Wand Capital Corporation Announces Proposed Acquisition of Multi-Residential Property as Qualifying Transaction

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TORONTO, April 5, 2012 /PRNewswire/ - (TSXV: WNC.P) Wand Capital Corporation (the "Corporation"), a capital pool company (as defined in Policy 2.4 (the "CPC Policy") of the TSX Venture Exchange Inc.'s (the "TSXV") Corporate Finance Manual), is pleased to announce that it has entered into a definitive acquisition agreement (the "Acquisition Agreement") with a related party to the Corporation's Chief Executive Officer, Daniel Drimmer (the "Vendor"), with respect to the acquisition of an initial multi-residential rental property (the "Initial Property"). The Corporation will purchase the Initial Property from the Vendor for a purchase price equal to $7.55 million, subject to customary adjustments. The purchase price for the Initial Property representing a capitalization rate of approximately 6.1%, will be financed by new mortgage financing of approximately $5.3 million, with the balance in cash.

As previously disclosed in the Corporation's (final) prospectus dated March 5, 2012, (the "Prospectus") the Corporation intends to reorganize pursuant to a plan of arrangement under the Business Corporations Act (Ontario) (the "Arrangement") into a real estate investment trust to be named True North Apartment Real Estate Investment Trust ("True North REIT"), subject to receipt of all necessary approvals, including the approval of the TSXV and the shareholders of the Corporation. The acquisition of the Initial Property and the Arrangement are proposed to constitute the Corporation's Qualifying Transaction, as defined in the CPC Policy (the "Proposed Transaction"). Completion of the acquisition of the Initial Property (the "Acquisition") is conditional upon the completion of the Arrangement.

Pursuant to Arrangement, among other things: (i) the issued and outstanding common shares ("Shares") of the Corporation will be exchanged for units ("Units") of True North REIT on a 8 for 1 basis (1 Unit for every 8 Shares) (the "Exchange Ratio"); and (ii) the issued and outstanding options ("Options") to purchase Shares of the Corporation will be exchanged for options ("True North Options") to purchase Units on terms and conditions identical to the terms and conditions of the Options, subject to adjustments to the exercise price of, and the number of Units underlying, the True North Options based upon the Exchange Ratio.

Starlight Investments Ltd. ("Starlight"), a corporation owned and controlled by Daniel Drimmer, will be the asset manager of True North REIT pursuant to an asset management agreement to be entered into between True North REIT and Starlight on the effective date of the Arrangement.

There will be no changes to the insiders of the Corporation as a result of the Proposed Transaction. The officers of the Corporation are Daniel Drimmer, Chief Executive Officer and Martin Liddell, Chief Financial Officer. The directors of the Corporation are Daniel Drimmer, Robert McKee, Alon Ossip, Denim Smith and Jason Underwood. The background of each director and officer of the Corporation is contained in the Prospectus, which is available on the SEDAR website at www.sedar.com.

Description of Initial Property

The Initial Property is located at 444 Victoria Road North, Guelph, Ontario, and is a high-rise residential apartment building situated on the southwest corner of the intersection of Victoria Road North and Woodlawn Road East in the City of Guelph. The building is located in close proximity to Highways 6 and 7. The seven storey building is situated on approximately 1.82 acres of land and contains a total of 51,375 square feet of rentable area. The building is improved with 72 suites consisting of 1-bachelor, 46-one bedroom, 21-two bedroom and 4-three bedroom suites. Building amenities include laundry facilities and 92 surface parking spaces. 444 Victoria is presently 100% occupied and produces an average monthly rent of $815 per unit.

