MARWEST APARTMENT REAL ESTATE INVESTMENT TRUST ANNOUNCES Q1 2025 RESULTS

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

WINNIPEG, MB, May 22, 2025 /CNW/ - Marwest Apartment Real Estate Investment Trust (the "REIT") (TSXV: MAR.UN) reported financial results for the three months ended March 31, 2025.  This press release should be read in conjunction with the REIT's Unaudited Condensed Consolidated Interim Financial Statements and Management's Discussion and Analysis ("Q1 2025 MD&A") for the three months ended March 31, 2025, which are available on the REIT's website at www.marwestreit.com and at www.sedarplus.ca.

"We are pleased with the ongoing positive operating results we achieved throughout the quarter.  Same Property Revenue from Investment Properties increased by 3.73% and average rental rates per suite increased by 4.79%, both over Q1 2024.  Throughout 2025 we will see the impact of the Manitoba government removing a property tax rebate that had been in place since 2021.  Although this will impact how certain comparisons to 2024 results are represented, we are proud of the positive operations we achieved in the quarter on the items within our control." commented Mr. William Martens, Chief Executive Officer of the REIT. 

Q1 2025 Quarterly Highlights

• Same Property Revenue from Investment Properties increased by 3.73% in the three months ended March 31, 2025 compared to same period 2024
• Reported Net Asset Value per Unit ("NAV") of $2.39 at March 31, 2025 compared to $2.37 at December 31, 2024
• Average occupancy rate of 98.14% reported for the three months ended March 31, 2025 compared to 99.01% in the same period 2024
• Weighted average mortgage term to maturity of over 5 years

Operations Summary

	Three months ended March 31
Portfolio Operation Information	2025	2024
Number of properties	4	4
Number of suites	516	516
Average occupancy ate	98.14 %	99.01 %
Average rental rate to date	$1,727	$1,648
	Three months ended March 31
Reconciliation of Same Property NOI^1to IFRS	2025	2024
Revenue from investment properties	$    2,635,142	$    2,540,498
Expenses:
Property operating expenses	694,292	653,557
Realty taxes	317,432	230,375
Total property operating expenses	1,011,724	883,932
Same Property NOI^1	$    1,623,418	$    1,656,566

¹ Same Property Portfolio consists of 4 multi-residential properties owned by the REIT for comparable periods in Q1 2025 and Q1 2024 – See "Notice with respect to Non-IFRS Measures" below.

Reconciliation of Debt-to-Gross Book Value ratio		At March 31, 2025		At December 31, 2024
Total interest-bearing debt	$	101,347,592	$	101,678,601
Total assets on balance sheet		150,132,730		150,093,432
Debt-to-Gross Book Value ratio		67.51 %		67.74 %
Reconciliation of Debt Service Coverage ratio		Three months ended March 31, 2025		Year ended December 31, 2024
Net Operating Income for the period ended	$	1,623,418	$	6,875,434
Mortgage payments for the period ended		1,244,130		4,959,081
Debt Service Coverage ratio		1.30		1.39
Weighted average term to maturity on fixed rate debt		60.57 months		63.56 months
Weighted average interest rate on fixed debt		3.09 %		3.09 %

Financial Summary

The REIT generated FFO and AFFO per Unit of $0.0254 and $0.0234, respectively, during the three months ended March 31, 2025.  FFO and AFFO are defined in "Non-IFRS Measures" in the March 31, 2025 MD&A and below under "Notice with respect to Non-IFRS Measures".

Reconciliation of Net Income and Comprehensive Income to FFO and AFFO	Three months ended March 31
	2025	2024
Revenue from investment properties	$   2,635,142	$   2,540,498
Property operating expenses	(694,292)	(653,557)
Realty taxes	(317,432)	(230,375)
Net Operating Income	1,623,418	1,656,566
NOI Margin	61.61 %	65.21 %
General and administrative	(224,660)	(189,091)
Interest income	33,920	31,175
Finance costs	(978,909)	(1,009,371)
Fair value (loss) gain on:
Investment properties	(38,785)	128,630
Unit-based compensation	(18,454)	115
Exchangeable Units	(1,148,795)	-
Net (loss) income and
comprehensive (loss) income	$     (752,265)	$      618,024

