Automotive Properties REIT Investor Presentation July 2015 A preliminary prospectus containing important information relating to the securities described in this presentation has been filed with the securities regulatory authorities in each of the provinces of Canada. A copy of the preliminary prospectus, and any amendment, is required to be delivered with this presentation. The preliminary prospectus is still subject to completion. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final prospectus has been issued. This presentation does not provide full disclosure of all material facts relating to the securities offered. Investors should read the preliminary prospectus, the final prospectus and any amendment for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision. No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise.
DISCLAIMER An investment in the securities described in this presentation 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 “Forward -Looking Statements” included in the preliminary prospectus dated June 9, 2015 (the “prospectus”) of Automotive Properties Real Estate Investment Trust (“Automotive Properties” or the “REIT”) before purchasing securities described hereunder. An investor should rely only on the information contained in the prospectus. This presentation is qualified in its entirety by reference to, and must be read in conjunction with, the detailed information appearing in the prospectus. Neither the REIT nor any of the Underwriters has authorized anyone to provide investors with different or additional information. The REIT is not offering, or soliciting offers to acquire, the securities in any jurisdiction in which the offer is not permitted. For purchasers outside Canada, neither the REIT nor the Underwriters have done anything that would permit the offering or distribution of this presentation together with the prospectus in any jurisdiction where action for that purpose is required, other than in Canada. An investor is required to inform itself about and to observe any restrictions relating to the Offering and the distribution of this presentation and of the prospectus. There is currently no market through which the securities may be sold and purchasers may not be able to resell securities purchased under the prospectus. This may affect the pricing of the securities in the secondary market, the transparency and availability of trading prices, the liquidity of the securities, and the extent of issuer regulation. The securities of the REIT discussed in this presentation have not been, and will not be, registered under the U.S. Securities Act, or the securities laws of any state of the United States and, subject to certain exceptions, may not be offered, sold or delivered, directly or indirectly, in the United States except pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. This presentation does not constitute an offer to sell or solicitation of an offer to buy any of the securities of the REIT in the United States. The following is a summary of the principal features of the Offering and should be read together with the more detailed information and financial data and statements contained in the prospectus. All amounts herein are in Canadian dollars unless otherwise noted. Terms undefined herein have the meanings ascribed to them in the prospectus. FORWARD-LOOKING STATEMENTS Certain statements contained in this presentation constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to the REIT’s future outlook and anticipated events or results and may include statements regarding the financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, taxes, plans and objectives of or involving the REIT. Particularly, statements regarding future results, performance, achievements, prospectus or opportunities for the REIT or the real estate or automotive dealership industry are forward-looking statements. The REIT has based these forward-looking statements on factors and assumptions about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs, including that the Canadian economy will remain stable over the next 12 months, that inflation will remain relatively low, that interest rates will remain stable, that tax laws remain unchanged, that conditions within the automotive dealership real estate industry and the automotive dealership industry generally, including competition for acquisitions, will be consistent with the current climate, that the Canadian capital markets will provide the REIT with access to equity and/or debt at reasonable rates when required and that the Dilawri Organization will continue its involvement with the REIT. Although the forward-looking statements contained in this presentation are based upon assumptions that management believes are reasonable based on information currently available to management, there can be no assurance that actual results will be consistent with these forward-looking statements. Forward-looking statements necessarily involve known and unknown risks and uncertainties, many of which are beyond the REIT’s control, that may cause the REIT’s or the industry’s actual results, performance, achievements, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward-looking statements. The forward-looking statements made in this presentation relate only to events or information as of the date of this presentation. Except as required by law, the REIT and Dilawri undertake no obligation to update or revise publicly any forward- looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. Please refer to “Forward -Looking Statements” in the prospectus. NON-IFRS MEASURES This presentation makes reference to certain non-IFRS measures. Funds from operations (‘‘FFO’’), adjusted funds from operations (‘‘AFFO’’), net operating income (‘‘NOI’’) and cash net operating income (‘‘ Cash NOI’’) are key measures of performance used by real estate businesses. However, such measures are not defined by IFRS and do not have standardized meanings prescribed by IFRS. The REIT believes that AFFO is an important measure of economic performance and is indicative of the REIT’s ability to pay distributions, while FFO, NOI and Cash NOI are important measures of operating performance and the performance of real estate properties. The IFRS measurement most directly comparable to FFO, AFFO, NOI and Cash NOI is net income. Please refer to “Non -IFRS Measures” in the prospectus. 2
INTRODUCTION Growth-oriented real estate Sponsored by The Dilawri Group: entity well positioned to Canada’s largest automobile dealership consolidate automotive company with 2014 combined revenues dealership properties of approximately $1.6 billion Only publicly traded REIT in Canada exclusively focused on auto dealership real estate LEADING PLATFORM FOR STRATEGIC CONSOLIDATION 3
PRESENTERS Milton Lamb Andrew Kalra, CA James Matthews, CA President and Chief Financial Officer Chief Financial Officer, Chief Executive Officer Dilawri • • Over 24 years in the commercial real • 8 years as CFO of Dilawri Currently VP, Finance, Dilawri estate industry • • Led all acquisitions by the Dilawri Group Over 20 years experience in finance, • From 2007 to 2015, SVP, National since 2007 including over 13 years in the Investment Services at Colliers automotive industry • Previous experience in senior financial International • and operational positions at W.K. Previously was Senior Director of Finance • Represented Canada on the Colliers Global Buckley, KIK Custom Products Inc. and and Business Strategy at Mazda Canada Investment Services (GIS) team the cablevision arm of Rogers • Held senior financial positions in public Communications Inc. • Worked with funds and financial and private companies at Nortel institutions to assist with both acquisitions Networks Inc. and Walt Disney Canada and dispositions and joint ventures totaling in excess of $2.5B 4
AUTOMOTIVE PROPERTIES REIT Milton Lamb President and Chief Executive Officer Dixie Auto Mall, Volkswagen Langley Acura 5
INVESTMENT HIGHLIGHTS • Opportunity to gain exposure to a unique real estate asset class • Automotive dealership properties benefit from strong underlying fundamentals • Portfolio of high-quality and strategically located automotive dealership properties • Strong national tenant with significant alignment of interest • Excellent leasing profile • Compelling valuation and conservative financial metrics • Significant growth opportunities • Experienced executive management and strong, independent board 6
AUTOMOTIVE PROPERTIES REIT – PORTFOLIO OVERVIEW • Focus on automotive dealership • 958,000 square feet of GLA properties • Forecast Cash NOI of $23.4 million • 26 initial properties, with 42 rental buildings on 88 acres GVA CALGARY 21% of Cash NOI 16% of Cash NOI REGINA GTA 15% of Cash NOI 48% of Cash NOI GROWTH DRIVERS: PORTFOLIO EXPANSION AND RENT INCREASES 7
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