MONTREAL, QUEBEC -- (MARKET WIRE) -- 06/20/2006 -- Alexis Nihon REIT (TSX: AN.UN) today announced the $11.1 million acquisition of a multi-tenant industrial property in Pointe Claire, Quebec.

The property is located on the southern service road of the Trans-Canada Highway in the heart of the West Island's industrial business park. Tenants have ready access to Montreal Island's most important autoroute, a bus stop in front of the building, a rail cargo line behind the site and abundant retail amenities located nearby.

"The addition of this property further contributes to our well-established presence in the industrial real estate market in the greater Montreal area," said Paul J. Massicotte, President and CEO. "It also presents the REIT with a significant redevelopment opportunity."

The property holds a total of 894,300 square feet of land. Gross leasable area ("GLA") currently comprises 292,900 square feet, including a portion measuring 112,600 square feet with a 24-foot clear ceiling height. The balance of GLA has clear ceiling heights ranging from 16 feet to 18 feet that is planned to be redeveloped into space with higher ceilings. The first phase of the redevelopment would feature approximately 100,000 square feet of GLA. The REIT also intends to increase the density of the site from the current 33% to approximately 45% to 50% by adding multi-tenant industrial spaces.

"The redevelopment plan is geared primarily to an increase in density and uniformly high ceilings," said Guy Charron, Executive Vice President and Chief Operating Officer.

Alexis Nihon has a development agreement with Sabino Grassi of Comdev Immobilia Inc. and Adam Cutler of Cutler Property Group, with the common goal of carrying out the redevelopment plan.

The property is currently 62.1% occupied by three tenants. The vendor has not leased space fronting the Trans-Canada in recognition of the desirability of redevelopment into space with higher ceilings.

The $11.1 million acquisition price equates to $37.90 per square foot of current leasable area, or $12.41 per square foot on total site area.

Of the purchase price, $4.4 million will be funded by the REIT's bank credit facilities. The $6.7 million balance of sale will be financed by the vendor for a three-year term.

"We plan to maximize net operating income of the property, while maintaining redevelopment flexibility," said Rene Fortin, Senior Vice President and Chief Financial Officer. "This would allow replacing most or all of the balance of sale amount with a first-ranking mortgage."

The acquisition increases the industrial segment of the portfolio by 1.9% to 4,064,390 square feet. Following the acquisition, the asset allocation within the REIT's portfolio consists of the following:

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Asset class    No. of properties  Square footage    Per cent of total

Industrial                    33       4,064,390                45.5%
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Office                        20       2,987,677                33.4%
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Retail                        10       1,586,122                17.7%
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Residential (i)                0         300,321                 3.4%
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(i)Residential apartments are located in Place Alexis Nihon, classed
 as an office property.

The REIT currently owns interests in 63 office, retail, and industrial properties, including a 426-unit multi-family residential property, all located in the greater Montreal area and the National Capital region. The REIT's portfolio has an aggregate of 8.9 million square feet of leasable area, of which 0.4 million square feet is co-owned.