DREAM Unlimited Corp. Class A · TSX:DRM
DREAM Unlimited Corp. Class A — Dream Industrial REIT — Investor Presentation (March 2018)
37 slides from DREAM Unlimited Corp. Class A's investor presentation, March 2018
Slide 1: Investor Presentation February/March 2018
dream @ industrial REIT Investor Presentation February/March, 2018
Slide 2: Presentation Overview
dream & industrial REIT Presentation Overview Section 1 Investment Opportunity Section 2 Our Company & Strategy Section 3 Investment & Portfolio Highlights Section & Capital Structure Section 5 Market Fundamentals
Slide 3: Investment Opportunity
dream & industrial REIT Investment Opportunity
Slide 4: Executive Summary
= e = xecutive Summary a Opportunity to invest in 19 million square feet of diversified and well-leased industrial real estate across Canada and the U.S. Well-positioned to capitalize on strong fundamentals through our strategic partnerships with Dream Unlimited and PAULS Corp to acquire, develop an
Slide 5: Our Company
Our Company Dream Industrial owns and operates a diversified portfolio of industrial real estate across Canada and the United States, supported by a platform with a proven track record of long-term value creation $1.8B Gross Asset Value 35% 25% 16% Western Canada Quebec Ontario Eastern Canada 10% 14
Slide 6: Partnerships to Support Dream Industrial REIT's Strategy
Partnerships to Support Dream Industrial REIT’s Strategy Local Canadian Platform Local U.S. Platform Long-Standing Relationship Canadian Acquisition & Development Platform U Acquisition & Development Platform ~15 Years of Strategic Partnership dream > building better communities Dream Unlimited prov
Slide 7: Why Invest In Industrial?
@ Why Invest In Industrial? -| The Case for Industrial + = =— Top ranked property sector in the past four years in the PWC Emerging Trends survey and expected to remain for 2018 — Improving demand and difficult asset class to amass scale — Supply and demand in balance — Strong and improving fundamen
Slide 8: Compelling Valuation & Metrics vs Peer Group
Compelling Valuation & Metrics vs Peer Group $150 95% 18.0X $122 90% $120 90% 15.0X 14.2X 14.4X 12.0X $90 85% 84% 10.1X $76 9.0X $60 80% $47 77% 6.0X $30 75% 3.0X $0 70% 0.0X SMU WIR DIR SMU WIR DIR SMU WIR DIR eye Scale Stability Value Annualized NOI ~60% Greater than Closest Peer Low & Stable FFO
Slide 9: Compelling Valuation vs U.S. Industrial REITs
Compelling Valuation vs U.S. Industrial REITs 108% 7.6% 21.0X . 90% 9 5.9% 10.1X US Ind. REITs US Ind. REITs DIR US Ind. REITs DIR © Yield LTM P/FFO P/NAV Attractive ~4% Yield-Spread to U.S. Peers Relative Value at ~11X Multiple Spread 10% Discount Based on Consensus NAV Note: 11 U.S. industriaHfocu
Slide 10: Our Company & Strategy
dream & industrial REIT Our Company & Strategy
Slide 11: Our Portfolio by GLA
@ Our Portfolio by GLA Geography Tenancy Profile Asset Type ™ Western Canada’ ™ Warehouse & Distribution = Flex Industrial = Ontario . = Multi Tenant ™ Quebec ® Single Tenant = Eastern Canada ® Light Manufacturing = United States The portfolio is well diversified by geography and asset type, with a
Slide 12: Acquisitions
Acquisitions Targeting further expansion into the U.S. and continued growth in DIR’s Canadian portfolio using existing dry powder and a disciplined investment strategy Well-Positioned For Accretive Growth Active Asset Management Add value to existing properties through organic rent growth and also l
Slide 13: Our Acquisition Strategy
