CANADIAN ECONOMIC OUTLOOK & MARKET

FUNDAMENTALS

FIRST QUARTER UPDATE 2017

19TH ANNUAL EDITION

Copyright © 2017 by Morguard Investments Limited. All rights reserved. Any request for reproduction of this Research Report should be directed to Keith Reading Director of Research 905-281-5345

FORWARD-LOOKING STATEMENTS DISCLAIMER

Statements contained herein that are not based on historical or current fact, including without limitation statements containing the words “anticipates,” “believes,” “may,” “continue,” “estimate,” “expects” and “will” and words of similar expression, constitute “forward-looking statements.” Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions, both nationally and regionally; changes in business strategy; financing risk; existing governmental regulations and changes in, or the failure to comply with, governmental regulations; liability and other claims asserted; and other factors. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Publisher does not assume the obligation to update or revise any forward-looking statements.

FIRST QUARTER UPDATE 2017

CANADIAN ECONOMIC OUTLOOK & MARKET FUNDAMENTALS

TABLE OF CONTENTS Financial Report 4

Investment Report 5

Leasing Report 6

Economic Report 7

Transactions 8

Acknowledgements / Works Cited 9

4 Q1 2017 UPDATE | 2017 CANADIAN ECONOMIC OUTLOOK & MARKET FUNDAMENTALS

FEDERAL BUDGET CONTAINED FEW SURPRISESThe Trudeau government’s second budget released in late March contained few surprises. For the most part, it outlined the specifics of the previous budget’s projections related to taxation and spending. The highlights of the release included the running of a deficit of $28.5 billion during the coming fiscal year. This total represented roughly 1.3% of Gross Domestic Product (GDP). The carrying of a deficit was expected to continue for the next few years. The federal government’s debt-to-GDP ratio was projected to hold fairly steady before edging down to 30.9% by 2021-2022. Generally speaking the forecast deficit was based upon a slightly stronger economic growth forecast. The ongoing management of the federal deficit required a significant volume of debt. The budget estimated $39.0 billion in net new domestic funds would be required over the next few years. Against this backdrop, the budget contained little in the way of new stimulus measures. On the whole, housing, skills training and innovation remained priorities. The current budget statement provided for a modest $4.4 billion in spending on new initiatives over the next five years. This was roughly 20.0% of the total announced previously, though over a somewhat longer term. In terms of taxation, the budget provided for few significant changes in light of an uncertain economic outlook. In this regard, the cautious approach taken by Ottawa in March’s budget statement was likely the most prudent.

INFLATION PRESSURES WERE LARGELY UNCHANGED The national inflation rate was unchanged during the first quarter, a period that has historically featured significant change in prices. In February, the headline Consumer Price Index (CPI) edged down by 10 bps to 2.0% from 2.1% in January. This slight downward pressure was mostly the result of a 4.9% dip in gasoline prices. More broadly, however, energy pricing increased by 12.3% during February. Food price deflation was also a factor with the average price of a basket of goods falling by 2.3% year-over-year. Excluding food and energy, prices continued to rise by 2.0%, a rate that was down marginally month-over-month. This rate of inflation was the highest dating back to 2007. Overall, regardless of whether you measure inflation by the traditional method or with the Bank of Canada’s three new core measures, inflation pressures were essentially unchanged during the first quarter.

Looking ahead, there are two schools of thought with regard to near-term inflation. In one camp, the stabilization of food prices is expected to have a similar impact on the national inflation rate. The other camp is calling for inflation to decelerate in the second half of 2017. Regardless, inflation pressure will remain fairly modest over much of 2017. The absence of a firmer inflation trend and continued economic slack would see the Bank of Canada likely hold off on a rate hike until next year.

