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TORONTO, April 12, 2016 /CNW/ – Starlight U.S. Multi-Family (No. 3) Core Fund (TSX.V: SUS.A, SUS.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 joint venture investments in The Villages at Sunset Ridge, Belle Haven Apartments, and Sorelle Apartments.
Fourth Quarter Highlights
- Same property rents grew from $1,078 to $1,125 during the Fourth Quarter compared to the fourth quarter of 2014 representing an increase of 4.4% and has increased by 4.3% on an annualized basis since the Fund’s inception.
- Same property revenue growth was 2.8% for the Fourth Quarter compared to the fourth quarter in 2014.
- Same property net operating income (“NOI”) growth was 3.3% during the Fourth Quarter compared to the fourth quarter in 2014.
- Portfolio occupancy was 92.3% during the Fourth Quarter, compared to 94.0% during the same period last year, reflecting the Fund’s ongoing efforts to optimize rental rates in order to drive overall revenue increases.
- Adjusted funds from operations (“AFFO”) payout ratio was a conservative 48.7% for the Fourth Quarter and significantly improved from 76.3% during the fourth quarter of 2014 and from 63.7% for the third quarter of 2015.
- The Fund recognized an additional $3.1 million fair value increase on its investment properties including those held in joint ventures during the Fourth Quarter and has recognized a $22.7 million increase since inception driven predominately by NOI growth.
- Interest coverage ratio and indebtedness coverage ratio for the Fourth Quarter was 2.83 times.
- The Fund’s weighted average interest rate was 2.65% as of December 31, 2015 and the weighted average term to maturity was 5.17 years.
- Indebtedness to gross book value was 67.8% and within the Fund’s targeted leverage range of 60-70%.
Operating Results
Property revenues for the Year End were $18,404 and NOI was $9,485 compared to $6,632 and $3,493, respectively, during the operating period from July 10, 2014 to December 31, 2014. Same property revenue grew in the Fourth Quarter by $103 or 2.8% and NOI grew by $63 or 3.3%. Portfolio occupancy was 92.3% during the Fourth Quarter compared to 94.0% during the three months ended December 31, 2014, in both cases within the Fund’s targeted occupancy range. Same property rents grew from $1,078 to $1,125 during the Fourth Quarter compared to the fourth quarter of 2014, representing an increase of 4.4% and has increased by 4.3% on annualized basis since the Fund’s inception.
Financial Position
As of December 31, 2015, the Fund’s gross book value was $218.3 million and indebtedness was $147.9 million or 67.8% of gross book value. Indebtedness as a percentage of gross book value was within the Fund’s targeted range of 60%-70%. The interest coverage ratio and indebtedness coverage ratio for the Fourth Quarter was 2.83 times and for the Year End was 2.84 times. The ratios have remained consistent and strong throughout 2015. The weighted average interest rate on the Fund’s mortgage portfolio increased slightly to 2.65% in the Fourth Quarter, due to an increase in interest rates in December. The Fund paid down $475 on its portion of the Belle Haven joint venture mezzanine loan in the Fourth Quarter reducing the Fund’s overall indebtedness.
About Starlight U.S. Multi-Family (No. 3) 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. 3) Core Fund
