This prospectus supplement, together with the short form base shelf prospectus dated October 9, 2014 to which it relates, as amended or
supplemented, and each document deemed to be incorporated by reference into the short form base shelf prospectus or this prospectus
supplement constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and
therein only by persons permitted to sell such securities. No securities regulatory authority has expressed an opinion about these
securities and it is an offence to claim otherwise.
The securities offered hereby have not been, and will not be, registered under the United States Securities Act of 1933, as amended, or
any state securities laws, and, subject to certain exceptions, may not be offered, sold or delivered, directly or indirectly, in the United
States.
Information has been incorporated by reference in this prospectus supplement from documents filed with securities commissions or
similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge
from the Corporate Secretary of First Capital Realty Inc., at King Liberty Village, 85 Hanna Avenue, Suite 400, Toronto, Ontario,
Canada M6K 3S3 (telephone: (416) 504-4114), and are also available electronically at www.sedar.com.
PROSPECTUS SUPPLEMENT
(TO A SHORT FORM BASE SHELF PROSPECTUS DATED OCTOBER 9, 2014)
New Issue
August 8, 2016
FIRST CAPITAL REALTY INC.
$150,064,000
6,640,000 Common Shares
This prospectus supplement qualifies the distribution (the “Offering”) of 6,640,000 common shares (the “Offered
Shares”) in the capital of First Capital Realty Inc. (“First Capital Realty” or the “Company”). The outstanding common
shares in the capital of the Company (the “Common Shares”) are listed and posted for trading on the Toronto Stock
Exchange (the “TSX”) under the symbol “FCR”. The closing price of the Common Shares on the TSX on August 4, 2016,
the last trading day before announcement of the Offering, was $23.10. The TSX has conditionally approved the listing of
the Offered Shares on the TSX. Listing is subject to the Company fulfilling all of the listing requirements of the TSX on or
before November 4, 2016.
Price to the
Public
Per Offered Share ............................................................................................................................
$22.60
Total(2)............................................................................................................................................. $150,064,000
Underwriters’
Fee
$0.904
$6,002,560
Net Proceeds to
the Company(1)
$21.696
$144,061,440
Notes:
(1) Before deducting expenses of the Offering, estimated to be $300,000, which together with the Underwriters’ fee, will be paid from the proceeds of
the Offering.
(2) The Company has granted to the Underwriters an option (the “Over-Allotment Option”) exercisable in whole or in part for a period of 30 days from
the closing of the Offering to purchase up to 996,000 additional Common Shares on the same terms as set forth above. If the Over-Allotment Option
is exercised in full, the total Price to the Public, Underwriters’ Fee and Net Proceeds to the Company will be $172,573,600, $6,902,944 and
$165,670,656, respectively. This prospectus supplement qualifies the grant of the Over-Allotment Option and the issuance of the Common Shares on
the exercise of the Over-Allotment Option. A purchaser who acquires Common Shares on exercise of the Over-Allotment Option acquires those
Common Shares under this prospectus supplement, regardless of whether the over-allocation position is ultimately filled through the exercise of the
Over-Allotment Option or secondary market purchases.
An investment in the Offered Shares is subject to certain risks that should be considered by prospective purchasers. See
“Risk Factors”.
At the time of closing of the Offering, the Offered Shares will qualify for investment as set out under “Eligibility for
Investment”.
The Company’s head and registered office and principal place of business is located at King Liberty Village, 85 Hanna
Avenue, Suite 400, Toronto, Ontario M6K 3S3.
TD Securities Inc. (“TDSI”), RBC Dominion Securities Inc. (“RBC”), CIBC World Markets Inc. (“CIBC WM”), BMO
Nesbitt Burns Inc. (“BMO”), National Bank Financial Inc. (“NBF”), Scotia Capital Inc. (“Scotia”), Canaccord Genuity
Corp. and Raymond James Ltd. (collectively, the “Underwriters”) have severally agreed to purchase the Offered Shares
from the Company at a price of $22.60 per Offered Share, subject to the terms and conditions of the underwriting
agreement described under “Plan of Distribution”. The price was determined by negotiation between the Company and the
Underwriters.
TDSI, RBC, CIBC WM, BMO, NBF and Scotia are wholly-owned subsidiaries of Canadian chartered banks (the
“Banks”) that are lenders to the Company. Consequently, the Company may be considered to be a connected issuer
of TDSI, RBC, CIBC WM, BMO, NBF and Scotia under applicable Canadian securities legislation. See “Plan of
Distribution”.
The Underwriters, as principals, conditionally offer the Offered Shares, subject to prior sale, if, as and when issued by the
Company and accepted by the Underwriters in accordance with the conditions of the underwriting agreement described
under “Plan of Distribution” and subject to the approval of certain legal matters on behalf of the Company by Torys LLP
and on behalf of the Underwriters by Stikeman Elliott LLP. The Underwriters may offer the Offered Shares to the
public at a price lower than that stated above. See “Plan of Distribution”.
The Company has been advised by the Underwriters that, in connection with the Offering, the Underwriters may over-allot
or effect transactions that stabilize or maintain the market price of the Common Shares at levels other than those which
otherwise might prevail on the open market. Such transactions, if commenced, may be discontinued at any time. See “Plan
of Distribution”.
Subscriptions for the Offered Shares will be received subject to rejection or allotment in whole or in part and the right is
reserved to close the subscription books at any time without notice. It is expected that closing of the Offering will take
place on August 17, 2016 or such other date as the Company and TDSI and RBC, on behalf of the Underwriters, may agree,
but in any event no later than August 24, 2016 and that Offered Shares will be available for delivery in book-entry form
through the facilities of CDS Clearing and Depository Services Inc. on the closing date. Subscribers for Offered Shares will
not have the right to receive physical certificates evidencing their ownership of Offered Shares except as described herein.
