KPMG Weekly Newsletter – For the Week Ending February 18th 2007!

February 19, 2007

The following information was obtained from newspaper articles appearing
in the Globe and Mail and the National Post for the week ending
February 18, 2007

Alexis Nihon REIT has endorsed a sweetened all-cash offer of $18.60 a unit by Halifax-based
Homburg Invest Inc., up 10 cents from its initial bid of $18.50. Cominar REIT has until February
21, to top Homburg’s bid.
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Homburg Invest Inc. plans to sell about $500-million worth of the projects in its development
pipeline in 2007. Homburg is now in the process of placing $100-million of bonds and may issue
up to $250-million worth of equity this year.
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Sunrise Senior Living REIT has received a buyout offer worth $1.4-billion, or $18 per unit, from
Health Care Property Investors Inc. An earlier bid by Ventas Inc. is worth $971.4-million or $15
a unit.
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Four Seasons Hotels Inc. has reached an agreement to take itself private at a price of US$82 a
limited voting share in a transaction that values Four Seasons at US$3.8-billion, including debt.
Following completion of the transaction, Four Seasons will be owned by affiliates of Cascade
Investment LLC, owned by Bill Gates, and Kingdom Hotels International. Four Seasons
founder Isadore Sharp will remain as chairman and CEO and his family firm, Triples Holdings
Ltd., will retain a 10% stake through special voting shares.
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Mills Corp. has agreed to be acquired by Simon Property Group Inc. and Farallon Capital
Management LLC for US$25.25 a share, or about $1.64-billion in cash. Including assumed debt
and preferred shares, the transaction has a value of US$7.9-billion. Brookfield Asset
Management Inc., which had previously struck an agreement with Mills for $21 a share or $1.35-
billion, will reportedly receive a breakup fee of about US$40-million.
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Boardwalk REIT reported that fourth-quarter profit rose to $6.5-million, or 12 cents a unit, from
$1.2-million, or 2 cents, a year earlier. Rental revenue increased to $83.6-million from $75.5-
million. Funds from operations climbed to $25-million from $17.8-million.
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UBC Okanagan in Kelowna is searching for partnerships with developers to enter long-term
leases for a portion of 60 acres of the campus set aside for commercial development that will
include offices, research facilities and a hotel. On 285 acres adjacent to the campus, Watermark
Developments Ltd. plans to build 70,000 square feet of retail space as part of a village-style
development that will include housing for students, faculty and staff.
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According to Cushman & Wakefield LePage, the total occupancy cost for office space in Calgary
rose to US$43.84 per square foot in 2006, making it the 28th most expensive market in the world
and the most expensive in Canada. London is the world’s most expensive market at US$246.17,
followed by Tokyo at US$182.88 and Hong Kong at US$177.78.
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According to the Canadian Real Estate Association, sales of existing homes rose 3.4% to
30,359 units in January from December, on a seasonally adjusted basis. Nationally, the average
price climbed 11.2% to $299,318 from a year earlier. The average price in Edmonton soared 52.6% to $303,820 from 2006. New listings increased 3.1% to 48,035 units.
According to Canada Mortgage and Housing Corp., sales of existing homes are projected to fall
4% to 464,550 in 2007 from 483,609 in 2006.
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According to the Canadian Institute of Mortgage Brokers and Lenders, there was $730-billion
in outstanding mortgage credit in Canada at the end of 2006.
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According to J.J. Barnicke, commercial real estate construction costs in Western Canada are up
30% in some areas.
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According to State Street Corp., the average yield of U.S. REITs dropped to 3.78% as of January
31, 2007.
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According to the National Association of Realtors, U.S. home prices fell from a year earlier in
about half of all metropolitan areas in the fourth quarter. The median price dropped in 73 metro
areas, rose in 71 and was flat in five areas. Nationally, the median price fell 2.7% to US$219,300
from a year earlier. The biggest drop was an 18% decline in the Sarasota-Bradenton-Venice area
of Florida while the biggest gain was a 26% increase in Atlantic City, New Jersey.
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According to the Commerce Department, U.S. housing starts fell 14.3% to an annual pace of
1.408 million in January from 1.643 million in December. Building permits were down 2.8%.
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According to Real Capital Analytics, sale prices for office space in Austin, Texas, now average
US$181 a square foot, compared with US$130 in Dallas and US$129 in Houston. Sales prices
have increased 50% since 2002.
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According to the Austin Board of Realtors, sales of single-family homes rose 10% in 2006 from
2005. The median home price increased 6% to US$174,500, compared with a national median
home price of US$222,000. According to Capitol Market Research, there are 4,200 apartments
and condominiums being planned or under construction in downtown Austin.
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U.S. home lender ResMAE Mortgage Corp. has filed for bankruptcy protection and Credit
Suisse Group agreed to purchase most of its assets for US$19.1-million. According to
Bloomberg, ResMAE is at least the 20th mortgage company to be sold or closed.
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According to RealtyTrac Inc., more than 1.3 million foreclosure filings were reported across the
U.S. in 2006, up 42% from 2005. Colorado had the highest foreclosure rate in 2006, with one filing
for every 33 households, up 85% over 2005. The number of U.S. homes entering the foreclosure
process due to nonpayment on mortgages rose to 130,511 in January, a 25% increase from a
year earlier.
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