Firm Capital Apartment REIT Reports Q2/2023 Results and Provides Strategic Review Update
August 08 2023 - 5:01PM
Firm Capital Apartment Real Estate Investment Trust (“the
“
Trust”), (TSXV: FCA.U), (TSXV: FCA.UN) is pleased
to report its financial results for the three and six months ended
June 30, 2023 as well as provide an update regarding the previously
announced Strategic Review:
EARNINGS
- For the three months ended June 30, 2023, net loss was
approximately $1.9 million, in comparison to the $4.9 million net
loss reported for the three months ended March 31, 2023 and the
$10.3 million net loss reported for the three months ended June 30,
2022;
- Excluding non-cash fair value adjustments, net loss was $0.2
million for the three months ended June 30, 2023, in comparison to
the $0.2 million net income reported for the three months ended
March 31, 2023 and the $0.8 million net income reported for the
three months ended June 30, 2022. Excluding non cash fair value
adjustments, net loss was $0.06 million for the six months ended
June 30, 2023 in comparison to the $1.3 million net income reported
for the six months ended June 30, 2022;
- For the three months ended June 30, 2023, AFFO was negative
$0.2 million, in comparison to the $0.2 million reported for the
three months ended March 31, 2023 and the $0.7 million reported for
the three months ended June 30, 2022. For the six months ended June
30, 2023, AFFO was negative $0.01 million in comparison to the $1.1
million reported for the six months ended June 30, 2022.
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Three Months Ended |
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Six Months Ended |
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Jun 30, 2023 |
Mar 31, 2023 |
Jun 30, 2022 |
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Jun 30, 2023 |
Jun 30, 2022 |
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Net
Loss |
$ |
(1,854,814 |
) |
$ |
(4,901,727 |
) |
$ |
(10,303,122 |
) |
|
$ |
(6,756,541 |
) |
$ |
(10,648,467 |
) |
|
Net
Income Before Fair Value Adjustments |
$ |
(221,406 |
) |
$ |
160,560 |
|
$ |
806,599 |
|
|
$ |
(60,846 |
) |
$ |
1,338,699 |
|
|
FFO |
$ |
(77,800 |
) |
$ |
(571,581 |
) |
$ |
971,866 |
|
|
$ |
(649,380 |
) |
$ |
1,262,054 |
|
|
AFFO |
$ |
(166,676 |
) |
$ |
154,444 |
|
$ |
687,960 |
|
|
$ |
(12,231 |
) |
$ |
1,134,311 |
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NAV AT $7.01 PER TRUST UNIT (CAD $9.28):
Including the face value of the convertible
debentures, the Trust reported NAV of $7.01 per Trust Unit (CAD
$9.28) in comparison to the $7.24 (CAD $9.80) per Trust Unit as at
Q1/2023, also adjusted for the face value of the convertible
debentures.
AVERAGE RENT INCREASES ACROSS INVESTMENT
PORTFOLIO:
Wholly-Owned Real Estate Investments
Portfolio: For the three months ended June 30, 2023,
average rents saw an increase of 1.96% to $1,230 per unit from the
$1,206 per unit reported for the three months ended March 31, 2023
and an increase of 8.25% from the $1,136 reported for the three
months ended June 30, 2022; Joint Venture Real Estate
Investments Portfolio: For the three months ended June 30,
2023, average rents saw an increase of 1% to $1,590 per unit from
the $1,576 per unit reported for the three months ended March 31,
2023 and an increase of 10.18% from the $1,443 reported for the
three months ended June 30, 2022;
STRATEGIC REVIEW On November 15,
2022, the Board of Trustees initiated a strategic review process to
identify, evaluate and pursue a range of strategic alternatives
with the goal of maximizing unitholder value (the
“Strategic Review”).
