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Automotive Properties Real Estate Investment Trust

Automotive Properties REIT Reports Financial Results for First Quarter of 2025

TORONTO , May 14, 2025 /CNW/ - Automotive Properties Real Estate Investment Trust (TSX: APR.UN) ("Automotive Properties REIT" or the "REIT") today announced its financial results for the three-month period ended March 31, 2025 ("Q1 2025").

"We expanded our property portfolio into the United States in the first quarter with the completion of our previously announced acquisition of a Tesla collision center property located in Dublin, Ohio, a suburb of Columbus. Subsequent to quarter-end, we added a second U.S. property with the acquisition of a Rivian automotive property located in Tampa, Florida," said Milton Lamb, CEO of Automotive Properties REIT. "These acquisitions are consistent with our strategy of acquiring attractive commercial properties in growing metropolitan markets, and enhancing our tenant and geographic diversification, and also increases our exposure to the electric vehicle and service market in North America."

"For the quarter, we generated growth in key financial performance metrics, including AFFO per unit, reflecting our property acquisitions in the fourth quarter last year and the fixed and CPI-linked contractual rent increases embedded in our leases," continued Mr. Lamb. "Looking ahead, we remain focused on strengthening our financial performance through both organic rental growth and property acquisitions that continue to drive increases in AFFO per Unit."

Q1 2025 Highlights 

  • The REIT generated AFFO per Unit1 of $0.247 (diluted) and paid regular cash distributions of $0.201 per Unit (as defined below) in Q1 2025, representing an AFFO payout ratio1 of approximately 81.4%. For the comparable three-month period ended March 31, 2024 ("Q1 2024"), the REIT generated AFFO per Unit of $0.234 (diluted) and paid cash distributions of $0.201 per Unit, representing an AFFO payout ratio of approximately 85.9%.
  • The REIT had a Debt to Gross Book Value ("Debt to GBV")2 ratio of 43.8% as at March 31, 2025, and $55.4 million of undrawn capacity under its revolving credit facilities, $0.1 million of cash on hand, and four unencumbered properties with an aggregate value of approximately $69.4 million. As at the date of this news release, the REIT has approximately $39.4 million of undrawn capacity under its revolving credit facilities, cash on hand of $0.1 million, and five unencumbered properties with an aggregate value of approximately $88.0 million.
  • On March 11, 2025, the REIT completed the acquisition of a Tesla-tenanted collision center property (the "Columbus Tesla Property") located in Dublin, Ohio, a suburb of Columbus, for a purchase price of approximately US$17.8 million plus acquisition costs of approximately US$0.8 million (total of approximately C$26.7 million). The REIT funded the purchase price for the acquisition of the Columbus Tesla Property primarily by drawing on its revolving credit facilities.

______________________________________


1 AFFO per Unit and AFFO payout ratio are non-IFRS measures and non-IFRS ratios, respectively. See "Non-IFRS Financial Measures" at the end of this news release.


2 Debt to GBV is a supplementary financial measure. See "Non-IFRS Financial Measures" at the end of this news release.

Subsequent Event  

  • On April 11, 2025, the REIT completed the acquisition of a Rivian-tenanted automotive property in Tampa, Florida (the "Tampa Property") for a purchase price of approximately US$13.5 million (approximately C$18.8 million). The REIT funded the purchase price for the acquisition of the Tampa Property with draws on its revolving credit facilities.

Financial Results Summary 


Three months ended 
March 31,





($000s, except per Unit amounts)

2025

2024

Change





Rental revenue (1)

$23,902

$23,413

2.1 %





NOI(2)

20,211

19,843

1.9 %





Cash NOI(2)

20,018

19,509

2.6 %





Same Property Cash NOI(2)

19,499

19,073

2.2 %





Net Income and other comprehensive income (3)

7,641

20,901

-63.4 %





FFO(2)

12,622

12,068

4.6 %





AFFO(2)

12,427

11,722

6.0 %





Distributions per Unit

$0.201

$0.201

-





FFO per Unit - basic (2)(4)

