PRO Real Estate Investment Trust · TSX:PRV.UN
PRO Real Estate Investment Trust — Investor Presentation (October 2013)
39 slides from PRO Real Estate Investment Trust's investor presentation, Oct 23, 2013
Slide 1: Investor Presentation October 23, 2013
Investor Presentation October 23, 2013 A preliminary short form prospectus containing important information relating to the securities described in this document has been filed with the securities regulatory authorities in each of the provinces of Canada. A copy of the preliminary short form prospec
Slide 2: Disclaimer
Disclaimer An investment in the securities described in this document is subject to a number of risks that should be considered by a prospective purchaser. Prospective purchasers should carefully consider the risk factors described under “Risk Factors” and “Notice Regarding Forward‐Looking Statement
Slide 3: Disclaimer
Disclaimer This presentation includes certain financial measures such as NOI, FFO and AFFO that have not been prepared in accordance with International Financial Reporting Standards. See “Non-IFRS Financial Measures” in the preliminary prospectus. The REIT is not a trust company and is not registere
Slide 4: Management
A MANAGEMENT PROREIT
Slide 5: Experienced Management Team
Experienced Management Team James W. Beckerleg Gordon G. Lawlor, CA Chief Executive Officer Chief Financial Officer Mark O’Brien, Director of Acquisitions Alison Schafer, Director of Finance 5
Slide 6: Experienced Management Team
Experienced Management Team 50+ years of experience Acquired and managed over $4.2 billion of assets Extensive network of real estate industry NL relationships to source high-quality ON acquisitions QC NB Strong knowledge and expertise of NS Québec, Atlantic Canada and Ontario real estate ma
Slide 7: Track Record of Value Creation
Track Record of Value Creation Former senior management team of CANMARC CANMARC REIT vs. S&P TSX REIT Index CANMARC was a diversified REIT with a 100% (Total Returns) national portfolio: CANMARC REIT 115 commercial properties totaling 9.4 million S&P/TSX Capped REIT Index square feet of GLA 75%
Slide 8: Investment Highlights
Investment Highlights Experienced management team and board with a proven track record of value creation Initial portfolio of high-quality commercial real estate Geographic focus on stable Eastern Canadian markets High-quality tenants with long term leases Alignment of interests through an
Slide 9: Objectives & Strategy
Objectives & Strategy Objectives Growth Strategies INTERNAL Provide stable and growing cash Generate revenue growth opportunities distributions from investments in real estate Implement operating improvements and preventative properties in Canada maintenance programs Expand asset base and en
Slide 10: Strong Governance and Board Independence
Strong Governance and Board Independence Name Role Experience • Partner at EDEV Real Estate Advisors • Chairman and John Levitt • Former trustee of CANMARC REIT Independent Trustee • Former senior management of O&Y Properties Corporation • Former trustee of CANMARC REIT Gérard Limoges • Independent
Slide 11: Portfolio Overview
A PROREIT PORTFOLIO OVERVIEW = PHARMAPRIX @ {
Slide 12: Eastern Canada Market Overview
Eastern Canada Market Overview Focus on Quebec, Atlantic Canada, and Ontario Amongst the largest economies in Canada Represents 60.6% of Canadian GDP ($1.1 trillion) and 67.1% of Canadian population (23.4 million people) Ontario and Quebec are the two largest Canadian economies Economies hav
Slide 13: Eastern Canada Market Overview
Eastern Canada Market Overview Large and fragmented real estate markets Capitalization Rate Spreads to National Averages 326 million square feet of office space Basis points 80 (67.5% of Canadian supply) 1.1 billion square feet of industrial space 60 (78.3% of Canadian supply) GTA and GMA ar
Slide 14: Initial Portfolio
Initial Portfolio 9 income-producing commercial properties QC NB NS Approximately 400,000 Quebec City square feet of GLA Halifax Saint John Montreal ON Ottawa Platform for growth in REIT’s target markets of Toronto Quebec, Atlantic Canada and Ontario Office Retail Commercial Mixed Use 14
Slide 15: Select Property Photos
Select Property Photos 135 Main St. 1670 Notre Dame Street Moncton, NB L’Ancienne-Lorette, QC 55 Technology Drive 2 Lawrence Street Saint John, NB Amherst, NS 15
Slide 16: Select Property Photos (cont'd)
Select Property Photos (cont’d) 3200-3600 Guénette Street St. Laurent, QC 16
Slide 17: Select Property Photos (cont'd)
Select Property Photos (cont’d) 370 Connell Street Woodstock, NB 17
Slide 18: Diversified Portfolio
Diversified Portfolio Property Type # of Properties GLA (square feet) Occupancy Office 3 125,407 85.0% Retail 5 171,795 88.5% Commercial Mixed Use 1 99,670 100.0% Total 9 396,872 90.3% Base Rent by Asset Class(1) Base Rent by Province(1) Office 26.8% Quebec 40.9% New Brunswick Retail 42.5% 50.0% Com
Slide 19: High-Quality Tenant Profile
High-Quality Tenant Profile 24 credit-worthy tenants Well diversified by industry sector Government and national tenants represent 88.5% of base rent Investment grade tenants represent 73.4% of base rent Base Rent by Tenant Profile(1) Base Rent by Tenant Industry(1)(2) Local Other Government
Slide 20: Top Ten Tenants
Top Ten Tenants Weighted Average % of GLA # Tenant Remaining Lease Credit Rating(2) Base Rent(1) (square feet) Term (years) 1 16.2% 35,709 10.5 BBB+, AL 2 11.9% 45,040 1.5 3 11.6% 42,737 13.2 BBB-, BBB 4 11.2% 50,732 1.2 Baa2, BBB 5 9.0% 14,589 8.8 Aa3, A+, AA 6 6.8% 28,490 4.3 A3, A- 7 5.8% 16,166
Slide 21: Lease Maturity Profile
Lease Maturity Profile Overall weighted average occupancy rate of 90.3% with a remaining lease term of 7.1 years Investment grade tenants (73.4% of forecast base rent) have a weighted average remaining lease term of 7.7 years Well balanced lease maturity profile Not more than 14.1% of the fo
Slide 22: Financial
A PROREIT — FINANCIAL = PHARMAPRIX @ jj
Slide 23: Sources of Funds
Sources and Uses Sources of Funds C$ millions Sources Working capital 2.6 Revolving credit facility 5.8 New and assumed mortgages 22.9 Equity – vendor retained units 5.6 Equity – public offering 16.2 Total Sources 53.1 Uses Property acquisitions 42.7 Real estate closing costs and lender fees 1.0 Rep
Slide 24: Financial Forecast
Financial Forecast C$ Financial Forecast(1) millions Assumptions Rental Income 7.7 Forecast period: 12 months ending Sept. 30, 2014 2.3% forecasted increase in rental income (as compared to Q1 annualized) Weighted average occupancy of 92.8% over the forecast period Vendor Leases represent 2.
