RESREIT -- summary under Domestic REITs

Overview

Offering of 14.72M instalment receipt units ("Receipt Units") to be distributed to the public and of 4.95M (fully-paid) "LT/Greenwin Units" described below. A portion of the proceeds will be used to prepay $175M of rent under 35 year leases of eight apartment buildings to RESREIT.

Receipt Units

The initial instalment payable at closing is $6.00 per unit and the fianl instalment is $4.00 per unit payable on or before the first anniversary of closing. The Receipt Units will be pledged to secure the final instalment.

LT/Greenwin Units

Will be issued on closing to member of the Greenwin Properties Group and the Lehndorff Tandem Properties Group in partial payment for the initial portfolio.

RESREIT

Will be a closed-end mutual fund trust.

Purchase/Lease of Properties

The REIT will acquire 32 apartment buildings and one townhouse complex, for a total amount payable of $366M including assumed mortgages. For eight of the properties, RESREIT will acquire a leasehold interest and prepay rent (of $175.5M) at closing under a long-term lease (35-year term).

Distributions

$0.66 p.a. per Receipt Unit distributed monthly, estimated to be 78% tax-deferred for 1998.

Canadian tax consequences

The prepaid rent (totalling $127.5M will be deducted on a straight-line basis (an annualized deduction of $3.6M). RESREIT is of the view that rights under the Rights Plan have no value., so that no amount should be allocated to it.