diversified national platform positioned for continued...
TRANSCRIPT
January 2016
Diversified National Platform
Positioned for Continued Profitable Growth
www.NorthviewREIT.com
Disclaimer
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This presentation may contain forward-looking information. All information included in this presentation other than statements of historical fact, is
forward-looking information. When used in this presentation, words “expect”, “estimate”, “project”, “potential” or other similar expressions identify
forward-looking information. The forward-looking information included in this presentation relates to, among other things, current expectations of
future results, performance, prospects and opportunities, including with respect to the benefits of the acquisition of True North Apartment REIT
and properties from affiliates of Starlight Investments Ltd. and affiliates of the Public Sector Pension Investment Board, growth opportunities,
payout ratio, market capitalization, mitigation of impact of commodity prices, population growth, results from the high-end renovation program,
above guideline increases, opportunities to increase below market rents, results from the sub-metering program, cost savings from management
internalization, development and acquisition opportunities, and debt management.
This presentation reflects Northview’s current beliefs and is based on information currently available to senior management. Forward-looking
information is provided for the purpose of presenting information about senior management’s current expectations and plans relating to the future
and readers are cautioned that such statements may not be appropriate for other purposes. This information is not a guarantee of future
performance and is based on Northview’s estimates and assumptions, which include, but are not limited to market growth, the general economy,
interest rates and real estate conditions are each stable, occupancy rates, results of operations, performance, prospects and opportunities.
The forward-looking information is subject to a variety of known and unknown risks and uncertainties, which could cause actual events, results
and performance to differ materially from the forward-looking information. Such risks and uncertainties include, but are not limited to, availability
of cash flow, risks of unexpected operating results, risks of investment in and development of real property, competition, financing and
refinancing risks, changes in economic conditions, changes in interest rates, changes in taxation rules, reliance on key personnel, environmental
matters, tenant risks, fluctuations in commodity prices and other risk factors. Northview cautions that this list of factors is not exhaustive.
Although the forward-looking information contained in this presentation is based on what Northview believes are reasonable assumptions, there
can be no assurance that actual results will be consistent with this forward-looking information. The forward-looking information is provided only
as of the date of such information, and Northview, except as required by applicable law, assumes no obligation to update or revise this
information to reflect new information or the occurrence of future events or circumstances.
Certain measures contained in this presentation do not have any standardized meaning as prescribed by International Financial Reporting
Standards (“IFRS”) and, therefore, are considered non-GAAP measures. These measures are provided to enhance the reader's overall
understanding of financial conditions. They are included to provide investors and management with an alternative method for assessing
operating results in a manner that is focused on the performance of operations and to provide a more consistent basis for comparison between
periods. These measures include widely accepted measures of performance for Canadian real estate investment trusts; however, the measures
are not defined by IFRS. In addition, these measures are subject to the interpretation of definitions by the preparers of financial statements and
may not be applied consistently between real estate entities. Please refer to Northview’s Third Quarter 2015 Management's Discussion &
Analysis for definitions of non-GAAP measures and additional GAAP measures, including NOI, FFO, debt to gross book value, and interest
coverage.
