Investor Presentation July 2014
Investment Summary Canada’s largest pure-play office REIT 24.6 million sf of valuable, hard to replicate central business district and suburban office properties CBD properties generate ~70% of NOI Proven Track record of value creation by senior management Strong tenant roster Significant unrealized value-add/repositioning opportunities Well diversified by geography, asset & tenant mix Strong occupancy with staggered lease maturities and rental rate growth A conservative and flexible balance sheet; 47.6% Debt to GBV Investment grade credit rating In our history, we’ve never had a better quality portfolio or a stronger balance sheet with embedded opportunities for growth and value creation. 2
Our Platform & Expertise Strong Depth & Expertise, with a Proven Track Result of Delivering Results Jane Gavan (1998) Mario Barrafato (2001) Ana Radic (1997) Chief Executive Officer SVP & Chief Financial Officer SVP & Chief Operating Officer Our senior management team has worked together for many years - completing over $17 billion of commercial real estate transactions, and establishing a respected presence in major urban markets across the country. 3
Our Platform & Expertise Strong Operational, Development & Leasing Team Kevin Hardy (2011) Paul Skeans (2013) Andrew Reial (2012) Sharon Mitchell (2013) SVP, GTA & Western Canada SVP, Operations Management SVP, Eastern Canada SVP, Western Canada Years of Experience in Commercial Years of Experience in Commercial Years of Experience in Commercial Years of Experience in Commercial Real Estate: 15+ (Oxford Properties) Real Estate: 16 (GWL Realty & CBRE) Real Estate: 15+ (Bentall) Real Estate: 25 (Oxford & BMO) Irene Au (2006) John Shields (2013) Victor Settino (2013) Samantha Farrell (2012) VP Leasing, Western Canada VP Leasing, Eastern Canada VP Commercial Development VP Leasing, Eastern Canada Years of Experience in Commercial Years of Experience in Commercial Years of Experience in Commercial Years of Experience in Commercial Real Estate: 20 (incl. Colliers & O&Y) Real Estate: 20+ (CBRE) Real Estate: 14 (First Gulf Real Estate: 16 (Oxford Properties, Corporation) CBRE, V&A Properties) 90+ years of combined real estate experience amongst our internally-managed senior operational team. 20 Experienced leasing professionals located in over 20 Markets across Canada 4
Our Platform & Expertise Strong Support from Dream Dream has… Dream’s platform benefits D.un: 20 year history in real estate and Transaction & capital markets expertise renewable power developer, Track record of development & value manager and investor creation Completed ~$20 billion of real Synergies realized across broad estate and alternative investment platform transactions Asset management & development 178 dedicated professionals in all capabilities disciplines Extensive network of global JV partners and financial institution support 5
Proven Track Record of Growth & Performance Results of Our 5 Year Capital Allocation Strategy December 2008 March 2014 Unit Price $12.60 (as at Dec 31, 2008) $29.59 (as at June 25, 2014) Market Capitalization $260 million $3.2 billion 19% 1-Year Fwd Consensus AFFO Estimates $2.22 $2.43 5-yr annual equiv. total AFFO Payout Ratio (on Consensus Estimates) 99% 92% return AFFO Multiple 5.7x 12.2x Annual Distribution / Implied Yield $2.20 / 17.5% $2.24 / 7.6% 12% Consensus NAV Estimate $25.90 $34.32 Annual Total Assets $1.3 billion $7.6 billion equiv. total NOI by Segment: 90% Office / 10% Industrial 100% Office return since CBD / Suburban / Other Exposure as a % of NOI 65% / 23% / 12% 70% / 30% / 0% inception Downtown Toronto / Calgary as a % of NOI 13% Toronto / 39% Calgary 28% Toronto / 17% Calgary Telus Tower (7%); AIR MILES Tower Scotia Plaza (10%); 700 De la (7%); McFarlane Tower (6%); 840 7 th Gauchètiere (4%); Adelaide Place (4%); Top 5 Assets (and % of NOI) Avenue (5%); Station Tower (5%) IBM Corp. Park (3%); Telus Tower (2%); GTA (42%); Calgary (19%); YK/Sask/Regina Calgary (47%); Toronto (13%); Vancouver (8%); Edmonton (8%); BC (5%); Montreal Geographic Distribution of NOI (9%); NWT (6%); Regina (4%); Sask (3%); (5%); SW Ont. (4%); Ottawa (4%); QC/Atl. SW Ontario (1%); Industrial/Other (17%) Cda (2%); Other (3%) Reported Debt to GBV / Term / Wtd. Average Int. Rate 66% / 5.5 years / 5.83% 47.6% / 4.6 years / 4.22% We have transformed our asset profile over the last five years, while delivering attractive annual returns of 19% to our unitholders. 6
