TREIT Circular 2010

ARRANGEMENT
Involving
TIMBERCREEK REAL ESTATE INVESTMENT TRUST
and
RESTIER LIMITED PARTNERSHIP
and
ALL HOLDERS OF CLASS A UNITS AND CLASS B UNITS

OF TIMBERCREEK REAL ESTATE INVESTMENT TRUST
ANNUAL AND SPECIAL MEETING OF UNITHOLDERS
OF TIMBERCREEK REAL ESTATE INVESTMENT TRUST
TO BE HELD ON AUGUST 18, 2010
NOTICE OF ANNUAL & SPECIAL MEETING

AND
MANAGEMENT PROXY CIRCULAR
August 3, 2010
These materials are important and require your immediate attention. They require holders of Units to make important
decisions. If you are in doubt as to how to make such decisions, please contact your financial, legal or other professional
advisors. If you have any questions or require more information with regard to voting your Units, please contact Carrie
Morris, Vice President – Investor Relations and Corporate Finance, at 1-416-306-9967 x 250.
TABLE OF CONTENTS
NOTICE OF ANNUAL AND SPECIAL MEETING OF UNITHOLDERS ................................................................3
MANAGEMENT PROXY CIRCULAR.......................................................................................................................7
CURRENCY .................................................................................................................................................................7
PAYMENT MECHANICS ...........................................................................................................................................7
CAUTIONARY STATEMENT WITH RESPECT TO FORWARD-LOOKING STATEMENTS..............................7
INFORMATION CONTAINED IN THE CIRCULAR ................................................................................................8
GLOSSARY OF TERMS..............................................................................................................................................9
SUMMARY OF MANAGEMENT PROXY CIRCULAR .........................................................................................13
INFORMATION CONCERNING THE MEETING AND VOTING.........................................................................19
THE ARRANGEMENT..............................................................................................................................................23
Background to the Arrangement.............................................................................................................................23

Recommendation of the Special Committee...........................................................................................................24
Recommendation of the Trustees............................................................................................................................25
Reasons for the Arrangement .................................................................................................................................25
Independent Fairness Opinion ................................................................................................................................26
Required Unitholder Approval ...............................................................................................................................27
Arrangement Mechanics .........................................................................................................................................28
Interests of Trustees and Senior Management in the Arrangement ........................................................................32
Intentions of Trustees and Executive Officers........................................................................................................33
Financing Arrangements.........................................................................................................................................33
THE ARRANGEMENT AGREEMENT ....................................................................................................................34
Terms of the Arrangement Agreement ...................................................................................................................34

Conditions Precedent to the Arrangement ..............................................................................................................34
Indemnification by Timbercreek Asset Management Inc. ......................................................................................34
Representations and Warranties..............................................................................................................................34
Covenants ...............................................................................................................................................................35
Termination Rights .................................................................................................................................................35
Expense Reimbursement.........................................................................................................................................35
CERTAIN TAX CONSIDERATIONS FOR UNITHOLDERS..................................................................................36
Certain Canadian Federal Income Tax Considerations...........................................................................................36

Currency Translation ..............................................................................................................................................36
Unitholders Resident in Canada..............................................................................................................................36
Unitholders Not Resident in Canada.......................................................................................................................37
INFORMATION CONCERNING TREIT ..................................................................................................................38
Auditors ..................................................................................................................................................................38
Description of TREIT Units ...................................................................................................................................38
Previous Purchases and Sales .................................................................................................................................38
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Pre-Closing Re-Organization..................................................................................................................................39
Financial Statements ...............................................................................................................................................39
INFORMATION CONCERNING THE PURCHASER .............................................................................................39
EXPENSES OF THE ARRANGEMENT ...................................................................................................................39
BENEFITS FROM THE ARRANGEMENT ..............................................................................................................39
COMMITMENTS TO ACQUIRE UNITS..................................................................................................................39
PROXY SOLICITATION AND DEPOSITARY........................................................................................................39
OTHER INFORMATION AND MATTERS..............................................................................................................40
LEGAL MATTERS ....................................................................................................................................................40
ADDITIONAL INFORMATION ...............................................................................................................................40
QUESTIONS AND FURTHER ASSISTANCE .........................................................................................................40
APPROVAL OF TREIT’S BOARD OF TRUSTEES.................................................................................................41
CONSENT OF GRANT THORNTON LLP ...............................................................................................................42
APPENDIX A – ARRANGEMENT RESOLUTION ..............................................................................................A-1
APPENDIX B – PLAN OF ARRANGEMENT.......................................................................................................B-1
APPENDIX C – FAIRNESS OPINION OF GRANT THORNTON LLP ...............................................................C-1
APPENDIX D – TIMBERCREEK GLOBAL REAL ESTATE FUND INVESTMENT WORKSHEET...............D-1
APPENDIX E – FINANCIAL STATEMENTS OF TREIT ........................................................................................1
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Dear Unitholder: August 3, 2010
We would like to invite you to join us at the annual and special meeting of unitholders (“Unitholders”) of
Timbercreek Real Estate Investment Trust (“TREIT”) that will be held at 9 a.m. (Toronto time) on August 18, 2010 at
Park Hyatt Toronto, located at 4 Avenue Rd, Toronto, Ontario.
At the meeting, among other things, you will be asked to consider a special resolution approving a proposed
arrangement (“Arrangement”) involving TREIT and Restier Limited Partnership (the “Purchaser”), a limited
partnership of which TREIT Equities Inc., an affiliate of Greystone Managed Investments Inc. (“the Lead Investor”),
TC Core 2 LP and Newport Real Estate LP (together with the Lead Investor, the “Investors”) are limited partners and
7550332 Canada Inc. is the general partner (the “General Partner”), that will result in the acquisition by the Purchaser
of all of the outstanding units of TREIT (“Units”) in exchange for an aggregate net cash payment to Unitholders of
$182,715,328.65 (the “Net Consideration”). The Net Consideration is net of the assumption of liabilities by the
Purchaser of performance fees of approximately $8,000,000 and transaction costs of approximately $529,000, translating
into a gross consideration of $191,253,654.70 (the “Gross Consideration”) or $14.45 per Unit.
Registered Unitholders whose last address, as shown on TREIT’s Unit register at the effective time of the
Arrangement, is in Canada will receive the Net Transaction Price per Unit (as defined in the attached Circular) as shown
in the table set out on page 29 of the Circular. Registered Unitholders that are non-residents of Canada will receive an
amount equal to the Net Transaction Price per Unit less applicable withholding taxes.
Concurrent with the proposed Arrangement, Timbercreek Global Real Estate Fund (“Timbercreek Global”) is
offering, pursuant to a prospectus, Class A and Class B Units (the “Timbercreek Global Offering”). You will have, as
set forth in the Letter of Transmittal, the option to elect to receive cash or to elect (the “Timbercreek Global Election”)
to direct 25%, 50%, 75% or all of the cash proceeds received under the Arrangement to Timbercreek Global for the
subscription of Timbercreek Global units offered under the Timbercreek Global Offering, subject to the terms thereof.
The Trustees of TREIT have unanimously approved the proposed Arrangement and have determined that the
proposed Arrangement is fair to Unitholders and is in the best interests of TREIT. In doing so, the Trustees had the
benefit of (among other things) a recommendation from a Special Committee of Trustees that was established to consider
this transaction and a fairness opinion from its financial advisor, Grant Thornton LLP.
The Trustees unanimously recommend that Unitholders vote FOR the special resolution approving the
Arrangement.
To be effective, the Arrangement must be approved by a special resolution passed by at least 66 2⁄3% of the
votes cast by Unitholders present in person or represented by proxy and entitled to vote at the special meeting.
The accompanying materials describe the transaction in some detail and include information to assist you in
considering how to vote on the proposed Arrangement, including the reasoning underlying the recommendation of the
Trustees and copies of the fairness opinion of TREIT’s financial advisor. You should read this information carefully and
consult your financial, legal or other professional advisors for further assistance.
Your vote is important, regardless of the number of Units you own. If you are unable to attend the annual and
special meeting in person, we encourage you to take the time now to complete, sign, date and return the accompanying
form of proxy (printed on blue paper) so that your Units can be voted at the meeting in accordance with your
instructions. We also encourage you to complete, sign, date and return the accompanying Letter of Transmittal (printed
on yellow paper) forthwith so that the cash payment for your Units can either be sent to you promptly or directed to
Timbercreek Global in accordance with the Timbercreek Global Election, upon the implementation of the Arrangement.
The closing date of the Timbercreek Global Offering is anticipated to occur on August 26, 2010. If you wish to direct
any or all of the cash proceeds received under this Arrangement to Timbercreek Global for the subscription of
Timbercreek Global units under the Timbercreek Global Offer in accordance with the Timbercreek Global Election, we
encourage you to complete, sign and deliver the Letter of Transmittal to the Depositary no later than August 18, 2010 so
as to ensure that your subscription of Timbercreek Global units is processed in time for the closing of the Timbercreek
Global Offer. If you are not a registered Unitholder and hold your Units through an intermediary, such as a securities
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dealer or broker, bank or trust company, please complete and return the materials in accordance with the instructions
provided to you by the intermediary. You should also ensure that you provide specific direction to the intermediary
regarding the completion of the Letter of Transmittal, including in respect of the Timbercreek Global Election.
If you have any questions, please contact Carrie Morris, Vice President – Investor Relations and Corporate
Finance, at 1-416-306-9967 x 250.
On behalf of TREIT, we would like to thank all of our Unitholders for their ongoing support as we prepare to
take part in this important event in TREIT’s history.
Yours very truly,
(Signed) Corrado Russo

Chairman of the Board of Trustees
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NOTICE OF ANNUAL AND SPECIAL MEETING OF UNITHOLDERS
NOTICE IS HEREBY GIVEN that an annual and special meeting (the “Meeting”) of the holders of units
(“Unitholders”) of Timbercreek Real Estate Investment Trust (“TREIT”) will be held commencing at 9 a.m. (Toronto
time) on August 18, 2010 at Park Hyatt Toronto, located at 4 Avenue Rd, Toronto, Ontario, for the following purposes:
1. to waive the requirement to hold annual meetings on or before June 30 of each year and to confirm and ratify
the holding of the annual meeting of TREIT for 2010 on August 18, 2010;
2. to present the audited financial statements of TREIT for the financial year ended December 31, 2009 and the
report of the Auditors thereon and the unaudited interim financial statements of TREIT for the 6 months ended
June 30, 2010 (the “Financial Statements”);
3. to elect the persons named as proposed Trustees below (or other persons duly nominated, if any) as Trustees for
the ensuing 2 year term;
4. to appoint KPMG LLP as the Auditor of TREIT for the ensuing year and to authorize the Trustees to fix the
remuneration of the Auditors;
5. to consider, and, if deemed advisable, to pass, with or without variation, a special resolution (the
“Arrangement Resolution”) to approve an arrangement (the “Arrangement”) involving TREIT and Restier
Limited Partnership (the “Purchaser”), a limited partnership of which TREIT Equities Inc., an affiliate of
Greystone Managed Investments Inc. (“the Lead Investor”), TC Core 2 LP and Newport Real Estate LP
(together with the Lead Investor, the “Investors”) are limited partners and 7550332 Canada Inc. is the general
partner (the “General Partner”), that will result in the acquisition by the Purchaser of all of the outstanding
units of TREIT (“Units”) in exchange for an aggregate net cash payment to Unitholders of $182,715,328.65,
and the plan of arrangement related thereto (the “Plan of Arrangement”), all as more particularly described in
the accompanying management proxy circular of TREIT (the “Circular”); and
6. to transact such further and other business as may properly come before the Meeting or any adjournment(s)
thereof.
The Trustees of TREIT have fixed 4 p.m. (Toronto time) on July 15, 2010 as the record date for determining the
Unitholders who are entitled to receive notice of, attend and vote at the Meeting or any adjournment(s) thereof.
The Arrangement is described in the Circular and the full text of the Arrangement Resolution is set out in
Appendix A to the Circular. The full text of the Plan of Arrangement is set out in Appendix B to the Circular. The
Circular, a form of proxy and a Letter of Transmittal accompany this Notice of Annual and Special Meeting of
Unitholders.
Unitholders who are unable to attend the Meeting in person and who wish to ensure that their Units will be
voted at the Meeting are requested to complete, date and sign the accompanying form of proxy and deliver it by hand,
mail or fax in accordance with the instructions set out in the form of proxy and in the Circular. To be used at the
Meeting, a duly executed form of proxy must be deposited with TREIT’s registrar and transfer agent, Olympia Trust
Company, either by courier or mail to 120 Adelaide St. West, Suite 920, Toronto, Ontario M5H 1T1 or by facsimile
transmission to 416-364-1827, not later than 9 a.m. (Toronto time) on August 17, 2010 or, if the Meeting is adjourned,
not later than 24 hours, excluding Saturday and holidays, preceding the time of such adjourned meeting.
Unitholders are also encouraged to complete, sign, date and return the accompanying Letter of Transmittal to
the Depositary forthwith so that the cash payment for the Units can either be sent to the Unitholder promptly or directed
to Timbercreek Global in accordance with the Timbercreek Global Election, upon the implementation of the
Arrangement. The closing date of the Timbercreek Global Offering is anticipated to occur on August 26, 2010.
Unitholders who wish to direct any or all of the cash proceeds received under this Arrangement to Timbercreek Global
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for the subscription of Timbercreek Global units under the Timbercreek Global Offer pursuant to the Timbercreek
Global Election are encouraged to complete, sign and deliver the Letter of Transmittal to the Depositary no later than
August 18, 2010 so as to ensure that their subscription of Timbercreek Global units is processed in time for the closing of
the Timbercreek Global Offer. Non-Registered Unitholders should also ensure that they provide specific direction to the
intermediaries regarding the completion of the Letter of Transmittal, including in respect of the Timbercreek Global
Election.
Dated at Toronto, Ontario on August 3, 2010.
By Order of the Board of Trustees,

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Trustees of TREIT
The following table sets forth the name, experience and principal occupation and the approximate number of
Units of TREIT beneficially owned or controlled by each of the current Trustees of TREIT and each of the individuals to
be nominated for election as a Trustee of TREIT at the Meeting, each of whom shall take office from and after the
Meeting. Trustees elected at the Meeting will hold office from and after the Meeting until the conclusion of the next
annual meeting of Unitholders held to elect Trustees (which is the second annual meeting after the Meeting), unless re-
elected at that meeting.
Name and Number, type

municipality of Positions held and the and percentage
principal date of obtaining that of securities of
residence position Principal Occupation the Trust
Ugo Bizzarri Chief Financial Officer, Ugo Bizzarri is a founding partner of Timbercreek Asset 11,243 Class A
Toronto, Ontario Trustee since Management Inc. and holds the title of CFO and Vice- Units
November 2004 and President, Acquisitions. Since the inception of the (0.08%)
Proposed Trustee Timbercreek real estate Funds in 2000, Mr. Bizzarri has
directed the acquisitions of greater than $1.1 billion worth
of Multi-Residential real estate for these Funds comprising
of over 10,000 units across 10 cities. Mr. Bizzarri’s is
responsible for broker negotiations, underwriting, and
structuring the financing for all Timbercreek Multi-
Residential acquisitions. Mr. Bizzarri is also a Trustee for
Timbercreek REIT, and a Credit Committee member for
the Timbercreek Mortgage Investment Corporation. Prior
to founding Timbercreek, Mr. Bizzarri was in Portfolio
Management at Ontario Teachers’ Pension Plan Board
(“OTPPB”) where he played a leadership role in the
strategic planning, corporate transactions / restructuring
and property acquisitions for the Real Estate Group of
OTPPB. Mr. Bizzarri has been involved as a negotiator
and manager in approximately $20 billion worth of real
estate transactions in the last ten years. Mr. Bizzarri is a
graduate of the Richard Ivey School of Business and is a
Chartered Financial Analyst.
Andrew Jones Trustee since Andrew Jones is Chief Credit Officer of Timbercreek and 29,470 Class A
Toronto, Ontario November 2004 and Vice-President of Timbercreek Mortgage Investment Units
Proposed Trustee Corporation. In 2002, Mr. Jones co-founded Canadian (0.22%)
Mortgage Strategies & Investments (“CMSI”), a
commercial mortgage brokerage firm with offices in
Toronto, Montreal, Edmonton and Vancouver. Prior to
founding CMSI, Mr. Jones served as Vice-President,
Canada ICI Commercial Mortgages Inc. (1999 – 2002)
and also held the positions of Vice-President, Finance at
Residential Equities REIT (1998 – 1999) and Vice-
President Finance at Dundee Realty Corporation (1998 –
1999). Mr. Jones is also a Trustee of Timbercreek REIT
and a Member of the Mortgage Advisory Committee. Mr.
Jones is a graduate of the University of British Columbia
and has worked in the commercial real estate and
mortgage business for over 15 years.
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Name and Number, type
municipality of Positions held and the and percentage
principal date of obtaining that of securities of
residence position Principal Occupation the Trust
Corrado Russo Independent Trustee since Corrado Russo is an Executive Director at Forum 25,071 Class A
New York, New November 2004, Chairman Securities Limited, where he is a Portfolio Manager for Units
York of the Trustees since June their global real estate securities team. Mr. Russo has an (0.19%)
2006 and Proposed extensive background in the investment management field,
Chairman of the Board and having held positions in portfolio management, equity
Independent Trustee research and direct real estate investments. Prior to joining
Forum, from September 2005 to June 2009, Mr. Russo
was a portfolio manager for Citi Property Investors
(“CPI”), where he co-managed the Global Diversified and
Global Alpha real estate securities strategies and also
launched and managed CPI’s Global Long/Short fund.
Prior to CPI, Mr. Russo was the lead portfolio manager for
the Empire Dividend Growth Fund from January 2004
until September 2005. From 2001 to 2004, Mr. Russo
worked as a Senior Equity Analyst for Investors Group
Asset Management. He has also held positions with the
Ontario Teacher’s Pension Plan Board, where he was
responsible for direct real estate acquisitions from 1997 to
2001. Mr. Russo holds an MBA from the Schulich School
of Business at York University in Toronto and holds the
Chartered Financial Analyst designation.
Chris Slightham Independent Trustee since Chris Slightham is the President of Royal Lepage 25,171 Class A
Toronto, Ontario November 2004 and Signature Real Estate Brokerage, the largest residential Units
Proposed Independent Royal Lepage office in Canada. Since buying the Royal (0.19%)
Trustee Lepage franchise and merging it with Slightham Realty in
2001, the business has tripled in size by volume, and now
employs over 200 individuals. Prior to 2001, Chris
managed Slightham Realty, a diversified family owned
real estate company founded in 1965. As well as offering
prestige brokerage services through Slightham Realty, the
Slightham family has built and maintained a portfolio of
multi-family residential properties since the 1960’s, and
developed a distinct property management business to
manage both their portfolio and those of other investors.
As a result, Mr. Slightham brings with him extensive
experience with multi-family residential real estate
management and the Ontario Landlord and Tenant Act.
Chris attended Ryerson Business School and sits on the
Board of Governors of Mount Sinai Hospital in Toronto.
David Cole Proposed Independent David Cole is a Managing Director of Newport Investment Nil
Toronto, Ontario Trustee Counsel Inc. (“Newport”) in Toronto. Mr. Cole is a
member of Newport's Investment Committee. Prior to
joining Newport in 2003, Mr. Cole was Vice-President and
portfolio manager for McGee Capital Management with
responsibilities including asset mix, money manager
selection and client relationships. Mr. Cole initially joined
McGee Capital Management Limited in 1992 as an
Investment Analyst and in 1996 assumed the role of
Portfolio Manager. David Cole graduated from Sir
Wilfred Laurier University in Economics and holds a CFA
designation.
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MANAGEMENT PROXY CIRCULAR
The Circular is furnished in connection with the solicitation of proxies by and on behalf of the management of
Timbercreek Real Estate Investment Trust (“TREIT”). The accompanying form of proxy is for use at the Meeting and at
any adjournment(s) thereof and for the purposes set forth in the accompanying Notice of Meeting. All capitalized terms
used in the Circular but not otherwise defined herein have the meanings set forth under “Glossary of Terms”.
CURRENCY
Unless otherwise specifically stated, all dollar figures in the Circular are references to Canadian dollars.
PAYMENT MECHANICS
Under the Arrangement, Non-Canadian Unitholders will receive the Net Transaction Price per Unit less any
amount required to be withheld for tax purposes. Canadian Unitholders will receive the Transaction Price per Unit.
“Net Transaction Price per Unit” means the price shown in the table on page 29 hereto and in Exhibit “A” of
the Plan of Arrangement under the column with the heading “Net Transaction Price per Unit” based on the initial
acquisition cost of the relevant Units.
If you are a Non-Registered Unitholder resident outside of Canada and hold your Units through an Intermediary
that is a participant in CDS, for the purposes of the Arrangement, you will be considered a Canadian Unitholder. If you
are a Non-Registered Unitholder resident outside of Canada you will be considered a Non-Canadian Unitholder.
You will have, as set forth in the Letter of Transmittal, the option to elect to direct 25%, 50%, 75% or all of the
cash proceeds received under the Arrangement to Timbercreek Global in accordance with the Timbercreek Global
Election for the subscription of Timbercreek Global units offered under the Timbercreek Global Offering, subject to the
terms thereof. In order to assist you in calculating the appropriate amount for such Timbercreek Global Election, TREIT
has prepared Appendix D attached hereto for your ease of reference.
CAUTIONARY STATEMENT WITH RESPECT TO FORWARD-LOOKING STATEMENTS
The Circular contains forward-looking statements about TREIT’s objectives, strategies, financial condition,
results of operations, cash flows and businesses. These forward-looking statements can be identified by the use of
terminology such as: “plan”, “expect”, “believe”, “anticipate”, “foresee”, “should”, “intend”, “will”, “may”, “suspect”,
“estimate”, “outlook”, “continue”, “project” and similar expressions concerning matters that are not historical facts.
These statements are based on certain factors and assumptions including, but not limited to, the relative stability in the
multi-residential real estate markets in Canada, the ability of TREIT to acquire multi-residential real estates on
favourable terms and conditions to TREIT, the ability of TREIT to operate and manage multi-residential properties
currently held by it in a manner consistent with and comparable to the past, maintenance of prevailing interest rates and
changes in general behaviour and political conditions, which management of TREIT believes are reasonable based on
currently available information. Forward-looking statements are not guarantees of future performance and involve risks,
uncertainties and assumptions, which could cause actual results to differ materially from those anticipated in these
forward-looking statements. In addition to other factors and matters contained or incorporated in the Circular,
management of TREIT believes the following factors could cause actual results to differ materially from those discussed
in the forward-looking statements: failure to satisfy the conditions to complete the Arrangement, including the receipt of
the required Unitholder approvals and the occurrence of any event, change or other circumstance that could give rise to
the termination of the Arrangement Agreement. In light of these risks, which are inherent in forward-looking statements,
readers are cautioned not to place undue reliance on these forward-looking statements. Furthermore, the forward-looking
statements contained in the Circular are made as of the date of the Circular. Unless otherwise required by applicable law,
TREIT does not undertake any obligation to update or to revise any of the included forward-looking statements, whether
as a result of new information, future events or otherwise.
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INFORMATION CONTAINED IN THE CIRCULAR
No person has been authorized to give information or to make any representations in connection with the
Arrangement other than those contained or incorporated by reference in the Circular and, if given or made, any such
information or representations should not be relied upon in making a decision as to how to vote on the Arrangement
Resolution or be considered to have been authorized by TREIT.
All information relating to the Purchaser, the Investors or any of their respective Affiliates contained in the
Circular has been provided to TREIT by those parties. TREIT has relied upon this information without having made
independent inquiries as to the accuracy or completeness thereof; however, it has no reason to believe such information
is misleading or inaccurate.
The Circular does not constitute an offer to buy, or a solicitation of an offer to sell, any securities, or the
solicitation of a proxy, by any person in any jurisdiction in which such an offer or solicitation is not authorized or in
which the person making such an offer or solicitation is not qualified to do so or to any person to whom it is unlawful to
make such an offer or solicitation.
Unitholders should not construe the contents of the Circular as legal, tax or financial advice and should consult
with their own professional advisors as to the relevant legal, tax, financial or other matters in connection herewith.
THIS CIRCULAR AND THE TRANSACTIONS CONTEMPLATED BY THE ARRANGEMENT

