Firm Capital American Realty Partners Corp. Announces Improving Fourth Quarter Results

TORONTO, April 3, 2017 /CNW/ - Firm Capital American Realty Partners Corp. ("the "Company"), (TSXV : FCA.U) is pleased to report its consolidated quarterly and annual financial results for the three and twelve months ended December 31, 2016.

QUARTER AND YEAR-TO-DATE HIGHLIGHTS

  • For the quarter ended December 31, 2016, net loss was approximately $0.3 million or a 92% improvement in comparison to the $4.1 million loss reported at December 31, 2015;

  • For the year ended December 31, 2016, net loss was approximately $5.9 million or a 71% improvement in comparison to the $20.0 million loss reported at December 31, 2015;

  • For the quarter ended December 31, 2016, FFO was approximately a $0.6 million loss or a 39% improvement over the $1.0 million loss reported at December 31, 2015. AFFO was approximately a $0.4 million loss or a 60% improvement over the $1.0 million loss reported at December 31, 2015;

  • For the year ended December 31, 2016, FFO was approximately a $5.5 million loss or an 11% improvement over the $6.1 million loss reported at December 31, 2015. AFFO was approximately a $3.5 million loss or a 42% improvement over the $6.0 million loss reported at December 31, 2015;

  • For the quarter ended December 31, 2016, Net loss per share was $(0.004) (($0.13) on a post-consolidation per share basis). For the year ended December 31, 2016, net loss per share was $(0.09) (($2.69) on a post-consolidation per share basis). Both are a 94% and 74% improvement over the net losses reported for the quarter and year ended December 31, 2015, respectively;

  • For the quarter ended December 31, 2016, FFO per share was $(0.01) (($0.23) on a post-consolidation per share basis) and AFFO per share was $(0.006) (($0.16) on a post-consolidation per share basis). Both are a 53% and 69% improvement over the FFO and AFFO reported for the quarter ended December 31, 2015;

  • For the year ended December 31, 2016, FFO per share was $(0.08) (($2.49) on a post-consolidation per share basis) and AFFO per share was $(0.05) (($1.59) on a post-consolidation per share basis). Both are a 21% and 48% improvement over the FFO and AFFO reported for the year ended December 31, 2015;

  • The Company currently has two asset portfolios:

    • Investment Portfolio: A portfolio of real estate investments with a fair value of approximately $52 million consisting of the following:

      • Multi-Family Portfolio: Consisting of three mini-multi residential buildings 66 mini-multi condominium units located across three buildings in Florida and 311 multi-family apartment units located across three buildings in Florida (1 building) and Texas (two buildings) with a fair value of approximately $44.7 million; and

      • Joint Venture Investments: Consisting of two joint venture investments: eight multi-family buildings comprised of 127 residential units and two commercial units located in New York City with a fair value of approximately $6.1 million and eight multi-family buildings comprised of 115 residential apartment units located in the Washington D.C. area with a fair value of approximately $1.0 million.

    • Single Family Disposition Portfolio: Consisting of 449 single family homes located in Florida, Atlanta and New Jersey with a fair value of approximately $24.9 million;

  • Occupancy: Multi-Family Investment Portfolio occupancy was a strong 95.0%, while Joint Venture Investment occupancy was a strong 91.3%;

  • Average Rents: Multi-Family Investment Portfolio average monthly rents increased by 1.7% over September 30, 2016;

  • $7.3 Million in Senior Secured Note ("SSN") and New Jersey Secured Promissory Note ("NJPN") Repayments Reduces Original Balances By 74% and Generates $0.6 Million in Interest Expense Savings: During the quarter, the Company repaid $3.4 million and $0.3 million of the SSN and NJPN, respectively. Subsequent to quarter end, the Company repaid an additional $3.2 million and $0.4 million of the SSN, respectively. In total, the Company repaid $7.3 million of the SSN and NJPN from October 1, 2016 until today. As a result, the SSN and NJPN balances currently stand at approximately $4.9 million and $2.4 million, respectively, or 26% of the original balance. The repayments of the SSN and NJPN over this period will generate the Company approximately $0.6 million in interest expense savings;

  • $7.5 Million in Single Family Home Sales: During the quarter ended December 31, 2016, the Company closed sales on 89 single family home units for gross proceeds of approximately $4.8 million (net proceeds of approximately $4.3 million). Subsequent to quarter end, the Company closed sales on an additional 44 single family home units for gross proceeds of approximately $2.7 million (net proceeds of approximately $2.3 million). In addition to closed home sales, the Company has under contract 77 single family homes units contracted for sale for gross proceeds of approximately $4.6 million;

  • Single Family Home Inventory Update: The Company currently has 24 single family home units available for sale in Florida, 76 single family home units available for sale in New Jersey and 224 single family home units available for sale in Atlanta. 120 of the Atlanta single family homes are part of a rental pool secured by a $4.0 million first mortgage due July 1, 2019 and 104 homes are currently being marketed for sale;

