TORONTO–(BUSINESS WIRE)–Slate Grocery REIT (TSX: SGR.U) (TSX: SGR.UN) (the “REIT”), an owner and operator of U.S. grocery-anchored real estate, announced today that each of the trustee nominees listed in the management information circular of the REIT dated April 3, 2023 were elected as trustees of the REIT at its annual meeting of the holders (“Unitholders”) of class A units, class I units, class U units and special voting units of the REIT held on May 4, 2023 (the “AGM”). Voting results for the individual trustees are as follows:

Name of Nominee		Voted For		%		Voted Withheld		%
Colum Bastable		16,071,227		92.28		1,344,469		7.72
Christopher Chee		16,435,437		94.37		980,259		5.63
Patrick Flatley		16,420,791		94.29		994,905		5.71
Marc Rouleau		14,630,920		84.01		2,784,776		15.99
Andrea Stephen		16,064,527		92.24		1,351,169		7.76
Mary Vitug		16,426,120		94.32		989,576		5.68
Blair Welch		16,301,179		93.60		1,114,517		6.40
Brady Welch		16,286,768		93.52		1,128,928		6.48

The resolution to re-appoint Deloitte LLP as the auditors of the REIT for the ensuing year and to authorize the trustees to fix the remuneration to be paid by the auditors was approved by 81.29% of the votes.

Final results on all matters voted upon at the AGM will be filed with the Canadian securities regulatory authorities and will be available on the REIT’s SEDAR profile at www.sedar.com.

Q1 2023 Earnings Call Transcript and Investor Update

Slate Grocery REIT’s Q1 2023 earnings call transcript and investor update are now available on the REIT’s website and can be accessed by visiting the following links:

• Slate Grocery REIT – Q1 2023 earnings call transcript
• Slate Grocery REIT – Q1 2023 investor update

About Slate Grocery REIT (TSX: SGR.U / SGR.UN)

Slate Grocery REIT is an owner and operator of U.S. grocery-anchored real estate. The REIT owns and operates approximately U.S. $2.4 billion of critical real estate infrastructure across major U.S. metro markets that communities rely upon for their everyday needs. The REIT’s resilient grocery-anchored portfolio and strong credit tenants provide unitholders with durable cash flows and the potential for capital appreciation over the longer term. Visit slategroceryreit.com to learn more about the REIT.

About Slate Asset Management

Slate Asset Management is a global alternative investment platform targeting real assets. We focus on fundamentals with the objective of creating long-term value for our investors and partners. Slate’s platform has a range of real estate and infrastructure investment strategies, including opportunistic, value add, core plus, and debt investments. We are supported by exceptional people and flexible capital, which enable us to originate and execute on a wide range of compelling investment opportunities. Visit slateam.com to learn more.

Forward-Looking Statements

Certain information herein constitutes “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 the REIT. The words “plans”, “expects”, “does not expect”, “scheduled”, “estimates”, “intends”, “anticipates”, “does not anticipate”, “projects”, “believes”, or variations of such words and phrases or statements to the effect that certain actions, events or results “may”, “will”, “could”, “would”, “might”, “occur”, “be achieved”, or “continue” and similar expressions identify forward-looking statements. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations.

Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management as of the date hereof, are inherently subject to significant business, economic and competitive uncertainties and contingencies. 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. A number of factors could cause actual results to differ, possibly materially, from the results discussed in the forward-looking statements. Additional information about risks and uncertainties is contained in the filings of the REIT with securities regulators.

SGR-FR

Contacts

For Further Information
Investor Relations

+1 416 644 4264

ir@slateam.com

This press release contains forward-looking information that is based upon assumptions and is subject to risks and uncertainties as indicated in the cautionary note contained within this press release. All dollar amounts in our tables are presented in thousands of Canadian dollars, except for rental rates and per unit amounts, unless otherwise stated.

TORONTO–(BUSINESS WIRE)–DREAM OFFICE REAL ESTATE INVESTMENT TRUST (D.UN-TSX) (“Dream Office REIT”, the “Trust” or “we”) today announced its financial results for the three months ended March 31, 2023 and provided a business update.

