Mr. Daniel Farb of Mill Pond Capital reports

MILL POND CAPITAL'S DANIEL FARB ANNOUNCES INTENTION TO VOTE 2.2 MILLION H&R REIT UNITS AGAINST THE PROPOSED GO RESIDENTIAL TRANSACTION

Daniel Farb, managing member of Mill Pond Capital LLC, who beneficially owns 2.2 million units of H & R Real Estate Investment Trust, has released the letter below to H & R's independent trustees. Mr. Farb intends to vote all of his units against the proposed transaction with GO Residential Real Estate Investment Trust and 1001700058 Ontario Inc. at the Nov. 13, 2026, special meeting.

The full text of the letter follows.

Independent trustees, H & R

Attention: Stephen Gross, independent lead trustee

To the independent trustees:

I am the managing member of Mill Pond Capital LLC and a long-time H & R unitholder. I beneficially own 2.2 million H & R units, and I intend to vote all of those units against the proposed transaction with GO Residential REIT at the Nov. 13, 2026, special meeting. This letter sets out the reasons for that decision.

In my view, the proposed transaction does not deliver fair value to H & R's public unitholders. It provides one form of consideration for the units held by the chief executive officer's family group and another for every other unit, and it exchanges H & R units for cash and units of a more highly levered REIT whose unit price has fallen by more than 50 per cent since its initial public offering in July, 2025.

1. One deal for the CEO's family, a worse deal for everyone else

The headline price of $12.01 depended on GO's Aug. 10 unit price. GO has since fallen from $9.75 (U.S.) to $7.18 (U.S.) at the Oct. 6 close, cutting H & R's consideration to roughly $10.09, a price 7 per cent below the $10.89 per unit H & R traded at prior to the proposed transaction announcement. The $10.09-per-unit consideration assumes GO does not fall further once legacy H & R unitholders, who will own approximately 67 per cent of the combined REIT, but never chose to own GO, sell into a market with no index buying.

H & R units traded at $9.23 at the Oct. 6 close, about 43 per cent below H & R's own reported net asset value of $16.23 per unit.

Meanwhile, H & R has disclosed that the units held by CRAL, a company controlled by members of the family of Tom Hofstedter, H & R's executive chairman and chief executive officer, together with units owned or controlled by certain of CRAL's affiliates and associates and the units of Mr. Hofstedter himself, will be redeemed and cancelled as partial consideration for CRAL's purchase price. A total of 44,038,986 units, approximately 16 per cent of the units and exchangeable units outstanding, are expected to be cancelled, and those units "will not receive any GO REIT units or cash consideration." No other unitholder was offered consideration in that form.

The prices of the assets CRAL seeks to acquire have not been disclosed. The filed purchase agreement defines the price by formula, to be confirmed by the parties before closing. Mr. Hofstedter describes these as non-core assets. I believe they are being acquired at a discount to net asset value, but, without a disclosed price, unitholders cannot assess what CRAL is paying, or compare it with the consideration offered to everyone else.

Asked why he was not taking GO units like everyone else, Mr. Hofstedter said CRAL is the best fit for non-core assets that require a long-term, private market orientation. That explains why CRAL wants the assets. It does not explain why the insider with the best information declined the GO consideration, or why no other unitholder was offered the same choice. H & R's trustees nonetheless concluded the transaction is fair to unitholders, with Mr. Hofstedter abstaining.

The trustees owe unitholders a clear explanation of why consideration the CEO and his family would not accept is fair to everyone else.

2. Control passes to a GO team with a record of underperformance

GO listed on the Toronto Stock Exchange at $15 (U.S.) in July, 2025, and trades at $7.18 (U.S.) as of the Oct. 6 close, down approximately 52 per cent from its initial public offering price, while U.S. REIT exchange-traded-fund USRT rose approximately 7 per cent over the same period.

H & R holders will own about 66.9 per cent of the combined REIT but receive only two GO board seats while GO's existing executives run the company. GO unitholders will hold a minority of the equity but a majority of the board seats.

3. Higher leverage and a heavy tax bill

H & R reported debt to total assets of 41.8 per cent and debt to earnings before interest, taxes, depreciation and amortization of 7.1 times at second quarter 2026. GO reported debt to gross book value of 53.5 per cent, up from 48.5 per cent at Dec. 31, 2025, and the joint investor presentation shows GO's stand-alone debt to EBITDA at 12.5 times. GO's promise to cut leverage by "more than approximately two times" is measured from its own elevated starting point. I estimate pro forma leverage well above H & R's approximately seven times stand-alone. Unitholders have not been shown a pro forma figure that compares favourably with H & R today.

The $4.28 cash portion of the consideration is not a clean return of capital. H & R states it will include recaptured depreciation and capital gains that Canadian unitholders must report as income. H & R holders will likely pay a meaningful share of that cash in tax while CRAL receives no taxable cash distribution.

4. H & R loses index membership while H & R unitholders effectively pay a premium for GO

H & R is a constituent of the S&P/TSX Capped REIT Index. GO is not in that index; its own release says it may qualify only "over time." Since the announcement, H & R has fallen about 15 per cent and GO about 25 per cent, versus approximately 6 per cent declines for both the Canadian REIT ETF XRE and U.S. REIT ETF USRT. In my view, the market is saying H & R unitholders are effectively paying a premium to buy GO units while handing GO's board and management the H & R multifamily portfolio along with other assets.

5. The trustees' duty is to all unitholders

On these facts, there are better paths. One is to complete the industrial sales, distribute the cash and retire debt, and keep Lantower and the assets CRAL seeks to acquire within the current structure. Alternatively, H & R could continue as is, sell assets at or near NAV one at a time, and use the proceeds to retire debt and repurchase units trading at a deep discount to NAV or sell the entire company for cash. Each of the above proposals treats all unitholders equally.

What is not acceptable is asking unitholders to accept a dilutive, tax-inefficient transaction into a more levered entity at a large discount to the company's stated NAV while the CEO and his family receive an entirely different form of consideration and use it to acquire, in my estimation, select H & R assets at a discount to NAV.

For the reasons outlined above, I intend to vote my 2.2 million units against this transaction.

Respectfully,

Daniel Farb,

Managing member,

Mill Pond Capital

This letter is a public announcement by Mr. Farb, a unitholder of H & R and managing member of Mill Pond Capital LLC, of how he intends to vote at the special meeting and the reasons for that decision, and is published in reliance on paragraph (i) of the definition of solicit in Section 1.1 of National Instrument 51-102 (Continuous Disclosure Obligations). It is not a solicitation of proxies. Neither Mill Pond Capital nor the author is requesting a proxy from any unitholder, is requesting that any unitholder execute, not execute or revoke a proxy, is sending a form of proxy, or is seeking authority to act as proxyholder for any unitholder. Historical performance figures reflect the author's calculations using publicly available data, and all financial figures come from publicly available reports and corporate disclosures. Unless otherwise noted, unit prices are as of the Oct. 6, 2026, close. This letter does not constitute investment, tax or legal advice. Mr. Farb and/or Mill Pond Capital may increase or decrease its position in H & R at any time.