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 months ended March
31, 2024 as well as provide an update regarding the previously
announced Strategic Review:
EARNINGS
- For the three months ended March
31, 2024, net loss was approximately $1.3 million, in comparison to
the $0.5 million net loss reported for the three months ended
December 31, 2023 and the $4.9 million net loss reported for the
three months ended March 31, 2023;
- Excluding non-cash fair value
adjustments, net loss was $0.06 million for the three months ended
March 31, 2024, in comparison to the $0.3 million net loss reported
for the three months ended December 31, 2023 and the $0.2 million
net income reported for the three months ended March 31, 2023;
- For the three months ended March
31, 2024, AFFO was negative $0.04 million, in comparison to the
negative $0.3 million reported for the three months ended December
31, 2023 and the $0.2 million reported for the three months ended
March 31, 2023;
|
Three Months Ended |
|
Mar 31,2024 |
|
Dec 31,2023 |
|
Mar 31,2023 |
|
Net Loss |
$ |
(1,298,849 |
) |
$ |
(469,539 |
) |
$ |
(4,901,727 |
) |
Net Income (Loss) Before Fair Value
Adjustments |
$ |
(57,937 |
) |
$ |
(339,306 |
) |
$ |
160,560 |
|
FFO |
$ |
(813,630 |
) |
$ |
(869,210 |
) |
$ |
(571,581 |
) |
AFFO |
$ |
(42,166 |
) |
$ |
(317,857 |
) |
$ |
154,444 |
|
NET ASSET VALUE (“NAV”) AT $6.69 PER
TRUST UNIT (CAD $8.84):Including disposition costs and the
principal amount of the convertible debenture, the Trust reported
NAV of $6.69 per Trust Unit (CAD $8.84).
OCCUPANCY ACROSS INVESTMENT
PORTFOLIO: For the three months ended March 31, 2024,
occupancy across the wholly-owned investment portfolio increased
320 bps to 91.8% from 89% at December 31, 2023. Occupancy across
the joint venture investments decreased 321 bps to 90.9% at March
31, 2024, compared to 93.9% at December 31, 2023.
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 had listed for sale its entire
Wholly Owned Real Estate Investments and is pleased to report on
the following:
- Texas: On June 22, 2023, the Trust
announced 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. The property sold had a
sales price in line with its Fair value.On October 2, 2023, the
Trust completed the sale of its unencumbered property located in
Austin, Texas for $9.9 million. Net of closing costs, the net sale
proceeds of approximately $9.6 million were used to pay off loans
as they came due and for working capital purposes. The property had
a sales price in line with its Fair value.In addition, the Trust
has two properties located in Houston, Texas that are actively
being marketed.
- New Jersey: On August 31, 2023, the
Trust completed the previously announced sale of its property
located in New Jersey for $19.5 million. Net of associated mortgage
debt and closing costs, the net sale proceeds of approximately $5.4
million were used to pay off the remainder of the Bridge Loan,
other loans as they came due and for working capital purposes. The
property sold had a sales price in line with its Fair value.
- 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 and Connecticut
as both the Trust and its partners have decided it is an
appropriate time to exit the respective investments. As of today,
one of the Maryland properties was sold and the other one is being
actively marketed, while the Connecticut property is also being
marketed.
On January 31, 2024 the Trust completed the sale
of one of its joint venture properties located in Maryland for
$15.9 million (100% of the property). Net of associated mortgage
debt and closing costs, the net sale proceeds were approximately
$4.1 million, of which the Trust received approximately $1.1
million given its 25% ownership in the property. The property had a
sales price in line with its Fair value.
PREFERRED CAPITAL INVESTMENTS:
As at March 31, 2024, 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.
NORMAL COURSE ISSUER BID: As a
result of the Trust’s cash position, on September 20, 2023, the
Trust announced that it received approval from the TSXV to commence
a Normal Course Issuer Bid (the " Bid ") to purchase up to $1.9
million (the “Allotment”) of the CAD$19.4 million, 6.25%
convertible unsecured subordinated debentures due June 30, 2026
("Debentures") (TSXV:FCA.DB). The Bid commenced on September 25,
2023 and will end no later than September 24, 2024. The Board of
Trustees is of the opinion that it is in the best interest of the
Trust and its security holders to purchase the Debentures at a
discount to Par, through the Bid, while providing liquidity for the
security holders. It is the intent of the Trust to acquire as much
of the Debentures as possible up to the maximum allowable under the
rules of the Exchange in the context of market pricing, thus
providing liquidity for existing holders of the Debentures.
During the three months ended March 31, 2024,
the Trust repurchased $0.12 million (CAD $0.16 million) of the
Convertible Debenture. The average price of all Convertible
Debentures repurchased is $95.00 for an affective buy-back yield of
6.6%. Note that the Trust is limited to acquiring up to 2% of the
Debentures on a monthly basis.
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 months ended March 31, 2024
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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