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 11, 2022 8:36am

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Post# 34673314

TD

Have a US$18.00 target. GLTA

Tricon Residential Inc.

(TCN-N, TCN-T) US$12.15 | C$15.88

Q1/22 First Look: Results In Line; SFR SPNOI of +11.6% Event

Q1/22 results. Conference call this morning at 11:00 a.m. ET (1-888-550-5422; conference ID: 3699415).

Impact: NEUTRAL

FFO/share (f.d.) of $0.138 was +5% versus Q1/21 and in line with our $0.137 estimate and consensus of $0.14. (Exhibit).

2022 Guidance Update. 2022 FFO/share guidance was left unchanged at $0.60- $0.64, while SFR SPNOI was increased 50bps to 7.5%-9.5% as higher expense growth assumptions (+50bps to 7.0%-9.0%) were offset by a 50bps increase to SFR SP revenue to 7.5%-9.5%.

Tricon's SFR portfolio SPNOI was +11.6% y/y. Occupancy was +70bps y/y to 98.0%, while blended rent growth was +8.7%, including 18.7% on new move- ins and 6.3% on renewals. SPNOI margin of 67.8% was +70bps y/y, reflecting strong SP revenue growth of +10.4%, slightly offset by an +8.1% increase to operating expenses (higher property taxes and R&M). The strong operating metrics continued into April, where occupancy increased a further +40bps to 98.4%, while blended rent growth was +8.6%.

Private Funds and advisory services FFO was +102% y/y as all fee streams posted y/y gains, but was largely driven by a $6.6mm increase in property management fees from the formation of SFR JV-HD and SFR JV-2s as well as the internalization of its U.S. multi-family property management function.

U.S. multi-family SPNOI was +17.5% y/y. Occupancy was +90bps y/y to 95.5%, while blended rent growth was 13.5%.

Acquisitions/Developments

SFR acquisition volume remained healthy with 1,935 homes ($347,000/home or $202mm at Tricon's share) acquired during Q1 - a typically slow quarter for acquisitions and just below Q4/21 at 2,016 homes. Tricon now manages 31,032 homes. Management reiterated its goal to acquire 8,000 homes in 2022 and plans to exceed 2,000 homes in Q2.
The U.S. residential developments generated $11.9mm of distributions, including $0.7mm of performance fees.

Balance Sheet/Other

Tricon reported an ~$300mm SFR FV gain or $1.09/share (Q4/21: $219.9mm) on the back of further home price appreciation.
During Q1, raised $530mm (4.32% coupon including service fees) through the securitization of ~2,480 homes within SFR JV-2. Net Debt/Assets was modestly higher at 35.7% (Q4/21:34.9%). Liquidity (proportionate) was ~$558mm ($143mm cash; $415mm credit facility capacity), down slightly ~$592mm in Q4