Mr. Brian Pauls reports

DREAM INDUSTRIAL REIT ANNOUNCES ACQUISITION OF CAD$235 MILLION (US$179 MILLION) LOGISTICS PORTFOLIO IN FIVE CITIES ACROSS THE MIDWEST U.S. AND $125 MILLION EQUITY OFFERING

Dream Industrial Real Estate Investment Trust has waived all conditions to acquire a portfolio of 21 buildings located in five cities across the Midwest United States totalling approximately 3.5 million square feet of gross leasable area (GLA). The acquisition portfolio is well located in the attractive U.S. logistics markets of Chicago, Cincinnati, Columbus, Indianapolis and Louisville. The total purchase price for the acquisition is approximately $235-million ($179.1-million (U.S.)) and is expected to be accretive to the trust's funds from operations (FFO) per unit on a stabilized basis. The acquisition is scheduled to close by the end of the first quarter of 2019.

Acquisition portfolio highlights:

• Sizable portfolio totalling 3.5 million square feet of GLA adds immediate scale in core logistics markets in the Midwest U.S.
• Each city within the portfolio is supported by large commercial airports and intermodal transport hubs and is accessible to over 50 per cent of the U.S. population within a one-day drive.
• Strong economic fundamentals support industrial real estate (e-commerce and logistics) with the average vacancy across all markets at 5.4 per cent, and unemployment rates in each market is below 4 per cent.
• The portfolio includes an attractive mix of single-tenant assets and multitenant facilities that service a broad range of tenant uses and sizes from small bay to large distribution facilities.
• The portfolio is composed of functional distribution facilities that are well located and highly reusable and cater to a wide range of users.
• The purchase price of $179.1-million (U.S.) represents a going-in capitalization rate of 6.0 per cent and $51 (U.S.) per square foot (below estimated replacement cost of $71 (U.S.) per square foot), with 3.0-per-cent average annual rent escalators built into the leases.
• There is a near-term growth opportunity with a recent vacancy of approximately 300,000 square feet in a high-quality, well-located facility in Louisville. Following lease-up, the REIT expects the cap rate to increase to approximately 6.5 per cent.

"Consistent with our communicated strategy, the acquisition adds highly functional assets in key industrial markets that offer attractive yields with strong growth potential, while improving the overall quality of the trust's portfolio," said Brian Pauls, chief executive officer of Dream Industrial REIT. "With a total GLA of 3.5 million square feet, the acquisition portfolio enables us to establish a meaningful footprint in attractive logistics markets in the U.S. and also add scale in our existing markets. Moreover, the acquisition further highlights the trust's ability to work alongside the Pauls U.S. platform and successfully source attractive investment opportunities in our core markets at below replacement cost. Less than two years after announcing our U.S. expansion, we have successfully acquired seven million square feet of GLA, and the U.S. now represents our initial target of approximately 20 per cent of our gross asset value. Looking forward, we will continue to add portfolio scale with a primary focus on our target Canadian markets, including Ontario and Quebec."

Acquired properties and market overview (1)

The acquisition portfolio is composed of 21 high-quality and functional industrial properties (totalling approximately 3.5 million square feet of GLA) that further expand the trust's presence in the United States. The portfolio includes both single and multitenant buildings that are well located in strong U.S. logistics hubs. The properties are strategically situated in each of their respective markets, located in close proximity to major U.S. cities with excellent access to interstate highways and transportation nodes. The tenant base has invested significant capital in respective properties and consists of an attractive mix of large- and medium-sized enterprises that span across multiple industries. The portfolio is currently 91 per cent occupied, and excluding approximately 300,000 square feet recently vacated in the Louisville property, portfolio occupancy is 99.6 per cent with a weighted-average lease term of 4.1 years. With Louisville just having recorded its second strongest quarter in market history, with two million square feet of net absorption, the recent vacancy at this property provides an opportunity to enhance the trust's yield through aggressive lease-up.

(1) Certain statistical information in this section has been taken from the following sources: U.S. Bureau of Labor statistics, September, 2018, report; CBRE Chicago industrial snapshot third quarter 2018; CBRE Columbus industrial snapshot third quarter 2018; CBRE Indianapolis industrial snapshot third quarter 2018; CBRE Louisville industrial snapshot third quarter 2018; and CBRE Cincinnati industrial snapshot third quarter 2018.

Chicago, Ill.

The Chicago industrial market experienced its 33rd consecutive quarter of positive net absorption in third quarter 2018, and market vacancy is now at 3.5 per cent. Demand for mid- to large-bay space is strong with over 80 tenants looking for at least 50,000 square feet of space, for a cumulative total of 21.1 million square feet. The development pipeline represents less than 1 per cent of market inventory despite 12.5 million square feet of new supply under construction. The acquisition portfolio consists of four assets totalling 1.3 million square feet, located primarily in the O'Hare and Lake County submarkets. The vacancy rate across the respective submarkets averages 2.3 per cent.

