Poirier - Appraisal Institute of Canada

DEMYSTIFYING REITTRANSACTIONSAppraisal Institute of Canada AGM: St John’s1 June 2008

Challenging Transactions & Market Data• REIT Transactions• Portfolio Sales and Acquisitions• Covenant Based TransactionsAppraisal Institute of Canada AGM: St John’s 2 June 2008

Overview and what to look for• Examples: Retail, Distribution, Industrialand Office but applies to others such asHotels• How to get behind the façade• Discussion Questionso Is this the new standard?o How to adjust and can you adjust?Appraisal Institute of Canada AGM: St John’s 3 June 2008

REITsReal Estate Investment TrustsCharacteristics of REITswhich affect transactionsAppraisal Institute of Canada AGM: St John’s4 June 2008

Credit for Articles Concerning REIT Buyer Mindsetand [2].Portions of this section is derived from:• Wilkes, D.C., and Shapiro, S.A., (2004),”’Detecting IntangibleAsset Value (or Capitalized Economic Profit) in Sales to REITs”,Real Estate Review, Winter 2004-2005), New YorkUniversity & from:• Ludwig, Gilbert J.(2003), Good Money After Bad: Whendoes capital investment not create assessable value,presented March 10-11, 2003, Educational Seminar of theWestern Chapter of the Canadian Property Tax AssociationAppraisal Institute of Canada AGM: St John’s 5 June 2008

REIT characteristics• A Tax-favored Entity• Borrowing Power• Diversity Advantages• Related Tenant Services as profit centers• Self-management and its effect on Purchase priceAppraisal Institute of Canada AGM: St John’s 6 June 2008

REIT Tax & BorrowingThe REIT as a Tax-favored Entity• The REIT's taxable income is only taxed at the shareholder level, incontrast to other corporations, and therefore a dollar of before tax NOIcarries far greater value for a REIT than it would for an ordinarycorporation or a partnership.Borrowing Power• Research indicates that REITs will frequently borrow capital at 150 to200 basis points below more conventional real estate borrowers; andtypically with a lower debt/equity ratio and lower debt servicingcharges.Appraisal Institute of Canada AGM: St John’s 7 June 2008

REIT Capital SourcesCAPITAL SOURCES & STRUCTURE:Factors to ConsiderCost ofCapitalDebt-EquityLevelEffects onOverallRiskAppraisal Institute of Canada AGM: St John’s 8 June 2008

REIT Strength in the Numbers• Diversityo Economies of ScaleThe total salary expense for management staff may be a smallfraction of the fees that any other investor would pay for a thirdpartycompany to oversee numerous buildings. Also, insurance,repair and other maintenance items may be reduced.o Tenant TransferabilityThe REIT has a major advantage over the single-building ownerbecause the REIT's tenants can be moved into other REIT-ownedbuildings as the tenants' space needs may change over time. Thisreduces the overall vacancy rate.Appraisal Institute of Canada AGM: St John’s 9 June 2008

REIT Ownership v.s. . Non-REIT OwnershipNone REIT OWNERSHIPREIT OWNERSHIPINCOME 320,000 SF PSF 320,000 SF PSFTotal Base Collected Rents320,000 SF Avg. Occupany $7,840,000 $24.50 $7,840,000 $24.50Escalatons & Recoveries (Actual) $396,800 $1.24 $396,800 $1.24Parking & Other Income (Actual) $35,200 $0.11 $35,200 $0.11Total Recoveries $432,000 $1.35 $432,000 $1.35POTENTIAL GROSS INCOME $8,272,000 $25.85 $8,272,000 $25.85Market Vacancy (Market - 97%) $8,023,840 $25.07 $8,023,840 $25.07EFFECTIVE GROSS INCOME $8,023,840 $25.07 8,023,840 $25.07OPERATING EXPENSESUtilities (not recoverd in base rent) $1,020,800 $3.19 $1,020,800 $3.19Operting Services $1,113,600 $3.48 $1,113,600 $3.48General & Administrative $12,800 $0.04 $12,800 $0.04Management $321,782 $1.01 $22,000 $0.07Reserves for Replacement (EGI) $0 $0.00 $0 $0.00Real Estate Taxes $1,024,000 $3.20 $1,024,000 $3.20Amortized Leasing Commissions $156,800 $0.49 $156,800 $0.49Amortized Tenant Improvements $326,400 $1.02 $326,400 $1.02Total Expenses $3,976,182 $12.43 $3,676,400 $11.49NET OPERATING INCOME $4,047,658 $12.65 $4,347,440 $13.59Capitalization ofManagement Savings:Savings PSF: $9.61X 320,000 SF:$3,075,200Total value ofREIT Self-Management:$3,075,200VALUATION ANALYSIS:Net operating Income $4,047,658 4,347,440Capitalization Rate 0.09750 0.09750Fair Market Value $41,514,441 $129.73 44,589,128 $139.34Difference:$9.61 PSFAppraisal Institute of Canada AGM: St John’s 10 June 2008

Regional Diversity v.s. . Local DiversityRegionalDiversityEffect (RDE)• diversify holdings• offset regionaleconomic risks• national tenant baseDiversity EffectsLocalDiversityEffect (RDE)• economies of scale• tenant transferability• moderation of riskAppraisal Institute of Canada AGM: St John’s 11 June 2008

REIT Diversity• Diversityo Regional DiversificationOne of the distinguishing characteristics of most equity REITs is the size oftheir real estate portfolios. This has implications for both per-building costsavings and individual and overall risk moderation are significant amongREITs.o Local DiversificationThis can be described as the situation where in any one local market, a REITmay own many buildings of similar use, e.g. office space, within a relativelysmall radius. A high concentration of assets creates tremendous economiesof scale in the operation and oversight of the real estate, as well as asignificant positive impact on the local portfolio's risk level.This local concentration of properties can create both (1) economies of scaleand (2) tenant transferability.Appraisal Institute of Canada AGM: St John’s 12 June 2008

Mindset of REIT Buyers• Most investors buy property mainly in the hope of substantialasset appreciation over a holding period• In contrast, for REITs, cash flow growth is often the primaryconsideration.• Residual value is important but often secondary because,REIT shareholders have little interest in the disposition value.Appraisal Institute of Canada AGM: St John’s 13 June 2008

Mindset of REIT Buyers• REITs tend to have longer holding periods.• Allows the REIT to accept a lower going-in capitalization rate• Increases the purchase prices on expectation that a return will beachieved over longer life of the investment.• A REIT can also maximize a cash flow that might only allow anordinary investor to just break even.Appraisal Institute of Canada AGM: St John’s 14 June 2008

REIT DCF FeaturesDISTINGUSHING FEATURES OFA REIT’s s DISCOUNTED CASH FLOW (DCF)LongerHoldingPeriodLower IRR/Discount RateForecastI & e(higher I;Lower E)Lower going-Out cap rateAppraisal Institute of Canada AGM: St John’s 15 June 2008

Summary of Common Possible Componentsof Value in a REIT PurchaseNon –Realty Costs of Corporate Transactions, Mergers & Acquisitions, etc.(e.g. Extraordinary Transaction Costs)Reduced Cost pf Capital & DCF FactorsPurchase PriceEconomies of ScaleManagement & Related Services ValueReal Estate AssetAppraisal Institute of Canada AGM: St John’s 16 June 2008

Portfolio TransactionsSpecial ConsiderationsAppraisal Institute of Canada AGM: St John’s17 June 2008

Portfolio Transactions• Rarely Easy to Decipher• Can include a REIT or other legal entity• Grouping of properties• Local or Geographic Dispersion• Full or Partial Interests• Various other intricaciesAppraisal Institute of Canada AGM: St John’s 18 June 2008

Portfolio ConsiderationsManagement /LeasingGuarantees /UndertakingsTax LiabilityOptionsRetentions /DisposalsNon-Real EstateValue Allocation &Portfolio PremiumFinancingInterestSoldMix &LocationAppraisal Institute of Canada AGM: St John’s 19 June 2008

Portfolio Considerations• Type of Property and Portfolio Mix• Portfolio Location• Interests Sold• Financing• Non-Real Estate• Options• Guarantees/Undertakings• Management/Leasing• Tax Liabilities• Retentions/Disposals• Value Allocation• Portfolio Premiums/DiscountsAppraisal Institute of Canada AGM: St John’s 20 June 2008

Portfolio Motivation Seller• Distress• Tax Disposal• Tax Repositioning (REIT versus Corporation)• Diversification/Portfolio Rebalancing• Family Disposition• Balance Sheet Considerations• Debt Reduction• Takeover of Going Concern• Corporate StrategyAppraisal Institute of Canada AGM: St John’s 21 June 2008

Portfolio Motivation Buyer• Restructuring• Passive Investment• Foreign versus Domestic Taxation Issues• REIT looking for Income• Diversification/Portfolio Rebalancing• Pension Fund Acquisition• Takeover of Going Concern• Corporate Strategy• Corporate AcquisitionAppraisal Institute of Canada AGM: St John’s 22 June 2008

Type of Property & Portfolio MixType of Property• If different types of property are represented in a portfolio, theallocation of value to individual properties is complicated bydifferent property markets and different investment horizons.Portfolio Mix• If the types of property represented in the portfolio areunbalanced as to value, the allocation of value to individualproperties is further complicated.Appraisal Institute of Canada AGM: St John’s 23 June 2008

Portfolio LocationGeographic Dispersion• Portfolios that are geographically dispersed are subject todifferent tax rules and are part of different property marketsand perceived investment risks and returns. Therefore anyallocation of value must reflect an understanding of the portfolioas a whole.Appraisal Institute of Canada AGM: St John’s 24 June 2008

Interests SoldPartial Interests• Sales of partial interests should not be converted to 100% equivalentinterests without reflecting on the saleability of such interests. In otherwords the following formula should not be applied automatically toconvert partial interests to 100% equivalent interests.Partial Interest Price/Partial Interest Fractional Percentage (not=) 100% InterestLeasehold Interests• If the portfolio includes leasehold interests, these need to be fullyunderstood when looking at relative allocation of the assets. Similarlysales of income properties are not sales of the fee simple interests assuch. Rather they are sales of the leased fee.Appraisal Institute of Canada AGM: St John’s 25 June 2008