U.S. FED ON TRACK FOR TRIO OF RATE HIKES THIS YEAR Continued confidence in the U.S. economic outlook supported the Fed’s 25 bps rate hike in March, the first of three increases anticipated this year. A further three increases were forecast for next year. This gradual tightening of national monetary policy was predicated on projected median economic growth rates of 2.1% in each of 2017 and 2018. Coincidentally, solid job growth patterns, rising consumer spending levels and increased business investment were cited as further outcomes of the positive outlook. The Fed’s March rate hike statement made no mention of any upside to its economic growth forecast. The Trump Administration’s plan of tax reform and reduced government influence on business was viewed as a catalyst for stronger economic growth and inflation. This economic upside would result in further rate hikes on top of those already planned.

FINANCIAL REPORT

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Mar

-87

Mar

-88

Mar

-89

Mar

-90

Mar

-91

Mar

-92

Mar

-93

Mar

-94

Mar

-95

Mar

-96

Mar

-97

Mar

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-99

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-00

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-01

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-11

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-13

Mar

-14

Mar

-15

Mar

-16

Mar

-17

%

Mortgage SpreadsCommercial Mortgage Rates Vs. 5-Year GOC Bonds

5-Year Commercial Mortgage Rate 5-Year GoC Bond Yield

Source: RBC Capital Markets, Bank of Canada

60100140180220260300340380420460500540580620

Mar

-00

Sep-

00M

ar-0

1Se

p-01

Mar

-02

Sep-

02M

ar-0

3Se

p-03

Mar

-04

Sep-

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ar-0

5Se

p-05

Mar

-06

Sep-

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ar-0

7Se

p-07

Mar

-08

Sep-

08M

ar-0

9Se

p-09

Mar

-10

Sep-

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ar-1

1Se

p-11

Mar

-12

Sep-

12M

ar-1

3Se

p-13

Mar

-14

Sep-

14M

ar-1

5Se

p-15

Mar

-16

Sep-

16M

ar-1

7

Inde

x (1

994:

4 =

100)

Global IndicesTrending of Global Price Return Indices

Euro D.J. Stoxx 50 France CAC 40 German DAXUK: FTSE 100 S&P/TSX Composite

Source: RBC Capital Markets

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17

%

National InflationCPI Measures, % Change Over 1 Year Ago

Core CPI (CPIX) Total CPI Inflation Control TargetSource: Bank Of Canada, Statistics

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

%

Official Policy Rates International Monetary Conditions

US Federal Funds Rate European Central Bank Target RateBank of Japan Policy Rate Cdn Overnight Lending Rate

Source: Bank Of Canada; Federal Reserve Board; European Central Bank; Bank of Japan

2017 CANADIAN ECONOMIC OUTLOOK & MARKET FUNDAMENTALS | Q1 2017 UPDATE 5

INVESTMENT TRENDS REFLECTED DURABILITY OF CYCLE PHASEConditions reported in Canada’s commercial investment property market during the first quarter provided evidence of the durability of the current phase of the cycle. Core properties were highly sought after resulting in multiple bid scenarios. Persistent demand resulted in modest downward pressure on yields, particularly when premium quality assets were on offer. This is expected to support above-average transaction volume in the coming months, with CBRE predicting annual sales nearing the $32.0 billion mark for 2017, which would represent the third highest annual total on record. Foreign capital continued to have an impact on the market during the first quarter following a record high for investment volume in 2016. Off-shore groups have been attracted by the relative stability of Canada’s financial system and economy. At the same time, domestic groups were also active when core assets were made available. The strength of the demand cycle in the first few months of 2017 continued to produce moderate upward pressure on values that were already at peak levels. A number of notable transactions were completed in the first quarter, with the office sector garnering the largest share of activity. Access to low-cost capital and core product were supportive of the continued health of the Canadian property investment market in the first quarter.

