Real Estate

Nexus Industrial REIT Announces Q3 2022 Results and

November 15, 2022

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TORONTO, Nov. 14, 2022 (GLOBE NEWSWIRE) — Nexus Industrial REIT (the “REIT”) (TSX: NXR.UN) introduced at this time its outcomes for the quarter ended September 30, 2022.

Highlights

On November 1, 2022, the REIT acquired a 435,871 sq. foot portfolio of 4 industrial properties occupied by a single tenant for $38.2 million ($28.5 USD million). Three of the properties are situated in Windsor, Ontario and one is situated in Tilbury, Ontario.
On October 4, 2022, the REIT offered a retail property situated in Longueuil, Quebec for $11.9 million.
On September 30, 2022, the REIT acquired an industrial property situated in Cornwall, Ontario for $4.9 million. The property is occupied by one of many REIT’s current tenants.
On September 8, 2022, the REIT acquired a single-tenant 74,681 sq. foot industrial property situated within the Montreal space for $17.8 million.
On August 31, 2022, the REIT elevated its current revolving credit score facility from $40 million to $140 million.
On August 3, 2022, the REIT offered a retail property situated in Châteauguay, Quebec for $8.3 million.
On July 18, the REIT acquired an 80% curiosity in land situated in Hamilton, Ontario for $4.8 million. The REIT anticipates with the ability to develop an roughly 115,000 sq. foot class A industrial constructing on the positioning, with building completion anticipated for early 2024.
On July 11, 2022, the REIT acquired a single-tenant 94,000 sq. foot industrial property situated within the Quebec City space for $18.9 million.
Occupancy of 97% at September 30, 2022 was per June 30, 2022 and elevated from 95% at September 30, 2021.
Q3 2022 internet working earnings of $24.9 million elevated by $10.8 million or 76.6% as in comparison with $14.1 million for Q3 2021 and by $0.9 million or 3.8% as in comparison with $24.0 million for Q2 2022.
Q3 2022 Same Property NOI⁽¹⁾of $12.9 million elevated by $0.3 million or 2.1% as in comparison with Q3 2021. The improve is primarily pushed by rental steps and CPI will increase at sure of the REIT’s industrial properties in addition to lease renewal raise, offsetting emptiness at one of many REIT’s industrial properties and an workplace property.
Q3 2022 outcomes included a $0.5 million unrealized overseas change loss which impacted per unit measures by $0.006 per unit.
Q3 2022 Normalized FFO⁽¹⁾ per unit was $0.209, as in comparison with $0.203 for Q2 2022 and $0.191 for Q3 2021.
Q3 2022 Normalized AFFO⁽¹⁾ per unit was $0.179, as in comparison with $0.177 for Q2 2022 and $0.174 for Q3 2021.
Q3 2022 Normalized AFFO payout ratio⁽¹⁾ was 88.9%, as in comparison with 90.3% for Q2 2022 and 95.9% for Q3 2021.
NAV⁽¹⁾ per unit elevated to $12.45 at September 30, 2022 as in comparison with $12.41 at June 30, 2022 and $11.55 at September 30, 2021.
Debt to Total Assets of 47.2% at September 30, 2022. $60.0 million of availability on the REIT’s traces of credit score and $59.4 million of unencumbered properties.

(1)

Non-IFRS Financial Measure

“In the third quarter, we began to see the positive impact of rental rate growth in our industrial portfolio with approximately 150,000 square feet of renewals and new leases commencing in the quarter with rents on average $1.35 per square foot higher than expiring rents. In the fourth quarter, we have approximately 250,000 square feet of renewals and new leases commencing with rents on average $2.50 per square foot higher than expiring rents” commented Kelly Hanczyk, the REIT’s Chief Executive Officer. “On the development front we are in negotiation with a tenant for a new build to suit industrial building at a REIT property in Regina, Saskatchewan where we have 23 acres of excess land on which we plan to build 300,000 square feet of gross leasable area. In London, Ontario we are awaiting permits for a planned 100,000 square feet addition to one of our properties, which we are currently in negotiation with a tenant to lease upon completion. We continue to soft market several of our retail and office properties and have an offer in play for one of our Quebec retail properties. We have also received an unsolicited offer to purchase a small portfolio of industrial properties in Saskatchewan. We will continue to pursue capital recycling opportunities where they make sense, with proceeds used to fund development projects that are expected to generate higher yields and to acquire class A industrial properties in Ontario and Quebec that will further elevate the quality of our portfolio.”