OPERATIONAL HIGHLIGHTS
(unaudited)
	As at
	March 31,				December 31,			March 31,
		2023			2022			2022
Total properties(1)
Number of active properties		26			26			29
Number of properties under development		2			2			1
Gross leasable area (in millions of square feet)		5.1			5.1			5.5
Investment properties value	$	2,386,395		$	2,382,883		$	2,596,240
Total portfolio(2)
Occupancy rate – including committed (period-end)(3)		84.0%			84.4%			85.0%
Occupancy rate – in-place (period-end)(3)		80.2%			81.0%			81.7%
Average in-place and committed net rent per square foot (period-end)	$	25.13		$	24.90		$	23.25
Weighted average lease term (years)		5.2			5.3			5.4
See footnotes at end.

		Three months ended
		March 31,			March 31,
		2023			2022
Operating results
Funds from operations (“FFO”)(4)	$	18,857		$	21,043
Comparative properties net operating income (“NOI”)(5)		27,325			26,657
Net rental income		26,172			25,863
Net income		1,378			52,282
Per unit amounts
Diluted FFO per unit(6)	$	0.36		$	0.39
Distribution rate per Unit		0.25			0.25
See footnotes at end.

“After more than three years of COVID, the future of the office sector continues to remain uncertain although there are many ways to achieve value in Dream Office REIT through uses other than as traditional office buildings,” said Michael Cooper, Chief Executive Officer of Dream Office REIT. “The sale of 720 Bay to reduce debt and repurchase units was one such example and we will continue to identify opportunities to increase value for our unitholders.”

• Net income for the quarter: For the three months ended March 31, 2023, the Trust generated net income of $1.4 million. Included in net income for the three months ended March 31, 2023 are net rental income totalling $26.2 million, net income from our investment in Dream Industrial Real Estate Investment Trust (“Dream Industrial REIT”) totalling $2.4 million and positive fair value adjustments to financial instruments totalling $2.8 million, primarily due to the revaluation of the subsidiary redeemable units as a result of a decrease in the Trust’s unit price, which were partially offset by negative fair value adjustments to investment properties totalling $12.1 million across the portfolio.

• Diluted FFO per unit⁽⁶⁾ for the quarter: For the three months ended March 31, 2023, diluted FFO per unit decreased by $0.03 per unit to $0.36 per unit relative to $0.39 per unit in Q1 2022, driven by higher interest expense (-$0.05), partially offset by higher FFO⁽⁴⁾ from our investment in Dream Industrial REIT (+$0.01) and higher comparative properties NOI (+$0.01).

• Net rental income for the quarter: Net rental income for the three months ended March 31, 2023 increased by $0.3 million relative to the prior year comparative quarter due to higher rental rates across the portfolio and a net decrease in provisions for bad debt during the quarter, partially offset by the sale of 720 Bay Street.

• Comparative properties NOI⁽⁵⁾ for the quarter: For the three months ended March 31, 2023, comparative properties NOI increased by 2.5%, or $0.7 million, over the prior year comparative quarter, primarily driven by higher in-place net rents across the portfolio from rent step ups, higher rates on new leases and renewals and overall higher parking revenues of $0.4 million across the portfolio. Partially offsetting the increases was lower weighted average in-place occupancy in both regions.

  We are actively managing our assets in the Toronto downtown region, which represent 82% of our active portfolio investment property fair values, to improve the quality of the buildings and to continue to improve rental rates in this market. For our assets in the Other markets region, which make up the remaining 18% of our active portfolio investment properties fair value, we are repositioning these assets to improve occupancy and liquidity in the private market.

• In-place occupancy: Total portfolio in-place occupancy on a quarter-over-quarter basis decreased by 0.8% relative to Q4 2022. In the Other markets region, in-place occupancy decreased by 1.1% relative to Q4 2022 as 36,000 square feet of expiries were partially offset by 11,000 square feet of renewals and 2,000 square feet of new lease commencements. In Toronto downtown, in-place occupancy decreased by 0.6% relative to Q4 2022 as 123,000 square feet of expiries were partially offset by 59,000 square feet of renewals and 48,000 square feet of new lease commencements.

  Total portfolio in-place occupancy on a year-over-year basis decreased from 81.7% at Q1 2022 to 80.2% this quarter due to negative absorption in Toronto downtown and the sale of 720 Bay Street in Q1 2023 along with negative absorption in Other markets, partially offset by the sale of Princeton Tower in Saskatoon in Q3 2022.

• Lease commencements for the quarter: For the three months ended March 31, 2023, 107,000 square feet of leases commenced in Toronto downtown at $30.47 per square foot, or 22.8% higher than the previous rent in the same space with a weighted average lease term of 7.1 years. In the Other markets region, 13,000 square feet of leases commenced at $21.55 per square foot, or 11.2% higher than the previous rents in the same space with a weighted average lease term of 5.1 years.