PLENTY OF ACTIVITY RECORDED IN OFFICE SECTORInvestors continued to favour Canada’s office sector during the first quarter resulting in ownership changes for a number of notable assets. In January, the Hospitals of Ontario Pension Plan acquired a 50.0% interest in the TransCanada Tower in Downtown Calgary for $257.4 million. In February, Cadillac Fairview sold a 25.0% interest in a 4.0 million square foot Downtown Vancouver portfolio to each of the Ontario Pension Board and the Workplace Safety and Insurance Board. Slate Properties acquired a 1.5 million square foot office portfolio in Calgary from Dream Office REIT for $204.0 million. In the final few days of March, Starlight Investments acquired a 50.0% interest in the Mississauga Executive Centre for $167.0 million. Finally, the Dominion Public Building was sold for $275.1 million, with a redevelopment upside. The recent surge in activity was a reflection of broader market trends. Investors, both foreign and domestic, continued to look to the Canadian office market as a source of stable and attractive returns during a period of uncertainty with respect to the global financial market and economy, or in other cases as opportunistic buys.

OUTLOOK IS POSITIVE AGAINST BACKDROP OF UNCERTAINTY Broadly positive investment market characteristics are expected to persist over the near term against a backdrop of heightened risk. A number of risks could be a factor in market performance over the near term. The Trump administration’s protectionist platform could negatively impact Canada’s economy and property investment performance. The potential for interest rate hikes could also erode economic growth. A prolonged commodities sector slump is also a threat to the outlook. Finally, a downturn in business confidence levels as a result of a breakup of the European Union would hamper economic activity and investment performance. Demand for income-producing properties will continue to outstrip supply, potentially pushing values higher. Low interest rates and the need to invest funds in a stable asset class will drive healthy demand activity levels. Foreign capital will continue to support above-average transaction volume and a competitive bidding environment. Leasing fundamentals will gradually improve which will boost investment performance. The health of the Canadian commercial property investment market is expected to progress despite an increased risk profile. Despite the existence of a number of risks, forecast property investment market performance is generally positive for the near term.

INVESTMENT REPORT

0.0

2.0

4.0

6.0

8.0

10.0

12.0

1-Year 3-Year 5-Year 10-Year 15-Year

5.8

6.9 8.

2

7.1

9.4

4.7

6.2

8.5 9.

0

10.0

6.0

7.5

10.0

9.8

11.6

8.0

7.9

9.9

9.4

9.3

%

RCPI/IPD ReturnsAnnualized Returns By Property Type To Dec 2016

Industrial Office Retail Apartment

Source: RCPI; © MSCI Real Estate 2016

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17F

$13.2$14.6

$13.0

$17.3$19.9

$24.0

$32.1

$21.7

$13.0

$19.5

$23.6

$30.6$26.8

$26.1$26.1

$34.7$33.0

$ B

illio

ns

Investment ActivityTotal Investment Volume

Domestic Foreign Forecast

Source: CBRE LimitedSource: CBRE Limited; Morguard

0.0

5.0

10.0

15.0

20.0

25.0

1-Year 3-Year 5-Year 10-Year

21.1

7.1

8.2

4.7

0.5

0.7

0.8 1.32.5

7.7

4.3 6.

3

17.6

7.4

6.5

6.3

5.7 7.

0 9.1

9.0%

Relative PerformanceComparing Annualized Returns To Dec 2016

S&P/TSX Index T-Bill FTSE Long BondTSX REIT Index RCPI/IPD Index

Source: © MSCI Real Estate; RBC CM; TSX Datalinx; SCM; PC Bond Analytics

0.01.02.03.04.05.06.07.08.09.0

10.0

Mar

-00

Sep-

00M

ar-0

1Se

p-01

Mar

-02

Sep-

02M

ar-0

3Se

p-03

Mar

-04

Sep-

04M

ar-0

5Se

p-05

Mar

-06

Sep-

06M

ar-0

7Se

p-07

Mar

-08

Sep-

08M

ar-0

9Se

p-09

Mar

-10

Sep-

10M

ar-1

1Se

p-11

Mar

-12

Sep-

12M

ar-1

3Se

p-13

Mar

-14

Sep-

14M

ar-1

5Se

p-15

Mar

-16

Sep-

16M

ar-1

7

%

Yield Spreads Cap Rates vs. 10-Year GOC Bonds

GOC 10-Year Yield Office-CBD Retail-RegionalIndustrial-Multi Tenant Apartment-Suburban

