(TheNewswire)
Edmonton, Alberta - TheNewswire - November 27, 2023 - Yorkton Equity Group Inc. (TSXV:YEG) (“ Yorkton ” or the“ Company ”) is very pleased to announce its financial results forthe third quarter ended September 30, 2023.
Mr. Ben Lui, President and CEO of Yorkton, is excitedto report, "Our residential rental revenue has increased by128.7%, to over $1.6 million during Q3 2023, and 122.5%, to over $4.3million during the nine months ended September 30 th , 2023. Thisnoteworthy accomplishment can be directly attributed to ouracquisition of The Dwell, a 188-unit luxurious multi-family rentalproperty located in Edmonton, Alberta. This acquisition hasstrategically positioned us to take advantage of the growth potentialwithin Alberta's multi-family rental market, which is fueled byfactors such as a rapidly expanding population from interprovincialand international immigration, a resilient economy, a robust labormarket, affordable housing costs and no rent price controls comparedto other markets in Canada.”
Q3 2023 Financial Highlights
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Residential rental revenue increased by $934,532 or128.7% to $1,660,554 and commercial rental revenue increased by$10,553 or 10.3% to $113,309 in Q3 2023. Total rental revenue in Q32023 was $1,773,863.
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Residential rental revenue increased by $2,389,255 or122.5% to $4,339,513 and commercial rental revenue increased by$39,465 or 12.9% to $345,577 during the nine months ended September30th, 2023. Total rental revenue during the nine months endedSeptember 30th, 2023 was $4,685,090.
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Net rental income increased by $572,350 or 99.9% to$1,145,466 in Q3 2023.
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Net rental income increased by $1,606,414 or 112.2% to$3,038,117 during the nine months ended September 30 th ,2023.
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The acquisition of The Dwell (Edmonton, AB) on February27 th , 2023 added $892,982 of rental revenue and $551,642 of netrental income during Q3 2023 and $2,073,181 of rental revenue and$1,388,944 of net rental income to the nine months ended September30 th , 2023.
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Overall net income of $2,400 in Q3 2023 as compared to$34,397 in Q3 2022.
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Overall net loss of $131,864 during the nine monthsended September 30 th , 2023 as compared to $244,492 in the sameperiod in 2022.
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Yorkton holds 393 residential rentalunits and 28,036 sq.ft. of commercial space for a total portfoliovalue of $96,730,863 which grew by 71.7% as compared to September30 th , 2022.
During the nine months ended September 30 th , 2023, the Company entered into a loan with Lui HoldingsCorporation (“Lui Holdings”), as previously announced on October2, 2023, to borrow up to $1,700,000, of which it had received$1,500,000 as at September 30 th , 2023. The loan had amaturity date twenty-four (24) months from the date of issuance andbore interest at a rate of five percent (5%) per annum for the firstthirty days and ten percent (10%) per annum from the 31st day untilthe maturity date, or upon the early repayment of the loan in full,whichever came first. The loan was made by Lui Holdings for thepurpose of satisfying the required deposits and other related paymentsfor the acquisition of The FUSE (discussed in Corporate Update sectionbelow).
Highlights of the residential rental portfolio for thethree and nine months ended September 30 th , 2023are:
Corporate Update
On October 12, 2023, the Company announced anon-brokered private placement of up to 2,200 unsecured convertibledebentures at an issue price of $1,000 per convertible debenture forgross proceeds of $2,200,000. Each convertible debenture will have aprincipal amount of $1,000 with an interest rate equal to 8% perannum, payable annually, only in cash without any conversion of thatinterest component into common shares. Each convertible debenture willmature on the date that is five (5) years from the date of issuance. The Company, after a period of thirty-six (36) months following thedate of closing, will also have the right, but not the obligation, toredeem the principal amount and any unpaid interest of the convertibledebenture in cash, without penalty, at any time prior to the date ofmaturity subject to certain conditions. The principal amount of eachconvertible debenture may, at the option of the convertible debentureholder, be converted, in whole or in part, into common shares at aconversion price of $0.20 per common share.
On October 17, 2023, the Company completed an initialtranche closing on the private placement announced on October 12, 2023with Lui Holdings, which included the loan from Lui Holdings(discussed in the Q3 2023 Financial Highlights section above), whichadopted the terms and conditions of the convertible debentures offeredin the private placement, for a total aggregate subscription of 2,000convertible debentures in the principal amount of $2,000,000.
