/EINPresswire.com/ -- CALGARY, ALBERTA -- (Marketwired) -- 08/11/16 -- Northview Apartment Real Estate Investment Trust ("Northview" or the "REIT") (TSX: NVU.UN) today announced financial results for the three and six months ended June 30, 2016.

Second Quarter Highlights

--  Diluted funds from operations ("FFO") per unit of $0.51 for the three
    months ended June 30, 2016, compared to $0.64 in the second quarter of
    2015. Diluted FFO per unit was $0.56, excluding Non-recurring Items.
    Diluted FFO payout ratio of 79.6% for Q2 2016, or 72.9%, excluding Non-
    recurring Items.
--  Multi-family residential portfolio occupancy of 90.8%, consistent with
    90.7% in Q1 2016. The stable high occupancy in Northview's Ontario,
    Atlantic Canada, and Northern Canada regions offset occupancy declines
    experienced in Northview's natural resource dependent markets.
--  Northview's Airdrie, AB, multi-family development is 95% leased after
    four months.
--  Northview experienced strong leasing demand in Fort McMurray, AB, as
    residents return to the city, reducing vacancy to 21% on August 1, 2016,
    compared to pre-wildfire levels of 29% as of April 1, 2016.
--  Completed the property management internalization of 7,600 units in
    Ontario effective April 1, 2016.
--  Continued execution of the strategic value creation initiatives in line
    with management's expectations.
--  Non-core asset sales of $79 million (including sales under contract
    expected to close in Q3 2016) reduce debt to gross book value by 0.9%.
--  Interest and debt service coverage ratios remain strong at 3.05 and
    1.72, respectively.
--  The financial impact of the Fort McMurray wildfires and evacuation was
    $3.2 million. The majority of the costs, in excess of the $1.0 million
    insurance deductible, are expected to be recovered.

Todd Cook, President and CEO, commented, "Our balanced national portfolio delivered strong and stable results in many of our markets. The strategic diversification achieved in 2015 reduced our exposure to Western Canada from 50% to 22% of net operating income."

Mr. Cook continued, "We are pleased with the strong financial results in Northern and Atlantic Canada and stable results in Ontario and Quebec in the second quarter of 2016. We continued to experience weaker results in Western Canada, primarily due to economic conditions in our resource based markets: Alberta and northeastern British Columbia. The strong performance of the portfolio acquired in October 2015 coupled with the ongoing execution of our strategic value creation initiatives will continue to contribute organic growth. We are happy with the lease up of our new Airdrie development and are seeing increased demand for units in Fort McMurray as residents and the local workforce return to the city."

Mr. Cook concluded, "Our focus remains on executing on our 2016 strategic priorities, maintaining or improving occupancy in our properties and managing costs across the portfolio."

The 2016 strategic priorities for Northview are focused on creating value for Northview's unitholders and enhancing the financial stability of the REIT. This will be achieved through the following:

1.  Execution of Strategic Value Creation Initiatives: Northview will
    continue to execute on the value creation initiatives identified in the
    Transaction and identify areas throughout the existing portfolio where
    similar benefits would be expected. These initiatives include the
    execution of the high-end renovation program, increasing rents to market
    levels, completing the sub-metering program in Ontario, and the
    achievement of approved above guideline rent increases in Ontario.

    Progress made on the execution of the strategic value creation
    initiatives in 2016 is in line with management's expectations.

2.  Disposition of Non-Core Assets: Management has identified approximately
    $150 million of non-core properties across the portfolio that are
    expected to be sold in 2016 and 2017. The proceeds from these
    dispositions will be used to reduce overall debt levels and management
    will consider repurchasing Trust Units through its Normal Course Issuer
    Bid ("NCIB") that was approved by the TSX during the second quarter of
    2016.

    Northview has completed $30 million of non-core asset sales through
    August 11, 2016, and has an additional $49 million in dispositions under
    contract, subject to due diligence. These sales are expected to close in
    the third quarter of 2016, which reduce debt to gross book value by
    0.9%.

3.  Restructure Credit Facilities: The $350 million Bridge Facility that was
    obtained to purchase the Portfolio Acquisitions in the Transaction was
    repaid in full on March 30, 2016, through term mortgage financing with a
    weighted average interest rate of 3.15% and term to maturity of 7.2
    years.

    Northview expects to complete the consolidation of its $75 million and
    $45 million operating facilities into one operating facility in the
    third quarter of 2016.

    Northview has established a new $30.0 million credit facility secured by
    certain properties in Nunavut.

