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FOR DISSEMINATION IN THE UNITED
STATES/
Third Quarter Highlighted By Investment Property Value
Increases
TORONTO, Nov. 6, 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
September 30, 2014 (the "Third
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, as well as a 75%
interest in Soho Parkway Apartments ("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. Other than numbers expressed in millions and
average monthly rent, all dollar amounts set out in this news
release are in thousands of United
States currency.
HIGHLIGHTS FOR THE THIRD QUARTER 2014
- The Fund recognized a $5.0
million fair value increase on its investment properties
(including 65% of Eagle Creek) driven by net operating income
("NOI") growth. Since the Fund's
inception, it has recognized $9.3
million in fair value appreciation on its investment
properties, representing 30.2% of initial public offering
proceeds.
- Revenues were $1,985 and equal to
$71 or 3.7% ahead of the
Forecast.
- Average monthly rent grew sequentially to $1,009 from $1,000
at the end of June 30, 2014.
- NOI was $1,032 or $22 ahead of the Forecast and was $3,013 or $83 ahead
of the Forecast for the nine months ended September 30, 2014, both driven by revenue
growth.
- Adjusted funds from operations ("AFFO") payout ratio was 68.79%, a significant improvement
compared to the three months ended June 30,
2014, which was 73.51%.
- The Fund's leverage was 63.9% of gross book value as at
September 30, 2014 and the Fund had a
weighted average interest rate of 2.65%.
"In the third quarter of 2014, the Fund's
financial performance was very strong, continuing the trend of
exceeding forecasted levels and driving capital appreciation in the
portfolio," commented Evan Kirsh,
President of the Fund. "We continue to be successful in adding
value and have identified a number of opportunities going
forward."
Operating Results
For the Third Quarter, including the Fund's
equity investment in Eagle Creek and Palm Valley, property revenues
and NOI were $1,985 and $1,032, respectively, both ahead of the Forecast.
At the conclusion of the Third Quarter, average monthly rent was
$1,009 and the weighted average
portfolio occupancy was 95.2% including the Fund's equity
investment in Eagle Creek. Both average monthly rent and
average portfolio occupancy were improved compared to the three
months ended June 30, 2014.
Financial Position
As of September 30,
2014, the Fund had a cash position of $2,000 in unrestricted cash, an increase of
$148 compared to June 30, 2014. The Fund's gross book value was
$105,456 and indebtedness was
$67,350 or 63.9% of gross book value,
including the Fund's equity investment in Eagle Creek, which is in
line with the target leverage range.
Subsequent Events
Starlight U.S. Multi-Family Core Fund refinanced
Eagle Creek on November 5,
2014. In connection with the refinancing, the Fund obtained
upward financing of $858 on its 65%
ownership in Eagle Creek after paying off Eagle Creek's existing
mortgages payable and satisfying deferred financing costs.
The refinancing reduced the Fund's weighted average interest rate
to 2.14% from 2.65%, calculated assuming the refinancing took place
on September 30, 2014 and including
the Fund's equity investment in Eagle Creek.
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 also available in the Fund's November 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
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.
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