Canadian REITs and REOCs

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RBC Dominion Securities Inc.Neil Downey, CFA, CA(Analyst)(416) [email protected] Cheng, CFA (Associate)(416) [email protected]

Matias Ronis, CA (Associate)(416) [email protected] Halm, CA, CPA(Associate)(416) [email protected]

November 19, 2013

Canadian REITs And REOCsQ3/13 Recap - Trend Line Growth Of 4% Keeps 2013 Target On TrackEventIn this note we provide a quick synopsis of the Q3/13 earnings season.

Highlights Q3/13 "Trend-Line" Earnings Posts 4% Growth, As Expected Q3 reporting season wrapped up

last week, and aggregate data shows that Q3/13 "trend-line" earnings growth registered 4%. Thiswas in line with our 4% expectation and a slight deceleration from Q2/13's 5%. Entities posting out-sized growth in Q3 included: Morguard Corp (+25%), Extendicare (+36%) and Granite REIT (+25%). Incontrast, notable YoY declines were posted by Huntingdon Capital Corp. (-51%), Partners REIT (-22%),and Retrocom REIT (-17%). Q3/13 same-property NOI averaged 1%, flat versus Q2/13's 1% and downfrom 3% in Q3/12.

Majority "Meets"; Handful of "Misses" Approximately 65% (20 of 31) of reporting entities postedQ3/13 earnings (i.e. FFO/unit or FFO/share) that were in line with our forecast. Approximately 23%(7 of 31) fell short of expectations (down from 9 in Q2), while 13% (4 of 31) exceeded expectations.Exhibit 1 summarizes the quarterly results.

2015 Forecasts Introduced With Q3 results in the books, our 2013-2014 "trend-line" earningsgrowth forecast remain at 5% and 4%, respectively. We've also rolled out our 2015 company-specificforecasts. From this, the aggregate data suggests the group should sustain its long-term averageearnings growth of ~4%, driven primarily by core organic growth (i.e. same-property NOI).

"Trend Line" Growth in Earnings/Unit, Quarterly - Q1/97 to Q3/13A and Q4/13E

Source: RBC Capital Markets

-20%

-10%

0%

10%

20%

30%

Q1/97 Q1/99 Q1/01 Q1/03 Q1/05 Q1/07 Q1/09 Q1/11 Q1/13

"Trend-Line" Earnings Growth 4 Quarter Moving Average

Recommended REITs & REOCs "Outperforms" include: Allied Properties REIT, Brookfield AssetManagement, Brookfield Office Properties, Calloway REIT, CAP REIT, CREIT, Dundee REIT, FirstCapital Realty, H&R REIT, InnVest REIT, Killam Properties Inc., Morguard Corp., Morguard REIT andRiocan REIT.

Exhibits 2 & 3 "REIT Valuation Table" and "NAV Summary".

Priced as of prior trading day's market close, EST (unless otherwise noted).All values in CAD unless otherwise noted.

For Required Non-U.S. Analyst and Conflicts Disclosures, see page 12.

Exhibit 1: Q3/13 FFO/Unit Estimates And Actuals (All amounts are diluted)

REIT/REOC Symbol Q3/12A Q3/13A Chg %

RBC

Q3/13E Var $ Var %

Exceeds / Meets /

Misses Notes

Q3/13 "Exceeds"

Artis REIT AX.UN 0.33 0.38 14% 0.36 0.02 7% h Q3/13 FFO/unit (diluted) of $0.38 which was +14% from Q3/12's $0.33 and was $0.02 above our $0.36

estimate. It was a low "quality" beat as results included ~$4MM ($0.03/unit) in lease termination fees

from Zellers. Operations were as expected, with slower acquisition activity ahead.

Killam Properties Inc. KMP 0.21 0.21 3% 0.20 0.01 6% h Q3/13 FFO/share of $0.214 increased 3% from Q3/12s $0.207 and was a penny above our $0.202

estimate. Top line trends improved while energy inputs normalized.

Leisureworld Senior Care Corp. LW 0.24 0.22 -10% 0.19 0.03 17% h Q3/13 FFO/share of $0.22 was $0.03 ahead of our $0.19 estimate as an anomalous (i.e., low) stock-

based compensation expense contributed to the "beat". More notably, core operating performance

improved across the board with good LTC results and important signs of improving occupancy and NOI

in the RH segment. The Specialty Care Deal is-track for a December close.

Morguard Corporation MRC 2.93 3.66 25% 2.50 1.16 46% h Q3/13 Proportionately consolidated FFO/share of $3.66 was up 25% from Q3/12s $2.93 and was

above our $2.50 estimate by a material 46% ($1.16/share). The largest variance related to the $2

million recovery in cash taxes, which was $11 million ($0.87/share) favourable versus our $9 million

forecast. The recovery related to the final settlement of the land rent dispute at The Colonnade,

Toronto.

Q3/13 "Meets"

Allied Properties REIT AP.UN 0.46 0.50 10% 0.50 0.00 1% 1 Q3/13 FFO/unit of $0.50 was in line to our $0.50 estimate. AP continues to generate strong FFO growth

due to organic and acquisition growth. Near-term acquisitions may prove elusive, yet organic growth

should remain strong. 2015+, developments should contribute to FFO growth. Board approved 4%

distribution increase effective with the Jan-15 payment.

Boardwalk REIT BEI.UN 0.75 0.86 14% 0.83 0.03 4% 1 Q3/13 FFO/unit of $0.86 was $0.03 above our $0.83 estimate. Organic NOI growth continued its strong

trend (6.7%) and was at its highest rate since Q3/12. BEI introduced initial 2014 FFO/share guidance

($3.25-3.45) which "hit the mark" in our view (RBCCM 2014E is $3.39). Non-core asset sales in BC are

currently under negotiation and appear imminent. Net proceeds could be applied to activate the NCIB.

Brookfield Office Properties BPO 0.29 0.29 -1% 0.30 (0.01) -3% 1 Q3/13 FFO/share of $0.29 was flat with Q3/12s $0.29 and a nick below our $0.30E. Q3/13 results.

Results included a $6MM ($0.01/share) charge, at BPO's share for debt pre-payment costs at BOX.

Operationally, results were as expected. Regarding the BPY tender, we see dual optionality in the form

of the potential for: 1) modest offer improvement; and, 2) an improved future BPY valuation.

Calloway REIT CWT.UN 0.44 0.47 5% 0.46 0.01 2% 1 Q3/13 FFO/unit of $0.47 was +10.8% from $0.44 in Q3/12 and slightly exceeded our $0.46 estimate.

Organic NOI growth was a consistent 1.1%. Strong FFO growth was therefore in large part driven by

recent acquisition activity, which was completed by leveraging the balance sheet.

CAP REIT CAR.UN 0.43 0.43 2% 0.43 0.00 0% 1 Q3/13 diluted FFO/unit of $0.435 was in line with our $0.434 estimate. There were no material

variances versus our forecast. Same-property NOI growth was a solid 3.7% demonstrating the efficiency

of its capital improvement programs. CAR's liquidity is poised to finish the year strong on the back of a

$150MM equity issuance.

CREIT REF.UN 0.67 0.72 8% 0.71 0.01 1% 1 Q3/13 FFO/unit of $0.72 was up 7.5% from Q3/12s $0.67 and in-line (+$0.01/unit) with our $0.71

estimate. FFO/unit growth continues to validate that its fully-internalized, low-leverage, low payout,

increasingly value-add, diversified business model is working very well.

Continued on next page.

h - Exceeds RBCCM estimate 1 - Meets RBCCM estimate $ - Misses RBCCM estimate

Canadian REITs And REOCs

November 19, 2013 2



RBC

Q3/13E Var $ Var %

Exceeds / Meets /

Misses Notes

Q3/13 "Meets" (Cont'd)

Chartwell Seniors Housing CSH.UN 0.20 0.21 0% 0.21 (0.00) 0% 1 Reported Q3/13 FFO/unit of $0.205 was +0.3% above Q3/12s $0.204 and in-line with our $0.205

estimate. Regional disparities (organic growth ranging from +5.4% in US RH to -10.3% in QC RH) proved

the benefits of diversification. Overall, it was a fairly routine quarter as CSH continues to execute its

strategic priorities.