AGREEMENT AND THE PLAN OF ARRANGEMENT HAVE NOT BEEN APPROVED OR DISAPPROVED
BY ANY SECURITIES REGULATORY AUTHORITY NOR HAS ANY SECURITIES REGULATORY
AUTHORITY PASSED UPON THE FAIRNESS OR MERITS OF SUCH TRANSACTIONS OR UPON THE
ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS CIRCULAR. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.
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GLOSSARY OF TERMS
The following glossary of terms used in the Circular, including the Summary, but not including the appendices,
is provided for ease of reference:
“Acquisition Proposal” means the letter indicating Greystone’s intention to pursue a potential transaction with TREIT
dated May 27, 2010.
“Advisor” or “TAMI” means Timbercreek Asset Management Inc.
“Affiliate” means, with respect to any specified Person, any other Person directly or indirectly controlling, controlled by
or under common control with such specified Person. For this purpose, “control” (including, with correlative meanings,
“controlled by” and “under common control with”) will mean the possession, directly or indirectly, of the power to direct
or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership
or other ownership interests, by contract or otherwise.
“allowable capital loss” has the meaning ascribed thereto under the heading “Certain Tax Considerations for
Unitholders — Certain Canadian Federal Income Tax Considerations — Unitholders Resident in Canada — Disposition
of Units”.
“Applicable Law” means, with respect to any Person, any domestic, foreign, national, federal, provincial, state or local
law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, policy or other
similar requirement enacted, adopted, promulgated or applied by a Governmental Entity that is binding upon or
applicable to such Person, as amended unless expressly specified otherwise.
“Arrangement” means the arrangement on the terms and conditions set forth in the Arrangement Agreement resulting,
inter alia, in the acquisition by the Purchaser of all of the outstanding Units, all on such terms and subject to the
conditions set out in the Arrangement Agreement and as more particularly described in the Plan of Arrangement, subject
to any amendments or variations made thereto in accordance with the Arrangement Agreement or the Plan of
Arrangement.
“Arrangement Agreement” means the Arrangement Agreement dated August 3, 2010 among TREIT, TAMI, and the
Purchaser, as it may be amended from time to time prior to the Closing Date, providing for, among other things, the
Arrangement.
“Arrangement Resolution” means the special resolution of the Unitholders approving the Arrangement to be
considered at the Meeting, as set out in Appendix A to the Circular.
“Asset Management Agreement” means the asset management agreement dated December 30, 2009 and made between
TREIT and TAMI, as amended from time to time.
“Authorization” means any authorization, approval, exemption, consent, waiver, certificate, directive, notice, “no
action” letter, license, order, permit, variance, agreement, instruction, registration or franchise of or from any
Governmental Entity or pursuant to any Applicable Law.
“Board” means the board of Trustees of TREIT.
“Business Day” means any day on which commercial banks are generally open for business in Toronto, Ontario, other
than a Saturday, a Sunday or a day observed as a holiday in Toronto under the laws of the Province of Ontario or the
federal laws of Canada.
“Canadian Unitholder” means a Registered Unitholder whose last address shown on TREIT’s Unit register at the
Effective Time is in Canada.
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“Circular” means this management proxy circular of TREIT, including the Notice of Meeting and all appendices and all
documents incorporated by reference herein, and any supplements and amendments.
“Closing” means the closing of the Arrangement and the other transactions contemplated by the Arrangement
Agreement.
“Closing Date” means the date of the Closing.
“Competition Act” means the Competition Act (Canada) and regulations made thereunder, as promulgated or as
amended from time to time.
“CRA” means the Canada Revenue Agency.
“Declaration of Trust” means the amended and restated declaration of trust dated June 29, 2006 in respect of TREIT, as
amended from time to time.
“Depositary” means Olympia Trust Company.
“Disposition Time” means the time at which Units are disposed of by the Unitholders pursuant to the Plan of
Arrangement.
“Effective Date” means the date upon which the Arrangement becomes effective as established pursuant to the Plan of
Arrangement.
“Effective Time” means the time at which the Arrangement becomes effective as established pursuant to the Plan of
Arrangement on the Effective Date.
“Eligible Institution” means a Canadian Schedule 1 chartered bank, a major trust company in Canada, a member of the
Securities Transfer Agents Medallion Program (STAMP), a member of the Stock Exchange Medallion Program (SEMP)
or a member of the New York Stock Exchange Inc. Medallion Signature Program (MSP).
“Fairness Opinion” means the opinion of Grant Thornton as to the fairness, from a financial point of view, of the
Transaction to the Unitholders, a copy of which is attached hereto as Appendix C.
“Financial Statements” means the annually audited financial statements of TREIT for the year ended December 31,
2009 and the interim unaudited financial statements of TREIT for the 6 months ended June 30, 2010, and attached hereto
as Appendix E.
“General Partner” means 7550332 Canada Inc., the general partner of the Purchaser.
“Governmental Entity” means any government, regulatory authority, governmental department, agency, commission,
bureau, official, minister, Crown corporation, court, body, board, tribunal or dispute settlement panel or other law, rule or
regulation-making organization or entity: (a) having jurisdiction on behalf of any nation, province, territory or state or
any other geographic or political subdivision of any of them; or (b) exercising any administrative, executive, judicial,
legislative, policy, regulatory or taxing authority or power.
“Grant Thornton” means Grant Thornton LLP, the independent financial advisor to the Special Committee.
“Greystone” means Greystone Managed Investments Inc.
“Gross Consideration” means $191,253,654.70, which comprise the Net Consideration, the assumption by the
Purchaser of liabilities relating to performance fees of approximately $8,000,000 and transaction costs of approximately
$529,000.
10
“Interested Unitholders” means the Advisor and its Affiliates and any other Unitholder which directly or through an
Affiliate has an ownership interest in the Purchaser, directly or indirectly.
“Intermediary” means an intermediary with which a Non-Registered Unitholder may deal, including banks, trust
companies, securities dealers or brokers and trustees or administrators of self-directed trusts governed by registered
retirement savings plans, registered retirement income funds, registered education savings plans (collectively, as defined
in the Tax Act) and similar plans, and their nominees.
“Investors” means the Lead Investor, TC Core 2 LP and Newport Real Estate LP.
“Lead Investor” means TREIT Equities Inc., a company controlled by Greystone.
“Letter of Transmittal” means the letter of transmittal and election form to be sent by or on behalf of TREIT to
Unitholders for use in connection with the Arrangement.
“Limited Partners” means the Investors and other persons who from time to time are admitted to the Purchaser as
limited partners.
“LOI” means the Letter of Intent dated July 16, 2010 from the Lead Investor to TREIT.
“Meeting” means the annual and special meeting of Unitholders (including any adjournments, continuations or
postponements thereof) to be held at 9 a.m. (Toronto time) on August 18, 2010 at Park Hyatt Toronto, located at 4
Avenue Rd, Toronto, Ontario, to consider, among other things, the Arrangement Resolution.
“NAV of a Unit” means the amount derived, as at the last Business Day of each calendar quarter, by subtracting the
aggregate amount of the total liabilities of TREIT, including accruing fees or liabilities as are to be taken into account as
determined from time to time by the Advisor (including any fees accruing in favour of the Advisor but not including any
Promissory Note) from the then fair market value of the assets of TREIT plus any capital improvements made to the
assets since the date of the last appraisal excluding any Trust assets that have either been acquired during the calendar
year or under major renovation or re-positioning, at the time the calculation is made. For the purpose of calculating
NAV, assets acquired during the calendar year or that are under major renovation or re-positioning shall be recorded at
cost plus any capital improvements; assets acquired by way of share acquisitions will be recorded at fair market value of
the individual assets; all other assets of TREIT at the time the calculation is made shall be recorded at book value; and
sales commissions and other expenses associated with the issuance of Units by TREIT will be amortized over five years.
“Net Consideration” means $182,715,328.65 to be paid by the Purchaser in cash for all the Units of TREIT issued and
outstanding as of the Closing Date.
“Net Transaction Price per Unit” means the price shown in the table on page 29 hereto and in Exhibit “A” of the Plan
of Arrangement under the column with the heading “Net Transaction Price per Unit” based on the initial acquisition cost
of the relevant Units.
“Non-Canadian Unitholder” means a Registered Unitholder whose last address shown on TREIT’s Unit register at the
Effective Time is not in Canada.
“Non-Registered Unitholder” means a non-registered beneficial holder of Units whose Units are held through an
Intermediary.
“Non-Resident Unitholder” means a Unitholder who, for the purposes of the Tax Act and at all relevant times, (i) has
not been and is not resident or deemed to be resident in Canada, and (ii) does not use or hold and is not deemed to use or
hold Units in connection with carrying on a business in Canada.
“Notice of Meeting” means the Notice of Annual and Special Meeting of Unitholders dated August 3, 2010.
11
“Person” means and includes any individual, general partnership, limited partnership, joint venture, syndicate, sole
proprietorship, company or corporation with or without share capital, joint stock company, association, trust, trust
company, bank, pension fund, trustee, executor, administrator or other legal personal representative, regulatory body or
agency, government or governmental agency, authority or other organization or entity, whether or not a legal entity,
however designated or constituted.
“Plan of Arrangement” means, in relation to the Arrangement, the plan of arrangement substantially in the form of
Appendix B hereto and any amendments or variations thereto made in accordance with the provisions of the
Arrangement Agreement.
“Promissory Note” means any non-interest bearing promissory note issued by TREIT to Timbercreek Investments Inc.
in connection with the initial acquisition of real property by TREIT from Timbercreek Investments Inc.
“Purchaser” means Restier Limited Partnership, a limited partnership collectively owned by the Investors.
“Record Date” means 4 p.m. (Toronto time) on July 15, 2010.
“Registered Unitholder” means a registered holder of Units as recorded in the Unitholders’ register.
“Resident Unitholder” means a Unitholder who, for purposes of the Tax Act and any applicable income tax treaty, at all
relevant times, is or is deemed to be resident in Canada.
“Special Committee” means the committee of independent Trustees established to consider the proposal by the
Purchaser in connection with the transactions contemplated by the Arrangement Agreement and the Plan of
Arrangement.
“Tax Act” means the Income Tax Act (Canada), as amended.
“taxable capital gain” has the meaning ascribed thereto under the heading “Certain Tax Considerations for Unitholders
— Certain Canadian Federal Income Tax Considerations — Unitholders Resident in Canada — Disposition of Units”.
“Timbercreek Global” means Timbercreek Global Real Estate Fund.
“Timbercreek Global Election” means the election by a Unitholder to direct 25%, 50%, 75% or all of the cash proceeds
received under the Arrangement to Timbercreek Global for the subscription of Timbercreek Global units offered under
the Timbercreek Global Offering, subject to the terms thereof.
“Timbercreek Global Offering” means the prospectus offering of Class A and Class B Units by Timbercreek Global.
“Transaction” means, collectively, the transactions contemplated by the Arrangement Agreement and the Plan of
Arrangement.
“Transfer Agent” means Olympia Trust Company.
“TREIT” means Timbercreek Real Estate Investment Trust, a trust governed by the laws of Canada.
“Trustees” means the Trustees of TREIT.
“Units” means the Class A Units and Class B Units of TREIT.
“Unitholders” means the holders of Units.
12
SUMMARY OF MANAGEMENT PROXY CIRCULAR
The following is a summary of certain information contained in the Circular. This summary is provided for
convenience only and should be read in conjunction with, and is qualified in its entirety by, the more detailed
information appearing or referred to elsewhere in the Circular, including the Appendices and documents incorporated
by reference herein. Certain capitalized words and terms used in this summary and the Circular are defined in the
Glossary of Terms or elsewhere in the Circular.
Meeting of Unitholders
The Meeting will be held on August 18, 2010 at 9 a.m. (Toronto time) at Park Hyatt Toronto, located at 4
Avenue Rd, Toronto, Ontario.
At the Meeting, you will be asked, among other things, to consider a special resolution approving a proposed
Arrangement involving TREIT and Restier Limited Partnership (the “Purchaser”), a limited partnership of which
TREIT Equities Inc., an affiliate of Greystone (“the Lead Investor”), TC Core 2 LP and Newport Real Estate LP
(together with the Lead Investor, the “Investors”) are limited partners and 7550332 Canada Inc. is the general partner
(the “General Partner”), that will result in the acquisition by the Purchaser of all of the outstanding units of TREIT
(“Units”) in exchange for an aggregate net cash payment to Unitholders of $182,715,328.65.
Unitholders of record at 4 p.m. (Toronto time) on July 15, 2010 will be entitled to attend and vote at the
Meeting or any adjournment(s) thereof.
Receipt of Financial Statements
As part of the annual meeting matters, the Unitholders will receive the Financial Statements.
Appointment of Auditors
As part of the annual meeting matters, the Unitholders will vote on the appointment of KPMG LLP as the
auditor of TREIT and the authorization of the Trustees to fix the remuneration of the auditors.
Election of Trustees
As part of the annual meeting matters, the Unitholders elect persons as Trustees for the ensuing 2 year term.
The Arrangement
The Arrangement Agreement provides for the acquisition of all of the outstanding Units by the Purchaser by
way of the Plan of Arrangement. Pursuant to the Plan of Arrangement, each outstanding Unit shall be deemed to be
transferred by the holder thereof to the Purchaser in exchange for a cash payment (less any amount required to be
withheld for tax purposes) by the Purchaser equal to the Net Transaction Price per Unit for each Unit transferred
thereunder.
Registered Unitholders whose last address as shown on TREIT’s Unit register at the effective time of the
arrangement is in Canada will receive the Net Transaction Price per Unit (as defined in the attached Circular) as shown
in the table set out on page 29 hereto. Registered Unitholders that are non-residents of Canada will receive an amount
equal to the Net Transaction Price per Unit less applicable withholding taxes.
As at July 30, 2010, there were 12,729,018.97 Class A Units and 506,528.07 Class B Units issued and
outstanding. These Units will be acquired by the Purchaser pursuant to the Arrangement.
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Recommendation of the Special Committee
The Trustees established the Special Committee to consider the Arrangement. The Special Committee
unanimously determined that the Arrangement is fair to Unitholders, and is in the best interests of TREIT. Accordingly,
the Special Committee unanimously recommended that the Trustees approve the Arrangement. See “The Arrangement
— Recommendation of the Special Committee”.
Recommendation of the Trustees
The Trustees have unanimously determined, based in part on the Special Committee’s recommendation, that the
Arrangement is fair to Unitholders and is in the best interests of TREIT. Accordingly, the Trustees have approved the
Arrangement and unanimously recommend that Unitholders vote FOR the Arrangement Resolution. See “The
Arrangement — Recommendation of the Trustees”.
Reasons for the Arrangement
In evaluating and approving the Arrangement and in making their recommendation, the Special Committee and
the Trustees considered a number of factors, including:
• the opinion of Grant Thornton that, as at August 3, 2010, the Transaction was fair, from a financial point of
view, to the Unitholders;
• the Net Transaction Price per Unit represents an approximate 15% premium over the NAV of the Units, on
March 31, 2010, the last quarter end immediately preceding the announcements by TREIT of the
Acquisition Proposal;
• the unlikelihood of the emergence of a superior competitive offer to acquire the Units or all or substantially
all of the assets of TREIT based on a review of recent comparable portfolio transactions and the Special
Committee and the Trustees have not received any superior competitive offer since the announcement of
the Acquisition Proposal on June 3, 2010;
• the fact that the Purchaser’s offer is non-brokered, which results in lower transaction costs than the parties
would otherwise incur with a brokered offer and as brokerage costs are typically paid for by the seller, the
lack of brokerage results in greater overall consideration available to the Unitholder;
• no redemption penalty is charged on the proceeds that Unitholders will receive from the Transaction;
• the Trustees’ understanding of the business prospects for TREIT and its industry, the risks associated with
achieving a higher unit price in the foreseeable future and the risks associated with TREIT’s ability to grow
in the future;
• the benefits to Unitholders (including substantially lower transactions than would be available otherwise)
resulting from the Purchaser making an offer for the Units as opposed to the assets of the Trust, thereby
increasing the overall consideration available to Unitholders;
• the Net Consideration to be paid to Unitholders under the Arrangement is to be paid entirely in cash;
• the fact that the Purchaser’s obligations are not subject to any financing conditions;
• the Trustees’ comfort as to the Purchaser’s commitment and ability to close the Transaction;
• the Special Committee’s conclusion that the Total Consideration was the highest price that it could obtain
from the Purchaser and that further negotiation could have caused the Purchaser to decide not to proceed
with the Arrangement, or to do so at a price lower than the Total Consideration negotiated by the Special
Committee, thereby leaving Unitholders without an opportunity to evaluate and vote in respect of the
proposed transaction;
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• in the case of the Trustees, the process undertaken by the Special Committee, including the retention of
McCarthy Tétrault LLP as legal advisors and Grant Thornton to provide a fairness opinion, the
recommendation of the Special Committee and the findings of the Special Committee;
• the fact that the Plan of Arrangement is subject to a favourable vote of the Unitholders; and
• the terms and conditions of the Arrangement Agreement, including the Net Consideration to be received
by the Unitholders, TREIT’s, and the Purchaser’s representations, warranties and covenants, and the
conditions to their respective obligations, were the product of arm’s length negotiations with TREIT and
the Purchaser.
The Special Committee and the Trustees also considered a number of other factors relating to the Arrangement,
including:
• the fact that the Purchaser is willing to agree to a closing date that is reasonably soon after the execution of
the Arrangement Agreement;
• the risks to TREIT if the Arrangement is not completed or is delayed, including the costs to TREIT in
pursuing the Arrangement and the diversion of management’s attention away from the conduct of TREIT’s
business in the ordinary course;
• the conditions to the Purchaser’s obligation to complete the Arrangement and the right of the Purchaser to
terminate the Arrangement Agreement under certain circumstances; and
• the fact that the Arrangement will be a taxable transaction and, as a result, Unitholders will generally be
required to pay taxes on any gains that result from their receipt of the cash proceeds in the Arrangement.
In reaching their determinations, the Special Committee and the Trustees also considered and evaluated, among
other things:
• the long-term implications of the current TREIT acquisition criteria (including cash yield requirements);
• the current and historical market prices of the Units;
• information concerning the business, operations, property, assets, financial condition, operating results and
prospects of TREIT;
• current industry, economic and market conditions and trends; and
• the information, data and conclusions contained in the Fairness Opinion.
See “The Arrangement — Reasons for the Arrangement”.
Fairness Opinion
The recommendations of the Arrangement by the Special Committee and the Trustees are, in part, based on the
Fairness Opinion prepared by Grant Thornton, the independent financial advisor retained by the Special Committee in
connection with its consideration of the Arrangement. The summary of the Fairness Opinion described in the Circular is
qualified by reference to the full text of such opinion. Unitholders are urged to read the Fairness Opinion, the full text of
which is attached as Appendix C to the Circular, carefully and in its entirety. Based upon and subject to the analyses,
assumptions, qualifications and limitations discussed in the Fairness Opinion, Grant Thornton advised the Special
Committee and the Trustees that, in its opinion, as at August 3, 2010, the Transaction is fair, from a financial point of
view, to the Unitholders. Grant Thornton provided its opinion for the benefit of the Special Committee and the Trustees
in connection with its evaluation of the Arrangement. The Fairness Opinion is not to be construed as a recommendation
by Grant Thornton to any Unitholder as to whether to vote in favour of or how to act with respect to any matters relating
to the Arrangement. See “The Arrangement — Independent Fairness Opinion”.
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Required Unitholder Approval
The approval of the Arrangement Resolution will require the affirmative vote of at least 66 2⁄3% of the votes
cast by Unitholders present in person or represented by proxy and entitled to vote at the Meeting and a simple majority
of the votes cast by Unitholders other than the Interested Unitholders present in person or represented by proxy and
entitled to vote at the Meeting in order for TREIT to implement the Arrangement on the Closing Date. As at July 30,
2010, there were 12,729,018.97 Class A Units and 506,528.07 Class B Units issued and outstanding. See “The
Arrangement — Required Unitholder Approval”.
Interests of Trustees and Senior Management in the Arrangement
In considering the recommendations of the Special Committee and the Trustees with respect to the
Arrangement, Unitholders should be aware that certain members of TREIT’s Trustees and senior management, through
their relationship with the Interested Unitholders, have certain interests in connection with the Arrangement that may
present them with actual or potential conflicts of interest in connection with the Arrangement. See “The Arrangement —
Arrangement Mechanics — Interests of Trustees and Senior Management in the Arrangement”.
Arrangement Mechanics
Pursuant to the Arrangement, the following transactions, among others, will occur in the order set out in the
Plan of Arrangement:
• immediately before the Effective Time, the Declaration of Trust will be amended as described in the Plan
of Arrangement attached hereto as Appendix B, in order to facilitate the Closing; and
• at the Effective Time, pursuant to and in full satisfaction of the Arrangement Agreement, the TREIT Units
held by each Unitholder, including a Non-Depositing Unitholder (as defined in the Plan of Arrangement
attached hereto as Appendix B), shall, without any further action by or on behalf of any Unitholder or Non-
Depositing Unitholder, be transferred to the Purchaser without any further act or formality, in exchange for
a cash amount equal to the Net Transaction Price per Unit transferred (less any amount required to be
withheld for tax purposes).
See “The Arrangement — Arrangement Mechanics”.
In order to receive the cash Net Transaction Price per Unit for the Units mentioned above, a Unitholder must
complete, sign, date and return the accompanying Letter of Transmittal in accordance with the instructions set out
therein. The Units held by Unitholders that do not deliver a duly completed Letter of Transmittal will be deemed to be
transferred to the Purchaser as of the Effective Time without any further action by such Unitholder pursuant to the Plan
of Arrangement and the proceeds such Unitholder is entitled to will be held for 2 years after the Closing Date by the
Depositary for the Unitholder to claim by returning the relevant Unit certificate and after 2 years, the Depositary will pay
any such proceeds back to the Purchaser. For clarity, whether the Unitholder delivers a Letter of Transmittal or returns
the Unit certificate or not, the Purchaser becomes the absolute owner of all Units of TREIT from the Effective Time of
the Arrangement.
Financing Arrangements
Under the terms of the Arrangement Agreement, based on the number of outstanding Units as at July 30, 2010,
the Purchaser will make an aggregate net cash payment of $182,715,328.65 to acquire all of the outstanding Units held
by Unitholders. The Purchaser has made adequate arrangements to ensure that the required funds are available to effect
payment in full for its payment obligations. See “The Arrangement — Arrangement Mechanics — Financing
Arrangements”.
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The Arrangement Agreement
Conditions Precedent to the Arrangement
The implementation of the Arrangement is subject to a number of conditions being satisfied or waived by one or
both of TREIT and the Purchaser, as applicable, at or before the Effective Time, including but not limited to:
• the approval of the Arrangement Resolution by 66 2/3% of the Unitholders that have voted on the
Arrangement at the Meeting;
• the expiry of the applicable waiting periods under s.123 of the Competition Act or the issuance of an
advance ruling certificate under s.102 of the Competition Act or the receipt of a “no action letter” from the
Commissioner of Competition appointed under the Competition Act;
• the Purchaser having completed to its satisfaction, in its sole discretion and unfettered discretion, its due
diligence review of the business, operations, properties, assets, affairs and financial condition of TREIT in
connection with the Arrangement by August 16, 2010;
• the representations and warranties of each of TREIT, TAMI and the Purchaser being true and correct in all
material respects at and as of the date of the Arrangement Agreement and as of the Closing Date as if made
at and as of such date;
• each of TREIT and the Purchaser having complied in all material respects all obligations, covenants and
agreements required to be performed by it under the Arrangement Agreement at or prior to the Closing
Date; and
• the non-existence or non-occurrence of any change (or any condition, event or development involving a
prospective change) which, individually or in the aggregate, has or is reasonably likely to have a Materially
Adverse effect on TREIT.
See “The Arrangement Agreement — Conditions Precedent to the Arrangement”.
Termination of the Arrangement Agreement
TREIT and the Purchaser may agree in writing to terminate the Arrangement Agreement at any time prior to the
Effective Time. In addition, either TREIT or the Purchaser may terminate the Arrangement Agreement at any time prior
to the Effective Time if certain specified events occur.
Due to the shortness of time between the signing of the LOI and the Arrangement Agreement, TREIT has
agreed to allow the Purchaser to have until August 16, 2010 to complete its due diligence and may terminate the
Arrangement Agreement if such due diligence condition is not resolved by August 16, 2010.
Expense Reimbursement
The Arrangement Agreement provides that out-of-pocket legal and other third-party expenses up to a maximum
of $400,000 are payable by TREIT to the Purchaser if the Arrangement Agreement is terminated as a result of the
Arrangement not being approved by Unitholders or TREIT receiving a superior proposal.
Certain Canadian Federal Income Tax Considerations
Residents of Canada. Generally, a Resident Unitholder who holds Units as capital property will realize a capital
gain (or a capital loss) equal to the amount by which the cash received by such Resident Unitholder, net of any
reasonable costs of disposition, exceeds (or is less than) the adjusted cost base to the Resident Unitholder of such Units.
Non-Residents of Canada. Generally, a Non-Resident Unitholder whose Units do not constitute “taxable
Canadian property” for purposes of the Tax Act will not be subject to tax under the Tax Act on any gain realized on the
exchange of such Units for cash under the Arrangement.
17
The foregoing is a brief summary of Canadian federal income tax consequences only. Unitholders should read
carefully the information in the Circular under the heading “Certain Tax Considerations for Unitholders — Certain
Canadian Federal Income Tax Considerations”, which qualifies the summary set forth above. Unitholders are urged to
consult their own tax advisors to determine the particular tax consequences to them of the Arrangement.
18
INFORMATION CONCERNING THE MEETING AND VOTING
Frequently Asked Questions on Voting and the Arrangement
Q: Who is soliciting my proxy?
A: Your proxy is being solicited by management of TREIT. The Circular is furnished in connection with that
solicitation. It is expected that the solicitation will be made primarily by mail, but proxies may also be solicited
personally or by telephone or other communication by the Trustees or officers of TREIT without special
compensation. The Manager is acting as TREIT’s proxy solicitation agent, for which it will be reimbursed for
its out-of-pocket expenses. The cost of the solicitation will be borne by TREIT. Proxies are to be used at the
Meeting to be held at 9 a.m. (Toronto time) on August 18, 2010 at Park Hyatt Toronto, located at 4 Avenue Rd,
Toronto, Ontario, and for the purposes set out in the accompanying Notice of Annual and Special Meeting of
Unitholders.
Q: What am I voting on?
A: As part of the annual meeting matters, you are being asked to vote on the appointment of KPMG LLP as the
auditor of TREIT and the election of Trustess. As part of the special meeting matters, you are being asked to
vote to pass the Arrangement Resolution to approve the Arrangement, which, among other things, will result in
the acquisition by the Purchaser of all of the outstanding Units.
Q: What will I receive for my Units?
A: If the Arrangement is completed, you will be entitled to receive the Net Transaction Price per Unit, or the Net
Transaction Price per Unit if you are a Non-Canadian Unitholder, less any amount required to be withheld for
tax purposes.
If you are a Non-Registered Unitholder resident outside of Canada and hold your units through an Intermediary
that is a participant in CDS, for the purposes of the Arrangement, you will be considered a Canadian Unitholder
and will receive payment in Canadian dollars.
The Net Transaction Price per Unit is calculated on the following basis:
A=B–C–G
G = ((B – D + E – C)/D × 100% – 6.5%) × 25% × D + F
Where:
A = Net Transaction Price / Unit