Proven Track Record of Growth & Performance Our AFFO/Unit While De-levering Our Balance Sheet Since the inception of Dream Office REIT in 2003, we generated a total return of 229%. (CAGR of ~12%) Over the past five years, AFFO/unit has grown 17%. While the asset base has grown by $6.3 billion, our reported debt/GBV has declined by almost 20%. Reported AFFO per Unit Reported Debt/GBV $2.50 $2.43 70% 66% $2.40 65% $2.30 60% $2.20 55% $2.08 $2.10 50% 48% $2.00 45% $1.90 40% 2008 2013 Q4/08 Q1/14 7
Proven Track Record of Growth & Performance Value Creation Through Transformational Transactions Scotia Plaza Whiterock Deleveraging Portfolio NCIB $8,000 Sale of $2.50 Industrial $7,500 Book Value of Total Assets ($millions) $2.40 $7,000 $6,500 $2.30 Realex $6,000 Portfolio $2.20 AFFO $5,500 Per Unit Slate $5,000 $2.10 Portfolio Sale of $4,500 Eastern $4,000 $2.00 Portfolio $3,500 Adelaide $1.90 $3,000 Place $2,500 $1.80 54 acquisition transactions $125M $2,000 with Western Canada focus convertible $1.70 $1,500 debenture $1,000 $1.60 $500 $0 $1.50 Dec-03 Dec-04 Dec-05 Dec-06 Aug-07 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Book Value We have an exceptional track record of growing our earnings , and the size and quality of our portfolio. We actively manage our portfolio through our pursuit of accretive acquisitions and the sale of non-core assets that no longer fit our strategy. 8
Irreplaceable Portfolio Large Scale & Diversification Q1 2014 - % NOI (excl. Reclassified Properties) CBD TOTAL OWNED SF % NOI CBD 2% 24.6 M 70% AVG. REMAINING PORTFOLIO AVG. TENANT SIZE Yellowknife LEASE TERM OCCUPANCY 11,549 SF 2% 5 YEARS 94.2% CBD 57% 5% CBD CBD 3% Edmonton 1% 9% CBD 1% Saskatoon British 3% Columbia 5% CBD CBD Quebec City 28% 4% 1% CBD CBD 3% Atlantic 17% Montreal GTA Canada 42% 5% 1% Regina 3% Calgary CBD 19% 4% CBD 2% SW Ontario USA 4% 41% 2% Ottawa 4% 84% of our portfolio NOI is derived from “core” markets (GTA, Calgary, Edmonton, Vancouver, Montreal, Ottawa) 9
Irreplaceable Portfolio Institutional Quality Assets 11,36 Adelaide Place IBM Corporate Park Scotia Plaza 700 De la Gauchetière Telus Tower Toronto (10%) Montreal (4%) Toronto (4%) Calgary (3%) Calgary (2%) 3 Barclay Centre I & II Enbridge Place State Street Financial Ctr. 5001 Yonge Street AIR MILES Tower Calgary (3%) Edmonton (2%) Toronto (2%) Toronto (2%) Toronto (2%) 840 7 th Avenue SW HSBC Bank Place 74 Victoria/137 Yonge St 655 Bay Street Station Tower Edmonton (1%) Toronto (1%) Toronto (1%) Calgary (1%) Surrey (1%) Our top 15 properties produce 40% of NOI ( 6.0 year weighted average lease term / 98% committed occupancy / 22,000 sf avg. tenant size) 10
Irreplaceable Portfolio Significant Strides to Increase CBD & GTA Exposure NOI Breakdown, Beginning of 2010 NOI Breakdown, Q1/14 Total IFRS Asset Base = $1.4 Billion Total IFRS Asset Base = $7.6 Billion Industrial / Retail , 5% Other, 13% Suburban Suburban Office, Office, CBD, 63% 28% 24% CBD, 67% Downtown – 15% QC, Atl. Cda GTA West – 5% 2% Ottawa, 4% Ottawa, 4% BC, 5% Montreal, 5% Edmonton, BC, 7% 8% GTA, 20% Calgary, 19% Calgary, YK, Sask, 53% US, 1% Regina, 13% GTA, 43% YK, Sask, Edmonton, Regina , 8% 2% Downtown – 28% SW Ont., 4% GTA West – 9% US, 2% GTA East – 5% 11
Irreplaceable Portfolio 5.4 Million Owned SF in Downtown Toronto 7 1. Scotia Plaza 97% 2. Adelaide Place 15 5 3. 30 Adelaide Street East Committed 4. 438 University Ave Occupancy 5. 655 Bay Street 6. 74 Victoria Street / 137 Yonge Street 7. 720 Bay Street 8. 100 Yonge Street 9. 18 King Street East 10. 36 Toronto Street 25 11. 330 Bay Street 4 12. 20 Toronto Street / 33 Victoria Street 13. 8 King Street East 14. Victory Building – 80 Richmond St W 15. 49 Ontario Street 16. 212 King Street West 17. 357 Bay Street 18. 10 Lower Spadina Avenue 14 19. 360 Bay Street 6 19 3 22 20. 10 King Street East 17 23 21. 350 Bay Street 10 21 12 22. 67 Richmond Street 26 24 11 23. 366 Bay Street 8 9 2 1 24. 56 Temperance Street 13 20 25. 250 Dundas Street West 26. 83 Yonge Street Central Business District 16 Our scale & concentration in downtown Toronto affords us great opportunities. We are the largest landlord in the GTA. 18 12
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