MELCOR REAL ESTATE INVESTMENT TRUST $ Š Š Units

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MELCOR REAL ESTATE INVESTMENT TRUST $ Š Š Units A copy of this preliminary prospectus has been filed with the securities regulatory authorities in each of the provinces and territories of Canada, but has not yet become final for the purpose of the sale of securities. Information contained in this preliminary prospectus may not be complete and may have to be amended. The securities may not be sold until a receipt for the prospectus is obtained from the securities regulatory authorities. No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities. These securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or the securities laws of any state of the United States and, subject to certain exceptions, may not be offered, sold or delivered, directly or indirectly, in the United States (as such term is defined in Regulation S under the U.S. Securities Act) (the “United States”) except pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. This prospectus does not constitute an offer to sell or solicitation of an offer to buy any of these securities in the United States. See “Plan of Distribution”. PRELIMINARY PROSPECTUS Initial Public Offering March 20, 2013 MELCOR REAL ESTATE INVESTMENT TRUST $ Š Š Units This prospectus qualifies the distribution (the “Offering”) of Š units (the “Units”) of Melcor Real Estate Investment Trust (the “REIT”), a newly formed unincorporated, open-ended real estate investment trust established under, and governed by, the laws of the Province of Alberta. The REIT has been formed to own a portfolio of income producing properties, comprised primarily of retail, office and industrial properties. Concurrent with the completion of the Offering and related transactions (the “Closing”), the REIT will indirectly acquire, through a limited partnership (the “Partnership”), interests in a portfolio of 27 income producing properties located in Western Canada, comprised primarily of retail, office and industrial properties (the “Initial Properties”) currently owned, or co-owned, and operated by Melcor Developments Ltd. (“Melcor”, and where the context requires, together with its affiliates). See “Acquisition of Initial Properties”. On Closing, it is expected that Melcor will, through an affiliate, hold an approximate Š % effective interest in the REIT through ownership of all of the Class B LP Units of the Partnership (or an approximate Š % effective interest in the REIT if the Over-Allotment Option is exercised in full). The Class B LP Units are economically equivalent to, and exchangeable for, Units. In addition, Melcor will hold all of the outstanding Class C LP Units of the Partnership in respect of the Retained Debt (as defined below). See “Retained Interest” and “Distribution Policy”. The objectives of the REIT are to: (i) generate stable and growing cash distributions on a tax-efficient basis; (ii) enhance the value of the REIT’s assets and maximize long-term Unit value through active asset and property management; and (iii) expand the asset base of the REIT and increase AFFO per Unit primarily through acquisitions and improvement of its properties, including the Initial Properties, and through targeted and strategically deployed capital expenditures. See “The REIT – Establishment and Objectives”. The REIT initially intends to make monthly cash distributions of $ Š per Unit to holders of Units, which are estimated on an annual basis to be approximately 93% of AFFO of the REIT. See “Non-IFRS Measures”, “Financial Forecast” and “Distribution Policy”. The Initial Properties, assembled from Melcor’s portfolio of investment properties, are located in the Edmonton, Alberta region; the Calgary, Alberta region; Lethbridge, Alberta; Regina, Saskatchewan; and Kelowna, British Columbia; with approximately 1.57 million of owned square feet of GLA. See “Assets of the REIT”. The REIT’s growth strategy will initially be focused primarily on opportunities to acquire additional retail, office and industrial properties that satisfy the REIT’s investment criteria, as well as to generate greater cash flow from its properties. The REIT will seek to leverage its relationship with Melcor to access acquisition opportunities that satisfy the REIT’s investment criteria. Melcor’s current intention is to offer to sell to the REIT additional investment properties that it owns, has under development, and/or develops in the future, including some or all of the Retained Commercial Properties (nine in total) and the Properties Currently Under Development (eight in total), in one or more transactions over the next few years, subject to market conditions. In order to formalize this intention, Melcor will grant the REIT: (i) the Right of (continued on next page) Tradition. Growth. Results. MELCOR REIT melcorREIT.ca 10310 Jasper Avenue 900, Melcor REIT Edmonton, Alberta T5J 1Y8 T \ 708.423.6931 F \ 780.426.1796 melcorREIT.ca Tradition. Growth. Results. An established & diversified portfolio focused on high-growth markets in Western Canada Tradition. Growth. Results. Tradition. Growth. Results. 