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 Aug 06, 2020 8:17am

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Post# 31371334

TD

Currently have a $11.50 target. GLTA

Tricon Residential Inc.

(TCN-T) C$10.08

Q2/20 First Look: Results Slightly Ahead; SFR Remains Resilient

Event

Q2/20 results.

Impact: NEUTRAL

FFO/share (f.d.) was $0.11, +$0.07 versus Q2/19, and slightly ahead of both our estimate and consensus of $0.10.

Rent Collections. In Q2, Tricon collected 99% of SFR rents and 98% of U.S. multi- family rents. Rent deferral agreements are in place for ~2% of SFR residents and ~4% of multi-family residents. Less than 1% of residents requested deferrals for July. July SFR and U.S. multi-family collections are currently 97% and 95%, respectively.

Conference call this morning at 10:00 AM ET (1-866-521-4909; conference ID: 7087334).

Operating Highlights

Q2 SFR SPNOI (15,367 homes or 71% of portfolio) was +5.1% y/y, driven by 4.7% blended rent growth, and a 50bps SPNOI margin improvement to 66.1% (total portfolio: 66.6%). Occupancy was +110bps y/y to 97.5%. Bad debt, as a percentage of revenue, was up 80bps y/y to 1.6%. NOI of $49.2mm was nicely ahead of our $44.9mm estimate. July occupancy is 97.4%, -20bps versus June, while blended rent growth improved to 5.5%.
U.S. Apartments SPNOI was -4.9% owing to a 120bps decrease in occupancy to 94.4% and -2.2% blended rent growth. SPNOI margin declined 130bps y/y to 56.8%. The decline in SPNOI was attributed to lower leasing demand and higher bad debts. NOI of $15.8mm was below our $16.9mm estimate. July occupancy declined 50bps versus June to 92.5%, while blended rent growth was -1.4%.
The Selby was 88.2% occupied as at June 30, +240bps vs. Q1. Management noted the lease-up has slowed due to the impact of COVID-19.

Acquisitions/Developments

Construction continues at The Taylor (286 suites), West Don Lands Block 8 (770), and The Ivy (231). There are five projects aggregating 2,408 suites in pre- construction.
Purchased 50% of the outstanding interest in The James development project and the 75% outstanding interest in the Shops of Summerhill site (both sites are in Toronto).

Balance Sheet/Other

Recorded a $10.3mm fair value gain as a $32.8mm increase in SFR was partially offset by a $22.5mm decline in its U.S. multi-family portfolio.
Post-Q2 completed a $553mm SFR securitization.
Management estimates Q2/20 liquidity at ~$203mm (Q1: $227mm), consisting of

$170mm of room on its corporate credit facility and $33mm of cash.