Monmouth Real Estate Investment Corporation€¦ · Forward-looking statements provide Monmouth Real Estate Investment Corporation’s current expectations or forecasts of future

Monmouth Real Estate Investment Corporation

BMO Capital Markets 12th Annual North American

Real Estate Conference

September 25-26, 2017

This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, asamended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995.Forward-looking statements provide Monmouth Real Estate Investment Corporation’s current expectations or forecasts of futureevents. Forward-looking statements include statements about Monmouth’s expectations, beliefs, intentions, plans, objectives,goals, strategies, future events, performance and underlying assumptions and other statements that are not historical facts. Youcan identify forward-looking statements by their use of forward-looking words, such as “may,” “will,” “anticipate,” “expect,”“believe,” “intend,” “plan,” “should,” “seek,” or comparable terms, or the negative use of those words, but the absence of thesewords does not necessarily mean that a statement is not forward-looking. The forward-looking statements are based onMonmouth’s beliefs, assumptions and expectations of its future performance, taking into account all information currently availableto it. Forward-looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as aresult of many possible events or factors, not all of which are known to Monmouth. Some of these factors are described under theheadings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as includedin Monmouth’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016 and its other periodic reports filed with theSecurities and Exchange Commission, which are accessible on SEC’s Electronic Data Gathering, Analysis and Retrieval website, or“EDGAR” at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with othercautionary statements that are included in this presentation and in Monmouth’s SEC filings. These and other risks, uncertainties andfactors could cause Monmouth’s actual results to differ materially from those included in any forward-looking statements it makes.Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it isnot possible for Monmouth to predict those events or how they may affect it. Except as required by law, Monmouth is not obligatedto, and does not intend to, update or revise any forward-looking statements, whether as a result of new information, future eventsor otherwise. You should not place undue reliance on these forward-looking statements, as events described or implied in suchstatements may not occur.

This presentation may include references to “FFO”, “Core FFO” and “AFFO”, which are non-GAAP financial measures. Areconciliation of “FFO”, “Core FFO” and “AFFO” to the most comparable GAAP financial measures is included in our most recentAnnual Report on Form 10-Q and/or our Supplemental Information package as of June 30, 2017, furnished to shareholders on Form8-K, and is available on our website at www.mreic.reit.

2

Select Properties

Kansas City MSA

Pittsburgh MSA Lexington MSA

Phoenix MSA

3

Indianapolis MSA

St. Louis MSA

Company Overview

Memphis MSA

Memphis MSA

Indianapolis MSA

Single tenant, net-leased Industrial REIT specializing in well-located, modern properties subject to long-term leases primarily to investment grade tenants or their subsidiaries

Property portfolio contains 18.6 million square feet, consisting of 107 properties with 99.3% occupancy

Geographically diversified portfolio from Coast to Coast across 30 states

Quality roster of investment grade tenants 85% of rental revenue from investment grade tenants or

their subsidiaries, including Anheuser Busch, Coca-Cola, FedEx, General Electric, International Paper, Jim Beam, Kellogg’s, National Oilwell, Siemens, Snap-on and United Technologies and other high-quality companies

Strong recent growth MNR successfully grew GLA by approximately 70% during

the past three years In fiscal 2016 closed on eight properties totaling 1.8 million

square feet for $210.7 million Thus far in fiscal 2017, closed on nine properties totaling 2.6

million square feet for $267 million Current acquisition pipeline includes four properties

totaling 1.0 million square feet with a total purchase price of $100.6 million

Conservative capital structure 33% Net Debt to Total Market Capitalization 6.3x Net Debt/Adjusted EBITDA(1)

2.4x Fixed Charge Coverage(1)

Source: MNR 10-Q and subsequent press releases(1): Pro-forma using full run rate of recent acquisitions and current preferred stock outstanding

4

Portfolio Overview 107 properties geographically diversified across 30 states,

totaling approximately 18.6 million square feet of GLA Highest occupancy rate in the Industrial REIT sector at 99.3% Youngest weighted average building age in the Industrial REIT

sector at 9.3 years Average building size is approximately 170,000 square feet Weighted average lease maturity is 7.9 years Weighted average rent per square foot is $5.92 Simple business model

No off-balance sheet joint ventures No in-house development division No significant non-income producing land

