Business
Mainstreet Gears Up for Acquisitions as the Rental Market Tide Begins to Turn
Mainstreet Gears Up for Acquisitions as the Rental Market Tide Begins to Turn
About this update from Mainstreet Equity Corp.
[{"type":"text","content":"\n\n\n\n May 10, 2010 (Canada NewsWire Group) -- In the second quarter of 2010(1), Mainstreet Equity Corp. pursued three key objectives, all of them aimed at positioning Mainstreet to accelerate its strategic acquisitions:\n\n\n >\n\n\nThe results of Mainstreet's focus on these objectives are evident in many key metrics and performance indicators during Q2 2010:\n\n\n >\n\n\nQ2 IN REVIEW\n\n1. $58 million in Debt Refinancing\n\nTo mitigate the risk in anticipated interest rate hikes, minimize the costs of borrowing and increase cash flow, Mainstreet continually refinances as much floating and maturing debt as possible into long-term, CMHC-insured mortgages at lower interest rates. As of the date of this release, Mainstreet's floating and maturing debts totalled $64 million. Of this, Mainstreet has already processed the refinancing of $37 million (58%) and expects to refinance an additional $21 million by the end of the financial year 2010. In so doing, Mainstreet expects to lower interest expenses and increase cash flow.\n\n2. Expect a 7% Decrease in Vacancy during the Non-peak Rental Season\n\nMainstreet expects the vacancy rate will drop to 12% by the end of May as compared to an average vacancy rate of 19% in Q1 2010, Mainstreet's vacancy rate at the date of this release was approximately 14%. Notably, every 1% decrease in vacancy rate translates to an annualized increase of approximately $680,000 (before rental incentives) in Mainstreet's net operating income. With the high rental season approaching, management is confident the Company can make further significant reductions in its vacancy rate before its financial year-end.\n\n3. A Solidified, Growth-oriented Organizational Structure\n\nMainstreet continues to restructure and optimize its human resources; and thanks to the team's focused efforts, the Corporation's vacancy rate and operating costs are down significantly .With projected healthy cash reserves (after refinancing anticipated for the balance of the fiscal year), the entire organization has been gearing up for substantial acquisitions in the coming quarters.\n\nCHALLENGES\n\nMainstreet's management believes that in recessionary times, the mid-market rental apartment space is consistently more resilient than any other real estate category; however, even Mainstreet's business feels the effects of an economic downtur...