Half Year 2026 Manulife US Real Estate Investment Trust Earnings Call

August 6, 2026

Speaker #1: Name is Wylyn, and I'm head of the investor relations team. Thank you very much for taking time to attend the briefing today. Before we proceed, I would like to run through some housekeeping.

Speaker #1: First, please note that this briefing is being recorded. The recording will be available on the MAS corporate website after the briefing. Secondly, to ensure that everyone can hear us clearly, please put yourself on mute until we get to the Q&A session.

Speaker #1: Allow me to now introduce the management team on the call. First, we have our CEO and CIO, Mr. John Casasante. And we have our CFO, Mr. Mushtaque Ali.

Speaker #1: Let me hand it over to John now for the presentation. John, please.

Speaker #2: Good morning. Everyone. I am pleased to present the key highlights of our first half 2026 financial results. In June, we completed the divestment of Figaroa, generating net proceeds of about $82 million, from which $72 million was used to fully repay our 2026 debt and partially repay our 2027 debt.

Speaker #2: With $10 million retained for CapEx, this has strengthened our balance sheet and improved our financial ratios. Did I investment also brings a total debt repayment since November of 2024 down to I'm sorry, makes a total payment since November of 2024 to $389 million.

Speaker #2: Notably, we have exceeded the minimum sales target of $328.7, which was a key requirement under the master restructuring agreement. This represents a significant milestone in our restructuring journey and positions us to exit restructuring by the end of 2026, subject to lender negotiations.

Speaker #2: In terms of our portfolio performance, occupancy improved to 70.4% following the divestment of Figaroa, which was at 45% occupied. Our portfolio wealth remained healthy at 4.4 years, as of June 30, 2026.

Speaker #2: On the capital management front, aggregate leverage improved to 54.1% from 58 in the prior quarter. Following debt repayment using the net proceeds from the sale of Figaroa, interest coverage ratio stood at 1.6 times as of June 30, 2026.

Speaker #2: I will now pass the presentation to Mushtaque to elaborate on our financial performance.

Speaker #3: Thank you, John. So I'll now go through the key highlights of MAS first half financial results. The income available for distribution declined USD 3.2 million, which is mainly due to a $6 million $6.2 million decrease in cash NPI arising from divestment of 3 properties.

Speaker #3: Namely, Figaroa, Peachtree, and Plaza. However, on the same store properties basis, the cash NPI increased by 2 million, which is driven by lower fee rent provided to tenants at 10 exchange and contributions from new leases at PEPS.

Speaker #3: Our finance expenses during the period decreased by 1.1 million, which is primarily driven by lower debt balances following the debt repayments that were made in year 2025 and 2026.

Speaker #3: And this was offset by higher interest costs after the expiry of interest rate swaps in July 2025 and April 2026. And lastly, our expenses were reduced by 0.3 million mainly due to reduction in management fees in line with reduced income available for distribution.

Speaker #3: Moving to the next slide. This slide highlights our performance of the same store portfolio on a cash NPI basis. Cash NPI refers to the NPI that's adjusted for any non-cash items, including amortization of leasing costs and straight-line rent adjustments.

Speaker #3: For first half of 2026, our cash NPI increased by 7%, driven mainly by higher rental recoveries from income recoveries income at FEPS from new leases, which commenced in 2025, lower fee rent provided to tenants at 10 exchange, and Michaelson and higher lease termination income at CenterPoint.

Speaker #3: This was partially offset by higher property taxes at Michaelson due to absence of one of tax appeal benefit that was recognized in the first half of 2025.

Speaker #3: Next slide, please. In terms of our financial position, as John highlighted earlier, USD 72 million of net proceeds realized from divestment of Figaroa have been used to fully repay the $35.6 million of debt from 2026 maturities and partially repay of about $36.8 million of 2027 debt maturities.

Speaker #3: We retained approximately $10 million for capital expenditure purposes from the net proceeds of total borrowings were reduced to about $490 million. We are continuing to adopt a prudent cash management and have improved our cash position, which will enhance our financial flexibility and position us well to support leasing activity and future growth opportunities.

Speaker #3: Next slide. So this slide outlines our current debt profile and key financial indicators. Following the debt repayment using the proceeds from divestment of Figaroa, we have no remaining debt outstanding in 2026.

Speaker #3: Our next debt maturity of about USD 133.4 million is due in 2027. At June 30, 2026, our aggregate leverage stood at 54.1%, which is a drop of 400 basis points compared to 3 months ago.

Mushtaque Ali: Proceeds realized from divestment of Figueroa have been used to fully repay the USD 35.6 million of debt from 2026 maturities and partially repay of about USD 36.8 million of 2027 debt maturities. We retained approximately $10 million for capital expenditure purposes from the net proceeds of Figueroa. As a result, our total borrowings were reduced to about $490 million. We are continuing to adopt a prudent cash management and have improved our cash position, which will enhance our financial flexibility and position us well to support leasing activity and future growth opportunities. Next slide. This slide outlines our current debt profile and key financial indicators. Following the debt repayment using the proceeds from divestment of Figueroa, we have no remaining debt outstanding in 2026. Our next debt maturity of about USD 133.4 million is due in 2027.

Speaker #1: Proceeds realized from the divestment of Figueroa have been used to fully repay the $35.6 million of debt maturing in 2026, and to partially repay approximately $36.8 million of 2027 debt maturities.

Speaker #3: Unencumbered gearing also improved to 59.7 million, falling within the financial covenant of 60%, which will resume from July 1, 2026. Our weighted average interest rate increased to 5.84% from 4.52% 3 months ago and this is primarily due to the expiry of a 250 million interest rate swap in April of this year.

Speaker #1: We retained approximately $10 million for capital expenditure purposes from the net proceeds of Figaroa. As a result, our total borrowings were reduced to about $490 million.

Speaker #3: The weighted average debt maturity is at 2 years, while the ICR is at 1.6 times. As mentioned, the increase in our borrowing cost in second quarter of 2026 is primarily driven by expiry of 250 million interest rate swap in April 2026.

Speaker #1: We are continuing to adopt prudent cash management and have improved our cash position, which will enhance our financial flexibility and position us well to support leasing activity and future growth opportunities.

Speaker #1: Next slide. This slide outlines our current debt profile and key financial indicators. Following the debt repayment using the proceeds from the divestment of Figaroa, we have no remaining debt outstanding in 2026.

Speaker #3: This swap carried a low fixed rate and was entered in 5 years ago, at approximate cost of below 1%. As a result of our hedged and fixed rate debt proportion, the fixed rate hedge proportion decreased to 34.3% as of June 30, 2026, from close to 75% at March 31.

Speaker #1: Our next debt maturity of about $133.4 million is due in 2027. As of June 30, 2026, our aggregate leverage stood at 54.1%, which is a drop of 400 basis points compared to three months ago.

Mushtaque Ali: At 30 June 2026, our aggregate leverage stood at 54.1%, which is a drop of 400 basis points compared to 3 months ago. Unencumbered gearing also improved to USD 59.7 million, falling within the financial covenant of 60%, which will resume from 1 July 2026. Our weighted average interest rate increased to 5.84% from 4.52% 3 months ago, and this is primarily due to the expiry of a $250 million interest rate swap in April of this year. The weighted average debt maturity is at 2 years, while the ICR is at 1.6x. Next slide. As mentioned, the increase in our borrowing cost in Q2 2026 is primarily driven by expiry of USD 250 million interest rate swap in April 2026. This swap carried a low fixed rate and was entered in 5 years ago at an approximate cost of below 1%.

Speaker #3: As we are currently in discussions with our lenders regarding our upcoming debt maturities, we will continue to assess our hedging strategy in tandem with these ongoing discussions.

Speaker #1: Unencumbered gearing also improved to $59.7 million, falling within the financial covenant of 60%, which will resume from July 1, 2026. Our weighted average interest rate increased to 5.84% from 4.52% three months ago, and this is primarily due to the expiry of a $250 million interest rate swap in April of this year.

Speaker #3: In the meantime, given the uncertain interest rate outlook, an elevated hedging cost at this point of time which currently exceed the cost of our floating rate borrowing cost, we believe it's prudent to maintain the flexibility until there is greater certainty around the capital structure and rate outlook.

Speaker #3: We'll continue to closely monitor the interest rate landscape taking into account our loan maturities and our expected debt repayments to determine the most appropriate hedging strategy going forward.

Speaker #1: The weighted average debt maturity is at 2 years, while the ICR is at 1.6 times. As mentioned, the increase in our borrowing cost in Q2 2026 is primarily driven by the expiry of a $250 million interest rate swap in April 2026.

Speaker #3: This slide shows our trading 12-month interest coverage ratio at June 30, which was at 1.6 times. If we exclude the sponsor lender loan exit premium, our MAS ICR would be higher at 1.9 times.

Speaker #1: This swap carried a low fixed rate and was entered into five years ago, at an approximate cost of below 1%. As a result of our hedged and fixed-rate debt proportion, the fixed-rate hedge proportion decreased to 34.3% as of June 30, 2026, from close to 75% at March 31.

Speaker #3: Our bank ICR under our loan facility is calculated different from MAS ICR, which is at 2.0 times, so we continue to have sufficient headroom above the relaxed covenant threshold of 1.5 times.

Mushtaque Ali: As a result of our hedge and fixed rate debt proportion, the fixed rate hedge proportion decreased to 34.3% as of 30 June 2026, from close to 75% at 31 March 2026. As we are currently in discussions with our lenders regarding our upcoming debt maturities, we will continue to assess our hedging strategy in tandem with these ongoing discussions. In the meantime, given the uncertain interest rate outlook and elevated hedging costs at this point of time, which currently exceed the cost of our floating rate borrowing cost, we believe it's prudent to maintain the flexibility until there is greater certainty around the capital structure and rate outlook. We'll continue to closely monitor the interest rate landscape, taking into account our loan maturities and our expected debt repayments to determine the most appropriate hedging strategy going forward. Next slide.

Speaker #3: The US Federal Reserve has kept the federal funds rate unchanged, since the start of this year, the Fed is also looking to restrict the forward-looking guidance in the wake of uncertain market conditions.

Speaker #1: As we are currently in discussions with our lenders regarding our upcoming debt maturities, we will continue to assess our hedging strategy in tandem with these ongoing discussions.

Speaker #3: With broad consensus indicating a potential rate hike later in the year, we are closely monitoring our financial metrics while executing our improved approach to improve the ICR.

