Artis REIT reports significant growth for 2006



    WINNIPEG, March 27 /CNW/ - Today Artis Real Estate Investment Trust
("Artis REIT" or "the REIT") issued its financial results and achievements for
the year ended December 31, 2006.
    "Artis REIT's financial results continue to demonstrate the effectiveness
of our internal and external growth strategies," said Armin Martens, President
and Chief Executive Officer of the REIT. "Our growth in existing property
income and accretive acquisitions in our target market continues to translate
into strong financial results for our unitholders. Our key metrics have all
improved as well. We are particularly pleased to report an increase in
Distributable Income ("DI") per unit of 78.4% and Funds from Operations
("FFO") per unit of 96.6% over the prior year, with a corresponding healthy
reduction in both our debt ratio and payout ratios."

    2006 FINANCIAL HIGHLIGHTS

    
    -------------------------------------------------------------------------

    ($000's, except unit and                  Year ended          Increase
    Per unit amounts)                        December 31,        (Decrease)
                                    -----------------------------------------
                                          2006           2005
                                    -----------------------------------------

    Revenues                         $    53,522   $     9,644   $    43,878
    Property NOI                     $    34,251   $     6,220   $    28,031
    Loss for the period              $   (11,153)  $    (2,519)  $    (8,634)
    Loss per unit (basic and
     diluted)                        $     (0.94)  $     (0.74)  $     (0.20)
    -------------------------------------------------------------------------
    Distributions                    $    12,874   $     3,330   $     9,544
    Distributions per unit           $      1.05   $      0.78   $      0.27
    DI                               $    15,878   $     2,508   $    13,370
    DI per unit (basic)              $      1.32   $      0.74   $      0.58
    DI payout ratio                        79.5%        105.4%       (25.9)%
    -------------------------------------------------------------------------
    FFO                              $    13,995   $     2,017   $    11,978
    FFO per unit (basic)             $      1.16   $      0.59   $      0.57
    FFO payout ratio                       90.5%        132.2%       (41.7)%
    -------------------------------------------------------------------------
    Weighted average units (basic)    11,907,917     3,399,747
    -------------------------------------------------------------------------
    Weighted average units (basic)
     including Class B Units          12,015,853     3,399,747
    -------------------------------------------------------------------------
    Total assets                     $   492,940   $   273,267   $   219,673
    Total long-term debt             $   312,844   $   190,834   $   122,010
    -------------------------------------------------------------------------
    Portfolio occupancy                    95.8%         92.5%          3.3%
    -------------------------------------------------------------------------
    

    Artis REIT's 2006 revenues, Property NOI, DI per unit and FFO per unit
have significantly exceeded 2005 results; these significant increases are
attributed to the impact of a full year of operations of the 26 properties
acquired in 2005 as well as the partial impact on operations of 2006
acquisitions. Management anticipates there will be further growth in revenues,
Property NOI, DI and FFO from these acquisitions in future periods.

    Artis REIT's 2006 Property NOI results exceed forecast expectations by
    23.8%

    Artis REIT's 2006 revenues and Property NOI have surpassed forecast
expectations in its February 27, 2006 forecast by $10.7 million and
$6.6 million, respectively. This growth has been driven substantially by
on-going acquisition activity, as well as growth in same Property NOI.

    Artis REIT reduces mortgage debt-to-GBV ratio while increasing the asset
    base

    In 2006, Artis REIT has increased the size of its asset base, measured by
gross book value ("GBV"), by 88.1%, from a GBV of $278.1 million at the start
of the year to a GBV of $523.1 million at December 31, 2006. Over the same
period, the ratio of mortgage debt to GBV decreased from 60.7% at December 31,
2005 to 52.1% at December 31, 2006.

    Artis REIT adds approximately 1.0 million square feet of leasable space
    to portfolio

    Artis REIT acquired eleven commercial properties in 2006, bringing the
total number of retail, office and industrial properties to 36 at December 31,
2006. The portfolio's leasable area increased to over 2.9 million square feet;
approximately 47% office, 46% retail and 7% industrial.

