REIT OVERVIEW

General Development of the Business

The Retrocom Mid-Market REIT was formally created on December 15, 2003 with the intention of being the leading Real Estate Investment Trust focused on owning and acquiring a geographically diverse portfolio of properties consisting of the premiere retail and commercial properties located in primary and secondary markets, known as mid-markets, across Canada. On March 22, 2004, the REIT completed an initial public offering of 11,069,000 Units (the "Initial Offering") at a price of $10 per Unit for total gross proceeds of approximately $110 million. In conjunction with closing the IPO, the REIT acquired the initial portfolio of properties, consisting of 26 retail, 1 commercial and 2 light industrial properties. Subsequent to the IPO, the REIT exercised the over-allotment option granted as part of the IPO and issued an additional 1,107,000 units on April 23, 2004 for gross proceeds of approximately $11 million.

Since the Initial Offering, the REIT has continuously reviewed its business operations, amended its asset base and reinvested in existing assets in order to position itself for sustainable future growth. The REIT invests in income-producing mid-market commercial retail, office and light industrial properties with strong tenant covenants, stable yields, low vacancy levels and strong growth potential. The REIT continually acquires additional properties with these characteristics to provide additional cash flow and further enhance the long-term portfolio value.

The REIT believes that the income-producing mid-market commercial property segment represents a more favourable risk/return investment environment with fewer national competitors than other segments of the commercial property market. By concentrating on the mid-market segment, the REIT believes it will be afforded greater opportunities to make accretive acquisitions that will contribute to achieving attractive yields for Unitholders. Retrocom believes that the geographic diversity of the Properties, as well as their diverse tenant mix, decreases the likelihood that a single regional economic downturn will have a material adverse impact on the REIT’s distributions.