Cominar REIT CUF.UN 0.43 0.45 4% 0.45 0.00 1% 1 Q3/13 FFO/unit of $0.45 was up 4.7% from Q3/12s $0.43 and in line with our $0.45 estimate.

Integration of 2012's ~$2.6 billion of acquisitions (CANMARC / GE) seems on-track. We believe 2014

will be a year of wringing out additional efficiencies, in order to demonstrate its normalized earnings

power. CUF believes it can complete $200 million in acquisitions in 2014 within the QC / Eastern

Canada regions.

Dundee REIT D.UN 0.72 0.73 1% 0.72 0.01 1% 1 Q3/13 FFO/unit of $0.73 was effectively in line with our $0.72 estimate. Near-term organic growth stabilized, while occupancy trends remained soft. D's units have lagged in 2013 as it bears the brunt of negative office

sentiment. We expect several hundred basis points of occupancy erosion over the next few years to be at least

partially mitigated by leasing spreads. With the units down heavily in 2013, we're not sure it is the right time to

sell short the capabilities of Dundee's Management.

First Capital Realty FCR 0.25 0.26 1% 0.27 (0.01) -3% 1 Q3/13 FFO/share of $0.26 increased 1.7% from Q3/12s $0.25 and was slightly below our $0.27 estimate. FCR continues to very much focus on long-tem growth and quality potential, at the expense of short-term FFO growth.

We believe that serious value creation is not a quarterly business and firmly believe in FCR's strategy to create a

best-in-class urban retail property portfolio.

Granite REIT GRT.UN 0.62 0.78 25% 0.77 0.00 1% 1 Q3/13 FFO/unit of $0.78 was +26% from Q3/12s $0.62 and slightly ahead of our $0.77 estimate. The

year-over-year growth in FFO/unit is exaggerated due to the incurrence of corporate re-org costs and

higher cash taxes in its pre-REIT era.

H&R REIT HR.UN 0.40 0.45 12% 0.44 0.01 2% 1 Q3/13 FFO of $0.45/unit (diluted) was in line (+2%) of our $0.44/unit estimate and up 12% from

Q3/12/s $0.40/unit. The July 1 internalization of the property management agreement was accretive to

Q3/13 NOI and FFO by just over $4 million. Having issued 9.5 million units (worth ~$200 million) as

consideration for the internalization, the net impact on FFO/unit for the quarter appears to have been

~$nil.

Melcor REIT MR.UN NA 0.22 n.a. 0.22 (0.00) -2% 1 Q3/13 FFO/unit of $0.22 was in line with our $0.22 estimate and 10% above the $0.20 IPO forecast.

Sequentially, Q3/13 FFO/unit was flat versus Q2/13s $0.22. Within the Q3/13 results, there were no

material variances versus our forecast. The FFO beat versus the IPO forecast was primarily a function

of a favourable revenue variance of $0.4 million ($0.02/unit) over the $9.4 million IPO forecast.

Morguard REIT MRT.UN 0.35 0.38 7% 0.38 0.00 0% 1 Q3/13 same-property NOI decreased 0.2%. This growth rate was lower by 70bps sequentially and it

was notably lower than Q1/13s 3.4% growth. Notably, MRT has been investing in what it knows best

(its own assets) through its NCIB. Year-to-date unit repurchase activity aggregates to a sizable 1.9

million units, representing 3% of the outstanding (as at the outset of the year) for a total investment of

~$31 million.

Northern Property REIT NPR.UN 0.55 0.65 18% 0.63 0.03 4% 1 Q3/13 FFO/unit of $0.65 increased 18% from Q3/12s $0.55 and was $0.02 ahead of our $0.63

estimate. The Q3/13 results contained $0.8 million ($0.02/unit) in net lease termination fees related to

the disposition of a warehouse in British Columbia. Ex-items, FFO/unit of $0.63 was in line with our

forecast. The Y/Y increase in per unit results marks the first quarter whereby NPRs results have

reached/exceeded the FFO/unit that preceded the disposition of some $200 million of net-lease

seniors housing properties in mid-2012 .




November 19, 2013 3



RBC

Q3/13E Var $ Var %

Exceeds / Meets /

Misses Notes

Q3/13 "Meets" (Cont'd)

NorthWest Healthcare Properties REIT NWH.UN 0.25 0.26 3% 0.26 (0.01) -2% 1 Q3/13 FFO/unit of $0.26 increased 3% from Q3/12s $0.25 and was in line with our $0.26 estimate.

Q3/13 S-P NOI was +0.8%. The acquisition front was quiet, with the only transaction of note being the

July 31 closing of the previously announced, $21 million Hargrave Portfolio.

Plazacorp Retail Properties Ltd. PLZ 0.07 0.07 4% 0.07 (0.00) -2% 1 Q3/13 FFO/unit of $0.07 increased 4% from Q3/12s $0.07 and was in line with our $0.07 estimate.

Q3/13 same-property NOI increased 0.4% on slightly higher rental revenue and lower operating

expenses, partially offset by higher realty taxes. Year-to-date, same property NOI increased 1.2%, aided

in part by higher termination fees in Q1. PLZ completed work at 3 sites (~105,000 sf) during Q3 that

were previously PUD. The KEYreit acquisition seems to be integrating well, with Management citing

ever greater value-surfacing possibilities than initially contemplated.

Pure Industrial REIT AAR.UN 0.09 0.11 18% 0.11 0.00 1% 1 Q3/13 FFO/unit of $0.11 increased 18% from Q3/12s $0.09 and was in-line with our $0.11 estimate.

Acquisition activity slowed (~$16 million) reflecting: 1) a deceleration transaction volume ; 2) sliding

REIT unit prices; and, 3) the requirement for PIRET to digests its mid-May, $360 million GE Portfolio

acquisition. AAR suggests larger portfolio offerings are once again in the market and its keen to grow.

Of course, subject to cost of equity and debt and the ability to drive value and cash flow accretive

deals.

Regal Lifestyle Communities Inc. RLC N/A 0.13 n.a. 0.14 (0.01) -5% 1 Despite the shortfall relative to our estimates, Regals NOI posted a sequentially improving trend.

Versus Q2/13, NOI increased 5.4% in Q3/13. The improvement was driven by higher occupancy and

revenue per occupied suite. Regal managed to achieve the latter by converting more temporary guest

suites to permanent suites during the quarter. Additionally, Regal completed its first post-IPO deal with

the acquisition of 4 retirement homes (546 suites) from Community Lifecare Inc. for ~$62 million

(~8.25% cap rate incl. capex).

RioCan REIT REI.UN 0.40 0.41 3% 0.41 (0.00) 0% 1 Organic growth generally improved. Same-property NOI growth for the Canadian portfolio was 1.9%,

up +160 bps from Q3/12. Same-Property NOI growth for the US portfolio was 0.9%, up +120 bps from

Q3/12s. Through its capital-recycling program (year-to-date dispositions now exceed $400 million),

REI has improved its exposure to Canada's major markets (VECTOM) to 72% from 68% at the outset of

the year.

Q3/13 "Misses"

Brookfield Asset Management BAM 0.42 0.49 15% 0.54 (0.05) -9% $ Q3/13 Operating FFO/share $0.49 ($342 million) increased 14% from Q3/12s $0.42 ($300 million) on

the back of stronger operating results from the Asset Management (+$47 million) and Renewable

Power (+$63 million) platforms. Property (-$64 million YoY) was down (a bit more than expected).

Asset Management profitability is rising rapidly and BAM is crystallizing some big accrued gains. Two

new investing themes are: 1) share buybacks; and, 2) emerging markets.

