COMPANY OVERVIEW TSX: IVQ.U
Invesque at a Glance STRATEGY MACRO OPPORTUNITY INVESTMENT THESIS Massive wave of aging Health care real estate Build a highly diversified baby boomers will utilize generates long-term, out- portfolio of income greater health care services paced risk adjusted returns. generating health care real and spend more dollars on estate. Diversify by type of While any particular asset health care. We are just class may come in and out asset, geography, payor beginning, and the real of favor in any cycle, long- source and operator. growth is ahead. term, patient investors, Operating partners are the will be rewarded . key to our success . 2
Invesque Portfolio Snapshot 99 12 years ~2.3% 20 Partnerships with Properties Average age of avg. annual high-quality rental escalators (1) portfolio operators Triple-net lease and Geographically 8,500+ ~12 yrs joint venture diversified across structure provides Beds/Suites Weighted average 19 states lease maturity stable cash 577,000 & flow MOB ft 2 2 Canadian Provinces (1) Triple net lease portfolio 3
Spectrum of Care Hospitals Inpatient Acute Care High Acuity Skilled Nursing and Care Post Acute/Transitional Care (TC) Long Term Care (LTC) Seniors Housing Memory Care (MC) Assisted Living (AL) Independent Living (IL) Senior Apartments Complimentary Health Care Medical Office Buildings Free Standing Emergency Ambulatory Surgery Center Urgent Care Center Low Acuity 4
Attractive & Stable Industry Dynamics Highly fragmented industry focused on a need-driven, cost-effective care model HIGHLY FRAGMENTED INDUSTRY Top 10 skilled nursing facility owners represent ~17% of total beds Top 10 assisted living & independent living community owners represent ~27% of total suites COST-EFFECTIVE CARE ALTERNATIVES Transitional Care and Long Term Care properties provide some of the most cost-effective care alternatives for third-party payer sources NEED-DRIVEN SERVICES Approximately 70% of people over age 65 will require some type of senior care service during their lifetime Data Source : National Investment Center for Seniors Housing & Care (NIC) 5
Preparing for Unprecedented Growth We are at the leading edge of the aging baby boom demographic 4,500 Future Need Age 58 4,000 Age 63 # OF ANNUAL BIRTHS 3,500 Age 68 (IN THOUSANDS) Utilizing Current Aging Facilities 3,000 Age 98 Age 93 Age 73 2,500 Age 88 Age 78 Age 83 2,000 1,500 1,000 1920 1925 1930 1935 1940 1945 1950 1955 1960 BIRTH YEAR Data Source: United States Census Bureau 6
Building a Diversified Portfolio ~30% ~30% Skilled Nursing Seniors Housing Joint Ventures Sale / Leaseback Sale / Leaseback Capex Loans Capex Loans Long Term Care Independent Living Traditional Skilled Nursing Assisted Living Transitional Care Memory Care 5-10% ~30% Development Strategic Health Care Mezzanine Loans Sale / Leaseback Preferred Equity Joint Ventures Seniors Housing Medical Office Skilled Nursing Outpatient Surgical Centers Strategic Health Care Behavioral Health Free Standing Emergency Other Health Assets 7
Clear Pathway to Growth Focused, Disciplined and Accretive Growth Strategy Development Partnerships Invesque has arrangements Acquisition Pipeline with sought after developers to provide development Current Operating Portfolio Experienced management financing in exchange for the team with access to unique right to acquire properties pipeline of acquisitions from Triple-net leases with annual its deep network of owner, contractual rental escalators of operator, developer, lender approximently 2.3% and broker relationships Expansion opportunities with current operating partners 8
Building a Strong Platform $1.4 BILLION $1.3 BILLION 99 89 $747 $680 MILLION $636 $598 MILLION $575 MILLION MILLION MILLION $443 MILLION $303 40 38 MILLION 35 32 28 23 11 JUN NOV DEC MAY DEC FEB JAN APR OCT 2016 2016 2016 2016 2016 2017 2017 2018 2019 9
Care Investment Trust: A CASE STUDY IN PORTFOLIO GROWTH & DIVERSIFICATION In 2018, Invesque closed on the transformative US$425 million acquisition of Care Investment Trust, comprising a portfolio of 42 high quality seniors housing and care properties across the United States Attractive and strategic portfolio acquisition Enhances scale and investment platform Improves diversification by tenant and geography Increases exposure to private pay senior housing Attractive acquisition metrics Shares issued at $9.75 validates embedded value in Invesque portfolio Accretive to 2018E AFFO per share 10