4.  Maintain Current Conservative Distribution Levels: Northview's low
    annual FFO payout ratio of approximately 70% allows the ability to
    maintain its current conservative distributions long term.

Portfolio Summary (including joint ventures at 100%) - June 30, 2016

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                                                         Total
                                     Execusuites   Residential    Commercial
Regions               Multi-family       & Hotel       (units)     (sq. ft.)
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Ontario                      8,235             -         8,235             -
Western Canada               7,241             -         7,241       136,000
Atlantic Canada              4,151           142         4,293       225,000
Northern Canada              2,402           277         2,679       771,000
Quebec                       2,285             -         2,285         3,000
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Total                       24,314           419        24,733     1,135,000
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Financial Performance Highlights

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(thousands of
 dollars, except
 per unit
 amounts)         Three months ended June 30      Six months ended June 30
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                       2016     2015  Change         2016     2015  Change
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Total revenue        81,112   49,401    64.2%     167,419   98,222    70.4%
Net operating
 income              44,330   30,041    47.6%      91,313   56,381    62.0%
Net and
 comprehensive
 income (loss)       (4,279)   6,289  (168.0%)        202   20,907   (99.0%)

FFO - diluted        27,335   20,327    34.5%      57,676   36,901    56.3%
FFO per Trust
 Unit - diluted   $    0.51  $  0.64   (20.3%) $     1.08  $  1.16    (6.9%)
FFO payout ratio
 -diluted              79.6%    63.7%   15.9%        75.4%    70.1%    5.3%

Excluding Non-
 recurring Items:
FFO - diluted      29,822(i)  20,327    46.7%   56,147(ii)  36,901    52.2%
FFO per Trust
 Unit - diluted   $    0.56  $  0.64   (12.5%) $     1.05  $  1.16    (9.5%)
FFO payout ratio
 -diluted              72.9%    63.7%    9.2%        77.4%    70.1%    7.3%

Distributions
 declared to
 Trust Unit
 holders             21,275   12,940    64.4%      42,551   25,880    64.4%
Distributions per
 Trust Unit            0.41     0.41     0.0%        0.81     0.81     0.0%
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(i)  Non-recurring Items in the three months ended June 30, 2016, include
     $3.2 million of incremental costs relating to the Fort McMurray
     wildfires, partially offset by $0.7 million of insurance proceeds
     received in the period.
(ii) Non-recurring Items in the six months ended June 30, 2016, include $4.7
     million of insurance proceeds received in the period, partially offset
     by $3.2 million of incremental costs relating to the Fort McMurray
     wildfires incurred in the period.

Net operating income ("NOI") and FFO are considered non-GAAP measures and do not have any standardized meaning as prescribed by generally accepted accounting principles ("GAAP"). See "Non-GAAP and Additional GAAP Measures" disclosure below.

FFO

Excluding Non-recurring Items, basic FFO for the three months ended June 30, 2016, was $29.5 million, an increase of 45.0%, compared to $20.3 million for the same period of 2015, due to the growth in Northview's portfolio from the Transaction. Non-recurring Items related to the Fort McMurray wildfire include $1.6 million of lost revenue and $1.6 million of incremental operating costs. In addition, Northview received insurance proceeds of $0.7 million in the second quarter. On a per unit basis, excluding Non-recurring Items, basic and diluted FFO for Q2 2016 was $0.56, compared to $0.64 for basic and diluted FFO for the second quarter of 2015.

Excluding Non-recurring Items, basic FFO for the six months ended June 30, 2016, was $55.5 million, an increase of 50.3%, compared to $36.9 million for the same period of 2015, primarily due to the growth in Northview's portfolio from the Transaction. On a per unit basis, excluding Non-recurring Items, basic FFO for the six months ended June 30, 2016, was $1.06 and diluted FFO was $1.05, compared to $1.16 for basic and diluted FFO for the same period of 2015.

The decrease in FFO on a per unit basis in the quarter was driven primarily by higher interest expense from additional mortgages and lower operating performance in natural resource based markets. Partially offsetting the decline was positive same door NOI growth from Northern Canada and positive contributions from the portfolios acquired in the Transaction, and Northview's other acquisitions and developments completed in 2015.

Northview's basic FFO payout ratio was 78.8% and diluted FFO payout ratio was 79.6% for the three months ended June 30, 2016, compared to basic and diluted of 63.7% for the same period of 2015. Excluding Q2 2016 Non-recurring Items, Northview's basic FFO payout ratio was 72.2% and diluted FFO payout ratio was 72.9%.

