Plan includes Strategic Sale of Two
Recently Vacated Ontario Properties, Reduction of Unitholder
Distribution and Pending Five-year Government Tenant Renewals of
140,000 square feet
/NOT FOR DISTRIBUTION IN THE U.S. OR OVER U.S.
NEWSWIRES/
"This news release constitutes a "designated
news release" for the purposes of the REIT's prospectus supplement
dated April 21, 2022 to its short
form base shelf prospectus dated February
17, 2022."
TORONTO, March 14,
2023 /CNW/ - True North Commercial Real Estate
Investment Trust (TSX: TNT.UN) (the "REIT") today announced its
financial results for the three months and year ended
December 31,2022. The REIT also announced its capital
strengthening and unitholder ("Unitholder") value strategy which
includes: (i) the sale of two recently vacated Ontario properties to separate purchasers; and
(ii) effective with the March 2023
distribution payable on April 17,
2023 to Unitholders of record on March 31, 2023 a 50% distribution reduction.
These strategic initiatives are expected to provide the REIT with
greater financial strength and the flexibility to address future
tenant turnover while preserving capital, improving its leverage
profile and delivering long-term value to its Unitholders.
"The implementation of the strategic initiatives announced today
will allow the REIT to strengthen its financial and liquidity
position while delivering long-term value to its Unitholders. The
reduction of the REIT's distribution will provide an additional
$25 million of cash annually that
will be used primarily to improve its capital profile and deliver
Unitholder value," explained Daniel
Drimmer, the REIT's Chief Executive Officer. "The
disposition of the recently vacated buildings located at 360
Laurier Avenue West and 400 Carlingview Drive provides us with the
ability to extract their underlying value at this time and will
provide approximately $5 million of
excess sale proceeds to further strengthen the REIT's financial
position. Disposing of non-core assets and reducing leverage
while also focusing on opportunities to deliver Unitholder value,
are expected to be our driving focus as we move forward in
2023."
Q4 Highlights
- Collected approximately 99.5% of contractual rent in
Q4-2022.
- Portfolio occupancy of 93%, predominately with government and
credit-rated tenants, with an average remaining lease term of 4.4
years.
- Contractually leased and renewed approximately 84,900 square
feet with a weighted average lease term of 6.6 years and a 1.6%
increase over expiring base rents.
- Pending five-year government tenant renewals of 140,000 square
feet.
- Net operating income(1) ("NOI") increased 1% while
revenue remained flat, compared to Q4-2021. The increase in NOI was
a result of higher same property NOI(1) ("Same Property
NOI") of 1.3% combined with additional NOI from the acquisitions in
Q4-2021 and Q3-2022, offset by a decrease in occupancy from 96% to
93% and higher amortization of leasing costs and straight-line rent
adjustments.
- Same Property NOI experienced an overall increase of 1.3% due
to termination fees relating to a tenant in the REIT's Greater Toronto Area ("GTA") portfolio that
downsized a portion of their space effective December 2022. Excluding termination fees, Same
Property NOI decreased 4.7%.
- Funds from operations(1) ("FFO") basic and
diluted per trust unit of the REIT ("Unit") decreased $0.02 and $0.01,
respectively to $0.13 and adjusted
funds from operations ("AFFO")1 basic and diluted per Unit
remained stable at $0.14. Excluding
lease termination fees, FFO and AFFO basic and diluted per Unit
would have been $0.12.
- $63.1 million of Available
Funds(1) at the end of Q4-2022.
(1) This is
a non-IFRS financial measure. Refer to
the Non-IFRS financial measures section.
|
YTD Highlights
- Collected approximately 99.5% of contractual rent during
2022.
- On August 22, 2022, acquired a
174,000 square foot office property located at 400 Cumberland
Street, Ottawa, Ontario for
approximately $40.5 million plus
closing costs.
- Contractually leased and renewed approximately 612,600 square
feet with a weighted average lease term of 5.8 years and a 3.5%
increase over expiring base rents.
- FFO basic and diluted per Unit increased $0.02 and $0.01 to
$0.61 and $0.60, respectively. AFFO basic and diluted per
Unit increased $0.03 and $0.04, respectively to $0.60. Excluding lease termination fees, FFO and
AFFO basic and diluted per Unit would have been $0.52.