Speaker #1: In the meantime, given the uncertain interest rate outlook and an elevated hedging cost at this point in time—which currently exceeds the cost of our floating-rate borrowing—we believe it's prudent to maintain flexibility until there is greater certainty around the capital structure and rate outlook.

Speaker #3: Our strategy under our growth and value of plan is to use the proceeds from asset divestment to primarily repay loans and then acquire higher yielding assets from industrial living and retail sectors.

Speaker #1: We'll continue to closely monitor the interest rate landscape, taking into account our loan maturities and our expected debt repayments, to determine the most appropriate hedging strategy going forward.

Speaker #3: Which will eventually help improve the ICR. With that, I'll pass it back to John for further comments. Thank you.

Speaker #2: Thank you, Mushtaque. Turning to our leasing performance, portfolio occupancy improved to 70.4% as of June 30, 2026, from 67.6 in the previous quarter, mainly due to the divestment of Figaroa, which was at a 45% occupancy at the point of sale.

Speaker #1: This slide shows our trailing 12-month interest coverage ratio at June 30, which was at 1.6 times. If we exclude the sponsor lender loan exit premium, our MAS ICR would be higher at 1.9 times.

Mushtaque Ali: This slide shows our trailing 12-month interest coverage ratio at 30 June 2026, which was at 1.6x. If we exclude the sponsor lender loan exit premium, our MAS ICR would be higher at 1.9x. Our bank ICR under our loan facility is calculated different from MAS ICR, which is at 2.0x. We continue to have sufficient headroom above the relaxed governance threshold of 1.5x. The U.S. Federal Reserve has kept the federal funds rate unchanged since the start of this year. The Fed is also looking to restrict the forward-looking guidance in the wake of uncertain market conditions. With broad consensus indicating a potential rate hike later in the year, we are closely monitoring our financial metrics while executing our approach to improve the ICR.

Speaker #2: This was also partially offset by an early termination of a partial lease so 4 of 5 floors were terminated at Center Point, where a tenant returned approximately 70,000 square feet of unutilized space and paid 4.4 million which will be recognized over the remainder of the original lease term through December 31, 2027, including its full rent obligation for the remaining term.

Speaker #1: Our bank ICR under our loan facility is calculated differently from the MAS ICR, which is at 2.0 times, so we continue to have sufficient headroom above the relaxed covenant threshold of 1.5 times.

Speaker #1: The US Federal Reserve has kept the federal funds rate unchanged since the start of this year. The Fed is also looking to restrict forward-looking guidance in the wake of uncertain market conditions.

Speaker #2: While the early termination reduced occupancy, it created a valuable leasing opportunity across the building's top floors. So they gave back the top 4 floors on this building.

Speaker #1: With broad consensus indicating a potential rate hike later in the year, we are closely monitoring our financial metrics while executing our improved approach to enhance the ICR.

Speaker #2: Importantly, we also believe that this arrangement has strengthened the relationship with our tenant as a point of that the tenant was a known vacate prior to this, us working with them and cooperating in this request allowed them to retain one floor which we are hopeful that at the appropriate time will be in discussions on a renewal on the balance of their space.

Speaker #1: Our strategy under our Growth and Value-Add plan is to use the proceeds from asset divestment to primarily repay loans, and then acquire higher-yielding assets from the industrial, living, and retail sectors.

Mushtaque Ali: Our strategy under our Growth and Value Up Plan is to use the proceeds from asset divestment to primarily repay loans. Then acquire higher-yielding assets from industrial, living, and retail sectors, which will eventually help improve the ICR. With that, I will pass it back to John for further comments. Thank you.

Speaker #1: Which will eventually help improve the ICR. With that, I'll pass it back to John for further comments. Thank you.

Speaker #2: Thank you, Mr. Shock. Turning to our leasing performance, portfolio occupancy improved to 70.4% as of June 30, 2026, from 67.6% in the previous quarter.

John Casasante: Thank you, Mushaq. Turning to our leasing performance. Portfolio occupancy improved to 70.4% as of 30 June 2026, from 67.6% in the previous quarter, mainly due to the divestment of Figueroa, which was at a 45% occupancy at the point of sale. This was also partially offset by an early termination of a partial lease. Four of five floors were terminated at Centerpointe, where a tenant returned approximately 70,000 sq ft of unutilized space and paid $4.4 million, which will be recognized over the remainder of the original lease term through 31 December 2027, including its full rent obligation for the remaining term. While the early termination reduced occupancy, it created a valuable leasing opportunity across the building's top floors. They gave back the top four floors on this building. Importantly, we also believe that this arrangement has strengthened the relationship with our tenant.

John Casasante: Thank you, Mushtaque . Turning to our leasing performance. Portfolio occupancy improved to 70.4% as of 30 June 2026, from 67.6% in the previous quarter, mainly due to the divestment of Figueroa, which was at a 45% occupancy at the point of sale. This was also partially offset by an early termination of a partial lease. Four of five floors were terminated at Centerpointe, where a tenant returned approximately 70,000 sq ft of unutilized space and paid $4.4 million, which will be recognized over the remainder of the original lease term through 31 December 2027, including its full rent obligation for the remaining term. While the early termination reduced occupancy, it created a valuable leasing opportunity across the building's top floors. They gave back the top four floors on this building. Importantly, we also believe that this arrangement has strengthened the relationship with our tenant.

Speaker #2: In addition to this, we also are negotiating a new deal on 2 of the 4 floors that were returned. So this ended up being a good situation for all, which we are actively marketing the balance of the vacated space as well to prospective tenants in addition to that.

Speaker #2: Mainly due to the divestment of Figaroa, which was at a 45% occupancy at the point of sale. This was also partially offset by an early termination of a partial lease, so 4 of 5 floors were terminated at Center Point, where a tenant returned approximately 70,000 square feet of unutilized space and paid $4.4 million, which will be recognized over the remainder of the original lease term through December 31, 2027, including its full rent obligation for the remaining term.

Speaker #2: Leasing activity has been consistent; it should be noted that in general larger lease transactions require more time to complete. Amongst the leases in our pipeline, 90,000 square feet are already in legal documentation, and is expected to be executed soon if all goes well.

Speaker #2: Next slide. We will remain on course with our strategic leasing strategy, our focus continues to be on deploying capital strategically and pursuing leasing opportunities that create value, liquidity, and accretion while maintaining and growing MPI across our portfolio.

Speaker #2: While the early termination reduced occupancy, it created a valuable leasing opportunity across the building's top floors. So, they gave back the top four floors on this building.

Speaker #2: Importantly, we also believe that this arrangement has strengthened the relationship with our tenant. As a point of that, the tenant was a known vacate prior to this. Us working with them and cooperating in this request allowed them to retain one floor, which we are hopeful that, at the appropriate time, will lead to discussions on a renewal on the balance of their space.

Speaker #2: Currently have about 700,000 square feet of activity in the pipeline in various leasing stages, ranging across tours, proposals, and negotiation. This makes up about 24% of our portfolio.

John Casasante: As I pointed out, the tenant was a known vacate prior to this. Us working with them and cooperating in this request allowed them to retain one floor, which we are hopeful that at the appropriate time, we will be in discussions on a renewal on the balance of their space. In addition to this, we also are negotiating a new deal on two of the four floors that were returned. This ended up being a good situation for all, which we are actively marketing the balance of the vacated space as well to prospective tenants, in addition to that. Leasing activity has been consistent. It should be noted that in general, larger lease transactions require more time to complete. Amongst the leases in our pipeline, 90,000 sq ft are already in legal documentation and is expected to be executed soon, if all goes well. Next slide.

Speaker #2: I think it's important to note that our lease transactions for office typically require longer completion timelines. Approximately half of our leasing pipeline by NLA comprises of 50,000 square foot and larger transactions.

Speaker #2: In addition to this, we are also negotiating a new deal on two of the four floors that were returned. So this ended up being a good situation for all. We are actively marketing the balance of the vacated space as well to prospective tenants, in addition to that.

Speaker #2: Which as a general guideline, from our brokers, that can take up to 18 months or more to complete. 22% of pipeline comprises of leases between 20 and 50,000 square feet, and also the general rule of thumb from our brokers is that from start to finish could take 9 to 12 months from tour to completion.

Speaker #2: Leasing activity has been consistent. It should be noted that, in general, larger lease transactions require more time to complete. Among the leases in our pipeline, 90,000 square feet are already in legal documentation and are expected to be executed soon if all goes well.

Speaker #2: As such, successful leasing requires not only a disciplined strategy continued focus and patience, particularly in this current environment. We remain focused on securing accretive and strategic leases that enhance portfolio resilience and support value creation.

Speaker #2: Next slide. We remain on course with our strategic leasing strategy. Our focus continues to be on deploying capital strategically and pursuing leasing opportunities that create value, liquidity, and accretion, while maintaining and growing MPI across our portfolio.

John Casasante: We remain on course with our strategic leasing strategy. Our focus continues to be on deploying capital strategically and pursuing leasing opportunities that create value, liquidity, and accretion, while maintaining and growing NPI across our portfolio. Currently have about 700,000 sq ft of activity in the pipeline in various leasing stages, ranging across tours, proposals, and negotiation. This makes up about 24% of our portfolio. I think it is important to note that our lease transactions for office typically require longer completion timelines. Approximately half of our leasing pipeline by NLA comprises of 50,000 sq ft and larger transactions, which as a general guideline from our brokers, that can take up to 18 months or more to complete. 22% of pipeline comprises of leases between 20,000 and 50,000 sq ft.

Speaker #2: Next slide. This slide illustrates our portfolio lease expirations, which are well staggered over the next few years. Only 4.2% of our portfolio NLA is due to expire, and the remaining of this year and we continue to engage these tenants proactively on renewal discussions.

Speaker #2: Currently, we have about 700,000 square feet of activity in the pipeline at various leasing stages, ranging across tours, proposals, and negotiations. This makes up about 24% of our portfolio.

Speaker #2: The top of the chart provides a breakdown of our tenant base by trade sector, which remains well diversified while the chart at the bottom shows an analysis of leases by rent escalation structures.

Speaker #2: On average, our annual rent escalation is 2.3% per annum. Next slide. This slide highlights our top 10 tenants, which have a whale of 4.8 years by NLA.

Speaker #2: Which, as a general guideline from our brokers, can take up to 18 months or more to complete. 22% of the pipeline comprises leases between 20,000 and 50,000 square feet, and also, the general rule of thumb from our brokers is that, from start to finish, it could take 9 to 12 months from tour to completion.

