August 2016 165 Ontario Street, St. Catharines, ON Diversified - - PowerPoint PPT Presentation

165 Ontario Street, St. Catharines, ON 120 Dundas Street East, Mississauga, ON Azure, Fort St. John, BC

Diversified National Platform Positioned for Continued Profitable Growth

Cobble Hill, Airdrie, AB

August 2016

Disclaimer

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This presentation may contain forward-looking information. All information included in this presentation other than statements of historical fact, is forward-looking information. When used in this presentation, words “expect”, “estimate”, “project”, “potential” or other similar expressions identify forward-looking information. The forward-looking information included in this presentation relates to, among other things, current expectations of future results, performance, prospects and opportunities, including with respect to the benefits of the acquisition of True North Apartment REIT and properties from affiliates of Starlight Investments Ltd. and affiliates of the Public Sector Pension Investment Board, growth opportunities, payout ratio, market capitalization, mitigation of impact of commodity prices, population growth, results from the high-end renovation program, above guideline increases, opportunities to increase below market rents, results from the sub-metering program, cost savings from management internalization, development and acquisition opportunities, and debt management. This presentation reflects Northview’s current beliefs and is based on information currently available to senior management. Forward-looking information is provided for the purpose of presenting information about senior management’s current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. This information is not a guarantee of future performance and is based on Northview’s estimates and assumptions, which include, but are not limited to market growth, the general economy, interest rates and real estate conditions are each stable, occupancy rates, results of operations, performance, prospects and opportunities. The forward-looking information is subject to a variety of known and unknown risks and uncertainties, which could cause actual events, results and performance to differ materially from the forward-looking information. Such risks and uncertainties include, but are not limited to, availability

• f cash flow, risks of unexpected operating results, risks of investment in and development of real property, competition, financing and

refinancing risks, changes in economic conditions, changes in interest rates, changes in taxation rules, reliance on key personnel, environmental matters, tenant risks, fluctuations in commodity prices and other risk factors. Northview cautions that this list of factors is not exhaustive. Although the forward-looking information contained in this presentation is based on what Northview believes are reasonable assumptions, there can be no assurance that actual results will be consistent with this forward-looking information. The forward-looking information is provided only as of the date of such information, and Northview, except as required by applicable law, assumes no obligation to update or revise this information to reflect new information or the occurrence of future events or circumstances. Certain measures contained in this presentation do not have any standardized meaning as prescribed by International Financial Reporting Standards (“IFRS”) and, therefore, are considered non-GAAP measures. These measures are provided to enhance the reader's overall understanding of financial conditions. They are included to provide investors and management with an alternative method for assessing

• perating results in a manner that is focused on the performance of operations and to provide a more consistent basis for comparison between
• periods. These measures include widely accepted measures of performance for Canadian real estate investment trusts; however, the measures

are not defined by IFRS. In addition, these measures are subject to the interpretation of definitions by the preparers of financial statements and may not be applied consistently between real estate entities. Please refer to Northview’s Second Quarter 2016 Management's Discussion & Analysis for definitions of non-GAAP measures and additional GAAP measures, including NOI, FFO, debt to gross book value, and interest coverage.

Content Overview

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Page Investment Highlights 4 2015 Transaction Overview 9 2016 Strategic Objectives 11 Execution of Strategic Value Creation Initiatives 12 Growth Opportunities 16 Financial Metrics 20 Portfolio Overview 24

For Investors Seeking Sustainable Yield and Growth

• One of Canada’s largest multi-family RElTs
• Diversified national platform
• Identified organic growth opportunities, development program,

and acquisition pipeline

• Sustainable payout ratio
• History of FFO and distribution growth

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Investment Highlights

TSX Symbol: NVU.UN

Summary

TSX Symbol: NVU.UN

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Key Statistics Unit Price (1) $20.25 Trust Units Outstanding (Basic) (2) 52.2 million Market Capitalization $1.1 billion Enterprise Value $3.0 billion Annual Distributions Per Trust Unit $1.63 Distribution Yield 8% FFO Payout Ratio (2)(3) 77% Estimated AFFO Multiple 2016 (4) 12.0x Multi-Family Units (2) 24,314 Commercial Square Footage (2) 1,135,000 Execusuites and Hotel Units (2) 419

(1) Closing price as at August 31, 2016. (2) Source: Q2 2016 MD&A. (3) Diluted FFO payout ratio excluding Non-recurring Items for the six months ended June 30, 2016. (4) Source: BMO REIT Beat (dated August 26, 2016).

