Whiterock REIT Announces 2006 Results and Achievements



    TORONTO, March 29 /CNW/ - Whiterock Real Estate Investment Trust
("Whiterock") today announced financial results for the three month period and
year ended December 31, 2006. The following comments and highlights should be
read in conjunction with the audited consolidated financial statements and
management's discussion and analysis for the years ended December 31, 2006 and
2005. These will be available on Whiterock's website at www.whiterockreit.ca.

    
    HIGHLIGHTS

    -   Strong Annual FFO Growth - FFO per Unit (basic) for the year ended
        December 31, 2006 increased by $0.83 to $0.84 per Unit (adjusted for
        the one-time costs of management internalization and the loss on
        redemption of the Series B Debentures) compared to $0.01 per Unit
        (basic) for the year ended December 31, 2005.

    -   Continued Quarterly FFO Growth - In the three months ended December
        31, 2006, FFO per Unit (basic) is $0.28 (adjusted for the one-time
        costs of management internalization), an increase of $0.19 per Unit
        over the same period in 2005.

    -   2006 Acquisitions - Acquired 21 properties in 12 cities across Canada
        for $256 million. The total GLA acquired of over 1.8 million square
        feet represents 10 office, 5 retail, and 6 industrial properties.

    -   Investment Grade Tenants on Long-Term Leases - At December 31, 2006,
        46.0% of revenues from government leases, 70.5% of revenues from
        government and other investment grade tenants. Average lease term of
        portfolio is 8.7 years.

    -   Unit Price Appreciation - Unit price closed at $13.30 at December 31,
        2006, an eighteen month increase of 78%, including reinvestment of
        distributions, since the June 2005 initial public offering.

    -   Completed $48.5 Million Equity and $25 Million Convertible Debenture
        Offerings - successfully raised $48.5 million of equity and
        $25 million of convertible debt throughout 2006. The proceeds of the
        offerings were used to acquire properties, significantly pay down the
        acquisition facility and for general business purposes.

    -   Debenture Refinancing - $10 million of 7.5% Redeemable Subordinated
        Convertible Debentures were issued to fund the redemption of all of
        Whiterock's 9% Redeemable Subordinated Series B Convertible
        Debentures, resulting in reduced interest payments, an extension of
        term and an increase in conversion price.

    -   Acquisition Facility - Announced a $23.5 million revolving facility
        to fund acquisitions, with an affiliate of Kimco Realty Corporation.
        Subsequently negotiated an increase in the acquisition facility to
        $45 million.

    -   Completed Internalization of Management - On December 12, 2006,
        successfully completed the internalization of asset management and
        management services for $3.5 million, settled in Units (before
        transaction costs).

    -   Expanded Board of Trustees - Appointed a new independent Chairman of
        the Board, an independent Audit Committee Chair and an independent
        Investment Committee Chair.

    -   Unit Consolidation - Completed a four for one Unit consolidation,
        effective August 21, 2006.

    -   TSX Listing - Listing moved to the Toronto Stock Exchange (TSX) from
        the TSX Venture Exchange.

    -   DRIP Plan Established - Distribution Reinvestment Plan established
        for Unitholders.

    HIGHLIGHTS - SUBSEQUENT EVENTS

    -   Announced process to solicit acquisition or merger proposals - On
        January 16, 2007, announced the commencement of a process to solicit
        proposals to acquire or merge with the REIT, in an effort to continue
        to enhance its Unit value.

    -   Adopted Unitholder Rights Plan - in connection with the process to
        solicit proposals to acquire or merge with the REIT the Trust adopted
        a Unitholder rights plan.

    -   Announced the proposed sale of three jointly owned Quebec
        properties - On February 16, 2007, announced the agreement to sell to
        the existing co-owners through the exercise of buy-sell provisions in
        its co-ownership agreement, which were initiated by Whiterock, 50%
        undivided, non-managed interests in three Quebec City properties,
        being 410 Charest, 750 Charest, and 880-930 Ste Foy, subject to
        closing conditions and adjustments, for $51.75 million. This
        represents an in-place cap rate of slightly below 7%.


