NEWS RELEASES

Milestone Apartments REIT Reports 2013 Second Quarter Results

TORONTO, Aug. 12, 2013 /CNW Telbec/ - Milestone Apartments REIT (TSX: MST.UN) ("Milestone" or the "REIT") today announced its financial results for the Second Quarter (Q2 2013) ended June 30, 2013. The Second Quarter is the first full quarter of operations for the REIT, as it completed an Initial Public Offering ("IPO") and commenced trading on the Toronto Stock Exchange on March 6, 2013.

The following summary of the REIT's financial results for the quarter is presented in comparison to the financial forecast presented in the REIT's prospectus dated February 27, 2013. All dollar amounts are in U.S. currency unless otherwise noted. Full Financial Statements and Management's Discussion and Analysis are available on the REIT's website at www.milestonereit.com and at www.SEDAR.com.

Q2 2013 Highlights

  • Total revenue 2.5% higher than forecast
  • Operating expenses 3.1% lower than forecast
  • Net Operating Income ("NOI"), Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO") higher than forecast
  • AFFO Payout Ratio of 80% versus forecast of 94%.Declared monthly distributions of C$0.054167 per REIT unit resulting in total cash distributions declared for the quarter of $7,936,000
  • Acquisition of Preston Pointe at Windermere (formerly "Century Windermere"), a 346-suite Class A multifamily apartment community in Atlanta, Georgia for $46 million.

"We exceeded our forecasts for all key financial metrics including, NOI, FFO and AFFO for the quarter ended June 30, 2013. This performance was underpinned by increased average occupancy rates and rents across our portfolio," said Robert Landin, CEO of the REIT. "We also demonstrated our commitment to identifying and acquiring complementary multifamily assets in U.S. Southeast and Southwest target markets, by completing the acquisition of Preston Pointe at Windermere, an attractive multifamily community located in the Alpharetta - Cumming submarket of Atlanta, Georgia. Subsequent to quarter end, we further strengthened and diversified the REIT's portfolio with the acquisition of Canyon Chase, a 358-suite multifamily apartment community located in the Westminster submarket of Denver, Colorado. We expect both of these transactions to be accretive to the REIT's AFFO per unit."

Q2 2013 Financial Summary

($ amounts in thousands,
except for average rents)
90 days ended
June 30, 2013
Q2 2013
Forecast
Average total occupancy 94.1% 93.7%
Average monthly in-place rent $712 $699
Rental Revenue 34,012 33,143
Total Revenue 39,700 38,721
Property Operating Expenses 19,750 20,381
Net Operating Income (NOI) 19,657 18,117
Funds From Operations (FFO) 12,182 10,716
Adjusted Funds From Operations (AFFO) 9,925 8,355
Total Cash Distributions¹ 7,905 n/a
AFFO payout ratio² 80% 94%
   
(1)      Represents total cash distributions declared to unitholders and Class B unitholders for the period.
(2)      The AFFO payout ratio is calculated by dividing total cash distributions declared to unitholders
and Class B unitholders by AFFO for the period.
   

For the quarter ended June 30, 2013, revenues totalled $39.7 million, compared to the forecast of $38.7 million. The favorable variance is primarily attributable to actual occupancy and rental rates for the entire portfolio being higher than forecasted due to better than anticipated market conditions.

Property operating expenses were $19.8 million in Q2 2013, compared to the $20.4 million forecast. This favorable variance is primarily related to unit turnover costs being less than anticipated.

NOI totalled $19.7 million in Q2 2013, compared to the $18.1 million forecast, an 8.5% favorable variance.

FFO was $12.2 million for Q2 2013, or $0.25 per unit, compared to forecasts of $10.7 million and $0.22 per unit, respectively. The favorable variance resulted from increased revenue and NOI. AFFO was $9.9 million, or $0.20 per unit, for the period and cash distributions declared to unitholders and Class B unitholders totalled $7.9 million, representing an AFFO payout ratio of 80%.

