/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
TORONTO, August 12, 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
June 30, 2014 (the "Second
Quarter"). The results and financial condition reflect
operations for the Fund's initial portfolio, comprised of Palm
Valley Apartments ("Palm Valley") and a 65% equity interest in
the Falls at Eagle Creek ("Eagle
Creek"), which were acquired by the Fund on November 18, 2013, along with a 75% interest in
Soho Parkway, which was acquired on April 1,
2014.
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 SECOND QUARTER 2014
- Revenues were $1,953 and gross
margin was 52.5%, including the Fund's equity interest in Eagle
Creek with Palm Valley; both ahead of Forecast.
- Adjusted funds from operations ("AFFO") for the Second
Quarter including the Fund's equity investment was $751, resulting in an AFFO payout ratio of
73.51%, a significant improvement from the 91.71% payout ratio for
the three months ended March 31,
2104. For the six months ended June
30, 2014, the AFFO payout ratio was 79.56%. Beginning
in the month of April 2014, the Fund
began paying its distribution to Unitholders on a fully deployed
capital basis, reflecting the acquisition of Soho Parkway on
April 1, 2014.
- Occupancy was in line with the Forecast for the Second Quarter
at 94.9% including the Fund's equity investment in Eagle Creek and
Palm Valley and was 94.3% with the inclusion of Soho Parkway.
- The Fund's weighted average interest rate was reduced to 2.65%
during the Second Quarter and weighted average term to maturity was
2.48 years including the impact of its interest in Eagle
Creek. The Fund had an interest coverage ratio of 2.45 times
including the impact from its equity investment in Eagle Creek
during the Second Quarter; improved from the three months ended
March 31, 2014.
"In the second quarter of 2014, the Fund's financial performance
was very strong, exceeding Forecast levels," said Evan Kirsh, President of the Fund. "With the
acquisition of Soho Parkway, the Fund's capital is now fully
deployed and the Fund's focus will be on maximizing returns from
the portfolio. Looking to the balance of the year, management
intends to implement multiple initiatives that are expected to
produce sustainable improvements in our operating metrics."
Operating Results
For the Second Quarter, property revenues and net operating
income ("NOI") were $1,953 and
$1,026, respectively, including the
Fund's equity investment in Eagle Creek and Palm Valley, both
values being ahead of the Forecast. At the conclusion of the Second
Quarter, average monthly rent was $1,000 and the weighted average portfolio
occupancy was 94.3% including the Fund's equity investment in Eagle
Creek.
Financial Position
As of June 30, 2014, the Fund had
a strong cash position with $1,852 in
unrestricted cash remaining from its initial public offering,
following the purchase of a 75% interest in Soho Parkway during the
Second Quarter. The Fund's gross book value was $71,378 and indebtedness was $46,225 or 64.76% of gross book value, excluding
the Fund's equity investment in Eagle Creek, which is in line with
the target leverage range.
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. 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 available
in the Fund's August 2014 Newsletter
which is available at
http://www.starlightinvest.com/starlight-u-s-multi-family-no-2-core-fund.
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.
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