TORONTO, ONTARIO–(Marketwired – Sept. 30, 2016) – Mitchell Cohen, President and Chief Executive Officer of Urbanfund Corp. (TSX VENTURE:UFC) (“Urbanfund” or the “Company”), announced today that the renovations of the multi-residential rental complex redevelopment project located at 48 Weber Street West in Kitchener, Ontario (the “Property”), in which it retains controlling interest, have been completed. Leasing has been underway for some time now and the Property is now 95% leased and occupied.

The Company further announces that the limited partnership that owns the Property completed today a conventional mortgage financing in the principal amount of $4.8 million. The financing is for a 7 year term at an interest rate of 2.92%. Proceeds were used to pay off the current construction financing of approximately $3.2 million with the remaining funds to be distributed to the joint venture partners as set forth in the paragraphs below and Urbanfund’s portion thereof to be used to seek other real estate opportunities.

In connection with financing the acquisition and redevelopment of the Property, the Company guaranteed the obligations of the borrower, Weber Investments GP Inc., which is the general partner of the limited partnership through which Urbanfund holds its controlling interest in the Property, in respect of the mortgage financing in the principal amount of $4.8 million.

Coincident with the financing, the limited partnership (in which the Company retains a controlling interest) that owns the adjacent properties located at 61 and 65 Roy Street in Kitchener (the “Roy Street Property”), secured a $900,000 credit facility, the proceeds of which will be used solely for the renovation of the Roy Street Property. The credit facility is for a one year term and bears interest at a rate of prime plus 1.25%.

Pursuant to a limited partnership agreement through which Urbanfund holds its interest in the Property, Urbanfund’s initial capital contribution in respect of the acquisition of the Property was approximately $1.17 million, representing approximately 87% of the total initial capital contributed. If additional capital contributions are required by limited partners, such additional capital contributions are to be determined by multiplying each limited partner’s proportionate share by the total additional capital contributions required. Urbanfund’s proportionate share in respect of the Property is equal to 65%. If any limited partner does not make such additional capital contribution, the general partner, or any limited partners who are prepared to do so, may advance such amount to the limited partnership on behalf of the non-contributing partner, and such advance shall be deemed for all purposes to be a limited recourse loan from the contributing partner to the non-contributing partner, bearing interest at the annual rate of the limited partnership’s chartered bank’s “prime rate” plus 8%, and principal and accrued interest shall be repayable out of the first cash available for distribution otherwise payable to the non-contributing partner.

Following redevelopment of the Property, any cash available for distribution shall be paid or distributed by the limited partnership (i) first, to Urbanfund until it has received cumulative distributions in an amount equal to its initial capital contribution, plus the amount required to achieve an annualized internal rate of return equal to 6% thereon; (ii) second, to one of the other limited partners (the “second limited partner”) until it has received cumulative distributions in an amount equal to its initial capital contribution, plus the amount required to achieve an annualized internal rate of return equal to 6% thereon; and (iii) thereafter, 64.99% to Urbanfund, 10% to the second limited partner, and subject to meeting the conditions precedent set out above, 25% to the other limited partner (the “third limited partner” together with the second limited partner, the “other limited partners”), and 0.01% to the general partner; provided, however, that such allocation to the limited partners shall be subject to re-directing amounts on account of contribution loans and accrued interest.

Urbanfund currently holds an 82.5% voting interest in the Property; however, such voting interest is subject to a carried interest held by one of the other limited partners and upon satisfaction of certain conditions precedent, including the Property having a stabilized net operating income of an amount equal to or greater than $315,000 by the date that is 12 months from the date the development manager for the Project is required to commence management responsibilities. If such conditions are met, Urbanfund’s voting interest shall be reduced to 65%.

ABOUT URBANFUND CORP.

Urbanfund Corp. is a Toronto-based real estate development and operating company. Urbanfund’s focus is to identify, evaluate and invest in real estate or real estate related projects. The Company’s assets are located in Belleville, Kitchener, London and Toronto, Ontario, Quebec City and Montreal, Quebec. The Company’s strategy going forward remains committed to seek accretive real estate or real estate-related opportunities.

FORWARD-LOOKING STATEMENTS

This press release contains certain forward-looking statements, which reflect management’s expectations regarding the Company’s growth, results of operations, performance and business prospects and opportunities. Statements about the Company’s renovation of the adjacent properties located at 61 and 65 Roy Street in Kitchener and payment of cash distributions from the Property constitute forward-looking statements. Wherever possible, words such as “may”, “will”, “should”, “could”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict” or “potential” or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. These statements reflect Management’s current beliefs and are based on information currently available to management as at the date hereof.

Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including: general economic and market segment conditions, interest rates, costs outside of the Company’s control such as real estate taxes and utilities, the ability of tenants to satisfy their contractual rent obligations and any unforeseen repair, maintenance or replacement of the Company’s assets. More detailed assessment of the risks that could cause actual results to materially differ than current expectations is contained in the “Risks and Uncertainties” section of the Company’s most recent Management’s Discussion and Analysis dated August 29, 2016.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the Policies of the TSX Venture Exchange) accepts responsibility for the adequacy or the accuracy of this release.