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Northview Residential REIT, Newly Transformed $2.7 Billion REIT, Reports Strong 2023 Results, Including Multi-Residential Same Door NOI Growth of 7.8% and Western Canada Occupancy Gains of 390 bps

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CALGARY, Alberta, Feb. 27, 2024 (GLOBE NEWSWIRE) — Northview Residential REIT (“Northview” or the “REIT”) (NRR.UN – TSX), today announced financial results for the three months and year ended December 31, 2023.

“2023 was a successful year for Northview with strong same door NOI growth and completion of the Recapitalization Event in August,” noted Mr. Todd Cook, President and Chief Executive Officer of Northview. “Same door NOI growth was driven by improved performance in the Western Canada portfolio with NOI growth of 22% where both occupancy and monthly rents increased throughout the year.”

“The Recapitalization Event included the acquisition of properties consisting of 3,301 multi-residential suites and 119,643 commercial square feet for $742 million, in addition to reducing total leverage, converting into a traditional REIT and internalizing management. With our diversified portfolio, strengthened balance sheet and improved distribution payout ratio, Northview is well positioned to continue to provide value and stable distributions to Unitholders,” concluded Mr. Cook.

2023 ANNUAL HIGHLIGHTS

Q4 2023 HIGHLIGHTS

FINANCIAL CONDITIONS AND OPERATING RESULTS

(thousands of dollars, except as indicated) As at
December 31, 2023
  As at
December 31, 2022
  As at
December 31, 2021
 
Total assets 2,748,450   1,954,529   1,853,096  
Total liabilities, excluding net assets attributable to Unitholders 1,918,398   1,388,497   1,357,746  
Credit facilities 348,576   503,502   513,677  
Mortgages payable 1,378,394   850,830   808,842  
Debt to gross book value(1) 65.1 % 69.5 % 71.1 %
       
Weighted average mortgage interest rate 3.80 % 3.63 % 2.87 %
Weighted average term to maturity (years) 4.7   2.5   2.7  
Weighted average capitalization rate 6.41 % 7.18 % 7.44 %
       
Multi-residential occupancy(1) 94.7 % 93.4 % 90.2 %
AMR ($)(1) 1,313   1,278   1,272  
Number of multi-residential suites 14,422   11,121   11,121  
Number of execusuites 200   200   200  
Commercial sq. ft. 1,251,373   1,131,730   1,131,730  
       
Number of Units outstanding(1) 36,056   20,524   20,524  
  Year Ended December 31
  2023   2022   2021  
Revenue 228,472   198,210   192,125  
NOI 131,948   112,508   112,669  
NOI margin(1) 57.8 % 56.8 % 58.6 %
       
Cash flows provided by operating activities 44,316   41,030   57,531  
Distributions declared to Unitholders(1) 38,546   45,150   45,150  
Distributions declared per Unit ($/Unit)      
Class A Unit 1.5547   2.2000   2.2000  
Class C Unit 1.6155   2.3218   2.3218  
Class F Unit 1.5894   2.2695   2.2695  
FFO payout ratio(2)(3) 84.9 % 88.3 % 69.1 %
AFFO payout ratio(2)(3) 115.5 % 117.7 % 83.3 %
       
Net and comprehensive income 163,168   70,811   (21,341 )
Per basic Unit ($/Unit) 6.23   3.45   (1.04 )
Per diluted Unit ($/Unit) 5.98   3.45   (1.04 )
FFO(2) 45,422   51,160   65,386  
Per basic Unit ($/Unit)(2) 1.73   2.49   3.19  
Per diluted Unit ($/Unit)(2) 1.67   2.49   3.19  
AFFO(2) 33,371   38,362   54,190  
Per basic Unit ($/Unit)(2) 1.27   1.87   2.64  
Per diluted Unit ($/Unit)(2) 1.22   1.87   2.64  
       
Weighted average number of Units – basic (000’s)(1) 26,184   20,524   20,524  
Weighted average number of Units – diluted (000’s)(1) 27,275   20,524   20,524  

(1) See “Non-GAAP and Other Financial Measures” section of this news release.
(2) Non-GAAP financial measure or non-GAAP ratio. See “Non-GAAP and Other Financial Measures” section of this news release.
(3) Calculated for the period from January 1, 2023 to December 31, 2023.

