FORM45-106F2 OFFERINGMEMORANDUMFORNON-QUALIFYINGISSUERS Date: April15,2015 TheIssuer Name: SkylineApartmentRealEstateInvestmentTrust (“SkylineApartmentREIT”) Headoffice: Address: 5DouglasStreet,Suite301 Guelph,OntarioN1H2S8 Phone#: 519.826.0439/1.888.977.7348 E-mailaddress: [email protected] Fax#: 519.766.8474 Currentlylistedorquoted? Thesesecuritiesdonottradeonanyexchangeormarket. Reportingissuer? No SEDARfiler? No TheOffering Securitiesoffered: Units(the“REITUnits”) Pricepersecurity: $13.50perREITUnit Minimum/Maximumoffering: Themaximumoffering(the“Offering”)ofREITUnitsis$45,000,000 (3,333,333REITUnits).Thereisnominimum.Youmaybetheonly purchaser. FundsavailableundertheOfferingmaynotbesufficient toaccomplishourproposedobjectives. Minimumsubscriptionamount: $50,000 Paymentterms: Cheque,bankdraftorwire Proposedclosingdate(s): ClosingofsalesofREITUnitswilloccurinstagesasREITUnitsare subscribedforuntilDecember15,2015. Incometaxconsequences: Thereareimportanttaxconsequencestothesesecurities.SeeItem6– IncomeTaxConsequencesandRRSPEligibility. Sellingagent? Yes.SkylineWealthManagementInc.willactassellingagentin connectionwiththisOffering.SeeItem7–CompensationPaidto SellersandFinders. SomedirectorsandofficersofSkylineWealthManagementInc.arealsoTrusteesofSkylineApartmentREIT. These persons(aswellasother shareholdersof Skyline WealthManagementInc.) arealsodirectors, officers and shareholders of Skyline Asset Management Inc. Skyline Wealth Management Inc. and Skyline Asset Management Inc. provide services to and receive fees from Skyline Apartment REIT. Under applicable securities legislation, Skyline Apartment REIT may be considered to be a connected issuer of Skyline WealthManagementInc.SeeItem2.2–OurBusiness-ManagementofSkylineApartmentREIT–TheWealth Manager. Resalerestrictions Youwillberestrictedfromsellingyoursecuritiesforanindefiniteperiod.SeeItem10–ResaleRestrictions. Purchaser’srights Youhave2businessdaystocancelyouragreementtopurchasethesesecurities.Ifthereisamisrepresentation in this offering memorandum, you have the right to sue either for damages or to cancel the agreement. See Item11–Purchasers’Rights. Nosecuritiesregulatoryauthorityorregulatorhasassessedthemeritsofthesesecuritiesorreviewedthis offering memorandum. Any representation to the contrary is an offence. This is a risky investment. See Item8–RiskFactors. TABLEOFCONTENTS Page GLOSSARY................................................................................................................................................................1 FORWARD-LOOKINGSTATEMENTS................................................................................................................5 ITEM1USEOFAVAILABLEFUNDS..................................................................................................................6 1.1 Funds.............................................................................................................................................6 1.2 UseofAvailableFunds...............................................................................................................6 1.3 Reallocation...................................................................................................................................7 ITEM2BUSINESSOFSKYLINEAPARTMENTREIT.......................................................................................7 2.1 Structure........................................................................................................................................7 2.2 OurBusiness.................................................................................................................................9 2.3 DevelopmentofBusiness..........................................................................................................49 2.4 LongTermObjectives................................................................................................................50 2.5 ShortTermObjectivesandHowWeIntendtoAchieveThem............................................51 2.6 InsufficientFunds......................................................................................................................51 2.7 MaterialAgreements.................................................................................................................51 ITEM3INTERESTSOFTRUSTEES,MANAGEMENT,PROMOTERSANDPRINCIPAL HOLDERS................................................................................................................................................62 3.1 CompensationandSecuritiesHeld.........................................................................................62 3.2 