Investor Update Q1 2017

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1 Investor Update Q1 2017

2 EXECUTIVE SUMMARY (All amounts in this presentation are in U.S. dollars unless otherwise stated) Pure Play: 100% grocery-anchored assets located in the United States o Acquired first property in 2011 and listed on the TSX in April 2014 o Portfolio is comprised of 71 properties located across 21 states totaling 8.5M SF 1 Focused Strategy: Build scale in over-looked large markets (population of 1M+) with a focus on top grocers Embedded Growth: Lack of new construction is creating high return, low risk anchor redevelopment opportunities and causing rents to increase well in excess of inflation Unique Structure: Industry leading low payout ratio allows for reinvestment and future cash flow growth Alignment: Slate Asset Management L.P. and employees are the largest unitholder group (~6.7%) 1 As of March 31, 2017 Slate Asset Management L.P. 2

3 WELL-POSITIONED IN THE CYCLE High occupancy and historically low new supply creates upward pressure on rents Net Completions of U.S. Community and Neighbourhood Shopping Centres Grocery-Anchored Supermarkets and Shopping Centres Occupancy % 94.5% 94.1% 93.9% 94.3% 94.4% 93.4% 93.0% 93.2% 93.4% Source: CoStar New Supply Occupancy Slate Asset Management L.P. 3

4 OPPORTUNITY FOR GROWTH Opportunities to deliver organic and external growth driven by current market landscape o o o o o o Investors continue to focus heavily on the top 5-6 MSAs Secondary markets lack institutional presence so operational proficiency is weak and capital is scarce Strip center supply remains at multi-decade lows Occupancy and rents are rising as tenant demand exceeds available supply Slate can purchase properties well below replacement cost Anchor tenants are redeveloping vs. building new due to more attractive returns Slate Asset Management L.P. 4

5 Moody s/rca All-Property Commercial Price Indices OPPORTUNITY FOR GROWTH Target overlooked markets for mispriced assets Unprecedented Valuation Gap Source: Moody s/rca Largest Six Markets Secondary Markets Slate Asset Management L.P. 5

6 EXPOSURE TO LARGE U.S. MARKETS Our portfolio is well diversified by geography and grocer with 71 properties across 21 states and presence in 23 major metropolitan areas 1 Top 10 Grocery Tenants Tenant % of Base Rent % of GLA Credit Rating 7.7% 11.9% Baa1 / BBB 5.4% 5.3% 4.8% 7.8% Aa2 / AA 4.8% 2.8% Baa2 / BBB 4.1% 4.1% B1 / B 3.2% 3.7% 2.4% 2.1% 2.3% 1.4% 1.4% 2.0% B3 1.4% 1.3% Ba2 1 As of March 31, 2017 Slate Asset Management L.P. 6

7 E-COMMERCE RESISTANT TENANTS Grocery-anchored retail is a defensive and well positioned asset class offering protection from e-commerce impacting other retail real estate Category # of Stores % of Rent Supermarkets 70 39% Medical & Personal Services % Restaurants % National & Discount Retailers 44 9% Financial Institutions 95 5% Fitness Facilities 21 3% Liquor Stores 21 2% Pharmacies 10 1% Other Tenants % Slate Asset Management L.P. 7

8 EMBEDDED LEASING UPSIDE Significant runway remains to reset expiring rents upward in-line with market rents $10.48 $8.91 $10.51 $ % 16.1% 12.4% 8.6% Percentage of Portfolio GLA Expiring Average Expiring Base Rent Average new leases <10,000 square feet in Q1 2017: $17.16 Slate Asset Management L.P. 8

