All figures are in $USD, unless otherwise specified.
TORONTO, May 18, 2022 (GLOBE NEWSWIRE) — Firm Capital Apartment Real Estate Investment Trust (“the “Trust”), (TSXV: FCA.U), (TSXV: FCA.UN) is pleased to announce its financial results for the quarter ended March 31, 2022:
- NAV AT $10.04 PER TRUST UNIT ($12.54 CAD): Since the third quarter of 2017, the Trust has increased the net asset value from $7.85 (C$9.80) per Trust Unit to $10.04 (C$12.54) per Trust Unit for a rate of compound annual growth of +10.1% (“CAGR”);
- INCREASE IN AVERAGE RENTS ACROSS THE ENTIRE INVESTMENT PORTFOLIO: For the three months ended March 31, 2022, average rents increased 5% to $1,255 per unit from $1,192 per unit for the quarter ended December 31, 2021;
- SECOND DISTRIBUTION INCREASE: On February 8, 2022, the Trust announced a 4.2% increase in quarterly distributions from $0.059 per Trust Unit to $0.0615 per Trust Unit effective Q2/2022 distributions. In addition, the Trust declared and approved quarterly distributions of $0.0615 per Unit for Unitholders of record on June 30, 2022, payable on or about July 15, 2022;
- 100% CAPITAL REFUND ON 2021 DISTRIBUTIONS: The Trust’s 2021 distributions were tax-efficient for unitholders as they generated a 100% return of capital;
- CAD $13 MILLION BRIDGE LOAN: On April 18, 2022, the Trust entered into an agreement with an entity related to the Trust’s asset manager, to borrow C$13 million to be used for the Houston, TX transaction and preferred capital investment. The summarized terms of the bridge loan are (i) the greater of 6.0% per annum or the Canadian chartered bank prime rate plus a spread; (ii) two-year term; (iii) fully open for redemption at any time prior to maturity; (iv) 1% commitment fee; (v) an undertaking to pledge all net excess cash flow generated by all mortgage refinancings and capital increases carried out by the Trust until full repayment of the bridge loan and (vi) a general guarantee agreement ;
- $3.5 MILLION, PREFERRED CAPITAL INVESTMENT AT 12%: On April 22, 2022, the Trust provided $3.5 million in preferred stock to an unrelated third party for the recapitalization of a multi-residential portfolio located in Sioux Falls, South Dakota. The preferred shares pay 12% interest for the initial three-year term; and
- ACQUISITION IN HOUSTON, TX: On April 29, 2022, the Trust acquired the remaining 50% interest in Houston, Texas Equity Accounted and Preferred Investment for $5.3 million. The Trust now owns 100% of this investment and will report it in the future as investment property in the Trust’s financial statements.
FIRST QUARTER HIGHLIGHTS
Key highlights for the three months ended March 31, 2022 are as follows:
- Net loss was approximately $0.3 million, compared to net loss of $2.9 million reported for the quarter ended March 31, 2021;
- Excluding non-cash fair value adjustments, net income was $0.5 million; and
- AFFO was around $0.4 million.
|Three months completed|
|Net income/(loss)||$||(345 345||)||$||3,478,939||$||(2,945,917||)|
|Net earnings before fair value adjustments||$||532 100||$||497,949||$||508 948|
|AFFO||$||446 352||$||497,684||$||507 952|
|Distributions||$||448 658||$||448 658||$||455 166|
|AFFO per unit||$||0.06||$||0.07||$||0.07|
|Distributions per unit||$||0.06||$||0.06||$||0.06|
|AFFO Payout Ratio||101%||90%||90%|
For the complete financial statements, including the management report, please visit www.sedar.com or the Trust’s website at www.firmcapital.com
The Trust’s portfolio consists of (i) wholly owned real estate investments (ii) joint venture real estate investments and (iii) preferred equity investments
(I) Wholly owned real estate investments:
The Trust opportunistically acquires wholly owned multi-family residential real estate assets in major major markets on an accretive basis and when the Trust’s cost of equity is compelling. Any growth in the scale described above will require the Trust to raise additional capital through the private and/or public debt and equity markets.
(ii) Joint venture real estate investments:
The Trust has successfully employed a joint venture strategy with partners who bring strong local expertise in its primary and secondary markets. The Trust strives to have at least a 50% ownership interest and will fund equity in a combined preferred and common equity investment structure. Preferred shares offer a fixed rate of return resulting in a secured structure prior to partner participation, while common shares offer investors an upside return to investors when the investment achieves its targeted objectives. The joint venture strategy reduces the risks associated with the Trust’s investment.
(iii) Preferred Equity Investments:
The Trust, utilizing Firm Capital’s more than 30 years of experience as a leader in the mortgage lending industry, provides preferred capital secured by multi-family residential real estate properties. Preferred capital investments continue to provide the Trust with attractive risk-adjusted returns. Preferred capital ranks ahead of common stock and behind first mortgage debt in the capital structure of a real estate investment. These types of investments generally generate a higher return and better overall risk-adjusted return for the Trust than the underlying real estate when real estate valuations are at a premium. In the short term, the Trust expects to continue to grow this category of investments.
The Trust’s strategy and primary objective is to use the proven industry experience of management, board of directors and joint venture partners to acquire and hold multi-family residential real estate properties in the United States in order to to increase the net asset value per unit, to generate attractive distributions and the total number of unitholders. Return.
In the short to medium term, the Trust expects to grow its portfolio of wholly-owned real estate investments by executing its first offer to acquire co-ownership interests in some of its existing joint ventures. Over the medium to long term, the Trust’s goal is to maintain a 1:1 ratio of wholly owned ownership to joint venture partner ownership, while continuing to grow its preferred capital investments that deliver returns guaranteed by the asset classes we hold.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Certain information contained in this press release constitutes forward-looking statements under applicable securities laws. All statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by words such as “may”, “should”, “anticipate”, “expect”, “intend” and similar expressions.
Forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse factors affecting the US real estate market generally or the specific markets in which the Trust holds properties; real estate price volatility; inability to access sufficient capital from internal and external sources and/or inability to access sufficient capital on favorable terms; industry and government regulation; changes in legislation, income tax and regulatory matters; the Trust’s ability to implement its business strategies; competition; currency and interest rate fluctuations and other risks. Other risk factors that could affect the Trust or cause actual results and performance to differ from the forward-looking statements contained herein are set forth in the Trust’s Annual Information Form under the heading Risk Factors ( a copy of which can be obtained under the Trust’s profile on www.sedar.com).
Readers are cautioned that the foregoing list is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. Such information, although considered reasonable by management at the time it was prepared, may prove to be incorrect and actual results may differ materially from those anticipated. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Except as required by applicable law, the Trust undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Certain financial information presented in this press release reflects certain International Financial Reporting Standards (“IFRS”) financial metrics, which include, but are not limited to, NOI, FFO, and AFFO. These measures are commonly used by real estate investment companies as useful measures for measuring performance, however, they do not have any standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other companies. real estate investment. These terms are defined in the Trust’s MD&A for the quarter ended March 31, 2022 filed on www.sedar.com.
Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
|For more information, please contact:|
|Sandy Poklar||Marc Goldrich|
|President and CEO||Financial director|
|(416) 635-0221||(416) 635-0221|
|For investor relations information, please contact:|
|Director, Investor Relations|