B = Gross Transaction Price / Unit
C = Transaction Cost / Unit
D = Initial Issue Price
E = Total Gross Distribution Year to Date
F = Performance Fee Paid Year to Date
G = Performance Fee Liability / Unit
For your ease of reference, a table showing the applicable Net Transaction Price per Unit for your acquisition
cost is set out on page 29 of the Circular.
Unitholders will have, as set forth in the Letter of Transmittal, the option to elect to direct all or a portion of the
cash proceeds received under the Arrangement to Timbercreek Global for the subscription of Timbercreek
Global units offered under the Timbercreek Global Offering, subject to the terms thereof. In order to assist you
in calculating the appropriate amount for such Timbercreek Global Election, TREIT has prepared a worksheet
in Appendix D attached hereto for your ease of reference.
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The Timbercreek Global Election worksheet set out in Appendix D herein is not a recommendation nor a
solicitation by the Trustees to purchase any of the Timbercreek Global units. Unitholders should consult their
own legal, financial and tax advisors as to whether to opt for the Timbercreek Global Election or to purchase
any Timbercreek Global units offered under the Timbercreek Global Offering.
Q: Who is entitled to vote?
A: If you were a Unitholder at 4 p.m. (Toronto time) on July 15, 2010, the Record Date, you are entitled to vote on
the Arrangement Resolution.
Q: What vote is required to approve the Arrangement Resolution?
A: The Arrangement Resolution must be approved by the affirmative vote of at least 66 2/3% of the votes cast by
Unitholders present in person or represented by proxy and entitled to vote at the Meeting and a simple majority
of Unitholders other than the Interested Unitholders present in person or represented by proxy and entitled to
vote at the Meeting.
As at July 30, 2010, there were 12,729,018.97 Class A Units and 506,528.07 Class B Units issued and
outstanding.
The Board of Trustees, upon the recommendation of the Special Committee, has resolved that in determining
whether the Arrangement Resolution is passed by the required majority, the votes (if any) cast by Interested
Unitholders shall be excluded and not counted.
Q: What is the quorum?
A: A quorum of the Meeting is the presence in person or by proxy of two or more individuals holding not less in
aggregate than 10% of the vote attached to all outstanding Units.
Q: How do TREIT’s Trustees recommend that I vote?
A: The Trustees unanimously recommend that Unitholders vote FOR the Arrangement Resolution to approve the
Arrangement.
Q: How can I vote my Units?
A: How you exercise your vote depends on whether you are a Registered Unitholder or a Non-Registered
Unitholder:
• You are a Registered Unitholder if you have a Unit certificate registered in your name.
• You are a Non-Registered Unitholder if your Units are registered in the name of an Intermediary (for
example, your broker, a bank, a trustee or investment dealer) or the name of a clearing agency of which the
Intermediary is a participant.
If you are a Registered Unitholder, you are entitled to attend the Meeting and cast your vote in person. If you
are a Registered Unitholder you may also vote by proxy. To be valid, the proxy form must be filled out,
correctly signed (exactly as your name appears on the proxy form), and returned to Olympia Trust Company,
TREIT’s registrar and transfer agent, by either mailing or couriering it in the accompanying postage paid return
envelope to 120 Adelaide St. West, Suite 920, Toronto, Ontario M5H 1T1 or by facsimile transmission to 416-
364-1827, by not later than 9 a.m. (Toronto time) on August 17, 2010 or, if the Meeting is adjourned, not later
than 24 hours, excluding Saturday and holidays, preceding the time of such adjourned meeting. Your
proxyholder may then vote on your behalf at the Meeting.
If you are a Non-Registered Unitholder and you receive materials entitling you to vote through an Intermediary,
complete and return the materials in accordance with the instructions provided to you by the Intermediary. As a
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Non-Registered Unitholder, you will not be entitled to vote unless you submit all required information to your
Intermediary in advance of the Meeting and carefully follow its instructions and procedures. You should ensure
that when submitting the required information to your Intermediary, you give specific direction
If you are a Non-Registered Unitholder you are also entitled to attend the Meeting and cast your vote in person,
provided you have instructed your investment dealer or other Intermediary to appoint you as proxyholder.
Please carefully review and follow the instructions in the materials provided to you by your Intermediary.
Q: How will my Units be voted if I return a proxy?
A: By completing and returning a proxy, you are authorizing the person named in the proxy to attend the Meeting
and vote your Units in respect of the Arrangement Resolution, according to your instructions. If there are no
instructions with respect to your proxy, your Units will be voted FOR the Arrangement Resolution to approve
the Arrangement.
The person you appoint to vote on your behalf may vote as he or she sees fit on any amendment or variation to
any of the matters identified in the Notice of Meeting and any other matters that may properly be brought
before the Meeting.
Q: Can I revoke a proxy or change my voting instructions?
A: Yes, if you are a Registered Unitholder and have granted a proxy, you may revoke it by delivering a duly
executed proxy with a later date or a form of revocation of proxy or other instrument in writing signed by you
or by your attorney authorized in writing (or if you are a corporation, by a duly authorized officer or attorney).
These instruments can be delivered to Olympia Trust Company, TREIT’s registrar and transfer agent, not later
than 9 a.m. (Toronto time) on August 17, 2010, or if the Meeting is adjourned, not later than 24 hours,
excluding Saturday and holidays, preceding the time of such adjourned meeting.
Alternatively, you may revoke your proxy and vote in person by delivering a form of revocation of proxy or a
signed instrument in writing to the Chairman of the Meeting at the Meeting or any adjournment thereof. You
may also revoke your proxy in any other manner permitted by law.
If you are a Non-Registered Unitholder and wish to change your voting instructions, you should contact your
Intermediary to discuss what procedure to follow.
Q: Does any Unitholder, directly or indirectly, beneficially own or exercise control over 10 per cent or more
of the Units that are outstanding?
A: As of July 30, 2010, Newport Strategic Yield Fund #2 directly and indirectly owns 10.86% of the issued and
outstanding Units.
Q: When will the Arrangement be implemented?
A: TREIT and the Purchaser intend to implement the Arrangement when all of the conditions to closing have been
satisfied or waived (as permitted), or on such other date as TREIT and the Purchaser may agree in writing. The
closing is currently expected to occur on or about August 26, 2010.
Q: When can I expect to receive consideration for my Units?
A: If you are a Registered Unitholder, as soon as practicable after the completion of the Arrangement and the
receipt by the Depositary from you of a properly completed Letter of Transmittal together with your certificates
representing Units and all other required documents, the Depositary will pay the consideration to you as you
may direct in the Letter of Transmittal, including the direction of 25%, 50%, 75% or all of the cash proceeds to
Timbercreek Global in accordance with the Timbercreek Global Election. If you hold your Units through an
Intermediary, your Intermediary will surrender your Units in exchange for the aggregate consideration to which
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you are entitled following completion of the Arrangement. If you hold your Units through an Intermediary, you
should ensure that you provide specific direction to the intermediary regarding the completion of the Letter of
Transmittal, including in respect of the Timbercreek Global Election.
The closing date of the Timbercreek Global Offering is anticipated to occur on August 26, 2010.
Unitholders who wish to direct any or all of the cash proceeds received under this Arrangement to
Timbercreek Global for the subscription of Timbercreek Global units under the Timbercreek Global
Offer in accordance with the Timbercreek Global Election are encouraged to complete, sign and deliver
the Letter of Transmittal to the Depositary no later than August 18, 2010 so as to ensure that their
subscription of Timbercreek Global units is processed in time for the closing of the Timbercreek Global
Offer. If the Arrangement is not approved or is otherwise not implemented, any Unit certificates
delivered with a Letter of Transmittal will be returned to the Unitholder.
Q: What are the Canadian federal income tax consequences of the Arrangement to me?
A: A Resident Unitholder who holds Units as capital property and disposes of such units pursuant to the
Arrangement will generally realize a capital gain (or capital loss) to the extent that the cash received by the
Resident Unitholder under the Arrangement, net of any reasonable costs of disposition, exceeds (or is less than)
the Resident Unitholder’s adjusted cost base of the Units immediately before the disposition. See “Certain
Canadian Federal Income Tax Considerations — Unitholders Resident in Canada”. A Non-Resident Unitholder
who holds Units as capital property will only be subject to tax under the Tax Act on a capital gain on the
disposition of Units pursuant to the Arrangement if the Units are “taxable Canadian property” as defined in the
Tax Act and the Non-Resident Unitholder is not entitled to relief under the provisions of an applicable income
tax treaty. See “Certain Canadian Federal Income Tax Considerations — Unitholders Not Resident in Canada”.
You should consult your own tax advisor for a full understanding of the applicable federal, provincial, state,
local, foreign and other tax consequences to you resulting from the Arrangement.
Q: Who can I contact if I have questions?
A: Unitholders who have additional questions about the Arrangement, including the procedures for voting, should
contact Carrie Morris, Vice President – Investor Relations and Corporate Finance at 1-416-306-9967 x 250.
Unitholders who have questions about deciding how to vote should contact their professional advisors.
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THE ARRANGEMENT
Background to the Arrangement
On December 21, 2009, the Board held a meeting at which the Advisor presented the results of its strategic
review of TREIT to the Board. In its presentation to the Board, the Advisor noted that its mandate under the Asset
Management Agreement includes identifying accretive opportunities for TREIT and maximizing value for Unitholders.
The Advisor explained to the Board that it frequently receives interest from institutional investors (“Institutional
Interest”) for information about TREIT’s portfolio of real estate properties and where appropriate, the Advisor has
explored potential strategic opportunities to enhance or maximize value for Unitholders with these institutional investors.
After receiving the presentation and discussing and considering relevant issues, the Board agreed that it was part of the
Advisor’s mandate to identify accretive opportunities for TREIT and to attempt to enhance and maximize value for
Unitholders. The Board further agreed that although it was not proactively seeking any sale opportunities for the Trust,
the Advisor should continue to explore any Institutional Interest it receives.
At the same meeting, the Advisor summarized for the Board some developing issues in relation to the structure
of TREIT that had been discussed at previous Board meetings:
• Lack of Accretive Opportunities: While TREIT’s portfolio of real estate assets continue to meet targeted
investment expectations, current multi-residential market fundamentals make it difficult for TREIT to
acquire new assets that meet the 8% cash yield requirements of the Trust. If TREIT is not able to continue
to grow, then it needs to be acknowledged and communicated to TREIT’s unitholders that the business
model will effectively have changed since the initial formation of the Trust.
• Redemption Risk: Unitholders are increasingly seeking to realize gains achieved over the life of their
investment in TREIT and the declining 5 year redemption penalty is no longer deterring redemptions.
• Complex Capital Structure: A mix of retail, private and institutional capital invested at different
subscription prices over a ten-year time horizon has resulted in a complicated process for calculating and
distributing income. The ongoing administration of subscriptions, distributions and redemptions of a
business that has almost 3000 unitholders has become extremely burdensome.
• Effect of Lower Cost Mortgage Debt: One of the by-products of historically low-cost, CMHC-insured
mortgage debt is that a borrower is more able to quickly pay down the principal on the mortgage.
However, as an amortization schedule comparing the payment streams for a mortgage with a higher (e.g.
5%) interest rate with that of a mortgage with a lower (e.g. 3.3%) interest rate would indicate, while the
total return may be higher on the mortgage with the lower interest rate as a result of the borrower paying
down the principal quicker and with lower interest costs, cash yields are lower. This is inconsistent with
TREIT’s investor base which is primarily focused on distributable yield rather than total return.
The Advisor explained that these potential risks are likely to impact the ability of TREIT to meet its targeted
yield in the future and that the Board may need to explore other strategic options.
It was agreed that the Advisor would prepare a Confidential Information Memorandum (“CIM”) summarizing
TREIT’s attributes which was to be provided to qualified institutional investors that, in the opinion of the Advisor, have
expressed legitimate interest in TREIT or TREIT’s assets. The CIM was completed on or about April 25, 2010 and was
circulated to institutional investors that have expressed an interest in exploring strategic options with the Trust. Since
then, the Advisor engaged in a number of discussions and responded to a number of enquiries from interested parties.
On May 27, 2010, the Advisor received a written expression of interest from Greystone Managed Investments
Inc. (“Greystone”) to explore a potential arrangement involving the purchase of all of the outstanding Units of TREIT
or, alternatively, purchasing TREIT’s portfolio of real properties. In response, the Board exchanged their views via
emails and noted that it would be a requirement of Greystone that the Advisor continue to be involved in the
management of TREIT’s assets after the proposed transaction. Given the possible conflict of interest of the Advisor and
certain other Trustees in the proposed transaction, the Board resolved on June 3, 2010 to form an independent special
committee (the “Special Committee”) to review and consider such indication of interest and any other further offers or
23
proposals from Greystone. The Board also directed the Advisor to issue a press release in relation to the receipt of such
expression of interest so that information about this development was widely disclosed.
In early June, 2010, the Special Committee met with McCarthy Tétrault LLP, its legal counsel, to discuss the
responsibilities and mandate of the Special Committee and deliberate on the appropriate process for reviewing and
considering the proposed transaction. At that same meeting, the Special Committee also resolved to solicit proposals
from financial advisory firms to provide a fairness opinion in respect of the proposed transaction. On June 17, 2010, the
Special Committee met again and considered the proposals from the various financial advisory firms in relation to the
rendering of a fairness opinion and after due consideration, the Special Committee decided to engage Grant Thornton
LLP to provide a fairness opinion on the offer that TREIT was expecting to receive from Greystone in relation to the
proposed transaction. On June 17, 2010, the Special Committee met with McCarthy Tétrault LLP to consider and discuss
what procedural arrangements would be appropriate in relation to the proposed transaction including, but not limited to,
the details in respect of the calling of a Unitholders’ meeting to consider the proposed transaction, the relevant voting
arrangement and the benefits, costs and effect of conducting an auction process.
In June and early July, 2010, Greystone and the Advisor had various discussions in respect of the terms and
process for the proposed transaction. These discussions resulted in the delivery of a letter of intent (“LOI”) from the
Purchaser to TREIT on July 16, 2010. The LOI set out the key terms of, and timeline for, the proposed transaction. The
Board met on the same day after receiving the LOI and after consideration and discussion, the Board unanimously
approved, in principle, an arrangement transaction further to which the Purchaser would acquire the remaining
outstanding Units, at the price proposed by the Purchaser in the LOI, subject to the negotiation and execution of a
definitive agreement. The Special Committee was then empowered by the Trustees to negotiate the terms of the proposed
arrangement and a definitive arrangement agreement on behalf of the Trust.
Over the following weeks, a definitive arrangement agreement was negotiated between the parties and their
counsel, with the Special Committee actively involved in the negotiation process.
On July 30, 2010, the Trustees met to consider the proposed Arrangement Agreement and to receive a
presentation and report from the Special Committee regarding the proposed terms thereof. At the meeting, the Special
Committee apprised the Trustees of the activities and process followed by the Special Committee since its formation,
including the Special Committee’s negotiations with the Purchaser in respect of the proposed transaction and the receipt
of a Fairness Opinion from Grant Thornton in respect of the transaction which states that, in Grant Thornton’s opinion,
as at August 3, 2010, the Transaction is fair, from a financial point of view, to the Unitholders. Following discussion
with the Trustees, the Special Committee advised the Trustees that it was recommending that the Trustees proceed with
the transaction. Following further discussions, the Trustees unanimously approved the Arrangement and resolved to
recommend that Unitholders vote in favour of the Arrangement.
Following the meeting, TREIT, the Purchaser and their respective counsel worked towards finalizing the terms
of the Arrangement Agreement. On August 3, 2010, the Purchaser, TREIT and TAMI entered into the Arrangement
Agreement.
To the knowledge of TREIT, none of the Trustees nor senior officers, together with each of their associated
entities, beneficially owned or exercised control or direction over more than 1% of the Units outstanding as at August 3,
2010, being the date the Arrangement Agreement was entered into.
Recommendation of the Special Committee
The Trustees established the Special Committee to consider the Arrangement. The Special Committee has
unanimously determined that the Arrangement is fair to the Unitholders and is in the best interests of TREIT.
Accordingly, the Special Committee unanimously recommended that the Trustees approve the Arrangement.
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Recommendation of the Trustees
The Trustees unanimously determined, based in part on the Special Committee’s recommendation, that the
Arrangement is fair to the Unitholders and is in the best interests of TREIT. Accordingly, the Trustees have approved the
Arrangement and unanimously recommends that Unitholders vote FOR the Arrangement Resolution.
Reasons for the Arrangement
In evaluating and approving the Arrangement and in making their recommendations, the Special Committee and
the Trustees considered a number of factors. In view of the variety of factors considered, each of the Special Committee
and the Trustees did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific
factors considered in reaching their determinations as to the fairness of the Arrangement and the Trustees’
recommendation that Unitholders vote for the Arrangement Resolution. The factors considered by the Special Committee
and the Trustees in respect of the Arrangement included:
• the opinion of Grant Thornton that, as at August 3, 2010, the Transaction is fair, from a financial point of
view, to the Unitholders;
• the Net Transaction Price per Unit represents an approximate 15% premium over the NAV of the Units, on
March 31, 2010, the last quarter end immediately preceding the announcements by TREIT of the
Acquisition Proposal;
• the unlikelihood of the emergence of a superior competitive offer to acquire the Units or all or substantially
all of the assets of TREIT based on a review of recent comparable portfolio transactions and the Special
Committee and the Trustees have not received any superior competitive offer since the announcement of
the Acquisition Proposal on June 3, 2010;
• the fact that the Purchaser’s offer is non-brokered, which results in lower transaction costs than the parties
would otherwise incur with a brokered offer and as brokerage costs are typically paid for by the seller, the
lack of brokerage results in greater overall consideration available to the Unitholder;
• no redemption penalty is charged on the proceeds that Unitholders will receive from the Transaction;
• the Trustees’ understanding of the business prospects for TREIT and its industry, the risks associated with
achieving a higher unit price in the foreseeable future and the risks associated with TREIT’s ability to grow
in the future;
• the benefits to Unitholders (including substantially lower transactions than would be available otherwise)
resulting from the Purchaser making an offer for the Units as opposed to the assets of the Trust, thereby
increasing the overall consideration available to Unitholders;
• the Net Consideration to be paid under the Arrangement is to be paid entirely in cash;
• the fact that the Purchaser’s obligations are not subject to any financing conditions;
• the Trustees’ comfort as to the Purchaser’s commitment and ability to close the Transaction;
• the Special Committee’s conclusion that the Total Consideration was the highest price that it could obtain
from the Purchaser and that further negotiation could have caused the Purchaser to decide not to proceed
with the Arrangement, or to do so at a price lower than the Total Consideration negotiated by the Special
Committee, thereby leaving Unitholders without an opportunity to evaluate and vote in respect of the
proposed transaction;
• in the case of the Trustees, the process undertaken by the Special Committee, including the retention of
McCarthy Tétrault LLP as legal advisors and Grant Thornton to provide a fairness opinion, the
recommendation of the Special Committee and the findings of the Special Committee;
• the fact that the Plan of Arrangement is subject to a favourable vote of the Unitholders; and
25
• the terms and conditions of the Arrangement Agreement, including the Net Consideration to be received by
the Unitholders, TREIT’s, and the Purchaser’s representations, warranties and covenants, and the
conditions to their respective obligations, were the product of arm’s length negotiations with TREIT and
the Purchaser.
The Special Committee and the Trustees also considered a number of other factors relating to the Arrangement,
including:
• the fact that the Purchaser is willing to agree to a closing date that is reasonably soon after the execution of
the Arrangement Agreement;
• the risks to TREIT if the Arrangement is not completed or is delayed, including the costs to TREIT in
pursuing the Arrangement and the diversion of management’s attention away from the conduct of TREIT’s
business in the ordinary course;
• the conditions to the Purchaser’s obligation to complete the Arrangement and the right of the Purchaser to
terminate the Arrangement Agreement under certain circumstances; and
• the fact that the Arrangement will be a taxable transaction and, as a result, Unitholders will generally be
required to pay taxes on any gains that result from their receipt of the cash proceeds in the Arrangement.
In reaching their determinations, the Special Committee and the Trustees also considered and evaluated, among
other things:
• the long-term implications of the current TREIT acquisition criteria (including cash yield requirements);
• the current and historical market prices of the Units;
• information concerning the business, operations, property, assets, financial condition, operating results and
prospects of TREIT;
• current industry, economic and market conditions and trends; and
• the information, data and conclusions contained in the Fairness Opinion.
Independent Fairness Opinion
The following constitutes a summary only of the Fairness Opinion. The Fairness Opinion has been provided for
the use of the Special Committee and the Trustees and for inclusion in the Circular. The Fairness Opinion is not to be
construed as a recommendation by Grant Thornton to any Unitholder as to whether to vote in favour of or how to act
with respect to any matters relating to the Arrangement. The following summary is qualified in its entirety by the full
text of the Fairness Opinion attached as Appendix C to the Circular. Unitholders are encouraged to read the full text of
the Fairness Opinion attached as Appendix C to the Circular.
Engagement of Grant Thornton by the Special Committee
The Special Committee initially contacted Grant Thornton in June, 2010 regarding a potential advisory
assignment and Grant Thornton was formally engaged by the Special Committee to provide the Fairness Opinion in
connection with the Arrangement pursuant to an agreement dated July 7, 2010 (the “Engagement”). The terms of the
Engagement provide that Grant Thornton receive a fee for its services. The fee to Grant Thornton in connection with the
Fairness Opinion is not contingent in any way on the conclusions reached in the Fairness Opinion. In addition, Grant
Thornton is to be reimbursed for reasonable out-of-pocket expenses and is to be indemnified in respect of certain
liabilities which may be incurred in connection with the provision of its services.
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Independence of Grant Thornton
The Special Committee determined, based in part on certain representations made to it by Grant Thornton, that
Grant Thornton was independent and qualified to provide the Fairness Opinion and should be retained as financial
advisor.
Credentials of Grant Thornton
Grant Thornton is a Canadian firm which provides assurance, tax and specialist advisory services. As part of
the firm’s specialist advisory capabilities, they have significant experience advising on mergers & acquisitions and
valuation matters for both public and privately held businesses. The Fairness Opinion represents the opinion of Grant
Thornton, and the form and content thereof have been approved for release by partners of Grant Thornton, all of whom
have experience in merger, acquisition, divestiture, valuation, fairness opinion and related matters.
Relationships with Interested Parties
Neither Grant Thornton nor any of its affiliates is an insider, associate or affiliate of TREIT, the Purchaser, or
any of their respective associates or affiliates. Grant Thornton has not been engaged to provide any other financial
advisory services nor has it participated in any financing involving TREIT or any of its respective associates or affiliates,
within the past two years, other than financial advisory services provided in connection with the provision of the Fairness
Opinion to the Special Committee and the on-going preparation of monthly letters regarding the pricing net asset value
of TREIT, Timbercreek Mortgage Investment Corporation and Timbercreek Investments Limited Partnership. Grant
Thornton may, in the future, in the ordinary course of its business, perform financial advisory or investment banking
services for TREIT, the Purchaser, or any of their respective associates or affiliates but currently there are no
understandings or agreements between Grant Thornton and TREIT, or its Unitholders or Affiliates with respect to future
business dealings.
Neither Grant Thornton nor any of its partners, principals or employees has any financial interest in TREIT or
any of its Affiliates or in the completion of the Transaction, either directly or indirectly.
Fairness Opinion
Based upon and subject to the factors set out in the Fairness Opinion (the full text of which is attached as
Appendix C to the Circular), Grant Thornton is of the opinion that, as at August 3, 2010, the Transaction is fair, from a
financial point of view, to the Unitholders.
The Fairness Opinion was provided for the benefit of the Special Committee and the Trustees in connection
with, and for the purpose of, its evaluation of the Arrangement. The Fairness Opinion is not to be construed as a
recommendation by Grant Thornton to any Unitholder as to whether to vote in favour of or how to act with respect to
any matters relating to the Arrangement.
The full text of the Fairness Opinion, which sets forth, among other things, assumptions made, information
reviewed, matters considered and limitations on the scope of the review undertaken by Grant Thornton in rendering its
opinion, is attached as Appendix C to the Circular. Unitholders are urged to read the Fairness Opinion in its entirety. The
summary of the Fairness Opinion described in the Circular is qualified in its entirety by reference to the full text of such
Fairness Opinion.
Required Unitholder Approval
At the Meeting, Unitholders will be asked to vote to approve the Arrangement Resolution. The approval of the
Arrangement Resolution will require the affirmative vote of at least 66 2⁄3% of the votes cast by Unitholders present in
person or represented by proxy and entitled to vote at the Meeting and a simple majority of the votes cast by Unitholders
other than the Interested Unitholders present in person or represented by proxy and entitled to vote at the Meeting in
order for TREIT to implement the Arrangement on the Closing Date. As at July 30, 2010, there were 12,729,018.97
27
Class A Units and 506,528.07 Class B Units issued and outstanding. See “The Arrangement — Required Unitholder
Approval”.
The Board of Trustees, upon the recommendation of the Special Committee, has resolved that in determining
whether the Arrangement Resolution is passed by the required majority, the votes (if any) cast by Interested Unitholders
shall be excluded and not counted.
Arrangement Mechanics
Amendment of Declaration of Trust
Subject to the approval of the Arrangement and in order to facilitate the Closing, the Declaration of Trust will
be amended as set forth in the Plan of Arrangement which is attached as Appendix B to the Circular. The proposed
amendments will only come into effect if the Arrangement is approved and they are effected for purposes of according
maximum flexibility to the Purchaser in the management of TREIT after TREIT becomes wholly owned by the
Purchaser, at which point the size of the Board may be reduced and the composition of the board may be altered.
Plan of Arrangement
The following description is qualified in its entirety by reference to the full text of the Plan of Arrangement,
which is attached as Appendix B to the Circular. The Plan of Arrangement will become effective at and will be binding
at and after, the Effective Time on (i) TREIT, (ii) the Purchaser, and (iii) all holders and all beneficial owners of Units.
Treatment of Units
The Arrangement Agreement provides for the acquisition of all of the outstanding Units by way of a plan of
arrangement. Each outstanding Unit will be deemed to be transferred by the holder thereof to the Purchaser in exchange
for a cash payment by the Purchaser equal to (a) in the case of Canadian Unitholders, the Net Transaction Price per Unit;
and (b) in the case of Non-Canadian Unitholders, the Net Transaction Price per Unit less any applicable withholding
taxes.
The Net Transaction Price per Unit is calculated on the following basis:
A=B–C–G
G = ((B – D + E – C)/D × 100% – 6.5%) × 25% × D + F
Where:
A = Net Transaction Price / Unit

