Marwest Apartment REIT Announces Q2 Results

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

WINNIPEG, MB, Aug. 24, 2021 /CNW/ - Marwest Apartment Real Estate Investment Trust ("Marwest Apartment REIT" or the "REIT") (TSXV: MAR.UN) reported financial results for the second quarter ended June 30, 2021.

The Condensed Consolidated Interim Financial Statements and Management's Discussion and Analysis ("MD&A") for Q2 2021 and the six months ended June 30, 2021 are available on the REIT's website at www.marwestreit.com and at www.sedar.com.

Q2 2021 Highlights

• Purchase of two properties comprising an aggregate of 251 units in Winnipeg, Manitoba
• Average monthly rent per suite at June 30, 2021 of $1,509
• Occupancy rate of 98.6% at June 30, 2021
• Generated net property operating income ("NOI") of $492,877 since the acquisition of 251 units on April 30, 2021
• NOI margin of 63.3%
• Adjusted funds from operations ("AFFO") of $0.03 per unit
• Commencing distributions at approximately 20 percent of AFFO to Unitholders of record on December 31, 2021, with an estimated first payment date of January 15, 2022

Mr. William Martens, Chief Executive Officer and Trustee commented "We are very pleased to have completed our initial property acquisitions.The acquisition of 251 newer generation residential suites in prime locations within Winnipeg provides Marwest Apartment REIT with a solid base from which to grow. Following the initial property acquisitions, the Principals of Marwest Asset Management Inc. and their associates retained a significant equity ownership in the REIT.  We believe that this support is indicative of the conviction that the principals of the Marwest Group have in our business strategy and provides significant alignment between us and our external asset and property manager.  Furthermore, we are excited to have completed our first broadly marketed public offering, raising $4.7 million of gross proceeds, which closed subsequent to the quarter end.  With the proceeds of the offering and cash on hand, Marwest will be focused on continuing to grow its portfolio and acquisition / development pipeline."

Portfolio Operational Information	As at June 30, 2021
Number of properties	2
Number of suites	251
Average Occupancy Rate	98.6%
Average rental rate	$1,509
Financial Summary	Period ended June 30, 2021
Property revenue	$	778,955
Net property operating income	492,877
Net loss	(510,871)
FFO	212,555
FFO per unit	$	0.03
AFFO	169,130
AFFO per unit	$	0.03
Debt Metrics as at	As at June 30, 2021
Debt to total assets	75.4%
Weighted average mortgage interest rate	2.78%
Weighted average months to debt maturity	82.42
Interest coverage ratio	1.38

Financial Summary

The REIT generated FFO and AFFO per unit of $0.03 in Q2 2021.  The reporting of FFO and AFFO was attributable to the recent acquisitions of the REIT's two properties.  As noted above, the  REIT's initial property acquisitions closed on April 30, 2021, so the results for the 3 months ended June 30, 2021 substantively reflect only the two month period that the REIT owned the properties.

FFO an AFFO are defined in "Non-IFRS Measures" in Q2 2021 Management's Discussion and Analysis.

Reconciliation of Net Income to FFO	Period ended June 30, 2021
Net loss	$	(510,871)
Fair value adjustments	723,426
FFO	212,555
FFO per unit	$	0.03
Reconciliation of FFO to AFFO
FFO	$	212,555
Capital expenditures	(28,281)
Leasing costs	(15,144)
AFFO	169,130
AFFO per unit	$	0.03

Operational Summary

Turnovers and Renewals	Period ended June 30, 2021
Suite Turnovers	24 units
Move ins	33 Units
Lease Renewals	51 units
Renewal rate	68%

Outlook

Management believes it will continue to see a stable rental market for rental apartments.  With increased vaccination rates, provincial re-opening plans in effect, and the easing of border restrictions driving immigration, management believes the demand for multi-family rentals will increase. 

The rising cost of home ownership has widened the affordability gap between renting and home ownership within the market that the REIT operates, which further fuels the demand for multi-family rentals.  The REIT's newer generation portfolio includes of amenities such as clubhouses and gyms, further increasing demand.   

Policy regarding Automatic Grants of Deferred Units in satisfaction of Trustee Compensation

The REIT's board of trustees also unanimously adopted a policy pursuant to which, at the election of each REIT trustee, the compensation payable to such trustee (other than meeting fees, which shall be paid in cash) in respect of each calendar quarter shall accrue and be payable at the beginning of the last day of the calendar quarter (or, if the REIT establishes a distribution record date for the last month of the quarter which is other than the last calendar day of the month, at the beginning of such distribution record date) (the "Grant Date").  Effective on each Grant Date, commencing on September 30, 2021, Deferred Units shall be issued to each trustee to whom accrued trustee compensation is payable, at a price determined in accordance with the REIT's equity incentive plan dated April 30, 2021 in such number so as to satisfy the accrued compensation amount in full, provided that no fractional Deferred Units shall be issued and any balance shall be payable in cash. 

Each of the trustees has elected to have all of their compensation (other than meeting fees) paid in deferred units pursuant to the policy.   The policy provides that neither the policy, nor any election of a particular trustee to receive compensation in deferred units, may be revoked, amended or changed during a general or special blackout period or, in the case of an individual Trustee, at any time when such individual Trustee has knowledge of a material fact or material change in respect of the REIT which has not been generally disclosed.

About Marwest Apartment REIT

The REIT is an unincorporated open-ended trust governed by the laws of the Province of Manitoba. The REIT was formed to provide Unitholders with the opportunity to invest in the Canadian multi-family rental sector through the ownership of high-quality income-producing properties, with an initial focus on stable markets throughout Western Canada.

Forward-looking Statements

The information in this news release includes certain information and statements about management's views of future events, expectations, plans and prospects that constitute forward– looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties.  Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward–looking statements. Forward–looking statements in this news release include, but are not limited to, the implementation of a cash distribution policy.  A number of factors could cause actual results to differ materially from these forward–looking statements.  The payment of cash distributions will be dependent upon a number of factors, including but not limited to the financial performance, financial condition and financial requirements of the REIT.  Although management of the REIT believes that the expectations reflected in forward– looking statements are reasonable, it can give no assurances that the expectations of any forward– looking statements will prove to be correct. Except as required by law, the REIT disclaims any intention and assumes no obligation to update or revise any forward–looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward–looking statements or otherwise.

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

The Trust Units are not registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") and may not be offered or sold within the United States or to or for the account or benefit of U.S. persons, except in certain transactions exempt from the registration requirements of the U.S. Securities Act. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, securities of the REIT in the United States or in any other jurisdiction.

SOURCE Marwest Apartment Real Estate Investment Trust

REIT Contact: For further information, please contact Mr. William Martens, Chief Executive Officer, Telephone: [phone].