BTB REIT’s recent accretive acquisitions contributed to a 20% FFO per unit growth for the first quarter of 2022

i.

Lease renewals: 175,484 sq. ft. of leases were renewed of which, 119,138 sq. ft. were renewed before the end of their term and
56,346 sq. ft. were renewed in anticipation of the end of their term for the years 2023 and after. 51.9% of lease renewals were concluded in the
off-downtown core segment.

ii.

New leases: 17,560 sq. ft. were leased to new tenants in the off-core office properties segment. Rental rates for this segment increased by 19.6% during Q1 2022.

__________________________

¹  Non-IFRS financial measure. See Appendix 1.
² Credit facilities is a term used that reconciles with the bank loans as presented and defined in the Trust’s consolidated financial statements.

Quarters ended March 31^st

(In thousands of dollars, except for ratios and per unit data)

2022

$

FINANCIAL INFORMATION

Rental revenue

29,068

23,532

23.5

Net operating income

16,234

12,414

30.8

Net income and comprehensive income

6,449

2,510

156.9

Net property income from the same property

portfolio ¹

12,281

12,036

2.0

Distributions

5,851

4,828

21.2

Recurring funds from operations (FFO) ¹

8,317

5,730

45.1

Recurring adjusted funds from operations (AFFO) ¹

7,602

5,506

38.1

Cash flow from operating activities

11,404

13,149

(13.3)

Total assets

1,182,836

923,854

28.0

Mortgage debt ratio ¹

56.8%

52.5%

4.3%

Weighted average interest rate on mortgage debt

3.7%

3.6%

0.1%

Market capitalization

360,140

272,807

32.0

FINANCIAL INFORMATION PER UNIT

Net income and comprehensive income

8.3¢

3.9¢

4.4¢

Distributions

7.5¢

7.5¢

–

Recurring FFO ¹

10.7¢

8.9¢

1.8¢

Recurring AFFO ¹

9.7¢

8.6¢

1.1¢

¹ Non-IFRS financial measure. See Appendix 1.

Quarters ended March 31^st

(In thousands of dollars, except per unit data)

2022

$

$

CASH FLOWS FROM OPERATING ACTIVITIES

11,404

13,149

Leasing payroll expenses

221

219

Transaction costs on purchase and disposition of investment properties and early repayment fees

(753)

–

Adjustments for changes in other working capital items

3,774

(1,263)

Financial income

145

134

Interest expenses

(6,904)

(5,791)

Provision for non-recoverable capital expenditures

(581)

(471)

Provision for non-recovered rental fees

(375)

(375)

Accretion of non-derivative liability component of convertible debentures

(82)

(96)

AFFO ¹

6,849

5,506

NON-RECURRING ITEM

753

–

RECURRING AFFO ¹

7,602

5,506

¹ Non-IFRS financial measure. See Appendix 1.

TIME:

9 am, Eastern Time

DIAL:

Toronto and over-seas: 1-416-764-8688

North America (toll-free): 1-888-390-0546          

WEB:

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VISUAL:

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https://www.btbreit.com/investor-relations-2/annual-meeting-presentations/

SAME-PROPERTY NOI

Same-property NOI is a non-IFRS financial measure defined as net operating income (“NOI”) for the properties that the Trust owned and operated for the entire duration of both the current year and the previous year. The most directly comparable IFRS measure to same-property NOI is Operating Income.

FUNDS FROM OPERATIONS (FFO)

& RECURRING FFO

FFO is a non-IFRS financial measure used by most Canadian real estate investment trusts based on a standardized definition established by REALPAC in its February 2019 White Paper (“White Paper”). FFO is defined as net income and comprehensive income less certain adjustments, on a proportionate basis, including (i) fair value adjustments on investment properties, class B LP units and derivative financial instruments; (ii) amortization of lease incentives; (iii) incremental leasing costs; and (iv) distribution on class B LP units. FFO is reconciled to net income and comprehensive income, which is the most directly comparable IFRS measure. FFO is also reconciled with the cash flows from operating activities, which is an IFRS measure.