FinancingCash• Rarely does real estate sell for cash. Normally financing is involved.Therefore sales should be examined in terms of typical commercialmarket down payments and financing.Typical Financing• Typical commercial market financing is usually based on 25% downpayments with 75% financing for 5 year terms and 25 yearamortization.Vendor Takeback Financing• If the seller gives back a mortgage examine the conditions closelyAppraisal Institute of Canada AGM: St John’s 26 June 2008

OptionsOptions to Purchase• Portfolio transactions often include options to purchase additionalinterests at pre-determined amounts or subject to buybackarrangements known as “shotgun clauses”. It is essentially that anyexamination of portfolio purchases consider the effect of these clauses.Pre-Existing Options• In some portfolio auctions that have occurred, some properties may besubject to pre-existing options to third parties owning partial interests.These third parties may have a right of first refusal thus negating theopportunity for a portfolio purchaser to actually acquire all theproperties bid on.Appraisal Institute of Canada AGM: St John’s 27 June 2008

GuaranteesIncome Guarantees• Often portfolio purchases will include an income guarantee for aperiod of time, thereby complicating the allocation of valuebased on a given years income.Appraisal Institute of Canada AGM: St John’s 28 June 2008

Undertakings/IndemnitiesEnvironmental Undertakings• Most buyers of property (especially pension fundsand REITs) want undertakings relating toenvironmental contamination.• These undertakings may significantly affect theamount of money realized by a vendor because theyrepresent a liability, which may last for many yearswith unknown costs.• Indemnity agreements signed by polluters.Appraisal Institute of Canada AGM: St John’s 29 June 2008

Management/LeasingManagement• Buyers of partial interests such as pension funds and REITs, oftenexpected to be passive investors expecting to rely on the formerowner or co-owner to manage the property in question.• This reliance on existing expertise, while useful sometimes lead toconflict later on when investment goals diverged.Leasing• Pension fund and REIT buyers often relied on the co-owner to leadthe way in leasing decisions and were initially happy to have theinherent bargaining power of the former owners or co-owner toenhance the investment.• As the 1990’s progressed the restructuring in the retail industry ledto unexpected problems not initially foreseen.Appraisal Institute of Canada AGM: St John’s 30 June 2008

Tax LiabilitiesCapital Tax• Pension funds are not liable for capital tax. This gives them an inherent advantage overprivate corporations and means that their net incomes are inherently higher. In additionthey do not have to pass this tax onto tenants.Land Transfer Tax• Some provinces exempt pension funds from land transfer taxes.Capital Gains Tax• Pension funds are not liable for capital gains tax. This gives them an inherent advantageover private corporations and means that their return on investment upon sale ordisposition are inherently higher.Taxes on Dividends• Until November 2005 taxes on dividends created an advantage for trusts over corporations.This created a movement towards conversion of corporations holding real estate to REITs.Corporation Tax Liability• April 2007 REIT guidelines affect Senior and Hotel REITsAppraisal Institute of Canada AGM: St John’s 31 June 2008

Retention/DisposalRetention• When a portfolio is acquired it may include a mix of properties whichare not equally desirable. It may be the intention of the buyer to retainonly certain of the properties purchased.Dispose• Often portfolios contain undesirable properties which do not fit aninvestors criteria for retention. In there cases the buyer willsubsequently dispose of these properties (often at a different pricethen the initial value allocationAppraisal Institute of Canada AGM: St John’s 32 June 2008

Value AllocationAssigning Value to Portfolio Components:• Assigning value to portfolio components may involve complex factorsbeyond normal appraisal techniques.• Often there is a tax-driven aspect of the transactions, which will affectallocation, especially if the portfolio straddles different tax jurisdictions.• If partial interests and non-realty elements are involved they mayfurther complicate the value allocation.• Sales investigation therefore must include the basis of the allocationand a full understanding of options, guarantees, undertakings, coownershipagreements, variable tax liabilities, plans for retention anddisposal, etc.• It is not sufficient to understand only one element of the transaction inisolation.Appraisal Institute of Canada AGM: St John’s 33 June 2008

Portfolio Premium or Discount• Portfolio Premium: Portfolio Premium is a term used to describe theadded value inherent in a portfolio where the value of the portfolio isgreater than the combined prices of the individual properties as a resultof being under one common management and the inherent benefits ofeconomies of scale.• Portfolio Discount: Portfolio Discount is a term used to describe theadded value inherent in a portfolio where the value of the portfolio isless than the combined prices of the individual properties as a result ofbeing sold in bulkAppraisal Institute of Canada AGM: St John’s 34 June 2008

Real Estate versus Non-Real EstateGoing-Concern ValueAppraisal Institute of Canada AGM: St John’s35 June 2008

Non-Real EstateGoing-Concern ValueGoing Concern Value[2]• “The market value of all the tangible and intangible assets of anestablished and operating business with an indefinite life as if sold inaggregate.”• “A going concern is an established and operating business with anindefinite future life. For certain types of properties (e.g., hotels andmotels, restaurants, bowling alleys, manufacturing enterprises, athleticclubs, landfills), the physical real estate assets are integral parts of anongoing business.• The market value of such a property (including all the tangible andintangible assets of the going concern, as if sold in aggregate) iscommonly called its going-concern value.•[2] Entire section on Going Concern Value is from Appraisal Institute(US) (2001) The Appraisal of Real Estate, 12th Edition, p. 27.Appraisal Institute of Canada AGM: St John’s 36 June 2008

Non-Real EstateGoing-Concern Value• Business Enterprise Value (Intangible)• Personal Property (Tangible)• Real Property (Tangible)Appraisal Institute of Canada AGM: St John’s 37 June 2008

Going-Concern ValueAppraisal Institute of Canada AGM: St John’s 38 June 2008

Going-Concern ValueBusinessEnterpriseValue(Intangible)RealProperty(Tangible)PersonalProperty(Tangible)Appraisal Institute of Canada AGM: St John’s 39 June 2008

Covenant Based SalesSales with Strong Major TenantsSales LeasebacksAppraisal Institute of Canada AGM: St John’s40 June 2008

Sale LeasebackWhen the Seller Becomes the TenantWatch for:• Tenant is a major corporation• Tenant is a major institution• Tenant is the government• Tenant is in trouble• Banks & Insurance CompaniesOther things to watch for:• Long term leases• Build to suit propertiesAppraisal Institute of Canada AGM: St John’s 41 June 2008

Sale Leaseback• Balance Sheet Considerationso Ownership with a mortgage is debto A lease is not• Debt Reductiono Proceeds of Real estate sale can be used to reduce debt• Asset Reallocationo Banks, Insurance Companies sold their real estate because theywere making higher returns elsewhereo Companies not in real estate can use the proceeds to invest in theircore functionoCASH CALLAppraisal Institute of Canada AGM: St John’s 42 June 2008

Tax Driven SalesShare TransfersAppraisal Institute of Canada AGM: St John’s43 June 2008

Share Transfers• May allow transfer of real estate withoutpayment of land transfer tax• May avoid triggering of capital cost allowanceprovisions of capital gains tax• May keep sale prices secret• May involve non real estate assets andliabilitiesAppraisal Institute of Canada AGM: St John’s 44 June 2008

Selling CorporationsThere are two ways to sell corporations:• Sell Assets• Sell the SharesAsset Sale• The easier and more common way is for the corporation to sell its assets (forexample: equipment, furniture, fixtures, inventory, etc.)Share Sale• The other option is for the shareholders to sell the shares of the company.• More complicated type of transaction which calls for advice and directionfrom accountants and lawyers.• A typical sale-of-shares transaction may run 10 to 30 pages long, dependingon its complexity.Appraisal Institute of Canada AGM: St John’s 45 June 2008

Share Sales Issues• Type of business• Restrictive clauses in lease for the operating premises that wouldprevent new owners from expanding their lines of business.• Special exemptions/privileges/licenses/rights it claims to have are,in fact, in place and can be supported with evidentiary documents.• In the case of franchises, the transfer to the next buyer is subject tothe provisions of the franchise agreement.• In cases of rights and licenses, transferability provisions are critical,however much the vendor is keen to sell. Fees are required to be paidupon the transfer and the processing of an application may take a longtimeAppraisal Institute of Canada AGM: St John’s 46 June 2008

Share Sales IssuesThe purchase price of assets and goodwill is only the beginning.• Non real estate assetso accounts receivable,o deposits payable for utilities (heat, light, water, telephones)o that last two or three months rent for the business premises (previously paid by thevendor when the lease was signed),o legal, financing fees and costs,o the accountant's and lawyer's initial consulting feeso insurance premiums payable in advance.• Franchiseso If a franchise is being purchased, add on the cost of transfer fees.• Cost of Inventoryo If the total purchase does not include the cost of inventory (stock-in-trade is often notincluded in the purchase price), find out the estimated value on hand.Appraisal Institute of Canada AGM: St John’s 47 June 2008

Why are Sales and Leases ImportantValueCap RatesMarket RentetcAppraisal Institute of Canada AGM: St John’s48 June 2008

Why are Sales and Leases Important?• Favored valuation approach of measuring or determiningmarket value. As we all know, even IncomeConsiderations have their basis in the market.• A sale or a lease of the subject may be the benchmarkfor tax assessments.• A sale or lease could be value in exchange or value inuse.• Price or Rent does not always equal value.Appraisal Institute of Canada AGM: St John’s 49 June 2008

Sales and Lease VerificationWho are the Buyers/Lessees• Pension Funds• REITs• Foreign Buyers• Private Domestic Individuals/Corporations• Former ownerWho are the Sellers/Lessors• Family• Pension Funds• Retailers• REITs• Former tenantAppraisal Institute of Canada AGM: St John’s 50 June 2008

Sales and Lease VerificationWhat types of Transactions• Portfolios• Net Lease Transactions• Sale Leasebacks• Share Transfers• RestructuringSales and Lease Verification Methods• What• When• Where• Why• Who• HowAppraisal Institute of Canada AGM: St John’s 51 June 2008

Specific Transaction ExamplesCalloway REITH&R REITCrombie REITRetrocom REITDundee REITAppraisal Institute of Canada AGM: St John’s52 June 2008

