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TORONTO, Aug. 05, 2026 (GLOBE NEWSWIRE) -- Flagship Communities Real Estate Investment Trust (“Flagship” or the “REIT”) (TSX: MHC.U; MHC.UN) today released its second quarter 2026 results. The financial results of the REIT have been prepared in accordance with International Accounting Standard 34 (“IAS 34”), Interim Financial Reporting, as issued by the International Accounting Standards Board (the “IASB”). Results are shown in U.S. dollars, unless otherwise noted.

Second Quarter 2026 Results
Compared to Second Quarter 2025 Results

• Rental revenue and related income was $30.4 million, an increase of 21.4% compared to $25.1 million
• Same Community Revenue¹ was $27.3 million, up 9.0% compared to $25.1 million
• Net income and comprehensive income was $4.2 million, a (decrease) of (87.9)% or $(30.9) million compared to $35.1 million
• Net Operating Income (“NOI”) was $19.8 million, up 18.9% compared to $16.7 million
• Same Community NOI¹ was $17.7 million, an increase of 6.3%, compared to $16.7 million
• NOI Margin¹ was 65.1% compared to 66.6%
• Same Community NOI Margin¹ was 64.9% compared to 66.6%
• Funds from operations (“FFO”) per unit (diluted)² was $0.406 compared to $0.385, which was an increase of $0.021 per unit or 5.5%
• FFO adjusted per unit (diluted)² was $0.389 compared to $0.357 which was an increase of $0.032 per unit or 9.0%
• Adjusted funds from operations (“AFFO”) per unit (diluted)² was $0.366 compared to $0.353, which was an increase of $0.013 per unit or 3.7%
• AFFO adjusted per unit (diluted)² was $0.349 compared to $0.326 which was an increase of $0.023 per unit or 7.1%
• Rent Collections¹ were 99.0%, a decrease of 0.2% compared to 99.2%
• Expanded presence in northern Ohio with the strategic acquisition of a 28-lot manufactured housing community (“MHC”) that is fully occupied and expected to be immediately accretive to the REIT’s AFFO
• Awarded 2026 Community of the Year by the Kentucky Manufactured Housing Institute (“KMHI”) for Sawyier Pointe. This is the fifth consecutive year Flagship has won KMHI’s Community of the Year award
  
  

As at June 30, 2026

• NAV¹ and NAV per Unit¹ were $835.6 million and $32.88, respectively, compared to $804.8 million and $31.93 as at December 31, 2025, an increase of 3.8% and 3.0%, respectively
• Debt to Gross Book Value¹ was 39.0% compared to 39.2% as at December 31, 2025
• Total portfolio Occupancy¹ was 84.7%, compared to 82.9% as at December 31, 2025
• Same Community¹ Occupancy¹ was 85.4%, an increase of 2.0% when compared to Same Community Occupancy as at December 31, 2025, which was 83.4%
  
  

Subsequent to Quarter-End

• Completed a $6.0 million supplemental borrowing on an existing $10.7 million mortgage. The interest rate was amended to 5.39%, representing a blended rate of 4.98% under the existing mortgage and 6.12% for this supplemental borrowing, with no change to the maturity date
  
  

¹See “Other Real Estate Industry Metrics”
²See “Non-IFRS Financial Measures”

"Flagship delivered another strong quarter, with occupancy gains and same community growth that reflect the desirability of our communities, the demand for affordable housing and the overall strength of the MHC sector,” said Kurt Keeney, President and CEO. “We were also pleased to be recognized by KMHI with its Community of the Year award, and we continued to expand our presence in key markets with the strategic acquisition of a fully occupied MHC in northern Ohio. The solid momentum we have achieved in the first half of 2026 has positioned us well to deliver another successful year for our residents and unitholders.”

Financial Summary

Financial Overview

Rental revenue and related income in the second quarter of 2026 was $30.4 million, an increase of 21.4% compared to the same period last year. This increase was driven by Acquisitions as well as lot rent increases across the REIT’s portfolio.

Same Community Revenue for the second quarter 2026 was $27.3 million, up 9.0% from the same period last year. The increase in Same Community Revenue was a result of increasing monthly lot rent and ancillary revenues year over year combined with an increase to Same Community Occupancy.