ManagementExperience...........................................................................................................63 3.3 Penalties,SanctionsandBankruptcy.......................................................................................65 3.4 Loans............................................................................................................................................65 ITEM4CAPITALSTRUCTURE...........................................................................................................................65 4.1 EquitySecurities.........................................................................................................................65 4.2 LongTermDebtSecurities........................................................................................................67 4.3 PriorSales....................................................................................................................................74 ITEM5SECURITIESOFFERED...........................................................................................................................74 5.1 TermsofSecurities.....................................................................................................................74 5.2 SubscriptionProcedure.............................................................................................................78 ITEM6INCOMETAXCONSEQUENCESANDRRSPELIGIBILITY............................................................79 ITEM7COMPENSATIONPAIDTOSELLERSANDFINDERS....................................................................83 ITEM8RISKFACTORS.........................................................................................................................................83 ITEM9 REPORTINGOBLIGATIONS...............................................................................................................88 ITEM10 RESALERESTRICTIONS....................................................................................................................88 10.1 GeneralStatement......................................................................................................................88 10.2 RestrictedPeriod........................................................................................................................89 10.3 ManitobaResaleRestrictions....................................................................................................89 ITEM11 PURCHASERS’RIGHTS......................................................................................................................89 ITEM12FINANCIALSTATEMENTS.................................................................................................................93 ITEM13DATEANDCERTIFICATE.................................................................................................................119 APPENDIX1PHOTOGRAPHSOFEXISTINGPROPERTIESANDRECENTPROPERTY ACQUISITIONS....................................................................................................................................120 i GLOSSARY “Acquisition and Operating Facility” means a revolving credit facility in the amount of $29,500,000 arrangedforthepurposeoffundingworkingcapitalandmortgageprincipalrepayments. “AdjustedGrossRevenues”meansallgrossrevenuesreceivedfromtheoperationsoftheProperties,not includinganynon-recurringitems(includingwithoutlimitationrefinancingproceeds,saleproceeds,lease buy-outsorsimilarpayments). “Adjusted Unitholders’ Equity” means, at any time, the aggregate of: (i) the amount of Unitholders’ equity; and (ii) the amount of accumulated depreciation and amortization recorded on the books and recordsofeachofSkylineApartmentREITanditsSubsidiariesinrespectoftheirproperties,ineachcase calculatedinaccordancewithIFRS. “AssetManagementAgreement”meansanassetmanagementagreementdatedJune1,2006betweenthe AssetManagerandSkylineApartmentREIT. “Asset Manager” means the asset manager engaged by Skyline Apartment REIT for the purpose of managing the day-to-day operations of Skyline Apartment REIT pursuant to the Asset Management Agreement,whichiscurrentlySkylineAssetManagementInc.,acorporationgovernedbythelawsofthe ProvinceofOntario. “AssetManagementAgreement”meansanassetmanagementagreementdatedJune1,2006betweenthe AssetManagerandSkylineApartmentREIT. “Base Rental Income” means the base or minimum rent payable pursuant to a lease and excludes any additionalrent. “BusinessDay”meansaday,otherthanaSaturdayorSunday,onwhichScheduleIcharteredbanksare