Key Performance Indicators
The REIT's presentation currency is the Canadian dollar. Unless
otherwise stated, dollar amounts expressed in this press release
are in thousands of dollars.
|
Three months
ended
|
Years
ended
|
|
December
31
|
December
31
|
|
2022
|
2021
|
2022
|
2021
|
Number of
properties
|
|
|
47
|
46
|
Portfolio
GLA
|
|
|
4,975,200 sf
|
4,799,600 sf
|
Occupancy
|
|
|
93 %
|
96 %
|
Remaining weighted
average lease term
|
|
|
4.4 years
|
4.4 years
|
Revenue from
government and credit rated tenants
|
|
80 %
|
76 %
|
Revenue
|
$ 35,451
|
$ 35,461
|
$ 143,575
|
$ 138,523
|
NOI
(1)
|
20,629
|
20,451
|
86,484
|
82,627
|
Net (loss) income and
comprehensive income
|
(21,905)
|
18,916
|
16,532
|
51,004
|
Same Property NOI
(1)
|
22,373
|
22,083
|
93,360
|
88,405
|
FFO
(1)
|
$ 12,665
|
$ 13,309
|
$
56,300
|
$
53,800
|
FFO per Unit - basic
(1)
|
0.13
|
0.15
|
0.61
|
0.59
|
FFO per Unit - diluted
(1)
|
0.13
|
0.14
|
0.60
|
0.59
|
AFFO
(1)
|
$ 12,734
|
$ 12,866
|
$
55,982
|
$
51,408
|
AFFO per Unit - basic
(1)
|
0.14
|
0.14
|
0.60
|
0.57
|
AFFO per Unit -
diluted (1)
|
0.14
|
0.14
|
0.60
|
0.56
|
AFFO payout ratio -
diluted (1)
|
110 %
|
106 %
|
99 %
|
106 %
|
Distributions
declared
|
$ 13,996
|
$ 13,579
|
$
55,296
|
$
53,973
|
(1) This is a
non-IFRS financial measure. Refer to the Non-IFRS financial
measures section.
|
Operating Results
The REIT's revenue remained relatively flat compared to Q4-2021
while NOI increased 1%. The main contributor was the increase
in Same Property NOI of 1.3% due to termination income received
from one tenant at a GTA property that downsized a portion of their
space effective December 2022,
combined with additional NOI from acquisitions in Q4-2021 and
Q3-2022, offset by a decrease in occupancy from 96% to 93% and
higher amortization of leasing costs and straight line rent
adjustments.
The REIT's FFO and AFFO decreased $644 (YTD-2022 - increased $2,500) and $132
(YTD-2022 - increased $4,574),
respectively in Q4-2022 over the comparable period.
Q4-2022 FFO basic and diluted per Unit were lower by
$0.02 and $0.01, respectively compared to Q4-2021. Q4-2022
AFFO basic and diluted per Unit remained stable at $0.14. YTD-2022 FFO basic and diluted per Unit
increased $0.02 and $0.01, respectively, to $0.61 and $0.60.
YTD-2022 AFFO basic and diluted per Unit increased $0.03 and $0.04,
respectively to $0.60.
Excluding termination fees, Q4-2022 FFO and AFFO basic and
diluted per Unit would have been $0.12 and YTD-2022 FFO and AFFO basic and diluted
per Unit would have been $0.52.
Q4-2022 AFFO diluted payout ratio would have been 127% and YTD-2022
AFFO diluted payout ratio would have been 115%.
Same Property NOI
|
As at December 31
|
|
|
Occupancy
|
2022
|
2021
|
|
NOI
|
Q4
2022
|
Q4
2021
|
|
Variance
|
Variance
%
|
|
|
|
|
|
|
|
|
|
|
Alberta
|
94.4 %
|
96.5 %
|
|
Alberta
|
$
3,567
|
$
3,465
|
|
$
102
|
2.9 %
|
British
Columbia
|
98.7 %
|
100.0 %
|
|
British
Columbia
|
1,268
|
1,250
|
|
18
|
1.4 %
|
New
Brunswick
|
85.1 %
|
89.3 %
|
|
New
Brunswick
|
861
|
1,264
|
|
(403)
|
(31.9) %
|
Nova Scotia
|
97.9 %
|
97.5 %
|
|
Nova Scotia
|
1,648
|
1,828
|
|
(180)
|
(9.8) %
|
Ontario
|
92.7 %
|
95.9 %
|
|
Ontario
|
15,029
|
14,276
|
|
753
|
5.3 %
|
Total
|
92.9 %
|
95.6 %
|
|
|
$ 22,373
|
$ 22,083
|
|
$
290
|
1.3 %
|
Q4-2022 Same Property NOI increased 1.3% and 5.6%
YTD-2022.