Net income and comprehensive income for the three months ended June 30, 2026 was $4.2 million, approximately $30.9 million less than the same period last year, as a result of the fair value adjustments on investment properties and Class B Units being $31.0 million less than in the same period in 2025.

NOI and NOI Margin for the second quarter of 2026 were $19.8 million and 65.1%, respectively, compared to $16.7 million and 66.6% during the second quarter of 2025.

Same Community NOI Margin for the second quarter 2026 was 64.9%, a (decrease) of (1.7)% compared to the same period last year.

While NOI saw an increase from amenity fees, NOI Margins were negatively impacted due to these corresponding services having a lower margin than what has historically been achieved by the REIT. Seasonal weather impacts also increased costs and decreased margins.

Same Community Occupancy was 85.4% as at June 30, 2026, an increase of 2.0% when compared to Same Community Occupancy as at December 31, 2025, which was 83.4%.

FFO for the second quarter of 2026 was $10.3 million, a 6.8% increase from the second quarter of 2025. FFO per unit (diluted) for the three months ended June 30, 2026 was $0.406, resulting in an increase of 5.5% compared to the same period in 2025.

FFO adjusted was $9.9 million for the second quarter of 2026, a 10.2% increase compared to the same period last year. FFO adjusted per unit for the second quarter of 2026 was $0.389, a 9.0% increase compared to the same period in 2025.

AFFO for the second quarter of 2026 was $9.3 million, a 4.7% increase from the second quarter of 2025. AFFO per unit for the three months ended June 30, 2026 was $0.366, a 3.7% increase compared to the same period in 2025.

AFFO adjusted was $8.9 million for the second quarter of 2026, an 8.3% increase compared to the same period last year. AFFO adjusted per unit for the second quarter of 2026 was $0.349, a 7.1% increase compared to the same period in 2025.

Rent Collections for the second quarter of 2026 were 99.0%, a decrease of 0.2% from the same period in 2025.

As at June 30, 2026 the REIT’s Weighted Average Mortgage Interest Rate (see “Other Real Estate Industry Metrics” for more information) was 4.54%. The REIT’s Weighted Average Mortgage Term (see “Other Real Estate Industry Metrics” for more information) to maturity was 7.7 years. Flagship has no substantial debt maturities until 2030.

Flagship’s Liquidity (see “Other Real Estate Industry Metrics” for more information) as at June 30, 2026 was approximately $25.8 million consisting of cash, cash equivalents, and available capacity on lines of credit.

Subsequent to quarter-end, Flagship borrowed $6.0 million as a supplemental borrowing to an existing $10.7 million mortgage. The interest rate on this mortgage was amended to 5.39%, representing a blended rate of 4.98% under the existing mortgage and 6.12% for this supplemental borrowing, with no change to the maturity date, leaving 193 months remaining as of the borrowing date, including interest-only payments for the first 13 months.

Operations Overview

During the second quarter of 2026, Flagship expanded its presence in northern Ohio with a strategic acquisition of an MHC that is expected to be immediately accretive to the REIT’s AFFO (the “Acquisition”). The 28-lot MHC is located in Marblehead, Ohio and is 100% occupied. The Acquisition includes a private beach area and a fishing pier along with a number of boat dock slips and is in close proximity to another Flagship-owned MHC, thereby enabling the REIT to leverage operational synergies and generate economies of scale.

In June 2026, Flagship’s Sawyier Pointe community in Georgetown, Kentucky was recognized as the 2025 Community of the Year by KMHI. This is the fifth consecutive year the REIT has won KMHI’s Community of the Year award, which acknowledges Flagship’s commitment to building safe, high-quality and vibrant residential communities.

As at June 30, 2026, the REIT owned a 100% interest in a portfolio of 87 MHCs with 17,044 lots as well as two recreational vehicle (“RV”) resort communities with 470 sites, located in eight contiguous states. The table below provides a summary of the REIT’s portfolio as of June 30, 2026, compared to December 31, 2025:

Outlook 

Flagship maintains a positive outlook for the MHC industry and believes it offers significant upside potential to investors. This is primarily due to the MHC industry’s consistent track record of historical outperformance relative to other real estate classes. Rising home ownership costs and limited new supply have led to greater housing unaffordability for many Americans. Additionally, the lack of supply of new manufactured housing communities given the various layers of regulatory restrictions, competing land uses and scarcity of land zoned for manufactured housing has created high barriers to entry for new market entrants.  

