Nexus REIT Announces Q1 2018 Results, Acquisitions Update and June 2018 Distribution

TORONTO and MONTREAL, May 30, 2018 /CNW/ - Nexus Real Estate Investment Trust (the "REIT") (TSXV: NXR.UN) announced today its results for the first quarter ended March 31, 2018 and the declaration of the June 2018 distribution.

Highlights

• Q1 2018 net income of $6,424,954, compared to 2017 Q1 net income of $13,289.
• AFFO per unit of $0.046 for Q1 2018 increased 4.9% as compared to Q1 2017 AFFO per unit of $0.044.
• AFFO payout ratio for Q1 2018 of 86.2% is down from 90.5% for the same quarter of 2017.
• Completed the $57.4 million acquisition of a property in Richmond, BC subsequent to the quarter end.
• Waived conditions on two industrial property acquisitions subsequent to quarter end: a $12.3 million acquisition in Nisku, Alberta and a $6.3 million acquisition in Regina, Saskatchewan.
• Three vendors will take a total of $27.9 million in units valued at $2.10 as partial purchase price consideration for the acquisitions.
• Completed the sale of a former REIT property in Kelowna, BC for $10.0 million as part of the Richmond transaction, and completed the sale of a non-core property in Yellowknife, NWT for $1.3 million in April.
• Management of the REIT will host a conference call on Thursday May 31^st at 1PM EST to review results and operations.

"2018 has been a year of growth for the REIT, with three acquisitions expected to close in the second quarter and due diligence continuing on other deals. We will have increased our market capitalization by $27.9 million by the end of the second quarter, issuing units to vendors at a premium to current trading values, and we continue to see attractive acquisition opportunities which would be accretive to our AFFO per unit. We expect to complete several additional acquisitions in the coming months." commented Kelly Hanczyk, the REIT's Chief Executive Officer. "Phase two of the repurposing of the recently acquired Richmond, BC asset is currently being planned and is expected to provide the REIT with significant value creation in near future."

Summary of Results

Included in the tables that follow and elsewhere in this news release are non-IFRS measures that should not be construed as an alternative to net income / loss, cash from operating activities or other measures of financial performance calculated in accordance with IFRS, and may not be comparable to similar measures as reported by other issuers. Readers are encouraged to refer to the REIT's MD&A for further discussion of the non-IFRS measures presented.

	Three months ended March 31,
	2018	2017
Financial Results	$	$
Property revenue	13,303,561	4,010,136
Net operating income	7,929,927	3,318,986
Net income	6,424,954	13,289
Net income excluding transaction costs and fair value adjustments	4,862,428	1,778,830
	Three months ended March 31,
	2018	2017
Financial Highlights	$	$
FFO ^(1) (4)	4,965,253	1,981,966
AFFO ^(1) (4)	4,377,367	1,853,447
Distributions declared (2)	3,773,105	1,677,645
Weighted average units outstanding - basic ^(3)	94,331,914	41,886,354
Weighted average units outstanding - diluted ^(3)	94,400,403	41,901,070
Distributions per unit, basic and diluted ^(2) (3)	0.040	0.040
FFO per unit, basic and diluted ^(1) (3) (4)	0.053	0.047
AFFO per unit, basic and diluted ^(1) (3) (4)	0.046	0.044
AFFO payout ratio, basic ^(1) (2) (4)	86.2%	90.5%
Debt to total assets ratio	53.7%	48.1%

(1)	Non-IFRS Measure
(2)	Includes distributions payable to holders of Class B LP Units which are accounted for as interest expense in the consolidated financial statements.
(3)	Weighted average number of units includes the Class B LP Units.
(4)	2017 comparative figures have been restated to conform with revisions made to the Real Property Association of Canada Whitepaper definition of FFO and AFFO in February 2018 which have been adopted in the current quarter.

Revenues and Results from Operations

Q1 2018 revenue and net operating income were up significantly as compared to Q1 2017 primarily due to the impact of the Nobel and Sandalwood transactions completed April 3, 2017 and July 7, 2017, respectively.    

Q1 2018 property revenue of $13,303,561 was $167,875 higher than property revenue of $13,135,686 as reported for Q4 2017. Net operating income of $7,929,927 for Q1 2018 was $231,339 or 2.8% lower than net operating income of $8,161,266 reported for the Q4 2017, primarily due to seasonality, with higher utilities and snow removal costs in Q1 2018 and lower percentage rents; sales thresholds for percentage rents are typically achieved in the fourth quarter of the year.

General and administrative expense for the quarter of $751,979 was $235,491 lower than Q4 2017 general and administrative expense of $987,470 primarily due to full year 2017 bonuses being expensed in Q4 2017, as compared to one quarter's bonuses accrued in the quarter ended March 31, 2018.

Earnings Call

Management of the REIT will host a conference call at 1:00 PM Eastern Standard Time on Thursday May 31, 2018 to review the financial results and operations. To participate in the conference call, please dial 416-915-3239 or 1-800-319-4610 (toll free in Canada and the US) at least five minutes prior to the start time and ask to join the Nexus REIT conference call.

A recording of the conference call will be available until June 30, 2018. To access the recording, please dial 604-674-8052 or 1-855-669-9658 (toll free in Canada and the US) and enter access code 2227.

June Distribution

The REIT will make a cash distribution in the amount of $0.01333 per unit, representing $0.16 per unit on an annualized basis, payable July 16, 2018 to unitholders of record as of June 29, 2018.

The REIT's current distribution per unit continues to be $0.01333 per month. The REIT's distribution reinvestment program ("DRIP") entitles eligible unitholders to elect to receive all, or a portion of the cash distributions of the REIT reinvested in units of the REIT. Eligible unitholders who so elect will receive a bonus distribution of units equal to 4% of each distribution that was reinvested by them under the DRIP.

About Nexus REIT

Nexus is a growth oriented real estate investment trust focused on increasing unitholder value through the acquisition, ownership and management of industrial, office and retail properties located in primary and secondary markets in North America. The REIT currently owns a portfolio of 61 properties comprising approximately 3.7 million square feet of rentable area. The REIT has approximately 89,021,840 units issued and outstanding. Additionally, there are approximately 15,100,942 Class B LP units of subsidiary limited partnerships of the REIT issued and outstanding.

Forward Looking Statements

Certain statements contained in this news release constitute forward-looking statements which reflect the REIT's current expectations and projections about future results. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the REIT to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Such forward-looking statements are based on a number of assumptions that may prove to be incorrect.

While the REIT anticipates that subsequent events and developments may cause its views to change, the REIT specifically disclaims any obligation to update these forward-looking statements except as required by applicable law. These forward-looking statements should not be relied upon as representing the REIT's views as of any date subsequent to the date of this news release. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The factors identified above are not intended to represent a complete list of the factors that could affect the REIT.

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

SOURCE Nexus Real Estate Investment Trust

Kelly C. Hanczyk, CEO at [phone] or Rob Chiasson, CFO at [phone].