  The renewal and relocation rate to expiring rate spread for the quarter was 13.5% above expiring rates on 70,000 square feet of renewals.

BUSINESS UPDATE

As at March 31, 2023, the Trust had $2.9 billion of total assets, $2.4 billion of investment properties and $1.3 billion of total debt.

During Q1 2023, the Trust executed leases totalling approximately 184,000 square feet across our portfolio. In Toronto downtown, the Trust executed 178,000 square feet of leases at a weighted average initial net rent of $31.36 per square foot, or 9.8% higher than the weighted average prior net rent per square foot on the same space, with a weighted average lease term of 5.6 years. In the Other markets region, comprising our properties located in Calgary, Saskatoon, Regina, Mississauga, Scarborough, and the United States (“U.S.”), we executed leases totalling 6,000 square feet at a weighted average net rent of $21.43 per square foot, an increase of 4.4% from the weighted average prior net rent on the same space, with a weighted average lease term of 2.4 years.

To date, the Trust has secured commitments for approximately 705,000 square feet, or 103%, of 2023 full-year natural lease expiries. In Toronto downtown, 33,000 square feet, or approximately 1% of the region’s gross leasable area, is currently being held intentionally vacant for retail repositioning and property improvement purposes.

We remain committed to investing in our well-located real estate portfolio in downtown Toronto to distinguish our assets and attract unique tenants. During 2022, we took 366 Bay Street and 67 Richmond Street West in Toronto offline to fully revitalize the assets. The projects are expected to be completed and ready to lease in Q3 2023 and Q2 2024, respectively. We are currently in active discussions with potential tenants for the buildings on completion. At 67 Richmond Street West, we have completed a lease with a premium restaurant tenant for the ground floor retail space which commences during Q2 2023.

At 67 Richmond Street West and 366 Bay Street, the development projects comprise full modernizations of the properties, including technical systems, interior lighting and elevators, along with enhanced common areas and larger floorplates. The Trust is targeting certain building and project certifications as part of the development projects. A portion of the development costs for these buildings satisfy the terms of the unsecured non-revolving credit facility and term credit facility with the Canada Infrastructure Bank (the “CIB Facility”), which gives the Trust access to an attractive financing program to decarbonize the properties.

During Q1 2023, we settled our zoning by-law appeal with the City of Toronto for our development at 212-220 King Street West in Toronto, Ontario. We are currently working through next steps with our partner. The density approval is for 535,000 square feet of gross floor area, comprising 438,500 square feet of residential area and 96,500 square feet square feet of commercial space including office, retail and hotel, at the Trust’s 50% interest.

As at March 31, 2023, the Trust had approximately $231.3 million of available liquidity⁽⁷⁾, comprising $12.4 million of cash, undrawn revolving credit facilities totalling $116.6 million and undrawn amounts on our CIB Facility of $102.2 million which offers low-cost fixed-rate financing for commercial property retrofits to achieve certain energy efficiency savings and greenhouse gas emission reductions. The Trust also had $105 million of unencumbered assets⁽⁸⁾ and a level of debt (net total debt-to-net total assets)⁽⁹⁾ of 43.0%. On January 30, 2023, the Trust sold 720 Bay Street in Toronto, Ontario for $135 million, the net proceeds of which were used to repay drawings on the $375 million credit facility, reducing leverage from 44.6% as at December 31, 2022 to 43.0% as at March 31, 2023.

During Q1 2023, the Trust drew $2.7 million against the CIB Facility. Since entering into the facility in 2022, we have drawn $10.6 million against that facility. These draws represent 80% of the costs to date for capital retrofits at ten properties in Toronto downtown for projects to reduce the operational carbon emissions in these buildings by an estimated 1,805 tonnes of carbon dioxide, or 52.9%, per year on project completion.

“Dream Office REIT is pleased to deliver its first positive quarter of year-over-year comparative properties NOI growth in Toronto downtown since the pandemic,” said Jay Jiang, Chief Financial Officer of Dream Office REIT. “We are continuing to execute leases at a healthy spread against expiring rents, keeping committed occupancy relatively stable and have already secured leases for over 100% of 2023 lease expiries.”

