Calloway Acquires 45 Properties

On July 8, 2005, Calloway Real Estate Investment Trust completed the acquisition of approximately eight million square feet of existing or newly constructed retail space in 35 shopping centres from First Pro Shopping Centres (eight of which were co-owned with Wal-Mart Canada Realty Inc.) for consideration of approximately $1.12 billion in one of the largest transactions to date by a Canadian REIT. Calloway REIT also acquired lands or options to acquire lands for the construction of an additional 10 centres, with 1.2 million square feet of retail space on completion, for consideration of approximately $42 million.

As partial payment of the consideration for the transaction, approximately 11,770,000 class B units of Calloway LP were issued, with each such unit carrying one vote at the Calloway REIT level. A portion of the cash component for the acquisition was funded from the proceeds of the private placement of subscription receipts, closed by Calloway REIT on June 22, 2005. These subscription receipts were converted into 11,336,000 units of Calloway REIT concurrently with the closing of the acquisition.

Calloway REIT and Calloway LP were represented by Shea Nerland Calnan in Calgary with a team that included David Calnan, Glenn Warkentin, Joe Brennan, Matt Clark and Devin Mylrea, with the assistance on title matters by Brett Tkatch, Shawn Wolfson and Nicole Kling at Blaney McMurtry LLP; Leonard Rodness, Rosemary Grenside, Sandra Hurst-Boyd and Stephanie Eiley at Torkin Manes Cohen Arbus LLP; Elizabeth Yip at McCarthy Tétrault LLP in Vancouver; James Camplin at MacPherson Leslie & Tyerman LLP in Regina; Hugh Adams, Dale Melanson and Christopher Hoeschen at Tapper Cuddy LLP in Winnipeg; Daniel Martin at De Grandpré Chait LLP in Montreal; Ian Bilek and Brian Tabor, Q.C., at Cox Hanson O’Reilly Matheson in Halifax; and Geoff Brown at Stewart McKelvey Stirling Scales in St. John’s, and D. Fraser MacFadyen and Andrew McFarlane in the Halifax office.

First Pro was represented in-house by a team led by general counsel David Taras, which included Joseph Amato and John Smith. First Pro was assisted by Goodmans LLP with a team led by William Alcamo that included Ken Herlin, Alan Bowman, Neil Sheehy, Jeffrey Shore and Steve Cohen.

Wal-Mart was represented by Ron Strathdee, associate general counsel - real estate, and Laurie Crocker, corporate counsel. Davies Ward Phillips & Vineberg LLP represented Wal-Mart, as well as First Pro with respect to certain joint venture properties, and was led by Gregory Howard, along with Steven Martin, Lori Sullivan and Jennifer Pankratz.

The Bank of Nova Scotia was represented by John Currie and Kar Soen Ho of McCarthy Tétrault LLP in Toronto. Merrill Lynch Capital Canada Inc. was represented by Baker McKenzie LLP, which provided financing for the acquisition with a team that included Mike Brady and Leneo Sdao.