MRG.UN Morguard North American Residential Real Estate Investment Trust

NOT FOR DISTRIBUTION IN THE UNITED STATESOR OVER UNITED STATES WIRE SERVICES

Morguard North American Residential Real Estate Investment Trust (“Morguard NAR REIT” or the “REIT”) (TSX:MRG.UN), announced today that it has entered into an agreement with a syndicate of underwriters, co-led by RBC Capital Markets and TD Securities Inc., for the purchase by the underwriters, on a bought deal basis, subject to regulatory approval, of $70,000,000 aggregate principal amount of 4.50% convertible unsecured subordinated debentures due March 31, 2023 (the “Debentures”). The Debentures are convertible, at the option of the holder, into trust units of Morguard NAR REIT at $20.20 per trust unit. Morguard NAR REIT has granted an over-allotment option exercisable at any time up to 30 days after Closing, to acquire additional Debentures up to the lesser of $10,500,000 aggregate principal amount of Debentures and the Underwriters respective “Over-Allocation Position” as at the closing date.

As part of the transaction, Morguard Corporation has agreed to purchase $5,000,000 of the Debentures being offered. 

Morguard NAR REIT will, by January 30, 2018, file with the securities commissions and other similar regulatory authorities in each of the provinces and territories of Canada, excluding Quebec, a preliminary short form prospectus relating to the issuance of the Debentures.  The offering is expected to close on or about February 13, 2018.

The REIT intends to use the net proceeds from the Offering to fund the redemption of all of the REIT’s 4.65% convertible unsecured subordinated debentures (current outstanding balance of $60.0 million) which mature on March 30, 2018 and which have a par call date of April 1, 2017. The REIT intends to use the remainder of the net proceeds, if any, to fund future acquisitions, for debt repayment and for general trust purposes.

This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in any jurisdiction. The securities being offered have not been and will not be registered under the U.S. Securities Act of 1933 and state securities laws. Accordingly, the securities may not be offered or sold to U.S. persons except pursuant to applicable exemptions from registration requirements.

About Morguard North American Residential REIT

The REIT is an unincorporated, open-ended real estate investment trust which owns, through a limited partnership, interests in a portfolio of 16 Canadian residential apartment communities, located in Alberta and Ontario, and 30 U.S. residential apartment communities located in Colorado, Texas, Louisiana, Illinois, Georgia, Florida, North Carolina, Virginia and Maryland consisting of approximately 13,000 residential suites.

For more information, please visit Morguard.com.

Certain information in this press release may constitute forward-looking statements that involve a number of risks and uncertainties, including statements regarding the outlook for the REIT’s business results of operations, proposed use of proceeds from the offering (including any redemption) and the timing thereof. Forward-looking statements use the words “believe,” “expect,” “anticipate,” “may,” “should,” “intend,” “estimate” and other similar terms, which do not relate to historical matters. Such forward-looking statements involve known and unknown risks and uncertainties and other factors that may cause the actual results to differ materially from those indicated. Such factors include, but are not limited to, general economic conditions, the availability of new competitive supply of commercial real estate that may become available either through construction or sublease, the REIT’s ability to maintain occupancy and to lease or re-lease space on a timely basis at current or anticipated rates, tenant bankruptcies, financial difficulties and defaults, changes in interest rates, changes in operating costs, the REIT’s ability to obtain adequate insurance coverage at a reasonable cost, the ability to complete potential acquisitions and the availability of financing. The REIT believes that the expectations reflected in forward-looking statements are based on reasonable assumptions; however, the REIT can give no assurance that actual results will be consistent with these forward-looking statements. Except as required by applicable law, the REIT disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Readers should be cautioned not to place undue reliance on the forward-looking statements.

For further information:

Mr. K. Rai Sahi, Chairman and Chief Executive OfficerMorguard North American Residential Real Estate Investment Trust55 City Centre DriveSuite 1000Mississauga, OntarioL5B 1M3Tel: 905-281-3800www.morguard.com