HR.UN H and R Real Estate Investment Trust

Editors Note: There is one photo associated with this press release.

H&R Real Estate Investment Trust (the "REIT") and H&R Finance Trust
(collectively, "H&R") (TSX:HR.UN) are pleased to announce that H&R has entered
into an agreement to sell, to a syndicate of underwriters co-led by CIBC and RBC
Capital Markets, on a bought deal basis, approximately $125 million of H&R
stapled units at a price of $23.30 per stapled unit (the "Offering"). Closing of
the Offering is expected to occur on or about December 22, 2011, subject to
receipt of Toronto Stock Exchange and any other necessary regulatory approvals.
The REIT plans to use its portion of the net proceeds of the Offering to repay,
in part, the bank indebtedness expected to be incurred for the Hess Tower
acquisition. 


The REIT has also entered into an agreement to acquire, for U.S. $442.5 million,
Hess Tower, downtown Houston's newest and one of its most energy efficient
office buildings. Hess Tower has achieved the prestigious LEED Platinum
certification for Core and Shell, the U.S. Green Building Council's highest
rating. 


Hess Tower is comprised of an impeccably designed 29-storey office tower
offering 844,763 rentable square feet of superior office space connected by a
climate-controlled skybridge to its adjacent 10-level, 1,430 space parking
garage. Hess Tower is part of Houston's Pedestrian Tunnel System that
interconnects 77 of Houston's major downtown office buildings to an abundance of
upscale restaurants, retail stores, first class hotels and world class sports
and entertainment destinations. 


Completed in June 2011, Hess Tower is fully leased to Hess Corporation, a global
integrated energy company listed on the New York Stock Exchange. The REIT has
secured a commitment for a U.S. $250 million first mortgage financing at 4.5%
per annum.  


Tom Hofstedter, President and CEO of the REIT stated: "This acquisition presents
a truly rare opportunity to acquire a best-in-class, LEED Platinum office tower
in an irreplaceable downtown Houston location, overlooking the recently
completed Discovery Green Park, with a long-term triple net lease secured by a
Fortune 100 investment grade tenant at a 6.6% capitalization rate. Hess Tower,
along with the recently acquired Gotham Center in New York City and the Bow in
downtown Calgary, will together become the hallmark of our portfolio of high
quality properties that will provide stable and growing cash flow to our
unitholders for decades to come". 


The Offering is being made under H&R's existing short form base shelf prospectus
dated March 31, 2011. 


The terms of the Offering will be described in a prospectus supplement to be
filed with Canadian securities regulators. 


About H&R REIT 

H&R REIT is an open-ended real estate investment trust, which owns a North
American portfolio of 38 office, 117 industrial and 133 retail properties
comprising over 42 million square feet, with a net book value of approximately
$5.4 billion. The foundation of H&R REIT's success since inception in 1996 has
been a disciplined strategy that leads to consistent and profitable growth. H&R
REIT leases its properties long term to creditworthy tenants and strives to
match those leases with primarily long-term, fixed-rate financing. 


Notice to Reader 

Certain statements in this news release contains forward-looking information
within the meaning of applicable securities laws (also known as forward-looking
statements), including in particular, H&R's expectation regarding the expected
closing of the Offering and timing thereof, the use of proceeds from the
Offering, the expected completion of the Hess Tower acquisition and timing
thereof, and the capitalization rate for the Hess Tower. Such forward-looking
statements reflect H&R's current beliefs and are based on information currently
available to management. These statements are not guarantees of future
performance and are based on H&R's estimates and assumptions that are subject to
risks and uncertainties, including those discussed in H&R's materials filed with
the Canadian securities regulatory authorities from time to time, which could
cause the actual results and performance of H&R to differ materially from the
forward-looking statements contained in this news release. Those risks and
uncertainties include, among other things, risks related to: prices and market
value of securities of H&R; availability of cash for distributions; development
and financing relating to the Bow development; restrictions pursuant to the
terms of indebtedness; liquidity; credit risk and tenant concentration; interest
rate and other debt related risk; tax risk; ability to access capital markets;
dilution; lease rollover risk; construction risks; currency risk; unitholder
liability; co-ownership interest in properties; competition for real property
investments; environmental matters; reliance on one corporation for management
of substantially all of the REIT's properties and changes in legislation and
indebtedness of H&R. Material factors or assumptions that were applied in
drawing a conclusion or making an estimate set out in the forward-looking
statements include that the general economy is stable; local real estate
conditions are stable; interest rates are relatively stable; equity and debt
markets continue to provide access to capital; and that the Hess Tower
acquisition will be completed. H&R cautions that this list of factors is not
exhaustive. Although the forward-looking statements contained in this news
release are based upon what H&R believes are reasonable assumptions, there can
be no assurance that actual results will be consistent with these
forward-looking statements. All forward-looking statements in this news release
are qualified by these cautionary statements. These forward-looking statements
are made as of today and H&R, except as required by applicable law, assumes no
obligation to update or revise them to reflect new information or the occurrence
of future events or circumstances.


To view the photo associated with this press release, please visit the following
link: http://www.marketwire.com/library/20111214-hess_tower1.jpg

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