LANESBOROUGH REIT REPORTS 2022 THIRD QUARTER RESULTS

WINNIPEG, MB, Nov. 24, 2022 /CNW/ - Lanesborough Real Estate Investment Trust ("LREIT") (TSXV: LRT.UN) today reported its operating results for the quarter ended September 30, 2022. The following comments in regard to the financial position and operating results of LREIT should be read in conjunction with the interim management's discussion & analysis – quarterly highlights ("MD&A – QH") and the interim financial statements for the quarter ended September 30, 2022, which may be obtained from the SEDAR website at www.sedar.com.

ANALYSIS OF OPERATING RESULTS

Analysis of Income (Loss) and Comprehensive Income (Loss)
	Three Months Ended September 30				Nine Months Ended September 30
			Increase (Decrease) in Income
	2022	2021	Amount	%	2022	2021
Rentals from investment properties	$     4,417,868	$     4,758,470	$      (340,602)	(7) %	$     13,438,795	$     13,764,122
Rental loss insurance proceeds	-	618,647	(618,647)	(100) %	-	618,647
Property operating costs	(3,110,373)	(3,205,468)	95,095	3 %	(9,609,990)	(9,556,479)
Net operating income (NOI)	1,307,495	2,171,649	(864,154)	(40) %	3,828,805	4,826,290
Interest income	19,464	43,715	(24,251)	(55) %	73,145	130,356
Interest expense	(2,713,225)	(3,166,891)	453,666	14 %	(8,212,072)	(9,178,341)
Trust expense	(291,396)	(288,962)	(2,434)	(1) %	(1,170,877)	(917,822)
Loss before the following	(1,677,662)	(1,240,489)	(437,173)	(35) %	(5,480,999)	(5,139,517)
Fair value adjustments	11,162,152	(546,573)	11,708,725	2,142 %	9,707,894	(10,908,331)
Gain on extinguishment of Series G Debentures	-	-	-	-	19,797,489	-
Income (loss) before discontinued operations	9,484,490	(1,787,062)	11,271,552	631 %	24,024,384	(16,047,848)
Loss from discontinued operations	(525,089)	(535,198)	10,109	2 %	(1,674,720)	(1,421,690)
Income (loss) and comprehensive income (loss)	$     8,959,401	$  (2,322,260)	$    11,281,661	486 %	$     22,349,664	$   (17,469,538)

Overall Results

LREIT completed Q3-2022 with an income and comprehensive income of $9.0 million, compared to a loss and comprehensive loss of $2.3 million, during the same period in the prior year, representing an increase in income of $11.3 million.

The increase in income mainly reflects a favourable fair value adjustment variance of $11.7 million, as well as a decrease in interest expense of $0.5 million, partially offset by a decrease in net operating income ("NOI") of $0.9 million.

The favourable fair value adjustment variance is mainly due to gains from fair value adjustments recognized during Q3-2022, in the amount of $11.2 million. The fair value adjustments recognized during Q3-2022 mainly reflect an increase in the carrying value of the Fort McMurray properties segment, primarily as a result of changes made to key valuation assumptions to incorporate information obtained from external appraisals received during the quarter and in recognition of the existing favourable occupancy trend.

The decrease in interest expense is primarily attributable to the exchange of the Series G Debentures for Trust Units on February 24, 2022. Interest recorded on the Series G Debentures during Q3-2021 amounted to $0.3 million.

The decrease in NOI mainly reflects a decrease in the NOI of the Held for Sale properties segment, due to the sale of Woodland Park during Q1-2022; and a decrease in rental loss insurance proceeds, due to proceeds recognized during Q3-2021 related to the April 2020 flood. As outlined in greater detail in the Analysis of Operating Results – Rental Revenues From Investment Properties section of the MD&A - QH, the average occupancy of the Fort McMurray properties segment increased from 84% during Q3-2021 to 90% during Q3-2022. The average monthly rental rate decreased by $16 from $1,424 during Q3-2021 to $1,408 during Q3-2022.

ABOUT LREIT
LREIT is a real estate investment trust, which is listed on the TSX Venture Exchange under the symbol LRT.UN (Trust Units). For further information on LREIT, please visit our website at www.lreit.com.

This press release contains certain statements that could be considered as forward-looking information.  The forward-looking information is subject to certain risks and uncertainties, which could result in actual results differing materially from the forward-looking statements. 

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

SOURCE Lanesborough Real Estate Investment Trust

Gino Romagnoli, Chief Executive Officer, or Arni Thorsteinson, Vice-Chair, Tel: [phone], Fax: [phone], Email: [email protected]