Three Keys to Skyline’s Real Estate Strategy

Early last month, we held our Annual General Meetings for the Skyline Apartment, Commercial and Retail REITs. As with all of our meetings, we went through the necessary technicalities whereby it was announced that after counting attendees both in person and by proxy, we had reached a quorum and were therefore able to proceed with the meetings. The auditors were then approved, and shortly thereafter, Unitholders elected Skyline’s slate of Trustees for 2015, all of whom look forward to working together to ensure Skyline enjoys another successful year. All three Boards of Trustees remain the same for 2015, with the exception of the Skyline Apartment REIT Board of Trustees, as we sadly lost Doug Gamsby this past year to a sudden accident. His long-standing loyalty, advice, and commitment to our community, our company and our Unitholders will be greatly missed.

The Skyline executives (myself included) and Investor Relations Team greatly value these meetings, as they are an excellent opportunity to speak with many of our investors in person. However, we realize that because Skyline’s investor base is growing larger and becoming more far-reaching each year, many of you are not able to attend. For this reason, I’d like to take this opportunity to highlight some of the key takeaways from each of the three Annual General Meetings. Although I touched on different key messages for each meeting, they are all part of a common philosophy that we apply to all facets of our real estate business, and therefore they are all relevant to each REIT and to each investor.

One of the most powerful tools available to ensure success in real estate is time. To give an example of this to the attendees at the Annual General Meetings, I recounted how Peter Minuit, a Dutch colonial governor, bought the Isle of Manhattan from the Native Americans for 60 Dutch guilders in the early 1600s (equivalent to approximately $26 today). What is still today perceived as a terrible rip-off for the Native Americans, if invested properly at 8% interest and left to compound annually, would now, in fact, be worth $282 trillion – far more than it would take to buy back the whole island. Now, I don’t know many of us who have that kind of time to wait around for such a payoff, but understanding the principle behind this example –how time works at a certain rate to compound your investment—is very valuable. I am happy to say that our Unitholder group is savvy when it comes to investing for the long term, and this understanding goes hand-in-hand with our long-term buy-and-hold strategy. We don’t have the pressure of quarter-to-quarter scrutiny of the public markets, nor do we have the limitations of a closed-end fund that must sell after a short period of time to repay investors, regardless of the market conditions at the time of sale. Instead, we can make long-term decisions and long-term investments in our REITs, which pay off handsomely when time is allowed to do its work.

Growth is a strategy that, when pursued simply for its own sake, is not a great approach to real estate. However, growth can be wielded

as a tool, and as an opportunity to inspire innovation in ways that just don’t make sense to small or static portfolios. So that you never forget how this works, allow me to make an unpleasant analogy coined “pennies in the urinal.” On its own, is that one penny worth picking up? To most people, not likely. But imagine thousands of these pennies or opportunities through scale and growth—and with enough pennies retrieved, now the resources are available to hire that person or team to come up with new and efficient ways of gathering even more pennies—in our case, for example, enough to make a meaningful difference to the performance of our REITs. In our business, these opportunities, like the example I use, are not easy, and are not things that many companies care to do. However, we do care about the fact that every $1 saved through fixing these existing inefficiencies or missed opportunities translates into approximately $16 in value to our Unitholders. When you can take your business to the next level through growth, you create the ability to drive down another level and open up more value.

The third of the key tools addressed at the meetings was the use of leverage. This tool can certainly work against you if you do not take the necessary precautions to mitigate your exposure. However, when used properly, it can greatly enhance investor returns. I want to assure everyone that we are taking these all-time-low interest rates and locking down our mortgages with 5, 7 and 10-year fixed terms, with a bias toward the 10-year terms. This means that a deal locked down today is unaffected by rate fluctuations until 10 years from now. This long term fix also ensures that we pay down a substantial portion of the mortgage over that time, so that we have a reduced exposure when it comes time to renew. As well as enjoying great rates today, we are refinancing properties that are coming off those 10-year terms, where rates 10 years ago were higher than they are today—so we are also seeing our overall interest costs continuing to go down. In turn, this means that rates have room to increase, and we would not be negatively impacted upon the renewal of an older mortgage.