Brookfield Canada Office Properties BOX.UN 0.38 0.36 -6% 0.42 (0.06) -15% $ Q3/13 FFO/unit of $0.36 decreased 6% from Q3/12s $0.38, and was $0.06/unit below our

$0.42E. Results were hit by $6MM (~$0.06/unit) in net debt breakage costs related to the early

refinancing of Suncor Energy Centre. Operating results were "in-line" with expectations. Fundamentals

are solid within BOX's major markets, but rising vacancy rates may become more of a headwind going

forward.

Extendicare Inc. EXE 0.15 0.20 36% 0.24 (0.04) -16% $ Q3/13 FFO/share of $0.197 was up from Q2/12 $0.145 yet below our $0.235 forecast. SIL accruals

related mostly to KY continue to dog the results. The runway on KY claims and provisioning seems to

be shortening, and we believe the potential elimination of such accruals could boost annualized EBITDA

by $25MM. EXE continues to work with advisors on its strategic review.




November 19, 2013 4


REIT/REOC Symbol 0 Q3/12A Q3/13A Chg %

RBC

Q3/13E Var $ Var %

Exceeds / Meets /

Misses Notes

Q3/13 "Misses" (Cont'd)

Huntingdon Capital Corp HNT 0.23 0.11 -52% 0.19 (0.08) -41% $ Q3/13 results FFO/unit was $0.11, down 52% from Q3/12's $0.23 and short of our $0.19E. Results

included a $1.1 MM charge to share-based compensation and a non-recurring transactional item of

$0.8MM. Excluding these items, FFO was $3.1MM ($0.29/unit). NOI and net interest expense were in

line with expectations as the majority of the variance was driven by G&A.

InnVest REIT INN.UN 0.29 0.27 -8% 0.28 (0.01) -5% $ Q3/13 FFO/unit of $0.27 was slightly below our $0.28 estimate on sluggish RevPAR growth and modest

reno-related room displacement. INN's strategic plan is progressing nicely as it sold 4 non-core assets in

Q3 with another 6 scheduled to close over the next 2 quarters. Investors should be willing to look to

2015 as INN's strategic plan continues to unfold.

Partners REIT PAR.UN 0.16 0.12 -22% 0.16 (0.04) -26% $ Q3/13 FFO/unit of $0.12 was -22% versus $0.16 last year and was well below our $0.16E. The miss was

largely driven by lower-than-forecast NOI ($0.035/unit), and higher-than-forecast G&A ($0.005/unit).

Notably, PAR's high payout ratio and leverage has prompted a 22% distribution cut, to $0.50/unit from

$0.64, effective with the November distribution. Additionally, PAR appointed a Special Committee to:

1) evaluate strategic alternatives (including a sale of all assets); and, 2) evaluate the impact of the

League Asset Corp.'s CCAA filing on PAR (League is the entity which owns LAPP, Partners' external

Manager).

Retrocom REIT RMM.UN 0.13 0.11 -17% 0.12 (0.01) -10% $ Q3/13 FFO/unit of $0.11 declined by 17 from Q3/12s $0.13 and was 10% below our $0.12 estimate.

Same-property NOI decreased 0.5% on a 1.5% decrease in same-property rental revenue partially offset

by a 2.6% decrease in operating expenses. RMM is in the process of seeking replacement tenants for

the 5/6 Zellers locations (1 has been released to Designer Depot; 66,000 sf for 10 years), with the

remaining leases subject to contractual lease expiries ranging from September 2014 to November

2015.



November 19, 2013 5

Exhibit 2: Canadian REITs And REOCs Valuation Table Neil Downey, CA, CFA (416) 842-7835Page 1 of 3 Kevin Cheng, CFA (416) 842-3803

Matias Ronis, CA (416) 842-7894

Implied Units Mkt.

Unit Total 52 Week O/S Cap Run- Current Payout Funds From Operations/Unit Adjusted FFO/Unit3

Property Sector Symbol Analyst Price Target Return Rating Risk High Low MM $MM Rate 12 13E Yield1 Ratio2 12 13E 14E 15E 12 13E 14E 15E

Boardwalk REIT BEI.un ND $59.97 $70.00 20% SP - $67.78 $53.19 52.4 3,140 $1.98 $1.88 $1.98 3.3% 68% $2.87 $3.21 $3.39 $3.54 $2.57 $2.89 $3.07 $3.20

CAP REIT CAR.un ND $21.08 $25.00 24% O - $26.06 $20.09 107.9 2,275 $1.15 $1.09 $1.14 5.5% 79% $1.46 $1.58 $1.60 $1.64 $1.35 $1.46 $1.48 $1.52

Killam Properties Inc. KMP ND $10.82 $12.50 21% O - $13.19 $9.91 54.4 588 $0.58 $0.58 $0.58 5.4% 98% $0.71 $0.70 $0.76 $0.81 $0.60 $0.59 $0.65 $0.70

Northern Property NPR.un ND $28.28 $31.00 15% SP - $32.96 $25.18 32.0 905 $1.58 $2.09 $1.55 5.6% 90% $2.25 $2.23 $2.44 $2.55 $1.84 $1.77 $1.96 $2.06

Multi-Unit Residential 4.9% 84%

InnVest REIT INN.un ND $4.48 $5.50 32% O - $5.03 $3.95 93.8 420 $0.40 $0.40 $0.40 8.9% 89% $0.66 $0.60 $0.57 $0.67 $0.47 $0.45 $0.43 $0.51

Lodging 8.9% 89%

Chartwell Retirement Residences CSH.un ND $10.06 $11.00 15% SP - $11.71 $8.95 172.6 1,736 $0.54 $0.54 $0.58 5.4% 80% $0.73 $0.76 $0.81 $0.85 4 $0.66 $0.68 $0.73 $0.75

Extendicare Inc. EXE ND $6.58 $7.00 14% SP Spec $8.79 $5.12 87.0 572 $0.48 $0.84 $0.60 7.3% 58% $0.99 $0.81 $0.73 $0.78 $0.95 $0.83 $0.70 $0.75

Leisureworld Senior Care LW ND $11.44 $12.50 17% SP - $13.19 $10.00 29.3 335 $0.90 $0.85 $0.90 7.9% 90% $0.96 $0.84 $1.07 $1.11 $1.25 $1.00 $1.22 $1.24

Regal Lifestyle Communities Inc. RLC ND $7.51 $8.25 19% SP - $9.88 $6.98 20.7 156 $0.70 $0.14 $0.70 9.3% 111% $0.13 $0.56 $0.74 $0.78 $0.15 $0.63 $0.70 $0.70

Seniors Housing 7.5% 85%

Allied Properties REIT AP.un ND $33.25 $37.00 15% O - $35.45 $29.28 68.3 2,272 $1.36 $1.32 $1.36 4.1% 81% $1.79 $1.95 $2.12 $2.26 $1.43 $1.67 $1.81 $1.94

Brookfield Office Props (US$) BPO ND $19.13 $21.50 15% O - $19.58 $15.60 505.2 9,665 $0.56 $0.56 $0.56 2.9% 88% $1.14 $1.12 $1.00 $1.25 $0.63 $0.63 $0.54 $0.79

Brookfield Cda Office Props BOX.un ND $25.46 $30.00 22% SP - $30.52 $23.95 93.2 2,374 $1.17 $1.11 $1.17 4.6% 95% $1.49 $1.55 $1.72 $1.78 $1.15 $1.23 $1.40 $1.45

Dundee REIT D.un ND $28.60 $33.00 23% O - $39.30 $28.03 108.2 3,096 $2.24 $2.20 $2.23 7.8% 95% $2.85 $2.87 $2.90 $2.90 $2.33 $2.35 $2.38 $2.38

Granite REIT GRT ND $35.48 $39.00 16% SP - $40.22 $33.89 46.9 1,666 $2.10 $2.00 $2.10 5.9% 72% $2.43 $3.04 $3.13 $3.18 $2.21 $2.90 $2.96 $3.01