See “Description of Share Capital”.
Underwriters’ Position
Maximum Size or Number of
Securities Available
Exercise Period
Exercise Price
Over-Allotment Option ................................
996,000 Common Shares
30 days from closing of the
Offering
$22.60 per Common Share
Total securities under option ................................
996,000 Common Shares
30 days from closing of the
Offering
$22.60 per Common Share
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TABLE OF CONTENTS
Page
(S-)
DOCUMENTS INCORPORATED BY REFERENCE .......................................................................................................... 4
MARKETING MATERIALS ................................................................................................................................................. 4
FORWARD-LOOKING STATEMENTS............................................................................................................................... 5
ELIGIBILITY FOR INVESTMENT ...................................................................................................................................... 6
THE COMPANY .................................................................................................................................................................... 6
RECENT DEVELOPMENTS................................................................................................................................................. 6
MATERIAL CHANGES TO CONSOLIDATED CAPITALIZATION................................................................................. 7
DESCRIPTION OF SHARE CAPITAL ................................................................................................................................. 7
PLAN OF DISTRIBUTION ................................................................................................................................................... 9
TRADING PRICE AND VOLUME ..................................................................................................................................... 10
PRIOR SALES...................................................................................................................................................................... 11
USE OF PROCEEDS............................................................................................................................................................ 11
CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS ....................................................................... 11
RISK FACTORS................................................................................................................................................................... 13
AUDITOR, TRANSFER AGENT AND REGISTRAR ....................................................................................................... 13
LEGAL MATTERS .............................................................................................................................................................. 13
PURCHASERS’ STATUTORY RIGHTS............................................................................................................................ 13
CERTIFICATE OF THE COMPANY.................................................................................................................................. 15
UNDERWRITERS’ CERTIFICATE.................................................................................................................................... 16
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DOCUMENTS INCORPORATED BY REFERENCE
This prospectus supplement is deemed to be incorporated by reference into the short form base shelf prospectus of
the Company dated October 9, 2014 (the “Short Form Prospectus”) solely for the purpose of the distribution of the
Offered Shares. Other documents are also incorporated, or deemed to be incorporated, by reference into the Short Form
Prospectus and reference should be made to the Short Form Prospectus for full particulars thereof.
The following documents filed with the securities commission or similar authority in each of the provinces of
Canada are specifically incorporated by reference into, and form an integral part of, this prospectus supplement and the
Short Form Prospectus:
(a)
the Company’s annual information form dated February 29, 2016;
(b)
the Company’s information circular dated April 12, 2016 in connection with the May 31, 2016 annual
meeting of shareholders;
(c)
the unaudited comparative consolidated interim financial statements of the Company and the notes
thereto for the three- and six-month periods ended June 30, 2016;
(d)
the audited comparative consolidated financial statements of the Company and the notes thereto for the
financial year ended December 31, 2015, together with the report of the independent auditors thereon;
(e)
management’s discussion and analysis for the unaudited comparative consolidated interim financial
statements referred to in paragraph (c) above;
(f)
management’s discussion and analysis for the audited comparative consolidated financial statements
referred to in paragraph (d) above; and
(g)
the template version of the term sheet for the Offering dated August 4, 2016 (the “Marketing
Materials”).
Any statement contained in the Short Form Prospectus, in this prospectus supplement or in a document
incorporated or deemed to be incorporated by reference herein or in the Short Form Prospectus for the purposes of the
distribution of the Offered Shares will be deemed to be modified or superseded, for purposes of this prospectus supplement,
to the extent that a statement contained herein or in the Short Form Prospectus or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein or in the Short Form Prospectus modifies or supersedes
such prior statement. The modifying or superseding statement need not state that it has modified or superseded a prior
statement or included any other information set out in the document that it modifies or supersedes. Any statement so
modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus
supplement. The making of a modifying or superseding statement will not be deemed an admission for any purposes that
the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or
an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in
light of the circumstances in which it was made.
Any documents of the types referred to in the preceding paragraphs (a) through (g), as well as all material change
reports (excluding confidential material change reports, if any) and business acquisition reports filed by the Company with
the securities regulatory authorities in any of the provinces of Canada after the date of this prospectus supplement and prior
to the termination of the Offering shall be deemed to be incorporated by reference into this prospectus supplement.
MARKETING MATERIALS
The Marketing Materials are not part of this prospectus supplement or the Short Form Prospectus to the extent that
the contents of the Marketing Materials have been modified or superseded by a statement contained in this prospectus
supplement or any amendment. Any “template version” of “marketing materials” (each as defined in National Instrument
41-101 − General Prospectus Requirements) filed with the securities commission or similar authority in each of the
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provinces of Canada in connection with this Offering after the date hereof but prior to the termination of the distribution of
the Offered Shares under this prospectus supplement (including any amendments to, or an amended version of, the
Marketing Materials) is deemed to be incorporated by reference herein and in the Short Form Prospectus.