0.257

0.246

0.011

FFO per Unit - diluted (2)(5)

0.251

0.241

0.010





AFFO per Unit - basic (2)(4)

0.253

0.239

0.014

AFFO per Unit - diluted (5)   

0.247

0.234

0.013





Ratios (%)




FFO payout ratio(2)(6)

80.1 %

83.4 %

3.3 %

AFFO payout ratio(2)(6)

81.4 %

85.9 %

4.5 %

Debt to GBV (7)

43.8 %

44.6 %

0.8 %


(1)

Rental revenue is based on rents from leases entered into with tenants, all of which are triple-net leases and include recoverable realty taxes and straight-line adjustments. Same Property Cash NOI is based on rental revenue for the same asset base having consistent gross leasable area in both periods.


(2)

NOI, Cash NOI, Same Property Cash NOI, FFO, AFFO, FFO per Unit, AFFO per Unit, FFO payout ratio and AFFO payout ratio are non-IFRS measures or non-IFRS ratios, as applicable. See "Non-IFRS Financial Measures" at the end of this news release. References to "Same Property" correspond to properties that the REIT owned in Q1 2024, thus removing the impact of acquisitions.


(3)

Net income for Q1 2025 includes changes in fair value adjustments of $0.8 million for, Deferred Units ("DUs"), Income Deferred Units ("IDUs"), Performance Deferred Units ("PDUs") and Restricted Deferred Units ("RDUs"), $4.7 million for interest rate swaps and foreign exchange forward contract and $1.0 million for investment properties. Please refer to the unaudited, condensed consolidated interim financial statements of the REIT and the notes thereto for additional information.


(4)

FFO per Unit and AFFO per Unit – basic is calculated by dividing the total FFO and AFFO by the amount of the total weighted average number of outstanding trust units of the REIT ("REIT Units" and together with the Class B LP Units, "Units") and Class B Limited Partnership Units of Automotive Properties Limited Partnership ("Class B LP Units") and together with the REIT Units, "Units".. The total weighted average number of Units outstanding – basic for Q1 2025 was 49,094,337.


(5)

FFO per Unit and AFFO per Unit – diluted is calculated by dividing the total FFO and AFFO by the amount of the total weighted average number of outstanding Units, DUs, IDUs, PDUs and RDUs granted to independent trustees and management of the REIT. The total weighted average number of Units outstanding (including Class B LP Units, DUs, IDUs, PDUs and RDUs) on a fully diluted basis for Q1 2025 was 50,333,328.


(6)

FFO payout ratio and AFFO payout ratio excludes the cash portion of the special distribution paid to Unitholders on January 6, 2025 (the "Special Distribution"). See "Non-IFRS Financial Measures" at the end of this news release.


(7)

 Debt to GBV is a supplementary financial measure. See "Non-IFRS Financial Measures" at the end of this news release.

Rental revenue in Q1 2025 increased by 2.1% to $23.9 million, compared to $23.4 million in Q1 2024. The increase in rental revenue reflects growth from properties acquired subsequent to Q1 2024 and contractual annual rent increases, partially offset by the reduction of rent from the sale of the automotive dealership property located at 8210 and 8220 Kennedy Road and 7 and 13/15 Main Street, in Markham, Ontario (collectively, the "Kennedy Lands") in October 2024.

The REIT generated total Cash NOI of $20.0 million in Q1 2025, representing an increase of 2.6% compared to Q1 2024. The increase was primarily attributable to properties acquired subsequent to Q1 2024 and contractual rent increases, partially offset by the reduction of rent from the sale of the Kennedy Lands. Same Property Cash NOI was $19.5 million in Q1 2025, representing an increase of 2.2% compared to Q1 2024. The increase was primarily attributable to contractual rent increases.

