Positive leasing momentum continued with
15.9% average rent increase on renewals during Q2
301,800 sq ft leased/renewed with a
weighted average lease term of 4.7 years including 84% government
and credit rated tenants
/NOT FOR DISTRIBUTION IN THE U.S. OR OVER U.S.
NEWSWIRES/
This news release constitutes a "designated news
release" for the purposes of the REIT's prospectus supplement dated
April 21, 2022 to its short form base
shelf prospectus dated February 17,
2022.
TORONTO, Aug. 3, 2023
/CNW/ - True North Commercial Real Estate Investment Trust (TSX:
TNT.UN) (the "REIT") today announced its financial results for the
three and six months ended June 30, 2023.
"Positive leasing momentum continued during the quarter which
highlighted our commitment to maintaining strong relationships with
our tenants while continuing to focus on our strategic initiative
of strengthening the REIT's financial and liquidity position with
the sale of 360 Laurier Avenue West in Ottawa, Ontario in July," stated Daniel Drimmer, the REIT's Chief Executive
Officer.
Second Quarter 2023 Highlights
- Contractually leased and renewed approximately 301,800 square
feet with a weighted average lease term of 4.7 years and a 15.9%
increase over expiring base rents.
- Portfolio occupancy of 93% with an average remaining lease term
of 4.5 years (89% and 4.4 years including investment properties
held for sale).
- Revenue and net operating income ("NOI") decreased 7% and
15%, respectively, compared to Q2-2022 driven by lower same
property NOI ("Same Property NOI"). Excluding termination income
and investment properties held for sale, revenue and NOI decreased
2% and 6%, respectively, compared to Q2-2022.
- During 2022, the REIT received termination income from one
tenant at 6925 Century Avenue, Mississauga, Ontario that downsized a portion
of their space effective Q4-2022. To date, 60% of this vacancy has
been contractually re-leased with rents commencing in the latter
half of 2023. Q2-2023 FFO and AFFO basic and diluted per Unit
decreased $0.05 to $0.11 which is consistent and in line with
Q1-2023. Excluding termination fees, Q2-2023 FFO and AFFO basic and
diluted per Unit ("Unit") were lower by $0.02 compared to Q2-2022.
- Same Property NOI decreased 2.6% excluding investment
properties held for sale and termination fees. Excluding investment
properties held for sale only, Q2-2023 Same Property NOI decreased
11.2% as a result of the significant termination fee income
recorded in the prior year period.
- $51.9 million of Available Funds
at the end of Q2-2023.
- Commenced a normal course issuer bid (the "NCIB") that became
effective from April 18, 2023 and
will remain in place until the earlier of April 17, 2024 or the date on which the REIT has
purchased the maximum number of Units permitted. During the six
months ended June 30, 2023, the REIT
repurchased 124,900 Units for $0.3
million under the NCIB.
- Suspension of the dividend reinvestment plan, as a result all
Unitholders received distributions in cash effective with the
distribution paid on April 17, 2023
to Unitholders of record on March 31,
2023.
YTD Highlights
- Completed the sale of 400 Carlingview Drive, Toronto, Ontario (the "Carlingview Property")
on March 10, 2023 for a sale price of
$7.25 million.
- Contractually leased and renewed approximately 425,900 square
feet with a weighted average lease term of 4.5 years and a 12.2%
increase over expiring base rents.
- 50% reduction to the monthly cash dividend from $0.0495 per Unit to $0.02475 per Unit or $0.297 per Unit on an annualized basis
("Distribution Reduction"). The new declared distribution was paid
on April 17, 2023 to Unitholders of
record on March 31, 2023. The
Distribution Reduction is expected to provide an additional
$25 million in cash annually that
will be used to improve the REIT's capital profile.
- Effective June 30, 2023,
Tracy Sherren, the REIT's President
and Chief Financial Officer and President, Canadian Commercial,
Starlight Investments, retired from her executive positions at the
REIT and Starlight Investments. Ms. Sherren will remain as a
trustee of the REIT. Martin Liddell,
the current Chief Financial Officer at Starlight, was appointed as
Chief Financial Officer of the REIT in addition to his positions at
Starlight.