FORWARD-LOOKING STATEMENTS
This prospectus supplement includes or incorporates by reference certain statements that are “forward-looking
statements”, and other statements concerning the Company’s objectives and strategies and management’s beliefs, plans,
estimates and intentions. Forward-looking statements can generally be identified by the expressions “anticipate”, “believe”,
“plan”, “estimate”, “project”, “expect”, “intend”, “outlook”, “objective”, “may”, “will”, “should”, “continue” and similar
expressions to the extent they relate to the Company or its management. All statements, other than statements of historical
fact, in this prospectus supplement that address activities, events or developments that First Capital Realty or a third party
expect or anticipate will or may occur in the future, including First Capital Realty’s future growth, results of operations,
performance and business prospects and opportunities, and the assumptions underlying any of the foregoing, are forwardlooking statements. These forward-looking statements are not historical facts but reflect First Capital Realty’s current
expectations regarding future results or events and are based on information currently available to First Capital Realty and
on assumptions it believes are reasonable. Forward-looking statements are based upon a number of assumptions and are
subject to a number of risks and uncertainties, many of which are beyond the control of First Capital Realty, that could
cause actual results to differ materially from those that are disclosed in or implied by such forward-looking statements.
These risks and uncertainties include, but are not limited to: general economic conditions; real property ownership; tenant
financial difficulties; defaults and bankruptcies; the relative illiquidity of real property; increases in operating costs and
property taxes; First Capital Realty’s ability to maintain occupancy and to lease or re-lease space at current or anticipated
rents; the availability and cost of equity and debt capital to finance the Company’s business, including the repayment of
existing indebtedness as well as development, intensification and acquisition activities; changes in interest rates and credit
spreads; changes to credit ratings; the availability of a new competitive supply of retail properties which may become
available either through construction, lease or sublease; unexpected costs or liabilities related to acquisitions, development
and construction; geographic and tenant concentration; residential development, sales and leasing; compliance with
financial covenants; changes in governmental regulation; environmental liability and compliance costs; unexpected costs or
liabilities related to dispositions; challenges associated with the integration of acquisitions into the Company; uninsured
losses and First Capital Realty’s ability to obtain insurance coverage at a reasonable cost; risks in joint ventures; matters
associated with significant shareholders; investments subject to credit and market risk; loss of key personnel; and the ability
of tenants to maintain licenses, certifications and accreditations.
Although the forward-looking statements contained in this prospectus supplement are based upon what First
Capital Realty believes are reasonable assumptions, there can be no assurance that actual results will be consistent with
these forward-looking statements. Readers, therefore, should not place undue reliance on any forward-looking statement.
Forward-looking information involves numerous assumptions such as rental income (including assumptions on timing of
lease-up, development coming on line and levels of percentage rent), interest rates, tenant defaults, borrowing costs
(including the underlying interest rates and credit spreads), the general availability of capital and the stability of the capital
markets, amount of development costs, capital expenditures, operating costs and corporate expenses, level and timing of
acquisitions of income-producing properties, number of shares outstanding and numerous other factors. Moreover, the
assumptions underlying First Capital Realty’s forward-looking statements contained in this prospectus supplement may
also include that consumer demand will remain stable and demographic trends will continue.
All of the forward-looking statements made in this prospectus supplement are qualified by these cautionary
statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results
or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or
effects on, First Capital Realty. All forward-looking statements in this prospectus supplement are made as of the date hereof
and, except as may be required by applicable law, First Capital Realty assumes no obligation to update or revise them to
reflect subsequent information, events or circumstances or otherwise. Additional information about these assumptions and
risks and uncertainties is contained in First Capital Realty’s filings with securities regulators, including First Capital
Realty’s current annual information form and management’s discussion and analysis.
S-5
ELIGIBILITY FOR INVESTMENT
In the opinion of Torys LLP, counsel to the Company, and Stikeman Elliott LLP, counsel to the Underwriters,
based on the provisions of the Income Tax Act (Canada) (the “Tax Act”) and the regulations thereunder (the
“Regulations”) in effect on the date hereof, the Offered Shares to be issued under this prospectus supplement if issued on
the date hereof, would be, on such date, qualified investments under the Tax Act and Regulations for trusts governed by
registered retirement savings plans (“RRSPs”), registered retirement income funds (“RRIFs”), registered education savings
plans, deferred profit sharing plans, registered disability savings plans and tax-free savings accounts (“TFSAs”), provided
that such shares are then listed on a designated stock exchange (which currently includes the TSX).
Notwithstanding that the Offered Shares may be qualified investments, a holder of a TFSA or an annuitant under
an RRSP or RRIF will be subject to a penalty tax if the Offered Shares are a “prohibited investment” (as defined in the Tax
Act) for a trust governed by TFSA, RRSP or RRIF. The Offered Shares will generally not be a prohibited investment for a
trust governed by a TFSA, RRSP or RRIF if the holder of the TFSA or the annuitant under the RRSP or RRIF, as the case
may be, deals at arm’s length with the Company for purposes of the Tax Act and does not have a “significant interest”
(within the meaning of subsection 207.01(4) of the Tax Act) in the Company. Holders of TFSAs and annuitants under
RRSPs or RRIFs should consult their own tax advisors in this regard.
THE COMPANY
The Company is one of Canada’s largest owners, developers and managers of grocery anchored, retail-focused
urban properties where people live and shop for everyday life. The Company’s primary strategy is the creation of value
over the long term by generating sustainable growth in cash flow and capital appreciation of its shopping centre portfolio.
To achieve its strategic objectives, management continues to: undertake selective development, redevelopment and
repositioning activities, including land use intensification; be focused and disciplined in acquiring well-located properties,
primarily where there are value creation opportunities, including sites in close proximity to existing properties in the
Company’s target urban markets; proactively manage the Company’s existing shopping centre portfolio to drive rent
growth; increase efficiency and productivity of operations; and maintain financial strength and flexibility to achieve a
competitive cost of capital.
The Company has one principal subsidiary, First Capital Holdings Trust, a 100% owned trust established under the
laws of the Province of Ontario, which had total assets amounting to more than 10% of the consolidated assets of the
Company as at June 30, 2016 or total revenues amounting to more than 10% of the consolidated revenues of the Company
for the three- and six-month periods ended June 30, 2016. First Capital Realty and First Capital (Alberta) Holdings II ULC
(a wholly-owned subsidiary of the Company) are the sole beneficiaries of this trust.
