STARLIGHT U.S. MULTI-FAMILY (NO. 2) CORE PLUS FUND ANNOUNCES Q2-2025 RESULTS

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

TORONTO, Aug. 28, 2025 /CNW/ - Starlight U.S. Multi-Family (No. 2) Core Plus Fund (TSXV: SCPT.A) (TSXV: SCPT.U) (the "Fund") announced today its results of operations and financial condition for the three months ended June 30, 2025 ("Q2-2025") and six months ended June 30, 2025 ("YTD-2025"). Certain comparative figures are included for the Fund's financial and operational performance as at December 31, 2024, for the three months ended June 30, 2024 ("Q2-2024") and for the six months ended June 30, 2024 ("YTD-2024").

All amounts in this press release are in thousands of United States ("U.S.") dollars except for average monthly rent ("AMR")¹ or unless otherwise stated. All references to "C$" are to Canadian dollars.

"The Fund has completed the disposition of its investment properties and has commenced proceedings to dissolve the Fund," commented Evan Kirsh, the Fund's President. "The dissolution of the Fund is expected to be completed in the fourth quarter of 2025 and the Fund expects to announce a specific date and amount for the liquidating distribution at a later date once it has determined the amount of any final liabilities to be paid."

Q2-2025 HIGHLIGHTS

• The Fund completed the disposition of Montane Apartments ("Montane") on June 27, 2025 and used the proceeds to repay the outstanding Montane first mortgage of $96,000 as well as fully repaid the Fund's unsecured loan and promissory note of $9,000 and $2,748, respectively. Following the disposition of Montane, the Board of Directors of the Fund (the "Board") approved a special distribution ("Special Distribution") of $21,974, applicable to unitholders of the Fund ("Unitholders") of record as of July 8, 2025, subject to certain exceptions, and payable on July 15, 2025.
  
  
• On August 12, 2025, the Fund completed the disposition of Hudson at East ("Hudson") for cash proceeds of $68,400 with the Fund utilizing the proceeds to fully repay the outstanding loan payable secured by such property amounting to $67,000 and paid other customary transaction costs with the Fund retaining any remaining proceeds (see "Subsequent Events").
  
  
• On August 12, 2025, the Fund's first mortgage lender for Summermill at Falls River ("Summermill") took control of the property and as a result of the transfer of ownership, the Fund discharged its obligation to pay the outstanding mortgage loan principal balance on Summermill of $85,639 and discharged all other liabilities of the Fund associated with the Summermill, with no cash proceeds being received by the Fund as a result of the transfer of ownership (see "Subsequent Events"). As a result of the transfer, the Fund expects to recognize a gain on the extinguishment of such debt in third quarter of 2025 amounting to approximately $13,000 (see "Subsequent Events").
  
  
• Revenue from property operations and net operating income ("NOI")¹ for Q2-2025 was $5,316 and $3,385 (Q2-2024 - $5,491 and $3,396), respectively, representing a decrease of 3.2% and 0.3% relative to Q2-2024 due to a decrease in AMR of 0.5% and reduction in economic occupancy¹ between these periods. As at June 30, 2025, the Fund had physical occupancy¹ of 95.6% for the properties owned at that time.
  
  
• The Fund reported a net loss and comprehensive loss attributable to unitholders for Q2-2025 of $32,851 (Q2-2024 - $2,803), primarily due to the Special Distribution of $21,974 and higher fair value loss on investment properties during Q2-2025. The fair value loss on investment properties during Q2-2025 was primarily due to the expansion of capitalization rates used to value the Fund's investment properties (see "Future Outlook").
  
  
• The Fund achieved economic occupancy of 94.2% during Q2-2025 and as at August 27, 2025, had collected approximately 99.2% of rents for Q2-2025, with further amounts expected to be collected in future periods, demonstrating the Fund's high quality resident base and operating performance.

