Starlight U.S. Multi-Family (No. 3) Core Fund Announces Strong 2016 First Quarter Results

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TORONTO, May 25, 2016 /CNW/ - Starlight U.S. Multi-Family (No. 3) Core Fund (TSX.V: SUS.A, SUS.U) (the "Fund") today announced its results of operations and financial condition for the three months ended March 31, 2016 (the "First Quarter"). All amounts in this news release are in thousands of United States dollars and include the Fund's share of revenues, expenses, assets and liabilities in its joint venture interests in The Villages at Sunset Ridge, Belle Haven Apartments and Sorelle Apartments.

First Quarter Highlights

• Same property rents increased to $1,133 during the First Quarter from $1,090 during the first quarter of 2015 representing an increase of 3.9% and have increased by 4.1% on an annualized basis since the Fund's inception.
• Portfolio occupancy was 92.4% during the First Quarter, compared to 93.1% during the same period last year, and is within the Fund's targeted occupancy range.
• Same property revenue growth was 3.2% compared to the first quarter in 2015.
• Net operating income ("NOI") for the First Quarter at $2,878 was $841 or 41.3% higher than the same period last year.
• Same property NOI growth during the First Quarter was $140 or 7.0% higher than the same period last year.
• Adjusted funds from operations ("AFFO") per unit increased by 35% to $0.27 reflecting strong same property NOI growth and contributions from acquired joint venture interests.
• AFFO payout ratio was a conservative 50.2% for the First Quarter and significantly reduced from 72.4% during the first quarter of 2015.
• Interest coverage ratio and indebtedness coverage ratio for the First Quarter were 2.60 times.
• The Fund's weighted average mortgage interest rate was 2.43% as at March 31, 2016 and the weighted average term to maturity was 5.07 years.
• Indebtedness to gross book value was 67.4% and within the Fund's targeted range of 60-70%.

Operating Results

Property revenue for the First Quarter increased by $1,272 or 31.1%, to $5,368 when compared to the first quarter of 2015. NOI increased by $822 or 40% to $2,878 compared to the first quarter 2015. Same property revenue and NOI growth was 3.2% and 7.0%, respectively.

Portfolio occupancy was 92.4% during the First Quarter compared to 93.1% during the first quarter of 2015 and within the Fund's targeted occupancy range. Same property rents grew by 3.9% to $1,133 compared to the first quarter of 2015, and have increased by 4.1% on annualized basis since the Fund's inception.

Financial Position

As at March 31, 2016, the Fund's gross book value was $218.6 million and indebtedness was $147.4 million or 67.4% of gross book value, which was within the Fund's targeted range of 60%-70%. The interest coverage ratio and indebtedness coverage ratio for the First Quarter was 2.60 times, down slightly from the previous quarter of 2.85 times due to an increase in the U.S. 30 day LIBOR rate being partly offset by NOI growth. The weighted average interest rate on the Fund's mortgage portfolio increased to 2.43% in the First Quarter, compared to 2.27% as of December 31, 2015. The weighted average term to maturity on mortgages was 5.07 years. The Fund repaid $910 of its share of the mezzanine loan associated with its joint venture interest in Sorelle Apartments on January 19, 2016 and realized a foreign exchange gain of $129 in connection with the repayment.

Subsequent Events

On April 18, 2016, the Fund repaid $325 of its share of the mezzanine loan associated with its joint venture in Belle Haven. The repayment lowered the Fund's weighted average interest rate on all loans payable to 2.76%.

About Starlight U.S. Multi-Family (No. 3) Core Fund

The Fund is a limited partnership formed under the Limited Partnerships Act (Ontario) for the primary purpose of indirectly acquiring, owning and operating a portfolio of diversified income producing rental properties in the U.S. multi-family real estate market.

For complete consolidated financial statements and management's discussion and analysis for the period, and any other information relating to the Fund, please visit www.sedar.com. Further details regarding the Fund's unit performance and distributions, market conditions where the Fund's properties are located, performance by the Fund's properties and a capital investment update are also available in the Fund's May 2016 Newsletter which is available on the Fund's profile at www.starlightus.com.

Non-IFRS Financial Measures

Certain terms used in this news release including NOI, AFFO, gross book value, indebtedness, interest coverage ratio and indebtedness coverage ratio are not measures defined under International Financial Reporting Standards ("IFRS") as prescribed by the International Accounting Standard Board. Details on non-IFRS financial measures are set out in the Fund's management's discussion and analysis for the period available on the Fund's profile at www.sedar.com.

Neither the 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 Starlight U.S. Multi-Family (No. 3) Core Fund

To learn more about Starlight U.S. Multi-Family (No. 3) Core Fund, visit www.starlightus.com or contact: Evan Kirsh, President, Starlight U.S. Multi-Family (No. 3) Core Fund, 647-725-0417, [email protected]; Martin Liddell, Chief Financial Officer, Starlight U.S. Multi-Family (No. 3) Core Fund, 647-729-2588, [email protected]