CALGARY, Aug. 5 /CNW/ - Mainstreet Equity's financial results for the
third quarter ended June 30, 2005, reflected the continued growth of its
portfolio.
During the third quarter of fiscal 2005, Mainstreet purchased three
multi-residential apartment complexes in Calgary, Alberta and Surrey, B.C,
totalling 390 units for $22 million. These additions brought Mainstreet's
total apartment unit count to 3,535 units across Canada, an increase of 30%
over the same period last year. In new markets such as Vancouver lower
mainland and the Greater Toronto Area, the company's portfolio increased by
226% and 81% respectively over the same period last year.
The company's total book value of its real estate properties grew to
$188 million from $142 million in the third quarter of 2004. The market
value(1) of these assets as of June 30, 2005 was $230 million. Based on the
company's current cash position, Mainstreet has approximately $100 million in
acquisition capacity and anticipates making additional acquisition
announcements over the next 30-45 days.
Mainstreet reported positive funds from operations (FFO) in the third
quarter of 2005. Total FFO improved 29% to $0.5 million from $0.4 million the
previous year. The biggest contributor to improved FFO was the stabilization
of rental units previously under renovation. At the end of the quarter,
approximately 90% of Mainstreet's properties (acquired before the convertible
debenture offering in October of 2004) were fully renovated and available for
leasing.
FFO is a generally accepted measure of operating performance of real
estate companies; however, it is a non-GAAP measurement. Although a number of
real estate companies use this measure, readers are cautioned that
Mainstreet's calculation of FFO may be different than other companies.
Mainstreet calculates FFO as net income plus amortization and future income
tax expenses (recovery).
In the third quarter of 2005, Mainstreet also reported a net loss of
$0.5 million ($0.05 per share) after gains from disposition and a net loss of
$0.06 million ($0.06 per share) before gains from disposition. This is
compared with a net loss of $0.6 million ($0.06 per share) in the same period
last year.
In commenting on these results, Mainstreet President and CEO Bob Dhillon
said: "Over the last three months, we continued to aggressively pursue our
business strategy for growth in our market niche -- mid-sized, mid-tiered
rental apartment buildings. We have achieved this growth while sticking
closely to our value chain philosophy: to only buy buildings in our core
geographic markets where we can add value and where we can achieve synergies
with our existing portfolio. This translates ultimately into higher rental
revenues, lower operating costs and long-term shareholder value."
Mainstreet is a publicly traded real estate company focused on the
acquisition, redevelopment, repositioning and management of "mid-market"
multi-family residential rental properties across Canada.
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(1) The market value is determined periodically by independent real
estate appraisers. The actual selling value and proceeds realized
of those properties may be substantially different and depends
on market conditions at the time of the sale.