	Three months ended March 31
Reconciliation of FFO	2025	2024
Net (loss) income and comprehensive (loss) income	(752,265)	618,024
Distributions on Exchangeable Units	40,730	41,467
Fair value loss (gain) on properties	38,785	(128,630)
Fair value loss (gain)  on unit-based compensation	18,454	(115)
Fair value loss on Exchangeable Units	1,148,795	-
FFO	494,499	530,746
Weighted average number of Units	19,498,838	19,498,838
FFO/unit	$       0.0254	$       0.0272
Reconciliation of AFFO
FFO	$     494,499	$     530,746
Capital expenditures	(38,785)	(14,348)
Leasing costs	-	(2,022)
AFFO	455,714	514,376
Weighted average number of Units	19,498,838	19,498,838
AFFO/unit	$       0.0234	$       0.0264
AFFO payout ratio	16.69 %	14.50 %

NAV and NAV per Unit Reconciliation	At March 31, 2025	At December 31, 2024
Unitholders' Equity	$39,113,552	$39,901,132
Exchangeable Units	7,937,133	6,788,338
NAV	47,050,685	46,689,470
Trust Units	9,055,242	9,055,242
Exchangeable Units	10,443,596	10,443,596
Deferred Units	170,206	169,608
Total Units oustanding	19,669,044	19,668,446
NAV per unit	$2.39	$2.37

The overall increase in NAV from $2.37 at December 31, 2024 to $2.39 at March 31, 2025, was primarily due to net operating income less finance costs and general and administrative expenses exceeding distributions.

Outlook

Management is focused on growing the portfolio and Unitholder value through increasing rental rates where the market allows, future acquisition opportunities that will increase the overall size and performance of the REIT, as well as maintaining a manageable debt structure.   The current debt structure of the REIT is all at fixed rates with an average remaining mortgage term of over five years.  The majority of the REIT's debt is CMHC insured.

Management believes the organic growth in NAV due to paydown of debt over the mortgage terms is a positive outcome of the higher leveraged position as well as lowering the REIT's debt to GBV ratio and thereby increasing the NAV per Unit over time.

Management anticipates that demand for rental housing will remain due to the affordability gap in rental vs. home ownership and the potential tariffs with the United States.  As interest rates remain at elevated levels and costs of construction remain relatively high, the increased costs of home ownership maintains the affordability gap.

Any increase in the portfolio's operating costs due to inflation may be offset by increases in rental rates, where the market allows, as 56 percent of the portfolio at March 31, 2025 is not under rent control or restrictive financing agreements.

About Marwest Apartment Real Estate Investment Trust

The REIT is an unincorporated open-ended trust governed by the laws of the Province of Manitoba. The REIT was formed to provide holders of Units with the opportunity to invest in the Canadian multi-family rental sector through the ownership of high-quality income-producing properties, with an initial focus on stable markets throughout Western Canada.

Forward-looking Statements 

The information in this news release includes certain information and statements about management's views of future events, expectations, plans and prospects that constitute forward‐looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties.  Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward‐looking statements. A number of factors could cause actual results to differ materially from these forward‐looking statements, including the risks described in the REIT's latest annual information form and management's discussion and analysis.  The payment of cash distributions, and the amount of such cash distributions, will be dependent upon a number of factors, including but not limited to the financial performance, financial condition and financial requirements of the REIT.  Although management of the REIT believes that the expectations reflected in forward‐looking statements are reasonable, it can give no assurances that the expectations of any forward‐looking statements will prove to be correct. Except as required by law, the REIT disclaims any intention and assumes no obligation to update or revise any forward‐looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward‐looking statements or otherwise.

Notice with respect to Non-IFRS Measures Disclosure

The REIT's financial statements are prepared in accordance with IFRS.  In addition to IFRS measures, this news release and the REIT's Q1 2025 MD&A disclose certain non-IFRS financial measures that are commonly used by Canadian real estate investment trusts as an indicator of performance.  Non-IFRS measures and ratios include the following:

Net Operating Income ("NOI")

The Trust calculates net operating income as revenue less property operating expenses such as utilities, repairs and maintenance and realty taxes.  Charges for interest or other expenses not specific to the day‑to‑day operations of the Trust's properties are not included.  The Trust regards NOI as an important measure of the income generated by income-producing properties and is used by management in evaluating the performance of the Trust's properties.  NOI is also a key input in determining the value of the Trust's properties. For reconciliation to IFRS measures, refer to "Financial Operations and Results" in the REIT's Q1 2025 MD&A

