INVESTOR PRESENTATION First Quarter 2014 1 Forward-Looking - - PowerPoint PPT Presentation

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INVESTOR PRESENTATION First Quarter 2014 1 Forward-Looking - - PowerPoint PPT Presentation

INVESTOR PRESENTATION First Quarter 2014 1 Forward-Looking Statements Certain statements in this presentation may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may


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INVESTOR PRESENTATION

First Quarter 2014

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Certain statements in this presentation may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of WPT Industrial Real Estate Investment Trust (“WPT REIT” or the “REIT"), or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this presentation, such statements use such words as "may", "would", "could", "will", "intend", "expect", "believe", "plan", "anticipate", "estimate" and other similar terminology. These statements reflect the REIT's current expectations regarding future events and

  • perating performance including the REIT’s future growth potential, results of operations, future prospects and opportunities, 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 involve significant risks and uncertainties, which include, but are not limited to the factors discussed under “Forward-Looking Statements” and "Risk Factors" in the prospectus of the REIT dated April 18, 2013, the “Prospectus” and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. Forward looking statements are necessarily broad on a number of estimates and assumptions that, while considered reasonable by management of the REIT as of the date of this presentation, are inherently subject to significant business, economic and competitive uncertainties and contingencies; therefore, the REIT cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this presentation and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the REIT assumes no obligation to update or revise them to reflect new events or circumstances. 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 Prospectus. This presentation includes certain financial measures such as funds from operations (“FFO”), adjusted funds from operations (“AFFO”) and net operating income (“NOI”) that are not measures recognized under International Financial Reporting Standards (“IFRS”) and do not have standardized meanings prescribed by IFRS. FFO, AFFO and NOI are supplemental measures of a Canadian real estate investment trust’s performance and the REIT believes they are relevant measures of the ability of the REIT to earn and distribute cash returns to investors in the Units and to evaluate the REIT’s performance. The IFRS measurement most directly comparable to FFO, AFFO and NOI is net income. Tables reconciling such non- IFRS financial measures are available in this presentation and in the Prospectus.

Forward-Looking Statements

All currency in U.S. dollars

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Targeting Disciplined but Aggressive Growth

ONLY Canadian REIT focused exclusively on U.S. industrial real estate

40 institutional-quality properties benefiting from US economic recovery Distributions in US funds

  • Current $0.70/Unit annualized
  • Strong yield as US$ strengthens

Listed on TSX (WIR.U) and OTCQX (WPTIF)

  • 14.2 million Units outstanding
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4 Focused on distribution sub-segment of U.S. industrial real estate market High-quality, stabilized and geographically diverse portfolio in major distribution markets Aligned and experienced management and majority-independent board of trustees Platform for accretive growth in a fragmented market

Investment Highlights

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3003 Reeves Road

Indianapolis, Indiana

GLA: 741,100 sq. ft. Ceiling height: 36 feet

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Proven Experienced Management Team

Well-Aligned Manager

Retained Interest

  • IPO Units locked up until October 2014

50.7%

Path to internalization

  • Automatic at $750 million in equity

market capitalization

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Strong and Stable United States Industrial Market

600 Hartman Industrial Crt. Atlanta, Georgia

GLA: 525,600 sq. ft. Ceiling height: 32 feet

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Increasing Demand for Warehouse and Distribution Space

Strong Market Fundamentals

Substantial E-commerce supply chain growth is driving significant demand for state-of-the-art distribution buildings Non-discretionary household goods Sector is benefitting from US economic recovery Build-to-suit & speculative development activity is occurring Significant tenant investment in properties

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100 West Thomas P Echols Drive

Louisville, KY

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

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Demand for Bigger Buildings

Significant Opportunity to Build Unitholder Value

  • Distribution sector growing in size and scale
  • The average footprint of distribution buildings

has been steadily increasing.

  • 52% of inventory constructed since 2000 larger

than 1 million square feet, more than double the size of the inventory built prior to 2000.

