MPCT Q3 Financial Release Preview I am most looking for details on the following in Q3:
49 Ontario Progress
Closing Updates on Brightwater Towns, Birch House, and The Mason
IVY Condos Closing
Rising NOI from Multi Family
Specific Q3 Financial Changes:
21M in debt from IVY will be gone from closings, and a one time profit will be realized. Reducing construction loans. This is EAI debt
30M in asset sales will be closed from 10 Lower Spadina and 349 Carlaw. No Mortgages. Cash used to repay debt.
Our Liquidity situation has greatly improved significantly reducing risk in the business. We have positioned MPCT for a higher rate environment of closer to 5%+. With rates falling and projects progressing, we are in very good shape
Slightly improved debt metrics due to asset sales & Ivy Closing
Multi-Family Income will continue to increase (see page 9-10 on Q2 Results). You will notice the mention of bad debt expense, which was likely due to the rent strike, that just ended. I am not sure if we will see recoveries. NOI 1.707M in Q2 I want to see a rise.
Fair Value of Multi Family will rise, specifically at Maple House, Aalto II, and Common at Zibi. As normal, as construction reaches milestones, and occupancy increases, value of these properties will increase and debt ratios will improve. Each rental project is CMHC funded and non recourse, making risk very low.
Possible Upside Surprises:
- 49 Ontario Deal/progress
- Scarborough Junction News (unlikely)
- Any details on Distribution reinstatement, even a hint of late 2025
- 76 Stafford Asset Sale
- New Building Start announcements at Brightwater, Quayside, Victory Silos, Zibi
- Zibi Land Sale Update
Expected weakness:
- Sussex Vacancies are known to have increased slightly
- Zibi Office Building Completed in Q3 (or might be considered Q4) which is vacant but a new tenant is likely 1 year away (in discussions)
Other Notes:
- With sale of office buildings in Q3, plus 76 Stafford up for sale, we will be left with mainly just Sussex office as non core office (we only own 50%). We have sold around 100K Sq feet of office with another 25K being marketed significantly reducing our office exposure
- Possibly a reduction in our LOC limit due to the above office sales
- Zibi Begins Construction of one building, with 2nd starting in 2025
- Bridge House at Brightwater (will this proceed)? This will pay down land loans.
- Rent Strike at Weston ended (no details will be given likely due to NDA)
- Would like to see some Forecast of 2026 NOI from recurring assets
Its been Busy!
- Brightwater Density was approved to add almost 900 apartments and remove office density
- a building has begun in Zibi (paying down land loans), with a 2nd starting soon
- Ottawa Senators are building their arena next to our Zibi and Dream Lebreton Projects
- 3.27 Acres at Zibi was put up for sale
- 76 Stafford was put up for sale
- 349 Carlaw and 10 lower spadina officially closed, with around 30M in cash incoming this report
- Toronto is working to pass a waiver on development fees saving our developments 10's of millions, as well as 15-100% exemption of property taxes (on top of the HST rebate)
- Birch House began Occupancy October 1st
- Maple House, Aalto II and Common at Zibi are leasing up well and increasing NOI quickly
- I show a slight decrease in Aalto occupancy at end of Q3 but has since recovered.
Conclusion:
We have made a lot of progress this year. Liquidity is strong, and our developments are progressing well. We should be happy with our achievements, and look forward to the big announcements of 49 Ontario, Scarborough Junction, and Distribution Reinstatement which could all occur in 2025.