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TORONTO, Nov. 11, 2021 (GLOBE NEWSWIRE) -- Flagship Communities Real Estate Investment Trust (the “REIT” or “Flagship”) (TSX:MHC.U) announced today that it has waived conditions on the acquisition of three high-quality manufactured housing communities (“MHCs”) from two separate vendor groups comprising 957 lots for an aggregate purchase price of approximately US$56.8 million (collectively, the “Acquisitions”). The Acquisitions are subject to customary closing conditions and are expected to close in December 2021.

The purchase price of approximately US$56.8 million is expected to be funded primarily with the net proceeds from the REIT’s US$40.4 million offering of trust units (“Units”) (see “Equity Financing” below), with the balance to be funded with cash on hand. The REIT's pro forma Debt to Gross Book Value Ratio (see “Non-IFRS Financial Measures” below) following the Acquisitions and the Offering is expected to be approximately 40.0% (prior to any exercise of the over-allotment option). The Acquisitions, together with the Offering, are expected to be immediately accretive to the REIT’s adjusted funds from operations ("AFFO") per Unit on a leverage neutral basis.

“We are continuing to grow our geographic footprint near existing communities, applying our successful business model with new strategic acquisitions,” said Kurt Keeney, President and Chief Executive Officer. “These acquisitions are in line with our disciplined growth strategy and have significantly enhanced our portfolio and presence in key markets. The Acquisitions allow Flagship to continue to consolidate existing markets, providing the REIT with above market growth opportunities over time.”

Highlights of the Acquisitions

  • Increased Size and Scale: The Acquisitions add three communities and 957 lots to our portfolio. Together with the other acquisitions completed since the REIT’s initial public offering (the “IPO”), the REIT’s pro forma portfolio totals 63 communities comprising 11,328 lots, representing an approximate 37% increase in the number of lots.
     
  • Further Consolidation of Existing Markets: The Acquisitions are indicative of the REIT’s ability to continue consolidating its operating footprint within existing markets. The REIT intends to continue sourcing acquisitions in Arkansas and Kentucky as well as other adjacent markets with a focus on strategically expanding the REIT’s contiguous portfolio.
     
  • Operating Platform Synergies and Economies of Scale: The REIT has successfully expanded its portfolio and is well-positioned to further benefit from its scalable management platform going forward. The REIT intends to continue its growth by sourcing acquisitions in existing and adjacent markets which are expected to generate significant economies of scale and operational synergies.
  • Improved Leverage Profile: Following the completion of the Acquisitions and the Offering, the REIT’s Debt to Gross Book Value Ratio is expected to be approximately 40.0% (prior to any exercise of the over-allotment option) compared to 49.6% following completion of the IPO and 42.0% as at September 30, 2021.
  • Accretive to AFFO per Unit: The Acquisitions, together with the Offering, are expected to be immediately accretive to the REIT’s AFFO per unit on a leverage neutral basis.
https://www.globenewswire.com/news-release/2021/11/11/2332905/0/en/Flagship-Communities-Real-Estate-Investment-Trust-Announces-US-56-8-Million-of-Acquisitions-and-US-40-4-Million-Equity-Offering.html