97.1%

95.2%96.0% 95.9%

97.7%

99.6% 99.3%

90.0%

91.0%

92.0%

93.0%

94.0%

95.0%

96.0%

97.0%

98.0%

99.0%

100.0%

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Current

Occupancy

100.0% 100.0%

86.0%93.0%

53.0%

100.0% 100.0%92.0%

0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%

100.0%

FY 2010 FY 2011 FY 2012 FY 2013FY 2014*FY 2015 FY 2016 FY 2017

Tenant Retention

5

Charlotte MSA

Consistent Results

* Only 438,000 square feet, representing 4% of total GLA, came due in fiscal 2014. 60,400sf of the 208,400sf that did not renew was re-leased to a new tenant.Source: MNR 10-Q and subsequent press releases

Portfolio Growth

6

7.5 8.5

9.6

11.2

13.9

16.0

18.8

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017E

Tota

l Squ

are

Feet

(In

Mill

ions

)

Total GLA

Total Real Estate Assets

$0.477$0.548

$0.628$0.738

$0.941

$1.171

$1.452

$0.4

$0.6

$0.8

$1.0

$1.2

$1.4

$1.6

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017E

Tota

l R

eal E

stat

e A

sset

s (in

Bill

ions

)

Source: MNR 10-Q and subsequent press releases

Capital Structure

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Q3'2017

Debt Preferred Equity Common Equity

Tota

l Mar

ket C

apita

lizat

ion

($ in

Bill

ions

)

7Source: MNR 10-Q and subsequent press releases

Financial Highlights

Source: MNR 10-Q. Estimates based on SNL consensus.

Gross Revenue

Adjusted Funds from Operations per Share

$10$20$30$40$50$60$70$80$90

$100$110

2012 2013 2014 2015 2016 9 MOS'2016 9 MOS'2017

+ 17%

+ 19%

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

2012 2013 2014 2015 2016 9 MOS'2016 9 MOS'2017

+ 10%

8

$ in

Mill

ions

+ 23%

+ 23%

+ 13% + 6%

+ 20%

Ecommerce Trends and MNR’s Portfolio

Source: eMarketer & U.S. Census Bureau

The entire retail industry has been shifting its focus from traditional brick and mortar stores to ecommerce platforms which hasled to significant demand for large, modern industrial distribution centers

U.S. ecommerce sales are expected to increase to over $400 billion in 2017, representing a 68% increase from 2013 Excluding food and fuel, ecommerce represents approximately 13% of total U.S. retail sales

ECommerce Sales

$-

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

2011 2012 2013 2014 2015 2016 2017E

CAGR: 14.8%

9

Global Retail Sales

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

0

5

10

15

20

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

E

2018

E

Online Sales (LHS)

In-Store Sales (LHS)

% Online (RHS)

$ in

trill

ions

Source: Goldman Sachs

Global consumer habits continue to change resulting in ever greater market share taking place online Global ecommerce sales are expected to rise to $2.4 trillion by 2018

10

Portfolio Markets & Panama Canal Expansion

Source: MNR 10-Q, subsequent press releases, Parsons Brinckerhoff Panama Canal Expansion Study, June 2012; Panama Canal Authority, Canal Expansion Programs – Components Report April 2012, Washington Post: “Modernization of the Panama Canal”; January 2013

Following nine years of construction costing $5.4 billion, the Panama Canal expansion project opened on June 26, 2016 North American ports have been spending billions of dollars in order to prepare for these larger ships

These ships have more than twice the cargo capacity of current ships The expanded Panama Canal allows larger vessels an approximate 29 day shorter transit time from the Atlantic to the Pacific oceans Container traffic has been gradually shifting towards the East Coast for the past decade Over 70% of the U.S. population lives east of the Mississippi River

11

Panama Canal Affected Markets:

Eastern Coastal

East Coast Inland

Gulf coast & Mississippi valley

Non-impacted marketsExisting Properties

Acquisitions Under Contract

High Quality Tenant Base

85% of rental revenue is from investment grade tenants or subsidiaries Higher investment grade tenant base than any other REIT

Rental roster includes Anheuser Busch, Coca-Cola, Dr Pepper Snapple Group, FedEx, General Electric, International Paper, Jim Beam, Kellogg’s, Milwaukee Tool, National Oilwell, Sherwin Williams, Siemens, Snap-on, ULTA, United Technologies and other high quality companies

