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Attention Business/Financial Editors:

ResREIT announces record year-end results

TORONTO, Feb. 22 — Residential Equities Real Estate Investment Trust ("ResREIT") (REE.UN - TSE) today announced financial results for the year ended December 31, 2000 - a year of significant returns fueled by active portfolio management and the inherent growth in Canada's urban apartment market.

Revenue for the year increased 20.5% to a record $96 million. Distributable income per unit rose 12.9% to $1.11 from 98.4 cents in 1999. Cash flow per unit for 2000 was $1.13 compared to 99.5 cents one year ago, a14.0% increase.

During the fourth quarter ended December 31, 2000, revenue grew to $25.3 million, up from $22.1 million, a 14.5% increase. Cash flow per unit for the quarter was 26.9 cents versus 25.6 cents, up 5.1%. Distributable income per unit increased 4.8% to 26.3 cents compared to 25.1 cents in the fourth quarter of 1999.

On a same-store basis, revenue was up 5.8%. Same store operating costs were controlled so that the full benefit of this internal growth fell to the bottom line as property net operating income grew by 8.0%. ResREIT's margins improved throughout 2000, reflecting management's commitment to improving operating efficiencies at each of its properties.

"These results demonstrate ResREIT's inherent growth potential, which, together with our selective acquisitions, provide excellent unitholder returns, on both a before- and after-tax basis," said Dino Chiesa, ResREIT's Chief Executive Officer. "Our management team has delivered these results through prudent use of capital, a commitment to quality and by building a leadership position in a market niche with excellent fundaments."

In 2000, ResREIT increased its monthly distributions to 8.5 cents per unit while achieving its objective to reduce the payout ratio to 88% of cash flow.

To optimize inherent growth within the portfolio, ResREIT invested $8.6 million in key properties to enhance the structure and aesthetics of the buildings - repositioning them to take advantage of the demand for upscale, urban apartments.

During the year, ResREIT continued its external growth objective, acquiring 860 apartment units comprising a total value of $50 million. Total gross property assets rose to $547 million and total debt to $331 million, indicating a loan-to-gross-property-book value of 60.5%.

"We continue to reap the benefits of our strong financial position, and continue to have the ability to fund future acquisitions with access to an additional $100 million of internal capacity," said Maurice Kagan, ResREIT's Chief Financial Officer. "To further strengthen our balance sheet, we also forward fixed $45 million of debt that was due to mature in 2001 for 10-year terms at interest rates ranging from 6.75% to 6.81%."

"Going forward, we will continue to execute our conservative strategy to ensure stability and growth," added Chiesa. "We have a high quality portfolio of well located apartments - properties with significant upside potential that will be realized and passed on to our unitholders in the coming months and years."

ResREIT is Canada's largest residential real estate investment trust offering investors significant returns through stable, tax-efficient monthly distributions and the inherent growth potential of Canada's urban apartment market. ResREIT has a nation-wide portfolio of properties comprised of 9,111 residential suites and 227,042 square feet of ancillary retail/office space.

ResREIT units trade on the Toronto Stock Exchange under the symbol REE.UN.

A summary of the financial results for the year ended December 31, 2000 is as follows:

    (Unaudited - in thousands of dollars except per unit amounts)

                                                        2000            1999
                                                        ----            ----

    Operating revenues                               $95,976         $79,662
    Operating expenses                                47,039          39,566

    Property net operating income                     48,937          40,096
    Trust expenses                                     4,387           4,091

    Earnings before interest and amortization         44,550          36,005
    Amortization expense                               9,897           7,752

    Earnings before interest                          34,653          28,253
    Interest expense                                  19,709          14,467

    Net earnings                                      14,944          13,786
    Add back:
      Amortization                                     9,379           7,522
      Instalment interest income                           -            (480)

    Distributable income                             $24,323         $20,828

    Number of units outstanding                   21,901,163      21,654,311

    Distributable income per fully paid unit           $1.11           $0.98

    (Unaudited - in thousands of dollars)
                                                        2000            1999
                                                        ----            ----

    Income-producing properties                     $366,614        $324,543
    Prepaid rents                                    158,430         151,264
    Cash and short-term investments                    1,784           7,403
    Accounts receivable                                1,990           1,282
    Deferred financing costs                           3,464           3,107
    Prepaid expenses                                   1,866           1,564

                                                    $534,148        $489,163

    Mortgages payable                               $308,037        $275,758
    Bank loan payable                                 22,732           8,250
    Accounts payable and other liabilities             7,709           6,588
    Security deposits and last month's rent            7,420           6,365

                                                     345,898         296,961

    Unitholders' Equity
      Issued and outstanding - 22,045,011 units
      (1999 - 21,763,000 units)                      188,250         192,202

                                                    $534,148        $489,163

A telephone conference call hosted by Dino Chiesa, President and Chief Executive Officer and Maurice Kagan, Chief Financial Officer is scheduled for Monday, February 26, 2001 at 10:00 a.m. EDT. The telephone number for the conference call is 416-641-6714. Playback of the call will be available from 12:00 noon on Monday, February 26, 2001 to 12:00 midnight on Friday, March 2, 2001 by calling 416-626-4100, access code 17903553.

The conference call can also be accessed online by logging on to www.newswire.ca/webcast/pages/residentialequities20010226/ and will be available for 90 days on ResREIT's website, www.resreit.com (click on Q4 link).


For further information: Dino Chiesa, Chief Executive Officer, (416) 869-2222, e-mail: dchiesa@resreit.com; Maurice Kagan, Chief Financial Officer, (416) 869-2224, e-mail: mkagan@resreit.com

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