Nexus REIT Announces Solid Q1 2019 Results, Annual Meeting Voting Results and June 2019 Distribution

TORONTO and MONTREAL, May 29, 2019 /CNW/ - Nexus Real Estate Investment Trust (the "REIT") (TSXV: NXR.UN) announced today its results for the quarter ended March 31, 2019, the annual meeting voting results and the declaration of the June 2019 distribution.

Highlights

• Net income for the quarter of $4,600,977, compared to $6,424,954 for the same quarter of the prior year; net income excluding fair value adjustments, Class B LP Unit distributions and other income for Q1 2019 was $5,376,609 as compared to $5,081,150 for Q1 2018.
• Property revenues increased to $14,386,438, as compared to $14,221,166 for Q4 2018 and $13,303,561 for Q1 2018.
• Normalized AFFO per unit for the quarter of $0.049 increased 5.6% as compared to Q1 2018 normalized AFFO per unit of $0.046.
• Normalized AFFO payout ratio for the quarter of 81.5% is down from 86.1% for same quarter of 2018.
• Conservative debt to total assets ratio of 51.8%.
• Management of the REIT will host a conference call on Thursday May 30^th at 1PM EST to review results and operations.

"The first quarter of 2019 was again, a consistently strong quarter for the REIT. Our 5-year history of completing acquisitions which are accretive to AFFO per unit has put us in a strong financial position with a payout ratio in the low 80% range." commented Kelly Hanczyk, the REIT's Chief Executive Officer. "Our most recent acquisition of a highly accretive Western Canada industrial portfolio combined with new leasing in the portfolio should further reduce our payout ratio over the next several quarters. Our conservative balance sheet and financial strength has and will allow us to provide unitholders with superior risk-adjusted returns."

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,
			2019	2018
Financial Results			$	$
Property revenue			14,386,438	13,303,561
Net operating income			8,936,821	7,929,927
Net income			4,600,977	6,424,954

		Three months ended March 31,
		2019	2018
Financial Highlights		$	$
Funds from operations (FFO) ^(1)		8,087,087	4,969,135
Normalized FFO ^(1) (4)		6,193,532	4,969,135
Adjusted funds from operations (AFFO) ^(1)		7,410,404	4,381,249
Normalized AFFO ^(1) (4)		5,516,849	4,381,249
Distributions declared ^(2)		4,494,971	3,773,105
Weighted average units outstanding – basic ^(3)		112,532,148	94,331,914
Weighted average units outstanding – diluted ^(3)		112,557,675	94,400,403
Distributions per unit, basic and diluted ^(2) (3)		0.040	0.040
FFO per unit, basic ^(1) (3)		0.072	0.053
Normalized FFO per unit, basic ^(1) (3) (4)		0.055	0.053
AFFO per unit, basic ^(1) (3)		0.066	0.046
Normalized AFFO per unit, basic ^(1) (3) (4)		0.049	0.046
Debt to total assets ratio		51.8%	53.7%

(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)	Normalized FFO and Normalized AFFO include a vendor rent obligation amount related to the Richmond Property which is settled in cash from the vendor of the Richmond Property until the property build out is complete and all tenants are occupying and paying rent. The vendor rent obligation amount is not included in NOI for IFRS accounting purposes. Normalized FFO and Normalized AFFO exclude amounts included in other income in the statement of income and comprehensive income.

Revenues and Results from Operations

Net operating income for the quarter of $8,936,821 was $1,006,894 higher than net operating income of $7,929,927 for the same quarter of 2018. Properties acquired in 2018 contributed approximately $938,000 in incremental net operating income in the quarter as compared to the same period of 2018. Partially offsetting the incremental operating income from acquisitions was a reduction of approximately $190,000 in net operating income related to the disposition of two properties in the second quarter of the year. Net operating income of the quarter was down $68,069 as compared to net operating income for the fourth quarter of $9,004,890, primarily due to higher percentage rents and construction and leasing fees in Q4 2018.

General and administrative expense for the quarter of $710,897 was $41,082 lower than general and administrative expense of $751,979 in the same quarter of the prior year primarily due lower salaries in the first quarter of 2019 resulting from organizational changes announced in Q1 2018.

In the three months ended March 31, 2019, the estimated vendor rent obligation related to the Richmond Property was reassessed in the context of anticipated delays in the completion of property improvements required before the commencement of certain leases and the total amount of additional vendor rent obligation expected to be collected from the Richmond Property vendor was estimated to be $2,523,625. This amount was recorded in other income.

Net income also includes fair value adjustments of investment properties, Class B LP Units, warrants and options in aggregate amount of $2,617,063.

Earnings Call

Management of the REIT will host a conference call at 1:00 PM Eastern Standard Time on Thursday May 30, 2019 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, 2019. 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 3290.

Annual Meeting Voting Results

Each of the matters set out in the REIT's management information circular dated April 23, 2019 (the "Circular") for the annual meeting of unitholders held on May 29, 2019 (the "Meeting") was approved by the requisite majority of unitholders.

Each of the trustee nominees listed in the Circular was elected as a trustee of the REIT. Voting results for the individual trustees are as follows:

Name of Nominee	Votes For	Votes Withheld
Bradley Cutsey	43,163,702 (99.84%)	69,645 (0.16%)
Mario Forgione	41,699,843 (96.45%)	1,533,504 (3.55%)
Kelly C. Hanczyk	43,194,934 (99.91%)	38,413 (0.09%)
Lorne Jacobson	43,063,685 (99.61%)	169,662 (0.39%)
Nick Lagopoulos	43,070,630 (99.62%)	162,717 (0.38%)
Ben Rodney	43,187,352 (99.89%)	45,995 (0.11%)

Final results on all matters considered at the Meeting are reported in the Report of Voting Results as filed on SEDAR (www.sedar.com).

June Distribution

The REIT announced today that it will make a cash distribution in the amount of $0.01333 per unit, representing $0.16 per unit on an annualized basis, payable July 15, 2019 to unitholders of record as of June 28, 2019.

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 70 properties comprising approximately 3.8 million square feet of rentable area. The REIT has approximately 101,521,000 units issued and outstanding. Additionally, there are Class B LP units of subsidiary limited partnerships of Nexus REIT issued and outstanding, which are convertible into approximately 18,236,000 REIT units.

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]

Related Links

http://www.nexusreit.com/index.aspx