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TORONTO, April 16, 2020 /CNW/ - Tricon Capital Group Inc.
("Tricon" or the "Company", TSX: TCN) provided an update today on
the various actions it has taken to protect and support its
employees and residents during the COVID-19 pandemic. The Company
also provided an interim update on its business and select
operating metrics as of April 15,
including:
- For the month-to-date, achieved 95% and 96% of historical rent
collections in the single-family and multi-family rental
portfolios, respectively
- Fewer than 1% of single-family rental residents and 3% of
multi-family rental residents have requested a rent deferral
plan
- Record single-family rental same home occupancy of 97% and
stable U.S. multi-family rental occupancy of 94% at the end of
March
- A temporary pause in acquisitions of single-family rental
homes
- Strong liquidity of ~$228 million
and a flexible debt maturity schedule
Supporting our Employees
Tricon is committed to the health and safety of over 700
employees across its U.S. and Canadian operations. Our employees
began working from home as early as March
16, leveraging our investments in technology to conduct
operations without interruption. Our call center staff are fully
equipped to work from home, and leasing activities are being
conducted using virtual tours and self-showings. In-person contact
is being minimized for our local market staff, and protective
equipment is being used where necessary to continue providing
essential maintenance activities.
Supporting our Residents
With our employees secure, Tricon is focused on providing our
residents with a safe living environment and helping to mitigate
the financial impact of COVID-19. We have moved to a strong
occupancy bias in our rental businesses, and are temporarily
halting evictions, waiving late fees, and offering flexible payment
plans for residents whose financial wellbeing has been directly
impacted by the pandemic. While we remain compassionate, our
payment plans are only available to those experiencing hardship as
a result of the pandemic. We are also encouraged by the significant
government stimulus efforts in the United
States and Canada which are
largely aimed at helping our middle market resident demographic
weather the crisis through wage replacement, expanded unemployment
insurance and small business loans tied to payroll protection.
A Message from CEO Gary
Berman
"In these turbulent times, when governments are asking people to
"shelter in place", our business has never been more essential and
our responsibility to provide our residents with a safe living
environment has never been more important. I am extremely proud of
our team's hard work and dedication during this crisis, which has
allowed us to operate our company without interruption and serve
our residents in their time of need.
I cannot help but recall the Great Recession when Tricon's
business was in the eye of the storm and our very existence was
threatened. Over the next decade, we deliberately transformed
Tricon from an asset manager focused solely on the development of
for-sale housing (an inherently cyclical business) to a rental
housing company that provides essential shelter to the workforce.
With average rents of $1,200 to
$1,500 per month in our U.S.
operations and household rent-to-income ratios in the low 20%
range, our business is defensive and is designed to perform
relatively well in good and bad times.
Now, as we grapple with the COVID-19 outbreak, it appears that
Tricon's transformation to a rental housing company serving the
broad "middle market", our role in helping to institutionalize the
single-family rental industry, and our early adoption of technology
were prescient. Although several weeks do not necessarily make a
trend, recent demand for our single-family rental homes has
increased as Americans seek out high-quality, affordable shelter
where they can keep their families safe. With physical distancing
policies in place, self-showings for prospective tenants have
increased dramatically and we have quickly implemented virtual
move-ins to limit physical contact between residents and our
employees. Walk-in traffic to our multi-family properties has
likewise been replaced with virtual tours which continue to attract
new residents. It is becoming increasingly apparent that the
technologies enabling single-family rental will be adopted by the
multi-family sector as our society adapts to life in a
post-pandemic world, and we have an opportunity to play a
leadership role in this transition."
Operational Update
In its single-family rental business, Tricon achieved record
same home occupancy of 97% at the end of March. As of April 15, Tricon has collected over 90% of April
rents, which represents 95% of historical collections at the same
point in time. Less than 1% of our single-family rental residents
have requested a rent deferral plan because of economic
hardship.
In the U.S. multi-family business, occupancy remained stable at
94% throughout Q1. As of April 15,
Tricon has collected 92% of April rents, which represents 96% of
historical collections at the same point in time. Approximately 3%
of our multi-family rental residents have requested a rent deferral
plan because of economic hardship.
Investment Activity Update
Given our desire to preserve cash and the practical challenges
of closing on new acquisitions and facilitating renovations in this
unprecedented time, Tricon has temporarily paused acquisitions of
single-family rental homes. For the first three months of 2020,
Tricon closed on 538 homes and is projected to close on 60-70 homes
in Q2 that were already under binding contracts prior to the
pandemic. As of March 31, Tricon had
closed on over 6,100 homes in its single-family rental joint
venture, representing approximately 60% of committed capital, and
we expect to resume acquisitions when conditions are more
stable.
Across Tricon's Canadian multi-family developments, construction
continues at The Taylor, and on an interim basis at the West Don
Lands (Block 8) and The Ivy, subject to essential construction
regulations. Construction activity is largely being funded by
construction loans. Other projects including The James, Labatt, and
the second and third phases of the West Don Lands continue to
advance through the development stages.
Tricon has also paused the value-add capital expenditure program
in its U.S. multi-family portfolio and other non-essential capital
expenditures in its single-family rental portfolio to preserve
liquidity and safeguard employees and contract workers.
Liquidity and Debt Profile
Tricon's liquidity consists of a $500
million corporate credit facility with approximately
$175 million of undrawn capacity as
at March 31. This facility matures in
July 2022. The Company also had
approximately $53 million of cash on
hand as of March 31, 2020. Tricon's
near-term debt maturities include three debt instruments at its
single-family rental subsidiaries totalling $337 million, which have initial maturities in
2020 that are extendible for one year to late 2021 at Tricon's
option. In addition, Tricon's U.S. multi-family business has a
$116 million credit facility with a
Canadian bank which matures in December
2020. The Company is in active discussions with the lender
to extend this maturity to the end of 2021.
About Tricon Capital Group Inc.
Tricon is a residential real estate company primarily focused on
rental housing in North America,
with $8.0 billion (C$10.5 billion) of assets under management and
~32,000 single-family and multi-family rental units in its
portfolio. Since its inception in 1988, Tricon has invested in real
estate and development projects valued at approximately
$22 billion. More information about
Tricon is available at www.triconcapital.com.
The ongoing impact of the current pandemic on Tricon's
income, liquidity and operations remains uncertain. Management will
provide a further update in Tricon's first quarter earnings release
in May.
This news release may contain forward-looking statements
relating to expected future events and financial and operating
results and projections of the Company. Such forward-looking
information and statements involve risks and uncertainties and are
based on management's current expectations, intentions and
assumptions in light of its understanding of relevant current
market conditions, investee business plans, and the Company's
prospects. If unknown risks arise, or if any of the assumptions
underlying the forward-looking statements prove incorrect, actual
results may differ materially from management expectations as
projected in such forward-looking statements. Examples of such
risks are described in the Company's continuous disclosure
materials from time to time, available on SEDAR at www.sedar.com.
Accordingly, although the Company believes that its anticipated
future results, performance or achievements expressed or implied by
the forward-looking statements and information are based upon
reasonable assumptions and expectations, the reader should not
place undue reliance on forward-looking statements and information.
The Company disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, unless required by
applicable law.
SOURCE Tricon Capital Group Inc.