Speaker #2: We have highlighted 7 of our top 10 tenants in blue, all of whom have renewed and/or expanded their leases with us since 2023. This underscores the strength of these properties and our tenant relationships.

John Casasante: The general rule of thumb from our brokers is that from start to finish could take 9 to 12 months from tour to completion. As such, successful leasing requires not only a disciplined strategy, continued focus, and patience, particularly in this current environment. We remain focused on securing accretive and strategic leases that enhance portfolio resilience and support value creation. Next slide. This slide illustrates our portfolio lease expirations, which are well staggered over the next few years. Only 4.2% of our portfolio NLA is due to expire in the remaining of this year, and we continue to engage these tenants proactively on renewal discussions. The top of the chart provides a breakdown of our tenant base by trade sector, which remains well-diversified, while the chart at the bottom shows an analysis of leases by rent escalation structures. On average, our annual rent escalation is 2.3% per annum.

Speaker #2: Our top tenants comprise of established credit tenants with strong business fundamentals thus providing greater stability of income for the REIT. We're in the final stages of renewing another one of our top 10 tenants on the above list.

Speaker #2: As such, successful leasing requires not only a disciplined strategy, but also continued focus and patience, particularly in this current environment. We remain focused on securing accretive and strategic leases that enhance portfolio resilience and support value creation.

Speaker #2: Next slide. As we transition from stabilization into recovery and growth, our strategy continues to be anchored on our four pillars. Risk management, capital markets, asset level strategy, and portfolio optimization.

Speaker #2: Next slide. This slide illustrates our portfolio lease expirations, which are well staggered over the next few years. Only 4.2% of our portfolio NLA is due to expire in the remainder of this year, and we continue to engage these tenants proactively on renewal discussions.

Speaker #2: We have made significant progress in reducing debt and strengthening our balance sheet while continuing to actively manage debt maturities and position the REIT for recovery and future growth.

Speaker #2: The top of the chart provides a breakdown of our tenant base by trade sector, which remains well diversified, while the chart at the bottom shows an analysis of leases by rent escalation structures.

Speaker #2: At the asset level, we remain disciplined in capital allocation and focused on enhancing asset performance. At the portfolio level, we remain focused on capitalizing on value opportunities to diversify into sectors that can deliver sustainable, risk-adjusted returns for unit holders.

Speaker #2: On average, our annual rent escalation is 2.3% per annum. Next slide. This slide highlights our top 10 tenants, which have a WALE of 4.8 years by NLA.

John Casasante: Next slide. This slide highlights our top 10 tenants, which have a WALE of 4.8 years by NLA. We have highlighted seven of our top 10 tenants in blue, all of whom have renewed and/or expanded their leases with us since 2023. This underscores the strength of these properties and our tenant relationships. Our top tenants comprise of established credit tenants with strong business fundamentals, thus providing greater stability of income for the REIT. We're in the final stages of renewing another one of our top 10 tenants on the above list. Next slide. As we transition from stabilization into recovery and growth, our strategy continues to be anchored on our four pillars: risk management, capital markets, asset level strategy, and portfolio optimization.

Speaker #2: Next slide. As a reminder, the growth and value up plan is focused on rejuvenating the portfolio through a selective divestments and diversification into industrial, living, and retail assets.

Speaker #2: We have highlighted seven of our top ten tenants in blue, all of whom have renewed and/or expanded their leases with us since 2023. This underscores the strength of these properties and our tenant relationships.

Speaker #2: We remain focused on divestments proceeds to further deleveraging the balance sheet which will strengthen the balance sheet and lower aggregate leverage. While positioning must for sustainable, long-term growth and a return to distributions.

Speaker #2: Our top tenants comprise established credit tenants with strong business fundamentals, thus providing greater stability of income for the REIT. We're in the final stages of renewing another one of our top 10 tenants on the above list.

Speaker #2: Next slide. We have reached a pivotal milestone in our journey to exit the MRA, having exceeded our minimum sales target which is a key requirement under the MRA.

Speaker #2: Next slide. As we transition from stabilization into recovery and growth, our strategy continues to be anchored on our four pillars: risk management, capital markets, asset-level strategy, and portfolio optimization.

Speaker #2: While there are still work to be done, in the coming months, we will be continuing discussions with our lenders with a target to exit restructuring by the end of 2026.

Speaker #2: We have made significant progress in reducing debt and strengthening our balance sheet, while continuing to actively manage debt maturities and position the REIT for recovery and future growth.

John Casasante: We have made significant progress in reducing debt and strengthening our balance sheet, while continuing to actively manage debt maturities and position the REIT for recovery and future growth. At the asset level, we remain disciplined in capital allocation and focused on enhancing asset performance. At the portfolio level, we remain focused on capitalizing on value opportunities to diversify into sectors that can deliver sustainable risk-adjusted returns for unitholders. Next slide. As a reminder, the Growth and Value Up Plan is focused on rejuvenating the portfolio through selective divestments and diversification into industrial, living, and retail assets. We remain focused on divestments proceeds to further de-leveraging the balance sheet, which will strengthen the balance sheet and lower aggregate leverage, while positioning us for sustainable long-term growth and a return to distributions. Next slide.

Speaker #2: This includes reinstating the loan facility terms and aligning our ICR requirements with the latest MAS guidelines subject to lender approval. We also continue to engage lenders in discussions regarding our upcoming debt maturities.

Speaker #2: Which we will continue to manage through a combination of divestments, refinancing, capital raising, and/or debt maturity extensions. We also intend to initiate distributions at a sustainable payout ratio after exiting the MRA.

Speaker #2: Next slide. As a reminder, the Growth and Value Up Plan is focused on rejuvenating the portfolio through selective divestments and diversification into industrial, living, and retail assets.

Speaker #2: Taking into account our balance sheet capacity and cash flow requirements. On growth, we are targeting to disciplined mix of divestments, equity, and/or debt, strategically on focus our focus will shift towards non-office sectors including industrial living sector and retail assets where we see stronger fundamentals and more resilient growth.

Speaker #2: We remain focused on divestment proceeds to further deleverage the balance sheet, which will strengthen the balance sheet and lower aggregate leverage, while positioning us for sustainable, long-term growth and a return to distributions.

Speaker #2: Next slide. We have reached a pivotal milestone in our journey to exit the MRA, having exceeded our minimum sales target, which is a key requirement under the MRA.

Speaker #2: As we navigate this recovery phase, our focus is clear to continue to deleverage our balance sheet, build financial flexibility, and enhance the resilience of our portfolio.

John Casasante: We have reached a pivotal milestone in our journey to exit the MRA, having exceeded our minimum sales target, which is a key requirement under the MRA. While there is still work to be done in the coming months, we will be continuing discussions with our lenders with a target to exit restructuring by the end of 2026. This includes reinstating the loan facility terms and aligning our ICR requirements with the latest MAS guidelines, subject to lender approval. We also continue to engage with lenders in discussions regarding our upcoming debt maturities, which we will continue to manage through a combination of divestments, refinancing, capital raising, and/or debt maturity extensions. We also intended to initiate distributions at a sustainable payout ratio after exiting the MRA, taking into account our balance sheet capacity and cash flow requirements.

Speaker #2: While there is still work to be done in the coming months, we will be continuing discussions with our lenders, with a target to exit restructuring by the end of 2026.

Speaker #2: We are taking disciplined steps to lay out the groundwork to position the REIT for a sustainable, long-term growth and value creation. This brings me to the end of my presentation.

Speaker #2: This includes reinstating the loan facility terms and aligning our ICR requirements with the latest MAS guidelines, subject to lender approval. We also continue to engage lenders in discussions regarding our upcoming debt maturities.

Speaker #2: I will hand it back to Wylyn.

Speaker #1: Thank you, John. For the Q&A session, you may use two options to ask your questions. The preferred option would be to use the raise hand function in Teams.

Speaker #1: I will call out your name and you may then unmute to ask your question. The second option is to type in your question in the Q&A chat box and I will ask the question on your behalf.

Speaker #2: We will continue to manage this through a combination of divestments, refinancing, capital raising, and/or debt maturity extensions. We also intend to initiate distributions at a sustainable payout ratio after exiting the MRA.

Speaker #1: So please go ahead if there are any questions, please raise your hands or type the questions in the chat box. I see Jovy. Jovy, go ahead.

Speaker #2: Taking into account our balance sheet capacity and cash flow requirements, on growth, we are targeting to acquire assets funded through a disciplined mix of divestments, equity, and/or debt. Strategically, our focus will shift towards non-office sectors, including the industrial, living sector, and retail assets, where we see stronger fundamentals and more resilient growth.

John Casasante: On growth, we are targeting to acquire assets funded through a disciplined mix of divestments, equity, and/or debt. Strategically, our focus will shift towards non-office sectors, including industrial living sector and retail assets, where we see stronger fundamentals and more resilient growth. As we navigate this recovery phase, our focus is clear: to continue to deleverage our balance sheet, build financial flexibility, and enhance the resilience of our portfolio. We are taking disciplined steps to lay out the groundwork to position the REIT for sustainable long-term growth and value creation. This brings me to the end of my presentation. I will hand it back to Lylin.

Speaker #1: Jovy, can you unmute? Jovy, are you able to unmute?

Speaker #2: As we navigate this recovery phase, our focus is clear: to continue to deleverage our balance sheet, build financial flexibility, and enhance the resilience of our portfolio.

Speaker #3: Hello, hi, now again. Can you hear me? Okay, great, great. Yeah, sorry, I was blocked earlier. Thanks for the presentation. Congrats on the news.

Speaker #3: Just a few questions here. Firstly, just to confirm, so you're looking to exit the MRA by end 2026. Does that mean that distributions I mean, if that is successful, does it mean distributions will resume by that quarter as well, that half?

Speaker #2: We are taking disciplined steps to lay the groundwork to position the REIT for sustainable, long-term growth and value creation. This brings me to the end of my presentation.

Speaker #2: I will hand it back to Wylan.

Speaker #3: So we're expecting an announcement for DPU to return maybe in March, February of next year?

Speaker #1: Thank you, John. For the Q&A session, you may use two options to ask your questions. The preferred option would be to use the Raise Hand function in Teams.

[Company Representative] (Manulife US Real Estate Investment Trust): Thank you, John. For the Q&A session, you may use two options to ask your question. The preferred option would be to use the raise hand function in Zoom. I will call out your name, and you may then unmute to ask your question. The second option is to type in your question in the Q&A chat box, and I will ask the question on your behalf. Please go ahead. If there are any questions, please raise your hands or type the questions in the chat box. I see Jovi. Jovi, go ahead. Jovi, can you unmute? Jovi, are you able to unmute?

