Mr. Robert McKee reports

FIRM CAPITAL PROPERTY TRUST REPORTS Q1/2023 RESULTS

Firm Capital Property Trust has released its financial results for the three months ended March 31, 2023.

Property portfolio highlights

The portfolio consists of 66 commercial properties with a total gross leasable area (GLA) of 2,555,185 square feet, five multiresidential complexes composed of 599 units and four manufactured home communities composed of 536 units. The portfolio is well diversified and defensive in terms of geographies and property asset types, with 50 per cent of net operating income (37 per cent of asset value) composed of grocery-anchored retail followed by industrial at 27 per cent of NOI (32 per cent of asset value). In addition, the portfolio is well diversified in terms of geographies with 38 per cent of NOI (40 per cent of asset value) composed of assets located in Ontario, followed by Quebec at 36 per cent of NOI (33 per cent of asset value).

Tenant diversification

The portfolio is well diversified by tenant profile with no tenant currently accounting for more than 10.5 per cent of total net rent. Further, the top-10 tenants are composed of large national tenants and account for 30.3 per cent of total net rent.

Normal course issuer bid (NCIB) generates 9.1-per-cent return on investment

For the three months ended March 31, 2023, the trust repurchased 89,200 trust units for net proceeds of approximately $500,000. The trust units were purchased under the NCIB at a weighted average price of $5.72 per trust unit for an implied distribution buyback yield of 9.1 per cent.

$35.9-million mortgage refinancing

On Jan. 16, 2023, the trust closed on an early renewal of a $35.9-million mortgage on its Waterloo industrial portfolio. The terms of the loan are at a 4.77-per-cent fixed interest rate, seven-year term and a 30-year amortization. The trust's 70-per-cent portion of the loan was $25.1-million.

$5.9-million manufactured housing community acquisition

On Jan. 31, 2023, the trust closed on the acquisition of a 50-per-cent interest in a 56-site manufactured housing community called SunPark Parkhill Estates located in Peterborough, Ont., and a 58-site manufactured housing community called SunPark Skyview Estates located in Trenton, Ont. The acquisition price for the trust's portion was $3.0-million (including transaction costs).

$38-million refinancing eliminates all floating-rate mortgage debt

On April 26, 2023, the trust locked in a fixed-rate mortgage for $38-million on a multiresidential building in Pointe-Claire, Que., at an interest rate of 3.69 per cent for 10 years, which is expected to close by the end of second quarter 2023. The closing of this transaction eliminates all floating-term mortgage debt for the trust, with a remaining weighted-average repayment term of approximately four years. Furthermore, the annual forecasted decrease in interest expense that is expected under this new renewal would be approximately $1.1-million or three cents per unit.

First quarter 2023 highlights

Key highlights for the three months ended March 31, 2023, are as follows:

• Net income was approximately $5.4-million, which was comparable with the same period in 2022;
• $7.65 net asset value per unit;
• Net operating income was approximately $9.2-million, 11-per-cent increase over Q1 2022;
• Same-property NOI increased 7 per cent over Q1 2022;
• Adjusted funds from operations (AFFO) were approximately $4.0-million, which was comparable with the same period in 2022;
• Commercial occupancy was 97.1 per cent, and multiresidential occupancy was 91.9 per cent while manufactured homes communities was 99.8 per cent;
• Conservative leverage profile with debt to gross book value at 52 per cent;
• The trust declared and approved monthly distributions in the amount of 4.333 cents per trust unit for unitholders of record on July 31, 2023, Aug. 31, 2023, and Sept. 29, 2023, payable on or about Aug. 15, 2023, Sept. 15, 2023, and Oct. 16, 2023, respectively.

See the attached table for additional information.

For the complete financial statements, management's discussion and analysis, and supplementary information, please visit SEDAR or the trust's website.

Distribution reinvestment plan and unit purchase plan

The trust has in place a distribution reinvestment plan (DRIP) and a unit purchase plan (the UPP). Under the terms of the DRIP, Firm Capital Property's unitholders may elect to automatically reinvest all or a portion of their regular monthly distributions in additional units, without incurring brokerage fees or commissions. Under the terms of the UPP, Firm Capital Property's unitholders may purchase a minimum of $1,000 of units per month and maximum purchases of up to $12,000 per annum. Management and trustees have not participated in the DRIP or UPP to date, and own or control approximately 9 per cent of the issued and outstanding trust units of the trust.

About Firm Capital Property Trust

Firm Capital Property is focused on creating long-term value for unitholders, through capital preservation and disciplined investing, to achieve stable distributable income. In partnership with management and industry leaders, the trust's plan is to own, as well as to co-own, a diversified property portfolio of multiresidential, flex industrial, net lease convenience retail and core service provider professional space. In addition to stand-alone accretive acquisitions, the trust will make joint acquisitions with strong financial partners and acquisitions of partial interests from existing ownership groups, in a manner that provides liquidity to those selling owners and professional management for those remaining as partners. Firm Capital Realty Partners Inc., through a structure focused on an alignment of interests with the trust, sources, syndicates, and property and asset manages investments on behalf of the trust.

We seek Safe Harbor.