NorthWest Healthcare REIT NWH.un ND $10.23 $12.50 30% SP - $13.68 $10.12 46.3 473 $0.80 $0.80 $0.80 7.8% 95% $0.99 $1.00 $1.02 $1.05 $0.83 $0.84 $0.87 $0.90

Pure Industrial REIT AAR.un ND $4.60 $5.25 21% SP - $5.39 $3.97 135.2 622 $0.31 $0.30 $0.31 6.8% 86% $0.35 $0.41 $0.43 $0.44 $0.30 $0.36 $0.37 $0.38

Office / Industrial 5.7% 88%

Calloway REIT CWT.un ND / TW $25.55 $30.00 23% O - $30.43 $23.87 133.8 3,418 $1.55 $1.55 $1.55 6.1% 90% $1.79 $1.84 $1.91 $1.96 $1.72 $1.72 $1.79 $1.84

Choice Properties REIT CHP.un TW / ND $10.33 $11.00 13% SP - $10.60 $9.50 370.0 3,822 $0.65 N/A $0.33 6.3% 88% N/A $0.43 $0.88 $0.88 N/A $0.37 $0.71 $0.73

First Capital Realty FCR ND / TW $17.48 $21.00 25% O - $19.95 $16.50 208.2 3,640 $0.84 $0.82 $0.84 4.8% 89% $1.00 $1.03 $1.08 $1.14 $0.89 $0.94 $0.98 $1.04

Partners REIT PAR.un ND / TW $5.82 $6.50 20% SP - $8.24 $5.05 25.9 151 $0.50 $0.64 $0.62 8.6% 117% $0.64 $0.57 $0.60 $0.62 $0.53 $0.43 $0.48 $0.52

Plazacorp Retail Properties PLZ ND / TW $4.24 $5.00 23% SP - $5.22 $3.98 89.1 378 $0.23 $0.22 $0.23 5.3% 82% $0.26 $0.29 $0.33 $0.34 $0.24 $0.27 $0.30 $0.32

Retrocom REIT RMM.un ND / TW $4.81 $5.50 24% SP - $5.67 $4.62 71.2 342 $0.45 $0.45 $0.45 9.4% 122% $0.45 $0.46 $0.51 $0.52 $0.37 $0.37 $0.42 $0.44

RioCan REIT REI.un ND / TW $25.23 $31.00 28% O - $29.60 $23.46 302.8 7,640 $1.41 $1.38 $1.41 5.6% 96% $1.52 $1.63 $1.70 $1.75 $1.39 $1.47 $1.54 $1.58

Retail 6.6% 98%

Artis REIT AX.un ND $14.52 $17.00 25% SP - $17.03 $13.42 126.4 1,836 $1.08 $1.08 $1.08 7.4% 88% $1.30 $1.47 $1.50 $1.54 5 $1.07 $1.23 $1.26 $1.29

CREIT REF.un ND $42.80 $50.00 21% O - $48.25 $39.51 68.6 2,936 $1.65 $1.47 $1.61 3.9% 66% $2.63 $2.84 $2.95 $3.05 $2.17 $2.48 $2.56 $2.65

Cominar REIT CUF.un ND $18.30 $22.00 28% SP - $24.00 $17.81 126.1 2,307 $1.44 $1.44 $1.44 7.9% 93% $1.78 $1.76 $1.81 $1.86 $1.50 $1.54 $1.58 $1.63

H&R REIT HR.un ND $21.67 $24.00 17% O - $25.10 $20.33 286.4 6,206 $1.35 $1.18 $1.35 6.2% 95% $1.60 $1.77 $1.77 $1.80 6 $1.30 $1.43 $1.50 $1.54

Huntingdon Capital Corp. HNT ND $12.10 $13.00 9% SP - $12.88 $11.80 10.2 123 $0.24 $0.24 $0.24 2.0% 39% $1.16 $0.88 $0.96 N/A $0.84 $0.61 $0.82 N/A

Melcor REIT MR.un ND $10.70 $11.00 9% SP - $10.99 $9.40 18.7 200 $0.68 N/A $0.45 6.3% 86% $0.74 $0.88 $0.92 $0.95 $0.69 $0.79 $0.81 $0.83

Morguard REIT MRT.un ND $16.48 $20.00 27% O - $19.55 $15.56 62.6 1,032 $0.96 $0.96 $0.96 5.8% 96% $1.40 $1.51 $1.58 $1.61 $0.73 $1.00 $1.14 $1.24

Diversified 5.6% 81%

All Commercial Property 6.0% 89%

Stock Rating Legend: TP Top Pick; O Outperform; SP Sector Perform; U Underperform. Analyst Legend: ND Neil Downey; TW - Tal Woolley Risk Qualifier Legend: Spec Speculative Risk.

Note: R Restricted from providing an investment opinion due to new issued distribution period or quiet period surrounding a "lock-up" termination; UR Under Review.

Cash Distributions / Unit


November 19, 2013 6

Exhibit 2: Canadian REITs And REOCs Valuation Table (Continued) Neil Downey, CA, CFA (416) 842-7835Page 2 of 3 Kevin Cheng, CFA (416) 842-3803

Matias Ronis, CA (416) 842-7894 Matias Ronis, CA (416) 842-7894

Implied RBCCM Book

Business Focus EV/ Cap Cap NAV / Price / Value / Price /

Property Sector (Estimated Sources of Income) EBITDA Rate Rate Unit NAV Unit Book 2011 2012 2013E 12 13E 14E 15E 12 13E 14E 15E

Boardwalk REIT Residential (by NOI: AB ~60%; BC ~2%; SK ~14%; QC ~16%; ON ~7%) 20.2x 5.3% 5.0% $67.00 90% $68.87 0.9x 67% 46% 40% 20.9x 18.7x 17.7x 17.0x 23.3x 20.7x 19.5x 18.7x

CAP REIT Residential (by NOI: ON ~67%; QC ~12%; BC ~10%; AB ~6%; Other ~5%) 19.0x 5.7% 5.3% $25.00 84% $24.66 0.9x 87% 65% 65% 14.4x 13.4x 13.1x 12.9x 15.6x 14.5x 14.3x 13.9x

Killam Properties Inc. Predominantly Atlantic Cda Apartments (77%); MHCs nationally (23%) 18.1x 6.3% 6.0% $12.00 90% $11.22 1.0x N/A N/A N/A 15.2x 15.5x 14.2x 13.4x 18.1x 18.4x 16.6x 15.5x

Northern Property High Arctic & Maritime (Residential ~65%; Commercial ~12%; Other ~25%) 14.7x 7.3% 7.5% $27.00 105% $24.93 1.1x 50% 4% 40% 12.5x 12.7x 11.6x 11.1x 15.4x 16.0x 14.4x 13.7x

Simple Averages 18.0x 6.2% 5.9% 92% 1.0x 68% 38% 48% 15.8x 15.0x 14.2x 13.6x 18.1x 17.4x 16.2x 15.5x

InnVest REIT Lodging (full-service and limited service hotels) 10.6x 7.9% 8.0% $4.25 105% $2.15 2.1x 61% 40% 40% 6.8x 7.5x 7.8x 6.7x 9.5x 10.0x 10.4x 8.8x

10.6x 7.9% 8.0% 105% 2.1x 61% 40% 40% 6.8x 7.5x 7.8x 6.7x 9.5x 10.0x 10.4x 8.8x

Chartwell Retirement Residences Private-pay focus (Cdn IL/RH ~61%; US IL/AL ~24%; Cdn LTCs ~15%) 15.3x 7.3% 7.3% $10.00 101% $3.22 3.1x 96% 83% 80% 13.7x 13.3x 12.4x 11.8x 15.2x 14.9x 13.9x 13.4x

