srt q4 2014 investor update
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Investor UpdateQ4 2014
2
Cautionary Statements
Forward-Looking Statements
This presentation contains forward-looking information within the meaning of applicable securities laws. These statements include, but are not limited to, statements concerning
the REIT’s objectives, its strategies to achieve those objectives, as well as statements with respect to management’s beliefs, plans, estimates, and intentions, and similar
statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Readers should not place undue reliance on
any such forward-looking statements.
Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the REIT to
be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Actual results and developments are likely to
differ, and may differ materially, from those expressed or implied by the forward-looking statements contained herein.
Such forward-looking statements are based on a number of assumptions that may prove to be incorrect, including, but not limited to, the continued availability of mortgage
financing and current interest rates; the extent of competition for properties; assumptions about the markets in which the REIT and its subsidiaries operate; the global and North
American economic environment; and changes in governmental regulations or tax laws.
Although the forward-looking information contained in this presentation is based upon what management believes are reasonable assumptions, there can be no assurance that
actual results will be consistent with these forward-looking statements. Certain statements included in this presentation may be considered “financial outlook” for purposes of
applicable securities laws, and such financial outlook may not be appropriate for purposes other than this presentation. Except as required by applicable law, the REIT undertakes
no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Non-IFRS Measures
This presentation contains financial measures that do not have a standardized meaning under International Financial Reporting Standards (“IFRS”) as prescribed by the
International Accounting Standards Board. Slate Retail uses the following non-IFRS financial measures: Funds from Operations (“FFO”), Adjusted Funds from Operations
(“AFFO”) on an aggregate and per unit basis and Net Operating Income (“NOI”). Management believes that in addition to conventional measures prepared in accordance with
IFRS, investors in the real estate industry use these non-IFRS financial measures to evaluate the REIT’s performance and financial condition. Accordingly, FFO and AFFO are
used by real estate industry analysts, investors and management as supplemental measures of operating performance of investment property. Management uses AFFO and FFO
in addition to net income to report operating results. FFO is an industry standard for evaluating operating performance. AFFO differs from FFO in that AFFO excludes from its
definition certain non-cash revenues and expenses recognized under IFRS, such as straight-line rent and the amortization of finance costs, but also includes capital and leasing
costs incurred during the period, but capitalized for IFRS purposes. Management also uses AFFO to evaluate the cash generation performance of the REIT available to fund
distributions to unitholders, which is why certain non-cash items are excluded and capital expenditures capital and leasing costs are deducted. NOI is used by real estate industry
analysts, investors and management to measure operating performance of the REIT’s properties. NOI represents total property revenues less property operating and
maintenance expenses. Accordingly, NOI excludes certain expenses included in the determination of net income such as investment property fair value gains and indirect
operating expenses and financing costs. These items are excluded from NOI in order to provide results that are more closely related to a property’s results of operations. Certain
items, such as interest expense, while included in FFO, AFFO and net income, do not affect the operating performance of a real estate asset and are often incurred at the REIT
level as opposed to the property level. As a result, management uses only those income and expense items that are incurred at the property level to evaluate a property’s
performance.
Use of Estimates
The preparation of the REIT financial statements in conformity with IFRS requires management to make estimates, judgments and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the
reporting period. Management’s estimates are based on historical experience and other assumptions that are believed to be reasonable under the circumstances. Actual results
could differ from those estimates under different assumptions.
