Frequently Asked Questions

That’s a good question considering:

• We’re nine tenths of the way there in terms of legal and financial requirements
• We function very much like a public REIT
• For a private company, we are extremely transparent and open about our financials, corporate strategies and goals to our investors

The fact is, remaining private allows Skyline to lessen the impact of the volatility and emotional speculation of the public markets.

• Demonstrated Steady & Predictable Returns
  Historically, apartment real estate has always produced solid returns. People will always need a place to live and the rent that is generated creates a predictable revenue stream  Second only to cash, apartment real estate is considered a highly reliable income stream.
   
• Diversification
  
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A REIT (Real Estate Investment Trust) is a group of individuals who use their combined money to buy income-producing real estate.

When you invest in Skyline Apartment REIT you as an investor own a piece of all of the properties in the REIT (past, present and future).  Further to this, your exposure to risk is limited because you are invested in multiple properties and your reward is higher as you’re sharing in combined profits from all of the buildings.

Obviously, our largest source of funds for distributions comes from rental income net of all expenses; however, we also have ancillary sources of income such as Parking, Laundry, Vending, and Cable Revenue Sharing which boost distributable income.  As an active REIT, we also have ongoing refinances which bring equity back out of buildings and into the REIT, as well as possible gains on sales of assets.

Distribution Re-Investment Plan ("DRIP") provides Unitholders with the opportunity to allow their monthly distributions to internally compound by reinvesting in additional units on a monthly basis.  Under our assumptions of a 9% per annum distribution and a 3% per annum growth rate, a Unitholder that DRIPs will likely see their investment double in 6 years.

Since 1991, we have never lost our investors a penny.  Through 1999-2005 we operated under a syndication model.  Each and every shareholder in those syndicates had great earnings and growth and when we launched our REIT, we had 100% participation and satisfaction.  From mid 2006, operating under our structure as a REIT, we have increased our monthly distributions to investors from $0.90 per unit to our current distribution of $0.99 per unit.  The value of our units has also increased from $10 per unit to our current level of $11. 

Skyline Apartment REIT is an open ended Investment Trust.  This means that there is no restriction on the number of properties that can be purchased and held in the REIT.

We re-calculate the unit price at least once per year and are required by the Declaration of Trust to do it every year at Dec 31st.  The unit value is determined by the income that is earned by the portfolio and subsequently distributed to our unitholders.  Those annualized distributions are then divided into our benchmark 9% return threshold to get to a marketable unit value that closely tracks the real estate equity.  What triggers a re-evaluation of the REIT?There are 4 trigger points:

REITs require new capital for a variety of reasons, but mainly to purchase additional properties to add to the portfolio.  This allows for further diversification and improves the economies of scale which in turn also helps drive down costs, making a REIT more profitable in the long term.  New investment dollars are also used to fund improvements to buildings already in the portfolio.  By attacking costs (implementing energy-saving solutions such as new low-flow toilets, light bulbs, shower heads, fridges and other appliances), the REIT can generate incremental revenue that g

Simply put, the REIT's earnings.  Currently, an $11.00 unit earns 9% or $0.99 per unit per year.  As the income for the REIT increases and is distributed to our unitholders, we use the baseline 9% to affect the unit price.  For example, with time and through various strategies, the rent goes up, costs remain under control, now we can distribute $1.08 per unit.  That is 9% of $12.00, therefore, our unit value is now $12.00 for new investors to buy in and for existing investors to sell at if they choose to do so.  The distribution rate will not change (9%) only the un

Oui, s'il vous plaît contacter,

Marissa Morettin
Directrice des Relations Investisseurs
Tél. 1.866.482.0439
mmorettin@skylineonline.ca

Yes, in fact the REIT is RRSP, RESP and RRIF eligible.  Please call our office for more details on how to move existing funds or open a new fund today.

Once taxable, distributions will be taxed as income; and therefore taxed at the Unitholders nominal tax rate. Presently, all distributions have been on a tax ‘deferred’ basis; meaning that they are not taxable until the Unitholder sells their Units.

Contact our office by calling 1.800.800.RENT (7368) and ask for Jeff Teeter.

REIT units are revalued at the following points:

• Prior to the release of an Offering Memorandum
• At the close of an Offering Memorandum
• If outside of an Offering Memorandum; the REIT buys or sells greater than 10% of its market value holdings
• December 31st each year

Return of Capital are tax ‘deferred’ distributions that reduce the cost base of the invested Units. These distributions will eventually become taxable when the Unitholder sells their Units.