CAPREIT Limited Partnership entered into an agreement to acquire European Commercial Real Estate Investment Trust (TSXV:ERE.UN) (ECREIT) from David Ehrlich and others in a reverse merger transaction on December 10, 2018. As part of transaction, ECREIT will issue approximately 59.6 million of its units to CAPREIT, totaling CAD 238.56 million. ECREIT may also satisfy up to an additional CAD 88 million of the purchase price through the issuance of ECREIT units to the extent ECREIT is unable to satisfy the CAD 88 million in cash prior to closing. In addition, if ECREIT is unable to fund the land transfer tax incurred as a result of the transaction, CAPREIT will subscribe for up to approximately an additional CAD 12 million in European Commercial Real Estate Investment units. ECREIT will assume CAPREIT’s European mortgages of CAD 307.02 million currently associated with the properties. Post-acquisition, Canadian Apartment Properties Real Estate Investment will hold approximately 58% of ECREIT’s units. ECREIT will be majority owned and managed by CAPREIT. European Commercial Real Estate Investment Trust intends to change its name, subject to unitholder approval, prior to closing. ECREIT’s Chief Executive Officer, Phillip Burns, will become an employee of CAPREIT and will become Chief Executive Officer of resulting company. Following closing, ECREIT trustees Ira Gluskin, Jan Arie Breure and Phillip Burns will continue as trustees of resulting company. As part of the transaction, CAPREIT will be entitled to nominate three trustees of resulting company. Subject to TSXV approval, it is proposed that Harold Burke, Gina Cody and Michael Stein, will be appointed as trustees of resulting company. Another independent trustee, to be selected by ECREIT’s Board of Trustees, is expected to be appointed in the months following closing. Upon closing, ECREIT’s existing management agreement with Maple Knoll Capital Ltd. will either be terminated at no cost to ECREIT or assumed by CAPREIT. Termination fee payable by ECREIT to CAPREIT is CAD 3 million. The transaction is subject to approval of ECREIT’s unitholders at a special meeting is expected to be held in early 2019, certain regulatory approvals, including the approval of the TSX-V, lender consents, resignation of Fred Waks and David Ehrlich at closing, the entering into of certain transaction documents on closing in substantially the form attached to the purchase agreement and certain termination rights available to the parties under the purchase agreement. The Independent Committee unanimously determined that the transaction was in the best interests of ECREIT and recommended its approval by ECREIT’s Board of Trustees. ECREIT’s Board of Trustees unanimously supports the transaction and recommends that its unitholders vote in favor of the transaction. The transaction is expected to close in the first quarter of 2019. A special meeting of shareholders of European Commercial Real Estate Investment Trust is scheduled on March 21, 2019. As of March 21, 2019, ECREIT shareholders approved the transaction. As of February 28, 2019 transaction is expected to close on or about March 29, 2019. RBC Capital Markets acted as financial advisor and David Weinberger, Ed Waitzer, Mike Devereux, Brandon Hoffman, Benjamin Jain, Billy Rosemberg, Oron Eli, Lindsay Gwyer, Eryn Fanjoy, Melissa Schyven, Lisa Matchim and Sabina Delvecchio of Stikeman Elliott LLP acted as legal advisors to CAPREIT. Scotiabank acted as financial advisor and Adam Kline of Miller Thomson LLP acted as legal advisor to ECREIT.