PURE INDUSTRIAL REAL ESTATE TRUST BMO FIXED INCOME CONFERENCE MARCH 29 2017
NOTICE TO THE READER THIS PRESENTATION AND ITS CONTENTS ARE CONFIDENTIAL AND ARE NOT FOR PUBLIC DISTRIBUTION This presentation has been prepared for informational purposes only. By reading this presentation or any other accompanying info rmation relating to Pure Industrial Real Estate Trust (“PIRET”), the reader agrees: (1) to keep strictly confidential the con tents of this presentation and such other information and not to disclose such documentation, the contents thereof or any such information to any third party; (2) not to copy all or any portion of this presentation, or any such other information; and (3) to return this presentation and all such other documents and information to PIRET upon the request of PIRET. This presentation is strictly confidential. This presentation is personal to each recipient and does not constitute an offer to any person or to the public generally to subscribe for or otherwise acquire any of the securities of PIRET. Distribution of this presentation to any person other than the recipient and those persons, if any, retained to advise such recipient with respect thereto is unauthorized, and any disclosure of any of its contents without the prior written consent of PIRET is prohibited. Each recipient, by reading this presentation, agrees to the foregoing. FORWARD-LOOKING INFORMATION This presentation includes forward-looking information made as of March 27, 2017 within the meaning of applicable securities laws (also known as forward-looking statements) with respect to PIRET, including without limitation, statements regarding its proposed acquisitions, projected costs, business operations and strategy, and financial performance and condition. These statements generally can be identified by the use of forward- looking words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “believe”, or “continue”, or the negative thereof, or similar variations. In particular, certain statements in this presentation discuss PI RET ’s anticipated future events. These statements include, but are not limited to: (i) the accretive acquisition of properties and the anticipated extent of the accretion of any acquisitions, which could be impacted by demand for properties and the effect that demand has on acquisition capitalization rates and changes in the cost of capital; (ii) maintaining/improving occupancy levels and rental revenue, which could be impacted by changes in demand for PIRET’s propert ies, tenant bankruptcies, the effects of general economic conditions and supply of competitive locations in proximity to PIRE T’s locations; (iii) overall indebtedness levels, which could be impacted by the level of acquisition activity PIRET is able to achieve and future financing opportunities; (iv) tax exempt status, which can be impacted by regulatory changes enacted by governmental authorities; (v) anticipated distributions, payout ratios and cash flow, which could be impacted by capital expenditures, results of operations and capital resource allocation decisions; (vi) anticipated replacement of expiring tenancies, which could be impacted by the effects of general economic conditions and the supply of competitive locations; and (vi) analyst consensus figures including AFFO and FFO as well as market cap goals as expressed by management. In addition, any pro forma financial information included in this presentation is forward-looking information. Forward- looking statements are provided for the purpose of presenting information about management’s current expectations and pl ans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Although P IRET’s management believes that the expectations reflected in such forward- looking statements are reasonable and represent PIRET’s inte rnal projections, expectations and belief at this time, such statements involve known and unknown risks and uncertainties which may cause the actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements and should not be read as guarantees of future performance or results. Those risks and uncertainties include, among other things, risks related to: unit prices; liquidity; credit risk and tenant conc entration; interest rate and other debt related risk; tax risk; ability to access capital markets; lease rollover risk; compe tition for real property investments; environmental matters; changes in legislation and indebtedness of PIRET. Management believes that the expectations reflected in forward-looking statements are based upon reasonable assumptions and information currently available which include, management’s current expectations, estimates and assumptions that: proposed acquisitions will be completed on the terms and b asi s agreed to by PIRET, property acquisition and disposition prospects and opportunities will be consistent with PIRET’s experi ence over the past 12 months, the industrial real estate market in Canada will remain stable, the global economic environment will remain stab le, interest rates will remain at current levels, and PIRET’s business strategy, plans, outlook, projections, targets and ope rating costs will be consistent with PIRET’s experience over the past 12 months, PIRET will be able to maintain occupancy at current levels, PIRET’s tenants will not default on lease terms, governmental regulations and taxation will not change to adversely affect PIRET’s bu siness and financial results, and PIRET will be able to obtain adequate insurance and financing; however, management can give no assurance that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ materially from such expectations include, among other things, the availability of suitable properties for purchase by PIRET, the availability of mortgage financing for such properties, and general economic and market factors, including interest rates, business competition, changes in government regulations or in tax laws, and the projections included in management’s financial forecast, in addition to those fac tors discussed or referenced in the “Risk Factors” section in PIRET’s annual information form and other continuous disclosure documents filed on SEDAR at www.sedar.com. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. These forward-looking statements are made as of the date of this presentation and PIRET does not undertake any obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise, except as expressly required by applicable securities laws. NON-IFRS MEASURES There are a number of non-IFRS measures used in this presentation, including adjusted funds from operations (AFFO), adjusted net operating income (Adjusted NOI), AFFO payout ratio (POR), Debt to EBITDA, Debt to Gross Book Value, earnings before interest, taxes, depreciation and amortization (EBITDA), enterprise value, going-in cap rate, gross book value (GBV), interest coverage, net asset value (NAV) per unit, occupancy levels, weighted average effective interest rate and weighted average lease term (WALT) . PIRET believes that these non-IFRS measures are appropriate measures of the operating performance of PIRET. These and other non-IFRS measures do not have any standardized meaning prescribed by IFRS. PIRET’s calculation of these measures may differ from the methodology used by other issuers and, accordingly, may not be comparable to such other issuers. Refer to PIRET’s management discussion and analysis (M D&A) for further descriptions of the non-IFRS measures, available on SEDAR at www.sedar.com. PIRET believes that certain of these measures are appropriate measures of PIRET’s operating performance because they facilita te an understanding of PIRET’s operating performance without giving effect to certain non -cash expenses. None of these measures are equivalent to net income or cash generated from operating activities determined in accordance with IFRS. 1
CONTENTS 1. WHO WE ARE 2. WHY INDUSTRIAL 3. PIRET CREDIT PROFILE
SECTION 1 WHO WE ARE 3
PIRET AT A GLANCE LARGEST $2.4 BILLION CANADIAN LISTED ASSETS UNDER INDUSTRIAL REIT MANAGEMENT 21.2 MILLION SF INTERNALLY ASSETS UNDER MANAGED MANAGEMENT EXCLUSIVELY FOCUSED ON INDUSTRIAL LOGISTICS / REAL ESTATE E-COMMERCE ASSETS 4
SECTION 2 WHY INDUSTRIAL 5
WHY ARE WE FOCUSED ON INDUSTRIAL? CASHFLOW Historically stable and predictable income stream Driven by positive real estate fundamentals YIELD Historically attractive yields 10 year IPD property index total return 8.4% GROWTH Fragmented market ripe for consolidation E-commerce is positively driving demand for logistics space 6
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