Tonko Development Corp. — M&A Activity 1998

TONKO DEVELOPMENT CORP.

For Immediate Release (“TAK” – TSE)

TONKO ANNOUNCES CLOSING OF THE PURCHASE OF A PORTFOLIO OF OFFICE/RETAIL BUILDINGS IN VANCOUVER, BRITISH COLUMBIA

Calgary, Alberta – May 4, 1998 – Tonko Development Corp. is pleased to announce that it has completed the acquisition of the purchase of the previously announced portfolio of four retail and office buildings in downtown Vancouver. This acquisition totals 376,700 square feet of rentable retail and office space. The portfolio includes the following properties:

1. E. A. Hall Building 124,000 square feet

789 West Pender Street

1. Birks Place 95,000 square feet

688 West Hastings Street

1. Leckie Building 92,700 square feet

220 Cambie Street

1. Yale Town Building 65,000 square feet

1090 Homer Street

The purchase price is $65 million. The portfolio’s annual Net Operating Income is expected to be $5.8 million. Included in the Purchase Agreement, the Vendor agreed to provide income protection for the portfolio for three (3) years from the date of closing.

This portfolio is anticipated to increase Tonko’s operating cash flow by $0.03 per share in 1998 and upwards of $0.045 per share in 1999. The purchase price will be funded by the assumption of $43.05 million of mortgage financing and $21.95 million of cash on hand.

In addition, Tonko is also pleased to announce its purchase of a majority interest in Novam Management Ltd. (“Novam”). Novam is one of the premier developers and managers of mid-market commercial properties in Greater Vancouver. The principals and staff of Novam will continue in their present positions with the company. By combining the skills and knowledge of the Novam principals’ in Vancouver with Tonko’s real estate expertise and its relationship to the investment community, we anticipate expanding Novam’s operations in Vancouver and the Lower Mainland. The company will be known as Tonko/Novam.

Tonko is a manager, developer and owner of commercial real estate assets throughout Alberta and British Columbia. Currently the company manages $500 million of real estate assets of which its proportionate ownership equates to $150 million. Tonko’s shares are listed on The Toronto Stock Exchange and trade under the symbol “TAK”.

For further information please contact Jeff Kohn Chairman, or Peter Cohos President, of Tonko Development Corp. at (403) 209-1733.

TONKO DEVELOPMENT CORP.

600, 999 - 8thStreet S.W.

Calgary, Alberta

T2R 1J5