INVESTOR PRESENTATION Second Quarter 20 16 1 Forward-Looking - - PowerPoint PPT Presentation

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INVESTOR PRESENTATION Second Quarter 20 16 1 Forward-Looking - - PowerPoint PPT Presentation

INVESTOR PRESENTATION Second Quarter 20 16 1 Forward-Looking Statements This presentation contains "forward-looking information" as defined under Canadian securities laws which reflect managements expectations regarding objectives,


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INVESTOR PRESENTATION

Second Quarter 20 16

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This presentation contains "forward-looking information" as defined under Canadian securities laws which reflect management’s expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of WPT Industrial Real Estate Investment Trust (the “REIT"). The words “plans”, “expects”, “scheduled”, “estimates”, “intends”, “anticipates”, “projects”, “believes”, or variations of such words and phrases (including negative variations) or statements to the effect that certain actions, events or results “may”, “will”, “could”, “would”, “might”, “be achieved”, or “continue” and similar expressions identify forward-looking statements. These statements reflect the REIT's current expectations regarding future events and operating performance including the REIT’s ability to invest in private funds and the future prospects and

  • pportunities relating to investment in, or co-investment with, such private funds, the current or future status of the REIT’s Unitholder Rights Plan Agreement, the REIT’s future growth

potential and other prospects and opportunities, results of operations, demographic and industry trends and future legislative and regulatory approaches with respect to matters affecting the REIT and speak only as of the date of this presentation. Forward looking statements are necessarily based on a number of estimates, beliefs and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies which could cause actual results to differ materially from those that are disclosed in such forward-looking statements. While considered reasonable by management of the REIT as of the date of this presentation, any of these estimates, beliefs or assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those estimates, beliefs or assumptions could be incorrect. When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved, if achieved at all. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including but not limited to those factors discussed or referenced under the “Risk Factors” section of the REIT’s MD&A. This presentation does not constitute or form part of any offer for sale or solicitation of any offer to buy or subscribe for any securities nor shall it or any part of it form the basis of or be relied on in connection with, or act as any inducement to enter into, any contract or commitment whatsoever. The information contained in this presentation concerning the REIT and its affiliates does not purport to be all-inclusive or to contain all the information that a prospective purchaser or investor may desire to have in evaluating whether or not to make an investment in the REIT. The information is qualified entirely by reference to the AIF. Certain terms included in this presentation such as funds from operations (“FFO”), adjusted funds from operations (“AFFO”) and net operating income (“NOI”) are used by management to measure, compare and explain the operating results and financial performance of the REIT and are not recognized terms under IFRS, and therefore should not be construed as alternatives to net income (loss) and comprehensive income (loss) or cash flow from operating activities calculated in accordance with IFRS. Management believes these terms are relevant measures in comparing the REIT’s performance to industry data, the REIT’s ability to earn and distribute cash returns to holders of the REIT’s trust units, and the REIT’s ability to meet its ongoing obligations. These terms are defined and reconciled to the most directly comparable measure specified in the REIT’s MD&A. Such terms do not have a standardized meaning prescribed by IFRS and may not be comparable to similarly titled measures presented by other issuers.

Forward-Looking Statements

All currency in U.S. dollars

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US Industrial Market Update

56 20 Inner Park Drive Pontoon Beach, Illinois

GLA: 1,262,648 sq. ft. Ceiling height: 32 feet

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Demand for Industrial

Industrial Fundam entals Solid

  • 24 consecutive quarters of industrial

demand outstripping supply. (Source: JLL Investm ent

Outlook, Q1 2016)

  • 2016 opens with 59.6 million sq ft of

positive net absorption (Source: CBRE Market Snapshot, Q1

2016)

  • E-commerce sales in the U.S. were up

15.2% in Q1 2016 vs. Q1 2015, while total sales increased 2.2% for the same

  • period. (Source: U.S. Census Bureau, May 2016)
  • 2016 Sales volume remain 10.2% above

the 10-year first-quarter average

(Excludes the 2015 IndCor Acquisition). (Source: JLL

Investm ent Outlook, Q1 2016)

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Development Activity

  • Nationwide availability hits a 15-

year low (Source: CBRE Marketview snapshot, Q1 2016)

  • Current space requirements in the

market (~249MM sf) exceed active speculative construction by a factor

  • f 2.3x. (Source: JLL US Industrial Outlook Q2 2015, JLL US Industrial

First Look Q3 2015 & CoStar – Costar data includes all industrial product types)

Strong Absorption will Fuel Developm ent

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Growing Rents

Rents are Rising

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WPT Industrial REIT Update

10 0 West Thom as P Echols Drive

Louisville, KY

GLA: 936,000 sq. ft. Ceiling height: 32 feet

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Unique Investm ent Vehicle

ONLY Canadian REIT focused exclusively on U.S. Industrial Real Estate

  • Specific concentration in U.S.

distribution and logistics market

  • Annual distribution of

$0.76/ unit in U.S. Dollars

  • Managed by WPT Capital

Advisors

  • Over 35 years of experience
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Acquisitions since IPO

6 76 6 Pontius Rd.

