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INVESTOR PRESENTATION
Fourth Quarter 20 16
INVESTOR PRESENTATION Fourth Quarter 20 16 1 Forward-Looking - - PowerPoint PPT Presentation
INVESTOR PRESENTATION Fourth 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
Fourth 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, the REIT’s future growth potential and other prospects and opportunities, results of
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 and the REIT’s annual information form for the year ended December 31, 2015 (the “AIF”). 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 REIT’s MD&A and 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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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 remains Strong
Industrial Market Dem and at Highest Level Since 20 0 5
continues to rise and land values soar, major urban areas are running low on options for Class A warehouse space.
(Source: JLL U.S. Investment Outlook Q4 2016)
logging ~47M sq. ft. of positive net absorption in Q4 2016 – the longest such streak in more than 20 years.
(Source: CBRE Marketview Snapshot, Q4 2016)
absorption outpacing development, we expect that asking rental rates will ascend at a rapid pace in the coming quarters.
(Source: Colliers International Industrial Market Outlook, Q3 2016)
2015, while total retail sales increased 2.2% in the same period, working to the advantage of industrial markets.
(Source: U.S. Census Bureau New s, February 2017)
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Development Activity
approach to development continue to attract investment even during uncertain economic conditions.
(Source: JLL Investment Outlook, Q3 2016)
the pipeline goes unleased; the worst case scenario is the vacancy rate would increase to 6.3%, which is still 15% below the 10 year
CBRE Western US Industrial and Office Conference)
savings measure, combined with the need to carry larger inventories in a competitive online sales environment, will keep demand for industrial real estate robust for the foreseeable
Tenant Dem and Exceeds Available Space, Fueling Developm ent
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Growing Rents
Industrial Tenant Dem and Continues to Drive Rents to Record Highs
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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
distribution and logistics market
$0.76/ unit in U.S. Dollars
Advisors
team with long history in industrial sector
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Proven Growth Strategies
Internal Growth:
portfolio
External Growth:
completing and integrating acquisitions Experienced Managem ent Team Delivering Growth & Results
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6 76 6 Pontius Rd.
Cincinnati, Ohio
GLA: 754,000 sq. ft. Ceiling height: 35 feet
Institutional Quality Properties
(1) As of December 31, 2016.
Strong Track Record of Growth
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Strategically Located in Key Distribution Markets Investment Properties
Current Portfolio
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State-of-the-Art Assets
Institutional-Quality Portfolio
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1. As of December 31, 2016 2. Industrial assets only
Average Clear Ceiling Heights
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Average Asset Age Average Tenant Size
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Average Building Size
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Stable and Diversified Tenant Mix
High-Quality Tenant Base
Top 10 Tenants*
*As of Decem ber 31, 20 16
Tenant % of Total Annualized Base Rent GLA Occupied (‘0 0 0 s sq. ft.) (%) of Total Portfolio GLA Sector
General Mills Operations, LLC 6.8 % 1,512.6 9.7% Consum er Products Unilever Hom e & Personal Care 5.8 % 1,262.6 8 .1% Consum er Products Zulily, LLC 3.8 % 737.5 4.7% Online Retailer Fullbeauty Brands, Inc. 3.6% 741.1 4.7% Online Retailer Am azon.com 3.3% 572.0 3.6% Online Retailer CEVA Logistics U.S. Inc. 3.3% 648 .8 4.2% Logistics Radial, Inc. 3.1% 543.5 3.5% Online Retailer Essendant Co. 3.1% 654.0 4.2% Consum er Products Honeywell International Inc. 3.1% 754.0 4.8 % Consum er Products KGP Logistics, Inc. 2.9% 311.1 2.0 % Logistics
Total 38 .8 % 7,737.2 49.5%
