Lanesborough REIT Reports 2017 Operating Results

The increase in NOI mainly reflects an increase in the average occupancy level of the Fort McMurray properties, which increased from 65% in 2016 to 71% during 2017, partially offset by the loss of operating income associated with the sales of Beck Court and Willowdale Gardens on May 1, 2016.

The occupancy levels of the Fort McMurray properties increased during 2017 as a result of the entry of homeowners displaced by the wildfire into the rental market and the commencement of the post‑fire rebuild; however, the impact of the rebuild on operating results has been less than previously anticipated and the extent of any future impact is uncertain.

LREIT completed 2017 with a loss and comprehensive loss of $32 million, compared to a loss and comprehensive loss of $1.7 million in 2016. The increase in the loss is primarily due to an unfavourable variance in the fair value adjustments of the investment properties. Specifically, the unfavorable fair value variance reflects the combined effect of an increase in the carrying value of the Fort McMurray properties during 2016, followed by a decrease in the carrying value during 2017.

The increase in fair value in 2016 was largely driven by the expectation of improved post‑fire rental market conditions. During 2017, the carrying value of the Fort McMurray properties was reduced to reflect a decrease in the anticipated positive impact of the post‑fire rebuilding process and an increase in the level of uncertainty regarding the extent and timing of future oil sands development activity and its corresponding impact on the recovery of the Fort McMurray rental market.

Liquidity and Capital Resources

During 2017, cash used in operations, prior to working capital adjustments amounted to $1.8 million (2016 ‑ $3.8 million) and the cash shortfall, after accounting for working capital adjustments, regular mortgage principal payments, capital expenditures, and transactions costs was $8.4 million (2016 ‑ $10.6 million).

As of December 31, 2017, LREIT was in default, as a result of outstanding service fee payments, on four mortgage loans secured by a total of seven properties with an aggregate principal balance of $46.9 million. Subsequent to December 31, 2017, forbearance agreements were executed for three of these loans, secured by a total of six properties, in the aggregate principal amount of $18.7 million. The forbearance agreements required an initial combined repayment of $1.7 million which was paid on March 5, 2018, and require future combined repayments of $0.6 million, $0.7 million and $0.3 million in 2018, 2019 and 2020, respectively. LREIT continues to meet the debt service obligations of the mortgage loan that remains in default and the lender has taken no action to demand repayment of enforce its security under the loan.

Subsequent to December 31, 2017, a forbearance termination event on one mortgage loan secured by one property in the aggregate principal amount of $25.6 million was triggered due to non‑compliance with a deadline set with respect to the establishment of a condominium sales program. The lender has taken no action to demand repayment or enforce its security under the loan and has indicated that it will not take any action with respect to the default prior to March 31, 2018. 

In addition, subsequent to December 31, 2017, two mortgage loans secured by two properties in the aggregate principal amount of $43.3 million were renewed until September 1, 2020 at an interest rate of prime plus 3.3%. The terms of the renewals required an initial combined principal repayment of $1.5 million, which was made on March 16, 2018, and additional principal repayments of $0.5 million every six months commencing on September 1, 2018 and ending on March 1, 2020.  In addition, principal repayments of $0.3 million are required for each quarter during the renewal period in which LREIT fails to sell a unit under its condominium sales program.

Pursuant to the terms of the Declaration of Trust, LREIT is prohibited from incurring additional mortgage loan indebtedness if such indebtedness would result in the total mortgage loan indebtedness of LREIT exceeding 75% of the appraised value of LREIT's total property portfolio. As LREIT's mortgage loan indebtedness exceeds 75% of the appraised value of its total property portfolio (77% at December 31, 2017), LREIT was unable to request an increase in the $30 million revolving loan facility from 2668921 Manitoba Ltd. but, instead, was able to obtain unsecured loan financing from Shelter Canadian Properties Limited ("Shelter") in the amount of $6.0 million to address the funding of its cash shortfall during 2017.

Outlook

The long term prospects of the Fort McMurray rental market remain closely correlated with the price of oil and oil sands development activity. Alberta's energy sector showed signs of recovery in 2017 and the Conference Board of Canada is forecasting GDP growth for the Regional Municipality of Wood Buffalo of 10.4% in 2018. Notwithstanding the economic improvement in the region, the extent of its impact on rental market conditions to date has not been sufficient to address LREIT's cash short falls.

The ability of LREIT to remain a going concern in the near‑term is largely contingent upon financial support from Shelter and its parent company, 2668921 Manitoba Ltd., as well as LREIT's capacity to continue to renew and/or refinance its mortgage loan debts as they become due. Addressing LREIT's liquidity concerns continues to be the top priority in 2018

STATEMENT OF FINANCIAL POSITION

KEY FINANCIAL PERFORMANCE INDICATORS

		Year Ended December 31
		2017			2016			2015
Operating Results
	Rentals from investment properties	$	19,052,202		$	18,328,212		$	30,215,224
	Net operating income	$	8,803,502		$	7,814,287		$	16,151,866
	Loss before discontinued operations	$	(31,877,187)		$	(1,264,483)		$	(96,394,897)
	Loss and comprehensive loss	$	(32,036,682)		$	(1,730,124)		$	(98,765,643)
	Funds from Operations	$	(6,423,890)		$	(12,463,056)		$	(8,426,367)
Cash Flows
	Cash used in operating activities	$	(2,662,330)		$	(3,254,380)		$	(6,492,224)
	Adjusted Funds from Operations	$	(7,625,263)		$ Werbung Mehr Nachrichten zum Optionsschein (WKN: ) kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 25.04.24 - PR Newswire Premier Miton Global Renewables Trust Plc - Dividend Declaration 25.04.24 - PR Newswire International Business Machines Corp - Doc re Form 8-K SolarBank    Wie die Revolution der sauberen Energie eine solide Investitionsmöglichkeit bieten könnte weiterlesen» Anzeige wo-site-teaser-box-16755_site-teaser-box_2024-04-25_09%253A00%253A00_2024-04-26_09%253A00%253A59