AIP Realty Trust Announces Year End 2023 Results

VANCOUVER, BC, May 9, 2024 /CNW/ - AIP Realty Trust (the "Trust" or "AIP Realty") (TSXV: AIP.U) today announced its financial results for the year ended December 31, 2023. All dollar amounts are stated in U.S. dollars.

2023 Highlights

• The Trust owns a 100% leased multi-tenant light industrial flex facility located on Eagle Court in Lewisville, Texas (the "Eagle Court Property"). The Eagle Court Property has been 100% leased since substantial completion in June 2020.  The Eagle Court Property had expected normal tenant turnover but even through this, has realized an overall ~10% increase in investment property revenue from higher lease rates.
• The Eagle Court Property generated investment property revenue of $595,793, comprised of tenant rental revenue and revenue from contracts with customers, specifically common area maintenance. Investment property operating expenses were $197,740, resulting in net rental income of $398,053.
• The Trust has previously announced entering into forward purchase agreements with the option to acquire up to 12 Serviced Industrial Business Suites ("SIBS") in the shallow bay light industrial flex space being developed in the Dallas-Fort Worth ("DFW") market by AllTrades Industrial Properties, Inc. ("AllTrades"), the Trust's exclusive development partner, and a related party of the Trust.¹
• Suspended its Q2 through Q4 quarterly distributions to support the Trust's priority of preserving capital to fund working capital until the properties discussed above are acquired.
• Announced that its Board of Trustees (the "Board") has initiated a process to explore and evaluate strategic alternatives available to the Trust and any other options that may be at hand and considered by the Board to be in the best interests of the Trust and its unitholders.
  
  
• Selected Financial Information 

Year ended December 31		2023		2022
Investment property revenue		$595,793		$352,548
Investment property operating expenses		($197,740)		($103,156)
Net rental income		$398,053		$249,392
Other income (expense)		($3,147,917)		($4,829,810)
Fair value adjustment to investment property		$78,310		($8,841)
Net loss and total comprehensive loss		($2,671,554)		($4,589,259)

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¹ The acquisition of each of the properties is subject to certain conditions, including but not limited to completion of the construction of each facility, receipt of audited financial statements for each facility, receipt of a satisfactory third-party appraisal supporting the purchase price for each facility, receipt of regulatory approvals, including the approval of the TSXV, approval of the independent trustees of AIP Realty and customary closing date and post-closing adjustments.

As at December 31		2023		2022
Investment property		$5,822,000		$5,750,000
Cash		$118,642		$608,984
Secured bank indebtedness (net of debt discount)		$3,017,083		$3,102.597
Accounts payable		$424,991		$443,565
Accrued expenses		$4,209,243		$1,774,918
Units outstanding		3,424,448		3,417,861

The foregoing is a summary of selected information for the years ended December 31, 2023 and 2022 and is qualified in its entirety by, and should be read in conjunction with, the Trust's consolidated financial statements and management discussion and analysis for the years ended December 31, 2023 and 2022. These documents are available on SEDAR+ at www.sedarplus.com, and on the Trust's website at www.aiprealtytust.com.

Readers should note that the 2022 figures, relative to the 2023 figures, may be less, in part due to the fact that the Trust's operations only commenced on April 14, 2022 to September 30, 2022 since the Eagle Court Property was acquired on April 14, 2022 and so the fiscal 2022 year may not be directly comparable to fiscal 2023.

Related party disclosures

The executive management team of the Trust is the same executive management team as AllTrades.

Outlook and Subsequent Events

Through its agreement with AllTrades, the Trust has been granted an exclusive right to purchase all AllTrades' completed and leased facilities, as well as any facilities in development. The 12 properties mentioned above and subject to forward purchase agreements include five DFW-area facilities already completed or nearing completion, and six additional facilities on which development has commenced. Development on these facilities was funded with equity capital from AllTrades and Trinity Investors, a $7 billion Dallas-based real estate private equity investor. In addition, AllTrades is actively planning the next tranche of facilities in DFW and Houston, TX.