The head office and principal place of business of the Company is located at King Liberty Village, 85 Hanna
Avenue, Suite 400, Toronto, Ontario M6K 3S3.
RECENT DEVELOPMENTS
There have been no material developments in the business of the Company since June 30, 2016, the date of the
Company’s unaudited comparative consolidated interim financial statements for the three- and six-month periods ended
June 30, 2016, which have not been disclosed in the Short Form Prospectus or the documents incorporated by reference
therein, or elsewhere in this prospectus supplement or in the documents incorporated by reference herein.
Consistent with the Company’s past practices and in the normal course of business, the Company is engaged in
discussions, and has various agreements, with respect to possible acquisitions of new properties and dispositions of existing
properties in its portfolio. However, there can be no assurance that these discussions or agreements will result in
acquisitions or dispositions or, if they do, what the final terms or timing of such acquisitions or dispositions would be. The
Company expects to continue current discussions and actively pursue other acquisition, investment and disposition
opportunities.
S-6
Flagship Retail Property at Yonge Street and Bloor Street, Toronto
On August 4, 2016, the Company announced that it had entered into a binding agreement to purchase 85,000
square feet of new flagship retail space and 52 commercial parking stalls at the southeast corner of Yonge Street and Bloor
Street in Toronto, Ontario, for a cash purchase price of $189.2 million (the “Yonge & Bloor Property”). The Yonge &
Bloor Property comprises three levels of retail space with over 220 feet and 270 feet of high visibility frontage on Bloor
Street and Yonge Street, respectively, one of the busiest pedestrian intersections in Canada. The retail space is situated at
the base of a residential condominium tower that is presently under construction. Nordstrom Rack will be a major tenant in
the property with their first Canadian location in a 39,000 square foot flagship store. The Company is finalizing its leasing
program that will be executed to secure tenant commitments and enhance value on the remaining 46,000 square feet of
available space which is presently under construction and is expected to be ready for occupancy in late 2017.
The Company expects to advance the purchase price in August 2016. The advance will earn a return payable
monthly by the vendor until completion of construction, which is expected during the second half of 2017. Closing of this
transaction is subject to certain closing conditions typical for a transaction of this type.
Pusateri’s Assembly, Avenue Road and Lawrence Avenue, Toronto
On August 3, 2016, the Company announced that it had advanced a $39 million interim first mortgage loan and
entered into an agreement of purchase and sale in respect of an assembly of properties including Toronto’s well-known
Pusateri’s Fine Foods gourmet grocery store located at the northeast corner of Avenue Road and Lawrence Avenue in
Toronto, Ontario (the “Pusateri’s Assembly Properties”). The Pusateri’s Assembly Properties consist of approximately
2.2 acres of land that are improved with the Pusateri’s grocery store (the newly renovated 35,000 square foot store is
expected to open by the end of 2016), an adjacent commercial retail building, car wash, small office building and a 15-unit
residential apartment building. The acquisition of the Pusateri’s Assembly Properties has a purchase price of approximately
$63.2 million and remains subject to completion of satisfactory due diligence by the Company.
There can be no assurance that all conditions to closing in respect of the Yonge & Bloor Property and the
Pusateri’s Assembly Properties will be satisfied or waived.
MATERIAL CHANGES TO CONSOLIDATED CAPITALIZATION
There have been no material changes in the consolidated capitalization of the Company since June 30, 2016, the
date of the Company’s unaudited comparative consolidated interim financial statements for the three- and six-month
periods ended June 30, 2016, which have not been disclosed in the Short Form Prospectus or in the documents incorporated
by reference therein or elsewhere in this prospectus supplement or in the documents incorporated by reference herein.
DESCRIPTION OF SHARE CAPITAL
General
The authorized share capital of the Company consists of an unlimited number of preference shares, issuable in
series, and an unlimited number of Common Shares. As at the close of business on August 5, 2016, there were no
preference shares outstanding and there were 235,181,989 Common Shares issued and outstanding.
Offering
The Offering consists of 6,640,000 Offered Shares (or 7,636,000 Offered Shares in the event that the OverAllotment Option is exercised in full).
Common Shares
Holders of Common Shares are entitled to receive: (a) notice of and attend at any meeting of the shareholders of
the Company, except class meetings of other classes of shares, and are entitled to one vote for each share held; and (b)
dividends in the discretion of the Company’s board of directors (the “Board”). Additionally, subject to the rights of
S-7
holders of any shares ranking prior to the Common Shares, the holders of the Common Shares shall be entitled to receive
the remaining property of the Company upon liquidation, dissolution or the winding-up of the Company.
The Company presently pays quarterly dividends on its Common Shares. Dividends on the Common Shares, if
any, that are declared in any year are at the discretion of the Board and must be declared and paid in equal amounts per
share on all Common Shares without preference or distinction. The Company’s second quarter dividend of $0.215 per
Common Share was paid on July 12, 2016 to shareholders of record on June 30, 2016. The Company’s third quarter
dividend of $0.215 per Common Share is expected to be paid on or about October 12, 2016 to shareholders of record on or
about September 28, 2016. Assuming the closing of the Offering occurs on or before August 24, 2016, holders of Offered
Shares on such record date will be entitled to be paid any such dividend on their Offered Shares.
The Company has the option to satisfy its obligations to pay principal and interest on its outstanding convertible
unsecured subordinated debentures, either in whole or in part, by the issuance of Common Shares.
