Strong Financial & Operating Results,
Executing on Strategic Repositioning
TORONTO, Nov. 15, 2021 /CNW/ - H&R Real Estate
Investment Trust ("H&R" or "the REIT") (TSX: HR.UN) announces
its financial results for the three and nine months ended
September 30, 2021.
TRANSFORMATIONAL STRATEGIC REPOSITIONING PLAN
On October 27, 2021, H&R
announced its transformational strategic repositioning plan to
create a simplified, growth-oriented company focusing on
multi-residential and industrial properties to surface significant
value for unitholders. H&R's target is to be a leading owner,
operator and developer of multi-residential and industrial
properties, creating value through redevelopment and greenfield
development in prime locations within Toronto, Montreal, Vancouver, and high growth U.S. sunbelt and
gateway cities. H&R will fund this growth through dispositions,
synchronizing asset sales with capital requirement.
"I am very pleased to report strong third quarter results,
reflecting the quality of H&R's portfolio and strength of our
balance sheet," said Tom Hofstedter,
President and CEO. "Our transformational strategic repositioning
plan, announced just a few weeks ago, provides a clear path forward
to simplifying H&R's business model creating significant value
and growth for unitholders. With our path forward now clearly
established, our teams have turned to the implementation phase,
where we are committed to efficiently and effectively executing on
our plan."
Execution Highlights
- Sale of Bow and Bell Office
Campus: previously announced sale of the Bow and Bell
office Campus significantly reduced Calgary office exposure, enhanced tenant
diversification, and created the liquidity and strengthened balance
sheet to enable the next steps.
- Primaris REIT Spinout: previously announced proposed
tax-free spin-off (the "Spin-Off") of the REIT's Primaris
properties including all of H&R's enclosed malls into a new,
completely independent, stand-alone, publicly traded REIT
("Primaris").
- Exit Retail and Office: previously announced Disposition
plan (the "Strategic Dispositions") of H&R's remaining retail
properties including its investment in ECHO Realty, and all office
properties other than those with significant near-term
redevelopment potential. These Strategic Dispositions are expected
to generate proceeds of approximately $3.4
billion over the next five years.
- Focus on Multi-Residential and Industrial: synchronize
Strategic Disposition proceeds to fund greenfield development and
office redevelopment into class A multi-residential and industrial
properties.
Benefits of the transformational strategic repositioning are
expected to include
- Greater concentration to higher growth multi-residential and
industrial assets, with reduced exposure to retail and office
properties.
- Enhanced major market presence in the Greater Toronto Area, high-growth U.S. sunbelt
and gateway cities and immediate reduction of Alberta exposure to 7% of investment
properties post Spin-Off.
- Increasing exposure to H&R's significant 12,700 class A
multi-residential and industrial development pipeline to drive
growth.
- Improved proforma balance sheet enhances financial flexibility
to execute on growth while maintaining H&R's current investment
grade credit rating.
- Upon completion of the Spin-Off, the combined annual
distributions of H&R REIT and Primaris are anticipated to equal
$0.72, up 4.3% from the current
$0.69 per H&R unit. H&R is
anticipated to distribute $0.52 per
annum while Primaris is anticipated to distribute $0.20 per Primaris unit (assuming that one
Primaris unit is issued for every H&R unit in the
Spin-Off).
Further details are included in H&R's material change report
filed on November 5, 2021 and
investor presentation which can be found at www.hr-reit.com.
The Bow and Bell Campus Sale
On August 3, 2021, H&R
announced it had entered into agreements to sell a 100%
ownership interest in the land and building of the 2.0 million
square foot Bow office property ("the Bow") in Calgary, AB and an 85% effective interest in
the net rent payable under the Ovintiv Inc. ("Ovintiv") lease
through expiry in May 2038. In
addition, H&R also entered into an agreement to sell a 100%
ownership interest in the 1.1 million square foot Bell office
campus ("Bell Campus") located in Mississauga, ON. Total gross proceeds from
these dispositions were approximately $1.47
billion. The closing of these transactions ("the Bow and
Bell Transaction") occurred on October 7,
2021. The Bow's property operating income for Q3 2021 was
$25.1 million. The Bell Campus
property operating income for Q3 2021 was $8.6 million.