9 FOCUSED STRATEGY Investing where others are not continues to provide us with mispriced high-quality acquisition opportunities Transaction Crombie REIT Portfolio Abbott s Village Property Count 11 1 Property Size (square feet) Portfolio average 77, ,600 Location Southern Ontario / Greater Montreal Atlanta MSA Buyer Manulife Financial Slate Retail REIT Date Q Q Purchase Price C$153 million $15 million Price per Square Foot $179 $139 Going-In Cap Rate ~6.5% ~7.4% 3 Mile Average Household Income Portfolio average $75,400 $134,600 3 Mile Population Portfolio average 90,400 83,200 Occupancy ~91% (at market) ~93% (below market) 1 10 of the 11 properties in the portfolio closed in Q1. Remaining asset closed post Q Slate Asset Management L.P. 9

10 FLEXIBLE DEBT STRUCTURE Average debt tenor of 4.7 years in line with the portfolio weighted average lease term of 4.9 years No maturities for over 3 years Weighted average interest rate 3.20% 1 Only 14.1% of properties subject to traditional mortgage financing o Provides flexibility on opportunistic dispositions when full value achieved and portfolio pruning Moved from 25% fixed rate debt to 68% fixed rate debt in Q Slate Retail REIT has one of the lowest weighted average interest rates compared to both Canadian (4.14%) and U.S. (4.02%) peers. Slate Asset Management L.P. 10

11 PORTFOLIO SALE COMPS February 2015 Edens acquires AmREIT July 2015 Blackstone acquires Excel Trust December 2015 Blackstone acquires RioCan s U.S. Portfolio June 2016 New Market acquires Hines Portfolio AmREIT rejected Eden s initial bid of $22.00 per share Transaction was later completed at $26.55 per share, a 40% premium to trading price 5.5% implied cap rate 23.7x 2014 AFFO Total portfolio size of ~1.5 million square feet Largest tenants include Kroger, CVS/Pharmacy, Landry s, H-E-B and Safeway $1.9 billion purchase ($245 per square foot) 6.4% implied cap rate 17.9x 2015E AFFO 40 properties totalling 7.6M square feet Largest tenants include Dick s Sporting Goods, Ross Stores, Publix, Kohl s and PetSmart $1.9 billion purchase price ($198 per square foot) 6.8% implied cap rate 49 properties totalling 10.0M square feet ~66% of portfolio GLA grocery anchored Largest tenants include Stop & Shop/Giant Food Stores, Best Buy, Staples, PetSmart, Walmart $210 million purchase price ($243 per square foot) 5.6% implied cap rate 8 grocery-anchored retail properties totalling 1.0M square feet Largest tenants include BJ s, Kroger, Safeway, H-E-B and Publix SRT currently trades at 11x 2017E AFFO and implied ~$126 psf Slate Asset Management L.P. 11

12 U.S. STRIP CENTRE REIT COMPS REIT/REOC Average Base Rent (per square foot) Occupancy Median Household Income Population American Assets Trust $ % 88,330 95,098 Acadia Realty Trust $ % 86, ,375 Brixmor $ % 66,020 81,535 DDR $ % 74, ,468 Equity One $ % 80, ,200 Federal Realty Trust $ % 101, ,563 Kimco $ % 77, ,283 Regency Centres $ % 87, ,474 Retail Properties of America $ % 69, ,815 Strip Center REITs $ % 79, ,009 Weingarten Realty Investors $ % 72, ,209 U.S. Strip Centre REIT W/A $ % 78, ,587 Slate Retail REIT $ % $61, ,272 Source: Green Street Advisors Slate Asset Management L.P. 12

