Tricon Residential Inc T.TCN

Tricon Residential Inc. is an owner, operator, and developer of a portfolio of approximately 38,000 single-family rental homes in the United States Sun Belt and multi-family apartments in Canada. The Company provides rental housing options for families across the United States and Canada through its technology-enabled operating platform and on-the-ground operating teams. The Company's segments include Single-Family Rental, Adjacent Businesses, and Strategic Capital. The Single-Family Rental business includes owning and operating single-family rental homes primarily within major cities in the United States Sun Belt. Its Adjacent Businesses include multi-family rental and residential development. Its multi-family rental business segment includes one Class A high-rise property in downtown Toronto known as The Selby. Through its Strategic Capital business, the Company provides asset management, property management and development management services.

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Tricon Residential Inc

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Post by retiredcfon May 15, 2020 7:48am

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Post# 31031867

TD

TCN is rated a Buy with a $12.00 target. GLTA

Tricon Capital Group Inc.

(TCN-T) C$7.42

First Look: FFO Slightly Ahead; Rebranding as Tricon Residential

Event

Q1/20 results.

Impact: NEUTRAL

FFO/share (f.d.) was $0.13, +$0.08 versus Q1/19, and slightly ahead of both our $0.12 estimate and consensus of $0.11 (range: $0.11-$0.14).

Rent Collections. Tricon collected 98% of April rents, largely in line with typical collections. May rent collections of 90% are tracking slightly ahead of April. Rent deferral agreements are in place for <1% of SFR residents and ~3% of multi-family residents.

Tricon announced that following its completed transformation to a rental housing company in January 2020, it will be consolidating all of its businesses under one brand, Tricon Residential Inc. The company also promoted Jonathan Ellenzweig to CIO and Kevin Baldridge to COO.

Our revised forecast will follow after we digest the reformatted financial disclosures.

Conference call is this morning at 10:00 AM ET (1-866-521-4909; conference ID: 4539588).

Q1 SFR SPNOI (15,378 homes or 71% of portfolio) was +5.5% y/y, driven by 6.1% blended rent growth, and a 20bps SPNOI margin improvement to 65.7% (total portfolio: 65.9%). Occupancy was +40bps y/y to 96.5%. Adjusting for the new disclosures, we estimate NOI was ~$2 million ahead of our forecast. April occupancy (total portfolio) was +190bps versus Q1/20 to 97.4%.
Tricon has paused its acquisition of single-family homes. In Q1/20, the company acquired 538 homes for $94.6mm (~$175,400/home).
U.S. Apartments SPNOI was largely flat as a 130bps increase in occupancy to 94.4% and 1.1% blended rent growth, were offset by a 130bps margin decline to 57.6%. NOI of $16.4mm was largely in line with our $16.9mm estimate.
The Selby was 87.2% occupied as at April 30. Tricon collected 98%/93% of April/ May rents.
Construction continues at The Taylor (286), West Don Lands Block 8 (770), and The Ivy (231). There are four projects aggregating 1,508 suites in pre- construction.
Generated $48mm of proceeds from the syndication of a 50% interest in Trinity Falls to the SFR Build-to-Rent JV with ASRS.
Recorded a ~$79.6mm (~$0.40/share) write-down on its for-sale housing business (~32%), which now accounts for only 2.6% of total assets.

Management estimates current liquidity at ~$227mm, consisting of $174mm of room on its corporate credit facility and $53mm of cash (click here for more details.