H&R effectively retains a 15% interest in the net rent
payable under the Ovintiv lease to the expiry of the lease in
May 2038, and will continue to manage
the Bow and earn management fees. The retained interest in the cash
flow from the Ovintiv lease and management fees total approximately
$18 million annually. H&R will
also continue to manage the Bell Campus for the remainder of the
term of the existing Bell Campus leases, earning management fees of
approximately $1.6 million
annually.
The sale includes an option in favour of H&R to repurchase
100% ownership of the land and building of the Bow at expiry of the
Ovintiv lease in May 2038 for
approximately $735 million
($368 per sq.ft.), substantially
below the current sale proceeds of $1.031
billion ($515 per sq.ft.).
This option provides H&R the ability to capture potential
upside in the Calgary office
market over an extended time frame (of approximately 17 years).
As part of the Bow and Bell Transaction, in October 2021, H&R redeemed its Bow Centre
Street Limited Partnership Series B and Series C Secured Bonds
secured by the Bow for a combined redemption amount of $524 million, inclusive of pre-payment penalties.
H&R has also repaid $25 million
of mortgages secured by the Bell Campus, inclusive of pre-payment
penalties, while another $97 million
of associated mortgage debt was assumed by the buyer. Combined
proceeds after the above debt repayments, mortgage assumption and
transaction costs amounted to approximately $800 million. These proceeds were used to be
repay lines of credit and the mortgage secured against Two Gotham
Centre, Long Island City, NY
totalling $419.0 million. The
remaining proceeds were used to redeem the $325.0 million principal amount outstanding
2.923% Series L Senior Debentures of the REIT in November 2021.
Spin-Off of Primaris
On October 27, 2021, H&R
announced its intention to spin-off its enclosed mall portfolio and
together with Healthcare of Ontario Pension Plan ("HOOPP") create
Primaris. Primaris' size, scale, portfolio composition, and capital
structure were designed to allow Primaris to grow and thrive in the
new retail landscape. Primaris will own interests in 35 shopping
centres with an appraised value of approximately $3.2 billion encompassing 11.4 million square
feet of gross leasable area ("GLA") at Primaris' share. H&R
will contribute 27 properties with an appraised value of
approximately $2.4 billion and HOOPP
will contribute eight properties with an appraised value of
approximately $0.8 billion. H&R's
secured debt will be reduced by approximately $579 million in respect of the mortgages to be
assumed by Primaris.
Primaris will have substantial scale, a differentiated low
leverage financial model and a full service, vertically integrated
management platform. Primaris' board of trustees and management
will be independent with no overlap with H&R's board of
trustees and management, and will operate as a distinct and
separate publicly-traded entity upon completion of the Spin-Off.
Immediately following the Spin-Off, H&R unitholders will
directly own approximately 74% of Primaris units outstanding, and
HOOPP will own approximately 26% of Primaris units outstanding.
Included in property operating income for the three months ended
September 30, 2021 was $35.2 million relating to the 27 properties being
contributed by H&R to Primaris.
H&R has applied to the TSX for the listing of Primaris units
on the TSX with the ticker PMZ.UN, following the expected closing
in late December 2021 or early 2022.
The listing will be subject to the TSX's customary listing approval
requirements.
Further details on the Spin-Off of Primaris can be found in
H&R's management information circular dated November 5, 2021 relating to the unitholder
meeting to be held on December 13,
2021 to consider the plan of arrangement giving effect to
the Spin-Off which circular is available at www.hr-reit.com and
www.sedar.com.
FINANCIAL HIGHLIGHTS
|
September
30
|
December
31
|
|
2021
|
2020
|
Total assets
(millions)
|
$13,123
|
$13,355
|
Debt to total assets
per the REIT's Financial Statements(1)
|
44.8%
|
47.7%
|
Debt to total assets
at the REIT's proportionate share(1)(2)
|
48.5%
|
51.1%
|
Unitholders' equity
(millions)
|
$6,338
|
$6,071
|
Units outstanding (in
thousands of Units)
|
288,340
|
286,863
|
Unitholders' equity
per Unit
|
$21.98
|
$21.16
|
Net Asset Value
("NAV" per unit)(2)
|
$22.77
|
$21.93
|
Unit price
|
$15.63
|
$13.29
|
|
3 months ended
September 30
|
9 months ended
September 30
|
|
2021
|
2020
|
2021
|
2020
|
Rentals from
investment properties (millions)
|
$268.8
|
$271.6
|
$799.6
|
$821.2
|
Property operating
income (millions)
|
$182.2
|
$175.8
|
$491.7
|
$480.1
|
Fair value adjustment
on real estate assets (millions)
|
($46.2)
|
$93.0
|
$26.0
|
($1,265.9)
|
Net income (loss)
(millions)
|
$135.3
|
$247.8
|
$389.7
|
($736.2)
|
Funds from operations
("FFO") (millions)(2)
|
$121.4
|
$124.5
|
$356.8
|
$375.7
|
FFO per Unit
(basic)(2)
|
$0.40
|
$0.41
|
$1.18
|
$1.25
|
Adjusted Funds from
Operations ("AFFO") (millions)(2)
|
$102.2
|
$107.4
|
$289.6
|
$316.5
|
AFFO per Unit
(basic)(2)
|
$0.34
|
$0.36
|
$0.96
|
$1.05
|
Distributions per
Unit
|
$0.17
|
$0.17
|
$0.52
|
$0.75
|
Payout ratio per Unit
(as a % of AFFO)(2)
|
50.0%
|
47.2%
|
54.2%
|
71.4%
|
|
|
(1)
|
Debt includes
mortgages payable, debentures payable, unsecured term loans and
lines of credit.