Depository Services
Except as otherwise provided below, the Offered Shares will be issued in the book based system of CDS Clearing
and Depository Services Inc. or a successor (“CDS”) and must be purchased or transferred through participants
(“Participants”) in the depository service of CDS, which include securities brokers and dealers, banks and trust companies.
On the date of closing of the Offering, the Company will cause a global certificate or certificates representing the Offered
Shares (each, a “Global Certificate”) to be delivered to, and registered in the name of, CDS or its nominee. Except as
described below, no purchaser of Offered Shares will be entitled to a certificate or other instrument from the Company or
CDS evidencing that purchaser’s ownership thereof, and no securityholder will be shown on the records maintained by
CDS except through a book-entry account of a Participant acting on behalf of such securityholder. The Company expects
that each securityholder will receive a customer confirmation of purchase from the registered dealer from which the Offered
Shares are purchased in accordance with the practices and procedures of that registered dealer. Practices of registered
dealers may vary, but generally customer confirmations are issued promptly after execution of a customer order. CDS will
be responsible for establishing and maintaining book-entry accounts for its Participants having interests in the Offered
Shares.
Offered Shares will be issued in fully registered form to holders or their nominees other than CDS or its nominee
if: (i) the Company determines that CDS is no longer willing or able to discharge properly its responsibilities as depository
and the Company is unable to locate a qualified successor; (ii) the Company, at its option, elects, or is required by law, to
terminate the book-entry system through CDS; or (iii) the Company, at its option, elects to terminate the book-entry system
in respect of its Common Shares through CDS.
Neither the Company nor the Underwriters will assume any liability for: (a) any aspect of the records relating to
the beneficial ownership of the Offered Shares held by CDS or the payments relating thereto; (b) maintaining, supervising
or reviewing any records relating to the Offered Shares; or (c) any advice or representation made by or with respect to CDS
and contained in the Short Form Prospectus and this prospectus supplement and relating to the rules governing CDS or any
action to be taken by CDS or at the direction of its Participants. The rules governing CDS provide that it acts as the agent
and depositary for the Participants. As a result, Participants must look solely to CDS and beneficial owners must look
solely to Participants for the payment of dividends paid by or on behalf of the Company to CDS.
As indirect holders of Offered Shares, investors should be aware that they (subject to certain exceptions): (a) may
not have Offered Shares registered in their name; (b) may not have physical certificates representing their interest in the
Offered Shares; (c) may not be able to sell the Offered Shares to institutions required by law to hold physical certificates for
securities they own; and (d) may be unable to pledge Offered Shares as security.
Transfers
Transfers of ownership in the Offered Shares represented by a Global Certificate will be effected only through
records maintained by CDS or its nominee for such Offered Shares with respect to interests of Participants and on the
records of Participants with respect to interests of persons other than Participants. Shareholders who are not Participants,
S-8
but who desire to purchase, sell or otherwise transfer ownership of or other interest in the Offered Shares represented by a
Global Certificate, may do so only through Participants.
The ability of a shareholder to pledge any of the Offered Shares represented by a Global Certificate or otherwise
take action with respect to such shareholder’s interest in the Offered Shares (other than through a Participant) may be
limited due to the lack of a physical certificate.
PLAN OF DISTRIBUTION
Under an underwriting agreement (the “Underwriting Agreement”) dated August 8, 2016 between the
Underwriters and the Company, the Company has agreed to sell and the Underwriters have agreed to purchase, on August
17, 2016 or such other date as may be agreed upon by the Company and TDSI and RBC, on behalf of the Underwriters, but
not later than August 24, 2016, subject to compliance with all necessary legal requirements and to the terms and conditions
contained in the Underwriting Agreement, the Offered Shares at a price of $22.60 per Offered Share, payable in cash to the
Company against delivery of the Offered Shares. The price was determined by negotiation between the Company and the
Underwriters. The Underwriting Agreement provides that the Company will pay the Underwriters a fee of $6,002,560 on
account of underwriting services rendered in connection with this Offering. The obligations of the Underwriters under the
Underwriting Agreement are several and may be terminated at their discretion upon the occurrence of certain stated events,
including in the event of certain stated material changes with respect to the Company and its subsidiaries (taken as a whole)
and certain stated events seriously adversely affecting the financial markets in Canada or the United States or the business,
operations or affairs of the Company and its subsidiaries (taken as a whole). The Underwriters are, however, obligated to
take up and pay for all of the Offered Shares if any of the Offered Shares are purchased under the Underwriting Agreement.
The Company has granted to the Underwriters an option (the “Over-Allotment Option”) exercisable in whole or
in part for a period of 30 days from the closing of the Offering to purchase up to 996,000 additional Common Shares on the
same terms as set out above. The Underwriting Agreement provides that First Capital Realty will pay the Underwriters a
fee of $0.904 per Common Share with respect to Common Shares issued under the Over-Allotment Option. This
prospectus supplement qualifies the grant of the Over-Allotment Option and the issuance of Common Shares on the
exercise of the Over-Allotment Option. A purchaser who acquires Common Shares on exercise of the Over-Allotment
Option acquires those Common Shares under this prospectus supplement, regardless of whether the over-allocation position
is ultimately filled through the exercise of the Over-Allotment Option or secondary market purchases.
