Mr. Tom Hofstedter reports

H&R REIT TO BE ACQUIRED IN $6.7 BILLION TRANSACTION

H & R Real Estate Investment Trust has entered into an arrangement agreement with GO Residential Real Estate Investment Trust (GO REIT) and 1001700058 Ontario Inc. (purchaser), on behalf of a consortium of co-purchasers (which includes funds affiliated with Blackstone Real Estate, Crestpoint Real Estate Investments Ltd., the Public Sector Pension Investment Board (PSP Investments), and a company controlled by members of the family of Tom Hofstedter, executive chairman and chief executive officer of H & R (CRAL), pursuant to which GO REIT and the purchaser (on behalf of the asset purchasers) have agreed to acquire all of the assets of H & R by way of a court-approved plan of arrangement under the Business Corporations Act (Alberta) in a cash and unit transaction valued at approximately $6.7-billion, including the assumption of certain debt.

Under the terms of the arrangement agreement, H & R unitholders will receive $4.28 per unit in cash plus 0.5688 GO REIT unit per H & R unit, representing a value of $12.01 per H & R unit based on the closing unit price of GO REIT on the Toronto Stock Exchange and a prevailing Canadian-dollar/U.S.-dollar exchange rate of 1.3942 on Aug. 10, 2026. The transaction is expected to close in the fourth quarter of 2026, subject to unitholder, court and regulatory approvals and other customary closing conditions.

The transaction concludes H & R's multiyear strategy to simplify its portfolio and focus on high-quality residential assets, delivers immediate cash and GO REIT unit consideration at a premium, and provides H & R unitholders with a 66.9-per-cent ownership stake in GO REIT on a pro forma basis. The board of trustees of H & R (with interested trustees abstaining) unanimously recommends that unitholders vote in favour of the transaction at a special meeting of unitholders expected to be held in October, 2026.

Transaction highlights:

• Compelling upfront premium and immediate cash liquidity: The consideration of $12.01 per unit represents a 14.5-per-cent premium to H & R's unaffected closing unit price on the TSX as at June 10, 2026 (being the last trading day prior to media speculation regarding H & R being in talks with Blackstone regarding a potential transaction), implying an equity value and enterprise value for H & R of approximately $3.4-billion and $6.7-billion, respectively. The $4.28-per-unit cash component delivers immediate and certain value to H & R unitholders, independent of market conditions at closing.
• Significant ownership in one of North America's leading residential REITs: After giving effect to the transaction, GO REIT will own 35 residential properties and over 13,300 residential suites across eight markets and four states, combining H & R's 27 properties and approximately 10,300 suites across seven Sunbelt markets and New York with GO REIT's 10 properties comprising 3,034 suites in the New York metro area. H & R unitholders will hold approximately 66.9 per cent of the pro forma entity. Two new trustees nominated by H & R are expected to be added to GO REIT's board of trustees, providing H & R unitholders with continuing governance representation in the go-forward entity.
• Positive financial impact on GO REIT and structural conditions for rerate: The GO REIT units H & R unitholders are receiving are expected to represent an attractive entry point into a combined entity with greater scale, a stronger balance sheet, significantly broader market reach and significant growth potential. Management of GO REIT expects the transaction to be accretive to GO REIT's FFO (funds from operations) and AFFO (adjusted funds from operations) per unit and reduce pro forma leverage by more than approximately two times at close, with further potential improvement from synergies and income support. Management believes the combined platform should trade more in line with its North American residential REIT peers over time.
• Dedicated management with a singular residential focus: The pro forma entity will be led by GO REIT's current executive team -- Josh Gotlib (chief executive officer), Matthew Keller (president), Max Kaufman (chief operating officer) and Peter Sweeney (chief financial officer) -- providing H & R unitholders with access to a seasoned management team with an exclusive focus on the multifamily residential sector.
• Tax-deferred rollover: The issuance of GO REIT units to H & R unitholders is structured to provide a tax-deferred rollover for eligible Canadian-resident unitholders.