|
(2)
|
These are non-GAAP
measures. See "Non-GAAP Financial Measures" in this press
release. H&R's management discussion and analysis
("MD&A") for the three and nine months ended September 30, 2021
includes a reconciliation of net income (loss) to FFO and AFFO as
well as the calculation of NAV per Unit. Readers are
encouraged to review the reconciliations and calculation in
H&R's MD&A.
|
SUMMARY OF SIGNIFICANT Q3 2021 ACTIVITY
Properties in Lease-up
Property
|
Q3 2021 Property
operating income
(cash basis)
(in millions)
|
Annualized Q3
2021
Property operating
income (cash basis)
(in millions)
|
Expected
Stabilized
Property operating
income (cash basis)
(in millions)
|
Expected Increase
in
Property operating
income (cash basis)
(in millions)
|
River Landing,
Miami,
FL
|
U.S. $3.4
|
U.S. $13.6
|
U.S. $24.8
|
U.S. $11.2
|
Jackson
Park,
Long Island City, NY*
|
U.S. $1.1
|
U.S. $4.4
|
U.S. $32.0
|
U.S. $27.6
|
* At H&R's ownership interest.
River Landing:
River Landing is an urban in-fill
mixed-use property site in Miami,
FL which achieved final completion in Q2 2021. River Landing includes approximately 341,000
square feet of retail space, approximately 149,000 square feet of
office space and 528 residential rental units. It is adjacent to
the Health District with approximately 1,000 feet of waterfront on
the Miami River, two miles from downtown Miami.
As at September 30, 2021,
residential occupancy was 86.6% and committed occupancy as at
November 3, 2021 was 94.7% with 500
of 528 residential units leased, exceeding management's
expectations on leasing velocity.
As at September 30, 2021, retail
occupancy was 78.6% and committed occupancy for retail space as at
November 3, 2021 was 90.0% with the
remaining retail lease-up expected to occur during Q4 2021 and the
first half of 2022. During Q3 2021, the REIT signed a lease with
the Public Health Trust of Miami Dade
County to occupy 43,351 square feet of office space,
bringing committed office occupancy to approximately 64.0% as of
November 3, 2021. The REIT is
continuing negotiations with multiple parties on the remaining
office space.
Jackson Park:
Jackson Park in Long Island City, NY has been negatively
impacted by COVID-19 with higher vacancy and lower than average
lease renewals. Beginning in June
2021, Jackson Park began to see a significant increase in
the number of leases signed and occupancy increased from 61.6% as
at June 30, 2021 to 97.5% as at
September 30, 2021. As a result of
the significant leasing completed, H&R incurred significant
up-front leasing costs which has negatively impacted Jackson Park's property operating income in Q3
2021.
Development Activity
H&R's active developments in Canada include two industrial properties,
totalling 182,889 square feet at H&R's industrial business park
in Caledon, ON with a total
development budget of $30.7 million.
As at September 30, 2021,
$14.9 million has been spent on
properties under development with $15.8
million of budgeted costs remaining to be spent.
H&R's active developments in the
United States includes three residential developments with a
total budget of U.S. $127.1 million.
As at September 30, 2021, U.S.
$116.6 million had been spent on
properties under development with U.S. $10.5
million of budgeted costs remaining to be spent. The REIT
has U.S. $14.1 million available to
be funded through secured construction facilities, in each case at
the REIT's ownership interest. These three residential developments
will produce 299 rental units at the REIT's ownership interest.