    FINANCIAL HIGHLIGHTS

                                         Three months ended    Year ended
                                             December 31,      December 31,
                                          ----------------- -----------------
    (in $000's except per Unit data)        2006     2005     2006     2005
    -------------------------------------------------------------------------
    Total revenue                          12,185    3,129   33,564    3,666
    Property operating income               7,539    1,814   20,774    2,045

    Income (loss)                          (4,243)    (257)  (6,471)    (661)
    Income (loss) (adjusted)(1)              (540)    (257)  (2,077)    (661)
    Income (loss) per Unit
      - basic                               (0.50)   (0.07)   (0.94)   (0.32)
      - basic (adjusted)(1)                 (0.06)   (0.07)   (0.30)   (0.32)
      - diluted                             (0.50)   (0.07)   (0.94)   (0.32)
      - diluted (adjusted)(1)               (0.06)   (0.07)   (0.30)   (0.32)

    Funds from operations (FFO)            (1,297)     352    1,430       25
    FFO (adjusted)(2)                       2,406      352    5,824       25
    FFO per Unit
      - basic                               (0.15)    0.09     0.21     0.01
      - basic (adjusted)(2)                  0.28     0.09     0.84     0.01
      - diluted                             (0.15)    0.09     0.20     0.01
      - diluted (adjusted)(2)                0.28     0.09     0.83     0.01

    Adjusted Funds From Operations (AFFO)   1,683      282    4,289       40
    AFFO (adjusted)(3)                      1,886      282    4,747       40
    AFFO per Unit
      - basic                                0.20     0.07     0.62     0.02
      - basic (adjusted)(3)                  0.22     0.07     0.69     0.02
      - diluted                              0.20     0.07     0.61     0.02
      - diluted (adjusted)(3)                0.22     0.07     0.67     0.02
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Income (loss) (adjusted) excludes the effect of the one-time costs
        relating to the internalization of management of $3,703,112 in the
        fourth quarter and the redemption of the Series B convertible
        debentures of $690,838 in the second quarter.
    (2) FFO per Unit (adjusted) excludes the effect of the one-time costs
        relating to the internalization of management of $3,703,112 and the
        redemption of the Series B convertible debentures of $690,838.
    (3) AFFO per Unit (adjusted) excludes the effect of the one-time cash
        costs relating to the internalization of management of $203,112 and
        the redemption of the Series B convertible debentures of $254,998.



    Balance sheet highlights for Whiterock as at December 31, 2006 and 2005
    are as follows:

    (in $000's)                                               2006      2005
    -------------------------------------------------------------------------
    Investment in real estate                               376,927  116,403
    Mortgages payable                                       247,286   84,193
    Acquisition facility                                      3,600        -
    Convertible debentures (face value)                      51,000   25,000
    Cash                                                      9,298   29,282
    Unitholders' equity                                      80,252   38,218
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Selected financial ratios for Whiterock as at, and for the period ended,
    December 31, 2006 and 2005 are as follows:

                                                              2006      2005
    -------------------------------------------------------------------------
    Percent of investment grade tenants                       70.5%    67.4%
    Weighted average fixed mortgage rate                       5.4%     5.4%
    Weighted average debenture rate                            7.1%     8.5%
    Interest coverage ratio(1)                                  1.5      1.0
    Occupancy level(2)                                        98.4%    97.8%
    FFO payout ratio (Q4)(3)                                   100%     311%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Interest coverage for the year is calculated based on property
        operating income less G&A, divided by interest expense (including
        debentures and financing fee amortization) net of interest income.
        For the fourth quarter, the interest coverage ratio has improved to
        1.6 compared to 1.3 in the prior year comparative quarter.
    (2) Occupancy includes space under head lease.
    (3) FFO payout ratio (Q4) is calculated as distributions divided by FFO,
        adjusted to exclude the effect of the one-time costs relating to the
        internalization of management of $3,703,112.
    