13 REIT/REOC TRADING COMPS Canadian Retail Comparables - C$ Price Change Since Market Prem/(Disc) 2017E FFO 2017E AFFO Debt / Debt / Implied TEV / 21-Apr-17 Listing Cap TEV to NAV Yield Multiple Payout Multiple Payout TEV GBV 1 Cap Rate Owned SF Ratio Ratio ($ millions) RioCan REIT $26.53 (3.5%) $8,665 $14, % 5.3% 15.7 x 83.5% 17.3 x 92.0% 41.3% 42.0% 5.6% $333 Choice Properties $ % $5,768 $9, % 5.1% 13.5 x 68.3% 16.5 x 83.3% 41.8% 44.5% 5.7% $227 First Capital Realty $ % $4,892 $8,959 (6.9%) 4.3% 17.6 x 75.4% 18.8 x 80.5% 45.4% 42.5% 5.5% $376 SmartREIT $ % $5,102 $8, % 5.2% 14.8 x 76.5% 15.9 x 81.9% 43.4% 44.3% 5.8% $281 CT REIT $ % $3,082 $5, % 4.7% 13.2 x 62.0% 16.2 x 75.9% 43.7% 47.5% 5.8% $222 Crombie REIT $ % $2,173 $4,583 (4.6%) 6.1% 12.1 x 73.3% 14.3 x 87.0% 52.6% 53.1% 6.3% $240 OneREIT $3.71 (23.2%) $324 $1,042 (19.3%) 8.1% 8.2 x 66.2% 10.5 x 84.9% 70.3% 57.7% 7.2% $155 Plaza Retail REIT $ % $501 $1, % 5.5% 13.9 x 76.4% 14.7 x 81.0% 50.2% 52.3% 6.9% $193 Average 12.3% (1.2%) 5.5% 13.6 x 72.7% 15.5 x 83.3% 48.6% 48.0% 6.1% $253 U.S. Retail Comparables - US$ Kimco $22.23 (1.3%) $9,462 $15,038 (16.0%) 4.9% 14.5 x 70.6% 17.8 x 86.3% 33.7% 41.5% 6.5% $218 DDR $12.40 (26.8%) $4,546 $9,303 (26.4%) 6.1% 10.9 x 67.1% 12.8 x 78.6% 48.3% 39.3% 7.5% $123 Brixmor Property Group $ % $6,592 $12,200 (22.8%) 4.8% 10.3 x 49.6% 12.9 x 62.3% 47.9% 52.0% 7.3% $142 Regency Centers $ % $11,475 $13,095 (8.4%) 3.0% 19.4 x 58.6% 22.5 x 68.1% 12.5% 32.0% 5.8% $229 Weingarten Realty Investors $ % $4,497 $6,964 (10.8%) 4.4% 14.5 x 63.8% 17.6 x 77.5% 33.8% 48.7% 6.4% $244 Acadia Realty Trust $ % $2,628 $4,861 (1.4%) 3.3% 21.2 x 70.1% 25.8 x 85.2% 32.1% 52.4% 5.0% $689 Cedar Realty Trust $5.34 (11.9%) $457 $1,255 (25.5%) 3.7% 10.0 x 37.3% 12.4 x 46.5% 48.4% 39.2% 8.0% $141 Average 3.8% (15.9%) 4.3% 14.4 x 59.6% 17.4 x 72.1% 36.7% 43.6% 6.6% $255 Slate Retail REIT C$ $ % $621 $1,449 (6.0%) 7.2% 8.7 x 62.6% 11.1 x 80.2% 59.9% 54.2% 6.9% $171 Slate Retail REIT US$ $11.15 (17.2%) $457 $1,070 (6.4%) 7.3% 8.6 x 62.6% 11.0 x 80.2% 60.0% 54.2% 6.9% $126 Source: CIBC, SNL Financial, FactSet, company reports Slate Asset Management L.P. 13

14 TRACK RECORD Growing size and unitholder value Net Operating Income ($ millions) Distributions per unit ($) AFFO per unit ($) 143% 7% 17% $28.60 $56.51 $69.46 $0.76 $0.78 $0.81 $0.92 $1.12 $ Net Asset Value ($millions) Market Capitalization ($millions) $ % 145% $541 $419 $305 $186 $ Current Current Slate Asset Management L.P. 14

15 APPENDIX NORTH AUGUSTA REDEVELOPMENT Slate Asset Management L.P. 15

16 NORTH AUGUSTA PLAZA, SC Negotiated Kmart lease buyout to take back space Redeveloped the 95 thousand square foot Kmart box (largest tenant by GLA and base rent) Five new tenants including new junior anchor Ross Dress for Less (investment grade A rating Moody s / S&P) Increase in base rent of 114% During 2016 significant progress was made, with completion expected to occur mid-2017 BEFORE AFTER Slate Asset Management L.P. 16

