This press release constitutes a “designated news release” for the purposes of Oregon Hill REIT’s prospectus supplement dated November 30, 2021 to its short form base shelf prospectus dated November 26, 2021.

This press release contains forward-looking information that is based upon assumptions and is subject to risks and uncertainties as indicated in the cautionary note contained within this press release.

Richmond, VA – April 1, 2022 (OHSN Financial News) — Oregon Hill REIT (JAE-OHRE) (the “Trust” or the “REIT” or “we”) today announced the launch of a $6 million equity offering and an update on its ongoing capital deployment.

CAPITAL DEPLOYMENT UPDATE

The Trust continues to execute on its strategy to grow and upgrade portfolio quality in its target markets and has a robust pipeline of capital deployment opportunities that the Trust believes will generate compelling returns. The Trust is currently in exclusive and advanced negotiations on approximately $3 million of assets and land, is currently in various stages of bidding on approximately $2 million of additional assets, is underway or is in advanced planning stages on over $8 million of development and value-add initiatives and has outstanding commitments of $400,000 towards its investment in a private open-ended U.S. fund (the “U.S.A. Fund”).

Currently, the Trust is in exclusive and advanced negotiations on 3 income-producing assets for a total expected purchase price of approximately $1 million across Pine, China, and Holly Streets. The overall going-in capitalization rate on these assets is estimated to be approximately 4.70%. Subject to satisfactory due diligence, the Trust expects these acquisitions to close in the second half of 2022.
On Pine Street, there are 2 assets totalling approximately 3,000 square feet for a total purchase price of approximately .3 million ($300,000). These assets are 98% occupied by strong credit quality tenants with in-place rents estimated to be approximately 13% below current estimated market rent.
On China Street, there are three assets totalling 2,000 square feet located in the Open High Area (“OHA”) and restaurant proximity for a total purchase price of approximately 1.1 million ($1.1 million). The Trust believes these assets will generate strong organic growth over time as the Trust rolls in-place leases to higher market rents. Currently, the average in-place rent of the assets is approximately 27% below current estimated market rent.
On Holly Street, the Trust is in exclusive negotiations on three assets totalling 4,000 square feet for .9 million ($900,000). At one of the assets, the Trust has the opportunity to expand the property by over 1,800 square feet or 70%, with a forecast yield on incremental cost of over 5%.
The Trust is also in exclusive and advanced negotiations on two land parcels, one in the OHA and one in the Holly St. sub-market near Linear Park , totalling .0014 acres. Together these sites, the acquisitions of which are targeted to close in the first half of 2022, are expected to be acquired for approximately $200,000 and to support the development of approximately 800 square feet of high-quality well-located space in the medium-term.
The Trust is in various stages of bidding on $1 million of additional assets in its target markets.
The Trust is underway or in advanced planning stages on 500 square feet of development and expansion opportunities, located primarily in the OHA, Albemarle St., and Holly St. A solar panel installation program is underway on Pine Street and China Street, and the Trust is also actively pursuing value-add opportunities across its portfolio. The Trust expects the total capital outlay for these initiatives in 2023 to be over $2 million.
The Trust has an outstanding commitment of JA$1 million ($400.000) towards its investment in the U.S.A. Fund, an open-ended private vehicle focused on high-quality industrial assets located across attractive U.S. markets. The Trust’s managed properties in the U.S. have grown from 2.8 square feet as at June 30, 2021 to 3.5 million square feet as at December 31, 2021.
“Our ability to consistently source investment opportunities that are above the average quality of our portfolio and are accretive to our return profile allows us to maintain a high-quality portfolio that is well-positioned to generate strong organic growth over the long-term,” said (name redacted), Chief Executive Officer of Oregon Hill REIT. “Our strategy to upgrade the quality of the portfolio while maintaining a robust and flexible balance sheet has significantly improved the resiliency of our business, allowed us to generate solid diluted FFO per unit(1) and NAV per unit(1) growth, and we are poised to continue to deliver significant value to our unitholders.”