"This transaction delivers immediate cash and GO REIT unit consideration at a meaningful premium and establishes H & R unitholders as significant partners in a larger, stronger, pure play residential platform with considerable upside potential. Following last year's exhaustive and independent review of H & R's strategic alternatives, the independent trustees are confident this transaction represents the best path forward for our unitholders," said Stephen Gross, independent lead trustee at H & R.

"This is a transformational transaction for GO REIT and H & R unitholders. GO REIT has built one of the highest-quality luxury residential portfolios in New York City, and H & R adds to that foundation with its portfolio of exceptional residential assets across the highest-growth Sunbelt markets in the United States. Together, we are establishing GO REIT as a leading luxury residential REIT with New York City and Sunbelt exposure, a platform with the scale, balance sheet strength and geographic diversification to compete for a broader category of investors. We are excited to welcome H & R unitholders as our partners," said Josh Gotlib, chief executive officer of GO REIT.

Transaction details

Under the arrangement agreement, H & R unitholders will receive the consideration at a value of $12.01 per unit based on the closing unit price of GO REIT and a prevailing Canadian-dollar/U.S.-dollar exchange rate of 1.3942 on Aug. 10, 2026. The consideration implies an equity value and enterprise value for H & R of approximately $3.4-billion and $6.7-billion, respectively, on a fully diluted basis.

As part of the transaction: (i) GO REIT will acquire H & R's 23 Lantower residential properties across three Sunbelt states, together with H & R's 50-per-cent interest in the Jackson Park luxury high-rise apartment complex in New York, the Gotham Centre Class A office building in New York, a 50-per-cent interest in the River Landing mixed-use asset in Miami and Lantower's head office building in Dallas, in consideration for GO REIT units, the assumption of H & R's Series S and Series T unsecured debentures with an aggregate principal amount of $550-million, and associated property-level debt of approximately $1.1-billion (U.S.); (ii) Blackstone will acquire certain of H & R's Canadian industrial properties for cash; (iii) Crestpoint and PSP Investments will acquire certain of H & R's Canadian industrial properties, in which they hold an existing co-ownership interest, for cash; and (iv) CRAL will acquire H & R's remaining non-core assets for cash, together with the redemption or cancellation of certain units held by CRAL and its joint actors, in each case subject to customary closing conditions. CRAL will also, among other things, commit to provide cost support and income support payments to GO REIT subsidiaries and assume certain contingent liabilities.

In addition, in accordance with its obligations under the management agreement with Lantower Residential Real Estate Development Trust (No. 1) (the REDT), H & R intends to make an offer to the REDT to acquire its interests in two joint venture development properties on the terms set out in the management agreement. If that acquisition is not completed prior to closing, GO REIT will receive H & R's approximately 30-per-cent interest in those properties and cash in lieu of the REDT's interest in those properties.

Prior to closing, GO REIT, which currently trades in U.S. dollars on the TSX, intends to introduce a Canadian-dollar-denominated listing on the TSX, which is expected to broaden GO REIT's investor base. This Canadian-dollar-denominated listing is a condition to the closing of the arrangement agreement.

The arrangement agreement includes customary deal protection provisions, including reciprocal customary non-solicitation covenants on the part of H & R and GO and fiduciary outs permitting the H & R board and the GO board to accept superior proposals, subject to a right to match. In addition, the arrangement agreement provides that: (a) a termination fee of approximately $102-million (representing 3 per cent of H & R's equity value) is payable by H & R to the purchaser and GO if H & R accepts a superior proposal and in certain other specified circumstances; and (b) a termination fee of approximately $27-million (representing 3 per cent of GO's equity value) is payable by GO to H & R if GO accepts a superior proposal and in certain other specified circumstances. In addition, a reverse termination fee of $136-million (representing 4 per cent of H & R's equity value is payable by the purchaser to H & R in the event the purchaser fails to finance the cash consideration (including for portions relating to the funds being advanced by the asset purchasers for their portion of the acquired assets) and in certain other specified circumstances.