YTD-2025 HIGHLIGHTS

• Revenue from property operations and NOI for YTD-2025 were $10,751 and $6,799 (YTD-2024 - $10,837 and $6,675), respectively, representing a decrease of 0.8% due to a decrease in AMR and an increase of 1.9% due to a decrease in property taxes relative to YTD-2024, respectively.
  
  
• The Fund reported a net loss and comprehensive loss attributable to Unitholders for YTD-2025 of $43,773 (YTD-2024 - $6,173), primarily resulting from the Special Distribution of $21,974 and YTD-2025 reporting a higher fair value loss on investment properties than YTD-2024.
  
  
• The Fund completed 5 in-suite light value-add upgrades at Summermill during YTD-2025, which generated an average rental premium of $212 and an average return on cost of approximately 18.4%.

¹ This metric is a non-IFRS measure. Non-IFRS financial measures do not have standardized meanings prescribed by IFRS (see "Non-IFRS Financial Measures and Reconciliations").

FINANCIAL CONDITION AND OPERATING RESULTS
Highlights of the financial and operating performance of the Fund as at June 30, 2025, for Q2-2025 and YTD-2025, including a comparison to December 31, 2024, Q2-2024 and YTD-2024, as applicable, are provided below:

				June 30, 2025	December 31, 2024
Key multi-family operational information
Number of multi-family properties owned^(1)				2	3
Total multi-family suites				595	995
Economic occupancy^(2)				94.2 %	93.8 %
Physical occupancy^(2)(3)				95.6 %	94.2 %
AMR (in actual dollars)^(3)				$1,625	$            1,734
AMR per square foot (in actual dollars)^(3)				$              1.52	$              1.72
Estimated gap to market versus in-place rents^(4)				2.8 %	(0.2) %
Selected financial information
Gross book value^(4)				$        141,200	$        290,800
Indebtedness^(4)				$        152,639	$        258,619
Indebtedness to gross book value^(1)(4)				108.1 %	88.9 %
Weighted average interest rate - as at period end^(5)				6.83 %	6.81 %
Weighted average loan term to maturity^(5)				0.12   years	1.06   years
		Q2-2025	Q2-2024	YTD-2025	YTD-2024
Summarized income statement
Revenue from property operations		$            5,316	$             5,491	$          10,751	$          10,837
Property operating costs		(1,388)	(1,432)	(2,832)	(2,835)
Property taxes^(6)		(543)	(663)	(1,120)	(1,327)
Adjusted Income from Operations / NOI		3,385	3,396	6,799	6,675
Fund and trust expenses		(1,043)	(393)	(1,437)	(781)
Finance costs^(7)		(4,743)	(5,471)	(9,722)	(10,862)
Other income and expense^(8)		(30,450)	(335)	(39,413)	(1,205)
Net loss and comprehensive loss - attributable to unitholders		$         (32,851)	$            (2,803)	$         (43,773)	$           (6,173)
Other selected financial information
Funds from operations ("FFO")^(4)		$           (1,582)	$            (1,768)	$           (3,302)	$           (3,568)
FFO per unit - basic and diluted		(0.15)	(0.16)	(0.30)	(0.33)
Adjusted funds from operations ("AFFO")^(4)		(1,004)	(365)	(1,708)	(954)
AFFO per unit - basic and diluted		(0.09)	(0.03)	(0.16)	(0.09)
Weighted average interest rate - average during period^(4)		6.68 %	6.59 %	6.66 %	6.59 %
Interest coverage ratio^(4)(9)		0.76x	0.90x	0.79x	0.87x
Indebtedness coverage ratio^(4)(9)		0.03x	0.90x	0.05x	0.87x
Distributions to unitholders		$          21,974	$                  —	$          21,974	$                 —
Weighted average units outstanding - basic and diluted (000s)		10,902	10,902	10,902	10,902

⁽¹⁾ On June 27, 2025, the Fund completed the disposition of Montane. Subsequent to June 30, 2025, the Fund completed the disposition of Hudson, and the Fund's first mortgage lender for Summermill took control of the property (see "Subsequent Events"). As a result of the transfer of the Summermill property to the lender, the Fund expects to recognize a gain on the extinguishment of such loans payable of approximately $13,000 in the third quarter of 2025. Assuming the Indebtedness was reduced to the gross book value of the Summermill property, the adjusted indebtedness to gross book value ratio would have been approximately 99%.

