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Oct 26, 2011

OPTIMUS INCREASES PORTFOLIO SIZE TO 547 CONDOS

OPTIMUS INCREASES PORTFOLIO SIZE TO 547 CONDOS, BY CLOSING ON A 184 UNIT CONDO PURCHASE (AVERAGE OF $48,900 PER UNIT) WITH A CREDIT FACILITY FROM STEARNS BANK N.A. (“STEARNS”)

The Optimus US Real Estate Fund (“Optimus”) is pleased to announce the acquisition of 184 residential condominium units in the Dolce by the Lakes (“Dolce”) project located in Las Vegas, Nevada for an average purchase price of $48,900 USD per unit (or $9,000,000 USD total contract price) plus closing costs (through its wholly owned subsidiary, Optimus Dolce LP).  The source of the proceeds used to purchase the Dolce project was a $10,000,000 revolving credit facility secured by deeds of trust, which are the equivalent of a first mortgage in Canada, on all of Optimus’ real estate assets (the “Stearns Facility”). This purchase increases the Optimus real estate portfolio to 547 units. The third party appraisals, ordered by Stearns, provide an aggregate value of $29.9 million (USD) as of Oct. 2011.

Dolce by the Lakes (“Dolce”)

Dolce consists of 358 garden style apartments, with a mix of two and three storey units, all with separate external entrances, located at 2750 S. Durango Dr., (Spring Valley), Las Vegas, Nevada.  Optimus purchased the remaining unsold 184 condos of an apartment to condo conversion project from a subsidiary of Citibank. The 184 units are 92% occupied and are being managed by TM Real Estate Group LLC (which also manages most of Optimus’ other holdings).  The units average 873 sq. ft in size, and comprise of:  69 one bedroom, 90 two bedroom and 25 three bedroom units. Internal proformas show the first year’s estimated net income of $632,000 (before tax and interest payments) or a cap rate of 6.5% (based on the contract price).

Stearns Credit Facility  (“Stearns Facility”)

The Stearns Facility carries a one year term at a minimum interest rate of the higher of: Wall Street prime plus 2% or 6.94%.  It is secured by deeds of trust on all five Optimus properties (Dolce, Solevita, Arbor Lakes, Traverse Point, and Riverwalk) with a maximum loan to value ratio of 50%, as well as being guaranteed by the Fund and its subsidiary Limited Partnerships and General Partners. Stearns Bank N.A., founded in 1912, is based out of Minnesota with total assets (in 2010) of $1.38 billion. With operations in Arizona, Georgia, Florida, and Minnesota, they are very well capitalized with a Tier 1 capital ratio of 19.07% (vs. a “peer” group ratio of 8.97% based on information contained in Stearns 2010 annual report). Stearns Bank, N.A. has national lending presence with expertise including, but not limited to, commercial and residential real estate; commercial and industrial business; Small Business Administration (SBA) loans; USDA; and leasing.

“The Dolce acquisition through the Stearns Facility represents two major milestones for Optimus. First, the Optimus portfolio is at a very substantial number (nearly 550 units), and second, we have been able to obtain reasonably priced commercial financing based on our assets to further enhance the execution of our business plan,” said Arthur Wong, Managing Director and CEO.  Grant Sardachuk, Managing Director – US Operations added, “we will be looking to increase our geographical diversification of our assets, either through bringing in co-investment into our Vegas properties (which now form 80% of our current assets) and investing into other Phoenix and Florida area properties, or by purchasing new projects through raising further equity with Optimus. Nevertheless, we have proven that the “fractured” condo model is a highly viable method of assembling a quality real estate portfolio.”

A detailed description of the Dolce purchase and Stearns Facility is included in the updated Optimus offering memorandum to be released on October 31, 2011.

The Optimus US Real Estate Fund is a prospectus exempt, open-ended investment trust that presents a rare opportunity to capitalize on an unprecedented downturn in US real estate prices. Designed with investors in mind, the fund optimizes both Canadian and US tax treatments and is RRSP eligible.  The highly skilled and dedicated management team has more than $3 billion in real estate acquisitions and financing experience. 

Forward Looking Statements:

Certain information in this Release is forward-looking and related to the anticipated financial performance, events and strategies of the Optimus U.S. Real Estate Fund and the General Partner (collectively, "Optimus" or the "Fund" in this note).  All statements other than statements of historical fact are forward-looking statements.  The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward looking information.  These statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information.  Optimus believes the assumptions reflected in the forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements speak only as at the date hereof.  Undue reliance should not be placed on forward-looking information, as there can be no assurance that the plans, assumptions, intentions or expectations upon which they are based will occur.

Contact:
François Le Bel, Eng., M.Sc. VP – Exempt Markets, Optimus US Real Estate Fund
m: +1 (403) 978-2468, Website: www.optimususrealestate.com

THIS PRESS RELEASE IS NOT AN OFFER TO SELL SECURITIES IN THE UNITED STATES