Independent trustees and board of trustees recommendation

Consistent with their fiduciary duties, the independent trustees reviewed and evaluated the terms of the transaction with the assistance of their independent financial and legal advisers. The board, acting on the unanimous recommendation of the independent trustees -- with Mr. Hofstedter declaring his conflict of interest and abstaining from voting and Juli Morrow abstaining from voting as a result of having provided legal advice on real estate matters to H & R -- has determined that the transaction is fair to holders of H & R units and is in the best interests of H & R. The board recommends that unitholders, holders of Class B LP units, and holders of special voting units vote in favour of the transaction.

The independent trustees and the board based their conclusions on a number of factors, including:

• Compelling upfront value to unitholders: The consideration represents a 14.5-per-cent premium to H & R's unaffected closing unit price as of June 10, 2026 (being the last trading day prior to media speculation regarding H & R being in talks with Blackstone regarding a potential transaction). The $4.28 cash component provides immediate and certain value independent of market conditions at closing, and the GO REIT unit consideration is structured to provide a tax-deferred rollover for eligible Canadian-resident unitholders.
• Independent process and financial fairness: The transaction is the result of extensive arm's-length negotiations conducted by the independent trustees and their advisers, independent of H & R management, and follows H & R's strategic review process conducted during 2025. CIBC World Markets Inc. has provided a fairness opinion to the independent trustees and National Bank of Canada Capital Markets (NBCCM) has provided an independent fairness opinion and formal valuations to the independent trustees. The independent trustees, having received each of the CIBC fairness opinion and the NBCCM fairness opinion and valuations, unanimously recommended the transaction. The valuations and fairness opinions will be included in the information circular, which is expected to be made available to unitholders in due course.
• Quality of the go-forward platform: The transaction is expected to create the second-largest residential REIT on the TSX by enterprise value, to be led by GO REIT's experienced management team with an exclusive focus on the multifamily sector. The transaction is expected to be accretive to GO REIT's FFO per unit and AFFO per unit and materially strengthen its balance sheet and increase its equity float capitalization by approximately four times the current float.
• Benefits to stakeholders: The independent trustees and the board considered the interests of H & R's broader stakeholders, including tenants and employees, and are satisfied that the terms of the arrangement agreement treat all stakeholders fairly. The H & R asset portfolios are being acquired by parties with the required capabilities and financial resources to successfully manage and operate them going forward.
• Reasonable likelihood of completion: The closing conditions are limited and reasonable. GO REIT and the asset purchasers have demonstrated the commitment and financial capacity to complete the transaction.
• Required approvals: The transaction will become effective only if approved by the requisite majority of unitholders at the special meeting as described below and by the Alberta Court of King's Bench, after considering the procedural and substantive fairness of the transaction.

Additional details regarding the background to the transaction, the rationale for the recommendations of the independent trustees and the board, and copies of the fairness opinions and formal valuation will be included in the management information circular in connection with the special meeting, which will be filed under H & R's profile on SEDAR+ in due course. Until the management information circular is available, unitholders are not required to take any action in respect of the transaction.

Tax treatment

The GO REIT unit consideration is structured to provide a tax-deferred rollover for eligible Canadian-resident unitholders. The cash portion of the consideration will include certain income, including recaptured depreciation, and capital gains realized by H & R in the transaction. H & R unitholders resident in Canada will be required to include such income and the taxable portion of such capital gains in computing their income for Canadian income tax purposes.

Distributions

H & R will pay the distribution declared in July, 2026, and payable in August, 2026, as scheduled. No further distributions will be declared or paid for September through December, 2026. If the transaction has not closed by Jan. 1, 2027, H & R intends to resume distributions not exceeding five cents per unit per month until closing.

Approvals

The transaction is structured as a statutory plan of arrangement under the Business Corporations Act (Alberta).