Pursuant to policy statements of certain securities commissions or regulatory authorities, the Underwriters may
not, throughout the period of distribution under this prospectus supplement, bid for or purchase Common Shares. The
foregoing restriction is subject to exceptions, on the condition that the bid or purchase not be engaged in for the purpose of
creating actual or apparent active trading in, or raising the price of, the Common Shares. These exceptions include a bid or
purchase permitted under the by-laws and rules of relevant self-regulatory authorities relating to market stabilization and
passive market making activities and a bid or purchase made for and on behalf of a customer where the order was not
solicited during the period of distribution. The Company has been advised by the Underwriters that, in connection with this
Offering and pursuant to the first-mentioned exception, the Underwriters may over-allot or effect transactions which
stabilize or maintain the market price of the Common Shares at levels other than those which otherwise might prevail on
the open market. Such transactions, if commenced, may be discontinued at any time. Offered Shares sold by the
Underwriters to the public will initially be offered at the offering price set forth on the cover page of this prospectus
supplement. If all of the Offered Shares are not sold at the offering price, the Underwriters may reduce the offering price,
and the compensation realized by the Underwriters will be reduced by the amount that the aggregate price paid by
purchasers for the Offered Shares is less than the price paid by the Underwriters to the Company.
The Underwriters are entitled under the Underwriting Agreement to indemnification by the Company against
certain liabilities, including liabilities under securities legislation, or to contribution with respect to payments that they may
be required to make in respect thereof.
The Offered Shares have not been and will not be registered under the United States Securities Act of 1933 (the
“U.S. Securities Act”). Accordingly, except in certain transactions exempt from the registration requirements of the U.S.
Securities Act, the Offered Shares may not be offered, sold or delivered within the United States, and each Underwriter or
selling agent has agreed that it will not offer, sell or deliver the Offered Shares within the United States. This prospectus
supplement does not constitute an offer to sell or solicitation of an offer to buy any of the Offered Shares in the United
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States. In addition, until 40 days after the commencement of the Offering, an offer or sale of the Offered Shares within the
United States by a dealer (whether or not participating in the Offering) may violate the registration requirements of the U.S.
Securities Act.
The TSX has conditionally approved the listing of the Offered Shares on the TSX. Listing is subject to the
Company fulfilling all of the listing requirements of the TSX on or before November 4, 2016.
Under the Underwriting Agreement, the Company has agreed that it will not, without the prior written consent of
TDSI and RBC, on behalf of the Underwriters, such consent not to be unreasonably withheld or delayed, create, issue, sell
or otherwise lend, transfer or dispose of (or agree or announce any such agreement to create, issue, sell or otherwise dispose
of), directly or indirectly, any equity securities of the Company, or any securities exchangeable or convertible into equity
securities, for the period up to and including 60 days after the closing date of the Offering, other than Common Shares
issued: (i) upon conversion, redemption or repayment of the Company’s outstanding convertible unsecured subordinated
debentures; (ii) to satisfy the Company’s interest obligations with respect to outstanding convertible unsecured
subordinated debentures; (iii) upon exercise of any outstanding options; (iv) through the Company’s existing dividend
reinvestment plan, share option plans and other existing compensation and incentive plans; and (v) as consideration for the
acquisition of real property or assets from a vendor that is arm’s length to the Company.
TDSI, RBC, CIBC WM, BMO, NBF and Scotia are wholly-owned subsidiaries of the Banks, which are lenders to
the Company. Consequently, the Company may be considered to be a connected issuer of TDSI, RBC, CIBC WM, BMO,
NBF and Scotia for the purposes of the securities regulations of certain Canadian provinces. As of the date of this
prospectus supplement, the Company is in compliance with the terms of its indebtedness, certain of which indebtedness is
secured against certain of the Company’s properties. Since the indebtedness to the Banks was incurred, the financial
position of the Company and the value of the collateral granted as security for the indebtedness have not materially
changed. As of the close of business on August 5, 2016, the Company was indebted to the Banks in an aggregate amount of
approximately $723 million. TDSI, RBC, CIBC WM, BMO, NBF and Scotia have each advised that the decision to
underwrite the Offering was made independently of the Banks and the Banks had no influence as to the determination of
the terms of the distribution. None of TDSI, RBC, CIBC WM, BMO, NBF and Scotia will receive any benefit in
connection with the Offering other than its respective portion of the Underwriters’ fee payable by the Company.
TRADING PRICE AND VOLUME
The Common Shares trade on the TSX under the symbol “FCR”. The following table sets forth certain trading
information for the Common Shares on the TSX for the 12-month period before the date of this prospectus supplement, as
reported by the TSX.
Common Shares
2015
2016
Month
August
September
October
November
December
January
February
March
April
May
June
July
August (1 to 5)
High ($)
18.44
18.92
19.90
19.80
19.63
18.84
19.92
20.87
20.85
21.60
22.42
23.25
23.31
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Low ($)
16.93
17.17
18.42
19.02
18.35
17.56
18.43
19.57
19.82
20.21
20.96
22.12
22.32
Volume
4,059,735
6,119,259
4,580,876
3,597,902
4,925,134
15,393,523
6,561,446
7,669,903
9,626,184
7,029,640
6,850,915
7,902,815
1,856,415
PRIOR SALES
The following table sets forth the sales for the 12-month period prior to the date of this prospectus supplement for
the Common Shares, the price at which such Common Shares were issued, the number of Common Shares issued and the
date on which such Common Shares were issued:
Date Issued
October 1, 2015
December 14, 2015
May 6, 2016
Number of
Common Shares Issued
40,913
85,873
5,451,000
Issue Price
Per Common Share
$18.48
$18.71
$21.10
In the past 12 months an aggregate of 906,461 Common Shares have been issued in respect of the payment of
interest on the Company’s convertible unsecured subordinated debentures as follows: (i) 479,317 Common Shares were
issued on September 30, 2015 at a price of $17.676 per Common Share, and (ii) 427,144 Common Shares were issued on
March 31, 2016 at a price of $19.559 per Common Share.
