True North Apartment REIT Announces First Quarter 2013 Results

/NOT FOR DISTRIBUTION IN THE U.S. OR OVER U.S. NEWSWIRES/

TORONTO, May 9, 2013 /CNW/ - True North Apartment Real Estate Investment Trust (TSX: TN.UN) (the "REIT") today announced its results of operations and financial condition for the three months ended March 31, 2013 ("the first quarter").

FIRST QUARTER HIGHLIGHTS

  • Increased Net Operating Income ("NOI") by 12% from the fourth quarter of 2012, reflecting the continued execution of the REIT's accretive acquisition strategy
  • Portfolio growth of 1,875 suites through a series of acquisitions totaling approximately $180 million
  • Achieved portfolio occupancy of 96.2% and Average Monthly Rents ("AMR") of $750, reflecting the solid fundamentals of recently acquired properties
  • Subsequent to the quarter, the REIT announced that the listing of its trust units had been approved by the Toronto Stock Exchange ("TSX"). The REIT's units commenced trading on the TSX under the symbol "TN.UN" on May 3, 2013

"In the first quarter of 2013, the REIT continued to execute upon our accretive acquisition strategy," stated Leslie Veiner, the REIT's Chief Executive Officer. "In total, we acquired 1,875 suites during the quarter, increasing the size of our portfolio by nearly 50%. These acquisitions have not only enhanced our geographic diversity, but also strengthened our position within the Greater Toronto Area. The new properties have recently benefited from significant capital expenditures, and feature compelling rental fundamentals that have already bolstered both our occupancy and rental rates."

"As we proceed through 2013, we will continue to seek out attractive acquisition opportunities," continued Mr. Veiner. "The quality of our portfolio has increased consistently since our inception, and I am confident that we can continue this pattern during the year ahead. I look forward to both creating value for our unitholders and developing strong relationships with our tenants."

Operating Results

The REIT's operating results for the first quarter include a full quarter's contribution from all properties acquired up to and including December 31, 2012.

For the first quarter, property revenues and NOI were $10.5 million and $5.2 million, respectively. At the conclusion of the first quarter, AMR were $750, an improvement of $40 when compared to December 31, 2012.  Portfolio occupancy was 96.2%, an improvement of 0.8 percentage points when compared to December 31, 2012.

                                                   
(in thousands of dollars)                                     Three months
ended
March 31, 2013
          For the period from
January 12, 2012 to
March 31, 2012
Revenue and NOI Highlights                                                  
                                                   
Revenue                                     10,470         $ -
Property operating costs                                     (5,266)            
NOI                                      5,204         $ -
NOI Margin                                     49.7%           -
                                                                                         
                                                                                        As at
March 31, 2013
Operational Information                                                                                        
Number of properties                                                                                       54
Total suites                                                                                       5,828
Occupancy %                                                                                       96.2%
Average Monthly Rent                                                                                       $750
                                                                                         

For first quarter, basic and diluted Funds from Operations ("FFO") per unit was $0.06, a decrease of $0.01 from the fourth quarter of 2012. The FFO payout ratio was 119%, an increase from 100% during the fourth quarter of 2012. Operating margins are typically lower in the first quarter due to the higher utility costs in the winter months. This results in the FFO and AFFO payout ratios in the first quarter being higher than the annual run rate.

               
(in thousands of dollars)         Three months
ended
March 31, 2013
  For the period from
January 12, 2012 to
March 31, 2012
               
Summary of Financial Information              
               
Interest coverage         2.63 x   n/a
Indebtedness coverage ratio         1.58 x   n/a
Revenue         $10,470   -
NOI           $5,204   -
Income (loss) and comprehensive income (loss)         $18,635   ($288)
FFO - basic and diluted         $2,707   n/a
FFO per unit - basic and diluted         $0.06   n/a
AFFO - basic and diluted         $2,350   n/a
AFFO per unit - basic and diluted         $0.05   n/a
Distributions per unit - basic         $0.07   n/a
FFO payout ratio         119%   n/a
AFFO payout ratio         137%   n/a
                   
                   
Units outstanding at period-end for FFO and AFFO per unit:              
  Weighted average (000s) - basic         46,094   n/a
  Add: Unexercised unit options         688   n/a
  Weighted average (000s) - diluted         46,782   n/a
                   

 Financial Position

As of March 31, 2013, the REIT's debt to Gross Book Value ("GBV") was 58%.  The interest coverage ratio for the first quarter was 2.63 times. Both these metrics fall within the REIT's stated targets. The weighted average interest rate on the REIT's mortgage portfolio was 2.95%, and the weighted average term to maturity was 3.5 years.

