TORONTO, March 24, 2026 /CNW/ - Starlight U.S. Residential (Multi-Family) Investment LP (TSXV: SURF.UN) (the "SURF LP") announced today its results of operations and financial condition for the three months ended December 31, 2025 ("Q4-2025") and year ended December 31, 2025 ("YTD-2025"). Certain comparative figures are included for SURF LP's financial and operational performance as at December 31, 2024, for the three months ended December 31, 2024 ("Q4-2024") and for the year ended December 31, 2024 ("YTD-2024").
All amounts in this press release are in thousands of United States ("U.S.") dollars except for average monthly rent ("AMR")1, or unless otherwise stated. All references to C$ are to Canadian dollars.
"SURF LP continues to own a high-quality, well diversified portfolio of multi-family communities," commented Evan Kirsh, SURF LP's President. "The focus continues to be on maximizing the net operating income at SURF LP's remaining properties while navigating the current challenging capital markets environment and focusing on managing SURF LP's liquidity."
Q4-2025 HIGHLIGHTS
Revenue from property operations for Q4-2025 was $5,494 (Q4-2024 - $9,741) representing a decrease of 43.6% in revenue due to SURF LP completing the dispositions of Lyric Apartments ("Lyric"), Eight at East and Emerson at Buda ("Emerson") in Q2-2025, Q3-2025 and Q4-2025, respectively ("Primary Variance Driver") as well as a decrease in same property revenue of 2.7% primarily as a result of decreases in AMR due to SURF LP facing heavy competition from new supply and aggressive pricing to lease new properties in Phoenix.
Net operating income ("NOI")1 for Q4-2025 was $3,754 (Q4-2024 - $6,198), representing a decrease of 39.4% in NOI primarily due to the Primary Variance Driver and reduction in same property NOI of 3.2%. Q4-2025 normalized same property NOI excluding the impact of the tax reassessments and Phoenix property described above would have been consistent with Q4-2024.
SURF LP reported a net loss and comprehensive loss attributable to Partners (as defined below) for Q4-2025 of $1,647 (Q4-2024 - $41,306), primarily due to higher fair value loss on investment properties during Q4-2024 due to the expansion of capitalization rates used to value SURF LP's investment properties, partially offset by lower NOI during Q4-2025 due to Primary Variance Driver.
SURF LP completed three in-suite light value-add upgrades at the multi-family properties ("Properties") during Q4-2025, which generated an average rental premium of $177 and an average return on cost of approximately 21.5%.
SURF LP achieved economic occupancy1 of 93.5% during Q4-2025 and as at March 23, 2026, had collected approximately 99.9% of rents for Q4-2025, with further amounts expected to be collected in future periods, demonstrating SURF LP's high quality resident base and operating performance.
On October 21, 2025, foreclosure proceedings of Emerson were finalized through a public auction which resulted in the transfer of ownership of Emerson to a third party and as a result of the transfer of ownership, SURF LP discharged its obligation to pay the outstanding mortgage loan principal balance on Emerson of $56,680 and discharged all other liabilities of SURF LP associated with Emerson, with no cash proceeds being received by SURF LP as a result of the transfer of ownership. As a result of the transfer, SURF LP recognized a gain on the extinguishment of such debt amounting to $1,209.
On December 30, 2025, SURF LP and Starlight U.S. Residential Fund (the "Fund") completed a reorganization transaction, pursuant to which unitholders of the Fund (the "Former Unitholders") and holders of class B LP units in SURF LP ("Class B LP Unitholders") (collectively, the "Partners") received class A limited partnership units of SURF LP ("SURF LP Units") based on a defined exchange ratio and as a result became new unitholders of SURF LP and its subsidiaries.
1 This metric is a non-IFRS measure. Non-IFRS financial measures do not have standardized meanings prescribed by IFRS (see "Non-IFRS Financial Measures and Reconciliations").
YTD-2025 HIGHLIGHTS
Revenue from property operations for YTD-2025 was $30,469 (YTD-2024 - $39,423), representing a decrease of 22.7% relative to YTD-2024, primarily due to the Primary Variance Driver and a decrease of 2.5% in same property revenue primarily as a result of decreases in AMR due to SURF LP facing heavy competition from new supply and aggressive pricing to lease new properties in Phoenix.