Investment HighlightsTSX symbol: NVU.UN
For Investors Seeking Sustainable Yield and Growth
• One of Canada’s largest multi-family RElTs
• Diversified national platform
• Identified organic growth opportunities and development program
• Increased distributions eight times in 13 years
• Conservative payout ratio
Key Stats
• Over 24,000 multi-family suites in 60 markets across eight provinces and two
territories
• 1.2 million square feet of commercial real estate
• Sustainable FFO pay out ratio of less than 70%
• $2.7 billion enterprise value1
• $880 million market capitalization1
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(1) As at Jan. 8, 2016
Northview Apartment REIT:
3rd largest publicly-traded multi-family REIT in CanadaTSX symbol: NVU.UN
2015 Northview Transaction OverviewNorthern Property REIT Acquired:
• True North units / Class B units at a fixed exchange ratio of 0.3908. Represents a
Capitalization Rate of 5.6%
• An institutional portfolio of 4,650 multi-family suites for total consideration of $535
million in cash, assumption of debt and NPR units / Class B units. Represents a
Capitalization Rate of 5.5%
61%15%
15%
10%
Former NPR Unitholders
Former True North Unitholders(excl. Daniel Drimmer)
Daniel Drimmer related entities(through units and Class B units)
Canadian Institutional Investor
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(1) Based on an NVU.UN closing price of $16.93 on Jan. 8, 2016
$2.7 billion1
pro forma enterprise
value
$0.9 billion1
pro forma market
capitalization
24,323multi-family suites
in 60 markets
across
eight provinces
and
two territories
Pro Forma Ownership %
Northview Apartment REITBuilding Greater Value Together
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Addressed growth
challenges and managed
risks related to portfolio
concentration
Achieved vital goals of
financial strength and
increased scale
Creation of Northview delivered on these strategies
and positions the REIT for further growth and
distributions to unitholders
•Diversified national platform
•Financial strength and liquidity
• Identified growth opportunities
•Access to markets with higher projected
population growth
Northview’s Growth Strategy Builds Upon its
Diversified, National Platform
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2015 TransactionNorthern Property portfolio
2015
Acquisition
2015 Acquisition
2002–2015
Western Expansion
2002–2015
Western Expansion 2003–2015
Atlantic Expansion
2002
Initial NPR
2011–2013
Eastern Expansion
Multi-family Residential Units
AB
3,795
BC
2,975NL
1,728
NT
1,329
NU
1,096
QC
2,285
SK
429
ON
8,235NS
1,288
NB
1,163
Profitable Growth in New Markets2015 Acquisitions are in markets with higher projected population growth
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High penetration in smaller
markets constrains growth
Selected Population Growth Forecast: 2015 – 2019 (3)
8%
Market
Penetration
31% 1%
1% 33%
Percentage
of Canadian
Population
NPR(Northern Markets (1))
Acquisition
Properties (2)
2%NPR(Other Markets (1))
Acquisitions are in markets with significantly
higher expected population growth
(1) NPR suites owned as at June 2015; Market suites and Canada population as at April 2015; City population based on 2011 census figures. Source: CMHC Rental Market Report; CMHC Northern Housing Report; Statistics Canada
(2) Sources: Statistics Canada (as at July 2015); CMHC Rental Market reports (as at October 2014); Conference Board
(3) Grande Prairie and Wood Buffalo (region where Fort McMurray is situated) is based on a census division population forecast from the Alberta Treasury Board and Finance. Source: Conference Board Metropolitan Outlook; Conference
Board Territorial Outlook; Alberta Treasury Board and Finance Population Projection
Thousands
0
100
200
300
400
500
Toro
nto
Mon
tre
al
Kitch
en
er
Ha
lifax
Lo
nd
on
Abb
ots
ford
St. J
oh
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cto
n
Gra
nde
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irie
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at.-
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gara
Fort
McM
urr
ay
Nu
na
vut
NW
T
1.4%
301.0%
17
0.8%
171.5%
11
1.3%
11
1.6%
10
0.2%
4
1.0%
2
(0.3%)
(1)
1.9%
CAGR
472
1.0%
171
1.6%
8
0.7%
2
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(1) Size of city is based on population, where: small=30,000 or less, medium=31,000 - 100,000, and large=100,001 or greater
Note: City population based on 2011 census figures (Source: Statistics Canada)
Oshawa, ON
Hamilton, ON
Toronto, ON
Sarnia, ON
Guelph, ON
Kitchener-Waterloo, ON
London, ON
St. Catharines-Niagara, ON
Brantford, ON
Montreal, QC
Peterborough, ON
Brockville, ON
Kingston, ON
Moncton, NB
Saint John, NB
Fredericton, NB
Halifax, NS
NOI Breakdown by Size of City(1)
Small9%
Medium30%
Large61%
Acquisition Portfolio Locations and Number of
Units
Montreal: 2,124
Southwestern ON: 4,625
Eastern ON: 1,831
GTA: 1,779
Nova Scotia: 1,288
New Brunswick: 1,163
Stability from Diverse Geographies
ON
25%
Multi-family Portfolio – Pro Forma NOI by Region(1)
Residential Units 24,323, Occupancy 93.4%
SK
2% QC
6%
AB
17%
BC
9%NL
8%
NS
2%
NB
2%
NU
18%
NT
11%
(1) NOI for Q2 2015 with respect to NPR and True North, and management’s estimates for institutional portfolio on an annualized basis
Quality diversified portfolio across
Canada provides stability, mitigating
the impact of cyclical regional
economic downturns.