Subsequent Events
- On July 10, 2023, the REIT
completed the sale of 360 Laurier Avenue West, Ottawa, Ontario ("the Laurier Property")
totaling 107,100 square feet, for a sale price of $17.5 million.
- On July 31, 2023, the REIT
disposed of 32071 South Fraser Way, Abbotsford, BC (the "Abbotsford Property")
totaling 52,300 square feet, for a sale price of $24.0 million.
- On July 31, 2023, the Credit
Facility was amended to remove the temporary increase of
$8 million due to the completion of
the sale of the Abbotsford Property. The two tranches of the Credit
Facility were also amended to increase the secured portion from
$30 million to $35 million and decrease the unsecured portion
from $30 million to $25 million.
- The REIT refinanced $36.5 million
of mortgages with a weighted average fixed interest rate of 6.05%
for five and seven-year terms.
The REIT's presentation currency is the Canadian dollar. Unless
otherwise stated, dollar amounts expressed in this press release
are in thousands of dollars.
Key Performance Indicators
|
Three months ended
|
Six months ended
|
|
June 30
|
June 30
|
|
2023
|
2022
|
2023
|
2022
|
Number of
properties
|
|
|
46
|
46
|
Portfolio
GLA
|
|
|
4,951,400 sf
|
4,801,100 sf
|
Occupancy
(1)
|
|
|
93 %
|
96 %
|
Remaining weighted
average lease term (1)
|
|
|
4.5 years
|
4.3 years
|
Revenue from
government and credit rated tenants
|
|
79 %
|
76 %
|
Revenue
|
$
32,690
|
$
35,120
|
$ 66,548
|
$
71,447
|
NOI
(2)
|
18,482
|
21,685
|
37,120
|
43,879
|
Net income and
comprehensive income
|
793
|
15,482
|
7,788
|
16,241
|
Same Property NOI
(2)
|
20,532
|
23,750
|
40,569
|
47,784
|
FFO
(2)
|
$
10,676
|
$
14,423
|
$
21,419
|
$ 29,199
|
FFO per Unit - basic
(2)
|
0.11
|
0.16
|
0.23
|
0.32
|
FFO per Unit - diluted
(2)
|
0.11
|
0.16
|
0.23
|
0.32
|
AFFO
(2)
|
$
10,466
|
$
14,341
|
$ 21,047
|
$ 28,958
|
AFFO per Unit - basic
(2)
|
0.11
|
0.16
|
0.22
|
0.31
|
AFFO per Unit -
diluted (2)
|
0.11
|
0.16
|
0.22
|
0.31
|
AFFO payout ratio -
diluted (2)
|
67 %
|
96 %
|
89 %
|
95 %
|
Distributions
declared
|
$
7,024
|
$
13,720
|
$
18,719
|
$ 27,400
|
(1)
Excludes investment properties held for sale.
(2) This is a non-IFRS financial measure, refer to
"Non-IFRS Financial Measures".
|
Operating Results
Revenue and NOI decreased 7% and 15%, respectively, in Q2-2023
and YTD-2023 when compared to the same periods in 2022. The
decrease in revenue and NOI was largely a result of the decrease in
termination income and lower revenue from a tenant in the REIT's
greater Toronto area portfolio
that downsized a portion of their space effective Q4-2022, combined
with a 101,200 square foot lease expiry in Q1-2023 at the Laurier
Property and 115,000 square foot lease expiry in Q2-2023 at 3650
Victoria Park Avenue, Toronto,
Ontario (the "Victoria Park Property"), together with the
disposition in Q1-2023 (the "Primary Variance Drivers"). This
decrease was partially offset by termination income received from
the tenant at the Carlingview Property and NOI from an acquisition
completed in Q3-2022.
Excluding termination income and investment properties held for
sale, revenue and NOI decreased 2% and 6%, respectively, in Q2-2023
and 3% and 8%, respectively, in YTD-2023.
Q2 2023 FFO and AFFO decreased $3,747 (YTD 2023 - $7,780), and $3,875
(YTD 2023 - $7,911), respectively
compared to the same period in 2022. FFO and AFFO were negatively
impacted by the Primary Variance Drivers, combined with higher
financing costs as a result of higher interest rates on mortgage
refinancings and higher interest expense on the Credit Facility.