Columbus, Ohio

Located within 500 miles of approximately 50 per cent of the combined population in the United States and Canada, Columbus serves as a major logistics hub with more than 4,400 warehouse/distribution facilities and employing 83,000 people. The acquisition portfolio includes 12 buildings totalling 1.2 million square feet in Columbus. The majority, or 11 assets, is located in the west submarket, with a low vacancy rate of 1.7 per cent. The remaining building is strategically located in the northeast submarket close to major population centres. This is the tightest submarket in the city, with a vacancy rate of only 0.8 per cent. These assets complement the trust's two existing assets in Columbus, adding scale and bringing the trust's total Columbus portfolio to two million square feet.

Indianapolis, Ind.

With seven Fortune 1000 companies headquartered in Indianapolis, the city has the eighth lowest unemployment rate amongst the 40 largest metro areas in the U.S. Indianapolis experienced 3.3 million square feet of positive net absorption during third quarter 2018, the 32nd consecutive quarter with positive net absorption. Vacancy is currently at 4.5 per cent, a postrecession low. The acquisition portfolio includes two large-bay single tenant buildings that are located in Indianapolis, totalling 632,000 square feet. The assets are well located with access to major transportation corridors and skilled labour.

Cincinnati, Ohio

Cincinnati has one of the tightest marketwide vacancy rates in the U.S., which includes absorption of a significant amount of recent industrial construction deliveries. Net absorption in third quarter 2018 totalled 1.1 million square feet with vacancy at 3.2 per cent as of third quarter 2018. The acquisition portfolio consists of two multitenant buildings totalling 140,000 square feet located adjacent to the Cincinnati Airport and in the preferred northern Kentucky submarket, which has excellent highway access and is located minutes away from Amazon Prime and DHL Supercargo hubs.

Louisville, Ky.

Industrial fundamentals in Louisville are strong with third quarter 2018 marking the second highest quarterly net absorption (two million square feet) in the history of the market, just behind second quarter 2018 of 2.6 million square feet. Vacancy in the market is 6.0 per cent, down 200 basis points year over year. The acquisition portfolio includes one 303,000-square-foot property in Louisville, which has immediate highway access and visibility along I-65. This 28-foot clear high-quality distribution and warehousing facility is the newest property in the portfolio.

Pro forma portfolio

Upon completion of the acquisition, the trust's portfolio will comprise 244 properties (including the previously announced acquisition of a property located in Montreal, which closed in October, 2018) with a total GLA of 23.7 million square feet and a pro forma gross asset value of $2.3-billion. Approximately seven million square feet or $500-million (22 per cent) of the pro forma portfolio will be located in the United States.

Acquisition financing

Equity offering

The trust has entered into an agreement to sell, on a bought deal basis, 12 million units of the trust at a price of $10.45 per unit to a syndicate of underwriters led by TD Securities Inc. for total gross proceeds of $125-million. In addition, the trust has granted the underwriters an overallotment option to purchase up to an additional 1.8 million units, exercisable in whole or in part, for a period of 30 days following closing of the offering. If the overallotment option is exercised in full, the gross proceeds of the offering will total $144-million. Closing of the offering is subject to certain customary conditions, including the approval of the Toronto Stock Exchange. The offering is expected to close on or about Feb. 13, 2019.

The trust intends to use the net proceeds from the offering to partially finance the purchase price of the acquisition and for general trust purposes. The balance of the purchase price for the acquisition will be financed from the trust's working capital and drawings on the trust's revolving credit facility.

The units will be offered by way of a shelf prospectus supplement to the trust's base-shelf prospectus dated Sept. 15, 2017, to be filed on or about Feb. 6, 2019, with the securities commissions and other similar regulatory authorities in each of the provinces of Canada.

Amended revolving credit facility

The trust announced today that it has also received lender approval to amend its existing revolving credit facility, increasing the borrowing capacity from $125-million to $150-million, with amounts available to be drawn in Canadian and/or U.S. dollars. The amendment is subject to customary closing conditions.

"The announced transactions allow us to acquire attractive assets that meet our investment criteria while reducing our leverage and increasing our financial flexibility," said Lenis Quan, chief financial officer of Dream Industrial REIT. "We remain focused on driving organic growth and improving the quality of our portfolio. For our 2019 renewals contracted to date, we have achieved rental spreads of 9.5 per cent and 11.5 per cent in Ontario and Quebec, respectively. We plan to accelerate our capital recycling program in 2019 and are well positioned with sufficient liquidity to grow our portfolio primarily in Canada by acquiring or developing best-in-class industrial assets that have strong income growth potential."

About Dream Industrial Real Estate Investment Trust

Dream Industrial REIT is an unincorporated, open-ended real estate investment trust. Dream Industrial REIT owns and operates a portfolio of 223 geographically diversified light industrial properties comprising approximately 20.2 million square feet of gross leasable area located primarily in key markets across Canada with a growing presence in the United States. Its objective is to build upon and expand its portfolio and to provide stable and sustainable cash distributions to its unitholders.

We seek Safe Harbor.