Mr. Todd Cook reports

NORTHVIEW RESIDENTIAL REIT ANNOUNCES Q3 2023 FINANCIAL RESULTS, INCLUDING SUCCESSFUL COMPLETION OF THE RECAPITALIZATION EVENT, CONTINUED STRONG SAME DOOR PERFORMANCE, AND IMPROVED FFO PAYOUT RATIO

Northview Residential REIT today released its financial results for the three and nine months ended Sept. 30, 2023.

All amounts in this news release are in thousands of Canadian dollars unless otherwise indicated. In August 2023, Northview's units were consolidated on a 1.75 to 1.00 basis. All references to the number of units and per-unit amounts in this news release have been restated and are reflected on a postconsolidation basis.

"We were pleased that occupancy and AMR continued to improve through the third quarter of 2023, emphasizing the strong fundamentals of the multiresidential real estate market. Northview's third quarter FFO payout ratio of 63.9 per cent provides for sustainable monthly Unitholder distributions," noted Todd Cook, chief executive officer of Northview. "The third quarter included a significant milestone as it was also our first quarter as Northview Residential REIT following the completion of our recapitalization event, including the acquisitions of three high-quality portfolios. Through enhanced flexibility, further portfolio diversification and a stronger balance sheet, the recapitalization event, along with the reduction of the credit facilities, puts Northview in a strong position to drive unitholder value in years to come," concluded Mr. Cook.

Q3 2023 highlights

• On Aug. 21, 2023, Northview completed the previously announced recapitalization transaction, which included the acquisitions of three high-quality portfolios consisting of 3,301 multiresidential suites and a transformation into Northview Residential REIT, an open-ended real estate investment trust. The recapitalization event provided Northview with further geographic diversification, grew total assets to $2.7-billion and provided the foundation for future growth opportunities through a strengthened balance sheet and a reduction in overall leverage. The completion of the recapitalization event has enhanced Northview's ability to broaden and deepen its access to capital.
• Same door net operating income (NOI) grew by 0.3 per cent from the third quarter of 2022 mainly due to multiresidential NOI offset by rental abatements provided to tenants evacuated due to the Yellowknife, NWT, wildfires. NOI from the acquired properties of $4.0-million in the third quarter of 2023, which reflected 41 days of operations, was consistent with management's expectations.
• Occupancy for the multiresidential segment increased for the sixth consecutive quarter. Multiresidential segment occupancy of 94.7 per cent represented an increase of 260 basis points (bps) from the third quarter of 2022, which was driven by a 660 bps increase in Western Canada.
• Debt to gross book value was 65.8 per cent as at Sept. 30, 2023, a decrease of 370 bps from 69.5 per cent as at Dec. 31, 2022, as the recapitalization event deleveraged and strengthened the balance sheet, driven by lower leverage ratios for the acquired portfolios.
• Distributions declared with unitholders of $8.0-million for the three months ended Sept. 30, 2023, represented 63.9 per cent of $12.5-million of funds from operations (FFO) in the third quarter of 2023, which is in line with management's expectations following the distribution reduction in June, 2023.
• Credit facility repayments of $126.0-million were completed in the third quarter of 2023, bringing repayments for the nine months ended Sept. 30, 2023, to $224.1-million. Northview increased its proportion of fixed-rate debt to 75 per cent as at Sept. 30, 2023, from 56 per cent as at Dec. 31, 2022.
• FFO was $12.5-million compared with $14.6-million for the three months ended Sept. 30, 2022, as higher financing costs more than offset increased NOI. FFO per basic and diluted unit of 46 cents and 43 cents were lower than 71 cents and 71 cents, respectively, for the comparative period due to lower FFO and additional units issued for the recapitalization event.
• Net and comprehensive income of $155.5-million was higher than $52.7-million for the three months ended Sept. 30, 2022, driven by a higher fair value gain on investment properties and lower distributions, partially offset by recapitalization event costs. The fair value gain on investment properties primarily related to a higher fair value of the acquired portfolios compared with the lower accounting of the acquisition cost.

2023 year-to-date highlights

• Same door NOI of $88.5-million in 2023 was higher than $84.2-million for 2022 as higher revenue more than offset higher operating expenses. The 5.2-per-cent increase was driven by the multiresidential segment due to a 260 bps increase in occupancy compared with the nine months ended Sept. 30, 2022, and higher AMR across all regions.
• Two thousand twenty-three FFO of $31.0-million was lower than $41.7-million for the nine months ended Sept. 30, 2022, as higher financing costs exceeded higher NOI. FFO per basic unit and diluted unit of $1.36 and $1.34 were lower than $2.03 and $2.03, respectively, for the comparative period due to lower FFO and additional units issued for the recapitalization event.
• Net and comprehensive income for the nine months ended Sept. 30, 2023, of $143.0-million was higher than $45.7-million for 2022. The increase in net and comprehensive loss was driven by a higher fair value gain on investment properties, lower distributions and NOI growth, partially offset by recapitalization event costs and higher financing costs.
• During the nine months ended Sept. 30, 2023, Northview completed $446.6-million of mortgage financing with a weighted average interest rate of 4.27 per cent and an average term to maturity of 7.48 years.

Financial information

Northview's unaudited condensed consolidated interim financial statements, the notes thereto, and management's discussion and analysis for the three months and nine months ended Sept. 30, 2023, and 2022, can be found on Northview's website and on SEDAR+.

About Northview Residential REIT

Northview is a publicly traded real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario for the primary purpose of indirectly acquiring, owning and operating a portfolio of income-producing rental properties in secondary markets within Canada.

We seek Safe Harbor.