Article about Calloway Portfolio 5Globe & Mail Wednesday, April 27, 2005 Page B18Investors could sour on Goldhar's sweet deal with Calloway• Calloway REIT was a tiny, two-bit property company before Mitch Goldhar came onthe scene. Then Mr. Goldhar began selling his shopping malls to Calloway, the stockprice nearly doubled, and it became one of the hot growth stories in Canadian realestate.• Now it's payback time, as far as Mr. Goldhar's concerned. Will Calloway investors lethim get what he wants when they vote on the deal? More importantly, will RioCanboss Edward Sonshine?• Calloway's latest deal is a stunner, not only for its size but for the importance it givesto Mr. Goldhar, who became one of the country's wealthiest men by finding anddeveloping Canadian sites for Wal-Mart. Calloway will pay $1.2-billion to buy interestsin 36 properties from Mr. Goldhar's privately held FirstPro Shopping Centres and Wal-Mart Canada.• The move will instantly double its size and make it the country's second-largest retailreal estate investment trust by market capitalization. That's the nice part. But anotherview, one that's gaining some currency with Calloway unitholders, is that Mr.Goldhar is using the deal to grab control of Calloway without paying for it.Appraisal Institute of Canada AGM: St John’s 53 June 2008

Calloway REIT Portfolio Transaction 5 July 8, 2005Calloway Portfolio Sale 5.1July 8, 2005Property Location Ownership Building Upon Buildable Occupancy Year Major RetailersInterest GLA Completion Area BuiltOntario GTA1 Brampton East Wal-Mart Centre Brampton 100.00% 227,055 319,045 91,990 100.00% 1998 Wal-Mart, Winners, Staples2 Etobicoke Wal-Mart Centre Etobicoke 100.00% 293,670 293,670 0 100.00% 2002 Wal-Mart, Home Depot, Linen "N Things, Best Buy3 Markham Woodside Centre Markham 50.00% 325,801 325,801 0 100.00% 1993 Home Depot, Chapter, Staples, Michaels4 Markham Woodside Centre (II & III) Markham 50.00% 13,500 33,500 20,000 100.00% 2004 LCBO5 Mississauga Erin Mills Wal-Mart Centre Mississauga 60.00% 282,617 282,617 0 97.48% 2004 Wal-Mart, Loblaws, Shoppers Drug Mart6 Pickering Wal-Mart Centre Pickering 60.00% 510,097 510,097 0 96.62% 2000 Wal-Mart, Sam's Club, Canadian Tire, Sobey's7 Scarborough Morningside NW Wal-Mart Centre Scarborough 100.00% 220,839 232,239 11,400 100.00% 2003 Wal-Mart, Cineplex Odeon, LCBO8 Vaughan Sevenbridge Wal-Mart Centre Vaughan 85.00% 196,451 523,968 327,517 94.99% 1997 Wal-Mart, Home Outfitters, Future Shop9 Whitby North Wal-Mart Centre Whitby 40.00% 231,771 231,771 0 100.00% 2003 Wal-Mart, Loblaws, LCBO10 Woodbridge Centre Woodbridge 35.00% 419,386 430,471 11,085 97.57% 1998 Canadian Tire, Fortino's (Loblaws), Best Buy, SportchekOntario GTA Sub-Total 2,721,187 3,183,179 461,992Ontario Other11 Barrie South Wal-Mart Centre Barrie 100.00% 359,137 359,137 0 100.00% 1994 Wal-Mart, Sobey's, Winners, Michael's12 Bolton Wal-Mart Centre Bolton 40.00% 72,640 183,600 183,600 100.00% 2004 Wal-Mart, Loblows13 Cambridge Wal-Mart Cambridge 100.00% 499,706 499,706 0 97.36% 1998 Wal-Mart, RONA, Canadian Tire14 Chatham Wal-Mart Centre Chatham 50.00% 183,284 239,724 56,440 98.60% 2004 Wal-Mart, Winners, Loblaws15 Hanover Wal-Mart Centre Hanover 100.00% 8,993 25,393 16,400 61.08% 2003 Wal-Mart , Loblaws, Marks Work Wearhouse16 Kenora Wal-Mart Centre Kenora 50.00% 80,881 80,881 0 100.00% 2005 Wal-Mart, Canadian Tire17 London North Wal-Mart Centre London 50.00% 235,030 546,842 311,812 100.00% 2003 Wal-Mart, Winners, Linens'N Things, Old Navy18 Midland Wal-Mart Centre Midland 100.00% 5,989 107,654 101,665 100.00% 2003 Wal-Mart , Boston Pizza19 Ottawa South Keys Wal-Mart Centre Ottawa 50.00% 467,382 467,382 0 100.00% 1996 Wal-Mart, Loblaws, Future Shop, Chapters, Winners20 Renfrew Wal-Mart Centre Renfrew 100.00% 10,971 19,971 9,000 100.00% 2003 Wal-Mart, Canadian TireOntario Other Sub-Total 1,924,013 2,530,290 678,917Appraisal Institute of Canada AGM: St John’s 54 June 2008

Calloway Portfolio Sale 5.2July 8, 2005Calloway REIT Portfolio Transaction 5 July 8, 2005Property Location Ownership Building Upon Buildable Occupancy Year Major RetailersInterest GLA Completion Area BuiltQuebec-Greater Montreal Area21 Laval West Wal-Mart Centre Laval (W) 50.00% 549,330 549,330 0 100.00% 2001 Wal-Mart, RONA, IGA, Home Outfitters, Canadian Tire22 Montreal Decarie Wal-Mart Centre Montreal 50.00% 224,720 267,720 43,000 100.00% 1999 Wal-Mart, Marks Work Wearhouse23 Saint-Jerome Wal-Mart Centre Saint-Jerome 50.00% 0 160,762 160,762 0.00% 2005 Wal-Mart, Home Depot24 Montreal North Wal-Mart Centre Montreal 100.00% 196,352 288,861 92,509 100.00% 2002 Wal-Mart, Winnners, Marks Work WearhouseQuebec-GMA Sub-Total 970,402 1,266,673 296,271Quebec Other25 Drummondville Wal-Mart Centre Drummondville 100.00% 47,543 50,793 3,250 100.00% 2003 Wal-Mart, Loblaws, CIBC26 Hull Wal-Mart Centre Hull 49.90% 245,928 245,928 0 100.00% 1997 Wal-Mart, Cineplex Odeon, Staples27 Saint-Constant Wal-Mart Centre Saint-Constant 40.00% 292,363 312,363 20,000 96.39% 2002 Wal-Mart, Home Depot, Metro RichelieuQuebec Other Sub-Total 585,834 609,084 23,250Nova Scotia33 Bridgewater Wal-Mart Centre Bridgewater 100.00% 0 97,675 97,675 0.00% 2005 Wal-Mart, Canadian Tire34 Halifax-Bayers Lake Power Centre Halifax 51.00% 155,377 155,377 0 100.00% 1998 Wal-Mart, Loblaws , Winners, Future ShopNova Scotia Sub-Total 155,377 253,052 97,675Newfoundland35 St. John's (Kenmount) Wal-Mart Centre St John's 50.00% 0 113,050 113,050 0.00% 2005 Wal-Mart, Home Depot , Canadian TireNewfoundland Sub-Total 0 113,050 113,050Total 7,855,736 9,829,503 2,046,407Property Summary Pages 31-33 Calloway Notice of Annual and Special Meeting and Management Information Circular June 9, 2005Retailers' name appeared in italic and bold font means they own the store.Appraisal Institute of Canada AGM: St John’s 55 June 2008

Calloway Portfolio Sale 5.3July 8, 2005Calloway REIT Portfolio Transaction 5 July 8, 2005Property Location Ownership Building Upon Buildable Occupancy Year Major RetailersInterest GLA Completion Area BuiltBritish Columbia28 New Westminster Wal-Mart Centre New Westminster 100.00% 292,546 419,737 127,191 100.00% 2003 Wal-Mart, Home Outfiters, Best Buy29 Prince George Wal-Mart Centre Prince George 100.00% 181,448 291,627 110,179 100.00% 2002 Wal-Mart, Canadian Tire, Home DepotBC Sub-Total 473,994 711,364 237,370Alberta30 Calgary Southeast Wal-Mart Centre Calgary 100.00% 215,399 219,218 3,819 100.00% 2002 Wal-Mart, London Drugs, Marks Work WearhouseAlberta Sub-Total 215,399 219,218 3,819Saskatchewan31 Regina East Wal-Mart Centre Regina 40.00% 370,575 374,638 4,063 100.00% 2000 Wal-Mart, Winners Home, Loblaws, RONASaskatchewan Sub-Total 370,575 374,638 4,063Manitoba32 Winnipeg (Southwest) Wal-Mart Centre Winnipeg 40.00% 438,955 568,955 130,000 96.08% 2000 Wal-Mart, Safeway, Home Outfitters, WinnersManioba Sub-Total 438,955 568,955 130,000Total 7,855,736 9,829,503 2,046,407Property Summary Pages 31-33 Calloway Notice of Annual and Special Meeting and Management Information Circular June 9, 2005Retailers' name appeared in italic and bold font means they own the store.Appraisal Institute of Canada AGM: St John’s 56 June 2008

Calloway Portfolio Sale 5July 8, 2005Calloway REIT Portfolio 5Satisfaction of Purchase PriceDescriptionAmountWal-Mart Mortgage @ 0% $13,000,000Wal-Mart Cash $271,000,000First Pro Mortgage @ 0% $18,000,000Class B and C Shares $250,000,000Existing Mortgage Debt $345,000,000Mark Mortgage Debt to Market $22,000,000Other Costs $21,000,000First Pro Cash $216,000,000Total $1,156,000,000Appraisal Institute of Canada AGM: St John’s 57 June 2008

Calloway REIT and SmartCentres: Portfolio 6• $1 billion• 16 Centres• 14 Wal-Mart anchored centres• 6.1% Cap Rate• 6.5% Development• The 16 properties comprise 9 operatingshopping centres, containing over 1.6million square feet of leased area and0.6 million square feet of expansionpotential, and 7 development propertieswith 1.8 million square feet of potentialleaseable area.• The 16 properties are expected to besubstantially completed over the next 3to 4 years.• Calloway to takeover 80 Smart Centremanagement staffAppraisal Institute of Canada AGM: St John’s 58 June 2008

