Strictly Private and Confidential

NAIOP Toronto

2009 Forecast Breakfast

Disclaimer

This presentation was prepared exclusively for the benefit and internal use of the recipient for the purpose of considering the transaction or transactions contemplated herein. This presentation is confidential and proprietary to RBC Capital Markets and may not be disclosed, reproduced, distributed or used for any other purpose by the recipient without our express written consent.

The information and any analyses contained in this presentation are taken from, or based upon, information obtained from the recipient or from publicly available sources, the completeness and accuracy of which has not been independently verified, and cannot be assured by RBC Capital Markets. The information and any analyses in these materials reflect prevailing conditions and our views as of this date, all of which are subject to change.

To the extent projections and financial analyses are set forth herein, they may be based on estimated financial performance prepared by or in consultation with the recipient and are intended only to suggest reasonable ranges of results. The printed presentation is incomplete without reference to the oral presentation or other written materials that supplement it.

Employees of RBC Capital Markets are expressly prohibited from offering directly or indirectly a specific price target, or offering or threatening to change research, a rating or a price target, to a company as inducement for the receipt of business or compensation.

3

Canadian Real GDP

-4

-2

0

2

4

6

8

00 01 02 03 04 05 06 07 08 09 10

Annualized % change, quarter-over-quarter

Forecast

Source: Statistics Canada, RBC Economics Research

Canada’s real GDP Growth

Annual Growth rates

'07 '08f '09f '10f

2.7 0.6 0.0 2.7

4

Equity Market Volatility

CBOE S&P500 Volatility Index (VIX) - 2002 – present

5

15

25

35

45

55

65

75

85

Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09

Ind

ex L

evel

5

Financial Index Performance

Canadian and U.S. Financial Index Performance - 2005 – present

20%30%

40%50%

60%70%

80%90%

100%110%

120%130%

140%150%

Jan-05 Jan-06 Jan-07 Jan-08 Jan-09

Rel

ativ

e P

erfo

rman

ce

S&P 500 Financial Index S&P/TSX Financial Index

6

Canadian Labour Market

7

Bank of Canada Overnight Rate and 10-Year GoC Yield

0

1

2

3

4

5

6

7

00 01 02 03 04 05 06 07 08 09 10

BoC overnight rate

10 year bond yield

%

Forecast

Bank of Canada overnight rate & 10 year bond yield

Source: Bank of Canada, RBC Economics Research

8

Corporate Bond Spreads

U.S. Corporate Bond Spreads

Canadian Corporate Bond Spreads

Source: RBC Capital Markets

Source: Bloomberg

0

100

200

300

400

500

600

700

Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09

Spr

ead

over

US

T (

bps)

AA A BBB

564 bps

327 bps

394 bps

0

100

200

300

400

500

600

Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09

Spr

ead

over

GoC

(bp

s)

AA A BBB

458 bps

531 bps

299 bps

9

Canadian CMBS Spreads

Canadian CMBS Spreads

Source: RBC Capital Markets

0

100

200

300

400

500

600

700

800

Dec-00 Jun-01 Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08

Spr

eads

(bp

s)

AAA 10 year AA 10 year A 10 year BBB 10 year

700 bps

800bps

550 bps

450 bps

10

U.S. High Yield Spreads Since January 2008

Spread (bps)

Source: Bloomberg

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09

HY Index SpreadBB SpreadB SpreadCCC Spread

1,683 bps

1,141 bps

1,450 bps

3,037 bps

11

REIT Index Performance and Cdn. REIT Price Premium / Discount to NAV

2008 Index Price Performance Historical Premium/Discount to NAV

30%

40%

50%

60%

70%

80%

90%

100%

110%

120%

J an-08

Feb-08

Mar-08

Apr-08

May-08

J un-08

J ul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

S&P/TSX REIT Index RMZ Index S&P/TSX CompositeNote: Price only return

-30%

-20%

-10%

0%

10%

20%

30%

40%

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Group-Average Premium (Discount) To NAV Period Average

Maximum: 28.0%

Current: -12.4%

Average: 5.4%

Source: RBC Capital Markets Research

Maximum: -25.0%

-41.5%

-43.1%

-35.0%

12

Canadian REIT Universe – Equity Market Capitalization

$0

$5

$10

$15

$20

$25

$30

$35

Q1/95 Q1/96 Q1/97 Q1/98 Q1/99 Q1/00 Q1/01 Q1/02 Q1/03 Q1/04 Q1/05 Q1/06 Q1/07 Q1/08 Current