Business Overview
4
Slate Retail REIT
TSX LISTED U.S. ASSET BASEAFFO PAYOUT
RATIO
MONTLY
DISTRIBUTIONS
SLATE
SPONSORSHIP
SRT.U (USD)
SRT.UN (CAD) 100% 67.9% USD6.3¢/UNIT ~8% EQUITY
• Company: The only Canadian REIT with 100% U.S. grocery-anchored asset base
• Strategy: Build scale in target markets; diversify across the top U.S. grocery retailers
• Portfolio: 41 properties in 19 states; 66% of the portfolio is within the top 50 U.S. MSAs
• High Quality Tenancy: Leading U.S. grocery retailers and other national brand tenants
• Embedded Growth: Below market rents, limited new supply, repositioning opportunities
• U.S. Style REIT: Conservative AFFO payout ratio structured for income and growth
5
2014 Key Performance Indicators
Three months ended
December 31, 2014
Operating period ended
December 31, 2014
Actual Forecast(2) Actual Forecast(2)
Rental revenue $14,508 $10,930 $35,779 $31,878
Net operating income (“NOI”)(1) $10,085 $7,570 $24,956 $21,717
Number of units outstanding 19,606 16,000 17,185 16,000
Funds from operations (“FFO”)(1) $3,500 $4,857 $12,425 $14,072
FFO per unit(1) $0.18 $0.30 $0.72 $0.88
Adjusted funds from operations (“AFFO”)(1) $5,496 $4,095 $13,792 $11,894
AFFO per unit(1) $0.28 $0.26 $0.80 $0.74
Total assets $648,166 $648,166
Total debt $365,538 $365,538
Portfolio Occupancy 96% 96%
AFFO payout ratio(1) 67.9% 67.9%
Debt / GBV ratio 56.4% 56.4%
Interest coverage ratio 3.89x 3.89x(1) See Non-IFRS Measures on p. 2.(2) Forecast as presented in Management Information Circular dated February 3, 2014.
6
80.0%
65.1% 64.3%
77.6% 78.4%
84.6%
47.6%
85.5%
82.5%83.5%
81.1% 80.6%
90.8%
67.9%
Kimco DDR Brixmor Regency Weingarten Equity One CedarRealty
RioCan ChoiceProperties
First Capital Calloway CT REIT Crombie Slate Retail
Conservative AFFO Payout Ratio
71.1% average payout ratio
84.0% average payout ratio
Slate Retail’s conservative approach provides stability and frees up cash flow
for future growth opportunities
Source: CIBC, SNL Financial, FactSet Fundamentals (as at Mar 18, 2015)
7
Why Grocery-Anchored Retail?
• The grocery business is non-cyclical, less susceptible to economic fluctuation
• Grocery retail is a defensive asset class; least threatened by spread of e-commerce
• Assets provide stable cash flow streams with embedded growth
• Low cost basis coupled with significant opportunity for capital appreciation delivers a
“total returns” strategy
• Hard assets with below market in-place rents offer protection against inflation
• The U.S. economy is improving, and what’s good for the U.S. economy is good for
U.S. commercial real estate
A pure-play strategy that, we believe, offers several attractive characteristics in
a volatile investment landscape
8
Why Grocery-Anchored Retail?
Grocery retail is a defensive asset class, least threatened by spread of
e-commerce—99% of purchases remain in-store.
81%
88%
93%
75%
89%
97%
99%
U.S. consumer purchases in 2013; percent of purchases in-store
Drugs, health and beauty aids
$503
Clothing
$358
Computers, electronics, appliances
$272
Furniture
$257
Toys and sporting goods
$128
Books, magazines, music and videos
$120 billion
Grocery and alcohol
$884
Source: Kantar Group, U.S. Commerce Dept.
Management Strategy
10
Slate Asset Management LP
Slate was founded on three key principals:
