AIP.U AIP Realty Trust

AIP Realty Trust (the “Trust” or “AIP”) (TSXV: AIP.U) through its exclusive development partner, AllTrades Industrial Properties, Inc. (“AllTrades”) continues to grow its acquisition pipeline of new light industrial flex facilities properties in the Dallas-Fort Worth (“DFW”) area of Texas. The Trust is pleased to announce that its wholly owned subsidiary AIP Realty Management, LLC (“ARM”) has entered into forward purchase agreements (the “Agreements”) to acquire up to seven additional companies, each of which are developing one new AllTrades-branded light industrial flex property in DFW (collectively, the “Properties”). The Agreements provide AIP with the exclusive option, subject to certain conditions, to acquire (i) AIP Roanoke, LLC, (ii) AIP Keller Hicks, LLC, (iii) AIP Justin, LLC, (iv) AIP North Freeway, LLC, (v) AIP Alliance Gateway, LLC, (vi) AIP Mesquite #2, LLC, and (vii) AIP McKinney, LLC (collectively, the “LLCs”). All dollars are stated in U.S dollars.

The seven Properties represent an aggregate of approximately 466,165 square feet of gross leasable area, comprised of 83 WorkSpace Shops™ and 92 WorkSpace Studios™ as well as 130 WorkSpace Secured Parking™ spaces, all targeted at the trades and services sectors and small businesses which are often underserved and relegated to older buildings with outdated amenities. The AllTrades facilities offer turnkey modern, appealing spaces that can be readily adapted to multiple uses. The facilities are intended to address the underserved needs for new generation, high-quality light industrial flex space by the large, diverse, and growing market of trades, services, and small businesses in the US seeking locations close to their customer base, following the growing trend of last mile service. With the construction of the first of these seven new facilities beginning in October, the Properties are being developed with equity capital from AllTrades and Trinity Investors, a $6 billion Dallas-based real estate private equity firm (“Trinity”).

AIP Roanoke The facility owned by AIP Roanoke, LLC (the “Roanoke Property”) is located in an attractive market in the northwestern part of the DFW market. The Roanoke Property will be comprised of 51,370 rentable square feet across 9 WorkSpace Shops™, 9 WorkSpace Studios™ and 22 WorkSpace Secured Parking™ spaces. The estimated purchase is projected to be $13,000,000 and financed with 50% equity and 50% permanent debt.

AIP JustinThe facility owned by AIP Justin, LLC (the “Justin Property”) is located in an attractive market in the northwestern part of the DFW market. The Justin Property will be comprised of 97,650 rentable square feet across 42 WorkSpace Studios™ and 21 WorkSpace Secured Parking™ spaces. The estimated purchase is projected to be $23,000,000 and financed with 50% equity and 50% permanent debt.

AIP McKinney The facility owned by AIP McKinney, LLC (the “McKinney Property”) is located in an attractive market in the northeastern part of the DFW market. The Justin Property will be comprised of 113,750 rentable square feet across 33 WorkSpace Shops™ and 31 WorkSpace Secured Parking™ spaces. The estimated purchase is projected to be $28,000,000 and financed with 50% equity and 50% permanent debt.

AIP Mesquite #2The facility owned by AIP Mesquite #2, LLC (the “Mesquite #2 Property”) is located in an attractive market in the central-eastern part of the DFW market. The Mesquite #2 Property will be comprised of 85,550 rentable square feet across 35 WorkSpace Shops™, and 32 WorkSpace Secured Parking™ spaces. The estimated purchase is projected to be $21,000,000 and financed with 50% equity and 50% permanent debt.

AIP Keller HicksThe facility owned by AIP Keller Hicks, LLC (the “Keller Hicks Property”) is located in an attractive market in the northwestern part of the DFW market. The Keller Hicks Property will be comprised of 46,050 rentable square feet across 15 WorkSpace Studios™ and 10 WorkSpace Secured Parking™ spaces. The estimated purchase is projected to be $11,000,000 and financed with 50% equity and 50% permanent debt.

AIP Alliance Gateway The facility owned by AIP Alliance Gateway, LLC (the “Alliance Gateway Property”) is located in an attractive market in the northwestern part of the DFW market. The Alliance Gateway Property will be comprised of 40,050 rentable square feet across 17 WorkSpace Studios™ and 17 WorkSpace Secured Parking™ spaces. The estimated purchase is projected to be $10,000,000 and financed with 50% equity and 50% permanent debt.

AIP North Freeway The facility owned by AIP North Freeway, LLC (the “North Freeway Property”) is located in an attractive market in the northwestern part of the DFW market. The North Freeway Property will be comprised of 31,745 rentable square feet across 6 WorkSpace Shops™, 9 WorkSpace Studios™ and 7 WorkSpace Secured Parking™ spaces. The estimated purchase is projected to be $8,000,000 and financed with 50% equity and 50% permanent debt.