Diversified National Platform

Geographically diverse portfolio operating in eight provinces and two territories

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Northview property portfolio

Multi-family Residential Units

$3.0 billion 24,314

Western Canada Ontario Atlantic Canada Northern Canada Québec 8,235 2,285 7,241 4,151 2,402 Enterprise Value

$7.5 $4.9 $3.2 $3.0 $1.9 $1.8 $1.3 $1.0 $1.0 CAP Boardwalk Milestone Apartments Northview Killam Morguard Residential InterRent Mainstreet Equity Pure Multi- Family

Enterprise Value(1)

$ billions

Increased Scale: New Opportunities

Enhanced access to capital, increased market liquidity

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(1) Source: Closing prices as at August 31, 2016. Data provided by Scotiabank.

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Other Regions 78% Resource Based Regions 22%

Source: Q2 2016 Financial Statements. NOI for resource based markets excludes Non-recurring Items.

Northern Canada, $31.7 (34%) Western Canada, $19.5

(Resource Based Markets $12.3)

(22%) Ontario, $24.3 (27%) Atlantic Canada, $11.2 (12%) Québec, $4.6 (5%)

Q2 2016 YTD NOI ($ MILLIONS)

Resourced Based Markets Resource Based Markets

National Portfolio

Insulated from regional market risk

Northern Canada, $26.2 (46%) Western Canada, $22.9

(Resource Based Markets $16.0)

(41%) Atlantic Canada, $6.9 (12%) Québec, $0.4 (1%)

Q2 2015 YTD NOI ($ MILLIONS)

Resource Based Markets

Diversified portfolio across Canada provides stability, mitigating the impact of cyclical regional economic downturns.

2015 Transaction Overview

Reduced risk and created new opportunities for profitable growth

Reduced inherent risk associated with NPR’s portfolio

• Portfolio concentration in Northern and Western Canada
• Impact of resource based markets on occupancy and rental rates

On strategy

• Continues geographic expansion since NPR IPO in 2002
• Consistent with core skillset of owning and

managing multi-family properties across Canada Delivers continued profitable growth

• NPR’s high market penetration limited opportunities
• Diversification through acquiring and developing

properties in markets with expanding populations and growing economies in Central and Atlantic Canada 9

Unit Price Performance Delink from Oil

Correlation to oil has decreased since the 2015 Transaction

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65 75 85 95 105 115 125 135 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Northview WTI Crude Oil (C$) (12.8%) 9.5%

Correlation: 47.1% Correl.: (32.3%)

60 65 70 75 80 85 90 95 100 105 110 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Northern Property WTI Crude Oil (C$) (25.9%) (33.9%)

Correlation: 90.9%

Pre Deal Close (12 Months)

Price Return (Base = 100)

Since Deal Close (October 30, 2015)

Price Return (Base = 100) Source: Bloomberg.

2016 Strategic Objectives

Sustaining and enhancing value creation for Unitholders

• Execution of Strategic Value Creation Initiatives

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• Disposition of Non-Core Assets

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• Restructure Credit Facilities

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Maintain Current Conservative Distribution Levels

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Creating Value for Unitholders

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Execution of Strategic Value Creation Initiatives

Realizing full value across through recent acquisition portfolios

Value Creation Initiative Progress High-End Renovation Program Completed 116 units in Q2 2016 YTD, 72 units expected in Q3 2016. Average rental rate increase on 98 renovated units that have been leased is $203 per unit with average return on investment of 15%. Below Market Rents Achieved $9 per unit increase in monthly rent on the acquired portfolio since January 1, 2016. Sub-Metering Program Identified 7,354 units, 3,727 units have been sub-metered of which 40% are enrolled. Above Guideline Increases Received approval on 2,850 units of which 1,250 units have been approved in 2016 at an increase of 4%, including the 2016 guideline of 2%. Property Management Internalization Internalized 7,600 units in Ontario on April 1, 2016, with plans to internalize remaining 5,150 units in 2017 (NS, NB, QC, ON).

558 Durham Crescent, Woodstock, ON

• $150 million of non-core properties expected

to be sold in 2016 and 2017

• $79 million including sales under contract are

expected to close by Q3 2016

Disposition of Non-Core Assets

Sales under contract in 2016 to reduce debt to gross book value by 0.9%

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50 Tripp Boulevard, Trenton, ON

Debt to Gross Book Value

• 60.2% (excluding convertible debentures) at Q2 2016
• Target of 50% to 55% range

Clear Path to Leverage Reduction

• Execution of strategic value creation initiatives
• Disposition of non-core assets