openforbusinessinToronto,Ontario. “ClassALPUnits”meansClassAlimitedpartnershipunitsofSkylineLP. “ClassBLPUnits”meansClassBmeansClassBlimitedpartnershipunitsofSkylineLP. “Closing”meansclosingsofsalesofREITUnitspursuanttotheOffering. “DeclarationofTrust”meansthedeclarationoftrustmadeasofJune1,2006,amendedasofOctober17, 2006 and amended and restated as of May 25, 2012 and November 5, 2014, governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein, pursuant to which Skyline Apartment REIT was created, as further amended, supplemented or amended and restated from time to time. “Distributable Income” means, for any period, the taxable net income of Skyline Apartment REIT, includingtaxableincomeearnedfromitsapplicableconsolidatedSubsidiariesforsuchperiodsetoutinits consolidated financial statements as determined in accordance with IFRS, subject to certain adjustments, including: (a) adding back the following items: depreciation, amortization (except for amortization of deferred financing costs, future income tax expense, losses on dispositions of assets and amortization of anynetdiscount onlong-termdebtassumed fromvendors of propertiesatratesof interest less thanfair value);and(b)deductingthefollowingitems:futureincometaxcredits,interestonconvertibledebentures to the extent not already deducted in computing net income, gains on dispositions of assets and amortizationofanynetpremiumonlong-termdebtassumedfromvendorsofpropertiesatratesofinterest greaterthanfairvalueandanyotheradjustmentsdeterminedbytheTrusteesintheirdiscretion. 1 “Distribution Date” means, with respect to a distribution by Skyline Apartment REIT, a Business Day determinedbytheTrusteesforanycalendarmonthtobeonoraboutthe15thdayofthefollowingmonth. “Equity Under Management” means the market value of the total investor equity of Skyline Apartment REIT,calculatedastheproductoftheoutstandingREITUnitsmultipliedbythethenmarketvalueofone REITUnit. “Exchange Agreement” means the exchange agreement dated May 28, 2012 entered into among Skyline ApartmentREIT,theOperatingTrust,SkylineLPandsuchpersonswhofromtimetotimeholdClassBLP Units. “ExistingProperties”meansthe 129 multi-unitresidentialbuildingsand 7 commercialbuildingslocated intheProvincesofOntario,SaskatchewanandNewfoundlandandLabrador,consistingof10,987unitsand 641,753squarefeetofcommercialspace. “FinalClosing”meansDecember15,2015. “FinanceCommittee”meansthefinancecommitteecreatedpursuanttotheDeclarationofTrust. “Focus Activity” means the acquisition, holding, maintaining, improving, leasing or managing of multi- unitresidentialrevenueproducingpropertiesandancillaryrealestateventuresinCanada. “GeneralPartner”meansSkylineIncorporated,acorporationincorporatedunderthelawsoftheProvince ofOntariotobethegeneralpartnerofSkylineLP,oranysuccessorgeneralpartnerofSkylineLP. “Governance and Compensation Committee” means the Governance and Compensation Committee createdpursuanttotheDeclarationofTrust. “GrossBookValue”means,atanytime,thebookvalueoftheassetsofSkylineApartmentREIT,asshown onitsmostrecentbalancesheetplustheamountofaccumulateddepreciationandamortizationthereon. “IFRS” means International Financial Reporting Standards issued by the International Accounting Standards Board, and asadopted by the Canadian Institute of Chartered Accountants, as amended from timetotime. “IndependentTrustee”meansaTrusteewhohasnodirectorindirectrelationshipwithSkylineApartment REITwhichcould,intheviewoftheboardoftrustees,reasonablyinterferewithaTrustee’sindependent judgement. “InitialUnit”meansaunitofbeneficialinterestinSkylineApartmentREITissuedtoSkylineIncorporated whichwasautomaticallyredeemedbySkylineApartmentREITupontheissuanceofthefirstREITUnit. “InvestmentCommittee”meanstheinvestmentcommitteecreatedpursuanttotheDeclarationofTrust. “MonthlyLimit”hasthemeaningascribedtheretoinItem5.1–TermsofSecurities–RedemptionofREIT Units. “NI45-106”meansNationalInstrument45-106ProspectusandRegistrationExemptions. “Non-residentBeneficiary”meansPersonswhoarenon-residentsofCanadaforthepurposesoftheTax Act. “Offering” means the offering of a maximum of 3,333,333 REIT Units pursuant to this Offering Memorandum. 