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TORONTO, April 12, 2016 /CNW/ – Starlight U.S. Multi-Family (No. 4) Core Fund (TSX.V: SUF.A, SUF.U) (the “Fund”) today announced its results of operations and financial condition for the three months ended December 31, 2015 (the “Fourth Quarter”) and for the year ended December 31, 2015 (the “Year End”). The Fund commenced operations on April 10, 2015 after closing its initial public offering on April 9, 2015.
All amounts in this news release are in thousands of United States dollars unless otherwise stated. The forecast figures below represent the financial forecast (“Forecast”) as set out in the final long form prospectus of the Fund dated March 27, 2015 after pro-rating the number of days that the Fund actually owned each property.
Fourth Quarter Highlights
- Average monthly rents increased in the Fourth Quarter to $1,191 compared to $1,182 in the previous quarter representing 3.0% on an annualized basis. Since the Fund’s inception, rents have increased 5.4% on an annualized basis.
- Net operating income (“NOI”) for the properties included in the Forecast was $2,102 or 3.4% ahead of the Forecast.
- Fourth Quarter revenue for the properties included in the Forecast was $3,456 and in-line with the Forecast.
- Portfolio occupancy during the Fourth Quarter was 92.6% and within the Fund’s targeted occupancy range.
- Adjusted funds from operations (“AFFO”) payout ratio improved significantly during the Fourth Quarter to 74.6%, resulting in the reduction of the Fund’s AFFO payout ratio since inception to 81.8%.
- The Fund recognized a $6.9 million fair value increase on its investment properties during the Fourth Quarter and has recognized a $21.6 million increase since inception, driven primarily by increased rental rates and NOI growth with some capitalization rate compression.
- Interest coverage ratio and indebtedness coverage ratio both improved to 2.21 times during the Fourth Quarter compared to 2.05 times in the previous quarter.
- The Fund’s weighted average interest rate was 2.96% as of December 31, 2015 and the weighted average term to maturity was 3.48 years.
- Indebtedness to gross book value was 67.7% and within the Fund’s targeted range.
During the Fourth Quarter, property revenues were $4,480 and in-line with the Forecast. NOI was $2,640 and ahead of the Forecast by $69 or 3.4%. Since inception, the Fund has exceeded the NOI in the Forecast by $73 or 1.3%. Occupancy was 92.6% during the Fourth Quarter, slightly below the Forecast but within the Fund’s targeted occupancy range. The Fund had an average rental rate per suite for the Fourth Quarter equal to $1,191 (actual dollars) compared to the previous quarter of $1,182 (actual dollars) representing an increase of 3.0% from the previous quarter on an annualized basis. Since the Funds inception, rents have increased 5.4% on an annualized basis.
As of December 31, 2015, the Fund’s gross book value was $210.0 million and indebtedness was $142.2 million or 67.7%. The interest coverage ratio and indebtedness coverage ratio for the Fourth Quarter improved to 2.21 times. The weighted average interest rate on the Fund’s mortgages payable was reduced to 2.96% from 3.04% for the previous quarter and the weighted average term to maturity increased significantly to 3.48 years. The Fund’s AFFO payout ratio for the Fourth Quarter was reduced further from 82.7% in the third quarter to 74.6% in the Fourth Quarter as a result of continued NOI growth, contributions from acquisitions and a stronger United States dollar vis-Ã -vis the Canadian dollar.
About Starlight U.S. Multi-Family (No. 4) Core Fund
The Fund is a limited partnership formed under the Limited Partnerships Act (Ontario) for the primary purpose of indirectly acquiring, owning and operating a portfolio of diversified income producing rental properties in the U.S. multi-family real estate market.
For complete consolidated financial statements and management’s discussion and analysis for the period, and any other information relating to the Fund, please visit www.sedar.com. Further details regarding the Fund’s unit performance and distributions, market conditions where the Fund’s properties are located, performance by the Fund’s properties and a capital investment update are also available in the Fund’s April 2016 Newsletter which is available on the Fund’s profile at www.starlightus.com.
Non-IFRS Financial Measures
Certain terms used in this news release including NOI, AFFO, gross book value, indebtedness, interest coverage ratio and indebtedness coverage ratio are not measures defined under International Financial Reporting Standards (“IFRS”) as prescribed by the International Accounting Standard Board. Details on non-IFRS financial measures are set out in the Fund’s management’s discussion and analysis for the period available on the Fund’s profile at www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Starlight U.S. Multi-Family (No. 4) Core Fund