All figures in $USD unless otherwise noted.
TORONTO, Aug. 08, 2023 (GLOBE NEWSWIRE) — 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.
| Three Months Ended | Six Months Ended | |||||||||||||||||
| Jun 30, 2023 | Mar 31, 2023 | Jun 30, 2022 | Jun 30, 2023 | Jun 30, 2022 | ||||||||||||||
| 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 | ||||||
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 |
