VANCOUVER, British Columbia, Aug. 29, 2024 (GLOBE NEWSWIRE) -- AIP Realty Trust (the "Trust" or "AIP Realty") (TSXV:AIP.U) today announced its financial results for the three and six months ended June 30, 2024. All dollar amounts are stated in U.S. dollars.
2024 Highlights
- The Trust owns a 100% leased multi-tenant light industrial flex facility located on Eagle Court in Lewisville, Texas (the "Eagle Court Property"). The Eagle Court Property has been 100% leased since substantial completion in June 2020. The Eagle Court Property had expected normal tenant turnover but even through this, has realized an overall ~10% increase in investment property revenue from higher lease rates.
- During the three and six months ended June 30, 2024, the Eagle Court Property generated investment property revenue of $152,591 and $303,633, comprised of tenant rental revenue and revenue from contracts with customers, specifically common area maintenance. Investment property operating expenses for the three and six months ended June 30, 2024 were $53,583 and $102,186, resulting in net rental income of $99,008 and $201,447, respectively.
- Effective April 19, 2024, the Trust completed the first tranche of a non-brokered private placement (the "Financing") and issued 1,100,000 Preferred Units - Series B Convertible (each, a "Preferred Unit"), at a price of $0.50 per Preferred Unit for aggregate gross proceeds of $550,000. The Trust intends to use the proceeds of the Financing for working capital and general corporate purposes. Each of the Preferred Units issued under the first tranche of the Financing will be subject to a four month and one day hold period from the date of issuance. There were no finder's fees paid in connection with the first tranche of the Financing.
- Effective April 29, 2024, the Trust completed an issuance of 1,500,000 Class A Trust Units (each, a "Unit") at a deemed issue price of $0.50 per Unit in satisfaction of an outstanding debt in the amount of $750,000 owed to AllTrades Industrial Development LLC ("AID"), a related party, pursuant to the terms of a property exclusivity fee for a Master Funding and Forward Purchase Agreement dated September 19, 2022 (the "Agreement") between AID and AIP Realty Management LLC (a wholly-owned subsidiary of the Trust). On May 9, 2024, the TSXV approved the offering of Units for outstanding debt and the Trust recorded the $750,000 as a one-time property exclusivity fee for the three and six months ended June 30, 2024.
- The Trust has previously announced entering into forward purchase agreements with the option to acquire up to twelve (12) Serviced Industrial Business Suites ("SIBS") in the shallow bay light industrial flex space being developed in the Dallas-Fort Worth ("DFW") market by AllTrades Industrial Properties, Inc. ("AllTrades"), the Trust's exclusive development partner, and a related party of the Trust.1
- The Trust suspended its Q1 and Q2 quarterly distributions to support the Trust's priority of preserving capital to fund working capital until the properties discussed above are acquired.
Selected Financial Information
| (unaudited) | Three months ended June 30 | Six months ended June 30 | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||
| Rental revenue | $152,591 | $161,443 | $303,633 | $298,078 | ||||||||||
| Property operating expenses | ($53,583 | ) | ($58,185 | ) | ($102,186 | ) | ($96,050 | ) | ||||||
| Net rental income | $99,008 | $103,258 | $201,447 | $202,028 | ||||||||||
| Other expenses | ($1,527,726 | ) | ($876,505 | ) | ($2,009,010 | ) | ($1,701,119 | ) | ||||||
| Fair value adjustment to investment property | 1,375 | $1,780 | 2,750 | $3,560 | ||||||||||
| Net loss and total comprehensive loss | ($1,427,343 | ) | ($771,446 | ) | ($1,804,813 | ) | ($1,495,531 | ) | ||||||
| As at June 30 (Unaudited) and December 31 (Audited) | 2024 | 2023 | ||||
| Investment property | $5,822,000 | $5,822,000 | ||||
| Cash | $140,737 | $118,642 | ||||
| Secured bank indebtedness (net of debt discount) | $2,968,541 | $3,017,083 | ||||
| Accounts payable | $296,303 | $424,991 | ||||
| Accrued expenses | $5,003,937 | $4,209,243 | ||||
| Units outstanding | 4,924,448 | 3,424,448 | ||||
The foregoing is a summary of selected information for the three and six months ended June 30, 2024 and 2023 and is qualified in its entirety by, and should be read in conjunction with, the Trust's condensed interim consolidated financial statements and management discussion and analysis for the three and six months ended June 30, 2024 and 2023. These documents are available on SEDAR+ at www.sedarplus.com, and on the Trust's website at www.aiprealtytrust.com.
Related party disclosures
The executive management team of the Trust is the same executive management team as AllTrades.