    The improvement in the financial results, after adjusting for one-time
costs, reflect the accretive acquisitions completed in 2005 and 2006 exceeding
interest and administrative costs.
    FFO and AFFO are supplemental non-GAAP financial measures used by the
real estate industry to measure and compare the operating performance of real
estate organizations. Whiterock's method of calculating FFO and AFFO may be
different from methods used by other REITs or corporations. Whiterock
calculates FFO in accordance with the recommendations of the Real Property
Association of Canada ("REALpac"). The definition is meant to standardize the
calculation of FFO across real estate entities in Canada. A description of
Whiterock's calculation of FFO and AFFO is included in Whiterock's
Management's Discussion and Analysis for the year ended December 31, 2006.

    OUTLOOK

    Management believes Whiterock has met or exceeded all of its objectives.
In the year ended December 31, 2006, Whiterock acquired 21 properties,
significantly improved its FFO, AFFO, FFO per Unit, AFFO per Unit, property
operating income, weighted average debenture interest rate, and increased its
interest coverage ratio while maintaining occupancy levels.
    Further, Whiterock has successfully put in place a solid business
platform by acquiring a portfolio of high quality assets with investment grade
tenants, establishing a management team and Board of Trustees (the majority of
which is independent), and establishing relationships in select markets across
Canada. In an effort to continue to enhance Unitholder value and capitalize on
the platform that has been put in place, on January 16, 2007, Whiterock
announced that its Board of Trustees had approved a process to solicit
proposals to acquire or merge with Whiterock. There can be no assurance that a
transaction will result from the process initiated by the Board of Trustees
and there is no certainty as to the price at which a transaction will be
effected, if one does take place. During the sale process, the REIT will
continue to manage its business in the normal course. However, significant
amounts of new capital will not be committed to new acquisitions during the
sale process.

    Forward Looking Statements

    This news release contains "forward-looking statements" within the
meaning of the United States Private Securities Litigation Reform Act of 1995
and applicable Canadian securities legislation. Forward-looking statements
include, but are not limited to, statements with respect to financial
performance, sale-leaseback opportunities, proposed acquisitions and equity or
debt offerings, new markets for growth, financial position, comparable
commercial REITs and proposed acquisitions. Generally, these forward-looking
statements can be identified by the use of forward-looking terminology such as
"plans", "expects" or "does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "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".
    Forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results, level of
activity, performance or achievements of Whiterock to be materially different
from those expressed or implied by such forward-looking statements, including
but not limited to: the risks related to the market for Whiterock's
securities, the general risks associated with real property ownership and
acquisition that future accretive acquisition opportunities will be identified
and/or completed by Whiterock, lease maturities, risk management, liquidity,
debt financing, credit risk, competition, general uninsured losses, interest
rate fluctuations, environmental matters, restrictions on redemptions of
outstanding Whiterock securities, lack of availability of growth
opportunities, diversification, reliance on anchor or single tenant
properties, potential Unitholder liability, potential conflicts of interest,
the availability of sufficient cash flow, fluctuations in cash distributions,
the market price of Whiterock's Units, the failure to obtain additional
financing, dilution, reliance on key personnel, changes in legislation,
failure to obtain or maintain mutual fund trust status and delays in obtaining
governmental approvals or financing as well as those additional factors
discussed in the section entitled "Risk Factors" in Whiterock's Annual
Information Form, which can be obtained at www.sedar.com.

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

    Source: Whiterock Real Estate Investment Trust

    %SEDAR: 00022234E




For further information:

For further information: www.whiterockreit.ca, Jason Underwood, (416)
907-4861; Paul Simcox, (416) 907-4862; Frank Bucys, CFO, (416) 907-4864

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WHITEROCK REAL ESTATE INVESTMENT TRUST

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