$14.3 Billion

Nov-05: O&Y REIT privatized, equity value of $1.0B

Jun-06: TGS NA REIT privatized, equity value of $265MM

Jan-07: Summit REIT privatized, equity value of $2.1B

Feb- 07: Retirement Residences REIT privatized, equity value of $780MM

Apr-07: Sunrise Senior Living REIT acquired, equity value of $1.1B

May-07: Alexis Nihon REIT acquired, equity value of $0.5B

Aug-07: Dundee REIT: Cancellation of ~66% of its units following a

large portfolio sale to GE Real Estate, equity value of $1.1B

Sep-07: Legacy Hotels REIT acquired, equity value $1.5B

Dec-07: CHIP REIT privatized, equity value $925MM

Dec-07: IPC US REIT acquired, equity value of $425MM

Total Equity Capitalization of Canadian REIT Universe ($billions)

13

Canadian REIT ComparablesNAV Estimate (2) Market Cap

19-Jan-09 2008 Price Mkt Cap FFO Multiples (2) Prem / App.

Canadian REITs Close Change ($MM)(1) Yield 2009E 2010E Per Unit (Disc) CR

Commercial REITs

Allied Properties REIT $11.90 -40.0% $372 11.1% 6.9 x 7.2 x $15.25 -22.0% 8.75%

Artis REIT $7.15 -51.1% $236 15.1% 4.2 x 4.5 x $8.25 -13.3% 9.00%

Calloway REIT $12.40 -53.7% $1,176 12.5% 7.0 x 7.3 x $15.00 -17.3% 8.00%

Cominar REIT $16.13 -21.5% $739 9.0% 8.8 x 8.4 x $15.75 2.4% 8.50%

CREIT $21.00 -22.1% $1,282 6.5% 9.0 x 8.9 x $24.00 -12.5% 7.75%

Crombie REIT $8.00 -30.3% $419 11.1% 5.6 x 5.6 x $9.58 -16.5% 9.00%

Dundee REIT $10.90 -62.6% $229 20.1% 3.6 x 3.9 x $18.50 -41.1% 9.00%

H&R REIT $7.93 -62.4% $1,161 9.1% 5.1 x 5.9 x $12.50 -36.6% 8.25%

Huntingdon REIT $0.25 -91.3% $18 0.0% 1.4 x n/a $0.46 -45.1% 10.18%

InStorage REIT $3.77 -46.4% $98 0.0% 11.4 x n/a $4.00 -5.8% 8.25%

Morguard REIT $10.84 -11.2% $640 8.3% 9.1 x 9.2 x $12.50 -13.3% 8.00%

Primaris Retail REIT $11.30 -41.5% $703 10.8% 8.7 x 8.7 x $14.25 -20.7% 8.00%

Retrocom Mid-Market REIT $1.69 -63.7% $47 26.6% 3.3 x n/a $2.43 -30.5% 9.85%

RioCan REIT $13.50 -37.4% $2,976 10.2% 8.8 x 8.7 x $16.00 -15.6% 7.75%

Scott's REIT $4.27 -42.9% $32 19.9% 4.3 x n/a $5.51 -22.6% 8.98%

Whiterock REIT $14.80 -56.8% $58 22.7% 3.6 x n/a $28.35 -47.8% 7.88%

Total / Weighted Average -38.8% $10,185 10.2% 7.7 x 7.9 x -17.7% 8.09%

Residential REITs

Boardwalk REIT $25.25 -42.6% $1,359 7.1% 10.5 x 11.0 x $34.63 -27.1% 7.00%

CAP REIT $14.65 -1.8% $988 7.4% 11.4 x 11.0 x $15.25 -3.9% 6.75%

InterRent REIT $1.30 -73.1% $24 9.2% 5.7 x 5.8 x $2.29 -43.2% 7.69%

Lanesborough REIT $2.99 -53.9% $53 18.7% 4.7 x 5.4 x $3.90 -23.3% 8.50%

Northern Property REIT $18.21 -27.5% $456 8.1% 8.6 x 8.4 x $18.00 1.2% 9.00%

Total / Weighted Average -26.7% $2,879 7.6% 10.4 x 10.5 x -14.7% 7.26%

Hospitality REITs

Holloway Lodging REIT $1.13 -77.9% $44 18.6% 2.9 x n/a $2.75 -58.9% n/a

InnVest REIT $3.53 -64.1% $263 21.2% 2.9 x 2.9 x $5.00 -29.4% 9.00%

Royal Host REIT $3.29 -49.5% $68 20.1% 5.0 x 4.8 x $2.60 26.5% 10.00%