CAPITAL HIGHLIGHTS
KEY FINANCIAL PERFORMANCE METRICS				As at
(unaudited)		March 31,		December 31,
		2023		2022
Financing
Weighted average face rate of interest on debt (period-end)(10)		4.24%		4.42%
Interest coverage ratio (times)(11)		2.3		2.5
Net total debt-to-normalized adjusted EBITDAFV ratio (years)(12)		10.3		10.4
Level of debt (net total debt-to-net total assets)(9)		43.0%		44.6%
Average term to maturity on debt (years)		3.0		3.1
Undrawn credit facilities, available liquidity and unencumbered assets
Undrawn credit facilities (in millions)	$	218.8	$	163.5
Available liquidity (in millions)(7)		231.3		171.6
Unencumbered assets (in millions)(8)		104.8		115.7
Capital (period-end)
Total number of REIT A and LP B units (in millions)(13)		50.3		51.3
Net asset value (“NAV”) per unit(14)	$	31.50	$	31.36
See footnotes at end.

• NAV per unit⁽¹⁴⁾: As at March 31, 2023, our NAV per unit increased to $31.50 compared to $31.36 at December 31, 2022. The increase in NAV per unit relative to December 31, 2022 is driven by cash flow retention (FFO net of distributions) and the effect of accretive unit repurchases under our normal course issuer bid program, partially offset by fair value losses on investment properties in both regions due to maintenance capital spent but not capitalized. As at March 31, 2023, equity per the condensed consolidated financial statements was $1.5 billion.

• Investment property disposition: On January 30, 2023, the Trust completed the sale of 720 Bay Street located in Toronto, Ontario for total gross proceeds before adjustments and transaction costs of $135.0 million. Proceeds from the disposition were used to repay drawings on the Trust’s revolving credit facilities.

• Mortgage extension: On March 13, 2023, the Trust extended the maturity of a $44.3 million mortgage secured by an investment property in downtown Toronto to a new maturity date of May 31, 2025. In connection with the renewal, the Trust entered into a fixed-for-variable swap to fix the interest rate on the mortgage at 5.03%.

• Demand revolving credit facility: On February 10, 2023, the Trust entered into a $20 million demand revolving credit facility secured by a property in Saskatoon, Saskatchewan. The demand revolving credit facility bears interest at the bankers’ acceptance rate plus 2.00% or at the bank’s prime rate plus 0.50%. The facility is due on demand with no fixed maturity.

CONFERENCE CALL

Dream Office REIT holds semi-annual conference calls following the release of second and fourth quarter results.

OTHER INFORMATION

Information appearing in this press release is a selected summary of results. The consolidated financial statements and Management’s Discussion and Analysis (“MD&A”) of the Trust are available at www.dreamofficereit.ca and on www.sedar.com.

Dream Office REIT is an unincorporated, open-ended real estate investment trust. Dream Office REIT is a premier office landlord in downtown Toronto with over 3.5 million square feet owned and managed. We have carefully curated an investment portfolio of high-quality assets in irreplaceable locations in one of the finest office markets in the world. For more information, please visit our website at www.dreamofficereit.ca.

