CALGARY, Alberta, May 10, 2018 (GLOBE NEWSWIRE) -- Northview Apartment Real Estate Investment Trust (“Northview”) (TSX:NVU.UN), today announced financial results for the three months ended March 31, 2018.

HIGHLIGHTS

• Diluted FFO per unit of $0.49 for the first quarter of 2018, compared to $0.44 for the same period of 2017, excluding Non-recurring Items

• Same door NOI increase of 6.0% including 6.9% increase for multi-family business segment for the first quarter of 2018

• Occupancy of 93.3% in the first quarter of 2018, an improvement of 270 basis points (“bps”) from the same period of 2017 and consistent with the fourth quarter of 2017

• Following the completion of the internalization of property management in Quebec during the first quarter of 2018, the entire portfolio is internally managed

• Total fair value increase of $7.1 million attributable to recently completed developments in Regina, SK, and Iqaluit, NU, an increase of 22% relative to total development costs

• Annualized NOI increase from the Value Creation Initiatives (“VCIs”) was $0.8 million in the first quarter of 2018, bringing the cumulative progress to $7.6 million

• Completed $33.7 million of acquisitions in 2018, including a 137 unit apartment in Nanaimo, BC, and development land in each of Nanaimo, BC, and Kitchener, ON

Todd Cook, President and CEO commented, “The improved results for the first quarter represent a solid start to the year for Northview. We are excited to see continued same door NOI growth, led by Ontario and further improvements in Western Canada, combined with continued successful execution of our value creation initiatives.”

“Our high-end renovation program continues to generate returns in excess of our targeted 15% to 20%. We have been steadily increasing the number of eligible properties as a result of strong market performance in Ontario, as well as recent acquisitions completed in 2017,” continued Mr. Cook.

Mr. Cook concluded, “We are looking forward to starting our first development in Ontario on the recently acquired land in Kitchener and beginning the second phase of our successful project in Calgary. We remain focused on creating value for our Unitholders through organic growth, growth from new developments, and future acquisition opportunities.”

Financial Performance Highlights

Funds from operations (“FFO”) is considered a non-GAAP measure and do not have any standardized meaning as prescribed by generally accepted accounting principles (“GAAP”). See “Non-GAAP and Other Financial Measures” disclosure below.

(i) Trust Unit refers to the publicly traded Northview Trust Unit and the Class B LP Unit.
(ii) See “Non-recurring Items” disclosure below.

Q1 2018 HIGHLIGHTS

FFO

Diluted FFO was $28.7 million for the three months ended March 31, 2018, compared to $25.0 million for the same period in 2017. Diluted FFO per unit was $0.49 for the three months ended March 31, 2018, an increase of 11.4% compared to $0.44 for the same period in 2017. The increases in FFO and FFO per unit were due to same door NOI growth, NOI contributions from acquisitions and newly developed properties completed since the first quarter of 2017, partially offset by non-core asset sales.

SAME DOOR NOI GROWTH OF 6.0%

During the three months ended March 31, 2018, total same door NOI growth was 6.0%, compared to total same door NOI decrease of 0.3% for the same period in 2017. Same door NOI increased 6.9% for the multi-family business segment during the three months ended March 31, 2018, compared to an increase of 0.5% for the same period in 2017. The multi-family same door NOI increase was led by higher AMR and occupancy across all regions.

Ontario continued with strong same door growth of $1.6 million or 15.4% during the quarter. Of the total same door NOI increase of $1.6 million, $0.9 million was due to higher AMR partially driven from successful execution of the VCIs, $0.2 million was due to higher occupancy, and $0.5 million was due to electricity cost savings.

In Western Canada, multi-family same door NOI increased 4.1% in the first quarter of 2018, mainly due to higher revenue from AMR and occupancy increases, partially offset by higher utility costs.

AMR improvement and higher occupancy in Quebec and Northern Canada resulted in same door NOI increases during the quarter of 6.5% and 3.9%, respectively. In addition, cost savings from the internalization of property management contributed to the same door NOI growth in Quebec.

Same door NOI for the three months ended March 31, 2018, decreased 0.8% in Atlantic Canada. The decrease was due to higher maintenance and utilities, partially offset by cost savings from the internalization of property management. Excluding one-time electricity rebates received in the prior year of $0.1 million, same door NOI growth in Atlantic Canada would have been 2.4%.

