/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR
FOR DISSEMINATION IN THE UNITED
STATES/
TORONTO,
March 25, 2014 /CNW/ - Starlight U.S.
Multi-Family (No. 2) Core Fund (TSX.V: SUD.A,
SUD.U) (the "Fund") today announced its results
of operations and financial condition for the three months ended
December 31, 2013 (the "Fourth
Quarter") and period from September 23,
2013 (date of formation) to December
31, 2013. The results and financial condition reflect
operations for the Fund's initial portfolio comprised of Palm
Valley and a 65% equity interest in the
Falls at Eagle Creek, the two properties that were acquired
on November 18, 2013.
The forecast figures below represent the
financial forecast ("Forecast") set out in the final long
form prospectus of the Fund dated October
30, 2013. All dollar amounts set out in this news release
are in thousands of United States
currency other than average monthly rent.
HIGHLIGHTS FROM 2013
- Net Operating Income ("NOI") was 12.4% higher than the
Forecast for the Fourth Quarter and for the period from
September 23, 2013 to December 31, 2013. Overall, the Fund's NOI
margin for the Fourth Quarter and period from September 23, 2013 to December 31, 2013 was 58.8%, representing a 4.2%
increase compared to the Forecast.
- Occupancy for the Fourth Quarter was 93.9% or 1.1% above the
Forecast including the Fund's equity interest in the Falls at Eagle Creek.
- Adjusted Funds from Operations ("AFFO") for the Fourth
Quarter and for the period from September
23, 2013 to December 31, 2013
including the Fund's equity investment was $170 with an AFFO payout ratio of 68.31% for the
first 44 days of operations.
- Capital expenditures were nominal for the Fourth Quarter and
highlight the fact that the Fund acquired recently constructed
assets with minimal capital expenditure requirements.
- The Fund's weighted average interest rate is 3.01% and weighted
average term to maturity is 2.84 years including the impact of its
interest in the Falls at Eagle
Creek. The Fund had an interest coverage ratio of 2.09 times
including the impact from its equity investment in the Falls at Eagle Creek.
Operating Results
For the Fourth Quarter and period from
September 23, 2013 to December 31, 2013, property revenues and NOI were
$510 and $300, respectively for Palm Valley. At the
conclusion of the Fourth Quarter average monthly rent was
$957 and the weighted average
portfolio occupancy was 95.9% for Palm Valley. The operations
relating to the Fund's equity investment in the Falls at Eagle Creek were in-line with the
Forecast and generated $67 of net
income and comprehensive income. Average monthly rent for the
Fund including its interest in Eagle Creek was $983 and the weighted average portfolio occupancy
was 93.9%.
Financial Position
As of December 31,
2013, the Fund had a strong cash position with $12,601 in unrestricted cash remaining from its
initial public offering that is expected to be deployed on
April 1, 2014 (see "Subsequent
Events" below). The Fund's gross book value was $36,990 and indebtedness was $25,000 or 67.6% of gross book value.
Subsequent Events
On February 24,
2014, the Fund, together with Starlight U.S. Multi-Family
Core Fund ("Fund No. 1"), announced that they had entered
into an agreement to acquire Soho Parkway Apartments ("Soho
Parkway"), a 379 unit garden style Class "A" apartment complex
located in North Dallas. The Fund is expected to acquire 75%
at a purchase price of $30,975 and
Fund No. 1 is expected to acquire 25% at a purchase price of
$10,325. The purchase is
subject to the satisfaction or waiver of conditions precedent and
is scheduled to close on April 1,
2014.
A first mortgage loan in respect of the property
for $28,300 has been secured for a
three year term with two one year extensions available. The
loan will be interest only for the entire term and will be payable
at an annual rate of LIBOR plus 2.00%. The Fund expects to
satisfy its cash portion of the purchase price with the remaining
proceeds from its initial public offering.
Following completion of the acquisition of Soho
Parkway, the Fund expects to be fully deployed and own and operate
a portfolio comprising interests in 1,131 recently constructed,
Class "A" stabilized, income producing multi-family real estate
suites located in Dallas-Fort
Worth, Houston and
Austin, Texas.
About Starlight U.S. Multi-Family (No. 2) 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.
Non-IFRS Financial Measures
Certain terms used in this news release including
NOI, AFFO, gross book value, indebtedness and interest 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.
Forward-looking Statements
This news release contains statements that may
constitute forward-looking statements within the meaning of
Canadian securities laws and which reflect the current expectations
of the Fund regarding future events, including statements
concerning the acquisitions of Soho Parkway and the financing of
Soho Parkway. Particularly statements regarding future results,
performance, achievements, prospects or opportunities for the Fund
or the real estate industry are forward looking statements. In some
cases, forward-looking statements can be identified by terms such
as "may", "might", "will", "could", "should", "would", "occur",
"expect", "plan", "anticipate", "believe", "intend", "seek", "aim",
"estimate", "target", "project", "predict", "forecast",
"potential", "continue", "likely", "schedule", or the negative
thereof or other similar expressions concerning matters that are
not historical facts.
The forward-looking statements in this news
release involve risks and uncertainties, including those set forth
in the materials of the Fund and Fund No. 1 filed with the Canadian
securities regulatory authorities from time to time at
www.sedar.com. Actual results could differ materially from those
projected herein. Those risks and uncertainties include, among
other things, risks related to: reliance on the manager of the Fund
and Fund No. 1; the ability to complete the acquisition of Soho
Parkway; the terms and availability of financing for Soho Parkway;
the expected benefits of the ownership of Soho Parkway; the
relationship and obligations of the Fund and Fund No.1 in respect
of Soho Parkway; the experience of the officers and directors of
the Fund; substitutes for residential real estate rental suites;
reliance on property management; competition for real property
investments and tenants; anticipated future growth of the Fund;
United States market factors.
Information contained in forward-looking
statements is based upon certain material assumptions that were
applied in developing such forward-looking statements 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 extent of competition between properties; the
ability of the manager of the Fund to manage and operate the
properties; the inventory of multi-family real estate properties;
the population of multi-family real estate market participants;
assumptions about the markets in which the Fund operates; the
global and North American economic environment; foreign currency
exchange rates; and governmental regulations or tax laws. Readers
are cautioned against placing undue reliance on forward-looking
statements. Except as required by applicable Canadian securities
laws, neither the Fund nor its manager undertakes any obligation to
update or revise publicly any forward-looking statements, whether
as a result of new information, future events or otherwise, after
the date on which the statements are made or to reflect the
occurrence of unanticipated events.
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 Fund