  • Both build-to-suit and speculative development

buildings over 1 million square feet are on the rise.

  • Tenants like Amazon.com, Proctor & Gamble, TJ

Maxx, Home Depot and WalMart constructed or broke ground on +1.0 msf build-to-suits in 2013.

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Strong Acquisition Growth Since IPO

6766 Pontius Rd.

Cincinnati, Ohio

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

$117.8 Million 3 Institutional Quality Properties 3.0 Million Square Feet 3 High-Quality Tenants

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$53.0 Million Acquisition

July 2013

5620 Inner Park Drive

Pontoon Beach, IL

GLA: 1,262,000 sq. ft. Ceiling height: 32 feet

Institutional Quality Property Efficient cross-dock configuration 32 foot clear ceiling height Ample parking and large, flexible truck court 1,262,000 square foot facility, 100% leased to Unilever (NYSE: UN)

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Highlights

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$13.3 Million Acquisition

April 2014

1500 Worldwide Blvd

Hebron, KY

GLA: 300,000 sq. ft. Ceiling height: 32 feet

Location: Proximity to Airport and Interstate 275 and 75 Efficient cross-dock configuration 32 foot clear ceiling height Ample parking and large, flexible truck court 300,000 square foot facility, 100% leased to UPS Supply Chain Solutions (NYSE: UPS)

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Highlights

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$51.5 million Acquisition

April 2014

1871 Willow Springs Church Road

Atlanta, GA

GLA: 1,500,000 sq. ft. Ceiling height: 32 feet

USGBC LEED Gold certified Building Efficient cross-dock configuration & rail served 32 foot clear ceiling height Ample parking and large, flexible truck court 1,512,000 square foot facility, 100% leased to General Mills (NYSE: GIS)

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Highlights

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MAJOR RAIL INFRASTRUCTURE MAJOR INTERSTATE HIGHWAYS INDUSTRIAL PROPERTIES OTHER DISTRIBUTION MARKETS

Strategically Located in Key Distribution Markets

Current Portfolio

Properties

11.7M

  • sq. ft. of GLA

40

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State-of-the-Art Warehouse and Distribution Properties

Institutional-Quality Portfolio

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1. As of March 31, 2014 2. Industrial assets only

Average Clear Ceiling Heights

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Average Asset Age Average Tenant Size

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31 feet 11 Years 175,000 Sq. Ft.

Average Building Size

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290,000 Sq. Ft.

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Stable and Diversified Tenant Mix

High-Quality Tenant Base

Top 10 Industrial Tenants

Tenant GLA Occupied (%) of Total Portfolio GLA Remaining Lease Term (Years) Sector General Mills 1,500,000 12.83% 6.17 Consumer Products Unilever 1,262,648 10.80% 9.25 Consumer Products OSP Group / Redcats 741,092 6.34% 2.42 Online Retailer Zulily 737,471 6.31% 3.17 Online Retailer Honeywell 594,000 5.08% 4.75 Consumer Products Ebay / GSI Commerce 543,512 4.65% 3.08 Online Retailer Lifescience Logistics 394,200 3.37% 6.25 Healthcare Keystone Automotive 350,819 3.00% 3.08 Automotive Equipment KGP Logistics 311,100 2.66% 4.75 Third Party Logistics UPS 300,000 2.57% 4.75 Supply Chain Management 6,734,842 57.60% 4.91

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Financial Overview

6766 Pontius Rd.

Cincinnati, Ohio

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

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Consistently Exceeded Forecast Since IPO

(US$,000 except per Unit amounts)

