Mr. Samir Manji reports

ARTIS REAL ESTATE INVESTMENT TRUST RELEASES FIRST QUARTER RESULTS AND ANNOUNCES UNCONDITIONAL SALE OF HOUSTON INDUSTRIAL PORTFOLIO

Artis Real Estate Investment Trust has released its financial results for the three months ended March 31, 2024, and has closed the unconditional sale of a portfolio of industrial properties located in Houston, Tex. The first quarter results in this news release should be read in conjunction with the REIT's consolidated financial statements and management's discussion and analysis (MD&A) for the three months ended March 31, 2024. All amounts are in thousands of Canadian dollars, unless otherwise noted.

"In the first quarter of 2024, Artis achieved several important objectives, generating positive momentum to build on throughout the remainder of the year," said Samir Manji, president and chief executive officer of Artis. "Our focus on liquidity continues to drive our disposition strategy. Artis has unlocked $174.3-million through key asset dispositions in 2024, demonstrating there is still demand for quality real estate despite the challenging interest rate environment. In addition, we have $184.4-million of unconditional Canadian asset sales and $272.9-million (U.S.) of unconditional U.S. asset sales scheduled to close in the coming months. These dispositions are vital to accomplishing our primary near-term goal: strengthening the balance sheet by enhancing liquidity and reducing debt. Today's announcement regarding the upcoming sale of Park 8Ninety represents a significant milestone and addition to our list of unconditional asset sales expected to close in the near term. Collectively, these dispositions will reduce our overall leverage below 45 per cent and will lower our borrowing costs moving forward. At the same time, the fact that we are achieving sale prices in line with IFRS provides compelling validation of our $14.06 net asset value per unit. Our operational fundamentals continue to demonstrate stability quarter over quarter. Same-property net operating income growth in the first quarter was strong at 4.0 per cent, compared to the same period last year. We are optimistic about the remainder of 2024 and confident that, with the continued execution of our plan, we will be able to narrow the gap between the intrinsic value and market price of our units."

First quarter highlights

Portfolio activity:

• Acquired an additional 5-per-cent interest in Park 8Ninety V, an industrial property located in the greater Houston area in Texas, for total consideration of $4.0-million (U.S.);
• Disposed of one industrial property, one office property and one retail property located in Canada for an aggregate sale price of $38.4-million.

Balance sheet and liquidity:

• Utilized the NCIB (normal course issuer bid) to purchase 1,132,824 common units at a weighted average price of $6.11 and 233,912 preferred units at a weighted average price of $17.26;
• Reported NAV (net asset value) per unit (1) of $14.06 at March 31, 2024, improved from $13.96 at Dec. 31, 2023;
• Reported total debt to adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) (1) of 8.0 at March 31, 2024, compared with 7.7 at Dec. 31, 2023;
• Extended the maturity date of the $100.0-million non-revolving credit facility for a two-year term maturing Feb. 6, 2026.

Financial and operational:

• Sam-property NOI (net operating income) (1) in Canadian dollars for the first quarter of 2024 increased 4.0 per cent compared with the first quarter of 2023;
• Maintained strong portfolio occupancy of 89.5 per cent at March 31, 2024, compared with 90.1 per cent at Dec. 31, 2023;
• Renewals totalling 288,517 square feet and new leases totalling 49,789 square feet commenced during the first quarter of 2024;
• Weighted average rental rate on renewals that commenced during the first quarter of 2024 increased 2.2 per cent.

(1) Represents a non-GAAP (generally accepted accounting principles) measure, ratio or other supplementary financial measure.

Unconditional disposition of Park 8Ninety

On May 2, 2024, Artis entered into an unconditional sale agreement for Park 8Ninety, a portfolio of industrial properties located in the greater Houston area in Texas, for a sale price of $234.2-million (U.S.), representing a price per square foot of $128 (U.S.).

Park 8Ninety was developed in five phases between 2017 and 2022, and comprises 12 buildings that total 1,823,410 square feet of leasable area. The disposition is anticipated to close in the second quarter of 2024.

Strategic review

On Aug. 2, 2023, Artis's board of trustees established a special committee to initiate a strategic review process to consider and evaluate alternatives that may be available to the REIT to unlock and maximize value for unitholders.

On Sept. 11, 2023, the board announced that the special committee retained BMO Nesbitt Burns Inc. to provide financial advisory services to the REIT and special committee in connection with the strategic review process.

