Mainstreet Equity Corp. makes changes to their accounting policy

CALGARY, June 16 /CNW/ - Mainstreet Equity Corporation (TSX:MEQ)
announced that the Company will account for financing and certain operating
costs, associated with the major renovation and repositioning of properties
within its portfolio, during the renovation period, using a different
methodology than the methodology that has been utilized by the Company since
going public in 1998. As a result, the Company's previously released financial
results completed in accordance with Canadian generally accepted accounting
principles ("GAAP"), including those in the most recent earnings release, may
require restatement.
In the past, financing and operating costs for these properties, during
the major renovation period, were expensed in the period in which they were
incurred. Going forward, Mainstreet's accounting policy, which is in
accordance with Canadian GAAP will be to capitalize financing and certain
operating cost associated with major property renovations until the suites are
fully renovated and ready for releasing, which usually takes between two to
three months. The financing and certain operating costs incurred during the
major renovation period will be treated as capital improvements and amortized
over an estimated useful life of 5 years.
The change in the accounting policy will be reflected in the Third
Quarter ended June 30, 2005 interim financial statements, and will be
retroactively applied to the financial statements for all prior fiscal periods
and presented for comparative purposes.
The Company believes that Funds From Operations (FFO)(1), which the
Company considers to be its most relevant measure of financial performance,
will be positively impacted by this change in accounting policy.
Mainstreet is a publicly-traded real estate company focused on the
acquisition, redevelopment, repositioning and management of "mid-market"  
multi-family residential rental properties across Canada. Please contact Bob
Dhillon at (403) 215-6063 or bdhillon(at)mainst.biz for more information or
visit our website at www.mainst.biz.

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(1) Funds from operations (FFO) is calculated as net earnings before
    depreciation of real estate properties and future income taxes.
    FFO is a widely accepted supplemental measure of a Canadian real
    estate company's performance. It is not, however, a recognized
    measure under Canadian generally accepted accounting principles
    (GAAP). The GAAP measurement most directly comparable to FFO is
    net income. FFO should not be construed as an alternative to net
    income or cash flow from operating activities, determined in
    accordance with GAAP, as an indicator of Mainstreet's performance.
    Readers are cautioned that FFO may differ from similar calculations
    used by other comparable entities.