ARTIS REAL ESTATE INVESTMENT TRUST MAIN FLOOR CONFERENCE ROOM 360 MAIN STREET, WINNIPEG, MANITOBA ANNUAL AND SPECIAL MEETING OF UNITHOLDERS JUNE 16, 2016
726 Heartland, Madison WI 7. 12. Termination and C.E.O. 11. Report of the President Notice Policy Trust to implement Advance 10. Amendments to Declaration of auditors Appointment of external 9. Election of trustees 8. Fix number of trustees statements ARTIS REAL ESTATE INVESTMENT TRUST consolidated financial Receipt of annual 6. Scrutineer’s report 5. Notice of meeting 4. Registration of proxies 3. Appointment of scrutineers 2. Call to order 1. AGENDA 2
(Wisconsin) ARTIS REAL ESTATE INVESTMENT TRUST Management SVP, Property 360 Main Street, Winnipeg MB (U.S. Region) Management SVP, Asset (Western Region) Management EVP, Asset (Eastern Region) Management SVP, Asset (Central Region) EVP, Asset Management Management EVP, Property Officer Chief Financial Executive Officer President and Chief SENIOR MANAGEMENT TEAM Armin Martens Jim Green David Johnson Frank Sherlock John Mah Philip Martens Leon Wilkosz Dennis Wong 3
ARTIS REAL ESTATE INVESTMENT TRUST Trustee Trustee Trustee Trustee Trustee Trustee Chairman of the Board Chief Executive Officer Trustee, President & North Scottsdale Corporate Center II, Phoenix AZ BOARD OF TRUSTEES Delmore Crewson Armin Martens Ronald Rimer Cornelius Martens Wayne Townsend Edward Warkentin Patrick Ryan Victor Thielmann 4
ARTIS REAL ESTATE INVESTMENT TRUST ARMIN ARMIN MAR MARTENS TENS President & C.E.O. 1700 Broadway, Denver CO REPORT OF THE PRESIDENT & C.E.O. 5
ARTIS REAL ESTATE INVESTMENT TRUST Improve the calibre of our real to grow over time our cash distributions, enabling them Improve the reliability/sustainability of Improve our balance sheet Improve our payout ratio estate portfolio To maintain a course of continuous improvement: KEY OBJECTIVES KEY OBJECTIVES management of commercial real estate in Canada and select U.S. markets To create economic value for our Unitholders through active investment and CORE MISSION CORE MISSION Max At Kierland, Scottsdale AZ CORE MISSION AND OBJECTIVES • • • • 6
3 ASSET CLASSES RED DEER MINNEAPOLIS TORONTO GTA OTTAWA WINNIPEG MOOSE JAW REGINA ESTEVAN SASKATOON MEDICINE HAT CALGARY EDMONTON ARTIS REAL ESTATE INVESTMENT TRUST EDSON GRANDE PRAIRIE FORT McMURRAY CRANBROOK KELOWNA METRO VANCOUVER NANAIAMO 10 MAJOR MARKETS DENVER INDUSTRIAL OFFICE 24.8M SF As at December As at December 31 31 2013 2014 2015 PROPERTIES 239 246 252 RETAIL SIZE 25.8M SF COMMITMENTS PHOENIX 95% 96% 26.2M SF 96% OCCUPANCY + $5.7B $5.5B $5.0B GBV PORTFOLIO OVERVIEW • • 7 7
ARTIS REAL ESTATE INVESTMENT TRUST 7% 10% ON 6% SK 31% USA 33% AB BC 13% MB 50% Office 25% Retail 25% Industrial By Geographical Region By Asset Class 8333 Greenway, Madison WI PORTFOLIO NOI SUMMARY 8 Year-to-date at March 31, 2016
ARTIS REAL ESTATE INVESTMENT TRUST 58% of Artis’ tenants are for 11.8% and 19.3% of gross top 20 tenants account Artis’ top 10 and Top Ten Tenants 601 Tower at Carlson, Minneapolis MN government or national 58% National Gov't & 42% & Local Regional revenue, respectively TENANT DIVERSIFICATION 9 All information on this slide is at March 31, 2016, based on gross revenue