Summary of Results

(In hundreds of Canadian {dollars}, besides per unit quantities)	Three months ended September 30,			Nine months ended September 30,
	2022	2021		2022	2021
Financial Results	$	$		$	$

Property revenues	34,424	20,719		100,265	56,022
Net working earnings (NOI)	24,873	14,095		70,859	36,881
Net earnings (loss)	40,055	(12,075	)	137,759	48,779

Financial Highlights

Funds from operations (FFO) ⁽¹⁾	16,661	9,979	47,085	25,579
Normalized FFO ^{(1) (2)}	16,548	10,393	47,454	26,666
Adjusted funds from operations (AFFO) ⁽¹⁾	14,302	9,074	40,601	23,027
Normalized AFFO ^{(1) (2)}	14,189	9,488	40,970	24,114
Same Property NOI ⁽¹⁾	12,935	12,666	30,182	30,388
Distributions declared ⁽³⁾	12,609	9,098	37,619	22,606

Weighted common models excellent (000s) – primary ⁽⁴⁾	79,208	54,428	78,543	46,322
Weighted common models excellent (000s) – diluted ⁽⁴⁾	79,336	54,600	78,696	46,530

Per unit quantities:
Distributions per unit – primary ^{(3) (4)}	0.159	0.167	0.479	0.488
FFO per unit – primary ^{(1) (4)}	0.210	0.183	0.599	0.552
Normalized FFO per unit – primary ^{(1) (2) (4)}	0.209	0.191	0.604	0.576
AFFO per unit – primary ^{(1) (4)}	0.181	0.167	0.517	0.497
Normalized AFFO per unit – primary ^{(1) (2) (4)}	0.179	0.174	0.522	0.521

NAV per unit ⁽¹⁾	12.45	11.21	12.45	11.21

Normalized AFFO payout ratio – primary ^{(1) (2) (3)}	88.9%	95.9%	91.8%	93.7%
Debt to whole belongings ratio	47.2%	36.6%	47.2%	36.6%

	(1)	Non-IFRS Financial Measure
	(2)	See Appendix A – Non-IFRS Financial Measures
	(3)	Includes distributions payable to holders of Class B LP Units that are accounted for as curiosity expense within the condensed consolidated interim monetary statements.
	(4)	Weighted common variety of models contains the Class B LP Units.

Included within the desk above and elsewhere on this information launch are non-IFRS monetary measures that shouldn’t be construed as an alternative choice to internet earnings / loss, money from working actions or different measures of monetary efficiency calculated in accordance with IFRS and might not be akin to comparable measures as reported by different issuers. Certain extra disclosures for these non-IFRS monetary measures have been integrated by reference and may be discovered on web page 3 within the REIT’s Management’s Discussion and Analysis for the three and 9 months ended September 30, 2022, out there on SEDAR at www.sedar.com and on the REIT’s web site underneath Investor Relations. See Appendix A of this earnings launch for a reconciliation of the non-IFRS monetary measures to the first monetary assertion measures.

Q3 2022 NOI of $24.9 million was $10.8 million larger than Q3 2021 NOI of $14.1 million. Acquisitions since June 30, 2021 generated $9.7 million of incremental NOI in Q3 2022 as in comparison with Q3 2021. Incremental rental earnings from the completion of an growth on the REIT’s Ajax property elevated Q3 2022 NOI by $0.1 million as in comparison with Q3 2021. Q3 2022 Same Property NOI elevated $0.3 million as in comparison with Q3 2021, primarily pushed by rental steps and CPI will increase at sure of the REIT’s industrial properties in addition to lease renewal raise, offsetting emptiness at one of many REIT’s industrial properties and an workplace property. The disposal of a retail property in 2021 and one other throughout Q3 2022 decreased NOI by $0.2 million. Straight-line rents additionally contributed $0.9 million to the rise over Q3 2021, pushed primarily by newly acquired properties with steps in lease. Amortization of tenant incentives and leasing prices and termination charges had been constant for Q3 2022 and Q3 2021.

Q3 2022 honest worth adjustment of funding properties of $1.9 million displays $34.8 million of honest worth write-downs primarily associated to capitalization price growth for sure industrial properties ($31.4 million), retail properties ($1.9 million) and workplace properties ($1.5 million) and $1.1 million of transaction prices. In addition, the REIT’s belongings held on the market had been written down by $1.3 million as a result of capitalization price growth. These quantities had been partially offset by a $23.9 million honest worth acquire associated to NOI enhancements, pushed by leasing, at sure industrial properties and a $11.2 million acquire associated primarily to a lately acquired industrial property with improvement potential, the carrying worth of which was adjusted to appraised worth.

Q3 internet earnings, AFFO and FFO included unrealized overseas change losses of $0.5 million on the revaluation of a US greenback denominated legal responsibility.

Earnings Call

Management of the REIT will host a convention name at 1:00 PM Eastern Standard Time on Tuesday November 15, 2022 to overview the monetary outcomes and operations. To take part within the convention name, please dial 416-915-3239 or 1-800-319-4610 (toll free in Canada and the US) at the very least 5 minutes previous to the beginning time and ask to hitch the Nexus Industrial REIT convention name.