B = Gross Transaction Price / Unit
C = Transaction Cost / Unit
D = Initial Issue Price
E = Total Gross Distributions Year to Date
F = Performance Fee Paid Year to Date
G = Performance Fee Liability / Unit
For your ease of reference, a table showing the applicable Net Transaction Price per Unit for your initial
acquisition cost is set out as follows:
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D B E C F G A
Difference
between Net
Transaction
Initial Gross Total Gross Performance Fee Performance Net Price and
Issue Transaction Distributions Transaction Paid Year to Fee Liability / Transaction Initial Issue
Price Price / Unit Year to Date Cost / Unit Date Unit Price / Unit Price
9.22 14.45 $0.50 $0.04 0.05000 $1.22 $13.19 $3.97
9.24 14.45 $0.50 $0.04 0.05000 $1.22 $13.19 $3.95
9.61 14.45 $0.50 $0.04 0.05000 $1.12 $13.29 $3.68
9.74 14.45 $0.50 $0.04 0.05000 $1.08 $13.33 $3.59
10.00 14.45 $0.50 $0.04 0.04000 $1.03 $13.38 $3.38
10.45 14.45 $0.50 $0.04 0.04000 $0.91 $13.50 $3.05
10.52 14.45 $0.50 $0.04 0.04000 $0.89 $13.52 $3.00
10.61 14.45 $0.50 $0.04 0.04000 $0.86 $13.55 $2.94
10.62 14.45 $0.50 $0.04 0.04000 $0.86 $13.55 $2.93
10.67 14.45 $0.50 $0.04 0.04000 $0.85 $13.56 $2.89
10.98 14.45 $0.50 $0.04 0.04000 $0.76 $13.65 $2.67
11.41 14.45 $0.50 $0.04 0.03000 $0.66 $13.75 $2.34
12.35 14.45 $0.50 $0.04 0.06000 $0.38 $14.03 $1.68
12.55 14.45 $0.50 $0.04 0.02000 $0.37 $14.04 $1.49
12.59 14.45 $0.50 $0.04 0.06000 $0.32 $14.09 $1.50
12.6 14.45 $0.50 $0.04 0.02000 $0.35 $14.06 $1.46
12.65 14.45 $0.50 $0.04 0.02000 $0.34 $14.07 $1.42
12.69 14.45 $0.50 $0.04 0.02000 $0.33 $14.08 $1.39
The names of the holders of Units whose units are deemed transferred to the Purchaser will be removed from
the register of holders of Units and the Purchaser will be recorded as the registered holder of the Units so transferred and
will be deemed the legal and beneficial owner thereof free and clear of any liens, claims, encumbrances, charges, adverse
interests or security interests.
Letter of Transmittal
If you are a Registered Unitholder, you should have received with the Circular a Letter of Transmittal (printed
on yellow paper). If the Arrangement Resolution is passed and the Arrangement is implemented, in order to receive
payment for Units, Registered Unitholders must complete and sign the Letter of Transmittal accompanying the Circular
and deliver it together with their certificates representing Units and the other relevant documents required by the
instructions set out therein to the Depositary by mail to 120 Adelaide St. West, Suite 920, Toronto, Ontario M5H 1T1, in
accordance with the instructions contained in the Letter of Transmittal. You can request additional copies of the Letter of
Transmittal by contacting the Depositary at 416-364-8081 or toll-free at 1-866-887-2984.
The Letter of Transmittal contains procedural information relating to the Arrangement, including in respect of
the Timbercreek Global Election and should be reviewed carefully. The deposit of Units pursuant to the procedures in
the Letter of Transmittal will constitute a binding agreement between the depositing Unitholder and the Purchaser upon
the terms and subject to the conditions of the Arrangement.
In all cases, payment for Units deposited will be made only after timely receipt by the Depositary of certificates
representing Units, together with a properly completed and duly executed Letter of Transmittal in the form
accompanying the Circular relating to such Units, with signatures guaranteed if so required in accordance with the
instructions in the Letter of Transmittal, and any other required documents and instruments. Upon the receipt by the
Depositary from you of a properly completed Letter of Transmittal together with your certificates representing Units and
29
all other required documents, the Depositary will pay to you the cash that represents the aggregate consideration to which
you are entitled as you may direct in the Letter of Transmittal, including the direction of all or a portion of the cash
proceeds to Timbercreek Global pursuant to the Timbercreek Global Election as set forth in the Letter of Transmittal.
If the Letter of Transmittal is signed by a person other than the registered owner(s) of the Units or if payment is
to be sent to a person other than the registered owner(s) of the Units (including to Timbercreek Global in accordance
with the Timbercreek Global Election), such signature must, save in the circumstances set out below, be guaranteed by
an Eligible Institution, or in some other manner satisfactory to the Depositary (except that no guarantee is required if the
signature is that of an Eligible Institution). If the Letter of Transmittal is signed outside of Canada and the United States
by a person other than the registered owner(s) of the Units, a guarantee will not be required if such signature is notarized
by a notary public or, in Ireland, sworn before a practicing solicitor.
The method of delivery of certificates representing Units and all other required documents is at the option and
risk of the person depositing the same. TREIT recommends that such documents be delivered by hand to the Depositary
and a receipt obtained or, if mailed, that registered mail (with a return receipt requested) be used and that appropriate
insurance be obtained.
The closing date of the Timbercreek Global Offering is anticipated to occur on August 26, 2010.
Unitholders who wish to direct any or all of the cash proceeds received under this Arrangement to Timbercreek
Global for the subscription of Timbercreek Global units under the Timbercreek Global Offer pursuant to the
Timbercreek Global Election are encouraged to complete, sign and deliver the Letter of Transmittal to the
Depositary no later than August 18, 2010 so as to ensure that their subscription of Timbercreek Global units is
processed in time for the closing of the Timbercreek Global Offer. Unitholders opting for the Timbercreek
Global Election should ensure that the signature on the Letter of Transmittal is, save in the circumstances
described above, guaranteed by an Eligible Institution, or in some other manner satisfactory to the Depositary. If
the Arrangement is not completed, the deposited Units and all other ancillary documents will be returned to the
Unitholder.
If you are a Non-Registered Unitholder, you should carefully follow the instructions from the Intermediary that
holds Units on your behalf in order to receive payment for your Units. You should also ensure that you provide specific
direction to the Intermediary regarding the completion of the Letter of Transmittal, including in respect of the
Timbercreek Global Election.
Unitholders who do not specify on the Letter of Transmittal whether they are opting for the Timbercreek Global
Election will be deemed to have opted not to have any of the cash proceeds directed to Timbercreek Global for the
subscription of Timbercreek Global Units under the Timbercreek Global Offer and will receive payment in cash pursuant
to the terms of the Arrangement.
The Units held by Unitholders that do not deliver a duly completed Letter of Transmittal will be deemed to be
transferred to the Purchaser as of the Effective Time without any further action by such Unitholder. Such Unitholder will
also be deemed not to have opted for the Timbercreek Global Election and will receive payment in cash pursuant to the
terms of the Arrangement.
Delivery of Proceeds
It is contemplated that as part of the completion of the Arrangement and before the Effective Time, the
Purchaser will deliver payment for the Units to the Depositary to be held for the benefit of the Unitholders. Under no
circumstances will interest accrue or be paid to persons depositing Units on the purchase price for Units purchased by the
Purchaser, regardless of any delay in making such payment.
The Depositary will act as the agent of persons who have deposited Units pursuant to the Arrangement for the
purpose of receiving payment from the Purchaser and transmitting payment from the Purchaser to such persons, and
receipt of payment by the Depositary will be deemed to constitute receipt of payment by persons depositing Units.
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Upon surrender to the Depositary of certificate(s) which immediately prior to the Effective Time represented
one or more Units, together with the Letter of Transmittal and such additional documents and instruments duly executed
and completed as the Depositary may reasonably require, the Unitholder of such surrendered certificate(s) will be
entitled to receive in exchange therefor, and the Depositary will deliver to such Unitholder as soon as practicable after
the Effective Time by first-class insured mail, postage prepaid, a cheque (or other form of immediately available funds)
representing the cash proceeds which such Unitholder has the right to receive under the Arrangement, less any amount
required to be withheld for tax purposes pursuant to the Plan of Arrangement. If so directed by the Unitholder in
accordance with the Timbercreek Global Election, the Depositary will pay 25%, 50%, 75% or all of the cash proceeds as
the Unitholder may specify, to Timbercreek Global for the subscription of Timbercreek Global units by the Unitholder
pursuant and subject to the terms of the Timbercreek Global Offer. Any remaining proceeds not directed by the
Unitholder to be paid to Timbercreek Global in accordance with the Timbercreek Global Election will be paid to the
Unitholder as described above.
Until surrendered, each certificate which immediately prior to the Effective Time represented Units will be
deemed after the Effective Time to represent only the right to receive upon such surrender a cash payment in lieu of such
certificate, less any amount required to be withheld for tax purposes pursuant to the Plan of Arrangement. Any such
certificate formerly representing Units not duly surrendered on or before the second anniversary of the Effective Date
will cease to represent a claim by or interest of any former Unitholder of any kind or nature against or in TREIT or the
Purchaser. On the second anniversary of the Effective Date, all cash to which such former holder was entitled will be
deemed to have been surrendered to the Purchaser.
Unless otherwise directed, cheques will be issued in the name of the registered holder of Units so deposited.
Unless the person who deposits Units instructs the Depositary to hold a cheque for pick-up by checking the appropriate
box in the Letter of Transmittal, cheques will be forwarded by first-class insured mail to the address provided in the
Letter of Transmittal. If no address is provided, cheques will be forwarded to the address of the person as shown on the
applicable register of TREIT.
If so directed by the Unitholder in accordance with the Timbercreek Global Election, cheques representing the
amount specified by the Unitholder to be directed to Timbercreek Global in accordance with the Timbercreek Global
Election will be issued in the name of Timbercreek Global and will be forwarded by first-class insured mail to
Timbercreek Global.
Notwithstanding the provisions of the Arrangement and the Letter of Transmittal, cheques in payment of Units
deposited pursuant to the Arrangement and certificates representing Units to be returned will not be mailed if the
Purchaser determines that delivery thereof by mail may be delayed. Persons entitled to cheques and other relevant
documents which are not mailed for the foregoing reason may take delivery thereof at the office of the Depositary at
which the deposited certificates representing Units in respect of which cheques are being issued were originally
deposited upon application to the Depositary, until such time as the Purchaser has determined that delivery by mail will
no longer be delayed. Cheques, certificates and other relevant documents not mailed for the foregoing reason will be
conclusively deemed to have been delivered on the first day upon which they are available for delivery at the office of
the Depositary at which the Units were deposited and payment for those Units will be deemed to have been immediately
made upon such deposit.
Subject to any applicable escheat laws, any payment made by way of cheque by the Depositary on behalf of the
Purchaser or TREIT that has not been deposited or has been returned to the Depositary or that otherwise remains
unclaimed, in each case, on or before the second anniversary of the Effective Date, will cease to represent a right or
claim of any kind or nature and the right of a Unitholder to receive the consideration for Units pursuant to the Plan of
Arrangement will terminate and be deemed to be surrendered and forfeited to the Purchaser or TREIT, as applicable, for
no consideration.
the Depositary will receive reasonable and customary compensation for its services in connection with the
Arrangement, will be reimbursed for certain out of pocket expenses and will be indemnified by TREIT against certain
liabilities under applicable securities laws and expenses in connection therewith.
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Withholding Rights
The Purchaser and its Affiliates (including TREIT) and the Depositary will be entitled to directly or indirectly
deduct and withhold from any amount otherwise payable pursuant to the Arrangement Agreement or the Plan of
Arrangement to any Unitholder such amounts as are entitled or required to be deducted and withheld with respect to the
making of such payment under the Tax Act or any other provision of domestic or foreign (whether national, federal,
provincial, state, local or otherwise) Applicable Law relating to taxes. To the extent that amounts are so deducted and
withheld and paid to the appropriate Governmental Entity directly or indirectly by the Purchaser and/or its Affiliates or
the Depositary, such deducted and withheld amounts will be treated for all purposes of the Arrangement Agreement and
the Plan of Arrangement as having been paid to the Unitholders, in respect of which such deduction and withholding was
made by the Purchaser and/or its Affiliates or the Depositary provided that such withheld amounts are actually remitted
to the appropriate Governmental Entity within the time required and in accordance with the Tax Act or any other
provision of domestic or foreign (whether national, federal, provincial, state, local or otherwise) Applicable Law relating
to taxes.
Lost Certificates
Where a certificate for Units has been destroyed, lost or stolen, the registered holder of that certificate should
immediately contact Depositary. Following receipt of an affidavit of loss, the Depositary will pay in exchange for such
destroyed, lost or stolen certificate, the cash payment which such holder is entitled to receive under the Arrangement.
When authorizing such payment in exchange for any lost, stolen or destroyed certificate, the person to whom the
payment is made shall, as a condition precedent to the delivery thereof, give a bond satisfactory to TREIT, the Purchaser
and the Depositary in such sum as the Purchaser may direct or otherwise indemnify the Purchaser in a manner
satisfactory to the Purchaser against any claim that may be made against Purchaser with respect to the certificate alleged
to have been destroyed, lost or stolen.
Interests of Trustees and Senior Management in the Arrangement
In considering the recommendations of the Special Committee and the Trustees with respect to the
Arrangement, Unitholders should be aware that certain members of TREIT’s Trustees and senior management have
certain interests in connection with the Arrangement that may present them with actual or potential conflicts of interest in
connection with the Arrangement. The Special Committee and the Trustees are aware of these interests and considered
them along with other matters described herein.
Trustees
The Trustees of TREIT beneficially own, directly or indirectly, or exercise control or direction over the
following Units:
Percentage of issued
Trustee Class A Units Held and outstanding Units
Ugo Bizzarri 11,243 0.08%
Andrew Jones 29,470 0.22%
Corrado Russo 25,071 0.19%
Chris Slightham 25,171 0.19%
Officers
The following Officers of TREIT beneficially own, directly or indirectly, or exercise control or direction over
the following Units:
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Percentage of issued
Officer Class A Units Held and outstanding Units
Ugo Bizzarri 11,243 0.08%
R. Blair Tamblyn 11450 0.09%
Timbercreek Asset Management Inc.
The Purchaser and TAMI have agreed that following the Effective Time, TAMI will continue to be the asset
manager pursuant to an asset management agreement. TAMI holds an indirect interest in the Purchaser via its interest in
TC Core 2 LP.
As of July 30, 2010, TAMI holds 48,180 Units, representing 0.36% of the outstanding Units. Certain directors
and officers of TAMI directly or indirectly are also Unitholders of TREIT. R. Blair Tamblyn, Ugo Bizzarri and Andrew
Jones are, respectively, the Chief Executive Officer, Chief Financial Officer and Chief Credit Officer of TAMI and they
collectively hold 52,163 Units, representing 0.39% of the outstanding Units.
Direct and Indirect Ownership of the Purchaser
The Purchaser is a limited partnership formed under the laws of the Province of Manitoba. TREIT Equities Inc.
(an affiliate of Greystone), TC Core 2 LP and Newport Real Estate LP are limited partners of the Purchaser and 7550332
Canada Inc. is the general partner. The majority of the units in the Purchaser are held by TREIT Equities Inc., which is
an affiliate of Greystone.
Indemnification and Insurance
The Arrangement Agreement provides that TREIT must, and the Purchaser must cause TREIT to, continue and
maintain in effect policies of liability insurance for the benefit of all past and current Trustees of TREIT in such amounts,
and with such deductibles retained amounts, coverages and exclusions and otherwise on terms and conditions no less
advantageous or favourable to them than such insurance maintained by TREIT immediately prior to the Effective Time
and providing protection in respect of claims arising from or related to facts or events which occurred on or prior to the
Effective Date. However, prior to the Effective Time, and notwithstanding the foregoing, TREIT may, at its option,
purchase prepaid non-cancellable run-off liability insurance providing coverage for a period of up to six (6) years from
the Effective Date with respect to claims arising from or related to facts or events which occur on or prior to the
Effective Date and any such policy purchased by TREIT will cover the interest of TREIT and Acquisition LP in respect
of their indemnification obligations under this section
Intentions of Trustees and Executive Officers
All Trustees and executive officers of TREIT (except for Ugo Bizzarri, Andrew Jones and R. Blair Tamblyn,
who are Interested Unitholders), who beneficially own, directly or indirectly, or exercise control or direction over, in the
aggregate, 50,242 Units as at July 30, 2010, representing approximately 0.38% of the outstanding Units, namely Corrado
Russo and Chris Slightham, have indicated that they intend to vote FOR the Arrangement Resolution.
Financing Arrangements
Under the terms of the Arrangement Agreement, based on the number of outstanding Units as at July 30, 2010,
the Purchaser will make an aggregate net cash payment of $182,715,328.65 to acquire all of the outstanding Units held
by Unitholders. The Purchaser has made adequate arrangements to ensure that the required funds are available to effect
payment in full for its payment obligations.
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THE ARRANGEMENT AGREEMENT
Terms of the Arrangement Agreement
The following description of certain material provisions of the Arrangement Agreement is a summary
only and is qualified in its entirety by reference to the full text of the Arrangement Agreement, a copy of which
you can obtain from TREIT by contacting Sanjay Junnarkar at 416-306-9967 x 266.
On August 3, 2010, TREIT, and the Purchaser entered into the Arrangement Agreement, under which it was
agreed that, subject to the terms and conditions set forth in the Arrangement Agreement and the Plan of Arrangement, the
Purchaser would acquire all of the issued and outstanding Units in exchange for a cash payment per Unit pursuant to the
Arrangement.
Conditions Precedent to the Arrangement
The Arrangement Agreement provides that the obligations of the parties to complete the Arrangement are
subject to the satisfaction or waiver by the Purchaser and/or TREIT, as applicable, on or before the Effective Time, of
certain customary conditions including, but not limited to, (a) the approval of the Arrangement Resolution by 66 2/3% of
the Unitholders that have voted on the Arrangement at the Meeting; (b) the expiry of the applicable waiting periods
under s.123 of the Competition Act or the issuance of an advance ruling certificate under s.102 of the Competition Act or
the receipt of a “no action letter” from the Commissioner of Competition appointed under the Competition Act; (c) the
Purchaser having completed to its satisfaction, in its sole discretion and unfettered discretion, its due diligence review of
the business, operations, properties, assets, affairs and financial condition of TREIT in connection with the Arrangement
by August 16, 2010; (d) the representations and warranties of each of TREIT, TAMI and the Purchaser being true and
correct in all material respects at and as of the date of the Arrangement Agreement and as of the Closing Date as if made
at and as of such date; (e) each of TREIT and the Purchaser having complied in all material respects all obligations,
covenants and agreements required to be performed by it under the Arrangement Agreement at or prior to the Closing
Date; and (f) the non-existence or non-occurrence of any change (or any condition, event or development involving a
prospective change) which, individually or in the aggregate, has or is reasonably likely to have a Materially Adverse
effect on TREIT.
Indemnification by Timbercreek Asset Management Inc.
TAMI, the manager of TREIT, has agreed to indemnify the Purchaser, subject to limitations, for certain losses
and damages suffered by the Purchaser as a result of the breach by TREIT of any representation, warranty or covenant
contained in the Arrangement Agreement or Plan of Arrangement for a period of 3 years from the Effective Date.
TAMI has also agreed to indemnify the Purchaser, subject to limitations, for certain losses and damages
suffered by or incurred by the Purchaser in connection with income tax payable by TREIT in respect of taxation periods
before the Effective Date.
As security for the aforementioned indemnification obligations of TAMI, TAMI has agreed to pledge as
security 100% of its interest in TC Core 2 LP for a period of 6 months from the Effective Date, which pledge will be
reduced to 25% of TAMI’s interest in TC Core 2 LP after the initial 6-month period and such security will stay in place
for another 12 months.
Representations and Warranties
The Arrangement Agreement contains customary representations and warranties on the part of TREIT relating
to, among other things: organization and qualification; Trustee approval; compliance with laws; capitalization; authority
relative to the Arrangement Agreement; absence of certain changes or events; tax; property; financial statements and
litigation.
The Arrangement Agreement also contains representations and warranties of the Purchaser relating to certain
customary matters relating to: formation and organization; authority; litigation; approvals and compliance with laws.
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The Arrangement Agreement also contains representations and warranties of TAMI, relating to certain
customary matters relating to: organization; authority; compliance with laws and litigation.
The representations and warranties of the parties in the Arrangement Agreement will survive the completion of
the Arrangement and will expire and be terminated on the earlier of 3 years after the Effective Time and the date on
which the Arrangement Agreement is terminated in accordance with its terms, except for representations and warranties
made by TREIT relating to capitalization, which will survive indefinitely, and representations and warranties made by
TREIT relating to tax, which will survive until 90 days after the expiration of the period during which any tax
assessment may be issued by a Governmental Authority in respect of any taxation year to which such representations
extend.
Covenants
In the Arrangement Agreement, each of the Purchaser and TREIT agreed to use its commercially reasonable
efforts to take all actions and to do all things necessary, proper or advisable to consummate and make effective as
promptly as is practicable the transactions contemplated by the Arrangement and the Arrangement Agreement, including
(a) the obtaining of waivers, consents and approvals required under the Arrangement Agreement; (b) the effecting of all
necessary registrations, filings and submissions of information required by governmental authorities relating to the
Arrangement; (c) the application for and the obtaining of all Appropriate Regulatory Approvals which are typically
applied for; and (d) the defence of all lawsuits or other legal, regulatory or other proceedings against either party
challenging or affecting the Arrangement Agreement or the consummation of the transactions contemplated thereby.
The Arrangement Agreement also contains customary negative and affirmative covenants on the part of TREIT
relating to the operation of TREIT’s business between the date of execution of the Arrangement Agreement and the
Effective Time.
Termination Rights
The Arrangement Agreement may be terminated at any time prior to the Effective Time, under the following
circumstances:
(a) by mutual written consent of TREIT and the Purchaser;
(b) by the Purchaser or TREIT if:
• the Effective Date has not occurred on or before September 30, 2010 (or such other date as
the parties may agree);
• the Meeting is held and the Arrangement Resolutions are not approved by the Unitholders;
• any Law makes the consummation of the Arrangement or the transactions contemplated by
the Arrangement Agreement illegal or otherwise prohibited, and such Law has become final
and non-appealable; or
• if the other party is in breach of any of its material obligations under the Arrangement
Agreement;
(c) by TREIT (i) upon notice to the Purchaser at any time after the Notice Period in respect of any
Superior Proposal; or (ii) upon notice to the Purchaser if the Purchaser does not provide the
Depositary with sufficient funds to complete certain of the transactions contemplated by the Plan
of Arrangement.
Expense Reimbursement
The Arrangement Agreement provides that if TREIT terminates the Arrangement Agreement as a result of the
Arrangement not being approved by Unitholders or TREIT receiving a superior proposal, TREIT will pay the out-of-
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pocket legal and other third-party expenses incurred by the Purchaser in connection with the Transaction, up to a
maximum of $400,000.
CERTAIN TAX CONSIDERATIONS FOR UNITHOLDERS
Certain Canadian Federal Income Tax Considerations
The following summary describes the principal Canadian federal income tax considerations generally applicable
to a Unitholder who disposes of its Units under the Arrangement and who, for the purposes of the Tax Act and at all
relevant times, holds its Units as capital property, deals at arm’s length with TREIT and the Purchaser, and is not
affiliated with TREIT or the Purchaser. Generally, Units will be capital property to a Unitholder unless the Units are held
or were acquired in the course of carrying on a business of buying and selling securities or as part of an adventure or
concern in the nature of trade. Certain Unitholders who are residents of Canada for purposes of the Tax Act and whose
Units might not otherwise be capital property may, in some circumstances, be entitled to make an irrevocable election in
accordance with subsection 39(4) of the Tax Act to have such Units and every other “Canadian security” (as defined in
the Tax Act) owned by them in the taxation year in which the election is made or any subsequent taxation year deemed
to be capital property in those years. Such Unitholders should consult their own tax advisors for advice with respect to
whether an election under subsection 39(4) of the Tax Act is available or advisable in their particular circumstances.
This summary is based upon the current provisions of the Tax Act, the regulations thereunder (the
“Regulations”) and counsel’s understanding of the current administrative policies and assessing practices of the CRA
made publicly available prior to the date hereof. This summary also takes into account all specific proposals to amend
the Tax Act and the Regulations publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date
hereof (the “Proposed Amendments”) and assumes that all Proposed Amendments will be enacted in the form
proposed. However, no assurances can be given that the Proposed Amendments will be enacted as proposed, or at all.
This summary does not otherwise take into account or anticipate any changes in law or administrative policies or
assessing practices, whether by legislative, regulatory, administrative or judicial action or decision, nor does it take into
account provincial, territorial or foreign tax legislation or considerations, which may be different from those discussed in
this summary. This summary assumes that TREIT will qualify as a mutual fund trust, as defined in the Tax Act, at the
time the Units are disposed of by a Unitholder pursuant to the Plan of Arrangement (the “Disposition Time”).
This summary is not applicable to (i) a holder that is, for the purposes of certain rules in the Tax Act
applicable to securities held by financial institutions, a “financial institution” (as defined in the Tax Act), (ii) any
holder of an interest which would be a “tax shelter investment” (as defined in the Tax Act), (iii) any holder to
whom the functional currency reporting proposals contained in subsection 261(5) of the Tax Act applies, or (iv) a
holder that is a “specified financial institution” (as defined in the Tax Act).
This summary is of a general nature only and is not, and is not intended to be, legal or tax advice to any
particular Unitholder. This summary is not exhaustive of all Canadian federal income tax considerations.
Accordingly, Unitholders should consult their own tax advisors with respect to the Canadian federal income tax
consequences of the Arrangement having regard to their own particular circumstances.
Currency Translation
All amounts relevant to the computation of income under the Tax Act must be reported in Canadian dollars.
Any amount that is expressed or denominated in a currency other than Canadian dollars, including adjusted cost base and
proceeds of disposition, must be converted into Canadian dollars based on exchange rates as determined in accordance
with the Tax Act.
Unitholders Resident in Canada
The following portion of this summary is generally applicable to a Unitholder who is a Resident Unitholder.
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Disposition of Units
Generally, a Resident Unitholder who disposes of Units under the Arrangement will realize a capital gain (or
capital loss) equal to the amount, if any, by which the cash received by the Resident Unitholder under the Arrangement,
net of any reasonable costs of disposition, exceeds (or is less than) the adjusted cost base of the Units to the Resident
Unitholder immediately before the disposition.
The adjusted cost base of a Unit to a Unitholder will include the amount paid by the Unitholder for the Unit,
subject to certain adjustments. The cost to a Unitholder of additional Units received in lieu of a cash distribution of
income (including net capital gains) will be the amount of income (including the applicable non-taxable portion of net
capital gains) distributed by the issue of those respective Units. For the purpose of determining the adjusted cost base to
a Unitholder of Units of a particular class, when a Unit of a particular class is acquired, the cost of the newly acquired
Unit must be averaged with the adjusted cost base of all of the Units of the same class owned by the Unitholder as capital
property immediately before that acquisition. The non-taxable portion of distributions (other than the non-taxable portion
of any net capital gains) received on a Unit will generally reduce the adjusted cost base of the Unit.
Generally, a Resident Unitholder is required to include in computing its income for a taxation year one-half of
the amount of any capital gain (a “taxable capital gain”) realized by the Resident Unitholder in the year. A Resident
Unitholder is required to deduct one-half of the amount of any capital loss (an “allowable capital loss”) realized in a
taxation year from taxable capital gains realized by the Resident Unitholder in the year, and allowable capital losses in
excess of taxable capital gains may be carried back and deducted in any of the three (3) preceding taxation years or
carried forward and deducted in any subsequent taxation year against net taxable capital gains realized by the Resident
Unitholder in such years, to the extent and in the circumstances prescribed by the Tax Act.
A Resident Unitholder that is throughout the year a “Canadian controlled private corporation” (as defined in the
Tax Act) may be liable for a refundable tax on its “aggregate investment income” (as defined in the Tax Act), which is
defined to include an amount in respect of taxable capital gains.
Capital gains realized by an individual or a trust, other than certain trusts, may give rise to alternative minimum
tax under the Tax Act. Resident Unitholders should consult their own advisors with respect to alternative minimum tax
provisions.
Unitholders Not Resident in Canada
The following portion of this summary is generally applicable to a Unitholder who is a Non-Resident
Unitholder. Special rules, which are not discussed in this summary, may apply to a Non-Resident Unitholder that is an
insurer carrying on business in Canada and elsewhere. Such Non-Resident Unitholders should consult their own tax
advisors.
Disposition of Units
A Non-Resident Unitholder will not be subject to tax under the Tax Act on any capital gain realized on the
disposition of Units under the Arrangement unless the Units are “taxable Canadian property” (within the meaning of the
Tax Act) to the Non-Resident Unitholder at the Disposition Time.
Generally, Units will not be taxable Canadian property to a Non-Resident Unitholder at the Disposition Time
provided that (a) TREIT qualifies as a mutual fund trust, as defined in the Tax Act, at that time, and (b) the Non-Resident
Unitholder, persons with whom the Non-Resident Unitholder does not deal at arm’s length, or the Non-Resident
Unitholder together with all such persons, has not owned 25% or more of the issued Units at any time during the sixty
(60) month period that ends at the Disposition Time. Under the Proposed Amendments, where the Non-Resident
Unitholder, persons with whom the Non-Resident Unitholder does not deal at arm’s length, or the Non-Resident
Unitholder together with all such persons, has owned 25% or more of the issued Units, they will only be considered
taxable Canadian property where more than 50% of the fair market value of the Units were derived, directly or indirectly
from (i) real or immovable property situated in Canada; (ii) Canadian resource property; (iii) timber resource properties;
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and (iv) an option in respect of any of (i) through (iii). Notwithstanding the foregoing, Units may be deemed to be
taxable Canadian property in certain circumstances specified in the Tax Act.
Even if Units are considered to be taxable Canadian property of a Non-Resident Unitholder at the Disposition
Time, any capital gain realized by the Non-Resident Unitholder on a disposition of the Units under the Arrangement may
be exempt from tax under the Tax Act pursuant to the terms of an applicable income tax treaty between Canada and the
country in which the Non-Resident Unitholder is resident. Non-Resident Unitholders should consult their own tax
advisors with respect to the availability of any relief under the terms of any applicable income tax treaty in their
particular circumstances.
In the event that the Units constitute taxable Canadian property to a Non-Resident Unitholder and any capital
gain realized by the Non-Resident Unitholder on the disposition of Units under the Arrangement is not exempt from tax
under the Tax Act by virtue of an applicable income tax treaty, then the tax consequences described above under the
heading “Unitholders Resident in Canada — Disposition of Units” will generally apply.
INFORMATION CONCERNING TREIT
TREIT is an unincorporated, open-end investment trust which was formed on November 30, 2004 under the
laws of the Province of Ontario and is governed by a Declaration of Trust dated November 30, 2004, and amended June
29, 2006 (the “Declaration of Trust”).
TREIT was formed to capitalize on under-performing, multi-family residential real estate in North America.
The corner stone of TREIT's investment philosophy is to deliver long-term value to investors while providing a steady
stream of predictable income and preserving investors’ capital. Timbercreek REIT currently owns approximately 5,100
multi-residential units across 8 Canadian cities.
The head office and principal business address of TREIT is at the office of the Advisor at 1000 Yonge Street,
Suite 500, Toronto, Ontario, Canada M4W 2K2.
Auditors
KPMG LLP is the auditor of TREIT. KPMG LLP has been the auditor of TREIT since its inception.
Description of TREIT Units
TREIT is authorized under the Declaration of Trust to issue an unlimited number of Class A Units and Class B
Units. Each Class A Unit and Class B Unit represents an equal undivided beneficial interest in any distributions from the
Trust. As at July 30, 2010, there were issued and outstanding 12,729,018.97 Class A Units and 506,528.07 Class B
Units. The Units are not publicly listed or traded on a stock exchange or other public market.
The Class A Units and the Class B Units vote as a single class. Each Unitholder is entitled to one vote for each
whole Unit held by it. No holder of a fraction of a Unit, as such, is entitled to notice of, or to attend or to vote at
meetings of Unitholders.
Distributions
The Units are redeemable monthly and distributions to Unitholders are made quarterly.
Previous Purchases and Sales
During the twelve months prior to the date hereof, TREIT has not purchased or sold any of its own securities.
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Pre-Closing Re-Organization
In connection with the Arrangement, TREIT intends to conduct a re-organization prior to the closing of the
Arrangement for the purpose of streamlining its property holding structure and for other commercial reasons.
Financial Statements
For your ease of reference, TREIT’s audited financial statements as at and for the year ended December 31,
2009 and the unaudited financial statements as at and for 6 months ended June 30, 2010 are attached hereto as
Appendix E.
INFORMATION CONCERNING THE PURCHASER
The Purchaser is a limited partnership formed under the laws of the Province of Manitoba. TREIT Equities Inc.
(an affiliate of Greystone), TC Core 2 LP and Newport Real Estate LP are limited partners of the Purchaser and 7550332
Canada Inc. is the general partner. The majority of the units in the Purchaser are held by TREIT Equities Inc., which is
an affiliate of Greystone.
EXPENSES OF THE ARRANGEMENT
TREIT estimates that expenses in the aggregate amount of approximately $530,000 will be incurred by TREIT
in connection with the Arrangement, including legal, financial advisory, accounting, printing costs, the cost of preparing
and mailing the Circular and fees in respect of the Fairness Opinion.
Pursuant to the Arrangement Agreement, all costs and expenses of the parties in connection with the
Arrangement are to be paid by the party incurring such expenses.
BENEFITS FROM THE ARRANGEMENT
Other than as disclosed elsewhere in the Circular, none of the Trustees or executive officers of TREIT, nor, to
the knowledge of the Trustees and executive officers of TREIT after reasonable enquiry, any associate of any Trustee or
executive officer of TREIT, any person or company holding more than 10% of any class of equity securities of TREIT or
any person or company acting jointly or in concert with TREIT, will receive any direct or indirect benefit from voting for
or against the Arrangement, other than the cash proceeds available to any Unitholder who deposits Units under the
Arrangement.
COMMITMENTS TO ACQUIRE UNITS
Other than as disclosed below and elsewhere in the Circular, neither TREIT nor any of the Trustees or executive
officers of TREIT, nor, to the knowledge of the Trustees and executive officers of TREIT after reasonable enquiry, any
associate of any Trustee or executive officer of TREIT, any person or company holding more than 10% of any class of
equity securities of TREIT or any person or company acting jointly or in concert with TREIT, has entered into any
commitments to acquire any securities of TREIT.
TAMI and its Affiliates, Ugo Bizzarri, Andrew Jones and R. Blair Tamblyn (each, an “Interested
Unitholder”), directly or through an Affiliate have an ownership interest in the Purchaser, directly or indirectly. The
votes attached to the Units held by each such Interested Unitholder (if cast) will be excluded at the Meeting for the
approval of the Arrangement Resolution and the Arrangement.
PROXY SOLICITATION AND DEPOSITARY
The Manager is acting as TREIT’s proxy solicitation agent, for which it will be reimbursed for its out-of-pocket
expenses.
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TREIT has retained Olympia Trust Company to act as Depositary for the receipt of certificates in respect of
Units and related Letters of Transmittal deposited pursuant to the Arrangement. the Depositary will receive reasonable
and customary compensation for its services in connection with the Arrangement, will be reimbursed for certain out-of-
pocket expenses and will be indemnified by TREIT against certain liabilities under applicable securities laws and
expenses in connection therewith.
No fee or commission is payable by any Unitholder who transmits its Units directly to the Depositary. Except as
set forth above, TREIT will not pay any fees or commissions to any broker or dealer or any other person for soliciting
deposits of Units pursuant to the Arrangement.
OTHER INFORMATION AND MATTERS
There is no information or matter not disclosed in the Circular but known to TREIT that would reasonably be
expected to affect the decision of Unitholders to vote for or against the Arrangement Resolution.
LEGAL MATTERS
Certain legal matters in connection with the Arrangement will be passed upon by McCarthy Tétrault LLP on
behalf of TREIT and the Special Committee. As at the date of the Circular, partners and associates of McCarthy Tétrault
LLP own beneficially, directly or indirectly, less than 1% of the outstanding securities of TREIT and its associates and
Affiliates.
ADDITIONAL INFORMATION
Information contained herein is given as of August 3, 2010, except as otherwise noted. If any matters which are
not now known should properly come before the Meeting, the accompanying form of proxy will be voted on such
matters in accordance with the best judgment of the person voting it.
QUESTIONS AND FURTHER ASSISTANCE
If you have any questions about the information contained in the Circular or require assistance in completing
your proxy form, please contact Carrie Morris, Vice President – Investor Relations and Corporate Finance, at 1-416-3-6-
9967 x 250
40
APPROVAL OF TREIT’S BOARD OF TRUSTEES
The contents and the sending of the Circular have been approved by the Board of Trustees.
Toronto, Ontario By Order of the Board of Trustees

