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Press release from Marketwire

Retrocom Mid-Market REIT Announces $40 Million Bought Deal Financing and Announces Acquisition of $43 Million Property Portfolio from Calloway REIT

Wednesday, February 23, 2011

Retrocom Mid-Market REIT Announces $40 Million Bought Deal Financing and Announces Acquisition of $43 Million Property Portfolio from Calloway REIT16:16 EST Wednesday, February 23, 2011TORONTO, ONTARIO--(Marketwire - Feb. 23, 2011) -NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES OR TO ANY NON-CANADIAN SOURCERetrocom Mid-Market Real Estate Investment Trust (TSX:RMM.UN)(the "REIT" or "Retrocom") today announced that it has entered into an agreement to sell, on a bought deal basis to a syndicate of underwriters led by TD Securities Inc., 6,850,000 Units at a price of $5.85 per Unit for gross proceeds of $40,072,500. In addition, Retrocom has granted the syndicate an over-allotment option, exercisable for a period of 30 days following closing, to purchase up to an additional 1,027,500 Units which, if exercised, would increase the gross offering size to $46,083,375.The net proceeds of the offering are expected to be used to repay funds drawn on the REIT's operating line for the closing of the previously announced acquisition of six properties from Counsel Corporation totalling $142.5 million (inclusive of transaction costs) on December 30, 2010, to fund part of the acquisition from Calloway REIT announced today, and for general trust purposes.The offering is expected to close on or about March 15, 2011. Closing of the offering is subject to certain customary conditions, including the receipt of all necessary regulatory approvals.Calloway AcquisitionRetrocom has also entered into a letter of intent with Calloway REIT to acquire four investment properties for a total purchase price of approximately $43 million (inclusive of estimated transaction costs). The portfolio, comprising of investment properties totalling approximately 226,000 square feet, is located in Ontario and Quebec and is currently 97.6% occupied. "The Calloway properties are a high quality addition to our portfolio and this acquisition further represents our commitment to grow the REIT through accretive transactions." said Richard Michaeloff, Chief Executive Officer. "The Calloway properties offer a strong tenant base including a Walmart store, stable occupancy, and are well located in terms of existing Retrocom markets."The total purchase price is expected to be satisfied by the assumption of existing mortgage debt of approximately $13.0 million, proceeds received from the equity offering announced today, and additional financing to be placed on two of the acquired properties. Two of the properties are strategically located in existing Retrocom markets of Midland and Kenora, Ontario and the other two properties are located in Peterborough, Ontario and Drummondville, Quebec. The portfolio has an overall average remaining lease term of approximately 9.6 years and the ages of the properties range from four to seven years. Property LocationRentable Area Square FeetOccupancyTotal Centre Square Feet (incl. Shadow Anchors)Major TenantsDrummondville, QC51,18693%250,331Addition Elle, Mark's Work Warehouse, Dormez-Vous (Sleep Country) and C.I.B.C. Shadow anchors: Walmart and LoblawsKenora, ON80,881100%139,098Walmart (single tenant) Shadow Anchor: Canadian TireMidland, ON35,59495%271,557Mark's Work Warehouse, Dollar Giant, Boston Pizza Shadow anchors: Walmart and Home DepotPeterborough, ON58,355100%58,355Home Outfitters, Jysk Linen 'N Furniture, Boston PizzaTotal Portfolio226,01697.6%Upon closing, the REIT will assume mortgages on two of the properties with a total outstanding balance of approximately $13.0 million, bearing a weighted average interest rate of approximately 6.0%, and with maturities occurring between 2019 to 2025. Retrocom intends to fund part of the purchase price by placing conventional first mortgages on the remaining two properties which will be unencumbered upon closing.The acquisition is expected to close in early Q2, 2011 and is subject to the completion of due diligence and customary closing conditions.This press release is not an offer of securities for sale in the United States. The units being offered have not been and will not be registered under the United Securities Act of 1933 and accordingly are not being offered for sale and may not be offered, sold or delivered, directly or indirectly within the United States, its possessions and other areas subject to its jurisdictions or to, or for the account or for the benefit of a U.S. person, except pursuant to an exemption from the registration requirements of that Act.About Retrocom Mid-Market REITRetrocom Mid-Market REIT is an Ontario unincorporated open-end real estate investment trust which focuses on owning and acquiring community-based commercial properties in primary and secondary cities across Canada with the objective of producing a geographically diversified portfolio of properties with stable and growing cash flows. Cautionary StatementsThis press release contains forward-looking statements including statements concerning the expected closing date of the offering and the acquisition, and the expected use of proceeds of the offering. In some cases, forward-looking statements can be identified by the use of words such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", and by discussions of strategies that involve risks and uncertainties. The forward-looking statements are based on certain key expectations and assumptions made by the REIT, including in respect of the receipt of all regulatory approvals necessary to complete the offering on a timely basis. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Although management of the REIT believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that future results, levels of activity, performance or achievements will occur as anticipated. Neither the REIT nor any other person assumes responsibility for the accuracy and completeness of any forward-looking statements, and no one has any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or such other factors which affect this information, except as required by law.FOR FURTHER INFORMATION PLEASE CONTACT: Richard MichaeloffRetrocom Mid-Market Real Estate Investment TrustChief Executive Officer(416) 741-7999 ext. 5227(416) 741-7993 (FAX)rmichaeloff@rmmreit.com