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Starlight U.S. Multi-Family Core Fund Provides Update on Performance

Friday, September 20, 2013 12:54 PM

Starlight U.S. Multi-Family Core Fund Provides Update on Performance


TORONTO, Sept. 20, 2013 /CNW/ - Starlight U.S. Multi-Family Core Fund (TSX.V: UMF.A, UMF.U) (the "Fund") announced today an update on its performance to date. Appraisals commissioned by the manager of the Fund for each of its properties resulted in a total appraised value of US$128.4 million, which amount exceeds the aggregate purchase price of the properties by US$10 million or 8.4%. Each of the properties of the Fund was appraised by CBRE Inc. in September, 2013 to confirm the Fund's strong performance to date. The increase in appraised value is the direct result of net operating income ("NOI") growth and not capitalization rate compression, and reflects strong underlying fundamentals and market conditions as well as the manager of the Fund's active asset management strategy.

The Fund also announced that the weighted average occupancy for the period ending August 31, 2013 for the Fund's properties was 96.3%, which was 2.3% above the forecasted occupancy for the period ending September 30, 2013 as set out in the Fund's final prospectus dated March 31, 2013 (the "Forecast"). Further, NOI for the Fund's properties was 9% ahead of the Forecast for the period ending June 30, 2013.  The increase in occupancy is believed to be attributable to the strength of market conditions in Houston and Dallas, the cities where the Fund's properties are located, and the seasonal nature of multi-family leasing, with summer being a historically strong leasing period. Other than results stemming from the acquisition of Greenhaven and the 35% interest in the Falls at Eagle Creek which will impact the comparability of income, operating expenses and NOI, management of the Fund is not aware of any events and circumstances that occurred between the closing of the Fund's initial public offering on April 18, 2013 and the date of this news release that are reasonably likely to cause actual operating results to differ materially from those contained in the Forecast for the current or future periods.

Given the strong occupancies at the properties, the Fund has aggressively increased rental rates on both new and renewal leases and curtailed concessions. Renewal rents for existing tenants are being increased between 3% and 8%, whereas asking rents for new tenants are being increased by 4% to 9% versus asking rents when the properties were acquired. Only moderate concessions are currently being offered on new leases at any of the Fund's properties.

Property management for the Falls at Copper Lake and the Falls at Eagle Creek is being provided by Greystar Real Estate Partners, the largest third party, multi-family property manager in the United States. Property Management for the Bridgemoor at Denton, Villages of Towne Lake and Greenhaven is being provided by the Pinnacle Family of Companies, the fourth largest third party, multi-family property manager in the United States.

Further details regarding the Fund's unit performance and distributions, market conditions where the Fund's properties are located, performance by the Fund's properties and a capital investment update are available in the Fund's September 2013 Newsletter which is available at http://starlightinvest.com/starlight-u-s-multi-family-core-fund.

About Starlight U.S. Multi-Family Core Fund

The Fund is a limited partnership formed under the Limited Partnerships Act (Ontario) for the primary purpose of indirectly acquiring, owning and operating a portfolio of diversified income producing rental properties in the U.S. multi-family real estate market.

Non-IFRS Measures

Certain terms used in this news release, such as NOI, are not measures defined under International Financial Reporting Standards ("IFRS") as prescribed by the International Accounting Standards Board, do not have standardized meanings prescribed by IFRS and should not be construed as alternatives to profit/loss, cash flow from operating activities or other measures of financial performance calculated in accordance with IFRS. NOI as computed by the Fund may not be comparable to similar measures as reported by other trusts or companies in similar or different industries. The Fund uses these non-IFRS measures to better assess the Fund's underlying performance and provides these additional non-IFRS measures so that investors may do the same.

NOI is defined as all property revenue, less direct property costs such as utilities, realty taxes, repairs and maintenance, on-site salaries, insurance, bad debt expenses, property management fees, and other property specific administrative costs.

NOI is presented in this news release because management considers this non-IFRS measure to be an important measure of the Fund's operating performance and uses this measure to assess the Fund's property operating performance on an unlevered basis.

Forward-Looking Information

This news release contains statements that may constitute forward-looking information within the meaning of Canadian securities laws and which reflect the Fund's current expectations regarding future events, including statements concerning: the payment of distributions; the value of the Fund's properties; performance relative to the Forecast; national and local real estate market conditions and economic variables; rental rates; and occupancy rates. Particularly, statements regarding future results, performance, achievements, prospects or opportunities for the Fund or the real estate industry are forward-looking statements. In some cases, forward-looking information can be identified by terms such as "may", "might", "will", "could", "should", "would", "occur", "expect", "plan", "anticipate", "believe", "intend", "seek", "aim", "estimate", "target", "project", "predict", "forecast", "potential", "continue", "likely", "schedule", or the negative thereof or other similar expressions concerning matters that are not historical facts.

The forward-looking information in this news release involves risks and uncertainties, including those set forth in the Fund's materials filed with the Canadian securities regulatory authorities from time to time at www.sedar.com. Actual results could differ materially from those projected herein. Those risks and uncertainties include, among other things, risks related to: reliance on the Fund's manager; the experience of the Fund's officers and directors; substitutes for residential real estate rental suites; reliance on property management; competition for real property tenants; U.S. market factors; and currency exchange rates.

Information contained in forward-looking information is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management's perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances, including the following: the inventory of multi-family real estate properties; the extent of competition between properties; the population of multi-family real estate market participants; assumptions about the markets in which the Fund operates; the ability of the manager of the Fund to manage and operate the properties; the global and North American economic environment; foreign currency exchange rates; and governmental regulations or tax laws. Readers are cautioned against placing undue reliance on forward-looking statements. Except as required by applicable Canadian securities laws, neither the Fund nor its manager undertakes any 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 or to reflect the occurrence of unanticipated events.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Starlight U.S. Multi-Family Core Fund

Evan Kirsh
President, Starlight U.S. Multi-Family Core Fund

Copyright CNW Group 2013
(Source: CNW )
(Source: Quotemedia)


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