NexLiving Communities Reports Record Q3 2024 Results and Declares Quarterly Dividend

HALIFAX, NS, Nov. 26, 2024 /CNW/ - (TSXV: NXLV) – NexLiving Communities Inc. ("NexLiving" or the "Company") announced operating and financial results for the three-month and nine-month periods ended September 30, 2024.

Stavro Stathonikos, President & CEO commented: "Q3 was a milestone quarter for NexLiving as we successfully completed the acquisition of 991 suites from Devcore, nearly doubling the size of our portfolio. The first month of ownership delivered strong results, contributing to a +39% increase in FFO, which reached a record $1.2 million for the quarter. We achieved this growth while also reducing leverage by 36 basis points, bringing net debt to GBV down to 68.2%. With a larger and more diversified portfolio, the Company is positioned to drive sustainable growth and continue to deliver long-term value to our shareholders."

Summary of Results:

• On August 30, 2024, NexLiving closed the previously announced acquisition of the 991-suite Devcore portfolio, increasing the Company's suite count to 2,032
• For the month of September, the Devcore portfolio delivered net operating income ("NOI") of $0.8 million and incurred interest expense of $0.3 million.
• NOI increased by +18% to $3.5 million (60.7% margin) for the three-month period and +15% to $9.4 million (60.1% margin) for the nine-month ended September 30, 2024.
• Funds from operations ("FFO") per share increased +3.9% for the three-month period and +18.3% for the nine-month period ended September 30, 2024, on a fully diluted basis.
• Year-to-date same property NOI increased +6.7% driven by a +5.0% increase in revenue and a +2.5% rise in expenses.

Q3 2024 Operating and Financial Highlights:

As at	30-Sep-24	31-Dec-23	Change
Number of suites	2,032	1,166	866
Occupancy	96.7 %	96.8 %	(10) bps
Net Debt to GBV*	68.2 %	68.6 %	(36) bps
Weighted average term to debt maturity (years)	4.3	4.6	(0.3) yrs
Weighted average contractual interest rate	3.27 %	3.71 %	(44) bps
Net asset value	133,909,249	74,633,442	79.4 %
Net asset value per share	$              4.05	$              4.49	(9.7) %

For the three months ended September 30,	2024	2023	Change
NOI	3,505,330	2,962,645	18.3 %
NOI margin	60.7 %	62.4 %	(93) bps
FFO*	1,154,547	832,971	38.6 %
FFO per share - diluted*	0.05	0.05	3.9 %
FFO payout ratio*	19 %	20 %	(75) bps
Same property revenue*	3,754,826	3,621,950	3.7 %
Same property operating expenses*	1,471,040	1,360,393	8.1 %
Same property NOI*	2,283,786	2,261,557	1.0 %
Same property NOI margin*	60.8 %	62.4 %	(162) bps

For the nine months ended September 30,	2024	2023	Change
NOI	9,358,294	8,130,807	15.1 %
NOI margin	60.1 %	59.5 %	64 bps
FFO*	2,604,378	1,981,179	31.5 %
FFO per share - diluted*	0.14	0.12	18.3 %
FFO payout ratio*	21 %	25 %	(391) bps
Same property revenue*	11,267,707	10,735,787	5.0 %
Same property operating expenses*	4,474,440	4,366,831	2.5 %
Same property NOI*	6,793,267	6,368,956	6.7 %
Same property NOI margin*	60.3 %	59.3 %	97 bps

*Refer to section "Non-IFRS Financial Measures"

Occupancy:

As of September 30, 2024, the portfolio had an occupancy rate of 96.7%, reflecting a 170 basis point improvement from June 30, 2024, driven by increased occupancy across the Company's existing portfolio and the addition of highly occupied properties from the Devcore acquisition.

In New Brunswick, occupancy rose by 40 basis points from the previous quarter, reaching 95.5% as of September 30, 2024. This improvement reflects the impact of targeted initiatives aimed at enhancing the competitive positioning of the Company's two newly constructed properties, Calabria in Saint John and Northpoint in Moncton, which collectively represented approximately half of the Company's vacancies in the quarter.

Sale of 39 Pleasant:

NexLiving has entered into a firm agreement to sell its 35-suite property located at 39 Pleasant Street, Moncton, NB, for $5.8 million.