To date, AIP has now entered into forward purchase agreements to acquire a total of 12 light industrial flex properties totaling 841,109 square feet of leasable space, comprised of 191 WorkSpace Shops™, 136 WorkSpace Studios™ and 339 WorkSpace Secured Parking™ spaces. This includes the previously disclosed agreements to acquire up to five properties in the DFW area, representing an aggregate of approximately 374,935 Square feet of gross leasable area (the “Original Properties”). The aggregate projected purchase price assuming that all of the properties are acquired by AIP would be $205,500,000.

“We are pleased to further solidify our acquisition pipeline with the announcement of seven additional purchase agreements,” said Leslie Wulf, Executive Chairman. “Together with the earlier agreements, we now have clear sightlines to acquiring 12 properties which would significantly increase AIP’s scale and diversity of cash flow. The first of these twelve facilities, located in the Mesquite submarket of DFW, was completed in August and is 100% leased achieving a NNN Rental average of $15.04 Per Square Foot above proforma rentals. A second facility located in Plano, TX is scheduled to be completed in approximately 40 days and is already 90% pre-leased. The pre-leasing activity on the other three of the first five facilities scheduled for completion between this fall and the first quarter of 2023 are tracking similarly, continuing to demonstrate the demand for the AllTrades branded market specific asset class.”

The acquisition of each of the Properties by ARM is subject to certain conditions, including but not limited to completion of the construction of each facility, receipt of audited financial statements for each facility, receipt of a satisfactory third-party appraisal supporting the purchase price for each facility, receipt of regulatory approvals, including the approval of the TSXV, approval of the independent trustees of AIP and customary closing date and post-closing adjustments.

Loan and Security Documentation AIP is also pleased to announce that, as part of its planned long-term growth strategy to provide mezzanine loans to its exclusive development partner, AllTrades, the Trust has executed the master loan and security documentation between its subsidiary ARM and AllTrades Industrial Development LLC (“AID”), a subsidiary of AllTrades. These agreements include: (i) Master Loan Agreement, (ii) Pledge and Security Agreement, (iii) Guaranty Agreement and (iv) form of Promissory Note (collectively, the “Loan Agreements”, and together with the Agreements, the “Transaction Documents”). The mezzanine loans granted will serve as all or a portion of the equity, which in conjunction with traditional construction loans, will finance the development of AllTrades branded light industrial flex facilities, designed to address the long-overlooked needs of small businesses and trades and services companies, across target growth markets in the U.S. In order to ensure all agreements and documentation relating to the Original Properties are consistent with the newly created Transaction Documents, the Trust also entered into amended and restated (i) master exclusive funding and forward purchase agreements and (ii) a rental income protection agreement to reflect general housekeeping changes. Copies of the Transaction Documents as well as the amended and restated agreements have been filed on SEDAR at www.sedar.com.

When credit facilities are granted to facilities that AIP has underwritten and have provided a forward purchase agreement to acquire upon completion and all required conditions are met, the credit facilities will bear current pay interest of 10% on the drawn-down portion and AIP will also receive up to 50% of the sales profit generated from the prorated portion of the mezzanine financing to the overall equity in the project.

“We are pleased to have the loan documentation and related security agreements in place,” said Leslie Wulf, Executive Chairman of AIP. “This will enable us to efficiently seize upon opportunities that meet our underwriting criteria, which is key to building a secure pipeline to grow the business as rapidly as is practically and prudently possible. AllTrades, our exclusive development partner, continues to grow its pipeline of new AllTrades-branded facilities on their national rollout.

After an extensive review and analysis of the transactions contemplated by the Transaction Documents and consideration of, among other things, the unanimous recommendation of AIP’s governance committee (comprised of three independent trustees of AIP) (the “Governance Committee”), the Board of Trustees of the Trust (the “Board”), with Leslie Wulf, Bruce Hall and Greg Vorwaller recused, unanimously approved the Transaction Documents. Leslie Wulf, Bruce Hall and Greg Vorwaller were not party to any discussions or deliberation relating to the approval of Documents. No securities of AIP will be issued, nor will any finders fees be paid by AllTrades or AIP in connection with the transactions contemplated in the Transaction Documents. The transactions will not result in the creation of new insiders or a new control person of AIP.

Upon completion of construction of each of the facilities, the Governance Committee will obtain independent appraisals and audited financial statements pertaining to each of the LLCs. In the event that each appraisal and set of audited financial statements support a purchase price that is within the range set out in the Agreements, the Governance Committee will make a recommendation to the Board, with Leslie Wulf, Bruce Hall and Greg Vorwaller recused, and AIP will then seek regulatory approvals, including approval of the TSX Venture Exchange to proceed with the acquisition of each of the LLCs, in turn.