The Follow-On Acquisitions

The Corporation also agreed today to acquire two additional properties (the "Follow-On Properties") subsequent to the completion of the Arrangement. The Corporation agreed to purchase a property located at 457 & 499 Albert Street, Waterloo, Ontario (the "Second Property") from the Vendor for a purchase price equal to $5.08 million, subject to customary adjustments, as well as a property located at 35 Mowat Boulevard, Kitchener, Ontario (the "Third Property") for a purchase price equal to $1.3 million, subject to customary adjustments. The Purchase price for the Second Property, representing a capitalization rate of approximately 5.7%, will be payable by a new mortgage financing of approximately $3.6 million with the balance in cash. The Purchase price for the Third Property, representing a capitalization rate of approximately 5.8%, will be payable as to $1.3 million in cash. Completion of the Second and Third Property (collectively the "Follow-On Acquisitions") is conditional upon the completion of the Arrangement.

Description of the Follow-On Properties

The Second Property is comprised of two low-rise walk-up residential apartment buildings situated on the west side of Albert Street, north of Bearinger Road in the City of Waterloo. The buildings are located in close proximity to Highway 85, University Avenue and the University of Waterloo, Laurier University and the RIM head office. The three storey buildings are situated on approximately 2.02 acres of land and contain a total of 40,252 square feet of rentable area. The buildings are improved with 40 suites consisting of 38-two bedrooms and 2-three bedroom suites. The buildings include laundry facilities and provide 44 surface parking spaces. 457 & 499 Albert Street are presently 95.0% occupied and produce average monthly rent in the amount of $1,056 per unit.

The Third Property is a low-rise residential walk-up apartment building situated on the northwest corner of the intersection of Ottawa Street South and Mowat Boulevard in the City of Kitchener. The building is located in close proximity to Highways 7 and 8. The three storey building is situated on approximately 0.54 acres of land and contains a total of 13,316 square feet of rentable area. The building is improved with 17 suites consisting of 6-one bedroom and 11-two bedroom suites. The buildings include laundry facilities and provide 13 surface parking spaces. The site is presently 100% occupied and produces average monthly rent in the amount of $794 per unit.

Shareholder Meeting to be Announced

The Corporation intends to present the terms of the Proposed Transaction and the Follow-On Acquisitions to its shareholders for approval at a special meeting to be held in May 2012 in Toronto.

As Daniel Drimmer currently indirectly owns an approximately 20.5% interest in the Corporation, and owns and controls Starlight, the Acquisition, certain aspects of the Arrangement and the Follow-On Acquisitions will constitute "related party transactions" under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") and therefore must be approved by the affirmative vote of a majority of minority shareholders of the Corporation.

In accordance with MI 61-101, the Corporation has retained a valuator to prepare independent valuations of the Initial Property and the Follow-On Properties.

Sponsorship of a Qualifying Transaction is required by the TSXV unless exempt in accordance with TSXV policies. The Corporation is currently reviewing the requirements for sponsorship and may apply for an exemption from the sponsorship requirements pursuant to the policies of the TSXV, however, there is no assurance that the Corporation will ultimately obtain this exemption. The Corporation intends to include any additional information regarding sponsorship in a subsequent press release.

Upon completion of the Proposed Transaction, the resulting issuer, being True North REIT, is expected to meet all of the minimum listing requirements for a Tier 2 Real Estate Issuer.

Wand Capital Corporation

The principal business of the Corporation is the identification and evaluation of assets or businesses with a view to completing a Qualifying Transaction. The Corporation has not commenced commercial operations and has no assets other than cash.

This press release contains forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Examples of such statements include the intention to complete the Proposed Transaction and the Follow-On Acquisitions and the intention to reorganize the Corporation into a real estate investment trust. Accordingly, readers should not place undue reliance on forward-looking statements. The factors identified above are not intended to represent a complete list of the factors that could affect the Corporation. Completion of the Proposed Transaction and the Follow-On Acquisitions is subject to a number of conditions, including but not limited to, TSXV acceptance and majority of the minority shareholder approval. Where applicable, the Proposed Transaction and the Follow-On Acquisitions cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the Proposed Transaction, any information released or received with respect to such transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSXV has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.

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

SOURCE Wand Capital Corporation