Mr. Mark Holly reports

CROMBIE REIT ANNOUNCES SECOND QUARTER 2023 RESULTS

Crombie Real Estate Investment Trust has released its results for its second quarter ended June 30, 2023. Management will host a conference call to discuss the results at 12 p.m. EDT, Aug. 10, 2023.

"Crombie's stable portfolio delivered solid results this quarter, with strong occupancy and consistent, healthy same-asset NOI growth. We continue leveraging our strengths, creating value on a sustainable basis," said Mark Holly, President and CEO. "In the second quarter, we announced and broke ground on our major development, The Marlstone, advanced entitlements at key properties in highly-desirable markets, and Voila CFC 3, our second industrial customer fulfillment centre, moved into economic occupancy in early June. We are also pleased to announce that we received validation and approval from the Science Based Targets initiative in support of our Climate Action Plan."

SECOND QUARTER SUMMARY

(In thousands of Canadian dollars, except per Unit amounts and square feet and as otherwise noted)

Operational Highlights

• Committed occupancy 96.4% and economic occupancy 95.9%; a 10 basis point increase in committed occupancy and economic occupancy remained constant compared to the second quarter of 2022
• Renewals of 245,000 square feet at rents 3.3% above expiring rental rates (an increase of 5.8% using the weighted average rent during the renewal term)
• Acquisition of one investment property added 58,000 square feet of GLA at a total aggregate purchase price of $9,760
• Construction commenced at our 291-unit residential rental development, The Marlstone, in Halifax, Nova Scotia
• The Science Based Targets initiative ("SBTi") has validated and approved Crombie's plan to reduce greenhouse gas ("GHG") emissions as part of its Climate Action Plan

Financial Highlights

• Property revenue of $107,967, a 4.8% increase from $103,064 in the second quarter of 2022
• Operating income attributable to Unitholders of $19,557, a decrease of 31.2% compared to the second quarter of 2022 of $28,424 (operating income attributable to Unitholders excluding employee transition costs was $26,729 for the quarter)
• Net property income(1) of $71,442, a 1.9% increase from $70,097 in the second quarter of 2022
• FFO(1) of $46,068 or $0.26 per Unit compared to $49,877 or $0.28 per Unit in the second quarter of 2022 (FFO per Unit excluding employee transition costs was $0.30 for the quarter)
• FFO(1) payout ratio of 86.7% for the second quarter of 2023 compared to 79.0% for the same period last year
• AFFO(1) of $39,118 or $0.22 per Unit compared to $43,551 or $0.25 per Unit in the second quarter of 2022 (AFFO per Unit excluding employee transition costs was $0.26 for the quarter)
• AFFO(1) payout ratio of 102.1% for the second quarter of 2023 compared to 90.5% for the same period last year
• Same-asset property cash NOI(1) increased 2.7% compared to the second quarter of 2022
• Debt to gross fair value(1)(2) of 42.3%, an improvement from 42.7% for the same period last year
• Debt to trailing 12 months adjusted EBITDA(1)(2) of 8.17x compared to the second quarter of 2022 at 8.75x
• Fair value of unencumbered investment properties of $2,488,359, a 15.5% increase from $2,155,326 for the same period last year
• Available liquidity of $614,072, a 38.2% increase from $444,262 in the second quarter of 2022

(1) Non-GAAP financial measures used by management to evaluate Crombie's business performance. See "Cautionary Statements and Non-GAAP Measures" below for a reconciliation of net property income, FFO, FFO payout ratio, AFFO, AFFO payout ratio, same-asset property cash NOI, debt to gross fair value, and debt to trailing 12 months adjusted EBITDA.

(2) At Crombie's proportionate share including joint ventures.

Information in this press release is a select summary of results. This press release should be read in conjunction with Crombie's Management's Discussion and Analysis for the quarter ended June 30, 2023 and Consolidated Financial Statements and Notes for the quarters ended June 30, 2023, and June 30, 2022. Full details on our results can be found on Crombie's website and SEDAR.

Financial Results

Operating income attributable to Unitholders decreased by $8,867, or 31.2%, primarily due to increased general and administrative expenses of $7,087 resulting from employee transition costs of $7,172 in the second quarter of 2023 and gain on disposal of investment properties of $4,863 in the second quarter of 2022. Total estimated costs related to these employee transitions have been captured in the quarter. The reduction in operating income was offset in part by revenue from management and development services of $2,046, consisting primarily of fees from a related party for work on our customer fulfillment centres, and increased net property income of $1,345.

Same-asset property cash NOI increased by $1,906, or 2.7%, compared to the second quarter of 2022 primarily due to renewals and new leasing, and higher supplemental rent of $271 from modernizations and capital improvements.

The decrease in FFO of $3,809 was primarily due to increased general and administrative expenses of $7,087 resulting from employee transition costs of $7,172 in the second quarter of 2023. This was offset in part by revenue from management and development services of $2,046, consisting mainly of fees from a related party for work on our customer fulfillment centres. Additionally, rental revenue increased $1,084 from renewals, new leasing, and acquisitions, and $504 from new developments, partially offset by $456 due to dispositions. FFO excluding employee transition costs of $7,172 was $53,240 for the quarter or $0.30 per Unit.

The reduction in AFFO was primarily due to the same factors impacting FFO as described above. It was further impacted by the increase in the maintenance expenditure charge for 2023 from $1.00 to $1.10 per square foot of weighted average GLA, an increased charge of $471 for the quarter. AFFO excluding employee transition costs of $7,172 was $46,290 for the quarter or $0.26 per Unit.