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Consistent Growth Since IPO
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$57,351 $67,423 $71,110 $40,000 $50,000 $60,000 $70,000 $80,000 2014 2015 2016
Investment Properties Revenue
$43,318 $50,602 $52,660 $35,000 $40,000 $45,000 $50,000 $55,000 2014 2015 2016
Net Operating Income
$27,523 $30,871 $33,394 $20,000 $24,000 $28,000 $32,000 $36,000 2014 2015 2016
Funds From Operations
$22,568 $28,637 $31,141 $20,000 $24,000 $28,000 $32,000 2014 2015 2016
Adjusted Funds From Operations
Targeting Disciplined and Strategic Growth
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Strong Balance Sheet & Liquidity Position
As of December 31, 2016 Total Debt to GBV 41.8% Weighted Average Effective Interest Rate 3.8% Weighted Average Mortgage Term-to-Maturity 4.3 yrs Interest Coverage Ratio 3.5 times Fixed Charge Coverage Ratio 3.0 times Debt to Adjusted EBITDA 7.5 times AFFO Payout Ratio – YTD 2016 91.6%
$73 Million in Capacity on Revolving Facility at 12/ 31/ 16
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10 0 % Fixed Rate Mortgage Debt with Weighted Average Interest Rate of 3.8 %
Well-Balanced Mortgage Profile
Weighted Average Mortgage Term-to-Maturity
(1) As of December 31, 2016
2,462 33,864 32,072 87,723 73,567 25,762 52,498 8,863 0.0% 1.0% 2.0% 3.0% 4.0% 5.0%
20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 2017 2018 2019 2020 2021 2022 2023 2024
Weighted Average Interest Rate
Maturities ($ in Thousands)
Mortgage Maturities by Year (1)
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Staggered Lease Maturity Schedule
Balanced Tenant Turnover
Weighted Average Remaining Lease Term
Leases expiring
10 21 22 14 26 8 8 9
(1) As of December 31, 2016.
8.4% 15.4% 13.5% 17.6% 14.4% 8.3% 12.7% 9.7% 0.0% 5.0% 10.0% 15.0% 20.0% 2017 2018 2019 2020 2021 2022 2023 2024+
Lease Expiration (% of GLA) by Year (1)
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2016 Leasing Activity
Track Record of Successful Tenant Retention
99.1% of leases expiring during
the year ended December 31, 2016 were renewed or leased to new tenants.
Occupancy Roll-Forward
Year Ended Decem ber 31, 20 16 (‘0 0 0 s sq. ft.) Occupancy Occupancy at Decem ber 31, 20 15 14,8 8 5.3 98 .6% Expansions 78.4 New leases 197.7 Renewals 2,256.2 Expiries (2,319.6) Acquisitions
711.3
Dispositions (252.5) Early terminations (133.4) Occupancy at Decem ber 31, 20 16 15,423.4 98 .7%
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2017 Lease Expirations
Major Tenants have Significant Capital Investm ents in Properties
As of December 31, 2016, the REIT had 10 leases comprising 8.4% (~1.3M sq. ft.) of the portfolio remaining in 2017 to renew. UPDATE AS OF March 15, 20 17: The REIT has renewed ~83% of its 2017 lease expirations totaling approximately 2.7M
and Essendant, leaving 3.6% of the portfolio to be renewed.
737,471 sq. ft. 5.0% of GLA
654,080 sq. ft. 4.4% of GLA
543,512 sq. ft. 3.6% of GLA
350,819 sq. ft. 2.4% of GLA
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Capital to Grow
Most Recent Equity Raise & Concurrent Private Placem ent
allotm ent)
existing m arkets
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Developm ent Project
28 25 Reeves Road Plainfield, IN
existing REIT land
potential tenants Infill Developm ent Project
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Minneapolis Acquisition
111 – 181 Cheshire Lane Plymouth (Minneapolis), Minnesota
Value-Add Acquisition
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Colum bus Acquisition
3360 Southwest Blvd. Grove City (Columbus), Ohio
front-office/ rear loaded distribution center
heights
dock doors
Fortune Global 500 companies
Stabilized and Accretive Acquisition
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APPENDIX
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Aligned Fee Structure Asset Managem ent
Acquisition
No Perform ance Incentives
Property Managem ent (% of revenue)
Construction Managem ent
Term
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
Trustee Real Estate/ Board Experience Independent Trustee Audit Com m ittee Investm ent Com m ittee CG&N 1 Com m ittee
Milo Arkema
Louie DiNunzio
Scott Frederiksen
Chair of the Board
Welsh Property Trust, LLC
Sarah Kavanagh
Scotia Capital
Stuart H.B. Smith
Charles Swanson
Robert Wolf
Lead Trustee
(CHAIR) (CHAIR)
1.Compensation, Governance and Nominating
(CHAIR)