1. Great real estate investing starts with putting real estate first.
2. Think entrepreneurially and find opportunities where others don’t think to look.
3. The best investors are owners too, working shoulder to shoulder their partners.
Slate Retail REIT
(TSX:SRT.un/SRT.u)
Slate Office REIT
(TSX:SOT.un)
U.S. Opportunity
(No. 3) (not listed)
Pure-plays in U.S. grocery-anchored retail
comprising 56 properties in over 20 states
Majority Canadian
suburban office
Private Alternative Investments
Canadian core and suburban office portfolios;
western Canadian industrial and retail properties
Privately held in partnership w/ institutions Public REITs w/ institutional and retail unitholders
$2.5 billion AUM
11
Fully Integrated U.S. Operations Platform
Asset
Management
Finance/
Reporting
Investor
RelationsLegal
Bankers Trust
GMAC
First National Financial
Fortress Investment Group
Lonestar
Truscan
Brookfield Asset Management
CB Richard Ellis
CIBC
Cushman & Wakefield
Deloitte
GE Capital
Goodmans LLP
Oxford Properties
A dedicated U.S. operations team draws upon experience from preeminent
names in commercial real estate finance, brokerage and asset management
Acquisitions/
Dispositions
Blair Welch
CEO
Brady Welch
CFO
12
Business Strategy
Poised for growth and well-positioned to be a leader in the U.S. grocery-
anchored retail sector
1. Build a North American
Platform with Superior
Management and Expert
Leadership
• “Total Returns” approach; manager acts as investor first
• Highly skilled senior leadership with significant U.S. experience
• Majority independent board with relevant skillsets
2. Leverage Asset Management
Expertise to Enhance
Property Cash Flows and
Create Long Term Value
• Leverage established anchor tenant relationships
• Deploy expert leasing and property management professionals
• Prudent use of historically low financing to enhance returns
3. Grow the Portfolio Through
Accretive Acquisitions in New
and Existing Markets
• Cultivate reputation of preferred counter-party
• Maintain robust pipeline of accretive acquisitions
• Acquire only what you would be “comfortable owning forever”
13
A Pure-Play with Large Market Presence
Among its North American peers, Slate Retail in the only vehicle with a 100%
grocery-anchored asset base
North American REITs/REOCs portfolio exposure to grocery-anchored centres
Source: GMP Securities, Company Reports
100% 98%
87% 86%84%
75% 75% 74% 73%71%
64%
57%
50%
22%20%
14
A Pure-Play with Large Market Presence
Slate Retail also ranks high among Canadian REITs/REOCs in exposure to
major urban markets
Canadian REITs/REOCs exposure to markets with >1 million population
Source: GMP Securities, Company Reports
9%
19%
28% 28%
45%
66%
72%
85%
Plazacorp Crombie Retrocom Choice Calloway Slate Retail RioCan First Capital
15
Building Scale in High Quality U.S. Urban Centres
Dallas-Ft Worth
Orlando
Minneapolis-St Paul
A geographically diverse portfolio with 66% of leasable area located in large
U.S. markets with over 1 million population.
Tampa
Denver
Jacksonville
Philadelphia
Raleigh-Durham
Atlanta
Nashville
Washington, DCPittsburgh Cleveland
DetroitMilwaukee
Cincinnati
Charlotte
Boston
Richmond
Columbia
StateAsset
Count% of Portfolio(1)
Minnesota 2
Ohio 3
Pennsylvania 4
New Hampshire 1
Connecticut 1
Michigan 2
Wisconsin 2
Illinois 1
Colorado 1
Kentucky 1
Tennessee 3
Alabama 1
Texas 1
Maryland 1
Virginia 4
North Carolina 5
South Carolina 2
Georgia 1
Florida 5
Total 41
5.4%
7.8%
12.7%
3.8%
2.9%
6.7%
4.6%
1.5%
2.0%
1.8%
7.1%
1.3%
3.4%
2.9%
6.1%
13.8%
2.2%
2.0%
12.0%
16
Parent Co. Store Brand(s) % GLA % Rent
Wal-Mart Stores, Inc 10.5% 6.4%
Super Valu, Inc. 5.1% 5.6%
Delhaize America 5.0% 5.5%
Bi-Lo Holdings Inc. 4.8% 4.7%
The Kroger Co. 8.5% 4.7%
Roundy's Supermarkets 2.5% 2.4%
Ahold USA 1.3% 2.6%
Publix Super Markets 2.5% 2.0%
Giant Eagle, Inc. 2.3% 1.7%
Lowes Foods, LLC. 1.7% 1.5%
Albertsons LLC 1.3% 1.3%
Total 45.5% 38.4%
A strategic selection the largest, most respected names in the U.S. grocery
retailing business
Diverse, Strong Performing Grocery Tenant Base
The additional of other national brand tenants including banks, fast food, dollar
stores and pharmacies raises the Portfolio Rent to approximately 70%
17
Urban Centres With >1
Million Population51 6
Significant U.S. Growth Opportunity
United States
Source: U.S. Census Bureau , Progressive Grocer, Statistics Canada , Canadian Grocer
37,000grocery stores
<1% owned by
largest landlord
~20% owned by
largest landlord
Canada
2,400 grocery stores
Large, fragmented U.S. investment landscape provides opportunity to develop scale
18
Targeting High-Quality, Mispriced Assets
80
100
120
140
160
180
200
220
240
Significant opportunity exists for well financed players in non-major markets
Pre-Downturn Downturn Recovery
Unprecedented
Valuation Gap
Top 6 markets
Other major MSAs
>1 million population
Moody’s RCA National All Property CPPI
(Dec 2000 = 100)
2000 2007 2010
Slate launches U.S. platform
SRT lists on TSX
Source: Real Capital Analytics
2014
19
Limited Supply of New Shopping Centres
Net Completions of U.S. Community and Neighbourhood Shopping Centres 1999-2013 (Left)
Grocery-Anchored Supermarkets and Shopping Centres Occupancy (Right)
Since 2006 there has been an approximate 92% drop in the delivery of new
U.S. shopping centres.
