Brookfield Canada Office Properties to Acquire Bay Adelaide Centre East Development in Toronto

Brookfield Canada Office Properties BOXC announced today that it has acquired the Bay Adelaide Centre East development in downtown Toronto. BOX purchased the property -- a 44-storey, 980,000-square-foot premier office tower currently under construction -- from parent company Brookfield Office Properties Inc. BPO based on a value of C$635 million at stabilization ($C602 million net of an imputed return on BOX's equity investment). BPO is selling the asset to BOX on an "as-if-completed-and-stabilized basis" and will retain development obligations including construction, lease-up and financing. At closing, through available liquidity, BOX will pay to BPO C$170 million representing the amount invested and value created to date in the project. BOX will commit to fund an additional C$26 million of up-front equity and an additional C$350 million that will be funded from a first mortgage construction loan. Additionally, BOX will make a final payment to BPO of C$56 million on stabilization for an aggregate total investment of C$602 million. "This acquisition is strategic for BOX as Brookfield's vehicle for the ownership of its premier Canadian office assets," said Jan Sucharda, president and chief executive officer. "Today's announcement affirms BOX's growth strategy and its commitment to adding value for its unitholders." The East tower is 60% pre-leased to anchor tenants Deloitte and Borden Ladner Gervais and is on target to be completed in late 2015. BOX will earn net operating income of C$32 million from substantial completion of the project. Bay Adelaide Centre is the newest, best-in-class office precinct in Toronto's financial core. The East tower is being developed to the highest level of efficiency and sustainability and will achieve LEED Platinum certification upon completion. The West tower opened in 2009 and is 95% occupied. BOX's board of trustees established an independent committee to assess the transaction and the committee unanimously recommended the board of trustees' approval. The committee retained Morrison Park Advisors Inc. as its financial advisor. Further details of this transaction are included in a supplemental information package that is available on BOX's website: www.brookfieldcanadareit.com.