STRONG TRACTION ON VALUE CREATION INITIATIVES

VCIs resulted in approximately $0.8 million of additional annualized NOI in the first quarter of 2018. The cumulative progress on VCIs is $7.6 million since November 1, 2015, which is 53% of the initial five-year target of $14.3 million established in 2015.

The high-end renovation program continues to prove successful, achieving a rate of return of 26% during the quarter, exceeding the target rate of return of 15% to 20%. During the quarter, 113 units relating to the Transaction were completed with an AMR increase of approximately $277 per unit.

With the success of the program, management continues to evaluate additional properties and suites for high-end renovations to expand the program. In addition to the high-end renovation program target set in 2015, management has identified 875 units as part of the acquisition completed in December 2017.

Management plans to complete approximately 500 units under the high-end renovation program in 2018.

OCCUPANCY REMAINS STRONG ACROSS THE PORTFOLIO

For the three months ended March 31, 2018, occupancy improved by 270 bps to 93.3%, compared to the same period of 2017 and remains consistent with the fourth quarter of 2017. Occupancy in all regions increased in the quarter compared to the same period of 2017, with Western Canada showing the largest improvement increasing 440 bps to 86.1%.

NEW ACQUISITIONS OF $34 MILLION

During the first quarter of 2018, Northview acquired a property in Nanaimo, BC, for $22.0 million consisting of four buildings containing 137 multi-family units and approximately 6,000 square feet of commercial space, known as Woodgrove Pines. The acquisition includes opportunities for future redevelopment and new units. In addition, a parcel of development land in Kitchener, ON, consisting of 4.3 acres of land was acquired for $5.4 million.

Subsequent to the end of the first quarter, Northview completed the acquisition of 6.9 acres of land for future development in Nanaimo, BC, for $6.3 million.

GROWTH THROUGH NEW DEVELOPMENT PROJECTS

Northview plans to commence development projects with total costs of approximately $50 to $100 million in 2018 in Calgary, AB, and on the recently purchased land in Kitchener, ON. The Calgary, AB, development is the second phase of the successful Vista project. The development in Kitchener, ON, supports Northview’s strategic goal of expanding its in-house development expertise to Ontario and is expected to further drive growth in net asset value.

Northview has a development project underway in Canmore, AB, with total estimated development costs of $25.0 million. At the end of the first quarter, $13.3 million has been incurred in respect of this project and occupancy is expected to commence in the third quarter of 2018.

During the first quarter of 2018, Northview completed the development of 132 units in Regina, SK, and 30 units along with approximately 11,000 square feet of commercial space in Iqaluit, NU. In Regina, leasing is ahead of expectations reaching 51% leased and the multi-family units in Iqaluit, NU, have been 100% leased as of May 2018. Northview has recorded a net fair value increase of $7.1 million or 22% relative to total development costs.

STRONG COVERAGE RATIOS

Debt to gross book value was 57.0% as at March 31, 2018, an increase of 60 bps from December 31, 2017. Interest and debt service coverage ratios were 3.09 and 1.65, respectively, for the twelve months ended March 31, 2018, compared to 3.05 and 1.63, respectively, for the twelve months ended December 31, 2017.

Debt to gross book value increased during the quarter as a result of internally funded growth. During this period, organic growth reflected in the same door NOI increase of 6.0% and NOI contributions from acquisitions and newly developed properties improved the interest and debt service coverage ratios.

Northview continues to monitor interest rates to identify opportunities to reduce its overall borrowing costs. During the three months ended March 31, 2018, Northview completed $81.2 million of mortgage refinancing, excluding short-term financing, for multi-family properties with a weighted average interest rate of 3.17% and an average term to maturity of 7.2 years.

FINANCIAL INFORMATION

Northview’s consolidated financial statements, the notes thereto, and Management’s Discussion and Analysis for the three months ended March 31, 2018, can be found on Northview’s website at www.northviewreit.com or www.sedar.com.

CAUTIONARY AND FORWARD-LOOKING STATEMENTS

This media release contains forward-looking statements including, but not limited to, statements relating to execution of our strategic priorities, including VCIs and organic growth within our portfolio, development and acquisition opportunities, completion and occupancy of development projects, and opportunities for the reduction of weighted average interest rates. These statements are not guarantees of future events, performance or results and will not necessarily be accurate indications of whether, or the times at which, such events, performance or results will be achieved.

