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Lanesborough Real Estate Investment Trust (LREIT) reported its operating results for the year ended December 31, 2009. The following comments in regard to the financial position and operating results of LREIT should be read in conjunction with the December 31, 2009 Management Discussion & Analysis and the financial statements for the year ended December 31, 2009, which may be obtained from the LREIT website at www.lreit.com or the SEDAR website at www.sedar.com.

LREIT initiated a divestiture program in 2009, with the objective of generating gross proceeds of $250 million from the sale of selected properties. The divestiture program resulted in the sale of 13 properties being completed in the fourth quarter of 2009, at an aggregate gross selling price of $90.4 million, and generated net cash proceeds of $29.6 million.

The positive impact of the divestiture program is reflected in the overall income results for 2009. During 2009, LREIT generated total net income of $3.5 million, compared to a loss in 2008 of $9.6 million. The total income figures include $19.0 million of income from discontinued operations in 2009 (including a $21.1 million gain on the sale of properties), compared to a loss from discontinued operations of $2.8 million in 2008. The impact of the recession in Fort McMurray, Alberta due to the slowdown in the oil sands industry was the overriding variable affecting the operations in 2009. As LREIT’s portfolio of income-producing properties is concentrated in Fort McMurray and as the Fort McMurray properties were achieving high rates of return during the booming economic period which preceded the market downturn, the recession resulted in a sharp decline in the operating income of specific properties in Fort McMurray and a corresponding decline in LREIT’s overall results from continuing operations. From continuing operations, LREIT incurred a loss, before taxes, of $12.8 million, compared to a loss, before taxes, of $6.5 million in 2008.

Cash provided by discontinued operations (i.e., from property sales) amounted to $7.8 million, after the retirement of $17.1 million of interim mortgage loan debt. The cash provided by discontinued operations also enabled LREIT to temporarily repay $9.8 million of its bank line of credit and revolving loan facility. As of December 31, 2009, the cash balance of LREIT, net of bank indebtedness, was $4.3 million, compared to $3.5 million as of December 31, 2008.

In summary, notwithstanding the negative impact of the recession on operating results, LREIT maintained liquidity during 2009, while also focusing on the longer-term objective of ensuring that it has the financial capability to meet its funding commitments.