Recurring FFO is also a non-IFRS financial measure that starts with FFO and removes the impact of non-recurring items such as transaction cost on acquisitions and dispositions of investment properties and early repayment fees.

The Trust believes FFO and recurring FFO are key measures of operating performance and allow the investors to compare its historical performance.

ADJUSTED FUNDS FROM OPERATIONS (AFFO) & RECURRING AFFO

AFFO is a non-IFRS financial measure used by most Canadian real estate investment trusts based on a standardized definition established by REALPAC in its February 2019 White Paper (“White Paper”). AFFO is defined as FFO less: (i) straight-line rental revenue adjustment; (ii) accretion of effective interest; (iii) amortization of other property and equipment; (iv) unit-based compensation expenses; (v) provision for non-recoverable capital expenditures; and (vi) provision for unrecovered rental fees (related to regular leasing expenditures). AFFO is reconciled to net income and comprehensive income, which is the most directly comparable IFRS measure. AFFO is also reconciled with the cash flows from operating activities, which is an IFRS measure.

Recurring AFFO is also a non-IFRS financial measure that starts with AFFO and removes the impact of non-recurring items such as transaction costs on acquisitions and dispositions of investment properties and early repayment fees.

The Trust considers AFFO and recurring AFFO to be useful measures of recurring economic earnings and relevant in understanding its ability to service its debt, fund capital expenditures, and provide distributions to unitholders.

FFO & AFFO PAYOUT RATIOS

AND

RECURRING FFO & RECURRING AFFO PAYOUT RATIOS

FFO and AFFO payout ratios and recurring FFO and recurring AFFO payout ratios are non-IFRS financial measures. These payout ratios are calculated by dividing the actual distributions per unit by FFO, AFFO, and recurring FFO and recurring AFFO per unit in each period.

The Trust considers these metrics a useful way to evaluate its distribution paying capacity.

TOTAL DEBT RATIO

The total debt ratio is a non-IFRS financial measure of the Trust’s financial leverage, which is calculated by taking the total long-term debt less cash divided by the total gross value of the assets of the Trust less cash.

The Trust considers this metric useful as it indicates its ability to meet its debt obligations and its capacity for future additional acquisitions.

PROVISION FOR

NON-RECOVERABLE CAPITAL EXPENDITURES

In calculating AFFO, the Trust deducts a provision for non-recoverable capital expenditures to consider capital expenditures invested to maintain the condition of its properties and to preserve rental revenue.

The provision for non-recoverable capital expenditures is calculated based on 2% of rental revenues. This provision is based on management’s assessment of industry practices and its investment forecasts for the coming years.

PROVISION FOR UNRECOVERED RENTAL FEES

The Trust also deducts a provision for unrecovered rental fees in the amount of approximately 25¢ per sq. ft. on an annualized basis. Even though quarterly rental fee disbursements vary significantly from one quarter to another, management considers that this provision fairly presents, in the long term, the average disbursements not recovered directly in establishing the rent that the Trust will undertake. These disbursements consist of inducements paid or granted when leases are signed that are generally amortized over the term of the lease and are subject to an equivalent increase in rent per square foot, and of brokerage commissions and leasing payroll expenses.

TOTAL LONG-TERM DEBT LESS CASH AND CASH EQUIVALENTS

This is a non-IFRS financial measure. Long-term debt less cash and cash equivalent is a non-IFRS financial measure, calculated as the total of (i) fixed-rate mortgage loans payable; (ii) floating rate mortgage loans payable; (iii) Series G debenture capital amount; (iv) Series F debenture capital adjusted with non-derivative component fewer conversion options exercised by holders; and (v) credit facilities, less cash, and cash equivalents. The most directly comparable IFRS measure to net debt is debt.