⁽²⁾ Economic occupancy for Q2-2025 and December 31, 2024 and physical occupancy as at the end of each applicable reporting period.

⁽³⁾ Given the Fund completed the disposition of Montane on June 27, 2025, both physical occupancy and AMR calculations exclude Montane as at June 30, 2025.

⁽⁴⁾ This metric is a non-IFRS measure. Non-IFRS financial measures do not have standardized meanings prescribed by IFRS (see "Non-IFRS Financial Measures and Reconciliations"). The decrease in AFFO, interest coverage ratio and indebtedness coverage ratio from Q2-2024 to Q2-2025 is primarily due to the increases in interest costs and a decrease in accrued interest cost payable upon maturity of the applicable loan relative to Q2-2024, which is excluded from the calculation of AFFO. The increased interest costs noted are primarily due to the higher weighted average interest rate on average indebtedness outstanding during Q2-2025. The AFFO, interest coverage ratio and indebtedness coverage ratio presented herein exclude $496 and $1,289 of interest costs for Q2-2025 and YTD-2025 or debt service shortfall funding from applicable lenders which are payable upon maturity of the applicable loan payable.

⁽⁵⁾ The weighted average interest rate on loans payable is presented as at June 30, 2025 based on one-month term Secured Overnight Financing Rate ("Term SOFR") as at that date, subject to any interest rate caps in place. The increase in Fund's weighted average interest rate to 6.83% during Q2-2025 is primarily due to an increase in the indebtedness for the Fund's promissory note and Summermill loan payable. The weighted average term to maturity ("WATM") presented as at June 30, 2025 assumes the Fund has repaid such loans in full as of the date such properties were disposed on August 12, 2025.

⁽⁶⁾ Property taxes include the IFRIC 21 fair value adjustment and treats property taxes as an expense that is amortized during the fiscal year for the purpose of calculating NOI. These amounts have been reported under property taxes under the Fund's condensed consolidated interim financial statements for the applicable reporting periods.

⁽⁷⁾ Finance costs include interest expense on loans payable, non-cash amortization of deferred financing and fair value changes in derivative financial instruments.

⁽⁸⁾ Includes dividends to preferred shareholders, unrealized foreign exchange gain (loss), realized foreign exchange gain (loss), fair value adjustment of investment properties, provision for carried interest and deferred income taxes.

⁽⁹⁾ The Fund's interest coverage ratio and indebtedness coverage ratio were both 0.76x and 0.79x during Q2-2025 and YTD-2025, with the Fund's operating results offset by increases in the Fund's interest costs. These calculations exclude $496 and $1,289 of interest costs or debt service shortfall funding for Q2-2025 and YTD-2025 as these amounts are accrued and payable only at maturity of the applicable loan payable. The Fund also had interest rate caps, swaps or fixed rate debt in place as at June 30, 2025 which in certain instances protect the Fund from increases Term SOFR beyond stipulated levels on its mortgages at the properties.

NON-IFRS FINANCIAL MEASURES AND RECONCILIATIONS

The Fund's condensed consolidated interim financial statements are prepared in accordance with IFRS Accounting Standards ("IFRS"). Certain terms that may be used in this press release such as AFFO, AMR, adjusted net income and comprehensive income, cash provided by operating activities including interest costs, economic occupancy, estimated gap in market versus in-place rents, FFO, gross book value, indebtedness, indebtedness coverage ratio, indebtedness to gross book value, interest coverage ratio and NOI (collectively, the "Non-IFRS Measures") as well as other measures discussed elsewhere in this press release, are not measures defined under IFRS as prescribed by the International Accounting Standards Board, do not have standardized meanings prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures as reported by other issuers. The Fund uses these measures to better assess its underlying performance and financial position and provides these additional measures so that investors may do the same. Information on the most directly comparable IFRS measures, composition of the Non-IFRS Measures, a description of how the Fund uses these measures, and an explanation of how these Non-IFRS Measures provide useful information to the investors are set out in the Fund's management's discussion and analysis ("MD&A") in the "Non-IFRS Financial Measures" section for Q2-2025 and are available on the Fund's profile on SEDAR+ at www.sedarplus.ca, which is incorporated by reference into this press release.

