Mr. Rael Diamond reports

CHOICE PROPERTIES REAL ESTATE INVESTMENT TRUST REPORTS RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2024

Choice Properties REIT has released its consolidated financial results for the three months ended March 31, 2024. The first quarter 2024 report to unitholders is available in the investors section of the trust's website and has been filed on SEDAR+.

"The first quarter was a strong start to the year for Choice Properties as we continued to see robust tenant demand for our necessity-based properties and significant rental rate lifts on lease renewals in our industrial portfolio. We further strengthened our market-leading portfolio by executing over $60-million of real estate transactions and completing development projects worth approximately $75-million during the quarter," said Rael Diamond, president and chief executive officer of the trust. "Despite the ongoing macroeconomic uncertainty, our industry-leading balance sheet continues to provide us with a distinct advantage of allowing our team to remain focused on our core business of owning, operating and developing real estate."

First quarter 2024 highlights:

• Reported net income for the quarter of $142.3-million as compared with net income of $270.8-million in the first quarter of 2023; the change in net income from the prior year was primarily due to non-cash fair value adjustments;
• Reported funds from operations per unit diluted of 25.9 cents, an increase of 6.1 per cent compared with the first quarter of 2023;
• Period-end occupancy was 97.9 per cent:
  • Retail at 97.7 per cent, industrial at 98.8 per cent and mixed use and residential at 94.7 per cent;
• Same-asset net operating income on a cash basis increased by 2.4 per cent compared with the first quarter of 2023:
  • Retail increased by 2.5 per cent;
  • Industrial increased by 2.8 per cent;
  • Mixed use and residential decreased by 1.3 per cent;
• Completed $61.7-million of transactions in the quarter, including:
  • The acquisition of a Toronto, Ont., retail property from Loblaw Companies Ltd. for a purchase price of $38.4-million;
  • The disposition of an industrial property and a retail property for aggregate proceeds of $23.3-million;
• Transferred $74.6-million of properties under development to income-producing status, with an average yield of 5.1 per cent; the transfers included a purpose-built residential rental building located in Brampton, Ont., of 151 units at the trust's share, and a retail intensification, which added approximately 26,000 square feet of new commercial gross leasable area;
• Invested $32.1-million of capital in development projects on a proportionate share basis;
• Ended the quarter in a strong liquidity position with approximately $1.5-billion of available credit under the trust's revolving credit facility, a $12.9-billion pool of unencumbered assets and adjusted debt to EBITDAFV (earnings before interest, taxes, depreciation, amortization and fair value) of 6.9 times.

Quarterly results

Choice Properties reported net income of $142.3-million for the first quarter of 2024 as compared with net income of $270.8-million in the first quarter of 2023. The decrease of $128.5-million compared with the prior year was primarily due to changes in the non-cash adjustments to fair value, including:

• A $77.1-million unfavourable change in the adjustment to fair value of investment properties;
• A $27.7-million unfavourable change in the adjustment to fair value of the trust's exchangeable units due to the change in the trust's unit price;
• An $18.1-million unfavourable change in the income from equity accounted joint ventures primarily due to a fair value loss recognized on investment properties held within equity accounted joint ventures in the current quarter compared with a gain in the prior-year period;
• A $15.0-million unfavourable change in the adjustment to fair value of the trust's investment in the real estate securities of Allied Properties Exchangeable Limited Partnership, a subsidiary of Allied Properties Real Estate Investment Trust, driven by the decrease in Allied's unit price.

The unfavourable changes in fair value were partially offset by an increase in net operating income of $10.5-million.

Quarterly results

For the three months ended March 31, 2024, same-asset NOI, cash basis, increased by $5.6-million compared with the prior year primarily due to increased revenue from higher rental rates on renewals, new leasing, contractual rent steps, and higher recoveries in the retail and industrial portfolios.

FFO increased by $10.3-million for the three months ended March 31, 2024. The increase was primarily due to an increase in net operating income, income from the sale of residential inventory and an increase in interest income. The increase was partially offset by higher interest expense.

Outlook

The trust is focused on capital preservation, delivering stable and growing cash flows, and net asset value appreciation, all with a long-term focus. Its high-quality portfolio is primarily leased to necessity-based tenants and logistics providers, which are less sensitive to economic volatility and therefore provide stability to its overall portfolio. It continues to experience positive leasing momentum across its portfolio and is well positioned to complete its 2024 lease renewals. It also continues to advance its development program, with a focus on commercial developments in the near term, which provides it with the best opportunity to add high-quality real estate to its portfolio at a reasonable cost and drive net asset value appreciation over time.

The trust is confident that its business model, stable tenant base, strong balance sheet and disciplined approach to financial management will continue to position it well for future success. In 2024, Choice Properties will continue to focus on its core business of essential retail and industrial, its growing residential platform, and its robust development pipeline, and is targeting:

• Stable occupancy across the portfolio, resulting in 2.5-per-cent-to-3.0-per-cent year-over-year growth in same-asset NOI, cash basis;
• Annual FFO per unit diluted in a range of $1.02 to $1.03, reflecting 2.0-per-cent-to-3.0-per-cent year-over-year growth;
• Strong leverage metrics, targeting adjusted debt to EBITDAFV slightly below 7.5 times.

Management's discussion and analysis, consolidated financial statements, and notes

Information appearing in this news release is a select summary of results. This news release should be read in conjunction with the Choice Properties first quarter 2024 report to unitholders, which includes the unaudited interim period condensed consolidated financial statements and MD&A for the trust, and is available at the Choice Properties website and on SEDAR+.

Conference call and webcast

Management will host a conference call on Thursday, April 25, 2024, at 9 a.m. EDT, with a simultaneous audio webcast. To listen to the teleconference, please dial 1-240-789-2714 or 1-888-330-2454 and enter the event passcode 4788974. The link to the audio webcast will be available on the Choice Properties website.

Annual meeting of unitholders

Choice Properties' annual meeting of unitholders will be held on Thursday, April 25, 2024, at 11 a.m. EDT, in a virtual meeting format by live webcast. Unitholders can attend the meeting by joining the live webcast on-line. Refer to "How do I attend and participate in the virtual meeting?" in the management proxy circular, which can be viewed on-line at the Choice Properties website or under Choice Properties' SEDAR+ profile, for detailed instructions on how to attend and vote at the meeting. The webcast of the meeting will be archived on the Choice Properties website following the meeting. Please refer to the events and webcasts page at the Choice Properties website for additional details on the virtual meeting.

About Choice Properties REIT

Choice Properties is a leading real estate investment trust that creates enduring value and places where people thrive.

The trust brings this to life by improving how its tenants and communities come together to live, work and connect. The trust strives to understand the needs of its tenants and manage its properties to the highest standard. It aspires to develop healthy, resilient communities through its dedication to social, economic and environmental sustainability. In everything it does, it is guided by a shared set of values grounded in care, ownership, respect and excellence.

We seek Safe Harbor.