Wylyn Liu: Thank you, John. For the Q&A session, you may use two options to ask your question. The preferred option would be to use the raise hand function in Zoom. I will call out your name, and you may then unmute to ask your question. The second option is to type in your question in the Q&A chat box, and I will ask the question on your behalf. Please go ahead. If there are any questions, please raise your hands or type the questions in the chat box. I see Jovi. Jovi, go ahead. Jovi, can you unmute? Jovi, are you able to unmute?

Speaker #2: Yeah. Thanks, Jovy. So as we highlighted that exit from MRA is a precondition from for reinstating the distributions. Having said that, as you know that there are items that we do need to negotiate with lenders how do we exit from the MRA, which includes other components including covenants, as well as debt extensions as highlighted by John.

Speaker #1: I will call out your name, and you may then unmute to ask your question. The second option is to type your question in the Q&A chat box, and I will ask the question on your behalf.

Speaker #1: So, please go ahead—if there are any questions, please raise your hands or type the questions in the chat box. I see Jovy. Jovy, go ahead.

Speaker #2: So this is a all-inclusive conversation that we are undertaking with our various lenders. And depending on the outcome of that, we will be able to resume distributions at a at a level that we can sustain given our current circumstances.

Speaker #1: Jovy, can you unmute? Jovy, are you able to unmute?

Speaker #2: Which will be obviously improve over a period of time as we execute on the growth strategy. But so specifically, the timelines cannot be guaranteed, but our goal is to have those conversations with lenders concluded by the end of this year.

Speaker #3: Hello. Hi, now again. Can you hear me?

[Analyst]: Hello. Hi. Now I can. Can you hear me?

Speaker #1: Yeah.

Speaker #3: Okay, great, great. Yeah, sorry, I was blocked earlier. Thanks for the presentation. Congrats on the news. Just a few questions here. Firstly, just to confirm, so you're looking to exit the MRA by end-2026?

[Company Representative] (Manulife US Real Estate Investment Trust): Yes.

Wylyn Liu: Yes.

[Analyst]: Okay, great. Yeah, sorry, I was blocked earlier. Thanks for the presentation. Congrats on the news. Just a few questions here. Firstly, just to confirm, you're looking to exit the MRA by end of 2026. If that is successful, does that mean distributions will resume by that quarter as well? That half. We are expecting an announcement for DPU to return maybe in March, February of next year?

Speaker #3: Does that mean that distributions—I mean, if that is successful, does it mean distributions will resume by that quarter as well, that half? So we're expecting an announcement for DPU to return maybe in March or February of next year?

Speaker #3: Okay, got it. Thank you. Thanks. My next question, I mean, from a peak of top assets, you half the portfolio to six. And I see here that you are looking to sell up to three office assets to acquire new assets.

Speaker #3: Can you just provide more details in your parameters? Is there a quantum you have in mind that you want to hit or is this are you comfortable with this figure of selling up to three assets right now?

Speaker #2: Yeah. Thanks, Jovy. So, as we highlighted, exit from the MRA is a precondition for reinstating the distributions. Having said that, as you know, there are items that we do need to negotiate with lenders on how we exit from the MRA, which includes other components, including covenants as well as debt extensions, as highlighted by John.

Mushtaque Ali: Thanks, Jovi. As we highlighted, that exit from MRA is a precondition for reinstating the distributions. Having said that, as you know, there are items that we do need to negotiate with lenders. How do we exit from the MRA? Which includes other components, including governance, as well as debt extensions as highlighted by John. This is an all-inclusive conversation that we are undertaking with our various lenders, and depending on the outcome of that, we will be able to resume distributions at a level that we can sustain given our current circumstances, which will obviously improve over a period of time as we execute on the growth strategy. Specifically, the timelines cannot be guaranteed, but our goal is to have those conversations with lenders concluded by the end of this year.

Speaker #2: Yeah, so that was part of our AGM in December growth and value-up plan. And we had initially targeted three assets. We've already sold one of the three, which was 865 Figaroa.

Speaker #2: So there are two more. That we can complete between now and basically the end of March. So that is constantly evolving and we're evaluating which the best approach to that as well as sort of as we mentioned before, a key focus for us is deleveraging as well.

Speaker #2: So, this is an all-inclusive conversation that we are undertaking with our various lenders. Depending on the outcome of that, we will be able to resume distributions at a level that we can sustain, given our current circumstances.

Speaker #2: So there's going to be a balance between deleveraging as well as growth as sort of kind of going hand in hand with that. But I can't specifically, I'm not able to tell you exactly which assets at this point.

Speaker #2: But between now and the end of March, we have two more assets that we can dispose.

Speaker #3: Okay, got it. Thank you. I think just the last question for now. Could you just tell us a bit more about your preference among the other asset types in your expanded mandate?

Speaker #3: Okay, got it. Thank you. Thanks. My next question—so, the portfolio went from a peak of 12 assets to half the portfolio, now at 6. And I see here that you are looking to sell up to 3 office assets to acquire new assets.

[Analyst]: Okay, got it. Thank you. Thanks. My next question, from a peak of 12 assets, you halved your portfolio to six. I see here that you are looking to sell up to three office assets to acquire new assets. Can you just provide more details on your parameters? Is there a quantum you have in mind that you want to hit? Or are you comfortable with this figure of selling up to three assets right now?

Speaker #3: How would you rank industrial? I'm assuming this includes data centers. How would you rank living sector and retail? And are your preferences different between the US and Canada?

Speaker #3: Can you just provide more details on your parameters? Is there a quantum you have in mind that you want to hit, or are you comfortable with this figure of selling up to three assets right now?

Speaker #2: Yeah, there's a great questions. I'm going to try to figure out how to succinctly answer those. I would tell you in general, industrial is a strong preference.

Speaker #2: Yeah, so that was part of our AGM in December—Growth and Value-Up Plan. And we had initially targeted three assets. We've already sold one of the three, which was 865 Figueroa.

John Casasante: That was part of our EGM in December Growth and Value Up Plan. We had initially targeted three assets. We've already sold one of the three, which was 865 Figueroa. There are two more that we can complete between now and basically the end of March.

Speaker #2: And one of the reasons being is that typically with industrial leases, they're triple net. So it's a very quantifiable what the owners expenses are going to be.

Speaker #2: And there's no surprises as it relates to expenses. The tenants are triple net. The tenants pay for taxes insurance and common area maintenance. And that's all included as part of their responsibility under their lease.

Speaker #2: So, there are two more that we can complete between now and basically the end of March. So, that is constantly evolving, and we're evaluating which is the best approach to that. As well as, sort of as we mentioned before, a key focus for us is deleveraging as well.

[Analyst]: Okay.

John Casasante: That is constantly evolving, and we're evaluating which is the best approach to that, as well as we mentioned before, a key focus for us is deleveraging as well. There's going to be a balance between deleveraging as well as growth as sort of going hand in hand with that. Specifically, I'm not able to tell you exactly which assets at this point. Between now and the end of March, we have two more assets that we can dispose.

Speaker #2: So from that standpoint, industrial would be a strong preference. In addition to that, the value with industrial is any capital enhancement that you do to a industrial project is not so much just from an appearance standpoint, but usually more from a functional standpoint.

Speaker #2: So there's going to be a balance between deleveraging as well as growth, as those sort of go hand in hand. But I can't specifically—I'm not able to tell you exactly which assets at this point.

Speaker #2: And so you're enhancement on an industrial asset is going to improve the functionality of the asset or the building or the real estate, however you want to qualify it.

Speaker #2: But between now and the end of March, we have two more assets that we can dispose of.

Speaker #3: Okay, got it. Thank you. I think just the last question for now. Could you just tell us a bit more about your preference among the other asset types in your expanded mandate?

Speaker #2: And by virtue of doing that, there's usually a direct correlation to be able to obtain higher rents on future leasing as it relates to those enhancements or maybe another way of saying it is upgrades.

[Analyst]: Okay, got it. Thank you. I think just the last question for now. Could you just tell us a bit more about your preference among the other asset types in your expanded mandate? How would you rank industrial? I'm assuming this includes data centers. How would you rank living sector and retail? Are your preferences different between the US and Canada?

Speaker #3: How would you rank industrial? I'm assuming this includes data centers. How would you rank the living sector and retail? And are your preferences different between the US and Canada?

Speaker #2: So industrial would be clearly a preference. Living sector has its own benefits. Albeit it's not triple net leases. However, in the US, living sector, residential leases are 12 months.

Speaker #2: Yeah, that's a great question. I'm going to try to figure out how to succinctly answer those. I would tell you in general, industrial is a strong preference.

John Casasante: Yeah, those are great questions. I'm going to try to figure out how to succinctly answer those. I would tell you in general, industrial is a strong preference. One of the reasons being is that typically with industrial leases, they're triple net. It's very quantifiable what the owner's expenses are going to be, and there's no surprises as it relates to expenses. The tenants are triple net. The tenants pay for taxes, insurance, and common area maintenance, and that's all included as part of their responsibility under their lease. From that standpoint, industrial would be a strong preference. In addition to that, the value with industrial is any capital enhancement that you do to an industrial project is not so much just from an appearance standpoint, but usually more from a functional standpoint.

Speaker #2: And one of the reasons being is that, typically with industrial leases, they're triple net. So it's very quantifiable what the owner's expenses are going to be.

Speaker #2: And so you have the ability to mark to market on a very regular basis every 12 months. So there's a benefit there. And in the same respect, renovation projects on living sector also have a direct correlation to future rents.

Speaker #2: And there are no surprises as it relates to expenses. The tenants are triple net. The tenants pay for taxes, insurance, and common area maintenance, and that's all included as part of their responsibility under their lease.

Speaker #2: On vacant units, on releasing the space. So also benefit there. And then retail, retail can also have triple net leases. Retail also as most commonly known is you have most commonly amongst people a grocery anchored or big box anchored retail.

Speaker #2: So from that standpoint, industrial would be a strong preference. In addition to that, the value with industrial is any capital enhancement that you do to an industrial project is not so much just from an appearance standpoint, but usually more from a functional standpoint.

Speaker #2: And so you have the benefit of credit and stability in a large tenant, albeit you typically have lower annual increases because of that and typically maybe slightly lower rent.