MNR began investing in properties leased to FedEx in 1992 Recent acquisitions include six properties consisting of an additional 1.8 million square feet leased to FedEx Fourteen total expansion projects recently completed, increasing the rent and lease terms of these FedEx

facilities

Higher Investment Grade Tenant Base Than Any Other REIT


FedEx Ground, 42.9%

FedEx Express, 7.7%

Milwaukee Tool, 4.6%ULTA, 3.6%

Jim Beam Brands, 3.2%

International Paper, 3.1%

TreeHouse, 3.0%

CBOCS Distribution, 2.1%

Best Buy, 2.0%

Remaining Tenants, 25.2%

FedEx Ground, 54.0%

FedEx Express,

6.1%

Milwaukee Tool, 2.7%

ULTA, 2.4%

International Paper, 2.4%

TreeHouse, 2.0%

Jim Beam Brands, 1.9%

United Technologies, 1.7%

Autoneum, 1.6%

Coca-Cola, 1.5%

Remaining Tenants, 23.7%

High Quality Tenants

Square Footage by TenantAnnual Rent by Tenant


FDX and its subsidiaries represent 60.1% of Annual Rent

FDX and its subsidiaries represent 50.6% of Square Footage

Florida, 10.2%

Texas, 9.6%

Kentucky, 7.0%

Mississippi, 6.2%

Ohio, 7.2%

Indiana, 5.4%

Illinois, 5.2%North Carolina,

5.1%

Tennessee, 4.8%

South Carolina, 4.8%

Remaining States, 34.5%

Texas, 12.9%

Florida, 12.6%

Ohio, 6.7%

Illinois, 5.6%

North Carolina, 5.2%

Michigan, 5.1%South Carolina, 4.8%

Kentucky, 4.6%

Kansas, 4.2%

Mississippi, 4.1%

Remaining States, 34.2%

Geographic Focus

Annual Rent by State Square Footage by State

14

Our 18.6 million square foot portfolio is well diversified over 30 states


Summary Portfolio Metrics

Source: SNL Financial1. Occupancy for MNR and peers based on SEC reports available as of 9/19/17.2. On a per square foot weighted average basis, MNR’s portfolio is 9.3 years old. This chart uses simple average instead of weighted average for comparative purposes because its peers do not publish weighted average. 15

Current Occupancy (1)

Rate

Average Building Age (in Years) (2)

Rent Roll (% next 3 years by base revenues)

99.3%

97.9%96.9% 96.8% 96.7%

95.7% 95.6%

94.0% 94.0%

90.0%

92.0%

94.0%

96.0%

98.0%

100.0%

MNR DRE TRNO EGP PLD FR DCT STAG PSB

23.2%31.0%

35.8% 38.9%43.8% 45.1% 46.9% 49.3%

54.5%

0.0%10.0%20.0%30.0%40.0%50.0%60.0%

MNR DRE DCT TRNO PLD FR EGP STAG PSB

13 15 19 19

23

31 31 32

-

10

20

30

40

MNR DRE EGP PLD DCT FR STAG TRNO

Highest occupancy rate in the sector

Youngest portfolio among peers

Limited near term rent roll

Fiscal 2017 Acquisitions Thus far in fiscal 2017, Monmouth acquired nine industrial properties, of which 83% are leased to investment grade tenants or their

subsidiaries for $267 million, containing approximately 2.6 million square feet Monmouth’s acquisition pipeline currently contains approximately 1.0 million square feet of new build-to-suit properties of which

41% are leased to investment grade tenants or their subsidiaries with an aggregate purchase price of $100.6 million

Fiscal 2017 AcquisitionsBuffalo,

NYFt. Myers,

FLGrand Rapids,

MIDallas,

TXAugusta,

GAMiami,

FLOklahoma

City, OKCharlotte,

NCKenton,

OH

Tenant:

Credit Rating:(S&P/Moody’s)

BBB/Baa2 BBB/Baa2 BBB/Baa2 BBB/Baa2 NR BBB/Baa2 NR BBB/Baa2 BBB/Baa2

Year Built: 2016 2016 2017 2017 2017 2017 2017 2017 2017

Size (sf): 338,584 213,672 343,483 351,874 315,560 237,756 110,361 354,482 298,472

Acres: 51.1 22.5 61.0 65.0 23.5 50.4 7.0 56.6 45.8

Purchase Price: $35,100,000 $21,001,538 $32,120,000 $50,621,072 $21,933,000 $38,347,933 $9,000,000 $40,598,446 $18,299,032

Price/SF: $103.67 $98.29 $93.51 $143.86 $69.51 $161.29 $81.55 $114.53 $61.31

Lease Maturity:

3/31/2031 9/30/2026 1/31/2032 3/31/2032 4/30/2032 3/31/2032 8/31/2024 5/31/2032 8/31/2027

Annualized Rental Revenue:

$2,309,000 $1,365,000 $2,102,000 $3,194,000 $1,700,000 $2,282,000 $721,000 $2,537,000 $1,243,000


Select Recent Acquisitions

FedEx Ground – Orlando, FL MSA – 310,922 sf


Walmart has recently constructed two large ecommerce fulfillment centers (one on each side of our FedEx facility) totaling 2.35 million square feet

The Changing of The Guard

Before

18Source: MNR

The Big Town Mall was for many years the largest mall in Texas, and today…

The Changing of The Guard

After

19Source: MNR

This large 65 acre parcel situated six miles east of downtown Dallas is now the site of Monmouth’s new 352,000 sf FedEx facility.

Select Recent Acquisitions (continued)

Indianapolis, IN MSA –671,354 sf


Pittsburgh, PA MSA –125,860 sf

Acquisition Pipeline Strong acquisition pipeline comprising 1.0 million square feet with a

purchase price of $100.6 million Leases commence throughout fiscal 2017 and 2018 12% of the square footage will be leased to FedEx Weighted average lease maturity of acquisition pipeline is 10.6

years Monmouth actively looks for new built-to-suit opportunities near

already owned FedEx facilities Three FedEx expansion projects just completed with a total cost of

$8.0 million as well as a 250,000 sf expansion for Milwaukee Tool at a total cost of $9.8 million

Two parking lot expansions in progress, expected to cost $2.7 million These expansions result in increased rents and extended lease terms Monmouth maintains excellent relationships with top merchant

builders

21

Built-to-Suit

Built-to-SuitBuilt-to-Suit Infrastructure Installation


Lease Expirations Are Well Dispersed In Fiscal 2017, 1.4 million square feet was set to expire of

which 92% renewed with a 1.1% decrease in the weighted average U.S. GAAP lease rate

Minimal rent roll down risk observed on lease renewals Weighted average lease maturity currently at 7.9 years Weighted average rent per occupied square foot of $5.92

National average rent psf for industrial real estate at the end of 2016 was $6.12 and trending higher

Monmouth historically averages over 90% annual tenant retention (100% renewed in Fiscal 2015 and 2016)

0 sq. ft.

500 sq. ft.

1,000 sq. ft.

1,500 sq. ft.

2,000 sq. ft.

2,500 sq. ft.

3,000 sq. ft.

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034

$6.01

$5.19

$5.52

$4.48

$5.60

$5.98

$6.10

$5.08

$3.91

$7.70$3.81

$7.37

GLA 6.2% 7.4% 2.1% 4.5% 6.1% 8.4% 10.0% 12.9% 6.1% 6.1% 5.4% 1.4% 5.6% 5.2% 8.6% 0.0% 3.0%

ABR 6.3% 6.5% 1.9% 3.4% 5.8% 8.5% 10.3% 11.1% 7.9% 6.2% 3.5% 1.4% 6.7% 6.5% 10.8% 0.0% 2.0%

Expi

ring

Squa

re F

oota

ge (0

00’s

)

22

Expiring square footage (‘000’s)Average rent per occupied square foot of expiring square footage above each bar

Source: MNR 10-Q and subsequent press releases, GLA: Gross Leasable Area, ABR: Annual Base Rent

$5.77

$5.96$7.38$7.07

Favorable US Industrial Fundamentals

Source: CBRE Research & Green Street

Current economic indicators are very favorable for the US industrial real estate sector due to: Rampant growth in ecommerce Limited new construction over the past 7 years Manufacturing growth due to increased domestic energy production Continued benefits from the recently completed Panama Canal expansion Resurgent Housing Sector

US Industrial Construction (000’s) US Industrial Occupancy

0

100,000

200,000

300,000

400,000

2003 2005 2007 2009 2011 2013 2015 2017E84%86%88%90%92%94%96%

2003 2005 2007 2009 2011 2013 2015 2017

95.2%

214,700

23

US Cap Rates

5%

6%

7%

8%

9%

10%

2003 2005 2007 2009 2011 2013 2015 2017

5.5%

Conservative Balance Sheet Conservative capital structure

33% Net debt to total market capitalization 6.3x Net Debt/Adjusted EBITDA(1)

2.4x fixed charge coverage(1)

82% fixed rate debt, weighted average interest rate of 4.2% Limited debt maturities each year through 2021 82% of debt consists of modest LTV asset level mortgage financing Weighted average mortgage maturity of 11.5 years $302.2 million in potential liquidity