Calloway REIT and SmartCentres: Portfolio 6GLA GLA onProperty Province Built Completion AnchorsBrampton (Airport & Bovaird) ON 0 280,235 Loblaws (1)Fredericton (N) NB 0 163,224 Wal-Mart (1)Kirkland QC 207,216 207,216 Wal-MartMagog QC 0 256,110 Wal-Mart (1)Milton ON 128,928 228,928 Wal-Mart (1), Canadian Tire (1)Mississauga (Erin Mills)(2)(40%) ON 272,130 286,927 Wal-Mart, No FrillsMississauga (Meadowvale)(3)(50%) ON 451,468 566,352 Wal-Mart, Rona, Loblaws (1)Pickering ON 527,863 527,863 Wal-Mart, Sam's Club, Canadian Tire (1), SobeysToronto (147 Laird)(4)(50%) ON 95,700 234,844 Sobeys, Home Depot(1)Victoriaville QC 0 42,440 Wal-Mart (1), Maxi (1), Home Depot (1)Whitby (NE) ON 20,847 58,373Sub-Total 1,704,152 2,852,512Carleton Place (McNeely Ave) ON 281,537 Wal-MartOakville ON 311,153 518,821 Wal-Mart, LoblawsOshawa(N)(2) ON 406,113 557,780 Wal-Mart, Loblaws, Home Depot (1)Rockland ON 176,436 Wal-MartStouffville ON 613,598 Wal-Mart (1), Canadian TireSub-Total 717,266 2,148,172Total 2,421,418 5,000,684(1) Shadow Anchor(2) Leased Property(3) 37.5% is leased(4) 25.0% is leasedAppraisal Institute of Canada AGM: St John’s 59 June 2008

Calloway REIT: Portfolio 7: May-2007Calloway from SmartCentres30-May-07Location Province Occupied Future Total Anchors Interest Lease/Purchase Price NOI YieldOperating PropertiesRichmond Hill Ontario 131,043 4,985 136,028 Wal-Mart, Dominion 50% LToronto Ontario 6,294 2,200 8,494 Wal-Mart (1) 100% LTotal 137,337 7,185 144,522 $43,000,000 $2,623,000 6.10%Development PropertiesAurora Ontario 0 259,383 259,383 Wal-Mart, Rona 50% LOshawa Ontario 0 260,235 260,235 Wal-Mart, Lowes 50% LSalmon Arm BC 0 185,279 185,279 Wal-Mart, Home Depot (1) 50% PAurora (South) Ontario 0 257,890 257,890 TBD 50% P (2)Total 0 962,787 962,787 $27,000,000Overall Total 137,337 969,972 1,107,309 $70,000,000Mezzanine Loan $13,500,000Additional Investment $167,000,000 $11,022,000 6.60%Overall Investment $250,500,000 $13,645,000 5.45%(1) Shadow Anchor(2) Calloway Option to Purchase 50% upon substantial completion, pursuant to loan agreement with SmartCentresAppraisal Institute of Canada AGM: St John’s 60 June 2008

Calloway REIT: Portfolio 8.1: Dec-2007GLA GLA on YearProperty Province Built Completion Occupancy Built AnchorsOntario - Golden HorseshoeScarborough (W) (2) Eglinton Ave E & Warden ON 251,519 396,979 100% 2006 Wal-MartBurlington (N) (3) Dundas St & Appleby Line ON 129,760 177,466 100% 2004 Wal-MartHamilton (SE) Rymal Rd E & Centennial Pkwy ON 188,137 312,978 100% 2006 Wal-MartOntario - OtherOrleans Innes RD & Mer Bleue Rd ON 301,577 316,061 100% 2005 Wal-Mart, Canadian Tire (1), Home Outfitters, Future ShopPembroke (3) Hwy 148 & Angus Campbell Dr ON 104,777 104,777 100% 1999 Wal-MartQuebec - Greater Montreal OtherLaval (E) Autoroute Laval & Autoroute 19 ON 419,759 771,449 100% 2005 Wal-Mart, Canadian Tire (1), IGAQuebec - OtherSherbrooke Autoroute 410 & Autoroute 55 ON 149,295 200,917 100% 2005 Wal-Mart, Canadian Tire (1), Home Depot (1), Mark's Work WearhouseBC - VancouverSurrey (W) 88th Ave & 124th St ON 172,570 245,871 100% 2004 Wal-MartSaskatchewanSaskatoon (S) Melville St & Clarence Ave ON 207,209 307,739 100% 2007 Wal-Mart, Home Depot (1), Mark's Work WearhouseManitoba - WinnipegWinnipeg (C) (3) Empress St & Ellice Ave QC 124,403 124,403 100% 2000 Wal-MartTotal 2,049,006 2,958,640(1) Shadow Anchor - Site is owned by others and no rent is paid to vendor on it.(2) Includes leasehold intersest for 40% and freehold interest for 60% - Calloway may prepay annual lease payments due over 49 years(3) Wal-Mart store - Calloway already owns the balance of the centreAppraisal Institute of Canada AGM: St John’s 61 June 2008

Calloway REIT: Portfolio 8.1: Dec-2007Calloway Portfolio 8Dec-07When NOI Price Cap Size NOI PSF Price psfInitial Payment Dec-07 $26,000,000 $405,000,000 6.42% 2,049,006 $12.69 $197.66Further Payments Dec-11 $18,000,000 $275,000,000 6.55% 909,634 $19.79 $302.32Completion $44,000,000 $680,000,000 6.47% 2,958,640 $14.87 $229.84Appraisal Institute of Canada AGM: St John’s 62 June 2008

Calloway REIT: Portfolio 8.2 Amended:Apr-2008GLA GLA on YearProperty Province Built Completion Occupancy Built AnchorsOntario - Golden HorseshoeScarborough (W) (2) Eglinton Ave E & Warden ON 272,508 369,508 100% 2006 Wal-MartBurlington (N) (3) Dundas St & Appleby Line ON 129,760 177,466 100% 2004 Wal-MartOntario - OtherOrleans Innes RD & Mer Bleue Rd ON 402,831 414,851 100% 2005 Wal-Mart, Canadian Tire (1), Home Outfitters, Future ShopQuebec - OtherSherbrooke Autoroute 410 & Autoroute 55 ON 149,295 200,647 100% 2005 Wal-Mart, Canadian Tire (1), Home Depot (1), Mark's Work WearhouseBC - VancouverSurrey (W) 88th Ave & 124th St ON 178,070 245,917 100% 2004 Wal-MartSaskatchewanSaskatoon (S) Melville St & Clarence Ave ON 276,905 332,025 100% 2007 Wal-Mart, Home Depot (1), Mark's Work WearhouseTotal 1,409,369 1,740,414(1) Shadow Anchor - Site is owned by others and no rent is paid to vendor on it.(2) Includes leasehold intersest for 40% and freehold interest for 60% - Calloway may prepay annual lease payments due over 49 years(3) Wal-Mart store - Calloway already owns the balance of the centreAppraisal Institute of Canada AGM: St John’s 63 June 2008

Calloway REIT: Portfolio 8.2 Amended:Apr-2008Calloway Portfolio 8Apr-08When NOI Price Cap Size NOI PSF Price psfInitial Payment Apr-08 $18,300,000 $270,000,000 6.78% 1,409,369 $12.98 $191.58Further Payments Dec-11 $7,500,000 $105,000,000 7.14% 358,045 $20.95 $293.26Completion $25,800,000 $375,000,000 6.88% 1,767,414 $14.60 $212.17Appraisal Institute of Canada AGM: St John’s 64 June 2008

Calloway REIT: Portfolio 8.2 Amended:Apr-2008 FinancingPortfolio 8 AmendedSourceAmountMortgage Debt & Acquistion Loans $160,000,000620,000 Calloway Units to Mitchell Goldhar $12,500,000Additional Mortgage Debt Other Calloway Properties $50,000,000Cash $47,500,000Total $270,000,000Transaction increases Mitchell Goldar's holdings in Calloway from 23.4% to 23.9%Appraisal Institute of Canada AGM: St John’s 65 June 2008

Calloway REIT Major ShareholdersCalloway REIT March 14, 2007Major ShareholdersVoting Units Beneficially Owned Deferred Units Beneficially Owned Total MarketName Number % Market Value Number % Market Value ValueSimon Nyilassy 27,000 0.030% $720,900 17,263 0.019% $460,922 $1,181,822David M. Calnan 200,175 0.221% $5,344,673 9,792 0.011% $261,446 $5,606,119Jamie M. McVicar 45,000 0.050% $1,201,500 11,200 0.012% $299,040 $1,500,540Kevin B. Pshebnicki 46,273 0.051% $1,235,489 13,719 0.015% $366,297 $1,601,786Michael Young 300,000 0.330% $8,101,000 7,383 0.008% $197,126 $8,298,126Al Mawani 3,000 0.003% $80,100 7,282 0.008% $194,429 $274,529Michael Goldhar * 20,338,709 22.470% $543,043,530 4,056 0.004% $108,295 $543,151,825Peter Forde 1,500 0.002% $40,050 425 0.000% $11,348 $51,398J. Michael Storey 214,711 0.240% $5,732,784 21,954 0.024% $586,172 $6,318,956Sub-Total 21,176,368 23.395% $565,500,025 93,074 0.103% $2,485,075 $567,985,100* Michael Goldhar is the owner of SmartCentres (formerly FirstPro Shopping Centres)Appraisal Institute of Canada AGM: St John’s 66 June 2008

Sales Leasebacks• Appraisal of Real Estate 12th Edition [1] and the Appraisal ofReal Estate 2nd Canadian Edition“When a market rent estimate for the subject property is required, theappraiser gathers, compares, and adjusts comparable rental data. Theparties to each lease should be identified to ensure that the party heldresponsible for rent payments is actually a party to the lease or, byendorsement, the guarantor. It is also important to ascertain that thelease represents a freely negotiated, arm's-length transaction. A leasethat does not meet these criteria, such as a lease to an ownertenantor a sale-leaseback (financing lease), may not provide areliable indication of market rent.”• [1] Appraisal Institute (US), (2001), Appraisal of Real Estate 12th Edition, Chapter 21,Section Heading: Estimating and Adjusting Market Rent, Page 500.Appraisal Institute of Canada AGM: St John’s 67 June 2008

8550 Goreway Drive, BramptonSale LeasebackPurchaser: H&R REITSeller: Canadian TireDate: Jan 31, 2006Height: 36 ft -105 ftBuilding (sf): 1,148,927Price: $127,300,000Price psf $111 psfRent: $6.25 5 yr escalations 10%Term: 21 years with optionsO.C.R.: 5.6%Appraisal Institute of Canada AGM: St John’s 68 June 2008