The property, a 3-storey wood-frame building constructed approximately 20 years ago, features an elevator and surface parking for residents. The sale price represents a 16% premium to the property's IFRS fair value as of June 30, 2024, and implies a 4.56% capitalization rate based on the trailing twelve months of operations as of September 30, 2024. The transaction also delivers an attractive 34% internal rate of return (IRR) on the Company's initial investment made in 2020.

NexLiving expects to receive approximately $2.5 million in cash proceeds after the repayment of the $3.3 million mortgage associated with the property. All conditions have been waived by the purchaser and the transaction is expected to close on or before December 13, 2024.

Fair Value of Investment Properties:

As of September 30, 2024, the Company's overall weighted average capitalization rate remained unchanged at 4.79%, consistent with December 31, 2023. The same property weighted average capitalization rate increased by 5 basis points during 2024 to 4.89%, reflecting higher capitalization rates applied in both New Brunswick and Ontario.

The fair value gain of $8.9 million for the three months and $9.3 million for the nine months ended September 30, 2024, reflects NOI growth realized during the period, as well as forecasted NOI improvements from anticipated rent increases and operating expense efficiencies.

Dividend:

The Company's board of directors has approved and declared a dividend of $0.01 per common share for the quarter ending December 31, 2024, representing $0.04 per share on an annualized basis. The dividend is payable on, or after December 27, 2024, to shareholders of record at the close of business on December 6, 2024.

About the Company

NexLiving continues to execute on its plan to acquire recently built or refurbished, highly leased multi-residential properties in bedroom communities across Canada. NexLiving aims to deliver exceptional living experiences to our residents and provide comfortable, affordable housing solutions that cater to a wide range of demographics. The properties offer a range of modern and updated suites, with a variety of amenities and features that allow residents to experience a hassle-free and maintenance-free lifestyle. NexLiving is committed to investing in its properties to ensure that they are modern and up to date. For its recently acquired properties in Ontario, the Company has undertaken a targeted value-add capital program to modernize and reposition the large existing suites. The Company currently owns 2,033 units in New Brunswick, Ontario and Quebec. NexLiving has also developed a robust pipeline of qualified properties for potential acquisition. By screening the properties identified to match the criteria set out by the Company (proximity to healthcare, amenities, services and recreation), management has assembled a significant pipeline of potential acquisitions for consideration by the Board.

For more information about NexLiving, please refer to our website at www.nexliving.ca and our public disclosure at www.sedarplus.ca.

Forward-Looking Statements

This news release forward-looking information within the meaning of applicable Canadian securities laws ("forward-looking statements"). All statements other than statements of historical fact are forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "projects", "estimates", "forecasts", "intends", "continues", "anticipates", or "does not anticipate" or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements contained in this news release include, but are not limited to, management's expectations of additional rental increases to come into effect by year end and the further enhancement of the Company's financial results. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. These forward-looking statements reflect the current expectations of the Company's management regarding future events and operating performance, but involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual events could differ materially from those projected herein and depend on a number of factors. These risks and uncertainties are more fully described in regulatory filings, which can be obtained on SEDAR at www.sedarplus.ca, under NexLiving's profile, as well as under Risk Factors section of the MD&A released on November 25, 2024. Although forward-looking statements contained in this new release are based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this new release speak only as of the date of this news release. Except as required by applicable securities laws, the Company does not undertake, and specifically disclaims, any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.

Non-IFRS Financial Measures

The Company prepares and releases unaudited consolidated interim financial statements and audited consolidated annual financial statements prepared in accordance with IFRS. In this and other earnings releases, as a complement to results provided in accordance with IFRS, NexLiving discloses financial measures not recognized under IFRS which do not have standard meanings prescribed by IFRS. These include FFO, FFO (cents per share) – diluted, FFO payout ratio, Debt to GBV and same-property metrics (collectively, the "Non-IFRS Measures"). These Non-IFRS Measures are further defined and discussed in the MD&A dated April 23, 2024, which should be read in conjunction with this news release. Since these measures are not recognized under IFRS, they may not be comparable to similar measures reported by other issuers. The Company presents the Non-IFRS measures because management believes these Non-IFRS measures are relevant measures of the ability of NexLiving to earn revenue and to evaluate its performance and cash flows. A reconciliation of these Non-IFRS measures is included in the MD&A dated November 25, 2024. The Non-IFRS measures should not be construed as alternatives to net income (loss) or cash flows from operating activities determined in accordance with IFRS as indicators of the Company's performance.

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 press release.

SOURCE NexLiving Communities Inc.

For further information please contact: Stavro Stathonikos, [email protected], 416-876-6617