Our Acquisition Strategy Reusable Distribution & Logistics Ample Parking & Site Circulation Location Industrial properties that are attractive to a wide variety of tenants with various business requirements Assets that are typically less than 1 million sf, that allow us to maintain tenant and geogra
Slide 14: Our Management
Our Management Mr. Brian Pauls is the Chief Executive Officer of Dream Industrial REIT and President of PAULS Corp LLC. He is an accomplished real estate professional with 23 years of industry experience, and was responsible for developing over eight million sf of industrial properties in Canada and
Slide 15: Our Financial & Debt Strategy
Our Financial & Debt Strategy 60.0% 4 r 100% } 75% 50.0% — L 50% 45.0% 4 L 25% 40.0% o% 2012 2013 2014 2015 2016 2017 mmm Debt-to-total-assets ——FFO Payout Ratio Through capital discipline we have been able to maintain the security of our distribution while also reducing leverage to establish a soli
Slide 16: Investment & Portfolio Highlights
dream & industrial REIT Investment & Portfolio Highlights
Slide 17: Summary of Investment Highlights
Summary of Investment Highlights High Quality Portfolio Diversified Tenant Base Strong & Proven Leasing Platform U.S. Expansion & Growth Compelling Valuation High quality, welHleased, reusable, strategically located assets, with a focus on multitenant properties Over 1,300 tenants, operating in a ra
Slide 18: GIA
GIA cilities 5.1 YEARS Avg. Lease Term | 71 le. # of Tenants i 97,800 SF Avg. Tenant Size 18
Slide 19: High Quality and Diversified Tenant Base
@ High Quality and Diversified Tenant Base — _ Diversified tenant base with over 1,300 tenants Nissan North America Inc. 6.2% — Strong and long-standing relationships Spectra Premium Industries Inc. 3.4% — Top ten tenants represent 24% of GLA and include : high quality investment grade covenants TC
Slide 20: Strong Leasing Platform
Strong Leasing Platform 100% 4 $7.20 98% 4 $6.90 ~96% 95% 4 $6.60 Avg. Occupancy IPO-Q4/17 93% 4 $6.30 90% + $6.00 Q115 Q2/15 — -Q3/15 4/15. 1/16 2/16 3/16 4/16 1/17, 2/17, 3/17, QU/17 @ Committed Occupancy 9 =In-Place Rents High portfolio occupancy with organic growth through contractual rent steps
Slide 21: Resilience in Western Canada
Resilience in Western Canada DIR - Western Canada Historical In-Place Rents & Occupancy $10.00 5 ; 100% $8.00 4 r 90% $6.00 4 r 80% $4.00 70% 2012 2013 2014 2015 2016 2017 @mm— DIR Western Canada Occupancy 9 In-Place Rents Strong occupancy demonstrates the resiliency of our portfolio in Western Cana
Slide 22: Leasing Momentum in Eastern Canada
Leasing Momentum in Eastern Canada DIR - Eastern Canada Historical Portfolio Occupancy and In-Place Rent $8.00 5 r 100% r 96% $7.00 4 Leasing Momentum: 350 bps Y/Y $6.00 | Occupancy Increase - Q4/17 + 92% $5.00 4 r 88% _ a i ” $3.00 r r r - 80% Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 mmm DIR
Slide 23: Capitalizing on Strong Industrial Fundamentals
@ Capitalizing on Strong Industrial Fundamentals Regional Lease Expiration by Pro Forma GLA (000s sf) 14% 15% 8% 8% \ fl i J Western Canada Ontario Quebec Eastern Canada m2018 m2019 m2020 m2021 DIR’s WALT of 4.1 years is relatively low and with substantial expiries in well occupied markets, we are p
Slide 24: Strategic Plan: U.S. Expansion
Strategic Plan: In mid-2017 we announced our expansion into the U.S., targeting 20% of NOI Integrating U.S. Experience: Appointment of Brian Pauls as CEO, and formation of strategic partnership with PAULS Corp. Positioning: In Q4/17 we raised $113 million in equity capital and increased our revolvin
Slide 25: U.S. Properties
