capital.

The Units have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements of that Act. This new release does not constitute an offer to sell the Units in the United States.

About the REIT

The REIT is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. The REIT intends to focus on acquiring and owning commercial rental properties across Canada, the United States and such other jurisdictions where opportunities exist. Additional information concerning the REIT is available at [ www.sedar.com ].

Contributing Sources

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