Speaker #2: And so your enhancement on an industrial asset is going to improve the functionality of the asset, or the building, or the real estate, however you want to qualify it.

John Casasante: Your enhancement on an industrial asset is going to improve the functionality of the asset or the buildings or the real estate, however you want to qualify it. By virtue of doing that, there's usually a direct correlation to be able to obtain higher rents on future leasing as it relates to those enhancements, or maybe another way of saying it is upgrades. Industrial would be clearly a preference. Living sector has its own benefits, albeit it's not triple net leases. However, in the US living sector, residential leases are 12 months, you have the ability to mark to market on a very regular basis every 12 months. There's a benefit there. In the same respect, renovation projects on living sector also have a direct correlation to future rents on vacant units on re-leasing the space. Also a benefit there.

Speaker #2: And then you have inline shops where typically you are able to achieve higher rents and being able to sort of overall push the returns of the project through more the inline shops as it relates to grocery anchor.

Speaker #2: And by virtue of doing that, there's usually a direct correlation to being able to obtain higher rents on future leasing as it relates to those enhancements—or maybe another way of saying it is upgrades.

Speaker #2: So that's kind of just a general overview from my perspective of how we're looking at this. And then your other question is Canada versus the US.

Speaker #2: So, industrial would be clearly a preference. The living sector has its own benefits, albeit it's not triple net leases. However, in the US, living sector residential leases are 12 months.

Speaker #2: I think we would have to look at the deal holistically and we would obviously compare the two obviously there's issues potentially in the current political environment with things that would need to be considered in buying something in Canada versus the US.

Speaker #2: And so you have the ability to mark to market on a very regular basis—every 12 months. So there's a benefit there. And in the same respect, renovation projects on the living sector also have a direct correlation to future rents.

Speaker #2: But we would measure it accordingly and ultimately seek the best asset with the best return and the most long-term growth and appreciation. But if I had to pick, I mean, really, the US is such a large market.

Speaker #2: There's going to be plenty of opportunities for us to be able to find something in the US. And then in addition to that, we have the ability to also look in Canada and our platform covers the Canadian markets too.

John Casasante: Retail. Retail can also have triple net leases. Retail also is most commonly known as you have, most commonly amongst people, a grocery anchored or big box anchored retail. You have the benefit of credit and stability in a large tenant, albeit you typically have lower annual increases because of that, and typically maybe slightly lower rent. You have in-line shops where typically you are able to achieve higher rents and being able to sort of overall push the returns of the project through more of the in-line shops as it relates to grocery anchor. That's kind of just a general overview from my perspective of how we're looking at this. Your other question is Canada versus the US. I think we would have to look at the deal holistically, and we would obviously compare the two.

Speaker #2: So I think we have the best of both markets in being able to find the optimal acquisitions going forward.

Speaker #2: And so you have the benefit of credit and stability in a large tenant, albeit you typically have lower annual increases because of that, and typically maybe slightly lower rent.

Speaker #3: All right, thank you. Thanks. Sorry, Wylyn, can I ask one more question?

Speaker #4: Sure.

Speaker #5: Sure, go ahead.

Speaker #3: Thanks, thanks. So thanks, John. I know your preference for the industrial assets you mentioned earlier. And I see also in the footnotes that your scope covers data centers, cold storage assets, and industrial outdoor storage assets, right?

Speaker #2: And then you have inline shops, where typically you are able to achieve higher rents, and being able to sort of overall push the returns of the project through more of the inline shops as it relates to grocery anchor.

Speaker #3: You also mentioned the enhancement blocks in a very functional and agree. But are you a concern about the Capex required for data centers? That sounds significantly higher than the other asset types mentioned.

Speaker #2: So that's kind of just a general overview from my perspective of how we're looking at this. And then your other question is Canada versus the U.S.

Speaker #2: Yeah, no, I mean, that's a fair question. I mean, just to answer your question, data centers and cold storage are kind of the same in the same category from the standpoint of Capex.

Speaker #2: I think we would have to look at the deal holistically, and we would obviously compare the two. Obviously, there are issues, potentially, in the current political environment with things that would need to be considered in buying something in Canada versus the US.

Speaker #2: And also the specific requirements within those facilities. I would tell you at this stage and the size that our REIT is, I doubt there would be the I can't rule anything out, but that would not be one of the initial acquisitions we would be looking at would be either data would be a data center.

John Casasante: Obviously, there's issues potentially, the current political environment with things that would need to be considered in buying something in Canada versus the US. We would measure it accordingly and ultimately seek the best asset with the best return and the most long-term growth and appreciation. If I had to pick, really the US is such a large market. There's going to be plenty of opportunities for us to be able to find something in the US. In addition to that, we have the ability to also look in Canada, and our platform covers the Canadian markets too. I think we have the best of both markets in being able to find the optimal acquisitions going forward.

Speaker #2: But we would measure it accordingly, and ultimately seek the best asset with the best return, and the most long-term growth and appreciation. But if I had to pick—I mean, really, the US is such a large market.

Speaker #2: And there's a couple of things to that. I mean, it's usually a much larger asset. It's going to carry a much larger acquisition price.

Speaker #2: There are going to be plenty of opportunities for us to find something in the US. In addition to that, we also have the ability to look in Canada, and our platform covers the Canadian markets too.

Speaker #2: And essentially, you have one tenant. And I would tell you the size of where we are now having multi-tenant clearly is the better approach because it safeguards us from any one tenant having financial issues or something occurring it allows us to have better diversification across the rent role.

Speaker #2: So I think we have the best of both markets in being able to find the optimal acquisitions going forward.

Speaker #3: All right, thank you. Thanks. Sorry, Widen, can I ask one more question?

[Analyst]: All right. Thank you. Thanks. Sorry, can I ask one more question?

Speaker #2: So I think again, that's living sector. You're well diversified in the living sector side. And on the industrial side, we would more than likely be looking at multi-tenant, not to say we wouldn't consider a single tenant, but we would need to take the credit risk in consideration with that.

Speaker #4: Sure.

Speaker #5: Sure, go ahead.

Speaker #3: Thanks, thanks. So, thanks, John. I know your preference for the industrial assets you mentioned earlier, and I see also in the footnotes that your scope covers data centers, cold storage assets, and industrial outdoor storage assets, right?

John Casasante: Sure.

Wylyn Liu: Sure.

[Analyst]: Thanks. Thanks, John. I know your preference for the industrial assets you mentioned earlier, and I see also in the footnotes that your scope covers data centers, cold storage assets, and industrial outdoor storage assets, right? You also mentioned the enhancement works and they're very functional and agree, but are you concerned about the CapEx required for data centers? That sounds significantly higher than the other asset types mentioned.

Speaker #3: You also mentioned that the enhancement works in a very functional way, and I agree. But are you concerned about the CapEx required for data centers? That sounds significantly higher than the other asset types mentioned.

Speaker #2: But I do agree with your comment as it relates to data centers. I'm thinking more distribution, by the way, so just to categorize it.

Speaker #2: Yeah, no, I mean, that's a fair question. I mean, just to answer your question, data centers and cold storage are kind of in the same category from the standpoint of CapEx.

Speaker #2: So more logistics and distribution and maybe advanced manufacturing could also be a possibility.

John Casasante: Yeah, no, that's a fair question. Just to answer your question, data centers and cold storage are kind of in the same category from the standpoint of CapEx and also the specific requirements within those facilities. I would tell you at this stage and the size that our REIT is, I can't rule anything out, but that would not be one of the initial acquisitions we would be looking at, would be a data center. There's a couple things to that. It's usually a much larger asset. It's going to carry a much larger acquisition price, and essentially you have one tenant. I would tell you the size of where we are now, having multi-tenant, clearly it is the better approach because it safeguards us from any one tenant having financial issues or something occurring.

Speaker #3: Okay, all right. Thank you. Thanks.

Speaker #5: Thanks, Jomi. I do have some questions in the Q&A box or read them out. The share price to book ratio is still this low.

Speaker #2: And also the specific requirements within those facilities. I would tell you at this stage and the size that our REIT is, I doubt there would be— I can't rule anything out, but that would not be one of the initial acquisitions we would be looking at, would be either data— would be a data center.

Speaker #5: Any equity raising at this low price will be diluted. So what are the steps the directors and management are doing to improve price to book?

Speaker #2: Let's take the first part of that.

Speaker #4: Sure. So yeah, rightly pointed out that our trading price is almost 80% discounted to what our book value is. And this we have observed this to be like this and has further exacerbated in the recent environment after obviously what's going on in the capital markets.

Speaker #2: And there are a couple of things to that. I mean, it's usually a much larger asset, so it's going to carry a much larger acquisition price.

Speaker #2: And essentially, you have one tenant. I would tell you, given the size of where we are now, having multi-tenant is clearly the better approach because it safeguards us from any one tenant having financial issues or something occurring. It allows us to have better diversification across the rent roll.

Speaker #4: But there is a potential investor sentiment about recovery especially the office recovery in the US. Which is mostly the reason behind this because you can see that it's not only us, but if you look at some of the other US focused assets REIT in Singapore market, who may not have restructuring and other things going on, have also are also subject to similar conditions when it comes to trading price or discount to book value.

John Casasante: It allows us to have better diversification across the rent roll. I think, again, that's living sector. You're well diversified in the living sector side. On the industrial side, we would more than likely be looking at multi-tenant. Not to say we wouldn't consider a single tenant, but we would need to take the credit risk in consideration with that. I do agree with your comment, as it relates to data centers. I'm thinking more distribution, by the way, just to categorize it. More logistics and distribution-

Speaker #2: So I think, again, that's the living sector. You're well diversified on the living sector side. And on the industrial side, we would more than likely be looking at multi-tenant—not to say we wouldn't consider a single tenant, but we would need to take the credit risk into consideration with that.

Speaker #2: But I do agree with your comment as it relates to data centers. I'm thinking more about distribution, by the way, just to categorize it.

Speaker #2: So, more logistics and distribution. And maybe advanced manufacturing could also be a possibility.

John Casasante: Maybe advanced manufacturing could also be a possibility.

Speaker #3: Okay, all right. Thank you. Thanks.

Speaker #5: Thanks, Jomi. I do have some questions in the Q&A box, or I can read them out. The share price-to-book ratio is still this low.

[Analyst]: Okay. All right. Thank you. Thanks.

Speaker #4: So in short, what our strategy does is really the recipe to recover our values because our growth into other than office would actually ensure that we have excess to assets that overall yield better results and provide total return to the unit holders.