A recording of the convention name shall be out there till December 15, 2022. To entry the recording, please dial 604-674-8052 or 1-855-669-9658 (toll free in Canada and the US) and enter entry code 9580.

December 2022 Distribution

The REIT will make a money distribution within the quantity of $0.05333 per unit, representing $0.64 per unit on an annualized foundation, payable January 16, 2023 to unitholders of report as of December 30, 2022.

The REIT’s distribution reinvestment plan (“DRIP”) entitles eligible unitholders to elect to obtain all, or a portion of the money distributions of the REIT reinvested in models of the REIT. Eligible unitholders who so elect will obtain a bonus distribution of models equal to 4% of every distribution that was reinvested by them underneath the DRIP.

About Nexus Industrial REIT

Nexus is a growth-oriented actual property funding belief centered on growing unitholder worth by means of the acquisition of business properties situated in main and secondary markets in Canada and probably together with the United States, and the possession and administration of its portfolio of properties. The REIT at the moment owns a portfolio of 113 properties (together with two properties held for improvement wherein the REIT has an 80% curiosity) comprising roughly 11.1 million sq. toes of gross leasable space. The REIT has roughly 58,799,000 Units issued and excellent. Additionally, there are Class B LP Units of subsidiary restricted partnerships of Nexus issued and excellent, that are convertible into roughly 20,535,000 Units.

Forward Looking Statements

Certain statements contained on this information launch represent forward-looking statements which replicate the REIT’s present expectations and projections about future outcomes. Often, however not all the time, forward-looking statements may be recognized by way of phrases equivalent to “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such phrases and phrases or state that sure actions, occasions or outcomes “may”, “could”, “would”, “might” or “will” be taken, happen or be achieved. Forward-looking statements contain identified and unknown dangers, uncertainties and different elements which can trigger the precise outcomes, efficiency or achievements of the REIT to be materially completely different from any future outcomes, efficiency or achievements expressed or implied by the forward-looking statements. Actual outcomes and developments are more likely to differ, and might differ materially, from these expressed or implied by the forward-looking statements contained on this information launch. Such forward-looking statements are based mostly on a lot of assumptions which will show to be incorrect.

While the REIT anticipates that subsequent occasions and developments might trigger its views to alter, the REIT particularly disclaims any obligation to replace these forward-looking statements besides as required by relevant legislation. These forward-looking statements shouldn’t be relied upon as representing the REIT’s views as of any date subsequent to the date of this information launch. There may be no assurance that forward-looking statements will show to be correct, as precise outcomes and future occasions may differ materially from these anticipated in such statements. Accordingly, readers shouldn’t place undue reliance on forward-looking statements. The elements recognized above should not supposed to characterize an entire checklist of the elements that might have an effect on the REIT.

For additional info please contact:

Kelly C. Hanczyk, CEO at (416) 906-2379 or
Rob Chiasson, CFO at (416) 613-1262.

APPENDIX A – NON-IFRS FINANCIAL MEASURES

(In hundreds of Canadian {dollars}, besides per unit quantities)	Three months ended September 30,						Nine months ended September 30,
	2022		2021		Change		2022		2021		Change
FFO	$		$		$		$		$		$

Net earnings	40,055		(12,075	)	52,130		137,759		48,779		88,980
Adjustments:
Loss on disposal of funding properties	255		–		255		255		95		160
Fair worth adjustment of funding properties	1,890		(26,287	)	28,177		4,513		(100,370	)	104,883
Fair worth adjustment of Class B LP Units	(27,558	)	45,204		(72,762	)	(88,212	)	73,104		(161,316	)
Fair worth adjustment of unit choices	(200	)	897		(1,097	)	(608	)	1,798		(2,406	)
Fair worth adjustment of restricted share models	(124	)	170		(294	)	(369	)	318		(687	)
Fair worth adjustment of spinoff monetary devices	(1,499	)	(704	)	(795	)	(17,365	)	(4,386	)	(12,979	)
Adjustments for fairness accounted three way partnership ⁽¹⁾	374		(44	)	418		618		(302	)	920
Distributions on Class B LP Units expensed	3,251		2,624		627		9,779		5,974		3,805
Amortization of tenant incentives and leasing prices	204		188		16		680		509		171
Lease principal funds	(10	)	(17	)	7		(34	)	(50		16
Amortization of right-of-use belongings	23		23		–		69		70		(1	)
Deferred earnings taxes	–		–		–		–		40		(40	)
Funds from operations (FFO)	16,661		9,979		6,682		47,085		25,579		21,506
Weighted common models excellent (000s) – primary⁽⁵⁾	79,208		54,428		24,780		78,543		46,322		32,221
FFO per unit – primary	0.210		0.183		0.027		0.599		0.552		0.047

