ARTIS REAL ESTATE INVESTMENT TRUST MAIN FLOOR CONFERENCE ROOM 360 - - PowerPoint PPT Presentation

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ARTIS REAL ESTATE INVESTMENT TRUST MAIN FLOOR CONFERENCE ROOM 360 - - PowerPoint PPT Presentation

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ARTIS REAL ESTATE INVESTMENT TRUST MAIN FLOOR CONFERENCE ROOM 360 MAIN STREET, WINNIPEG, MANITOBA ANNUAL AND SPECIAL MEETING OF UNITHOLDERS JUNE 16, 2016 726 Heartland, Madison WI 7. 12. Termination and C.E.O. 11. Report of the President

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SLIDE 1

ARTIS REAL ESTATE INVESTMENT TRUST

ANNUAL AND SPECIAL MEETING OF UNITHOLDERS JUNE 16, 2016

MAIN FLOOR CONFERENCE ROOM 360 MAIN STREET, WINNIPEG, MANITOBA

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SLIDE 2

2 ARTIS REAL ESTATE INVESTMENT TRUST

1. Call to order 2. Appointment of scrutineers 3. Registration of proxies 4. Notice of meeting 5. Scrutineer’s report 6. Receipt of annual consolidated financial statements 7. Fix number of trustees 8. Election of trustees 9. Appointment of external auditors

  • 10. Amendments to Declaration of

Trust to implement Advance Notice Policy

  • 11. Report of the President

and C.E.O.

  • 12. Termination

AGENDA

726 Heartland, Madison WI

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SLIDE 3

3 ARTIS REAL ESTATE INVESTMENT TRUST

SENIOR MANAGEMENT TEAM

Armin Martens

President and Chief Executive Officer

Jim Green

Chief Financial Officer

Frank Sherlock

EVP, Property Management

David Johnson

EVP, Asset Management (Central Region)

John Mah

SVP, Asset Management (Eastern Region)

Dennis Wong

EVP, Asset Management (Western Region)

Philip Martens

SVP, Asset Management (U.S. Region) 360 Main Street, Winnipeg MB

Leon Wilkosz

SVP, Property Management (Wisconsin)

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SLIDE 4

ARTIS REAL ESTATE INVESTMENT TRUST

BOARD OF TRUSTEES

Armin Martens

Trustee, President & Chief Executive Officer

Edward Warkentin

Chairman of the Board

Delmore Crewson

Trustee

Wayne Townsend

Trustee

Cornelius Martens

Trustee

Ronald Rimer

Trustee

Victor Thielmann

Trustee

Patrick Ryan

Trustee

4

North Scottsdale Corporate Center II, Phoenix AZ

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SLIDE 5

ARTIS REAL ESTATE INVESTMENT TRUST

REPORT OF THE PRESIDENT & C.E.O.

ARMIN ARMIN MAR MARTENS TENS President & C.E.O.

5

1700 Broadway, Denver CO

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SLIDE 6

ARTIS REAL ESTATE INVESTMENT TRUST

CORE MISSION AND OBJECTIVES

CORE MISSION CORE MISSION To create economic value for our Unitholders through active investment and management of commercial real estate in Canada and select U.S. markets KEY OBJECTIVES KEY OBJECTIVES To maintain a course of continuous improvement:

  • Improve the calibre of our real

estate portfolio

  • Improve our payout ratio
  • Improve our balance sheet
  • Improve the reliability/sustainability of
  • ur cash distributions, enabling them

to grow over time

6

Max At Kierland, Scottsdale AZ

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SLIDE 7

7 ARTIS REAL ESTATE INVESTMENT TRUST

PORTFOLIO OVERVIEW

As at December As at December 31 31

2013 2014 2015 PROPERTIES 239 246 252 SIZE 24.8M SF 25.8M SF 26.2M SF GBV $5.0B $5.5B $5.7B OCCUPANCY + COMMITMENTS 96% 96% 95%

PHOENIX

RETAIL OFFICE INDUSTRIAL

DENVER MINNEAPOLIS TORONTO GTA OTTAWA WINNIPEG MOOSE JAW REGINA ESTEVAN SASKATOON MEDICINE HAT CALGARY RED DEER EDMONTON EDSON GRANDE PRAIRIE FORT McMURRAY CRANBROOK KELOWNA METRO VANCOUVER NANAIAMO

7

  • 10 MAJOR MARKETS
  • 3 ASSET CLASSES
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SLIDE 8

ARTIS REAL ESTATE INVESTMENT TRUST

PORTFOLIO NOI SUMMARY

By Asset Class By Geographical Region

Industrial 25% Retail 25% Office 50%

MB 13% BC 7% AB 33% USA 31% SK 6% ON 10%

8

Year-to-date at March 31, 2016

8333 Greenway, Madison WI

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SLIDE 9

ARTIS REAL ESTATE INVESTMENT TRUST

TENANT DIVERSIFICATION

Regional & Local 42% Gov't & National 58%

58% of Artis’ tenants are government or national

All information on this slide is at March 31, 2016, based on gross revenue

9

601 Tower at Carlson, Minneapolis MN

Top Ten Tenants

Artis’ top 10 and top 20 tenants account for 11.8% and 19.3% of gross revenue, respectively