                                                                   
(in thousands of dollars)                                                                 As at
March 31, 2013
                                                                   
Summary of Financial Information                                                                  
                                                                   
Gross Book Value                                                                 $499,909
Indebtedness                                                                 $289,795
Indebtedness to Gross Book Value                                                                 57.97%
Weighted average mortgage interest rate                                                                 2.95%
Weighted average mortgage term to maturity                                                                 3.50 years
                                                                   

 Summary of First Quarter Acquisitions

On January 23, 2013, the REIT indirectly acquired a 40-suite residential property in Tillsonburg, Ontario, for a purchase price of $2.4 million.

On February 20, 2013, the REIT acquired a portfolio of 17 properties comprising a total of 1,570 suites in British Columbia, Alberta, Ontario, and Québec. The purchase price for these properties was $152.3 million.

On March 1, 2013, the REIT indirectly acquired four properties comprising a total of 265 suites in Brantford, Guelph, and Kitchener, Ontario. The purchase price for these properties was approximately $25.7 million.

Subsequent Events

On May 1, 2013, the REIT announced the approval of the listing of the REIT's units on the TSX. The Units commenced trading on the TSX under the symbol "TN.UN" on May 3, 2013, at which time the Units were de-listed from, and ceased trading on, the TSX Venture Exchange.

Contemporaneously with the listing on the TSX, the Units and special voting units of the REIT (collectively, the "Voting Units") were consolidated on the basis of one (1) post-consolidation Voting Unit for two and one half (2.5) pre-consolidation Voting Units. The exercise price and number of units issuable upon the exercise of the outstanding unit options, as well as the number of outstanding Class B LP units of subsidiary partnerships of the REIT were each proportionately adjusted with the implementation of the consolidation. As a result the REIT's regular monthly distribution on a post-consolidation basis will now be $0.05825 per unit.

The number of REIT units, Class B LP units, common shares, and per unit amounts found within this MD&A do not reflect this unit consolidation.

About the REIT

The REIT is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. The REIT focuses on a long-term strategy to generate stable cash distributions on a tax-efficient basis for unitholders. The REIT intends to actively look for opportunities to expand its asset base and increase its distributable cash flow through acquisitions of additional multi-suite residential rental properties across Canada, the United States, and other jurisdictions where opportunities may arise.

For complete financial statements and management's discussion and analysis for the period, and any other information relating to the REIT, please visit either www.sedar.com or the REIT's website, www.truenorthreit.com.

Forward-looking Statements

Certain statements contained in this press release constitute forward-looking information within the meaning of applicable securities laws. Forward-looking information may relate to the REIT's future outlook and anticipated events or results and may include statements regarding the financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, taxes, plans and objectives. Statements regarding future results, performance, achievements, prospects or opportunities for the REIT or the real estate industry are forward-looking statements. In some cases, forward-looking information can be identified by such terms such as "may", "might", "will", "could", "should", "would", "occur", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue", "likely", "schedule", or the negative thereof or other similar expressions concerning matters that are not historical facts. Some of the specific forward-looking statements in this press release include, but are not limited to, statements with respect to the anticipated future growth of the REIT in 2013.

Although the forward-looking statements contained in this press release are based upon assumptions that management of the REIT believes are reasonable based on information currently available to management, there can be no assurance that actual results will be consistent with these forward-looking statements. Forward-looking statements necessarily involve known and unknown risks and uncertainties, many of which are beyond the REIT's control, which may cause actual results to differ materially from those expressed or implied by such forward-looking statements.

The forward-looking statements made in this press release relate only to events or information as of the date hereof. Except as required by applicable Canadian law, the REIT undertakes no 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.

 

SOURCE: True North Apartment Real Estate Investment Trust

For further information:

Leslie Veiner
Chief Executive Officer
(416) 234-8444

Or

Martin Liddell
Chief Financial Officer
(416) 234-8444

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True North Apartment Real Estate Investment Trust

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