Same Property NOI in Alberta
increased 2.9% mainly due to a termination payment received from a
tenant at the REIT's Edmonton
property. The surrendered space has been re-leased with rents
starting in Q1-2023. Same property occupancy in British Columbia decreased due to a lease
expiry at the end of Q2-2022. NOI was positively impacted by
contractual rent increases.
New Brunswick Same Property NOI experienced a decline due to
lower occupancy as certain tenants downsized their space
requirements on renewal. A total of 34,000 square feet of new lease
deals were completed in 2022 with revenue commencing in the first
half of 2023. Same Property NOI in Nova
Scotia was negatively impacted by a 14,600 square foot short
term lease that ended in Q2-2022 following which the space was
subsequently re-leased with rent commencing in Q2-2023.
While occupancy has decreased in the REIT's Ontario portfolio, Same Property NOI increased
by 5.3% mainly due to termination fees. Termination fees relate to
a tenant in the GTA portfolio that downsized a portion of their
space effective December 2022, of
which approximately 60% has been contractually re-leased with rents
commencing in the second half of 2023.
Excluding termination fees, Same Property NOI for the quarter
decreased 4.7% and 2.7% YTD-2022.
Debt and Liquidity
|
December 31,
2022
|
December 31,
2021
|
Indebtedness to GBV
ratio (1)
|
59.3 %
|
57.7 %
|
Interest coverage
ratio (1)
|
3.00x
|
3.02x
|
Indebtedness -
weighted average fixed interest rate
|
3.54 %
|
3.31 %
|
Indebtedness -
weighted average term to maturity
|
3.27 years
|
3.70 years
|
On August 19, 2022, the REIT renewed
its credit facility for a further two years maturing December 1, 2024 which included an increase from
$60,000 to $68,000, with the additional $8,000 expiring on June
30, 2023 to align with the previously announced sale of
32071 South Fraser Way, Abbotsford,
British Columbia.
As at December 31, 2022, the
REIT's mortgage portfolio carried a weighted average maturity of
3.27 years and a weighted average fixed interest rate of
3.54%. During the quarter, the REIT refinanced a total of
$36,000 (YTD-2022 - $118,820) of mortgages with a weighted average
fixed interest rate of 5.38% (YTD-2022 - 4.53%) for five year terms
(YTD-2022 - one to seven year terms), providing the REIT with
additional liquidity of approximately $8,800 (YTD-2022 - $29,400). Subsequent to year-end, the REIT
refinanced $31,226 of mortgages
providing the REIT with additional liquidity of approximately
$5,800.
Property Dispositions
The REIT has entered into a binding agreement for the sale of a
107,100 square foot property located at 360 Laurier Avenue West,
Ottawa, Ontario (the "Laurier
Property") and on March 10, 2023
completed the sale of 26,800 square foot property located at 400
Carlingview Drive, Toronto,
Ontario (the "Carlingview Property") for a combined sale
price of $24.8 million, excluding
transaction costs and standard closing adjustments. The two
dispositions will provide the REIT with $5
million of excess sale proceeds.
The Carlingview Property a single-tenanted office building
located in close proximity to Toronto Pearson International
Airport, was purchased in February
2013 and became fully vacant as of March 2023. The Laurier Property is an
eleven-story office building located in Ottawa and was purchased in February 2019. The Laurier Property is
approximately 96% vacant as of February
2023 with the sale expected to close on or about
June 15, 2023. Completion of the sale
of the Laurier Property remains subject to the satisfaction of
certain customary closing conditions being fulfilled.
Management believes these dispositions are advantageous and
strategic given the lead tenant at each property had provided
notice that they would be vacating at the end of their current
lease term. For these particular properties, the ability to extract
their underlying value at this time is advantageous given the
significant re-leasing costs and loss of income associated with
replacing the vacancy.
Distribution Reduction
Although the REIT has performed well over the last three years
in uncertain operating and capital market conditions, it has faced
challenges due to changing office requirements following the
COVID-19 pandemic, increased inflation and rising interest
rates.
