WPT

Overview

Through an indirectly owned Delaware LP (the "Partnership"), the REIT (an Ontario unit trust) will acquire a portfolio of 37 warehouse and distribution industrial rental properties in the U.S., appraised at between $460.8M and $468.9 million. The properties will be acquired from a Minnesota-headquartered LLC ("Welsh"), which will hold exchangeable units in the Partnership (i.e, an "UPREIT" structure), and will be the asset and property manager. Although the REIT will be a U.S. corporation under the U.S. anti-inversion rule, this will be addressed by it being a U.S. REIT under the Code. For Canadian purposes, it will avoid the SIFT rules by not holding non-portfolio property.

Structure

A direct Delaware LLC subsidiary of the REIT ("US Holdco") will hold all the Class A units of the Partnership, which will be general partner units.

Following closing, Welsh will hold an approximate 52.1% effective interest in the REIT units (48.6% after over-allotment) by virtue of holding all of the Class B exchangeable units of the Partnership (being 10.9M units).

Unitholders/Redemptions

In order to assist in qualifying as a U.S. REIT, the declaration of trust will prohibit any person from actually or constructively owing more than 9.8% of the REIT units, subject to any exemptions granted by the board. There will be a unitholder rights plan. Unit redemptions in excess of $50,000 per month (with the redemption price calculated at the lesser of closing market price and 90% of VWAP) are satisfied with notes of the REIT.

Management

Almanac Realty Investors, LLC, formerly Rothschild Realty Manager, LLC holds a $183M note of Welsh, which is convertible into 81% of the Welsh equity. The CEO of the REIT is the CEO of Welsh.

Debt

Debt level targeted at below 55% of consolidated gross book value ($236.2M at closing) (p. 80).

Distributions

Monthly, of $0.0583 representing 90% of AFFO. The tax-deferred percentage for 2013 was estimated in the prelim. to be 75%. It is estimated for 2013 that 69% of the monthly distributions will be paid out of the REIT's current or accumulated earnings and profits and, accordingly, will be subject to US withholding tax. Distributions will be paid in US dollars, with FX hedging of the REIT's US-dollar revenues.

Implementation of Structure

The following transactions will occur upon closing of the offering:

• the REIT will use the net proceeds of the offering to subscribe for preferred and common shares of US Holdco, which will subscribe for Class A units of the Partnership
• Welsh will transfer its equity of the property LLCs or LPs to the Partnership in consideration for cash of $68.4 million and 10.9M Class B units

Canadian tax consequences

SIFT tax. Management does not anticipate that the REIT will hold any non-portfolio property or carry on a Canadian business, so that it should not be considered to be a SIFT trust.

FAPI

. A portion of the income earned by US Holdco (and CFAs of the Partnership, or certain subsidiary partnerships thereof) will be foreign accrual property income, and included in the income of the REIT.

FTCs

The tax disclosure is not directed to investors who hold more than 5% of the REIT units for Code purposes. The U.S. withholding tax deducted in respect of a distribution paid on a Unit in a taxation year will generally be characterized as "non-business income tax," and may be deducted as a foreign tax credit where the holder has sufficient non-business income from U.S. sources. Alternatively, such non-business income tax (including any amount not deductible as a foreign tax credit) generally may be deducted by the Holder in computing the Holder's income. A Holder's ability to apply U.S. withholding taxes in the foregoing manner may be affected where the Holder does not have sufficient taxes otherwise payable under Part I of the Tax Act, or sufficient U.S. source income in the taxation year the U.S. withholding taxes are paid, or where the Holder has other U.S. sources of income or losses, or has paid other U.S. taxes. Per 2014 AIF:

The proceeds receivable on a disposition of a Unit may not qualify as U.S. source income for purposes of the Tax Act (including for Canadian foreign tax credit purposes), and beneficiaries of certain Unitholders that are trusts may not be considered to have paid such tax for purposes of the Tax Act and, accordingly, may not be entitled to a foreign tax credit in respect of such U.S. tax for Canadian tax purposes.

U.S. tax consequences

REIT status. The REIT is treated as a U.S. corporation for all Code purposes under Code s. 7874 and, accordingly, is permitted to elect to be treated as a real estate investment trust. The REIT will elect real estate investment trust status beginning with its taxable year ending December 31, 2013. Management intends to make timely distributions sufficient to satisfy the annual distribution requirements.

Ordinary distributions to non-US holders

Distributions that are neither attributable to gains from the sales or exchanges by the REIT of U.S. real property interests ("USRPIs"), nor designated as capital gains dividends, will be treated as dividends of ordinary income to the extent they are made out of the REIT's current or accumulated earnings and profits, so that qualifying non-US holders generally are entitled to a 15% withholding rate on such distributions under the Treaty. Such qualifying non-US holders are holders holding no more than 5% of the outstanding units if the units are publicly traded, individuals holding no more than 10% of the outstanding units, and those holding no more than 10% of the outstanding units and the REIT is diversified (based on no single property exceeding 10% of the gross value of the real property). RRSPs, RRIFs and DPSPs may be eligible for exemption. Distributions received by a TFSA, RESP or RDSP will be treated for the above purposes as received by the beneficiary or annuitant.

Distributions in excess of the REIT's current and accumulated earnings and profits will reduce the adjusted tax basis of the non-resident holder's units. Because management expects that the REIT units will be considered to be regularly traded on an established securities market, it does not expect to be required to withhold on such excess distributions made to non-US holders owning 5% or fewer of the outstanding units during the applicable testing period.

FIRPTA re distributions

A distributions of proceeds attributable to the sale or exchange by the REIT of USRPIs will not be subject to FIRPTA tax or branch profits tax and instead will be treated as an ordinary distribution if (as anticipated -see below) the REIT units qualify as regularly traded on an established securities market located in the U.S. and the recipient unitholder does not own more than 5% of the units at any time during the preceding one year. A non-US unitholder who fails to give notice of becoming the owner or constructive owner of more than 5% of the units, will have the excess (over 5%) units sold, with the lesser of the original purchase price for the excess units and the net sales proceeds being remitted to it.

FIRPTA re unit dispositions

Although the REIT is expected to be a U.S. real property holding corporation ("USRPHC"), the REIT units will not be treated as an interest in a USRPHC to a disposing unitholder who does not own or constructively own more than 5% of the units at any time in the five years preceding the disposition (or such shorter period as the units were held), if the units qualify as "regularly traded on an established securities market." As the REIT has received indications that at least two brokers or dealers are willing to regularly quote and make a market in the REIT units on the pink sheets and/or the OTCQX, the units should qualify as "regularly traded" on an established securities maket in the U.S. A more rigorous test would apply if reliance were placed on the TSX as the relevant securities market for these purposes.