Medalist Diversified REIT, Inc. Releases Update From Interim CEO and President

Medalist Diversified REIT, Inc. (NASDAQ: MDRR) (the "Company" or "Medalist"), a Virginia-based real estate investment trust that specializes in acquiring, owning and managing commercial real estate in the Southeast region of the U.S., released today a letter from Francis P. Kavanaugh, the Company’s interim CEO and President, providing an update on the Company’s activities during the first 30 days of his tenure.

Dear Shareholders,

Having reached my 30th day as interim CEO of Medalist Diversified REIT, Inc. (“MDRR”), I'm pleased to present an update on our strategic progress, tenant relationships, and promising trends in the retail industry that I believe bode well for our future.

Property Overview

- Southeast geographic focus
- Nearly 1 million square feet across 5 shopping centers and 3 flex/industrial assets as of July 31, 2023
- Assumable debt of $61 million of July 31, 2023
- 4.2% weighted average interest rate; 5.8 year weighted average debt maturity as of July 31, 2023

Leasing Activity

Leasing remains central to our strategy, with recent engagements that signal our alignment with market demands:

- Parkway Center: Achieved full occupancy with a newly-signed 2,569 square foot lease on August 7, 2023
- Greenbrier Business Center: A new 6,770 square foot lease brings occupancy to 98% as of August 23, 2023
- Salisbury Marketplace – Family Dollar: Secured an 8,470 square foot lease renewal for 10 years on July 28, 2023
- Lancer Center – Big Lots: 10-year, 28,257 square foot lease renewal on June 27, 2023
- Ashley Plaza – CitiTrends: 5-year, 14,880 square foot lease renewal on June 7, 2023

We believe these high-profile new leases and lease renewals demonstrate our commitment to fostering sustainable relationships and securing long-term stability.

Retail Sector Resilience

According to an article in the Wall Street Journal on August 22, 2023, the retail real estate market has proven resilient, with remarkable trends including:

- Retail Availability at Record Lows: The nationwide availability rate now stands at 4.8%, the lowest in 18 years.
- Positive Rent Growth: The average asking rent in the U.S. increased by 6.3% since Q2 2020.
- Resilience Despite Economic Fluctuations: Despite predictions of physical retail’s decline due to online sales, brick-and-mortar locations are flourishing. Retail’s strength is largely the result of a sharp drop in retail construction since the 2008-2009 financial crisis and digitally native companies are even opening physical stores.