On October 17, 2023, the Company also closed on theacquisition of “The FUSE”, a one hundred and twenty-five (125)unit condominium grade multi-family residential complex that wasconstructed in 2015 and is comprised of two buildings situated onapproximately 2.67 acres of land located in the Summersideneighborhood of Edmonton, Alberta for a purchase price of $25,625,000. As part of the financing of the acquisition of the property, theCompany obtained a Canada Mortgage and Housing Corporation(“CMHC”) insured mortgage on The FUSE of $24,423,140 at a fixedinterest rate of 4.0% per annum, amortized over 50 years, maturing onNovember 30, 2028 and secured by the property, general assignment of rent, specific assignment of present and futureleases of the property, and general security agreement. In addition,as a condition on the mortgage payable, the property holding companyis required to maintain a minimum of 80% of the units in The FUSE as“affordable units”, as defined by the CMHC, with residential rentsat or below 30% of the median renter income in Edmonton, Alberta atthe time of the issuance of the Certificate of Insurance (“COI”)and with allowable annual increases according to the Consumer PriceIndex (“CPI”) as stipulated by Statistics Canada for Alberta, ofwhich the allowable rent increase is 6.4% for 2024.
On November 1, 2023, Yorkton successfully implemented the YARDI VOYAGER system, acloud-based enterprise resource planning system (“ERP”) suite thatcovers all the key areas of finance, accounting, human resources, andproperty management, including marketing and leasing, business andmarket intelligence, customer relationship management (“CRM”),energy management, supply chain, and end-to-end procurement. It alsocan provide a two-way real-time connection with tenants via securetenant portals and mobile applications for online payments, conciergeservices, maintenance requests, property and tenant documents,announcements and more. The YARDI system is being used to managecertain properties of the Company and other properties will be addedin the future. It is expected that the use of YARDI will improve theefficiency and effectiveness of Yorkton’s operations and allowYorkton’s management team to measure and monitor the progress andefficacy of its organic growth.
About Yorkton
Yorkton Equity Group Inc. is a growth-oriented real estate investmentcompany committed to providing shareholders with growing assetsthrough accretive acquisitions, organic growth, and the activemanagement of multi-family rental properties with significant upsidepotential. Our current geographical focus is in Alberta and BritishColumbia with diversified and growing economies, and strong populationin-migration. Our business objectives are to achieve growing NetOperating Income (“NOI”) as well as the asset values in ourmulti-family rental property portfolio in strategic markets acrossWestern Canada.
The management team at Yorkton Equity Group Inc. has well over 30years of prior real estate experience in acquiring and managing rentalassets.
Further information about Yorkton is available on the Company’swebsite at www.yorktonequitygroup.com and the SEDAR+ website at www.sedarplus.ca.
Neither the TSX Venture Exchange norits Regulation Services Provider (as that term is defined in thepolicies of the TSX Venture Exchange) accepts responsibility for theadequacy or accuracy of this release.
For further information on Yorkton,please contact:
Ben Lui, CEO - Corporate Office: (780) 409-8228
Yorkton Equity Group Inc. – Shareholder Communications: (780)907-5263
Email: investors@yorktonequitygroup.com
Forward-looking information
This press release may include forward-lookinginformation within the meaning of Canadian securities legislationconcerning the business of Yorkton. Forward-looking information isbased on certain key expectations and assumptions made by themanagement of Yorkton. Although Yorkton believes that the expectationsand assumptions on which such forward-looking information is based arereasonable, undue reliance should not be placed on the forward-lookinginformation because Yorkton can give no assurance that they will proveto be correct. Forward-looking statements contained in this pressrelease are made as of the date of this press release. Yorktondisclaims any intent or obligation to update publicly anyforward-looking information, whether as a result of new information,future events or results or otherwise, other than as required byapplicable securities laws.
This press release does not constitute an offer to sellor a solicitation of an offer to buy any of the securities describedherein in the United States. The securities described herein have notbeen and will not be registered under the UnitedStates Securities Act of 1933, as amended, or any applicablesecurities laws or any state of the United States and may not beoffered or sold in the United States or to the account or benefit of aperson in the United States absent an exemption from the registrationrequirement.
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