FFO and AFFO benefited from NOI on the acquisition completed in
Q3-2022 and termination income.
Q2-2023 FFO and AFFO basic and diluted per Unit decreased
$0.05 to $0.11. YTD-2023 FFO basic and diluted per
Unit decreased $0.09 to $0.23 and AFFO basic and diluted per Unit
decreased $0.09 to $0.22 compared to YTD-2022. Excluding termination
fees, Q2-2023 FFO and AFFO basic and diluted per Unit were lower by
$0.02 and YTD-2023 FFO and AFFO basic
and diluted per unit were lower by $0.05 compared to the same period in 2022.
Same Property NOI(1)
|
As at June 30
|
|
|
Occupancy
(2)
|
2023
|
2022
|
|
NOI
|
Q2
2023
|
Q2
2022
|
|
Variance
|
Variance
%
|
|
|
|
|
|
|
|
|
|
|
Alberta
|
94.4 %
|
95.7 %
|
|
Alberta
|
$ 3,537
|
$ 3,475
|
|
$
62
|
1.8 %
|
British
Columbia
|
100.0 %
|
98.7 %
|
|
British
Columbia
|
1,270
|
1,274
|
|
(4)
|
(0.3) %
|
New
Brunswick
|
85.0 %
|
83.8 %
|
|
New
Brunswick
|
1,359
|
1,000
|
|
359
|
35.9 %
|
Nova Scotia
|
96.2 %
|
96.9 %
|
|
Nova Scotia
|
1,811
|
1,719
|
|
92
|
5.4 %
|
Ontario
|
93.3 %
|
96.5 %
|
|
Ontario
|
11,884
|
14,907
|
|
(3,023)
|
(20.3) %
|
Total
|
93.2 %
|
95.2 %
|
|
|
$ 19,861
|
$
22,375
|
|
$
(2,514)
|
(11.2) %
|
Q2-2023 Same Property NOI decreased 2.6% (YTD-2023 - 4.6%)
excluding termination fees and investment properties held for
sale. Excluding investment properties held for sale only,
Q2-2023 Same Property NOI decreased 11.2% (YTD-2023 - 13.3%) as a
result of the significant termination fee income recorded in the
prior year periods.
Despite a decrease in occupancy, Alberta Same Property NOI was
positively impacted by contractual rent increases and a new lease
that commenced in Q1-2023. New Brunswick Same Property NOI
increased as a result of a new lease that commenced in June 2023 coupled with 141,000 square feet of
government renewals across three properties at higher rental rates
which were retroactive to Q4-2022. Same Property NOI in
Nova Scotia increased due to new
leases that commenced in the second half of 2022 offset by certain
tenants that downsized on renewal.
Ontario Same Property NOI decreased mainly due to termination
fees received in Q2-2022 relating to a tenant in the REIT's GTA
portfolio that downsized a portion of their space effective
December 2022, of which 60% has been
contractually re-leased with rents commencing in the latter half of
2023. The decrease in NOI generated from investment properties held
for sale was due to the lead tenant vacating the Laurier Property
and Victoria Park Property on expiry.
(1) This is
a non-IFRS financial measure. Refer to the Non-IFRS financial
measures section below.
(2 )Excludes investment properties held for
sale.
|
Debt and Liquidity
|
June 30,
2023
|
December 31,
2022
|
|
|
|
Indebtedness to GBV
ratio (1)
|
60.2 %
|
59.3 %
|
Interest coverage
ratio (1)
|
2.62 x
|
3.00 x
|
Indebtedness
(1) - weighted average fixed interest rate
|
3.64 %
|
3.54 %
|
Indebtedness
(1) - weighted average term to maturity
|
2.89 years
|
3.27 years
|
At the end of Q2-2023, the REIT had access to Available Funds of
approximately $51,927, and a weighted
average term to maturity of 2.89 years in its mortgage portfolio
with a weighted average fixed interest rate of 3.64%. During the
first quarter, the REIT refinanced a total of $31,121 of mortgages, one with a fixed interest
rate of 4.83% (five-year term) and one with a variable interest
rate at prime plus 1.5% (one-year term), providing the REIT with
additional liquidity of approximately $5,700.