Other macro and MHC industry-specific characteristics and trends that support Flagship’s positive outlook include:

• Increasing household formations;
• Lower housing and rental affordability;
• Declining single-family residential homeownership rates.
  
  

Non-IFRS Financial Measures

In this news release, the REIT uses certain financial measures that are not defined under IFRS including certain non-IFRS ratios, to measure, compare and explain the operating results, financial performance, and cash flows of the REIT. These measures are commonly used by entities in the real estate industry as useful metrics for measuring performance. However, they do not have any standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other publicly traded entities. These measures should be considered as supplemental in nature and not as a substitute for related financial information prepared in accordance with IFRS.

Funds from operations (“FFO”) and adjusted funds from operations (“AFFO”) are calculated in accordance with the definition provided by the Real Property Association of Canada (“REALPAC”).

FFO is defined as IFRS consolidated net income (loss) adjusted for items such as distributions on redeemable or exchangeable units (including distributions on the Class B Units), unrealized fair value adjustments to Class B Units, unrealized fair value adjustments to investment properties, unrealized fair value adjustments to unit based compensation, loss on extinguishment of acquired mortgages payable, gain on disposition of investment properties, and depreciation. FFO should not be construed as an alternative to consolidated net income (loss), or consolidated cash flows provided by (used in) operating activities determined in accordance with IFRS. The REIT’s method of calculating FFO is substantially in accordance with REALPAC’s recommendations but may differ from other issuers’ methods and, accordingly, may not be comparable to FFO reported by other issuers. Refer to section “Reconciliation of FFO, FFO per unit, FFO adjusted, FFO adjusted per unit, AFFO, AFFO per unit, AFFO adjusted and AFFO adjusted per unit” for a reconciliation of FFO and FFO adjusted to net income and comprehensive income.

“FFO per unit (diluted)” is defined as FFO for the applicable period divided by the diluted weighted average unit count (including Units, Class B Units, vested Restricted Units (“RUs”) and vested Deferred Trust Units (“DTUs”)) during the period.

“FFO adjusted” is defined as FFO adjusted for non-real estate industry specific operating transactions. FFO adjusted presents FFO in a normalized manner that is substantially in accordance with REALPAC’s recommendations. FFO adjusted may, as transactions occur, include adjustments that were not included in the definition of FFO adjusted in a previous period but are included in the current period to present FFO in a normalized manner that is substantially in accordance with REALPAC’s recommendations. Adjustments for the three months and six months ended June 30, 2026 and 2025 included note payable settlement expense, which is comprised of prepayment penalties, defeasance, amortization of financing costs, and other costs associated with the refinance and payoff of a note payable prior to maturity; and insurance proceeds related to covered damage to investment property or property and equipment.

“FFO adjusted per unit (diluted)” is defined as FFO adjusted for the applicable period divided by the diluted weighted average unit count (including Units, Class B Units, vested RUs and vested DTUs) during the period.

AFFO is defined as FFO adjusted for items such as maintenance capital expenditures, and certain non-cash items such as amortization of intangible assets, and premiums and discounts on debt and investments. AFFO should not be construed as an alternative to consolidated net income (loss), or consolidated cash flows provided by (used in) operating activities determined in accordance with IFRS. The REIT’s method of calculating AFFO is substantially in accordance with REALPAC’s recommendations. The REIT uses a capital expenditure reserve of $90 per lot per year and $1,200 per rental home per year for the year ending December 31, 2026 in the AFFO calculation. The REIT used a capital expenditure reserve of $75 per lot per year and $1,100 per rental home per year for the year ended December 31, 2025. This reserve is based on management’s best estimate of the cost that the REIT may incur related to maintaining the investment properties. This may differ from other issuers’ methods and, accordingly, may not be comparable to AFFO reported by other issuers. Refer to section “Reconciliation of FFO, FFO per unit, FFO adjusted, FFO adjusted per unit, AFFO, AFFO per unit, AFFO adjusted and AFFO adjusted per unit” for a reconciliation of AFFO and AFFO adjusted to net income and comprehensive income.