On April 1, 2016, the Company issued an aggregate of 3,079,949 Common Shares at a price of $19.579 per
Common Share in connection with the redemption in full of its 5.25% convertible unsecured subordinated debentures,
which were due March 31, 2018, and its 4.95% convertible unsecured subordinated debentures, which were due March 31,
2017.
In the past 12 months, an aggregate of 71,545 Common Shares have been issued in respect of the redemption of
deferred share units as follows: (i) 45,000 Common Shares were issued on September 8, 2015, and (ii) 26,545 Common
Shares were issued on October 16, 2015. The issue prices for such Common Share were $17.92 and $19.02, respectively,
and in each case represented the volume weighted average trading price of the Common Shares for the five days ended on
the business day immediately prior to the applicable issuance.
In the past 12 months, an aggregate of 1,137,469 Common Shares have been issued in respect of the exercise of
options at a weighted average exercise price of $16.69 per Common Share.
USE OF PROCEEDS
The estimated net proceeds to the Company from the Offering, after deducting fees payable to the Underwriters
and the estimated expenses of the Offering, will be approximately $143.8 million (or approximately $165.4 million if the
Over-Allotment Option is exercised in full). The Company will use the net proceeds from the Offering to partially fund the
capital requirements in connection with (i) the acquisition of the Yonge & Bloor Property and (ii) the advance of an interim
first mortgage loan and related acquisition in respect of the Pustateri’s Assembly Properties. The balance of the net
proceeds will be used for general corporate purposes.
CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
In the opinion of Torys LLP, counsel to the Company, and Stikeman Elliott LLP, counsel to the Underwriters, the
following is a summary of the principal Canadian federal income tax considerations under the Tax Act generally applicable
to a holder who acquires Offered Shares under the Offering and who, for purposes of the Tax Act and at all relevant times,
is resident in Canada or deemed to be a resident of Canada, deals at arm’s length with, and is not affiliated with, the
Company, and acquires and holds the Offered Shares as capital property (a “Holder”).
Generally, the Offered Shares will be considered capital property to a Holder thereof provided that the Holder does
not use or hold the Offered Shares in the course of carrying on a business of buying and selling securities and such Holder
has not acquired them in one or more transactions considered to be an adventure or concern in the nature of trade. Certain
holders who might not otherwise be considered to hold the Offered Shares as capital property may, in certain
circumstances, be entitled to have the Offered Shares and all other “Canadian securities”, as defined in the Tax Act, owned
by such holders in the taxation year of the election and all subsequent taxation years deemed to be capital property by
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making the irrevocable election permitted by subsection 39(4) of the Tax Act. Holders who are considering making such an
election should consult their own tax advisors having regard to their particular circumstances.
This summary is not applicable to a holder (i) that is a “financial institution” for the purposes of the “mark-tomarket rules” contained in the Tax Act, (ii) that is a “specified financial institution” as defined in the Tax Act, (iii) an
interest in which is a “tax shelter investment” as defined in the Tax Act, (iv) that has elected to report its tax results in a
“functional currency” (as defined in the Tax Act, which excludes Canadian currency), or (v) that has entered or will enter
into, with respect to the Offered Shares, a “derivative forward agreement”, as defined in the Tax Act. Such holders should
consult their own tax advisors with respect to an investment in Offered Shares.
This summary is based on the facts set out in this prospectus supplement, the provisions of the Tax Act and the
Regulations in force as of the date prior to the date hereof, all specific proposals to amend the Tax Act and the Regulations
publicly announced by the Minister of Finance prior to the date hereof (the “Proposals”) and counsel’s understanding of
the current administrative and assessing policies and practices published in writing by the Canada Revenue Agency (the
“CRA”) prior to the date hereof. Except for the Proposals, this summary does not take into account any changes in law or
in administrative practices or assessing policies, whether by legislative, administrative or judicial decision or action, nor
does it take into account or consider any provincial, territorial or foreign income tax considerations, which may be different
from those discussed herein. No assurance can be given that the Proposals will be enacted as proposed or at all. This
summary is not exhaustive of all possible Canadian federal income tax consequences that may affect prospective
purchasers.
This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or
tax advice to any particular Holder, and no representation with respect to the Canadian federal income tax
consequences to any particular Holder is made. Consequently, Holders are advised to consult their own tax advisors
with respect to their particular circumstances.
Dividends on Offered Shares
Dividends (including deemed dividends) received on the Offered Shares by a Holder who is an individual (other
than certain trusts) will be included in the individual’s income and will be subject to the gross-up and dividend tax credit
rules applicable to taxable dividends received by individuals from “taxable Canadian corporations”, as defined in the Tax
Act, including the enhanced dividend tax credit rules applicable to any dividends designated by the Company as “eligible
dividends” in accordance with the Tax Act. There may be limitations on the Company’s ability to designate dividends as
eligible dividends. Such dividends received by an individual (other than certain trusts) may give rise to alternative
minimum tax under the Tax Act, depending on the individual’s circumstances.
Dividends (including deemed dividends) received on the Offered Shares by a Holder that is a corporation will be
included in computing the corporation’s income and will generally be deductible in computing its taxable income. In
certain circumstances, subsection 55(2) of the Tax Act will treat a taxable dividend received by a Holder that is a
corporation as proceeds of disposition or a capital gain. A Holder that is a “private corporation” or a “subject corporation”,
each as defined in the Tax Act, may be liable to pay a refundable tax under Part IV of the Tax Act on dividends received (or
deemed to be received) on the Offered Shares to the extent that such dividends are deductible in computing taxable income.
