Milestone REIT -- summary under Trust Asset Sales

Overview

The REIT will sell its assets (essentially only the shares of a U.S. LLC (“U.S. Holdco”) indirectly holding its U.S. apartment portfolio) to a Starwood-affiliated purchasing LP (the “Purchaser”). The sale will not be subject to FIRPTA withholding given that Milestone is a U.S. corporation (and U.S. REIT) for Code purposes. In the case of the REIT’s unitholders, their pro rata portion of the capital gain will be distributed to them and their units will be redeemed with the balance of their share of the net proceeds (i.e., US$16.15 per unit, minus the portion distributed as a capital gain). U.S. investors hold Class B exchangeable units of a subsidiary Delaware LP of U.S. Holdco (“MMI LP”). MMI LP will be merged into a subsidiary LP of the Purchaser (the “Partnership Merger Sub”) with MMI LP as the surviving entity and with each exchangeable unit being converted into the right to receive US$16.15 in cash. Non-U.S. holders owning less than 10% of the REIT units (actually or constructively) will not be subject to U.S. FIRPTA withholding on the transaction.