Slide 1: Q2 2021 Investor Presentation
MAINSTREE Q2 2021 Investor Presentation 99) ]SUIBIN
Slide 2: Forward-looking statements
Certain statements contained herein constitute “forward-looking statements” as such term is used in applicable Canadian securities laws. These statements relate to analysis and other information based on forecasts of future results, estimates of amounts not yet determinable and assumptions of manage
Slide 3: We are a Corporation not a REIT
We are a Corporation not a REIT We are an add-value consolidator of mid-market multi-family apartment buildings Mid-Market Characteristics ▪ Typically less than 100 units ▪ Fragmented Mom & Pop ownership ▪ Owner neglect and mismanagement ▪ Greater deferred maintenance ▪ Owners have limited access to
Slide 4: Management believes current market rents do not justify new construction
Management believes: Current market rents do not justify new construction due to high costs Increasing demand and limited supply will continue to create favourable rental market conditions Mainstreet’s Purchase Price Market Value Replacement Cost* (Build cost of comparable new apartments) © All Righ
Slide 5: Rental universe, vacancy and population growth by market
Population Growth: 26,121 (2020) [32% of total rental universe] Rental Universe: 80,933 (2020) Calculation of ownership Premium = Principal & Interest for Avg. Resale Home minus [Mid-market: 59,727 (74%)] (2020) Avg. 2-bedroom Apt. Rent: $831 (Fall 2019) Vacancy Rate: 6.8% (Oct 2020) Calculation of
Slide 6: Rental universe, vacancy and population growth by market (BC)
Population Growth: 2,071 (2020) [61% of total rental universe] Rental Universe: 3,412 (2020) Calculation of ownership Premium NA [Mid-market: 3,412 (100%)] (2020) Avg. 2-bedroom Apt. Rent: NA Vacancy Rate: 1.5% (Oct 2020) Population Growth: 1,833 (2020) [42% of total rental universe] Rental Universe
Slide 7: Q2 2021, 12,907 units are stabilized out of the portfolio
Identify and buy under-performing rental units at prices well below replacement costs. Increase the asset value of Mainstreet’s portfolio by renovating acquired properties. Minimize operating costs through professional management, efficient technology and energy-saving equipment. Reposition renovate
Slide 8: © All Rights Reserved - MAINSTREET EQUITY CORP. TSX:MEQ
© All Rights Reserved - MAINSTREET EQUITY CORP. TSX:MEQ 8
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© All Rights Reserved - MAINSTREET EQUITY CORP. TSX:MEQ 9
Slide 10: Improve NOI after stabilization
Improve NOI from Improve NOI from $1,543K to $3,493K $69K to $2,340K Improve NOI from Improve NOI from (-$135K) to $224K $1,175K to $1,952K © All Rights Reserved - MAINSTREET EQUITY CORP. TSX:MEQ 10
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© All Rights Reserved - MAINSTREET EQUITY CORP. TSX:MEQ 11
Slide 12: Renovation program and expense reductions
1. Mainstreet’s aggressive renovation program has resulted in significant expense reductions in key areas such as: ▪ Electrical (install compact fluorescent bulbs: LED bulbs for emergency exit signs) ▪ Water (‘Ultra-high efficiency’ toilets; low-flow aerators installed on showers and all taps) ▪ Ins
Slide 13: Higher operating margins versus larger concrete complexes
Higher operating margins versus larger concrete complexes Low rise properties have relatively less operating expenses such as: ▪ Limited or no elevator maintenance ▪ No repair heat or maintenance of underground parking garage ▪ Amenities Lower realty taxes versus larger structures Lower hydro cost r
