COVID-19 FAQ – Skyline Apartment REIT
Q: Is it still safe to be invested in multi-residential real estate at this time?
A: As Skyline Apartment REIT provides a basic need—shelter—in the most economical form, its management team believes that rental housing is one of the safest sectors in which to be invested at this time. Consumers are already cutting spending in many areas, but no matter what the economic climate, people will strive to fulfill their basic needs, including shelter.
Q: Has Skyline Apartment REIT taken any measures to mitigate against rental payment delinquency?
A: The federal government has made changes to the waiting period for EI to assist tenants facing temporary layoffs as well as stated other stimulus funds will be deployed to keep people in their homes The Apartment REIT’s management team has communicated this information to tenants so that if needed, they can apply for assistants right away, helping to limit the Apartment REIT’s exposure to delinquency and bad debt.
Q: What will happen to distributions if Skyline Apartment REIT does encounter a high vacancy rate?
A: The Apartment REIT has a budgeted 89% payout ratio, meaning that it has an additional 10% of net income that can be distributed before it hits 100% of its funds from operations. At this time, the Apartment REIT is managing cashflows to ensure no disruption to investor distributions in the event of higher-than-forecasted vacancies, or receivables. The Apartment REIT can also make use of its available business lines of credits to ensure business continuity as needed.
Q: Is Skyline Apartment REIT continuing to spend on capital expenditure projects at this time?
A: No. The Apartment REIT has put capital expenditure spending on hold until further notice. Instead, it will keep cash in hand to mitigate any potential business interruptions.
Q: What is Management’s outlook for the Skyline Apartment REIT?
A: The Apartment REIT’s management team is predicting a temporary rise in receivables, but its revenue remains intact with a 96% occupancy rate across more than 18,300 individual rental units. Income from tenants is diversified across the Apartment REIT due to the portfolio’s geographic and demographic diversity. Not all employment sectors have been affected by the current economic climate. Income for the Apartment REIT includes that which is coming from government pensions and permanent financial aid, as well as diversified employment sectors. The Apartment REIT’s management team is committed to working with its tenants to get through this difficult period.
Q: How are declining interest rates affecting Skyline Apartment REIT?
A: Low interest rates provide the potential to refinance at a lower debt servicing cost. The Apartment REIT is actively looking at financing and re-financing opportunities where they most make sense, in order to help lower the Apartment REIT’s weighted average interest rate. The Apartment REIT is actively reviewing and reallocating over $100 million in debt at lower rates than what was already within the portfolio. This practice will add additional income, which creates additional financial stability for the Apartment REIT.
Press releases are disseminated by Skyline Wealth Management Inc. (“Skyline Wealth”) on behalf of the Issuer as at the date of publication and Skyline Wealth does not undertake to advise the reader of any changes. Skyline Wealth has not taken any steps to verify accuracy.
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