6336 114 Avenue SE, CalgarySale LeasebackPurchaser: H&R REITSeller: Canadian TireDate: Jan 30, 2006Height: 30 ftBuilding (sf): 954,813 (973,764)Site Area (sf): 3,473,623Price: $101,750,000Price psf $107Rent: $6.00 5 yr escalations @10%Term: 21 years with optionsO.C.R.: 5.6%Appraisal Institute of Canada AGM: St John’s 69 June 2008

2290 Cambie Street, VancouverPurchaser: RioCan REITSeller:Canadian TireOffers: 8Multi-level Retail: 148,189 sfPrice: $44,500,000O.C.R.: 6.39%Tenant: Canadian Tire, Best BuyPrice p.s.f.: $299Appraisal Institute of Canada AGM: St John’s 70 June 2008

Sale versus Sale/Leaseback TransactionSame PropertyAppraisal Institute of Canada AGM: St John’s71 June 2008

Post Tech Sale Hunting Oil Calgary• Seller: Solectron• Buyer: Hunting Oil• Type: Sale• Date: May 2003• Price $5,850,000• Area: 124,758 sf• $/sf: $39.00Appraisal Institute of Canada AGM: St John’s 72 June 2008

Post Tech Sale/LeasebackHunting Oil Calgary• Seller: Hunting Oil• Buyer: H&R REIT• Type: Sale Leaseback• Date: Jan 2004• Price $7,800,000• Area: 124,758 sf• $/sf: $63.00Appraisal Institute of Canada AGM: St John’s 73 June 2008

REIT TransactionREIT as DeveloperAppraisal Institute of Canada AGM: St John’s74 June 2008

EnCana Calgary Tower between 5th and 7thAvenues between Centre and 1st Street S.E.• Buyer: H&R REIT (Centre Street Trust)• Seller: EnCana Corp.• Type: Build-to-suit• Building Size: 1,900,000 sq ft• Storeys: 59• Land Cost: $ 70 million• Building Cost: $1.100 billion• Total Cost: $1.170 billion• Completion: 2011• Tenant: EnCana Corp• 1 st Year Rent: $36.37 psf• Rent Increase: 1.5%/year• Term: 25 years• Cap Rate: 6.25%• Project Design: Foster and Partners London• Source: National Post 10-Feb-2007» Garry Marr Financial PostAppraisal Institute of Canada AGM: St John’s 75 June 2008

REIT as Financing VehicleFinancing TransactionAppraisal Institute of Canada AGM: St John’s76 June 2008

Empire (Sobeys) Portfolio• Date: 22-Apr-2008• Seller: Sobeys (Empire)• Buyer: Crombie REIT• Properties: 61• Sobeys stores: 40• Strip Plazas: 21• Size: 3,300,000 sf• Price: $428.5 million• Cap: 8.12%• REIT Owned: 47.8% by EmpireAppraisal Institute of Canada AGM: St John’s 77 June 2008

Sobeys Portfolio: Single Tenant PropertiesLocationSite Area(acre) GLA (sq ft) Anchor TenantsSingle Tenant PropertyAcadia Street (Stellarton, NS) NS 2.07 23,652 Sobeys + NSLCAncaster, ON ON 6.64 60,000 Sobeys freestandingAntigonish, NS NS 2.86 51,272 Sobeys + Antigonish MallBale Comeau, PQ PQ 5.42 43,462 IGA ExtraBarrie, ON ON 4.04 47,742 SobeysBathurst, NB NB 2.38 18,125 Price ChopperBrookside Mall (Fredericton, NB) NB 1.00 43,180 SobeysCap de la Madeleine, PQ PQ 5.37 43,500 IGA ExtraChamplain Place (Moncton, NB) NB 4.99 51,886 SobeysChateauguay (Montreal, PQ) PQ 6.30 50,190 IGA ExtraChatham, ON ON 4.46 48,000 SobeysDeer Lake, NL NL 8.23 15,000 Foodland FreestandingEdmunston, NB NB 0.84 8,162 Price ChopperElizabeth Ave. (St. John's, NL) NL 6.64 66,100 SobeysForest Hills (Dartmouth, NS) NS 4.20 43,585 SobeysGlace Bay, NS NS 10.60 17,200 Price ChopperGrand Bank, NL NL 17.74 18,700 SobeysGrand Falls, NL NL 3.93 27,287 SobeysGrimsby, ON ON 0.80 35,437 SobeysLacewood (Halifax, NS) NS 5.40 58,792 Sobeys + Parkwest plazaLebourgneuf (Quebec City, PQ) PQ 5.86 57,000 IGA ExtraMontague, PE PE 2.31 24,515 Sobeys freestandingNew Waterford, NS NS 2.30 26,023 Sobeys freestandingNewcastle (Miramichi, NB) NB 1.42 20,300 SobeysNorth & Windsor (Halifax, NS) NS 4.19 49,989 Sobeys freestandingNorthwest Centre (Moncton, NB) NB 4.25 516,000 Sobeys + Northwest CentrePitt St (Sydney Mines, NS) NS 2.46 17,537 Price ChopperPlacentia, NL NL 2.87 19,602 Sobeys + Placentia MallPort Hawkesbury, NS NS 0.80 34,470 SobeysRiverview, NB NB 4.47 49,300 Sobeys freestandingRiviera du Loup, PQ PQ 4.97 52,239 IGA Extra + FamiliprixRopewalk Lane (St. Jahn's, NL) NL 4.66 43,920 SobeysSheet Harbour, NS NS 7.04 8,992 Foodland FreestandingSherbrooke, PQ PQ 6.32 53,359 IGA ExtraSpryfield (Halifax, NS) NS 8.14 47,580 Sobeys freestandingSt. Georges, PQ PQ 4.52 44,247 IGA ExtraSt. Romuald (Quebec City, PQ) PQ 7.72 53,000 IGA ExtraSydney River, NS NS 5.68 50,517 SobeysWest Royalty (Charlottetown, PE) PE 3.92 54,150 SobeysTotalAppraisal Institute of Canada AGM: St John’s 78 June 2008

Sobeys Portfolio: Plaza PropertiesLocationSite Area(acre) GLA (sq ft) Anchor TenantsPlaza PropertiesAmherst Plaza NS 3.19 24,504 Price Choper, TD BankBeauport Plaza (Quebec City, PQ) PQ 8.39 61,111 IGA ExtraBlink Bonnie Plaza (Pictou, NS) NS 6.58 44,869 Sobeys, NSLC (NS Liquor CommissionBridgeview Plaza (Miramichi, NB) NB 10.49 157,580 Sobeys, Canadian Tire, Empire TheatresEdmunston Plaza NB 4.21 42,060 IGA & Great Canadian Dollar StoreElmsdale Plaza NS 24.30 133,820 Sobeys & The Bargian Shop and Piercey's Buildrite.Fairvale Plaza (Rothesay, NB) NB 7.07 65,857 SobeysFundy Trail (Truro, NS) NS 13.86 129,931 Sobeys, Staples and Canadian TireLes Sautes Plaza (Quebec City, PQ) PQ 7.07 69,117 IGA Extra, SAQ & Tim HortonsLong Pond Plaza (Conception Bay, NF) NF 7.61 55,015 SobeysMillcove Plaza (Bedford, NS) NS 30.03 139,280 Sobeys & Nova Scotia Liquor commission and eventually LawtonsPaspebiac Plaza PQ 6.28 63,575 IGA Extra, SAAN, DollaramaQueen Street Plaza (Halifax, NS) NS 2.87 54,391 Sobeys, Needs Convenience Store, Good day hair Salon UPS StoreTantallon Plaza NS 38.31 142,907 Sobeys, Piercey's Buildrite, HRM LibraryTatamagouche Mall NS 2.75 16,656 Nova Scotia Liquor comm. (NSLC) and FodlandTopsail Road Plaza (St. John's, NF) NF 14.53 157,753 Sobeys, ZellersTorbay Road Plaza (SL John's, NF) NF 11.79 164,645 Sobeys, Nubody's Fitness, ConvergysTracadie Plaza NB 4.49 39,671 Price ChopperWestside Plaza (New Glasgow, NS) NS 5.50 70,366 Sobeys/NSLCWhite Horse Plaza (Simcoe, ON) ON 6.55 113,972 Sobeys, Hart, PhamaSaveWoodstock Plaza ON 4.86 49,346 SobeysTotalAppraisal Institute of Canada AGM: St John’s 79 June 2008

REIT Giving Up ManagementManagementAppraisal Institute of Canada AGM: St John’s80 June 2008

Retrocom Mid-Market REIT acquires $55million of property May 1, 2008• Retrocom Mid-Market REIT announced today that it has enteredinto a definitive purchase and support agreement with a vendorgroup led by Mitchell Goldhar, owner of SmartCentres Inc.,pursuant to which Retrocom will acquire four properties for apurchase price of approximately $55 million which represents a9% capitalization rate on an estimated 2008 net operatingincome.Appraisal Institute of Canada AGM: St John’s 81 June 2008

What Sold• The four properties, totaling approximately 522,915 square feetof gross leasable area, are strategically located in the majormetropolitan market of the Greater Toronto Area ("GTA").These properties currently have an occupancy rate ofapproximately 98% and have a number of high quality tenants.The properties are located at:• 1480/1490 Dundas Street East, Mississauga,• 1224 Dundas Street East, Mississauga,• 750/760 Birchmount Road, Toronto, and• 1100/1140/1170 Burnhamthorpe Road West, Mississauga.Appraisal Institute of Canada AGM: St John’s 82 June 2008

SmartCentres to Retrocom REITRetrocom REITAddress Location Size Stores Price Cap Rate1480-1490 Dundas St E Mississauga 53,991 61224 Dundas St E Mississauga 202,991 16750-760 Birchmount Rd Toronto 66,154 141100, 1140, 1170 Burnhamthorpe Rd Mississauga 199,825 60Total 522,961 96 $55,000,000 9.0%Appraisal Institute of Canada AGM: St John’s 83 June 2008

Retrcom REIT Property Management• In addition, on closing of the transaction, SmartCentres willbecome the property manager for substantially all of the REIT'sportfolio of enclosed community and regional malls and stripcentres pursuant to a long-term property management contract.Retrocom believes that this relationship with SmartCentres willprovide it with future strategic opportunities to purchaseadditional properties, as well as allow it to benefit fromSmartCentres' relationships with many of the premier tenants inCanada including many of those in the REIT's current portfolio.Appraisal Institute of Canada AGM: St John’s 84 June 2008

