Alignvest Student Housing – Q2 Management Report

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We are pleased to send you the June 30, 2021 Management Report of Alignvest Student Housing Real Estate Investment Trust (“ASH REIT”).

Q2 2021 has been an exceptionally busy quarter for us: we closed our Waterloo acquisition on March 31, 2021 and have focused on integrating staffing, maintenance, leasing and other activities; we spent considerable time on the due diligence of our upcoming acquisition in Ottawa, which we expect to close imminently; and we have experienced very strong pre-leasing activity for Fall 2021.

In particular, over the past eight weeks, our leasing teams have signed on average 105 leases per week, taking our September 2021 pre-leased occupancy at our privately managed properties from about 50% at the beginning of the quarter to about 85% today. In addition, our university managed property has confirmed occupancy and pending offers for 90% of its beds and outstanding applications to fill the remaining beds. With just over a month to go before the start of the school year, we are optimistic that our portfolio will return to pre-pandemic occupancies. Student housing has definitely proven itself to be a resilient asset class.

Below is the link to our Management Report. Please contact us if you have any questions or need additional information.

Report

Alignvest Student Housing – Q1 2021 Management Report

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MARCH 31, 2021 – MANAGEMENT REPORT

 

We are pleased to send you the March 31, 2021 Management Report of Alignvest Student Housing Real Estate Investment Trust (“ASH REIT”).

Throughout Q1 2021, we continued to focus on operations and growth while maintaining the health and safety of our team and residents at our properties. With the roll-out of vaccines in Canada and our universities issuing “return-to-campus” announcements for Fall 2021, we are starting to see signs of a return to normalcy in Canada.

We expect that high-quality accommodations will be in demand as students return to campus. With this in mind, we completed a strategic acquisition of two properties in Waterloo that added 795 beds to our portfolio, and we have secured another attractive acquisition in Ottawa with over 500 beds that we expect to close in early Q3 2021. With these acquisitions completed, our assets will be valued at over $650 million. We are continuing to raise equity capital to fund these acquisitions.

Below is the link to our Management Report. In addition, below is a link to our recently issued 2020 audited financial statements. We have included enhanced financial disclosure and commentary in this report. Please contact us if you have any questions or need additional information.

 

March 31, 2021 - Management Report

2020 Audited Financial Statements

 

 

Insurance Division Giveaway

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Our insurance division is running a contest for the month of April. CONTEST CLOSED: Winner has been announced April 29, 2021 on our social media. Thank you to all who participated in our contest.

 

Grand Prize:

Two night Staycation at your local Alt/Germain Hotel with a dinner or breakfast on us!*
Four Weekly Prizes: to be showcased on our social media pages

 

How to Enter:

Run a personal insurance quote on our website: Insurance | Meckelborg Financial Group (mfgltd.com)  under the “get a quote” section to be eligible. Be sure to include your full name and email address, limit one entry per person per week*. You will be entered to win that weeks prize as well as the Grand Prize Staycation. Contest is starting April 5th 2021, with the winner being drawn on April 29th, 2021.

 

For Additional Entries:

• Like & follow both of MFG’s Instagram and Facebook pages
• Share and tag us in this post on both Instagram and Facebook
• Tag 3 friends

 

Official Site | Alt Hotel Saskatoon (germainhotels.com)

*up to a maximum of $500.00 for a two night stay, $50.00 for dinner/breakfast

*eligibility will be based off legitimacy of insurance quotes

Northpoint Global Partners Fund – Financial Statements

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Please click on the below link to view the 2020 Northpoint Global Partners Fund Financial Statements.

 

2020 Northpoint Global Partners Fund

Alignvest Student Housing – Opportunity

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Dear Investors,

 We are excited to announce that Alignvest Student Housing (ASH) is acquiring two high-quality properties in Waterloo.  Additionally, ASH has entered a contract to acquire another asset in Ottawa.  The total value of these acquisitions is approximately $220M and will require $75M of equity to close.  In an effort to fund this growth, the REIT is raising $50M of equity.  The next closing date is scheduled for April 1st

 

 Existing unit-holders should consider making an additional investment and are encouraged to pass this opportunity along to others.  We will be hosting a ZOOM meeting featuring Alignvest senior management this coming Thursday March 4th at 3:30pm SK time.  Anyone is welcome to join.  Stay tuned for the formal ZOOM invite.

 

 

Investment Summary

Last year, in spite of COVID, student housing assets in the U.S and Globally had the highest ever recorded amount of transactions ($11B in the U.S. and $20B Globally) at record breaking prices. We know we are on to something special here and are well positioned to be the leader of Purpose Built Student Accommodations in Canada. Below is a quick commentary from MFG on Alignvest Student Housing (ASH).

