OPERATIONAL REVIEW As at 31 December 2025, Manulife US REIT’s portfolio comprised seven office buildings with an NLA of 3.5 million sq ft, a long WALE of 4.5 years and an occupancy rate of 67.7%. The Manager completed the divestment of Plaza in Secaucus, New Jersey in February 2025 and Peachtree in Atlanta, Georgia in May 2025. MUST’s assets now span across Arizona, California, Georgia, New Jersey, Virginia and Washington, D.C. U.S. Office Fundamentals Continue to Improve For the second consecutive year, the U.S. office sector reached a new post-pandemic high in its quarterly leasing volume in 4Q2025, marking a significant growth of 4.4% QoQ to 55.1 million sq ft. This increase contributed to an impressive year-end total of 207 million sq ft, reflecting a 5.2% rise over 20241. In 2025, larger markets continued to outperform, with gateway markets experiencing a 15% YoY increase in leasing volume compared to a 3.5% and 3.3% growth in secondary and tertiary markets, respectively. Capital market liquidity also improved in 2025. Over the past seven quarters, investment volumes have increased YoY. Total transaction activity grew by 35% in 2025 to US$47.9 billion. The improvement in liquidity is anticipated to facilitate the transition of some distressed assets to healthier ownership, which typically precedes a surge in new development activity within 12 to 18 months. MUST: Paving the Way for Recovery and Growth Under MUST’s Recapitalisation Plan, the Manager made progress with its asset dispositions in 2025, completing the sale of Plaza for US$40.0 million in net proceeds in February and Peachtree for US$123.6 million in net proceeds in May. Proceeds from these transactions, together with additional cash from MUST’s balance sheet, were used to fully repay 2025 debt maturities and substantially reduce 2026 obligations, leaving only US$35.6 million outstanding in 2026. As at 31 December 2025, the Manager achieved approximately 83% of the Minimum Sale Target of US$328.7 million and repaid about US$317 million of debt. Going forward, it will continue its disposition efforts while pursuing acquisition opportunities under the Growth and Value Up Plan, leveraging its broadened investment mandate to acquire assets that improve its portfolio diversification and create long-term value. MUST’s same-store occupancy declined YoY to 67.7%, from 73.4% as at 31 December 2024, as a result of the tenantfavourable leasing environment as landlords in the market continue to offer tenants high concessions. Strategic Asset Management to Optimise Capital In 2025, the Manager continued to focus on strategic asset management to optimise its capital. In the current tenant's market, many leasing deals come with significant tenant concessions, resulting in long payback periods without providing any meaningful uplift to valuations. The Manager is therefore strategically prioritising leases where it has a competitive advantage. Rather than solely pursuing occupancy, it is focused on structuring leases that are accretive to MUST. Some examples of such strategic leases secured include a new ~40,000 sq ft lease signed with Banc of California at Figueroa at above market rent and low TI allowance compared to the market, leveraging on the tenant’s need for building signage for the Los Angeles 2028 Olympics. At Phipps, the Manager signed two new leases with a real estate tenant and administrative and support services tenant at TIs significantly below market rates. At Exchange, the Manager also renewed a 2026 expiring tenant for more than seven years at favourable terms, with TIs more than 50% below market, and also leased full-floor space to large movie studios to help generate revenue while the space continues to be marketed for long-term lease. In all, the Manager executed ~407k sq ft of leases in 2025, mainly from the Public Administration, Real Estate, and Administrative and Support Services sectors. The executed leases represent 11.5% of its portfolio NLA. Average rent reversion came in at -6.1% for leases signed for the year. It also maintained a well-spread lease expiry profile. 4.4% of the leases based on NLA are expiring in 2026. 1 JLL U.S. Office Outlook 4Q2025. 2 Based on the respective purchase and sale agreements, and subjected to closing adjustments. 3 The divestment consideration took into account the independent valuation of the property. Using the income capitalisation approach, which consists of the discounted cash flow method, Cushman & Wakefield of New Jersey, LLC valued the property at US$43.7 million as at 31 December 2024. 4 The divestment consideration took into account the independent valuation of the property. Using the income capitalisation approach, which consists of the discounted cash flow method and direct capitalisation method, Cushman & Wakefield valued the property at US$133.4 million as at 28 April 2025. Divestments Property City, State Net Consideration2 (US$ million) Valuation (US$ million) Buyer Completion Date (U.S. time) Plaza Secaucus, New Jersey 403 43.7 500 Plaza Ground Lessor LLC 25 February 2025 Peachtree Atlanta, Georgia 1214 133.4 SSC VII INVESTOR, LLC 27 May 2025 Total 161 / 23 / MANULIFE US REIT
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