Source: CoStar (occupancy data only available beginning in 2007)
784 755
647611
692
783
883 890847
751
351
134 112 89 69
94.5%
94.1%
93.4%
93.0%
93.2%
93.4%
93.9%
92.8%
93.0%
93.2%
93.4%
93.6%
93.8%
94.0%
94.2%
94.4%
94.6%
0
100
200
300
400
500
600
700
800
900
1000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
20
Acquisition Criteria
Target assets include grocery-anchored retail properties that are…
1. Available at a discount-to-peak and/or replacement value;
2. Located in large U.S. markets with sustainable/improving population and employment
statistics;
3. Anchored by a top grocery retailer with an established sales and profitability;
4. Situated in well-developed sub-markets with limited risk of new development; and,
5. Accretive to Adjusted Funds from Operations on a per unit basis.
Despite the abundance of U.S. grocery-anchored acquisition opportunities, we
remain focused our disciplined acquisition strategy
Q4 2014 Highlights
22
Significant Acquisition Activity
Since Q2 2014 SRT has acquired, or committed to acquire, 16 additional
grocery-anchored assets, increasing leasable area by approximately 50%.
New grocers to the portfolio
beginning in Q4 2014:
*Committed acquisition
Asset Market State Square FeetPurchase
Price (000s)
Per
Square
Foot
Occupancy Anchor (Parent)
North Summit Square Winston-Salem NC 224,530 $15,800 $70 98% Sam's Club (Walmart)
East Little Creek Norfolk VA 69,620 9,900 142 100% Farm Fresh (Supervalu)
Waterbury Plaza Hartford CT 141,443 27,200 192 100% Stop & Shop (Ahold)
Wellington Park Raleigh NC 102,787 15,500 151 91% Lowes Foods
Seminole Oaks Tampa FL 63,572 11,400 179 97% Winn-Dixie
Smithfield Shopping Plaza Newport News VA 134,644 12,300 91 92% Farm Fresh (SuperValu)
Forest Plaza Fond du Lac WI 123,028 16,900 137 100% Pick 'n Save (Roundy's)
Stonefield Square Louisville KY 90,991 12,600 138 92% The Fresh Market
Oakland Commons Bloomington IL 73,705 8,200 111 96% Jewel-Osco (Albertsons)
Derry Meadows Boston NH 186,997 24,400 130 93% Hannaford (Delhaize)
Stadium Center Port Huron MI 92,365 5,300 57 93% Kroger
Westminster Plaza Denver CO 97,013 12,670 131 98% Safeway
Glidden Crossing DeKalb IL 98,683 16,600 168 94% Schnucks
Ocean Plaza Myrtle Beach SC 66,497 5,500 83 91% Kroger
Roxborough Marketplace* Littleton CO 107,818 15,600 145 88% Safeway
City Center Plaza* Westland MI 97,670 12,500 128 97% Kroger
Total 1,771,363 $222,370 $126 95%
23
Strong Leasing Fundamentals
Tenant Size Deal Type Summary 2014 YTD Q4 2014 Q3 2014
>10,000 square feet
Renewal
Leases signed 4 0 3
Square feet 107,933 0 97,703
Average rent $6.42 0 $6.25
Rental spread 2.4% n/a 2.0%
New
Leases signed 0 0 0
Square feet 0 0 0
Average rent $0.00 $0.00 $0.00
<10,000 square feet
Renewal
Leases signed 59 21 22
Square feet 165,980 66,462 42,151
Average rent $15.39 $16.83 $18.11
Rental spread 7.3% 5.7% 6.5%
New
Leases signed 23 7 7
Square feet 59,557 20,029 17,208
Average rent $13.42 $12.76 $17.62
Robust leasing activity in 2014 included significant rental rate growth and
enhancement in overall tenant quality
24
Staggered Lease Maturities
Leasable Area Expiring in Square Feet and as a % of Portfolio Leasable Area
