Imperial Equities : 2023 – Third Quarter Report

3rd Quarter Report 2023

Ending June 30, 2023

Table of Contents

President's Report																							01
Management's Discussion and Analysis								03
Responsibility of Management and the Board of Directors				04
Forward-looking Information										04
Non-IFRS Financial Measures										04
Business Overview																			05
Strategic Direction																			05
Key Performance Drivers												05
Key Performance Indicators										06
Investment Properties													07
Leasing Activities																08
Lease Terms																09
Financing																12
Mortgage Maturities														13
Activity During the Period										14
Results of Operations												14
Fair Market Value of Investment Properties					16
Changes in Cash Flows										18
Changes in Financial Position									18
Summary of Consolidated Quarterly Results					19
Quarterly Changes in Revenue								20
Outstanding Share Data								21
Dividends									21
Related Party Transactions								21
Liquidity, Capital Resources, and Solvency					22
Critical Estimates of the Current Economic Environment and Outlook		23
Risks and Risk Management						23
Planned Expenditures						26
Critical Accounting Estimates and Changes in Accounting Policies		26
Critical Accounting Estimates and Assumptions		27
Disclosure Controls and Procedures		28
Off-balance Sheet Arrangements		28
Financial Statements		29

IMPERIAL EQUIITES INC. 2023 THIRD QUARTER REPORT

President's Report

3rd Quarter

June 30, 2023

Report to Shareholders

From the beginning of this fiscal year and throughout this third quarter our team has been active across all areas to ensure our portfolio retained its robust performance, to bring some major internal investing activity to a conclusion and begin to look outward again for new investment opportunities.

All of our fundamentals remain strong with our occupancy rate maintained at 97.9% and leasing activities keeping pace with anticipated renewals and turnover. Close to 100,000 square feet have been renewed or remarketed so far this year, with industry competitive rates maintained across all assets. Our ability to continue to attract and retain tenants and maintain high occupancy reflects the strength of our assets and an ongoing show of trust from our tenants. As always, this is a major measure of our success.

Our financial performance for the quarter continues to be strong, even as we have held steady on outward investing activity. Total revenue and funds from operations have been stable, and excess capital has supported our internal expansion and renewal. The value of assets under management has increased to almost $264 million as of Q3 2023, across all income- producing properties - all providing stable cash flow to support debt repayment, ensure consistent quarterly dividends and generate funds for long-term growth.

Our major investment activity this quarter remains with our Fort McMurray Wajax property which is nearing completion on a major, onsite expansion, expected to be completed prior to the end of Q4 2023. The tenant is already occupying the first phase of the expansion with the secondary building nearing completion. We have chosen to self-finance this expansion while we assess our new interest rate environment, and our fixed price contract helped constrain costs at a time in which our industry is still feeling significant inflationary pressure. Once completed and an occupancy certificate is issued by the municipality, we will be in a position to place conventional financing in order to pay down short-term financing and begin to free up excess capital for investment.

Our other major investment for the year is the modernization of the systems in one of our older properties to support its long-term viability. Incorporating energy efficient components and contending with supply chain issues in addition to excess demands from the municipality have caused some delays on this work. However, early on in this quarter we were able to comply with all municipal requirements and our new tenant was able to obtain occupancy.

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We also continue to invest to lower our ESG impacts, implementing measures across all properties to reflect our ongoing commitment to sustainability and giving back in the communities that support our Company.

Like all of our industry, we are adapting to the new interest rate environment as our weighted average interest rate continues to increase as debt is refinanced. We continue to benefit from the financial decisions we made in the low rate environment that preceded this new era, but we do see the impact to our bottom line as cash required for debt repayment has increased each quarter this year.

Still, we maintain a healthy average of 50% debt to total assets, and our overall income from operations is slightly ahead of Q3 2022 even as we absorb new costs and self-finance internal expansions. An overall lower net income is attributable to higher financing costs as well as the impact of changes in valuations of investment properties.

As we move towards our year end, we are looking to successfully bring priority projects to completion and to explore opportunities for new investment.

I offer my sincere thanks to our Management, Partners, Directors and our Shareholders who continue to support our efforts to pursue greater shareholder value. As always, I can be reached with any questions about our Company at [e-mail].

Sincerely,

Sine Chadi

President & CEO

IMPERIAL EQUIITES INC. 2023 THIRD QUARTER REPORT	02

MANAGEMENT'S DISCUSSION & ANALYSIS

for the third quarter ending June 30, 2023

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