Forum Real Estate Income and Impact Fund Report Q1 2023 Results

TORONTO, ON / ACCESSWIRE / April 27, 2023 / The Forum Real Estate Income and Impact Fund ("REIIF" or the "Fund") released its results for the first quarter ended March 31, 2023.

Series F investors in REIIF have earned a return of 2.53%¹ for the first quarter, including the monthly distribution (3.83 cents/Series F/month or a 4.3% annualized distribution yield).

REIIF's consistent performance is fueled by sustained imbalances in the rental housing market, resulting in strong rental growth in 2022 and a continued positive outlook for 2023. The purpose-built student accommodation ("PBSA") properties of REIIF, situated on-campus at York University, have shown substantial leasing momentum for the upcoming academic year, with nearly 70% of the units already leased.

"The Fund's asset allocation strategy, with a majority to student housing that experiences naturally higher tenant turnover and strong demand, is being validated as we expect significantly higher rental rate growth and increased cash flow starting this September" said Aly Damji, Managing Partner at Forum Asset Management ("Forum") and a Trustee of REIIF.

Portfolio Update

Currently, the Fund comprises ten properties and over 1,800 units spanning approximately 625,000 square feet of residential gross leasable area and over $400 M of asset value. The portfolio is substantially stabilized with portfolio occupancy of 98.6%, Comparative Property NOI growth versus the previous quarter of +4% and an embedded rental rate ‘mark-to-market on turnover' of +20%.

Two assets were recently independently appraised in accordance with the Fund's valuation policy, contributing to the positive returns realized in the first quarter of 2023. The Fund's properties located near Black Creek Village in Toronto saw an increase in value from the completion of adding an additional 20% to unit count, that will result in higher income for the Fund commencing in the second quarter. Additionally, the appraisal value of the Fund's co-living property in Ottawa increased due to capturing rental growth from tenant turnover, contributing to higher income for the property.

"Our active asset management approach creates value for unitholders which is supported through third party appraisals," said Greg Spafford, Fund Head for REIIF.

Further, Forum continues to see a strong pipeline of accretive acquisitions for REIIF in primary and secondary markets across Canada. Forum expects to see further growth for REIIF in the near term through exclusive access to Forum's completed development pipeline under a right of first offer agreement ("ROFO"), which will provide access to over $100 million of properties to be delivered in 2023.

Distributions

The March distribution was paid on April 17, 2023 to unitholders of record as at March 31, 2023 as follows:

Balance Sheet Update

As of March 31, 2023, the Fund has maintained a conservative debt to assets ratio of 48%. The Fund's liquidity position also increased by over $10 million in the quarter, exceeding $50 million. In the second quarter, after completing the planned CMHC-insured financing initiatives, REIIF's debt structure is expected to be over 90% fixed rate, with an effective coupon approximating 3% and a weighted average term to maturity² of approximately seven years.

"REIIF is financed with primarily long-term, fixed rate, CMHC-insured mortgages, which provides the lowest cost of debt capital for the rental housing sector," said Rajeev Viswanathan, Managing Partner and CFO at Forum. "Despite the recent turmoil in the financial sector, the market for CMHC-insured mortgages continues to operate normally, as it did during the Global Financial Crisis and the COVID-19 pandemic."

Impact Initiatives

REIIF's impact and environmental, social and governance ("ESG") initiatives are focused on reducing its environmental footprint and increasing social engagement. In 2022, REIIF neutralized 50% of its carbon consumption with the balance expected to be offset in 2023.

"Through a combination of energy-efficient operations and strategic capital investments, we are actively implementing a Net Zero Carbon Transition Plan to reduce our environmental footprint and enhance the performance of our portfolio while contributing to a more sustainable planet." said Kathleen Beaumont, Director Impact & ESG for Forum.

More information on REIIF's Impact Framework is available at www.forumreiif.ca/impact.

1 - The yield and total return is for the Lead Series F units and is no guarantee of future results. The distribution rate and total return received by a unit holder will differ based on the series of trust units in which a unit holder invests.

2 - Weighted average term to maturity (WATM) aggregates each loan's remaining years to maturity, weighted by the loan's principal balance outstanding over total indebtedness.

About REIIF

REIIF invests principally in institutional-quality, multi-family rental apartments, purpose-built student accommodations, and co-living communities located in supply constrained markets in Canada. The Fund also strives to deliver a sector-leading impact and ESG-driven portfolio that will enhance yields and total returns while future-proofing the portfolio to ensure diversity and resiliency of income. For more information, please visit our website at www.forumreiif.ca.

About Forum

Forum, the manager of REIIF, is an investor, developer and asset manager operating across North America for over 25 years. Our core purpose is to deliver Extraordinary Outcomes™ to our stakeholders. Our adaptable, agile, and dynamic team is committed to sustainability and responsible investing, creating value that benefits the communities in which we invest.

Our investment focus includes real estate, private equity, and infrastructure. The enterprise value of our assets under management currently exceeds C$1.7 billion. Our investments have attracted a number of top investors. We're proud to have delivered in the top tier of alternative asset returns since 2002, while positively impacting over 6,000 lives. For more information about Forum, visit: www.forumam.com.

Contacts

Name: Rajeev Viswanathan, Chief Financial Officer
Phone Number: 416-947-0389
Email: rajeev@forumam.com

Cautionary Statement

The information contained in this news release is for informational purposes only; is not investment, financial or other advice; and is not intended to be used as the basis for making an investment decision. This news release does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities, nor shall any part of this news release form the basis of, or be relied on in connection with, any contract or investment decision in relation to any securities of REIIF. The offering of units of REIIF is made pursuant to its confidential offering memorandum only to those "accredited investors" in certain jurisdictions of Canada who meet certain eligibility and cannot be sold in Canada to the general public. This news release does not constitute any form of commitment, recommendation, representation, or warranty on the part of any person. No reliance should be placed on the completeness of the information contained in this news release. This news release is not intended to be a comprehensive review of all matters concerning REIIF. Please visit www.forumreiif.ca for more information.

This news release may contain forward-looking information within the meaning of applicable Canadian securities laws. Often, but not always, forward-looking information can be identified by the use of words such as "expect", "intends", "anticipated", "believes" or variations (including negative variations) of such words and phrases, or states that certain actions, events or results "may", "could", "would" or "will" be taken, occur or be achieved. Such forward-looking statements reflect management's current beliefs and are based on assumptions made by and information currently available to Forum. Readers are cautioned that these forward-looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected including, without limitation, risks associated with general economic conditions; adverse factors affecting the real estate market generally or those specific markets in which REIIF holds properties; volatility of real estate prices; inability to access sufficient capital from internal and external sources and/or inability to access capital on favourable terms; currency and interest rate fluctuations and other risks. Although Forum has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. These forward-looking statements are made as of the date hereof and Forum does not assume any obligation to update or revise them to reflect new events or circumstances save as required under applicable securities legislation.

SOURCE: Forum Asset Management