August 3, 2010

41
CONSENT OF GRANT THORNTON LLP
We hereby consent to the references to the opinion dated August 3, 2010 of our firm in the letter attached to the
management proxy circular of Timbercreek Real Estate Investment Trust dated August 3, 2010 (the “Circular”) and
under the headings “The Arrangement — Background to the Arrangement Agreement”, “The Arrangement — Reasons
for the Arrangement” and “The Arrangement — Independent Fairness Opinion” and to the inclusion of the foregoing
opinion in the Circular.
Dated: August 3, 2010
(Signed) Tim Oldfield
Name: Tim Oldfield

Title: Partner
42
APPENDIX A –
ARRANGEMENT RESOLUTION
SPECIAL RESOLUTION OF THE UNITHOLDERS OF

BE IT RESOLVED THAT:
1. The arrangement (the “Arrangement”) involving TIMBERCREEK REAL ESTATE INVESTMENT TRUST (
“TREIT”), as more particularly described and set forth in the management proxy circular (the “Circular”) of
TREIT accompanying the notice of this meeting (as the Arrangement may be or may have been modified or
amended in accordance with its terms) is hereby authorized, approved and adopted.
2. The plan of arrangement (the “Plan of Arrangement”) involving TREIT, the full text of which is set out as
Appendix B to the Circular (as the Plan of Arrangement may be or may have been modified or amended in
accordance with its terms) is hereby authorized, approved and adopted.
3. The Arrangement Agreement (the “Arrangement Agreement”) made between Restier Limited Partnership,
TREIT and Timbercreek Asset Management Inc. and dated August 3, 2010, the actions of the Trustees of
TREIT in approving the Arrangement Agreement and the actions of the Trustees and officers of TREIT in
executing and delivering and causing TREIT to perform its obligations under the Arrangement Agreement and
any amendments thereto in accordance with its terms are hereby ratified and confirmed.
4. Notwithstanding that this resolution has been passed (and the Plan of Arrangement adopted) by the unitholders
of TREIT, the Trustees of TREIT are hereby authorized and empowered without further notice to or approval of
the unitholders of TREIT (i) to amend the Arrangement Agreement or the Plan of Arrangement to the extent
permitted by the Arrangement Agreement, and (ii) subject to the terms of the Arrangement Agreement, to cause
TREIT not to proceed with the Arrangement.
5. Any officer or Trustee of TREIT is hereby authorized and directed for and on behalf of TREIT to execute or
cause to be executed, under the seal of TREIT or otherwise, and to deliver or cause to be delivered, all such
other documents and instruments and to perform or cause to be performed all such other acts and things as may
be necessary or desirable to give full effect to the foregoing resolutions and the matters authorized hereby, such
determination to be conclusively evidenced by the execution and delivery of such document or instrument and
the doing of such act or thing.
APPENDIX B –
PLAN OF ARRANGEMENT
PLAN OF ARRANGEMENT
OF
Article 1
INTERPRETATION
1.1 Definitions
In this Plan of Arrangement, unless there is something in the subject matter or context inconsistent therewith,
the following terms shall have the respective meanings set out below and grammatical variations of such terms shall have
corresponding meanings:
“Arrangement Agreement” means the arrangement agreement dated August 3, 2010, between the Purchaser,
TREIT and TAMI and any amendment thereto made in accordance with such agreement;
“Arrangement” means an arrangement on the terms and subject to the conditions set out in this Plan of
Arrangement, subject to any amendments or variations thereto made in accordance with Section 8.11 of the Arrangement
Agreement or Article 6 hereof;
“business day” means any day on which commercial banks are generally open for business in Toronto, Ontario,
other than a Saturday, a Sunday or a day observed as a holiday in Toronto under the laws of the Province of Ontario or the
federal laws of Canada;
“Circular” means the notice of the TREIT Meeting and accompanying TREIT management information circular,
including all schedules, appendices and exhibits thereto, to be sent to Unitholders of TREIT in connection with the TREIT
Meeting, as amended, supplemented or otherwise modified;
“Declaration of Trust” means the Amended and Restated Declaration of Trust of TREIT dated effective as of
June 29, 2006, as amended from time to time;
“Depositary” means Olympia Trust Company;
“Effective Date” means August 26, 2010 or on such other date to be determined by the Parties which is the third
business day after the date on which all conditions to the completion of the Arrangement as set out in Article 7 of the
Arrangement Agreement have been satisfied or waived in accordance with the provisions of the Arrangement Agreement
and all documents agreed to be delivered thereunder have been delivered to the satisfaction of the Parties, acting reasonably,
provided that such date occurs on or prior to the Outside Date;
“Effective Time” means 1 p.m. (Toronto time) on the Effective Date or as otherwise specified in writing by
TREIT;
“Governmental Entity” means any (a) multinational, federal, provincial, state, regional, municipal, local or other
government, governmental or public department, ministry, central bank, court, tribunal, arbitral body, commission, board,
bureau or agency, domestic or foreign, (b) any subdivision, agent or authority of any of the foregoing, or (c) any
quasi-governmental or private body, including any tribunal, commission, commissioner, regulatory agency or self-
regulatory organization, exercising any regulatory, expropriation or taxing authority under or for the account of any of the
foregoing;
“Letter of Transmittal” means the letter of transmittal to be sent by TREIT to holders of Units for use in
connection with the Arrangement;
“Liens” means any hypothecations, mortgages, liens, charges, security interests, pledges, claims, encumbrances
and adverse rights or claims;
“Meeting Date” means the date of the TREIT Meeting;
“Net Transaction Price per Unit” means the price shown in the table attached hereto as Exhibit “A” under the
column with the heading “Net Transaction Price per Unit” based on the initial acquisition cost of that Unit, and if there is
any issue or dispute in relation to the acquisition cost of a Unit, the records of TREIT will be determinative and conclusive.
“Non-Depositing Unitholder” means a Unitholder who has not voted in favour of the Arrangement at the TREIT
Meeting and has not deposited Units in accordance with the Arrangement;
“Outside Date” means September 30, 2010;
“Parties” means the Purchaser and TREIT, and “Party” means either of them;
“person” includes an individual, limited or general partnership, limited liability company, limited liability
partnership, trust, joint venture, association, body corporate, unincorporated organization, trustee, executor, administrator,
legal representative, government (including any Governmental Entity) or any other entity, whether or not having legal
status;
“Purchaser” means Restier Limtied Partnership, a limited partnership formed under the laws of the Province of
Manitoba;
“TAMI” means Timbercreek Asset Management Inc.;
“Tax Act” means the Income Tax Act (Canada) and the regulations made thereunder, as now in effect and as they
may be promulgated or amended from time to time;
“Timbercreek Global” means Timbercreek Global Real Estate Fund;
“Timbercreek Global Offering” means the public offering of Class A and Class B Units by Timbercreek Global
under a Preliminary Prospectus dated June 9, 2010;
“Timbercreek Global Units” means any of the Class A and Class B Units issued by Timbercreek Global under
the Timbercreek Global Offering;
“TREIT” means Timbercreek Real Estate Investment Trust;
“TREIT Meeting” means the special meeting of holders of Units, including any adjournment or postponement
thereof, to be called and held in accordance with the Declaration of Trust to consider the Arrangement;
“Units” means the trust units of TREIT, including both Class A Units and Class B Units; and
“Unitholder” means a holder of Units shown from time to time in the register maintained by or on behalf of
TREIT in respect of the Units.
1.2 Sections and Headings
The division of this Plan of Arrangement into articles and sections and the insertion of headings are for
convenience of reference only and shall not affect the construction or the interpretation of this Plan of Arrangement. Unless
otherwise indicated, any reference in this Plan of Arrangement to articles or sections refers to the specified articles or
sections of this Plan of Arrangement.
1.3 Number, Gender and Persons
In this Plan of Arrangement, unless the context otherwise requires, words importing the singular number include
the plural and vice versa and words importing any gender include all genders.
1.4 Date of Any Action
In the event that any date on which any action is required to be taken under this Plan of Arrangement is not a
business day, such action shall be required to be taken on the next succeeding day which is a business day.
1.5 Time
Time shall be of the essence in this Plan of Arrangement.
Article 2
BINDING EFFECT
2.1 Binding Effect
This Plan of Arrangement will become effective on, and be binding on and after, the Effective Date on TREIT, the
Purchaser, all Unitholders (including but not limited to all Non-Depositing Unitholders and all beneficial owners of Units).
Article 3
ARRANGEMENT
3.1 Arrangement
On the Effective Date, the following shall occur and shall be deemed to occur in the following order without any
further act or formality:
(a) immediately before the Effective Time, the Declaration of Trust be amended as follows:
(i) Section 7.1 be deleted in its entirety and replaced with the following:
“7.1 Number of Trustees
The minimum number of Trustees shall be one and the maximum number
of Trustees shall be nine. The actual number of Trustees from time to
time within such range shall be fixed by resolution of the Voting
Unitholders or if there is one Voting Unitholder, unless otherwise
determined by such Voting Unitholder, the number of Trustees shall be
fixed at one.”;
(ii) Section 7.7 be amended by deleting the first sentence of Section 7.7 in its entirety and
replacing with the following:
“At all meetings of the Trustees every question shall be decided by a

majority of the votes cast on the question.”;
(iii) Section 7.13 be deleted in its entirety; and
(iv) Section 8.1 be amended by deleting the sentence “A majority of the Trustees must not be
officers, employees or consultants of the Company, or any of its affiliates unless such a
majority arises between meetings of the Unitholders by reason of any Trustee’s resignation,
death or failure to meet the above qualifications.”
(b) at the Effective Time, pursuant to and in full satisfaction of the Arrangement Agreement, the Units
held by each Unitholder, including a Non-Depositing Unitholder, shall, without any further action by
or on behalf of any Unitholder or Non-Depositing Unitholder, be transferred (free and clear of Liens)
to the Purchaser without any further act or formality, in exchange for a cash amount equal to the Net
Transaction Price per Unit for each Unit transferred hereunder;
(c) with respect to each Unit transferred to the Purchaser pursuant to Section 3.1(b) and concurrently with
the step contemplated in Section 3.1(b):
(i) the holder of each such Unit shall cease to be the holder of such Unit and such holder’s name
shall be removed as the holder of such Unit from the register of Units; and
(ii) the Purchaser shall be deemed to be the transferee of such Units (free and clear of any Liens)
and shall be entered in the register of Units as the holder thereof.
Article 4
PAYMENT AND CERTIFICATES
4.1 Payment of Cash Consideration
(a) By the Effective Time, the Purchaser shall have deposited with the Depositary, for the benefit of the
Unitholders, cash in the aggregate amount equal to $182,715,328.65, representing the aggregate net
cash payment to be paid by the Purchaser for all issued and outstanding Units under the Arrangement
Agreement.
(b) Upon surrender to the Depositary of a certificate which immediately prior to the Effective Time
represented Units that were transferred as provided in Section 3.1(b), together with a duly completed
Letter of Transmittal and with such other documents and instruments as would have been required to
effect the transfer of the Units and such additional documents and instruments as the Depositary may
reasonably require, the holder of such surrendered certificate shall be entitled to receive in exchange
therefor the cash payment (net of amounts required to be withheld pursuant to Section 4.4) which such
holder is entitled to receive pursuant to Section 3.1(b).
(c) Subject to Sections 4.1(d), (h) and 4.3, the Purchaser shall cause the Depositary, as soon as practicable
following the later of the Effective Date and the date of deposit with the Depositary of the
documentation as provided in Section 4.1(b), to:
(i) forward or cause to be forwarded by first class mail (postage paid) to the holder at the
address specified in the Letter of Transmittal; or
(ii) if requested by the Unitholder in the Letter of Transmittal, make available at the Depositary
for pick-up by the holder; or
(iii) if the Letter of Transmittal neither specifies an address nor contains a request as described in
Section 4.1(c)(ii), forward or cause to be forwarded by first class mail (postage paid) to the
Unitholder at the address of such Unitholder as shown on the applicable register maintained
by or on behalf of TREIT as at the Effective Time;
a cheque representing the cash payment, if any, payable to such Unitholder in accordance with the
provisions hereof (net of amounts required to be withheld pursuant to Section 4.4).
(d) If requested by the Unitholder in the Letter of Transmittal, the Purchaser shall cause the Depositary, as
soon as practicable following the Effective Date, to forward or cause to be forwarded by first class
mail (postage paid) to Timbercreek Global at 1000 Yonge St., Suite 500, Toronto, Ontario M4W 2K2,
a cheque payable to “Timbercreek Global Real Estate Fund” representing an amount equal to the
subscription price of Timbercreek Global Units subscribed by the Unitholder pursuant to the terms of
the Timbercreek Global Offering (which payment amount shall be specified by the Unitholder in the
Letter of Transmittal) and all remaining amounts payable by the Purchaser to the Unitholder under this
Arrangement, if any, shall be paid to the Unitholder in accordance with Section 4.1(c). For greater
certainty, only the closest amount that is dividable by $12.00 to a whole number will be paid over to
Timbercreek Global in respect of the purchase of Timbercreek Global Units under the Timbercreek
Global Offer. Any remainder will be paid over to the Unitholder in accordance with 4.1(c).
(e) No Unitholder shall be entitled to receive any consideration with respect to the Units, other than the
cash payment, if any, which they are entitled to receive in accordance with Section 3.1(b) (net of
amounts required to be withheld pursuant to Section 4.4) and, for greater certainty, no such Unitholder
will be entitled to receive any interest, dividends, distributions, premium or other payment in
connection therewith.
(f) Until such time as a former Unitholder complies with the provisions of Section 4.1(b), the cash
payment, if any, to which such holder is entitled (net of amounts required to be withheld pursuant to
Section 4.4) shall, subject to Section 4.3, be paid to the Depositary to be held in trust for such holder
for delivery to the holder, without interest, upon deposit with the Depositary of the documentation as
provided in Section 4.1(b).
(g) Until surrendered as contemplated by this Section 4.1, each certificate which immediately prior to the
Effective Date represented Units that were transferred as provided in Section 3.1(b) shall be deemed at
all times after the Effective Time to represent only the right to receive upon such surrender (together
with the documentation set forth in Section 4.1(b)) the cash payment which such holder is entitled to
receive pursuant to the provisions hereof.
(h) Notwithstanding Sections 3.1(b) and 4.1(c), any amount less than $10.00 will not be paid to the
Unitholder due to administrative costs.
4.2 Lost Certificates
In the event any certificate which immediately prior to the Effective Time represented one or more outstanding
Units that were transferred pursuant to Section 3.1(b) shall have been destroyed, lost or stolen, upon the making of an
affidavit of that fact by the person claiming such certificate to be lost, stolen or destroyed, the Depositary will pay in
exchange for such destroyed, lost or stolen certificate, the cash payment which such holder is entitled to receive pursuant to
Sections 3.1(b) (net of amounts required to be withheld pursuant to Section 4.4). When authorizing such payment in
exchange for any destroyed, lost or stolen certificate, the person to whom the payment is made shall, as a condition
precedent to the delivery thereof, give a bond satisfactory to TREIT, the Purchaser and the Depositary in such sum as the
Purchaser may direct or otherwise indemnify the Purchaser in a manner satisfactory to the Purchaser against any claim that
may be made against the Purchaser with respect to the certificate alleged to have been destroyed, lost or stolen.
4.3 Extinction of Rights
If any Unitholder fails for any reason to deliver to the Depositary the certificates formerly representing Units
under this Plan of Arrangement (or an affidavit of loss and bond or other indemnity pursuant to Section 4.2), together
with such other documents or instruments required for such holder to receive payment for Units, on or before the second
anniversary of the Effective Date, such holder shall be deemed to have donated and forfeited to the Purchaser any cash
(net of amounts required to be withheld pursuant to Section 4.4) held by the Depositary in trust for such holder to which
such holder is entitled. At and after the Effective Time, any certificate formerly representing Units shall represent only
the right to receive the consideration provided in this Plan of Arrangement; provided that such certificates shall, on the
second anniversary of the Effective Date, cease to represent a claim of any nature whatsoever and shall be deemed to
have been surrendered to the Purchaser and shall be cancelled.
4.4 Withholding Rights
TREIT, the Purchaser and the Depositary shall be entitled to deduct and withhold from any consideration
otherwise payable to any Unitholder under this Plan of Arrangement, such amounts as TREIT, the Purchaser, or the
Depositary is required to deduct and withhold with respect to such payment under the Tax Act, the United States Internal
Revenue Code of 1986 or any provision of provincial, state, local or foreign tax law, in each case, as amended or succeeded
and subject to the provisions of any applicable income tax treaty between Canada and the country where the holder is
resident. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes as having been
paid to the Unitholder in respect of which such deduction and withholding was made, provided that such withheld amounts
are actually remitted in accordance with applicable law to the appropriate taxing authority.
Article 5
AMENDMENTS
5.1 Amendments to Plan of Arrangement
(a) TREIT reserves the right to amend, modify and/or supplement this Plan of Arrangement at any time
and from time to time prior to the Effective Date, provided that each such amendment, modification
and/or supplement must be (i) set out in writing, (ii) approved by the Purchaser, and
(iii) communicated to holders of Units if and as required by the Declaration of Trust.
(b) Any amendment, modification or supplement to this Plan of Arrangement may be made following the
Effective Date unilaterally by the Purchaser, provided that it concerns a matter which, in the
reasonable opinion of the Purchaser, is of an administrative nature required to better give effect to the
implementation of this Plan of Arrangement and is not adverse to the financial or economic interests
of any Unitholder.
(c) This Plan of Arrangement may be withdrawn prior to the Effective Time in accordance with the terms
of the Arrangement Agreement.
Article 6
FURTHER ASSURANCES
Notwithstanding that the transactions and events set out herein shall occur and be deemed to occur in the order
set out in this Plan of Arrangement and shall become effective without any further act or formality, each of the Parties
shall make, do and execute, or cause to be made, done and executed, all such further acts, deeds, agreements, transfers,
assurances, instruments or documents as may reasonably be required by any of them in order to further document or
evidence any of the transactions or events set out herein.
EXHIBIT “A”
NET TRANSACTION PRICE PER UNIT INFORMATION
D B E C F G A
Difference
between
Gross Transactio
Transactio Total Performance Net n Price
Issue n Price / Distribution Transaction Fee Paid Performanc Transaction and Issue
Price Unit s YTD Cost / Unit YTD e Fee / Unit Price / Unit Price
9.22 14.45 $0.50 $0.04 0.05000 $1.22 $13.19 $3.97
9.24 14.45 $0.50 $0.04 0.05000 $1.22 $13.19 $3.95
9.61 14.45 $0.50 $0.04 0.05000 $1.12 $13.29 $3.68
9.74 14.45 $0.50 $0.04 0.05000 $1.08 $13.33 $3.59
10.00 14.45 $0.50 $0.04 0.04000 $1.03 $13.38 $3.38
10.45 14.45 $0.50 $0.04 0.04000 $0.91 $13.50 $3.05
10.52 14.45 $0.50 $0.04 0.04000 $0.89 $13.52 $3.00
10.61 14.45 $0.50 $0.04 0.04000 $0.86 $13.55 $2.94
10.62 14.45 $0.50 $0.04 0.04000 $0.86 $13.55 $2.93
10.67 14.45 $0.50 $0.04 0.04000 $0.85 $13.56 $2.89
10.98 14.45 $0.50 $0.04 0.04000 $0.76 $13.65 $2.67
11.41 14.45 $0.50 $0.04 0.03000 $0.66 $13.75 $2.34
12.35 14.45 $0.50 $0.04 0.06000 $0.38 $14.03 $1.68
12.55 14.45 $0.50 $0.04 0.02000 $0.37 $14.04 $1.49
12.59 14.45 $0.50 $0.04 0.06000 $0.32 $14.09 $1.50
12.6 14.45 $0.50 $0.04 0.02000 $0.35 $14.06 $1.46
12.65 14.45 $0.50 $0.04 0.02000 $0.34 $14.07 $1.42
12.69 14.45 $0.50 $0.04 0.02000 $0.33 $14.08 $1.39

