Mr. Brad Cutsey reports

INTERRENT REIT TO BE ACQUIRED BY CLV GROUP IN PARTNERSHIP WITH GIC IN $4 BILLION ALL-CASH TRANSACTION

InterRent Real Estate Investment Trust has entered into an arrangement agreement with Carriage Hill Properties Acquisition Corp., a newly formed entity owned by CLV Group and GIC, pursuant to which the purchaser will acquire InterRent in an all-cash transaction valued at approximately $4-billion, including the assumption of net debt.

Under the terms of the arrangement agreement, InterRent unitholders (other than retained interest holders, as such term is defined in the arrangement agreement and which, as of the date of the arrangement agreement, included CLV Group and its affiliated entities) will receive $13.55 per unit in cash, which represents a 35-per-cent premium to InterRent's unaffected closing unit price on the Toronto Stock Exchange as of March 7, 2025, and a 29-per-cent premium to InterRent's 90-day volume-weighted average price on the TSX as of May 26, 2025.

"We are pleased to provide immediate and certain premium value to our unitholders through this all-cash transaction with CLV Group and GIC, while also allowing InterRent to solicit superior proposals through a go-shop period of 40 days," said Brad Cutsey, chief executive officer and trustee of InterRent. "The entire board of trustees and management team are proud to have executed on our strategy to build a best-in-class operating platform and assemble a portfolio of well-located properties in some of Canada's strongest urban rental markets. Leveraging that platform, we have repositioned these assets into high-quality communities, generating industry-leading growth and creating significant value for all stakeholders."

"We are delighted to partner together with GIC on this transformative transaction, combining our 50 years of operating experience and GIC's strong track record as a long-term investor in Canada and around the world," said Mike McGahan, president and chief executive officer, CLV Group. "We look forward to continuing to deliver exceptional value to residents through the operational excellence of our combined CLV and InterRent teams."

InterRent expects to continue to pay its regular monthly distribution per unit through closing of the transaction.

Transaction details

Pursuant to the arrangement agreement, the purchaser will acquire all of the units of the REIT (other than the units of retained interest holders) for $13.55 per unit in cash by way of a statutory plan of arrangement under the provisions of the Business Corporations Act (Ontario) (such plan of arrangement to include a transfer of all or substantially all of the assets of the REIT and/or its subsidiaries, on the terms and conditions set out in such plan of arrangement). The total equity value of the transaction is approximately $2-billion on a fully diluted basis, and the total transaction value is approximately $4-billion including the assumption of net debt.

To ensure the process remains fair, open and in the best interests of the unitholders, and pursuant to the arrangement agreement, InterRent has an initial 40-day go-shop period, beginning on May 28, 2025, and ending on July 6, 2025, during which InterRent, with the assistance of its advisers, may actively solicit and consider superior proposals from third parties that express an interest in acquiring InterRent. InterRent has the option to extend the go-shop period by up to five days (to July 11, 2025) in certain circumstances. The purchaser will have the right to match any superior proposals received either during or after the go-shop period, on the terms and conditions set forth in the arrangement agreement.

The arrangement agreement also includes customary provisions, including non-solicitation by the REIT of alternative transactions following the conclusion of the go-shop period, which is subject to customary fiduciary-out provisions that enable InterRent to terminate the arrangement agreement and accept a superior proposal in certain circumstances.

A termination fee of approximately $49-million or $79-million would be payable to the purchaser under certain customary circumstances if the arrangement agreement is terminated during or after the go-shop period, respectively. A reverse termination fee of approximately $89-million would be payable to the REIT if the arrangement agreement is terminated in certain circumstances.

There can be no assurance that the go-shop process will result in a superior proposal. InterRent does not intend to disclose developments with respect to the go-shop process unless and until the board of trustees makes a determination requiring further disclosure.

The completion of the transaction requires approval of at least 66-2/3rds per cent of the votes cast by unitholders, as well as the approval by a simple majority of votes cast by unitholders, excluding CLV Group, its affiliates and any other unitholders required to be excluded under Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. The transaction is also subject to court approval, regulatory approvals, consents and approvals from Canada Mortgage and Housing Corp. (CMHC) and certain existing lenders (including in respect of the purchaser's debt financing in connection with the transaction and the security granted thereunder), and the satisfaction of other customary closing conditions.

A special meeting of unitholders to consider the transaction is expected to be held in the third quarter of 2025. Further details regarding the transaction, including the rationale for the board of trustees' recommendation, will be provided in a management information circular to be mailed to unitholders in advance of the meeting.

