Crombie REIT announces $73.3 million of property acquisitions and $92.6 million debt refinancing transaction

STELLARTON, NS, Oct. 22, 2012 /CNW/ – Crombie Real Estate Investment
Trust ("Crombie REIT") (TSX: CRR.UN) today announces the acquisition of
four properties for total consideration of $73.3 million (before
transaction and related costs) as well as a separate refinancing of
mortgages on 23 properties totalling $92.6 million.

"We are very pleased with the recent acquisitions as they are consistent
with our strategy of accretive growth diversified across Canada" noted
Donald E. Clow, FCA, President and Chief Executive Officer. "The two
acquisitions from Sobeys underscore the sustainable competitive
advantage we enjoy in acquiring new, fully occupied and long term
leased properties from their development pipeline. The mortgage
refinancing on 23 properties was a unique opportunity and provides us
with significant interest savings."

Details of the acquired properties are as follows:

  • In August, a 100% occupied, 41,000 sq. ft. Sobeys anchored retail plaza
    in Regina, Saskatchewan was acquired from a third party.
  • In August, a 92% occupied, 135,000 sq. ft. mixed retail and office
    property in St. John's, Newfoundland and Labrador was acquired from a
    third party. This property is adjacent to Crombie's approximately
    600,000 sq. ft. Avalon Mall complex.
  • In October, a 100% occupied, 80,000 sq. ft. Sobeys anchored retail plaza
    in Stittsville (Ottawa), Ontario was acquired from a subsidiary of
    Sobeys Inc ("Sobeys").
  • In October, a 100% occupied, 72,000 sq. ft. retail plaza in Moncton, New
    Brunswick was acquired from Sobeys. This property is anchored by a
    Sobeys grocery store and Lawtons drug store.

The properties were initially acquired using Crombie's revolving credit
facility with Crombie assuming a $5.1 million mortgage upon closing of
the Regina property. Crombie has commitments from lenders to place an
additional $32.3 million in new mortgages on certain of the properties.

Details of the 23 property mortgage refinancing are as follows:

  • On September 21, 2012 Crombie successfully arranged the purchase by
    Scotiabank of a portfolio of 23 mortgages granted by Crombie to a
    mortgage lender in 2008.
  • The mortgages, which total $92.6 million in current principal amount,
    were scheduled to mature from 2013 to 2017 and carried a weighted
    average interest rate of 5.91%.
  • Concurrent with the purchase of the mortgages by Scotiabank, Crombie
    renegotiated the terms of the mortgage debt to a 30 month floating rate
    term facility with the interest rate based on 30 day Bankers Acceptance
    rates plus a spread.
  • This term facility is expected to be repaid from the proceeds of new
    mortgage financings anticipated to be completed on some of the 23
  • In its third quarter (Q3) of 2012, Crombie will expense approximately
    $3.0 million of costs associated with this transaction ($1.5 million in
    cash costs relating to legal fees, term facility set up costs and a
    repayment fee paid to the mortgage lender and the incurring of
    approximately $1.5 million representing the unamortized portion of
    deferred financing and other costs previously paid in respect of the
    2008 mortgage financing). This Q3 cost impact on FFO and AFFO will
    approximate 2 to 3 cents per Unit.
  • These incremental cash costs are anticipated to be recovered in full
    through interest savings in the first year, assuming interest rates
    remain at current levels.

About Crombie Real Estate Investment Trust

Crombie Real Estate Investment Trust is an unincorporated, 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 REIT currently owns a portfolio of 170 commercial properties in
nine provinces, comprising approximately 14.0 million square feet of
gross leasable area.  More information about Crombie REIT can be found

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 under
"Risk Management" in Crombie's Management Discussion and Analysis for
the year ended December 31, 2011, 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, including the announced
acquisition of properties, the anticipated funding of those
acquisitions and the anticipated extent of interest savings, which
could be impacted by a number of factors including changes in interest
rates and the availability of new mortgage financing on acceptable
terms. 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.