Subsequent to quarter end, the REIT refinanced $36,452 of mortgages with a weighted average
fixed interest rate of 6.05% for five and seven-year terms.
About the REIT
The REIT is an unincorporated, open-ended real estate investment
trust established under the laws of the Province of Ontario. The REIT currently owns and operates
a portfolio of 44 commercial properties consisting of approximately
4.8 million square feet in urban and select strategic secondary
markets across Canada focusing on
long term leases with government and credit rated tenants.
The REIT is focused on growing its portfolio principally through
acquisitions across Canada and
such other jurisdictions where opportunities exist. Additional
information concerning the REIT is available at www.sedarplus.ca or
the REIT's website at www.truenorthreit.com.
Non-IFRS measures
Certain terms used in this press release such as FFO, AFFO, FFO
and AFFO payout ratios, NOI, Same Property NOI, indebtedness
("Indebtedness"), gross book value ("GBV"), Indebtedness to GBV
ratio, net earnings before interest, tax, depreciation and
amortization and fair value gain (loss) on financial instruments
and investment properties ("Adjusted EBITDA"), interest coverage
ratio and Available Funds are not measures defined by International
Financial Reporting Standards ("IFRS") as prescribed by the
International Accounting Standards Board, do not have standardized
meanings prescribed by IFRS and should not be compared to or
construed as alternatives to profit/loss, cash flow from operating
activities or other measures of financial performance calculated in
accordance with IFRS. FFO, AFFO, FFO and AFFO payout ratios,
NOI, Same Property NOI, Indebtedness, GBV, Indebtedness to GBV
ratio, Adjusted EBITDA, interest coverage ratio, adjusted cash
provided by operating activities and Available Funds as computed by
the REIT may not be comparable to similar measures presented by
other issuers. The REIT uses these measures to better assess the
REIT's underlying performance and provides these additional
measures so that investors may do the same. Details on
non-IFRS measures are set out in the REIT's Management's Discussion
and Analysis for the three and six months ended June 30, 2023
("MD&A") and the Annual Information Form ("AIF") are available
on the REIT's profile at www.sedarplus.ca.
(1) This is
a non-IFRS financial measure. Refer to the Non-IFRS financial
measures section below.
|
Reconciliation of Non-IFRS financial measures
The following tables reconcile the non-IFRS financial measures
to the comparable IFRS measures for the three and six months ended
June 30, 2023 and 2022. These non-IFRS financial measures do
not have any standardized meanings prescribed by IFRS and may not
be comparable to similar measures presented by other issuers.
NOI
The following table calculates the REIT's net operating income,
a non-IFRS financial measure:
|
Three months ended
June 30
|
|
Six
months ended
June
30
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue
|
$
|
32,690
|
$
|
35,120
|
$
|
66,548
|
$
|
71,447
|
Expenses:
|
|
|
|
|
|
|
|
|
Property operating
costs
|
|
(9,194)
|
|
(8,451)
|
|
(19,101)
|
|
(17,522)
|
Realty
taxes
|
|
(5,014)
|
|
(4,984)
|
|
(10,327)
|
|
(10,046)
|
NOI
|
$
|
18,482
|
$
|
21,685
|
$
|
37,120
|
$
|
43,879
|
Same Property NOI
Same Property NOI is measured as the net operating income for
the properties owned and operated by the REIT for the current and
comparative period. The following table reconciles the REIT's Same
Property NOI to NOI:
|
Three months
ended
June 30
|
Six months
ended
June
30
|
|
|
2023
|
|
2022
|
2023