  • Completion of $10 Million Rights Offering: On December 15, 2016, the Company completed its previously announced $10 million Rights Offering to all existing shareholders of the Company at a price of US$0.16 per Rights Share (pre-share consolidation) or approximately $4.71 per Rights Share on a post-share consolidation basis. The Company immediately used a portion of the net proceeds of the Rights Offering to close the previously announced joint venture investments in New York City and Washington, DC (see below), along with debt reduction and will use the remaining net proceeds for future acquisitions and general corporate purposes;

  • Executed on $6.1 Million Joint Venture Investment in New York City: On December 20, 2016, the Company closed on a joint venture investment that consists of eight multi-family buildings comprised of 127 residential units and two commercial units located in New York City with an experienced local partner. The Portfolio is currently 91% occupied and presents significant repositioning and value enhancement opportunities. The purchase price for 100% of the investment was $38.4 million, representing a going-in 4.5% capitalization rate. The joint venture plans to renovate the apartment units and increase rents over a three year repositioning period. The Company invested $6.1 million in a combination of preferred equity ($4.6 million) and common equity ($1.5 million), which represents a 22.5% ownership interest. The preferred equity has a fixed rate of return of 8% per annum. The investment was funded from Rights Offering proceeds;

  • Executed on $1.0 Million Joint Venture Investment in the Washington, DC area: On January 18, 2017, the Company closed on a joint venture investment that consists of eight multi-family buildings comprised of 115 residential units located in the Washington, DC area with an experienced local partner. The Portfolio is currently 92% occupied and presents significant repositioning and value enhancement opportunities. The purchase price for 100% of the investment was $9.8 million, representing a going-in 7.6% capitalization rate. The joint venture plans to refurbish the buildings, add units and apply more hands-on management in order to increase the net rental income over a seven year time horizon. The Company invested $1.0 million in a combination of preferred equity ($0.7 million) and common equity ($0.3 million), which represents a blended 25% ownership interest. The preferred equity has a fixed rate of return of 8% per annum. The investment was funded from proceeds received from the Rights Offering;

  • Completion of Share Consolidation: On February 3, 2017, the Company completed the consolidation of its issued and outstanding common shares on the basis of one (1) post-consolidation common share for every 29.41 pre-consolidation common shares;

  • Announced Senior Management Changes Including New Chief Executive Officer and Director: On February 27, 2017, the Company announced the appointment of Kursat Kacira as President, Chief Executive Officer and a Director of the Company. Previously, on January 12, 2017, the Company announced the appointment of Sandy Poklar as Chief Financial Officer of the Company. Further, the Company announced that Jonathan Mair would be responsible for all mortgage debt underwriting and Michael Weitzner would be responsible for all real estate acquisitions and equity underwriting initiatives as Vice President, Investment Portfolio Management; and

  • Announces Board Changes: The Company announces the resignation of Romeo DeGasperis from the Board of Directors. In addition, the Company announces that Geoffrey Bledin has been appointed to the audit committee and at the Company's Annual General Meeting ("AGM") will be appointed to Chairman of the Board of Directors. Keith Ray will remain a director of the Company and Chairman of the audit committee.

For the complete financial statements including Management's Discussion & Analysis, please visit www.sedar.com or the Company's website at www.firmcapital.com

ABOUT FIRM CAPITAL AMERICAN REALTY PARTNERS CORP.
Firm Capital American Realty Partners Corp. (formerly Delavaco Residential Properties Corp.) (the "Company") focuses on capital partnership investing in U.S. income producing real estate and mortgage debt investments.

The Company is focused on the following investment platforms:

  • Income Producing Real Estate Investments: Acquiring income producing real estate assets in major cities across the United States. Acquisitions are completed solely by the Company or in joint-venture partnerships with local industry expert partners who retain property management; and
  • Mortgage Debt Investments: Real estate debt and equity lending platform focused in major cities across the United States. Focused on providing all forms of bridge mortgage loans and joint venture capital.

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 in this news release include, but are not limited to, statements regarding the Company's single family property disposition program and debt repayments, which may not be completed within the estimated time frames specified above or at all. Failure to complete the steps described above or any delays in their implementation may have a material adverse effect upon the business of the Company and its market value. There is no assurance that the Company will be able to complete the disposition of the single property disposition portfolio at anticipated values or at all or that market conditions will support the debt and equity raises contemplated by the Company. There is no assurance that the implementation of the steps described above, even if completed as described above, will increase the market value of the Company's securities, which is subject to numerous factors beyond the Company's control.

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 Company holds properties; volatility of real estate prices; inability to complete the Company's single family property disposition program or debt restructuring in a timely manner; inability to access sufficient capital from internal and external sources, 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 Company to implement its business strategies; competition; currency and interest rate fluctuations and other risks.

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.

Certain financial information presented in this press release reflect certain non-International Financial Reporting Standards ("IFRS") financial measures, which include 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 Company's Management Discussion and Analysis for the quarter and year ended December 31, 2016 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.

SOURCE Firm Capital American Realty Partners Corp.

For further information: please contact: Kursat Kacira, President & Chief Executive Officer, (416) 635-0221; Sandy Poklar, Chief Financial Officer, (416) 635-0221


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