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November 15, 2014 To: Mr. Steve Nyvik Managing Director Short Term Capital Management re: Analysis of Cominar REIT (CUF.UN) and RioCan REIT (RELUN) 14-Nov-14 Closing Mkt Price $18.79 $26.71 Intrinsic Value $21.52 $20.29 P/IV 0.87 1.32 Cominar REIT RioCan REIT Using the Dividend Discount Model, my analysis suggests that Cominar REIT would be the preferred investment to add as it is now trading at a 13% discount to its intrinsic value. In comparison, RioCan REIT is trading at a 32% premium to its intrinsic value. Cominar REIT Dividend payment June July Feb Mar lan TOTAL of compounding periods Apr Nov Sept Dec Aur Oct May D 1 2 0 0 0 0 0 0 0 0 0.08 0.088 0.08 0.088 0.093 0.095 0.1 0.1 0.102 0.113 0.083 0.088 0.088 0.09 0.095 0.098 0.1 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 () 0.102 0.08 0.088 0.088 0.088 0.093 0.095 0.1 0.102 0.102 0.113 0.12 0.12 0.12 0.12 0.12 0.12 0.08 Q.OR 0.088 0.083 0.093 0.095 0.1 0.1 0.102 0.13 0.12 0.12 0.12 0.12 0.12 0.12 0.1225 0.083 0.0BB 0.088 0.09 0.033 0.095 0.1 0.102 0.102 0.113 0.12 0.12 0.12 0.12 0.12 0.12 0.1225 0.088 0.088 0.088 0.09 0.095 0.098 0.1 0.102 0.11 0.083 0.088 0.088 0.09 0.095 0.098 0.1 0.102 0.105 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.083 0.088 0.088 0.09 0.095 0.098 0.1 0.102 0.105 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.1225 0.088 0.068 0.0BB 0.09 0.095 0.098 0.1 0.102 0.11 0.12 0.12 0.12 0.12 0.12 0.12 0.1225 0.1225 0.105 0.12 0.12 0.08 0.088 0.088 0.09 0.095 0.098 0.1 0.102 0.11 0.12 0.12 0.12 0.12 0.12 0.12 0.1225 0.1225 0.216 0.181 0.206 0.213 0.211 0.21 0.21 0.214 0.248 0.245 0.24 0.24 0.24 0.24 0.24 0.245 1.052 1.061 1,086 1.107 1.153 1.178 1.21 1.23 1.301 1.434 1.44 1.44 1.44 1.44 1.44 1.4525 1.47 0.12 3 4 5 6 7 8 9 10 11 12 13 14 15 D 0.12 0.12 0.12 0.12 0.12 0.12 0:12 0.12 0 0 0 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.1225 0.12 0.1225 0.1225 0 = D. =D; 0.1225 0.245 0 0.1225 0.1225 Geometric Growth Rate of dividends (e) - RATEHyrs, Pmt, -PV, PV) - Rate(15 years, paymentm -1.052, 1.4525) 2.17% Cominar Dividend History 15 14 13 1.2 11 1 09 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Choice of Dividend Discount Model Dividends has been growing but at a low rate its policy is to provide unitholders with growing cash distributions, sustainable on the long-term. So it is fair to use Constant Growth Model Cominar's EPS is $1.95 (per Globeinvestor Gold) and given its annual dividend of 51.47 (2015 est) as well as it having a reasonable level of debt (D/t of 1.26), there is financial ability to utlize the 16 year growth rate of dividends of 2.11M Determination of the Required Rate of Return We'll use the CAPM to determine where: ke RR-RRI R. Risk free rate which we'll use the Tbil Rate :0.90% Source: http://www.financialpost.com/markets/data/money vields can ushtml Beta of Cominar 0.28 Source: google finance R-Market Returns 8.54% Rate 35 years, o pm, 1,699.69, 34,613.30) long-term index price return + 2% index dividend yield KR.0090 -0.28(0834-0090) 298329 Constant Dividend Growth Model Intrinsic Value D/ D. - $1.47.52.17% 2.94525 intrinsic Value = D/5147/029332 . 