proreit investment presentation 2019may16-final

INVESTORPRESENTATION

MAY 2019

INVESTORPRESENTATIONMAY 2019


MAY 2019

Disclaimer

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About this PresentationThis presentation is dated May 13, 2019 and is strictly intended to provide general information about PRO Real Estate Investment Trust (“PROREIT”) and its business. This presentationdoes not constitute an offer to sell or the solicitation of an offer to buy any securities of PROREIT. The information in this presentation is stated as at March 31, 2019, unless otherwiseindicated.

Non-IFRS MeasuresPROREIT’s consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). In this presentation, as a complement to resultsprovided in accordance with IFRS, PROREIT discloses and discusses certain non-IFRS financial measures, including Adjusted Funds From Operations (“AFFO”), Funds From Operations(“FFO”), Gross Book Value (“GBV”), debt-to-GBV, Net Operating Income (“NOI”), interest coverage ratio and payout ratios as well as other measures discussed elsewhere in thispresentation. These non-IFRS measures are not defined by IFRS, do not have a standardized meaning and may not be comparable with similar measures presented by other issuers.PROREIT has presented such non-IFRS measures as Management believes they are relevant measures of PROREIT’s underlying operating performance and debt management.Non-IFRS measures should not be considered as alternatives to net income, cash generated from (utilized in) operating activities or comparable metrics determined in accordance withIFRS as indicators of PROREIT’s performance, liquidity, cash flow, and profitability. For a full description of these measures and, where applicable, a reconciliation to the most directlycomparable measure calculated in accordance with IFRS, please refer to the “Non-IFRS and Operational Key Performance Indicators” section in PROREIT’s Management’s Discussion andAnalysis for the period ended March 31, 2019 and for the year ended December 31, 2018 available on SEDAR at www.sedar.com.

Forward-Looking InformationCertain statements contained in this presentation constitute forward-looking information within the meaning of applicable securities laws. In some cases, forward-looking information can beidentified by such terms such as “may”, “might”, “will”, “could”, “should”, “would”, “occur”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “estimate”, “predict”, “potential”, “continue”, “likely”,“schedule”, or the negative thereof or other similar expressions concerning matters that are not historical facts. Some of the specific forward-looking statements in this presentation include,but are not limited to, statements with respect to PROREIT’s future financial performance; the ability of PROREIT to execute its growth strategies; PROREIT’s ability to continue payingmonthly distributions and PROREIT’s ability to raise capital; the expected timing and completion of the REIT’s announced transactions. Forward-looking statements are based on a numberof assumptions and are subject to a number of risks and uncertainties, many of which are beyond PROREIT’s control, that could cause actual results and events to differ materially fromthose that are disclosed in or implied by such forward-looking statements. PROREIT’s objectives and forward-looking statements are based on certain assumptions, including that (i)PROREIT will receive financing on favourable terms; (ii) the future level of indebtedness of PROREIT and its future growth potential will remain consistent with PROREIT’s currentexpectations; (iii) there will be no changes to tax laws adversely affecting PROREIT’s financing capacity or operations; (iv) the impact of the current economic climate and the current globalfinancial conditions on PROREIT’s operations, including its financing capacity and asset value, will remain consistent with PROREIT’s current expectations; (v) the performance ofPROREIT’s investments in Canada will proceed on a basis consistent with PROREIT’s current expectations; and (vi) capital markets will provide PROREIT with readily available access toequity and/or debt. Additional information about these assumptions and risks and uncertainties is contained under “Risk Factors” in PROREIT’s latest annual information form, and in otherfilings that PROREIT has made and may make with applicable securities authorities in the future, all of which are or will be available on SEDAR at www.sedar.com. In addition, theacquisitions announced by PROREIT remain subject to satisfactory due diligence review and other conditions.The forward-looking statements contained in this presentation are expressly qualified in their entirety by this cautionary statement. Investors are cautioned not to put undue reliance onforward-looking statements. All forward-looking statements in this presentation are made as of the date of this presentation. PROREIT does not undertake to update any suchforward-looking information whether as a result of new information, future events or otherwise, except as required by law.

Additional InformationInformation appearing in this presentation is a select summary of PROREIT’s business, operations and results. The latest annual information form of PROREIT and its consolidated financialstatements and management’s discussion and analysis thereon for the year ended December 31, 2018 and for the period ended March 31, 2019 are available on SEDAR atwww.sedar.com.