17 SOPHISTICATED MANAGER Slate Asset Management and employees are aligned via ~6.7% ownership of Slate Retail REIT Slate Asset Management L.P. Capital Partners Private investors Publicly-traded vehicles Investment Vehicles Private Equity Slate Advisors Slate Retail REIT (TSX:SRT.U/SRT.UN) Slate Office REIT (TSX:SOT) Investment Themes Opportunistic Core and core plus Grocery anchored U.S. retail Canadian office ~C$4.0 Billion AUM 224 Properties 20 Million Sq. Ft. Slate Asset Management L.P. 17

18 ALIGNED MANAGER Low-cost external management contract rewards clear focus and ability to execute Annual asset management fee equal to 40 bps of Gross Book Value Performance fee totaling 15% of FFO per unit above $1.28 (plus inflation mechanism) Acquisition fee equal to 75 bps of gross acquisition cost, capitalized upon closing No leasing, property management, construction, re-financing or disposition fees Slate Asset Management L.P. and insiders own ~6.7% of Slate Retail REIT Internalization multiple at 1x trailing annual fees Slate Asset Management L.P. 18

19 EQUITY ANALYST COVERAGE The REIT has seen a significant increase in equity research coverage over the last two years. There are currently 6 analysts who cover the REIT Company Analyst BMO Troy MacLean troy.maclean@research.bmo.com CIBC Dean Wilkinson dean.wilkinson@cibc.com GMP Securities Jimmy Shan jshan@gmpsecurities.com National Bank Financial Dawoon Chung dawoon.chung@nbc.ca Raymond James Johann Rodrigues johann.rodrigues@raymondjames.ca RBC Capital Markets Michael Smith michael.smith-tor@rnccm.com Slate Asset Management L.P. 19

20 CAUTIONARY STATEMENTS Forward-Looking Statements This presentation contains forward-looking information within the meaning of applicable securities laws. These statements include, but are not limited to, statements concerning the REIT s objectives, its strategies to achieve those objectives, as well as statements with respect to management s beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Readers should not place undue reliance on any such forward-looking statements. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the REIT to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained herein. Such forward-looking statements are based on a number of assumptions that may prove to be incorrect, including, but not limited to, the continued availability of mortgage financing and current interest rates; the extent of competition for properties; assumptions about the markets in which the REIT and its subsidiaries operate; the global and North American economic environment; and changes in governmental regulations or tax laws. Although the forward-looking information contained in this presentation is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Certain statements included in this presentation may be considered financial outlook for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this presentation. Except as required by applicable law, the REIT undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Non-IFRS Measures This presentation contains financial measures that do not have a standardized meaning under International Financial Reporting Standards ( IFRS ) as prescribed by the International Accounting Standards Board. Slate Retail uses the following non-ifrs financial measures: Funds from Operations ( FFO ), Adjusted Funds from Operations ( AFFO ), Net Operating Income ( NOI ), and Earnings Before Interest, Taxes, Depreciation and Amortization ( EBITDA ). Management believes that in addition to conventional measures prepared in accordance with IFRS, investors in the real estate industry use these non-ifrs financial measures to evaluate the REIT s performance and financial condition. Accordingly, these non-ifrs financial measures are intended to provide additional information and should not be considered in isolation or as a substitute for performance measures prepared in accordance with IFRS. In addition, they do not have standardized meanings and may not be comparable tomeasures used by other issuers in the real estate industry orother industries. Use of Estimates The preparation of the REIT financial statements in conformity with IFRS requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Management s estimates are based on historical experience and other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates under different assumptions. Slate Asset Management L.P. 20

21 Investor Relations Slate Retail REIT Slate Asset Management L.P. 121 King St W, Suite 200 Toronto, ON M5H 3T9 slateam.com Slate Asset Management L.P. 21