A stable expiry profile ensures cash flow stability
2015 2016 2017 2018 2019
6.9%8.2%
14.1%
15.5%14.7%
40.5%
327,903 387,711
668,758
744,950 697,413
1,917,574
100,320 36,075
187,601
369,238427,524
1,040,652
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
2015 2016 2017 2018 2019 2020 +
% of Total Leasable Area Total Square Feet Anchor Square Feet
Case Study: Uptown Station
26
Case Study: Uptown Station
• Purchased by Slate in Q2 2013 for $33 million ($110 PSF) representing an unlevered yield (cap
rate) of ~8%
• Approximately 50% of leasable area is comprised of national brand tenants
• Winn-Dixie’s annual sales are among the highest chain-wide
Uptown Station is 95% occupied and serves as a community focal point for
Ft Walton Beach, FL
27
Case Study: Uptown Station
Upon acquisition, Slate Retail embarked on a
comprehensive revitalization program for the
shopping centre including:
• Targeted capital improvements such as
landscaping, parking lot and roof repairs
• Tenant relations & community engagement
Significant value enhancement has been
achieved since assuming ownership
• Over 94,000 square feet of leasing
• A ~5% increase in occupancy
• 5-year early term extension with grocery
anchor Winn-Dixie
After completing value-add initiatives, Slate
Retail refinanced Uptown Station with a 10-year
fixed rate mortgage loan at 3.80%:
• The lender valued the asset at a 6.75% cap
rate; repatriated ~20% of initial equity
investment ($3 million)
• No increase in overall loan-to-value ratio
• Equity was reinvested: Slate Retail
purchased a property for $5.5 million with no
dilution, increasing portfolio NOI by ~$400k
Photo: Flag raising ceremony at Uptown Station; the State of
Florida’s largest American flag.
Governance & Alignment
29
Experienced, Majority Independent Board of Trustees
Slate Retail REIT Committee
Independent Audit Investment
Compensation,
Governance and
Nomination
Tom Farley (Chairman)
Brookfield Canada Office PropertiesYes
Sam Altman, JD, CFA
Joddes LimitedYes
Colum Bastable, FCA (IRL)
Cushman & WakefieldYes
Patrick Flatley
Fidelity National Title InsuranceYes
Peter Tesché, CFA
P.T. Lloyd AssociatesYes
Blair Welch
Slate Retail REITNo
Brady Welch
Slate Retail REITNo
Committee Chair
Drawing on a strategic combination of skillsets that include vast real estate,
legal, finance and cross-border experience.
30
Alignment and Fee Structure
Slate owns approximately 8% ownership of the REIT
Manager Fee Summary
Asset management 0.4% of GBV
Acquisition 0.75% of gross acquisition cost
Manager incentive 15% of FFO in excess of $1.28 (plus inflation hurdle)
Financing
None
Disposition
Property Management
Leasing
Construction
Financial Overview
32
Understanding Fiscal 2014 and Q4 Results
The following is a summary of accounting matters, that have previously been
discussed, that significantly impact Slate Retail’s consolidated financial
statements prepared in accordance with IFRS:
• Pursuant to the Combination Transaction, Slate U.S. Opportunity (No. 2) Realty Trust (“SUSO 2”) was identified as the “accounting acquirer”,
primarily as a result of unitholders of SUSO 2 holding a controlling interest in Slate Retail units post-Combination Transaction.
