Crombie REIT announces $39 million mortgage financing

STELLARTON, NS, Feb. 12 /CNW/ – Crombie Real Estate Investment Trust ("Crombie") (TSX: CRR.UN) is pleased to report that today it completed $39 million of mortgage financing on 8 properties acquired in a portfolio acquisition in April of 2008. The proceeds of this financing were applied to repay in part a bridge loan facility entered into by Crombie in April 2008 to partially finance the acquisition by Crombie of a portfolio of 61 properties (the "Bridge Loan").

Today's financing is comprised of $32.8 million first mortgage financing with a Schedule I Canadian bank and $6.2 million subordinate mortgage financing with Empire Company Limited ("Empire"). The aggregate $39 million of mortgage financing represents approximately 65% of the value of the 8 properties financed.

The Schedule I Canadian bank and Empire mortgages have a 5 year term, a weighted average 18.27 year amortization, and a weighted average interest rate of 4.96%. Factoring in the cost of settling the delayed interest rate swap placed upon assumption of the Bridge Loan, the overall weighted average interest rate is 7.46%.

Including today's financing, approximately $140 million of the original $280 million Bridge Loan has now been replaced with long term debt. The overall weighted average interest rate for the financings to date is approximately 6.56%, including the cost of settling the related delayed interest rate swap agreements. This is 21 basis points higher than the 6.35% rate used to model the pro forma accretion of the Portfolio Acquisition.

Commenting on the closing of the financing, J. Stuart Blair, President and Chief Executive Officer stated: "While the credit markets continue to prove to be challenging, the progress made in replacing an additional portion of our bridge loan with suitable long term financing is very encouraging. The support provided by our largest unitholder is further evidence of the strength of the relationship and long term commitment of Empire. We continue to have discussions with a number of potential sources for completing the refinancing of the remaining Bridge Loan which matures on October 22, 2009."

About Crombie

Crombie is an open-ended real estate investment trust established under, and governed by, the laws of the Province of Ontario. The trust invests in income-producing retail, office and mixed-use properties in Canada, with a future growth strategy focused primarily on the acquisition of retail properties. Crombie currently owns a portfolio of 113 commercial properties in seven provinces, comprising approximately 11.1 million square feet of rentable space.

About Empire

Empire is a Canadian company headquartered in Stellarton, Nova Scotia. Empire's key businesses include food retailing, real estate, and investments and other operations. Food retailing is carried out through wholly-owned Sobeys Inc. The real estate business is carried out through a wholly-owned operating subsidiary ECL Properties Limited, as well as a 35.7 percent ownership interest in Genstar Development Partnership and a 47.9 percent ownership interest in Crombie. With over $14 billion in annual revenue and approximately $5.8 billion in assets, Empire employs approximately 42,000 people directly and through its subsidiaries.

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 "continue", "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 2007 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.

In particular, certain statements in this document discuss Crombie's anticipated outlook of future events. These statements include, but are not limited to refinancing of the remaining bridge loan, which could be impacted by credit markets conditions including liquidity, credit spreads and other financing risks. 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.

Additional information relating to Crombie can be found on Crombie's web site at or on the SEDAR web site for Canadian regulatory filings at

Contact: Scott Ball, C.A., Vice President, Chief Financial Officer and Secretary, Crombie REIT, (902) 755-8100