*U.S. dollars Deltapoint Memphis, TN Shelby V=Memphis, TN American Way - Orlando, FL 25
Slide 26: U.S. and Canadian Transactions
U.S. Transcations Quarter Company Location Price ($M) Cap Rate Q2/17 AAR Houston $83 6.8% Q1/17 AAR Atlanta $53 5.3% Q4/17 WPT Reno $8 7.2% Q3/17 WPT Pennsylvania $94 5.8% Q3/17 WPT Portland $74 4.8% Average 6.0% Canadian Transcations Quarter Company Location Price ($M) Cap Rate Q3/17 AAR Brampton $
Slide 27: Improving Capital Structure and Enhanced Liquidity
@ Improving Capital Structure and Enhanced Liquidity 56.0% Leverage has decreased over 300 bps since Q4 2016 54.0% 3.8 years 3.3x Interest Term to Maturity Caen 52.0% $113m $125m (159) Unencumbered Credit 50.0% A Facility 48.0% Ul 2012 2013 2014 2015 2016 2017 DIR is well positioned and has the fina
Slide 28: Staggered Debt Maturities
@ Staggered Debt Maturities $mm $300 5 $200 + - ; i | | $0 Lo | 2018 2019 2020 2021 2022 2023+ ™ Mortgages m Debentures Staggered debt maturity profile with 3.8 year weighted average debt term and ample liquidity to early-redeem our 5.25% converts before their maturity at the end of 2019 28
Slide 29: Market Fundamentals
dream & industrial REIT Market Fundamentals
Slide 30: Attractive Macro Economic Backdrop
Attractive Macro Economic Backdrop Real GDP Growth 2017E Real GDP Growth 2018E 4.0% 4 4.0% 3.0% 3.0% 4 3.0% 2.5% y 2.3% 21% 2.0% 4 2.0% - | | - | | L 0.0% - 0.0% Japan UK. Italy France U.S. OECD Germany Canada UK. Japan Italy France Canada Germany OECD United States Canada and the U.S. were both top
Slide 31: Strong Industrial Fundamentals in DIR's Markets
Strong Industrial Fundamentals in DIR’s Markets DIR Portfolio Occupancy by Region! Q4/17 - Construction As % of Market Supply 1.6% 100.0% 99.7% 100.0% 14% 15% 1.2% 97.0% 96.3% 1.0% 95.1% 0.8% 08% 08% 94.0% 4 93.3% 0.6% 91.0% owe _ 0.1% 88.0% oo% Eastern Western Quebec Ontario United States Ottawa Mo
Slide 32: E-Commerce Tailwinds
E-Commerce Tailwinds E-commerce & Industrial Real Estate ( ) 3X E-commerce requires approximately three times as much space as traditional distribution \ y, (~ ~) For every additional $1 billion in e-commerce 1 ms) M sales, ecommerce industrial demand increases over 1.25 million sf V y, (- ) 1 O of
Slide 33: E-commerce users will demand an additional ~27 million sf of space
With sales forecast to grow to $56 billion by 2020, e-commerce users will demand an additional ~27 million sf of space (~1.5% of inventory), nearly double current industrial construction, but for e-commerce alone
Slide 34: The Industrial Investment Market
The Industrial Investment Market Historical Cap Rate Compression 9.0% 4 8.0% + 7.0% 4 6.0% + 5.0% + 1005 4005 3006 2007 1008 4008 3009 2010 1011 4Q11 3012 2013 1014 4O14 3015 2016 1017 4Q17 —IndustrialA = =—=Industrial B 0/7bps odSbps Y/Y Class A Y/Y Class B Compression - Q4/17 Compression - Q4/17 4
Slide 35: Industrial-A cap rates below office-A and historical average
Industrial-A cap rates are currently ~40 bps below office-A, ~60bps lower than the historical average, which reflects strong demand from tenants and investors and benefits existing owners
Slide 36: Thank you
thank you.
Slide 37: Forward Looking Information
Forward Looking Information This slide presentation contains forward looking information within the meaning of applicable securities legislation, including statements regarding our plans, objectives and strategies; our expansion into new markets; the future composition of our portfolio; our expectat
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