NOI for YTD-2025 was $18,636 (YTD-2024 - $24,927), representing a decrease of 25.2% relative to YTD-2024, primarily due to the Primary Variance Driver, decrease of 2.5% in same property revenue as described above and property tax assessment increase in Raleigh which is based on a four year reassessment cycle.
SURF LP reported a net loss and comprehensive loss attributable to Partners for YTD-2025 of $38,795 (YTD-2024 - $58,119), primarily resulting from YTD-2024 reporting a higher fair value loss on investment properties than YTD-2025.
SURF LP completed 117 in-suite light value-add upgrades at the Properties during YTD-2025, which generated an average rental premium of $107 and an average return on cost of approximately 24.7%.
SURF LP completed the disposition of Lyric on April 29, 2025 and used the proceeds to fully repay the outstanding loan payable secured by the property of $86,697 and to fully repay SURF LP's credit facility outstanding balance of $13,605, which reduced the remaining availability on such credit facility to $2,395. The remaining net proceeds from the sale were utilized for working capital and liquidity requirements of SURF LP.
On July 17, 2025, the Bainbridge Sunlake ("Sunlake") loan payable was extended by one-year to June 1, 2026. As per the terms of the extension, the loan is subject to certain conditions during the remaining loan term and bears interest-only payments at a fixed rate of 8.56% per annum with any debt service shortfall, as defined therein, being accrued and deferred until maturity.
On August 12, 2025, SURF LP completed the disposition of Eight at East for proceeds of $64,700 and fully repaid the applicable first mortgage of $64,225.
Despite continuing to enter into good faith negotiations to extend or modify the Ventura Apartments ("Ventura") loan payable, SURF LP received a maturity default notice (the "Notice") from the lender of the first mortgage secured by Ventura (the "Lender"). SURF LP continues to enter into good faith negotiations to extend such loan (see "Future Outlook"). SURF LP does not expect a material impact on its net asset value as a result of any remedies the lender may exercise.
FINANCIAL CONDITION AND OPERATING RESULTS
Highlights of the financial and operating performance of SURF LP as at December 31, 2025, for Q4-2025 and YTD-2025, including a comparison to December 31, 2024, Q4-2024 and YTD-2024, as applicable, are provided below:
December 31,2025
December 31, 2024
Key multi-family operational information
Number of multi-family properties owned(1)
3
6
Total multi-family suites
1,029
1,973
Economic occupancy(2)
93.5 %
93.3 %
Physical occupancy(2)(3)
94.2 %
93.8 %
AMR (in actual dollars)(2)
$ 1,552
$ 1,591
AMR per square foot (in actual dollars)(2)
$ 1.71
$ 1.67
Estimated gap to market versus in-place rents(3)
(0.4) %
1.2 %
Selected financial information
Gross book value(3)
$ 265,700
$ 514,400
Indebtedness(3)
$ 256,400
$ 461,314
Indebtedness to gross book value(3)(4)
96.5 %
89.7 %
Weighted average interest rate - as at period end(5)
7.81 %
6.10 %
Weighted average term to maturity(6)
1.13 years
1.57 years
Q4-2025
Q4-2024
YTD-2025
YTD-2024
Summarized income statement (excluding non-controlling interest)(6)
Revenue from property operations
$ 5,494
$ 9,741
$ 30,469
$ 39,423
Property operating
(1,372)
(2,654)
(8,236)
(10,453)
Property taxes(7)
(368)
(889)
(3,597)
(4,043)
Adjusted Income from Operations / NOI
3,754
6,198
18,636
24,927
Partnership expenses
(1,009)
(566)
(3,745)
(2,243)
Finance costs(8)
(4,004)
(8,486)
(26,644)
(35,591)
Other income and expense(9)
(388)
(38,452)
(27,042)
(45,212)
Net loss and comprehensive loss - attributable to Partners(6)
$ (1,647)
$ (41,306)
$ (38,795)
$ (58,119)
Other selected financial information
Funds from operations ("FFO")(3)
$ (657)
$ (2,011)
$ (8,267)
$ (6,292)
Adjusted funds from operations ("AFFO")(3)
303
(611)
(2,377)
(1,966)
Weighted average interest rate - average during period(5)
7.75 %
6.10 %
7.18 %
5.91 %
Interest and indebtedness coverage ratio(3)(10)
1.13 x
0.92 x
0.89 x
0.94 x
(1) On April 29, 2025, August 12, 2025 and October 21, 2025, SURF LP completed the dispositions of Lyric, Eight at East and Emerson, respectively.
