Tax Considerations for Canadian Unitholders

For Canadian federal income tax purposes, distributions from the REIT will consist of either income distributions, return of capital distributions, or a combination of both.

In general, income distributions will be taxable to a Canadian unitholder. Return of capital distributions will not result in immediate tax to a Canadian unitholder but will reduce the unitholders' tax cost in their units.

Distributions paid by the REIT to a Canadian unitholder that are made out of the REIT's "current or accumulated earnings and profits" (as determined for U.S. federal income tax purposes) generally will be subject to U.S. withholding tax at a rate of 15% (generally reduced to 0% for RRSPs). To the extent a Canadian unitholder is subject to U.S. withholding tax in respect of distributions paid by the REIT out of the REIT's current or accumulated earnings and profits, the amount of such tax generally will be eligible for foreign tax credit or deduction treatment in Canada. Distributions in excess of the REIT's current and accumulated earnings and profits generally will not be subject to U.S. withholding tax, provided that the recipient has not owned (or been deemed to own) more than 5% of the outstanding Units.

Unitholders should consult their own tax advisors with respect to the income tax consequences of an investment in Units in their particular circumstances.

Tax Considerations for U.S. Unitholders

In general, for Canadian federal income tax purposes, distributions from the REIT will consist of either income distributions, return of capital distributions, or a combination of both.

In general, income distributions from the REIT to a US unitholder will not be subject to Canadian withholding provided the unitholder is a qualifying resident of the U.S. for purposes of the Canada-U.S. Tax Treaty. Similarly, return of capital distributions to a U.S. unitholder will not be subject to Canadian withholding tax. For U.S. federal income tax purposes, distributions paid by the REIT to a U.S. unitholder generally will be taxed in a manner similar to distributions from any other U.S. REIT. Such distributions generally will be taxable as ordinary income to the extent paid out of the REIT's current or accumulated earnings and profits. Distributions in excess of the REIT's current or accumulated earnings and profits will first be treated as a tax-free return of capital reducing tax basis, and thereafter taxable as gain realized from the sale of Units.

Unitholders should consult their own tax advisors with respect to the income tax consequences of an investment in Units in their particular circumstances.