After posting a sizable loss this past quarter, the board of Firm Capital Apartment Real Estate Investment Trust, a publicly traded Toronto-based firm focused on apartment ownership since 2012, said it will cease doing business in the United States and plans to sell its remaining U.S. assets and consider returning cash to investors or repurposing the trust.
In a statement announcing the conclusion of a strategic review and the REIT's third-quarter earnings, in which the REIT reported a third-quarter net loss of $5.45 million, the REIT said, "No further growth will occur in the U.S. under the current platform, and that it plans to "sell and exit all current investments, and return cash to unitholders, and/or sell and exit all current investments and explore the sale or re-utilization of the trust for another property and/or platform."
Firm Capital Apartment REIT said it has already sold four of its six U.S. properties for a total of $71.6 million and used $28 million of the proceeds to pay down debt. It reported the number in U.S. dollars. As of this week, only two of its properties remain unsold, both located in Texas.
Sandy Poklar, president and CEO of Firm Capital Apartment REIT, said the company's priority is “maximizing unitholder value” and that all options remain on the table. The REIT referenced “general economic conditions, adverse factors affecting the U.S. real estate market, volatility of real estate prices, and inability to access sufficient capital on favourable terms" as reasons for shuttering its U.S. operations.
Firm Capital Apartment REIT was founded in 2012 and has been led by Poklar since October 2020. Its portfolio is entirely residential and is valued at about 108 million Canadian dollars.