A reconciliation of the Fund's interest coverage ratio and indebtedness coverage ratio are provided below:

Interest and indebtedness coverage ratio		Q2-2025	Q2-2024	YTD-2025	YTD-2024
Net loss and comprehensive loss - attributable to unitholders		$       (32,851)	$         (2,803)	$       (43,773)	$         (6,173)
Add / (deduct): non-cash or one-time items and distributions^(1)		31,420	1,606	40,908	3,729
Adjusted net loss and comprehensive loss^(2)		(1,431)	(1,197)	(2,865)	(2,444)
Interest coverage ratio^(3)(4)		0.76x	0.90x	0.79x	0.87x
Indebtedness coverage ratio^(4)(5)		0.03x	0.90x	0.05x	0.87x

⁽¹⁾ Comprised of unrealized foreign exchange gain (loss), deferred income taxes, amortization of financing costs, fair value adjustment on derivative instruments, transaction costs and fair value adjustment on investment properties.

⁽²⁾ This metric is a non-IFRS measure. Non-IFRS financial measures do not have standardized meanings prescribed by IFRS (see "Non-IFRS Financial Measures and Reconciliations").

⁽³⁾ Interest coverage ratio is calculated as adjusted net loss and comprehensive loss plus interest expense, divided by interest expense.

⁽⁴⁾ These calculations exclude $496 and $1,289 of interest costs or debt service shortfall funding for Q2-2025 and YTD-2025 as these amounts are accrued and payable only at maturity of the applicable loan payable.

⁽⁵⁾ Indebtedness coverage ratio is calculated as adjusted net loss and comprehensive loss plus interest expense, divided by interest expense and mandatory principal payments on the Fund's loans payable.

For Q2-2025 and YTD-2025, the interest coverage ratio and the indebtedness coverage ratio were both 0.76x and 0.79x (Q2-2024 and YTD-2024 - 0.90x and 0.87x) respectively. Subsequent to June 30, 2025, all loans payable of the Fund were repaid in full. The balloon repayments amount paid under the Montane first mortgage, unsecured promissory note as well unsecured loan have been excluded from this calculation as a result of these repayments being covered from the disposition proceeds of Montane.

The Fund also utilized interest rate caps, swaps or fixed rate debt in certain instances to limit the potential impact on the Fund's financial performance from any increases in Term SOFR beyond stipulated levels. As at June 30, 2025, the Fund's weighted average rate was 6.83%.

CASH PROVIDED BY OPERATING ACTIVITIES RECONCILIATION TO FFO and AFFO

Basic and diluted AFFO and AFFO per unit for Q2-2025 were $(1,004) and $(0.09), respectively (Q2-2024 - $(365) and $(0.03)), representing a decrease in AFFO of $639 or 175.1% and a decrease in AFFO per Unit of $0.06 relative to Q2-2024, primarily as a result of higher interest costs in Q2-2025 and higher accrued interest costs payable upon maturity of the applicable loan payable during Q2-2024 relative to Q2-2025, which have been added back for the purposes of calculating AFFO.