In September 2021, H&R
acquired 3.7 acres of land in Dallas,
TX for U.S. $6.3 million,
which is expected to be developed into 300 residential rental
units. The site is located within CityLine, a mixed-used
development in the suburb of Richardson,
TX which spans 186 acres and is anchored by the regional
headquarters of State Farm Insurance.
In September 2021, H&R sold
its 33.3% non-managing interest in Esterra Park, a 263 residential
rental unit development in Seattle,
WA for approximately U.S. $43.8
million and recorded a gain on sale of U.S. $8.7 million at the REIT's ownership interest.
The return on equity invested amounted to approximately 81.7%.
Office
In July 2021, H&R sold a
54,100 square foot single-tenanted property in Markham, ON for approximately $13.1 million.
Same-Asset property operating income (cash basis) from office
properties increased by 1.2% for the three months ended
September 30, 2021 compared to the
respective 2020 period, primarily due to contractual rental
escalations. Same-Asset property operating income (cash basis) from
office properties increased by 12.9% from Q2 2021 to Q3 2021,
primarily due to Hess Corporation's ("Hess") free rent period
ending in June 2021. Hess received a
seven-month free rent period (which commenced in December 2020) as part of a lease extension and
amending agreement completed in November
2020 for its premises in Houston,
TX under which Hess agreed to extend the term of its lease
on approximately two-thirds of the building for an additional term
of 10 years beyond its current expiry of June 30, 2026.
Industrial
In July 2021, H&R sold its 50%
ownership interest in a portfolio of nine single-tenanted cold
storage properties located across Canada for $117.5
million. The weighted average overall capitalization rate
for this portfolio disposition was approximately 4.0%.
Same-Asset property operating income (cash basis) from
industrial properties decreased by 0.8% for the three months ended
September 30, 2021 compared to the
respective 2020 period, primarily due to the decrease in same-asset
occupancy.
Residential
In Q4 2020, the Exchange at Bayfront (Phase 1 of the Hercules
Project), a 54 residential rental unit development (at H&R's
ownership interest) in Hercules,
CA was substantially completed. In September 2021, the REIT sold its 31.7%
non-managing interest for approximately U.S. $35.9 million. H&R's total cost to build this
property was approximately U.S. $25.8
million at the REIT's ownership interest. H&R recorded a
gain on sale of U.S. $8.0 million and
had previously recorded a $2.1
million fair value adjustment when the development was
completed. The return on equity invested amounted to approximately
69.3%.
Same-Asset property operating income (cash basis) from
residential properties in U.S. dollars decreased by 4.0% for the
three months ended September 30, 2021
compared to the respective 2020 period, primarily due to Jackson
Park in New York which has been
temporarily negatively impacted by COVID-19, and is further
discussed above. Excluding Jackson
Park, Same-Asset property operating income (cash basis) from
residential properties in U.S. dollars increased by 12.3% for the
three months ended September 30, 2021
compared to the respective 2020 period, primarily due to an
increase in rental revenue.
Retail
Same-Asset property operating income (cash basis) from retail
properties increased by 8.6% for the three months ended
September 30, 2021 compared to the
respective 2020 period, primarily due to higher bad debt expenses
recorded during the onset of COVID-19 in 2020. Included in
same-asset property operating income (cash-basis) for the three
months ended September 30, 2021 was
$33.3 million relating to the 27
properties being contributed by H&R to Primaris.
Funds from Operations and Adjusted Funds from
Operations
FFO per Unit in Q3 2021 was $0.40
compared to $0.38 in Q2 2021 and
$0.41 in Q3 2020. AFFO per Unit
was $0.34 in Q3 2021 compared to
$0.30 in Q2 2021 and $0.36 in Q3 2020. Distributions paid as a
percentage of AFFO was 50.0% in Q3 2021, resulting in significant
retained cash flow of approximately $51.0
million.
Debt Highlights
As at September 30, 2021, debt to
total assets was 44.8% compared to 46.3% as at June 30, 2021 and 47.7% as at December 31, 2020. The weighted average interest
rate of H&R's debt as at September 30,
2021 was 3.5% with an average term to maturity of 3.2
years.
Liquidity
As at September 30, 2021, H&R
had $1.1 billion available under its
unused lines of credit, an unencumbered property pool of
approximately $4.3 billion and cash
on hand of $52.4 million.