FOOTNOTES

(1)		Excludes properties held for sale and joint ventures that are equity accounted at the end of each period.
(2)		Excludes properties under development, properties held for sale and joint ventures that are equity accounted at the end of each period.
(3)		Occupancy figures as at March 31, 2022 include sold properties 720 Bay Street in Toronto and Princeton Tower in Saskatoon. Excluding these properties from March 31, 2022 figures, total portfolio in-place occupancy would have been 81.7% and in-place and committed occupancy would have been 85.3%. In Toronto downtown, in-place occupancy would have been 83.5% and in-place and committed occupancy would have been 87.7%.
(4)		FFO is a non-GAAP financial measure. The most directly comparable financial measure to FFO is net income. The tables included in the Appendices section of this press release reconcile FFO for the three months ended March 31, 2023 and March 31, 2022 to net income. For further information on this non-GAAP financial measure please refer to the statements under the heading “Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures” in this press release.
(5)		Comparative properties NOI is a non-GAAP financial measure. The most directly comparable financial measure to comparative properties NOI is net rental income. The tables included in the Appendices section of this press release reconcile comparative properties NOI for the three months ended March 31, 2023 and March 31, 2022 to net rental income. For further information on this non-GAAP financial measure, please refer to the statements under the heading “Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures” in this press release.
(6)		Diluted FFO per unit is a non-GAAP ratio. Diluted FFO per unit is calculated as FFO (a non-GAAP financial measure) divided by diluted weighted average number of units. For further information on this non-GAAP ratio, please refer to the statements under the heading “Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures” in this press release. A description of the determination of the diluted weighted average number of units can be found in the management’s discussion and analysis of the financial condition and results of operations of the Trust for the three months ended March 31, 2023, dated May 4, 2023 (the “MD&A for the first quarter of 2023”) in the section “Supplementary Financial Measures and Other Disclosures” under the heading “Weighted average number of units”.
(7)		Available liquidity is a non-GAAP financial measure. The most directly comparable financial measure to available liquidity is undrawn credit facilities. The tables included in the Appendices section of this press release reconcile available liquidity to undrawn credit facilities as at March 31, 2023 and December 31, 2022. For further information on this non-GAAP financial measure please refer to the statements under the heading “Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures” in this press release.
(8)		Unencumbered assets is a supplementary financial measure. For further information on this supplementary financial measure, please refer to the statements under the heading “Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures” in this press release.
(9)		Level of debt (net total debt-to-net total assets) is a non-GAAP ratio. Net total debt-to-net total assets comprises net total debt (a non-GAAP financial measure) divided by net total assets (a non-GAAP financial measure). The tables in the Appendices section reconcile net total debt and net total assets to total debt and total assets, the most directly comparable financial measures to these non-GAAP financial measures, respectively, as at March 31, 2023 and December 31, 2022. For further information on this non-GAAP ratio and these non-GAAP financial measures, please refer to the statements under the heading “Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures” in this press release.
(10)		Weighted average face rate of interest on debt is calculated as the weighted average face rate of all interest-bearing debt balances excluding debt in joint ventures that are equity accounted.
(11)		Interest coverage ratio (times) is a non-GAAP ratio. Interest coverage ratio comprises trailing 12-month adjusted EBITDAFV divided by trailing 12-month interest expense on debt. Adjusted EBITDAFV, trailing 12-month adjusted EBITDAFV and trailing 12-month interest expense on debt are non-GAAP measures. The tables in the Appendices section reconcile adjusted EBITDAFV to net income for the three months ended March 31, 2023 and March 31, 2022 and for the year ended December 31, 2022 and trailing 12-month adjusted EBITDAFV and trailing 12-month interest expense on debt to adjusted EBITDAFV and interest expense on debt, respectively, for the trailing 12-month period ended March 31, 2023. For further information on this non-GAAP ratio and these non-GAAP financial measures, please refer to the statements under the heading “Non-GAAP Financial Measures and Ratios and Supplementary Financial Measures” in this press release.
(12)		Net total debt-to-normalized adjusted EBITDAFV ratio (years) is a non-GAAP ratio. Net total debt-to-normalized adjusted EBITDAFV comprises net total debt (a non-GAAP financial measure) divided by normalized adjusted EBITDAFV (a non-GAAP financial measure). Normalized adjusted EBITDAFV comprises adjusted EBITDAFV (a non-GAAP financial measure) adjusted for NOI from sold properties in the quarter. For further information on this non-GAAP ratio and these non-GAAP financial measures, please refer to the statements under the heading “Non-GAAP Financial Measures and Ratios and Supplementary Financial Measures” in this press release.
(13)		Total number of REIT A and LP B units includes 5.2 million LP B Units which are classified as a liability under IFRS.
(14)		NAV per unit is a non-GAAP ratio. NAV per unit is calculated as Total equity (including LP B Units) (a non-GAAP financial measure) divided by the total number of REIT A and LP B units outstanding as at the end of the period. Total equity (including LP B Units) is a non-GAAP measure. The most directly comparable financial measure to total equity (including LP B Units) is equity. The tables included in the Appendices section of this press release reconcile total equity (including LP B Units) to equity as at March 31, 2023 and December 31, 2022. For further information on this non-GAAP financial measure please refer to the statements under the heading “Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures” in this press release.