Source: AltusInSite; Bank of Canada

6 Q1 2017 UPDATE | 2017 CANADIAN ECONOMIC OUTLOOK & MARKET FUNDAMENTALS

OFFICE LEASING MARKET POSTED MODEST START TO THE YEARCanada’s office leasing market registered a moderately positive start to 2017, following mostly solid performance patterns during much of the past year. Overall, vacancy edged down 10 bps to 13.1% during the first quarter for all classes of space in the nation’s major urban centres. Montreal, and to a lesser extent Vancouver and Toronto, outperformed by a wide margin. A total of 943,000 square feet of vacancy was absorbed in the Greater Montreal Area (GMA) over the three-month period. Vancouver and Toronto also registered strong gains at 420,457 square feet and 246,243 square feet, respectively, according to CBRE statistics. In a reversal of recent performance, much of the first quarter progress took place in suburban locations. In the GMA suburban submarket 550,031 square feet of space was absorbed in a region that suffered through a period of oversupply over past few years. The Greater Vancouver Area (GVA) posted 275,860 square feet of net absorption in its suburbs, outpacing downtown’s 144,597 square feet. The submarket was in less of a position of oversupply by the end of the first quarter, with vacancy having topped the 14.0% mark a year ago. Absorption of 342,693 square feet was recorded in the Greater Toronto Area (GTA) suburbs following a modest 586,213 square feet through all of 2016. Downtown, the GMA also led the way with 392,767 square feet of absorption, with small gains in the GVA and Ottawa. The strong suburban progress reported in the first quarter was a positive signal for the near term after a period of weaker demand.

POSITIVE MOMENTUM RECORDED IN INDUSTRIAL SECTOR Positive momentum continued to characterize the Canadian industrial leasing market in the first quarter with demand outpacing supply. There was 7,304,447 square feet of space absorbed during the first 90 days of the year, on the heels of a 19.4 million square foot annual total during 2016. The third quarter progress pulled the national industrial availability rate down below the 5.0% barrier to 4.9% from 5.5% a year ago. The GTA, GVA, GMA and Waterloo Region (WR) outperformed in the first quarter resulting in 3,472,111 square feet, 1,989,346 square feet, 1,099,343 square feet and 794,110 square feet of absorption, respectively. The Greater Ottawa, Greater Calgary and Greater Winnipeg Areas also saw moderately positive results during the period. There was little change in occupancy recorded in the Greater Halifax Area while Halifax was largely stable. In contrast, Edmonton and London generated negative outcomes. In London, occupancy declined by 175,038 square feet. Edmonton witnessed a significant setback with occupancy being reduced by 415,069 square feet over the first quarter. Generally, demand for industrial space outdistanced supply resulting in a moderately positive performance to start 2017.

Slightly more than 4.2 million square feet of newly built space was added to the national industrial inventory in the first quarter. The total was significantly lower than the net absorption total of just over 7.3 million square feet over the same period. For the most part, vacant options continued to decline with shortages of alternatives in certain size and quality categories. The GTA accounted for the largest share of construction completions over the quarter. The just shy of 2.5 million square feet represented 59.0% of the total. The GVA was the next largest contributor to the total at 847,000 square feet or 20.0%. Looking ahead, if the Canadian industrial market continued to post absorption and new supply completion averages in line with that of the most recent three-year period, then conditions would continue to slowly tighten. In turn, rents would continue gradually rise. Therefore, it was not all that surprising that the demand for industrial investment properties surpassed the supply of assets available to acquire in the first quarter. In addition, the continued compression of cap rate was also not unexpected. In short, the outlook for the industrial sector remained bright.