By way of update, the Board is pleased to report
on the following:
- WHOLLY OWNED ASSET DISPOSITIONS: The Trust has
listed for sale its entire Wholly Owned Real Estate Investments and
is pleased to report on the following:
- Texas: As previously announced, the Trust
completed the sale of one of its properties located in Austin,
Texas for $12.6 million. Net of associated mortgage debt and
closing costs, the net sale proceeds of approximately $8.8 million
were used to pay off additional debt including, but not limited to,
the mortgage associated with the Trust’s other property located in
Austin, Texas; bank indebtedness and the vast majority of the $5.1
million (CAD$6.9 million) Bridge Loan. In addition, the Trust has
an unencumbered property located in Austin, Texas under contract
for sale. The net sale proceeds will be used to pay the remainder
of the $0.9 million (CAD$1.2 million) Bridge Loan and for working
capital purposes. This sale is expected to close during Q3/2023.
Both properties have/had sales prices in line with their respective
IFRS values. In addition, the Trust has two properties located in
Houston, Texas that are actively being marketed;
- New Jersey: The Trust has a sale in place for
its sole property located in New Jersey. The expected closing of
the sale is anticipated to be during Q3/2023. The property
disposition has a sales price in line with its IFRS value; and
- Florida: The Trust’s property in Florida is
under negotiations to be sold.
- JOINT VENTURE ASSET DISPOSITIONS: The Trust
has listed for sale its Joint Venture Real Estate Investments
located in Maryland as both the Trust and its partners have decided
it was an appropriate time to exit the respective investments. As
of today, one of the Maryland properties is under negotiations and
one is being actively marketed. In terms of the remaining joint
venture properties located in New York, Connecticut and Georgia,
the Trust has decided with its partners to hold these investments
until such time as the value of the respective investments can be
maximized.
- PREFERRED CAPITAL INVESTMENTS: As at June 30,
2023, the Trust has two Preferred Capital Investments located in
Texas and South Dakota that aggregate approximately $5.1 million.
The Trust continues to hold these investments and earns income at
10% and 12%, respectively. Both investments are current in terms of
their interest payments.
The Board will continue to assess matters on a
quarterly basis and determine if the Trust should: (i) distribute
excess income; (ii) distribute net proceeds from asset sales, after
debt repayment; (iii) reinvest net proceeds into other investments;
(iv) distribute proceeds as a return of capital or special
distribution; and/or (v) use excess proceeds to repurchase Trust
units in the marketplace. It is the Trust’s current intention not
to disclose developments with respect to the Strategic Review
unless and until it is determined that disclosure is necessary or
appropriate, or as required under applicable securities laws.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS:
Certain information in this news release
constitutes forward-looking statements under applicable securities
law. Any statements that are contained in this news release that
are not statements of historical fact may be deemed to be
forward-looking statements. Forward-looking statements are often
identified by terms 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 U.S. real estate market generally or those specific
markets in which the Trust holds properties; volatility of real
estate prices; inability to access sufficient capital from internal
and external sources, the completion of the Strategic Review;
and/or inability to access sufficient capital on favourable terms;
industry and government regulation; changes in legislation, income
tax and regulatory matters; the ability of the Trust to implement
its business strategies; competition; currency and interest rate
fluctuations and other risks. Additional risk factors that may
impact 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
placed will occur. Such information, although considered reasonable
by management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those anticipated.
Forward-looking statements contained in this news 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 reflect certain non-International Financial Reporting
Standards (“IFRS”) financial measures, which
include, but not limited to NOI, FFO and AFFO. These measures are
commonly used by real estate investment companies as useful metrics
for measuring performance, however, they do not have standardized
meaning prescribed by IFRS and are not necessarily comparable to
similar measures presented by other real estate investment
companies. These terms are defined in the Trust’s Management
Discussion and Analysis for the three and six months ended June 30,
2023 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 further information, please contact: |
|
Sandy Poklar |
Claudia Alvarenga |
President & Chief Executive Officer |
Chief Financial Officer |
(416) 635-0221 |
(416) 635-0221 |
|
|
For Investor Relations information, please contact: |
|
Victoria Moayedi |
|
Director, Investor Relations |
|
(416) 635-0221 |
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