Funds from Operations ("FFO")

The Trust calculates FFO substantially in accordance with the guidelines set out in the white paper titled "White Paper on Funds from Operations & Adjusted Funds from Operations for IFRS" by the Real Property Association of Canada ("REALpac") as revised in January 2022.  FFO is defined as IFRS consolidated net income adjusted for items such as unrealized changes in the fair value of the investment properties, effects of puttable instruments classified as financial liabilities and changes in fair value of financial instruments and derivatives.  FFO should not be construed as an alternative to net income or cash flows provided by or used in operating activities determined in accordance with IFRS.  The Trust regards FFO as a key measure of operating performance. For reconciliation to IFRS measures, refer to "Financial Operations and Results" in the REIT's Q1 2025 MD&A

Adjusted Funds from Operations ("AFFO")

The Trust calculates AFFO substantially in accordance with the guidelines set out in the white paper titled "White Paper on Funds from Operations & Adjusted Funds from Operations for IFRS" by REALpac as revised in January 2022.  AFFO is defined as FFO adjusted for items such as maintenance capital expenditures and straight‑line rental revenue differences.  AFFO should not be construed as an alternative to net income or cash flows provided by or used in operating activities determined in accordance with IFRS.  The Trust regards AFFO as a key measure of operating performance.  The Trust also uses AFFO in assessing its capacity to make distributions. For reconciliation to IFRS measures, refer to "Financial Operations and Results" in the REIT's Q1 2025 MD&A

The following other non‑IFRS measures are defined as follows:

• "FFO per unit" is calculated as FFO divided by the weighted average number of Trust Units and Exchangeable Units of the Partnership outstanding over the period.
• "AFFO per unit" is calculated as AFFO divided by the weighted average number of Trust Units and Exchangeable Units of the Partnership outstanding over the period.
• "AFFO Payout Ratio" is the proportion of the total distributions on Trust Units and Exchangeable Units of the Partnership to AFFO per Unit.
• "Net Asset Value" is calculated as the sum of unitholders' equity and Exchangeable Units
• "Net Asset Value per Unit" or "NAV per Unit" is calculated as the sum of unitholders' equity and Exchangeable Units divided by the sum of Trust Units, Exchangeable Units and Deferred Units outstanding at the end of the period.
• "Debt‑to‑Gross Book Value ratio" is calculated by dividing total interest‑bearing debt consisting of mortgages by total assets and is used as the REIT's primary measure of its leverage.
• "Debt Service Coverage ratio" is the ratio of NOI to total debt service consisting of interest expenses recorded as finance costs and principal payments on mortgages.
• "Stabilized net operating income" is the estimated 12-month net operating income that a property could generate at full occupancy, less a vacancy rate and stable operating expenses. 
• "Average occupancy rate" is defined as the ratio of occupied suites to the total suites in the portfolio for the period.
• "Same Property NOI" is defined as Net Operating Income from properties owned by the REIT throughout comparative periods, which removes the impact of situations that result in the comparative period to be less meaningful, such as acquisitions, or properties going through a lease-up period.

Management believes that these measures are helpful to investors because, while not necessarily calculated comparably among issuers, they are widely recognized measures of the REIT's performance and tend to provide a relevant basis for comparison among real estate entities.  These non-IFRS financial measures are not defined under IFRS and are not intended to represent financial performance, financial position or cash flows for the period and should not be viewed as an alternative to net income, cash flow from operations or other measures of financial performance calculated in accordance with IFRS.

The above measures are not standardized under the financial reporting framework used to prepare the financial statements of the REIT.  Readers should be further cautioned that the above measures as calculated by the REIT may not be comparable to similar measures presented by other issuers.  For further information, refer to the sections entitled "Non-IFRS measures" and "Financial Operations and Results" in the REIT's Q1 2025 MD&A, which is incorporated by reference herein, for further information (available on SEDAR+ at sedarplus.ca or the REIT's website www.marwestreit.com).

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.

The Units are not registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") and may not be offered or sold within the United States or to or for the account or benefit of U.S. persons, except in certain transactions exempt from the registration requirements of the U.S. Securities Act. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, securities of the REIT in the United States or in any other jurisdiction.

SOURCE Marwest Apartment Real Estate Investment Trust

REIT Contact: For further information, please contact Mr. William Martens, Chief Executive Officer, Telephone: [phone]