As at June 30, 2013, the REIT had total mortgage notes payable of $679 million with a weighted average interest rate of 3.8%. Debt to Gross Book Value was 56%. The REIT had cash and cash equivalents of $5.4 million as at June 30, 2013, and a $50 million revolving credit facility. A total of $21.0 million was drawn from this facility as a direct result of the acquisition of Preston Pointe at Windermere on June 21, 2013. Preston Pointe at Windermere is a 346-suite Class A multifamily apartment community located in Atlanta, Georgia. Milestone purchased this asset for $46.0 million.

The total number of Units outstanding as of June 30, 2013 was 36,850,000.  In addition, there are currently 12,864,265 Class B Redeemable Units of Milestone Multifamily Investors LP outstanding and 1,425,000 Unit options outstanding.

Subsequent Event

Subsequent to the end of the Second Quarter, on July 31, 2013, the REIT completed the purchase of Canyon Chase, a 358-unit garden style multifamily apartment community located in the Westminster submarket of Denver, Colorado, for a purchase price of US$40.5 million.

Canyon Chase was built in 1986 and features extensive amenities, consistent with the REIT's established portfolio. The property benefits from its close proximity to several employment centers, including downtown Denver and Boulder, and major transportation corridors. The Westminster community offers Canyon Chase residents a wide variety of shopping, dining and entertainment venues nearby.

An additional $18.2 million was drawn from the REIT's revolving credit facility as part of the purchase consideration for Canyon Chase

Quarterly Results Conference Call

Robert Landin, CEO, Steve Lamberti, COO, and Chris Phillips, CFO, will host a conference call for the investment community on Tuesday, August 13, 2013 at 10:00 a.m. (ET). The call-in numbers for participants are 416-764-8688 or 888-390-0546. A webcast of the call will be accessible via Milestone's website at www.milestonereit.com/investor-relations/events-presentations.

A replay of the call will be available until August 20, 2013. To access the replay, dial 416-764-8677 or 888-390-0541 (PIN: 481323). The webcast will be archived on Milestone's website.

About Milestone Apartments REIT

Milestone Apartments REIT (the REIT) is an unincorporated, open-ended real estate investment trust that is governed under the laws of Ontario. The REIT's portfolio is made up of 54 multifamily garden-style residential properties, comprising 17,648 units that are located in 11 major metropolitan markets throughout the Southeast and Southwest United States. Milestone Apartments REIT is the largest REIT listed on the TSX focused solely on the U.S. multifamily sector. The Milestone Group, based in Dallas, Texas, is the external asset manager of the REIT. For more information, please visit www.milestonereit.com

About The Milestone Group

The Milestone Group is a privately-held real estate investment management company with expertise and presence in major metropolitan markets throughout the United States. Founded in 2004, The Milestone Group has a strong track record of investing in the U.S. multifamily sector, including completion of more than $4.5 billion in multifamily transactions.

Non-IFRS Financial Measures

NOI, FFO and AFFO are key measures of performance commonly used by real estate operating companies and real estate investment trusts. They are not measures recognized under International Financial Reporting Standards ("IFRS") and do not have standardized meanings prescribed by IFRS. NOI, FFO and AFFO as calculated by the REIT may not be comparable to similar measures presented by other issuers. Please refer to the REIT's Management's Discussion and Analysis for the second quarter ended June 30, 2013 for a reconciliation of NOI, FFO and AFFO to standardized IFRS measures.

Forward-looking information

This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to business of the REIT and the environment in which it operates. Forward-looking statements are identified by words such as "believe", "anticipate", "expect", "intend", "plan", "will", "may" and other similar expressions. These statements are based on the REIT's expectations, estimates, forecasts and projections. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. These risks and uncertainties are discussed in the REIT's prospectus dated February 27, 2013 available at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. The REIT undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances.

SOURCE: Milestone Apartments REIT


For more information, please contact:

Robert P. Landin, CEO
Milestone Apartments REIT 
Tel: 214.561.1206

Bruce Wigle
Investor Relations
Tel: 416.447.4740, x 232

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