MAY 2019


MAY 2019

BUILDING A MID-CAP DIVERSIFIED COMMERCIAL REIT IN CANADA

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MAY 2019


MAY 2019

Section 1. PROREIT AT A GLANCESection 2. PROVEN EXECUTIONSection 3. ROBUST 2019 FIRST QUARTER Section 4. POSITIONED FOR GROWTHSection 5. APPENDICES

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MAY 2019


MAY 2019

PROREIT AT A GLANCE

5

SECTION 1.


MAY 2019

84PROPERTIESIN 9 PROVINCES

BC: 5AB: 11

SK: 4

MB: 6

ON: 10 QC: 16

NS: 9NB: 22

PEI: 1

About PROREIT

6

Quick Facts(As at May 16, 2019)

NOI by Asset Class(3 months ended March 31, 2019)

Retail 44.6%

Industrial 28.6%

Commercial Mixed-Use 10.7%

Office 16.1%

Ticker Symbol (TSX)PRV.UN

DRIP Eligible3% bonus units

Tax Deferred Distribution100% (estimated)

Annual Distribution$0.63 (post-consolidation)

Total Units31,449,987

Market Capitalization$220 million

Yield8.9%

Average Volume65,000

Established in 2013, PROREIT owns $517 million of diversified commercial real estate properties in Canada, representing over 3.7 million square feet of gross leasable area. PROREIT is mainly focused on strong secondary markets in Québec, Atlantic Canada and Ontario, with selective exposure in Western Canada.


MAY 2019

Our Vision

To become a mid-cap diversified Canadian REIT with high-quality commercial real estate in specific segmentsof the industrial, retail, commercial mixed-use and office sectors, recognized for its ability to:

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WITH A CLEAR STRATEGY TO GROW FFO AND NAV

PRODUCESTABLE AND GROWING RETURNS

GROWUNITHOLDER VALUE PER UNIT


MAY 2019


MAY 2019

PROVEN EXECUTIONSECTION 2.

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MAY 2019

Our Growth History

► 23 properties; 1.0M sq. ft. GLA




A TRANSFORMATIONAL YEAR► Achieved $500M asset target► 84 properties; 3.7M sq. ft. GLA

► $69.1 million in new equity capital raised► Bought deals at $2.30 per unit and $2.32 per unit► Large banking groups

► Acquisition of property management platform► Now present in 9 Canadian provinces

FOCUSED ON THE FUTURE► Internalization of asset

management on April 1, 2019

► Graduation to TSX on May 7, 2019► Consolidation of

Units 3:1

2013 2014 2015 2016 2017 2018 2019

Consistently paid attractive distributions every month, since January 2014

PROREIT CREATION BY FORMER CANMARC MANAGEMENT► One $6 million property;

397K sq. ft. GLA

► TSX-V listing (PRV.UN)

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MAY 2019

A Solid Track Record

FIVEYEARS OF GROWTH

1,628

9,189

18,19022,963

29,639

40,889

05

1015202530354045

2013 2014 2015 2016 2017 2018

1,1265,758

11,20714,105

18,266

26,049

05

1015202530354045

2013 2014 2015 2016 2017 2018

1,410 2,9446,258 7,619

10,32514,340

05

1015202530354045

2013 2014 2015 2016 2017 2018

Property Revenues($ Millions)

Net Operating Income($ Millions)

Adjusted funds from operations($ Millions)

Total Assets($ Millions)

Gross Leasable Area (‘000 sq. ft.)

70,2

141,5203,2

258,0

365,9

509,7

0

100

200

300

400

500

600

2013 2014 2015 2016 2017 2018

397

1 044

1 6702 005

2 690

3 703

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

2013 2014 2015 2016 2017 2018

CAGR 91% CAGR

87%

CAGR 49%

CAGR 56%

CAGR 59%

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MAY 2019

2018 Property Additions

TransactionPurchase Price

($millions)Number of Properties

Added GLA(sq. ft.)

