Star Metro - Forum Real Estate Income and Impact Fund Reports Q4 2024 Results

We are pleased to highlight that as of December 31, 2024, Series F investors in REIIF have earned an annual time-weighted return of 12.20% and an annualized return of 11.20% since inception¹, representing performance at the higher end of REIIF's targeted net return range of 8-12%. REIIF's performance in 2024 reflects stable, risk adjusted returns for our unitholders during the year, supported by disciplined management. This stable historical performance is contrasted to the significant growth in asset value REIIF has witnessed since inception with the addition of several assets including the Alignvest Student Housing REIT ("ASH" or "Alignvest") portfolio.

Despite federal policy changes, including the two-year cap on international undergraduate study permits announced in early 2024, impact on REIIF's portfolio was limited given its strategic focus on purpose-built student accommodations (PBSA) at top-tier public universities and colleges. The demand for professionally managed student housing remains strong, driven by chronic supply shortages in Canada's largest university markets ² .

In 2024, REIIF benefited from the acquisition of three right of first offer agreement (ROFO) assets with Forum Asset Management ("Forum"): The ARC, ALMA @ Oshawa and Woodroffe Place, adding nearly 950 beds at share across three markets. REIIF's proprietary ROFO pipeline continues to add meaningful value to investors and differentiates REIIF from its peer group, given its access to Forum's development pipeline of new-build assets located in major urban and university markets.

On December 18, 2024, the Fund successfully completed the acquisition of the assets of ASH growing REIIF's gross asset value to $2.4 billion, marking a transformational milestone for REIIF. This strategic acquisition positions REIIF and Forum as the leading owner and developer, respectively, of PBSA in Canada. The acquisition added nearly 7,200 beds, across seven university-focused markets, bringing REIIF's total to approximately 10,500 beds coast-to-coast. Following the acquisition, the Fund now comprises 31 properties ³ , across nine cities and six provinces and a strategic allocation to PBSA, that accounts for approximately 90% of the portfolio by asset value.

"Acquiring ASH elevates our position as a leader in one of the most undersupplied PBSA markets in the world. Our focus remains on creating vibrant, tenant-centered communities that provide students with a best-in-class living experience. By prioritizing institutional-quality management, we are shaping a housing platform that supports the success of students - the future leaders of our country - while striving to deliver consistent returns for our unitholders." said Aly Damji, Managing Partner at Forum, Fund Head and a Trustee of REIIF.

Looking ahead, ALMA @ ByWard Market Ottawa located in downtown Ottawa, approximately 200 meters from the University of Ottawa, is scheduled for acquisition by REIIF in Q3 2025 ⁴ . ALMA @ ByWard Market Ottawa consists of 742 bed new construction to be fully repositioned by Forum to the ALMA brand. The anticipated acquisition of ALMA @ ByWard Market Ottawa would grow REIIFs holdings in Ottawa - a market with 48,000 students⁵- to over 2,759 beds, strengthening its position as the leading provider of PBSA in the nation's capital.

Portfolio Update

REIIF's stabilized comparable properties ⁶ have achieved a 97.9% occupancy rate for the 2024/2025 academic year. Comparative Property Net Operating Income (NOI) growth for our PBSA assets increased 4% from the same quarter last year.

The Fund's leasing performance highlights continued demand for well-managed, amenitized student housing, in top university markets. The Fund's performance in the quarter was largely fueled by fair value gains from recently appraised PBSA assets located in the Greater Toronto Area (GTA).

REIIF's valuation process involves external appraisers conducting valuations on approximately 25% of the Fund's total property value each quarter, with two external and two internal appraisals conducted on each asset annually. This practice helps to ensure that the portfolio's valuations remain aligned with external market conditions and reflect the impacts of current leasing activity.

Balance Sheet Update

As of December 31, 2024, REIIF's net debt-to-asset ratio was approximately 55%. The Fund's debt structure comprises 86% fixed rate debt at the end of the year with an overall coupon of 3.99% and a weighted average term of 4.9 years.

A key financing priority for 2025 is to integrate REIIF's historically proven long-term, fixed-rate debt strategy into the recently acquired Alignvest portfolio. Management has initiated steps to replace the variable-rate acquisition financing on the Alignvest portfolio with long-term, fixed-rate CMHC mortgages. This strategy is expected to provide lower financing costs, greater financial predictability and align with REIIF's historical success in risk-adjusted returns.

Distributions

The Trustees of REIIF have approved an increase in distributions of 4.2% on Series F, effective for unitholders of record as of January 31, 2025.

Updated 2025 Distribution Per Unit:

¹ Includes REIIF Trust A Lead and AX Series.
² Includes REIIF Trust F Lead and FX Series.
³ Includes REIIF Trust H Lead and HX Series.
⁴ Includes REIIF Trust I Lead Series, IX Series and Founders I Series.

Subsequent Event

On February 6, 2025, a strategic investment from Brookfield Asset Management in support of REIIF's acquisition of ASH was announced. Brookfield Asset Management, through its real estate solutions strategy, will invest up to $100 million in REIIF. ⁷ .