APPENDIX C –
FAIRNESS OPINION OF GRANT THORNTON LLP
APPENDIX D –
TIMBERCREEK GLOBAL REAL ESTATE FUND INVESTMENT WORKSHEET
The following worksheet has been provided to assist a taxable Canadian resident investor who wishes to invest a portion
or all of their proceeds from the Arrangement in Timbercreek Global Real Estate Fund.
This worksheet is of a general nature only and is not, and is not intended to be legal or tax advice to any
particular Unitholder. The worksheet assumes that a Unitholder is an individual resident in Canada and that the
Unitholder holds the TREIT Units as capital property. The Adjusted Cost Base (“ACB”) per unit included in the
chart below is based on a theoretical calculation assuming that the proceeds received on subscription form the
Unitholders original cost. The ACB has been reduced by the cumulative return of capital paid to the Unitholder
during the holding period. No further adjustments have been made to the Unitholder’s ACB, including
adjustments for acquisition costs, if any, incurred by the Unitholder on the original acquisition of the TREIT
Unit. The calculation uses a blended federal and provincial top marginal tax rate of 25% to approximate the
highest effective tax rate payable by an individual investor resident in Canada on a capital gain. Accordingly, the
actual tax payable by the Unitholder may vary by each Unitholder depending on the actual ACB, the province of
residence and whether the investor has realized a capital loss in the year from the disposition of other properties
or has a capital loss available for carry-forward. Unitholders should consult their own tax advisors with respect
to the Canadian federal income tax consequences of the Arrangement having regard to their own particular
circumstances.
Worksheet Instructions:
1. Fill in the blanks below using the information provided in the chart below. You will need to know the number
of TREIT Units you hold in order to complete the worksheet.
2. If you have multiple positions in TREIT each at a different Issue Price, complete the worksheet for each Issue
Price separately.
Number of Units held: ________________
X Net Transaction Price per Unit: A ________________ (see column A of chart below)
= Total Proceeds BEFORE Tax: ________________ C
X Theoretical Taxes Payable % B ________________ (see column B of chart below)
= Theoretical Taxes Payable ________________ D
= Total Net Proceeds Available ________________ E
Amount Payable to Timbercreek Global Real Estate Fund:
% ExF
% of Net Proceeds Available you want to invest __________F ________________
Amount Payable to Unitholder:
% (E x G) + D
% of Net Proceeds Available returned to you __________G ________________
100% ________________
All amounts in the table are shown per unit.
A B
Est. % of
Taxes
Purchased Theoretical Est. Top Payable of
Through Net Theoretical Taxable Combined Est. Net Net
Issue Brokered Transaction Theoretical Capital Capital Marginal Taxes Proceeds Transaction
Series Price Offering Price / Unit ACB Gain Gain Tax Rate Payable after Tax Price
B2 $9.22 Yes $13.19 $5.77 $7.42 $3.71 25% $1.86 $11.33 14%
B1 $9.24 Yes $13.19 $5.79 $7.41 $3.71 25% $1.85 $11.35 14%
B3 $9.61 Yes $13.29 $6.14 $7.15 $3.58 25% $1.79 $11.50 13%
A1 $9.74 No $13.33 $6.11 $7.21 $3.60 25% $1.80 $11.52 14%
A1 $10.00 No $13.38 $6.51 $6.88 $3.44 25% $1.72 $11.67 13%
A1 $10.00 Yes $13.38 $6.35 $7.04 $3.52 25% $1.76 $11.63 13%
A1 $10.45 No $13.50 $7.12 $6.39 $3.20 25% $1.60 $11.91 12%
A1 $10.45 Yes $13.50 $6.97 $6.54 $3.27 25% $1.64 $11.87 12%
A1 $10.52 No $13.52 $7.38 $6.15 $3.07 25% $1.54 $11.99 11%
A1 $10.52 Yes $13.52 $7.24 $6.29 $3.15 25% $1.57 $11.96 12%
A1 $10.61 No $13.55 $8.12 $5.43 $2.72 25% $1.36 $12.19 10%
A1 $10.62 No $13.55 $8.31 $5.24 $2.62 25% $1.31 $12.24 10%
A1 $10.62 Yes $13.55 $8.20 $5.35 $2.67 25% $1.34 $12.21 10%
A1 $10.67 No $13.56 $8.16 $5.41 $2.71 25% $1.35 $12.22 10%
A1 $10.67 Yes $13.56 $8.04 $5.53 $2.76 25% $1.38 $12.19 10%
A1 $10.98 No $13.65 $9.02 $4.63 $2.31 25% $1.16 $12.49 8%
A1 $10.98 Yes $13.65 $8.93 $4.72 $2.36 25% $1.18 $12.47 9%
A1 $11.41 No $13.75 $9.68 $4.08 $2.04 25% $1.02 $12.74 7%
A1 $11.41 Yes $13.75 $9.61 $4.15 $2.08 25% $1.04 $12.72 8%
A1 $12.35 No $14.03 $11.94 $2.10 $1.05 25% $0.52 $13.52 4%
A1 $12.55 No $14.04 $11.16 $2.89 $1.44 25% $0.72 $13.33 5%
A1 $12.59 No $14.09 $12.18 $1.92 $0.96 25% $0.48 $13.62 3%
A1 $12.60 No $14.06 $12.07 $2.00 $1.00 25% $0.50 $13.57 4%
A1 $12.60 Yes $14.06 $12.05 $2.02 $1.01 25% $0.50 $13.57 4%
A1 $12.65 No $14.07 $11.05 $3.02 $1.51 25% $0.75 $13.32 5%
A1 $12.69 No $14.08 $11.16 $2.93 $1.47 25% $0.73 $13.36 5%
A1 $12.69 Yes $14.08 $11.09 $3.00 $1.50 25% $0.75 $13.34 5%
APPENDIX E –
FINANCIAL STATEMENTS OF TREIT
AS AT AND FOR THE YEAR ENDED DECEMBER 31, 2009

AND
AS AT AND FOR THE SIX MONTHS ENDED JUNE 30, 2010
Consolidated Financial Statements of
TIMBERCREEK REAL ESTATE

INVESTMENT TRUST
Year ended December 31, 2009

Consolidated Balance Sheet

December 31, 2009, with comparative figures for 2008
2009 2008
Assets
Properties (note 6) $ 378,836,132 $ 392,991,173
Other assets and receivables 1,013,518 916,237
Goodwill 6,226,059 6,226,059
Due from Timbercreek Asset Management Inc. (note 11) 2,209,067 –
$ 388,284,776 $ 400,133,469
Liabilities and Unitholders’ Equity

Liabilities:
Mortgages payable (note 7) $ 267,142,494 $ 270,971,925
Bank indebtedness 1,224,341 581,903
Operating and acquisition loan (note 8) 32,756,950 29,788,210
Loans payable (note 9) 3,700,000 6,500,000
Accounts payable and other liabilities 2,144,607 1,870,095
Due to Timbercreek Asset Management Inc. (note 11) – 18,493
Distribution payable 3,083,778 3,190,668
Future tax liability (note 12) 1,408,794 2,343,861
311,460,964 315,265,155
Unitholders’ equity 76,823,812 84,868,314
Commitments and contingencies (notes 2 and 16)

Subsequent event (note 14(c))
$ 388,284,776 $ 400,133,469
See accompanying notes to consolidated financial statements.
On behalf of the Trustees:
“R. Blair Tamblyn”
“Corrado Russo”
Consolidated Statement of Operations

Year ended December 31, 2009, with comparative figures for 2008
2009 2008
Revenue:
Net rental income (note 5) $ 24,569,886 $ 21,759,070
Other income 492,432 59,217
25,062,318 21,818,287
Expenses:
Incentive fee (note 11) 596,602 689,555
Service fee 228,954 190,308
General, administrative and trust 478,662 457,098
1,304,218 1,336,961
Income before financing costs, capital tax,
amortization, income taxes and
discontinued operations 23,758,100 20,481,326
Financing costs:
Mortgage interest 14,971,990 14,705,837
Loan interest 1,082,746 1,798,316
Gain on settlement of mortgages payable – (877,985)
16,054,736 15,626,168
Income from continuing operations before

capital tax, amortization and income taxes 7,703,364 4,855,158
Capital tax 154,309 224,715
Amortization (note 15) 21,608,766 22,474,998
21,763,075 22,699,713
Loss from continuing operations before income taxes (14,059,711) (17,844,555)

Future income tax recovery (note 12) (935,067) (3,882,198)
Loss from continuing operations (13,124,644) (13,962,357)
Income from discontinued operations,
net of income taxes (note 4) – 1,130,927
Loss for the year $ (13,124,644) $ (12,831,430)
Basic and fully diluted income (loss) per unit (note 10(d)):
From continuing operations $ (1.05) $ (1.20)
From discontinued operations – 0.10
$ (1.05) (1.10)

Consolidated Statement of Unitholders’ Equity

Cumulative Cumulative Cumulative Contributed

2009 capital deficit distributions surplus Total
Unitholders’ equity,
beginning of year $ 131,167,649 $ (28,109,069) $ (18,238,236) $ 47,970 $ 84,868,314
Loss for the year – (13,124,644) – – (13,124,644)
Distributions – – (10,991,586) – (10,991,586)
Issuance of REIT Units,
net of costs 21,554,227 – – – 21,554,227
Redemption of REIT Units (5,482,499) – – – (5,482,499)
end of year $ 147,239,377 $ (41,233,713) $ (29,229,822) $ 47,970 $ 76,823,812

beginning of year $ 120,655,548 $ (15,277,639) $ (7,541,405) $ 47,970 $ 97,884,474
Loss for the year – (12,831,430) – – (12,831,430)
Distributions – – (10,696,831) – (10,696,831)
Issuance of REIT Units, 11,316,936 – – – 11,316,936
net of costs
Redemption of REIT Units (804,835) – – – (804,835)
end of year $ 131,167,649 $( 28,109,069) $ (18,238,236) $ 47,970 $ 84,868,314

Consolidated Statement of Cash Flows

2009 2008
Cash provided by (used in):

Operations:
Loss for the year $ (13,124,644) $ (12,831,430)
Items not involving cash:
Amortization of properties 21,608,766 22,887,362
Amortization of financing costs 908,273 568,521
Gain on settlement of mortgage payable – (877,985)
Gain on disposition of properties (note 4) – (1,438,067)
Future income taxes (935,067) (3,882,198)
Due from/to Timbercreek Asset Management Inc. (2,227,560) (1,821,589)
Change in non-cash operating items 162,119 (675,345)
6,391,887 1,929,269
Financing:
Mortgage financing 40,416,858 56,430,489
Mortgage principal repayments (5,074,594) (4,762,289)
Mortgages discharged (39,130,836) (7,473,121)
Financing costs (949,132) (1,716,083)
Operating and acquisition loan 2,968,740 6,559,848
Loans payable (2,800,000) 5,000,000
Proceeds from issuance of REIT Units, net of issue costs (note 10) 21,554,227 11,316,936
Redemption of REIT Units (note 10) (5,482,499) (804,835)
Distributions to unitholders (11,098,476) (9,862,953)
Settlement of liabilities assumed on acquisition – (2,298,957)
404,288 52,389,035
Investments:
Acquisition of properties, net of debt assumed and (1,121,910) (55,981,731)
REIT Units issued (note 3)
Deposit refunded on future acquisition – 500,000
Proceeds on sale of properties – 4,917,852
Capital improvements to properties (6,316,703) (5,143,185)
(7,438,613) (55,707,064)
Decrease in cash and cash equivalents (642,438) (1,388,760)
Cash and cash equivalents (bank indebtedness), beginning of year (581,903) 806,857
Bank indebtedness, end of year $ (1,224,341) $ (581,903)
Supplemental cash flow information:
Interest paid $ 15,149,724 $ 16,343,072
Supplemental disclosure of non-cash financing and investing activities:
Debt assumed by purchaser on sale of property – 11,954,479
Application of deposits paid on acquisition of properties – 1,600,000

Notes to Consolidated Financial Statements
Timbercreek Real Estate Investment Trust (“Timbercreek REIT” or the “Trust”) is an unincorporated open-ended real
estate investment trust which was formed pursuant to a Declaration of Trust dated November 30, 2004, as amended
and restated, under the laws of the Province of Ontario. Timbercreek REIT began operations on December 30,
2004 and was formed for the purpose of acquiring, investing in and capitalizing on under-performing multi-family
residential real estate opportunities across North America.
1. Significant accounting policies:

(a) Basis of presentation:
These consolidated financial statements have been prepared in accordance with Canadian generally
accepted accounting principles (“Canadian GAAP”) and include the accounts of Timbercreek REIT
and its subsidiaries, including its taxable subsidiary, Timbercreek Investments Inc. (the “Company”). All
intercompany transactions and balances have been eliminated upon consolidation. All amounts are stated
in Canadian dollars.
(b) Adoption of new accounting standards:
(i) GoodwiIl and intangible assets:

Effective January 1, 2009, the Trust adopted Handbook Section 3064, Goodwill and Intangible Assets,
replacing Section 3062, Goodwill and Other Intangible Assets (“Section 3062”), and Section 3450,
Research and Development Costs which was issued by The Canadian Institute of Chartered Accountants
(“CICA”).This section establishes standards for the recognition, measurement, presentation and disclosure
of goodwill and other intangible assets subsequent to their initial recognition. Standards concerning
goodwill are unchanged from the standards included in the previous Section 3062. The adoption of this
standard did not have a material impact on the Trust’s consolidated financial statements.
(ii) Financial instruments - disclosures:
In June 2009, the CICA amended Handbook Section 3862, Financial Instruments - Disclosures. The
Section now requires that all financial instruments measured at fair value be categorized into one of
three hierarchy levels for disclosure purposes. Each level is based on the transparency of the inputs
used to measure the fair values of assets and liabilities. There was no material impact to the Timbercreek
REIT’s consolidated financial statements upon adoption of this standard.
(c) Financial Instruments:
The Trust classifies all financial instruments as one of: (a) held-to-maturity; (b) loans and receivables; (c) held-
for-trading; (d) available-for-sale; or (e) other liabilities. Financial assets and liabilities held for trading are
measured at fair value with gains and losses recognized in loss for the year. Financial instruments classified
as held to maturity, loans and receivables and other liabilities are measured at amortized cost. AvailabIe-
for-sale financial instruments are measured at fair value, with unrealized gains and losses recognized in
comprehensive income.
The Trust has designated its bank indebtedness as held-for-trading; other assets and receivables, and due
from Timbercreek Asset Management Inc., as loans and receivables; mortgages payable, operating and
acquisition loan, loans payable, due to Timbercreek Asset Management Inc., accounts payable and other
liabilities and distribution payable as other liabilities. The Trust has neither available-for-sale nor held-to-
maturity instruments.
Transaction costs that are directly attributable to the acquisition or issuance of financial assets or liabilities
are accounted for as part of the respective asset or liability’s carrying value at inception.
Notes to Consolidated Financial Statements (continued)
1. Significant accounting policies (continued):

(d) Properties:
Properties are carried at cost less accumulated amortization. Cost includes all amounts relating to the
acquisition and capital improvements.
An impairment loss is required to be recognized in the year in which the carrying amount of the property
exceeds the sum of the undiscounted cash flows expected from its use plus its residual value. An impairment
loss is measured as the amount by which the carrying amount of the asset exceeds its fair value.
In accordance with Emerging Issues Committee 140, Accounting for Operating Leases Acquired in Either an
Asset Acquisition or a Business Combination, upon the acquisition of a property, a portion of the purchase
price is allocated to intangible amounts, including the fair value of in-place tenant leases, above- and
below-market leases and tenant relationships.
In-place tenant leases represent the avoided costs of originating the acquired leases plus the value of lost
net tenant revenue over the estimated lease-up period of the property.
(e) Amortization of properties:
Amortization is provided for over the estimated useful lives of the assets on a declining-balance basis
using the following annual rates:
Buildings 5%
Furniture, fixtures and equipment 20%
Parking lots 8%
Building improvements 20%
In-place tenant lease costs are amortized over the expected term of tenant occupancy, which management
estimates to be two years.
(f ) Revenue recognition:
The head lease agreements (the “Head Lease Agreements”) between the Trust and Timbercreek Asset
Management Inc. (the “Advisor”) have been accounted for as operating leases and the related revenue is
recognized on a monthly basis as services are provided in accordance with the terms of the agreements
(note 2).
(g) Financing costs:
Financing costs are recorded as a reduction of the applicable debt instrument and amortized to interest
expense using the effective interest rate over the anticipated life of the related debt (note 1(c)).
(h) Cash and cash equivalents:
The Trust considers highly liquid investments with an original maturity of three months or less to be cash
equivalents.

(i) Goodwill:
Goodwill represents the cost of acquired net assets in excess of their fair values. Goodwill is not amortized,
but tested annually for impairment, or more frequently if events or changes in circumstances indicate the
asset might be impaired, by comparing the carrying value of a reporting unit with its fair value.
(j) Income taxes:
Timbercreek REIT’s corporate subsidiaries are subject to income taxes on their taxable income. Income
taxes for these subsidiaries are accounted for using the asset and liability method. Under the asset and
liability method, future income tax assets and liabilities are determined based on the temporary differences
between the carrying amount and tax bases of the subsidiaries’ assets and liabilities. Income tax assets are
also recognized for the benefits from tax losses and deductions that cannot be identified with particular
assets or liabilities. A valuation allowance is recorded against a future income tax asset when it is determined
that it is more likely than not that the asset will not be realized in the future. Future income tax assets and
liabilities are measured using the tax laws and rates that are anticipated to apply in the year of reversal.
(k) Unit-based compensation:
The Trust accounts for options granted under its unit-based compensation plan under the fair value
method using the Black-Scholes option pricing model. The fair value of unit options is charged to income
on a straight-line basis over the vesting period of the options granted.
(l) Use of estimates:
The preparation of financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, including the valuation of goodwill, the estimated useful
life of properties and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the year.
These assumptions are limited by the availability of reliable comparable data, economic uncertainty and
the uncertainty of predictions concerning future events. Accordingly, by their nature, estimates of fair value
are subjective and do not necessarily result in precise determinations. Should the underlying assumptions
change, the estimate fair value could change by a material amount.
(m) Recent Canadian accounting pronouncements issued and not yet adopted:
International Financial Reporting Standards (“IFRS”):
The Accounting Standards Board (“AcSB”) of the CICA confirmed that Canadian GAAP for publicly
accountable enterprises wiII be converged with IFRS effective in the calendar year 2011. IFRS will replace
current Canadian GAAP for these enterprises.The conversion to IFRS may be required for the Trust for interim
and annual financial statements beginning on January 1, 2011, and if adopted, the Trust will also be required
to provide comparative IFRS information for the previous fiscal year. The Trust is currently evaluating the
impact of their adoption on its consolidated financial statements. This will be an ongoing process as the
International Accounting Standards Board and the AcSB issue new standards and recommendations. The
Trust’s consolidated financial performance and financial position as disclosed in these financial statements
may be significantly different when presented in accordance with IFRS.
2. Governing agreements:
Pursuant to the terms of the asset management agreement (the “Asset Management Agreement”) between the
Trust and the Advisor, the Advisor provides advice and assistance in sourcing, acquiring, managing and disposing
of properties as well as general management and operational services relating to the Trust. Each property acquired
by the Trust is subject to the provisions of a separate agreement between the Trust and the Advisor.
For each property acquired, the Trust enters into a separate long-term Head Lease Agreement, whereby the
property is leased to the Advisor as head tenant under the Head Lease Agreement. The Advisor, as head tenant,
is entitled to all rents from underlying tenant leases, is responsible for all costs of operating and maintaining
the property and is entitled to retain a share of the annual gross rents of up to 1% of the acquisition cost of the
property annually, with the remaining net rental income due to the Trust.
Pursuant to the Asset Management Agreement, in any year where the Trust achieves a hurdle rate cash yield in
excess of 6.5% (the “Hurdle Rate”), the Advisor is entitled to an incentive fee equal to one-quarter of the cash
yield in excess of the Hurdle Rate.
3. Acquisitions:
The following table summarizes the consideration for the net assets of the properties acquired during the year,
at fair value:
2009 2008
Cash paid $ 1,121,910 $ 57,581,731
Allocation of book value to properties $ 1,137,022 $ 57,555,651

Allocation of book value to other
assets and liabilities, net (15,112) 26,080
$ 1,121,910 $ 57,581,731
Multi-family units acquired 15 700

The property acquisitions have been recorded by the purchase method, with results of operations included in
these consolidated financial statements from the date of acquisition.
During the year ended December 31, 2009, the Trust completed the acquisition of one 15-unit property located
in London, Ontario, located beside two existing properties, for total consideration of $1,121,910. The transaction
closed on September 11, 2009.
During the year ended December 31, 2008, the Trust completed the acquisition of six properties for the total
consideration of $57,581,731. Included in these acquisitions are:
(i) A 124-unit property located in Montreal, Quebec, for total consideration of $15,549,617. The transaction
closed on January 18, 2008.
(ii) Four properties including 244 units located in Ottawa, Ontario, from a related party by virtue of common
management and another non-related entity for total consideration of $19,384,352. The transaction closed
on February 8, 2008.
(iii) A 332-unit property located in London, Ontario, for total consideration of $22,647,762. The transaction
closed on June 5, 2008.
4. Discontinued operations:
During the year ended December 31, 2008, Timbercreek REIT disposed of two properties in Montreal, Quebec
with a carrying value of $15,502,323. As a result of this transaction, a gain of $1,438,067 was recognized on
this sale.
2008
Sale price $ 17,000,000

Cost of disposition 59,610
Total proceeds 16,940,390
Net book value 15,502,323
Gain on disposition $ 1,438,067
The results of operations for the sold properties have been classified as discontinued operations in accordance
with Canadian GAAP Section 3475, Disposal of Long-Lived Assets and Discontinued Operations. The following
revenue and expenses were incurred during the year with respect to these properties.
2008
Revenue $ 879,851
Expenses:
Property taxes 92,705
Utilities 167,375
Repairs and maintenance 94,553
Other property operating 95,648
450,281
Net operating income 429,570
Less amount retained by the Advisor (note 2) 68,161

361,409
Net rental income
(256,185)
Financing costs
(412,364)
Amortization
Gain on disposition 1,438,067
Income from discontinued operations $ 1,130,927

5. Net rental income:

The following summarizes the operating results of the properties subject to the Head Lease Agreements
(note 2) and the related net rental income earned from the Advisor.
2009 2008
Revenue $ 51,049,429 $ 48,004,841
Expenses:
Property taxes 6,998,941 6,489,491
Utilities 7,276,695 7,326,561
Repairs and maintenance 3,371,736 4,577,030
Other property operating 4,797,852 4,097,465
22,445,224 22,490,547
Net operating income 28,604,205 25,514,294
Less amount retained by the Advisor (note 2) 4,034,319 3,755,224
Net rental income $ 24,569,886 $ 21,759,070
6. Properties:
Accumulated Net book

2009 Cost amortization value
Land $ 81,831,779 $ – $ 81,831,779

Buildings 305,762,676 38,619,729 267,142,947
In-place tenant leases 13,996,537 13,718,544 277,993
Furniture, fixtures and equipment 7,034,534 2,443,320 4,591,214
Parking lots 21,552,959 3,691,871 17,861,088
Building improvements 9,804,432 2,673,321 7,131,111
$ 439,982,917 $ 61,146,785 $ 378,836,132

2008 Cost amortization value
$ 81,611,779 $ – $ 81,611,779
Land
Buildings 305,012,233 24,658,061 280,354,172
In-place tenant leases 13,905,539 9,678,194 4,227,345
Parking lots 20,451,262 2,206,042 18,245,220
$ 432,529,193 $ 39,538,020 $ 392,991,173
7. Mortgages payable:
Mortgages are secured by properties to which they relate and bear interest at rates ranging between
2.40% and 7.24% (2008 - between 4.1% and 8.5%), with a weighted average rate of 5.10% at December 31, 2009
(2008 - 5.3%), and mature between 2010 and 2021.
The minimum future principal repayments required to meet mortgage obligations at December 31, 2009 are
as follows:
Regular Principal
principal due on
repayment maturity Total
2010 $ 4,991,272 $ 26,405,478 $ 31,396,750

2011 5,210,644 – 5,210,644
2012 5,074,873 47,344,083 52,418,956
2013 4,447,963 14,945,873 19,393,836
2014 3,981,437 29,995,534 33,976,971
Thereafter 11,321,065 116,664,860 127,985,925
$ 35,027,254 $ 235,355,828 270,383,082
Less unamortized financing costs 3,240,588
$ 267,142,494
During the year ended December 31, 2009, the Trust completed the following mortgage financings:
(a) In February 2009, the Trust refinanced one mortgage totalling $4,000,000, bearing interest at 8.50%
with a new 5-year fixed mortgage at a rate of 3.34%, in the amount of $6,261,900.
(b) In April 2009, the Trust refinanced one mortgage totalling $5,582,119 at the same principal amount.
The original first and second mortgages bore interest at a weighted average rate of 4.40%. The new
mortgage is for a term of five years, bearing interest at a fixed rate of 3.38%.
(c) In June 2009, the Trust refinanced one mortgage totalling $662,280, bearing interest at 6.45% with a
new five-year fixed mortgage at a rate of 3.82%.
(d) In November 2009, the Trust refinanced three mortgages totalling $21,780,881, secured by nine
properties and bearing interest at a rate of 5.17%. The new mortgages are for a term of seven years,
bearing interest at a fixed rate of 5.69%, totalling $20,805,000. As a result of this transaction, three of
these properties will no longer be subject to mortgage financing.
(e) In December 2009, the Trust refinanced one mortgage totalling $3,405,557 at the same principal
amount. The original first mortgage bore interest at a rate of 5.30%. The new mortgage is for a term of
seven years, bearing interest at a fixed rate of 4.04%.
8. Operating and acquisition loan:

During the year ended December 31, 2009, the Trust renewed and increased the borrowing capacity on the
operating and acquisition loan to $45,000,000. Of the total loan amount, $9,000,000 is due on demand and
$36,000,000 is due in November 2010. The loan is secured by a first or second charge on specific assets. At
December 31, 2009, $32,756,950 (2008 - $29,788,210) was outstanding on the loan. The loan carries an interest
rate of prime plus 2.0%.
9. Loans payable:
Description Maturity date Interest rate 2009 2008
Promissory note On demand Prime rate $ 1,700,000 $ 1,700,000

Promissory note September 30, 2010 4% 1,000,000 1,000,000
Promissory note On demand Prime rate 1,000,000 3,800,000
$ 3,700,000 $ 6,500,000
10. REIT Units:

Timbercreek REIT is authorized to issue an unlimited number of Class A and Class B units (the “REIT Units”)
through continuous offerings. Class A REIT Units are issued to new subscribers, whereas Class B REIT Units were
originally issued to reinvestment subscribers on formation of the Trust. REIT Units rank equally and represent an
undivided beneficial interest in Timbercreek REIT and in distributions made by the Trust and entitle the holder
to one vote per unit at all meetings of unitholders.