Disposition of Offered Shares
Generally, upon a disposition (or a deemed disposition) of an Offered Share a Holder will realize a capital gain (or
a capital loss) equal to the amount by which the Holder’s proceeds of disposition, net of any reasonable costs of disposition,
exceed (or are exceeded by) the Holder’s adjusted cost base of such share. The adjusted cost base to the Holder of an
Offered Share acquired pursuant to this prospectus supplement will be determined by averaging the cost of such share with
the adjusted cost base of all common shares of the Company owned by the Holder as capital property immediately before
the acquisition, if any. For the tax treatment of capital gains and capital losses, see “Taxation of Capital Gains or Capital
Losses” below.
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Taxation of Capital Gains or Capital Losses
Generally, one-half of any capital gain (a “taxable capital gain”) realized by a Holder in a taxation year must be
included in the Holder’s income for that year and one-half of any capital loss (an “allowable capital loss”) realized by a
Holder in a taxation year must be deducted against taxable capital gains realized by the Holder in the year. Allowable
capital losses in excess of taxable capital gains realized in a taxation year may generally be carried back and deducted
against taxable capital gains in any of the three taxation years preceding the year or any subsequent taxation year to the
extent and under the circumstances described in the Tax Act.
The amount of any capital loss realized by a Holder that is a corporation on the disposition (or deemed disposition)
of an Offered Share may be reduced by the amount of any dividends received or deemed to have been received by the
Holder on such share (or a share substituted for such share) to the extent and under the circumstances described in the Tax
Act. Similar rules may apply where an Offered Share is owned by a partnership or trust of which a corporation, trust or
partnership is a member or beneficiary.
A Holder that is throughout the relevant taxation year a “Canadian-controlled private corporation”, as defined in
the Tax Act, may be liable to pay an additional refundable tax on its “aggregate investment income”, which is defined in the
Tax Act to include an amount in respect of taxable capital gains, for the year.
A taxable capital gain realized by a Holder that is an individual (excluding certain trusts) may give rise to a
liability for alternative minimum tax under the Tax Act.
RISK FACTORS
There are risks associated with the Offered Shares being distributed under the Offering. In addition to the risks
described herein, reference is made to the section entitled “Risk Factors” in the Company’s current annual information form
and the risks described in the Company’s management’s discussion and analysis for the financial year ended December 31,
2015, all of which are incorporated herein by reference.
AUDITOR, TRANSFER AGENT AND REGISTRAR
The independent auditor of First Capital Realty is Ernst & Young LLP, Chartered Professional Accountants,
Licensed Public Accountants, Ernst & Young Tower, 222 Bay Street, Toronto, Ontario M5K 1J7. Such firm is independent
of the Company within the meaning of the Rules of Professional Conduct of the Chartered Professional Accountants of
Ontario (registered name of The Institute of Chartered Accountants of Ontario).
The transfer agent and registrar for the Common Shares is Computershare Trust Company of Canada, at its
principal office in Toronto, Ontario.
LEGAL MATTERS
Legal matters in connection with the issuance of the Offered Shares offered by this prospectus supplement will be
passed upon at the date of closing of the Offering on behalf of the Company by Torys LLP and on behalf of the
Underwriters by Stikeman Elliott LLP.
As of the date hereof, the partners and associates of Torys LLP, as a group, and Stikeman Elliott LLP, as a group,
beneficially own, directly or indirectly, less than 1% of the outstanding securities of the Company.
PURCHASERS’ STATUTORY RIGHTS
Securities legislation in certain of the provinces of Canada provides purchasers with the right to withdraw from an
agreement to purchase securities. This right may be exercised within two business days after receipt or deemed receipt of a
prospectus and any amendment. In several of the provinces, the securities legislation further provides a purchaser with
remedies for rescission or, in some jurisdictions, revision of the price or damages if the prospectus and any amendment
thereto contains a misrepresentation or is not delivered to the purchaser, provided that the remedies for rescission, revision
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of the price or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the
purchaser’s province. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s
province for the particulars of these rights or consult with a legal adviser.
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CERTIFICATE OF THE COMPANY
Dated: August 8, 2016
The short form prospectus, together with the documents incorporated herein by reference, as supplemented by the
foregoing, constitutes full, true and plain disclosure of all material facts relating to the securities offered by the short form
prospectus and this prospectus supplement as required by the securities legislation of each of the provinces of Canada.
(Signed) ADAM E. PAUL
President and Chief Executive Officer
(Signed) KAY BREKKEN
Executive Vice President and Chief Financial Officer
On behalf of the Board of Directors
(Signed) ALLAN S. KIMBERLEY
Director
(Signed) ANDREA M. STEPHEN
Director
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UNDERWRITERS’ CERTIFICATE
Dated: August 8, 2016
To the best of our knowledge, information and belief, the short form prospectus, together with the documents
incorporated herein by reference, as supplemented by the foregoing, constitutes full, true and plain disclosure of all material
facts relating to the securities offered by the short form prospectus and this prospectus supplement as required by the
securities legislation of each of the provinces of Canada.
TD SECURITIES INC.
RBC DOMINION SECURITIES INC.
By: (Signed) ANDREW PHILLIPS
By: (Signed) CAROLYN BLAIR
CIBC WORLD MARKETS INC.
By: (Signed) JEFF APPLEBY
BMO NESBITT BURNS INC.
NATIONAL BANK FINANCIAL INC.
SCOTIA CAPITAL INC.
By: (Signed) JONATHAN LI
By: (Signed) ANDREW WALLACE
By: (Signed) BRYCE STEWART
CANACCORD GENUITY CORP.
By: (Signed) DAN SHEREMETO
RAYMOND JAMES LTD.
By: (Signed) LUCAS ATKINS
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