Property Composition by NOI
Residential85%
Execusuites& Hotel 3%
Commercial12%
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Resource based
region NOI of 30% (1)
Resource based
region NOI of 22% (1)
10
NE BC7%
Alberta23%
Other regions
70%
NPR NOI
NE BC5%
Alberta17%
Other regions
78%
Northview NOI
(1) NOI for Q2 2015 with respect to NPR and True North, and management’s estimates for institutional portfolio on an annualized basis
Reduced Exposure to Resource Oriented Markets
Value Creation OpportunitiesOrganic Opportunities
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Value Creation Opportunities
# of eligible
suites in
acquired
portfolios
Estimated
monthly
improvement in
NOI per suite
Total Estimated
Annual NOI
Increase
(in thousands)
High-end renovation program 1,754 250 - 300 5,800
Below market rent 13,558 32 5,200
Sub-metering program 5,221 40 2,500
Above Guideline Increases 3,214 20 800
Total 14,300
Assumed Capitilization rate 5.5%
Estimated value creation (in thousands) 260,000
Estimated increase in fully diluted FFO/unit 0.29
Executing on Value Creation OpportunitiesTranslates into distribution increases
High-End Renovation ProgramValue creation through investment
Average cost: $15,000-20,000/suite
Avg. rent increase: $250-$300/month
ROI: 15-20%
Target: 300 suites annually
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Before After
Identified Suites Completed
2,440
20 Properties
748
31%
(1) As of November 2015. Additional 9 high end units expected in December 2015.
Value Creation through Market PricingRealizing full value across through recent acquisition portfolios
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Below Market Rents
• Opportunity to increase rents to market level on tenant turnover, with minimal capex
• Average $32/suite (3.8%) below market across ≈14,000 suite acquisition portfolio
• Annual tenant turnover 30-35%
Sub-metering Program (in Ontario)
• Opportunity for expense reduction on tenant turnover
• Average monthly savings: $40/suite
• Potential annual savings: $2.5 million
Identified Suites Completed (1) Remaining
6,226
57 Properties
1,230
20%
4,996
(1) As of November 2015. Addition 30 sub-metering enrollments expected in December 2015.