LEASING REPORT

-6-4-20246810121416

75

80

85

90

95

100

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

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F20

18F

2019

F20

20F

2021

F

Mill

ions

of S

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et

%

Office Demand & Supply National Historical & Forecast Aggregates

Net Absorption (RS) New Construction (RS) Occupancy Rate (LS)Source: CBRE Limited; CBRE Econometric Advisors

-20

-10

0

10

20

30

40

50

75

80

85

90

95

100

2000

2001

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F20

18F

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et

%

Industrial Demand & Supply National Historical & Forecast Aggregates

Net Absorption (RS) New Construction (RS) Occupancy Rate (LS)Source: CBRE Limited; CBRE Econometric Advisors

0.0

2.0

4.0

6.0

8.0

10.0

12.0

Jun-

02D

ec-0

2Ju

n-03

Dec

-03

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04D

ec-0

4Ju

n-05

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-05

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6Ju

n-07

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-07

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n-09

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-09

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-11

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n-13

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-13

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ec-1

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n-15

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-15

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16D

ec-1

6

%

Retail Vacancy RatesNational Trending Across Property Types

Super Regional Regional Community Centre Neighbourhood

Source: © MSCI Real Estate 2016

0.0 2.0 4.0 6.0 8.0

Victoria

Vancouver

Toronto

Winnipeg

Halifax

Ottawa

National

Montreal

Edmonton

Calgary

0.7

0.5

1.6

3.0

3.2

3.4

3.9

4.0

7.0

8.0

0.6

0.8

1.6

2.9

3.4

3.4

3.8

4.0

4.25.3

%

CMA's Rental VacancyRates for Structures of 3 units+

20152016F

Source: CMHC, Housing Market Outlook

2017 CANADIAN ECONOMIC OUTLOOK & MARKET FUNDAMENTALS | Q1 2017 UPDATE 7

SOLID START TO THE YEAR FOR CANADIAN ECONOMY The Canadian economy registered a solid start to the year in the first quarter, building on a stronger-than-expected growth in the final few months of 2016. January’s 0.6% month-over-month expansion marked a third consecutive period of positive performance. During this period, growth was fairly widespread with 15 of 20 major industry categories posting gains according to Statistics Canada. The manufacturing sector posted an increase in output of 2.0% in support of the recent growth trend. After a number of false starts recorded over the past few years, the recent expansion trend hinted that Canada’s economy may have turned a corner on the road to recovery. Despite the run of positive news of late, the sustainability of this growth trend remained uncertain.

JOBLESS RATE FELL TO TWO-YEAR LOW Canada’s labour market continued to surpass most forecasts in the first quarter resulting in a two-year low jobless rate. Canada’s economy created more than 15,000 jobs in February alone helping to drive the national unemployment rate down to 6.6%. From a regional standpoint, British Columbia registered the strongest monthly gain at 19,000 jobs, pushing the provincial unemployment rate down to just 5.1%. Ontario and Quebec also registered healthy labour market progress in the past few months. At the national level, February gains were focused in full-time private sector employment. A total of 17,000 private sector jobs were created during the four-week period while public sector employment declined by 7,000. The transition from part-time to full-time job growth continued with 105,100 positions created contrasting the 89,800 part-time plunge. The overall increase in February employment marked the strongest monthly growth since May 2006. The strength of first quarter labour market conditions extended a trend that has unfolded over the past year. During this 12-month run a somewhat surprising total of over 288,000 jobs have been created. Of this total, 219,000 jobs were created in the past six months, indicating a strengthening of the labour market cycle. Accelerated job growth over the past year represented the strongest rate of increase since 2012. For policy makers, however, the lack of a firm wage growth trend remains a concern. In addition, the shift from growth in the consumer and housing sectors to non-energy manufacturing and export industries had not materialized. In the meantime, the recent surge in job growth was expected to support economic progress.

