Crombie REIT announces closing of acquisition, exchange of previously issued subscription receipts and extension of maturity date for debentures

STELLARTON, NS, April 22 /CNW/ – Crombie Real Estate Investment Trust ("Crombie") (TSX: CRR.UN) announced today that it has closed the acquisition (the "Acquisition") of a portfolio of 61 retail properties from subsidiaries of Empire Company Limited ("Empire"). The properties represent approximately 3.3 million square feet of gross leaseable area and consist of 40 freestanding grocery stores carrying various Sobeys banners and 21 strip plazas all of which are also anchored by Sobeys bannered grocery stores. The Acquisition was previously announced by Crombie on February 25, 2008.

The purchase price for the Acquisition was $428.5 million, excluding closing and transaction costs, and represents an effective capitalization rate of 8.12% before transaction costs. The Acquisition was immediately accretive to Crombie's adjusted funds from operations ("AFFO") and, as a result, Crombie is increasing its annual distributions from $0.85 per unit to $0.89 per unit in connection with the closing of the Acquisition effective for the May distribution to unitholders of record on May 30, 2008, payable in June 2008.

In order to partially finance the Acquisition, on March 20, 2008, Crombie completed a bought deal financing consisting of 5,727,750 subscription receipts (the "Subscription Receipts"), after full exercise of the underwriters' over-allotment option, and $30 million aggregate principal amount of 7.0% extendible convertible unsecured subordinated debentures (the "Debentures"), for aggregate gross proceeds of $93,005,250. Effective on closing of the Acquisition, each Subscription Receipt converted into one unit of Crombie and the maturity date for the Debentures was extended to March 20, 2013.

The remainder of the purchase price for the Acquisition was satisfied by: (i) the issuance of $55 million of Class B LP Units of Crombie Limited Partnership to affiliates of Empire; (ii) a $280 million 18 month bridge financing from a Canadian Chartered bank; and (iii) a draw on Crombie's revolving credit facility. Following the Acquisition, Empire holds a 47.8% economic and voting interest in Crombie.

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. Following closing of the Acquisition, Crombie owns a portfolio of 113 commercial properties in six provinces, comprising approximately 11.3 million square feet of rentable space.

This news release contains forward looking statements regarding the expected payment of distributions by Crombie. These forward looking statements reflect the current expectations of management of Crombie regarding Crombie's distributions and are based on information currently available to management of Crombie. These forward looking statements involve significant risks and uncertainties. In particular, distributions by Crombie to unitholders are not guaranteed and are reliant on Crombie's properties generating sufficient income to support the expected distribution levels. The actual amount distributed by Crombie is dependent on various factors including Crombie's financial performance, obligations under applicable credit facilities, fluctuations in working capital, the sustainability of income derived from anchor tenants and capital expenditure requirements. The risks associated with these forward looking statements should be considered carefully and readers 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. These forward-looking statements are made as of the date of this news release and Crombie assumes no obligation to update or revise them to reflect new events or circumstances.

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