Monthly Distributions Declared
H&R today declared distributions for the months of November
and December scheduled as follows:
|
Distribution/Unit
|
Annualized
|
Record date
|
Distribution
date
|
November
2021
|
$0.0575
|
$0.690
|
November 23,
2021
|
December 7,
2021
|
December
2021
|
$0.0575
|
$0.690
|
December 31,
2021
|
January 12,
2022
|
Special Distribution
The REIT also announced today that it has declared a special
distribution of $0.73 per Unit. The
distribution will be payable in Units ($0.63 per Unit) and cash ($0.10 per Unit) to all Unitholders of record as
at December 31, 2021.
The special distribution is principally being made to distribute
to Unitholders the capital gains realized by the REIT from
transactions completed during the twelve-month period
ended December 31, 2021. The REIT is making the special
distribution payable partially in cash and partially in Units, in
order to provide Unitholders with cash to help fund any additional
tax that may arise associated with the special distribution. Most
of the net cash proceeds generated by the sale transactions have
been used to repay debt to enable the Primaris Spin-Off.
Tax Implications
Immediately following the special distribution, the outstanding
Units of the REIT will be consolidated such that each Unitholder
will hold, after the consolidation, the same number of Units as
such Unitholder held before the special distribution. The amount of
the special distribution payable in Units will increase the tax
cost basis of Unitholders' consolidated Units. The remaining
portion of the special distribution will be paid in cash on
January 12, 2022.
The REIT cautions that the foregoing comments are not intended
to be, and should not be construed as, legal or tax advice to any
Unitholder. The REIT recommends that Unitholders consult their own
tax advisors regarding the income tax consequences to them of this
anticipated special distribution and related Unit
consolidation.
Conference Call and Webcast
Management will host a conference call to discuss the financial
results for H&R REIT on Tuesday,
November 16, 2021 at 9.30 a.m.
Eastern Time. Participants can join the call by dialing
1-888-510-2507 or 1-289-514-5065. For those unable to participate
in the conference call at the scheduled time, it will be archived
for replay beginning approximately one hour following completion of
the call. To access the archived conference call by telephone, dial
1-647-362-9199 or 1-800-770-2030 and enter the passcode 3504623
followed by the pound key. The telephone replay will be available
until Tuesday, November 23, 2021 at
midnight.
A live audio webcast will be available through
https://www.hr-reit.com/investor-relations/#investor-events. Please
connect at least 15 minutes prior to the conference call to ensure
adequate time for any software download that may be required to
join the webcast. The webcast will be archived on H&R's website
following the call date.
The investor presentation is available on H&R's website at
https://www.hr-reit.com/investor-relations/#investor-presentation
About H&R REIT
H&R REIT is one of Canada's
largest real estate investment trusts with total assets of
approximately $13.1 billion at
September 30, 2021. H&R REIT has
ownership interests in a North American portfolio of high-quality
office, retail, industrial and residential properties comprising
over 40 million square feet. H&R is currently undergoing a
five-year, transformational strategic repositioning to create a
simplified, growth-oriented company focusing on multi-residential
and industrial properties to surface significant value for
unitholders.
Forward-Looking Disclaimer
Certain information in this news release contains
forward-looking information within the meaning of applicable
securities laws (also known as forward-looking statements)
including, among others, statements made or implied relating to
H&R's objectives, beliefs, plans, estimates, projections and
intentions and similar statements concerning anticipated future
events, results, circumstances, performance or expectations that
are not historical facts, including the statements made under the
headings "Business Update", "Financial Highlights" and "Summary of
Significant Q3 2021 Activity" including with respect to H&R's
future plans, including the REIT's strategic repositioning,
including the Spin-Off and the Strategic Dispositions, the
anticipated proceeds from the Strategic Dispositions as well as the
timing thereof, the expected benefits from the REIT's strategic
repositioning, the impact of the Spin-Off and Strategic
Dispositions on the REIT's portfolio metrics, future distributions
by the REIT and by Primaris, the approval of the listing of
Primaris on the TSX, ongoing management fees from the Bow and Bell
Campus, the ability of H&R to capture potential upside in the
Calgary office market, details
regarding Primaris pro forma the Spin-Off and sale of assets by
HOOPP, significant development projects, H&R's expectation with
respect to the activities of its development properties, including
the building of new properties, the timing of construction, the
timing of occupancy and lease-up and the expected total cost of
development properties, expected stabilized property operating
income and increases in property operating income from River Landing and Jackson Park, management's expectations
regarding future distributions, management's belief that H&R
has sufficient funds and liquidity for future commitments and
management's expectation to be able to meet all of the REIT's
ongoing obligations. Forward-looking statements generally can
be identified by words such as "outlook", "objective", "may",
"will", "expect", "intend", "estimate", "anticipate", "believe",
"should", "plans", "project", "budget" or "continue" or similar
expressions suggesting future outcomes or events. Such
forward-looking statements reflect H&R's current beliefs and
are based on information currently available to management.
