DREAM Unlimited Corp. Class A · TSX:DRM
DREAM Unlimited Corp. Class A — Dream Industrial REIT — Investor Presentation (July 2019)
41 slides from DREAM Unlimited Corp. Class A's investor presentation, July 2019
Slide 1: Investor Presentation July 2019
dream @ industrial REIT Investor Presentation July 2019
Slide 2: Presentation Overview
dream & industrial REIT Presentation Overview Section 1 Investment Opportunity Section 2 Our Company & Strategy Section 3 Investment & Portfolio Highlights Section 4 Market Fundamentals
Slide 3: Investment Opportunity
dream & industrial REIT Investment Opportunity
Slide 4: Executive Summary
ie Gti Executive Summary Opportunity to invest in approximately 24 million square feet of diversified and functional industrial real estate across Canada and the U.S. Strong management platform, strategic partnerships with Dream and PAULS Corp to acquire, develop and manage industrial properties Bal
Slide 5: Portfolio mix and key metrics
re 26% 26% 15% Western Canada Quebec Ontario Eastern 22% Canada 11% United States 1 -As at March 31° 2019 2 - Distribution rate divided by unit price as at May 31+, 2019 Source: Bloomberg, “Pricing Date: May 31%, 2019; $1.6B* Market Capitalization 6.0%* Distribution Yield? 24.8%* YTD Total Return
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 U Acquisition & Canadian Acquisition & ~15 Years of Strategic Partnership Development Platform Development Platform building better communities dream > »] PAULS Dream and P
Slide 7: Why Invest In Industrial?
Why Invest In Industrial? Investment prospects Fatient Senior housing Worse] "Moderate income workforce apartments: Medical office Afordable apartments Flex Central-city office Research and development Student housing Midscale hotels Neighborhood/eommunity shopping centers Single-family rental Upsca
Slide 8: Total return since July 2017
60% 4 50% + 40% 4 DIR annoui expansion into Nashville acq Total DIR Return since July 2017: 52% DIR announces $125M equity offering and early repayment of conv. debentures DIR announces acquisition of DCT portfolio, $75M equity raise, and $26M private placement Brian Pauls appointed CEO of DIR nces
Slide 9: Compelling Valuation & Metrics vs Peer Group
Compelling Valuation & Metrics vs Peer Group S145 90.4% 90.3% 22.3x 16.2 $97 $98 * 13.6x : : 82.4% SMU wiR DIR SMU WIR DIR SMU WIR DIR Scale Stability Value 12019 Ai lis Net Ri ii “ . " . 9120 Annualized Net Renta posame 50% Low & Stable LTM Diluted FFO Payout Ratio LTM P/FFO2: ~5X Multiple Spread t
Slide 10: Compelling Valuation & Metrics vs U.S. Industrial REITs
Compelling Valuation & Metrics vs U.S. Industrial REITs 23.3x 6.0% 3.6% 13.6X US Peer Group DIR US Peer Group DIR ry Yield LTM P/FFO? Attractive ~2.5% Yield-Spread to U.S. Peers! Relative Value at ~10X Multiple Spread Source: SNL Financial, Company Disclosures; Pricing date: May 31% 2019 +10 US. ind
Slide 11: Our Strategy
dream & industrial REIT Our Strategy
Slide 12: Acquisitions and Active Asset Management
Acquisitions Targeting continued growth in DIR’s Canadian portfolio through a disciplined investment strategy and select opportunities in the U.S. Well-Positioned For Accretive Growth Active Asset Management Add value to existing properties through maximizing organic rent growth while evaluating red
Slide 13: Drivers of Comparative Property NOI Growth
Drivers of Comparative Property NOI Growth Rental Growth in Capture higher market rents as leases roll over. To date in 2019, DIR has locked in 15% and 12% Ontario and Quebec rental rate increases in Ontario and Quebec, respectively. L Contractual Rent I Built-in contractual growth of 1.5% per year
Slide 14: Our Acquisition Strategy
Our Acquisition Strategy 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 geographic dive
Slide 15: Our Financial & Debt Strategy
