Starlight U.S. Multi-Family Core Fund Announces Third Quarter 2013 Results and Provides Update on Peformance

/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

TORONTO, Nov. 6, 2013 /CNW/ - Starlight U.S. Multi-Family Core Fund (TSX.V: UMF.A, UMF.U) (the "Fund") today announced its results of operations and financial condition for the three months ended September 30, 2013 (the "Third Quarter") and period from February 12, 2013 (date of formation) to September 30, 2013. The results and financial condition reflect operations for the Fund's initial portfolio, comprised of three properties, that was acquired on April 23, 2013, as well as the acquisition of Greenhaven Apartments on July 29, 2013 and the acquisition of a 35% interest in the Falls at Eagle Creek on September 16, 2013.

The forecast figures below represent the financial forecast ("Forecast") as stated in the final long form prospectus of the Fund dated March 31, 2013. All dollar amounts set out in this news release are United States currency unless otherwise noted.

Full condensed consolidated financial results and related management's discussion and analysis are available on the Fund's profile at www.sedar.com. In addition, 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 available in the Fund's October 2013 Newsletter which is available at http://starlightinvest.com/starlight-u-s-multi-family-core-fund and at www.sedar.com.

THIRD QUARTER HIGHLIGHTS

  • Weighted Average occupancy for the period from February 12, 2013 to September 30, 2013 was 95.8% or 1.8% above the Forecast.
  • Net Operating Income ("NOI") in relation to the initial portfolio was 4.5% above the Forecast for the third quarter and was 6.4% above the Forecast for the period from February 12, 2013 to September 30, 2013.
  • Adjusted Funds from Operations ("AFFO") payout ratio for the Third Quarter was 84.2% and 80.5% for the period from February 12, 2013 to September 30, 2013.
  • Excluding the Fund's non-controlling interest in the Falls at Eagle Creek, the Fund's indebtedness was 61.89% of gross book value.
  • Subsequent to the completion of the Third Quarter, the Fund announced its cash distribution for the month of October representing the full deployment of the proceeds of the initial public offering.

Evan Kirsh, the Fund's President commented, "The Fund is now fully deployed with results to date that are ahead of the Forecast. The Manager of the Fund continues to pursue opportunities to increase the Fund's NOI by increasing rental rates at each property, adding ancillary revenue opportunities and providing tenants with a menu of in-suite, upgrade option items. Performance at the Fund's properties not only reflects the strength of the local markets in Texas but also reflects the Fund's ability to leverage the expertise of its Manager and local third party property managers."

Operating Results

For the Third Quarter, property revenues and NOI, excluding the Fund's non-controlling interest in the Falls at Eagle Creek, were $2.83 million and $1.69 million, respectively. At the conclusion of the Third Quarter, average monthly rent was $978 and weighted average portfolio occupancy was 95.6% after removing the Fund's non-controlling interest.

Financial Position

As of September 30, 2013, the Fund's gross book value was $155.53 million and indebtedness was $101.24 million or 65.09%.  Excluding the Fund's non-controlling interest in the Falls at Eagle Creek, the Fund's gross book value was $128.41 million and indebtedness was $79.47 or 61.89%. The interest coverage ratio for the Third Quarter was 2.80 times after removing the Fund's non-controlling interest in the Falls at Eagle Creek. Both these metrics fall within the Fund's stated targets. The weighted average interest rate on the Fund's mortgage portfolio was 3.33%, and the weighted average term to maturity was 3.74 years after removing the Fund's non-controlling interest in the Falls at Eagle Creek.

Occupancy

The Fund's weighted average occupancy of its properties for the period from February 12, 2013 to September 30, 2013 was 95.8%, which was 1.8% above the Forecast. The increase in occupancy is attributable to strong market dynamics, the seasonal leasing impact in Dallas and Houston and the earlier than expected deployment of the proceeds of the Fund's initial public offering.

Given the strong occupancies at the properties, the Fund has aggressively increased rental rates on both new and renewal leases and curtailed concessions. Renewal rents for existing tenants are being increased between 2.5% and 10% depending upon current tenant rents versus current asking rents. Asking rents for new tenants are being increased by up to 9% versus asking rents when the properties were acquired. Only moderate concessions are currently being offered on new leases at any of the Fund's properties.

About Starlight U.S. Multi-Family 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 financial statements and management's discussion and analysis for the period, and any other information relating to the Fund, please visit www.sedar.com.

Non-IFRS Financial Measures

Certain terms used in this news release including NOI, AFFO, gross book value, indebtedness and interest coverage ratio are not measures defined under International Financial Reporting Standards 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 Third Quarter available on the Fund's profile at www.sedar.com.

Forward-looking Statements

This news release contains statements that may constitute forward-looking statements within the meaning of Canadian securities laws and which reflect the Fund's current expectations regarding future events, including statements regarding financial position, business strategy, budgets, litigation, national and local real estate market conditions and economic variables, occupancy rates, projected costs, capital expenditures, financial results, taxes, plans and objectives, future results, performance, achievements, prospects or opportunities for the Fund or the real estate industry. In some cases, forward-looking statements can be identified by terms such as "may", "might", "will", "could", "should", "would", "occur", "expect", "plan", "anticipate", "believe", "intend", "seek", "aim", "estimate", "target", "project", "predict", "forecast", "potential", "continue", "likely", "schedule", or the negative thereof or other similar expressions concerning matters that are not historical facts.

The forward-looking statements in this news release involve risks and uncertainties, including those set forth in the Fund's materials filed with the Canadian securities regulatory authorities from time to time at www.sedar.com. Actual results could differ materially from those projected herein. Those risks and uncertainties include, among other things, risks related to: reliance on the Fund's manager; the experience of the Fund's officers and directors; substitutes for residential real estate rental suites; reliance on property management; competition for real property investments and tenants; anticipated future growth of the Fund; United States market factors; and exchange rates.

Information contained in forward-looking statements is based upon certain material assumptions that were applied in developing such forward-looking statements including management's perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances, including the following: the extent of competition between properties; the ability of the manager of the Fund to manage and operate the properties; the inventory of multi-family real estate properties; the population of multi-family real estate market participants; assumptions about the markets in which the Fund operates; the global and North American economic environment; foreign currency exchange rates; and governmental regulations or tax laws. Readers are cautioned against placing undue reliance on forward-looking statements. Except as required by applicable Canadian securities laws, neither the Fund nor its manager undertakes any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

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 Core Fund

For further information:

Evan Kirsh
President, Starlight U.S. Multi-Family Core Fund
647-725-0417
ekirsh@starlightus.com

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Starlight U.S. Multi-Family Core Fund

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