NON-GAAP FINANCIAL MEASURES, RATIOS AND SUPPLEMENTARY FINANCIAL MEASURES

The Trust’s condensed consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). In this press release, as a complement to results provided in accordance with IFRS, the Trust discloses and discusses certain non-GAAP financial measures, including FFO, comparative properties NOI, available liquidity, adjusted EBITDAFV, trailing 12-month adjusted EBITDAFV, trailing 12-month interest expense on debt, net total debt, net total assets, normalized adjusted EBITDAFV – annualized and total equity (including LP B Units or subsidiary redeemable units) and non-GAAP ratios, including diluted FFO per unit, level of debt (net total debt-to-net total assets), interest coverage ratio, net total debt-to-normalized adjusted EBITDAFV and NAV per unit, as well as other measures discussed elsewhere in this release. These non-GAAP financial measures and ratios are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other issuers. The Trust has presented such non-GAAP financial measures and non-GAAP ratios as Management believes they are relevant measures of the Trust’s underlying operating and financial performance. Certain additional disclosures such as the composition, usefulness and changes, as applicable, of the non-GAAP financial measures and ratios included in this press release are expressly incorporated by reference from the MD&A for the first quarter of 2023 and can be found under the section “Non-GAAP Financial Measures and Ratios” and respective sub-headings labelled “Funds from operations and diluted FFO per unit”, “Comparative properties NOI”, “Level of debt (net total debt-to-net total assets)”, “Net total debt-to-normalized adjusted EBITDAFV ratio (years)”, “Interest coverage ratio (times)”, “Available liquidity”, “Total equity (including LP B Units or subsidiary redeemable units)”, “Adjusted earnings before interest, taxes, depreciation, amortization and fair value adjustments (“adjusted EBITDAFV”)”, “Trailing 12-month Adjusted EBITDAFV and trailing 12-month interest expense on debt”, and “ NAV per Unit”. In this press release, the Trust also discloses and discusses certain supplementary financial measures, including unencumbered assets. The composition of supplementary financial measures included in this press release are expressly incorporated by reference from the MD&A for the first quarter of 2023 and can be found under the section “Supplementary financial measures and ratios and other disclosures”. The MD&A for the first quarter of 2023 is available on SEDAR at www.sedar.com under the Trust’s profile and on the Trust’s website at www.dreamofficereit.ca under the Investors section. Non-GAAP financial measures should not be considered as alternatives to net income, net rental income, cash flows generated from (utilized in) operating activities, cash and cash equivalents, total assets, non-current debt, total equity, or comparable metrics determined in accordance with IFRS as indicators of the Trust’s performance, liquidity, leverage, cash flow, and profitability.

Contacts

For further information:

Michael J. Cooper
Chairman and Chief Executive Officer

(416) 365-5145

mcooper@dream.ca

Jay Jiang
Chief Financial Officer

(416) 365-6638

jjiang@dream.ca

Read full story here

TORONTO–(BUSINESS WIRE)–DREAM OFFICE REAL ESTATE INVESTMENT TRUST (D.UN-TSX) (“Dream Office REIT”, the “Trust” or “we”) today announced it has entered into an agreement to sell, on a bought deal basis, 12,500,000 units of Dream Industrial REIT (DIR.UN-TSX) (the “DIR Units”) at a price of $14.20 per DIR Unit to a syndicate of underwriters led by TD Securities Inc. (the “Underwriters”) for total gross proceeds of approximately $177.5 million (the “Secondary Offering”). Closing of the Secondary Offering is subject to certain customary conditions. The Secondary Offering is expected to close on or about May 16, 2023.

The Trust intends to use the net proceeds from the Secondary Offering, together with cash on hand and drawings under the Trust’s existing credit facility to fund the commencement of a substantial issuer bid (the “SIB Offer”) pursuant to which the Trust will offer to purchase up to 12,500,000 of its outstanding REIT units, Series A (“REIT A Units”) at a purchase price of $15.50 per REIT A Unit in cash (the “Purchase Price”).

Consistent with the Trust’s strategy of maximizing net asset value (“NAV”) per unit for our unitholders, the Trust’s Board of Trustees has authorized the commencement of the SIB Offer as it allows the Trust to monetize a portion of its holdings of 26,039,307 units of Dream Industrial REIT and to offer our unitholders the option to either access liquidity by selling their REIT A Units for cash at a premium to the current trading price of the REIT A Units or potentially increase their ownership in the Trust.

Holders of LP Class B Units, Series 1 of Dream Office LP (“LP B Units”), a subsidiary of the Trust, will be permitted to participate in the SIB Offer by tendering their LP B Units on an as-exchanged basis.

The Purchase Price represents a 23% premium over the closing price of the REIT A Units on the Toronto Stock Exchange on May 4, 2023, the last full trading day prior to this announcement. As at March 31, 2023, the NAV per unit of Dream Office REIT was $31.50 and the NAV per unit of Dream Industrial REIT was $17.03.

