Firm Capital Property Trust Announces Strong Finish to 2013 and April, May and June 2014 Distributions

TORONTO, March 19, 2014 /CNW/ - Firm Capital Property Trust ("FCPT" or the "Trust"), (TSXV : FCD.UN) reported today its consolidated financial results for the three and twelve months ended December 31, 2013.

FOURTH QUARTER HIGHLIGHTS

  • Stabilized FFO and AFFO of $0.585 million and $0.598 million. Stabilized AFFO is a 6% increase over Q3/2013;

  • Stabilized FFO and AFFO per Unit of $0.104 and $0.106 per Unit;

  • Stabilized FFO and AFFO payout ratios of 86% and 84%;

  • Rental revenue of $2.3 million, which is a 51% increase over the $1.5 million generated during Q3/2013;

  • Strong 92.2% occupancy;

  • Net rent per square foot increased by 1.2% to $7.72 per square foot over Q3/2013;

  • Net Operating Income ("NOI") of $1.3 million, which is a 23% increase over the $1.0 million generated during Q3/2013;

  • Net Income of $1.1 million, which includes a $0.45 million and $0.027 million net fair value adjustment for the real estate portfolio and marketable securities, respectively; and

  • Announced 5.7% increase in monthly distributions to $0.030833 per Unit  ($0.37 per Unit annualized)

YEAR END HIGHLIGHTS

  • Stabilized FFO and AFFO of $2.0 million and $1.9 million;

  • Stabilized FFO and AFFO per Unit of $0.403 and $0.387 per Unit;

  • Stabilized FFO and AFFO payout ratios of 87% and 91%, well below the 110% and 116% recorded during Q1/2013;

  • Rental revenue of $5.5 million and NOI of $3.5 million vs. $0.288 million and $0.189 million reported for the period ended December 31, 2012, respectively;

  • Net Income of $3.8 million, which includes a $1.7 million and $0.050 million net fair value adjustment for the real estate portfolio and marketable securities, respectively;

  • Increased the asset base by 124% since the beginning of 2013 to $61.5 million from $27.4 million, while keeping leverage at a conservative 49.5% debt / gross book value;

  • Increased the investment portfolio from four properties at the beginning of 2013 to 30 by the end of 2013;

  • Acquired our first core service provider professional building in Barrie, ON and our first 50% interest in an industrial portfolio located in Montreal, QC for a total of $31.3 million (including transaction costs and working capital adjustments);

  • Sold ISG Capital Corporation for a $50,000 gain, while also receiving $66,140 in income prior to the disposition;

  • Raised approximately $6.4 million of trust units at $5.10 per Unit through a non-brokered private placement; and

  • Implemented Distribution Reinvestment Plan ("DRIP") and Unit Purchase Plan

FINANCIAL HIGHLIGHTS
Rental revenue for the three and twelve months ended December 31, 2013 was $2,265,159 and $5,514,133, respectively. NOI for the three and twelve months ended December 31, 2013 was $1,266,373 and $3,459,742 respectively.

For the three months ended December, 2013, Stabilized FFO per Unit was $0.104 while AFFO per Unit was $0.106. FFO and AFFO payout ratios are 86% and 84%, respectively.

For the twelve months ended December 31, 2013, Stabilized FFO per Unit was $0.403 while Stabilized AFFO per Unit was $0.387. Stabilized FFO and AFFO payout ratios are 87% and 91%, respectively. Stabilized FFO and AFFO per Unit exclude income and the gain on sale received ISG Capital Corporation, which is non-recurring in nature.

                 
                 
      Q4/2013 Q3/2013 4Q/2013
Rental Revenue      $ 2,265,159  $   1,504,844  $   5,514,133
Net Operating Income (NOI)      $ 1,266,373  $   1,029,246  $   3,459,742
EBITDA      $ 923,818  $ 882,890  $   2,865,699
Net Income & Comprehensive Income      $ 1,057,578  $   1,144,667  $   3,822,015
                 
Stabilized Funds From Operations (FFO)      $ 585,254  $ 590,086  $   1,971,400
Stabilized Adjusted Funds From Operations (AFFO)  $ 597,546  $ 561,158  $   1,893,724
                 
FFO Per Unit      $ 0.104  $ 0.113  $ 0.403
AFFO Per Unit      $ 0.106  $ 0.108  $ 0.387
Distributions Per Unit      $ 0.089  $ 0.088  $ 0.352
                 
FFO Payout Ratio       86%   78%   87%
AFFO Payout Ratio       84%   81%   91%
                 
Q vs. Q Growth                
 - Revenue Growth (%)       51%        
 - NOI Growth (%)       23%        
 - AFFO Growth (%)       6%        
                 
                 
Occupancy by Property Type                
Net Lease Convenience Retail       96.5%   96.5%    
Core Service Provider Office       98.7%   99.4%    
Industrial Portfolio        90.8%   93.4%    
Total Occupancy       92.2%   94.3%    
                 
Net Rent PSF by Property Type                
Net Lease Convenience Retail      $ 19.09  $ 19.09    
Core Service Provider Office      $ 13.91  $ 13.84    
Industrial Portfolio       $ 4.50  $ 4.48    
Weighted Average Net Rent PSF      $ 7.72  $ 7.63    

 

PROPERTY PORTFOLIO HIGHLIGHTS
The Trust's property portfolio consists of 30 properties with a total Gross Leasable Area ("GLA") of 671,798 square feet (668,740 square feet of Net Leasable Area). The portfolio is well diversified across geographies with 40% of the NOI generated from Ontario, 44% from Quebec and 16% from Nova Scotia. The portfolio is equally diversified across asset classes with 44% of NOI generated from Net Lease Convenience Retail, 44% from Industrial and 12% from Core Service Provider Office.