Extendicare Inc. Gov't Reimbursement (US SNFs ~64%; Cdn LTCs ~26%; Services ~10%) 9.5x 10.7% 11.0% $6.49 101% $0.65 10.1x 70% 35% N/A 6.7x 8.1x 9.0x 8.4x 7.0x 7.9x 9.4x 8.8x

Leisureworld Senior Care Gov't Reimbursement (LTCs ~85% by suite count, all in ON) 14.1x 8.2% 8.3% $10.50 109% $6.20 1.8x N/A N/A N/A 11.9x 13.7x 10.7x 10.3x 9.1x 11.4x 9.3x 9.2x

Regal Lifestyle Communities Inc. Private-pay focus IL/RH (ON ~84%, SK ~11%, NL~5%) 16.8x 7.1% 7.3% $7.00 107% $7.51 1.0x N/A N/A N/A NMF 13.4x 10.1x 9.6x NMF 11.9x 10.7x 10.8x

13.9x 8.3% 8.5% 105% 4.0x 83% 59% 80% 10.8x 12.1x 10.5x 10.0x 10.4x 11.5x 10.8x 10.5x

Allied Properties REIT Class I Properties (Office ~88%; Retail ~12%) 17.6x 5.9% 6.3% $31.00 107% $29.50 1.1x 94% 54% 50% 18.6x 17.1x 15.7x 14.7x 23.2x 19.9x 18.4x 17.1x

Brookfield Office Props (US$) CBD Office (North America and Australia) 18.1x 6.0% 5.8% $22.00 87% $21.03 0.9x N/A N/A N/A 16.8x 17.1x 19.1x 15.3x 30.6x 30.1x 35.2x 24.3x

Brookfield Cda Office Props Class "A" Office (ON ~56%; AB ~39%; BC ~5%) 17.5x 6.1% 5.3% $33.00 77% $32.91 0.8x 80% 78% 70% 17.1x 16.4x 14.8x 14.3x 22.1x 20.7x 18.2x 17.6x

Dundee REIT Office ~92%; Industrial ~8% 15.1x 7.0% 6.4% $36.00 79% $35.49 0.8x 70% 44% 50% 10.0x 10.0x 9.9x 9.9x 12.3x 12.1x 12.0x 12.0x

Granite REIT Industrial (100%) 11.4x 9.8% 9.0% $39.00 91% $35.41 1.0x N/A N/A N/A 14.6x 11.7x 11.3x 11.1x 16.1x 12.2x 12.0x 11.8x

NorthWest Healthcare REIT Medical Office Buildings (ON ~41%; Western Cdn ~36%; Other ~23%) 14.7x 7.2% 6.7% $12.00 85% $12.95 0.8x 94% 95% 90% 10.3x 10.3x 10.0x 9.7x 12.3x 12.2x 11.8x 11.4x

Pure Industrial REIT Industrial (100%) 15.9x 6.6% 6.5% $4.75 97% $4.29 1.1x 97% 90% 85% 13.0x 11.3x 10.7x 10.5x 15.4x 12.7x 12.4x 12.1x

15.8x 6.9% 6.6% 89% 0.9x 87% 72% 69% 14.3x 13.4x 13.1x 12.2x 18.9x 17.1x 17.1x 15.2x

Calloway REIT Primarily Wal-Mart anchored, New Format Centers (85%) 15.7x 6.5% 6.0% $29.50 87% $28.52 0.9x 56% 31% 40% 14.3x 13.9x 13.4x 13.0x 14.9x 14.8x 14.3x 13.9x

Choice Properties REIT Primarily foodstore (Loblaws) anchored shopping centres (90%) 17.0x 6.2% 6.3% $10.10 102% $10.15 1.0x N/A N/A N/A N/A 11.9x 11.7x 11.7x N/A 14.0x 14.5x 14.2x

First Capital Realty Primarily urban food store-anchored strip retail 18.5x 5.8% 5.8% $17.75 98% $15.79 1.1x N/A N/A N/A 17.6x 17.0x 16.2x 15.4x 19.5x 18.5x 17.9x 16.9x

Partners REIT Primarily Ontario and Quebec 13.2x 6.9% 6.6% $6.80 86% $7.60 0.8x 100% 100% 100% 9.1x 10.3x 9.7x 9.3x 11.0x 13.7x 12.0x 11.2x

Plazacorp Retail Properties Mostly strip plazas/single-tenant; ~60% GLA from Atlantic Canada 15.7x 7.2% 6.8% $4.65 91% $4.56 0.9x N/A N/A N/A 16.0x 14.9x 12.9x 12.3x 17.4x 15.5x 14.2x 13.4x

Retrocom REIT 100%-A mix of formats, primarily in secondary/tertiary markets 14.2x 7.5% 7.0% $5.80 83% $6.03 0.8x 100% 100% 100% 10.8x 10.5x 9.5x 9.2x 13.1x 13.0x 11.5x 11.0x

RioCan REIT Retail ~96%; Office ~4%; Canada/US split is ~85%/~15% 18.5x 5.9% 5.9% $25.00 101% $22.44 1.1x 62% 53% 50% 16.6x 15.5x 14.8x 14.4x 18.2x 17.1x 16.4x 16.0x

16.1x 6.6% 6.3% 93% 0.9x 80% 71% 73% 14.1x 13.4x 12.6x 12.2x 15.7x 15.2x 14.4x 13.8x

Artis REIT Office 53%; Retail ~26%; Industrial ~21% 15.0x 6.9% 6.4% $17.00 85% $17.26 0.8x 100% 100% 100% 11.1x 9.9x 9.7x 9.4x 13.5x 11.8x 11.6x 11.2x

CREIT New Format/Strip Retail ~53%; Office ~23%; Industrial ~24% 17.5x 6.1% 6.0% $44.00 97% $24.86 1.7x 13% 4% 10% 16.3x 15.1x 14.5x 14.0x 19.7x 17.2x 16.7x 16.1x

Cominar REIT Retail ~19%; Office ~49%; Industrial ~32% 14.4x 7.2% 6.5% $22.50 81% $22.04 0.8x 73% 90% 80% 10.3x 10.4x 10.1x 9.8x 12.2x 11.9x 11.6x 11.2x

H&R REIT Primarily NNN (Office ~48%; Industrial ~29%; Retail ~23%) 0.1x 6.3% 6.1% $23.50 92% $23.84 0.9x 49% 57% 50% 13.5x 12.2x 12.2x 12.0x 16.6x 15.2x 14.5x 14.1x

Huntingdon Capital Corp. Office 22%; Retail 27%; Industrial 23%; Ground Lease 29% 0.0x 10.0% 7.5% $14.75 82% $15.47 0.8x N/A N/A N/A 10.4x 13.7x 12.6x N/A 14.4x 19.8x 14.8x N/A

Melcor REIT Office 59%; Retail 36%; Industrial 3%; Other 2% 16.3x 6.6% 6.4% $11.50 93% $11.63 0.9x N/A N/A N/A 14.4x 12.2x 11.6x 11.3x 15.4x 13.6x 13.3x 12.9x

Morguard REIT Malls/Retail ~49%; Office ~48%; Other ~3% 14.4x 7.2% 6.1% $23.00 72% $23.25 0.7x 32% 45% 40% 11.8x 10.9x 10.4x 10.2x 22.6x 16.5x 14.5x 13.3x

Simple Averages 11.1x 7.2% 6.4% 86% 1.0x 53% 59% 56% 12.6x 12.1x 11.6x 11.1x 16.3x 15.1x 13.8x 13.1x

All Commercial Property 14.3x 6.9% 6.4% 89% 0.9x 73% 67% 65% 13.6x 13.0x 12.4x 11.9x 17.0x 15.8x 15.1x 14.1x

Overall, Simple Averages 14.6x 7.0% 6.7% 92% 1.4x 73% 61% 62% 13.4x 12.9x 12.3x 11.7x 16.2x 15.3x 14.5x 13.6x

Overal (Ex-Lodging), Simple Averages 14.8x 7.0% 6.6% 92% 1.4x 73% 62% 63% 13.6x 13.1x 12.4x 11.9x 16.5x 15.5x 14.7x 13.8x

Tax Deferral AFFO/Unit MultiplesFFO/Unit Multiples


November 19, 2013 7

Exhibit 2: Canadian REITs And REOCs Valuation Table (Continued) Neil Downey, CA, CFA (416) 842-7835Page 3 of 3 Kevin Cheng, CFA (416) 842-3803

Matias Ronis, CA (416) 842-7894

Footnotes (all amounts are stated on a diluted basis):

1) Current distribution and yield are based on the current annualized monthly/quarterly distribution.