Relative to the Trust’s NAV per unit of $31.50¹ as at March 31, 2023, provided the SIB Offer is successful and fully tendered, the Trust’s pro forma NAV per unit is expected to be approximately $35.85, before transaction costs and fees.

Dream Unlimited Corp. (“Dream”) has advised the Trust that it intends to participate in the SIB Offer, although Dream expects to make a determination of the number of REIT A Units or LP B Units to tender closer to the expiration date of the SIB Offer based on prevailing market conditions and other factors at that time.

“Dream Office has an exceptional portfolio of office properties. The Trust’s ownership in Dream Industrial REIT units represent in excess of 60% of the overall market cap of the Trust. The SIB Offer represents unit repurchases at approximately 51% discount to March 31, 2023 NAV per unit and provides unitholders the ability to maintain the same exposure to the office assets while receiving approximately 31% of the market capitalization of Dream Office. Each unitholder can choose to increase their ownership of Dream Office or more or less maintain their ownership per cent and reduce their capital investment. We will look to opportunistically sell or partner on our existing assets to continually reduce leverage and increase the value of our business,” said Michael Cooper, Chief Executive Officer of Dream Office REIT.

Details of the SIB Offer

Details of the SIB Offer, including instructions for tendering REIT A Units to the SIB Offer and the factors considered by the Board of Trustees in making its decision to approve the SIB Offer, will be included in the formal offer to purchase and issuer bid circular and other related documents (the “Offer Documents”), which are expected to be mailed to unitholders, filed with applicable Canadian Securities Administrators and made available free of charge on or about May 10, 2023 on SEDAR at www.sedar.com and on the Trust’s website at www.dreamofficereit.ca. Unitholders should carefully read the Offer Documents prior to making a decision with respect to the SIB Offer. The SIB Offer will not be conditional on any minimum number of REIT A Units being tendered, but will be subject to various other conditions that are typical for a transaction of this nature.

The SIB Offer will expire at 5:00 p.m. Eastern time on June 19, 2023, unless terminated or extended by the Trust. If more than 12,500,000 REIT A Units are properly tendered to the SIB Offer, the Trust will take-up and pay for the tendered REIT A Units on a pro-rata basis according to the number of REIT A Units tendered, except that “odd lot” tenders (holders beneficially owning fewer than 100 REIT A Units) will not be subject to pro-ration. Assuming that 12,500,000 REIT A Units are purchased pursuant to the SIB Offer, the aggregate purchase price pursuant to the SIB Offer will be $193,750,000. The Trust intends to fund the SIB Offer with a combination of proceeds from the DIR Offering, cash on hand and drawings under the Trust’s existing credit facility.

Our Board of Trustees has obtained an opinion from Cormark Securities Inc. to the effect that, based on and subject to the assumptions and limitations stated in such opinion, there is a liquid market for our REIT A Units as of May 4, 2023 and it is reasonable to conclude that, following the completion of the SIB Offer in accordance with its terms, there will be a market for unitholders who do not tender to the SIB Offer that is not materially less liquid than the market that existed at the time of the making of the SIB Offer. A copy of the opinion of Cormark Securities Inc. will be included in the Issuer Bid Circular.

Our Board of Trustees has authorized the making of the SIB Offer. However, our Board of Trustees is not making any recommendation to any Dream Office REIT unitholder as to whether to tender or refrain from tendering their REIT A Units under the SIB Offer. Unitholders are strongly urged to consult their own financial, tax and legal advisors and to make their own decisions whether to tender or to refrain from tendering their REIT A Units to the SIB Offer and, if so, how many REIT A Units to tender.

Any questions or requests for information may be directed to Computershare Investor Services Inc., as the depositary for the SIB Offer, at 1-800-564-6253 (Toll Free).

About Dream Office REIT

Dream Office REIT is an unincorporated, open-ended real estate investment trust. Dream Office REIT is a premier office landlord in downtown Toronto with over 3.5 million square feet owned and managed. We have carefully curated an investment portfolio of high-quality assets in irreplaceable locations in one of the finest office markets in the world. For more information, please visit our website at www.dreamofficereit.ca.

FOOTNOTE

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NAV per unit is a non-GAAP ratio. NAV per unit is calculated as Total equity (including LP B Units) (a non-GAAP financial measure) divided by the total number of REIT A Units and LP B Units outstanding as at the end of the period. Total equity (including LP B Units) is a non-GAAP measure. The most directly comparable financial measure to total equity (including LP B Units) is equity. For a reconciliation of total equity (including LP B Units) to equity, please see the section “Non-GAAP Financial Measures and Ratios” in the Management’s Discussion & Analysis of Dream Office REIT which section is incorporated by reference herein and as filed under Dream Office REIT’s profile on SEDAR at www.sedar.com. For further information on this non-GAAP financial measure please refer to the statements under the heading “Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures” in this press release.