Since the announcement of the strategic review, Artis has completed or entered into unconditional agreements for $164.8-million of office assets, $218.6-million of retail assets and $377.3-million of industrial assets at values, and on terms that were acceptable to the REIT. This equates to approximately $760.7-million of asset sales (in line with the REIT's IFRS (international financial reporting standards) values), including unconditional transactions, since Aug. 2, 2023.

The REIT is continuing to evaluate opportunities relating to the sale of additional retail, office and industrial assets, with a focus on the industrial portfolio, in its efforts to further deleverage and strengthen the balance sheet, grow NAV per unit, and enhance liquidity. A portion of this liquidity may be directed toward the NCIB, which was renewed on Dec. 19, 2023.

The board remains committed to pursuing strategic alternatives that may be available to the REIT to unlock and maximize value for unitholders, including pursuing near-term opportunities available to Artis to enhance and grow NAV per unit. The work undertaken over the past several months has enabled Artis to properly assess the current environment and options available to the REIT in an effort to create and maximize value for unitholders.

There can be no assurance that the strategic review process will result in the REIT pursuing any transaction. The REIT has not set a timetable for completion of this process and does not intend to disclose further developments unless it determines that disclosure is appropriate or necessary.

Balance sheet and liquidity

The REIT's balance sheet metrics are detailed in an attached table.

At March 31, 2024, Artis had $30.6-million of cash on hand and $107.6-million available on its revolving credit facilities.

Liquidity and capital resources may be impacted by financing activities, portfolio acquisition, disposition and development activities, or debt repayments occurring subsequent to March 31, 2024.

Artis reported portfolio occupancy of 89.5 per cent at March 31, 2024, compared with 90.1 per cent at Dec. 31, 2023. Weighted average rental rate on renewals that commenced during the first quarter of 2024 increased 2.2 per cent.

Artis's portfolio has a stable lease expiry profile with 48.8 per cent of gross leasable area expiring in 2028 or later. Information about Artis's lease expiry profile is provided in an attached table.

Upcoming webcast and conference call

A conference call with management will be held on Friday, May 3, 2024, at 12 p.m. CT (1 p.m. ET). In order to participate, please dial 1-416-764-8688 or 1-888-390-0546. You will be required to identify yourself and the organization on whose behalf you are participating.

Alternatively, you may access the simultaneous webcast by following the link from the company's website. Prior to the webcast, you may follow the link to confirm you have the right software and system requirements.

If you cannot participate on Friday, May 3, 2024, a replay of the conference call will be available by dialling 1-416-764-8677 or 1-888-390-0541 and entering passcode 455732 followed by the pound key. The replay will be available until Friday, May 31, 2024. The webcast will be archived 24 hours after the end of the conference call and will be accessible for 90 days.

Notice with respect to non-GAAP and supplementary financial measures disclosure

In addition to reported IFRS measures, certain non-GAAP and supplementary financial measures are commonly used by Canadian real estate investment trusts as an indicator of financial performance. GAAP means the generally accepted accounting principles described by the CPA Canada Handbook -- Accounting, which are applicable as at the date on which any calculation using GAAP is to be made. Artis applies IFRS, which is the section of GAAP applicable to publicly accountable enterprises.

Non-GAAP measures and ratios include same-property net operating income, funds from operations (FFO), adjusted funds from operations (AFFO), FFO per unit AFFO per unit, FFO payout ratio, AFFO payout ratio, NAV per unit, total debt to GBV (gross book value), adjusted EBITDA interest coverage ratio and total debt to adjusted EBITDA.

Supplementary financial measures include unencumbered assets to unsecured debt.

Management believes that these measures are helpful to investors because they are widely recognized measures of Artis's performance and provide a relevant basis for comparison among real estate entities.

These non-GAAP and supplementary financial measures are not defined under IFRS and are not intended to represent financial performance, financial position or cash flows for the period, nor should any of these measures be viewed as an alternative to net income, cash flow from operations or other measures of financial performance calculated in accordance with IFRS.

The above measures are not standardized financial measures under the financial reporting framework used to prepare the financial statements of Artis. Readers should be further cautioned that the above measures as calculated by Artis may not be comparable with similar measures presented by other issuers. Refer to the notice with respect to non-GAAP and supplementary financial measures disclosure of Artis's Q1 2024 MD&A, which is incorporated by reference herein, for further information (available on SEDAR+ or Artis's website).

About Artis Real Estate Investment Trust

Artis is a diversified Canadian real estate investment trust with a portfolio of industrial, office and retail properties in Canada and the United States. Artis's vision is to become a best-in-class real estate asset management and investment platform focused on value investing.

We seek Safe Harbor.