PRO Real Estate Investment Trust · TSX:PRV.UN
PRO Real Estate Investment Trust — Q3 2022 Earnings Presentation
29 slides from PRO Real Estate Investment Trust's earnings presentation, Nov 9, 2022
Slide 1: Built for Sustainable Growth and Performance
BUILT FOR SUSTAINABLE GROWTH AND PERFORMANCE INVESTOR PRESENTATION NOVEMBER 9, 2022 INVESTOR PRESENTATION | Q3 2022 1
Slide 2: Built for Sustainable Growth and Performance
BUILT FOR SUSTAINABLE GROWTH AND PERFORMANCE 2 INVESTOR PRESENTATION | Q3 2022 2
Slide 3: Disclaimer
DISCLAIMER About this Presentation This presentation is dated November 9, 2022 and is strictly intended to provide general information about PRO Real Estate Investment Trust (“PROREIT”) and its business. This presentation does not constitute an offer to sell or the solicitation of an offer to buy an
Slide 4: PROREIT (PRV.UN) at a Glance
PROREIT (PRV.UN) AT A GLANCE Owns and operates a high-quality commercial 131 PROPERTIES IN (1) $1.04B TOTAL ASSETS (2) 6.5M GROSS LEASABLE (1) real estate portfolio with a 10 PROVINCES AREA (SQ. FT) strong industrial focus, FOCUS ON CENTRAL AND located in mid-sized 97.9% $0.45 EASTERN CANADA (3) Can
Slide 5: High Quality Portfolio with Strong Industrial Focus
HIGH QUALITY PORTFOLIO WITH STRONG INDUSTRIAL FOCUS (1) INDUSTRIAL PORTFOLIO RETAIL PORTFOLIO OFFICE PORTFOLIO 79.7% of GLA 13.7% of GLA 6.6% of GLA > Multi-tenant and single-tenant > High-quality community > Mainly suburban and properties in high-demand service centres mixed use flex office industr
Slide 6: Taking PROREIT to the Next Level
TAKING PROREIT TO THE NEXT LEVEL WHAT DIFFERENTIATES US IS OUR ABILITY TO IDENTIFY AND BUILD A AMBITION Reach $2B in asset value as an industrial-focused REIT owning and STABLE, LOW RISK PORTFOLIO IN STRONG SECONDARY operating high-quality properties in MARKETS WHERE mid-size Canadian cities with st
Slide 7: Track Record of Driving Value
TRACK RECORD OF DRIVING VALUE BASE RENT BY ASSET CLASS (%) BASE RENT BY REGION (%) Retail Office Maritime Provinces Quebec Industrial Ontario Western Canada 13.1 9.9 12.7 16.8 29.2 21.9 9.8 11.5 50.0 39.5 68.2 32.2 27.5 57.7 Q3-2021 Q3-2022(1) Q3-2021 Q3-2022(1) GROWING EXPOSURE TO INDUSTRIAL SECTOR
Slide 8: Our Growth History
OUR GROWTH HISTORY BACK IN AN INDUSTRIAL- GROWTH MODE FOCUSED REIT A BREAKOUT > 120 properties, > Strategic JV agreement YEAR 6.6M sq. ft. GLA with Crestpoint Real PROREIT CREATION > Internalization Estate Investments in BY FORMER CANMARC > Acquisition of August 2022 of asset MANAGEMENT > 91 propert
Slide 9: Fully Internalized Property Management Function
FULLY INTERNALIZED PROPERTY MANAGEMENT FUNCTION > Acquired in 2018, Compass Commercial Realty is a long-established group operating autonomously $1.6B TOTAL VALUE 10M SQ.FT from Halifax (headquarters) OF MANAGED MANAGED PROPERTIES - Offices in Halifax, Moncton, Montreal, Ottawa and Toronto > Signifi
Slide 10: 2022 Strategic Joint Venture Agreement