[Company Representative] (Manulife US Real Estate Investment Trust): Thanks, Joey. I do have some questions in the Q&A box, so I'll read them out. The share price-to-book ratio is still dismal. Any equity raising at this low price will be dilutive. What are the steps the directors and management are doing to improve price book?

Wylyn Liu: Thanks, Joey. I do have some questions in the Q&A box, so I'll read them out. The share price-to-book ratio is still dismal. Any equity raising at this low price will be dilutive. What are the steps the directors and management are doing to improve price book?

Speaker #5: Any equity raising at this low price will be dilutive. So, what are the steps the directors and management are taking to improve the price-to-book?

Speaker #2: Let's take the first part of that.

Speaker #3: Sure. So, yes, you rightly pointed out that our trading price is almost 80% discounted to what our book value is. We have observed this trend for some time, and it has further exacerbated in the recent environment, given what's going on in the capital markets.

John Casasante: Want to take the first part of that?

Speaker #4: Which will basically be what will drive the unit price in the long run. Apart from addressing some of the other things that we are working on, such as our dealing with our debt maturities, risk management, and improving on our key fundamentals strengthening financial position as John highlighted that we would be looking to repay further debt to strengthen our financial position.

Mushtaque Ali: Sure. Yeah, rightly pointed out that our trading price is almost 80% discounted to what our book value is. We have observed this to be like this and has further exacerbated in the recent environment, after obviously what's going on in the capital markets. There is a potential investor sentiment about recovery, especially the office recovery in the US, which is mostly the reason behind this. You can see that it's not only us, but if you look at some of the other US-focused assets REIT in Singapore market, who may not have restructuring and other things going on, are also subject to similar conditions when it comes to trading price or discount to book value. In short, what our strategy does is really the recipe to recover our values.

Speaker #3: But there is a potential investor sentiment about recovery, especially the office recovery in the US, which is mostly the reason behind this. Because you can see that it's not only us, but if you look at some of the other US-focused asset REITs in the Singapore market, who may not have restructuring and other things going on, have also been subject to similar conditions when it comes to trading price or discount to book value.

Speaker #4: So those are the things that we are doing and will continue to do to strengthen ourselves. But ultimately, the unit price would be driven by our asset optimization when we move into the growth phase into the new asset types which will attract higher deposits.

Speaker #2: Yeah, I would just add, I mean, we I mean, I think I know where you're coming with the question and we agree. We need to take appropriate measures to bring up our share price before we can contemplate anything as it relates to an EFR or anything at that point.

Speaker #2: So we're looking at all those measures from the growth side of it to deleveraging to all the things that we've mentioned. So completely agree.

Speaker #3: So in short, what our strategy does is really the recipe to recover our values. Because our growth into other than office would actually ensure that we have access to assets that overall yield better results and provide total return to the unitholders.

Mushtaque Ali: Our growth into other than office will actually ensure that we have access to assets that overall yield better results and provide total return to the unit holders, which will basically be what will drive the unit price in the long run. Apart from addressing some of the other things that we are working on, such as dealing with our debt maturities, risk management, and improving on our key fundamentals. Strengthening financial position, as John highlighted, that we would be looking to repay further debt to strengthen our financial position. Those are the things that we are doing and will continue to do to strengthen ourselves, but ultimately the unit price would be driven by our asset optimization when we move into the growth phase, into the new asset types, which will attract higher support.

Speaker #5: That is the second question here. There are a couple of questions in this. So I'll just split them up. What is the progress of the MRA exit plan?

Speaker #5: Has the REIT manager narrowed down the category of assets for diversification? Is there any advanced talk in asset diversement or acquisition?

Speaker #3: Which will basically be what will drive the unit price in the long run. Apart from addressing some of the other things that we are working on, such as dealing with our debt maturities, risk management, and improving on our key fundamentals—strengthening our financial position—as John highlighted, we would be looking to repay further debt to strengthen our financial position.

Speaker #2: Okay, so there's a couple of questions in that. So I think we've already outlined our timing for exiting the MRA. Which we're targeting the end of the year as we've mentioned before.

Speaker #2: And this ongoing conversation with the lenders, which we can't go into obviously, but that is occurring as we speak. And as it relates to divestments, we're continually looking at the optimal assets to dispose of.

Speaker #3: So those are the things that we are doing and will continue to do to strengthen ourselves. But ultimately, the unit price would be driven by our asset optimization when we move into the growth phase—into the new asset types—which will attract a higher-to-book.

Speaker #2: Yeah, I would just add—I mean, I think I know where you're coming from with the question, and we agree. We need to take appropriate measures to bring up our share price.

John Casasante: Yeah. I would just add, I think I know where you're coming with the question, and we agree. We need to take appropriate measures to bring up our share price before we can contemplate anything as it relates to an EFR, anything at that point. We're looking at all those measures from the growth side of it to de-leveraging, to all things that we've mentioned. Completely agree.

Speaker #2: It's not as straightforward as you might think. There's a lot of considerations that have to be taken into account. So those conversations are occurring.

Speaker #2: Before we can contemplate anything as it relates to an EFR—anything at that point—we're looking at all those measures: from the growth side of it, to deleveraging, to all the things that we've mentioned.

Speaker #2: And then as far as acquisitions, we're not at a point to be ruling something at this moment. We first need to exit the MRA just to even be able to do this.

Speaker #2: So our primary focus is on those discussions as referenced and exiting the MRA. And concurrently, we're evaluating which assets would be most suitable for the next divestment, but there has not been anything that has been put on the market at this point.

Speaker #2: Completely agree.

Speaker #5: That is the second question here. There are a couple of questions in this, so I'll just split them up. What is the progress of the MRA exit plan?

[Company Representative] (Manulife US Real Estate Investment Trust): There is a second question here. There are a couple of questions in this, I'll just split them up. What is the progress of the MRA exit plan? Has the REIT manager narrowed down the category of assets for diversification? Is there any advanced talk in asset divestment or acquisition?

Wylyn Liu: There is a second question here. There are a couple of questions in this, I'll just split them up. What is the progress of the MRA exit plan? Has the REIT manager narrowed down the category of assets for diversification? Is there any advanced talk in asset divestment or acquisition?

Speaker #5: Has the REIT manager narrowed down the category of assets for diversification? Is there any advanced talk in asset diversification or acquisition?

Speaker #2: And there's no off-market discussions. And then as it relates to acquisitions, I mean, I think we just went through the categories of what we would be looking at, but it would be too premature to circle an asset to buy at this point just kind of given sort of the timetable we've already outlined having said that, having said that, I sit on a weekly pipeline call within our platform.

Speaker #2: Okay, so there's a couple of questions in that. So, I think we've already outlined our timing for exiting the MRA, which we're targeting for the end of the year, as we've mentioned before.

John Casasante: Okay, there's a couple of questions in that. I think we've already outlined our timing for exiting the MRA, which we're targeting the end of the year as we've mentioned before. This ongoing conversation with the lenders, which we can't go into obviously, but that is occurring as we speak. As it relates to divestments, we're continually looking at the optimal assets to dispose of. It's not as straightforward as you might think. There's a lot of considerations that have to be taken into account. Those conversations are occurring. As far as acquisitions, we're not at a point to be doing something at this moment. We first need to exit the MRA just to even be able to do this. Our primary focus is on those discussions as referenced and exiting the MRA.

Speaker #2: And this ongoing conversation with the lenders—which we can't go into, obviously—but that is occurring as we speak. And as it relates to divestments, we're continually looking at the optimal assets to dispose of.

Speaker #2: So we're constantly seeing the deals that are available in the market that our team is pursuing. This is a weekly call that happens every Monday morning.

Speaker #2: And our transaction team, which not only covers the entire US, but also Canada, runs through their pipeline of deals that I'm looking at. And again, just to be clear on these pipeline calls, they're not ringing every single deal that's on the market.

Speaker #2: It's not as straightforward as you might think. There are a lot of considerations that have to be taken into account. So, those conversations are occurring.

Speaker #2: And then, as far as acquisitions, we're not at a point to be ruling something in at this moment. We first need to exit the MRA just to even be able to do this.

Speaker #2: They're filtering it down to what they know the funds that sit on the platform would be interested in in combination with our in-house market research department on product types, sectors, submarkets that they should be focused to achieve the best outcomes or best returns on these potential acquisitions.

Speaker #2: So our primary focus is on those discussions as reference, and exiting the MRA. Concurrently, we're evaluating which assets would be most suitable for the next investment.

John Casasante: Concurrently, we're evaluating which assets would be most suitable for the next divestment, but there has not been anything that's been put on the market at this point. There's no off-market discussions. As it relates to acquisitions, I think we just went through the categories of what we'd be looking at, but it would be too premature to circle an asset to buy at this point, just given the timetable we've already outlined. Having said that, I sit on a weekly pipeline call within our platform. We're constantly seeing the deals that are available in the market that our team is pursuing. This is a weekly call that happens every Monday morning. Our transaction team, which not only covers the entire US, but also Canada, runs through their pipeline of deals that they're looking at.

Speaker #2: So there's a filtering that's being done and then they present those assets and as I've mentioned in the past, the way it works is it's a formal rotation and since the SRE hasn't purchased anything, when we get to that point in time, if there's an asset that we're interested in, we will be the first in line to accept that asset and work through the acquisition process with our transaction team that sits on the manulife investment management.

Speaker #2: But there has not been anything that's been put on the market at this point, and there's no off-market discussions. And then, as it relates to acquisitions, I mean, I think we just went through the categories of what we would be looking at, but it would be too premature to circle an asset to buy at this point.

Speaker #2: Just kind of given sort of the timetable we've already outlined, having said that, having said that, I sit on a weekly pipeline call within our platform.

Speaker #2: So I'm happy to take any follow-up questions to that if any of that didn't make sense or didn't hit your question exactly.

Speaker #2: So, we're constantly seeing the deals that are available in the market that our team is pursuing. This is a weekly call that happens every Monday morning.

Speaker #5: There is a two more questions from this person. Is there still any ongoing initiative to revive discussion of selling the REIT manager from the sponsor?

Speaker #2: And our transaction team, which not only covers the entire US but also Canada, runs through their pipeline of deals that I'm looking at. And again, just to be clear, on these pipeline calls, they're not bringing every single deal that's on the market.

Speaker #5: What are foreseen implementation risks and what are the mitigation measures?

Speaker #2: Yeah, there's not currently, there's no conversations going on. So I can't really address the other issues.