These three themes, although presented individually at each REIT’s Annual General Meeting, are consistent with the approach we take to all real estate, regardless of asset class. 2015 is shaping up to be one of Skyline’s biggest years to-date in terms of real estate acquisition, and we will use this growth to fuel efficiencies and innovation. Over time, the impact of this work becomes realized and translates into more valuable real estate. Using proper leverage, we are able to enhance returns and maximize your investments. We appreciate your ongoing participation, as it has enabled us to make the most of the three tools mentioned above, and to execute on our strategy from which we can all benefit.

Thank you for your continued support,

WHAT’S INSIDE

1. Apartment REIT Acquisitions in Q2 4. Skyline in the Media

2. Commercial REIT Disposition in Q2 5. Snapshot of Skyline’s REIT Investments

3. Retail REIT Acquisition in Q2 6. 11th Annual Charity Golf Classic

7. Skyline in the Community

INVESTOR NEWSLETTER // JULY 2015, Q2

Jason Castellan,Co-Founder and CEO, the Skyline Group of Companies

365 & 379 Lake Street, Sault Ste. Marie, ON 621, 627, & 631 MacDonald Ave, Sault Ste. Marie, ON 334 East 14th Street, Hamilton, ON

260 Goderich Street, Port Elgin, ON

3 RETAIL REIT ACQUISITION IN Q2

1 APARTMENT REIT ACQUISITIONS IN Q2

June 19th, 2015

The Skyline Apartment REIT purchased two additional properties in the city of Sault Ste. Marie, ON. The Apartment REIT now has six buildings in the city, with a total of 714 apartment suites.

365 & 379 Lake Street, Sault Ste. Marie, ON had a purchase price of $10.5M and has 136 suites. The property is close to several parks, schools and shops, as well as the Trans-Canada Highway.

621, 627 & 631 MacDonald Avenue, Sault Ste. Marie, ON had a purchase price of $29.5M and has 271 suites. Located just around the corner from Skyline’s new property on Lake Street, this building is also close to parks, schools, shops and the Trans-Canada Highway.

June 30th, 2015

The Skyline Apartment REIT purchased its eighth property in the city of Hamilton, ON. The Apartment REIT now has a total of 934 suites in the city.

334 East 14th Street, Hamilton, ON had a purchase price of $9.8M and has 105 suites. Located close to Highway 403 and the Lincoln Alexander Parkway, the property has several parks, schools, and a hospital and mall nearby.

The Skyline Apartment REIT currently comprises 145 properties in 46 communities across 6 provinces, with 12,447 suites.

May 13, 2015

The Skyline Retail REIT purchased its second property in the town of Port Elgin, ON. The property at 260 Goderich Street had a purchase price of $3.1M and includes 14,725 square feet of commercial space. Its anchor tenants include Dollar Tree, Harvey’s and Swiss Chalet.

The Skyline Retail REIT currently comprises 42 properties in 29 Ontario communities, with over 1.2 million square feet of commercial space.

2 COMMERCIAL REIT DISPOSITION IN Q2

June 26, 2015

Skyline Commercial REIT sold a component of one of its commercial properties at 36 George Street in Barrie, ON. The REIT capitalized on a great opportunity to make significant gains on a property that was purchased only a few years ago.

The total sale price was $670,000. Please note that this sale does not affect the property count in the Commercial REIT, as the REIT still owns the adjacent 44 George Street in Barrie (36 & 44 George Street were considered a single property).

The Skyline Commercial REIT currently comprises 68 properties in 19 communities, with over 3.8 million square feet of commercial space.

6 11TH ANNUAL CHARITY GOLF CLASSIC

REGISTRATION NOW OPEN – DON’T DELAY!

NEW LOCATION: Granite Ridge Golf Club, 9503 Dublin Line, Milton, ON

This year’s 11th Annual Charity Golf Classic will be another fantastic day of great food, golf and prizes! Plus, we’re at a new location this year- the beautiful Granite Ridge Golf Club in Milton, ON (just off Highway 401). Register now at www.skylineonline.ca (log into our investor-only page to access the registration form), or contact Bethany Curtis at bcurtis@skylineonline.ca or 1.888.977.REIT(7348).