NOI

Multi-family NOI increased 62.5% and 80.0% for the three and six months ended June 30, 2016, primarily driven by the Transaction, compared to the same period of 2015.

Occupancy

Occupancy for the three months ended June 30, 2016, was 90.8%, increasing from 89.9% experienced in the same period of 2015 and consistent with 90.7% in the first quarter of 2016. The Ontario region maintained its stable high occupancy performance consistent with the first quarter of 2016, while improvements in the Atlantic Canada, Northern Canada and Quebec regions offset the declines experienced in the resource based Western region. The addition of the Ontario, Quebec and Atlantic Canada portfolios acquired in the Transaction, and the continued strong performance of the Northern Canada portfolio continue to provide Northview with stable operating results, partially offsetting the impact of natural resource based markets.

Occupancy by Region

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                            Q1     Q2     Q3     Q4            Q1        Q2
Region                    2015   2015   2015   2015   2015   2016      2016
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Ontario                      -      -      -   96.2%  96.2%  95.9%     95.9%
Western Canada            85.8%  84.7%  84.5%  84.3%  84.8%  81.9%  81.3(i)%
Atlantic Canada           94.4%  93.7%  91.3%  93.1%  93.1%  92.9%     93.5%
Northern Canada           93.1%  96.1%  97.4%  96.5%  95.8%  94.6%     95.3%
Quebec                    99.6%  99.0%  99.3%  90.6%  92.5%  90.7%     91.4%
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Overall                   89.4%  89.9%  90.0%  91.5%  90.3%  90.7%     90.8%
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(i) Western Canada occupancy for Q2 2016 has been adjusted to exclude the
    mandatory evacuation of Fort McMurray due to the wildfires.

Developments

The first phase of Northview's Calgary, AB, development, consisting of 261 units, is anticipated to be completed in the fourth quarter of 2016. Total development costs are expected to be $45.0 million, with an expected Cap Rate between 7.0% and 7.5%.

During the second quarter of 2016, Northview began the development of 36 units in Cambridge Bay, NU, with occupancy expected in the second quarter of 2017. Total development costs are estimated to be $10.5 million, with an expected Cap Rate between 10.0% and 10.5%.

Management continues to evaluate development opportunities in Ontario and has identified approximately 500 new units that can be developed on existing property sites acquired in the Transaction.

Financial Position

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                                           June 30,  December 31,
                                               2016          2015   Change
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Total assets (000'$)                      3,173,109     3,132,617      1.3%
Debt to gross book value                       60.2%         59.2%     1.0%
Interest coverage ratio (times)                3.05          3.31     (7.9%)
Debt service coverage ratio (times)            1.72          1.86     (7.5%)
Weighted average mortgage interest rate        3.29%         3.33%   (0.04%)
Weighted average term to maturity (years)       5.1           5.0      2.0%
Weighted average capitalization rate           6.81%         6.83%   (0.02%)
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Debt to gross book value, debt service coverage ratio and interest coverage
ratio are considered non-GAAP measures and do not have any standardized
meaning as prescribed by GAAP. See "Non-GAAP and Additional GAAP Measures"
disclosure below.

Management has a clear debt strategy plan to reduce leverage. Successful execution of the strategic value creation initiatives coupled with the non-core asset disposition plan is expected to reduce debt to gross book value below 55% in the next three to five years. The long-term goal is a debt to gross book value in the 50% to 55% range.

Northview's coverage ratios remain strong, and are among the best in the Canadian multi-family sector. For the twelve months ended June 30, 2016, the interest coverage ratio was 3.05 and the debt service coverage ratio was 1.72.

During the three months ended June 30, 2016, Northview completed $33.8 million in mortgage financings and renewals with a weighted average interest rate of 2.53% and a term to maturity of 6.1 years. The net proceeds were used to fund development and capital improvement activity.

Financial Statements

Northview's condensed consolidated financial statements and the notes thereto and Management's Discussion and Analysis for the three and six months ended June 30, 2016, can be found on Northview's website at www.northviewreit.com or www.sedar.com.

Cautionary/Forward-Looking Statements

This news release contains forward-looking statements relating to our value creation initiatives, disposition activity, restructuring of our credit facilities expected costs and Cap Rates of our development project, completion of apartments for which development approvals have been obtained, commencement of development of new buildings, prospects for long-term occupancy, distribution levels, and repurchases under the NCIB. These statements are not guarantees of future events, performance or results and will not necessarily be accurate indications of whether, or the times at which, such events, performance or results will be achieved.

