FIRM CAPITAL AMERICAN REALTY PARTNERS CORP. REPORTS STRONG FINISH TO 2019 AND CONTINUES TO INCREASE NAV TO $9.39/ SHARE
April 06 2020 - 6:52PM
Firm Capital American Realty Partners Corp. (“the
“
Company”), (TSXV: FCA.U), (TSXV: FCA) is pleased
to report its financial results for the three and twelve months
ended December 31, 2019:
- For the three months ended December 31, 2019, net income was
approximately $3.5 million, a 49% increase over the $2.4 million
reported for the three months ended December 31, 2018. For the year
ended December 31, 2019, net income was approximately $7.1 million,
a 25% increase over the $5.6 million reported for the year ended
December 31, 2018;
- For the three months ended December 31, 2019, basic net income
per share was approximately $0.51, a 41% increase over the $0.36
reported for the three months ended December 31, 2018. For the year
ended December 31, 2019, basic net income per share was
approximately $1.02, a 13% increase over the $0.90 reported for the
year ended December 31, 2018;
- For the three months ended December 31, 2019, AFFO was
approximately $0.2 million, a significant improvement over the
$0.08 million reported for the three months ended December 31,
2018. For the year ended December 31, 2019, AFFO was approximately
$1.7 million, a 110% improvement over the $0.8 million reported for
the year ended December 31, 2018; and
- $9.39 Net Asset Value (“NAV”) per Share, a 4%
improvement over the $9.07 NAV per Share as reported at September
30, 2019.
- Results for the year ended December 31, 2019 are as
follows:
|
Three Months Ended |
|
Twelve Months Ended |
|
Dec 31, 2019 |
Dec 31, 2018 |
|
Dec 31, 2019 |
Dec 31, 2018 |
Net
Income |
$ |
3,514,541 |
$ |
2,353,158 |
|
|
$ |
7,055,862 |
$ |
5,629,358 |
FFO |
$ |
8,612 |
$ |
(279,960 |
) |
|
$ |
1,394,335 |
$ |
345,503 |
AFFO |
$ |
202,343 |
$ |
79,409 |
|
|
$ |
1,731,910 |
$ |
824,978 |
Dividends |
$ |
409,183 |
$ |
390,167 |
|
|
$ |
1,636,731 |
$ |
1,424,207 |
Basic Net Income Per Share |
$ |
0.51 |
$ |
0.36 |
|
|
$ |
1.02 |
$ |
0.90 |
Diluted Net Income Per Share |
$ |
0.48 |
$ |
0.30 |
|
|
$ |
1.02 |
$ |
0.71 |
FFO
Per Share |
$ |
0.00 |
$ |
(0.04 |
) |
|
$ |
0.20 |
$ |
0.05 |
AFFO
Per Share |
$ |
0.03 |
$ |
0.01 |
|
|
$ |
0.25 |
$ |
0.12 |
Dividends Per Share |
$ |
0.06 |
$ |
0.06 |
|
|
$ |
0.24 |
$ |
0.23 |
- +108% increase in AFFO Per Share: Through the
impact of accretive investments, the Company realized a +108% year
over year AFFO increase to $0.25/share, thereby providing the
second full year of positive AFFO for each and every quarter.
- +95% increase in Income from Equity Accounted and
Preferred Investments: As a result of accretive
investments and overall portfolio performance, the Company realized
a 95% increase in it’s income from equity accounted and preferred
investments (excluding fair market value adjustments);
- 8% Increased Valuation in Wholly Owned
Portfolio: Through increased rents and capitalization rate
compression, the Company realized +8% increased value in its wholly
owned portfolio;
- Increased NAV by a +10.5% CAGR to $9.39 Per
Share: Since Q3/2017, the Company has increased NAV from
$7.85 per Share to $9.39 per Share for a +10.5% Compounded Annual
Growth Rate (“CAGR”) through a combination of
accretive investments, debt reduction, new capital and other
value-creation initiatives that have ultimately generated higher
earnings for the Company;
- Invested $10.2 Million to acquire $60.2 Million in Real
Estate: During 2019 and early 2020, the Company closed on
three equity accounted and preferred investments comprised of 497
units located in West Hartford, Connecticut; Canton, Georgia; and
Houston, Texas. The total purchase price for these investments were
approximately $60.2 million. The Company contributed $6.2 million
of preferred equity, yielding a weighted average interest rate of
8.5% and $4.0 million of common equity representing a 50% ownership
interest in each of the following investments:
- $13.0 Million Hartford, CT Acquisition: On
April 4, 2019, the Company closed an equity accounted and preferred
investment to acquire a 109 unit multi-family residential portfolio
comprised of two buildings located in Hartford, CT (the
“Hartford Portfolio”). The purchase price of the
Hartford Portfolio was $13.0 million (including transaction costs).