RESALE HOME PRICE GROWTH WAS A TALE OF THREE CITIESRecord growth in resale home prices in the first quarter was focused in three cities. The average resale home price increased by 1.0% in February, representing the sharpest rise in the 18-year history of the Teranet-National Bank Composite House Price Index. Price inflation was driven by increases in Toronto, Hamilton and Vancouver at 1.9%, 1.4% and 1.4%, respectively. Of the 11 markets surveyed, Ottawa was the only other city where prices rose, and only by a modest 0.9%. Victoria, Montreal, Edmonton, Winnipeg, Quebec City, Calgary and Halifax posted modest declines. Material decreases were reported in Calgary and Halifax at 1.3% and 1.9%, respectively. The average year-over-year growth for the 11 markets was 13.4% driven by outperformances in Toronto, Hamilton, Victoria and Vancouver. Minor increases were recorded in the balance of the markets tracked except for slight dips in Edmonton and Quebec City. Some economists have speculated that Toronto’s red-hot market was now in a bubble. In mid-March of this year two of the country’s major banks, Bank of Montreal and TD, referred to Toronto’s housing market “bubble’ in separate reports. More broadly, record resale housing price growth recorded in early 2017 was seen as a significant threat for Canada’s economy over the near term.

ECONOMIC REPORT

$25.0

$27.5

$30.0

$32.5

$35.0

$37.5

$40.0

$42.5

$45.0

$47.5

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ions%

Retail SalesMonth-Over-Month Trending

Month/Month % Change (LS) Monthly Level (RS)Source: Statistics Canada

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%

Thou

sand

s

Housing MarketMonthly Trends

Housing Starts (LS) 5-Year Mortgage Rate (RS)Source: Statistics Canada, CMHC

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

-150

-100

-50

0

50

100

150

07 08 09 10 11 12 13 14 15 16 17

%

Thou

sand

s of

Job

s

Labour MarketMonth-Over-Month Trending

Employment Growth (LS) Unemployment Rate (RS)Source: Statistics Canada

3.1

3.2

2.6

2.1 1.

0

-2.9

3.1

3.1

1.7 2.

5

2.6

0.9 1.3 1.9

2.0

3.8

3.3

2.7

1.8

-0.3

-2.8

2.5

1.6 2.

2

1.7 2.

4 2.6

1.6 2.

2 2.4

-4.0

-2.0

0.0

2.0

4.0

6.0

04 05 06 07 08 09 10 11 12 13 14 15 16 17F 18F

%

Economic Growth Real GDP Growth - Historical & Forecast

Canada United States WorldSource: Conference Board Of Canada (Mar 2017); International Monetary Fund (Oct 2016)

8 Q1 2017 UPDATE | 2017 CANADIAN ECONOMIC OUTLOOK & MARKET FUNDAMENTALS

INVESTMENT MARKET TRANSACTIONS | Q1 2017

OFFICE

Property Date Price SF PSF Purchaser City105 Gordon Baker Rd Mar-17 $33.7 M 153,380 $219 Antoo Ltd. TorontoMississauga Exec. Ctr (50%) Mar-17 $167.0 M 1,079,647 $309 Starlight Investments TorontoDREAM Calgary Portfolio Feb-17 $204.2 M 1,505,520 $136 Slate AM CalgaryDominion Public Building Jan-17 $128.0 M 362,886 $353 Canada Lands Toronto1148 Hornby St Jan-17 $20.8 M 29,992 $694 Wesgroup VancouverTransCanada Tower (50%) Jan-17 $257.4 M 931,187 $553 HOOPP Calgary

INDUSTRIAL

Property Date Price SF PSF Purchaser CityGramercy Trust GTA Mar-17 $22.5 M 297,620 $75 Summit REIT Toronto

2335 Speers Rd Feb-17 $28.2 M 260,830 $108 Summit REIT Toronto124-126 Milner, 35 Ironside Cr Feb-17 $11.5 M 129,608 $89 Annapolis Financial Toronto8041 132nd St, 13139-45 80th Feb-17 $15.5 M 124,251 $125 Beedie Group Vancouver100 & 107 Alfred Kuehne Blvd Feb-17 $113.0 M 1,115,633 $101 HOOPP Toronto1601, 1635 Tricont Ave Jan-17 $21.1 M 259,181 $81 Lasalle Investment Toronto5820 11th St SE Jan-17 $19.0 M 225,160 $84 Burns LC Ltd. Calgary8495 Goreway Dr Jan-17 $35.0 M 360,000 $97 Greystone/Rice Toronto400 Nugget Ave Jan-17 $49.5 M 635,124 $78 Blackwood Partners Toronto