In view of the current capital and property market conditions,
together with the uncertainty surrounding the duration and impact
of these macroeconomic factors, management and the board of
trustees (the "Board") have carefully considered initiatives in
order to ensure the long-term viability of the REIT's cash flow and
preserve value for its Unitholders. As part of its process, the
Board conducted a comprehensive review of the REIT's distribution
policy and has approved a 50% reduction to its monthly cash
dividend from $0.0495 per Unit to
$0.02475 per Unit or $0.297 per Unit on an annualized basis. The new
declared distribution will be paid on April
17, 2023 to Unitholders of record on March 31, 2023. The Board will re-evaluate the
REIT's distribution policy on a regular basis, taking into account
various factors including, but not limited to, market conditions
and the REIT's financial position.
(1) This is a
non-IFRS financial measure. Refer to the Non-IFRS financial
measures section.
|
The decision to reduce the distribution was made by the Board
following a careful review of the REIT's strategic goals, capital
structure and operations, as well as a thorough investigation of
the potential merits of the distribution reduction and strategic
alternatives. The Board and management believe this decision is
prudent and in the best interests of the REIT and its Unitholders,
particularly in light of current market conditions. Specifically,
this decision underlines the Board's and management's view that the
Unitholders are best served by a well-capitalized REIT, which
bolsters the REIT's ability to enhance its portfolio and pursue
value-creating opportunities.
The distribution reduction is expected to provide the REIT with
financial flexibility to continue advancing its short and long-term
objectives while exploring strategic, value-creating opportunities,
with maximizing Unitholder value being the principal objective.
About the REIT
The REIT is an unincorporated, open-ended real estate investment
trust established under the laws of the Province of Ontario. The REIT currently owns and operates
a portfolio of 46 commercial properties consisting of approximately
4.9 million square feet in urban and select strategic secondary
markets across Canada focusing on
long term leases with government and credit rated tenants.
The REIT is focused on growing its portfolio principally through
acquisitions across Canada and
such other jurisdictions where opportunities exist. Additional
information concerning the REIT is available at www.sedar.com or
the REIT's website at www.truenorthreit.com.
Non-IFRS financial measures
Certain terms used in this press release such as FFO, AFFO, FFO
and AFFO payout ratios, NOI, Same Property NOI, indebtedness
("Indebtedness"), gross book value ("GBV"), Indebtedness to GBV
ratio, net earnings before interest, tax, depreciation and
amortization and fair value gain (loss) on financial instruments
and investment properties ("Adjusted EBITDA"), interest coverage
ratio and Available Funds are not measures defined by International
Financial Reporting Standards ("IFRS") as prescribed by the
International Accounting Standards Board, do not have standardized
meanings prescribed by IFRS and should not be compared to or
construed as alternatives to profit/loss, cash flow from operating
activities or other measures of financial performance calculated in
accordance with IFRS. FFO, AFFO, FFO and AFFO payout ratios,
NOI, Same Property NOI, Indebtedness, GBV, Indebtedness to GBV
ratio, Adjusted EBITDA, interest coverage ratio, adjusted cash
provided by operating activities and Available Funds as computed by
the REIT may not be comparable to similar measures presented by
other issuers. The REIT uses these measures to better assess the
REIT's underlying performance and provides these additional
measures so that investors may do the same. Details on non-IFRS
financial measures are set out in the REIT's Management's
Discussion and Analysis for the three months and year ended
December 31, 2022 and the Annual Information Form are
available on the REIT's profile at www.sedar.com.
Reconciliation of Non-IFRS financial measures
The following tables reconcile the non-IFRS financial measures
to the comparable IFRS measures for the three months and year ended
December 31, 2022 and 2021. These
non-IFRS financial measures do not have any standardized meanings
prescribed by IFRS and may not be comparable to similar measures
presented by other issuers.