Retrocom REIT Board• On closing, the REIT will increase the number of Trustees fromsix to eight and amend its declaration of trust to provideMitchell Goldhar with the right to appoint (i) three of theBoard members of the REIT while the Vendor and its affiliateshold at least 25% of the REIT's total aggregate issued andoutstanding units and Special Voting Units, (ii) two of eightBoard members while the Vendor and its affiliates hold at least15% but less than 25% of the REIT's units and Special VotingUnits and (iii) one of eight Board members while the Vendorand its affiliates hold at least 5% but less than 15% of theREIT's units and Special Voting Units.• The Vendor will also be granted the right, under certaincircumstances, to receive additional Special Voting Units of theREIT in order to maintain its voting interest at a minimum of25% for a period of five years. This right of the Vendor may beextended for a further five year period under certaincircumstances, including in the event that the Vendor or itsaffiliates sell or originate the sale to the REIT of at least $300million of assets.Appraisal Institute of Canada AGM: St John’s 85 June 2008

Retrocom REIT• In addition to the purchase price payable to the Vendorat closing, the REIT will pay to SmartCentres or itsdesignee a one-time structuring fee of $1.25 million andissue to SmartCentres or its designee warrants topurchase, at any time during the 5-year period afterclosing, 1.5 million REIT units at an exercise price of$5.50 per unit. The agreement also allows for customary"fiduciary out" provisions and a termination fee of $2.7million payable by the REIT in certain circumstances.The REIT expects to incur approximately $3.5 million inexpenses and costs associated with the transaction.Appraisal Institute of Canada AGM: St John’s 86 June 2008

Example of a key Distribution WarehouseLease ComparableWhy Drill Down?Appraisal Institute of Canada AGM: St John’s87 June 2008

A Distribution Centre Lease ComparableThis property’s lease rate is quoted as being$8.95 net based on the “AssessmentRequest for Information” form submitted bythe City in its evidence package. Thisdeemed “net” lease is well above anymarket evidence presented in the appellant’ssubmission, based on details uncovered inthe property’s mortgage, is not reflective ofa typical lease situation.Appraisal Institute of Canada AGM: St John’s 88 June 2008

Why Drill Down?There are four parties involved in the ownership, lease, utility and financing of thisproperty.•The registered owner is Metrus Western Properties Inc.• A lease was registered as an encumbrance on title dated August 27, 1999, with nosignificant details available for public view. The lessee is SCM Supply ChainManagement Inc. SCM is a world leader and supplier of logistics services for largeretailers such as Wal-Mart.• An encumbrance registered as a “Mortgage” is actually a Deed of Trust held byThe Canada Trust Company.•A deed of trust can take many forms. In this case, it consists of a financinginstrument that is much more complex than a typical mortgage but offers taxadvantages and flexibility. This particular deed of trust also incorporates “step up”payment clauses and, in this case, is tied directly to a “Distribution Agreement”between SCM and Wal-Mart Canada Corp.Appraisal Institute of Canada AGM: St John’s 89 June 2008

Why Drill Down?SCM leases from the owner, as a purpose built structure with very detailedspecifications. The specific requirements of SCM and their client result inhigher costs, which are built in to and amortized over the life of the “lease”document, resulting in a rental rate that is typically above market.The “backer” of the SCM lease is therefore Wal-Mart through thewarehousing and distribution agreement. The details of this agreement arenot made public through the registration system; however, the fact that allthe documents are interwoven is undeniable. This is taken one step furtherin that Wal-Mart, as the “backer” of the SCM lease through the warehouseand distribution agreement, also becomes the backer of the financingagreement.Appraisal Institute of Canada AGM: St John’s 90 June 2008

Why Drill Down?The Deed of Trust held by Canada Trust is an actual bond issue, i.e. a series ofinvestment certificates issued in $10,000 and $1,000 denominations to finance theconstruction of the facility. Investment bonds require a rating in order to be offered toinvestors. In this case, the rating is tied directly to the strength of Wal-Mart throughit’s agreement with SCM and the SCM lease with Metrus.Wal-Mart is neither the owner nor the lessee; however, its corporate strength resultsin the bond rating for the bond issue through the deed of trust. Wal-Mart does haveadditional responsibilities relative to the financing agreement through a form of crossguarantee referenced in the caveat document. Although the details of the lease andthe warehousing and distribution agreement are not public documents; however, therelationship between the four parties and all of the documents is clear.The deemed “net” lease, is much higher than any other data within market. Whenone understands the special purpose nature of the building, its specific design andutility, and the circumstances surrounding the “lease” and the financing, it is obviousthat the figure quoted as a net rent is not reflective of a typical market net rent in anyway.Appraisal Institute of Canada AGM: St John’s 91 June 2008

How to Drill Down?•Brokers/Realtors•Finance Companies•Internet•Press Releases•Corporate Web Sites•Stock Trade Reports, etc.•Registry Documents•Networking & BeggingAppraisal Institute of Canada AGM: St John’s 92 June 2008

Making AdjustmentsTricks and TrapsAppraisal Institute of Canada AGM: St John’s93 June 2008

Calloway Portfolio Sale 1February 16, 2004Property Additional Development Land Value Purchase Value Net Net CapBuildable Land Value per Buildable Price of Land Income RateCourtenay, BC 45,186 $1,425,071 $31.54 $27,885,355 $26,460,284 $2,328,505 8.80%Kamloops, BC 0 $0 $0.00 $32,280,983 $32,280,983 $2,824,586 8.75%Lethbridge, Alberta 58,980 $1,544,535 $26.19 $26,012,372 $24,467,837 $2,177,637 8.90%Winnipeg, Manitoba 80,011 $3,392,777 $42.40 $39,389,357 $35,996,580 $3,167,699 8.80%Kapuskasing, Ontario 14,023 $569,205 $40.59 $6,069,272 $5,500,067 $495,006 9.00%Barrie, Ontario 0 $0 $0.00 $27,431,048 $27,431,048 $2,304,208 8.40%Owen Sound,Ontario 24,400 $588,674 $24.13 $14,002,407 $13,413,733 $1,207,236 9.00%St Catherines, Ontario 50,800 $1,529,819 $30.11 $41,198,516 $39,668,697 $3,471,011 8.75%Montreal (Mascouche) Queb 21,700 $717,385 $33.06 $47,244,226 $46,526,841 $3,954,782 8.50%Montreal (Valleyfield) Quebec 10,500 $210,769 $20.07 $16,108,770 $15,898,001 $1,399,024 8.80%Saint-Jean Quebec 117,603 $3,128,257 $26.60 $19,727,879 $16,599,622 $1,493,966 9.00%Truro Nova Scotia 26,000 $613,079 $23.58 $11,553,012 $10,939,933 $984,594 9.00%Total 449,203 $13,719,571 $30.54 $308,903,197 $295,183,626 $25,808,254 8.74%Appraisal Institute of Canada AGM: St John’s 94 June 2008

Calloway Portfolio Sale 15% Portfolio AdjustmentProperty Additional Purchase Value Net Value Less Net Cap AdjustedBuidable Price of Land Premium Income Rate CapCourtenay, BC 45,186 $27,885,355 $26,460,284 $25,137,270 $2,328,505 8.80% 9.26%Kamloops, BC 0 $32,280,983 $32,280,983 $30,666,934 $2,824,586 8.75% 9.21%Lethbridge, Alberta 58,980 $26,012,372 $24,467,837 $23,244,445 $2,177,637 8.90% 9.37%Winnipeg, Manitoba 80,011 $39,389,357 $35,996,580 $34,196,751 $3,167,699 8.80% 9.26%Kapuskasing, Ontario 14,023 $6,069,272 $5,500,067 $5,225,064 $495,006 9.00% 9.47%Barrie, Ontario 0 $27,431,048 $27,431,048 $26,059,496 $2,304,208 8.40% 8.84%Owen Sound,Ontario 24,400 $14,002,407 $13,413,733 $12,743,046 $1,207,236 9.00% 9.47%St Catherines, Ontario 50,800 $41,198,516 $39,668,697 $37,685,262 $3,471,011 8.75% 9.21%Montreal (Mascouche) Quebe 21,700 $47,244,226 $46,526,841 $44,200,499 $3,954,782 8.50% 8.95%Montreal (Valleyfield) Quebec 10,500 $16,108,770 $15,898,001 $15,103,101 $1,399,024 8.80% 9.26%Saint-Jean Quebec 117,603 $19,727,879 $16,599,622 $15,769,641 $1,493,966 9.00% 9.47%Truro Nova Scotia 26,000 $11,553,012 $10,939,933 $10,392,936 $984,594 9.00% 9.47%Total 449,203 $308,903,197 $295,183,626 $280,424,445 $25,808,254 8.74% 9.20%Appraisal Institute of Canada AGM: St John’s 95 June 2008

Blackstone and Dundee REIT Portfolio DealsWould you rely on these deals for a valution in the NECalgary MarketAppraisal Institute of Canada AGM: St John’s96 June 2008

Blackstone PortfolioBlackstone Portfolio Sales AnalysisIndex Sale Date Location Address Market City Price Size $ sf Cap NOI6.1 27/01/2006 3115 12th Street NE 3115 12th Street NE NE Calgary $8,944,616 74,311 $120 7.04% $629,5486.2 27/01/2006 Braithwaite Boyle Centre 1701 Centre Street NW NW Calgary $8,995,607 54,829 $164 6.20% $557,7286.3 27/01/2006 Kipling Square 601 10th Avenue SW Beltline Calgary $7,142,249 50,016 $143 7.40% $528,5266.4 27/01/2006 Five Ten Fifth 510 5th Street SW Downtown Calgary $21,946,076 109,472 $200 6.10% $1,338,7116.5 27/01/2006 Northland Building 910 7th Avenue SW Downtown Calgary $18,971,452 142,589 $133 8.10% $1,536,6886.0 Total Blackstone Portfolio Calgary $66,000,000 431,217 $153 7.00% $4,591,200Appraisal Institute of Canada AGM: St John’s 97 June 2008