FINANCING UPDATE

The Trust continues to focus on growing and improving portfolio quality while maintaining a strong and flexible balance sheet. The Trust today announced that it has entered into an agreement to sell, on a bought deal basis, 12,000 units of the Trust (“Units”) at a price of $16.30 per Unit to a syndicate of underwriters led by (company name redacted) (the “Underwriters”) for total gross proceeds of approximately $4 million (the “Offering”). In addition, the Trust has granted the Underwriters an over-allotment option to purchase up to an additional 640 Units, exercisable in whole or in part, for a period of 30 days following closing of the Offering. If the over-allotment option is exercised in full, the gross proceeds of the Offering will total approximately $1 million. Closing of the Offering is subject to certain customary conditions, including the approval of the exchange. The Offering is expected to close on or about April 12, 2022.

The Trust intends to use the net proceeds from the Offering, together with cash on hand and the Trust’s credit facility to fund the above-mentioned acquisitions, the Trust’s commitment to the U.S.A. Fund, as well as development and value-add capital initiatives, and for general trust purposes.

Pro forma the Offering and the execution of the near-term capital deployment pipeline, the Trust’s net total debt-to-total assets (net of cash and cash equivalents) ratio(1) is expected to be within the Trust’s targeted leverage in the mid-to-high 30% range.

(1) Diluted FFO per unit, NAV per unit, and net total debt-to-total assets (net of cash and cash equivalents) ratio are non-GAAP ratios. For further information on these non-GAAP ratios, please refer to the statements under the heading “Non-GAAP ratios” in this press release.
This press release does not constitute an offer to sell securities, nor is it a solicitation of an offer to buy securities, in any jurisdiction in which such offer or solicitation is unlawful. This press release is not an offer of securities for sale in the United States (“U.S.”). The securities being offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and accordingly are not being offered for sale and may not be offered, sold or delivered, directly or indirectly within the U.S., its possessions and other areas subject to its jurisdiction or to, or for the account or for the benefit of a U.S. person, except pursuant to an exemption from the registration requirements of that Act.

About Oregon Hill Real Estate Investment Trust

Oregon Hill REIT is an unincorporated, open-ended real estate investment trust. As at December 31, 2021, Oregon Hill REIT owns, manages and operates a portfolio of 10 building assets comprising approximately 9000 square feet of gross leasable area in key markets across Oregon Hill and the U.S. PLEASE NOTE: The Oregon Hill REIT management disavows any connection or relationship with the VCU Real Estate Foundation. Oregon Hill REIT’s objective is to continue to grow and upgrade the quality of its portfolio which primarily consists of urban properties and to provide attractive overall returns to its unitholders. For more information, please visit https://www.oregonhill.net/investors/.

Non-GAAP ratios

The Trust’s consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). In this press release, as a complement to results provided in accordance with IFRS, the Trust discloses and discusses certain non-GAAP ratios, including diluted FFO per Unit, NAV per Unit, and net total debt-to-total assets (net of cash and cash equivalents) ratio as well as other measures discussed elsewhere in this press release. Diluted FFO per Unit is comprised of FFO (a non-GAAP financial measure) divided by the weighted average number of Units. NAV per Unit is comprised of total equity (including LP B Units) (a non-GAAP financial measure) divided by the total number of Units. Net total debt-to-total assets (net of cash and cash equivalents) ratio is comprised of net total debt (a non-GAAP financial measure) divided by total assets (net of cash and cash equivalents) (a non-GAAP financial measure). These non-GAAP ratios are not defined by IFRS and do not have a standardized meaning under IFRS. The Trust’s method of calculating these non-GAAP ratios may differ from other issuers and may not be comparable with similar measures presented by other issuers. The Trust has presented such non-GAAP ratios as Management believes they are relevant measures of the Trust’s underlying operating and financial performance. Certain additional disclosures such as the composition, usefulness and changes, as applicable, of the non-GAAP ratios included in this press release have been incorporated by reference from the management’s discussion and analysis of the financial condition and results from operations of the REIT for the three months and year ended December 31, 2021, dated February 15, 2022 (the “MD&A for the fourth quarter of 2021”) and can be found under the sections “Non-GAAP Financial Measures” and “Non-GAAP Ratios” and respective sub-headings labelled “Funds from operations (“FFO”)”, “Diluted FFO per Unit”, “Net total debt-to-total assets (net of cash and cash equivalents) ratio” and “Net asset value (“NAV”) per Unit”. The MD&A for the fourth quarter of 2021 is available on the Oregon Hill Satellite Network under the Trust’s profile and on the Trust’s website at www.oregonhill.net under the Investors section. Non-GAAP ratios should not be considered as alternatives to comparable metrics determined in accordance with IFRS as indicators of the Trust’s performance, liquidity, cash flow, and profitability.