A reconciliation of the Fund's cash provided by operating activities determined in accordance with IFRS to FFO and AFFO for Q2-2025, Q2-2024, YTD-2025 and YTD-2024 is provided below:

		Q2-2025	Q2-2024	YTD-2025	YTD-2024
Cash provided by operating activities		$                926	$             3,256	$             3,845	$             6,569
Less: interest costs		(4,430)	(4,190)	(8,872)	(8,318)
Cash used in operating activities - including interest costs^(1)		(3,504)	(934)	(5,027)	(1,749)
Add / (deduct):
Change in non-cash operating working capital		2,087	(525)	2,118	(1,010)
Transaction costs		668	—	668	—
Change in restricted cash		(678)	266	(616)	323
Amortization of financing costs		(155)	(575)	(445)	(1,132)
FFO		(1,582)	(1,768)	(3,302)	(3,568)
Add / (deduct):
Amortization of financing costs		155	575	445	1,132
Vacancy costs associated with the suite upgrade program		—	33	7	52
Sustaining capital expenditures and suite renovation reserves		(73)	(75)	(147)	(150)
Accrued interest costs^(2)		496	870	1,289	1,580
AFFO		$            (1,004)	$              (365)	$            (1,708)	$              (954)

⁽¹⁾ This metric is a non-IFRS measure. Non-IFRS financial measures do not have standardized meanings prescribed by IFRS (see "Non-IFRS Financial Measures and Reconciliations").

⁽²⁾ These amounts represent interest costs that are deferred and payable only at maturity of the applicable loan payable.

SUBSEQUENT EVENTS AND FUTURE OUTLOOK

On August 12, 2025, the Fund completed the disposition of Hudson for cash proceeds of $68,400 with the Fund utilizing the proceeds to fully repay the outstanding loan payable secured by such property amounting to $67,000 and paid other customary transaction costs with the Fund retaining any remaining proceeds.

On August 12, 2025, the Fund's first mortgage lender for Summermill took control of the property and as a result of the transfer of ownership, the Fund discharged its obligation to pay the outstanding mortgage loan principal balance on Summermill of $85,639 and discharged all other liabilities of the Fund associated with the Summermill, with no cash proceeds being received by the Fund as a result of the transfer of ownership. As at June 30, 2025, the fair value of the Summermill property has been reported as part of investment properties at a fair value less than the outstanding principal for any loans payable secured by such property. Subsequent to June 30, 2025, the Fund's first mortgage lender took control of the property in exchange for discharging any obligations the Fund has related to such loan and as a result, the Fund expects to recognize a gain on extinguishment of such debt in the third quarter of 2025 of approximately $13,000.

As a result of the above noted transactions, the Fund has completed the liquidation of all of its investment properties and will be commencing the commencing the final wind-up and liquidation process (the "Dissolution"), which includes using cash on hand, including the net proceeds from the sale of Hudson, to pay all final liabilities of the Fund, delisting the Fund's class A and class U Units from trading on the TSXV and issuing the final liquidating distribution from the Fund (the "Liquidating Distribution"). The Dissolution is expected to be completed in the fourth quarter of 2025 and the Fund expects to announce a specific date and amount for the Liquidating Distribution at a later date once it has determined the amount of any final liabilities to be paid.

Based on the transactions subsequent to June 30, 2025, as of the date of issuance of this press release, the Fund estimates the Class A equivalent net asset value per Unit to be approximately C$0.25.

Further disclosure surrounding the Future Outlook is included in the Fund's MD&A in the "Future Outlook" section for Q2-2025 under the Fund's profile, which is available on www.sedarplus.ca.

FORWARD-LOOKING STATEMENTS 

Certain statements contained in this press release constitute forward-looking information within the meaning of Canadian securities laws and which reflect the Fund's current expectations regarding future events, including the overall financial performance of the Fund and its properties, the impact of elevated levels of inflation and interest rates, uncertainty surrounding U.S. tariffs, the potential implications of a default under loans payable and the Fund's capital management and liquidity measures. Forward-looking information is provided for the purposes of assisting the reader in understanding the Fund's financial performance, financial position and cash flows as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes.

