Choice Properties Real Estate Investment Trust Reports Results for the Three and Nine Months Ended September 30, 2021

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TORONTO — Alternative Properties Actual Property Funding Belief (“Alternative Properties” or the “Belief”) (TSX: CHP.UN) right this moment introduced its consolidated monetary outcomes for the three and 9 months ended September 30, 2021. The 2021 Third Quarter Report back to Unitholders is out there within the Traders part of the Belief’s web site at www.choicereit.ca , and has been filed on SEDAR at www.sedar.com .

“We’re happy with the robust monetary and working outcomes we delivered this quarter. Our necessity-based portfolio has been resilient over the course of the pandemic, and we count on it would proceed to drive steady outcomes going ahead,” stated Rael Diamond, President and Chief Government Officer of the Belief. “We additionally continued to advance our long-term pipeline of mixed-use developments within the quarter. We submitted zoning functions for 2 extra initiatives, and thus far we now have over 10 million sq. ft of potential density submitted for zoning approval. With the power of our steadiness sheet, we’re positioned effectively to execute on this pipeline of compelling growth alternatives.”

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Abstract of GAAP Foundation Monetary Outcomes

Quarterly Outcomes

Alternative Properties recorded internet earnings of $163.7 million for the third quarter of 2021 as in comparison with $97.2 million within the third quarter of 2020. The quarterly improve in comparison with the prior yr was primarily on account of a $31.4 million beneficial change within the adjustment to the truthful worth of the Belief’s Exchangeable Items and a $33.1 million beneficial change within the truthful worth of funding properties (together with these held inside fairness accounted joint ventures), a decline in dangerous debt expense, and a rise in rental income primarily as a result of internet contribution from acquisitions and growth transfers accomplished previously 12 months.

For the three months ended September 30, 2021, dangerous debt expense was $0.4 million on a GAAP foundation ($1.0 million on a proportionate share foundation) in comparison with $4.0 million on a GAAP foundation ($4.7 million on a proportionate share foundation) for the three months ended September 30, 2020.

Yr-to-Date Outcomes

Alternative Properties reported internet earnings for the 9 months ended September 30, 2021 of $186.1 million in comparison with $334.1 million for the 9 months ended September 30, 2020. The lower in comparison with the prior yr was primarily on account of a $931.4 million unfavourable change within the adjustment to the truthful worth of the Belief’s Exchangeable Items, partially offset by a $753.8 million beneficial change within the truthful worth of funding properties (together with these held inside fairness accounted joint ventures), a decline in dangerous debt expense and a rise in rental income primarily as a result of internet contribution from acquisitions and growth transfers accomplished previously 12 months.

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For the 9 months ended September 30, 2021, the year-to-date dangerous debt expense was $3.6 million on a GAAP foundation ($4.7 million on a proportionate share foundation) in comparison with $19.0 million on a GAAP foundation ($20.2 million on a proportionate share foundation) for the 9 months ended September 30, 2020.

The outcomes for the 9 months ended September 30, 2020 have been impacted by a non-recurring $7.8 million allowance for anticipated credit score losses on a selected mortgage receivable and $6.8 million in early redemption premiums paid in June 2020 for 2 senior unsecured debentures that may have matured in 2021.

Abstract of Proportionate Share⁽¹⁾ Monetary Outcomes

Quarterly and Yr-to-Date Outcomes

For the three months ended September 30, 2021, Funds from Operations (“FFO”, a non-GAAP measure) was $172.7 million or $0.239 per unit diluted in comparison with $169.2 million or $0.238 per unit diluted for the three months ended September 30, 2020. For the 9 months ended September 30, 2021, FFO was $515.1 million or $0.712 per unit diluted in comparison with $480.5 million or $0.679 per unit diluted for the 9 months ended September 30, 2020.

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FFO elevated by $3.5 million in comparison with the prior yr primarily on account of a $3.8 million decline in dangerous debt expense and contributions from growth transfers and transaction exercise, partially offset by a decline in straight line rental income.

On a year-to-date foundation, FFO elevated by $34.6 million primarily on account of a $15.5 million lower in dangerous debt expense, financial savings from decrease borrowing prices and contributions from growth transfers and transaction exercise. The prior yr outcomes have been impacted by non-recurring expense objects, together with a $7.8 million allowance for anticipated credit score losses on a selected mortgage receivable and $6.8 million in early redemption premiums paid in June 2020 for 2 senior unsecured debentures that may have matured in 2021.

On a per unit foundation, the Belief had the next weighted common variety of models excellent as at September 30, 2021, on account of the Belief models issued as consideration for the acquisition of two property from Wittington Properties Restricted in July 2020 and the Exchangeable Items issued as consideration for the acquisition of six property from a wholly-owned subsidiary of George Weston Restricted, in December 2020.

Transaction Exercise

Through the quarter the Belief accomplished a strategic acquisition of a retail property in Toronto, Ontario, from a 3rd occasion for $31.6 million. The property is adjoining to an present Loblaw-anchored website owned by the Belief.