John Casasante: Again, just to be clear, on these pipeline calls, they're not bringing every single deal that's on the market. They're filtering it down to what they know that the funds that sit on the platform would be interested in combination with our in-house market research department on product types, sectors, sub-markets that they should be focused to achieve the best outcomes or best returns on these potential acquisitions. There's a filtering that's being done, and then they present those assets. As I've mentioned in the past, the way it works is it's a formal rotation.

Speaker #2: They're filtering it down to what they know the funds that sit on the platform would be interested in, in combination with our in-house market research department on product types, sectors, sub-markets that they should be focused on to achieve the best outcomes or best returns on these potential acquisitions.

Speaker #5: Let's check if there's anyone with questions. Are there any other questions? Maybe I want a question on leasing. What is the leasing outlook across Musk's key submarkets over the next 12 months?

Speaker #2: So, there's a filtering that's being done and then they present those assets. As I've mentioned in the past, the way it works is it's a formal rotation, and since the S-REIT hasn't purchased anything, when we get to that point in time, if there's an asset that we're interested in, we will be the first in line to accept that asset and work through the acquisition process with our transaction team that sits on the Manulife Investment Management side.

Speaker #5: Do you expect your portfolio occupancy to improve, stabilize, or is there further pressure?

Speaker #2: So there's two sides to the question. So let me sort of bifurcate it. In general, I will say most of our submarkets, we've seen leasing activity pick up.

John Casasante: Since the S-REIT hasn't purchased anything, when we get to that point in time, if there's an asset that we're interested in, we will be the first in line to accept that asset and work through the acquisition process with our transaction team that sits on the Manulife Investment Management side. I'm happy to take any follow-up questions to that if any of that didn't make sense or didn't hit your question exactly.

Speaker #2: There's still a couple of markets that are pretty sleepy. DC is still pretty quiet. The last couple of months, we have seen pickup at Diablo.

Speaker #2: So I'm happy to take any follow-up questions to that. If any of that didn't make sense or didn't hit your question exactly.

Speaker #2: Michaelson and Fitz continue to have pretty good activity as well as CenterPoint. So for the most part, we're seeing leasing activity either consistent or slightly pick up.

Speaker #5: There are two more questions from this person. Is there still any ongoing initiative to revive discussion of selling the REIT manager from the sponsor?

[Company Representative] (Manulife US Real Estate Investment Trust): There is two more questions from this person. Is there still any ongoing initiatives to revive discussion of selling the REIT manager from the sponsor? What are foreseen implementation risks, and what are the mitigation measures?

Wylyn Liu: There is two more questions from this person. Is there still any ongoing initiatives to revive discussion of selling the REIT manager from the sponsor? What are foreseen implementation risks, and what are the mitigation measures?

Speaker #5: What are the foreseeable implementation risks, and what are the mitigation measures?

Speaker #2: By no means is it robust or at the top of the market, but we are seeing in some of our submarkets the fundamentals come together where we can see that the recovery is starting.

Speaker #2: Yeah, currently, there are no conversations going on, so I can't really address the other issues.

John Casasante: Yeah. Currently, there's no conversations going on, I can't really address the other issues.

Speaker #2: On several of our submarkets. So there's improvement from that standpoint. We do get to see a decent amount of leasing volume as you've seen on our charts.

Speaker #5: Let's check if there's anyone with questions. Any other questions? Maybe one question on leasing: What is the leasing outlook across MUST's key sub-markets over the next 12 months?

[Company Representative] (Manulife US Real Estate Investment Trust): Just check if there's anyone with questions. Joseph, any other questions? Maybe one question on leasing. What is the leasing outlook across MUST's key sub-markets over the next 12 months? Do you expect your portfolio occupancy to improve, stabilize, or is there further pressure?

Wylyn Liu: Just check if there's anyone with questions. Joseph, any other questions? Maybe one question on leasing. What is the leasing outlook across MUST's key sub-markets over the next 12 months? Do you expect your portfolio occupancy to improve, stabilize, or is there further pressure?

Speaker #2: Having said that, we still need to make decisions on a lot of these deals as we progress through the negotiations of them as it relates to moving forward with the transaction.

Speaker #5: Do you expect your portfolio occupancy to improve, stabilize, or is there further pressure?

Speaker #2: A key criteria for us, and has always been for us from the beginning, which is why we call it strategic leasing, is we need to make sure that when we deploy capital into leasing, that's the highest and best use of that deal actually benefits the assets.

Speaker #2: So, there are two sides to the question. So, let me sort of bifurcate it. In general, I will say most of our sub-markets—we've seen leasing activity pick up.

John Casasante: There are two sides to the question, let me sort of bifurcate it. In general, I will say most of our sub-markets, we've seen leasing activity pick up. There's still a couple markets that are pretty sleepy. DC is still pretty quiet. The last couple months, we have seen pickup at Diablo. Michelson and Fitz continue to have pretty good activity as well as Centerpointe. For the most part, we're seeing leasing activity either consistent or slightly picked up. By no means is it robust or at the top of the market. What we are seeing in some of our sub-markets, the fundamentals come together where we can see that the recovery is starting on several of our sub-markets. There's improvement from that standpoint. We do get to see a decent amount of leasing volume as you've seen on our charts.

Speaker #2: There are still a couple of markets that are pretty sleepy. D.C. is still pretty quiet. The last couple of months, we have seen a pickup at Diablo.

Speaker #2: In the utilization of our capital being spent and that maybe our capital wouldn't be better used elsewhere. So overall, things are improving. We have several leases that are in the works that hopefully next quarter we'll be able to announce.

Speaker #2: Michaelson and Phipps continue to have pretty good activity, as well as CenterPoint. So, for the most part, we're seeing leasing activity either consistent or slightly picking up.

Speaker #2: So things have gotten better from the leasing standpoint.

Speaker #5: Another question in the chat box. What is the expected valuation trends of the underlying properties when they are revalued in December?

Speaker #2: By no means is it robust or at the top of the market, but we are seeing, in some of our sub-markets, the fundamentals come together where we can see that the recovery is starting.

Speaker #2: Yeah, I don't have a direct answer for you on that, obviously. The appraisals haven't even started yet. I think I can't give you sort of a general guideline based upon the leasing that we're seeing in the markets.

Speaker #2: On several of our sub-markets, there's improvement from that standpoint. We are seeing a decent amount of leasing volume, as you've seen on our charts.

Speaker #2: Having said that, we still need to make decisions on a lot of these deals as we progress through the negotiations of them, as it relates to moving forward with the transaction.

Speaker #2: So our tranche three assets, which I think everyone knows has outperformed the two tranche one and tranche one assets, probably have the ability again, I'm not making any promises, but at least have the ability to see some gains given the market fundamentals that they sit in.

John Casasante: Having said that, we still need to make decisions on a lot of these deals as we progress through the negotiations of them as it relates to moving forward with the transaction. A key criteria for us, and has always been for us from the beginning, which is why we call it strategic leasing, is we need to make sure that when we deploy capital into leasing, that's the highest and best use of that capital, and that deal actually benefits the asset in the utilization of our capital being spent, and that maybe our capital wouldn't be better used elsewhere. Overall, things are improving. We have several leases that are in the works that hopefully next quarter we'll be able to announce. Things have gotten better from the leasing standpoint.

Speaker #2: A key criteria for us, and has always been for us from the beginning—which is why we call it strategic leasing—is we need to make sure that when we deploy capital into leasing, that's the highest and best use of that capital, and that deal actually benefits the assets.

Speaker #2: And the leasing activity that we've seen at those assets. Tranche two, the leasing has not been very hasn't really picked up quite yet. On our tranche two asset.

Speaker #2: In the utilization of our capital being spent, and that maybe our capital wouldn't be better used elsewhere. So overall, things are improving. We have several leases that are in the works that hopefully, next quarter, we'll be able to announce.

Speaker #2: Tranche two asset is 10X. It sits in Jersey City. And basically is a spillover market from Manhattan. Now, Manhattan has picked up rates are moving up in Manhattan and Midtown.

Speaker #2: So things are trending in the right direction, which that typically results in a spillover into Jersey City. But having said that, Jersey City is still 30% vacant.

Speaker #2: So things have gotten better from the leasing standpoint.

Speaker #5: Another question in the chat box: What are the expected valuation trends of the underlying properties when they are revalued in December?

Speaker #2: So I think from that standpoint, expectation should not be that there would be a gain on valuations. I mean, the tranche one assets, probably follow within the same category just given sort of the lack of leasing activity and the fact that those markets haven't really started to fully recover yet.

[Company Representative] (Manulife US Real Estate Investment Trust): Another question in the chat box. What is the expected valuation trends of the underlying properties when they are revalued in December?

Wylyn Liu: Another question in the chat box. What is the expected valuation trends of the underlying properties when they are revalued in December?

Speaker #2: Yeah, I don't have a direct answer for you on that, obviously. The appraisals haven't even started yet. I think I can give you sort of a general guideline based upon the leasing that we're seeing in the markets.

John Casasante: Yeah. I don't have a direct answer for you on that. Obviously, the appraisals haven't even started yet. I can give you sort of a general guideline based upon the leasing that we're seeing in the markets. Our tranche three assets, which I think everyone knows has outperformed the two, tranche one and tranche one assets, probably have the ability, again, I'm not making any promises, but at least have the ability to see some gains given the market fundamentals that they sit in and the leasing activity that we've seen at those assets. Tranche two, the leasing hasn't really picked up quite yet on a tranche two asset. A tranche two asset is 10 Exchange Place. It sits in Jersey City. Basically is a spillover market from Manhattan. Now Manhattan has picked up.

Speaker #2: So our Tranche 3 assets—which I think everyone knows have outperformed the Tranche 1 and Tranche 2 assets—probably have the ability, again I'm not making any promises, but at least have the ability to see some gains given the market fundamentals that they sit in.

Speaker #5: Thank you. Just checking again, anyone else has questions for management? If there is a question in the chat box, what is your targeted occupancy rate by end 2026 and 2027?

Speaker #2: And the leasing activity that we've seen at those assets—Tranche Two—the leasing has not been very, hasn't really picked up quite yet on our Tranche Two asset.

Speaker #5: Do you have an estimate or target?

Speaker #2: Tranche two asset is 10X. It sits in Jersey City and basically is a spillover market from Manhattan. Now, Manhattan has picked up. Rates are moving up in Manhattan and Midtown.