Our Financial & Debt Strategy 60% Increase driven by operating at lower leverage levels in 2018 and 2019 —__f F 90% 54.1% 50% 76.2% 75.9% 74.2% % + 70% 43.5% 424% — § 50% 4O% F 30% 30% 10% 2012 2013 2014 2015 2016 2017 2018 Q1 2019 mmm Net Debt to Assets Ratio = <=®==Diluted FFO Payout Ratio Through
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 Portfolio Strong & Proven Leasing Platform Growth in U.S. Target Markets Attractive Valuation’ ‘Pricing Date: May 31%, 2019 ( >) High quality, wellleased, reusable, strategically located assets, with a focus on multi-tenant properti
Slide 18: Portfolio by region
11% 21% Western Canada Ontario Quebec 30% United States Eastern Canada 22% 16%
Slide 19: Portfolio statistics
SS cu 109,600 SF Avg. Tenant Size 19
Slide 20: High Quality and Diversified Tenant Base
@ High Quality and Diversified Tenant Base Top Tenants % of Gross Rental Revenue High Quality & Diversified Tenant Base — Diversified tenant base with over 1,400 tenants — _ Strong and long-standing relationships — Top ten tenants represent ~16% of Gross Rental Revenue* and include high-quality inve
Slide 21: Strong Leasing Platform With a Track Record of Success
@ Strong Leasing Platform With a Track Record of Success 100% 4 98% 4 96% 4 94% 4 92% 4 90% @ 1nPlace § Committed Occupancy wd] 06% Avg. Occupancy Q1/15-01/19 2015 2016 2017 2018 High portfolio occupancy along with organic growth through contractual rent steps across the portfolio and increasing ren
Slide 22: Capitalizing on Strong Industrial Fundamentals
@ Capitalizing on Strong Industrial Fundamentals Regional Lease Expiration Net of Commitments (000’s sf)! 1000 4 800 4 600 + Western Canada Ontario Quebec Eastern Canada US. m20i9 m2020 m2021 m2022 WALT of 4.1 years with expiries in well-occupied markets provides an opportunity to capitalize on stro
Slide 23: Well Positioned to Drive Rents Higher - Ontario
@ Well Positioned to Drive Rents Higher - Ontario 15% 1,000 + 2019 2019 2020 2021 Lease commitments ™ Remaining Expiries Opportunity to continue to drive organic growth in core Ontario and Quebec markets - for 2019 leases completed, DIR has captured rental spreads over expiring/prior rates of 15% an
Slide 24: Well Positioned to Drive Rents Higher - Quebec
@ Well Positioned to Drive Rents Higher - Quebec 1,000 5 12% 2019 Committed spreads 750 5 500 250 5 2019 2020 2021 Lease commitments ™ Remaining Expiries Opportunity to continue to drive organic growth in core Ontario and Quebec markets - for 2019 leases completed, DIR has captured rental spreads ov
Slide 25: Industrial acquisition transactions and cap rates
Quarter Company Location Price ($M) Cap Rate Q4/17 WIR Reno $8 7.2% Q2/18 GRT Columbus $232* 6.0% Q2/18 GRT Pennsylvania, Indiana $74* 5.5% Q1/19 GRT Louisville, Dallas $173* 6.0% Q2/19 WIR Multiple U.S. Markets $226* 5.1% Average 6.0% Quarter Company Location Price ($M) Cap Rate Q4/17 AAR Edmonton
Slide 26: Improved Capital Structure
Improved Capital Structure 60% - Leverage (net debt-to-assets ratio) as of 01/19 was 42.4%, a decline of 10.1% since YE 2016 4.4 years Term to Maturity sow | 3.4x Interest Coverage Ratio 7.1x 40% 5 Net debt/adj. EBITDAFV $322m 30% Unencumbered 2012 2013 2014 2015 2016 2017 2018 Q1 2019 Assets [ DIR
Slide 27: Staggered Debt Maturities
@ Staggered Debt Maturities 31.7% 24.2% 14.5% 11.3% 11.6% 5 i | 2019 2020 2021 2022 2023 2024+ ™Mortgages im Credit Facility Staggered debt maturity profile with 4.4 year weighted average debt term and ample liquidity through recently upsized corporate facility and unencumbered asset pool ‘As at Mar
Slide 28: Fundamentals in our U.S. Target Markets
Fundamentals in our U.S. Target Markets Total Net Rentable New Supply as % of Q1 Absorption (mm sf) Total Vacancy Availability Average Net Rent Total Area (mm sf) Columbus 259 08 3.9% 5.6% $3.81 1.6% Nashville 184 0.3 9.3% 11.0% $4.81 1.4% Memphis 244 141 5.7% 10.2% $3.36 2.1% Orlando 117 OW 5.6% 8.