Outlook and Subsequent Events
Through its agreement with AllTrades, the Trust has been granted an exclusive right to purchase all AllTrades' completed and leased facilities, as well as any facilities in development. The 12 properties mentioned above and subject to forward purchase agreements include five DFW-area facilities already completed or nearing completion, and seven additional facilities on which development has commenced. Development on these facilities was funded with equity capital from AllTrades and Trinity Investors, a $7 billion Dallas-based real estate private equity investor. In addition, AllTrades is actively planning the next tranche of facilities in DFW and Houston, TX.
As previously disclosed in March 2024, the Board of Trustees continues to explore the execution of its business plan and relationship with AllTrades and is considering a transaction structure that would also facilitate AIP acquiring AllTrades. AllTrades has twelve facility assets comprised of (a) five (5) assets ready for acquisition, comprising 377,990 SF and 143 leasable units and (b) seven (7) assets under development for 476,877 SF and 167 leasable units.
As previously disclosed in March 2024, Raymond James Ltd. ("Raymond James") continues to serve as financial advisor for the Trust in connection with a potential transaction involving AllTrades.
Effective August 16, 2024, the Trust completed a second (final) tranche of the Financing and issued 1,900,000 Preferred Units at a price of US$0.50 per Preferred Unit for aggregate gross proceeds of $950,000.
In total, the Trust issued 3,000,000 Preferred Units under the Financing for aggregate gross proceeds of $1,500,000. Each of the Preferred Units issued under the Financing will be subject to a four-month and one-day hold period from the date of issuance.
The Trust intends to use the proceeds of the Financing for working capital and general corporate purposes. Based upon the above recently completed financings, the Trust has developed and maintains financial projections for the next twelve (12) months that show sufficient cash flows to cover forecasted operating expenses.
About AIP Realty Trust
AIP Realty Trust is an unincorporated, open ended mutual fund trust with a growing portfolio of AllTrades branded SIBS light industrial flex facilities focused on small businesses and the trades and services sectors in the U.S. These properties appeal to a diverse range of small space users, such as contractors, skilled trades, suppliers, repair services, last-mile providers, small businesses and assembly and distribution firms. They typically offer attractive fundamentals including low tenant turnover, stable cash flow and low capex intensity, as well as significant growth opportunities. With an initial focus on the Dallas-Fort Worth market, AIP plans to roll out this innovative property offering nationally. AIP holds the exclusive rights to finance the development of and to purchase all the completed and leased properties built across North America by its development and property management partner, AllTrades Industrial Properties, Inc. For more information, please visit www.aiprealtytrust.com.
For further information from the Trust, contact:
Leslie Wulf
Executive Chairman
(214) 679-5263
les.wulf@aiprealtytrust.com
Or
Greg Vorwaller
Chief Executive Officer
(778) 918-8262
Greg.vorwaller@aiprealtytrust.com
Cautionary Statement on Forward-Looking Information
This press release contains statements which constitute "forward-looking information" within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of AIP Realty Trust with respect to future business activities and operating performance. Forward-looking information is often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" or similar expressions and includes information regarding, future acquisitions by the Trust, the ability to obtain regulatory and unitholder approvals and other factors. When or if used in this news release, the words "anticipate", "believe", "estimate", "expect", "target", "plan", "forecast", "may", "schedule" and similar words or expressions identify forward-looking statements or information. These forward-looking statements or information may relate to the commencement of development on certain of the AllTrades facilities, receipt of final approval from the TSXV for the Financing and the Unit Issuance, proposed financing activity, proposed acquisitions, regulatory or government requirements or approvals, the reliability of third-party information and other factors or information. Such statements represent the Trust's current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Trust, are inherently subject to significant business, economic, competitive, political and social risks, contingencies and uncertainties. Many factors, both known and unknown, could cause results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward- looking statements. These forward-looking statements are made as of the date hereof and are expressly qualified in their entirety by this cautionary statement. The Trust does not intend, and do not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements and information other than as required by applicable laws, rules and regulations.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release is not an offer of securities for sale in the United States. The securities may not be offered or sold in the United States absent registration or an exemption from registration under U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"). The Trust has not registered and will not register the securities under the U.S. Securities Act. The Trust does not intend to engage in a public offering of their securities in the United States.
Source: AIP Realty Trust
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1 The acquisition of each of the properties is subject to certain conditions, including but not limited to completion of the construction of each facility, receipt of audited financial statements for each facility, receipt of a satisfactory third-party appraisal supporting the purchase price for each facility, receipt of regulatory approvals, including the approval of the TSXV, approval of the independent trustees of AIP Realty and customary closing date and post-closing adjustments.