• As required under IFRS, the April 2014 Combination Transaction is accounted for as a “business combination” whereby SUSO 2 acquired
Slate U.S. Opportunity (No. 1) Realty Trust (‘SUSO 1”) and Grocery Anchored Retail Limited Partnerships (“GAR”).
• Slate Retail’s consolidated financial statements are issued under the name “Slate Retail REIT”. The comparative and pre-Combination
Transaction balances and results of operations reflect only a continuation of SUSO 2 from an accounting perspective.
• Goodwill recognized on completion on the Combination Transaction was primarily the result of the requirement to recognize a deferred tax
liability. Accordingly, the amount recognized as goodwill was not supportable and was immediately written-off.
• To provide better comparability, the MD&A compares the forecast presented in the February 3, 2014 Management Information Circular,
adjusted to reflect the Combination Transaction closing date on April 15, 2014
33
Financial Highlights
(1) To increase comparability between the Forecast and the actual results, the REIT's results from operations includes the period from April 1 to September 30, 2014 ("Operating
Period"). The Operating Period ended September 30, 2014 includes the full period earnings of Slate U.S. Opportunity (No. 2) Realty Trust from April 1, 2014 and the acquisition of
Slate U.S. Opportunity (No. 1) Realty Trust and the GAR portfolio on April 15, 2014
US$ THOUSANDSEXCEPT PER UNIT AMOUNTS
THREE MONTHS ENDED DECEMBER 31, 2014
VARIANCEOPERATING PERIOD ENDED
DECEMBER 31, 2014 (1) VARIANCE
Actual Forecast $ % Actual Forecast $ %
Property Revenue $14,508 $10,930 $3,578 32.7% $35,779 $31,878 $3,901 12.2%
Net Operating Income (NOI) 10,085 7,570 2,515 33.2% 24,956 21,717 3,239 14.9%
Funds From Operations (FFO) 3,500 4,857 (1,357) (27.9)% 12,425 14,072 (1,647) (11.7)%
FFO per WA Class U Unit2 0.18 0.30 (0.12) (40.0)% 0.72 0.88 (0.16) (18.2)%
FFO excluding de-recognition of loan costs 6,383 4,857 1,526 —% 15,308 14,072 1,236 8.8%
Revised FFO per WA Class U Unit2 0.33 0.30 0.03 (40.0)% 0.89 0.88 0.01 1.1%
Adjusted FFO (AFFO) 5,496 4,095 1,401 34.2% 13,792 11,894 1,898 16.0%
AFFO per WA Class U Unit2 0.28 0.26 0.02 7.7% 0.80 0.74 0.06 8.1%
34
Net Operating Income
For the 29 Initial Properties, NOI is below forecast by $175 in the fourth quarter. The variance results from changes made to the calculations of year-end recovery estimates,
based on prior year changes.
Overall, NOI for the REIT is higher than forecast by $2,515 in the fourth quarter, which is driven to the acquisitions of the 12 new investment properties during the Operating
Period.
THREE MONTHS ENDED DECEMBER 31, 2014
US$ THOUSANDSEXCEPT PER UNIT AMOUNTS ACTUAL FORECAST DIFFERENCE
Rental Revenue $10,819 $10,930 ($111)
Straight-line Rent Revenue (326) (126) (200)
Property Operating Expenses (2,040) (3,225) 1,185
IFRIC 21 Property Tax Adjustment (1,058) (9) (1,049)
Initial Properties NOI $7,395 $7,570 ($175)
Twelve new investment properties 2,690 — 2,690
Total NOI $10,085 $7,570 $2,515
35
Funds from Operations and Adjusted Funds From Operations
1) Calculated on a fully-diluted basis assuming the conversion of all SUSO 1 class A units and SUSO 1 class I units into Class U Units at their respective conversion ratios and the
redemption of all outstanding Class B LP2 Units and GAR B Exchangeable Units for Class U Units.(2) Excluding REIT start-up costs and REIT offering costs.