TENANT DIVERSIFICATION
The portfolio is well diversified by tenant profile with no tenant accounting for more than 5.4% of total net rent. Further, the top 10 tenants are largely comprised of credit worthy and large national tenants and account for 33.0% of total net rent and 21.1% of total NLA.

DURATION MATCHED DEBT & LEASE MATURITY PROFILE
The current portfolio has a weighted average lease term to maturity of 4.0 years, which is duration matched with mortgage debt with a weighted average term to maturity of 4.6 years.

OCCUPANCY
For Q4/2013, occupancy was 92.2%, a slight decline over the 94.3% reported at Q3/2013. The slight decline was largely the result of the Montreal Industrial portfolio whose occupancy declined to 90.8% at Q4/2013 from 93.4% at Q3/2013. Subsequent to Q4/2013, a 10 year lease was entered into in the Montreal Industrial portfolio that's comprised of 31,563 square feet of net leasable area (FCPT's pro-rate interest equates to 15,782 square feet of net leasable area) which would bring the overall occupancy of the entire investment portfolio to approximately 93%. This new lease commences during Q2/2014.

NET RENTS
For Q4/2013, net rent per square foot increased by 1.2% to $7.72 per square foot over Q3/2013. The increase is the result of FCPT's active re-leasing program at both the Barrie medical office property and Montreal Industrial portfolio where net rents per square foot increased to $13.91 and $4.50 per square foot, respectively. Net rents for the Net Lease Convenience Retail portfolio were unchanged at $19.09 per square foot.

SUBSEQUENT CAPITAL RAISING ACTIVITY
On January 27, 2014 and February 7, 2014, the Trust closed the first and second tranches of its previously announced private placement of Trust Units. The gross proceeds raised by the Trust were approximately $7.3 million at a subscription price of $5.30 per Trust Unit.

DISTRIBUTIONS FOR APRIL, MAY AND JUNE 2014
The Trust is also pleased to announce monthly cash distributions of $0.030833 per Trust unit for the months of April, May and June, 2014. These distributions will be paid on or about May 15, 2014, June 16, 2014 and July 15, 2014 to unitholders of record at the close of business on April 30, 2014; May 30, 2014; and June 30, 2014, respectively.

The policy of FCPT is to pay cash distributions on or about the 15th day of each month to Unitholders of record on the last business day of the preceding month. Distributions paid to Unitholders who are non-residents of Canada will be subject to Canadian withholding tax.

DISTRIBUTION REINVESTMENT PLAN & UNIT PURCHASE PLAN
The Trust has in place a Distribution Reinvestment Plan ("DRIP") and Unit Purchase Plan (the "Plan"). Under the terms of the DRIP, FCPT's Unitholders may elect to automatically reinvest all or a portion of their regular monthly distributions in additional Units, without incurring brokerage fees or commissions. Under the terms of the Plan, FCPT's Unitholders may purchase a minimum of $1,000 of Units per month and maximum purchases of up to $12,000 per annum. Management and trustees have not participated in the DRIP or Plan to date and own approximately 13% of the issued and outstanding trust units of the Trust.

For the complete financial statements and Management's Discussion & Analysis for the period, please visit www.sedar.com or the Trust's website at www.firmcapital.com

ABOUT FIRM CAPITAL PROPERTY TRUST
Firm Capital Property Trust is focused on creating long-term value for Unitholders, through capital preservation and disciplined investing to achieve stable distributable income. In partnership with management and industry leaders, The Trust's plan is to co-own a diversified property portfolio of multi-residential, flex industrial, net lease convenience retail, and core service provider professional space. In addition to stand alone accretive acquisitions, the Trust will make joint acquisitions with strong financial partners and acquisitions of partial interests from existing ownership groups, in a manner that provides liquidity to those selling owners and professional management for those remaining as partners.  Firm Capital Realty Partners Inc., through a structure focused on an alignment of interests with the Trust, will source, syndicate and participate in investments.

FORWARD LOOKING INFORMATION
This press release may contain forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", and by discussions of strategies that involve risks and uncertainties. The forward-looking statements are based on certain key expectations and assumptions made by the Trust regarding, among other things, the use of the net proceeds from the Offering, the closing of the Offering, and the closing of the Acquisition. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Although management of the Trust believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that future results, levels of activity, performance or achievements will occur as anticipated. Neither the Trust nor any other person assumes responsibility for the accuracy and completeness of any forward-looking statements, and no one has any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or such other factors which affect this information, except as required by law.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made only by means of a prospectus, nor shall there be any sale of the Units in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under securities laws of any such state, province or other jurisdiction. The Units of the Firm Capital Property Trust have not been, and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold or delivered in the United States absent registration or an application for exemption from the registration requirements of U.S. securities laws.


 

SOURCE Firm Capital Property Trust

For further information:

Robert McKee
President & Chief Executive Officer
(416) 635-0221

Sandy Poklar
Chief Financial Officer
(416) 635-0221