1 * This marketing material relate to the distribution of units of the InvestPlus Real Estate Investment Trust under an offering memorandum dated August 25, 2016 and is incorporated into and form part of the offering memorandum
Disclaimer The information contained herein is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from InvestPlus ● (the “Company”) and should not be made available to any other person or entity without the written consent of the Company. The material contained herein is for information purposes only and does not constitute an offer to sell nor a solicitation of an offer to buy the securities. An offer can only be made by the Offering Memorandum and the appropriate exemption documents being provided to prospective purchasers. This information is inherently limited in scope and does not contain all of the applicable terms, conditions, limitations and exclusions of the investments described herein. Prospective purchasers should read the Offering Memorandum before considering investment in this project. This material is in no way a complete description of the proposed investment and is in all respects subject to the provisions of the Offering Memorandum and the Declaration of Trust . The information contained herein is not to be relied upon; investors should rely on the information described in the Offering Memorandum. Every effort was made to obtain accurate and complete information; however, no representation, warranty or guarantee, expressed or implied, may be made as to the accuracy or reliability of the information contained herein. The only representations and warranties made by the Company would be those contained in an Offering Memorandum and a definitive subscription agreement. The InvestPlus Real Estate Investment Trust. intends to make regular distributions of its available cash to Unitholder, such distributions may be reduced or suspended and are not guaranteed. These offerings may be subject to potential risks associated with the investment, including market, liquidity and investment return risk. Please consult the offering documents for further information regarding these potential risks. Using borrowed money to finance the purchase of securities involves greater risk than a purchase using cash resources only. If you borrow money to purchase securities, your responsibility to repay the loan and pay interest as required by its terms remain the same even if the value of the securities purchased declines. In order to be eligible for subscription in this Offering, individuals must satisfy the criteria required for investors as described in the Offering Memorandum. 2
Presentation Overview Experienced Real Estate Investor/Manager • Private Real Estate generating Above Average, Non-correlated • Returns with Low Volatility Abundant Growth Opportunities in Western Canada • Existing Portfolio of Income Producing Assets • Attractive Quarterly Income Distributions • Tax Efficient Growth Investment Vehicle • 3
Organizational Profile InvestPlus Real Estate Investment Trust (IP REIT) is a private real • estate investment fund Based in Calgary, Alberta • Provides an opportunity to invest in a diversified portfolio of • multi-unit residential apartment and commercial buildings in western Canada Existing portfolio appraised $33,8mm comprised of 217 rental • units and 18,831 square-feet of commercial space 4
History Incorporated in 2004 • Acquired five properties through Joint Ventures - 2004 to 2008 • Acquired eleven properties through four syndicated Limited • Partnerships – 2008 to 2014 Divested of six properties 2010 to 2014 • Restructured into private InvestPlus REIT (IPR) with $39,6 mm • assets in 2015 5
InvestPlus Transaction History ✓ $50mm + transacted ✓ 16 buildings Prince George (1 property ) Edmonton (12 properties) ✓ 420 Rental suites Calgary (3 properties) ✓ 18,831 Sq-ft Commercial 6
InvestPlus REIT Portfolio ✓ $33.8mm in Assets ✓ 9 buildings Prince George (1 property ) ✓ 217 Rental Units Edmonton ( 6 properties) ✓ 18,831 Sq-ft Calgary (2 properties) Commercial 7
Objectives Provide investors with stable quarterly distributions and generating • per unit growth rate superior to industry averages Grow and maintain a conservative, diversified portfolio of income- • producing multi-unit residential apartments and commercial assets in western Canada Maximize unit holder value through active internal asset and property • management Leverage management’s network of building owners and sellers and • its experience in driving under-performing portfolios. 8