Forward-looking statements are provided for the purpose of
presenting information about management's current expectations and
plans relating to the future and readers are cautioned that such
statements may not be appropriate for other purposes. These
statements are not guarantees of future performance and are based
on H&R's estimates and assumptions that are subject to risks,
uncertainties and other factors including those risks and
uncertainties in H&R's materials filed with the Canadian
securities regulatory authorities from time to time, which could
cause the actual results, performance or achievements of H&R to
differ materially from the forward-looking statements contained in
this news release. Material factors or assumptions that were
applied in drawing a conclusion or making an estimate set out in
the forward looking statements include that the general economy is
gradually recovering as a result of the COVID-19 pandemic, the
extent and duration of which is unknown; debt markets continue to
provide access to capital at a reasonable cost, notwithstanding the
ongoing economic downturn; the assumptions made in connection with
the anticipated benefits of the Spin-Off and Strategic
Dispositions; the anticipated approval of the Spin-Off by
unitholders; the anticipated receipt of any required consents,
exemptions, approvals and rulings including the conditional
approval of the TSX, of which there are no assurances; the
expectation that the parties to the arrangement agreement for the
Spin-Off and the purchase and sale agreement with HOOPP will comply
with its terms and conditions; and the expectation that no event,
change or other circumstance will occur that could give rise to the
termination of the arrangement agreement for the Spin-Off and the
purchase and sale agreement with HOOPP. Additional risks and
uncertainties include, among other things, risks related to: real
property ownership; the current economic environment; COVID-19;
credit risk and tenant concentration; lease rollover risk; interest
and other debt-related risk; construction risks; currency risk;
liquidity risk; financing credit risk; cyber security risk;
environmental and climate change risk; co-ownership interest in
properties; joint arrangement and investment risks; Unit price
risk; availability of cash for distributions; ability to access
capital markets; dilution; unitholder liability; redemption right
risk; risks relating to debentures and the inability of the REIT to
purchase senior debentures on a change of control; tax risk, and
additional tax risk applicable to unitholders. H&R cautions
that these lists of factors, risks and uncertainties are not
exhaustive. Although the forward-looking statements contained in
this news release are based upon what H&R believes are
reasonable assumptions, there can be no assurance that actual
results will be consistent with these forward-looking
statements.
Readers are also urged to examine H&R's materials filed with
the Canadian securities regulatory authorities from time to time as
they may contain discussions on risks and uncertainties which could
cause the actual results and performance of H&R to differ
materially from the forward-looking statements contained in this
news release. All forward-looking statements in this news
release are qualified by these cautionary statements. These
forward-looking statements are made as of November 15, 2021 and the REIT, except as
required by applicable Canadian law, assumes no obligation to
update or revise them to reflect new information or the occurrence
of future events or circumstances.
Non-GAAP Financial Measures
The REIT's financial statements are prepared in accordance with
International Financial Reporting Standards ("IFRS"). H&R's
management uses a number of measures which do not have a meaning
recognized or standardized under IFRS or Canadian Generally
Accepted Accounting Principles ("GAAP"). The non-GAAP
measures NAV per Unit, FFO, AFFO, Payout Ratio per Unit, property
operating income (cash basis), Same-Asset property operating income
(cash basis) and the REIT's proportionate share as well as other
non-GAAP measures discussed elsewhere in this news release, should
not be construed as an alternative to financial measures calculated
in accordance with GAAP. Further, H&R's method of
calculating these supplemental non-GAAP financial measures may
differ from the methods of other real estate investment trusts or
other issuers, and accordingly may not be comparable. H&R use
these measures to better assess H&R's underlying performance
and provide these additional measures so that investors may do the
same. These non-GAAP financial measures are more fully defined and
discussed in H&R's MD&A as at the three and nine months
ended September 30, 2021, available
at www.hr-reit.com and on www.sedar.com.
SOURCE H&R Real Estate Investment Trust