Restructure Credit Facilities

• Utilize CMHC financing extend term and lower interest rate
• Bridge loan refinanced during Q1 2016 and established a new $30.0 million credit facility in Q2
• Consolidation of the $75 million and $45 million operating facilities into one operating facility to be

completed in Q3

Restructure Credit Facilities

Systematic plan to reduce leverage

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$1.15 $1.18 $1.25 $1.31 $1.38 $1.48 $1.48 $1.48 $1.53 $1.53 $1.53(1) $1.55 $1.59 $1.63 90.9% 80.3% 77.7% 81.3% 79.5% 77.2% 69.8% 67.3% 70.0% 65.3% 68.1% 69.3% 67.1% 69.2% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Annual Distributions FFO Payout Ratio - Basic

Maintain Conservative Distribution Levels

Sustainable FFO payout ratio

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(1) Excludes special distribution of $0.56 per unit.

Growth Opportunities

Development and Starlight Relationship

331 363 299 401 2013 2014 2015 2016 Projected

Development

Highly accretive opportunities

• Development yields 100 to 200 bps higher than acquisition Cap Rates
• Existing land holdings creates substantial development pipeline
• 48 acres owned for 1,700 units in Western and Northern Canada
• Approximately 500 new units can be developed on existing properties in

Ontario

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Historical units completed

Cobble Hill, Airdrie, AB

Vista – Calgary, AB

Cambridge Bay, NU

36 $290 10.5%

Units Per Unit Stabilized Cap Rate

thousand

Development Activity

Quality multi-family rental properties

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Q2

Completion Date

2017

Calgary, AB

261 $170 7.5%

Units Per Unit Stabilized Cap Rate

thousand

Q4

Completion Date

2016

Airdrie, AB

140 $186 7.0%

Units Per Unit Stabilized Cap Rate

thousand

Q1

Completion Date

2016

Potential Starlight Pipeline

Institutional portfolio demonstrates potential of Starlight relationship

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Track Record of Growing Public Vehicles

• Starlight Investments is one of Canada’s leading private real estate

investors and asset managers

• Starlight is owned by Daniel Drimmer, a Trustee of Northview, and has

completed over $9.0 billion worth of acquisition and financing transactions over the past 20 years

• Starlight maintains a portfolio of over 12,000 multi-family suites in

Canada Summary of Assets Sold by Privately Held Drimmer Entities to REITs

8,200 10,626 2,076 1,570 2,824 4,650 2,000 4,000 6,000 8,000 10,000 12,000 2010 (IPO) 2011 2012 2013 2014 2015 Suites

Financial Metrics

Strong Financial Base for Sustainable Distributions

3.5x 3.1x 3.0x 2.6x 2.5x 2.0x 1.7x 1.6x 1.5x 1.4x

Boardwalk Northview Cap Interrent Killam

Interest Coverage Ratio Debt Service Coverage Ratio

Strong Coverage Ratios

Among the best in the Canadian multi-family REIT sector

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(1) BEI.UN, NVU.UN, CAR.UN, IIP.UN, and KMP based on trailing twelve months as of June 30, 2016. (1) (1) (1) (1) (1)

21.7%

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21.9% 25.4% 9.3% 14.4%

Source: Total unit return performance is from January 1, 2016 to August 31, 2016. Data provided by Scotiabank.

NVU.UN Total Unit Return Performance

Strong performance in 2016

23.8x 19.9x 17.6x 16.8x 12.0x IIP CAP BEI KMP NVU

Source: BMO REIT Beat (dated August 26, 2016). NVU.UN distribution yield as at August 31, 2016.

Lowest AFFO Multiple in the REIT Sector

Opportunity for improvement

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Distribution Yield 3% 4% 5% 5% 8%

Portfolio Overview

Geographical diversification

Portfolio Summary

NOI diversified across country

Northern Canada 34% Atlantic Canada 12%

NOI BY PORTFOLIO

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Commercial, 10% Execusuites & Hotel, 4% Residential, 86%

Source: Q2 2016 MD&A and Financial Statements. NOI percentage based on six months ended June 30, 2016.

Western Canada 22% Ontario 27% Québec 5%

Multi-family Residential Units

24,314

Occupancy

91%

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Regional Overview – Ontario

Opportunities for internal and external growth from growing populations

Six months ended Q2 2016 NOI ($millions) $24.3 Total NOI % 27% Occupancy (%) 96% Multi-Family Units 8,235

Oshawa, ON Hamilton, ON Toronto, ON Sarnia, ON Guelph, ON Kitchener-Waterloo, ON London, ON

• St. Catharines-Niagara, ON

Peterborough, ON Brockville, ON

Southwestern ON: 4,625 Eastern ON: 1,831 GTA: 1,779

Note: Regions with a portfolio of greater than 200 units are listed. Lindsay, ON

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Regional Overview – Western Canada

