Whiterock REIT Announces 2009 Second Quarter Results



    TORONTO, Aug. 12 /CNW/ - Whiterock Real Estate Investment Trust
("Whiterock") today announced financial results for the three and six months
ended June 30, 2009. The following comments and highlights should be read in
conjunction with the unaudited consolidated financial statements and
management's discussion and analysis for the three and six months ended June
30, 2009. These will be available on Whiterock's website at
www.whiterockreit.ca.

    
    HIGHLIGHTS - June 30, 2009

    -   Solid FFO - FFO was $3.4 million or $0.78 per unit for the three
        months ended June 30, 2009. This represents a 101% FFO cash payout
        ratio for the three months ended June 30, 2009 and 91% for the six
        months ended June 30, 2009.

    -   Increased AFFO - AFFO for the three months ended June 30, 2009 was up
        9% to $3.2 million ($0.73 per unit) compared to the prior year.

    -   Success in Renewing Tenants - To date, 83% of leases up for renewal
        in 2009 have been re-leased and 28% of leases up for renewal in 2010
        have been re-leased.

    -   Solid Rental Rate Increases - Rate increases for 2009 renewals and
        re-leasing averaged approximately 22% year to date.

    -   Excellent Financial Flexibility - Issued $10.9 million of equity and
        renewed a $40 million credit facility in a difficult financing
        environment.

    -   High Quality Acquisition Pipeline - Over $10 million equity invested
        or committed to invest in properties providing in place AFFO yield in
        excess of 20%. Acquired an interest in a 394,000 square foot
        industrial building in Regina Saskatchewan and have entered into an
        agreement to acquire an interest in a 411,000 square foot Class A
        office building in Toronto, Ontario.

    -   Gain from Sale of Property - Sold 400 Volta Avenue, in Quebec City, a
        non-core industrial property for gross proceeds totalling $1,500,000
        and a $530,000 gain on sale.

    -   Investment Grade Tenants on Long-Term Leases - 58% of revenues were
        from government and other investment grade tenants. Average lease
        term of the portfolio is 7.7 years, providing strong cash flow
        stability.

    -   Secure Top Ten Tenants - Average remaining lease term of top ten
        tenants, all investment grade and representing 46.2% of revenue, is
        11.1 years.

    -   Long-Term Fixed Rate Debt - Average 6.6 year term for mortgage debt
        at a weighted average interest rate of 5.7%, all at fixed rates.

    -   Geographically Balanced Portfolio - At June 30, 2009, 17% of the
        portfolio's property operating income was in Alberta, 18% in
        Saskatchewan, 23% in Ontario, 29% in Quebec and 13% in Atlantic
        Canada.

    -   Yield - Distribution yield of 19.7% annualized, based on per unit
        distribution for the three months ended June 30, 2009, totaling
        $0.84, and the August 11, 2009 Unit closing price of $17.06.

    -   Tax Efficient Distributions - 100% of the distributions made in 2008,
        2007 and 2006 were classed as return of capital for tax purposes.
    

    "I am excited about Whiterock's future. This quarter we focused on
financial flexibility, issuing $10.9 million of equity and renewing our $40
million credit facility. With this flexibility, we are acquiring interests in
two high quality properties and advancing our efforts on our acquisitions
pipeline. While our FFO and AFFO were impacted by the increased liquidity that
was not fully invested in the quarter, we remain very comfortable with our
financial position. Our six month FFO payout ratio on cash distributions is
91% and 2009 lease rate increases are averaging almost 22% to date. Whiterock
continues to be an investment with solid value, a secure distribution and
growth potential," said Whiterock CEO Jason Underwood.

    
    FINANCIAL HIGHLIGHTS
    (including discontinued operations, except as noted)

                                      Three months ended  Three months ended
    (in $000's except per unit data)       June 30, 2009       June 30, 2008
    -------------------------------------------------------------------------

    Total revenue - continuing operations         14,789              12,814
    Property operating income -
     continuing operations                         9,007               7,722

    Funds from operations (FFO)                    3,403               3,535
    FFO per Unit
      - basic                                       0.78                0.99
      - diluted                                     0.77                0.96

    Adjusted funds from operations (AFFO)          3,188               2,923
    AFFO per Unit
      - basic                                       0.73                0.82
      - diluted                                     0.71                0.78
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Balance sheet highlights for Whiterock as at June 30, 2009 and
    December 31, 2008 are as follows:

    (in $000's)                            June 30, 2009   December 31, 2008
    -------------------------------------------------------------------------

    Investment in real estate assets(1)          439,143             444,960
    Mortgages payable and facilities             272,110             284,154
    Convertible debentures (face value)           55,410              55,410
    Cash                                           2,668                   -
    Unitholders' equity                           82,879              80,069
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Includes $7.3 million of mortgages receivable secured by real estate
        assets at December 31, 2008.