The REIT recorded net income and other comprehensive income of $7.6 million in Q1 2025, compared to $20.9 million in Q1 2024. The decrease was primarily due to changes in non-cash fair value adjustments for interest rate swaps and foreign exchange foreign contract, investment properties and DUs, IDUs, PDUs and RDUs (collectively "Unit-based compensation") in Q1 2025 compared to Q1 2024, as well as a fair value adjustment to Class B LP Units in Q1 2024. The impact of the movement in the traded value of the REIT Units resulted in an increase in fair value adjustment for Unit-based compensation of $0.8 million in Q1 2025. In Q1 2024, the impact of the movement in the traded value of the REIT units resulted in an increase in fair value adjustment for Class B LP Units and Unit-based compensation of $5.0 million.

FFO in Q1 2025 increased 4.1% to $12.6 million, or $0.251 per Unit (diluted), compared to $12.1 million, or $0.241 per Unit (diluted), in Q1 2024. The increase in FFO was primarily attributable to higher rental revenue and lower interest expense, partially offset by the reduction of rent from the sale of the Kennedy Lands.

AFFO in Q1 2025 increased 6.0% to $12.4 million, or $0.247 per Unit (diluted), compared to $11.7 million, or $0.234 per Unit (diluted), in Q1 2024. The increase in AFFO reflected the impact of the properties acquired subsequent to Q1 2024, contractual rent increases and lower interest costs, partially offset by the reduction of rent from the sale of the Kennedy Lands. Straight-line rent adjustment is excluded from the calculation of AFFO.

Adjusted Cash Flow from Operations ("ACFO")[3] for Q1 2025 was $14.1 million, compared to $12.4 million in Q1 2024. The increase was primarily attributable to properties acquired subsequent to Q1 2024 and contractual rent increases, partially offset by the reduction of rent from the sale of the Kennedy Lands.

_________________


3 ACFO is a non-IFRS measure. See "Non-IFRS Financial Measures" at the end of this news release

Cash Distributions

The REIT is currently paying monthly cash distributions of $0.067 per Unit, representing $0.804 per Unit on an annualized basis. For Q1 2025, the REIT declared and paid regular cash distributions of $9.87 million, or $0.201 per Unit, representing an AFFO payout ratio of 81.4%. The AFFO payout ratio was lower in Q1 2025 compared to the 85.9% AFFO payout ratio in Q1 2024, primarily due to the positive impact of the properties acquired subsequent to Q1 2024, contractual rent increases and lower interest costs, partially offset by the reduction of rent from the sale of the Kennedy Lands. The AFFO payout ratio in Q1 2025 excludes the cash portion of the Special Distribution that the REIT paid to unitholders on January 6, 2025. 

Liquidity and Capital Resources 

As at March 31, 2025, the REIT had a Debt to GBV ratio of 43.8%, $55.4 million of undrawn capacity under its revolving credit facilities, $0.1 million of cash on hand, and four unencumbered properties with an aggregate value of approximately $69.4 million. As at the date of this news release, the REIT has approximately $39.4 million of undrawn capacity under its revolving credit facilities, cash on hand of $0.1 million, and five unencumbered properties with an aggregate value of approximately $88.0 million.

As at March 31, 2025, 93% of the REIT's debt was fixed with a weighted average interest rate of 4.35%, a weighted average interest rate swap term and mortgages remaining of 4.2 years, and a weighted average term to maturity of debt of 2.4 years.

Units Outstanding

As at March 31, 2025, there were 49,117,113 REIT Units and nil Class B LP Units outstanding.

Outlook 

The REIT is subject to risks associated with inflation, interest rates, currency fluctuations and availability of capital. The REIT is actively monitoring risks associated with trade tariffs and other trade restrictions, which could impact cross-border trade, material costs, and overall economic market conditions in Canada and the United States. While the full extent and impact of these proposed trade tariffs and trade restrictions remains uncertain, the REIT is continuing to assess their potential effect on its business, property valuations and financing conditions.

The Canadian and United States automotive and original equipment manufacturer ("OEM") dealership and service industry is highly fragmented, and the REIT expects continued consolidation over the mid to long term due to increased industry sophistication and growing capital requirements for owner operators, which encourages them to pursue increased economies of scale. The REIT plans to continue to grow its portfolio of properties leased to OEMs, OEM dealers and other automotive related uses.

