FLAGSHIP COMMUNITIES REIT TO ACQUIRE ILLINOIS’ SECOND MANUFACTURED HOUSING COMMUNITY FOR US$6.250 MILLION


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TORONTO, April 27, 2022 /CNW/ – Flagship Communities Real Estate Investment Trust (“Flagship” or the “REIT”) (TSX: MHC.U) announced today that it will add a second Illinois community to its portfolio with the acquisition of a Riverton Illinois prefab housing community, located in the suburbs springfield illinois(the “Acquisition”) for a purchase price of approximately $6.25 million. The acquisition is 89% occupied and is expected to be immediately accretive to the REIT’s adjusted funds from operations (“AFFO”) on a per unit basis. The acquisition is subject to customary closing conditions and is expected to close on or about May 292022.

“This acquisition is part of our disciplined business strategy to grow our presence in the central states and diversify into adjacent regions with attractive acquisitions that enhance our portfolio,” said Kurt Keney, President and CEO. “This well-located property is our second in the Springfield, Ill. market and will be immediately accretive to our AFFO per unit with above-market growth over time. »

The purchase price of $6.25 million will be funded by cash on the REIT’s balance sheet.

“We continue to leverage our regional management structure and proven operating model to support another acquisition in the Illinois market,” said Nathan Smith, Director of Investments. “This community is currently 89% occupied with further growth potential – as we have realized with our other acquisitions to date.”

Overview of the acquisition

Riverton Illinois

Near the geographic center of Illinois, Springfield, the state capital, is a quiet agricultural center with a strong government presence. This quiet city with an educated population has an important heritage built around of Abraham Lincoln residence and activities. It’s only fitting that Lincoln’s history is embedded in such a traditional Central American city.

Workforce: The state of illinois is the largest employer in the region with Springfield public schools, City of Springfield, University of Illinois at Springfield as well as many private companies.

Education: In addition to primary and secondary schools, Springfield is served by two post-secondary institutions.

Pro forma portfolio

The acquisition is a focused and strategic expansion of the REIT’s portfolio, increasing the number of manufactured home communities from 64 to 65 and the number of manufactured home lots from 11,428 to 11,531. The table below provides a summary of the acquisition in progress May 29, 2022.

Acquisition portfolio

# of lots

(#)

103

Land use

(%)

89

AMR Batch

(US DOLLARS$)

$260

About Flagship Communities Real Estate Investment Trust

Flagship Communities Real Estate Investment Trust is a newly created, internally managed, unincorporated, open-ended real estate investment trust established pursuant to a Declaration of Trust under the laws of the Province of Ontario. The REIT was formed to own and operate a portfolio of income-generating manufactured home communities located in Kentucky, Indiana, Ohio, Tennessee, Arkansas, Illinois and Missouriincluding a park of prefabricated houses for rent to residents of these housing communities.

Non-IFRS Financial Measures

The REIT uses certain non-IFRS financial measures, including certain real estate industry measures such as FFO, FFO per unit, AFFO, AFFO per unit and Same Community, to measure, compare and explain results of operations, financial performance and the financial condition of the REIT. The REIT also uses AFFO to assess its ability to pay for distribution and the REIT is a key input in determining the value of the REIT’s properties. These measures are commonly used by entities in the real estate industry as useful metrics to measure performance. However, they do not have any standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other publicly traded entities. These measures should be considered supplemental in nature and not a substitute for related financial information prepared in accordance with IFRS.

FFO is defined as consolidated net income under IFRS adjusted for items such as distributions on redeemable or exchangeable units recognized as finance expense under IFRS (including distributions on Class B units, fair value adjustments unrealized losses on investment properties, loss on extinguishment of acquired mortgages, gain on disposal of investment properties and amortization Canada (“REALPAC”).

AFFO is defined as FFO adjusted for items such as maintenance capital expenditures and certain non-cash items such as amortization of intangible assets, premiums and discounts on debt and investments. The REIT’s AFFO calculation method essentially complies with REALPAC recommendations. The REIT uses a capital expenditure reserve of $60 (dollars/annual) per batch and $1,000 (dollars/annual) per rental unit in the AFFO calculation. This reserve is based on management’s best estimate of the cost that the REIT could incur in connection with the maintenance of the investment properties.

NOI is defined as the total property income (i.e. rental income and other property income) minus the direct operating expenses of the property in accordance with IFRS.

Same Community results are the results of MHCs held throughout the applicable period and this measure is used by management to assess the period-over-period performance of investment properties. These results eliminate the impact of disposals or acquisitions of investment properties.

Please refer to the REIT’s MD&A for the period ended March 31, 2021 for details on non-IFRS financial measures, including reconciliations of these measures to normalized IFRS measures.

Forward-looking statements

This press release contains statements that include forward-looking information within the meaning of Canadian securities laws. These forward-looking statements reflect the REIT’s current expectations regarding future events, including statements regarding the REIT’s expected monthly distributions. In some cases, forward-looking statements may be identified by words such as “may”, “will”, “could”, “occur”, “expect”, “anticipate”, “believe”, “have the ‘intend’, ‘estimate’, ‘target’, ‘plan’, ‘predict’, ‘plan’, ‘continue’, or their negative form or other similar expressions relating to matters which are not historical facts. Important factors and assumptions used by management of the REIT in developing forward-looking information include, but are not limited to, that the REIT will have sufficient liquidity to pay its distributions. Although management considers these assumptions to be reasonable based on information currently available, they may prove to be incorrect.

Although management believes that the expectations reflected in these forward-looking statements are reasonable and represent the REIT’s internal expectations and beliefs at the current time, such statements involve known and unknown risks and uncertainties and may not prove to be accurate. and some strategic objectives and goals may not be achieved. A variety of factors, many of which are beyond the control of the REIT, could cause actual results in future periods to differ materially from current expectations of events or results expressed or implied by such forward-looking statements, such as the risks identified in the REIT’s final prospectus report available under the REIT’s profile at www.sedar.com, including under “Risk Factors”. Readers are cautioned not to place undue reliance on forward-looking statements. Except as required by applicable Canadian securities laws, the REIT undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. after the date on which the statements are made.

SOURCE Flagship Communities Real Estate Investment Trust

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View original content: http://www.newswire.ca/en/releases/archive/April2022/27/c5727.html

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