Mr. Craig Mitchell reports

NORTHWEST HEALTHCARE PROPERTIES REAL ESTATE INVESTMENT TRUST ANNOUNCES Q3 2023 RESULTS

Northwest Healthcare Properties Real Estate Investment Trust has released results for the period ending Sept. 30, 2023. The REIT also provided updates on recent capital management initiatives and shared results of the 2023 GRESB ESG (environmental, social and governance) real estate assessment.

Craig Mitchell, Northwest's chief executive officer, comments, "While a strategic review is under way, management and the board have taken key actions in the near term to strengthen the balance sheet and the business."

"The REIT will eliminate all 2023 debt maturities and over 60 per cent of its 2024 debt maturities. We are also seeking approval from our debentureholders to amend and extend the Series G debentures. We are working to divest our remaining investment units in Australian Unity Healthcare Fund (AUHPT). To date, we have completed investment and non-core asset sales that have generated gross proceeds of $235.1-million, with additional non-core assets being under contract. We remain committed to building on our position as a health care real estate leader, focused on creating value for our many stakeholders."

Strengthening the balance sheet

Since August, 2023, Northwest has pursued a strategy to strengthen the balance sheet by reducing its monthly distributions and extending its maturity profile to create stability through 2024. To date, the REIT has been successful in refinancing and extending corporate debt obligations. With the completion of the convertible debt maturity date extension anticipated for later this month, the REIT will have eliminated corporate debt facilities maturing before November, 2024. As previously communicated to the market, the REIT is also undertaking non-core assets sales to de-lever the balance sheet.

Actions taken:

• Secured a new term loan of $140-million, with an April, 2025, maturity;
• Launched the process of amending and extending its $125-million (Series G) convertible debentures due on Dec. 31, 2023, to March 31, 2025. See announcement of Oct. 16, 2023 for details;
• Refinanced its largest debt facility maturing in 2024, which comprises the $269-million (Australian) ($235-million) JV (joint venture) portfolio debt facilities, extending the maturity date from June, 2024, to December, 2025;
• To-date completed sales or have under contract $181-million gross non-core property asset;
• To-date completed $110-million in sales of its investment in AUHPT.

Q3 2023 financial and operational highlights

For the three and nine months ended Sept. 30, 2023, revenue increased by 5.1 per cent and 15.3 per cent, respectively. Net income (loss) for the three and nine months ended Sept. 30, 2023, decreased by $116.4-million and $553-million, respectively, primarily as result of fair value losses on investment properties from changes in valuation parameters.

Operationally, the REIT's high-quality and defensive health care real estate portfolio delivered strong results, including 3.7-per-cent same property net operating income (SPNOI) growth on a year-over-year basis.

The REIT's portfolio occupancy of 96 per cent is supported by a weighted average lease expiry of 13.2 years and 82.9 per cent of leases are subject to inflation indexation. With a portfolio comprising more than 2,000 tenants, the REIT's cash flow is highly diversified across its 229 properties.

Adjusted funds from operations (AFFO) per unit decreased from 15 cents in Q3 2022 to 13 cents in Q3 2023 as result of increased interest expense.

Q3 2023 highlights:

• Q3 2023 revenue of $122.2-million up 5.1 per cent year over year;
• Q3 2023 net loss attributable to unitholders of $81.3-million as result of fair value loss on investment properties;
• Q3 2023 SPNOI increased by 3.7 per cent on a year-over-year basis, driven primarily by annual rent indexation;
• Strong portfolio occupancy of 96 per cent consistent with last quarter;
• Q3 2023 AFFO of 13 cents per unit, down from 15 cents per unit on a year-over-year basis;
• Weighted average lease expiry of 13.2 years is underpinned by health care infrastructure;
• Total assets under management (AUM) decreased by 5.3 per cent on a year-over-year basis to $10-billion due to combination of non-core asset sales and property valuations;
• Net asset value (NAV) per unit decreased by 4.7 per cent to $11.96 in Q3 2023 compared with June 30, 2023. The decrease is predominantly due to cap rate expansion to 5.75 per cent;
• Total capital deployed in fee bearing vehicles is $5.7-billion, a decrease of 1.7 per cent year over year as result of fluctuation in foreign exchange rates;
• Consolidated debt to gross book value, including convertible debentures of 51.6 per cent, an increased of 80 bps (basis points) on a quarter-over-quarter basis.

Monthly distribution

On Sept. 22, 2023, the REIT announced a reduction in the REIT's monthly distribution to unitholders from 6.667 cents per unit to three cents per unit. The distribution reduction is expected to provide the REIT with financial flexibility to continue advancing its short- and long-term objectives while exploring strategic alternatives, with maximizing unitholder value being the principal objective.

The REIT announced a distribution of three cents per REIT unit to unitholders of record on Sept. 29, 2023, and paid on Oct. 16, 2023.

2023 ESG global ranking

In 2023, the REIT and Vital Healthcare Property Trust (which is managed by Northwest) participated in the GRESB Real Estate Assessment for the third year running. GRESB, the global environmental, social and governance benchmark for assessing real estate and infrastructure investments, collectively representing $8.8-trillion (U.S.) in gross asset value (GAV).

Northwest and Vital were GRESB sector leaders in the following categories:

• Global listed sector leader, health care standing investments:
  • Vital and Northwest came in first and second place respectively;
• Global listed sector leader, health care development:
  • Vital and Northwest came in first and second place respectively;
• Global sector leader, health care development:
  • Vital and Northwest came in first and third place respectively.

These results for the REIT and Vital demonstrate Northwest's commitment to ESG best practices. Not only is this the right and responsible thing to do, but this in time will also represent a key component of Northwest's value and its associated cost of capital.

Q3 2023 conference call

A conference call will be held on Nov. 8, 2023, at 10 a.m. ET. Participating on the call will be members of the REIT's senior management team.

Investors are invited to instantly join the conference call by phone to register and be connected into the conference call automatically:

• Investors may also access the call by dialling 416-764-8609 or 1-888-390-0605. The conference ID is 16291139, followed by the number sign.
• An audio replay of this call will be made available from Nov. 8, 2023, through Nov. 15, 2023, by dialling 416-764-8677 or 1-888-390-0541.
• The conference replay entry code is 291139, followed by the number sign.

About Northwest Healthcare Properties Real Estate Investment Trust

Northwest Healthcare Properties is an unincorporated, open-ended real estate investment trust established under the laws of Ontario. The REIT provides investors with access to a portfolio of high-quality international health care real estate infrastructure comprised as at Sept. 30, 2023, of interests in a diversified portfolio of 229 income-producing properties and 18.2 million square feet of gross leasable area located throughout major markets in Canada, the United States, Brazil, Europe, Australia and New Zealand.

We seek Safe Harbor.