$100.5 million in REIT marketable securities $90.0 million available on our $200 million unsecured

revolving line of credit, plus an additional $100 million potentially available on an accordion feature

$11.7 million in cash

Source: MNR 10-Q and subsequent press releases (1): Pro-forma using full run rate of recent acquisitions and current preferred stock outstanding(2): All dollar amounts except stock price are in millions

Debt Maturities

Total Market Capitalization (2)

Equity, 56%

Debt, 34%

Preferred, 10%

Total Shares Outstanding 73,824,161

Stock Price (6/30/17) $15.05

Equity Market Capitalization $1,111.1

Mortgage Notes Payable 554.5

Loans Payable 122.1

Total Debt $676.6

Total Preferred 210.0

Total Market Capitalization $1,997.7

24

$0

$50

$100

$150

$200

$250

$300

$350

$400

2017 2018 2019 2020 2021 Thereafter

21.9%

7.9%7.4%

55.9%

1.3%5.6%

Tota

l Deb

t (in

Mill

ions

)

Dallas MSA

Loans Payable

Mortgages

% of Total Debt Outstanding

Long Term Cash Dividend

Source: SNL Financial(1): REIT average based on the SNL US REIT Equity Index as of 9/19/2017.

Monmouth has maintained or increased its dividend for 25 consecutive years Monmouth was one of the only REITs that maintained its dividend throughout the Great Recession 100% cash dividends since inception Dividend yield is approximately 50 bps greater than the SNL US REIT Equity Index (1)

$0.51 $0.53

$0.57 $0.58 $0.58 $0.58 $0.58 $0.58 $0.58

$0.60 $0.60 $0.60 $0.60 $0.60 $0.60 $0.60 $0.60 $0.60 $0.60 $0.64 $0.64

$-

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Dividends Per Share

25

Peer Analysis

Source: SNL Financial as of 9/19/17NOTE: MNR peers include DCT, DRE, EGP, FR, PLD, PSB, STAG and TRNO.

Dividend Yield

2017E FFO Multiple 2017E FFO Payout Ratio

Total Debt/Total Market Capitalization

26

32.5x

24.1x 23.7x 22.8x21.5x 21.2x 20.7x 20.2x

16.6x

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

35.0x

TRNO DCT DRE PLD PSB EGP MNR FR STAG

33.9%

28.7%27.4% 27.1%

24.1% 23.6%

18.5% 17.5%

1.8%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

MNR STAG FR EGP PLD DCT DRE TRNO PSB

5.0%

3.9%

2.8% 2.7% 2.7% 2.6% 2.5% 2.4%2.1%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

STAG MNR EGP PLD FR DRE PSB TRNO DCT

83.6% 81.8% 77.9%

62.7% 61.5% 60.6%54.9% 54.5%

51.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

STAG MNR TRNO PLD DRE EGP PSB FR DCT

Total Return Performance

Source: SNL Financial as of 9/19/17

10 Year

-100-50

050

100150200250300

9/19

/200

7

1/19

/200

8

5/19

/200

8

9/19

/200

8

1/19

/200

9

5/19

/200

9

9/19

/200

9

1/19

/201

0

5/19

/201

0

9/19

/201

0

1/19

/201

1

5/19

/201

1

9/19

/201

1

1/19

/201

2

5/19

/201

2

9/19

/201

2

1/19

/201

3

5/19

/201

3

9/19

/201

3

1/19

/201

4

5/19

/201

4

9/19

/201

4

1/19

/201

5

5/19

/201

5

9/19

/201

5

1/19

/201

6

5/19

/201

6

9/19

/201

6

1/19

/201

7

5/19

/201

7

9/19

/201

7

27

Dividend Yield

5.0%

3.9%

2.8% 2.7% 2.7% 2.6% 2.5% 2.4%2.1%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

STAG MNR EGP PLD FR DRE PSB TRNO DCT

MNR Peer Group RMS

274.47%

72.74%75.49%

Monmouth was recently named the best performing Industrial REIT over the past 10 year period

Key Investment Highlights

Best-in-Class Net-Lease Industrial Portfolio

28

Geographically Diversified with a High Quality Tenant Base

Demonstrated Portfolio Growth and Well Positioned for Future Growth

Conservative Balance Sheet

Experienced & Aligned Management Team with 8% Ownership

Monmouth Real Estate Investment Corporationwww.MREIC.reit

Documents

Monmouth Real Estate Investment Corporation€¦ · Forward-looking statements provide Monmouth Real Estate Investment Corporation’s current expectations or forecasts of future