TOTAL GROSS VALUE OF THE ASSETS OF THE TRUST LESS CASH AND CASH EQUIVALENT

This is a non-IFRS financial measure. Gross value of the assets of the Trust less cash and cash equivalent (“GVALC”) is a non-IFRS financial measure defined as the Trust’s total assets adding the cumulated amortization property and equipment and removing the cash and cash equivalent. The most directly comparable IFRS measure to GVALC is total assets.

2022

2021

2021

2021

2021

2020

2020

2020

Q-1  

Q-4  

Q-3  

Q-2  

Q-1  

Q-4  

Q-3  

Q-2  

(In thousands of dollars, except for per unit)

$

$

$

$

$

$

$

$

NET INCOME AND COMPREHENSIVE INCOME

6,449

23,219

8,678

7,161

2,510

3,850

5,757

(1,101)

Fair value adjustment on investment properties

(1,007)

(19,571)

–

–

–

(2,130)

–

3,607

Fair value adjustment on Class B LP units

66

21

(18)

(52)

280

242

(59)

39

Amortization of lease incentives

735

858

780

777

877

794

751

771

Fair value adjustment on derivative financial instruments

997

3,297

(2,598)

733

1,814

2,950

265

330

Leasing payroll expenses

221

208

173

184

219

146

176

137

Distributions – Class B LP units

26

30

22

26

30

30

30

45

Unit-based compensation (Unit price remeasurement) ⁵

77

23

(19)

185

–

–

–

–

FFO ¹

7,564

8,085

7,018

9,014

5,730

5,882

6,920

3,828

NON-RECURRING ITEM

Transaction cost on acquisitions and dispositions of investment properties and early repayment fees

753

109

–

188

–

440

–

882

RECURRING FFO ¹

8,317

8,194

7,018

9,202

5,730

6,322

6,920

4,710

FFO PER UNIT ^{1, 2, 3}

9.7¢

10.9¢

9.5¢

12.3¢

8.9¢

9.2¢

10.9¢

6.1¢

RECURRING FFO PER UNIT ^{1, 2, 4}

10.7¢

11.0¢

9.5¢

12.5¢

8.9¢

9.9¢

10.9¢

7.5¢

FFO payout ratio ¹

77.2%

68.9%

79.0%

61.1%

84.0%

81.1%

68.6%

140.1%

Recurring FFO payout ratio ¹

70.2%

68.0%

79.0%

59.9%

84.0%

75.5%

68.6%

113.9%

1

This is a non-IFRS financial measure.

2

Including Class B LP units.

3

The FFO per unit ratio is calculated by dividing the FFO ¹ by the Trust’s unit outstanding at the end of the period (including the Class B LP units outstanding at the end of the period).

4

The recurring FFO per unit ratio is calculated by dividing the recurring FFO ¹ by the Trust’s unit outstanding at the end of the period (including the Class B LP units outstanding at the end of the period).

5

The impact of the unit price remeasurement on the deferred unit-based compensation plan has been considered in the calculation of the recurring FFO and AFFO starting Q2 2021. As a reference, the cumulative impact for the 12 months cumulative period in 2020 was positive $373 or 0.1¢ per unit.

2022

2021

2021

2021

2021

2020

2020

2020

Q-1  

Q-4  

Q-3  

Q-2  

Q-1  

Q-4  

Q-3  

Q-2  

(In thousands of dollars, except for per unit)

$

$

$

$

$

$

$

$

FFO ¹

7,564

8,085

7,018

9,014

5,730

5,882

6,920

3,828

Straight-line rental revenue adjustment

(150)

(758)

(88)

(91)

(397)

108

(214)

1

Accretion of effective interest

288

275

239

428

359

343

229

287

Amortization of other property and equipment

30

22

23

27

15

23

29

24

Unit-based compensation expenses

73

143

114

(24)

644

281

22

51

Provision for non-recoverable capital expenditures

(581)