RETAIL

Property Date Price SF PSF Purchaser CityWoodlawn Square Feb-17 $19.9 M 133,244 $149 Private Guelph1551-1553 Dundas St Feb-17 $14.5 M 51,450 $281 Skyline Retail London*Sevenoaks Shopping Ctr Feb-17 $214.0 M 567,830 $377 Sevenoaks S.C. L.P. Vancouver329-333 Queen St W Feb-17 $17.1 M 15,339 $1,115 Crestpoint TorontoGrantham Shopping Ctr Feb-17 $18.1 M 159,800 $113 Mobius Group St Cathar.Sun Valley Square Jan-17 $14.4 M 29,500 $486 Canvas Developments Toronto1102-06, 1110-16 W Broadway Jan-17 $19.0 M 14,718 $1,291 Minglian Group VancouverAustin Avenue Mall Jan-17 $12.0 M 22,971 $522 Anthem Properties Vancouver

MULTI-SUITE RESIDENTIAL

Property Date Price # Units /Unit Purchaser City111-121 Mistral St Mar-17 $24.0 M 224 $107,143 InterRent REIT MontrealSilverspring Park Feb-17 $84.0 M 430 $195,349 Starlight Investments TorontoVillage Acres Feb-17 $17.8 M 186 $95,700 Mainstreet Equity Corp EdmontonEdgewater on Jasper Jan-17 $191.0 M 694 $275,216 Resport Equities Inc. Edmonton3311 Bathurst St Jan-17 $20.8 M 102 $203,922 Starlight Investments Toronto* share sale

ACKNOWLEDGEMENTS & CITED RESEARCH RESOURCES

In the course of compiling the statistical information and commenting on real estate markets,

national, regionally and across Canadian metropolitan areas, we acknowledge the assistance

and feedback from the following parties in completing this report:

The Altus Group, Avison Young, Bank of Canada, Bank of Japan, BMO Economics, BMO Nesbitt Burns,

British Bankers’ Association, Brunsdon Martin & Associates, CBRE Econometric Advisors, CBRE Limited,

CIBC World Markets, Canada Newswire, Canadian Mortgage and Housing Corporation (CMHC), Canadian

Mortgage Loans Services Limited, The Canadian Real Estate Association (CREA), Colliers International,

Commercial Edge, Conference Board of Canada, Cushman & Wakefield, Developers and Chains e-news,

Economy.com, European Central Bank, The Federal Reserve Board, Frank Russell Canada (RCPI),

The Globe and Mail, ICR Commercial Real Estate, International Council of Shopping Centres (ICSC),

Insite-Altus Research, International Monetary Fund, jlr Land Title Solutions, The Johnson Report (Winnipeg),

Jones Lang LaSalle, Monday Report on Retailers, MSCI, Ottawa Business Journal, PC Bond Analytics,

PricewaterhouseCoopers, RBC Capital Markets, RBC Economics, RealNet Canada Inc., RealTrack Inc.,

Rogers Media, Statistics Canada, Scotia Capital, TD Economics, Toronto Star, Torto Wheaton Research,

Urban Land Institute, United States Department of the Treasury, York Communications

With a strategic focus on high-quality assets and diversification, we realize the potential of

real estate through consistent investment performance. Our primary business strategy is to

generate stable and increasing cash flow and asset value by improving the performance of

the real estate investment portfolio and by acquiring and developing real estate properties in

sound economic markets.

We have developed a broad and efficient real estate platform in North America to manage our

own real estate portfolio, as well as invest and manage real estate on behalf of institutional

clients. Today, our owned and managed Real Estate Portfolio is valued at more than $16 billion.

TO CONTACT US, VISIT MORGUARD.COM

MORGUARD’S CORE STRENGTH IS REAL ESTATE OWNERSHIP, MANAGEMENT AND INVESTMENT.

55 CITY CENTRE DRIVE

SUITE 800

MISSISSAUGA, ON L5B 1M3

905-281-3800

MORGUARD.COM