Approved Pending
Approval
2016 Suites
Average rent
increase (1)
682
4.0%
2,173
4.1%
2017 Suites
Average rent
increase (1)
151
3.4%
1,003
3.9%
• Opportunity for return on significant capital investment in Ontario portfolio through
rental rate growth above provincial guideline
Above Guideline Increases (AGI)Value creation through investment
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AGI Applications
(1) As of November 2015. Includes a 2.0% guideline increase (the Ontario provincial guideline increase for 2016)
Value Creation From NVU’s Proven Internal
Management ModelFuture growth from structure
• Cost savings through internalization of property management
• Continuity of experienced management team
• Property management internalization expected to be completed by 2017
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Region Suites
2015 Alberta 750
2016 Ontario 7,600
2017 New Brunswick, Nova Scotia,
Quebec, Ontario
5,150
Value Creation OpportunitiesDevelopment and Starlight Relationship
DevelopmentA highly accretive opportunity
• Shortage of supply
• Development yields 100-200 bps higher than acquisition cap rates
• Current rents support new construction
• Strong in-house expertise (since 1980s)
• Ability to ramp up or down based on economic conditions without financial penalty
• Lower CAPEX requirement for first 10+ years
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Historical units completed
331363
299
140
261
0
100
200
300
400
2013 2014 2015 2016Projected
2017Projected
Development Plan
• Current: Focus on stable, non-resource based markets
• 2016: Calgary: 261 units
• Review non-resource based markets and new opportunities in Central and Eastern
Canada
• 42 acres owned for 1,500 units in Western and Northern Canada
• 6 intensification opportunities identified in Ontario market
• Long Term: Develop 600 to 800 units per year
• Identifying new opportunities in the acquired portfolio
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Completed Development
• Rents and NOI are exceeding pro-forma expectations
• Completed cost of $142,000 per unit in 2014
• Cap Rate on completion ~ 8.0%
• Fair value increase of $30,000 per unit recognized upon completion
• Stabilized at 95% occupancy
189 Units
McCarthy Ridge
Regina, SK
Potential Starlight Pipeline
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Track Record of
Growing Public
Vehicles
• Starlight Investments is one of Canada’s leading private real estate
investors and asset managers
• Starlight is owned by Daniel Drimmer, who acts as President and CEO,
and has completed over $9.0 billion worth of acquisition and financing
transactions over the past 20 years
• Starlight maintains a portfolio of over 12,000 multi-family suites in
Canada
Institutional Portfolio Demonstrates Potential of Starlight Relationship
8,200
10,626
2,0761,570
2,824
0
2,000
4,000
6,000
8,000
10,000
12,000
2010 (IPO) 2011 2012 2013 2014
Su
ites
Suites
Summary of Assets Sold by Privately Held Drimmer
Entities to Drimmer Sponsored REITs
Financial MetricsAmong the strongest in the Canadian REIT sector
Increased Scale:
New Opportunities & Reduced RiskEnhanced access to capital, increased market liquidity
29FEB201210222095
Enterprise Value1
$ billions
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(1) Closing prices on Jan. 8, 2016
$6.5
$4.4
$2.7
$2.3
$1.7 $1.6
$1.0 $1.0 $0.8
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
8.7x
14.4x 14.8x
15.9x
17.0x
NVU KMP BEI IIP CAP
Source: BMO REIT Beat December 25, 2015 – 2016E
(1) Closing prices on Jan. 8, 2016
Lowest AFFO multiple in the REIT sectorOpportunity for improvement
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Distribution
Yield(1)9.6% 5.9% 4.7% 3.8% 4.6%
49%
57%
67%69%
71%
IIP BEI NVU CAP KMP
Source: BMO REIT Beat December 25, 2015 – 2016E
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FFO Payout Ratio vs. Competitors
26
NVU Historical Distributions
$1.15 $1.18
$1.25
$1.31
$1.38
$1.48 $1.48 $1.48
$1.53 $1.53 $1.53
$1.58
$1.63
80.3% 77.7% 81.3% 79.5% 77.2%69.8% 67.3% 70.0% 65.3% 68.1% 69.3% 67.1%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Annual Distribution FFO Payout Ratio
(1)
90.9%
NVU Historical Distribution GrowthSustainable FFO payout ratio
(1) Excludes special distribution of $0.56 per unit
Comparable Debt Metrics to Peers
3.6x
2.9x 2.9x
2.6x
2.3x2.2x
1.7x 1.6x 1.5x 1.4x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
4.0x
Interest Coverage Ratio Debt Service Coverage Ratio
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Coverage ratios expected to remain among the strongest in Canadian multi-family sector
Note: BEI.UN, CAR.UN, IIP.UN, KMP based on trailing twelve months.