Forward-looking statements are based on information available at the time they are made, underlying estimates and assumptions made by management and management's good faith belief with respect to future events, performance and results, and are subject to inherent risks and uncertainties surrounding future expectations generally, which could cause actual results to differ materially from what is currently expected. Such risks and uncertainties include, but are not limited to, risks related to: real property ownership; availability of cash flow and mortgage financing; demand for rental accommodation and commercial space; natural resource prices; development and construction risks; reliance on key personnel; concentration of tenants; capital requirements; interest rate risk; credit risk; liquidity risk; general uninsured losses; government regulation; environmental risk; utility costs; potential conflicts of interest; integration of acquired properties; income tax related risk factors; and other risk factors more particularly described in the most recent Annual Information Form available on SEDAR at www.sedar.com. Additional risks and uncertainties not presently known to Northview or that Northview currently believes to be less significant may also adversely affect Northview.

Readers are cautioned that the above list of factors is not exhaustive and that should certain risks or uncertainties materialize, or should underlying estimates or assumptions prove incorrect, actual events, performance and results may vary significantly from those expected. There can be no assurance that the actual results, performance, events or activities anticipated by Northview will be realized or, even if substantially realized, that they will have the expected consequences to, or effect on, Northview. Readers, therefore, should not place undue importance on forward-looking information. Further, forward-looking statements speak only as of the date on which such statements are made. Northview disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

NON-GAAP AND OTHER FINANCIAL MEASURES

Certain measures in this media release do not have any standardized meaning as prescribed by GAAP and, therefore, are considered non-GAAP measures. These measures are provided to enhance the readers’ overall understanding of our current financial condition. 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. Please refer to Northview’s most recent Management’s Discussion and Analysis for definitions of non-GAAP and other financial measures, including FFO, debt to gross book value, debt service coverage and interest coverage.

NON-RECURRING ITEMS

During the three months ended March 31, 2018, Northview received insurance proceeds of $0.4 million relating to a fire in Lethbridge, AB. During the year ended December 31, 2017, Northview received total insurance proceeds of $0.9 million relating to the wildfires in Fort McMurray, AB, and the fire in Lethbridge, AB. These items have been defined as “Non-recurring Items”, as they are not considered normal operating conditions, and management has presented revenue, operating expenses, NOI, same door NOI and NOI margin for the multi-family residential business segment and other specific performance metrics adjusting for Non-recurring Items where appropriate.

FINANCIAL RESULTS CONFERENCE CALL AND WEBCAST

Participating on the conference call and webcast will be Mr. Todd Cook, President and Chief Executive Officer, Mr. Travis Beatty, Chief Financial Officer, and Mr. Leslie Veiner, Chief Operating Officer.

WEBCAST INFORMATION
Date: Friday, May 11, 2018
Time: 10:00 a.m. Mountain Time, 12:00 p.m. Eastern Time
Webcast: www.northviewreit.com/investor-relations/presentations

CONFERENCE CALL INFORMATION
Dial In: 1-855-473-4527 or 1-661-378-9963
Conference ID: 7880967

REPLAY INFORMATION
The webcast will be available for replay two hours after the conference call ends and will be available at: www.northviewreit.com/investor-relations/presentations

CORPORATE PROFILE

Northview is one of Canada's largest publicly traded multi-family REITs with a portfolio of approximately 25,000 quality residential suites and 1.2 million square feet of commercial space in more than 60 markets across eight provinces and two territories. Northview's well-diversified portfolio includes markets characterized by expanding populations and growing economies, which provides Northview the means to deliver stable and growing profitability and distributions to Unitholders of Northview over time. Northview currently trades on the TSX under the ticker symbol: NVU.UN. Additional information concerning Northview is available at www.sedar.com or www.northviewreit.com.

Northview Apartment Real Estate Investment Trust

Mr. Todd Cook
President and Chief Executive Officer
(403) 531-0720

Mr. Travis Beatty
Chief Financial Officer
(403) 531-0720

Mr. Leslie Veiner
Chief Operating Officer
(403) 531-0720