2 “OfferingMemorandum”meansthisconfidentialofferingmemorandum. “Operating Trust” means Skyline Operating Trust, the trust created under the laws of the Province of OntariobydeclarationoftrustdatedJune1,2006,asitmaybefurtheramended,supplementedorrestated fromtimetotime. “OperatingTrustNotes”meanstheSeries1NotesandtheSeries2NotesissuedbytheOperatingTrust. “OperatingTrustUnit”meansaunitofinterestintheOperatingTrust. “Person”meansanindividual,partnership,limitedpartnership,corporation,unlimitedliabilitycompany, trust,unincorporatedorganization,association,government,oranydepartmentoragencythereofandthe successors and assigns thereof or the heirs, executors, administrators or other legal representatives of an individual,oranyotherentityrecognizedbylaw. “Properties”meanscollectively,theExistingProperties,RecentPropertyAcquisitionsandPropertiesthat maybeacquiredinthefuture. “Properties Under Due Diligence” means the four multi-residential Properties under contract and in variousstagesofduediligence. “Purchase Agreements” means agreements entered into by Skyline Apartment REIT to acquire the PropertiesUnderContract. “RecentPropertyAcquisitions”meansthe6multi-unitresidentialPropertieslocatedinthe Provincesof Ontario,Québec,AlbertaandBritishColumbia,consistingof949units. “Redemption Price” hasthe meaningascribed thereto inItem5.1 –Terms of Securities – Redemptionof REITUnits. “REIT Unit” means a unit of beneficial interest in Skyline Apartment REIT (other than a Special Voting Unit and the Initial Unit) authorized and issued under the Declaration of Trust as such and for the time beingoutstandingandincludesafractionofaunitandanyotherclassesofunitsauthorizedbytheTrustees assuch. “RelatedParty”means,withrespecttoanyPerson,aPersonwhoisa“relatedparty”asthattermisdefined inMultilateralInstrument61-101ProtectionofMinoritySecurityHoldersinSpecialTransactions,asamended fromtimetotime(includinganysuccessorruleorpolicythereto). “SkylineAppointees”meanstheTrusteesthatSkylineIncorporatedisentitledtoappoint. “SkylineLP”meansSkylineRealEstateLimitedPartnership,alimitedpartnershipgovernedbythelaws oftheProvinceofOntario. “SkylineApartmentREIT”meansSkylineApartmentRealEstateInvestmentTrust. “SpecialVotingUnit”meansaunitofinterestinSkylineApartmentREITissuedonlyinconnectionwith theExchangeAgreementtoaholderofClassBLPUnits. “Subscriber”meansaPersonpurchasingREITUnitspursuanttothisOffering. 3 “SubscriptionAgreements”meanscollectively,thesubscriptionagreementsenteredintobetweenSkyline Apartment REIT and one or more Subscribers setting out the contractual relationship between Skyline ApartmentREITandtheSubscribersofREITUnitspursuanttotheOffering. “Subsidiary”means, withrespecttoanyPerson(otherthananindividual),any other Person(otherthan an individual) the financial results of which would be required to be consolidated with those of the first Person’sinthepreparationofthefirstPerson’sconsolidatedfinancialstatementsifpreparedinaccordance withIFRS. “TaxAct”meanstheIncomeTaxAct,R.S.C.1985(5thSupp.),c.1,asamended. “Trustees”meansthetrusteesofSkylineApartmentREIT. “Units”means,collectively,theREITUnitsandtheSpecialVotingUnits. “Unitholder”meansaholderofoneormoreUnits. “Wealth Manager” means Skyline Wealth Management Inc., a corporation governed by the laws of the Province of Ontario that is responsible for acting as exempt market dealer on all offerings of REIT Units and providing other services to Skyline Apartment REIT, as described in Item 2.2 – Our Business - ManagementofSkylineApartmentREIT–TheWealthManager. “Wealth Management Agreement” means the agreement dated January 1, 2012 between the Wealth ManagerandSkylineApartmentREIT. 4 FORWARD-LOOKINGSTATEMENTS Certain information contained in this Offering Memorandum constitutes “forward-looking information” within the meaning of applicable securities laws, including, among other things, statements concerning future financial position, results of operations and forecasted future cash flows, statements concerning objectives and strategies to achieve those objectives, statements with respect to management’s beliefs, plans, estimates and intentions and statements concerning anticipated future events, circumstances, expectations,results,operationsorperformancethatarenotstatementsofhistoricalfacts.Forward-looking statements can be identified generally by the use of forward-looking terminology, such as “indicators”, “outlook”, “objective”, “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plan”,“continue”,“aim”,“would”,“forecast”,“project”,“seek”orsimilarexpressionssuggestingfuture outcomes or events. In particular, certain statements in Item 1 – Use of Available Funds and Item 2 – BusinessofSkylineApartmentREITconstituteforwardlookinginformation. Actualresultsmayvaryfromtheforward-lookinginformationcontainedinthisOfferingMemorandumas such information is subject to a variety of risks, uncertainties and other factors that could cause actual results to differ materially from expectations. Such forward-looking statements reflect management’s current beliefs and are based on information currently available to management. The forward-looking statementsinthisOfferingMemorandumarenotguaranteesoffutureresults,operationsorperformance and are based on estimates and assumptions that are subject to risks and uncertainties, including those described below under “Item 8 - Risks Factors”, which could cause