Operating income attributable to Unitholders decreased by $8,942, or 16.7%, on a year to date basis primarily driven by higher general and administrative expenses resulting from employee transition costs of $7,172 in the second quarter of 2023 and lower gain on disposal of investment properties of $4,752 compared to the same period in 2022. Total estimated costs related to these employee transitions have been captured in the second quarter of 2023. Also leading to the variance year over year was a gain on distribution from equity-accounted investments of $1,933 in the first quarter of 2022 as a result of cash distributions received from 1600 Davie Limited Partnership in excess of our investment in the joint venture. The decrease was offset in part by growth in income from equity-accounted investments of $3,414 resulting from the sale of two parcels of land at our Opal Ridge property in Dartmouth, Nova Scotia in the first quarter of 2023 and by revenue from management and development services of $2,046, consisting primarily of fees from a related party for work on our customer fulfillment centres.

On a year to date basis, same-asset property cash NOI increased by $3,527, or 2.6%, compared to the same period in 2022 primarily due to renewals and new leasing, improved parking revenue of $787, and an increase in supplemental rent of $712 from modernizations and capital improvements. Additionally, lease termination income increased by $454 resulting from tenant surrenders. The increase in same-asset property cash NOI was offset in part by an increase in bad debt expense of $343.

For the six months ended June 30, 2023, FFO decreased $65 primarily driven by higher general and administrative expenses resulting from employee transition costs of $7,172 in the second quarter of 2023 and a decrease of $2,099 in rental revenue from properties that were disposed. This was offset in part by growth in income from equity-accounted investments of $3,414 resulting from the sale of two parcels of land at our Opal Ridge property in Dartmouth, Nova Scotia in the first quarter of 2023 and by revenue from management and development services of $2,046, consisting primarily of fees from a related party for work on our customer fulfillment centres. Increased income of $2,175 from renewals and new leasing, $1,016 from acquisitions, $830 in supplemental rent from modernizations investments, improved parking revenue of $787, and increased rental revenue from new developments of $661 further offset the decrease in FFO. FFO excluding employee transition costs of $7,172 was $106,075 or $0.59 per Unit.

The reduction in AFFO on a year to date basis was driven primarily by the increase in the maintenance expenditure charge for 2023 from $1.00 to $1.10 per square foot of weighted average GLA, an increased charge of $939 for the period. This was offset in part by the factors impacting FFO as described above. AFFO excluding employee transition costs of $7,172 was $92,199 or $0.52 per Unit.

Operations and Leasing

During the quarter, Crombie achieved economic occupancy of 95.9% and committed occupancy of 96.4%. Crombie renewed 245,000 square feet with an increase of 3.3% over expiring rents during the quarter. Year to date, new leases increased occupancy by 419,000 square feet at an average first year rate of $19.86 per square foot. In the second quarter, Voila CFC 3, in Calgary, Alberta, moved into economic occupancy and is included in year to date new leases.

Development

Crombie segregates its development pipeline by expected timing. Near-term projects indicate that a decision to commit financially is expected to be determined within the next two years. Currently, Crombie has three developments classified as near-term projects. Upon completion, these projects will total approximately 1,083,000 square feet of residential GLA (1,451 residential units) and 104,000 square feet of commercial GLA. The geographical breakdown of GLA in square feet is as follows: 854,000 in Vancouver; 145,000 in Victoria and 188,000 in Halifax.

The Marlstone, a 291-unit residential rental project in the heart of downtown Halifax, is under active development. Construction commenced in May 2023 and is expected to be completed in the second quarter of 2026.

Timing estimates are subject to change, as well as other development risks described in Crombie's second quarter Management's Discussion and Analysis under "Development" and "Risk Management".

Climate Action

In the second quarter of 2023, Crombie announced the advancement of its environmental commitments through its newly created Climate Action Plan. Through this plan, Crombie is committed to achieve net zero by 2050 for scopes 1, 2, and 3. In the near term, Crombie is committed to reducing scope 1 and 2 emissions by a minimum of 50% by 2030 from its 2019 base year. All targets were submitted to SBTi and validation and approval was received subsequent to the second quarter of 2023.

SBTi is an internationally recognized body that defines and promotes best practice in emissions reductions and net zero targets in line with climate science. Scope 1 refers to an entity's direct emissions, while Scope 2 is an entity's indirect emissions through its energy use. Scope 3 emissions are the result of activities not controlled by the entity, but indirectly related to its value chain.

Subsequent Event

On July 31, 2023, Crombie paid an amount of $16,361, excluding transaction costs, to a subsidiary of Empire in connection with the assignment to Crombie of 24 subleases for retail fuel sites in Western Canada owned by Crombie, following the completion of Empire's previously announced transaction with a subsidiary of Shell Canada.

Conference Call Invitation

Crombie will provide additional details concerning its period ended June 30, 2023 results on a conference call to be held Thursday, August 10, 2023, beginning at 12:00 p.m. (EDT). Accompanying the conference call will be a presentation that will be available on Crombie's website. To join this conference call, you may dial (416) 764-8688 or (888) 390-0546. To join the conference call without operator assistance, you may register and enter your phone number on-line to receive an instant automated call back. You may also listen to a live audio webcast of the conference call by visiting the Investor section of Crombie's website.

Replay will be available until midnight August 17, 2023 by dialing (416) 764-8677 or (888) 390-0541 and entering passcode 585088 #, or on the Crombie website for 90 days following the conference call.

About Crombie REIT

Crombie invests in real estate that enriches local communities and enables long-term sustainable growth. As one of the country's leading owners, operators, and developers of quality real estate, Crombie's portfolio primarily includes grocery-anchored retail, retail-related industrial, and mixed-used residential properties in Canada's top urban and suburban markets. As at June 30, 2023, our portfolio contains 293 income-producing properties comprising approximately 18.6 million square feet, and a significant pipeline of future development projects.

We seek Safe Harbor.