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TORONTO, April 12, 2016 /CNW/ – Starlight U.S. Multi-Family (No. 2) Core Fund (TSX.V: SUD.A, SUD.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”). All amounts in this news release are in thousands of United States dollars and include the Fund’s revenues, expenses, assets and liabilities of its equity investment in the Falls at Eagle Creek and investment in joint venture, Soho Parkway Apartments, unless otherwise stated.
Fourth Quarter Highlights
- Same property rents grew from $1,009 to $1,071 in the Fourth Quarter compared to the fourth quarter of 2014, representing an increase of 6.1% and have increased by 5.3% on annualized basis since the Fund’s inception.
- Same property revenue growth was 3.8% in the Fourth Quarter and 6.9% for the Year End.
- Same property net operating income (“NOI”) for the Year End was $354 or 8.5% higher than the previous year.
- Portfolio occupancy was 94.6% during the Fourth Quarter, compared to 95.2% during the same period last year, reflecting the Fund’s continued optimization of rental rates to drive overall revenue increases.
- Adjusted funds from operations (“AFFO”) payout ratio was a conservative 40.6% for the Fourth Quarter and significantly improved from 55.9% for the Fourth Quarter of 2014 and consistent with 38.4% for the third quarter of 2015.
- The Fund recognized an additional $8.2 million fair value increase on its investment properties, including Soho Parkway Apartments during the Fourth Quarter and has recognized a $38.4 million increase since inception driven by NOI growth and capitalization rate compression.
- Interest coverage ratio and indebtedness coverage ratio both remained strong and improved to 3.07 times during the Fourth Quarter.
- The Fund’s weighted average interest was 2.55% as of December 31, 2015 and the weighted average term to maturity was 5.09 years.
- Indebtedness to gross book value was 61.4%, at the lower end of the Fund’s targeted leverage range of 60-70%.
Operating Results
Property revenues for the Year End were $16,326 compared to $10,353 in 2014 and NOI was $9,133 compared to $5,640 in 2014. Same property revenue growth for the Year End was $541 or 6.9% and same property NOI growth for the Year End was $354 or 8.5%. Portfolio occupancy was 94.6% during the Fourth Quarter compared to 95.2% during the three months ended December 31, 2014, in both cases at the high end of the Fund’s targeted occupancy range. Same property rents grew from $1,009 to $1,071 in the Fourth Quarter compared to the fourth quarter of 2014, representing an increase of 6.1% and has increased by 5.3% on annualized basis since the Fund’s inception.
Financial Position
As of December 31, 2015, the Fund’s gross book value was $187.7 million and indebtedness was $115.2 million or 61.4% of gross book value. Indebtedness as a percentage of gross book value was at the lower end of the Fund’s targeted range of 60%-70%. The interest coverage ratio and indebtedness coverage ratio for the Fourth Quarter was 3.07 times and for the Year End was 2.95 times. The ratios have remained consistent and healthy throughout 2015. The weighted average interest rate on the Fund’s mortgage portfolio increased slightly to 2.55% from 2.14% when comparing 2015 to the prior year as a result of the Fund’s acquisition of Travesia Apartments in March of 2015.
About Starlight U.S. Multi-Family (No. 2) 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, indebtedness to gross book value and interest 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. 2) Core Fund