actual results, operations or performancetodiffermateriallyfromtheforward-lookingstatementsexpressedorimpliedinthisOffering Memorandum. Additionalfactorsthatcouldcauseactualresults,performanceorachievementstodiffermateriallyinclude, but are not limited to, risks associated with: real property ownership; general economic conditions; local real estate markets; future property acquisitions; competition for real property investments; revenue- producingproperties;significantpropertyexpenditures;fluctuatingliquidityinrelationtodemandforand the perceived desirability of investments; ability to vary portfolio promptly in response to changing economicorinvestmentconditions;debtfinancing,includingtheriskthatexistingmortgageindebtedness secured by the properties will not be able to be refinanced or that the terms of such refinancing; tenant terminationsandfinancialstability;competitionfortenants;abilitytoleasespace;abilitytocompletefuture property acquisitions; interest rates; general uninsured losses; availability of cash flow; environmental matters; governmentregulation; Unitholder liability; dependence on keypersonnel; potentialconflictsof interest; tax related risks; dilution; restrictions on potential growth and reliance on credit facilities; debt financing, including the risk that Skyline Apartment REIT may be unable to make interest or principal payments or meet loan covenants, the risk of defaults and cross defaults, and the risk that existing indebtedness may not be able to be refinanced or that the terms of such refinancing may not be as favourableasthetermsofexistingindebtedness;costofborrowing;andrisksassociatedwithholdingunits ratherthanshares. The forward-looking statements in this Offering Memorandum are based on numerous assumptions regardingSkylineApartmentREIT’spresentandfuturebusinessstrategiesandtheenvironmentinwhich SkylineApartmentREITwilloperateinthefuture,includingassumptionsregardingthestabilityoftarget markets,thatacquisitioncapitalizationratesremainreasonablyconstant,thattheequityanddebtmarkets continuetoprovideuswithaccesstocapitalatareasonablecosttofundourfuturegrowthandtorefinance ourmortgagedebtasitmaturesandourabilitytooperateonaprofitablebasis. Although the forward-looking statements contained in this Offering Memorandum are based on what managementbelievesarereasonableassumptions,therecanbenoassurancethatactualresults,operations orperformancewillbeconsistentwiththesestatements. All forward-looking statements in this Offering Memorandum are qualified in their entirety by this forward-looking disclaimer. Without limiting the generality of the foregoing, the discussion in Item 1 – 5 UseofAvailableFundsandItem2–BusinessofSkylineApartmentREITisqualifiedinitsentiretybythis forward-lookingdisclaimer.ThesestatementsaremadeasofthedateofthisOfferingMemorandum,and, except as required by applicable law, we undertake no obligation to update publicly or revise any such statementstoreflectnewinformationortheoccurrenceoffutureeventsorcircumstances. The following section of this Offering Memorandum contains forward-looking information, particularlystatementsrelatedtoamountstoberaisedbythisOfferingandtheintendedusesofavailable funds,butnotlimitedtothosestatements. Thediscussioninthissectionisqualifiedinitsentiretybythe cautionarylanguageundertheheading“Forward-LookingStatements”inthisOfferingMemorandum. ITEM1USEOFAVAILABLEFUNDS 1.1 Funds ThefollowingtablesetsforththefundsavailableasaresultoftheOffering. Assumingmin. Assumingmax. offering(1) offering A Amounttoberaisedbythisoffering $0 $45,000,000 B Sellingcommissionsandfees(2) $0 $450,000 C Estimatedofferingcosts(e.g.,legal,accounting, $0 $20,000 audit.) D Availablefunds:D=A-(B+C) $0 $44,530,000 E Additionalsourcesoffundingrequired $0 $0 F Workingcapitaldeficiency $0 $0 G Total:G=(D+E)–F $0 $44,530,000 Notes: (1) ThereisnominimumamountoffundstoberaisedpursuanttothisOffering. (2) Assumesthemaximumequityfeeraiseequalto1%ofthegrossproceedsofthisOfferingmaybe paidtotheWealthManager. SeeItem7–CompensationPaidtoSellersandFinders. 1.2 UseofAvailableFunds ThefollowingtablesetsforthabreakdownofhowSkylineApartmentREITwillusetheavailable funds. Descriptionofintendeduseofavailablefundslisted Assumingmin. Assumingmax. inorderofpriority offering(1) offering RepaymentofAcquisitionandOperatingFacility(2) $0 $25,826,833 Futureaccretivepropertyacquisitions(3) $0 $18,703,167 Total: $0 $44,530,000 Notes: (1) ThereisnominimumamountoffundstoberaisedpursuanttothisOffering. (2) TheAcquisitionandOperatingFacilityhasfacilitatedacquisitionsbySkylineApartmentREITbyenablingit toenterintonegotiationsforthepurchaseofpropertieswithouttheneedforanequityfinancingcondition. Asatthe datehereof,thereiscurrently$25,826,833outstandingundertheAcquisitionandOperatingFacility.Thesefundswere borrowedandsecuredagainstExistingProperties. 