2022 STRATEGIC JOINT VENTURE AGREEMENT > Joint venture agreement with > Two-portion transaction, immediately Crestpoint Real Estate Investments, a accretive to earnings: high-profile institutional real estate - PROREIT and Crestpoint each investor, completed on August 5, 2022 acquired a 50% interest
Slide 11: Two-Portion Joint Venture Transaction
TWO-PORTION JOINT VENTURE TRANSACTION PROREIT 50% ACQUISITION INTEREST PROREIT 50% INTEREST SALE Building City Province GLA (in sq.ft.) Building City Province GLA (in sq.ft.) 202 & 204 Brownlow Ave Dartmouth NS 213,789 26-28 Topple Dr Dartmouth NS 201,110 201 Brownlow Ave and 320-340 Wright Ave Dart
Slide 12: ESG Highlights
ESG HIGHLIGHTS ENVIRONMENTAL > Reducing paper consumption with implementation of 14 +99% 100% automated accounts payable system PROREIT-OWNED PROREIT’S PORTFOLIO PROREIT-OWNED PROPERTIES ARE BOMA CERTIFIED IS LOCATED IN AREAS SUBJECT TO A THOROUGH ASSESSMENT OF PROPERTIES IDENTIFIED AS LOW ALL ENVIR
Slide 13: Q3-2022 Financial Highlights
Q3-2022 FINANCIAL HIGHLIGHTS > Same Property NOI1 up 3.6%, compared to Q3 2021 > Fair value gains on investment properties of $52.7 million year-to-date > AFFO1 increase of 21.0% in Q3 2022, compared to Q3 2021 > Debt to Gross Book Value1 of 49.8% at September 30, 2022, compared to 58.2% at same dat
Slide 14: Robust Internal Growth
ROBUST INTERNAL GROWTH Same Property NOI1 3 Months Ended YoY by asset class September 30, 2022 Retail $3.1M ↑ 3.3% Office segment reported a decrease in occupancy from performance in two of our nine buildings, which should Office $1.2M ↓ 12.2% improve in Q4-2022, due to a new six-year term lease eff
Slide 15: Significant Value Embedded in Portfolio
SIGNIFICANT VALUE EMBEDDED IN PORTFOLIO(1) Weighted Avg Estimated Asset Class Leased GLA In-Place Net Market Net Spread Rent Rent(2) GROWTH OPPORTUNITIES Retail 877,937 $14.70 $14.83 1% WITHIN PORTFOLIO: Office 383,785 $14.12 $14.96 6% - Important mark-to-market rental rate upside Industrial 5,142,3
Slide 16: Active Asset Management Case Studies
ACTIVE ASSET MANAGEMENT CASE STUDIES FROM VACANT TO FULLY LEASED > 82,300 sq. ft industrial property purchased vacant for $4.5M in May 2021 > New 10-year lease secured in December 2021 with international aerospace tenant, starting October 2022 > Value nearly doubled, with building appraisal at $8.7M
Slide 17: High Quality, Low Risk Portfolio
HIGH QUALITY, LOW RISK PORTFOLIO OPERATING HIGHLIGHTS STAGGERED LEASE MATURITY PROFILE GLA 50.0% 41.6% As at September 30, 2022 Base Rent 40.0% Number of Occupancy GLA WALT(2) Asset Class Properties (%)(1) (sq. ft.) (years) 30.0% Retail 37 97.5 900,225 4.6 16.2% 17.9% 42.9% 20.0% Office 9 89.4 429,4
Slide 18: Top Ten Tenants
TOP TEN TENANTS AS AT SEPTEMBER 30, 2022 # Tenant % of In-Place Base Rent GLA (sq. ft.) WALT (years) Credit Rating (1) 71.1% OF BASE RENT 1 4.2% 222,491 4.9 na/BBB-/BBB- FROM NATIONAL AND 2 4.1% 127,334 2.3 Ba1/BB+/BBB- GOVERNMENT TENANTS 3 3.6% 73,786 7.8 Baa2/BBB+/na 4 3.5% 134,867 4.2 Aaa/AAA/AA+
Slide 19: Sound and Flexible Capital Structure