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SLIDE 10

Completed ~$50 million of new construction projects in 2015 ~$130 million of major redevelopment and new construction projects under way in 2016 Over $400 million of new construction projects in the pipeline, with potential to be developed over the next several years

10 ARTIS REAL ESTATE INVESTMENT TRUST

VALUE CREATION

1595 Buffalo WINNIPEG, MB

Centrepoint, Winnipeg MB

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SLIDE 11

$1.41 $1.42 $1.49 $1.49

FFO Per FFO Per Unit Unit

ARTIS REAL ESTATE INVESTMENT TRUST

SELECT 2015 ANNUAL RESULTS

$467 $509 $553 $553

$420 $440 $460 $480 $500 $520 $540 $560 2013 2014 2015

Revenue Revenue (millions)

$5,077 $5,546 $5,651 $5,651

$3,000 $3,500 $4,000 $4,500 $5,000 $5,500 $6,000

2013 2014 2015

Total Assets tal Assets (millions)

Revenue, FFO and AFFO calculations are excluding lease termination income All information inclusive of Artis’ proportionate share of joint venture arrangements

2013 2014 2015 11

800 5th Ave, Calgary AB

4.9% FFO 4.9% FFO incr increase in ease in 2015 2015

76.6% 76.1% 72.5% 72.5%

FFO Payout FFO Payout Ratio Ratio

2013 2014 2015

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SLIDE 12

ARTIS REAL ESTATE INVESTMENT TRUST

MEETING THE OBJECTIVES

201 2015 SCO SCORECARD

STAYING ON THE PATH OF CONTINUOUS IMPROVEMENT ACCRETIVE RECYCLING OF CAPITAL AND IMPROVING THE CALIBRE OF REAL ESTATE PORTFOLIO Acquired over $195 million of assets for a weighted-average capitalization rate of 6.85% and disposed of $150 million of assets for a weighted-average capitalization rate of 4.94%(1) IMPROVED OUR FFO PAYOUT RATIO Decreased from 76.1% to 72.5% (exclusive of lease termination income) IMPROVED OUR BALANCE SHEET Secured mortgages and loans to GBV reduced from 41.9% to 41.2% MAINTAINED BBB LOW(STABLE) INVESTMENT GRADE CREDIT RATING 12

415 Yonge Street, Toronto ON

(1) Excluding properties sold to an owner-occupier

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SLIDE 13

13 ARTIS REAL ESTATE INVESTMENT TRUST

CAPITAL RECYCLING PROGRESS IN 2016

ACQUISITIONS DISPOSITIONS

Madison Lifestyle Portfolio Portfolio of 16 Class A Office Properties 1.7 million square feet of leasable area Purchase price: US$260.0 million Capitalization Rate: 7.75%

Tamarack Centre Cranbrook, BC Retail shopping centre 287,969 square feet Sale Price: $41.5 million Capitalization Rate: 6.67% Crosstown North Minneapolis, MN Industrial cross-dock facility 120,000 square feet Sale Price: US$7.4 million Capitalization Rate: sold to an owner-occupier Whistler Hilton Whistler, BC Retail shopping centre 30,063 square feet (Artis’ interest) Sale Price: $28.7 million (Artis’ interest) Capitalization Rate: 6.53%

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SLIDE 14

LOOKING AHEAD

TWO MARKETPOINTE MINNEAPOLIS, MN

Introduction of new GICS category for REITs

  • Potential for REIT ETFs and an increase in allocation of

investment funds to REITs

Interest rate environment

  • Federal Open Market Committee (FOMC) rate increase?
  • Bank of Canada (BOC) rate decrease?
  • Affect on foreign exchange and Artis

Headwinds for REITs and Artis:

  • Bond rates
  • Commodity prices
  • Calgary office market

So, what about “AX on the TSX”?

  • Just keep our hands on the plow
  • FFO per unit
  • Pay-out ratio
  • Balance sheet
  • Property portfolio

ARTIS REAL ESTATE INVESTMENT TRUST 14

Hudson’s Bay Centre, Denver CO

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SLIDE 15

Q & A

ARTIS REAL ESTATE INVESTMENT TRUST 15

Stampede Station, Calgary AB

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SLIDE 16

ARTIS REAL ESTATE INVESTMENT TRUST

ANNUAL AND SPECIAL MEETING OF UNITHOLDERS JUNE 16, 2016

MAIN FLOOR CONFERENCE ROOM 360 MAIN STREET, WINNIPEG, MANITOBA