Mr. Robert McKee reports

FIRM CAPITAL PROPERTY TRUST REPORTS SOLID Q4/2023 RESULTS AND IMPROVING AFFO PAYOUT RATIO

Firm Capital Property Trust has released its financial results for the three and 12 months ended Dec. 31, 2023.

Property portfolio highlights

The portfolio consists of 65 commercial properties with a total gross leasable area of 2,553,184 square feet, five multiresidential complexes composed of 599 units and four manufactured home communities composed of 537 units. The portfolio is well diversified and defensive in terms of geographies and property asset types, with 49 per cent of net operating income (42 per cent of asset value) composed of grocery-anchored retail followed by industrial at 28 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 (41 per cent of asset value) composed of assets located in Ontario, followed by Quebec at 37 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 11.2 per cent of total net rent. Further, the top-10 tenants are composed of large national tenants and account for 31.8 per cent of total net rent.

Tax-efficient distributions

Ninety-four per cent of 2023 distributions were return of capital or non-taxable. For the year ended Dec. 31, 2023, the trust is pleased to report that 88 per cent of distributions were ROC while 6 per cent represented the non-taxable portion of capital gains.

Fourth quarter 2023 highlights

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

• Net income was approximately $6.8-million, compared with $8.7-million net income recorded for the same period in 2022;
• $7.48 net asset value per unit;
• Net operating income was approximately $9.5-million, a 3-per-cent increase from the same period in 2022;
• Same-property NOI increased 5 per cent over Q4 2023 and year to date;
• Adjusted funds from operations were approximately $4.7-million, 10 per cent higher than the same period in 2022;
• AFFO per unit for Q4 2023 increased by 10 per cent to 12.8 cents over Q4 2022;
• Payout ratio decreased to 101 per cent for Q4 2023 from 112 per cent over the same period in 2022;
• Commercial occupancy was 96.5 per cent, and multiresidential occupancy was 96.9 per cent while manufactured home communities were 100.0 per cent;
• The trust closed on the sale of a retail property from the centre ice retail portfolio for gross proceeds of approximately $2.0-million; the trust's pro rata share of the gross proceeds was $1.4-million;
• Conservative leverage profile with debt to gross book value at 52.6 per cent;and
• The trust declared and approved monthly distributions in the amount of 4.33 cents per trust unit for unitholders of record on April 30, 2024, May 31, 2024, and June 28, 2024, payable on or about May 15, 2024, June 17, 2024, and July 15, 2024, respectively.

See the attached chart for additional information.

Distribution reinvestment plan and unit purchase plan

The trust has in place a distribution reinvestment plan and unit purchase plan. 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 10 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 and net lease convenience retail. 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.