“AFFO Payout Ratio” is defined as total cash distributions of the REIT (including distributions on Class B Units) divided by AFFO.

“AFFO per unit (diluted)” is defined as AFFO for the applicable period divided by the diluted weighted average unit count (including Units, Class B Units, vested RUs and vested DTUs) during the period.

“AFFO adjusted” is defined as AFFO adjusted for transactions that are not considered recurring measures of economic earnings with the goal of presenting AFFO in a normalized manner that is substantially in accordance with REALPAC’s recommendations. AFFO adjusted may, as transactions occur, include adjustments that were not included in the definition of AFFO adjusted in a previous period but are included in the current period to present AFFO in a normalized manner that is substantially in accordance with REALPAC’s recommendations. Adjustments for the three and six months ended June 30, 2026 and 2025, included note payable settlement expense, which is comprised of prepayment penalties, defeasance, amortization of financing costs, and other costs associated with the refinance and payoff of a note payable prior to maturity; and insurance proceeds related to covered damage to investment property or property and equipment.

“AFFO adjusted Payout Ratio” is defined as total cash distributions of the REIT (including distributions on Class B Units) divided by AFFO adjusted.

“AFFO adjusted per unit (diluted)” is defined as AFFO adjusted for the applicable period divided by the diluted weighted average unit count (including Units, Class B Units, vested RUs and vested DTUs) during the period.

The REIT believes these non-IFRS financial measures and ratios provide useful supplemental information to both management and investors in measuring the operating performance, financial performance, and financial condition of the REIT. The REIT also uses AFFO and AFFO adjusted in assessing its distribution paying capacity.

Other Real Estate Industry Metrics

Additionally, this news release contains several other real estate industry financial metrics:

• “Acquisitions” means the REIT’s properties, excluding Same Community (as defined below) (i.e., Acquisitions Revenue, as well as Acquisitions net operating income (“NOI”), and Acquisitions NOI Margin (as defined below)), and such measure is used by management to evaluate period-over-period performance of such investment properties throughout both respective periods. These results reflect the impact of acquisitions of investment properties.
• “Debt to Gross Book Value” is calculated by dividing indebtedness, which consists of the total principal amounts outstanding under mortgages and note payable, net and credit facilities, by Gross Book Value (as defined below). Refer to section “Calculation of Other Real Estate Industry Metrics – Debt to Gross Book Value.”
• “Gross Book Value” means, at any time, the greater of: (a) the value of the assets of the REIT and its consolidated subsidiaries, as shown on its then most recent consolidated statements of financial position prepared in accordance with IFRS, less the amount of any receivable reflecting interest rate subsidies on any debt assumed by the REIT; and (b) the historical cost of the investment properties, plus (i) the carrying value of cash and cash equivalents, (ii) the carrying value of mortgages receivable; and (iii) the historical cost of other assets and investments used in operations.
• “Liquidity” is defined as (a) cash and cash equivalents, plus (b) borrowing capacity available under any existing credit facilities.
• “Net Asset Value” or “NAV” is calculated by taking unitholders’ equity plus Class B Units, vested RUs and vested DTUs. NAV provides an indication of the total value of the REIT's investment properties, after accounting for outstanding mortgages and note payable. NAV also provides an indication of the changes in the REIT’s overall value resulting from the performance of its assets. The reason for adding back Class B Units, vested RUs and vested DTUs is that they are economically equivalent to Units, receive the same distributions (or distribution equivalents) as Units, and can be exchanged for Units.
• “Net Asset Value per Unit” or “NAV per Unit” is defined as NAV divided by the total number of units (including Units, Class B Units, vested RUs and vested DTUs) outstanding.
• “NOI Margin” is defined as NOI divided by total revenue. Refer to section “Calculation of Other Real Estate Industry Metrics – NOI and NOI Margin”.
• “Occupancy” is defined as the number of economically occupied lots in a community, defined as a lot that is generating revenue for the REIT as opposed to a lot that is physically occupied by a vacant structure, divided by the total lots in that community.
• “Rent Collections” is defined as the total cash collected in a period divided by total revenue charged in that same period.
• “Same Community” means all properties which have been owned and operated continuously since the first day of the preceding calendar year by the REIT and such measures (i.e., Same Community Revenue, as well as Same Community NOI, Same Community NOI Margin, and Same Community Occupancy) are used by management to evaluate period-over-period performance.
• “Weighted Average Lot Rent” means the lot rent for each individual community multiplied by the total lots in that community summed for all communities divided by the total number of lots for all communities.
• “Weighted Average Mortgage Interest Rate” is calculated by multiplying the interest rate of each outstanding mortgage and note by the mortgage balance and dividing the sum by the total mortgage balance.
• “Weighted Average Mortgage Term” is calculated by multiplying the remaining term of each mortgage by the mortgage balance and dividing the sum by the total mortgage balance.
  