The Belief superior a $41.6 million mezzanine mortgage to a growth associate. The mezzanine mortgage is primarily secured by, and has an fairness conversion proper for a 75% possession curiosity in, 154 acres of future industrial growth land in East Gwillimbury, Ontario.

The Belief invested in its growth program, with $32.9 million of spending throughout the quarter on a proportionate share foundation ⁽¹⁾ . Through the quarter, the Belief transferred a 16,800 sq. foot pad at a retail website in Guelph, Ontario, and a 93 unit residential constructing at The Brixton in Toronto, Ontario, from properties below growth to earnings producing properties, at a price of $51.9 million on a proportionate share foundation ⁽¹⁾ .

Outlook

Alternative Properties is a number one Actual Property Funding Belief that creates enduring worth by means of the possession, operation and growth of high-quality industrial and residential properties. Our purpose is to offer internet asset worth appreciation, steady internet working earnings progress and capital preservation, all with a long-term focus. Though there stays uncertainty on the longer-term impacts of the COVID-19 pandemic, Alternative Properties stays assured that its enterprise mannequin, steady tenant base, and disciplined strategy to monetary administration will proceed to place it effectively.

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Our diversified portfolio of retail, industrial and workplace properties is 97.0% occupied and leased to high-quality tenants throughout Canada. Our portfolio is primarily leased to grocery shops, pharmacies or different necessity-based tenants, and logistics suppliers, who proceed to carry out effectively on this setting and supply stability to our total portfolio. This stability is obvious in our monetary outcomes and by our lease collections, which exceeded 99% for the third quarter. As restrictions from the COVID-19 pandemic proceed to ease throughout the nation, we’re inspired by the optimistic leasing momentum we’re seeing in our portfolio.

We proceed to advance our growth program, which gives us with one of the best alternative so as to add high-quality actual property to our portfolio at an affordable price and drive internet asset worth appreciation over time. Now we have a mixture of lively growth initiatives ranging in measurement, scale and complexity, together with retail intensification initiatives, industrial greenfield growth, and rental residential initiatives situated in city markets with a concentrate on transit accessibility. Our lively growth pipeline is targeted on rising our rental residential portfolio. Now we have two residential initiatives underway in Toronto that we count on to finish and switch to earnings producing properties by the tip of this yr and we’re progressing with building on two extra high-rise residential initiatives, one in every of which is in Brampton situated subsequent to the Mount Nice GO Station and the opposite is within the Westboro neighbourhood in Ottawa. We’re additionally advancing a brand new greenfield industrial mission with plans to assemble a contemporary logistics facility with over 350,000 sq. ft, situated in a chief industrial node in Surrey, British Columbia.

Past our lively initiatives, we now have a considerable pipeline of bigger, extra complicated mixed-use developments, which collectively are anticipated to drive significant internet asset worth progress sooner or later. We proceed to advance the rezoning course of for a number of of those initiatives. Within the quarter, we submitted two extra zoning functions for initiatives in Toronto, Ontario and we now have over 10 million sq. ft of mixed-use GLA submitted for zoning.

Underpinning all features of our enterprise mannequin is a robust steadiness sheet and a disciplined strategy to monetary administration. We take a conservative strategy to leverage and financing threat by sustaining robust leverage ratios and a staggered debt maturity profile. Now we have roughly $130 million of debt obligations coming due over the rest of the yr which we intend to refinance with long term debt. From a liquidity perspective, the Belief has roughly $1.4 billion of obtainable money, comprised of $1.3 billion from the unused portion of the Belief’s revolving credit score facility and $52.9 million in money and money equivalents, along with roughly $12.8 billion in unencumbered property.

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Replace on Hire Assortment

Hire assortment for the third quarter remained excessive, reflecting the steadiness of the Belief’s necessity-based portfolio.

For 3 months ended September 30, 2021, the Belief collected or expects to gather roughly 99% of contractual rents:

In figuring out the anticipated credit score losses on lease receivables, the Belief takes into consideration the fee historical past and future expectations of possible default occasions (i.e. asking for rental concessions, functions for rental aid by means of authorities applications, or stating they won’t be making rental funds on the due date) primarily based on precise or anticipated insolvency filings or firm voluntary preparations and sure deferrals of funds due, and potential abatements to be granted by the owner. These assessments are made on a tenant-by-tenant foundation.

The Belief’s evaluation of anticipated credit score losses is inherently subjective as a result of forward-looking nature of the assessments. Consequently, the worth of the anticipated credit score loss is topic to a level of uncertainty and is made on the premise of assumptions which can not show to be correct given the uncertainty attributable to COVID-19. Based mostly on its evaluate, the Belief recorded dangerous debt expense of $4.7 million in property working prices, on a proportionate share foundation (1) , throughout the 9 months ended September 30, 2021, with a corresponding quantity recorded as an anticipated credit score loss in opposition to its lease receivables.

