Mr. Michel Leonard reports

STRONG GROWTH AND RESILIENCE: BTB'S PORTFOLIO DELIVERS, AGAIN, SOLID PERFORMANCE IN Q2 2023

BTB Real Estate Investment Trust has released its financial results for the second quarter of 2023, compared with the same period of 2022, and has released the following highlights and information:

• Rental revenue: stood at $31.7-million for the current quarter, which represents an increase of 9.4 per cent compared with the same quarter of 2022; for the cumulative six-month period, the rental revenue totalled $64.6-million, which represents an increase of 11.3 per cent compared with the same period in 2022;
• Net operating income (NOI): stood at $19.0-million for the current quarter, which represents an increase of 8.2 per cent compared with the same quarter of 2022; for the cumulative six-month period, the NOI totalled $38.0-million, which represents an increase of 12.5 per cent compared with the same period in 2022;
• Net operating and comprehensive income: totalled $10.8-million for the quarter ($19.6-million for the 2023 cumulative six-month period) compared with $18.2-million for the same period in 2022 ($24.7-million for the 2022 cumulative six-month period), representing a decrease of $7.4-million; the decrease is caused by a reduction of non-cash gain in net adjustment to fair value of derivative financial instruments of $8.6-million and an increase in the financial expenses of $1.2-million;
• Adjusted earnings before interest, taxes, depreciation and amortization (EBIDTA) (1) for the quarter increased by $1.6-million compared with the same period last year;
• Same-property NOI (1): increased by 1.7 per cent compared with the same quarter last year; the NOI of the industrial segment decreased by 3.9 per cent due a planned tenant departure (which space was leased to a new tenant during the quarter at a higher rental rate than that of the previous tenant) compared with the same quarter last year, and the NOI for the necessity-based retail segment increased by 15.9 per cent compared with the same quarter last year due to strong leasing efforts; for the cumulative six-month period, the same-property NOI increased by 0.9 per cent;
• Recurring funds from operations (FFO) payout ratio (1): was 63.8 per cent for the quarter compared with 65.5 per cent for the same period in 2022; for the cumulative six-month period, the recurring FFO payout ratio was 63.8 per cent compared with 67.8 per cent for the same period in 2022;
• Recurring FFO (1): was 11.8 cents per unit for the quarter compared with 11.4 cents per unit for the same period in 2022, representing an increase of 3.1 per cent; for the cumulative six-month period, the recurring FFO was 23.5 cents per unit, which represents an increase of 6.1 per cent compared with the same period in 2022;
• Recurring adjusted funds from operations (AFFO) payout ratio (1): was 69.0 per cent for the quarter compared with 68.3 per cent for the same period in 2022; for the cumulative six-month period, the recurring AFFO payout ratio was 70.5 per cent compared with 72.3 per cent for the same period in 2022;
• Recurring AFFO (1): was 10.9 cents per unit for the quarter compared with 11.0 cents per unit for the same period in 2022, representing a decrease of 0.5 per cent; for the cumulative six-month period, the recurring AFFO was 21.3 cents per unit, which represent an increase of 2.4 per cent compared with the same period in 2022;
• Leasing activity: the trust completed a total of 208,338 square feet of lease renewals and 125,223 square feet of new leases for the quarter; the occupancy rate stood at 94.1 per cent, representing a 0.9-per-cent increase compared with the prior quarter, and a 0.3-per-cent increase compared with the same period in 2022; the increase in the average rent renewal rate for the quarter was 4.9 per cent;
• Acquisition: on May 1, 2023, the trust acquired a fully leased industrial property located at 8810, 48 Ave. Northwest, in Edmonton, Alta. (83,292 square feet); as part of the transaction, the trust satisfied a portion of the purchase price through the issuance to the vendor of 550,000 Class B limited partnership units at a per-unit price of $4.50, and the balance of the purchase price was financed by the credit facility; the revenue from this acquisition contributed to the second quarter financial results;
• Debt metrics: BTB REIT ended the quarter with a total debt ratio (1) of 58.9 per cent, recording an increase of 0.4 per cent compared with Dec. 31, 2022; the trust ended the quarter with a mortgage debt ratio (1) of 52.9 per cent, a decrease of 1.3 per cent compared with Dec. 31, 2022;
• Liquidity position: BTB REIT held $3.7-million of cash at the end of the quarter; during the quarter, the trust, as provided in the initial agreement, increased the available amount under its credit facilities (2) by $10.0-million, leaving $23.7-million available on its credit facilities, with a remaining option to increase by an additional $10.0-million;
• Base shelf prospectus: On June 12, 2023, since its initial short form base shelf prospectus was nearing maturity, the trust filed a final base shelf prospectus, generally under the same terms and conditions as the previous base shelf, valid for a 25-month period for the total amount of $200.0-million.

A message from Michel Leonard, president and chief executive officer

"One of the main indicators of BTB's strong performance is the persistent leasing activity during the last quarters. The occupancy rate rose to 94.1 per cent, which represents a 0.9-per-cent increase compared to [first quarter] 2023. Our leasing team successfully maintained high occupancy levels across our diverse portfolio, showcasing the REIT's ability to attract and retain quality clients. In this perspective, our aptitude to foster long-term relationships with clients (208,338 square feet of leases renewed) and attract new businesses to our properties (125,223 square feet of new leases) should bolster investor confidence."

(1) Non-international financial reporting standard measure.

(2) Credit facilities is a term used that reconciles with the bank loans as presented and defined in the trust's consolidated financial statements and accompanying notes.

Financial information

The attached table summarizes results for the periods ended June 30, 2023, and June 30, 2022, as well as the cumulative periods for the first six months of 2023 and 2022.

Quarterly call information

Management will hold a conference call on Tuesday, Aug. 8, 2023, at 9 a.m. Eastern Time, to present BTB REIT's financial results and performance for the second quarter of 2023.

Date:  Tuesday, Aug. 8, 2023

Time:  9 a.m. Eastern Time

Dial:  local: 1-416-764-8688 or North America (toll-free): 1-888-390-0546

Visual:  A presentation will be uploaded on BTB REIT's website prior to the call.

The media and all interested parties may attend the call-in listening mode only. Conference call operators will coordinate the question-and-answer period (from analysts only) and will instruct participants regarding the procedures during the call.

The audio recording of the conference call will be available by playback until Aug. 15, 2023, by dialling: 1-416-764-8677 (local) or 1-888-390-0541 (toll-free) and by entering the following access code: 345398 followed by the number sign.

About BTB Real Estate Investment Trust

BTB REIT is a real estate investment trust listed on the Toronto Stock Exchange. BTB REIT invests in industrial, off-downtown core office and necessity-based retail properties across Canada for the benefit of its investors. As of today, BTB REIT owns and manages 75 properties, representing a total leasable area of approximately 6.1 million square feet.

People and their stories are at the heart of its success.

We seek Safe Harbor.