2009 2008
Units Amount Units Amount
Balance at net issue price,

beginning of year 11,698,153 $ 131,167,649 10,814,692 $ 120,655,548
Issuance of Class A REIT Units 1,809,508 22,692,912 948,903 12,009,796

Issue costs – (1,138,685) – (692,860)
1,809,508 21,554,227 948,903 11,316,936
Redemption of Class A REIT Units (436,456) (5,456,898) (45,752) (572,722)

Redemption of Class B REIT Units (2,581) (25,601) (19,690) (232,113)
(439,037) (5,482,499) (65,442) (804,835)
Balance, end of year 13,068,624 $ 147,239,377 11,698,153 $ 131,167,649
(a) Redemptions:
Subject to suspension of redemptions by the Trustees in certain circumstances, a unitholder is entitled

to require payment of the redemption price of all or any of his REIT Units by giving written notice to the
Registrar and Transfer Agent.
10. REIT Units (continued):

Proceeds payable upon redemption are subject to restrictions as outlined in the Declaration of Trust
and will be calculated as the Pricing Net Asset Value of the REIT Units as of the last business day of the
preceding calendar quarter end, less applicable redemption charges as outlined in the respective Offering
Memorandum.
Under the terms of the Declaration of Trust, the Advisor is entitled to a Redemption Entitlement upon
the redemption of REIT Units equal to one-quarter of the increase in the value of the REIT Units over the
unitholder’s initial cost base. The Redemption Entitlement is deducted from the unitholder’s proceeds
payable upon redemption.
(b) Distributions:
Timbercreek REIT makes distributions to unitholders on a quarterly basis on or about the 15th day of the
following month.
(c) Unit option plan:
The Trust has adopted a unit option plan for the benefit of certain employees and directors of the Advisor. A
total of 10% of the issued and outstanding Class A Units can be authorized for the plan. During 2007, a total
of 300,000 options with an exercise price of $11.41 per unit were granted and are exercisable at any time
up to June 27, 2012. The options vested immediately upon issuance and the Trust recorded compensation
expense of $47,970 based on the estimated fair value of each option granted on the grant date. The fair value
of the options was determined using the Black-Scholes option pricing model with the following assumptions:
expected distribution yield is 8%, expected volatility is 10%, risk free rate is 4.5%, and expected option life
of five years.
(d) Weighted average units:
The weighted average number of REIT Units outstanding at December 31 was as follows:
2009 2008
Basic units 12,532,948 11,660,327
Effect of dilutive REIT Units:

Unit option plan (note 10(c)) 300,000 300,000
12,832,948 11,960,327
11. Related party transactions and balances:

Except as disclosed elsewhere in these consolidated financial statements, related party transactions include the
following transactions and balances. The Advisor and the Trust are related by virtue of common management.
(a) Timbercreek REIT has entered into an Asset Management Agreement with the Advisor. The Advisor is
controlled by Battlestone Capital Corp., a company owned principally by a trustee, an officer and other
non-related individuals to Timbercreek REIT.
In accordance with the Head Lease Agreements (note 2), $24,569,886 (2008 - $22,120,479) was paid to
Timbercreek REIT by the Advisor during the year ended December 31, 2009.
Pursuant to the Asset Management Agreement (note 2), the Advisor received an incentive fee totalling
$538,525 during 2009 (2008 - $665,413).
In accordance with the Asset Management Agreement, the Advisor received a Redemption Entitlement of
$58,077 (2008 - $24,142) in respect of redemptions of REIT Units during 2009.
As at December 31, 2009, $2,209,067 (2008 - $18,493 payable to) remains receivable by the Trust from the
Advisor.
(b) The Trust utilizes the services of mortgage brokers to ensure competitive borrowing rates. During 2008,
brokerage fees of $105,264 were paid to Canadian Mortgage and Strategies Inc. (“CMSI”). One of the
trustees of Timbercreek REIT was a principal of CMSI during 2008 and is currently an officer of the Advisor.
(c) The Trust had a second-ranking mortgage payable of $3,700,000 to Timbercreek Mortgage Investment
Corporation, a related party by virtue of common management. The mortgage bore interest at 8.5% and
was repaid in June 2009. During the year ended December 31, 2009, $99,304 (2008 - nil) was paid in interest
and a lender fee of $18,500 (2008 - nil).
These transactions are in the normal course of operations and are measured at the exchange amount,
which is the amount of consideration established and agreed to by the related parties.
12. Income taxes:

The Trust is taxed as a Mutual Fund Trust for income tax purposes and is not subject to income taxes to the
extent that the taxable income of the Trust is distributed to its unitholders during the year. Pursuant to the
Declaration of Trust, the Trustees distributed during the year and intend to distribute in the future all taxable
income directly earned by the Trust to unitholders of the Trust and to deduct such distributions for income
tax purposes. Accordingly, the Trust is considered tax exempt for financial statement purposes. Therefore, no
provision for current or future income taxes is required for the Trust and its flow-through subsidiaries.
The Trust is not subject to the specified investment flow through tax on certain publicly listed trusts as its
units are not listed or traded on a stock exchange or other public market. Accordingly, the Trust has not
recorded a provision for income taxes or future income tax assets or liabilities for the Trust or its flow-through
subsidiaries.
The tax effects of the temporary differences of the Trust’s corporate subsidiaries that give rise to significant
portions of future tax assets and future tax liabilities are presented below:
2009 2008
Future tax asset:

Losses available for carryforward $ 1,332,906 $ 1,218,000
Future tax liability:

Properties (2,741,700) (3,561,861)
Net future tax liability $ (1,408,794) $ (2,343,861)
The losses available for carryforward substantially all expire in 2029. No valuation allowance has been recorded
against the future tax asset resulting from the losses as the Trust has determined that it is more likely than not
that the losses will be realized through reversing taxable temporary differences in the future.
Realization of the future tax assets is dependent upon future earnings, the timing and amount of which is
uncertain.
As of December 31, 2009, the Trust’s corporate subsidiaries had net operating losses carried forward for income
tax purposes of approximately $5,317,000 which are available to offset future taxable income, which if not
utilized, will expire as follows:
2026 $ 309,000
2028 3,439,000
2029 1,569,000
$ 5,317,000
13. Capital risk management:

The Trust manages its capital structure in order to support ongoing operations while focusing on its primary
objectives of providing unitholders with stable quarterly cash distributions and preserving unitholder capital.
The Trust defines its capital structure to include: mortgages payable, the operating and acquisition loan,
promissory notes and REIT Units. There were no changes to the Trust’s approach to capital management during
the year ended December 31, 2009.
Timbercreek REIT reviews its capital structure on an ongoing basis and adjusts its capital structure in response
to property acquisition or disposition opportunities, the availability of capital, and anticipated changes in
general economic conditions.
The Trust’s capital management strategy is driven in large part by the investment restrictions and operating
policies set out in its Declaration of Trust. The Declaration of Trust requires that:
(a) The Trust will not incur or assume any long term indebtedness (as defined in the Declaration of Trust), which
after incurring or assuming the indebtedness would make the total indebtedness of the Trust exceed 75%
of the gross book value;
(b) The Trust will distribute to unitholders an amount equal or greater than the taxable income for the taxation
year.
The Trust has complied with all investment restrictions and operating policies as set out in its Declaration of Trust.
In addition, the Trust is required by its lender on the acquisition and operating loan to meet certain financial
covenants as defined in its credit agreement including:
(i) Pro forma debt service coverage ratio at the last day of each fiscal quarter of at least 1.20 to 1 for the
portfolio properties, as defined in the credit agreement;
(ii) Pro forma debt service coverage ratio at the last day of each fiscal quarter of at least 1.20 to 1 for the
mortgaged properties, as defined in the credit agreement; and
(iii) Debt service coverage ratio at the last day of each fiscal quarter of at least 1.20 to 1.
For the year ended December 31, 2009, the Trust has met all externally imposed financial requirements.
14. Financial instruments:

In the normal course of business, Timbercreek REIT is exposed to various financial risks, including changes in
interest rates and government-regulated rent controls. The following describes these financial risks and how
they are managed by Timbercreek REIT.
(a) Interest rate risk:
Timbercreek REIT is exposed to interest rate risk in its bank indebtedness, operating and acquisition loan,
loans payable and one variable rate mortgage payable totalling approximately $59,700,000 at December
31, 2009. Interest rate risk is the risk that the fair value or future cash flows of financial assets or financial
liabilities will fluctuate because of changes in market interest rates. Based on Timbercreek REIT’s positions
at December 31 2009, if interest rates at that date had been 50 basis points lower, with all other variables
held constant, the loss for the year would decrease by $298,500, arising mainly as a result of lower interest
expense on the acquisition and operating loan and loans payable. If interest rates had been 50 basis points
higher with other variables held constant, the loss for the year would increase by $298,500, arising mainly
as a result of higher interest expense on the acquisition and operating loan and loans payable.
14. Financial instruments (continued):

Management continually reviews its operating and acquisition loan and upcoming mortgage renewals for
opportunities to convert existing debt into more favourable terms and rates. Management also staggers the
term of mortgage maturities to minimize the Trust’s exposure to interest rate fluctuations in any one particular
year. Generally, Timbercreek REIT fixes the term of long-term debt within a range from 5 to 10 years.
(b) Credit risk:
Credit risk is the risk that a financial loss to the Trust arising from the possibility that the Advisor may be
unable to honour its lease commitments under a Head Lease Agreement (note 2) as a result of a negative
change in market conditions. As the ability to make head lease payments is directly impacted by the
collection of accounts receivable from each residential tenant, the Advisor routinely obtains credit history
reports on prospective tenants before entering into a tenancy agreement. In addition, the Advisor obtains
security deposits from tenants in geographic regions where permitted by law.
(c) Liquidity risk:
Liquidity risk is the risk that the Trust will encounter difficulty in meeting its financial obligations as they
become due. This risk arises from the possibility of not having sufficient debt and equity capital available
to the Trust to fund property acquisition opportunities, refinance maturing mortgage loans, renew the
operating and acquisition loan and loans payable or meet other payment obligations.
The Trust’s principal liquidity needs arise from working capital requirements, debt servicing and repayment
obligations, redemptions of REIT Units by unitholders, planned and unforeseen capital expenditures,
distributions to unitholders and cash requirements required to close on property acquisitions.
The above liquidity needs are funded from cash flows generated from property operations, loans payable
and the operating and acquisition loan. Debt repayment obligations can be funded through refinancing
the Trust’s maturing mortgages, obtaining a second mortgage on properties where possible or financing
of unencumbered properties. The quality of the underlying assets being financed and general economic
conditions at that time may have an impact on the Trust’s ability to obtain funding. If the Trust is unable
to secure funding from a lender, other sources of funding include issuing new REIT Units, drawing on the
operating and acquisition loan or extracting equity from other properties through dispositions.
There is also a risk that the financial institution which holds the operating and acquisition loan may not
refinance the loan at terms and conditions that are favourable to the Trust or at all. Under the terms of the
loan agreement, the Trust has available the lesser of 1) $45,000,000; or 2) the calculated residual equity
(the “Borrowing Base”) of the assets secured by the loan. As at December 31, 2009, the Borrowing Base was
approximately $53,000,000; as such, the Trust was limited to $45,000,000. It is the Trust’s intention to seek
renewal of the operating and acquisition loan before it matures in November 2010.
There is a risk that $3,700,000 of loans payable may be demanded for repayment in 2010 and that the Trust
may not refinance these amounts at terms and conditions favourable to the Trust or at all. Subsequent to
year end, the Trust repaid $700,000 of the loans due on demand.
(d) Fair values of financial instruments:
For purposes of disclosure, the Trust calculates the fair values of certain assets and liabilities. The fair values of
the Trust’s financial assets and liabilities, which represent net working capital and the Trust’s operating and
acquisition loan, approximate their recorded values at December 31, 2009 due to their short-term nature.
The fair value of the Trust’s mortgages payable approximates carrying value. The fair value of mortgages
payable has been estimated based on current market rates for mortgages with similar terms and conditions.
15. Amortization:
Amortization expense is made up of the following:
2009 2008
Properties $ 17,568,416 $ 17,145,585

In-place tenant leases 4,040,350 5,329,413
$ 21,608,766 $ 22,474,998
16. Commitments and contingencies:

(a) The Trust has entered into various Agency Agreements with qualified dealers or brokers (the “Agents”) to assist
with the sale of REIT Units. The Agents are entitled to a service fee for placing orders for the purchase of REIT
Units equal to 0.40% per annum on the net proceeds raised in the respective offering. The service fee is paid
to the Agents on a quarterly basis as a deduction in the distributions received by the respective unitholders.
During the year ended December 31, 2009, $228,954 (2008 - $190,308) was paid to these Agents.
(b) The Trust continues to guarantee certain debt assumed by purchasers in connection with past dispositions
of properties. These guarantees will remain until the debt is modified, refinanced or extinguished. The Trust
has recourse under these guarantees in the event of default by the purchaser, in which case the Trust
would have a claim against the underlying property.
(c) The Trust has entered into an agreement relating to a property acquired during the year ended December
31, 2007, whereby the vendor guaranteed a minimum net operating income (“NOI”) in each successive
twelve-month period for a total of five years. The agreement requires the Trust to pay a maximum amount
of $3,728,488 based on a formula stipulated in the agreement if the minimum NOI is achieved in a given
twelve-month period. Should the NOI not be achieved, the maximum amount will be reduced over the
same period. Based on the first successive 12 month period, the maximum amount has been reduced to
$2,087,262.
(d) In the ordinary course of business activities, the Trust may be contingently liable for litigation and claims
from, among others, tenants, partners and former employees. Where required, management records
adequate provisions in the accounts. Although it is not possible to accurately estimate the extent of
potential costs and losses, if any, management believes that the ultimate resolution of such contingencies
would not have a material adverse effect on the financial position of the Trust.
Interim Consolidated Financial Statements
TIMBERCREEK REAL ESTATE

INVESTMENT TRUST
Three months ended June 30, 2010 and 2009
(unaudited)
Interim Consolidated Balance Sheets

June 30, 2010 with comparative figures for December 31, 2009
2010 2009
(Unaudited)
Assets
Properties (note 5) $ 399,626,969 $ 378,836,132
Other assets and receivables 500,971 1,013,518
Goodwill 6,226,059 6,226,059
Due from Timbercreek Asset Management Inc. (note 10) 874,758 2,209,067
$ 407,228,757 $ 388,284,776
Liabilities and Unitholders’ Equity

Liabilities:
Mortgages payable (note 6) $ 283,833,108 $ 267,142,494
Bank indebtedness 277,763 1,224,341
Operating and acquisition loan (note 7) 43,482,464 32,756,950
Loans payable (note 8) 9,000,000 3,700,000
Accounts payable and other liabilities 1,648,227 2,144,607
Distribution payable 3,049,405 3,083,778
Future tax liability 1,042,101 1,408,794
342,333,068 311,460,964
Unitholders’ equity 64,895,689 76,823,812
Commitments and contingencies (notes 14)
Subsequent events (note 15)
$ 407,228,757 $ 388,284,776
See accompanying notes to interim consolidated financial statements.

Interim Consolidated Statement of Operations

Six months ended June 30, 2010 and 2009
(unaudited)
Three-month periods ended Six-month periods ended

June 30, June 30,
2010 2009 2010 2009
Revenue
Net rental income (note 4) $ 6,679,831 $ 6,474,321 $ 12,507,516 $ 11,659,813
Other 9,128 321,141 37,262 460,382
6,688,959 6,795,462 12,544,778 12,120,195
Expenses:
Incentive fee 4,846 – 49,702 –
Service fee (note 14 (a)) 62,141 54,769 123,895 101,202
General, administrative and trust 57,992 141,304 160,410 191,382
124,979 196,073 334,007 292,584
Income before financing costs, capital tax, 6,563,980 6,599,389 12,210,771 11,827,611
amortization, income taxes
and discontinued operations
Financing costs:
Mortgage interest 3,686,507 3,728,748 7,333,149 7,624,249
Loan interest 497,597 259,737 905,716 605,333
4,184,104 3,988,485 8,238,865 8,229,582
Income from continuing operations before 2,379,876 2,610,904 3,971,906 3,598,029
capital tax, amortization and income taxes
Capital tax 44,185 75,357 44,185 75,357
Amortization 4,442,209 5,611,807 8,856,625 11,220,301
4,486,394 5,687,164 8,900,810 11,295,658
Loss from continuing operations
before income taxes (2,106,518) (3,076,260) (4,928,904) (7,697,629)
Future tax expense (recovery) (156,975) (263,413) (366,693) (663,692)
Loss from continuing operations (1,949,543) (2,812,847) (4,562,211) (7,033,937)
Loss for the period $ (1,949,543) $ (2,812,847) $ (4,562,211) $ (7,033,937)

Basic and fully diluted income (loss)
per unit (note 9(d)):
From continuing operations $ (0.15) $ (0.22) $ (0.34) $ (0.57)

Interim Consolidated Statement of Unitholders’ Equity

(unaudited)

Unitholders’ equity, $ 147,239,377 $ (41,233,713) $ (29,229,822) $ 47,970 $ 76,823,812

beginning of year
Loss for the period – (4,562,211) – – (4,562,211)
Distributions – – (5,980,035) – (5,980,035)
Issuance of REIT Units, – – – – –

net of costs

end of period

beginning of period $ 131,167,649 $ (28,109,069) $ (18,238,236) $ 47,970 $ 84,868,314
Loss for the period – (7,033,937) – – (7,033,937)
Distributions – – (5,133,465) – (5,133,465)
Issuance of REIT Units, 19,538,960 – – – 19,538,960

net of costs

end of period

Interim Consolidated Statement of Cash Flows

(unaudited)

June 30, June 30,
2010 2009 2010 2009
Cash provided by (used in):
Operating activities:
Loss for the period $ (1,949,543) $ (2,812,847) $ (4,562,211) $ (7,033,937)
Items not affecting cash:
Amortization of properties 4,442,209 5,611,807 8,856,625 11,220,301
Amortization of financing costs 235,519 189,225 474,579 424,319
Future income taxes (156,975) (263,413) (366,693) (663,692)
Due from/to Timbercreek
Asset Management Inc. 2,111,254 (2,401,935) 1,334,309 (2,569,395)
Change in non-cash operating items 669,342 259,419 (83,833) (442,485)
5,351,806 582,256 5,652,776 935,111
Financing activities:
Mortgage financing 18,822,939 662,280 21,806,496 16,206,299
Mortgage principal repayments (1,290,662) (1,251,870) (2,571,686) (2,484,965)
Mortgages discharged – (4,362,280) (2,464,213) (13,944,399)
Financing costs (517,361) (25,371) (554,560) (269,519)
Operation and acquisition loan 4,159,658 (10,373,498) 10,725,514 (5,221,849)
Loans payable 6,000,000 – 5,300,000 (2,800,000)
Proceeds from issuance of REIT Units,
net of issue costs – 19,417,835 – 19,538,960
Redemption of REIT Units (148,120) (1,256,192) (1,385,877) (4,547,752)
Distributions to unitholders (2,988,844) (2,455,594) (6,014,408) (5,599,829)
24,037,610 355,310 24,841,266 876,946
Investing activities:
Acquisition of properties (27,087,278) – (27,087,278) –
Deposit paid on future acquisition – – 100,000 –
Capital improvements to properties (1,586,189) (958,429) (2,560,186) (1,515,754)
(28,673,467) (958,429) (29,547,464) (1,515,754)
Increase (decrease) in cash 715,949 (20,863) 946,578 296,303
Cash and cash equivalents (bank indebtedness), (993,712) (264,737) (1,224,341) (581,903)
beginning of period
Cash and cash equivalents (bank indebtedness), $ (277,763) $ (285,600) $ (277,763) $ (285,500)
end of period

Notes to Interim Consolidated Financial Statements (continued)
(unaudited)
Timbercreek Real Estate Investment Trust (“Timbercreek REIT” or the “Trust”) is an unincorporated open-ended real
estate investment trust which was formed pursuant to a Declaration of Trust dated November 30, 2004, as amended
and restated, under the laws of the Province of Ontario. Timbercreek REIT began operations on December 30,
2004 and was formed for the purpose of acquiring, investing in and capitalizing on under-performing multi-family
residential real estate opportunities across North America.
1. Significant accounting policies:

(a) Basis of presentation:
These interim consolidated financial statements have been prepared in accordance with Canadian
generally accepted accounting principles (“Canadian GAAP”) and include the accounts of Timbercreek
REIT and its subsidiaries, including its taxable subsidiary, Timbercreek Investments Inc. (the “Company”), as
well as the proportionate share of the accounts of its co-ownership interests. All intercompany transactions
and balances have been eliminated upon consolidation. All amounts are stated in Canadian dollars.
Timbercreek REIT’s results for the six months ended June 30, 2010 are not necessarily indicative of the
results expected for a full year of operations due to the seasonal variations in utility costs. Historically,
Timbercreek REIT experiences higher utility expenses in the first and fourth quarters of each year due to
the winter months.
(b) Future accounting changes:
(i) Business combinations, consolidated financial statements and non-controlling interests:

Business Combinations, Section 1582
This section replaces the former Section 1581, Business Combinations. The new section expands the
definition of a business subject to an acquisition and establishes significant new guidelines on the
measurement of consideration given, and the recognition and measurement of assets acquired and
liabilities assumed in a business combination. The new section requires that all business acquisitions
be measured at the full fair value of the acquired entity at the acquisition date. Subsequent changes in
the fair value of contingent consideration classified as a liability will be recognized in earnings for each
period until settled, and not as an adjustment to the purchase price.
(unaudited)

Virtually all acquisition costs of a business combination are no longer considered part of the acquisition
accounting and such costs will be expensed as incurred, unless they constitute the costs associated with
issuing debt or equity securities.
Consolidated Financial Statements, Section 1601, and Non-controlling Interests, Section 1602
These two sections replace Section 1600, Consolidated Financial Statements. The new sections require that,
for each business combination, the acquirer measure any non-controlling interest in the acquiree either at
fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets.
The new sections also require the non-controlling interest to be presented as a separate component of
unitholder’s equity. Under Section 1602, consolidated net income and other comprehensive income are
allocated to the controlling and non-controlling interest based on relative ownership interests.
The new standards are applicable to the Trust prospectively to business combinations for which the
acquisition date is on or after January 1, 2011. Early adoption is permitted, if all three sections are applied
at the same time. The Trust has not adopted these sections at this time.
(c) Financial Instruments:
The Trust classifies all financial instruments as one of: (a) held-to-maturity; (b) loans and receivables; (c) held-
for-trading; (d) available-for-sale; or (e) other liabilities. Financial assets and liabilities held for trading are
measured at fair value with gains and losses recognized in loss for the year. Financial instruments classified
as held to maturity, loans and receivables and other liabilities are measured at amortized cost. AvailabIe-
for-sale financial instruments are measured at fair value, with unrealized gains and losses recognized in
comprehensive income.
The Trust has designated its bank indebtedness as held-for-trading; other assets and receivables, and due
from Timbercreek Asset Management Inc., as loans and receivables; mortgages payable, operating and
acquisition loan, loans payable, accounts payable and other liabilities and distribution payable as other
liabilities. The Trust has neither available-for-sale nor held-to-maturity instruments.
Transaction costs that are directly attributable to the acquisition or issuance of financial assets or liabilities
are accounted for as part of the respective asset or liability’s carrying value at inception.
(unaudited)

(d) Properties:
Properties are carried at cost less accumulated amortization. Cost includes all amounts relating to the
acquisition and capital improvements.
An impairment loss is required to be recognized in the year in which the carrying amount of the property
exceeds the sum of the undiscounted cash flows expected from its use plus its residual value. An impairment
loss is measured as the amount by which the carrying amount of the asset exceeds its fair value.
In accordance with Emerging Issues Committee 140, Accounting for Operating Leases Acquired in Either an
Asset Acquisition or a Business Combination, upon the acquisition of a property, a portion of the purchase
price is allocated to intangible amounts, including the fair value of in-place tenant leases, above- and
below-market leases and tenant relationships.
In-place tenant leases represent the avoided costs of originating the acquired leases plus the value of lost
net tenant revenue over the estimated lease-up period of the property.
(e) Amortization of properties:
Amortization is provided for over the estimated useful lives of the assets on a declining-balance basis
using the following annual rates:
Buildings 5%
Furniture, fixtures and equipment 20%
Parking lots 8%
Building improvements 20%