|
|
2022
|
Number of
properties
|
|
45
|
|
45
|
45
|
|
45
|
Revenue
|
$
|
31,627
|
$
|
34,954
|
63,916
|
$
|
71,106
|
Expenses:
|
|
|
|
|
|
|
|
Property
operating
|
|
(8,897)
|
|
(8,415)
|
(18,444)
|
|
(17,438)
|
Realty
taxes
|
|
(4,835)
|
|
(4,961)
|
(9,955)
|
|
(10,001)
|
|
$
|
17,895
|
$
|
21,578
|
35,517
|
$
|
43,667
|
Add:
|
|
|
|
|
|
|
|
Amortization of
leasing costs and tenant inducements
|
|
2,269
|
|
1,594
|
4,297
|
|
3,159
|
Straight-line
rent
|
|
368
|
|
578
|
755
|
|
958
|
Same Property
NOI
|
$
|
20,532
|
$
|
23,750
|
40,569
|
$
|
47,784
|
|
|
|
|
|
|
|
|
Less: Investment
properties held for sale
|
|
671
|
|
1,375
|
1,611
|
|
2,824
|
Same Property NOI
excluding investment properties held for sale
|
|
19,861
|
|
22,375
|
38,958
|
|
44,960
|
|
|
|
|
|
|
|
|
Reconciliation to
condensed consolidated interim financial statements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions and
dispositions
|
|
640
|
|
1,497
|
1,985
|
|
3,063
|
Amortization of
leasing costs and tenant inducements
|
|
(2,270)
|
|
(1,610)
|
(4,307)
|
|
(3,188)
|
Straight-line
rent
|
|
251
|
|
(577)
|
484
|
|
(956)
|
NOI
|
$
|
18,482
|
$
|
21,685
|
37,120
|
$
|
43,879
|
FFO and AFFO
The following table reconciles the REIT's FFO and AFFO to net
income and comprehensive income, for the three and six months ended
June 30, 2023 and 2022:
|
Three months
ended
June
30
|
Six months
ended
June
30
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income and
comprehensive income
|
$
|
793
|
$
|
15,482
|
$
|
7,788
|
$
|
30,391
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
Fair value adjustment
of Unit-based compensation
|
|
(133)
|
|
(358)
|
|
(432)
|
|
(482)
|
Fair value adjustment
of investment properties
|
|
11,832
|
|
1,610
|
|
18,304
|
|
3,280
|
Fair value adjustment
of Class B LP Units
|
|
(2,734)
|
|
(2,661)
|
|
(8,595)
|
|
(3,416)
|
Transaction costs on
sale of investment property
|
|
—
|
|
—
|
|
244
|
|
—
|
Distributions on Class
B LP Units
|
|
185
|
|
449
|
|
498
|
|
898
|
Unrealized gain on
change in fair value of derivative instruments
|
|
(1,537)
|
|
(1,709)
|
|
(695)
|
|
(4,660)
|
Amortization of
leasing costs and tenant inducements
|
|
2,270
|
|
1,610
|
|
4,307
|
|
3,188
|
FFO
|
$
|
10,676
|
$
|
14,423
|
$
|
21,419
|
$
|
29,199
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
Unit-based
compensation expense
|
|
164
|
|
183
|
|
332
|
|
448
|
Amortization of
financing costs
|
|
362
|
|
352
|
|
742
|
|
728
|
Rent
Supplement
|
|
742
|
|
—
|
|
1,485
|
|
—
|
Amortization of
mortgage discounts
|
|
(8)
|
|
(12)
|
|
(17)
|
|
(25)
|
Instalment note
receipts
|
|
14
|
|
15
|
|
28
|
|
32
|
Straight-line
rent
|
|
(251)
|
|
577
|
|
(484)
|
|
956
|
Capital
reserve
|
|
(1,233)
|
|
(1,197)
|
|
(2,458)
|
|
(2,380)
|
AFFO
|
$
|
10,466
|
$
|
14,341
|
$
|
21,047
|
$
|
28,958
|
|
|
|
|
|
|
|
|
|
FFO per
Unit:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.11
|
$
|
0.16
|
$
|
0.23
|
$
|
0.32
|
Diluted
|
$
|
0.11
|
$
|
0.16
|
$
|
0.23
|
$
|
0.32
|
AFFO per
Unit:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.11
|
$
|
0.16
|
$
|
0.22
|
$
|
0.31
|
Diluted
|
$
|
0.11
|
$
|
0.16
|
$
|
0.22
|
$
|
0.31
|
AFFO payout
ratio:
|
|
|
|
|
|
|
|
|
Basic
|
|
67 %
|
|
96 %
|
|
89 %
|
|
95 %
|
Diluted
|
|
67 %
|
|
96 %
|
|
89 %
|
|
95 %
|
Distributions
declared
|
$
|
7,024
|
$
|
13,720
|
$
|
18,719
|
$
|
27,400
|
Weighted average
Units outstanding (000s):
|
|
|
|
|
|
|
|
|
Basic
|
|
94,632
|
|
92,338
|
|
94,553
|
|
92,196
|
Add:
|
|
|
|
|
|
|
|
|
Unit options and
Incentive Units
|
|
27
|
|
126
|
|
25
|
|
130
|
Diluted
|
|
94,659
|
|
92,464
|
|
94,578
|
|
92,326
|
Indebtedness to GBV Ratio