Dundee REIT Portfolio 1Index Date Transaction Name Address Municipality Price Size (Sf) Price/Sf Cap Rate7.1 04/07/2006 Franklin Atrium 3030 3rd Ave NE NE Calgary $22,708,000 142,656 $1597.2 04/07/2006 Franklin Building 112 28th Street SE SE Calgary $9,070,000 50,761 $1797.3 04/07/2006 Mount Royal Place 1414 8th Street SW Beltline Calgary $13,845,000 56,399 $2457.4 06/07/2006 McFarlane Tower 700 4th Avenue SW Downtown Calgary $74,634,000 236,277 $3167.5 04/07/2006 AltaLink Place 1035 7th Avenue SW Downtown Calgary $24,305,000 76,755 $3177.6 04/07/2006 Phoenix Place 840 7th Avenue SW Downtown Calgary $71,938,000 259,192 $2787.0 Overall $216,500,000 822,040 $263 7.30%Appraisal Institute of Canada AGM: St John’s 98 June 2008

Dundee REIT Portfolio 2Citium to Dundee REIT29-Nov-06Address Location Type Interest Occupancy Size Date Price Reported Price psfAirport Corporate Centre West Mississauga Office 100% 86% 357,000 28-Nov-06 $66,253,000 $67,128,855 $185.5830 and 50 St Clair Ave West Toronto Office 100% 96% 435,000 9-Jan-07 $110,368,000 $109,625,000 $253.722891 Sunridge Way NE Calgary Office 100% 100% 88,000 20-Dec-06 $25,736,000 $25,800,000 $292.45625 Agnes St New Westminster Office 100% 88% 83,000 24-Jan-07 $14,587,000 $14,587,000 $175.75Total 963,000 $216,944,000 $217,140,855 $225.28Appraisal Institute of Canada AGM: St John’s 99 June 2008

THANK YOU• John Glen, AACIjglen@aec-international.com• Louis Poirier, AACIlpoirier@aec-international.comAppraisal Institute of Canada AGM: St John’s 100 June 2008

REIT DealsIs this the new reality?Appraisal Institute of Canada AGM: St John’s101 June 2008

Global REITsAppraisal Institute of Canada AGM: St John’s 102 June 2008

REITs ArrivingAppraisal Institute of Canada AGM: St John’s 103 June 2008

REITs LeavingAppraisal Institute of Canada AGM: St John’s 104 June 2008

REITs Leaving• April 6, 2007• $1 billion +• Alexis Nihon REIT sold to:RETAIL ASSETS• Homburg• $500 m• Cap Rate 6.72%OFFICE AND INDUSTRIAL ASSETS• Cominar REIT• $592 M• Cap Rate 6.72%• 35 Industrial 4.1 million sf• 19 Office 2.4 million sfAppraisal Institute of Canada AGM: St John’s 105 June 2008

Dundee REIT sells Eastern Canada Assets• August 24, 2007• GE's real estate divisionannounced the purchase of an18% stake in Canada's DundeeReal Estate Investment Trust, ina tender offer valuing theshares at 19% above Friday'sclosing price.• GE will also purchase 180Dundee commercial andindustrial properties in Ontario,Quebec and Newfoundland for atotal price of approximatelyC$2.3 billion.Appraisal Institute of Canada AGM: St John’s 106 June 2008

Dundee REIT: Office Atlantic CanadaAddress Ownership Area Owned Total AreaAtlanticScotia Centre, St. John's 100.00% 190,136 190,136Appraisal Institute of Canada AGM: St John’s 107 June 2008

Dundee REIT: Quebec OfficeAddress Ownership Area Owned Total AreaQuebec400-480 boulevard Armand-Frappier, Laval 100.00% 197,893 197,8939975-9995 avenue Catania, Brossard 100.00% 124,146 124,1467400 boulevard les Galeries d'Anjou, Montréal 100.00% 116,422 116,4221000 boulevard St-Jean, Pointe-Claire 100.00% 109,980 109,9808250 boulevard Décarie, Montréal 100.00% 84,041 84,04130-56 du Vallon, Québec City 100.00% 77,696 77,6961400 de la Rive-Sud, St-Romuald 100.00% 77,078 77,0783-243 Place Frontenac, Pointe-Claire 100.00% 66,118 66,1187450 boulevard les Galeries d'Anjou, Montréal 100.00% 66,380 66,380953-981 boulevard St-Jean, Pointe-Claire 100.00% 62,828 62,8288200 boulevard Décarie, Montréal 100.00% 60,558 60,5582800 avenue Marie-Curie, Montréal 100.00% 50,000 50,00025 rue de Lauzon, Boucherville 100.00% 43,452 43,4521 Place du Commerce, Brossard 100.00% 43,083 43,08311 Place du Commerce, Brossard 100.00% 40,531 40,5312310 boulevard Alfred-Nobel, Montréal 100.00% 36,400 36,400768-790 boulevard Décarie, Montréal 100.00% 35,804 35,8042 Place du Commerce, Brossard 100.00% 36,035 36,0359045 chemin de la Côte-de-Liese, Dorval 100.00% 31,183 31,1837150 rue Albert-Einstein, Montréal 100.00% 31,169 31,1698 Place du Commerce, Brossard 100.00% 30,011 30,0113 Place du Commerce, Brossard 100.00% 27,901 27,9011156 de la Rive-Sud, St-Romuald 100.00% 27,091 27,09185 rue Bombardier, Boucherville 100.00% 26,460 26,4602650 avenue Marie-Curie, Montréal 100.00% 26,261 26,2613669-3681 boulevard des Sources, Dollard-des-Ormeaux 100.00% 24,585 24,5852300 boulevard Alfred-Nobel, Montréal 100.00% 21,580 21,5802525 avenue Marie-Curie, Montréal 100.00% 21,384 21,3847290 rue Frederick- Ba nti ng, Montréal 100.00% 20,859 20,8597190 rue Frederick- Ba nti ng, Montréal 100.00% 20,244 20,2447200 rue Frederick- Ba nti ng, Montréal 100.00% 20,000 20,0007150 rue Frederick- Ba nti ng, Montréal 100.00% 19,623 19,6237170 rue Frederick- Ba nti ng, Montréal 100.00% 19,614 19,6145 Place du Commerce, Brossard 100.00% 19,451 19,4517210 rue Frederick- Ba nti ng, Montréal 100.00% 18,739 18,7399675 chemin de la Côte-de-Liesse, Dorval 100.00% 17,608 17,6089545 chemin de la Côte-de-Liesse, Dorval 100.00% 18,572 18,5727220 rue Frederick- Ba nti ng, Montréal 100.00% 17,500 17,5001135 de la Rive-Sud, St-Romuald 100.00% 12,008 12,0081301 Gay Lussac, Boucherville 100.00% 14,776 14,776985 boulevard St-Jean, Pointe-Claire 100.00% 11,800 11,800Québec Office1 100.00% 1,826,864 1,826,864Appraisal Institute of Canada AGM: St John’s 108 June 2008

Dundee REIT: Quebec Industrial 1AddressQuebec IndustrialOwnership Area Owned Total Area22000 route Transcanadienne, Baie d'Urfé 100.00% 316,243 316,2433901 rue Jarry Est, Montréal 100.00% 174,013 174,013105-125 Montée de Liesse, Montréal 100.00% 159,848 159,848900-950 boulevard St-Martin, Laval 100.00% 142,693 142,693375-455 rue Deslauriers, Montréal 100.00% 138,646 138,646295-371 rue Deslauriers, Montréal 100.00% 134,673 134,673457-491 and 495-533 rue Deslauriers, Montréal 100.00% 134,561 134,561105-145 rue Deslauriers, Montréal 100.00% 116,611 116,6112580 avenue Dollard, Montréal 100.00% 89,500 89,500350-354 boulevard Lebeau, Montréal 100.00% 73,800 73,8002695 avenue Dollard, Montréal 100.00% 70,853 70,8531415-1531 rue Berlier, Laval 100.00% 69,856 69,856290-316 rue Benjamin-Hudon & 165 rue Deslauriers, Montréal 100.00% 67,075 67,075555 and 604-678 rue Deslauriers, Montréal 100.00% 66,896 66,8969601-9665 chemin de la Côte-de-Liesse, Dorval 100.00% 66,542 66,5429551-9599 chemin de la Côte-de-Liesse, Dorval 100.00% 64,312 64,31210113-10161 chemin de la Côte-de-Liesse, Dorval 100.00% 63,177 63,17710205-10255 chemin de la Côte-de-Liesse, Dorval 100.00% 62,483 62,4832789-2855 boulevard Le Corbusier, Laval 100.00% 59,370 59,3704575-4605 rue Hickmore, Montréal 100.00% 57,887 57,887300 avenue Labrosse, Pointe-Claire 100.00% 55,333 55,3339501-9521 chemin de la Côte-de-Liesse, Dorval 100.00% 55,090 55,090115 boulevard Hymus, Pointe-Claire 100.00% 55,044 55,044295-341 rue Benjamin-Hudon and 255 rue Deslauriers, Montréal 100.00% 53,543 53,5439701-9745 chemin de la Côte-de-Liesse, Dorval 100.00% 52,660 52,6603961-4015 avenue Robert, Montréal 100.00% 52,447 52,447Appraisal Institute of Canada AGM: St John’s 109 June 2008