FFO	16,661		9,979		6,682		47,085		25,579		21,506
Add: Vendor lease obligation⁽²⁾	688		615		73		1,971		1,862		109
Less: Other earnings⁽²⁾	(801	)	(201	)	(600	)	(1,602	)	(982	)	(620	)
Add: TSX commencement itemizing charges⁽³⁾	–		–		–		–		207		(207	)
Normalized FFO	16,548		10,393		6,155		47,454		26,666		20,788
Weighted common models excellent (000s) Basic⁽⁵⁾	79,208		54,428		24,780		78,543		46,322		32,221
Normalized FFO per unit – primary	0.209		0.191		0.018		0.604		0.576		0.028

(In hundreds of Canadian {dollars}, besides per unit quantities)	Three months ended September 30,					Nine months ended September 30,
	2022		2021		Change		2022		2021		Change
AFFO	$		$		$		$		$		$

FFO	16,661		9,979		6,682		47,085		25,579		21,506
Adjustments:
Straight-line changes floor lease and lease	(1,059	)	(155	)	(904	)	(2,684	)	(427	)	(2,257	)
Capital reserve⁽⁴⁾	(1,300	)	(750	)	(550	)	(3,800	)	(2,125	)	(1,675	)
Adjusted funds from operations (AFFO)	14,302		9,074		5,228		40,601		23,027		17,574
Weighted common models excellent (000s) – primary ⁽⁵⁾	79,208		54,428		24,780		78,543		46,322		32,221
AFFO per unit – primary	0.181		0.167		0.014		0.517		0.497		0.020

AFFO	14,302		9,074		5,228		40,601		23,027		17,574
Add: Vendor lease obligation ⁽²⁾	688		615		73		1,971		1,862		109
Less: Other earnings ⁽²⁾	(801	)	(201	)	(600	)	(1,602	)	(982	)	(620	)
Add: TSX commencement itemizing charges ⁽³⁾	–		–		–		–		207		(207	)
Normalized AFFO	14,189		9,488		4,701		40,970		24,114		16,856
Weighted common models excellent (000s) – primary ⁽⁵⁾	79,208		54,428		24,780		78,543		46,322		32,221
Normalized AFFO per unit – primary	0.179		0.174		0.005		0.522		0.521		0.001

	(1)	Adjustment for fairness accounted three way partnership pertains to a good worth adjustment of swaps in place on the three way partnership to swap floating price bankers’ acceptance charges to a set price and honest worth adjustment of the three way partnership funding property.
	(2)	Normalized FFO and Normalized AFFO embody changes for vendor lease obligation quantities associated to the REIT’s Richmond, BC and Ajax properties, that are payable from the distributors of the properties till buildout of the properties is full and tenants are occupying and paying lease. The vendor lease obligation quantity isn’t included in NOI for accounting, however the estimated whole quantity of vendor lease obligation is recorded in different earnings. Normalized FFO and Normalized AFFO exclude estimated future vendor lease obligation quantities included in different earnings within the condensed consolidated interim statements of earnings and complete earnings and embody the scheduled quarterly rents receivable within the type of vendor lease obligation.
	(3)	Normalized FFO and Normalized AFFO embody changes for $0.2 million of one-time TSX itemizing charges associated to commencement to the TSX, that are included normally and administrative expense within the nine-month interval ended September 30, 2021.
	(4)	Capital reserve contains upkeep capital expenditures, tenant incentives and leasing prices. Reserve quantities are established with regards to constructing situation studies, value determinations, and inner estimates of tenant renewal, tenant incentives and leasing prices. The REIT believes {that a} reserve is extra acceptable given the fluctuating nature of those expenditures.
	(5)	Weighted common variety of models contains the Class B LP Units.

(In hundreds of Canadian {dollars})	Three Months ended September 30,						Nine Months ended September 30,
Same Property NOI	2022		2021		Change		2022		2021		Change
	$		$		$		$		$		$

Property revenues	34,424		20,719		13,705		100,265		56,022		44,243
Property bills	(9,551	)	(6,624	)	(2,927	)	(29,406	)	(19,141	)	(10,265	)
NOI	24,873		12,220		10,778		70,859		36,881		33,978
Add/(Deduct):
Amortization of tenant incentives and leasing prices	204		190		14		680		535		145
Straight-line changes of lease	(1,036	)	(134	)	(902	)	(2,619	)	(363	)	(2,256	)
Development	(90	)	–		(90	)	(270	)	–		(270	)
Acquisitions	(10,967	)	(1,224	)	(9,743	)	(38,109	)	(5,877	)	(32,232	)
Disposals	(49	)	(260	)	211		(300	)	(775	)	475
Termination charges and different non-recurring gadgets	–		(1	)	1		(59	)	(13	)	(46	)
Same Property NOI	12,935		12,666		269		30,182		30,388		(206	)

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