(539)

(478)

(519)

(471)

(449)

(472)

(461)

Provision for unrecovered rental fees

(375)

(375)

(375)

(376)

(374)

(375)

(375)

(375)

AFFO ¹

6,849

6,853

6,453

8,459

5,506

5,813

6,139

3,355

NON-RECURRING ITEM

Transaction cost on acquisitions and dispositions of investment properties and early repayment fees

753

109

–

188

–

440

–

882

RECURRING AFFO ¹

7,602

6,962

6,453

8,647

5,506

6,253

6,139

4,237

AFFO PER UNIT ^{1, 2, 3}

8.8¢

9.2¢

8.7¢

11.5¢

8.6¢

9.1¢

9.7¢

5.3¢

RECURRING AFFO PER UNIT ^{1, 2, 4}

9.7¢

9.4¢

8.7¢

11.8¢

8.6¢

9.8¢

9.7¢

6.7¢

AFFO payout ratio ¹

85.3%

81.3%

85.9%

65.1%

87.4%

82.1%

77.4%

159.9%

Recurring AFFO payout ratio ¹

76.8%

80.0%

85.9%

63.7%

87.4%

76.3%

77.4%

126.6%

1

This is a non-IFRS financial measure.

2

Including Class B LP units.

3

The AFFO per unit ratio is calculated by dividing the AFFO ¹   by the Trust’s unit outstanding at the end of the period (including the Class B LP units outstanding at the end of the period).

4

The recurring AFFO per unit ratio is calculated by dividing the recurring AFFO ¹ by the Trust’s unit outstanding at the end of the period (including the Class B LP units outstanding at the end of the period).

(In thousands of dollars)

March 31, 2022

December 31, 2021

March 31, 2021

$

$

$

Cash and cash equivalents

(40,666)

(7,191)

(6,255)

Mortgage loans outstanding ²

619,555

607,038

482,083

Convertible debentures ²

43,569

44,564

50,124

Credit facilities

35,318

35,468

15,000

TOTAL LONG-TERM DEBT LESS CASH AND CASH EQUIVALENTS ^{1, 3}

657,776

679,879

540,952

Total gross value of the assets of the Trust less cash and cash equivalents ^{1, 4}

1,091,245

1,124,690

918,519

Mortgage debt ratio (excluding convertible debentures and credit facilities) ^{1, 5}

56.8%

54.0%

52.5%

Debt ratio – convertible debentures ^{1, 6}

4.0%

4.0%

5.5%

Debt ratio – credit facilities ^{1, 7}

3.2%

3.2%

1.6%

Total debt ratio ¹

60.3%

60.5%

58.9%

1

This is a non-IFRS financial measure.

2

Before unamortized financing expenses and fair value assumption adjustments.

3

Long-term debt less cash and cash equivalent is a non-IFRS financial measure, calculated as total of: (i) fixed-rate mortgage loans payable; (ii) floating rate mortgage loans payable; (iii) Series G debenture capital amount; (iv) Series F debenture capital adjusted with non-derivative component fewer conversion options exercised by holders; and (v) credit facilities, less cash, and cash equivalents. The most directly comparable IFRS measure to net debt is debt.

4

Gross value of the assets of the Trust less cash and cash equivalent is a non-IFRS financial measure defined as the Trust’s total assets adding the cumulated amortization property and equipment and removing the cash and cash equivalent. The most directly comparable IFRS measure to GVALC is total assets.

5

The mortgage debt ratio is calculated by dividing the mortgage loans outstanding by the total gross value of the assets of the Trust less cash and cash equivalent.

6

Debt ratio – convertible debentures is calculated by dividing the convertible debentures by the total gross value of the assets of the Trust less cash and cash equivalent.

7

Debt ratio – credit facilities is calculated by dividing the credit facilities by the total gross value of the assets of the Trust less cash and cash equivalent.