Financial Statements

The REIT's unaudited condensed consolidated interim financial statements and related Management's Discussion & Analysis ("MD&A") for Q1 2025 are available on the REIT's website at www.automotivepropertiesreit.ca and on SEDAR+ at www.sedarplus.ca.

Conference Call

Management of the REIT will host a conference call for analysts and investors on Thursday, May 15, 2025 at 9:00 a.m. (ET). To join the conference call without operator assistance, participants can register and enter their phone number at https://emportal.ink/43LrroX to receive an instant automated call back. Alternatively, they can dial (416) 945-7677 or (888) 699-1199 to reach a live operator who will join them into the call. A live and archived webcast of the call will be accessible via the REIT's website www.automotivepropertiesreit.ca.

To access a replay of the conference call, dial (289) 819-1450 or (888) 660-6345, passcode: 96462 #. The replay will be available until May 22, 2025.

About Automotive Properties REIT

Automotive Properties REIT is an unincorporated, open-ended real estate investment trust focused on owning and acquiring primarily income-producing automotive and other OEM dealership and service properties located in Canada and the United States. The REIT's portfolio currently consists of 80 income-producing commercial properties, representing approximately three million square feet of gross leasable area, in metropolitan markets across British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Québec in Canada, and Florida and Ohio in the United States. Automotive Properties REIT is the only public vehicle in Canada focused on consolidating automotive and OEM dealership and service real estate properties. For more information, please visit: www.automotivepropertiesreit.ca.

Forward-Looking Information

This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects the REIT's current expectations regarding future events and in some cases can be identified by such terms as "will" and "expected". Forward-looking information includes the REIT's expectations with respect to the impact of changes in economic conditions, including changes in interest rates, currency fluctuation and the rate of inflation, and the impact of tariffs or other trade restrictions , including the impact of each of the foregoing on the REIT and its tenants, and the REIT's future acquisition capacity. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT's control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under "Risks & Uncertainties, Critical Judgments & Estimates" in the REIT's MD&A for the year ended December 31, 2024 and in the REIT's MD&A for the interim period ended March 31, 2025 and under "Risk Factors" in the REIT's annual information form dated March 5, 2025, which are available on SEDAR+ ( www.sedarplus.ca ) and the REIT's website ( www.automotivepropertiesreit.ca ). The REIT does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. This forward-looking information speaks only as of the date of this news release.

Non-IFRS Financial Measures

This news release contains certain financial measures and ratios which are not defined under International Financial Reporting Standards ("IFRS") and may not be comparable to similar measures presented by other real estate investment trusts or enterprises. FFO, AFFO, FFO payout ratio, AFFO payout ratio, NOI, Cash NOI, Same Property Cash NOI and ACFO are key measures of performance used by the REIT's management and real estate businesses. Debt to GBV, a supplementary financial measure, is a measure of financial position defined by agreements to which the REIT is a party. These measures, as well as any associated "per Unit" amounts, are not defined by IFRS and do not have standardized meanings prescribed by IFRS, and therefore should not be construed as alternatives to net income or cash flow from operating activities calculated in accordance with IFRS. The REIT believes that AFFO is an important measure of economic earnings performance and is indicative of the REIT's ability to pay distributions from earnings, while FFO, NOI, Cash NOI and Same Property Cash NOI are important measures of operating performance of real estate businesses and properties. The IFRS measurement most directly comparable to FFO, AFFO, NOI, Cash NOI and Same Property Cash NOI is net income. ACFO is a supplementary measure used by management to improve the understanding of the operating cash flow of the REIT. The IFRS measurement most directly comparable to ACFO is cash flow from operating activities. For reconciliations of NOI, FFO, AFFO and Cash NOI to net income and comprehensive income, and ACFO to cash flow from operating activities, please see the tables below. For further information regarding these non-IFRS measures and supplementary financial measures, please refer to Section 1 "General Information and Cautionary Statements – Non-IFRS Financial Measures" and Section 6 "Non-IFRS Financial Measures" in the REIT's Q1 2025 MD&A which is incorporated by reference herein and is available on the REIT's website at www.automotivepropertiesreit.ca  and on SEDAR+ at www.sedarplus.ca .

