GT CANADA MEDICAL PROPERTIES REIT (TSX-V: MOB.UN) ANNOUNCES FOURTH QUARTER AND YEAR END 2010 FINANCIAL RESULTS

TORONTO, April 29 /CNW/ - GT Canada Medical Properties REIT (the "REIT") is pleased to announce its financial results for the three months and year ended December 31, 2010.

Highlights

  • On March 12, 2010, the REIT's corporate predecessor, GT Canada Medical Properties Inc. ("GTC Inc.") acquired a medical office building located in Hamilton Ontario (the "Hamilton Property") as part of its "qualifying transaction" (the "Qualifying Transaction") under the policies of the TSX Venture Exchange (the "TSXV").

  • On December 24, 2010, the REIT completed the following:
    • a public offering (the "Offering") of equity securities for aggregate gross proceeds of $25,550,000;
    • the acquisition (the "Acquisition") of a portfolio of five medical office buildings, including one substantially pre-leased property currently under construction, for a purchase price of $39,950,000 (subject to adjustment), which implies a cap rate of approximately 8.25%; and
    • the conversion (the "Conversion") of GTC Inc. into the REIT.
  • Under the Offering the REIT issued 12,775,000 investment units (the "Investment Units") at a price of $2.00 per Investment Unit. Each Investment Unit consists of one trust unit of the REIT (each a "Unit" and, collectively, the "Units") and one-half of a Unit purchase warrant (each whole Unit purchase warrant being referred to as a "Warrant"). Each Warrant will entitle the holder thereof to purchase one Unit at any time prior to 5:00 p.m. (Toronto time) on or before December 24, 2012 at a price of $2.25.

  • The REIT used approximately $23.2 million of the net proceeds of the Offering to fund the cash portion of the purchase price payable under the Acquisition and related expenses. The balance of the Offering proceeds were allocated for working capital purposes. The non-cash portion of the Acquisition purchase price included 662,500 units, each comprised of one Class B limited partnership unit ("Class B LP Units") of GT Canada Operating Partnership (I) L.P., a subsidiary of the REIT, and one-half of a Warrant. Each Class B LP Unit is exchangeable on a one-for-one basis for a Unit.

  • Immediately prior to the completion of the Offering and the Acquisition, the Conversion was made effective. As part of the Conversion, the outstanding shares in the capital of GTC Inc. were exchanged for Units, on the basis of ten common shares for each Unit.

  • Subsequent to December 31, 2010, the REIT announced on April 20, 2011 that it had entered into a revolving credit facility agreement (the "Credit Facility") in the amount of approximately $5.7 million to be drawn on by the REIT for property acquisitions and working capital. Amounts outstanding under the Credit Facility bear interest at a rate equal to the lender's prime rate plus 200 basis points. The Credit Facility has an initial two-year term and is secured by a first ranking mortgage on the property located at 89 Dawson Road, in Guelph Ontario.

  • On April 20, 2011 the REIT also announced that it had refinanced (the "Refinancing") four of its properties for a gross amount of $17.345 million which generated proceeds of $4.158 million. The Refinancing reset the mortgage terms for three of the properties to five years and increased the mortgage amortizations to 25 years. The weighted average interest rate on the REIT's secured mortgage portfolio was decreased from 5.51% to 5.13% as a result of the Refinancing.

  • On April 21, 2011 the REIT adopted a deferred unit plan (subject to approval of the unitholders at the next annual general meeting) to promote a greater alignment of interests between the trustees and management of the REIT and unitholders. Under the terms of the deferred unit plan, they have the right to receive a percentage of their annual remuneration in the form of deferred units.

Financial Results

  • For the three month period ended December 31, 2010, the REIT had property rental revenues of $232,312 and property operating costs of $129,037. For the year ended December 31, 2010, the REIT had property rental revenues of $548,349 and property operating costs of $272,421. As the REIT owned no properties in 2009, there are no comparable revenues or costs for 2009.

  • For the three month period ended December 31, 2010, the REIT had a net loss of $305,741 or $0.10 per unit basic and diluted. The net loss in Q4 2010 was primarily due to higher general and administrative costs. The net loss increased to $1,112,640 or $0.54 per unit in the year ended December 31, 2010 compared to $765,639 in the prior year primarily due to an increase in general and administrative costs, incentive unit compensation, depreciation and mortgage interest expense. General and administrative expenses were significantly higher in 2010 than 2009 primarily because the REIT did not own any properties in 2009. The completion of the Qualifying Transaction, the Offering, the Acquisition and the Conversion all also contributed to higher G&A costs in 2010. These costs were partially offset by the net revenue earned on the Hamilton Property acquired in March 2010.

Outlook

The REIT is focusing on achieving its goal of becoming a significant owner of medical office properties throughout Canada through acquisition, aimed at creating a geographically diversified portfolio of high quality income producing properties.

2010 Fourth Quarter and Year End Financial Results

For the complete third quarter 2010 Management's Discussion and Analysis and Financial Statements, please visit www.sedar.com

GT Canada Medical Properties REIT

The REIT intends to become a leading owner and co-developer of medical office buildings in Canada through a disciplined acquisition, development and management program aimed at creating a geographically diversified portfolio of properties that will generate stable and growing rental income and capital appreciation opportunities.

This press release contains forward-looking statements. Forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forwardlooking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation to be materially different from any future results, performance or achievements.

SOURCE GT Canada Medical Properties Inc.

For further information:

Andrew I. Shapack, Chief Executive Officer (416) 572-2170

Profil de l'entreprise

GT Canada Medical Properties Inc.

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