Dundee REIT: Quebec Industrial 2AddressQuebec IndustrialOwnership Area Owned Total Area700-740 avenue Renaud, 9125 and 9135 chemin de la Côte-de-Liesse, Dorval 100.00% 51,181 51,1819 Place du Commerce, Brossard 100.00% 50,600 50,600601-623 rue le Breton, Longueuil 100.00% 48,788 48,788601-631 rue Bériault, Longueuil 100.00% 48,709 48,7092115-2147 rue de la Province, Longueuil 100.00% 48,174 48,174605-607 rue Deslauriers, Montréal 100.00% 43,709 43,709500-510 rue Deslauriers, Montréal 100.00% 39,390 39,390220-232 rue Lebeau , Montréal 100.00% 36,000 36,000470-472 rue Deslauriers, Montréal 100.00% 35,559 35,5599335-9395 chemin de la Côte-de-Liesse, Dorval 100.00% 31,801 31,8017 Place du Commerce, Brossard 100.00% 31,500 31,5009405-9475 chemin de la Côte-de-Liesse, Dorval 100.00% 31,321 31,321908-926 Place Trans-Canada, Longueuil 100.00% 27,645 27,645742 avenue Renaud, Dorval 100.00% 30,381 30,38135 rue de Lauzon, Boucherville 100.00% 28,140 28,140874-896 Place Trans-Canada, Longueuil 100.00% 27,836 27,836938-952 Place Trans-Canada, Longueuil 100.00% 27,826 27,826982-1002 Place Trans-Canada, Longueuil 100.00% 27,415 27,415200-210 rue Lebeau , Montréal 100.00% 26,550 26,55090 Marie Victorin, Boucherville 100.00% 25,000 25,0005205 Rideau, Québec City 100.00% 24,400 24,400750 Chemin Olivier, St-Nicolas 100.00% 23,710 23,710735-743 avenue Renaud, Dorval 100.00% 23,386 23,3869010-9060 rue Ryan, Dorval 100.00% 23,063 23,0639245 and 9255 chemin de la Côte-de-Liesse, Dorval 100.00% 19,178 19,17810 Place du Commerce, Brossard 100.00% 18,300 18,3001351 Gay Lussac, Boucherville 100.00% 12,600 12,6001550 de Coulomb, Boucherville 100.00% 10,345 10,345780 Craig Street, St-Nicolas 100.00% 6,000 6,000336 Montée Industrielle, Rimouski 100.00% 4,447 4,447Québec Industrial 100.00% 3,336,110 3,336,110Appraisal Institute of Canada AGM: St John’s 110 June 2008

Dundee REIT: Ontario Office: OttawaAddressNational CapitalOwnership Area Owned Total Area975 boulevard Saint-Joseph, Gatineau 100.00% 194,167 194,167222-230 Queen Street (Capitol Square), Ottawa 100.00% 204,339 204,339110 O'Connor Street, Ottawa 100.00% 189,173 189,173Entrust Tower, Ottawa 100.00% 146,170 146,17025 Fitzgerald Road, Ottawa 100.00% 120,000 120,0001145 Hunt Club Road, Ottawa 100.00% 89,339 89,339770 Palladium Drive, Ottawa 100.00% 85,555 85,555750 Palladium Drive, Ottawa 100.00% 80,550 80,5501 Antares Road, Ottawa 100.00% 71,611 71,61135 Fitzgerald Road, Ottawa 100.00% 63,301 63,301700 Palladium Drive, Ottawa 100.00% 63,052 63,0522465 St Laurent Boulevard, Ottawa 100.00% 54,997 54,99721 Fitzgerald Road, Ottawa 100.00% 41,706 41,706National Capital Region Office 100.00% 1,403,960 1,403,960Appraisal Institute of Canada AGM: St John’s 111 June 2008

Dundee REIT: Ontario Office: Toronto RegionAddress Ownership Area Owned Total AreaToronto Region OfficeAviva Corporate Centre, Scarborough 100.00% 353,031 353,031Woodbine Steeles Corporate Centre, Markham 100.00% 292,632 292,63255 St Clair Ave West, Toronto 100.00% 251,554 251,554Centennial Centre, Toronto 100.00% 235,847 235,84756 Wellesley Street West, Toronto 100.00% 215,729 215,729State Street Financial Centre, Toronto 50.00% 413,934 206,96730 St Clair Ave West, Toronto 100.00% 174,827 174,8272400 Skymark Avenue, Mississauga 100.00% 169,004 169,004151 Bloor Street West, Toronto 100.00% 166,543 166,5432 St. Clair Avenue East, Toronto 100.00% 156,365 156,3655055 Satellite Drive, Mississauga 100.00% 151,745 151,745204 King Street East, Toronto 100.00% 135,707 135,7071625 Tech Avenue, Mississauga 100.00% 135,258 135,2581660-1680 Tech Avenue, Mississauga 100.00% 131,775 131,7752285 Speakman Drive, Mississauga 100.00% 130,335 130,335720 Bay Street, Toronto 50.00% 247,743 123,8721685-1705 Tech Avenue, Mississauga 100.00% 116,390 116,3902599 Speakman Drive, Mississauga 100.00% 112,967 112,96721 St. Clair Avenue East, Toronto 100.00% 109,995 109,9955110 Creekbank Road, Mississauga 100.00% 101,616 101,6165 Park Home Avenue, Toronto 100.00% 89,431 89,431110 Sheppard Avenue East, Toronto 50.00% 151,583 75,7921620 Tech Avenue, Mississauga 100.00% 73,371 73,3712121 Argentia Road, Mississauga 100.00% 61,185 61,1852400-2430 Meadowpine Boulevard, Mississauga 100.00% 59,354 59,35470 Richmond Street East, Toronto 100.00% 34,414 34,4142355 Skymark Avenue, Mississauga 100.00% 30,091 30,09140 Bramtree Court, Brampton 100.00% 20,462 20,4625345 Creekbank Road, Mississauga 100.00% 7,117 7,117Toronto Region Office 90.61% 4,330,005 3,923,376Partial Interests Subsequently ExcludedToronto Region Office (Amended)50.00%100.00%813,260 406,6313,516,745 3,516,745Appraisal Institute of Canada AGM: St John’s 112 June 2008

Dundee REIT: Ontario IndustrialAddress Ownership Area Owned Total AreaOntario Industrial100 Legacy Road, Ottawa 100.00% 103,438 103,4382110-2160 Williams Parkway, Brampton 100.00% 228,668 228,66877 Fima Crescent, Toronto 100.00% 212,110 212,1102155 Steeles Avenue East and 7956 Torbram Road, Brampton 100.00% 154,152 154,15251 Caldari Road, Vaughan 100.00% 146,426 146,4261925 Williams Parkway, Brampton 100.00% 143,205 143,2057600 Danbro Crescent, Mississauga 100.00% 137,728 137,72825 Bramtree Court, Brampton 100.00% 127,876 127,876375-425 Britannia Road, Mississauga 100.00% 121,321 121,3211219 Corporate Drive, Burlington 100.00% 103,119 103,11970 Disco Road, Toronto 100.00% 98,792 98,7921020 Birchmount Road, Scarborough 100.00% 87,161 87,161400 Chrysler Drive, Brampton 100.00% 87,090 87,0902440 Scanlan Street, London 100.00% 84,633 84,6331070-1100 Midway Boulevard, Mississauga 100.00% 83,368 83,3683915 Commerce Road, London 100.00% 82,600 82,6001820 Ironstone Drive, Burlington 100.00% 81,776 81,776199 Traders Blvd East, Mississauga 100.00% 77,449 77,44935 Bramtree Court, Brampton 100.00% 63,649 63,649120 Valleywood Drive, Markham 100.00% 59,425 59,4254255 14th Avenue, Markham 100.00% 57,377 57,3771020 Lorimar Avenue and 7115 Tomken Road, Mississauga 100.00% 52,295 52,295147 Massey Road, Guelph 100.00% 41,190 41,1903820 Commerce Road, London 100.00% 40,200 40,20055 Idema Road, Markham 100.00% 36,720 36,7201500-1520 Trinity Drive, Mississauga 100.00% 29,759 29,75985 Idema Road, Markham 100.00% 28,605 28,605Ontario Industrial 100.00% 2,570,132 2,570,132Appraisal Institute of Canada AGM: St John’s 113 June 2008

Dundee REIT: Summary of Pre-Sale PortfolioRegion Size % AreaOffice Area % AreaAtlantic 190,136 1.6%Quebec 1,826,864 15.3%National Capital Region 1,403,960 11.8%Toronto Region 4,330,005 36.3%Eastern Canada 7,750,965 64.9%Alberta 3,047,326 25.5%Other Western Canada 1,143,975 9.6%Western Canada 4,191,301 35.1%Total Office 11,942,266 100.0%Industrial Area % AreaQuebec 3,336,110 40.1%Ontario 2,570,132 30.9%Eastern Canada 5,906,242 71.1%Alberta 2,404,999 28.9%Western Canada 2,404,999 28.9%Total Industrial 8,311,241 100.0%Appraisal Institute of Canada AGM: St John’s 114 June 2008

Dundee REIT:Summary of Original Eastern Canada Sale PortfolioRegion Size % AreaOffice Area % AreaAtlantic 190,136 2.5%Quebec 1,826,864 23.6%National Capital Region 1,403,960 18.1%Toronto Region 4,330,005 55.9%Eastern Canada 7,750,965 100.0%Industrial Area % AreaQuebec 3,336,110 56.5%Ontario 2,570,132 43.5%Eastern Canada 5,906,242 100.0%Appraisal Institute of Canada AGM: St John’s 115 June 2008

Dundee REIT: Analysis of NOI versus Price:Original Sale PortfolioTotalRegionNOIQuebec $34,210National Capital Region $24,210Toronto Region $47,895Eastern Canada $106,315Alberta $42,747Other Western Canada $13,379Western Canada $56,126Total NOI $162,441PriceCapOriginal Sale PortfolioEastern Canada$2,400,000,000 4.43%Appraisal Institute of Canada AGM: St John’s 116 June 2008

Dundee REIT: Summary ofAmended Eastern Canada Sale PortfolioRegion Size % AreaOffice Area % AreaAtlantic 190,136 2.7%Quebec 1,826,864 26.3%National Capital Region 1,403,960 20.2%Toronto Region 3,516,745 50.7%Eastern Canada 6,937,705 100.0%Industrial Area % AreaQuebec 3,336,110 56.5%Ontario 2,570,132 43.5%Eastern Canada 5,906,242 100.0%Appraisal Institute of Canada AGM: St John’s 117 June 2008

Dundee REIT: Summary ofResidual Properties After Eastern Canada SaleResidual Portfolio Plus Western CanadaRegionSizeOfficeAreaToronto Region 813,260Eastern Canada 813,260Alberta 3,047,326Other Western Canada 1,143,975Western Canada 4,191,301Total Office 5,004,561IndustrialAreaAlberta 2,404,999Western Canada 2,404,999Total Industrial 2,404,999Appraisal Institute of Canada AGM: St John’s 118 June 2008

Dundee Book ValuesBefore and After Eastern Canada DispositionAppraisal Institute of Canada AGM: St John’s 119 June 2008

Discussion Questions• Is this type of transaction the new Standard?• Is this type of transaction arm’s length or is aclosely brokered deal simply the reality of atight market, i.e. limited number of players?• What to adjust?• Can you adjust?• Is the individual property value extractedrepresentative of a true individual sale?• Are the cap rates reflective of market?Appraisal Institute of Canada AGM: St John’s 120 June 2008