Speaker #2: I mean, I would tell you by the end of this year, it's probably going to be flat. Is sort of our target. By the end of next year, it's a little difficult to say.

Speaker #2: So things are trending in the right direction, which typically results in a spillover into Jersey City. But having said that, Jersey City is still 30% vacant.

Speaker #2: And the reason being is as we talked about earlier in this conversation, there's probably a couple more assets that are going to be sold.

John Casasante: Rates are moving up in Manhattan, in Midtown, so things are trending in the right direction, which that typically results in a spillover into Jersey City. Having said that, Jersey City is still 30% vacant. I think from that standpoint, expectation should not be that there would be a gain on valuations. The tranche one assets probably fall within the same category, just given sort of the lack of leasing activity and the fact that those markets haven't really started to fully recover yet.

Speaker #2: So I think from that standpoint, expectations should not be that there would be a gain on valuations. I mean, the tranche one assets probably fall within the same category, just given the lack of leasing activity and the fact that those markets haven't really started to fully recover yet.

Speaker #2: And so selling of assets has a direct impact on what the occupancy is going to look like. So that's near impossible given we haven't identified which assets are going to be sold at this point to then be able to predict the occupancy for those assets.

Speaker #2: And just as an example of selling 865 big, pushed our occupancy up because 865 big was such a low property occupancy. So it's hard to say.

Speaker #5: Thank you. Just checking again—does anyone else have questions for management? If there is a question in the chat box, what is your targeted occupancy rate by the end of 2026 and 2027?

[Company Representative] (Manulife US Real Estate Investment Trust): Thank you. Just checking again, anyone else has questions for management? Okay, there is a question in the chat box. What is your targeted occupancy rate by end 2026 and 2027? Do you have an estimate or target?

Wylyn Liu: Thank you. Just checking again, anyone else has questions for management? Okay, there is a question in the chat box. What is your targeted occupancy rate by end 2026 and 2027? Do you have an estimate or target?

Speaker #2: On what that would be. I wish if we had a static portfolio it would be much easier, but not only are we talking about divestments from the standpoint of continuing to deleverage, but we're also talking about potential divestments for the ability to grow.

Speaker #2: Which means we're then bringing in new assets at the appropriate time and those are going to come with its own property-level occupancy, which is going to move the numbers in a different direction as well.

Speaker #5: Do you have an estimate or target?

Speaker #2: I mean, I would tell you by the end of this year, it's probably going to be flat—that's sort of our target. By the end of next year, it's a little difficult to say.

Speaker #5: New question. For the other assets under discussion to be disposed, would it cost further dilution to book value and within time constraints? So I think the question is, is there a time constraint for the dispossessions?

John Casasante: I would say by the end of this year, it's probably going to be flat, is sort of our target. By the end of next year is a little difficult to say. The reason being is, as we talked about earlier in this conversation, there's probably a couple more assets that are going to be sold. Selling of assets has a direct impact on what the occupancy is going to look like. That's near impossible given we haven't identified which assets are going to be sold at this point to then be able to predict the occupancy for those assets. Just as an example, selling 865 Figueroa pushed our occupancy up because 865 Figueroa was such a low property occupancy. It's hard to say on what that would be. If we had a static portfolio, it would be much easier.

Speaker #2: And the reason being is, as we talked about earlier in this conversation, there are probably a couple more assets that are going to be sold.

Speaker #2: Well, the first part as far as the effect on book value, I mean, we don't know until we actually get a building on the market of what that price is going to look like.

Speaker #2: And so, selling of assets has a direct impact on what the occupancy is going to look like. So, that's near impossible given we haven't identified which assets are going to be sold at this point, to then be able to predict the occupancy for those assets.

Speaker #2: So we can't forecast that, obviously. As far as timing, I mean, again, there's a lot of things that are in the works, but the one thing that is black and white is we do have a debt maturity coming up in April of 2027, which is public information.

Speaker #2: And just as an example, selling 865 Big pushed our occupancy up because 865 Big was such a low property occupancy. So it's hard to say.

Speaker #2: So obviously, we need to deal with our upcoming debt maturity. So there is, again, as we've referenced, our ongoing conversation with lenders that could potentially affect that.

Speaker #2: On what that would be. I wish, if we had a static portfolio, it would be much easier. But not only are we talking about investments from the standpoint of continuing to deleverage, we're also talking about potential divestments for the ability to grow.

John Casasante: Not only are we talking about divestments from the standpoint of continuing to deleverage, but we're also talking about potential divestments for the ability to grow, which means we're then bringing in new assets at the appropriate time. Those are going to come with its own property level occupancy, which is going to move the numbers in a different direction as well.

Speaker #2: But at the same token, at this point in time, we also have to look at the ability to be able to sell that maturity as well.

Speaker #2: Which means we're then bringing in new assets at the appropriate time, and those are going to come with their own property-level occupancy, which is going to move the numbers in a different direction as well.

Speaker #2: So again, I think that's why in the beginning of our Q&A, I did mention that there would be one, maybe two assets that potentially would be sold before March.

Speaker #5: For the other assets under discussion to be disposed of, would that cause further dilution to book value, and are there any time constraints? So I think the question is: Is there a time constraint for the dispositions?

[Company Representative] (Manulife US Real Estate Investment Trust): New question. For the other assets under discussion to be disposed, would it cause further dilution to book value and within time constraints? I think the question is there a time constraint for the dispositions? Thank you.

Wylyn Liu: New question. For the other assets under discussion to be disposed, would it cause further dilution to book value and within time constraints? I think the question is there a time constraint for the dispositions? Thank you.

Speaker #5: Thank you. Do you expect rental reversion to be positive going forward?

Speaker #2: Well, the first part, as far as the effect on book value, I mean, we don't know until we actually get a building on the market, what that price is going to look like.

John Casasante: Well, the first part, as far as the effect on book value, we don't know until we actually get a building on the market of what that price is going to look like. We can't forecast that, obviously. As far as timing, again, there's a lot of things that are in the works. The one thing that is black and white is we do have a debt maturity coming up in April of 2027, which is public information. Obviously, we need to deal with our upcoming debt maturity. There is, again, as we reference our ongoing conversation with lenders, that could potentially affect that. At the same token, at this point in time, we also have to look at the ability to be able to sell that maturity as well.

Speaker #2: This is a question that we talk about every single quarter. There are deals that we do that do have positive reversion, but for the most, they're not positive reversion.

Speaker #2: So we can't forecast that, obviously. As far as timing, I mean, again, there are a lot of things that are in the works, but the one thing that is black and white is we do have a debt maturity coming up in April 2027, which is public information.

Speaker #2: And a lot has to do with the fact of the prior lease that was in place. And the prior lease that's in place could have potentially outpaced market growth and been at a much higher rent than where market sits today.

Speaker #2: So, obviously, we need to deal with our upcoming debt maturity. As we've referenced, there are ongoing conversations with lenders that could potentially affect that.

Speaker #2: So unless we artificially grow the rent number, we're going to end up with a negative reversion. And at this point in time, where the rate sits, our focus is more on utilizing capital for other uses growth, for deleveraging, versus putting more money into a lease to have positive reversions on the rental rate.

Speaker #2: But at the same token, at this point in time, we also have to look at the ability to be able to settle that maturity as well.

Speaker #2: So again, I think that’s why, in the beginning of our Q&A, I did mention that there would be one, maybe two, assets that potentially would be sold before March.

John Casasante: Again, I think that's why in the beginning of our Q&A, I did mention that there would be one, maybe two assets that potentially would be sold before March.

Speaker #5: Thank you. Do you expect rental reversion to be positive going forward?

Speaker #5: Thank you. Checking again, any last questions from the participants? Don't see any questions in the Q&A. Yeah, I don't see any raised hands either.

[Company Representative] (Manulife US Real Estate Investment Trust): Thank you. Do you expect rental reversion to be positive going forward?

Wylyn Liu: Thank you. Do you expect rental reversion to be positive going forward?

John Casasante: This is a question that we talk about every single quarter. There are deals that we do that do have positive reversion, but for the most, they're not positive reversion. A lot has to do with the fact of the prior lease that was in place. The prior lease that's in place could have potentially outpaced market growth and been at a much higher rent than where market sits today. Unless we artificially grow the rent number, we're going to end up with a negative reversion. At this point in time, where the REIT sits, our focus is more on utilizing capital for other uses, albeit for growth, for deleveraging, versus putting more money into a lease to have positive reversions on the rental payment.

Speaker #2: This is a question that we talk about every single quarter. There are deals that we do that do have positive reversion, but for the most part, they're not positive reversion.

Speaker #5: So I think, yeah, we can probably wrap up the briefing today. So I just want to on behalf of management team, I just want to thank everyone for their time today.

Speaker #2: A lot of it has to do with the fact that the prior lease was in place. That prior lease could have potentially outpaced market growth and was at a much higher rent than where the market sits today.

Speaker #5: If you have any further questions, please feel free to reach out to the IR team. So thank you.

Speaker #2: Thanks, everyone.

Speaker #5: Take care.

Speaker #2: So unless we artificially grow the rent number, we're going to end up with a negative reversion. At this point in time, where the rate sits, our focus is more on utilizing capital for other uses—albeit for growth, for deleveraging—versus putting more money into a lease to have positive reversions on the real estate.

[Company Representative] (Manulife US Real Estate Investment Trust): Thank you. Checking again, any last questions from the participants? Don't see any questions in the Q&A. I don't see any raised hands either. I think, we can probably wrap up the briefing today. On behalf of management team, I just want to thank everyone for their time today. If you have any further questions, please feel free to reach out to the IR team. Thank you.

Wylyn Liu: Thank you. Checking again, any last questions from the participants? Don't see any questions in the Q&A. I don't see any raised hands either. I think, we can probably wrap up the briefing today. On behalf of management team, I just want to thank everyone for their time today. If you have any further questions, please feel free to reach out to the IR team. Thank you.

Speaker #5: Thank you. Checking again, are there any last questions from the participants? I don't see any questions in the Q&A. Yeah, I don't see any raised hands either.

Speaker #5: So I think, yeah, we can probably wrap up the briefing today. So, on behalf of the management team, I just want to thank everyone for their time today.

Speaker #5: If you have any further questions, please feel free to reach out to the IR team. Thank you.

Speaker #2: Thanks, everyone.

Speaker #5: Take care.

John Casasante: Thanks, everyone.

Mushtaque Ali: Thank you.

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Half Year 2026 Manulife US Real Estate Investment Trust Earnings Call

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