Reconciliation of NOI, Cash NOI, FFO and AFFO

Three months ended March 31,




($000s, except per Unit amounts)

Q1 2025

Q1 2024

Variance 

Calculation of NOI




Property revenue

$23,902

$23,413

$489

Property costs

(3,691)

(3,570)

(121)

NOI (including straight‑line adjustments)

$20,211

$19,843

$368

Adjustments:




Land lease payments

(99)

(86)

(13)

Straight‑line adjustment

(94)

(248)

154

Cash NOI

20,018

19,509

509

Reconciliation of net income to FFO and AFFO




Net income and comprehensive income

$7,641

$20,901

($13,260)

Adjustments:




Change in fair value – Interest rate swaps and foreign exchange translation adjustment

4,782

(5,503)

10,285

Distributions on Class B LP Units

-

1,875

($1,875)

Change in fair value – Class B LP Units and Unit-based compensation

(763)

(5,002)

4,239

Change in fair value – investment properties

1,037

(138)

1,175

ROU asset net balance of depreciation/interest and lease payments

(75)

(65)

(10)

FFO

$12,622

$12,068

$554

Adjustments:




Straight‑line adjustment 

$(94)

$(248)

$154

Capital expenditure reserve

(101)

(98)

(3)

AFFO

$12,427

$11,722

$705

Number of Units outstanding (including Class B LP Units)

49,117,113

49,054,833

62,280

Weighted average Units Outstanding — basic

49,094,337

49,054,833

39,504

Weighted average Units Outstanding — diluted

50,333,328

50,113,221

220,107

FFO per Unit – basic(1) 

$0.257

$0.246

$0.011

FFO per Unit – diluted(2)

$0.251

$0.241

$0.010

AFFO per Unit – basic(1)

$0.253

$0.239

$0.014

AFFO per Unit – diluted(2)

$0.247

$0.234

$0.013

Distributions per Unit

$0.201

$0.201

—

FFO payout ratio (3)

80.1 %

83.4 %

3.3 %

AFFO payout ratio (3)

81.4 %

85.9 %

4.5 %


(1)

FFO and AFFO per Unit — basic is calculated by dividing the total FFO and AFFO by the amount of the total weighted-average number
of outstanding REIT Units and Class B LP Units.


(2)

FFO and AFFO per Unit — diluted is calculated by dividing the total FFO and AFFO by the amount of the total weighted-average number
of outstanding REIT Units, Class B LP Units and Unit-based compensation granted to independent trustees and management of the REIT.


(3)

FFO payout ratio and AFFO payout ratio excludes the cash portion of the Special Distribution.

Same Property Cash Net Operating Income

Three months ended March 31,

2025

2024

Variance

Same property base rental revenue

$19,598

$19,159

$439

Land lease payments

(99)

(86)

(13)

Same Property Cash NOI

$19,499

$19,073

$426

Reconciliation of Cash Flow from Operating Activities to ACFO 

Three months ended March 31,




($000s)

2025

2024

Variance 

Cash flow from operating activities

$18,929

$19,262

(333)

Change in non-cash working capital

1,235

(394)

1,629

Interest paid

(5,669)

(6,150)

481

Amortization of financing fees

(277)

(203)

(74)

Amortization of other assets

(25)

(36)

11

Net interest expense and other financing charges in excess of interest
paid

(12)

28

(40)

Capital expenditure reserve

(101)

(98)

(3)

ACFO

$14,080

$12,409

$1,671

ACFO payout ratio

70.1 %

79.5 %

(9.4 %)

SOURCE Automotive Properties Real Estate Investment Trust