The Governance Committee is responsible for supervising the process to be carried out by AIP and its professional advisors in connection with the Transaction Documents, making recommendations to the Board, with Leslie Wulf, Bruce Hall and Greg Vorwaller recusing, in respect of matters that it considered relevant with respect to the Transaction Documents, and ensuring that AIP performs its obligations as contemplated in the Transaction Documents in compliance with the requirements of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”), AIP’s declaration of trust and applicable policies of the TSXV. The transactions contemplated in the Transaction Documents may constitute a “related party transaction” under MI 61-101 as the LLCs are current owned by AIP DFW II, LLC (“AIPDFW”), an entity owned indirectly by Trinity and directly by AID, a subsidiary of AllTrades. Three of the trustees and officers of AIP, namely Leslie Wulf, Bruce Hall and Greg Vorwaller, are directors and officers of AllTrades. Bruce Hall, also serves as Chief Financial Officer of AID, manager of AIPDFW. Leslie Wulf, Greg Vorwaller and Bruce Hall collectively own approximately 15.8% of AIP. Pursuant to subsections 5.5(e) and 5.7(1)(c) of MI 61-101, AIP was exempt from obtaining a formal valuation and approval of AIP’s minority shareholders because AIP’s units trade on the TSXV and, pursuant to subsection 5.5(e) of MI 61-101, the Transaction Documents were supported by Alpha Carta Ltd., AIP’s controlling unitholder.

About AIP Realty TrustAIP Realty Trust is a real estate investment trust with a growing portfolio of light industrial flex facilities focused on small businesses and the trades and services sectors in the U.S. These properties appeal to a diverse range of small space users, such as contractors, skilled trades, suppliers, repair services, last-mile providers, small businesses and assembly and distribution firms. They typically offer attractive fundamentals including low tenant turnover, stable cash flow and low capex intensity, as well as significant growth opportunities. With an initial focus on the Dallas-Fort Worth market, AIP plans to roll out this innovative property offering nationally. AIP holds the exclusive rights to finance the development of and to purchase all the completed and leased properties built across North America by its development and property management partner, AllTrades Industrial Properties, Inc. For more information, please visit www.aiprealtytrust.com.

For further information from the Trust, contact:Leslie WulfExecutive Chairman(214) 679-5263les.wulf@aiprealtytrust.com

Or

Greg VorwallerChief Executive Officer(778) 918-8262Greg.vorwaller@aiprealtytrust.com

Cautionary Statement on Forward-Looking InformationThis press release contains statements which constitute “forward-looking information” within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of AIP Realty Trust with respect to future business activities and operating performance. Forward-looking information is often identified by the words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” or similar expressions and includes information regarding, the expected timing and completion of the acquisition of the LLCs, the effect of the acquisitions of the LLCs on AIP’s financial performance, the ability to secure the funding required to complete the acquisition of the LLCs, the satisfaction of the conditions precedent to consummation of the acquisition of the LLCs, including the ability to obtain required regulatory approvals, the ability of AIP to execute its business and growth strategies, future acquisitions by the Trust, the ability to obtain regulatory and unitholder approvals and other factors. When or if used in this news release, the words “anticipate”, “believe”, “estimate”, “expect”, “target, “plan”, “forecast”, “may”, “schedule” and similar words or expressions identify forward-looking statements or information. These forward-looking statements or information may relate to proposed financing activity, proposed acquisitions, regulatory or government requirements or approvals, the reliability of third-party information and other factors or information. Such statements represent the Trust’s current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Trust, are inherently subject to significant business, economic, competitive, political and social risks, contingencies and uncertainties. Many factors, both known and unknown, could cause results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward- looking statements. Such factors include, but are not limited to, the following: (i) AIP will receive financing on favourable terms; (ii) the future level of indebtedness of AIP and its future growth potential will remain consistent with AIP’s current expectations; (iii) there will be no changes to tax laws adversely affecting AIP’s financing capacity or operations; (iv) the impact of the current economic climate and the current global financial conditions on AIP’s operations, including its financing capacity and asset value, will remain consistent with AIP’s current expectations; (v) the performance of AIP’s investments in Texas will proceed on a basis consistent with AIP’s current expectations; and (vi) capital markets will provide AIP with readily available access to equity and/or debt. The Trust does not intend, and do not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements and information other than as required by applicable laws, rules and regulations.

The forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement. All forward-looking statements in this press release are made as of the date of this press release. AIP does not undertake to update any such forward- looking information whether as a result of new information, future events or otherwise, except as required by law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release is not an offer of securities for sale in the United States. The securities may not be offered or sold in the United States absent registration or an exemption from registration under U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”). The Trust has not registered and will not register the securities under the U.S. Securities Act. The Trust does not intend to engage in a public offering of their securities in the United States.

Source: AIP Realty Trust