SOUND AND FLEXIBLE CAPITAL STRUCTURE At Sept. 30, 2022 DEBT MATURITY PROFILE As of September 30, 2022 Debt to Gross Book Value(1) 49.82% Debt Maturing During Year Payments of Principal Total debt $519.7M 160 Total first mortgage debt weighted average rate 3.69% $142.4 140 $127.3 Total first mortgage
Slide 20: Key Strategic Pillars to Create Long-Term Value
KEY STRATEGIC PILLARS TO CREATE LONG-TERM VALUE INCREASE INDUSTRIAL FOCUS AND OPTIMIZE BALANCE SCALE DIVERSIFY BY TENANCIES SHEET AND CAPITAL AND GEOGRAPHY ALLOCATION > Reach $2B in asset value > Continue to focus on class > Reduce Debt to Gross in medium term B, high-quality commercial Book Value a
Slide 21: Experienced and Aligned Management and Board
EXPERIENCED AND ALIGNED MANAGEMENT AND BOARD SENIOR MANAGEMENT TEAM INDEPENDENT BOARD OF TRUSTEES John Levitt Independent Trustee and Chair of the Board Peter Aghar, CPA, CMA Independent Trustee James W. Beckerleg James W. Beckerleg Gordon Lawlor, CPA, CA Trustee, President and Chief Executive Offic
Slide 22: Why Invest in PROREIT
WHY INVEST IN PROREIT > High quality industrial-focused portfolio > Ample liquidity, stable cash flows with resilient low-risk tenants and strong balance sheet > Significant value embedded in portfolio > Fully internalized asset and > Clear strategy to grow earnings property management and value > E
Slide 23: Appendices
APPENDICES 23 INVESTOR PRESENTATION | Q3 2022 23
Slide 24: Returning to Market in Growth Mode in 2021
RETURNING TO MARKET IN GROWTH MODE IN 2021 > Accretive acquisition of 34 institutional-caliber +1.2M STRATEGICALLY DEPLOYING SQ. FT OF GLA industrial assets for CAPITAL TO $297M in 2021 CREATE LONG-TERM - 21 properties in Atlantic Canada - 10 properties in Winnipeg, 6% AVERAGE VALUE Manitoba CAPITAL
Slide 25: 2021 Transactions
2021 TRANSACTIONS Number of GLA Transaction Capitalization Date closed City Properties (in sq.ft) Price (in $ Rate Highlight million) Acquisitions 100% interest in three small bay industrial April 23, 2021 Ottawa (ON) 3 283,495 49.2 6.1 buildings strategically located withing core industrial submark
Slide 26: 2021 Financing Highlights
2021 FINANCING HIGHLIGHTS EQUITY DEBT > April 2021: $50M private > $71.4M in mortgage > CREDIT FACILITY placement with Bragg financing at lower EXPANDED ON Group, a prominent rates and extended IMPROVED Canadian private terms TERMS TO $60M investor > Eliminated expensive > October 2021: $83.3M alter
Slide 27: Strong Growth Since Inception
STRONG GROWTH SINCE INCEPTION TOTAL ASSETS AND OCCUPANCY PROPERTY REVENUES ADJUSTED FUNDS FROM OPERATIONS(3) ($ Millions) ($ Millions) ($ Millions) 98.4% 77.674 1000 80 40 990.0 900 CAGR(1) 70 CAGR (1) 69.810 CAGR (1) 800 39% 74% 51% 60 57.627 30 700 98.4% 98.0% 25.072 600 50 634.7 634.5 22.436 98.2
Slide 28: We've Done It Before
WE’VE DONE IT BEFORE 100% S&P/TSX Capped REIT Index CANMARC REIT 75% 50% 25% 0% May-2010 Jul-2010 Sep-2010 Nov-2010 Jan-2011 Mar-2011 May-2011 Jul-2011 Sep-2011 Nov-2011 Jan-2012 > Former CANMARC REIT management > Diversified REIT with national portfolio > 143 properties > Acquired by Cominar in 201
Slide 29: Thank you
Thank you INVESTOR PRESENTATION | Q3 2022 29
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