Slide 29: Chicago, IL
Chicago, IL Closed on March 1%, 2019 uisville, KY Cincinnati, OH 29
Slide 30: Midwest U.S. Logistics Portfolio Overview
Midwest U.S. Logistics Portfolio Overview Functional Properties Well Located Attractive Markets Diversified Tenant Base Growth Potential a > The portfolio is comprised of highly functional distribution facilities that are reusable and cater to a wide range of users r Properties are strategically sit
Slide 31: Market Fundamentals
dream & industrial REIT Market Fundamentals
Slide 32: Attractive Macro Economic Backdrop
Attractive Macro Economic Backdrop Real GDP Growth 2019E Real GDP Growth 2020E 27% me 2.6% 2.1% 2.2% 1.9% Lung 1.6% 1.6% 14% 1.5% _ 1.1% 0.9% y 1.0% 1 | | | I Italy Japan U.K. France Germany Canada U.S. _— Australia Japan Italy U.K. Germany France Canada U.S. Australia Canada and the U.S. are expect
Slide 33: Strong Industrial Fundamentals in DIR's Markets
Strong Industrial Fundamentals in DIR’s Markets DIR Portfolio Occupancy by Region Total Portfolio Occupancy: 96.5% 98.5% 98.0% 985% ~~ ~ L 94.9% Western Ontario Quebec Eastern United States Canada Canada Q1/19 - Construction as % of Market Supply 3.4% 2.2% 1.9% 1.5% 1.2% 1.2% 1.1% r 7] Toronto Canad
Slide 34: E-Commerce Driving Demand for U.S. Urban Logistics
E-Commerce Driving Demand for U.S. Urban Logistics 500Msf of Net Absorption 1 12% and 11% on 10-12% 8% growth in Net Asking Rents @ Online Retail as a % of Total Retail Sales Expected Source: eMarketer 2017 2018 2019 2020 2021 | A similar trend is happening in Canada ] 34
Slide 35: Canadian Industrial Investment Market
Canadian Industrial Investment Market Historical Cap Rate Compression 9.0% 4 8.5% 4 8.0% 4 7.5% 4 7.0% 4 6.5% 4 6.0% 4 5.5% 4 5.0% 4 4.5% Q1/05 =O1/06 =O1/07. O1/08 O1/09 O10 O11 O12 O13 O14 O15 O16 O1/17) O1/18 O1/19 Industrial A Industrial B 27bps 36bps Y/Y Class A Y/Y Class B Compression - Q1/19
Slide 36: Canadian Industrial Vs. Office Cap Rates Suggest Strong Demand
Canadian Industrial Vs. Office Cap Rates Suggest Strong Demand 9% 4 r 0.6% % | &% + 0.4% 7% 4 + 0.2% 6% | 5% 7 + 0.0% 4% 4 + -0.2% 3% 4 r -0.4% 2% + L 0.69 ~ | 0.6% 0% -0.8% Q1/06 Q1/07 Q1/08 Q1/09 Q1/10 Qt Q1/12 Q1/13 O14 Q1/15 QW16 = QI/17 Q1/18 Q119 Mmmm Spread s=—eOffice —=—=—Industrial Industri
Slide 37: Canada Industrial Fundamentals
Canada Industrial Fundamentals $8.00 4 r 7% $7.50 | L 6% $7.00 | L 5% $6.50 4 r 4% $6.00 + L 3% $5.50 4 L 2% $5.00 1% Q1/13 Q1/14 Q1/15 Q1/16 Q1/17 Q1/18 Qi Average Net Rent (CADS) = Availability Rate Source: CBRE 37
Slide 38: U.S. Industrial Fundamentals
U.S. Industrial Fundamentals $8.00 5 r 12% $7.50 4 r 11% $7.00 4 r 10% $6.50 4 L 9% $6.00 + L gy% $5.50 4 L 7% $5.00 6% Q1/13 1/14 Q1/15 Q1/16 Q1/17 Q1/18 Q1i9 Average Net Rent (US$) Availability Rate Source: CBRE 38
Slide 39: 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 40: Thank you
thank you.
Slide 41: Forward Looking Information
Forward Looking Information This investor presentation may contain forward-looking information within the meaning of applicable securities legislation, including statements regarding our objectives. strategies to achieve those objectives, its outlook, beliefs, plans, estimates, projections and inten
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