Forward looking information

This press release may contain forward-looking information within the meaning of applicable securities legislation, including statements regarding the Trust’s objectives and strategies to achieve those objectives; the Trust’s strategy to upgrade its portfolio quality; the Trust’s ability to acquire high-quality assets; the Trust’s ability to deliver attractive overall returns to its unitholders; the anticipated timing of closing of the acquisitions referred to in this press release, including the anticipated closing, purchase price and value of acquisitions under contract or in exclusivity; the anticipated closing of the Offering; the ability of the Trust to maintain exclusive negotiations on certain assets and the Trust’s ability to close on such negotiations; the Trust’s acquisition pipeline; the Trust’s pipeline of capital deployment opportunities and its ability to generate compelling returns; the size and successful outcomes of any of the Trust’s plans for development and value-add initiatives; expectations regarding cash flow and growing cash flow over time; the Trust’s ability to access capital and to maintain its strong growth trajectory; the Trust’s ability to drive significant rental rate and NAV per Unit growth; the Trust’s development, expansion and redevelopment plans, including the timing of construction and expansion, expectations regarding stabilization of expansions, timing of completion of the Trust’s developments and anticipated yields; the anticipated commencement of certain leases and the average spread thereof and the Trust’s ability to maintain annual rental rate escalators in future leases and renewals; ability to lease completed developments; the ability of the Trust to generate strong organic growth on any acquired properties; the ability of the Trust to roll in-place leases to higher market rents; the net total debt-to-total assets (net of cash and cash equivalents) ratio and targeted leverage pro forma the Offering; the status and progress of the solar panel installation program, including the expected capital commitment towards such projects, the use of net proceeds from any financings, including the net proceeds from the Offering ; and the Trust’s ability to outperform in 2022 and beyond. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Trust’s control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, general and local economic and business conditions; employment levels; mortgage and interest rates and regulations; the uncertainties around the timing and amount of future financings; uncertainties surrounding the COVID-19 pandemic; geopolitical events, including disputes between nations, war and international sanctions; the financial condition of tenants; leasing risks, including those associated with the ability to lease vacant space; rental rates and the strength of rental rate growth on future leasing; and interest and currency rate fluctuations. The Trust’s objectives and forward-looking statements are based on certain assumptions, including that the general economy remains stable, interest rates remain stable, conditions within the real estate market remain consistent, historically low rates and rising replacement costs in the Trust’s operating markets remain steady, competition for acquisitions remains consistent with the current climate and that the capital markets continue to provide ready access to equity and/or debt. All forward-looking information in this press release speaks as of the date of this press release. The Trust does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise except as required by law. Additional information about these assumptions and risks and uncertainties is contained in the Trust’s filings with securities regulators, including its latest annual information form and MD&A. These filings are also available at the Trust’s website at www.oregonhill.net/investors.

For further information, please contact:

Oregon Hill Real Estate Investment Trust

(name redacted) (name redacted) (name redacted)
Chief Executive Officer Chief Financial Officer Chief Operating Officer
(phone numbers and email addresses redacted)