FLAGSHIP COMMUNITIES REAL ESTATE INVESTMENT TRUST ADDS ANOTHER INDIANA COMMUNITY TO ITS PORTFOLIO

/Not for distribution to U.S. newswire services or dissemination in the United States/

TORONTO, Feb. 17, 2023 /CNW/ - Flagship Communities Real Estate Investment Trust ("Flagship" or the "REIT") (TSX: MHC.U) announced today it has agreed to acquire a 20-acre, high-quality manufactured housing resort community ("MHC") in Austin, Indiana, further expanding the REIT's presence in the key market of Indiana. The acquisition ("Acquisition") includes 120 MHC homesites, which includes 94 developed lots and 26 lots for additional expansion. The purchase price for the Acquisition was satisfied by approximately $2.0 million in the issuance of Class B units by Flagship Operating, LLC, a subsidiary of the REIT. Flagship expects the acquisition to be accretive to the REIT's long-term AFFO on a per unit basis.

"The acquisition of a community within our existing Indiana footprint demonstrates our growth strategy as well as our ability to identify stable, high performing communities in desirable areas," said Kurt Keeney, President and Chief Executive Officer. "Affordable housing continues to be a challenge for many Americans. Located just 35 miles from the Louisville Kentucky metro area, the Austin location offers affordable housing in Scott County, Indiana, and includes an array of amenities including a new clubhouse, playground, basketball courts and soccer fields. Scott County is in the automotive supply chain network with the Honda manufacturing plant located in Greensburg, Indiana and is within 35 minutes of downtown Louisville, Kentucky as well as also being on the I-65 corridor that connects Louisville to Indianapolis, Indiana."  

"This acquisition is our 18^th in Indiana and will benefit from our economies of scale with regard to management and service," said Chief Investment Officer, Nathan Smith. "We are a well-known community operator in this market and have high demand for quality home communities in the area. This MHC has significant growth potential as we look to increase occupancy in the developed lots as well as the lots available for expansion."

About Flagship Communities Real Estate Investment Trust

Flagship Communities Real Estate Investment Trust is an internally managed, unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. The REIT has been formed to own and operate a portfolio of income-producing manufactured housing communities located in Kentucky, Indiana, Ohio, Tennessee, Arkansas, Missouri, and Illinois, including a fleet of manufactured homes for lease to residents of such housing communities.

Non-IFRS Financial Measures

The REIT uses certain non-IFRS financial measures, including certain real estate industry metrics such as FFO, FFO Per Unit, AFFO, AFFO Per Unit and Same Community, to measure, compare and explain the operating results, financial performance and financial condition of the REIT. The REIT also uses AFFO in assessing its distribution paying capacity and NOI is a key input in determining the value of the REIT's properties. These measures are commonly used by entities in the real estate industry as useful metrics for measuring performance. However, they do not have any standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other publicly traded entities. These measures should be considered as supplemental in nature and not as a substitute for related financial information prepared in accordance with IFRS.

FFO is defined as IFRS consolidated net income adjusted for items such as distributions on redeemable or exchangeable units recorded as finance cost under IFRS (including distributions on the Class B Units, unrealized fair value adjustments to investment properties, loss on extinguishment of acquired mortgages payable, gain on disposition of investment properties and depreciation. The REIT's method of calculating FFO is substantially in accordance with the recommendations of the Real Property Association of Canada ("REALPAC").

AFFO is defined as FFO adjusted for items such as maintenance capital expenditures, and certain non-cash items such as amortization of intangible assets, premiums and discounts on debt and investments. The REIT's method of calculating AFFO is substantially in accordance with REALPAC's recommendations. The REIT uses a capital expenditure reserve of $60 (dollars/annual) per lot and $1,000 (dollars/annual) per rental home in the AFFO calculation. This reserve is based on management's best estimate of the cost that the REIT may incur, related to maintaining the investment properties.

Forward-Looking Statements

This press release contains statements that include forward-looking information within the meaning of Canadian securities laws. These forward-looking statements reflect the current expectations of the REIT regarding future events, including statements concerning the intended monthly distributions of the REIT. In some cases, forward-looking statements can be identified by terms such as "may", "will", "could", "occur", "expect", "anticipate", "believe", "intend", "estimate", "target", "project", "predict", "forecast", "continue", or the negative thereof or other similar expressions concerning matters that are not historical facts. Material factors and assumptions used by management of the REIT to develop the forward-looking information include, but are not limited to, the REIT having sufficient cash to pay its distributions. While management considers these assumptions to be reasonable based on currently available information, they may prove to be incorrect.

Although management believes the expectations reflected in such forward-looking statements are reasonable and represent the REIT's internal expectations and beliefs at this time, such statements involve known and unknown risks and uncertainties and may not prove to be accurate and certain objectives and strategic goals may not be achieved. A variety of factors, many of which are beyond the REIT's control, could cause actual results in future periods to differ materially from current expectations of events or results expressed or implied by such forward-looking statements, such as the risks identified in the REIT's final prospectus available under the REIT's profile at www.sedar.com, including under the heading "Risk Factors" therein. Readers are cautioned against placing undue reliance on forward-looking statements. Except as required by applicable Canadian securities laws, 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.

For further information, please contact:
Eddie Carlisle, Chief Financial Officer
Flagship Communities Real Estate Investment Trust
Tel: [phone]

SOURCE Flagship Communities Real Estate Investment Trust