TORONTO, ON / ACCESSWIRE / August 3, 2022 / The Forum Real Estate Income and Impact Fund (“REIIF” or the “Fund”) reported second quarter results and is on track to deliver strong results for its owners in the first year.
The REIIF was launched in December 2021 and is focused on the acquisition of impact-driven institutional quality residential rental properties that provide long-term, stable, inflation-protected cash flows with the opportunity for capital appreciation. REIIF’s portfolio is located across Canada, with an emphasis on supply-constrained markets showing 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 consists of approximately $290 million in assets representing over 1,100 units, comprising over 400,000 square feet of gross leasable area in mixed-use student housing (PBSA ) and coexistence communities.
Series F initial investors in the REIIF have earned a time-weighted return of 6.2% to date through June 30, 2022, including a distribution yield of 4.5% (3.75 cents/month)1. Returns to date have primarily been driven by capital appreciation and strong rental rate growth. REIIF’s net asset value per unit is supported by third-party asset valuations and approved monthly by REIIF’s board of trustees, most of whom are independent of Forum Asset Management Inc. (“FAM”).
“We are pleased with our progress to date, focused on delivering strong total returns for unitholders during this period of market volatility,” said Aly Damji, managing real estate partner at FAM.
Rental income increased 25% quarter-over-quarter as the initial properties in the portfolio that were acquired with vacancies were leased.
“With occupancy at 95.4% 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, increasing net operating income and cash flow,” said Greg Spafford, Fund Director for REIIF . “Furthermore, through active asset management that includes increasing beds, units and amenities within 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 are focused on reducing environmental impact and increasing social engagement.
REIIF has established decarbonization plans for its 455 Abbott (Vancouver) and 1602-1604 Queen. (Toronto), targeting short-term energy savings and a multi-year plan to achieve net zero operational greenhouse gas emissions. In the second quarter, REIIF also submitted its inaugural Real Estate Assessment, a global ESG benchmark and investor-led reporting framework for listed companies, private equity funds, developers and investors who invest directly in real estate.
The fund ended the quarter with a debt-to-asset ratio of 48.4% and over $30 million in available liquidity. Further, nearly two-thirds of REIIF’s debt is at fixed rates with a WATM2 of over 8 years.
“REIIF’s strong balance sheet is supported by long-term fixed-rate mortgages secured through Canada’s Canada Mortgage and Housing Corporation (CMHC), among the cheapest debt capital available to property owners,” said Rajeev Viswanathan, managing partner and CFO at FAM .
Purchase – 399 Stan Bailie, Winnipeg, Manitoba
On July 11, REIIF added its fourth acquisition of 2022 and seventh acquisition since launching in December 2021. 399 Stan Bailie Drive, a 126-unit multifamily property 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 property was purchased fully occupied, with attractive fixed rate financing on the spot at an interest rate of 1.6%, making it a high profile acquisition for the Fund. Over the next year, the property will benefit from several ESG upgrades that will contribute to higher revenue, lower operating costs and greater social engagement, all of which will lead to greater value.
For more details, see the REIIF report for the second quarter of 2022 provided to current and potential investors.
1 – Yield and total yield are for Series F units as of December 2021 and are not guarantees of future results. The distribution rate and total return received by the unitholder will vary depending on the series of trust units in which the unitholder invests.
2 – Weighted Average Time to Maturity (WATM) aggregates each loan’s remaining years to maturity, weighted by the loan’s outstanding principal relative to total indebtedness.
3 – Source: CBRE “Assessment of Canadian Secondary Markets for Multifamily Investments”, May 2022.
REIIF invests primarily in institutional quality, multi-family rental apartments, purpose-built student housing (PBSA) and co-housing communities located in supply-constrained markets in Canada. The fund also seeks to provide sector-leading and ESG-driven portfolios that will enhance returns and total returns, while future-proofing the portfolio to ensure income diversity and resilience. For more information, visit our website at www.forumreiif.ca.
About Forum Asset Management Inc.
Forum Asset Management Inc., the manager of REIIF, together with its affiliates, is an investor, developer and asset manager operating throughout North America for over 25 years. Our core purpose is to deliver Outstanding Results™ to our stakeholders. Our adaptable, agile and dynamic team is committed to sustainability and responsible investment, 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 numerous top investors. We are proud to have achieved the highest level of return on alternative assets since 2002, while positively impacting more than 6,000 lives. Visit www.forumam.com.
Name: Rajeev Viswanathan, Managing Partner and CFOP Phone Number: 416-947-0389 Email: [email protected]
The information contained in this release is 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 any offer or solicitation to sell or issue, or any reference to any offer to buy or subscribe for, any securities, nor does any part of this press release form the basis of or be relied upon may be relied upon in connection with any contract or investment decision relating to any securities of the REIIF. This press release does not constitute any form of commitment, recommendation, representation or warranty by any person. You should not rely on the completeness of the information contained in this announcement. This press release is not intended to be a comprehensive overview of all matters concerning the REIIF. Please visit www.forumreiif.ca for more information.
This 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”, “expects”, “believes” or variations (including negative variations) of such words and phrases, or states that certain actions, events or results “may”, “could”, “would” or “will” be taken, occur or be achieved. Such forward-looking statements reflect management’s current beliefs and are based on assumptions 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 could cause future results to differ materially from expectations, including, without limitation, risks associated with general economic conditions; adverse factors affecting the real estate market in general or those specific markets in which the REIIF owns property; 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 as expected, 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 other than in accordance with applicable securities laws.