Calloway Real Estate Investment Trust Releases Third Quarter Results

Highlights of the Quarter:

--  Leased 78,000 square feet of previously vacant space, improving
    portfolio occupancy to 98.8%
--  Renewed 86,000 square feet of leases, the year-to-date renewed rate over
    90%, with average increases over in place rent of over 7%
--  Raised $175 million through the issuance of $50 million of equity and
    $125 million of term financing
--  Arranged a two year $160 million revolving operating facility
--  Invested $45.3 million to complete earn outs and developments of 200,699
    square feet of leaseable area
--  Net income decreased by $9.9 million to $6.7 million over the same
    period in 2008, a result of lower gains on property sales, increased
    interest expense and a decrease in interest revenue

"Strong centres deliver strong results," said Mr. Simon Nyilassy, President and CEO. "So far this year, we have filled 250,000 square feet of previously vacant space representing over 75% of the vacancies arising this year as a result of the economic downturn. In addition, we have opened 200,000 square feet of new stores with tenants such as Winners, Lowes, Golf Town and Dollarama. With one quarter of the year still remaining, we have already brought our occupancy levels close to the 99% plus level that we enjoyed for the past 4 years."

As at September 30, 2009, Calloway's $4.1 billion real estate portfolio includes 22.4 million square feet of built gross leasable area and 5.4 million square feet of future developable area in 117 operating and 10 development properties.

Developments completed during the quarter comprised approximately 200,699 square feet of leasable area at a cost of $45.3 million.

Calloway raised $175 million through the issuance of 3.2 million units at $15.50 for gross proceeds of $50 million and $125.4 million term financing to repay maturing mortgages and reduce indebtedness. The term mortgages have an average term of 4.4 years and weighted average interest rate of 5.5%. Also during the quarter, Calloway negotiated a new, two year, $160 million operating line to replace two maturing operating facilities.

As a result of these financing activities, Calloway has reduced its debt-to-gross book value (non-GAAP measure) to 54.7% from 55.2% and has sufficient capital resources to address its financial obligations through to 2011.

Comparing results to third quarter 2008, continued high occupancy levels of over 98.8%, as well as Calloway's acquisition and development program, helped the income-producing portfolio to generate revenue of $113.4 million, a $3.2 million increase. Net operating income (non-GAAP measure) of $74.2 million increased $3.0 million or 4.2%. Income from continuing operations decreased $2.6 million mainly as a result of increased interest expense and property operating costs. Cash flow as measured by Funds from Operations (FFO - a non-GAAP measure) totalled $39.6 million, a decrease of $3.2 million or 7.5%. The results were negatively impacted by the expected increased interest expense from new financings and lower interest income from repaid mezzanine loans offset by completed acquisitions and developments generating revenues of $4.1 million. FFO per unit (fully diluted) was $0.407 compared to $0.451. "Our decision to significantly enhance our liquidity at a time when debt costs were expensive will impact cash flow in the short-term," said Nyilassy, "but this has kept Calloway on a strong financial footing during the economic downturn and has us better positioned for a recovery." The Trust's quarterly distribution of $0.387 per unit represents a payout ratio (to FFO) of 95% compared to 85.8% in 2008.

The non-GAAP measures identified in this Press Release do not have any standardized meaning prescribed by Canadian generally accepted accounting principles ("GAAP") and are therefore unlikely to be comparable to similar measures presented by other issuers. These non-GAAP measures are more fully defined and discussed in the management discussion and analysis of Calloway for the three-months ended September 30, 2009, available on SEDAR website at www.sedar.com.

Full reports of the financial results of the Trust for the three months ended September 30, 2009 are outlined in the unaudited consolidated financial statements and the related management discussion and analysis of Calloway, available on the SEDAR website at www.sedar.com. In addition, supplemental information is available on Calloway's website at www.callowayreit.com.

Calloway will hold a conference call on Friday, November 6, 2009 at 10:00 a.m. (ET). Participating in the call will be members of Calloway's senior management.

Investors are invited to access the call by dialing 1-800-250-4877. You will be required to identify yourself and the organization on whose behalf you are participating. A recording of this call will be made available Friday November 6, 2009 beginning at 12:00 p.m. (ET) through to 11:59 p.m. (ET) on Friday November 13 14, 2009. To access the recording, please call 1-877-289-8525 and use the reservation number 4176583#.

The Toronto Stock Exchange neither approves nor disapproves of the contents of this Press Release.