*All amounts stated in USD, unless otherwise stated.
TORONTO, May 25, 2016 /CNW/ - Delavaco Residential Properties Corp. ("Delavaco" or the "Company") (TSXV: DVO.U) today announced its results for the first quarter ended March 31, 2016.
- Excluding a one-time loss from the conversion of the convertible unsecured debentures into equity, Funds From Operations ("FFO") for the quarter ended improved by $128,803 or 7% over the quarter ended March 31, 2015;
- Adjusted Funds From Operations ("AFFO") for the quarter ended improved by $464,756 or 30% over the quarter ended March 31, 2015;
- Excluding a one-time loss from the conversion of the convertible unsecured debentures into equity, FFO per share for the quarter ended March 31, 2016 was $(0.03) per share, in line with March 31, 2015, and
- AFFO per share for the quarter ended March 31, 2016 was $(0.02) per share, a 33% improvement over the $(0.03) per share reported as at March 31, 2015.
- Fair value of investment properties and assets held for sale as at March 31, 2016, was $79,299,595, of which $41,901,004 is the single-family portfolio and $37,398,591 is the multi-family portfolio;
- Aggregate portfolio occupancy as at March 31, 2016, was 67%, or a 300 basis point improvement over December 31, 2015. Single-family portfolio occupancy was 53% while multi-family portfolio occupancy was 98%;
- Average monthly rent for the aggregate portfolio was $950, in line with the $949 per month reported at December 31, 2015. Single-family average rent was $893 while average rent for the multi-family portfolio was $1,067; and
- Sold 27 single-family units located in Florida for an aggregate sale price of approximately $1,737,435 during the quarter ended.
- From April 1, 2016, to May 18, 2016, Delavaco sold 33 single-family units located in Florida for an aggregate sale price of approximately $2.1 million. As such, the Company has 84 remaining homes in Florida to dispose, of which 33 properties are under contract that should generate proceeds of approximately $2.8 million. Subsequent to these home sales, the Company will be left with 51 homes to sell in Florida; and
- On May 3, 2016, the Company received both TSX Venture Exchange and note holder approval to restructure the 7.5% Senior Secured Notes ("SSN"). Approximately 75% of SSN note holders have agreed to a revised repayment plan (the "Revised Repayment Plan"). The Revised Repayment Plan reduces the provision to make mandatory principal repayments of the SSN of no less than $2.5 million to no less than $100,000, as accumulated with repayments being made on the first of each month. As a result, the Company has accumulated and paid out approximately $2.4 million of cash in its escrow accounts as a result of home sales and has paid these amounts to the SSN note holders, thereby reducing the amount owed to approximately $12.6 million.
ATLANTA SINGLE FAMILY HOME DISPOSITION PROGRAM
- The Company has begun the process of disposing of its Atlanta single family home portfolio. The Atlanta portfolio currently consists of 312 single family homes, of which 64 homes are completely unencumbered while 128 homes are encumbered by the SSN and the remainder (120 homes) by a $4.0 million mortgage. The Company has listed the unencumbered and SSN encumbered homes with agents and undertaken a program to sell these homes in a similar fashion as the South Florida assets. The remaining 120 homes encumbered by the $4.0 million mortgage are currently 57.5% occupied. The Company is actively leasing these homes with a view of disposing of them once stabilized. From the unencumbered and SSN encumbered home portfolio, the Company has three homes under contract for an aggregate contract price of $167,000 that should close during the second quarter of 2016.
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 arrangements described above with Firm Capital, including the property management arrangements, Single Family Property Disposition Program and Debt Restructuring, which may not be completed within the estimated time frames specified above or at all. In the event that such steps are not completed to the satisfaction of Firm Capital, the rebranding, Board restructuring and new business focus described above will likely be subject to amendment or may not proceed, which could have a material adverse effect upon the Company. Failure to complete the steps or any delays in their implementation may have a material adverse affect 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. Failure to achieve these objectives will have a material and adverse effect upon the ability of the Company to complete the announced terms of the Debt Restructuring. There is no assurance that the amounts owed by the Company's former CEO will be repaid in accordance with their terms or at all. There is no assurance that the implementation of the steps, 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 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 Delavaco 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. Delavaco believes that FFO and AFFO are important measures of operating performance. The IFRS measurement most directly comparable to AFFO is net income. These terms are defined in Delavaco's Management Discussion and Analysis for the Quarter Ended December 31, 2015 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 Delavaco Residential Properties Corp
For further information: Michael Galloro, Chief Financial Officer, [email protected]