Forward-looking information may relate to future results, the impact of inflation levels and interest rates, the ability of the Fund to make and the resumption of future distributions, the trading price of the Fund's TSX Venture Exchange listed units being class A units and class U units of the Fund ("Listed Units") and the value of the Fund's unlisted units, which include all units other than the Listed Units, acquisitions, financing, performance, achievements, events, prospects or opportunities for the Fund or the real estate industry and may include statements regarding the financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, occupancy levels, AMR, taxes, and plans and objectives of or involving the Fund. Particularly, matters described in "Future Outlook" are forward-looking information. In some cases, forward-looking information can be identified by terms such as "may", "might", "will", "could", "should", "would", "occur", "expect", "plan", "anticipate", "believe", "intend", "seek", "aim", "estimate", "target", "goal", "project", "predict", "forecast", "potential", "continue", "likely", "schedule", or the negative thereof or other similar expressions concerning matters that are not historical facts.

Forward-looking statements involve known and unknown risks and uncertainties, which may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct, and that objectives, strategic goals and priorities may not be achieved. Those risks and uncertainties include; the ability of the Fund to make the future distributions; the trading price of the Listed Units, changes in government legislation or tax laws which would impact any potential income taxes or other taxes rendered or payable with respect to the properties or the Fund's legal entities; the timing of any final or liquidating distribution made by the Fund and the Fund's ability to continue as a going concern. A variety of factors, many of which are beyond the Fund's control, affect the operations, performance and results of the Fund and its business, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results.

There are numerous risks and uncertainties which include, but are not limited to, risks related to the units and risks related to the Fund and its business. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements as there can be no assurance actual results will be consistent with such forward-looking statements. Although the Fund believes the expectations reflected in such forward-looking information are reasonable and represent the Fund's projections, expectations and beliefs at this time, such information involves known and unknown risks and uncertainties which may cause the Fund's actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking information. Important factors that could cause actual results to differ materially from the Fund's expectations include, among other things, the general economic and market factors, including interest rates, inflation, business competition, the thing of any final or liquidating distribution made by the Fund and changes in government regulations or in tax laws. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking information, as there can be no assurance that actual results will be consistent with such forward-looking information.

Information contained in forward-looking information is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, 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 trading price of the Listed Units, the price at which the Fund's properties may be disposed and the timing thereof; closing and other transaction costs in connection with the disposition of the properties; the ability of the Manager to manage and operate the properties or achieve similar returns to previous investment funds managed by the Manager; the global and North American economic environment; foreign currency exchange rates; and governmental regulations or tax laws. Given this period of uncertainty, there can be no assurance regarding: (a) operations and performance or the volatility of the units; (b) the Fund's ability to mitigate such impacts; (c) credit, market, operational, and liquidity risks generally; (d) the Manager or any of its affiliates, will continue its involvement as asset manager of the Fund in accordance with its current asset management agreement; and (e) other risks inherent to the Fund's business and/or factors beyond its control which could have a material adverse effect on the Fund.

The forward-looking information included in this press release relates only to events or information as of the date on which the statements are made in this press release. Except as specifically required by applicable Canadian securities law, the Fund undertakes no obligation to update or revise publicly any forward-looking information, whether because of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

ABOUT STARLIGHT U.S. MULTI-FAMILY (NO. 2) CORE PLUS FUND

The Fund is a limited partnership formed under the Limited Partnerships Act (Ontario) for the primary purpose of directly or indirectly acquiring, owning and operating a portfolio of value-add, income producing rental properties located in the U.S. multi-family real estate market. The Fund owned interests in two properties, consisting of 595 suites with an average year of construction in 2011.

For the Fund's condensed consolidated interim financial statements and MD&A for the three and six months ended June 30, 2025 and any other information related to the Fund, please visit www.sedarplus.ca. 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 also available in the Fund's August 2025 Newsletter which is available on the Fund's profile at www.starlightinvest.com.

Please visit us at www.starlightinvest.com and connect with us on LinkedIn at www.linkedin.com/company/starlight-investments-ltd-.

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 (No. 2) Core Plus Fund

Evan Kirsh, President, Starlight U.S. Multi-Family (No. 2) Core Plus Fund, [phone], [email protected]; Martin Liddell, Chief Financial Officer, Starlight U.S. Multi-Family (No. 2) Core Plus Fund, [phone], [email protected]