Weighted avg.
interest rate3.57% 3.30% 3.87% 3.37% 2.78% 3.85% 3.25% 3.24% 3.21%
• Weighted average interest rate at September 30, 2015: 3.34%, 33 bps lower than
December 31, 2014
• Weighted average term to maturity at September 30, 2015: 4.9 years compared to
5.0 years December 31, 2014
• Potential interest savings opportunity of $1.5M in 2016 by refinancing at ~100 bps
lower than the average interest rates
Note: As of September 30, 2015
Financing
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$-
$40
$80
$120
$160
$200
2016 2017 2018 2019 2020 2021 2022 2023 Thereafter
($ m
illio
ns)
Clear path to leverage reduction
• Internal value creation
• Selective non-core asset
dispositions
Extend term mortgages
• Long-term financing at fixed rates
when borrowing conditions are
favourable
Refinance properties on Bridge
Facility with term mortgage
• Utilize CMHC financing to lower
interest rate
• Majority to be completed by Q2
2016
Northview Debt Management StrategyPlans to de-lever
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59.3%
57.8%Excluding pro forma mark-to-market
debt adjustment &
TN Convertible Debentures
Pro Forma Debt to
Gross Book Value
Competitive Debt
Position to Peers
1.7xDebt Coverage Ratio
2.9xInterest Coverage Ratio
Experienced Management Team
With Proven Track Record
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Todd Cook
President &
Chief Executive Officer
• President & CEO of Northview Apartment REIT since 2014. Joined Northern Property
REIT in 2006, CFO from 2007 to 2011 and President and COO in 2013
• Previously CFO of TGS North American REIT from 2003 until its acquisition by The
Great-West Life Assurance Company in 2006
Leslie Veiner
Chief Operating Officer
• Previously President & CEO of the True North Apartment REIT since 2012
• Previously CFO of TransGlobe Apartment REIT from 2010 to 2012. Employed by
Chartwell Retirement Residences as SVP Real Estate from 2005 to 2008 and CFO
from 2003 to 2005
Robert Palmer
Chief Financial Officer
• CFO of Northview Apartment REIT since 2013
• Previously VP, Controller of WestJet Airlines Ltd. from 2007 to 2012 and prior to that,
senior finance roles with Molson Coors Canada from 2003 to 2007
Richard Anda
VP, Business Development
• VP, Business Development, of Northview Apartment REIT since 2011. Joined
Northern Property REIT in 2003. VP, Operations from 2004 to 2011
• Previously with Canada Mortgage and Housing Corporation
Lizaine Wheeler
VP, Residential Operations
• VP, Residential Operations of Northview Apartment REIT since 2012
• Previously SVP Operations at Mainstreet Equity Corp from 2010-2012, and prior to
that, senior operations roles with Boardwalk REIT from 1998 to 2010
Bo Rasmussen
VP, Property Development
• VP, Property Development of Northview Apartment REIT since 2011.
Joined Northern Property REIT in 2007 as Manager of Construction and Development
• Previously VP Development for NewNorth Projects Ltd. from 2004 to 2007
Commitment to Strong Governance
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Douglas Mitchell, Chair National Co-chair, Borden Ladner Gervais LLP
Todd Cook1 President & CEO, Northview Apartment REIT
Daniel Drimmer1 President & CEO, Starlight Investments Ltd.
Kevin Grayston Corporate Director, former CFO, CHIP REIT
Dennis Hoffman Former Partner, City Leader (Calgary Office), PricewaterhouseCoopers LLP
Christine McGinley Corporate Director, former SVP of Operations, Canwest Global
Terrance McKibbon President & CEO, Aecon Group Inc.
Graham Rosenberg President & Co-CEO, Dental Corporation of Canada Inc.
Scott Thon President & CEO, AltaLink L.P.
Principal Occupation
(1) Non-independent
Contact Information
Todd CookPresident & Chief Executive Officer
(403) 531-3610
Leslie VeinerChief Operating Officer
(647) 725-0433
Robert PalmerChief Financial Officer
(403) 531-3545
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www.NorthviewREIT.com