THREE MONTHS ENDED DECEMBER 31, 2014 OPERATING PERIOD ENDED DECEMBER 31, 2014
US$ THOUSANDSEXCEPT PER UNIT AMOUNTS
Actual Forecast Variance Actual Forecast Variance
Property Revenue $14,508 $10,930 $3,578 $35,779 $31,878 $3,901
Straight-line Rent Adjustment (375) (126) (249) (550) (369) (181)
Property Operating Expenses (2,483) (3,225) 742 (5,958) (9,608) 3,650
IFRIC 21 Property Tax Adjustment (1,565) (9) (1,556) (4,315) (184) (4,131)
Net Operating Income $10,085 $7,570 $2,515 $24,956 $21,717 $3,239
Straight-line Rent Adjustment 375 126 249 550 369 181
G&A (2) (1,340) (770) (570) (3,084) (2,310) (774)
Interest Expense (5,620) (2,069) (3,551) (9,997) (5,704) (4,293)
FFO $3,500 $4,857 ($1,357) $12,425 $14,072 ($1,647)
FFO excluding de-recognition of loan costs $6,383 $4,857 $1,526 $15,308 $14,072 $1,236
Straight-line Rent Adjustment (375) (126) (249) (550) (369) (181)
Amortization of Finance Charges 2,913 — 2,913 3,381 — 3,381
Mark-to-market Adjustments on Debt (131) (17) (114) (320) (48) (272)
Capital and Leasing Costs (411) (619) 208 (1,144) (1,761) 617
AFFO $5,496 $4,095 $1,401 $13,792 $11,894 $1,898
FFO per WA Class U Unit (1) $0.18 $0.30 ($0.12) $0.72 $0.88 ($0.16)
Revised FFO per WA Class U Unit (1) $0.33 $0.30 $0.03 $0.89 $0.88 $0.01
AFFO per WA Class U Unit (1) $0.28 $0.26 $0.02 $0.80 $0.74 $0.06
36
Comparable Retail Portfolio Transactions
Transaction Date Cap Rate Comments
Kimco acquires Blackstone's 67% interest
in “Kimstone” JVExpected closing Q1 2015 6.0%
39 grocery-anchored shopping centres
and power centres; valued at ~$250/SF
EDENS acquisition of AmREIT ($765M) Expected closing Q1 2015 5.5%
Offer price implies 23.7x 2014 AFFO; 1.5
million square feet; 95% occupied; ~40%
premium to unit price
Washington Prime acquisition of Glimcher Jan 2015 6.0%
$4.2 billion deal (cash and stock);
combined company will own 119 assets
(68 million square feet)
Vornado Realty Trust retail REIT spin-off Jan 2015 5.8%“Urban Edge Properties” comprises 81
strip centres and 4 enclosed malls
Kite realty acquisition of Inland Jul 2014 6.6%KRG purchases Inland Diversified for
$2.1 billion (57 assets / 10.2 million SF)
Blackstone-DDR JV Jun 2014 7.1%BX and DDR form a JV to acquire 76
shopping centres for $2.0 billion
Blackstone acquires portion of EDENS Dec 2013 5.5%BX paid $780M for 29% stake in SC-
based shopping centre owner
Source: KeyBanc Capital Markets, Company Reports
37
A Significant Value Proposition
Estimated strip centre cap rates, in place rents and occupancy (Q4 2014)
Metropolitan Statistical Area State Cap RateRent Per
Square Foot Occupancy Metropolitan Statistical Area State Cap Rate
Rent Per
Square Foot Occupancy
Atlanta GA 6.5% $ 12.67 91% Miami FL 5.9% $ 15.03 92%
