Unwind of Stapled Unit Structure – October 1, 2024

Granite Real Estate Investment Trust (“Granite REIT”) and Granite REIT Inc. (“Granite GP”) (collectively, “Granite”) announced on October 1, 2024 that Granite completed the previously-announced court-approved plan of arrangement under the Business Corporations Act (British Columbia) (the “Arrangement”) to replace Granite’s stapled unit structure with a conventional REIT trust unit structure. The Arrangement was approved by holders of Granite’s stapled units (“Stapled Units”) (each consisting of a unit of Granite REIT (a “Granite REIT Unit”) and a common share of Granite GP (a “Granite GP Share”), at meetings of unitholders held on June 6, 2024 and by a final order of the Supreme Court of British Columbia.

Under the Arrangement, (i) the two components of each Stapled Unit were uncoupled, (ii) each Granite GP Share was automatically exchanged for 0.001/99.999 of a Granite REIT Unit, and (iii) the Granite REIT Units were consolidated back to the number of Stapled Units outstanding before the exchange occurred.

Immediately before the completion of the Arrangement, Granite REIT owned no Granite GP Shares. Immediately after the completion of the Arrangement, Granite REIT owned 62,740,097 Granite GP Shares, representing 100% of the outstanding Granite GP Shares.

Each Granite GP Share was acquired by Granite REIT in return for 0.001/99.999 of a Granite REIT Unit. The closing price of the Stapled Units (of which the value of the Granite GP Share component comprised a nominal amount) on September 30, 2024 on the TSX was $81.63 per stapled unit, and on the NYSE was US$61.11 per stapled unit.

Canadian Tax Implications

Step (i) – The uncoupling should not be considered a taxable event.

Step (ii) – The exchange of Granite GP Shares for 0.001/99.999 of Granite REIT Units should cause a disposition of only the Granite GP Shares. It does not cause a disposition of the Granite REIT Units. The proceeds of disposition of the Granite GP Share should be 0.001% of the $81.63 per unit or $0.0008163. The adjusted tax base of such Granite GP Share is dependant on each taxpayer’s situation when the Stapled Unit was purchased. Please consult your tax advisor in order to determine the adjusted tax base. The proceeds of disposition of the Granite GP Shares, should be added to the adjusted tax base of the Granite REIT Units.

Step (iii) – The consolidation should not be considered a taxable event.

US Tax Implications

Refer to the Steps as described above and consider unitholder tax status in the US. Please refer to the Income Tax Information (US) section of Granite’s website. We strongly recommend investors consult their tax advisors.

Please refer to page 34 of the April 10, 2024 Management Information Circular that refers to the detailed tax analysis of the transaction.