2) Payout Ratio = Run-Rate Cash Distribution / 2013E AFFO.

3) Adjusted Funds From Operations = FFO, adjusted for non-recoverable maintenance capital expenditures, significant straight-line rent adjustments and other items.

4) Chartwell REIT FFO/unit shown above excludes unrealized gains and losses on derivative financial instruments, unrealized foreign exchange gains and losses, and, writedowns on mezzanine loans.

5) Artis REIT - FFO/unit shown above excludes the impact of FX beginning in 2010.

6) H&R REIT FFO/unit shown above excludes non-operating

7) Melcor REIT 2013 FFO and AFFO (and multiples thereof) shown as the IPO 4 quarter forecast period ending March 30, 2014.

Source: RBC Capital Markets estimates and Thomson One


November 19, 2013 8

Exhibit 3: Canadian REITs And REOCs NAV Summary 1

Page 1 of 3

Office / Industrial REITs and REOCs Retail REITs and REOCs Diversified REITs and REOCs

Allied Brookfield Brookfield NorthWest Pure Choice First Plazacorp Huntingdon

Prop. Office Props Canada Dundee Granite Healthcare Industrial Calloway Properties Capital Partners Retail Retrocom RioCan Artis Cominar H&R Capital Melcor Morguard

REIT (US$) Office Props REIT REIT REIT REIT REIT REIT Realty REIT Properties REIT REIT REIT CREIT REIT REIT Corp. REIT REIT

Premium/(Discount) to NAV:

Unit Price - November 18, 2013 $33.25 $19.13 $25.46 $28.60 $35.48 $10.23 $4.60 $25.55 $10.33 $17.48 $5.82 $4.24 $4.81 $25.23 $14.52 $42.80 $18.30 $21.67 $12.10 $10.70 $16.48

Implied Cap Rate At Current Market Price 5.90% 6.00% 6.10% 7.00% 9.80% 7.20% 6.60% 6.50% 6.20% 5.80% 6.90% 7.20% 7.53% 5.90% 6.90% 6.10% 7.20% 6.30% 10.00% 6.60% 7.20%

Cap Rate Assigned By RBC CM 6.25% 5.75% 5.30% 6.35% 9.00% 6.70% 6.50% 6.00% 6.30% 5.75% 6.60% 6.85% 7.00% 5.90% 6.40% 6.00% 6.50% 6.10% 7.50% 6.35% 6.10%

RBC CM NAV Per Unit $31.00 $22.00 $33.00 $36.00 $39.00 $12.00 $4.75 $29.50 $10.10 $17.75 $6.80 $4.65 $5.80 $25.00 $17.00 $44.00 $22.50 $23.50 $14.75 $11.50 $23.00

Premium/(Discount) to NAV 7% (13%) (23%) (21%) (9%) (15%) (3%) (13%) 2% (2%) (14%) (9%) (17%) 1% (15%) (3%) (19%) (8%) (18%) (7%) (28%)

Change In Valuation Parameters & Sensitivity:

Previous Cap Rate2 6.10% 5.75% 5.25% 6.25% 9.00% 6.60% 6.40% 5.90% NA 5.75% 6.60% 6.75% 7.10% 5.85% 6.40% 6.00% 6.50% 6.00% 7.00% NA 6.10%

Change In Cap Rate From Prior Quarter 0.15% 0.00% 0.05% 0.10% 0.00% 0.10% 0.10% 0.10% NA 0.00% 0.00% 0.10% -0.10% 0.05% 0.00% 0.00% 0.00% 0.10% 0.50% NA 0.00%

$ Per Unit Sensitivity to 25bp Chg In Cap Rate $1.72 $2.11 $2.72 $2.77 $1.36 $1.04 $0.40 $2.11 $0.81 $1.47 $0.88 $0.37 $0.50 $1.85 $1.52 $2.95 $1.75 $2.01 $0.36 $0.91 $1.84

Percentage Sensitivity 6% 10% 8% 8% 3% 9% 8% 7% 8% 8% 13% 8% 9% 7% 9% 7% 8% 9% 2% 8% 8%

Quarterly Change In NAV Analysis:

Previous NAV/Unit $29.00 $21.00 $31.50 $36.00 $38.50 $13.00 $4.50 $28.50 NA $17.00 $7.50 $4.50 $5.80 $24.00 $16.00 $40.00 $21.50 $24.50 $14.50 NA $21.50

Change $2.00 $1.00 $1.50 $0.00 $0.50 ($1.00) $0.25 $1.00 NA $0.75 ($0.70) $0.15 $0.00 $1.00 $1.00 $4.00 $1.00 ($1.00) $0.25 NA $1.50

$ Change - Excluding Revaluation3 $3.03 $1.00 $2.04 $1.11 $0.50 ($0.58) $0.41 $1.84 NA $0.75 ($0.70) $0.30 ($0.20) $1.37 $1.00 $4.00 $1.00 ($0.20) $0.97 NA $1.50

$ Change - Due to Revaluation4 ($1.03) $0.00 ($0.54) ($1.11) $0.00 ($0.42) ($0.16) ($0.84) NA $0.00 $0.00 ($0.15) $0.20 ($0.37) $0.00 $0.00 $0.00 ($0.80) ($0.72) NA $0.00

Percentage Change Since Last Quarter 7% 5% 5% 0% 1% (8%) 6% 4% NA 4% (9%) 3% 0% 4% 6% 10% 5% (4%) 2% NA 7%

Percentage Change - Excluding Revaluation3 10% 5% 6% 3% 1% (4%) 9% 6% NA 4% (9%) 7% (3%) 6% 6% 10% 5% (1%) 7% NA 7%

Percentage Change - Due to Revaluation4 (4%) 0% (2%) (3%) 0% (3%) (4%) (3%) NA 0% 0% (3%) 3% (2%) 0% 0% 0% (3%) (5%) NA 0%

Other Metrics:

Book Value Per Unit $29.50 $21.03 $32.91 $35.49 $35.41 $12.95 $4.29 $28.52 $10.15 $15.79 $7.60 $4.56 $6.03 $22.44 $17.26 $24.86 $22.04 $23.84 $15.47 $11.63 $23.25

Price/Book 1.1x 0.9x 0.8x 0.8x 1.0x 0.8x 1.1x 0.9x 1.0x 1.1x 0.8x 0.9x 0.8x 1.1x 0.8x 1.7x 0.8x 0.9x 0.8x 0.9x 0.7x

Debt/Enterprise Value - Balance Sheet Leverage5 37% 54% 48% 54% 25% 60% 53% 48% 48% 49% 73% 59% 62% 45% 60% 41% 55% 53% 45% 50% 55%

Debt/Enterprise Value - FFO Leverage6 37% 49% 48% 53% 25% 56% 53% 47% 48% 44% 57% 53% 52% 45% 56% 41% 52% 51% 45% 50% 49%


November 19, 2013 9

Exhibit 3: Canadian REITs And REOCs NAV Summary 1

Page 2 of 3

Lodging REITs Apartment REITs and REOCs Seniors Housing

Northern Chartwell Extendicare Leisureworld Regal

InnVest Boardwalk CAP Killam Property Retirement Inc. Senior Lifestyle

REIT REIT REIT Prop. Inc. REIT Residences Care Communities

Premium/(Discount) to NAV1:

Unit Price - November 18, 2013 $4.48 $59.97 $21.08 $10.82 $28.28 $10.06 $6.58 $11.44 $7.51

Implied Cap Rate At Current Market Price2 7.87% 5.34% 5.69% 6.27% 7.30% 7.30% 11.26% 8.19% 7.05%

Cap Rate Assigned By RBC CM 8.0%/DCF 5.00% 5.25% 6.00% 7.50% 7.30% 11.00% 8.25% 7.25%

RBC CM NAV Per Unit $4.25 $67.00 $25.00 $12.00 $27.00 $10.00 $7.00 $10.50 $7.00

Premium/(Discount) to NAV 5% (10%) (16%) (10%) 5% 1% (6%) 9% 7%

Change In Valuation Parameters & Sensitivity:

Cap Rate Assigned By RBC CM 8.0%/DCF 5.00% 5.15% 6.00% 7.50% 7.30% 10.80% 8.30% 7.25%

Change In Cap Rate From Prior Quarter 0.00% 0.00% 0.10% 0.00% 0.00% 0.00% 0.20% -0.05% N/A

$ Per Unit Sensitivity to 25bp Chg In Cap Rate $0.47 $5.77 $2.50 $1.12 $1.59 $0.00 $0.44 $0.76 $0.63

Percentage Sensitivity 11% 9% 10% 9% 6% 0% 6% 7% 9%

Quarterly Change In NAV Analysis:

RBC CM NAV Per Unit $4.00 $63.00 $25.00 $13.00 $27.00 $9.50 $8.50 $10.50 N/A

Change $0.25 $4.00 $0.00 ($1.00) $0.00 $0.50 ($1.50) $0.00 N/A

$ Change - Excluding Revaluation3 $0.25 $4.00 $1.00 ($1.00) $0.00 $0.50 ($1.15) ($0.15) N/A

$ Change - Due to Revaluation4 $0.00 $0.00 ($1.00) $0.00 $0.00 $0.00 ($0.35) $0.15 N/A

Percentage Change Since Last Quarter 6% 6% 0% (8%) 0% 5% (18%) 0% N/A

Percentage Change - Excluding Revaluation3 6% 6% 4% (8%) 0% 5% (14%) (1%) N/A

Percentage Change - Due to Revaluation4 0% 0% (4%) 0% 0% 0% (4%) 1% N/A

Other Metrics:

Book Value Per Unit $2.15 $68.87 $24.66 $11.22 $24.93 $3.22 $0.65 $6.20 $7.51

Price/Book 2.1x 0.9x 0.9x 1.0x 1.1x 3.1x 10.1x 1.8x 1.0x

Debt/Enterprise Value - Balance Sheet Leverage5 71% 43% 52% 58% 41% 55% 68% 58% 58%

Debt/Enterprise Value - FFO Leverage6 47% 43% 52% 50% 41% 52% 54% 52% 58%


November 19, 2013 10

Exhibit 3: Canadian REITs And REOCs NAV SummaryPage 3 of 3

Notes:

1. All calculations are derived from FTM estimated NOI from existing assets, after an appropriate adjustment for the value NOI non-producing assets (i.e., properties under developments or mezzanine loans).

2. The capitalization rate applied in the determination of NAV/unit approximately three months ago. None of the changes this quarter are due to substantial shifts in portfolio composition, but rather they are reflective

of small adjustments that we have implemented in order to more closely align our view of each REIT or REOC's portfolio with private market pricing for similar assets.

3. This line shows the component of the NAV/unit change that has occurred due to operating and financing parameters.

4. This line item shows the component of the NAV/unit change that has occurred because we have changed our valuation parameters (i.e., due to cap rate change).

5. Debt includes all convertible debentures in this calculation. This calculation portrays the degree by which the balance sheet is levered.

6. Debt excludes all convertible debentures in this calculation. This calculation portrays the degree by which FFO/share (diluted) is levered

(because all convertible debentures are converted to equity in the diluted FFO and AFFO per share calculations).

Source: RBC Capital Markets estimates, Thomson One and Company reports



Companies MentionedBrookfield Asset Management Inc. (NYSE: BAM; $39.97; Outperform)Morguard Corporation (TSX: MRC.TO; C$116.28; Outperform)

Required disclosures

Non-U.S. analyst disclosureKevin Cheng, Matias Ronis and Ben Halm (i) are not registered/qualified as research analysts with the NYSE and/or FINRA and (ii)may not be associated persons of the RBC Capital Markets, LLC and therefore may not be subject to FINRA Rule 2711 and NYSERule 472 restrictions on communications with a subject company, public appearances and trading securities held by a researchanalyst account.

Conflicts disclosuresThis product constitutes a compendium report (covers six or more subject companies). As such, RBC Capital Markets choosesto provide specific disclosures for the subject companies by reference. To access current disclosures for the subject companies,clients should refer to https://www.rbccm.com/GLDisclosure/PublicWeb/DisclosureLookup.aspx?entityId=1 or send a request toRBC CM Research Publishing, P.O. Box 50, 200 Bay Street, Royal Bank Plaza, 29th Floor, South Tower, Toronto, Ontario M5J 2W7.Please note that current conflicts disclosures may differ from those as of the publication date on, and as set forth in, this report.

The analyst(s) responsible for preparing this research report received compensation that is based upon various factors, includingtotal revenues of the member companies of RBC Capital Markets and its affiliates, a portion of which are or have been generatedby investment banking activities of the member companies of RBC Capital Markets and its affiliates.

Distribution of ratingsFor the purpose of ratings distributions, regulatory rules require member firms to assign ratings to one of three rating categories- Buy, Hold/Neutral, or Sell - regardless of a firm's own rating categories. Although RBC Capital Markets' ratings of Top Pick(TP)/Outperform (O), Sector Perform (SP), and Underperform (U) most closely correspond to Buy, Hold/Neutral and Sell, respectively,the meanings are not the same because our ratings are determined on a relative basis (as described above).

Distribution of ratingsRBC Capital Markets, Equity Research

As of 30-Sep-2013Investment BankingServ./Past 12 Mos.

Rating Count Percent Count Percent

BUY [Top Pick & Outperform] 769 51.00 271 35.24HOLD [Sector Perform] 656 43.50 179 27.29SELL [Underperform] 83 5.50 13 15.66

Conflicts policyRBC Capital Markets Policy for Managing Conflicts of Interest in Relation to Investment Research is available from us on request.To access our current policy, clients should refer tohttps://www.rbccm.com/global/file-414164.pdfor send a request to RBC Capital Markets Research Publishing, P.O. Box 50, 200 Bay Street, Royal Bank Plaza, 29th Floor, SouthTower, Toronto, Ontario M5J 2W7. We reserve the right to amend or supplement this policy at any time.

Dissemination of research and short-term trade ideasRBC Capital Markets endeavors to make all reasonable efforts to provide research simultaneously to all eligible clients, havingregard to local time zones in overseas jurisdictions. RBC Capital Markets' research is posted to our proprietary websites to ensureeligible clients receive coverage initiations and changes in ratings, targets and opinions in a timely manner. Additional distribution



may be done by the sales personnel via email, fax or regular mail. Clients may also receive our research via third-party vendors.Please contact your investment advisor or institutional salesperson for more information regarding RBC Capital Markets' research.RBC Capital Markets also provides eligible clients with access to SPARC on its proprietary INSIGHT website. SPARC contains marketcolor and commentary, and may also contain Short-Term Trade Ideas regarding the securities of subject companies discussed in thisor other research reports. SPARC may be accessed via the following hyperlink: https://www.rbcinsight.com. A Short-Term TradeIdea reflects the research analyst's directional view regarding the price of the security of a subject company in the coming days orweeks, based on market and trading events. A Short-Term Trade Idea may differ from the price targets and/or recommendationsin our published research reports reflecting the research analyst's views of the longer-term (one year) prospects of the subjectcompany, as a result of the differing time horizons, methodologies and/or other factors. Thus, it is possible that the securityof a subject company that is considered a long-term 'Sector Perform' or even an 'Underperform' might be a short-term buyingopportunity as a result of temporary selling pressure in the market; conversely, the security of a subject company that is rateda long-term 'Outperform' could be considered susceptible to a short-term downward price correction. Short-Term Trade Ideasare not ratings, nor are they part of any ratings system, and RBC Capital Markets generally does not intend, nor undertakes anyobligation, to maintain or update Short-Term Trade Ideas. Short-Term Trade Ideas discussed in SPARC may not be suitable for allinvestors and have not been tailored to individual investor circumstances and objectives, and investors should make their ownindependent decisions regarding any Short-Term Trade Ideas discussed therein.