    OUTLOOK AND SUBSEQUENT EVENTS

    Artis is a growth-oriented REIT providing investors with the opportunity
to invest in western Canada - Canada's strongest economic region.
    Artis REIT focuses exclusively on quality commercial properties (office,
retail and industrial) in primary and growing secondary markets in western
Canada, particularly in Alberta. Artis REIT's business model continues to gain
traction, providing investors with stable, predictable monthly cash
distributions, growing over time.
    Subsequent to December 31, 2006, Artis REIT's financial position will be
further improved by an $80.0 million equity offering which closed on
February 8, 2007. The proceeds from that offering, together with an additional
underwriter's over-allotment of $12.0 million, will be used to finance
additional accretive acquisitions. Thus far, Artis REIT has closed an
additional $116.6 million of acquisitions in 2007, with an additional
$78.9 million scheduled to close on or before March 31, 2007.
    Disciplined execution of Artis REIT's growth strategy has resulted in a
diversified portfolio of real estate assets aggregating nearly 4.0 million
square feet of leasable area (including all acquisitions to date as well as
the balance scheduled to close on or before March 31, 2007).
    Artis REIT will continue to source accretive and quality commercial
properties, as well as pursue development opportunities, in its target
markets. Artis REIT also remains focused on increasing same Property NOI
through effective property and leasing management. Management anticipates that
as a result of its recent acquisitions, as well as its strong internal growth
profile, Artis REIT will continue to deliver steady growth in revenues,
Property NOI, DI and FFO in the future.

    Internalization of Management

    Artis REIT is currently externally managed by Marwest Management Canada
Ltd. This model has served unitholders well thus far, with the REIT achieving
substantial growth in the size of the portfolio, while concurrently increasing
DI and FFO per unit and decreasing its debt to GBV ratios.
    Given the current and pending asset base of the REIT, at the March 22,
2007 meeting of the Board of Trustees, a motion was passed, effective
immediately, to begin a formal review process respecting the internalization
of management.

    Non-GAAP Performance Measures

    DI, Property NOI and FFO are non-GAAP measures commonly used by Canadian
income trusts as an indicator of financial performance. Management uses DI,
Property NOI and FFO to analyze operating performance. DI, Property NOI and
FFO may not be comparable to similar measures presented by other issuers.
Neither DI nor FFO are intended to represent operating profits for the period
or from a property nor should either be viewed as an alternative to net
income, cash flow from operating activities or other measures of financial
performance calculated in accordance with GAAP. A description of Artis REIT's
calculation of these measures is included in the REIT's management discussion
and analysis for the year ended December 31, 2006.

    Cautionary Statements

    The comments and highlights herein should be read in conjunction with the
consolidated financial statements and management's discussion and analysis for
the same period and the Statement of Consolidated Forecasted Net Income (the
"Forecast") for the year ended December 31, 2006 included in the REIT's short
form prospectus dated February 27, 2006. These documents are available on the
SEDAR website at www.sedar.com or on the REIT's web site at www.artisreit.com.

    This news release contains forward-looking statements. For this purpose,
any statements contained herein that are not statements of historical fact may
be deemed to be forward looking statements. Without limiting the foregoing,
the words "expects", "anticipates", "intends", "estimates", "projects", and
similar expressions and the negatives thereof are intended to identify forward
looking statements.
    Artis REIT is subject to significant risks and uncertainties which may
cause the actual results, performance or achievements of the REIT to be
materially different from any future results, performance or achievements
expressed or implied in these forward-looking statements. Such risk factors
include, but are not limited to, risks associated with real property
ownership, availability of cash flow, general uninsured losses, future
property acquisitions, environmental matters, tax related matters, debt
financing, unitholder liability, potential conflicts of interest, potential
dilution, reliance on key personnel, changes in legislation and potential
changes in the tax treatment of trusts. Artis REIT cannot assure investors
that actual results will be consistent with any forward-looking statement and
the REIT assumes no obligation to update or revise such forward-looking
statements to reflect actual events or new circumstances. All forward-looking
statements contained in this press release are qualified by this cautionary
statement.

    The Toronto Stock Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.





For further information:

For further information: Mr. Armin Martens, President and Chief
Executive Officer of the REIT; or Mr. Jim Green, Chief Financial Officer of
the REIT at (204) 947-1250


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