0217) 5180.72 This intrinsic Value calculation is meaningless given the extremely low due to the low Assumingk = 9 Intrinsic value, /kg- 5147/409-0217) $21.52 Cominar REIT closed at $12.79 on 14-Nov-2014 November 15, 2014 To: Mr. Steve Nyvik Managing Director Short Term Capital Management re: Analysis of Cominar REIT (CUF.UN) and RioCan REIT (RELUN) 14-Nov-14 Closing Mkt Price $18.79 $26.71 Intrinsic Value $21.52 $20.29 P/IV 0.87 1.32 Cominar REIT RioCan REIT Using the Dividend Discount Model, my analysis suggests that Cominar REIT would be the preferred investment to add as it is now trading at a 13% discount to its intrinsic value. In comparison, RioCan REIT is trading at a 32% premium to its intrinsic value. Cominar REIT Dividend payment June July Feb Mar lan TOTAL of compounding periods Apr Nov Sept Dec Aur Oct May D 1 2 0 0 0 0 0 0 0 0 0.08 0.088 0.08 0.088 0.093 0.095 0.1 0.1 0.102 0.113 0.083 0.088 0.088 0.09 0.095 0.098 0.1 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 () 0.102 0.08 0.088 0.088 0.088 0.093 0.095 0.1 0.102 0.102 0.113 0.12 0.12 0.12 0.12 0.12 0.12 0.08 Q.OR 0.088 0.083 0.093 0.095 0.1 0.1 0.102 0.13 0.12 0.12 0.12 0.12 0.12 0.12 0.1225 0.083 0.0BB 0.088 0.09 0.033 0.095 0.1 0.102 0.102 0.113 0.12 0.12 0.12 0.12 0.12 0.12 0.1225 0.088 0.088 0.088 0.09 0.095 0.098 0.1 0.102 0.11 0.083 0.088 0.088 0.09 0.095 0.098 0.1 0.102 0.105 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.083 0.088 0.088 0.09 0.095 0.098 0.1 0.102 0.105 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.1225 0.088 0.068 0.0BB 0.09 0.095 0.098 0.1 0.102 0.11 0.12 0.12 0.12 0.12 0.12 0.12 0.1225 0.1225 0.105 0.12 0.12 0.08 0.088 0.088 0.09 0.095 0.098 0.1 0.102 0.11 0.12 0.12 0.12 0.12 0.12 0.12 0.1225 0.1225 0.216 0.181 0.206 0.213 0.211 0.21 0.21 0.214 0.248 0.245 0.24 0.24 0.24 0.24 0.24 0.245 1.052 1.061 1,086 1.107 1.153 1.178 1.21 1.23 1.301 1.434 1.44 1.44 1.44 1.44 1.44 1.4525 1.47 0.12 3 4 5 6 7 8 9 10 11 12 13 14 15 D 0.12 0.12 0.12 0.12 0.12 0.12 0:12 0.12 0 0 0 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.1225 0.12 0.1225 0.1225 0 = D. =D; 0.1225 0.245 0 0.1225 0.1225 Geometric Growth Rate of dividends (e) - RATEHyrs, Pmt, -PV, PV) - Rate(15 years, paymentm -1.052, 1.4525) 2.17% Cominar Dividend History 15 14 13 1.2 11 1 09 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Choice of Dividend Discount Model Dividends has been growing but at a low rate its policy is to provide unitholders with growing cash distributions, sustainable on the long-term. So it is fair to use Constant Growth Model Cominar's EPS is $1.95 (per Globeinvestor Gold) and given its annual dividend of 51.47 (2015 est) as well as it having a reasonable level of debt (D/t of 1.26), there is financial ability to utlize the 16 year growth rate of dividends of 2.11M Determination of the Required Rate of Return We'll use the CAPM to determine where: ke RR-RRI R. Risk free rate which we'll use the Tbil Rate :0.90% Source: http://www.financialpost.com/markets/data/money vields can ushtml Beta of Cominar 0.28 Source: google finance R-Market Returns 8.54% Rate 35 years, o pm, 1,699.69, 34,613.30) long-term index price return + 2% index dividend yield KR.0090 -0.28(0834-0090) 298329 Constant Dividend Growth Model Intrinsic Value D/ D. - $1.47.52.17% 2.94525 intrinsic Value = D/5147/029332 . 0217) 5180.72 This intrinsic Value calculation is meaningless given the extremely low due to the low Assumingk = 9 Intrinsic value, /kg- 5147/409-0217) $21.52 Cominar REIT closed at $12.79 on 14-Nov-2014

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