  

NAV and NAV per Unit

1.   Total Units includes Units, Class B Units, vested RUs and vested DTUs

Debt to Gross Book Value

Forward-Looking Statements

This news release contains statements that include forward-looking information (within the meaning of applicable Canadian securities laws). Forward-looking statements are identified by words such as “believe”, “anticipate”, “project”, “expect”, “intend”, “plan”, “will”, “may”, “can”, “could”, “would”, “must”, “estimate”, “target”, “objective”, and other similar expressions, or negative versions thereof, and include statements herein concerning: the REIT’s investment strategy, objectives and creation of long-term value; the REIT’s intention to continue to expand in its existing operational footprint; expected sources of funding for future acquisitions and the expected performance of acquisitions; macro characteristics and trends in the United States real estate and housing industry, as well as the manufactured housing community (“MHC”) industry specifically; the REIT’s distribution policy and intended sources of cash therefor; and the REIT’s target indebtedness as a percentage of Gross Book Value. These statements are based on the REIT’s expectations, estimates, forecasts, and projections, as well as assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies that could cause actual results to differ materially from those that are disclosed in such forward-looking statements. While considered reasonable by management of the REIT as at the date of this news release, any of these expectations, estimates, forecasts, projections, or assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those expectations, estimates, forecasts, projections, or assumptions could be incorrect. Material factors and assumptions used by management of the REIT to develop the forward-looking information in this news release include, but are not limited to, the REIT’s current expectations about: vacancy and rental growth rates in MHCs and the continued receipt of rental payments in line with historical collections; demographic trends in areas where the MHCs are located; further MHC acquisitions by the REIT; the applicability of any government regulation concerning MHCs and other residential accommodations; the availability of debt financing and future interest rates, as there is no guarantee that the future Federal Reserve will continue to hold or decrease interest rates; increasing expenditures and fees, in connection with the ownership of MHCs, driven by inflation or tariffs; tax laws; general economic conditions; and the recent increased volatility of equity markets in the United States. When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as they are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed or referenced under the heading “Risks and Uncertainties” herein or otherwise disclosed in the REIT’s Management’s Discussion and Analysis, the Annual Management’s Discussion and Analysis or the Annual Information Form. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Further, certain forward-looking statements included in this news release may be considered as “financial outlook” for purposes of applicable Canadian securities laws, and as such, the financial outlook may not be appropriate for purposes other than to understand management’s current expectations and plans relating to the future, as disclosed in this news release. Forward-looking statements are made as of the date of this news release (or the date otherwise indicated herein) and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About Flagship Communities Real Estate Investment Trust 

Flagship Communities Real Estate Investment Trust (TSX: MHC.U; MHC.UN) is a leading operator of affordable residential Manufactured Housing Communities primarily serving working families seeking affordable home ownership. The REIT owns and operates exceptional residential living experiences and investment opportunities in family-oriented communities in Kentucky, Indiana, Ohio, West Virginia, Tennessee, Arkansas, Missouri, and Illinois. To learn more about Flagship, visit www.flagshipcommunities.com.

For further information, please contact:

Eddie Carlisle, Chief Financial Officer
Flagship Communities Real Estate Investment Trust
Tel: +1 (859) 568-3390