Cincinnati, Ohio

GLA: 754,000 sq. ft. Ceiling height: 35 feet

$255.4 Million 11 Institutional Quality Properties 6.5 Million Square Feet 17 High-Quality Tenants

Significant Growth since IPO

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Strategically Located in Key Distribution Markets Properties

15.1M

  • sq. ft. of GLA

48

Minneapolis

Current Portfolio

1

  • 1. As of June 30, 2016

“The value of goods delivered by same-day delivery is expected to increase by 154% annually through 2018.” (Source: Business

Insider Intelligence Estimates)

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State-of-the-Art Assets

Institutional-Quality Portfolio

1

1. As of June 30, 2016 2. Industrial assets only

Average Clear Ceiling Heights

2

Average Asset Age Average Tenant Size

2

31 feet 14 Years 187,0 0 0 Sq. Ft.

Average Building Size

2

321,0 0 0 Sq. Ft.

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Stable and Diversified Tenant Mix

High-Quality Tenant Base

Top 10 Tenants*

*As of June 30 , 20 16

Tenant % of Total Annualized Base Rent GLA Occupied (%) of Total Portfolio GLA Sector General Mills Operations, LLC 7.3% 1,512,552 10.0% Consumer Products Unilever Home & Personal Care 6.2% 1,262,648 8.4% Consumer Products Zulily Inc 4.1% 737,471 4.9% Online Retailer Fullbeauty Brands, Inc. 3.9% 741,092 4.9% Online Retailer Essendant Co (Formerly United

Stationers Supply Co)

3.7% 654,080 4.3% Consumer Products CEVA Logistics U.S. Inc. 3.5% 648,750 4.3% Logistics Amazon.com 3.4% 572,000 3.8% Online Retailer Radial, Inc. (Formerly eBay

Enterprise, Inc.)

3.4% 543,512 3.6% Online Retailer Honeywell International Inc 3.3% 754,000 5.0% Consumer Products KGP Logistics, Inc. 3.1% 311,100 2.1% Logistics Total 4 1.9% 7,737,20 5 51.3%

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Financial Overview

6 76 6 Pontius Rd.

Cincinnati, Ohio

GLA: 754,000 sq. ft. Ceiling height: 35 feet

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Consistent Growth Since IPO

Targeting Disciplined and Accretive Growth

(US$,0 0 0 except per Unit am ounts)

Q2 20 16 Q1 20 16 Q4 20 15 Q3 20 15 Q2 20 15 Investment properties revenue $ 17,550 $ 17,564 $ 15,769 $ 17,705 $ 17,563 NOI 13,046 13,029 11,372 13,420 13,358 FFO 8,276 7,511 6,121 8,617 8,143 AFFO 7,569 7,180 7,423 7,361 7,156 AFFO per Unit $0.224 $0.213 $0.220 $0.218 $0.212

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Strong Balance Sheet & Liquidity Position

As of June 30, 2016 Total Debt to GBV 48.1% Weighted Average Effective Interest Rate 3.8% Weighted Average Mortgage Term-to-Maturity 4.4 yrs Interest Coverage Ratio 3.3 times Fixed Charge Coverage Ratio 2.9 times Debt to EBITDA 8.1 times AFFO Payout Ratio – Q2 2016 84.7%

$31.1 Million in Capacity on Revolving Facility

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10 0 % Fixed Rate Mortgage Debt with Weighted Average Interest Rate under 4%

Well-Balanced Mortgage Portfolio

Weighted Average Mortgage Term-to-Maturity

4.4 years

(1) As of June 30, 2016

22,067 1,913 33,295 31,481 87,111 50,011 25,762 52,498 8,863 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00%

  • 10,000

20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 2016 2017 2018 2019 2020 2021 2022 2023 2024

Weighted Average Interest Rate of Maturities

Maturities ($ in Thousands)

Mortgage Maturities by Year (1)

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Staggered Lease Maturity Profile

Balanced Tenant Turnover with Near-Term Opportunity

Weighted Average Remaining Lease Term

3.8 years

Leases expiring 6 12 17 14 11 15 5 6 5

(1) As of June 30, 2016

2.0% 19.7% 15.7% 12.1% 17.7% 13.6% 2.9% 12.1% 4.2% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 2016 2017 2018 2019 2020 2021 2022 2023 2024+

Lease Expiration (% of GLA) by Year (1)

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2016 Update

516 6 Pleasant Hill Road Mem phis, Tennessee

GLA: 648,750 sq. ft. Ceiling height: 32 feet

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2016 Leasing Activity

Successful Tenant Retention

  • Renewed/ Re-tenanted 76% of the 1.5M SF of

2016 renewals (inclusive of previously disclosed renewals – Q1

and Q2 activity)

