Offering

Of units of the REIT, which is TSXV-listed, at $2.00 per unit for gross proceeds of $25M ($28.75M if over-allotment).

Structure

Structure

The Fund subscription proceeds described below are used by the Fund to subscribe for a general partner interest in a subsidiary general partnership (Holding GP) with the other general partner (Holding GP) being an Ontario corporation owned by the Manager. The Fund General Partner also is owned by the Manager. The Fund may also subscribe for interest-bearing notes of Holding GP.

Overview of structure

An Ontario LP ("REIT LP") that will trade on the TSX Venture Exchange invests in a Maryland corporation (holding US apartment buildings) that qualifies as a US private REIT. Management is not entitled to fees (other than expense reimbursement); but the Managing GP holds Class B units of REIT LP that stay fixed at a 5% interest, notwithstanding subsequent Class A unit issuances to the public, until the market cap reaches $300 million (or there is a successful takeover). No (cross-border) internal debt.

General

Terms

ROC payments

Semi-annual principal repayments of $2.50 per Note, starting on September 14, 2014, if the closing level of the Index (the S&P/TSX 60) is at least equal to the Barrier Level (70% of the initial level) two business days before such repayment date.

Autocall redemption

If on an observation day two business days before the 2nd to 5th anniversary of the March 14, 2014 day of issue (with the 5th anniversary being the maturity date) the closing level of the Index is higher than 110% of its initial level, the Notes will automatically be redeemed.

ROC distributions and Maturity

The purchaser of a Cdn.$100 note is entitled to receive monthly distributions of $0.51 as partial repayments of principal (ROC distributions), or $30.60 over the five-year term. On the Maturity Date, the holder will receive (in addition to the ROC distribution then due) for each $100 (original) principal amount of note a cash payment equal to the Outstanding Principal Amount (i.e., the original $100 principal minus ROC distributions) plus the "Aggregate Return" (which can be a negative amount).

The purchaser of a Cdn.$100 note is entitled to receive semi-annual partial repayments of 2.25% thereof (ROC distributions), or approximately 13.5% over the term of approximately three years. On maturity, the Note is redeemed for an amount determined as follows:

(a) if the Index Return (on the S&P/TSX 60) is in excess of 4.5%, the redemption amount is equal to the (original) principal amount ($100) plus a 10% participation in that excess;

(b) if the Index Return is equal to or less than 4.5% but better than -30%, the redemption amount is $100; or