¹ Total net returns (net of all REIIF expenses) for the Lead Series F units and is no guarantee of future results. The distribution rate and total return received by a unitholder will differ based on the series of trust units in which a unitholder invests. The expectations of the yield and returns is based on various assumptions and subject to certain risks, including those risk factors identified in REIIF's confidential offering memorandum.

² Bonard 2023 Annual Report

³ Two properties, 308 King and The Link, previously owned by Alignvest Student Housing REIT are now managed by Forum Asset Management and are expected to be integrated into REIIF's portfolio in due course, with REIIF entitled to interim profits or losses.

⁴ REIIF has entered into a forward purchase agreement in respect of this property, the closing of which is subject to satisfying certain remaining conditions.

⁵ University of Ottawa 2024 Quick Facts

⁶ Stabilized occupancy rate represents the occupancy level of a portfolio, excluding properties currently undergoing renovations or those that have not yet reached full operational potential, which includes seven properties.

⁷ As of the date of this press release, Brookfield has, through a special purpose limited partnership, invested twenty five million dollars and has the option, at its discretion and subject to certain terms and conditions, to increase its investment in REIIF up to one hundred million dollars in Canadian funds in the aggregate. These terms and conditions could affect the timing or likelihood of additional capital being deployed. There can be no guarantee that Brookfield will invest the full investment option amount.

About REIIF

Forum Real Estate Income and Impact Fund (REIIF) consolidates institutional-quality purpose-built student accommodations, as well as multi-family and furnished rentals, in supply-constrained markets. REIIF delivers impact and Extraordinary Outcomes™ to investors, enhancing yields and total returns, maintaining diversity and resiliency of income, benefiting students - and cities - across Canada.

About Forum

Forum Asset Management (Forum) is an investor, developer and asset manager operating across North America for over 28 years, focusing on real estate, private equity and infrastructure, with a strategic concentration in housing. We are committed to creating value that benefits our stakeholders and the communities in which we invest, what we call our Extraordinary Outcomes.™

Contacts

Name: Lara Iannucci, Chief Financial Officer, Real Estate
Phone Number: 416-947-0389
Email: [email protected]

Cautionary Statement

This news release is for informational purposes only and is not intended as investment, financial or other advice or a recommendation to invest in the Fund. It is also not an offer, solicitation, or basis for any investment decision regarding REIIF securities, which are available only to "accredited investors" within certain jurisdictions of Canada and not for sale to the general public.

The information in this news release regarding the Fund's portfolio, including the number of properties, units, residents served, and Gross Asset Value (GAV) as well as Fund performance and returns are based on current estimates developed from Forum's unaudited financial information, and are subject to change. Series F returns as expressed herein, are net of REIIF expenses like administrative costs, management fees, and unit class specific fees. The targeted distribution rate and total return received by a unitholder will differ based on the series of REIIF units in which a unitholder invests and the distribution reinvestment plan strategy that such unitholder elects to pursue. Past performance is historical and not a guarantee of future results. Investors should not place undue reliance on these figures and are encouraged to perform their own due diligence or consult with a professional advisor before making any investment decisions. A Prospective investors and other readers are strongly encouraged to carefully review the risk factors, assumptions, and uncertainties set out in REIIF's offering memorandum dated December 20, 2024, as same may be amended or supplemented from time to time (the "OM") before making any investment decisions. The OM contains important information about REIIF's investment strategy, potential risks, and other factors that should be considered.

Forward Looking Statements

This news release includes forward-looking statements under Canadian securities laws, identifiable by terms like "expect," "intends," and "anticipates," or variations of these, and those which imply forward looking statements such as those statements relating to the Fund, strategy, objectives and plans, outlining REIIF's investment objectives, strategies, opportunity pursuits, expected acquisitions pursuant to REIIF's ROFO agreement with Forum, expected annual net operating income growth, GAV growth, expectations of the yield and returns on units within the Fund including the stability of such returns, financing strategies including financing applications with CMHC, distribution expectations, REIIF's differentiating factors, rental housing demand and supply expectations, rental housing shortfall estimates, and general market outlook. However, these statements are based on current management beliefs and available information, and they are not guarantees of future performance. These forward looking statements are subject to risks and uncertainties that could cause actual outcomes to vary significantly, including economic conditions, real estate market volatility, funding access challenges, timing issues, and currency or interest rate changes. Additionally, the Alignvest transaction has been entered into with the expectation that its successful completion will result in long-term strategic benefits, economies of scale and synergies. It is possible that this may not occur as planned, or that the financial and other benefits may be less than anticipated. Unforeseen and other factors may lead to material differences in actual outcomes.

For more information on these factors, risks and uncertainties as well as the assumptions underlying management's forecasts, please refer to REIIF's OM which is available here. These forward-looking statements reflect our position as of this release, with no obligation for updates unless required by law.

SOURCE: Forum Asset Management Inc.

View the original press release on ACCESS Newswire

W.Fortin--SMC