NOI
The following table calculates NOI:
|
Three months
ended
December
31
|
Years
ended December
31
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenue
|
$
|
35,451
|
$
|
35,461
|
$
|
143,575
|
$
|
138,523
|
Expenses:
|
|
|
|
|
|
|
|
|
Property operating
costs
|
|
(9,834)
|
|
(10,016)
|
|
(36,882)
|
|
(35,940)
|
Realty
taxes
|
|
(4,988)
|
|
(4,994)
|
|
(20,209)
|
|
(19,956)
|
NOI
|
$
|
20,629
|
$
|
20,451
|
$
|
86,484
|
$
|
82,627
|
Same Property NOI
Same Property NOI is measured as the net operating income for
the properties owned and operated by the REIT for the current and
comparative period. The following table reconciles the REIT's Same
Property NOI to NOI:
|
Three months
ended
December
31
|
Years
ended
December
31
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Number of
properties
|
|
45
|
|
45
|
|
45
|
|
45
|
Revenue
|
$
|
33,751
|
$
|
35,059
|
$
|
139,942
|
$
|
137,455
|
Expenses:
|
|
|
|
|
|
|
|
|
Property
operating
|
|
(9,430)
|
|
(9,923)
|
|
(36,044)
|
|
(35,688)
|
Realty
taxes
|
|
(4,764)
|
|
(4,940)
|
|
(19,673)
|
|
(19,801)
|
|
$
|
19,557
|
$
|
20,196
|
$
|
84,225
|
$
|
81,966
|
Add:
|
|
|
|
|
|
|
|
|
Amortization of
leasing costs and tenant inducements
|
|
2,012
|
|
1,652
|
|
6,784
|
|
5,929
|
Straight-line
rent
|
|
804
|
|
235
|
|
2,351
|
|
510
|
Same Property
NOI
|
$
|
22,373
|
$
|
22,083
|
$
|
93,360
|
$
|
88,405
|
Reconciliation to
financial statements:
|
|
|
|
|
|
|
|
|
Acquisitions and
dispositions
|
|
1,070
|
|
255
|
|
2,247
|
|
675
|
Amortization of
leasing costs and tenant inducements
|
|
(2,012)
|
|
(1,652)
|
|
(6,784)
|
|
(5,943)
|
Straight-line
rent
|
|
(802)
|
|
(235)
|
|
(2,339)
|
|
(510)
|
NOI
|
$
|
20,629
|
$
|
20,451
|
$
|
86,484
|
$
|
82,627
|
FFO and AFFO
The following table reconciles the REIT's FFO and AFFO to net
income and comprehensive income, for the three months and years
ended December 31, 2022 and 2021:
|
Three months
ended
December
31
|
Years
ended
December 31
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net (loss) income
and comprehensive (loss) income
|
$
|
(21,905)
|
$
|
18,916
|
$
|
16,532
|
$
|
51,004
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
Fair value adjustment
of Unit-based compensation
|
|
7
|
|
108
|
|
(580)
|
|
801
|
Fair value adjustment
of investment properties
|
|
31,803
|
|
(7,361)
|
|
41,925
|
|
(6,219)
|
Fair value adjustment
of Class B LP Units
|
|
455
|
|
514
|
|
(4,590)
|
|
3,601
|
Transaction costs on
sale of investment property
|
|
—
|
|
—
|
|
—
|
|
623
|
Distributions on Class
B LP Units
|
|
375
|
|
449
|
|
1,673
|
|
1,884
|
Unrealized gain on
change in fair value of derivative instruments
|
|
(82)
|
|
(969)
|
|
(5,444)
|
|
(3,837)
|
Amortization of
leasing costs and tenant inducements
|
|
2,012
|
|
1,652
|
|
6,784
|
|
5,943
|
FFO
|
$
|
12,665
|
$
|
13,309
|
$
|
56,300
|
$
|
53,800
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
Unit-based
compensation expense
|
|
124
|
|
115
|
|
665
|
|
448
|
Amortization of
financing costs
|
|
391
|
|
401
|
|
1,524
|
|
1,372
|
Amortization of
mortgage discounts
|
|
(9)
|
|
(12)
|
|
(45)
|
|
(51)
|
Installment note
receipts
|
|
15
|
|
25
|
|
62
|
|
105
|
Straight-line
rent
|
|
802
|
|
235
|
|
2,339
|
|
510
|
Capital
reserve
|
|
(1,254)
|
|
(1,207)
|
|
(4,863)
|
|
(4,776)
|
AFFO
|
$
|
12,734
|
$
|
12,866
|
$
|
55,982
|
$
|
51,408
|
|
|
|
|
|
|
|
|
|
FFO per
Unit:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.13
|
$
|
0.15
|
$
|
0.61
|
$
|
0.59
|
Diluted
|
$
|
0.13
|
$
|
0.14
|
$
|
0.60
|
$
|
0.59
|
AFFO per
Unit:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.14
|
$
|
0.14
|
$
|
0.60
|
$
|
0.57
|
Diluted
|
$
|
0.14
|
$
|
0.14
|
$
|
0.60
|
$
|
0.56
|
AFFO payout
ratio:
|
|
|
|
|
|
|
|
|
Basic
|
|
110 %
|
|
105 %
|
|
99 %
|
|
105 %
|
Diluted
|
|
110 %
|
|
106 %
|
|
99 %
|
|
106 %
|
Distributions
declared
|
$
|
13,996
|
$
|
13,579
|
$
|
55,296
|
$
|
