NOVA NET LEASE REIT ANNOUNCES FINANCIAL RESULTS FOR THE PERIOD ENDED SEPTEMBER 30, 2022, AND PROVIDES BUSINESS UPDATE

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TORONTO, Nov. 28, 2022 /CNW/ - Nova Net Lease REIT ("NOVA" or the "REIT") (CSE: NNL.U) (OTCQB: NNLRF), a real estate investment trust focused on delivering attractive financing solutions to quality U.S. Cannabis Operators, and strong risk-adjusted returns to Investors in a tax-efficient structure, today announced its financial results for the three months ended September 30, 2022. The Company's financial results are available on SEDAR (www.sedar.com). Results are presented in U.S. dollars.

"We are pleased with this quarter's results as our existing property continues to display the consistency of revenues for cannabis real estate assets notwithstanding the volatility in the broader economy and capital markets" said Tyson Macdonald, President and CEO. "The best-in-class management team and board of trustees of Nova remains singularly focused on delivering value and total returns to unitholders. Our pipeline remains robust, with management prioritizing opportunities with vendors interested in participating in the longer-term opportunity represented by Nova. We believe that in creating economic alignment between all the stakeholders of the REIT we maximize the overall value creation for our unitholders" he added.

Results of operations for the period ended September 30, 2022, represented the REIT's third full quarter of rental revenue from its initial investment property, a cannabis cultivation facility in Kalamazoo, Michigan. Revenue for the period ended September 30, 2022, was $388,655. General and administrative expenses for the period were $640,892 and finance costs of $53,977, offset by a fair value gain on the Class B Units of $862,186 and a fair value gain on investment properties of $24,344, resulting in net income of $580,316.

For further information, please see the Condensed Interim Consolidated Financial Statements for the period ended September 30, 2022, and the related Management's Discussion and Analysis for the same period, which are available on SEDAR at www.sedar.com.

Business Update

  • Management continues to pursue multiple investment opportunities amid positive fundamental developments across the US cannabis real estate sector despite the challenging capital markets for cannabis issuers and the broader REIT sector.

  • NOVA's existing property is well positioned for the current macro conditions as the lease structure of the REIT's Kalamazoo property includes rental rate escalations tied to CPI – the REIT strives to negotiate similar terms in potential follow-on acquisitions.

  • The REIT's acquisition pipeline remains robust and well diversified across property type, tenant and geography, now sitting at over US$800 million.

  • Given the current capital market environment the REIT is prioritizing opportunities with like-minded vendors who are excited to pursue investing alongside the REIT, similar to owners of Cloud Cannabis, who see the attractive opportunity in an early-stage REIT.

  • The REIT currently has a Net Asset Value (1) of $ 11,467,842, which equates to $0.766 per unit (2) which demonstrates the underlying value in the REIT's units.

(1)

Total Assets less Total Liabilities plus Contingently redeemable Class B units


(2)

Total number of trust units outstanding plus Contingently Redeemable Class B Units


"As we navigate a challenging macro environment, we would like to take this opportunity to thank our unitholders for their continued support, and we remain committed to maximizing value for the REIT through our investment strategy. We look forward to continuing to update you as we progress with our business strategy" commented Tyson Macdonald, President and CEO.

Forward-Looking Statements

This press release contains statements that include forward-looking information within the meaning of Canadian securities laws. These forward-looking statements reflect the current expectations of the REIT regarding future events, including statements concerning the ability of the REIT to achieve its stated investment objectives, any future acquisitions and the future success of the platform. In some cases, forward-looking statements can be identified by terms such as "may", "will", "could", "occur", "expect", "anticipate", "believe", "intend", "estimate", "target", "project", "predict", "forecast", "continue", or the negative thereof or other similar expressions concerning matters that are not historical facts.

These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any result expressed or implied by such forward-looking statements, including the risk factors set forth in the REIT's final Prospectus dated December 22, 2021 and Annual Information Form dated May 3, 2022, under the heading "Risk Factors".

Although forward-looking statements contained in this press release are based upon what management of NOVA believes are reasonable assumptions, there can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. NOVA undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.

SOURCE Nova Net Lease REIT

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