Total / Weighted Average -63.1% $375 20.7% 3.3 x 3.3 x -22.7% 9.21%

Seniors Housing REITs

Chartwell Seniors Housing REIT $5.65 -52.4% $574 13.1% 8.0 x 7.8 x $6.50 -13.1% 8.50%

Extendicare REIT $5.77 -53.2% $428 14.6% 4.1 x 3.7 x $9.35 -38.3% 14.00%Total / Weighted Average -52.7% $1,002 13.7% 6.3 x 6.1 x -23.8% 10.85%

1. Based on most recent publicly available information

2. Estimates from RBC Research, except for Charter, Crombie, Huntingdon, Retrocom, Scott's, Whiterock, InterRent, Lanesborough, Holloway, Extendicare, BTB, Charter, Lakeview and Temple, whose estimates are consensus

14

Transaction

Date Announced/Closing Date

8/14/2007 /12/12/2007

8/1/2007 /12/4/2007

7/12/2007 /9/18/2007

6/4/2007 /8/24/2007 (Real Estate

Sale) / 8/27/2007 (Equity

Investment)

1/12/2007 /4/26/2007

12/1/2006 /5/22/2007

10/5/2006 /2/2/2007

8/30/2006 /1/26/2007

TransactionValue US$1.4 Billion $1.2 Billion $2.5 Billion

i) $2.3B in Direct Real Estate

ii) $165MM of Equity (~16%)

$2.3 Billion $1.0 Billion $2.8 Billion $3.3 Billion

Bid Price US$9.75 $19.10 $12.60 $47.50 $16.50 $18.60 $8.35 $30.00

Price Prior to Announcement US$9.30 $14.26 $12.00 $39.96 $11.05 $14.89 $6.79 $25.45

Bid Premium Over

Prior Day Price4.8% 33.9% 5.0% 18.9% 49.3% 24.9% 23.0% 17.9%

Implied Cap Rate at Bid Price(1) 7.5% 6.7% 6.5% 6.0% 5.8% 6.8% 8.4% 6.0%

FFO Multiple(1,2) 10.9x 12.2x 12.7x 16.3x 21.0x 13.4x 10.0x 15.1x

AFFO Multiple(1,2) 15.5x 15.2x 20.1x 20.5x 22.6x 18.2x 13.0x 18.1x

(1) Implied cap rates and FFO/AFFO multiples are based on consensus street estimates

(2) Multiples are based on 1-year forward estimates

Canadian REIT M&A Overview: Deals Completed in 2007 2007 was an extremely active year for REIT M&A market in Canada, with transactions totaling ~$17 billion in value being

completed

acquisition of a large portfolio of real

estate from, and an equity stake in

acquisition ofacquisition of acquisition of acquisition ofacquisition ofacquisition ofacquisition of

15

Class ‘A’ Cap Rate Trends1 Vs. 10-Year GoC Bond Yields

Source: Altus InSite Investment Trends Survey

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08

Ca

p R

ate

December 31, 2008

GoC: 2.69% Power: 6.80%

CBD: 6.60% Multi: 7.50%

Single: 7.20% Reg: 6.1%

December 31, 2007

GoC: 3.99% Power: 5.90%

CBD: 5.90% Multi: 6.50%

Single: 6.30% Reg: 5.50%

Multi-Tenant IndustrialSingle-Tenant IndustrialPower Centres

CBD Office

Regional Mall

10-Year GoC Yield

Note 1: Toronto cap rates used as proxy

The “rear view” nature of this information is likely causing it to underestimate current market cap rates

YoY Change

GoC: -1.30% Power: +0.90%

CBD: +0.70% Multi: +1.00%

Single: +0.90% Reg: +0.60%

16

Canadian GoC Bond Yields and Mortgage Rates

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09

Source: RBC Capital Markets

10-Year Mortgage

Spread

10-Year GoC Yield