Occupancy Rate at Acquisition

1750 Jean-Berchmans-Michaud St. Drummondville, QC (50%) $4.39 1 85,560 100%

Winnipeg, MB Industrial Portfolio $27.3 6 237,430 100%

598 Union St., Frederiction, NB $4.5 1 32,258 100%

Quebec Retail Portfolio $8.95 4 13,606 100%

Ottawa ON Office Portfolio $51.7 5 282,000 97.3%

Saint Hyacinthe, QC light industrial property $10.0 1 176,070 100%

Southwest Ontario Industrial properties $15.4 2 202,000 100%

Total Acquisitions $122.24 20 1,028,924

Total Sales ($0.895) (1) (11,700)

Net Acquisitions $121.34 19 1,017,224

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MAY 2019

Strong Experienced Management Team

► 70+ years of collective asset management and property management experience

► Former CANMARC REIT team§ Sold to Cominar in 2012

for $1.9B (43% annual ROI since IPO)

► Extensive network of real estate and capital markets relationships

► Alignment with unitholders: officers and trustees own 8% of outstanding Units

► Competitive, objectives-based asset management structure

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James W. BeckerlegChief Executive Officerand Trustee

Gordon Lawlor, CPA, CAExecutive Vice President, Chief Financial Officer and Secretary

Mark O'BrienManaging Director,Operations

Alison Schafer, CPA, CADirector of Finance

Chris AndreaPresidentCompass Commercial Realty

INTERNALIZATION OF ASSET MANAGEMENT FUNCTION COMPLETED ON APRIL 1, 2019 WILL ADD VALUE FOR UNITHOLDERS


MAY 2019

Scale Brings Transformational Growth Opportunities

INTERNALIZATION OF PROPERTY AND ASSET MANAGEMENT (2018-2019)

► Increases cash flow and adds value

► Creates significant economies of scale

► Provides additional transparency in accounting and financial reporting

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INCREASED SCALE ► Increases access to larger and higher

quality acquisitions

► Decreases risk with greater diversification and reduced dependency on top tenants

► Increases potential for internal growth: rent increases, densification, etc.

LEVERAGE TO IMPROVE COST OF CAPITAL AND INCREASED GROWTH PER UNIT


MAY 2019


MAY 2019

ROBUST 2019 FIRST QUARTER PERFORMANCE

SECTION 3.

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MAY 2019

2019 First Quarter Strong Financial Results

CAD $ thousands except for unit amounts unless otherwise stated

Three months ended Mar. 31, 2019

Three months ended Mar. 31, 2018 Change YoY %

Total Assets $516,875 $366,581 41.0%

Property Revenue $13,510 $9,397 43.8%

NOI $8,458 $5,891 43.6%

Debt to Gross Book Value 58.58% 55.42% –

Interest Coverage Ratio 2.6x 2.6x –

AFFO $4,829 $3,200 50.9%

AFFO Payout Ratio (Basic) 102.3% 114.4% 10.6%

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MAY 2019

An Increasingly Diversified Portfolio Over the Last Year

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Base Rent by Asset Class (1)

Retail

Industrial

(1) Based on in-place and committed base rent as of Sept. 30, 2018 and Mar. 31, 2019

Base Rent by Province (1)

46.0

27.4

10.5

16.1

43.2

18.9

18.2

19.6

Commercial Mixed Use

Office

Q1-2019

Maritime Provinces

Quebec

Western Canada

Ontario

Q1-2019

Asset Class Number of Properties Occupancy (%) GLA (sq. ft.)

Retail 49 97.6 1,079,074

Commercial Mixed-Use 7 97.4 443,678

Office 9 94.1 435,005

Industrial 19 99.3 1,744,673

Total 84 98.0 3,702,430Based on in-place and committed base rent as of Mar. 31, 2019

Q3-2018 Q3-2018

54.225.9

12.57.4

51.1

20.1

21.5

7.3


MAY 2019

Top Ten Tenants

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# Tenant % of In-Place Base Rent GLA (sq. ft.) WALT

(years) Credit Rating (1)

1 7.7 104,929 10.3 Baa2/BBB+/na

2 7.4 222,491 8.4 na/BB+/BBH

3 4.3 66,083 6.0 na/BBB/BBB

4 4.1 73,811 3.0 Aaa/AAA/AAA

5 2.5 88,840 8.8 na

6 2.1 176,070 6.2 Ba1/BB+/na

7 2.0 40,901 7.5 na/BB+/BBH

8 2.0 20,219 11.8 Aa2/A+/AH

9 1.9 172,719 9.3 na

10 1.9 44,720 3.9 na

TOP TEN SUBTOTAL 35.9 1,010,783 7.8OTHER TENANTS 64.1 2,617,262 4.9VACANT 74,385TOTAL 100.00 3,702,430 5.8

(1)Based on annualized in-place and committed base rent at March 31, 2019(2) Source: Moody’s, S&P, and DBRS. Credit rating assigned to tenant or its parent.

