WINNIPEG, MB, May 23, 2024 /CNW/ - Lanesborough Real Estate Investment Trust ("LREIT") (TSXV: LRT.UN) today reported its operating results for the quarter ended March 31, 2024. The following comments in regard to the financial position and operating results of LREIT should be read in conjunction with interim management's discussion & analysis – quarterly highlights and the interim financial statements for the quarter ended March 31, 2024, which may be obtained from the SEDAR+ website at www.sedarplus.ca.
ANALYSIS OF OPERATING RESULTS
Analysis of Income (Loss) and Comprehensive Income (Loss)
|
Three Months Ended March 31
|
Increase (Decrease)
in Income
|
|
2024
|
2023
|
Amount
|
%
|
|
|
|
|
|
|
Rentals from investment properties
|
$ 2,685,698
|
$ 3,481,753
|
$ (796,055)
|
(23) %
|
|
Rental loss insurance proceeds (reversal of proceeds)
|
-
|
(65,012)
|
65,012
|
100 %
|
|
Property operating costs
|
(1,884,197)
|
(2,799,329)
|
915,132
|
33 %
|
|
Net operating income(NOI)
|
801,501
|
617,412
|
184,089
|
30 %
|
|
Interest income
|
31,844
|
21,654
|
10,190
|
47 %
|
|
Interest expense
|
(2,534,249)
|
(2,643,383)
|
109,134
|
4 %
|
|
Trust expense
|
(271,211)
|
(265,074)
|
(6,137)
|
(2) %
|
|
Loss before the following
|
(1,972,115)
|
(2,269,391)
|
297,276
|
13 %
|
|
Loss on sale of investment property
|
(7,322)
|
(41,835)
|
34,513
|
82 %
|
|
Fair value adjustments
|
394,686
|
4,055,639
|
(3,660,953)
|
(90) %
|
|
Income (loss) before discontinued operations
|
(1,584,751)
|
1,744,413
|
(3,329,164)
|
(191) %
|
|
Loss from discontinued operations
|
(733,112)
|
(588,967)
|
(144,145)
|
(24) %
|
|
Income (loss) and comprehensive income (loss)
|
$ (2,317,863)
|
$ 1,155,446
|
$ (3,473,309)
|
(301) %
|
Overall Results
LREIT completed Q1-2024 with a loss and comprehensive loss of $2.3 million, compared to an income and comprehensive income of $1.2 million during Q1-2023, representing a decrease in income and comprehensive income of $3.5 million. The decrease mainly reflects a $3.7 million decrease related to fair value adjustments and a $0.1 million increase in loss from discontinued operations, partially offset by a $0.2 million increase in the net operating income ("NOI") of the investment properties and investment properties held for sale, and a $0.1 million decrease in interest expense.
The decrease from fair value adjustments reflects a $0.4 million gain from fair value adjustments during Q1- 2024, compared to a $4.1 million gain from fair value adjustments during Q1-2023. The gain from fair value adjustments during Q1-2024 is primarily due to a $0.4 million increase in the carrying value of previously written off vacant land to reflect the sales price for the land in the purchase and sales agreement executed by the Trust subsequent to March 31, 2024. The gain from fair value adjustments recognized during Q1-2023 mainly reflected an increase in the carrying value of the Fort McMurray properties segment, primarily as a result of an increase in the normalized revenue considered to be achievable in the market in light of a continued favourable occupancy trend.
The increase in loss from discontinued operations is primarily due to a $0.1 million impairment adjustment resulting from the write‑down of capital expenditures at Chateau St. Michael's that are considered to be maintenance versus value‑added in nature. The property's carrying value as of March 31, 2024 is consistent with the year‑end carrying value and the sales price for the property in the purchase and sales agreement executed by the Trust subsequent to March 31, 2024.
The increase in the NOI mainly reflects increases in the average rental rate of the Fort McMurray properties segment, which increased $69 or 5% from $1,377 during Q1-2023 to $1,446 during Q1- 2024; partially offset by a reduction in the average occupancy rate of the Fort McMurray properties segment, which decreased from 95% during Q1-2023 to 94% during Q1-2024. The sales of Laird's Landing, Lakewood Apartments and Westhaven Manor on January 31, 2023 and the sales of Parsons Landing and Nelson Ridge Estates on March 1, 2024 resulted in a $0.9 million decrease in rental revenues and a largely offsetting $0.9 million decrease in property operating costs in the held for sale and/or sold properties segment, during Q1-2024, in comparison to Q1-2023.
The decrease in interest expense is mainly due to the assumption of mortgage loan debt, in the aggregate principal amount of $22.9 million, by the purchaser upon completion of the sales of Laird's Landing, Lakewood Apartments and Westhaven Manor on January 31, 2023 and the assumption of mortgage loan debt, in the aggregate principal amount of $57.5 million, inclusive of accrued interest and fees, by the purchaser upon completion of the sales of Parsons Landing and Nelson Ridge Estates on March 1, 2024; as well as a decrease in the weighted average interest rate on the Trust's mortgage loans, which decreased from 7.2% in Q1-2023 to 6.6% in Q1-2024; partially offset by a $0.3 million increase in amortization of transaction costs mainly due to the full amortization of transaction costs associated with Parsons Landing during Q1-2024 as a result of the sale of the property on March 1, 2024.
ABOUT LREIT
LREIT is a real estate investment trust, which is listed on the TSX Venture Exchange under the symbol LRT.UN (Trust Units). For further information on LREIT, please visit our website at www.lreit.com.
This press release contains certain statements that could be considered as forward-looking information. The forward-looking information is subject to certain risks and uncertainties, which could result in actual results differing materially from the forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Lanesborough Real Estate Investment Trust
View original content: http://www.newswire.ca/en/releases/archive/May2024/23/c6857.html