In-place tenant lease costs are amortized over the expected term of tenant occupancy, which management
estimates to be two years.
(f ) Revenue recognition:
The head lease agreements (the “Head Lease Agreements”) between the Trust and Timbercreek Asset
Management Inc. (the “Advisor”) have been accounted for as operating leases and the related revenue is
recognized on a monthly basis as services are provided in accordance with the terms of the agreements
(note 2).
(unaudited)

(g) Financing costs:
Financing costs are recorded as a reduction of the applicable debt instrument and amortized to interest
expense using the effective interest rate over the anticipated life of the related debt (note 1(c)).
(h) Cash and cash equivalents:
The Trust considers highly liquid investments with an original maturity of three months or less to be cash
equivalents.
(i) Goodwill:
Goodwill represents the cost of acquired net assets in excess of their fair values. Goodwill is not amortized,
but tested annually for impairment, or more frequently if events or changes in circumstances indicate the
asset might be impaired, by comparing the carrying value of a reporting unit with its fair value.
(j) Income taxes:
Timbercreek REIT’s corporate subsidiaries are subject to income taxes on their taxable income. Income
taxes for these subsidiaries are accounted for using the asset and liability method. Under the asset and
liability method, future income tax assets and liabilities are determined based on the temporary differences
between the carrying amount and tax bases of the subsidiaries’ assets and liabilities. Income tax assets are
also recognized for the benefits from tax losses and deductions that cannot be identified with particular
assets or liabilities. A valuation allowance is recorded against a future income tax asset when it is determined
that it is more likely than not that the asset will not be realized in the future. Future income tax assets and
liabilities are measured using the tax laws and rates that are anticipated to apply in the year of reversal.
(k) Unit-based compensation:
The Trust accounts for options granted under its unit-based compensation plan under the fair value
method using the Black-Scholes option pricing model. The fair value of unit options is charged to income
on a straight-line basis over the vesting period of the options granted.
(unaudited)

(l) Use of estimates:
The preparation of financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, including the valuation of goodwill, the estimated useful
life of properties and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the year.
These assumptions are limited by the availability of reliable comparable data, economic uncertainty and
the uncertainty of predictions concerning future events. Accordingly, by their nature, estimates of fair value
are subjective and do not necessarily result in precise determinations. Should the underlying assumptions
change, the estimate fair value could change by a material amount.
(m) Recent Canadian accounting pronouncements issued and not yet adopted:
International Financial Reporting Standards (“IFRS”):
The Accounting Standards Board (“AcSB”) of the CICA confirmed that Canadian GAAP for publicly
accountable enterprises wiII be converged with IFRS effective in the calendar year 2011. IFRS will replace
current Canadian GAAP for these enterprises. The conversion to IFRS will be required for the Trust for
interim and annual financial statements beginning on January 1, 2011, and if adopted, the Trust will also
be required to provide comparative IFRS information for the previous fiscal year. The Trust is currently
executing its convergence plan in order to transition its financial statement reporting, presentation
and disclosure to meet the convergence deadline. This will be an ongoing process as the International
Accounting Standards Board and the AcSB issue new standards and recommendations. The Trust’s
consolidated financial performance and financial position as disclosed in these financial statements may
be significantly different when presented in accordance with IFRS.
2. Governing agreements:
Pursuant to the terms of the asset management agreement (the “Asset Management Agreement”) between the
Trust and the Advisor, the Advisor provides advice and assistance in sourcing, acquiring, managing and disposing
of properties as well as general management and operational services relating to the Trust. Each property
acquired by the Trust is subject to the provisions of a separate agreement between the Trust and the Advisor.
For each property acquired, the Trust enters into a separate long-term Head Lease Agreement, whereby the
property is leased to the Advisor as head tenant under the Head Lease Agreement. The Advisor, as head tenant,
is entitled to all rents from underlying tenant leases, is responsible for all costs of operating and maintaining
the property and is entitled to retain a share of the annual gross rents of up to 1% of the acquisition cost of the
property annually, with the remaining net rental income due to the Trust.
Pursuant to the Asset Management Agreement, in any year where the Trust achieves a hurdle rate cash yield in
excess of 6.5% (the “Hurdle Rate”), the Advisor is entitled to an incentive fee equal to one-quarter of the cash
yield in excess of the Hurdle Rate.
(unaudited)
3. Acquisitions:
The following table summarizes the consideration for the net assets acquired during the period, at fair value:
June 30, June 30,

2010 2009
Cash paid $ 26,948,630 $ –

Total purchase price $ 26,948,630 $ –
Allocation of book value to properties $ 27,087,331 $ –
Allocation of book value to other
assets and liabilities, net (138,701) –
$ 26,948,630 $ –
Multi-family units acquired 47 –
Interest in multi-family units acquired 766 –
The property acquisitions have been recorded by the purchase method, with results of operations included in
these interim consolidated financial statements from the dates of acquisition.
During the period ended June 30, 2010, the Trust completed the following acquisitions:
(i) A 47-unit property located in Halifax, Nova Scotia for total consideration of $3,914,247. The transaction
closed on May 11, 2010.
(ii) A 25% co-ownership interest in eight properties including 766 units located in Ottawa, Ontario, from a
related party by virtue of common management and another non-related entity for total consideration of
$23,034,383. The transaction closed on June 14, 2010.
(unaudited)
4. Net rental income:

The following summarizes the rental income less direct operating costs from continuing operations associated
with the properties subject to the Head Lease Agreements (note 2) and the Trust’s co-ownership interests.
June 30, June 30,

2010 2009
Revenue $ 25,930,759 $ 25,166,061

Expenses:
Property taxes 3,678,603 3,432,915
Utilities 3,860,582 4,052,058
Repairs and maintenance 1,632,832 1,529,539
Other property operating 2,224,678 2,475,697
11,396,695 11,490,209
Net operating income 14,534,064 13,675,852
Less amount retained by the Advisor (note 2) 2,026,548 2,016,039
Net rental income $ 12,507,516 $ 11,659,813
5. Properties:

June 30, 2010 Cost amortization value
Land $ 87,230,779 $ – $ 87,230,779
Buildings 325,090,253 45,306,665 279,783,587
Parking lots 23,495,509 4,421,446 19,074,063
$ 469,630,306 $ 70,003,337 $ 399,626,969
(unaudited)
5. Properties (continued):

December 31, 2009 Cost amortization value
Land $ 81,831,779 $ – $ 81,831,779

Buildings 305,762,676 38,619,729 267,142,947
Parking lots 21,552,959 3,691,871 17,861,088
$ 439,982,917 $ 61,146,785 $ 378,836,132
6. Mortgages payable:
Mortgages are secured by properties to which they relate and bear interest at rates ranging between 2.40%
and 7.24% (June 30, 2009 – 2.39% and 7.24%), with a weighted average rate of 4.97% at June 30, 2010 (June 30,
2009 - 5.04%), and mature between 2010 and 2021.
The minimum future principal repayments required to meet mortgage obligations at June 30, 2010 are as
follows:
Regular Principal
principal due on
repayment maturity Total
Remainder 2010 $ 2,812,713 $ 23,941,815 $ 26,754,528

2011 5,846,248 – 5,846,248
2012 5,736,294 47,344,083 53,080,377
2013 5,136,270 14,945,323 20,081,593
2014 4,697,741 29,980,834 34,678,575
Thereafter 12,681,750 134,030,607 146,712,357
$ 36,911,016 $ 250,242,662 287,153,678
Less unamortized financing costs 3,320,570
$ 283,833,108
(unaudited)
7. Operating and acquisition loan:

The Trust has available an operating and acquisition loan of $45,000,000. Of the total loan amount, $9,000,000
is due on demand and $36,000,000 is due in November 2010. The loan is secured by a first or second charge on
specific assets. At June 30, 2010, $43,482,464 (December 31, 2009 - $32,756,950) was outstanding on the loan.
The loan carries an interest rate of prime plus 2.0%.
8. Loans payable:
Description Maturity date Interest rate 2010 2009
Promissory note On demand Prime rate $ 1,000,000 $ 1,700,000

Promissory note September 30, 2010 4% 1,000,000 1,000,000
Promissory note On demand Prime rate 1,000,000 1,000,000
Promissory note September 30, 2010 8% 6,000,000 -
$ 9,000,000 $ 3,700,000
During the three months ended June 30, 2010, the Trust secured a promissory note of $6,000,000. The proceeds
were used to acquire properties during the period (note 3).
(unaudited)
9. REIT Units:
Timbercreek REIT is authorized to issue an unlimited number of Class A and Class B units (the “REIT Units”)
through continuous offerings. Class A REIT Units are issued to new subscribers, whereas Class B REIT Units were
originally issued to reinvestment subscribers on formation of the Trust. REIT Units rank equally and represent an
undivided beneficial interest in Timbercreek REIT and in distributions made by the Trust and entitle the holder
to one vote per unit at all meetings of unitholders.
June 30, 2010 June 30, 2009

Units Amount Units Amount
Balance at net issue price,
beginning of year 13,069,625 $ 147,239,377 11,698,153 $ 131,167,649
Issuance of Class A REIT Units – – 1,639,930 20,593,093
Issue costs – – – (1,054,133)
– – 1,639,930 19,538,960
Redemption of Class A REIT Units (59,787) (735,080) (361,164) (4,524,285)
Redemption of Class B REIT Units (54,291) (650,797) (2,581) (23,467)
(114,078) (1,385,877) (363,745) (4,547,752)
Balance, end of period 12,955,547 $ 145,853,500 12,974,338 $ 146,158,857
(a) Redemptions:
Subject to suspension of redemptions by the Trustees in certain circumstances, a unitholder is entitled

to require payment of the redemption price of all or any of his REIT Units by giving written notice to the
Registrar and Transfer Agent.
Proceeds payable upon redemption are subject to restrictions as outlined in the Declaration of Trust
and will be calculated as the Pricing Net Asset Value of the REIT Units as of the last business day of the
preceding calendar quarter end, less applicable redemption charges as outlined in the respective Offering
Memorandum.
Under the terms of the Declaration of Trust, the Advisor is entitled to a Redemption Entitlement upon
the redemption of REIT Units equal to one-quarter of the increase in the value of the REIT Units over the
unitholder’s initial cost base. The Redemption Entitlement is deducted from the unitholder’s proceeds
payable upon redemption.
(unaudited)
9. REIT Units (continued):

(b) Distributions:
Timbercreek REIT makes distributions to unitholders on a quarterly basis on or about the 15th day of the
following month.
(c) Unit option plan:
The Trust has adopted a unit option plan for the benefit of certain employees and directors of the Advisor
and Trustees of the Trust. A total of 10% of the issued and outstanding Class A Units can be authorized for
the plan. During 2007, a total of 280,000 options with an exercise price of $11.41 per unit were granted
and are exercisable at any time up to June 27, 2012. The options vested immediately upon issuance and
the Trust recorded compensation expense of $47,970 based on the estimated fair value of each option
granted on the grant date. The fair value of the options was determined using the Black-Scholes option
pricing model with the following assumptions: expected distribution yield is 8%, expected volatility is 10%,
risk free rate is 4.5%, and expected option life of five years.
(d) Weighted average units:
The weighted average number of REIT Units outstanding at June 30 was as follows:

June 30, June 30,
2010 2009 2010 2009
Basic units 12,956,070 11,667,937 12,962,951 11,667,937

Effective of dilutive REIT Units: 280,000 300,000 280,000 300,000
Unit option plan (note 9(c))
13,236,070 11,967,937 13,242,951 12,256,223
(unaudited)
10. Related party transactions and balances:

Except as disclosed elsewhere in these consolidated financial statements, related party transactions include the
following transactions and balances. The Advisor and the Trust are related by virtue of common management.
(a) Timbercreek REIT has entered into an Asset Management Agreement with the Advisor. The Advisor is
controlled by Battlestone Capital Corp., a company owned principally by a trustee, an officer and other
non-related individuals to Timbercreek REIT.
In accordance with the Head Lease Agreements (note 2), $12,507,516 (June 30, 2009 - $11,659,813) was
paid to Timbercreek REIT by the Advisor during the six months ended June 30, 2010. In addition, $6,044
was paid to the Advisor by the Trust for management fees relating to its co-ownership interest in eight
properties (June 30, 2009 – nil).
In accordance with the Asset Management Agreement, the Advisor received a Redemption Entitlement of
$49,702 (June 30, 2009 - nil) in respect of redemptions of REIT Units during the six months ended June 30,
2010.
As at June 30, 2010, $874,758 (December 31, 2009 - $2,209,067 receivable) remains receivable by the Trust
from the Advisor.
These transactions are in the normal course of operations and are measured at the exchange amount,
which is the amount of consideration established and agreed to by the related parties.
11. Capital risk management:

The Trust manages its capital structure in order to support ongoing operations while focusing on its primary
objectives of providing unitholders with stable quarterly cash distributions and preserving unitholder capital.
The Trust defines its capital structure to include: mortgages payable, the operating and acquisition loan,
promissory notes and REIT Units. There were no changes to the Trust’s approach to capital management during
the period ended June 30, 2010.
Timbercreek REIT reviews its capital structure on an ongoing basis and adjusts its capital structure in response
to property acquisition or disposition opportunities, the availability of capital, and anticipated changes in
general economic conditions.
The Trust’s capital management strategy is driven in large part by the investment restrictions and operating
policies set out in its Declaration of Trust. The Declaration of Trust requires that:
(a) The Trust will not incur or assume any long term indebtedness (as defined in the Declaration of Trust), which
after incurring or assuming the indebtedness would make the total indebtedness of the Trust exceed 75%
of the gross book value;
(b) The Trust will distribute to unitholders an amount equal or greater than the taxable income for the taxation
year.
The Trust has complied with all investment restrictions and operating policies as set out in its Declaration
of Trust.
(unaudited)
11. Capital risk management (continued):

In addition, the Trust is required by its lender on the acquisition and operating loan to meet certain financial
covenants as defined in its credit agreement including:
(i) Pro forma debt service coverage ratio at the last day of each fiscal quarter of at least 1.20 to 1 for the
portfolio properties, as defined in the credit agreement;
(ii) Pro forma debt service coverage ratio at the last day of each fiscal quarter of at least 1.20 to 1 for the
mortgaged properties, as defined in the credit agreement; and
(iii) Debt service coverage ratio at the last day of each fiscal quarter of at least 1.20 to 1.
For the period ended June 30, 2010, the Trust has met all externally imposed financial requirements.
12. Financial instruments:

In the normal course of business, Timbercreek REIT is exposed to various financial risks, including changes in
interest rates and government-regulated rent controls. The following describes these financial risks and how
they are managed by Timbercreek REIT.
(a) Interest rate risk:
Timbercreek REIT is exposed to interest rate risk in its bank indebtedness, operating and acquisition loan,
loans payable and one variable rate mortgage payable totalling approximately $23,000,000 at June 30,
2010. Interest rate risk is the risk that the fair value or future cash flows of financial assets or financial
liabilities will fluctuate because of changes in market interest rates. Based on Timbercreek REIT’s positions
at June 30, 2010, if interest rates at that date had been 50 basis points lower, with all other variables held
constant, the loss for the period ended would decrease by $215,914 arising mainly as a result of lower
interest expense on the acquisition and operating loan and loans payable. If interest rates had been 50
basis points higher with other variables held constant, the loss for the period ended would increase by
$215,914, arising mainly as a result of higher interest expense on the acquisition and operating loan and
loans payable.
(unaudited)

Management continually reviews its operating and acquisition loan and upcoming mortgage renewals for
opportunities to convert existing debt into more favourable terms and rates. Management also staggers
the term of mortgage maturities to minimize the Trust’s exposure to interest rate fluctuations in any one
particular year. Generally, Timbercreek REIT fixes the term of long-term debt within a range from 5 to 10
years.
(b) Credit risk:
Credit risk is the risk that a financial loss to the Trust arising from the possibility that the Advisor may be
unable to honour its lease commitments under a Head Lease Agreement (note 2) as a result of a negative
change in market conditions. As the ability to make head lease payments is directly impacted by the
collection of accounts receivable from each residential tenant, the Advisor routinely obtains credit history
reports on prospective tenants before entering into a tenancy agreement. In addition, the Advisor obtains
security deposits from tenants in geographic regions where permitted by law.
(c) Liquidity risk:
Liquidity risk is the risk that the Trust will encounter difficulty in meeting its financial obligations as they
become due. This risk arises from the possibility of not having sufficient debt and equity capital available
to the Trust to fund property acquisition opportunities, refinance maturing mortgage loans, renew the
operating and acquisition loan and loans payable or meet other payment obligations.
The Trust’s principal liquidity needs arise from working capital requirements, debt servicing and repayment
obligations, redemptions of REIT Units by unitholders, planned and unforeseen capital expenditures,
distributions to unitholders and cash required to close on property acquisitions.
The above liquidity needs are funded from cash flows generated from property operations, loans payable,
operating and acquisition loan and the issuance of REIT Units. Debt repayment obligations can be funded
through refinancing the Trust’s maturing mortgages, obtaining a second mortgage on properties where
possible or financing of unencumbered properties. The quality of the underlying assets being financed and
general economic conditions at that time may have an impact on the Trust’s ability to obtain funding. If the
Trust is unable to secure funding from a lender, other sources of funding include issuing REIT Units, drawing
on the operating and acquisition loan or extracting equity from other properties through dispositions.
(unaudited)

There is also a risk that the financial institution which holds the operating and acquisition loan may not
refinance the loan at terms and conditions that are favourable to the Trust or at all. Under the terms of the
loan agreement, the Trust has available the lesser of 1) $45,000,000; or 2) the calculated residual equity
(the “Borrowing Base”) of the assets secured by the loan. As at June 30, 2010, the Borrowing Base was
approximately $53,000,000; as such, the Trust was limited to $45,000,000. It is the Trust’s intention to seek
renewal of the operating and acquisition loan before it matures in November 2010.
There is a risk that $9,000,000 of loans payable may be demanded for repayment in 2010 and that the
Trust may not refinance these amounts at terms and conditions favourable to the Trust or at all. Although
$2,000,000 is due on demand, management expects that the financing provided will be available to the
Trust for at least the next 12 months.
(d) Fair values of financial instruments:
For purposes of disclosure, the Trust calculates the fair values of certain assets and liabilities. The fair values
of the Trust’s financial assets and liabilities, which represent net working capital and the Trust’s operating
and acquisition loan, approximate their recorded values at June 30, 2010 due to their short-term nature.
The fair value of the Trust’s mortgages payable approximates carrying value. The fair value of mortgages
payable has been estimated based on current market rates for mortgages with similar terms and conditions.
13. Amortization:
Amortization expense is made up of the following:

June 30, June 30,
2010 2009 2010 2009
Revenue-producing properties $ 4,357,623 $ 4,344,700 $ 8,626,595 $ 8,625,165

In-place tenant leases 84,586 1,267,107 230,030 2,595,136
$ 4,442,209 $ 5,611,807 $ 8,856,625 $ 11,220,301
(unaudited)
14. Commitments and contingencies:

(a) The Trust has entered into various Agency Agreements with qualified dealers or brokers (the “Agents”) to
assist with the sale of REIT Units. The Agents are entitled to a service fee for placing orders for the purchase
of REIT Units equal to 0.40% per annum on the net proceeds raised in the respective offering. The service
fee is paid to the Agents on a quarterly basis as a deduction in the distributions received by the respective
unitholders. During the six month ended June 30, 2010, $123,895 (June 30, 2009 - $191,382) was paid to
these Agents.
(b) The Trust continues to guarantee certain debt assumed by purchasers in connection with past dispositions
of properties. These guarantees will remain until the debt is modified, refinanced or extinguished. The Trust
has recourse under these guarantees in the event of default by the purchaser, in which case the Trust
would have a claim against the underlying property.
(c) The Trust has entered into an agreement relating to a property acquired during the year ended December
31, 2007, whereby the vendor guaranteed a minimum net operating income (“NOI”) in each successive
twelve-month period for a total of five years. The agreement requires the Trust to pay a maximum amount
of $3,728,488 based on a formula stipulated in the agreement if the minimum NOI is achieved in a given
twelve-month period. Should the NOI not be achieved, the maximum amount will be reduced over the
same period. Based on the second successive 12 month period, the maximum amount has been reduced
to $2,087,262.
(d) In the ordinary course of business activities, the Trust may be contingently liable for litigation and claims
from, among others, tenants, partners and former employees. Where required, management records
adequate provisions in the accounts. Although it is not possible to accurately estimate the extent of
potential costs and losses, if any, management believes that the ultimate resolution of such contingencies
would not have a material adverse effect on the financial position of the Trust.
(e) The Trust has assumed an obligation with respect to one land lease. The lease, with an annual payment of
$71,775, expires on June 20, 2052.
15. Subsequent events:

(a) In July, 2010 the Trust secured a fixed rate mortgage totalling $4,000,000 at a rate of 4.32% on a property
previously without a mortgage. The mortgage will mature in July 2011 and is prepayable at anytime without
penalty.
(unaudited)
15. Subsequent events (continued):

(b) In July, 2010 the Advisor and Trustees of the Trust exercised 280,000 REIT Unit options at a price of $11.41.
(c) On May 27, 2010 the Advisor received an “expression of interest” from an institutional investor (the
“Purchaser”) to explore a potential arrangement involving the purchase of all outstanding REIT Units. In
response to the expression of interest, the Board of Trustees of the Trust formed a special committee of
independent trustees (the “Special Committee”) to consider the expression of interest.
In June, 2010 the Special Committee began working with legal counsel of the Trust to discuss its
responsibilities and deliberate on the appropriate process for reviewing the proposed transaction. At
that time the Special Committee also concluded to solicit proposals from financial advisory firms to
provide a fairness opinion on the proposed transaction. Following a review of the proposals and after
due consideration it was determined that Grant Thornton LLP would provide a fairness opinion on the
proposed transaction.
Throughout June and July, 2010, the Advisor and the Purchaser had various discussions resulting in the
delivery of a letter of intent (“LOI”) from the Purchaser on July 16, 2010. The LOI set out the key terms of, and
timeline for, the proposed transaction. The Board of Trustees unanimously determined, based in part by the
Special Committee’s recommendation, that the transaction is fair to unitholders and is in the best interests
of Timbercreek REIT.
An annual and special meeting of unitholders is scheduled in August, 2010 where unitholders will be asked
to consider a special resolution approving the proposed transaction that will result in the acquisition by the
Purchaser of all outstanding REIT Units in exchange for a cash payment of approximately $180,000,000.

TREIT Circular 2010

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TREIT Circular 2010

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ARRANGEMENT

TIMBERCREEK REAL ESTATE INVESTMENT TRUST

RESTIER LIMITED PARTNERSHIP

ALL HOLDERS OF CLASS A UNITS AND CLASS B UNITS

ANNUAL AND SPECIAL MEETING OF UNITHOLDERS

OF TIMBERCREEK REAL ESTATE INVESTMENT TRUST

TO BE HELD ON AUGUST 18, 2010

NOTICE OF ANNUAL & SPECIAL MEETING

NOTICE OF ANNUAL AND SPECIAL MEETING OF UNITHOLDERS ................................................................3

MANAGEMENT PROXY CIRCULAR.......................................................................................................................7

PAYMENT MECHANICS ...........................................................................................................................................7

CAUTIONARY STATEMENT WITH RESPECT TO FORWARD-LOOKING STATEMENTS..............................7

INFORMATION CONTAINED IN THE CIRCULAR ................................................................................................8

SUMMARY OF MANAGEMENT PROXY CIRCULAR .........................................................................................13

INFORMATION CONCERNING THE MEETING AND VOTING.........................................................................19

Background to the Arrangement.............................................................................................................................23

THE ARRANGEMENT AGREEMENT ....................................................................................................................34

Terms of the Arrangement Agreement ...................................................................................................................34

CERTAIN TAX CONSIDERATIONS FOR UNITHOLDERS..................................................................................36

Certain Canadian Federal Income Tax Considerations...........................................................................................36

INFORMATION CONCERNING TREIT ..................................................................................................................38

INFORMATION CONCERNING THE PURCHASER .............................................................................................39

EXPENSES OF THE ARRANGEMENT ...................................................................................................................39

BENEFITS FROM THE ARRANGEMENT ..............................................................................................................39

COMMITMENTS TO ACQUIRE UNITS..................................................................................................................39

PROXY SOLICITATION AND DEPOSITARY........................................................................................................39

OTHER INFORMATION AND MATTERS..............................................................................................................40

LEGAL MATTERS ....................................................................................................................................................40

ADDITIONAL INFORMATION ...............................................................................................................................40

QUESTIONS AND FURTHER ASSISTANCE .........................................................................................................40

APPROVAL OF TREIT’S BOARD OF TRUSTEES.................................................................................................41

CONSENT OF GRANT THORNTON LLP ...............................................................................................................42

APPENDIX A – ARRANGEMENT RESOLUTION ..............................................................................................A-1

APPENDIX B – PLAN OF ARRANGEMENT.......................................................................................................B-1

APPENDIX C – FAIRNESS OPINION OF GRANT THORNTON LLP ...............................................................C-1

APPENDIX D – TIMBERCREEK GLOBAL REAL ESTATE FUND INVESTMENT WORKSHEET...............D-1

APPENDIX E – FINANCIAL STATEMENTS OF TREIT ........................................................................................1

Yours very truly,

(Signed) Corrado Russo

NOTICE OF ANNUAL AND SPECIAL MEETING OF UNITHOLDERS

Dated at Toronto, Ontario on August 3, 2010.

By Order of the Board of Trustees,

(Signed) Corrado Russo

Name and Number, type

MANAGEMENT PROXY CIRCULAR

CAUTIONARY STATEMENT WITH RESPECT TO FORWARD-LOOKING STATEMENTS

THIS CIRCULAR AND THE TRANSACTIONS CONTEMPLATED BY THE ARRANGEMENT

“Advisor” or “TAMI” means Timbercreek Asset Management Inc.

“Board” means the board of Trustees of TREIT.

“Closing Date” means the date of the Closing.

“CRA” means the Canada Revenue Agency.

“Depositary” means Olympia Trust Company.

“Greystone” means Greystone Managed Investments Inc.

“Lead Investor” means TREIT Equities Inc., a company controlled by Greystone.

“Record Date” means 4 p.m. (Toronto time) on July 15, 2010.

“Tax Act” means the Income Tax Act (Canada), as amended.

“Timbercreek Global” means Timbercreek Global Real Estate Fund.

“Transfer Agent” means Olympia Trust Company.

“Trustees” means the Trustees of TREIT.

“Units” means the Class A Units and Class B Units of TREIT.

“Unitholders” means the holders of Units.

Receipt of Financial Statements

Recommendation of the Trustees

Reasons for the Arrangement