5 Reasons to Invest into a REIT Source: Real Property Association of Canada 1. REITs offer diversification and a level of stability, without sacrificing growth potential. 2. REITs provide exposure to real estate – real assets with tangible value and reliable income streams 3. REITs are distinct in their combination of relatively steady income, capital gains potential and tax benefits 4. Typically, REITs provide more attractive yields than other income investments. 5. REITs are subject to more stringent regulations in areas such as leverage and financial reporting, providing investors with an added layer of security. 9
Private vs Public Differences A Public REIT is listed on a stock exchange A Private REIT is not listed on a stock ➢ ➢ exchange. A Public REIT, while liquid, can be volatile. ➢ Traded stock investors can push values up or Private REITs are not liquid, however, ➢ down and to extremes very quickly redemptions and subscriptions are based because of liquidity and that becomes the upon the value of the underlying real estate new price, regardless of the underlying asset and not a traded market price which may be substantially different than the value of value. the underlying real estate. Public REIT’s have additional costs compare ➢ to a private REIT that are paid by the REIT, InvestPlus REIT as a private REIT isn´t exposed ➢ which reduces returns to investors in a Public to the extreme volatility of the stock market. REIT InvestPlus REIT can only be bought by ➢ Public REITs can be invested by Qualified Investors via Offering Memorandum ➢ or accredited investors only in Quebec. anyone “ The market is a voting machine, NOT a weighing machine ” (Buffett/Graham) 10
1,2,3 InvestPlus Properties Joint Venture & Limited Partnerships ANNUAL RETURN PROFILE vs. BENCHMARKS 100.00% 2007 Return capped at 100% Non-correlated, down to preserve graph scale market protection 80.00% 60.00% 40.00% 20.00% 0.00% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 -20.00% IPP TSX TRI TSX REIT -40.00% Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Annualized IPP 1.07% 15.03% 342.65% 5.22% -24.36% -9.73% -5.27% 16.66% 16.12% 19.66% 1.15% 17.22% TSX TRI 24.10% 17.30% 9.80% -33.00% 35.10% 17.60% -8.71% 7.19% 12.99% 10.55% -8.32% 6.04% TSX REIT 25.30% 24.70% -5.65% -38.42% 55.25% 22.61% 21.67% 16.97% -5.52% 10.36% -4.65% 8.47% 11 Source: InvestPlus Properties (IPP) JV’s & LP’s, Bloomberg
InvestPlus Properties – Joint Ventures & Limited Partnerships 1,2,3 VALUE OF $10,000 INVESTED $70,000 IPP TSX TRI TSX REIT $60,000 $57,433 $50,000 $40,000 $30,000 $24,450 $20,000 $19,066 $10,000 $- 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 IPP $ 10,000 $ 10,107 $ 11,626 $ 51,463 $ 54,151 $ 40,958 $ 36,971 $ 35,024 $ 40,860 $ 47,449 $ 56,778 $ 57,433 TSX TRI $ 10,000 $ 12,410 $ 14,557 $ 15,984 $ 10,709 $ 14,468 $ 17,014 $ 15,532 $ 16,649 $ 18,812 $ 20,796 $ 19,066 TSX REIT $ 10,000 $ 12,530 $ 15,625 $ 14,742 $ 9,078 $ 14,094 $ 17,281 $ 21,025 $ 24,593 $ 23,236 $ 25,643 $ 24,450 12 Source: InvestPlus Properties (IPP) JV’s & LP’s, Bloomberg
Beaumont Case Study At Acquisition After Normalization Beaumont Manor – 21 Suites Edmonton, Alberta Renovated the building and refinanced in Building was purchased during the credit crisis ($35/bpd oil) October 2009 and pulled out $320,000 in equity Value Oct 2009: $2,01M 17% Rents were significantly below market Annual NOI: $133,920 28% Purchase (March 2009): $1.51M Refinanced Oct 2009: $1,700,000 Annual NOI: $104,220 Equity take out: $ 300,000 Upgrading cost: $300,000 Upgrading timeline: 8 months Sold Jan 2014: $2,394,000 4 Cash on Cash Return: 65.7% Total Invested: $600,000 13
The Brunswick Case Study The Brunswick – 13,704 sq-ft Prince George, BC Purchase Dec 2015 $2,800,000 • Est. Value Dec 2016: $3,000,000 7% • Purchase Cap Rate 8.6% • Est. free cash flow: $24,000 • Lease Expiry December 2025 • Triple-Net Lease: The tenant is financially • responsible for management, operations and capital improvements Accretive – Additional free cash flow of • 8 $20,000/year after distributions, debt, expenses and debt repayment based on current rents 14
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