Slide 14: Through clustering assets Mainstreet has maximized efficiencies and growth
Abbotsford Calgary Edmonton Through clustering assets Mainstreet has maximized efficiencies and growth, transforming a single asset into a network of apartment complexes. Saskatoon Regina Surrey We achieved this through: Clustering assets within a 5 block radius Requiring fewer resident managers lea
Slide 15: Properties
104 Properties [2,955 units] © All Rights Reserved - MAINSTREET EQUITY CORP. TSX:MEQ 15
Slide 16: Target Markets Rental Apartment Universe
Target Markets Rental Apartment Universe <100 Units/ Total Rental % Mid-Market building Universe Abbotsford 4,026 4,398 92% Surrey 5,299 6,232 85% Chilliwack 3,412 3,412 100% Kamloops 4,185 4,295 97% Vernon 2,032 2,032 100% Penticton 2,546 2,546 100% Courtenay 1,587 1,818 87% Calgary 28,635 45,882 6
Slide 17: Estimated potential rental apartment total mid-market share
40,000 36,009 34,209 35,000 32,408 30,608 30,000 28,807 27,007 25,206 25,000 23,406 Units 20,000 14,245 15,000 10,000 5,000 0 7.9% 13.0% 14.0% 15.0% 16.0% 17.0% 18.0% 19.0% 20.0% Estimated Potential Rental Apartment Total Mid-Market Share * Numbers obtained from CMHC, the potential target markets in
Slide 18: Number of outstanding shares
▪ Listed on the TSX in 2000, Mainstreet has grown its portfolio from 272 units with a market value of $17 million to 14,209 units (YTD) with a market value of $2.2 billion with limited equity dilution. ▪ As of September 30, 2020 the number of common shares (9,349,830) as compared to 8,883,333 common
Slide 19: © All Rights Reserved - MAINSTREET EQUITY CORP. TSX:MEQ
▪ ▪ ▪ ▪ © All Rights Reserved - MAINSTREET EQUITY CORP. TSX:MEQ 19
Slide 20: Property stabilization case study (178 units)
Mainstreet purchased the above property (178 units) in August 2016. It took approximately 12 months to complete the stabilization process and we financed the property in November 2017. Financial results for the property before and after stabilization and financing are summarized as follows: Purchase
Slide 21: Property stabilization case study (331 units)
Mainstreet purchased the above property (331 units with 5 buildings) in January 2015. It took approximately 6 months to complete the stabilization process and we financed the property in November 2016. Financial results for the property before and after stabilization and refinancing are summarized a
Slide 22: Property stabilization case study (52 units)
Mainstreet purchased the above property (52 units) in April 2012. It took approximately 29 months to complete the stabilization process and we financed the property in September 2014. Financial results for the property before and after stabilization and refinancing are summarized as follows: (000’s)
Slide 23: Property stabilization case study (240 units)
Mainstreet purchased the above property (240 units) in June 2019. It took approximately 16 months to complete the stabilization process and we financed the property in September 2020. Financial results for the property before and after stabilization and refinancing are summarized as follows: (000’s)
Slide 24: Gross Book/Appraised Value
$2,500 # of outstanding shares Billions 0.01 $2,183 $2,223 $2,020 $2,000 0 1,866 -0.01 $1,632 Gross Book Value $1,500 $1,458 Gross Book/Appraised Value $1,386 $1,400 $1,406 -0.02 Appraised Value $1,259 $1,293 # of outstanding shares $1,150 # of Outstanding Shares $1,051 $1,148 -0.03 $976 $1,000 $908
Slide 25: Mortgage maturity as of March 31, 2021
