/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
TORONTO, May 8, 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 March 31, 2014 (the "First Quarter").
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 by the Fund 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 FOR THE FIRST QUARTER 2014
- The Fund's portfolio since inception has recognized capital
appreciation of $4,821 or 7.6%
against the purchase prices, including the Fund's equity interest
in the Falls at Eagle Creek.
- Occupancy was 93.4% or 0.6% above the Forecast for the First
Quarter including the Fund's equity investment in Eagle Creek.
- Revenues were $1,846 and gross
margin was 51.7%, including the Fund's equity interest in Eagle
Creek, both ahead of the Forecast.
- Adjusted Funds from Operations ("AFFO") for the First
Quarter including the Fund's equity investment was $374 with an AFFO payout ratio of 91.71%.
- The Fund had a strong cash position as of March 31, 2014 with $12,218 in unrestricted cash. Approximately
$10,350 was deployed on April 1, 2014 with the acquisition of Soho
Parkway Apartments ("Soho Parkway").
- The Fund's weighted average interest rate was 3.01% and
weighted average term to maturity was 2.60 years including the
impact of its interest in the
Falls at Eagle Creek. The Fund had an interest
coverage ratio of 2.29 times including the impact from its equity
investment in the Falls at Eagle
Creek.
- The Fund is now fully deployed for distribution purposes
commencing in the month of April
2014.
Operating Results
For the First Quarter, property revenues and net operating
income ("NOI") were $1,846 and
$955, respectively, including the
Fund's equity investment in Eagle Creek, both values being ahead of
the Forecast. At the conclusion of the First Quarter average
monthly rent was $986 and the
weighted average portfolio occupancy was 93.4% including the Fund's
equity investment in Eagle Creek. The Fund exceeded the forecasted
occupancy for the First Quarter 2014 by 0.6%. Occupancy is
expected to increase in the next quarter of 2014 with warmer
weather.
Financial Position
As of March 31, 2014, the Fund had
a strong cash position with $12,218
in unrestricted cash remaining from the initial public offering.
The Fund's gross book value was $39,510 and indebtedness was $25,000 or 63.3% of gross book value, excluding
the Fund's equity investment in Eagle Creek.
Subsequent Events
On April 1, 2014, the Fund,
together with Starlight U.S. Multi-Family Core Fund ("Fund No. 1"),
acquired Soho Parkway, a 379 unit, garden style, Class "A"
apartment complex, built in 2008 and located at 6653 McKinney Ranch
Parkway in McKinney, Texas, a
rapidly growing area of North Dallas. The Fund acquired a 75%
interest for a purchase price of $30,975.
A first mortgage loan in respect of the property for
$28,300 was secured for a three year
term with two one year extensions available. The loan is
interest only for the entire term and will be payable at an annual
rate of LIBOR plus 2.00%. The Fund satisfied its cash portion
of the purchase price with the remaining proceeds from its initial
public offering. Subsequent to the acquisition, the Fund
announced that it had achieved full deployment which will be
reflected in its April 2014
distribution.
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
AFFO, gross book value, indebtedness, interest coverage ratio, and
NOI 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
occupancy. 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 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: the ability to increase occupancy; reliance on the manager of
the Fund; 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; and exchange
rates.
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