Mohawk Medical Properties REIT: A CASE STUDY OF DIVERSIFICATION AND ESTABLISHING A PLATFORM FOR GROWTH In 2018, Invesque expanded its portfolio to include medical office buildings with the US$138 million acquisition of Mohawk Medical Properties REIT. The acquisition was comprised of 14 properties totaling more than 500,000 ft 2 in Canada and the United States. Comprehensive entry into a new asset class Solid investment with stable occupancy Enhances diversification with addition of strategic properties Continue increasing exposure to private pay All stock transaction at $9.75 demonstrating embedded value in portfolio Accretive to 2018E AFFO per share 11
Well-established Industry Leading Operating Partners 12
Geographically Diverse Footprint 99 Properties ~US$1.4B of Investment Properties 8,500+ Suites & Beds MOB ft 2 577,000 3 AB 12 ON ONTARIO NY 9 CA PA 15 2 2 NE 2 NJ IL 12 MD IN 3 2 2 TN 6 VA KS 2 1 MO 2 TN AR 1 4 SC AZ 1 GA 3 TX 13 LA 1 3 FL All information provided includes announced transactions 13
Financial Profile & Strategy CONSERVATIVE DEBT PROFILE • Prospective targeted debt profile of 50 – 55% of Total Assets • 54% as of September 30, 2018, 48% excluding debentures • 80% fixed rate / 20% floating rate LOW COST OF CAPITAL & CONSERVATIVE PAYOUT RATIO • Weighted average interest rate of 5.0% as of September 30, 2018 • 76% payout ratio for the nine months ending September 30, 2018 • Dividends designated as eligible dividends for Canadian tax purposes, unless otherwise indicated FLEXIBLE DEBT FUNDING STRUCTURE CONSERVATIVE FINANCIAL POSITIONED FOR GROWTH STRUCTURE WITH ATTRACTIVE • $400m senior secured credit facility which DEBT TERMS includes a $200m term loan and $200m revolver • Average debt maturity of 4.6 years 14
Investment Highlights Strong yield with a conservative leverage profile Stable cash flow from triple-net leases with upside from both contractual rent escalations and JV partnerships Experienced and aligned management team with a track record of delivering value Strong partnerships with leading operators and health care providers Investment platform and industry positioned for future growth Attractive asset class supported by compelling demographics 15
Experienced Leadership Team • Previously Executive Vice President of Mainstreet and HealthLease Properties REIT. SCOTT WHITE • 20+ years of investment banking, accounting, real estate Chief Executive Officer and capital markets experience. • Former Senior Vice President at Brookfield Asset Management and director at Citigroup. • Previously Chief Financial Officer of Mainstreet and CFO of HealthLease Properties. ADLAI CHESTER • 15+ years of experience in finance, real estate, investments, Chief Investment Officer development and capital markets. • Awarded CFO of the Year in 2014 and earned a spot on the 40 under 40 list in 2015 by the IBJ. • Previously Senior Vice President – Finance of Mainstreet. • 14 years of finance and accounting experience in real estate. SCOTT HIGGS • Significant experience working with public companies as a Chief Financial Officer Senior Manager with KPMG, including advising on multiple initial public offerings. 16
Appendix 17
Mohawk MOB Portfolio O P P O R T U N I T Y O V E R V I E W Strategic Rationale • High quality medical properties • Stable occupancy of 90% Solid Investment • Multi-tenanted physician practices in a high-earnings multiple asset class • Initial 15 MOB Purchase Price USD$145m • Opportunity to enter into a highly desirable core asset class across North America Transformative • New strategic partnership with industry veterans proficient in management and Expert Partners acquisitions in the U.S. and Canada • In-place management team with capacity to take on additional properties Growth Platform • Focused on growth in North America • In line with IVQ’s business plan to invest in strategic health care real estate in Strategic addition to senior living, skilled nursing, and development • Positively impacts each of IVQ’s key diversification metrics: asset type, geography, Added Diversification private pay, and tenant mix 18
Mohawk MOB Portfolio Geographic Snapshot Geographic Snapshot Asset Type: Medical Office Buildings Canada Average Occupancy: 90% 15 buildings (577,000 FT 2 ) Portfolio Size: Alberta – 3 Purchase Price: $145m Ontario – 8 Asset Management Tiered payment structure designed to reduce Fee: costs United States New York – 2 Capital Structure Florida – 2 61.4% 38.6% Debt Share Takeback B/S Cash $89m $35m $21m $0m $20m $40m $60m $80m $100m $120m $140m $160m 19
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