TORONTO, Aug. 5 /CNW/ - H&R Real Estate Investment Trust (TSX: HR.UN) announced today that one of its retail tenants - Boscov Department Stores - has filed for protection with a United States bankruptcy court, and plans to close seven of its stores on properties owned by H&R. The seven stores, which anchor shopping centres, have a total gross leasable area of approximately 1,679,000 square feet. With non-recourse mortgages outstanding on the properties of approximately $124 million, the stores represent an equity investment of approximately $42 million for H&R. The stores contribute distributable cash of approximately USD$4.3 million or 3 cents per unit annually to the REIT.

H&R President & CEO Tom Hofstedter said, "Weakened economic conditions in the United States are affecting the profitability of retailers that depend on consumer discretionary spending. While exploring several options to remedy the situation, we will strive to minimize the negative impacts of these store closures on our unitholders."

H&R also announced that it has entered into a binding contract to sell one of its retail properties in Toronto for gross proceeds of $79 million, generating a gain on sale of approximately $38 million and net cash after debt repayment of $54 million. The sale is expected to close in the fourth quarter this year.

Mr. Hofstedter added, "The REIT expects that the potential annual loss incurred from the closure of the Boscov department stores will be mostly offset once the cash generated from the sale of this Toronto property has been re-invested."

About H&R REIT

H&R REIT is a TSX-listed, open-ended real estate investment trust, which owns a North American portfolio of 35 office, 124 industrial and 129 retail properties comprising 43 million square feet, with a net book value of $4.5 billion. The foundation of H&R's success since inception in 1996 has been a disciplined strategy that leads to consistent and profitable growth. Additional information regarding H&R REIT is available at www.hr-reit.com and on www.sedar.com.

Certain information in this news release contains forward-looking statements within the meaning of applicable securities laws including, among others, statements relating to the Trust's objectives, strategies to achieve those objectives, the Trust's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by words such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or "continue" or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect the Trust's current beliefs and are based on information currently available to management.