Completed ~$50 million of construction projects in the ARTIS REAL ESTATE INVESTMENT TRUST several years developed over the next new construction projects in pipeline, with potential to be Over $400 million of new way in 2016 construction projects under redevelopment and new ~$130 million of major 2015 Centrepoint, Winnipeg MB 1595 Buffalo VALUE CREATION WINNIPEG, MB 10
$1.41 (millions) $3,500 $4,000 $4,500 $5,000 $5,500 $6,000 2013 2014 2015 Total Assets tal Assets 2013 2014 2015 $5,651 4.9% FFO 4.9% FFO incr increase in ease in 2015 2015 76.1% 72.5% 72.5% FFO Payout FFO Payout Ratio Ratio $1.42 $3,000 $5,651 $5,546 $1.49 $1.49 FFO Per FFO Per Unit Unit ARTIS REAL ESTATE INVESTMENT TRUST $467 $509 $553 $553 $420 $440 $460 $560 $5,077 (millions) Revenue Revenue 2015 2014 2013 $540 $520 $500 $480 2013 2014 2015 SELECT 2015 ANNUAL RESULTS 76.6% 800 5 th Ave, Calgary AB Revenue, FFO and AFFO calculations are excluding lease termination income 11 All information inclusive of Artis’ proportionate share of joint venture arrangements
ARTIS REAL ESTATE INVESTMENT TRUST rate of 4.94% (1) 415 Yonge Street, Toronto ON MAINTAINED BBB LOW(STABLE) INVESTMENT GRADE CREDIT RATING Secured mortgages and loans to GBV reduced from 41.9% to 41.2% IMPROVED OUR BALANCE SHEET Decreased from 76.1% to 72.5% (exclusive of lease termination income) IMPROVED OUR FFO PAYOUT RATIO 6.85% and disposed of $150 million of assets for a weighted-average capitalization Acquired over $195 million of assets for a weighted-average capitalization rate of OF REAL ESTATE PORTFOLIO ACCRETIVE RECYCLING OF CAPITAL AND IMPROVING THE CALIBRE STAYING ON THE PATH OF CONTINUOUS IMPROVEMENT SCORECARD 2015 SCO 201 MEETING THE OBJECTIVES (1) Excluding properties sold to an owner-occupier 12
Capitalization Rate: 6.53% Capitalization Rate: 6.67% Sale Price: $28.7 million (Artis’ interest) 30,063 square feet (Artis’ interest) Retail shopping centre Whistler, BC Whistler Hilton Capitalization Rate: sold to an owner-occupier Sale Price: US$7.4 million 120,000 square feet Industrial cross-dock facility Minneapolis, MN Crosstown North Sale Price: $41.5 million ARTIS REAL ESTATE INVESTMENT TRUST 287,969 square feet Retail shopping centre Cranbrook, BC Tamarack Centre Capitalization Rate: 7.75% Purchase price: US$260.0 million 1.7 million square feet of leasable area Portfolio of 16 Class A Office Properties Madison Lifestyle Portfolio DISPOSITIONS ACQUISITIONS CAPITAL RECYCLING PROGRESS IN 2016 13
Hudson’s Bay Centre, Denver CO Calgary office market Commodity prices Bond rates Just keep our hands on the plow Headwinds for REITs and Artis: Affect on foreign exchange and Artis FFO per unit Bank of Canada (BOC) rate decrease? Pay-out ratio Federal Open Market Committee (FOMC) rate increase? Balance sheet Interest rate environment investment funds to REITs Potential for REIT ETFs and an increase in allocation of Property portfolio Introduction of new GICS category for REITs ARTIS REAL ESTATE INVESTMENT TRUST So, what about “AX on the TSX”? TWO MARKETPOINTE LOOKING AHEAD MINNEAPOLIS, MN • • • • • • • • • • • • 14
ARTIS REAL ESTATE INVESTMENT TRUST Stampede Station, Calgary AB Q & A 15
ARTIS REAL ESTATE INVESTMENT TRUST MAIN FLOOR CONFERENCE ROOM 360 MAIN STREET, WINNIPEG, MANITOBA ANNUAL AND SPECIAL MEETING OF UNITHOLDERS JUNE 16, 2016
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