The table below calculates the REIT's Indebtedness to GBV ratio
as at June 30, 2023 and December 31,
2022. The Indebtedness to GBV ratio is calculated by
dividing the indebtedness by GBV:
|
June 30,
2023
|
December 31,
2022
|
Total assets
|
$
|
1,426,916
|
$
|
1,450,315
|
Deferred financing
costs
|
|
6,846
|
|
7,070
|
GBV
|
$
|
1,433,762
|
$
|
1,457,385
|
Mortgages
payable
|
|
837,319
|
|
846,689
|
Credit
Facility
|
|
22,500
|
|
14,400
|
Unamortized financing
costs and mark to market mortgage adjustments
|
|
3,218
|
|
3,745
|
Indebtedness
|
$
|
863,037
|
$
|
864,834
|
Indebtedness to
GBV
|
|
60.2 %
|
|
59.3 %
|
Adjusted EBITDA
The table below reconciles the REIT's adjusted EBITDA to net
income and comprehensive income for twelve month period ended
June 30, 2023 and 2022:
|
Twelve months
ended
June 30
|
|
2023
|
|
2022
|
|
Net income and
comprehensive income
|
$
|
(6,071)
|
$
|
65,154
|
|
|
|
|
|
|
|
Add
(deduct):
|
|
|
|
|
|
Interest
expense
|
|
30,951
|
|
27,444
|
|
Fair value adjustment
of Unit-based compensation
|
|
(530)
|
|
(414)
|
|
Transaction costs on
sale of investment property
|
|
244
|
|
—
|
|
Fair value adjustment
of investment properties
|
|
56,949
|
|
(7,453)
|
|
Fair value adjustment
of Class B LP Units
|
|
(9,769)
|
|
(3,416)
|
|
Distributions on Class
B LP Units
|
|
1,273
|
|
1,809
|
|
Unrealized loss on
change in fair value of
derivative
instruments
|
|
(1,479)
|
|
(6,027)
|
|
Amortization of leasing
costs, tenant inducements,
mortgage premium and
financing costs
|
|
9,404
|
|
7,815
|
|
Adjusted
EBITDA
|
$
|
80,972
|
$
|
84,912
|
|
Interest Coverage Ratio
The table below calculates the REIT's interest coverage ratio
for the twelve month period ended June 30, 2023 and 2022. The
interest coverage ratio is calculated by dividing Adjusted EBITDA
by interest expense.
|
Twelve months ended
June 30
|
|
2023
|
|
2022
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
80,972
|
$
|
84,912
|
Interest
expense
|
|
30,951
|
|
27,444
|
Interest coverage
ratio
|
|
2.62
x
|
|
3.09
x
|
Available Funds
The table below calculates the REIT's Available Funds as at
June 30, 2023 and December 31,
2022:
|
June 30,
2023
|
December 31,
2022
|
Cash
|
$
|
6,427
|
$
|
9,501
|
Undrawn Credit
Facility
|
|
45,500
|
|
53,600
|
Available
Funds
|
$
|
51,927
|
$
|
63,101
|
Forward-looking Statements
Certain statements contained in this press release constitute
forward-looking information within the meaning of Canadian
securities laws. Forward-looking statements are provided for the
purposes of assisting the reader in understanding the REIT's
financial performance, financial position and cash flows as at and
for the periods ended on certain dates and to present information
about management's current expectations and plans relating to the
future. Readers are cautioned that such statements may not be
appropriate for other purposes. Forward-looking information may
relate to future results, performance, achievements, events,
prospects or opportunities for the REIT or the real estate industry
and may include statements regarding the financial position,
business strategy, budgets, projected costs, capital expenditures,
financial results, taxes, plans and objectives of or involving the
REIT. In some cases, forward-looking information can be identified
by such terms as "may", "might", "will", "could", "should",
"would", "expect", "plan", "anticipate", "believe", "intend",
"seek", "aim", "estimate", "target", "goal", "project", "predict",
"forecast", "potential", "continue", "likely", or the negative
thereof or other similar expressions suggesting future outcomes or
events.