Mortgage Maturity ▪ As of March 31, 2021, Mainstreet has $1,286M of as of March 31, 2021 mortgages, of which $1,265M (98%) are CMHC Cost Saving insured (fixed) at an average interest rate of 2.56% 100 basis points and the balance of $21M are fixed conventional on $193M maturing mortgages mortgages w
Slide 26: Stabilization of existing non-stabilized portfolio
Annualized Annualized Annualized Annualized Annualized NOI Additional NOI Additional Additional Optimum based on Q2 at 95% NOI without NOI at full potential 2021 results occupancy rate concession market rent NOI Difference ▪ Stabilization of existing non-stabilized portfolio which equates to 8% of t
Slide 27: Q1 and Q2 2019 Acquisitions
Q1 2019 Acquisitions City Address # of Units Purchase Price Appraised Value Price per door Saskatoon 4234 & 4238 DeGreer St East 64 $6,688,000.00 TBD $104,500 Edmonton 10735 107 St NW 24 $2,380,000.00 TBD $99,167 Calgary Vista Group 125 $18,300,000.00 TBD $146,400 Regina 1424 Victoria & 1969 St. Joh
Slide 28: Q3 and Q4 2019 Acquisitions
Q3 2019 Acquisitions City Address # of Units Purchase Price Appraised Value Price per door Calgary 1937 11 Ave SW 8 $1,197,500 TBD $149,688 Saskatoon 402 Ave P South 31 $1,550,000 TBD $50,000 Calgary 6347 Bowview Rd NW 74 $13,000,000 TBD $175,676 Calgary 626 57 Ave SW 29 $4,814,000 TBD $166,000 Calg
Slide 29: Q1 and Q2 2020 Acquisitions
Q1 2020 Acquisitions City Address # of Units Purchase Price Appraised Value Price per door Calgary 4311 75 St NW 8 $1,040,000 TBD $130,000 Saskatoon 1306, 1310, 1320 20 St W 54 $1,320,000 TBD $24,444 Edmonton 10719 110 St NW 23 $1,918,000 TBD $83,391 Kamloops 627 Lilac Ave - Kamloops 48 $7,000,000 T
Slide 30: Q3 and Q4 2020 Acquisitions
Q3 2020 Acquisitions City Address # of Units Purchase Price Appraised Value Price per door Calgary 1624 16 Ave SW 28 $3,360,000 TBD $120,000 Edmonton 10730 102 St NW 33 $2,000,000 TBD $60,606 TOTAL Q3 2020 61 $5,360,000 Q4 2020 Acquisitions City Address # of Units Purchase Price Appraised Value Pric
Slide 31: Q1 and Q2 2021 Acquisitions
Q1 2021 Acquisitions City Address # of Units Purchase Price Appraised Value Price per door Saskatoon 525/529/601/605 Ave X S & 2309 17th St W 1 $24,000 TBD $24,000 Kamloops 196 Yew Street 18 $2,300,000 TBD $127,778 Regina 3525 Avonhurst Dr 72 $7,459,000 TBD $103,597 Winnipeg 314 Broadway 87 $7,330,0
Slide 32: Subsequent to Q2 2021 Acquisitions
Subsequent to Q2 2021 Acquisitions- unconditional City Address # of Units Purchase Price Appraised Value Price per door Chilliwack 46180 Bole Ave 45 $6,717,000 TBD $149,267 Chilliwack 46155 Bole Ave 48 $7,114,000 TBD $148,208 Chilliwack 9275 Mary St 42 $6,469,000 TBD $154,024 Penticton 769 Winnipeg
Slide 33: Land and development lots
▪ Trevella Park Townhomes - Calgary, AB (~14 acres of High Density Residential Land) ▪ Highland Park Townhomes – Lethbridge, AB (13.1 acres of High Density Residential Land) ▪ Dover – Calgary, AB (Residual Land) ▪ Imperial Court - Surrey, BC (High Density Residential Land) ▪ Ashley Court – Surrey, B
Slide 34: Condominium conversion opportunity
Alberta British Columbia ▪ Trevella Park – Calgary, AB ▪ Sunshine complex, BC ▪ Highland Park – Lethbridge, AB ▪ Pinetree complex, BC The opportunity exists to convert the existing portfolio ▪ Wedgewood – Edmonton, AB ▪ Hanna Estates, Abbotsford, BC ▪ Lauderdale – Edmonton, AB ▪ Villa Christina, Abb
Slide 35: Environmental Social Governance
ENVIRONMENTAL SOCIAL GOVERNANCE ▪ Environmental Consultation ▪ Health & Safety ▪ Risk Management Committed to implementing best environmental Competitive employee health benefits Audit Committees practices suggested by independent Enhanced Covid protocols for employees and Whistle Blower Policy envi