NEXUS REIT continues to deliver on all operating metrics with strong growth in AFFO/unit quarter over quarter

TORONTO and MONTREAL, Nov. 28, 2017 /CNW/ - NEXUS Real Estate Investment Trust (the "REIT") (TSXV: NXR.UN) announced today its results for the three and nine months ended September 30, 2017 and the declaration of the December 2017 distribution.

Highlights

• Completed $147 million acquisition of interests in 26 properties comprising 1,531,574 square feet of gross leasable area (the Sandalwood Acquisition).
• Property revenue increased $9,113,861 or 235%, and net operating income increased $5,234,105 or 165% as compared to the same quarter of the previous year primarily as a result of the Sandalwood and Nobel acquisitions; up $6,139,461 or 90% and $3,192,832 or 61%, respectively as compared to the Q2 2017.
• AFFO per unit for the quarter of $0.052 is 9.2% higher than AFFO per unit of the previous quarter of $0.048 (5.8% higher when removing a lease termination fee received in the quarter).
• AFFO Payout ratio for the quarter decreased to 77% from the prior quarter normalized payout ratio of 84%.
• Management of the REIT will host a conference call on Wednesday November 29^th at 1PM EST to review results and operations.

"As mentioned last quarter, the completion of the Sandalwood acquisition has delivered strong accretive growth and has partnered us with a very skilled and dedicated team in our co-owner, Sandalwood Management," stated Kelly Hanczyk, the REIT's Co-Chief Executive Officer. "Management and board alignment has resulted in a disciplined approach to growth, completing acquisitions that continue to provide an increase in our AFFO/unit."

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 September 30,		Nine months ended September 30,
		2017	2016	2017	2016
Financial Results		$	$	$	$
Property revenue		12,996,361	3,882,500	23,863,397	11,417,969
Net operating income		8,426,074	3,191,969	16,978,302	9,480,771
Net income		3,359,029	1,864,454	3,385,877	4,784,012
Net income excluding transaction costs, fair value
	adjustments, and bargain purchase gain	5,708,722	1,740,474	10,436,621	5,381,660

	Three months ended September 30,		Nine months ended September 30,
	2017	2016	2017	2016
Financial Highlights	$	$	$	$
FFO ^(1)	5,633,080	1,965,936	10,713,012	6,057,121
Normalized FFO ^(1) (4)	5,483,080	1,965,936	10,563,012	5,800,593
AFFO ^(1)	4,885,216	1,835,460	9,619,687	5,680,535
Normalized AFFO ^(1) (4)	4,885,216	1,835,460	9,619,687	5,424,007
Distributions declared ^(2)	3,764,086	1,645,203	8,434,583	4,854,085
Weighted average units outstanding - basic ^(3)	94,049,376	40,846,738	65,392,717	40,333,633
Weighted average units outstanding - diluted ^(3)	94,124,232	40,846,738	65,482,473	40,333,633
Distributions per unit, basic and diluted ^(2) (3)	0.040	0.040	0.129	0.120
FFO per unit, basic and diluted ^(1) (3)	0.060	0.048	0.164	0.150
Normalized FFO per unit, basic ^(1) (3) (4)	0.058	0.048	0.164	0.144
AFFO per unit, basic and diluted ^(1) (3)	0.052	0.045	0.147	0.141
Normalized AFFO per unit, basic and diluted ^(1) (3) (4)	0.052	0.045	0.147	0.134
Normalized AFFO payout ratio, basic^(1) (2) (4) (5)	77.1%	89.6%	87.7%	89.5%
Debt to total assets ratio	54.8%	50.4%	54.8%	50.4%

(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)				For the nine months ended September 30, 2016, FFO and AFFO include $256,528 of other income relating to the release in the first quarter of 2016 of funds previously held in an environmental escrow in connection with the acquisition of ten industrial properties on January 14, 2014. This is a one-time item which is excluded from normalized FFO and normalized AFFO for the three months ended March 31, 2016.
(5)				Excluding a termination fee received in the quarter, the AFFO payout ratio is 79.5%.

Revenues and Results from Operations in Line with Expectations

NOI and AFFO in the quarter increased due to the accretive acquisition of a portfolio of 26 properties.  Included in the quarter's results is a termination payment received in the amount of $150,000. The early termination allowed the REIT to expand the GLA of a neighbouring tenant into part of the terminated space and to early renew and extend their lease. While many of the REIT's leases are triple net, NOI in the quarter was seasonally strong, with no heating or snow removal costs incurred in the quarter.

Interest expense increased in the quarter with the assumption of debt with a principal amount outstanding of approximately $75,712,000 in connection with the Sandalwood Acquisition and $8,500,000 of new mortgage financing placed against one of the acquisition properties.

Net income was impacted by fair value adjustments (expenses) totaling $2,349,693 in the quarter, partially offset by the REIT's share of net earnings in its joint venture of $237,101, which joint venture earnings include fair value adjustment gains of $321,859. Net of these fair value gains, the REIT's share of the net earnings in the joint venture was a loss of $84,758.

Earnings Call

Management of the REIT will host a conference call at 1:00 PM Eastern Standard Time on Wednesday November 29, 2017 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 December 29, 2017. 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 1858.

December 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 January 15, 2018 to unitholders of record as of December 29, 2017.

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 62 properties comprising approximately 3.5 million square feet of rentable area. The REIT has approximately 88,198,584 units issued and outstanding. Additionally, there are approximately 6,006,065 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, co-CEO at [phone]; Jean Teasdale, co-CEO at [phone]; or Rob Chiasson, CFO at [phone].