Ms. Cheryl Fried reports

H&R REIT ANNOUNCES NEXT STEPS TO DRIVE UNITHOLDER VALUE FOLLOWING TERMINATION OF ARRANGEMENT AGREEMENT WITH CONSORTIUM OF PURCHASERS

At the special meeting of unitholders held earlier today, the special resolution approving the previously announced plan of arrangement involving H & R Real Estate Investment Trust and a consortium of purchasers did not receive the requisite H & R unitholder approvals. As a result and in accordance with the terms of the arrangement agreement dated Aug. 10, 2026, as amended, H & R has delivered written notice to the parties to the arrangement agreement terminating the arrangement agreement, effective immediately.

The REIT also announced that, in light of the outcome of the unitholder vote on the transaction, it is not proceeding with the proposed acquisition of the approximately 70-per-cent interest in two joint venture development properties owned by Lantower Residential Real Estate Development Trust (No. 1) that were not previously owned by the REIT given that a positive vote on the transaction was a condition to closing and is no longer capable of being satisfied.

Pursuant to the terms of the transaction, no termination fee will be payable by H & R to the consortium of purchasers in connection with the termination of the transaction. H & R will remain a publicly traded real estate investment trust, and its units will continue to trade on the Toronto Stock Exchange under the ticker symbol HR.UN.

Stephen Gross, independent lead trustee of H & R, said: "The H & R board of trustees brought this transaction to a unitholder vote with a view to maximizing unitholder value through an en bloc transaction, which it considered the most certain and actionable path and in the best interests of H & R. Since mid-August, we have met with a number of unitholders and listened closely to their perspectives on the proposed transaction. We appreciate their views and respect the outcome of today's vote.

"Today, as part of our initial go-forward plan, we are announcing a number of important actions, including retroactive payment of monthly distributions, the intent to pay a special distribution before year-end, a commitment to seek to surface unitholder value through asset sales and a board refreshment process that will include CEO succession planning. The board remains committed to providing value to all unitholders," said Mr. Gross.

Retroactive reinstatement of monthly distribution

Commencing with the November, 2026, distribution, the H & R board of trustees has reinstated the monthly distribution of five cents per unit, and has declared a special distribution to unitholders of 15 cents per unit to compensate for the months of August, September and October, 2026, during which time distributions were suspended pursuant to the arrangement agreement, for an aggregate of 20 cents per unit, payable as follows.

                    Distribution per   Annualized     Record date     Distribution date
                                unit                 

November, 2026                 $0.20        $0.60   Nov. 30, 2026         Dec. 15, 2026

Future special distribution

As a result of asset sales completed during the year, H & R intends to declare a special cash distribution of approximately $2.30 per unit prior to the end of 2026 subject to lender approval and in addition to the 20-cent-per-unit distribution set out above.

Commitment to surface value in the REIT's portfolio through potential asset and portfolio sales

The REIT intends to pursue opportunities to surface value through asset and portfolio sales with an aim to create a simplified value driven REIT, which may include the sale of the REIT's industrial properties. The board will evaluate the best use of proceeds of any such sale, which may include distributing cash to unitholders, paying down debt or repurchasing of units.

Board refreshment and chief executive officer succession planning

The board has commenced a process of board refreshment and has requested that the compensation, environmental, social, governance and nominating committee, which includes Mr. Gross, Lindsay Brand and Brenna Haysom, begin a search to identify new trustee candidates who can bring complementary skills and experience to the board. The board remains committed to governance best practices including regular board renewal and enhancement and intends to replace up to four members of the board with new independent trustees by the end of this year.

The mandate of the refreshed board will include CEO succession planning to ensure that H & R has the leadership in place to execute on its strategy. Throughout this process, the board looks forward to engaging with significant unitholders and other stakeholders.

Timing of third quarter 2026 results, conference call and webcast

H & R also announced today that it will release its financial results for the three and nine months ended Sept. 30, 2026, on Monday, Nov. 16, 2026. Management will host a conference call to discuss the financial results for H & R REIT on Monday, Nov. 16, 2026, at 5 p.m. Eastern Time.

Conference call

Participants can join the call by dialling 1-800-717-1738 or 1-289-514-5100. For those unable to participate in the conference call at the scheduled time, a replay will be available approximately one hour following completion of the call. To access the archived conference call by telephone, dial 1-289-819-1325 or 1-888-660-6264 and enter the passcode 78930 followed by the number key. The telephone replay will be available until Nov. 23, 2026, at midnight.

Webcast

A live audio webcast will be available. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. The webcast will be archived on H & R's website following the call date.

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 composed of high-quality residential (operating as Lantower Residential), industrial and office properties totalling approximately 20.5 million square feet.

We seek Safe Harbor.