Analyst certificationAll of the views expressed in this report accurately reflect the personal views of the responsible analyst(s) about any and all ofthe subject securities or issuers. No part of the compensation of the responsible analyst(s) named herein is, or will be, directly orindirectly, related to the specific recommendations or views expressed by the responsible analyst(s) in this report.

The Global Industry Classification Standard (GICS) was developed by and is the exclusive property and a service mark of MSCI Inc. (MSCI) and Standard & Poors Financial ServicesLLC (S&P) and is licensed for use by RBC. Neither MSCI, S&P, nor any other party involved in making or compiling the GICS or any GICS classifications makes any express or impliedwarranties or representations with respect to such standard or classification (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warrantiesof originality, accuracy, completeness, merchantability and fitness for a particular purpose with respect to any of such standard or classification. Without limiting any of the foregoing,in no event shall MSCI, S&P, any of their affiliates or any third party involved in making or compiling the GICS or any GICS classifications have any liability for any direct, indirect, special,punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

Disclaimer

RBC Capital Markets is the business name used by certain branches and subsidiaries of the Royal Bank of Canada, including RBC Dominion Securities Inc., RBCCapital Markets, LLC, RBC Europe Limited, RBC Capital Markets (Hong Kong) Limited, Royal Bank of Canada, Hong Kong Branch and Royal Bank of Canada, SydneyBranch. The information contained in this report has been compiled by RBC Capital Markets from sources believed to be reliable, but no representation or warranty,express or implied, is made by Royal Bank of Canada, RBC Capital Markets, its affiliates or any other person as to its accuracy, completeness or correctness. Allopinions and estimates contained in this report constitute RBC Capital Markets' judgement as of the date of this report, are subject to change without notice andare provided in good faith but without legal responsibility. Nothing in this report constitutes legal, accounting or tax advice or individually tailored investmentadvice. This material is prepared for general circulation to clients and has been prepared without regard to the individual financial circumstances and objectives ofpersons who receive it. The investments or services contained in this report may not be suitable for you and it is recommended that you consult an independentinvestment advisor if you are in doubt about the suitability of such investments or services. This report is not an offer to sell or a solicitation of an offer to buyany securities. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. RBC CapitalMarkets research analyst compensation is based in part on the overall profitability of RBC Capital Markets, which includes profits attributable to investment bankingrevenues. Every province in Canada, state in the U.S., and most countries throughout the world have their own laws regulating the types of securities and otherinvestment products which may be offered to their residents, as well as the process for doing so. As a result, the securities discussed in this report may not beeligible for sale in some jurisdictions. RBC Capital Markets may be restricted from publishing research reports, from time to time, due to regulatory restrictions and/or internal compliance policies. If this is the case, the latest published research reports available to clients may not reflect recent material changes in the applicableindustry and/or applicable subject companies. RBC Capital Markets research reports are current only as of the date set forth on the research reports. This report isnot, and under no circumstances should be construed as, a solicitation to act as securities broker or dealer in any jurisdiction by any person or company that is notlegally permitted to carry on the business of a securities broker or dealer in that jurisdiction. To the full extent permitted by law neither RBC Capital Markets norany of its affiliates, nor any other person, accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or the informationcontained herein. No matter contained in this document may be reproduced or copied by any means without the prior consent of RBC Capital Markets.

Additional information is available on request.

To U.S. Residents:This publication has been approved by RBC Capital Markets, LLC (member FINRA, NYSE, SIPC), which is a U.S. registered broker-dealer and which acceptsresponsibility for this report and its dissemination in the United States. Any U.S. recipient of this report that is not a registered broker-dealer or a bank acting ina broker or dealer capacity and that wishes further information regarding, or to effect any transaction in, any of the securities discussed in this report, shouldcontact and place orders with RBC Capital Markets, LLC.To Canadian Residents:This publication has been approved by RBC Dominion Securities Inc.(member IIROC). Any Canadian recipient of this report that is not a Designated Institution inOntario, an Accredited Investor in British Columbia or Alberta or a Sophisticated Purchaser in Quebec (or similar permitted purchaser in any other province) and



that wishes further information regarding, or to effect any transaction in, any of the securities discussed in this report should contact and place orders with RBCDominion Securities Inc., which, without in any way limiting the foregoing, accepts responsibility for this report and its dissemination in Canada.To U.K. Residents:This publication has been approved by RBC Europe Limited ('RBCEL') which is authorized by the Prudential Regulation Authority and regulated by the FinancialConduct Authority ('FCA') and the Prudential Regulation Authority, in connection with its distribution in the United Kingdom. This material is not for generaldistribution in the United Kingdom to retail clients, as defined under the rules of the FCA. However, targeted distribution may be made to selected retail clients ofRBC and its affiliates. RBCEL accepts responsibility for this report and its dissemination in the United Kingdom.To Persons Receiving This Advice in Australia:This material has been distributed in Australia by Royal Bank of Canada - Sydney Branch (ABN 86 076 940 880, AFSL No. 246521). This material has been preparedfor general circulation and does not take into account the objectives, financial situation or needs of any recipient. Accordingly, any recipient should, before acting onthis material, consider the appropriateness of this material having regard to their objectives, financial situation and needs. If this material relates to the acquisitionor possible acquisition of a particular financial product, a recipient in Australia should obtain any relevant disclosure document prepared in respect of that productand consider that document before making any decision about whether to acquire the product. This research report is not for retail investors as defined in section761G of the Corporations Act.To Hong Kong Residents:This publication is distributed in Hong Kong by RBC Investment Services (Asia) Limited, RBC Investment Management (Asia) Limited and RBC Capital Markets (HongKong) Limited, licensed corporations under the Securities and Futures Ordinance or, by the Royal Bank of Canada, Hong Kong Branch, a registered institution underthe Securities and Futures Ordinance. This material has been prepared for general circulation and does not take into account the objectives, financial situation,or needs of any recipient. Hong Kong persons wishing to obtain further information on any of the securities mentioned in this publication should contact RBCInvestment Services (Asia) Limited, RBC Investment Management (Asia) Limited, RBC Capital Markets (Hong Kong) Limited or Royal Bank of Canada, Hong KongBranch at 17/Floor, Cheung Kong Center, 2 Queen's Road Central, Hong Kong (telephone number is 2848-1388).To Singapore Residents:This publication is distributed in Singapore by the Royal Bank of Canada, Singapore Branch and Royal Bank of Canada (Asia) Limited, registered entities grantedoffshore bank and merchant bank status by the Monetary Authority of Singapore, respectively. This material has been prepared for general circulation and doesnot take into account the objectives, financial situation, or needs of any recipient. You are advised to seek independent advice from a financial adviser beforepurchasing any product. If you do not obtain independent advice, you should consider whether the product is suitable for you. Past performance is not indicativeof future performance. If you have any questions related to this publication, please contact the Royal Bank of Canada, Singapore Branch or Royal Bank of Canada(Asia) Limited.To Japanese Residents:Unless otherwise exempted by Japanese law, this publication is distributed in Japan by or through RBC Capital Markets (Japan) Ltd., a registered type one financialinstruments firm and/or Royal Bank of Canada, Tokyo Branch, a licensed foreign bank.

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Canadian REITs and REOCs

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