NON-GAAP AND OTHER FINANCIAL MEASURES

Certain measures in this earnings release do not have any standardized meaning as prescribed by generally accepted accounting principles (“GAAP”) and may, therefore, be considered non-GAAP financial measures, non-GAAP ratios, or other measures and may not be comparable to similar measures presented by other issuers. These measures are provided to enhance the readers’ overall understanding of Northview’s current financial condition and financial performance. They are included to provide investors and management with an alternative method for assessing our operating results in a manner that is focused on the performance of our ongoing operations and to provide a more consistent basis for comparison between periods. These measures include widely accepted measures of performance for Canadian real estate investment trusts; however, the measures are not defined by GAAP. In addition, these measures are subject to the interpretation of definitions by the preparers of financial statements and may not be applied consistently between real estate entities. These measures include:

For information on the most directly comparable GAAP measures, composition of the measures, a description of how Northview uses these measures, and an explanation of how these measures provide useful information to investors, refer to the “Non-GAAP and Other Financial Measures” section of Northview’s Management Discussion and Analysis as at and for the years ended December 31, 2023 and 2022, available on Northview’s profile on SEDAR+ at www.sedarplus.com, which is incorporated by reference into this news release.

NON-GAAP RECONCILIATION

The following table reconciles FFO and AFFO from net and comprehensive income, the most directly comparable GAAP measure as presented in the audited consolidated annual financial statements:

  Three Months Ended December 31 Year Ended December 31
(thousands of dollars, except as indicated) 2023   2022   2023   2022  
Net and comprehensive income 20,213   25,128   163,168   70,811  
Adjustments:        
Distributions 929   11,287   23,902   45,150  
Depreciation 732   751   3,007   3,040  
Fair value gain on investment properties (17,733 ) (26,926 ) (177,555 ) (67,235 )
Fair value loss on Exchangeable Units 8,289     3,200    
Accretion on Redeemable Units 2,229     3,183    
Recapitalization Event costs 450     27,050    
Other(1) (734 ) (735 ) (533 ) (606 )
FFO 14,375   9,505   45,422   51,160  
Maintenance capex reserve – multi-residential (3,178 ) (2,963 ) (11,355 ) (11,852 )
Maintenance capex reserve – commercial (183 ) (236 ) (696 ) (946 )
AFFO 11,014   6,306   33,371   38,362  
         
FFO        
FFO per Unit – basic ($/Unit) 0.40   0.46   1.73   2.49  
FFO per Unit – diluted ($/Unit) 0.34   0.46   1.67   2.49  
FFO payout ratio(2) 84.9 % 88.3 % 84.9 % 88.3 %
         
AFFO        
AFFO per Unit – basic ($/Unit) 0.31   0.31   1.27   1.87  
AFFO per Unit – diluted ($/Unit) 0.26   0.31   1.22   1.87  
AFFO payout ratio(2) 115.5 % 117.7 % 115.5 % 117.7 %
         
Weighted average number of Units        
Basic (‘000s) 36,056   20,524   26,184   20,524  
Diluted (‘000s) 42,125   20,524   27,275   20,524  

FINANCIAL INFORMATION

Northview’s audited consolidated annual financial statements, the notes thereto, and Management’s Discussion and Analysis for the years ended December 31, 2023 and 2022, can be found on Northview’s website at www.rentnorthview.com and on SEDAR+ at www.sedarplus.com.

