TORONTO, ON/ACCESSWIRE/August 3, 2022/ Forum Real Estate Income and Impact Fund (“REIIF” or the “Fund”) has announced its second quarter results and is on track to deliver strong performance to its unitholders in its first year.
REIIF was launched in December 2021 and is focused on acquiring impact-oriented, institutional-grade residential rental real estate, offering long-term, inflation-protected and stable cash flow, with the possibility of capital appreciation. REIIF’s portfolio is spread across Canada, with a focus on supply-constrained markets that show strong rental demand, including Toronto, Vancouver, Ottawa, Montreal and Winnipeg.
Following REIIF’s recent acquisition of 399 Stan Bailie (Winnipeg) in July 2022, the portfolio comprises approximately $290 million in assets representing over 1,100 units, covering over 400,000 square feet of residential gross leasable area distributed in multi-family, purpose-built apartments for student housing (PBSA) and co-living communities.
Series F initial investors of the REIIF earned a time-weighted return of 6.2% through June 30, 2022, including a distribution return of 4.5% (3.75 cents/month)1. Returns to date are primarily driven by capital appreciation and strong growth in rental rates. REIIF’s net asset value per unit is supported by independent property valuations and approved monthly by REIIF’s Board of Directors, the majority of which are independent of Forum Asset Management Inc. (“FAM”).
“We are pleased with our progress to date, focused on delivering strong total returns to unitholders during this period of market volatility,” said Aly Damji, managing partner of real estate at FAM.
Rental income increased 25% quarter-over-quarter as initial properties in the portfolio acquired while vacant were let.
“With 95.4% occupancy at the end of the second quarter, we remain on track to have all of REIIF’s properties substantially leased before the end of the year, which will drive operating profit and cash flow,” said Greg Spafford, chief fund officer for REIIF. “Additionally, through active asset management that includes increasing the number of beds, units and amenities in our buildings, we can generate more revenue per square foot to create long-term value. “
REIIF’s impact and environmental, social and governance (“ESG”) initiatives focus on reducing environmental footprint and increasing social engagement.
REIIF has established decarbonization plans for its 455 Abbott (Vancouver) and 1602-1604 Queen. (Toronto), targeting near-term energy savings and a multi-year plan to achieve net-zero greenhouse gas emissions. In the second quarter, REIIF also submitted its first real estate assessment, the global investor-focused ESG benchmark and reporting framework for listed real estate companies, private real estate funds, developers and investors who invest directly in real estate.
Balance sheet update
The Fund ended the quarter with a leverage ratio of 48.4% and over $30 million in available cash. In addition, nearly two-thirds of REIIF’s debt is priced at a fixed rate with a WATM2 over 8 years old.
“REIIF’s strong balance sheet is backed by long-term fixed rate mortgages insured by the Government of Canada’s Canada Mortgage and Housing Corporation (CMHC), some of the cheapest debt capital available to homeowners. said Rajeev Viswanathan, Managing Partner and Chief Financial Officer at FAM.
Acquired – 399 Stan Bailie, Winnipeg, Manitoba
July 11e, REIIF added its fourth acquisition in 2022 and its seventh acquisition since its launch in December 2021. 399 Stan Bailie Drive, a 126-unit multi-family building built in 2021 and located in Winnipeg, Manitoba. The Winnipeg market continues to benefit from strong immigration as well as employment growth, trends that are expected to continue in the future.3
The asset was acquired fully occupied, with attractive fixed rate financing in place at 1.6% interest, making it a highly accretive acquisition for the Fund. Over the coming year, the asset will benefit from several ESG upgrades that will help increase revenues, reduce operating costs and strengthen social engagement, which will generate greater value.
For more details, please refer to the Q2 2022 REIIF report provided to current and potential investors.
1 – Performance and total return are for Series F units as of December 2021 and are not guarantees of future results. The distribution rate and total return received by a Unitholder will differ depending on the series of Trust Units in which a Unitholder invests.
2 – Weighted Average Term to Maturity (WATM) aggregates each loan’s remaining years to maturity, weighted by loan principal balance to total indebtedness.
3 – Source: CBRE “Assessment of Canadian Secondary Markets for Multifamily Investing”, May 2022.
REIIF invests primarily in institutional-quality multi-family rental apartments, purpose-built student accommodation (PBSA), and co-living communities located in supply-constrained markets in Canada. The Fund also strives to deliver cutting-edge impact and an ESG-focused portfolio that will enhance returns and total returns while future-proofing the portfolio to ensure income diversity and resilience. For more information, please visit our website at www.forumreiif.ca.
About Forum Asset Management Inc.
Forum Asset Management Inc., the manager of REIIF, collectively with its affiliates, is an investor, promoter and asset manager operating throughout North America for over 25 years. Our primary goal is to provide Extraordinary Outcomes™ to our stakeholders. Our adaptable, agile and dynamic team is committed to sustainability and responsible investing, creating value that benefits the communities in which we invest.
Our investment focus includes real estate, private equity and infrastructure. The enterprise value of our assets under management currently exceeds C$1.7 billion. Our investments have attracted a number of leading investors. We are proud to have achieved the next level in alternative asset returns since 2002, while positively impacting over 6,000 lives. Visit www.forumam.com.
Name: Rajeev Viswanathan, Managing Partner and Chief Financial Officer
Phone number: 416-947-0389
E-mail: [email protected]
The information contained in this press release is provided for informational purposes only; is not investment, financial or other advice; and is not intended to be used as a basis for making an investment decision. This press release does not constitute or form part of an offer or invitation to sell or issue, or any solicitation of an offer to buy or subscribe, securities, and no part of this press release should form the basis of or be relied upon in connection with any contract or investment decision relating to securities of REIIF. This press release does not constitute any form of commitment, recommendation, representation or guarantee on the part of anyone. No reliance should be placed on the completeness of the information contained in this press release. This press release is not intended to be a comprehensive review of all matters relating to REIIF. Please visit www.forumreiif.ca for more information.
This press release may contain forward-looking information within the meaning of applicable Canadian securities laws. Often, but not always, forward-looking information can be identified by the use of words such as “expects”, “intends”, “anticipates”, “believes” or variations (including variations negatives) of such words and phrases, or states that certain actions, events or results “could”, “might”, “would” or “would” be undertaken, occur or be achieved. These forward-looking statements reflect the current beliefs of management and are based on assumptions made by and information currently available to FAMI. Readers are cautioned that these forward-looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected, including, without limitation, risks associated with general economic conditions; adverse factors affecting the real estate market generally or the specific markets in which REIIF holds properties; real estate price volatility; inability to access sufficient capital from internal and external sources and/or inability to access capital on favorable terms; currency and interest rate fluctuations and other risks. Although FAMI has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information, there may be other factors that cause results not to be those anticipated, estimated or planned. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. These forward-looking statements are made as of the date hereof, and FAMI undertakes no obligation to update or revise them to reflect new events or circumstances, except as required by applicable securities laws.
THE SOURCE: Forum Asset Management