53,973
|
Weighted average
Units outstanding (000s):
|
|
|
|
|
|
|
|
|
Basic
|
|
94,202
|
|
91,312
|
|
93,007
|
|
90,799
|
Add:
|
|
|
|
|
|
|
|
|
Unit options and
Incentive Units
|
|
20
|
|
622
|
|
76
|
|
753
|
Diluted
|
|
94,222
|
|
91,934
|
|
93,083
|
|
91,552
|
Indebtedness to GBV Ratio
The table below calculates the REIT's Indebtedness to GBV ratio
as at December 31, 2022 and
2021. The Indebtedness to GBV ratio is calculated by dividing
the indebtedness by GBV:
|
December
31,
2022
|
December
31,
2021
|
Total assets
|
$
|
1,450,315
|
$
|
1,421,177
|
Deferred financing
costs
|
|
7,070
|
|
7,171
|
GBV
|
$
|
1,457,385
|
$
|
1,428,348
|
Mortgages
payable
|
|
846,689
|
|
820,402
|
Credit
Facility
|
|
14,400
|
|
—
|
Unamortized financing
costs and mark to market mortgage adjustments
|
|
3,745
|
|
3,977
|
Indebtedness
|
$
|
864,834
|
$
|
824,379
|
Indebtedness to
GBV
|
|
59.3 %
|
|
57.7 %
|
Adjusted EBITDA
The table below reconciles the REIT's adjusted EBITDA to net
income and comprehensive income for the years ended December 31, 2022 and 2021:
|
|
December 31,
2022
|
|
December 31,
2021
|
|
|
|
|
Net income and
comprehensive income
|
$
|
16,532
|
$
|
51,004
|
|
|
|
|
|
|
|
Add
(deduct):
|
|
|
|
|
|
Interest
expense
|
|
28,855
|
|
27,344
|
|
Fair value adjustment
of Unit-based compensation
|
|
(580)
|
|
801
|
|
Transaction costs on
sale of investment property
|
|
—
|
|
623
|
|
Fair value adjustment
of investment properties
|
|
41,925
|
|
(6,219)
|
|
Fair value adjustment
of Class B LP Units
|
|
(4,590)
|
|
3,601
|
|
Distributions on Class
B LP Units
|
|
1,673
|
|
1,884
|
|
Unrealized gain on
change in fair value of
derivative
instruments
|
|
(5,444)
|
|
(3,837)
|
|
Amortization of leasing
costs, tenant inducements,
mortgage premium and
financing costs
|
|
8,263
|
|
7,264
|
|
Adjusted
EBITDA
|
$
|
86,634
|
$
|
82,465
|
|
Interest Coverage Ratio
The table below calculates the REIT's interest coverage ratio
for the years ended December 31, 2022
and 2021. The interest coverage ratio is calculated by dividing
Adjusted EBITDA by interest expense.
|
|
December 31,
2022
|
|
December 31,
2021
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
86,634
|
$
|
82,465
|
Interest
expense
|
|
28,855
|
|
27,344
|
Interest coverage
ratio
|
|
3.00 x
|
|
3.02 x
|
Available Funds
The table below calculates the REIT's Available Funds as at
December 31, 2022 and 2021:
|
December 31,
2022
|
December 31,
2021
|
Cash
|
$
|
9,501
|
$
|
5,476
|
Undrawn Credit
Facility
|
|
53,600
|
|
60,000
|
Available
Funds
|
$
|
63,101
|
$
|
65,476
|
Forward-looking Statements
Certain statements contained in this press release constitute
forward-looking information within the meaning of Canadian
securities laws, including statements regarding anticipated
outcomes and benefits in respect of the sale of two Ontario properties and the distribution
reduction (including the potential impact thereof on Unitholders,
as well as the REIT and its ability to advance its objectives,
explore strategic opportunities and deliver long-term value to its
Unitholders), and the timing thereof, the ability of the REIT to
complete the proposed sale of the Laurier Property and the timing
thereof, the ability of the REIT to complete the pending five year
government tenant renewals of 140,000 square feet and the
timing thereof, and the REIT's future plans (including the Board's
and management's expectations regarding the REIT's leverage,
portfolio and future distributions). Forward-looking
statements are provided for the purposes of assisting the reader in
understanding the REIT's financial performance, financial position
and cash flows as at and for the periods ended on certain dates and
to present information about management's current expectations and
plans relating to the future. Readers are cautioned that such
statements may not be appropriate for other purposes.