The TSX has approved the deferral of the REIT's annual general meeting, which will now be held concurrently with the special meeting to be called to consider the transaction.

Assuming the timely receipt of all required key regulatory approvals and consents and approvals from CMHC and certain existing lenders, the transaction is expected to close in late 2025 or early 2026.

In addition to CLV Group and its affiliates, InterRent's trustees and certain of its officers have entered into customary voting and support agreements, pursuant to which they have agreed, subject to the terms thereof, to support and vote their units in favour of the transaction. Consequently, holders of approximately 6.3 per cent of the issued and outstanding trust units have agreed to vote their units in favour of the transaction.

Following closing, InterRent will be delisted from the TSX, and it is anticipated that InterRent will apply to cease to be a reporting issuer.

The foregoing summary is qualified in its entirety by the provisions of the arrangement agreement, a copy of which will be filed under InterRent's profile on SEDAR+.

Special committee and board of trustees recommendation

As Mr. McGahan is the president and chief executive officer and controlling shareholder of CLV Group, as well as the executive chair of the board of InterRent, the transaction, if consummated, will constitute a business combination for purposes of MI 61-101. Consistent with its fiduciary duties, the board formed a special committee composed entirely of independent trustees of InterRent to, among other things, review and evaluate the terms of the initial and subsequent proposals received from the purchaser, make recommendations to the board in respect of such proposals, negotiate the terms of any transaction, and supervise the preparation of a formal valuation of the fair market value of the units of InterRent in accordance with MI 61-101.

The board of trustees (with the interested trustee abstaining from voting), acting on the unanimous recommendation of the special committee, composed entirely of independent trustees and advised by independent financial and legal advisers, has unanimously approved the transaction and recommends that unitholders vote in favour of the transaction. The special committee, after receiving advice from its financial and legal advisers, determined that the transaction is in the best interests of InterRent and is fair, from a financial point of view, to the REIT's unitholders (other than retained interest holders).

BMO Capital Markets and National Bank Financial have each provided a fairness opinion to the board and the special committee that, subject to the assumptions, limitations and qualifications set out in such opinions, the consideration to be received by unitholders pursuant to the transaction is fair, from a financial point of view, to unitholders (other than the purchaser and its affiliates).

In addition, National Bank Financial has delivered the formal valuation to the special committee, which determined that, as of May 26, 2025, and based on the assumptions, limitations and qualifications set forth in such formal valuation, the fair market value of the units is in the range of $12.75 to $14 per unit.

Copies of each of the fairness opinions and the formal valuation, as well as additional details regarding the terms and conditions of the transaction and the rationale for the recommendation made by the special committee and the board, will be set out in the management proxy circular to be sent in connection with the transaction and filed by InterRent under its profile on SEDAR+.

Advisers

BMO Capital Markets is acting as financial adviser to InterRent and has provided the board of trustees and special committee with a fairness opinion in respect of the transaction. National Bank Financial provided an independent fairness opinion and the formal valuation to the special committee.

Norton Rose Fulbright Canada LLP is acting as legal counsel to the special committee. Gowling WLG (Canada) LLP is acting as legal counsel to InterRent.

Bank of Nova Scotia is acting as financial adviser to the purchaser, and Goodmans LLP and Stikeman Elliott LLP are acting as legal counsel to CLV Group and GIC, respectively. LaBarge Weinstein LLP is counsel to CLV Group in connection with the joint venture arrangements, and Skadden, Arps, Slate, Meagher & Flom LLP is counsel to GIC in connection with the joint venture arrangements. Scotiabank is acting as sole underwriter on the credit facilities in support of the acquisition.

About InterRent Real Estate Investment Trust

InterRent is a growth-oriented real estate investment trust engaged in increasing unitholder value and creating a growing and sustainable distribution through the acquisition and ownership of multiresidential properties.

InterRent's strategy is to expand its portfolio primarily within markets that have exhibited stable market vacancies, sufficient suites available to attain the critical mass necessary to implement an efficient portfolio management structure, and offer opportunities for accretive acquisitions.

InterRent's primary objectives are to use the proven industry experience of the trustees, management and operational team to: (i) grow both funds from operations per unit and net asset value per unit through investments in a diversified portfolio of multiresidential properties; (ii) provide unitholders with sustainable and growing cash distributions, payable monthly; and (iii) maintain a conservative payout ratio and balance sheet.

We seek Safe Harbor.