The independent trustees and the board have determined that the purchaser, CRAL and their affiliates, associates and joint actors may constitute a related party and that the transaction constitutes a business combination under Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions.

Completion of the transaction requires approval by: (i) at least 66-2/3rds per cent of votes cast by holders of trust units and special voting units voting together; (ii) at least 66-2/3rds per cent of votes cast by holders of units, special voting units and exchangeable limited partnership units of H & R Portfolio Limited Partnership (Class B LP units) voting together; and (iii) a simple majority of votes cast by holders of units, Class B LP units and special voting units voting together, excluding units held by CRAL, its joint actors and affiliates, and any other unitholders excluded under MI 61-101. NBCCM was retained by the independent trustees to provide independent formal valuations in accordance with MI 61-101. H & R unitholders will be asked to vote on the transaction at the special meeting expected to be held in October, 2026.

Each of the trustees and executive officers of H & R who owns trust units of H & R, special voting units and exchangeable limited partnership units of H & R Portfolio LP (Class B LP units) and companies controlled by the family of Mr. Hofstedter, collectively holding approximately 3.5 per ccent of H & R trust units, 100 per cent of special voting units and 43 per cent of Class B LP units, has entered into a voting and support agreement with GO REIT and the purchaser, pursuant to which, subject to the terms and conditions set forth therein, they will vote all of their units in favour of the arrangement agreement.

Under applicable TSX rules, the issuance of GO REIT units under the transaction also requires approval by a majority of GO REIT unitholders at a separate special meeting expected to be held in October, 2026. Each of the trustees and executive officers of GO REIT who owns voting securities of GO REIT has entered into a voting and support agreement with H & R and the purchaser, pursuant to which, subject to the terms and conditions set forth therein, they will vote all of their securities in favour of the arrangement agreement.

The transaction is expected to close in the fourth quarter of 2026, subject to approval of the Alberta Court of King's Bench, the unitholder approvals described above, clearances under the Competition Act (Canada) and other customary closing conditions.

Copies of the arrangement agreement and accompanying asset purchase agreements with GO REIT and the asset purchasers will be filed under H & R's profile on SEDAR+. Following the completion of the transaction, it is expected that the units will be delisted from the TSX and H & R will apply to cease to be a reporting issuer in all provinces of Canada.

Conference call

H & R and GO REIT will host a joint analyst conference call on Aug. 11, 2026, at 8 a.m. ET to discuss the transaction. A supporting slide presentation will be available on H & R's website. A live audio webcast is available on-line.

Analysts wishing to ask questions during the question-and-answer session should dial in using conference ID 2312353:

• Canada: 647-932-3411;
• United States and international: 1-646-307-1963;
• Toll-free: 800-715-9871.

A replay will be available for one week following the call at 647-362-9199 (Canada), 609-800-9909 (U.S.) or 800-770-2030 (toll-free), using playback ID 2312353.

Advisers

CIBC World Markets and National Bank Financial Inc. are acting as exclusive financial advisers to H & R and the independent trustees, respectively. Miller Thomson LLP is acting as legal counsel to the independent trustees and Goulston & Storrs PC is acting as U.S. tax counsel to the independent trustees.

J.P. Morgan Securities LLC acted as exclusive financial adviser to GO Residential. GO Residential engaged Blake, Cassels & Graydon LLP as Canadian counsel, Skadden, Arps, Slate, Meagher & Flom LLP as U.S. counsel, and Pryor Cashman LLP as U.S. real estate counsel.

BMO Capital Markets is acting as financial adviser to CRAL. Bennett Jones LLP is acting as legal counsel to the purchaser and CRAL.

Simpson Thacher & Bartlett LLP and Torys LLP are acting as legal counsel to Blackstone.

About H & R Real Estate Investment Trust

H & R is one of Canada's largest real estate investment trusts. H & R has ownership interests in a Canadian and U.S. portfolio primarily comprising high-quality residential (operating as Lantower Residential), industrial and office properties totalling approximately 21.2 million square feet.

We seek Safe Harbor.