APARTMENT REIT

145 Properties

46 Communities

6 Provinces (AB, BC, NL, ON, QC)

12,447 Apartment Suites

643,650 Square Feet of Commercial space

COMMERCIAL REIT

68 Properties

19 Communities

2 Provinces (ON, QC)

3,808,480 Square Feet of Commercial Space

RETAIL REIT

42 Properties

29 Communities

1 Province (ON)

1,206,880 Square Feet of Commercial Space

Over 70% Comprised of National Brand Anchor Tenants

5 SNAPSHOT OF SKYLINE’S REIT INVESTMENTS

VALUE: $1.2+ BILLION VALUE: $346+ MILLION VALUE: $282+ MILLION

4 SKYLINE IN THE MEDIA

Industry and business publications are taking notice of Skyline, thanks to its recognition as a Best Managed Company in 2014, as well as its skyrocketing growth. So far this year, we have enjoyed coverage in FRPO Exchange Magazine, Advantage Magazine, Canadian Industry Magazine, BCBusiness Magazine, and the DDC

Journal. We have also been featured in the 2015 “Who’s Who” issue of Canadian Apartment Magazine. These publications, along with many others featuring Skyline, can be accessed by visiting our website at www.skylineonline.ca and clicking About Skyline/Skyline Publications.

CONTACT THE SKYLINE WEALTH MANAGEMENT INVESTOR RELATIONS TEAMinvest@skylineonline.ca | 1.888.977.REIT (7348) | skylineonline.ca | 5 Douglas Street, Suite 301, Guelph ON, N1H 2S8

Onward Willow Volunteer Dinner

In April 2015, Skyline proudly hosted Onward Willow’s Annual Volunteer Appreciation Dinner for the fifth year in a row. Nearly 100 dedicated volunteers enjoyed an evening celebrating the spirit of volunteering, with live music and a delicious dinner and desserts donated and served by the Skyline team. The Onward Willow: Better Beginnings, Better Futures program is dedicated to improving the quality of life and strengthening families in the Onward Willow area of Guelph.

Canadian Cancer Society Caring Company Award

In May 2015, Skyline was presented with a Canadian Cancer Society Caring Company Award for its contributions to the society’s year-round volunteer initiatives. Skyline has volunteered for the society’s Wellington Warrior Challenge in September, its Pink in the Rink Event at a Guelph Storm game in November, and Daffodil Month in April. We are proud to support the Canadian Cancer Society in the fight against cancer.

Skyline Executive Recognized for Community and Business Achievements

We are proud to announce that Marissa Teeter, Vice President of Skyline Wealth Management Inc., was recently recognized in the Guelph community for her remarkable achievements as both a businesswoman and as an advocate for philanthropy and charitable initiatives.

Marissa was recognized as a YMCA-YWCA of Guelph Woman of Distinction in the category of Business & Entrepreneurs. She was also listed in the 2015 Guelph Mercury’s “Top 40 Under 40” feature, and selected as the winner of the 2015 Guelph Mayor’s Volunteer Award. Additionally, Marissa has been nominated for the 2015 Women’s Executive Network (WXN) Most Powerful Women in Canada: Top 100 Awards.

We are incredibly proud of Marissa, and the entire Skyline team, for their tireless investment of time and effort to build each Skyline community through volunteer work, charitable donations, and care for the environment.

Skyline Scholarship

Skyline is pleased to announce University of Guelph Real Estate & Housing Program students Ryan Malenfant (pictured above) and Lindsey Lippert (not pictured) as the winners of Skyline’s 2015 Real Estate Scholarships. For the past two years, Skyline has awarded three scholarships to students in the Real Estate & Housing Program: a Skyline Scholarship, a Sustainability Scholarship, and a Property Management Scholarship. We congratulate Ryan and Lindsey for their remarkable academic achievements, and their notable work in the community and in the Real Estate & Housing Program.

Spring Hope Food Drive

This spring, for the 7th year in a row, Skyline buildings across Ontario, including Skyline’s offices, participated in the annual Federation of Rental Housing Providers of Ontario (FRPO) Spring Hope Food Drive. We collected over 14,000 lbs of food – that’s enough cans to stretch across 2.5 km! Contributions were donated to food banks in each Skyline community across the province.

7 SKYLINE IN THE COMMUNITY

As our valued investors, you are always the first to be informed about upcoming REIT Offerings and requirements for new equity. The Skyline Apartment REIT is currently open for investments – its original $45M Offering is almost sold out. The equity raised is being used to fund a substantial portfolio of highly-accretive income-producing properties across Southwestern Ontario. We will also continue to offer smaller-sized Offerings that will likely open and close quickly as equity needs are fulfilled. The next Offering for the Commercial REIT can be expected to arrive within a few weeks – please contact us for details. If you have any investment questions or needs before then, we encourage you to get in touch with us.