MONTREAL, QUEBEC -- (MARKET WIRE) -- 09/13/2006 -- Alexis Nihon REIT (TSX: AN.UN) today announced the acquisition of an industrial property in Saint-Laurent, Quebec for $6.1 million, representing a going-in capitalization rate of 9.4%.

The property is located on Pitfield Road in the heart of the Montreal borough of Saint-Laurent and has excellent visibility from highway 13.

"This is our second acquisition in Saint-Laurent this year," said Paul J. Massicotte, President and Chief Executive Officer. "This property further strengthens our presence in the industrial real estate market in the greater Montreal area, a strategic growth area for the REIT."

Gross leasable area of the property is 99,900 square feet, of which 85,200 square feet is warehouse space with clear ceiling height of 22 feet, and 14,700 square feet is office/showroom space. The property's site area is approximately 200,000 square feet. The building is occupied by a single tenant, Calego International Inc., the largest importer and distributor of children's licensed accessories in Canada.

"The property is situated in proximity to other properties owned by the REIT, which will further enhance operational synergies," said Guy Charron, Executive Vice President and Chief Operating Officer.

The $6.1 million acquisition price equates to $60.81 per square foot of leasable area. The purchase price will be initially funded from the REIT's bank credit facilities, pending arrangement of mortgage financing.

"We are pleased that the going-in cap rate of 9.4% is accretive for a single-tenant property," said Rene Fortin, Senior Vice President and Chief Financial Officer.

The acquisition increases the industrial segment of the portfolio to 4,204,290 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
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Industrial                    35         4,204,290                 46.3%
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Office                        20         2,987,677                 32.9%
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Retail                        10         1,586,122                 17.5%
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Residential (i)                0           300,321                  3.3%
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(i) Residential apartments are located in Place Alexis Nihon, classed
    as an office property.

The REIT currently owns interests in 65 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 9.1 million square feet of leasable area, of which 0.4 million square feet is co-owned.