Forward-looking statements are based on information available at the time they are made, underlying estimates and assumptions made by management and management's good faith belief with respect to future events, performance and results, and are subject to inherent risks and uncertainties surrounding future expectations generally, which could cause actual results to differ materially from what is currently expected. Such risks and uncertainties include, but are not limited to, risks related to: real property ownership; availability of cash flow; debt financing; demand for rental accommodation and commercial space; natural resource prices; development and construction risks; reliance on key personnel; concentration of tenants; capital requirements; interest rate risk; credit risk; liquidity risk; general uninsured losses; government regulation; environmental risk; utility costs; Trust Unitholder liability; property and land transfer tax risk; potential conflicts of interest; integration of acquired properties; dilution; restriction on redemption, income tax related risk factors, and other risk factors more particularly described in our most recent Annual Information Form available on SEDAR at www.sedar.com. Additional risks and uncertainties not presently known to Northview or that Northview currently believes to be less significant may also adversely affect Northview.

Readers are cautioned that the above list of factors is not exhaustive and that should certain risks or uncertainties materialize, or should underlying estimates or assumptions prove incorrect, actual events, performance and results may vary significantly from those expected. There can be no assurance that the actual results, performance, events or activities anticipated by Northview will be realized or, even if substantially realized, that they will have the expected consequences to, or effect on, Northview. Readers, therefore, should not place undue importance on forward-looking information. Further, forward-looking statements speak only as of the date on which such statements are made. Northview disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

Non-GAAP and Additional GAAP Measures

Certain measures in this news release do not have any standardized meaning as prescribed by GAAP and, therefore, are considered non-GAAP measures. These measures are provided to enhance the reader's overall understanding of our current financial condition. They are included to provide investors and management with an alternative method for assessing our operating results in a manner that is focused on the performance of our ongoing operations and to provide a more consistent basis for comparison between periods. These measures include widely accepted measures of performance for Canadian real estate investment trusts; however, the measures are not defined by GAAP. In addition, these measures are subject to the interpretation of definitions by the preparers of financial statements and may not be applied consistently between real estate entities. Please refer to our second quarter 2016 Management's Discussion & Analysis for definitions of non-GAAP and additional GAAP measures, including NOI, FFO, debt to gross book value, debt service coverage and interest coverage.

Results Conference Call

Northview's conference call will take place on August 12, 2016, at 8:00 a.m. Mountain Time, 10:00 a.m. Eastern Time. Participating on the call will be Mr. Todd Cook (Chair), President and Chief Executive Officer, Mr. Travis Beatty, Chief Financial Officer, and Mr. Leslie Veiner, Chief Operating Officer.

Investors and analysts are invited to participate in the call by calling 1-888-789-9572 or 416-695-7806. You will be required to provide the Conference Call Operator with the Conference ID 6938272 prior to being admitted to the call. Following the conclusion of the call, an instant replay will be available by calling 905-694-9451 or 1-800-408-3053, passcode 4449876. The recording will also be available on our website on August 15, 2016.

Corporate Profile

Northview is primarily a multi-family residential real estate investor and operator providing a broad spectrum of rental accommodations with a portfolio of more than 24,000 quality residential suites in more than 60 markets across Canada. Northview's portfolio includes residential and an execusuites and hotel segment. Northview also has a portfolio of commercial buildings focused on government and quality corporate tenancies predominantly located in Newfoundland and Labrador, the Northwest Territories, and Nunavut.

On October 30, 2015, through a plan of arrangement, Northern Property REIT ("NPR") acquired all of the assets and properties of True North Apartment Real Estate Investment Trust ("TN" or "True North") in exchange for NPR Trust Units and NPR Special Voting Units. In addition, NPR acquired seven apartment properties held by Starlight Investment Ltd. ("SL" or "Starlight") and 26 apartment properties from a joint venture between affiliates of SL and affiliates of the Public Sector Pension Investment Board ("PSP"), collectively the "Transaction". Upon completion of the Transaction, NPR changed its name to Northview Apartment Real Estate Investment Trust.

Northview operates in Alberta, British Columbia, Newfoundland and Labrador, New Brunswick, Nova Scotia, the Northwest Territories, Nunavut, Ontario, Quebec, and Saskatchewan.

Northview is traded on the TSX under the ticker symbol: NVU.UN.

Contacts:
Northview Apartment Real Estate Investment Trust
Todd Cook
President and CEO
403-531-3610

Northview Apartment Real Estate Investment Trust
Travis Beatty
Chief Financial Officer
403-531-3545

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