The Belief’s provision for recurring tenant billings for the 9 months ended September 30, 2021, is comprised of the next:

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Because of continued uncertainty surrounding the pandemic, it’s not attainable to reliably estimate the size and severity of COVID-19 associated impacts on the monetary outcomes and operations of the Belief and its tenants, in addition to on client behaviours and the economic system normally. For extra data on the dangers offered to the Belief by the COVID-19 pandemic, please see Part 12, “Enterprise Dangers and Danger Administration” of the Belief’s MD&A for the yr ended December 31, 2020 and its Annual Data Kind for the yr ended December 31, 2020.

Non-GAAP Monetary Measures and Extra Monetary Data

Along with utilizing efficiency measures decided in accordance with Worldwide Monetary Reporting Requirements (“IFRS” or “GAAP”), Alternative Properties additionally measures its efficiency utilizing sure non-GAAP measures, and gives these measures on this information launch in order that traders might do the identical. Such measures and associated per-unit quantities usually are not outlined by IFRS and due to this fact shouldn’t be construed as alternate options to internet earnings or money circulation from working actions decided in accordance with IFRS. Moreover, the supplemental measures utilized by administration will not be similar to comparable measures offered by different actual property funding trusts or enterprises. These phrases, which embrace the proportionate share foundation of accounting because it pertains to “fairness accounted joint ventures”, internet working earnings (“NOI”), funds from operations (“FFO”) and adjusted funds from operations (“AFFO”), are outlined in Part 13, “Non-GAAP Monetary Measures”, of the Alternative Properties MD&A for the three and 9 months ended September 30, 2021, and are reconciled to probably the most comparable GAAP measure.

Alternative Properties’ unaudited interim interval condensed consolidated monetary statements and MD&A for the three and 9 months ended September 30, 2021 can be found on Alternative Properties’ web site at www.choicereit.ca and on SEDAR at www.sedar.com . Readers are directed to those paperwork for monetary particulars and a fulsome dialogue on Alternative Properties’ outcomes.

Administration’s Dialogue and Evaluation and Consolidated Monetary Statements and Notes

Data showing on this information launch is a choose abstract of outcomes. This information launch ought to be learn along with the Alternative Properties 2021 Third Quarter Report back to Unitholders, which incorporates the unaudited interim interval condensed consolidated monetary statements and MD&A for the Belief, and is out there at www.choicereit.ca and on SEDAR at www.sedar.com .

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Convention Name and Webcast

Administration will host a convention name on Thursday, November 4, 2021 at 10:00AM (ET) with a simultaneous audio webcast. To entry through teleconference, please dial (236) 389-2653 or (833) 921-1643 and enter the occasion passcode: 7159847. The hyperlink to the audio webcast will likely be accessible on www.choicereit.ca/events-webcasts .

About Alternative Properties Actual Property Funding Belief

Alternative Properties is a number one Actual Property Funding Belief that creates enduring worth by means of the possession, operation and growth of high-quality industrial and residential properties.

We consider that worth comes from creating areas that enhance how our tenants and communities come collectively to dwell, work, and join. We try to grasp the wants of our tenants and handle our properties to the very best normal. We aspire to develop wholesome, resilient communities by means of our dedication to social, financial, and environmental sustainability. In all the things we do, we’re guided by a shared set of values grounded in Care, Possession, Respect and Excellence. For extra data, go to Alternative Properties’ web site at www.choicereit.ca and Alternative Properties’ issuer profile at www.sedar.com .

Cautionary Statements Concerning Ahead-looking Statements

This information launch comprises forward-looking statements regarding Alternative Properties’ operations and the setting by which the Belief operates, that are primarily based on administration’s expectations, estimates, forecasts and projections. These statements usually are not ensures of future efficiency and contain dangers and uncertainties which can be troublesome to regulate or predict. Due to this fact, precise outcomes and outcomes might differ materially from these expressed in these forward-looking statements. Readers, due to this fact, shouldn’t place undue reliance on any such forward-looking statements. Additional, a forward-looking assertion speaks solely as of the date on which such assertion is made. Administration undertakes no obligation to publicly replace any such assertion, to replicate new data or the prevalence of future occasions or circumstances, besides as required by regulation.

Quite a few dangers and uncertainties may trigger the Belief’s precise outcomes to vary materially from these expressed, implied or projected within the forward-looking statements, together with these described in Part 12, “Enterprise Dangers and Danger Administration” of the Belief’s MD&A for the yr ended December 31, 2020, which incorporates detailed dangers and disclosure relating to COVID-19 and its impression on the Belief, and people described within the Belief’s Annual Data Kind for the yr ended December 31, 2020.

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Contacts

For additional data, please contact investor@choicereit.ca

Mario Barrafato
Chief Monetary Officer
t: (416) 628-7872 e: Mario.Barrafato@choicereit.ca