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States/
TORONTO, Feb. 17,
2023 /CNW/ - Flagship Communities Real Estate
Investment Trust ("Flagship" or the "REIT") (TSX: MHC.U) announced
today it has agreed to acquire a 20-acre, high-quality manufactured
housing resort community ("MHC") in Austin, Indiana, further expanding the REIT's
presence in the key market of Indiana. The acquisition ("Acquisition")
includes 120 MHC homesites, which includes 94 developed lots and 26
lots for additional expansion. The purchase price for the
Acquisition was satisfied by approximately $2.0 million in the issuance of Class B units by
Flagship Operating, LLC, a subsidiary of the REIT. Flagship expects
the acquisition to be accretive to the REIT's long-term AFFO on a
per unit basis.
"The acquisition of a community within our existing Indiana footprint demonstrates our growth
strategy as well as our ability to identify stable, high performing
communities in desirable areas," said Kurt
Keeney, President and Chief Executive Officer. "Affordable
housing continues to be a challenge for many Americans. Located
just 35 miles from the Louisville
Kentucky metro area, the Austin location offers affordable housing in
Scott County, Indiana, and
includes an array of amenities including a new clubhouse,
playground, basketball courts and soccer fields. Scott County is in the automotive supply chain
network with the Honda manufacturing plant located in Greensburg, Indiana and is within 35 minutes
of downtown Louisville, Kentucky
as well as also being on the I-65 corridor that connects
Louisville to Indianapolis, Indiana."
"This acquisition is our 18th in Indiana and will benefit from our economies of
scale with regard to management and service," said Chief Investment
Officer, Nathan Smith. "We are a
well-known community operator in this market and have high demand
for quality home communities in the area. This MHC has significant
growth potential as we look to increase occupancy in the developed
lots as well as the lots available for expansion."
About Flagship Communities Real Estate Investment
Trust
Flagship Communities Real Estate Investment Trust is an
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 has been formed to own and
operate a portfolio of income-producing manufactured housing
communities located in Kentucky,
Indiana, Ohio, Tennessee, Arkansas, Missouri, and Illinois, including a fleet of manufactured
homes for lease to residents of such housing communities.
Non-IFRS Financial Measures
The REIT uses certain non-IFRS financial measures, including
certain real estate industry metrics such as FFO, FFO Per Unit,
AFFO, AFFO Per Unit and Same Community, to measure, compare and
explain the operating results, financial performance and financial
condition of the REIT. The REIT also uses AFFO in assessing its
distribution paying capacity and NOI 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 for
measuring 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 as supplemental in nature and not as
a substitute for related financial information prepared in
accordance with IFRS.
FFO is defined as IFRS consolidated net income adjusted for
items such as distributions on redeemable or exchangeable units
recorded as finance cost under IFRS (including distributions on the
Class B Units, unrealized fair value adjustments to investment
properties, loss on extinguishment of acquired mortgages payable,
gain on disposition of investment properties and depreciation. The
REIT's method of calculating FFO is substantially in accordance
with the recommendations of the Real Property Association of
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 method of calculating AFFO is
substantially in accordance with REALPAC's recommendations. The
REIT uses a capital expenditure reserve of $60 (dollars/annual) per lot and $1,000 (dollars/annual) per rental home in the
AFFO calculation. This reserve is based on management's best
estimate of the cost that the REIT may incur, related to
maintaining the investment properties.
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
current expectations of the REIT regarding future events, including
statements concerning the intended monthly distributions of the
REIT. In some cases, forward-looking statements can be identified
by terms such as "may", "will", "could", "occur", "expect",
"anticipate", "believe", "intend", "estimate", "target", "project",
"predict", "forecast", "continue", or the negative thereof or other
similar expressions concerning matters that are not historical
facts. Material factors and assumptions used by management of the
REIT to develop the forward-looking information include, but are
not limited to, the REIT having sufficient cash to pay its
distributions. While management considers these assumptions to be
reasonable based on currently available information, they may prove
to be incorrect.
Although management believes the expectations reflected in
such forward-looking statements are reasonable and represent the
REIT's internal expectations and beliefs at this time, such
statements involve known and unknown risks and uncertainties and
may not prove to be accurate and certain objectives and strategic
goals may not be achieved. A variety of factors, many of which are
beyond the REIT's control, 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
available under the REIT's profile at www.sedar.com, including
under the heading "Risk Factors" therein. Readers are cautioned
against placing undue reliance on forward-looking statements.
Except as required by applicable Canadian securities laws, the REIT
undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise, after the date on which the statements
are made.
For further information, please contact:
Eddie Carlisle, Chief Financial Officer
Flagship Communities Real Estate Investment Trust
Tel: +1 (859) 568-3390
SOURCE Flagship Communities Real Estate Investment Trust