Business
2008 positions Mainstreet Equity for continued growth during turbulent times
CALGARY, Dec. 19 /CNW/ - Mainstreet Equity Corp. ("Mainstreet" or the "Corporation") (TSX:MEQ) to...
About this update from Mainstreet Equity Corp.
[{"type":"text","content":"\n\n\n\nCALGARY, Dec. 19 /CNW/ - Mainstreet Equity Corp. ("Mainstreet" or the\n"Corporation") (TSX:MEQ) today released its financial results for its fiscal\nyear ended September 30, 2008. Mainstreet achieved a strong cash position as a\nresult of refinancing activities in 2008, and posted increases in rental\nrevenues, net operating income and the size of its portfolio.\n\n\n2008 HIGHLIGHTS\n\n\nStrong cash position achieved. Subsequent to 2008 year-end, as a result\nof financing activities in 2008, Mainstreet achieved a $50 million cash\nposition and mitigated risk by refinancing 32% of its floating rate and\nmatured debt (about $85 million) under fixed five-year to 10-year terms. The\nlast $16 million of financing was secured at an average interest rate of 3.9%\nfor a five-year term. The new financing is insured by Canada Mortgage and\nHousing Corporation (CMHC), with a reduced average interest rate of 4.84% as\ncompared to 5.42% before refinancing. Despite the significant drop in real\nestate valuation, Mainstreet's debt to market value ratio of only 49% for the\ntotal portfolio provides an opportunity to leverage more of its properties\nthrough refinancing, and extract cash to support growth.\n\n\nMarket Value. The value of the Corporation's portfolio is estimated at\n$625 million, as determined by five qualified appraisers (AACI - Accredited\nAppraiser Canadian Institute) based on properties held by Mainstreet on\nSeptember 30, 2008.\n\n\nGrowth in portfolio. Mainstreet's portfolio grew to 5,562 units in 2008,\na 6% increase compared to fiscal year-end 2007. Subsequent to year-end,\nMainstreet acquired two properties, consisting of 84 units of residential\napartments in Abbotsford, B.C. and Saskatoon, Saskatchewan for consideration\nof $7.2 million.\n\n\nB.C. Lower Mainland\n - Mainstreet's British Columbia portfolio grew by 16% in 2008 to 1,281\n units from 1,108 units in 2007.\n - Two properties were acquired in Abbotsford - one with 84 units and\n one with 89 units - for an average cost per door of just over\n $100,000, which is below estimated market value and replacement\n cost; 89 of these units have condominium title.\n - Approximately 12% of Mainstreet's B.C. properties have condominium\n title, which is very difficult to acquire, and make the properties\n more valuable.\n - Most of these propert...