Highlights

Top ten tenants account for35.9%of base rent

Sevenof the top tentenants are credit rated

Credit quality tenants account for 48.9% of in-place base rent


MAY 2019

High-Quality Tenant Profile

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GLA

BASE RENT

-0,1

0

0,1

0,2

0,3

0,4

0,5

0,6

0

0,1

0,2

0,3

0,4

0,5

0,6

0,7

0,8

0,9

1

2019 2020 2021 2022 2023 2024-2036

► Excellent retention rate: Tenant renewal or replacement rate average above 90% in each of the past five years

► Overall weighted occupancy rate of 98.0% with a weighted average remaining lease term of 5.8 years

► Credit quality tenants have a weighted average remaining lease term of 6.5 years

► Staggered lease maturity profile► Not more than 13.5% of base rent matures in any given lease year

2.6%6.9%

13.5%

8.4%11.0%

55.7%

1.5%7.4%

13.4% 11.1% 11.1%

55.4%


MAY 2019


MAY 2019

POSITIONED FOR GROWTH

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SECTION 4.


MAY 2019

Strategies for Driving Growth and Creating Value

Internal Growth► Nurture existing client

relationship, ensuring tenant retention and growth

► Implement operating improvements and preventative maintenance programs

► Pursue expansion and redevelopment opportunities within the portfolio

► Exploit lease-up opportunities

Strong Balance Sheet► Low cost of debt

► Staggered mortgage and lease maturity profile

► Targeted Debt to GBV ratio

► Access to multiple sources of capital

► Prudent capital management

External Growth► Acquire accretive income-

producing commercial properties in strong secondary markets

► Focus on Class B, high-quality commercial real estate

► Seek properties with selective development, expansion opportunities and geographical diversification

► Pursue off-market opportunities allowing access to unique pipeline

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MAY 2019

What Differentiates Us

OUR ABILITY TO IDENTIFY AND BUILD A STABLE, LOW RISK PORTFOLIO WHERE LARGER REITs ARE CURRENTLY DIVESTING

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► Urban markets and regional economic centres outside Central Vancouver, Toronto and Montreal

► Often higher capitalization rates

► Focus on Eastern Canada

► Strong upside as market is transforming

► Our size permits us to be opportunistic

Strong Secondary MARKETS

Selection of High Quality Class B Assets

► Community retail service centres

► Industrial

► Mixed-use Commercial

► Office

Targeting specific SEGMENTS within four SECTORS


MAY 2019

Focused on Community-Based Service Centres

► Typically brand grocery or pharmacy anchored► Brand names► Long-term leases► Excellent covenants

► Banks, medical professionals, government services, restaurants► Upside potential from rent increases, vacancy fill-up and pad development is available

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MAY 2019

Focused on Light Industrial Buildings

► Single or multi-tenant, light industrial buildings (typically 22 feet clearance or higher)

► Located on major transportation routes with strategic access to:► Airports► Large cities► Border crossings

► Currently focused on 50,000 sq. ft. to 200,000 sq. ft. buildings where increased occupancy and increased annual revenues are available

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MAY 2019

Focused on Mixed-Use Commercial / Office

► Buildings are often in industrial parks► Flex office with loading docks► Retail in industrial buildings (e.g. - décor, wholesale)► Light industrial with office space

► Currently, the right buildings in the right sectors are seeing increasing demand from a growing economy

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MAY 2019

Case Studies and Ongoing Opportunities

HALLS CREEK (2016-2017)► New pad development completed► > 10% ROIC► 100% leased► Approximately $140 thousand NOI on annualized basis

ST. MARGARET’S BAY (ONGOING)► 41,500 sq. ft. in development opportunity

KING GEORGE HIGHWAY (2017)► Pad developments complete► 6,400 sq. ft. of new GLA► Rogers, Subway and Cara signed► >9% ROIC on Cara pad, >18% ROIC on Rogers and Subway pads

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OTHER OPPORTUNITIES (ONGOING)► 8150 Trans-Canada Highway, St. Laurent, QC