Period Mar 4 to June 30, 2013 Quarter ended Sept. 30, 2013 Quarter ended Dec. 31, 2013 Quarter ended Mar. 31, 2014 Investment properties revenue 8,433 12,577 12,649 12,847 NOI 6,263 9,370 9,370 9,432 FFO 3,988 5,686 5,731 5,929 AFFO 2,957 4,264 4,680 4,817 AFFO per Unit $ 0.140 $ 0.177 $ 0.197 $ 0.202 Forecast NOI 8,293 11,470 11,211 11,309 Forecast FFO 4,006 5,477 5,276 5,297 Forecast AFFO 2,912 4,097 3,973 4,164

July 2013 property acquisition makes significant contribution

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Strong Balance Sheet & Liquidity Position

As of March 31, 2014 Total Debt to GBV 52.4% Weighted Average Mortgage Effective Interest Rate 4.0% Weighted Average Mortgage Term-to-Maturity 6.5 yrs Interest Coverage Ratio 3.2 times AFFO Payout Ratio (Q1 2014) 86.4% Fixed Charge Ratio 2.7 times

$5.7 Million Invested in Trust Unit Buyback to Date

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Capitalizing on Low Interest Rate Environment

Well-Balanced Mortgage Portfolio

$15,851 $1,917 $22,957 $1,702 $64,875 $2,739 $2,859 $49,281 $1,722 $52,228 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023+

($,000)

Mortgage Maturities by Year

Weighted Average Mortgage Term-to-Maturity

6.5 years

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Staggered Lease Maturity Profile

Limited Near-Term Tenant Turnover Weighted Average Remaining Lease Term

5.0 years

Lease Expirations by Year

2.8% 2.0% 15.5% 19.1% 17.5% 2.5% 18.8% 4.1% 3.7% 14.1% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023+

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Growth Strategies

6579 West 350 North Indianapolis, Indiana

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

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Proven Growth Strategies

Internal Growth:

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

External Growth:

  • Strong acquisition pipeline
  • Institutional relationships
  • Excellent reputation in the Industry
  • Proven track record of sourcing,

completing and integrating acquisitions

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23 Focused on distribution sub-segment of U.S. industrial real estate market High-quality, stabilized and geographically diverse portfolio in major distribution markets Aligned and experienced management and majority-independent board of trustees Platform for accretive growth in a fragmented market

Summary

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3003 Reeves Road

Indianapolis, Indiana

GLA: 741,100 sq. ft. Ceiling height: 36 feet

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APPENDIX

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Experienced Manager – Welsh Property Trust, LLC

ACQUISITIONS Ben Applebaum Vice President Ryan Doyle Vice President Grant Campbell Associate ASSET SERVICES Spencer Gerberding Vice President Randy Bauernfeind Vice President ACCOUNTING/FINANCE Dennis Heieie CFO Jennifer Matthew

Vice President & Corporate Controller

Toni Toborg

Financial Reporting Analyst

LEGAL Matt Cimino General Counsel & Secretary Emily Howell Corporate Counsel Julie Te Slaa Senior Real Estate Paralegal Scott Frederiksen CEO

Comprehensive Management Platform

  • 35-year history
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Majority-Independent Board with Extensive Real Estate & Financial Experience

Board of Trustees

Trustee Real Estate/Board Experience Independent Trustee Audit Committee CG&N1 Committee

Robert Wolf

Lead Trustee

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

 

Milo Arkema

  • Independent Consultant
  • 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

 

Harry Rosenbaum

  • Founding Principal, Great Gulf Group of Companies
  • Partner, Ashton Wood Homes

 

Andrew Silberstein

  • Partner, Almanac Realty Investors LLC
  • Former CIO and COO of Stoltz Real Estate

Scott Frederiksen

Chair of the Board

  • CEO, Welsh Property Trust LLC
  • 25 years with Welsh organization

(CHAIR) (CHAIR)

1.Compensation, Governance and Nominating

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Aligned Fee Structure Asset Management

  • 0.25% of GBV

Acquisition

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

No Performance Incentives

  • No AFFO hurdle

Property Management (% of revenue)

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

Construction Management

  • 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 development fees No employees directly billed to REIT