Forward-looking statements involve known and unknown risks and
uncertainties, which may be general or specific and which give rise
to the possibility that expectations, forecasts, predictions,
projections or conclusions will not prove to be accurate,
assumptions may not be correct and objectives, strategic goals and
priorities may not be achieved. A variety of factors, many of which
are beyond the REIT's control, affect the operations, performance
and results of the REIT and its business, and could cause actual
results to differ materially from current expectations of estimated
or anticipated events or results. These factors include, but are
not limited to: risks and uncertainties related to the trust units
of the REIT ("Units"); risks related to the REIT and its business;
fluctuating interest rates and general economic conditions,
including increased levels of inflation; credit, market,
operational and liquidity risks generally; occupancy levels and
defaults, including the failure to fulfill contractual obligations
by tenants; lease renewals and rental increases; the ability to
re-lease and find new tenants for vacant space; the timing and
ability of the REIT to acquire or sell certain properties; the
ongoing effects of COVID-19 and work-from-home flexibility
initiatives on the business, operations and financial condition of
the REIT and its tenants, as well as on consumer behavior and the
economy in general, including the ability to enforce leases,
perform capital expenditure work, increase rents, raise capital
through the issuance of Units or other securities of the REIT;
repurchasing Units under the NCIB; and obtain mortgage financing on
the REIT's properties (the "properties"). The foregoing is not an
exhaustive list of factors that may affect the REIT's
forward-looking statements. Other risks and uncertainties not
presently known to the REIT could also cause actual results or
events to differ materially from those expressed in its
forward-looking statements. The reader is cautioned to consider
these and other factors, uncertainties and potential events
carefully and not to put undue reliance on forward-looking
statements as there can be no assurance actual results will be
consistent with such forward-looking statements.
Information contained in forward-looking statements is based
upon certain material assumptions applied in drawing a conclusion
or making a forecast or projection, including management's
perception of historical trends, current conditions and expected
future developments, as well as other considerations believed to be
appropriate in the circumstances. There can be no assurance
regarding: (a) the ongoing effects of COVID-19 and work-from-home
initiatives on the REIT's business, operations and performance,
including the performance of its Units; (b) the REIT's ability to
mitigate any impacts related to fluctuating interest rates,
inflation and the after effects of COVID-19 including the shift to
hybrid working; (c) the factors, risks and uncertainties expressed
above in regards to the post COVID-19 environment on the commercial
real estate industry and property occupancy levels; (d) credit,
market, operational, and liquidity risks generally; (e) the
availability of investment opportunities for growth in Canada and
the timing and ability of the REIT to acquire or sell certain
properties; (f) repurchasing units under the NCIB; (g) Starlight
Group Property Holdings Inc., or any of its affiliates
("Starlight"), continuing as asset manager of the REIT in
accordance with its current asset management agreement; and (h)
other risks inherent to the REIT's business and/or factors beyond
its control which could have a material adverse effect on the
REIT.
The forward-looking statements made relate only to events or
information as of the date on which the statements are made in this
MD&A. Except as specifically required by applicable Canadian
law, the REIT undertakes no obligation to update or revise publicly
any forward-looking statements, whether as a result of new
information, future events or otherwise, after the date on which
the statements are made or to reflect the occurrence of
unanticipated events.
SOURCE True North Commercial Real Estate Investment Trust