Slide 25: Third Party Reports
Third Party Reports Appraisals Appraisals conducted by independent appraisers Aggregate market value estimated between $66.8 million to $68.1 million as at October 1, 2013 Includes portfolio premium of 2% to 4% Aggregate purchase price of $60.6 million (excluding closing costs) Building Cond
Slide 26: Debt Strategy
Debt Strategy Debt/GBV of 60.0% Total debt weighted average rate: 4.09% Total debt: $37.5 million Total debt weighted average term: 4.4 years Interest coverage ratio of 2.9x(1) Debt Composition Debt Maturity Profile C$ millions Revolving Maximum of $6.9M Credit Facility Interest at BAs
Slide 27: Management Agreement
Management Agreement Competitive and efficient asset management structure No incentive, disposition, financing, leasing, construction, or development fees Pre-determined internalization at $500 million of GBV Non-compete Manager Labec Realty Advisors Inc. Annual Advisory Fee 0.25% of Adj
Slide 28: Investment Highlights
Investment Highlights Experienced management team and board with a proven track record of value creation Initial portfolio of high-quality commercial real estate Geographic focus on stable Eastern Canadian markets High-quality tenants with long term leases Alignment of interests through an
Slide 29: Offering Summary
A PROREIT OFFERING SUMMARY
Slide 30: Offering Terms
Offering Terms Issuer PRO Real Estate Investment Trust (PRV.UN: TSX-V) Public Offering Size $16.2 million Over-Allotment Option 15% (30 days) Indicative Price $2.50 per unit Indicative Yield 8.00% to 8.50% Payout Ratio 91.7% to 97.5% Retained Interest 24.7% Tax Deferral Estimated 2013 tax deferral o
Slide 31: Comparables
A COMPARABLES PROREIT
Slide 32: Comparable REITs
Comparable REITs In accordance with Section 13.7(4) of National Instrument 41-101 - General Prospectus Requirements, all the information relating to PROREIT’s comparables and any disclosure relating to the comparables, which is contained in the presentation to be provided to potential investors, has
Slide 33: Thank you
Thank you T 514-933-9552 www.proreit.com © PROREIT 2013
Slide 34: Appendix
A PROREIT APPENDIX
Slide 35: Property Overview
Property Overview Year Built/ GLA Property Location Renovated # of Tenants (square feet) Occupancy Office Properties 55 Technology Drive Saint John, NB 1999 1 50,732 100.0% 26-32 Prince Arthur/11-15 Princess Amherst, NS 1957/1974/2008 7 50,681 76.3% 325 Hymus Boulevard Pointe-Claire, QC 1977/2011 1
Slide 36: Vendor Leases
Vendor Leases Vendor Leases represent: 3.5% of total portfolio GLA 2.8% of forecast base rent Proposed Term GLA % of Year 1 % of Forecast Property From To (square feet) Total GLA Base Rent Base Rent 3200-3260 Guénette Street 10,445 2.6% $77,815 1.6% Closing Dec 31, 2015 370 Connell Street 3,41
Slide 37: Quebec Market Information
Quebec Market Information Office Rental Rates GMA Office Occupancy Rates GMA Canada $18.62 $18.46 $18.48 Canada $16.50 $17.43 $17.18 $16.97 $17.84 Second largest economy in $14.57 $14.46 $14.19 $14.22 $13.86 $14.42 $14.42 $14.27 93.5% 93.7% 93.9% Canada $13.72 $12.33 91.8% 91.5% 91.4% 92.7% 92.8%
Slide 38: Atlantic Canada Market Information
Atlantic Canada Market Information Office Rental Rates Office Occupancy Rates Halifax Halifax Canada Canada $18.62 $18.46 $18.48 $17.84 $16.50 $17.43 $15.60 $17.18 $16.97 Fourth largest economy in $14.57 93.5% 93.7% 93.9% Canada: $14.46 $14.22 $14.59 $14.57 $14.19 $14.31 $14.26 92.7% 92.8% 92.7% $13
Slide 39: Ontario Market Information
Ontario Market Information Office Rental Rates Office Occupancy Rates GTA GTA $18.27 $18.21 $18.27 $17.55 $17.28 Canada $16.96 Canada $16.61 $17.86 $16.63 $16.04 $15.78 $16.50 $17.43 $18.62 $17.18 $16.12 $16.97 $17.84 $18.46 $18.48 Largest economy in Canada $14.57 $14.46 93.3% 93.8% 94.5% 93.3% 93.0
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