The acquisition was financed with a $10.0 million, 4.81% first
mortgage due April 3, 2039 and $3.0 million of equity. The Company
contributed $0.6 million (100% ownership) of preferred equity
yielding 8% and $1.2 million of common equity, representing a 50%
ownership stake in the investment;
- $19.3 Million Canton, GA Acquisition: On
September 27, 2019, the Company closed an equity accounted and
preferred investment to acquire a 138 unit multi-family residential
building located in Canton, GA (the “Canton
Acquisition”). The purchase price for 100% of the Canton
Acquisition was $19.3 million (including transaction costs). The
Canton Acquisition was financed, in part with a $14.0 million, 4.0%
first mortgage due on September 26, 2029. The Company contributed
$2.1 million (100% ownership) of preferred equity yielding 8% and
$1.6 million of common equity representing a 50% ownership stake in
the investment; and
- $27.9 Million Houston, TX Acquisition: On
January 31, 2020, the Trust closed an equity accounted and
preferred investment to acquire the Woodglen Village, a 250-unit
multi-family residential portfolio located in Houston, TX (the
“Woodglen Acquisition”). The purchase price for
100% of the Woodglen Acquisition was $27.9 million (including
transaction costs). The Woodglen Acquisition was financed, in part
with a $22.1 million, 4.6% first mortgage due on January 30, 2024.
The Trust contributed $3.5 million (100% ownership) of preferred
equity yielding 9% and $1.2 million of common equity representing a
50% ownership stake in the investment.
- $3.0 Million Preferred Capital Investment: On
November 15, 2019, the Company closed on a participation of $3.0
million in a $10.0 million preferred capital investment (the
“Houston Preferred Capital”) for a portfolio of five apartment
buildings located in Houston, Texas. The Houston Preferred Capital
earns an interest rate of 12% per annum during its initial term of
two years, following which if the term is extended, at an interest
rate of 18% per annum;
- CAD $19.4 Million Convertible Debenture
Financing: On August 8, 2019 and August 13, 2019, the
Company closed a total of CAD $19.4 million, 6.25% convertible
unsecured unsubordinated debenture (the “Convertible
Debenture”) offering. The Convertible Debenture has
a term to maturity of seven years and is due on June 30, 2026. The
Convertible Debenture can be converted into common shares of the
Company at an exercise price of CAD $12.60 per common share at any
time prior to June 30, 2026. Each Convertible Debenture Unit also
includes 79 common share purchase warrants of the Company. The
warrants are exercisable at an exercise price of CAD$12.60 per
share for a period of two years due on August 7, 2021;
- $12.8 Million Equity Offering Financing: On
March 13, 2020, the Trust closed a marketed offering of 1,590,000
Trust Units at a price of $8.20 (CAD $10.90 per unit based on the
Bank of Canada daily noon rate of exchange of $1.3745). The Trust
raised total gross proceeds of $12.8 million;
- 100% of Atlanta Homes Sold: The Company has
sold all 120 homes located in Atlanta, with gross proceeds of
approximately $12.3 million;
- Successful Conversion into Real Estate Investment Trust
(REIT): On January 8, 2020, the Company completed its plan
of arrangement to convert into a Real Estate Investment Trust and
commenced under Firm Capital American Realty Partners Trust (the
“Trust”). The units of the Trust began trading on TSXV on January
8, 2020, under symbols FCA.U and FCA.UN. Under the terms of the
Arrangement, each outstanding common share of the Company was
exchanged for one unit of the Trust.