(pad development)► 50 Empire Lane, Windsor, NS

(pad development)► 1455 Mountain Ave., Winnipeg MB

(building expansion)► 10 Bentall Street, Winnipeg, MB

(vacant land, industrial opportunity)► 31 Auriga Drive, Ottawa, ON

(potential building expansion)


MAY 2019

Our Debt Strategy

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Debt Composition ($millions)

Operating Facilities, Term Loans $42.0

First Mortgages $261.1

Total $303.1

Debt to GBV: 58.58%

Total Debt $303.1M

Total debt weighted average rate 3.88%

Total debt weighted average term: 5 years

Debt Maturity ProfileAs of March 31, 2019

Debt Maturing During Year

Payments of Principal

0

10

20

30

40

50

60

70

80

1 year 1-2 years 2-3 years 3-4 years 4-5 years later

$30.51

$7.1

$51.8

$64.4$69.3

(1) Includes $29.4 million relating to a revolving credit facility

$50.5


MAY 2019

Why Invest in PROREIT

► Attractive yield and consistent monthly distributions

► Solid five-year growth record ► Diversified portfolio and

high-quality, low-risk tenants with long-term leases

► Experienced management team and solid relationships in the investment banking and lending businesses

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► Current transformation to achieve next stage of growth

► Acquisition focused► Opportunistic and well-positioned

to benefit from current real estate market transformation

► Clear strategy to grow earnings and net asset value


MAY 2019


MAY 2019

APPENDICES

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SECTION 5.


MAY 2019

We’ve Done It Before

► The Former CANMARC REIT

► Diversified REIT with national portfolio

► 143 properties

► Acquired by Cominar in 2012 for $1.9 billion

► 43% compound annual rate of return since IPO, compared to 28% for the REIT index

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0%

25%

50%

75%

100%

mai-2010 juill-2010 sept-2010 nov-2010 janv-2011 mars-2011 mai-2011 juill-2011 sept-2011 nov-2011 janv-2012

S&P/TSX Capped REIT Index

CANMACR REIT


MAY 2019

Compass Commercial Realty Acquisition

HIGHLY STRATEGIC ACQUISITION ► Potential to transform REIT operations and profitability

► To be managed autonomously from Halifax headquarters

► 60 clients in total

► Managed 25 PROREIT properties

► Most properties will be managed by Compass by January 1, 2019

► Offices in Halifax, Moncton, Montreal and Oakville

► Significant room for expansion

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MAY 2019

Recent Property Acquisitions

► $122 million in recent property acquisitions

► 1,029,000 square feet of gross leasable area.

► Builds our national footprint while further strengthening our presence in Ontario, the Maritimes and Quebec

► The acquisitions allowed us to complete the redeployment of the proceeds of our January 2018 and September 2018 equity issues

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MAY 2019

Recent Property Acquisitions

WINNIPEG MB INDUSTRIAL PROPERTIES► 5 light industrial properties, one commercial

mixed use property, and undeveloped land► 237,430 sq. ft. GLA► Very stable commercial market► Significant potential for incremental NOI

and development► Acquired June 29, 2018

598 UNION STREET, FREDERICTON, N.B.► $4.5 million retail strip mall► Rent step-ups built into leases► Acquired June 14, 2018

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MAY 2019

Recent Property Acquisition Announcements

1750 JEAN-BERCHMANS-MICHAUD STREET►High quality light industrial building.►Acquired 50% interest not already owned.►Rent step-ups built in to lease.►Acquired June 28, 2018.

FOUR RETAIL PROPERTIES ► $8.95 million ► Montreal, Sherbrooke, Laurier Station and Lévis. ► 100% leased to Couche Tard convenience stores

and include a Tim Hortons. ► Total of 13,606 square feet of GLA for the four

buildings.► Acquired August 15, 2018

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MAY 2019

Recent Property Acquisition Announcements

OTTAWA OFFICE PROPERTY PORTFOLIO► Five suburban office properties ► $51.7 million ► 97.3% occupied► 292,000 total GLA► Situated along new light rail rapid transit ► Acquired November 14, 2018

SAINT-HYACINTHE LIGHT INDUSTRIAL PROPERTY► $10 million► 176,070 GLA► Single global creditworthy tenant

with long-term lease► Situated on Trans-Canada Highway► Acquired November 7, 2018

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MAY 2019


MAY 2019

THANK YOU !

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proreit investment presentation 2019may16-final

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