  • Leased two vacant spaces increasing occupancy

to ~99%

  • Expect to renew all remaining 2016 expiries

91 1,001 176 270

  • 200

400 600 800 1,000 1,200 1,400 1,600 1,800

Square Feet

Expiries Renewals New leases Open

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Opportunity for Growth

Equity Raise & Concurrent Private Placem ent

  • Gross proceeds of $8 4M (inclusive of over-

allotm ent)

  • Increased current cash available to

~ $120 M (includes Revolving Facility availability)

  • Provides flexibility to expand in new

and existing m arkets

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Developm ent Project at 30 0 3 Reeves Road

  • 10.7 acre development parcel on

existing REIT land

  • 171,600 Sq. Ft.
  • 32’ ceiling clear height
  • Multi-tenant
  • Scheduled to be completed in Q2 ‘17

Value-add Opportunity for the REIT and Investors

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2017 Outlook

4 0 Logistics Blvd. Walton (Cincinnati), KY

GLA: 543,512 sq. ft. Ceiling height: 32 feet

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Lease Renewals

Major Tenants have Significant Capital Investm ents in Properties

  • 12 leases comprising 20% (~3M Sq. Ft.) of the

portfolio expire in 2017

  • Includes 4 Top 15 Tenants (based on GLA)

totaling 15.1% (~2.3M Sq. Ft.) of the portfolio

  • 2 of the 12 leases totaling 1% (197k Sq. Ft.) of the

portfolio have been renewed to date

  • Exp. 5/ 31/ 17

737,471 Sq. Ft. 4.9% of GLA

  • Exp. 7/ 31/ 17

654,080 Sq. Ft. 4.3% of GLA

  • Exp. 4/ 30/ 17

543,512 Sq. Ft. 3.6% of GLA

  • Exp. 4/ 30/ 17

350,819 Sq. Ft. 2.3% of GLA

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Growth Strategies

6 579 West 350 North Indianapolis, Indiana

GLA: 629,200 sq. ft. Ceiling height: 32 feet

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Proven Growth Strategies

Internal Growth:

  • Contractual rent increases
  • Rolling rents to market upon renewals
  • Increased occupancies
  • Effective asset & property management
  • Strategic debt placement & refinancing
  • Development of vacant land parcels

External Growth:

  • Strong established acquisition team
  • Strong acquisition pipeline
  • Extensive institutional relationships
  • Proven track record of sourcing,

completing and integrating acquisitions Experienced Managem ent Team Delivering Growth & Results

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APPENDIX

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Aligned Fee Structure Asset Managem ent

  • 0.25% of GBV

Acquisition

  • 1.0% on first $100M
  • 0.75% on next $100M
  • 0.5% over $200M

No Perform ance Incentives

  • No AFFO hurdle

Property Managem ent (% of revenue)

  • 2% on single-tenant industrial
  • 3% on multi-tenant industrial
  • 4% on office

Construction Managem ent

  • 5% on non-maintenance capital projects >$100,000

Term

  • Initial term of 5 years plus 5 year renewal option
  • Automatic internalization at $750 million equity

market capitalization

Asset and Property Management

No disposition, financing, leasing or developm ent fees No em ployees directly billed to REIT

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Majority-Independent Board with Extensive Real Estate & Financial Experience

Board of Trustees

Trus Trustee tee Real Real Es Estat tate/B e/Boar

  • ard E

d Expe xperi rience ence Inde Indepen penden dent t Trus Trustee tee Audi Audit t Comm Committ ittee ee Inve Investm stment ent Comm Committ ittee ee CG&N CG&N1 Comm Committ ittee ee

Robert Wolf

Lead Trustee

  • Principal, RTW Capital Corporation
  • Former CFO, RioCan REIT

 

Milo Arkema

  • Independent Consultant
  • Former Accountant, Baker Tilly Virchow Krause, LLP

  

Sarah Kavanagh

  • Commissioner, Ontario Securities Commission
  • Former Vice Chair, Co-Head, Diversified Industry Group,

Scotia Capital

  

Charles Swanson

  • Former VP, Real Estate, bcIMC
  • Former Director, SilverBirch Hotels & Resorts

  

Louie DiNunzio

  • Senior Vice President of Investments, Cadillac Fairview
  • Chartered Accountant

 

Stuart H.B. Smith

  • Chairman and Founder, EPIC Realty Partners Inc.
  • Former President and CEO of Oxford Properties Group

  

Scott Frederiksen

Chair of the Board

  • CEO, WPT Capital LLC and Welsh Property Trust LLC
  • 26 years with Welsh organization

(CHAIR) (CHAIR)

1.Compensation, Governance and Nominating

(CHAIR)