All amounts in this news release are in thousands of Canadian dollars unless otherwise indicated. In August 2023, Northview’s units were consolidated on a 1.75 to 1.00 basis. All references to the number of units and per unit amounts in this news release have been restated and are reflected on a post-consolidation basis.

ABOUT NORTHVIEW RESIDENTIAL REIT

Northview is a publicly-traded real estate investment trust established pursuant to a declaration of trust under the laws of the province of Ontario for the primary purpose of indirectly acquiring, owning, and operating a portfolio of income-producing rental properties in secondary markets within Canada.

CAUTIONARY AND FORWARD-LOOKING INFORMATION

Certain information contained in this news release constitutes forward-looking information within the meaning of applicable securities laws. Statements that reflect Northview’s objectives, plans, goals, and strategies are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed, projected, or implied by such forward-looking information. In some instances, forward-looking information can be identified by the use of terms such as “may”, “should”, “expect”, “will”, “anticipate”, “believe”, “intend”, “estimate”, “predict”, “potentially”, “starting”, “beginning”, “begun”, “moving”, “continue”, or other similar expressions concerning matters that are not historical facts. Forward-looking information in this news release includes, but is not limited to, future maintenance expenditures, financing and the availability of financing and the terms thereof, the replacement of floating-rate debt with fixed-rate debt, the intention to sell select assets, the use of proceeds from any such sales, future economic conditions, the expected distributions of Northview, liquidity and capital resources, market trends, future operating efficiencies, tenant incentives, and occupancy levels. Such statements involve significant risks and uncertainties and are not meant to provide guarantees of future performance or results. These cautionary statements qualify all of the statements and information contained in this news release incorporating forward-looking information.

Forward-looking information is made as of February 27, 2024 and is based on information available to management as of that date. Management believes that the expectations reflected in forward-looking information are based upon reasonable assumptions; however, management can give no assurance that the actual results will be consistent with this forward-looking information. Factors that could cause actual results, performance, or achievements to differ materially from those expressed or implied by forward-looking information include, but are not limited to the risks identified in Northview’s Management’s Discussion and Analysis for the years ended December 31, 2023 and 2022 and those discussed in Northview’s other materials filed with the Canadian securities regulatory authorities from time to time, general economic conditions; the availability of a new competitive supply of real estate which may become available through construction; Northview’s ability to maintain distributions at their current level; Northview’s ability to maintain occupancy and the timely lease or re-lease of multi-residential suites, execusuites, and commercial space at current market rates; tenant defaults; changes in interest rates, which continue to be volatile and have trended upward since Northview’s formation in 2020; changes in inflation rates, including increased expenses as a result thereof; Northview’s qualification as a real estate investment trust; changes in operating costs; governmental regulations and taxation; fluctuations in commodity prices; and the availability of financing. Additional risks and uncertainties not presently known to Northview, or those risks and uncertainties that Northview currently believes to not be material, may also adversely affect Northview. Northview cautions readers that this list of factors is not exhaustive and that should certain risks or uncertainties materialize, or should underlying estimates or assumptions, including those outlined in Note 2 of Northview’s annual audited financial statements for the year ended December 31, 2023, prove incorrect, actual events, performance, and results may vary materially from those expected. Except as specifically required by applicable Canadian law, Northview assumes no obligation to update or revise publicly any forward-looking information to reflect new events or circumstances that may arise after February 27, 2024.

(1) “Other” is comprised of non-controlling interest, amortization of other long-term assets, amortization of tenant inducements, and fair value adjustments for non-controlling interest and equity investments.
(2) Calculated for the period from January 1, 2023 to December 31, 2023.

To learn more about Northview, visit www.rentnorthview.com or contact:

Todd Cook, Chief Executive Officer
Northview Residential REIT
Tel: 403-531-0720
Email: tcook@nvreit.ca
Sarah Walker, Chief Financial Officer
Northview Residential REIT
Tel: 403-531-0720
Email: swalker@nvreit.ca


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