Baltimore MD 6.2% $ 15.75 97% Greensboro NC 7.2% $ 10.96 91%
Boston MA 6.1% $ 16.95 98% Houston TX 6.5% $ 13.62 96%
Buffalo NY 7.2% $ 10.22 90% Jacksonville FL 6.5% $ 12.42 89%
Charleston SC 6.8% $ 10.87 90% Memphis TN 7.0% $ 12.00 94%
Charlotte NC 6.5% $ 14.11 91% Minneapolis MN 6.7% $ 12.68 95%
Charlottesville VA 6.2% $ 21.10 96% Nashville TN 7.0% $ 10.39 94%
Chicago IL 6.4% $ 15.18 95% New York NY 5.6% $ 22.10 96%
Cincinnati OH 7.2% $ 12.33 96% Orlando FL 6.6% $ 14.88 90%
Cleveland OH 7.2% $ 11.28 92% Philadelphia PA 6.4% $ 16.01 95%
Columbus OH 7.0% $ 11.96 97% Pittsburgh PA 6.8% $ 10.25 98%
Dallas-Ft Worth TX 6.5% $ 16.07 94% Raleigh-Durham NC 6.6% $ 14.30 95%
Dayton OH 7.2% $ 10.03 92% Richmond VA 6.5% $ 14.04 95%
Denver CO 6.5% $ 14.88 91% Tampa FL 6.5% $ 12.41 91%
Detroit MI 7.5% $ 10.76 92% Washington, DC DC 5.9% $ 22.59 96%
National 6.4% $ 14.57 94%
Slate Retail REIT 7.7% $ 9.65 96%
Source: Greet Street Advisors
38
Canada/U.S. REIT/REOC Trading Comparables (as at Mar 18, 2015)
Source: CIBC, SNL Financial, FactSet Fundamentals, company reports
2015E AFFO Implied
Unit Price
Since
Listing
Market Cap
(Millions)
TEV
(Millions)
Premium to
Analyst
NAV Dist. Yield AFFO Yield Multiple
Payout
Ratio Debt/GBV Cap Rate
Value
PSF
Canadian Retail Comparables (CAD)
RioCan REIT $28.05 2.0% $8,863 $15,520 6.0% 5.0% 5.9% 17.0 x 85.5% 44.9% 5.7% $194
Choice Properties $11.43 7.0% $4,393 $8,090 2.5% 5.7% 6.9% 14.5 x 82.3% 45.7% 6.1% $207
First Capital Realty $19.60 9.9% $4,327 $7,958 2.7% 4.4% 5.3% 19.0 x 83.5% 42.4% 5.5% $325
Calloway REIT $29.18 8.6% $3,978 $6,970 (1.5%) 5.5% 6.8% 14.8 x 81.1% 51.4% 6.1% $258
CT REIT $13.03 12.8% $2,427 $4,408 11.7% 5.1% 6.3% 15.8 x 80.6% 45.0% 5.8% $220
Crombie REIT $13.18 (1.8%) $1,721 $3,811 (8.7%) 6.8% 7.5% 13.4 x 90.8% 53.7% 6.6% $212
Average 6.4% 2.1% 5.4% 6.4% 15.8 x 84.0% 47.2% 6.0% $236
U.S. Retail Comparables (USD)
Kimco $27.06 20.1% $11,164 $16,619 6.3% 3.5% 4.4% 22.6 x 80.0% 37.7% 5.6% $142
DDR $18.94 11.7% $6,816 $12,394 0.1% 3.6% 5.6% 17.9 x 65.1% 45.7% 6.2% $99
Brixmor $26.33 23.9% $7,828 $14,070 0.5% 3.4% 5.3% 18.8 x 64.3% 53.7% 6.3% $162
Regency Centers $68.07 29.9% $6,407 $8,639 5.0% 2.9% 3.8% 26.6 x 75.8% 39.4% 5.3% $197
Weingarten Realty $36.52 18.4% $4,474 $6,730 (3.8%) 3.8% 4.8% 20.9 x 78.9% 40.0% 5.8% $137
Equity One $27.35 23.5% $3,418 $5,015 7.8% 3.2% 3.7% 27.1 x 87.1% 36.6% 5.2% $324
Cedar Realty Trust $7.54 24.4% $615 $1,471 (2.0%) 2.7% 5.6% 18.0 x 47.6% 42.8% 6.9% $160
Average 21.7% 2.0% 3.3% 4.7% 21.7 x 71.3% 42.3% 5.9% $174
Slate Retail REIT
(USD)$9.89 (26.5%) $249 $593 (27.9%) 7.6% 11.6% 8.6 x 65.7% 50.6% 7.9% $117
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