6 (3) FutureaccretivepropertyacquisitionsmayincludethePropertiesUnderDueDiligence. SeeItem2.2–Our Business–PropertiesUnderDueDiligence. SkylineApartmentREIThasnotwaivedtheconditionstoclosingofthe PropertiesUnderDueDiligence. Asaresult,therecanbenoassurancethattheacquisitionofthePropertiesUnder DueDiligencewillbecompletedascurrentlycontemplatedoratall. 1.3 Reallocation Weintendtospendtheavailablefundsasstated.Wewillreallocatefundsonlyforsoundbusiness reasons. The following section of this Offering Memorandum contains forward-looking information, particularly statements related to the management and investment strategy of Skyline Apartment REIT, theobjectivesofSkylineApartmentREITandtheachievementofthoseobjectives,butnotlimitedtothose statements. Thediscussioninthissectionisqualifiedinitsentiretybythecautionarylanguageunderthe heading“Forward-LookingStatements”inthisOfferingMemorandum. ITEM2 BUSINESSOFSKYLINEAPARTMENTREIT 2.1 Structure Skyline Apartment Real Estate Investment Trust (“Skyline Apartment REIT”) is an unincorporated open-end investment trust created by a declaration of trust made as of June 1, 2006, amendedasofOctober17,2006andamendedandrestatedasofMay25,2012andNovember5,2014(the “Declaration of Trust”) and governed by the laws of the Province of Ontario and the federal laws of Canadaapplicabletherein.SeeItem2.7–MaterialAgreements–DeclarationofTrust. TheobjectivesofSkylineApartmentREITare:(i)toprovideUnitholderswithstableandgrowing cashdistributions,payablemonthlyand,totheextentreasonablypossible,taxdeferred,frominvestments inadiversifiedportfolioofincome-producingmulti-unitresidentialandcommercialpropertieslocatedin Canada; and (ii) to maximize REIT Unit value through the ongoing management of Skyline Apartment REIT’sassetsandthroughthefutureacquisitionofadditionalresidentialproperties. The trustees of Skyline Apartment REIT (the “Trustees”) are responsible for the general control and direction of Skyline Apartment REIT. The day-to-day management of Skyline Apartment REIT is carried out by the Asset Manager, the Properties will be managed internally under the direction of the AssetManagerandofferingsofREITUnitswillbeconductedbytheWealthManager. The Existing Properties and Recent Property Acquisitions currently consist of 142 properties located in 46 communities across 6 Canadian provinces containing an aggregate of 11,936 suites and approximately641,753 square feetof commercialspace. See Item2.2 –Our Business- Properties. Future acquisitionswillbesubjecttospecificinvestmentrestrictionsandtheoperationofSkylineApartmentREIT will be subject to specific operating policies. See Item 2.7 – Material Agreements – Declaration of Trust - InvestmentRestrictionsandOperatingPolicies. TheheadofficeofSkylineApartmentREITislocatedat:5 DouglasStreet,Suite301,Guelph,Ontario,N1H2S8. 7 ThefollowingsetsforththeprincipaloperatingstructureofSkylineApartmentREIT: Skyline Apartment REIT will hold all of its interest in the Existing Properties, Recent Property AcquisitionsandallfutureacquisitionsinthenameofSkylineRealEstateHoldingsInc.,SkylineRealEstate Holdings(II)Inc.,SkylineRealEstateHoldings(III)Inc.,orinthenameofothernomineecorporations,on behalf of Skyline Real Estate Limited Partnership (“Skyline LP”), all of the shares of which nominee corporationsareowned,directlyorindirectly,bySkylineApartmentREIT. Skyline Apartment REIT owns, indirectly through Skyline Operating Trust (the ”Operating Trust”), allof the ClassA LPUnitsof Skyline LP. In connection withthe internalization of the property managementfunctioninJanuary2014bywayofapurchaseoftheassetsofSkylineManagementInc.(the “Assets”),ClassBLPUnitsofSkylineLPandacorrespondingnumberofSpecialVotingUnitsofSkyline ApartmentREITwereissuedtoSkylineManagementInc.inpartialpaymentofthepurchaseprice ofthe Assets. See Item2.3 – Developmentof the Business– Internalization of Property Management Function. AsaresultoftheacquisitionoftheHighstreetPortfolioinFebruary2015,ClassB LPUnitsofSkylineLP and a corresponding number of Special Voting Units of Skyline Apartment REIT were issued to certain vendors in partial payment of the purchase price. See Item 2.2 – Our Business – Properties – Existing PropertiesandRecentPropertyAcquisitions. ClassBLPUnitsshallbeexchangeableforREITUnitsona onetoonebasispursuanttotheExchangeAgreement,onthetermsandsubjecttotheDeclarationofTrust, the Exchange Agreement and the limited partnership agreement governing Skyline LP. As Class B LP UnitsareexchangedforREITUnitsinaccordancewiththeExchangeAgreement,thecorrespondingSpecial 8