Well positioned to be the first choice for new residents when the market recovers

Fort Nelson, BC Dawson Creek, BC Fort St. John, BC Chetwynd, BC Abbotsford, BC Nanaimo, BC Grande Prairie, AB Fort McMurray, AB Bonnyville, AB Lloydminster, AB Regina, SK Airdrie, AB Calgary, AB Lethbridge, AB

BC: 2,767 AB: 4,045 SK: 429

Six months ended Q2 2016 NOI ($millions) $19.5 Total NOI % 22% Occupancy (%) 81% Multi-Family Units 7,241 Commercial Square Feet 136,000

Note: Regions with a portfolio of greater than 200 units in BC or 500 units in AB and SK or recent developments are listed. Prince George, BC

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Regional Overview – Atlantic Canada

Increased presence in attractive markets

Six months ended Q2 2016 NOI ($millions) $11.2 Total NOI % 12% Occupancy (%) 94% Multi-Family Units 4,151 Execusuites & Hotel Units 142 Commercial Square Feet 225,000

Fredericton, NB Saint John, NB Moncton, NB Dieppe, NB Shediac, NB Halifax, NS Dartmouth, NS Labrador City, NL Gander, NL

• St. John’s, NL

NB: 1,135 NS: 1,288 NL: 1,728

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Regional Overview – Northern Canada

Strong and stable performing region

Six months ended Q2 2016 NOI ($millions) $31.7 Total NOI % 34% Occupancy (%) 95% Multi-Family Units 2,402 Execusuites & Hotel Units 277 Commercial Square Feet 771,000

Yellowknife, NT Inuvik, NT Cambridge Bay, NU Gjoa Haven, NU Taloyoak, NU Arctic Bay, NU Pond Inlet, NU Clyde River, NU Pangnirtung, NU Iqaluit, NU Kimmirut, NU Cape Dorset, NU

NT: 1,309 NU: 1,093

Igloolik, NU Hall Beach, NU

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Regional Overview – Québec

Opportunity for growth as occupancy improves

Six months ended Q2 2016 NOI ($millions) $4.6 Total NOI % 5% Occupancy (%) 91% Multi-Family Units 2,285 Commercial Square Feet 3,000

Montreal, QC Sept-Iles, QC

QC: 2,285

Experienced Management Team

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Todd Cook President & Chief Executive Officer

• President & CEO since 2014
• Joined Northern Property REIT in 2006, CFO from 2007 to 2011 and President and COO in 2013
• Previously CFO of TGS North American REIT from 2003 until its acquisition by The Great-West Life

Assurance Company in 2006 Leslie Veiner Chief Operating Officer

• COO since 2015
• Previously President & CEO of the True North Apartment REIT since 2012
• Previously CFO of TransGlobe Apartment REIT from 2010 to 2012. Employed by Chartwell

Retirement Residences as SVP Real Estate from 2005 to 2008 and CFO from 2003 to 2005 Travis Beatty Chief Financial Officer

• CFO since May 2016
• Previously CFO of West Valley Energy from 2012 to 2014 and various roles including CFO with

OPTI Canada from 2002 to 2011 Richard Anda VP, Business Development

• VP, Business Development since 2011
• Joined Northern Property REIT in 2003. VP, Operations from 2004 to 2011
• Previously with Canada Mortgage and Housing Corporation

Lizaine Wheeler VP, Residential Operations

• VP, Residential Operations of since 2012
• Previously SVP Operations at Mainstreet Equity Corp from 2010-2012, and prior to that, senior
• perations roles with Boardwalk REIT from 1998 to 2010

Bo Rasmussen VP, Property Development

• VP, Property Development since 2011.

Joined Northern Property REIT in 2007 as Manager of Construction and Development

• Previously VP Development for NewNorth Projects Ltd. from 2004 to 2007

Commitment to Strong Governance

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Douglas Mitchell, Chair National Co-chair, Borden Ladner Gervais LLP Todd Cook(1) President & CEO, Northview Apartment REIT Daniel Drimmer(1) President & CEO, Starlight Investments Ltd. Kevin Grayston Corporate Director, former CFO, CHIP REIT Dennis Hoffman Former Partner, City Leader (Calgary Office), PricewaterhouseCoopers LLP Christine McGinley Corporate Director, former SVP of Operations, Canwest Global Terrance McKibbon President & CEO, Aecon Group Inc. Graham Rosenberg President & Co-CEO, Dental Corporation of Canada Inc. Scott Thon President & CEO, AltaLink L.P. Principal Occupation

(1) Non-independent.

www.NorthviewREIT.com