1.57 million owned square feet Exposure to High-Growth Canadian Established & Diversified Portfolio Western Markets 1 2 3 4 9 Spruce Grove > 27 Income-Producing Properties > Above-average GDP Growth 2013 – 2016 Edmonton 11 13 14 15 16 17 5 2 > Recognizable, credit-worthy tenants > 97% of Forecast NOI in Alberta & Saskatchewan 7 Leduc > 90-year heritage and continued strong relationship with Melcor Calgary Airdrie 2 4 3 Chestermere Retained Interest & Strong Alignment with Melcor 5 8 1 Kelowna 1 7 12 > Access to Melcor Developments Pipeline Lethbridge Regina > Eight Properties Under Construction 1 6 10 6 > Joint Development Opportunities OFFICE BUILDINGS LOCATION GLA OCC% 1 100 Street Place Edmonton 44,295 91 Tradition. 2 Trail Business Centre Edmonton 77,295 78 3 Birks Building Edmonton 35,539 65 Growth. 4 Capilano Centre Edmonton 48,379 79 5 Crowfoot Business Centre Calgary 67,603 100 Results. 6 Executive Terrace Regina 42,843 100 INDUSTRIAL BUILDINGS RETAIL BUILDINGS LOCATION GLA OCC% 7 Kelowna Business Centre Kelowna 72,076 96 LOCATION GLA OCC% 8 Kensington Road Building Calgary 23,850 84 9 Melton Building Edmonton 114,612 98 1 Lethbridge Industrial Lethbridge 49,005 100 1 Chestermere Station Chestermere 47,588 93 10 Parliament Place Regina 24,411 96 2 TKE Building Edmonton 15,968 100 2 Corinthia Plaza Leduc 23,179 100 11 Princeton Place Edmonton 59,081 85 3 Kingsview Market Airdrie 36,003 100 12 Richter Street Kelowna 28,978 81 4 Leduc Common Leduc 213,966 95 13 Royal Bank Building Edmonton 132,376 92 RESIDENTIAL BUILDINGS LOCATION GLA OCC% 5 Miller Crossing Edmonton 27,448 78 14 Stanley Buildings Edmonton 34,976 93 6 Towers Mall Regina 114,331 95 15 Sterling Business Centre Edmonton 67,909 89 1 Watergrove Calgary N/A 100 7 Westgrove Common Spruce Grove 21,810 89 16 Westcor Building Edmonton 72,810 87 17 Westgate Business Centre Edmonton 75,142 76 An established & diversified portfolio focused on high-growth markets in Western Canada Tradition. Growth. Results. Tradition. Growth. Results. 1.57 million owned square feet Exposure to High-Growth Canadian Established & Diversified Portfolio Western Markets 1 2 3 4 9 Spruce Grove > 27 Income-Producing Properties > Above-average GDP Growth 2013 – 2016 Edmonton 11 13 14 15 16 17 5 2 > Recognizable, credit-worthy tenants > 97% of Forecast NOI in Alberta & Saskatchewan 7 Leduc > 90-year heritage and continued strong relationship with Melcor Calgary Airdrie 2 4 3 Chestermere Retained Interest & Strong Alignment with Melcor 5 8 1 Kelowna 1 7 12 > Access to Melcor Developments Pipeline Lethbridge Regina > Eight Properties Under Construction 1 6 10 6 > Joint Development Opportunities OFFICE BUILDINGS LOCATION GLA OCC% 1 100 Street Place Edmonton 44,295 91 Tradition. 2 Trail Business Centre Edmonton 77,295 78 3 Birks Building Edmonton 35,539 65 Growth. 4 Capilano Centre Edmonton 48,379 79 5 Crowfoot Business Centre Calgary 67,603 100 Results. 6 Executive Terrace Regina 42,843 100 INDUSTRIAL BUILDINGS RETAIL BUILDINGS LOCATION GLA OCC% 7 Kelowna Business Centre Kelowna 72,076 96 LOCATION GLA OCC% 8 Kensington Road Building Calgary 23,850 84 9 Melton Building Edmonton 114,612 98 1 Lethbridge Industrial Lethbridge 49,005 100 1 Chestermere Station Chestermere 47,588 93 10 Parliament Place Regina 24,411 96 2 TKE Building Edmonton 15,968 100 2 Corinthia Plaza Leduc 23,179 100 11 Princeton Place Edmonton 59,081 85 3 Kingsview Market Airdrie 36,003 100 12 Richter Street Kelowna 28,978 81 4 Leduc Common Leduc 213,966 95 13 Royal Bank Building Edmonton 132,376 92 RESIDENTIAL BUILDINGS LOCATION GLA OCC% 5 Miller Crossing Edmonton 27,448 78 14 Stanley Buildings Edmonton 34,976 93 6 Towers Mall Regina 114,331 95 15 Sterling Business Centre Edmonton 67,909 89 1 Watergrove Calgary N/A 100 7 Westgrove Common Spruce Grove 21,810 89 16 Westcor Building Edmonton 72,810 87 17 Westgate Business Centre Edmonton 75,142 76 First Offer to acquire, after Closing, Melcor’s interest in certain investment properties prior to the disposition of any such interest to third parties; (ii) the Development Property Option to acquire, after Closing, Melcor’s interest in certain Development Properties; and (iii) the Mezzanine Financing Option to acquire, after Closing, at a discount to the appraised value, certain Development Properties for which the REIT has provided mezzanine financing to Melcor for the development of such properties (which financing may be provided by the REIT in its sole discretion). Melcor will also grant the REIT the Joint Venture Option providing the opportunity to enter into joint ventures with Melcor, after Closing, with respect to Development Properties in certain circumstances.
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