- New Independent Trustee: On February 12, 2020,
the Trust announced the appointment of Ms. Valentina Kalyk to the
Board of Trustees. Ms. Kalyk brings over 20 years of capital
markets experience. Until her recent retirement, she spent 15 years
with Canaccord Genuity where she was a Managing Director and senior
member of the institutional equity sales team, with a dedicated
focus to REIT’s; and
- Distributions: On February 14, 2020, the
Trust, declared and approved quarterly distributions of $0.059 per
unit for unitholders on record as of March 31, 2020 payable on or
about April 15, 2020.
For the complete financial statements including
Management’s Discussion & Analysis, please visit www.sedar.com
or the Company’s website at www.firmcapital.com
ABOUT FIRM CAPITAL AMERICAN REALTY
PARTNERS TRUST
Effective January 8, 2020, Firm Capital American
Realty Partners Corp. (the “Company”) successfully
converted into Firm Capital American Realty Partners Trust (the
“Trust”). Accordingly, references to historical
results and transactions will reference the Company while forward
looking statements will reference the Trust.
The Trust is a U.S. focused real estate
investment entity that pursues real estate and debt investments
through the following platforms:
- Income Producing Real
Estate Investments:
-
- Core Markets Wholly Owned
Investments: The Trust is focused on growing its wholly
owned multi-residential property portfolio in large core markets
with attention to cities located in Texas, Florida, New Jersey,
North and South Carolina, Colorado, Georgia and New York.
- Core and Non-Core Markets:
Joint Venture Investments: The Trust will also purchase in
both core and non-core markets where it lacks knowledge or
experience, partial ownership interests in multi-residential
properties with industry leaders as partners. These partners bring
both expertise in operations and knowledge, especially in non-core
markets. The Trust strives to have a minimum 50% ownership interest
and will fund the equity in a combined preferred/common equity
investment structure. The preferred equity provides a fixed rate of
return for investors in the Trust, resulting in a secured structure
ahead of the partners ownership interest, while the common equity
provides investors an upside return for investors as the investment
meets its targeted objectives.
- Mortgage Debt
Investments: The Trust, using Firm Capital’s 30-year plus
experience as a leader in the mortgage lending industry, provides
bridge lending of mortgage and preferred capital secured by
residential/multi-residential properties.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
Forward-looking statements necessarily involve
known and unknown risks, including, without limitation, risks
associated with general economic conditions; adverse factors
affecting the U.S. real estate market generally or those specific
markets in which the Company holds properties; volatility of real
estate prices; inability to complete the Company’s single family
property disposition program or debt restructuring in a timely
manner; inability to access sufficient capital from internal and
external sources, and/or inability to access sufficient capital on
favourable terms; industry and government regulation; changes in
legislation, income tax and regulatory matters; the ability of the
Company to implement its business strategies; competition; currency
and interest rate fluctuations and other risks.
Readers are cautioned that the foregoing list is
not exhaustive. Readers are further cautioned not to place undue
reliance on forward-looking statements as there can be no assurance
that the plans, intentions or expectations upon which they are
placed will occur. Such information, although considered reasonable
by management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those anticipated.
Forward-looking statements contained in this news release are
expressly qualified by this cautionary statement.
Certain financial information presented in this
press release reflect certain non-International Financial Reporting
Standards (“IFRS”) financial measures, which
include, but not limited to NOI, FFO and AFFO. These measures are
commonly used by real estate investment companies as useful metrics
for measuring performance, however, they do not have standardized
meaning prescribed by IFRS and are not necessarily comparable to
similar measures presented by other real estate investment
companies. These terms are defined in the company’s Management
Discussion and Analysis for the quarter ended December 31, 2019
filed on www.sedar.com.
Neither the Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
For further information, please contact:
Eli
Dadouch |
Sandy
Poklar |
President & Chief Executive Officer |
Chief Financial Officer |
(416) 635-0221 |
(416) 635-0221 |
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