Forward-looking information may relate to future results,
performance, achievements, events, prospects or opportunities for
the REIT or the real estate industry and may include statements
regarding the financial position, business strategy, budgets,
projected costs, capital expenditures, financial results, taxes,
plans and objectives of or involving the REIT. In some cases,
forward-looking information can be identified by such terms as
"may", "might", "will", "could", "should", "would", "expect",
"plan", "anticipate", "believe", "intend", "seek", "aim",
"estimate", "target", "goal", "project", "predict", "forecast",
"potential", "continue", "likely", or the negative thereof or other
similar expressions suggesting future outcomes or events.
Forward-looking statements that involve a number of risks and
uncertainties, including statements regarding the outlook for the
REIT's business and results of operations, the ability of the REIT
to manage inflation and rising interest rates, and the changes to
the REIT's business and operations following the coronavirus
pandemic (SARS- CoV-2) ("COVID-19"). Forward-looking statements
involve known and unknown risks and uncertainties, which may be
general or specific and which give rise to the possibility that
expectations, forecasts, predictions, projections or conclusions
will not prove to be accurate, assumptions may not be correct and
objectives, strategic goals and priorities may not be achieved. A
variety of factors, many of which are beyond the REIT's control,
affect the operations, performance and results of the REIT and its
business, and could cause actual results to differ materially from
current expectations of estimated or anticipated events or results.
These factors include, but are not limited to: risks and
uncertainties related to the Units; risks related to the REIT and
its business; fluctuating mortgage and interest rates and general
economic conditions, including increased levels of inflation;
credit, market, operational and liquidity risks generally;
occupancy levels and defaults, including the failure to fulfill
contractual obligations by tenants; lease renewals and rental
increases including the pending five-year government renewals of
140,000 square feet; the ability to re-lease and find new tenants
for vacant space; the timing and ability of the REIT to sell
certain properties; the after effects of the COVID-19 pandemic on
the business, operations and financial condition of the REIT and
its tenants, as well as on consumer behavior and the economy in
general, including the ability to enforce leases, perform capital
expenditure work, increase rents, raise capital through the
issuance of Units or other securities of the REIT and obtain
mortgage financing on the REIT's properties. The foregoing is not
an exhaustive list of factors that may affect the REIT's
forward-looking statements. Other risks and uncertainties not
presently known to the REIT could also cause actual results or
events to differ materially from those expressed in its
forward-looking statements. The reader is cautioned to consider
these and other factors, uncertainties and potential events
carefully and not to put undue reliance on forward-looking
statements as there can be no assurance actual results will be
consistent with such forward-looking statements.
Information contained in forward-looking statements is based
upon certain material assumptions applied in drawing a conclusion
or making a forecast or projection, including management's
perception of historical trends, current conditions and expected
future developments, as well as other considerations believed to be
appropriate in the circumstances. There can be no assurance
regarding: (a) the sale of the two Ontario properties, including the completion
of the sale of the Laurier Property, and the impact of the
distribution reduction on long-term Unitholder value including the
completion of the five-year government renewals of 140,000 square
feet; (b) the after effects of COVID-19 on the REIT's business,
operations and performance, including the performance of its Units;
(c) the REIT's ability to mitigate any impacts related to
fluctuating mortgage and interest rates and inflation; (d) the
factors, risks and uncertainties expressed above in regards to the
post pandemic environment on the commercial real estate industry
and property occupancy levels; (e) credit, market, operational, and
liquidity risks generally; (f) the availability of investment
opportunities for growth in Canada and the timing and ability of
the REIT to sell certain properties; (g) Starlight Group Property
Holdings Inc., or any of its affiliates, continuing as asset
manager of the REIT in accordance with its current asset management
agreement; and (h) other risks inherent to the REIT's business
and/or factors beyond its control which could have a material
adverse effect on the REIT.
The forward-looking statements made in this news release are
dated and relate only to events or information as of the date of
this news release. Except as specifically required by applicable
Canadian law, the REIT undertakes no 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.
SOURCE True North Commercial Real Estate Investment Trust