 

Goals
  • Build Canada’s premier portfolio of Purpose-Built Student Accommodations (PBSA)
  • Provide investors with stable cash flows and a material gain upon sale of the portfolio
  • Consolidate portfolio for sale in 2023/2024

 

Consolidation Strategy
  • The consolidation of PBSA began approximately 15 years ago in the United States
  • ASH is the first group to put together a relevant portfolio roll up strategy in Canada
  • ASH is now the largest owner and operator of PBSA in Canada
    • Well on its way to creating a $1Billion+ portfolio
  • Building valuations increased dramatically during the consolidation of PBSA in the United States
    • We anticipate similar valuation increases in Canada
    • ASH is well positioned to capture this opportunity

 

Recent Developments
  • The REIT has entered into a purchase and sale agreement to acquire two  properties in the Waterloo – $100M acquisition
  • They have also entered into an LOI for an additional property in one of their core markets (Ottawa) – additional $116M acquisition
  • The acquisitions are another great step forward as we will solidify ourselves as the leader in PBSA with 4700 beds and $650M in properties

 

How Alignvest is increasing value
  • Through acquisition of high quality and accretive properties
  • Increasing Net Operating Income (NOI)
    • Our team at Alignvest is hyper focus on increasing NOI. Please find their strategies outlined in their corporate presentation or contact an MFG team member to discuss.
  • The table below illustrates how an increase in NOI from a poorly managed property to a well managed property increases the building value – while maintaining the same Cap Rate.

 

 

Target price and total return for investors

It is our opinion that the 12-month target price of the units should be $125/unit. Current valuation of $112/unit implies an annual return of 18%+ for 2021 (including distributions). We have also modelled a long-term target price at exit of $173/unit based off of the current assets owned by the portfolio. The $173/unit valuation simply calculates the current portfolio (not the acquisitions outlined above) at the same value as multifamily assets in the same market. It does not include future acquisitions or NOI growth going forward.

 

Summary

From now through to our targeted exit date of 2023/2024

  • ASH will continue to acquire high quality buildings at good valuations
  • Optimize NOI
  • Look to sell the portfolio to a large institutional investor
    • This sale will be highly competitive as ASH is the largest owner of PBSA in Canada.
  • The current entry point for investors of $112/unit represents a great opportunity for investors. The uncertainty from COVID throughout 2020 kept our unit values stagnate. As outlined above, the future is bright for these assets and highly sought after. Unitholders will be handsomely rewarded for consolidating such a unique and compelling portfolio of assets.

 

Alignvest Attachments
    • First attachment is a quick one pager from the company titled Alignvest Teaser. It outlines the current capital raise they are completing, the recent accomplishments of the fund and a brief outline of the acquisitions they are working on.
    • Second attachment is the corporate slide deck. It is a very comprehensive presentation that discusses all aspects of the business.

 

Please call your MFG representative once you have had a chance to review the information.  Again,  please forward this to anyone you think would be interested.

 

Click below to view:

 

Alignvest Teaser

 

Investor Presentation

Term vs Permanent Life Insurance

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Understanding Life Insurance – Sun Life Financial Feature

Their are two basic types of life insurance. Term can last for a set amount of time. Permanent can last for your entire life. But which one is right for you? Knowing their differences and benefits can help you find out.

 

                                                    Term                                                       Permanent

What is it for?
  • Temporary coverage from the financial impact of death
  • Lifelong coverage from the financial impact of death
  • Combining coverage with tax-preferred cash value growth
  • Estate planning

 

Who is it for, mainly?
  • Young families and homeowners with a mortgage
  • Business owners
  • Adults with a long-term perspective
  • People who already make full use of registered investment accounts such as RRSP’s and TFSA’s

 

What are the advantages?
  • It’s initially inexpensive, if you’re young
  • You can buy lots of coverage
  • It’s easy to understand
  • Lifetime coverage continues even if your health fails
  • The cost is guaranteed to never go up (with most types of permanent insurance)
  • Later in life, it’s less costly than term insurance
  • It provides tax-preferred cash value growth opportunities for people whose RRSPs and TFSAs are topped up
  • You can cash in or borrow against its accumulated value

 

What are the disadvantages?
  • Coverage is temporary; the protection ends when the term ends (if you don’t renew)
  • The cost goes up if you renew when the term ends (usually after 10, 15, 20 or 30 years)
  • It’s more expensive than term insurance

 

When is it most cost-effective?
  • When you’re young
  • When you need only temporary coverage (e.g., until your mortgage is paid off or children are no longer financially dependent)
  • Later in life
  • When you have built up cash value in the policy
  • When you have a sizable estate to pass along to heirs or charities
  • If you’re in a higher tax bracket

 

Can you convert it to the other type of insurance?  Yes  No
Can it supplement the insurance you have at work?  Yes  Yes
Trends to consider
  • Rising mortgage and consumer debt. You could still be in debt after temporary term life insurance stops being the cheaper option (or even becomes unavailable)
  • Adult children are financially dependent on parents longer than ever, perhaps even after your term policy expires
  • The trend toward increased longevity makes this an increasingly attractive option because coverage is lifelong, not temporary

 

Read the full article below on the sun life website:

Full Article - Sun Life
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