FORWARD LOOKING INFORMATION

This press release may contain forward-looking information within the meaning of applicable securities legislation, including statements regarding our strategy of maximizing NAV per unit, our ability to opportunistically sell or partner on existing assets, our ability to increase the value of the Trust’s business, the anticipated closing of the DIR Offering; the use of net proceeds from any financings, including the net proceeds from the DIR Offering; our intention to undertake the SIB Offer and the terms thereof, including the aggregate number and purchase price of the REIT A Units we may purchase under the SIB Offer, the expected expiration time of the SIB Offer, the sources and availability of funding for the SIB Offer, the anticipated reduction in the number of outstanding REIT A Units following successful completion of the SIB Offer; and the Trust’s pro forma NAV per unit following the following successful completion of the SIB Offer. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dream Office REIT’s control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, general and local economic and business conditions, including in respect of real estate; mortgage and interest rates and regulations; inflation; risks related to a potential recession or economic slowdown in certain of the jurisdictions in which we operate and the effect inflation and any such recession or economic slowdown may have on market conditions and lease rates; the uncertainties around the availability, timing and amount of future equity and debt financings; development risks including construction costs, the project timings and the availability of labour; NOI from development properties on completion; the impact of the COVID-19 pandemic on the Trust; the effect of government restrictions on leasing and building traffic; employment levels; the uncertainties around the timing and amount of future financings; leasing risks, including those associated with the ability to lease vacant space; rental rates on future leasing; and interest and currency rate fluctuations. Our objectives and forward-looking statements are based on certain assumptions, which include but are not limited to: that the general economy remains stable; our interest costs will be relatively low and stable; that we will have the ability to refinance our debts as they mature; inflation and interest rates will not materially increase beyond current market expectations; conditions within the real estate market remain consistent; the timing and extent of current and prospective tenants’ return to the office; our future projects and plans will proceed as anticipated; that government restrictions due to COVID-19 on the ability of us and our tenants to operate their businesses at our properties will not be re-imposed in any material respects; competition for acquisitions remains consistent with the current climate; and that the capital markets continue to provide ready access to equity and/or debt to fund our future projects and plans. All forward-looking information in this press release speaks as of the date of this press release. Dream Office REIT does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise except as required by law. Additional information about these assumptions and risks and uncertainties is contained in Dream Office REIT’s filings with securities regulators, including its latest annual information form and management’s discussion and analysis (“MD&A”). These filings are also available at Dream Office REIT’s website at www.dreamofficereit.ca.

NON-GAAP FINANCIAL MEASURES, RATIOS AND SUPPLEMENTARY FINANCIAL MEASURES

The Trust’s consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). In this press release, as a complement to results provided in accordance with IFRS, the Trust discloses and discusses certain non-GAAP financial measures, including total equity (including LP B Units) and non-GAAP ratios, including NAV per unit, as well as other measures discussed elsewhere in this release. These non-GAAP financial measures and ratios are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other issuers. The Trust has presented such non-GAAP financial measures and non-GAAP ratios as Management believes they are relevant measures of the Trust’s underlying operating and financial performance. Certain additional disclosures such as the composition, usefulness and changes, as applicable, of the non-GAAP financial measures and ratios included in this press release are expressly incorporated by reference from the MD&A for the first quarter of 2023 and can be found under the section “Non-GAAP Financial Measures and Ratios” and sub-heading labelled “NAV per Unit”. The MD&A for the first quarter of 2023 is available on SEDAR at www.sedar.com under the Trust’s profile and on the Trust’s website at www.dreamofficereit.ca under the Investors section. Non-GAAP financial measures should not be considered as alternatives to net income, net rental income, cash flows generated from (utilized in) operating activities, cash and cash equivalents, total assets, non-current debt, total equity, or comparable metrics determined in accordance with IFRS as indicators of the Trust’s performance, liquidity, leverage, cash flow, and profitability.

Contacts

Michael J. Cooper

Chief Executive Officer

(416) 365-5145

mcooper@dream.ca

Jay Jiang

Chief Financial Officer

(416) 365-6638

jjiang@dream.ca