Starlight U.S. Multi-Family (No. 4) Core Fund Announces 2016 First Quarter Results In-line With Forecast and Continued Rental Growth

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TORONTO, May 25, 2016 /CNW/ - Starlight U.S. Multi-Family (No. 4) Core Fund (TSX.V: SUF.A, SUF.U) (the "Fund") today announced its results of operations and financial condition for the three months ended March 31, 2016 (the "First Quarter"). The Fund commenced operations on April 10, 2015 after closing its initial public offering on April 9, 2015.

All amounts in this news release are in thousands of United States dollars unless otherwise stated. The forecast figures below represent the financial forecast ("Forecast") as set out in the final long form prospectus of the Fund dated March 27, 2015.  

Fourth Quarter Highlights

• Average monthly rents increased in the First Quarter to $1,202 compared to $1,191 in the previous quarter representing an increase of 3.7% on an annualized basis. Since the Fund's inception, rents have increased 5.0% on an annualized basis.
• Portfolio occupancy during the First Quarter was 92.9%, compared to 92.6% during the previous three months ended December 31, 2015 and within the Fund's targeted occupancy range.
• First Quarter revenue for the properties included in the Forecast was $3,499 and in-line with the Forecast.
• Net operating income ("NOI") for the properties included in the Forecast was $2,077 which was in-line with the Forecast and NOI margin was 59.4% for those properties included in the Forecast.
• Adjusted funds from operations ("AFFO") for the First Quarter was $1,188 and in-line with Forecast. AFFO per unit was $0.19. AFFO payout ratio improved during the First Quarter to 71.3% from 74.6% during the previous three months ended December 31, 2015.
• Interest coverage ratio and indebtedness coverage ratio at 2.23 times during the First Quarter was slightly higher than 2.21 times during the previous quarter.
• The Fund's weighted average interest rate on mortgages was 2.54% as of March 31, 2016 and the weighted average term to maturity was 4.48 years.
• Indebtedness to gross book value was 67.7% and within the Fund's targeted leverage range of 60-70%.

Operating Results

During the First Quarter, property revenues were $4,520 and NOI was $2,627.  Excluding The Reserves at Alafaya ("Alafaya") which was acquired on July 2, 2015 and not included in the Forecast, revenue and NOI were $3,499 and $2,077, respectively, which was in-line with Forecast. NOI was $2,627 and in-line with Forecast.

Portfolio occupancy was 92.9% during the First Quarter which was within the Fund's targeted occupancy range.  The Fund had an average rental rate per suite for the First Quarter equal to $1,202 (actual dollars) compared to the previous quarter of $1,191 (actual dollars) representing an increase of 3.7% on an annualized basis.  Since the Funds inception, rents have increased by an annualized 5.0%.  

Financial Position

As of March 31, 2016, the Fund's indebtedness to gross book value was 67.7%. The interest coverage ratio and indebtedness coverage ratio for the First Quarter improved to 2.23 times from 2.21 times in the previous quarter. The weighted average interest rate on the Fund's mortgages payable increased to 2.54% from 2.18% in the previous quarter due to an increase in the U.S. 30 day LIBOR rate and the weighted average term to maturity increased significantly to 4.48 years as a result of the refinancing of the Verano mortgage with a seven year term to maturity. The Fund's AFFO payout ratio for the First Quarter further improved from 74.6% in the fourth quarter of 2015 to 71.3% as a result of continued NOI growth and contributions from Alafaya.

Subsequent Events

On April 18, 2016, the Fund repaid $300 of the mezzanine loan associated with Pure Living.  This repayment lowered the Funds weighted average interest rate on all loans payable to 3.00%.

About Starlight U.S. Multi-Family (No. 4) Core Fund

The Fund is a limited partnership formed under the Limited Partnerships Act (Ontario) for the primary purpose of indirectly acquiring, owning and operating a portfolio of diversified income producing rental properties in the U.S. multi-family real estate market.

For complete consolidated financial statements and management's discussion and analysis for the period, and any other information relating to the Fund, please visit www.sedar.com. 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 May 2016 Newsletter which is available on the Fund's profile at www.starlightus.com.

Non-IFRS Financial Measures

Certain terms used in this news release including NOI, AFFO, gross book value, indebtedness, interest coverage ratio and indebtedness coverage ratio are not measures defined under International Financial Reporting Standards ("IFRS") as prescribed by the International Accounting Standard Board. Details on non-IFRS financial measures are set out in the Fund's management's discussion and analysis for the period available on the Fund's profile at www.sedar.com.

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. 4) Core Fund

For further information: To learn more about Starlight U.S. Multi-Family (No. 4) Core Fund, visit www.starlightus.com or contact: Evan Kirsh, President, Starlight U.S. Multi-Family (No. 4) Core Fund, 647-725-0417, [email protected]; Martin Liddell, Chief Financial Officer, Starlight U.S. Multi-Family (No. 4) Core Fund, 647-729-2588, [email protected]