Effective April 19, 2024, the Trust completed the first tranche of a non-brokered private placement (the "Financing") and issued 1,100,000 Preferred Units – Series B Convertible (each, a "Preferred Unit"), at a price of US$0.50 per Preferred Unit for aggregate gross proceeds of US$550,000. An aggregate of up to 6,000,000 Preferred Units may be issued under the Financing for aggregate gross proceeds of up to US$3,000,000. The Trust intends to use the proceeds of the Financing for working capital and general corporate purposes. Completion of a second or other tranches of the Financing remains subject to approval from the TSX Venture Exchange (the "TSXV").  Each of the Preferred Units issued under the first tranche of the Financing will be subject to a four month and one day hold period from the date of issuance. There were no finder's fees paid in connection with the first tranche of the Financing.

Effective April 29, 2024, the Trust completed an issuance of 1,500,000 Class A Trust Units (each, a "Unit") at a deemed issue price of US$0.50 per Unit in satisfaction of an outstanding debt in the amount of US$750,000 owed to AllTrades Industrial Development, LLC ("AID") pursuant to the terms of the previously announced Master Funding and Forward Purchase Agreement dated September 19, 2022 between AID and AIP Realty Management LLC (a wholly-owned subsidiary of the Trust) (the "Unit Issuance").  Completion of the Unit Issuance remains subject to final approval from the TSXV.

Effective May 6, 2024, the British Columbia Securities Commission has issued a failure to file cease trade order (the "FFCTO") against the Trust, effective so long as the annual financial statements for the year ended December 31, 2023 are not filed. The FFCTO prohibits the trading by any person of any securities of the Trust in Canada, including trades in the Trust's class A trust units made through the facilities of the TSX-V, until the annual financial statements have been filed and the FFCTO revoked. 

About AIP Realty Trust

AIP Realty Trust is an unincorporated, open ended mutual fund trust with a growing portfolio of AllTrades branded SIBS light industrial flex facilities focused on small businesses and the trades and services sectors in the U.S. These properties appeal to a diverse range of small space users, such as contractors, skilled trades, suppliers, repair services, last-mile providers, small businesses and assembly and distribution firms. They typically offer attractive fundamentals including low tenant turnover, stable cash flow and low capex intensity, as well as significant growth opportunities. With an initial focus on the Dallas-Fort Worth market, AIP plans to roll out this innovative property offering nationally. AIP holds the exclusive rights to finance the development of and to purchase all the completed and leased properties built across North America by its development and property management partner, AllTrades Industrial Properties, Inc. For more information, please visit www.aiprealtytrust.com.

Cautionary Statement on Forward-Looking Information

This press release contains statements which constitute "forward-looking information" within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of AIP Realty Trust with respect to future business activities and operating performance. Forward-looking information is often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" or similar expressions and includes information regarding, future acquisitions by the Trust, the ability to obtain regulatory and unitholder approvals and other factors. When or if used in this news release, the words "anticipate", "believe", "estimate", "expect", "target", "plan", "forecast", "may", "schedule" and similar words or expressions identify forward-looking statements or information. These forward-looking statements or information may relate to the commencement of development on certain of the AllTrades facilities, receipt of final approval from the TSXV for the Financing and the Unit Issuance, proposed financing activity, proposed acquisitions, regulatory or government requirements or approvals, the reliability of third-party information and other factors or information. Such statements represent the Trust's current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Trust, are inherently subject to significant business, economic, competitive, political and social risks, contingencies and uncertainties. Many factors, both known and unknown, could cause results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward- looking statements. These forward-looking statements are made as of the date hereof and are expressly qualified in their entirety by this cautionary statement. The Trust does not intend, and do not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements and information other than as required by applicable laws, rules and regulations.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release is not an offer of securities for sale in the United States. The securities may not be offered or sold in the United States absent registration or an exemption from registration under U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"). The Trust has not registered and will not register the securities under the U.S. Securities Act. The Trust does not intend to engage in a public offering of their securities in the United States.

SOURCE AIP Realty Trust

From the Trust, contact: Leslie Wulf, Executive Chairman, [phone], [email protected] Or Greg Vorwaller, Chief Executive Officer, [phone], [email protected]