    Selected financial ratios for Whiterock as at, and for the six months
    ended, June 30, 2009 and 2008 are as follows:

                                           June 30, 2009       June 30, 2008
    -------------------------------------------------------------------------
    Weighted average fixed mortgage rate            5.7%                5.4%
    Weighted average debenture rate                 6.8%                7.0%
    Interest coverage ratio(1)                       1.7                 1.9
    Occupancy level(2)                             97.0%               98.5%
    FFO cash payout ratio(3)                         91%                 75%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Interest coverage for the period is calculated based on property
        operating income less G&A, divided by interest expense (including
        debentures and financing fee amortization) net of interest income.
    (2) Includes leases executed to date and space under head lease.
    (3) FFO cash payout ratio is calculated as cash distributions divided by
        FFO for the six months ended June 30, 2009.
    

    In the three months ended June 30, 2009, Whiterock improved its AFFO and
property operating income compared to a year ago.
    Whiterock's financial results primarily reflect accretive acquisitions,
the impact of new leases and rent escalations, partially offset by the impact
of the increased liquidity generated from new mortgages and equity as these
funds have not yet been fully invested, by temporary vacancies and by
provisions related to potential vacancies.
    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. A description of
Whiterock's calculation of FFO and AFFO is included in Whiterock's
Management's Discussion and Analysis for the three and six months ended June
30, 2009.

    CONFERENCE CALL

    Whiterock invites you to participate in its conference call with senior
management on Wednesday August 12, 2009 at 11:00 a.m. E.D.T., to discuss the
REIT's results and achievements for the three and six months ended June 30,
2009. A presentation to accompany management's comments during the call will
be available on Whiterock's website. To view it, please go to
www.whiterockreit.ca and click on the link for Quarterly Financial Statements
and Conference Call on the homepage or access it directly using
www.whiterockreit.ca/financial_reports.php.
    You may participate in the live conference call toll free at
1-866-227-3320 and enter the passcode '128348' followed by the number sign
when prompted by the operator. To ensure your participation, please call five
minutes prior to the scheduled start of the call. The call will be archived on
Whiterock's website and available after the call.

    Forward-Looking Statements

    This news release contains "forward-looking statements" within the
meaning of applicable securities legislation. These forward-looking statements
generally can be identified by the use of forward-looking terminology such as
"may", "will", "expect" "estimate", "anticipate", "intend", "believe" or
"continue", the negative forms thereof and similar expressions suggesting
future outcomes or events. Such forward-looking statements reflect
management's current beliefs and are based on information currently available
to management. These statements are not guarantees of future events or
performance and, by their nature, are based on Whiterock's estimates and
assumptions, which are subject to known and unknown risks, uncertainties and
other factors that may cause the actual events, results or prospects to be
materially different from those expressed or implied herein. Readers are
cautioned that a number of factors, including those discussed in the section
entitled "Risk Factors" in Whiterock's Annual Information Form which can be
obtained at www.sedar.com, could cause actual events, results or prospects to
differ materially from those stated or implied. These factors should be
considered carefully, and a reader should not place undue reliance on
forward-looking statements, as there can be no assurance that actual events,
results or prospects will be consistent with such statements. In particular,
but without limitation, there can be no assurance that Whiterock will be to
able to continue to increase its AFFO. Material factors or assumptions that
were applied in drawing a conclusion or making an estimate set out in the
forward-looking information may include, but are not limited to: a less robust
leasing environment than has been seen for the last several years; relatively
stable interest costs; an increase in acquisition capitalization rates and
more limited access to equity and debt capital markets to fund, at acceptable
costs, Whiterock's growth plans, and to enable Whiterock to refinance its
debts as they mature. Except as required by law, Whiterock does not undertake,
and specifically disclaims, any obligation to update or revise any
forward-looking statements, whether as a result of new information, future
developments or otherwise.

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

    %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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