Whiterock REIT Announces Agreements to Acquire $73 Million of Accretive Office and Retail Properties in British Columbia and 5.95% Unsecured Debenture Offering


TORONTO, April 20 /CNW/ - Whiterock Real Estate Investment Trust (TSX: WRK.UN), a growth oriented REIT with a significant presence in major Canadian markets, announced today that it has entered into binding agreements to purchase a $40.7 million (before closing costs) grocery-anchored retail centre and a $32 million (before closing costs) Class A office building in British Columbia, Canada. The average remaining lease term across the assets is approximately 5.6 years. These properties will be purchased in partnership with Return on Innovation Capital Ltd. ("ROI Capital Ltd."), with Whiterock owning a 40% interest and providing property management for all buildings. Management anticipates that these transactions will close in the second quarter of 2011, subject to standard closing conditions.

Whiterock REIT (the "Trust") also announced today that it has entered into a binding agreement to issue $35 million aggregate principal amount of senior unsecured (non-convertible) debentures due April 2016 (the "Debentures") in two tranches. The $25 million initial tranche is expected to close on or about April 26, 2011 with the balance expected to close within 60 days. Two trustees of the Trust, one of which is a member of management (the "Participants"), will subscribe for a total of 1% of the aggregate principal amount of Debentures at face value. The Debentures will bear interest at a rate of 5.95% per annum payable monthly, commencing June 30, 2011, and will be redeemable at the option of the Trust. Whiterock intends to use approximately $10 million of the proceeds for the announced acquisitions, approximately $10 million to fund the early repayment of its 7.5% Series D debentures due July 31, 2011, and the remainder to pay down its acquisition and operating facilities, and for general trust purposes. The Debentures represent a significant milestone for Whiterock as the Trust moves away from the use of convertible debentures while continuing to focus on deleveraging the overall balance sheet and increasing AFFO.

The Toronto Stock Exchange (the "TSX") has conditionally approved the listing of the Debentures on the TSX. Listing of the Debentures will be subject to fulfilling all of the TSX's requirements on or before July 11, 2011.

The participation by the Participants in the offering of Debentures constitutes a related party transaction as defined in Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Trust is relying on the exemptions to the formal valuation and minority security holder approval requirements in section 5.5(a) and 5.7(a), respectively, of MI 61-101.  The independent members of the board of trustees of the Trust have reviewed the terms of the offering of Debentures, including the involvement of the Executive, and unanimously determined that the timing and terms of the offering are in the interest of the Trust and reasonable in the circumstances.

The securities being offered have not been and will not be registered under the United States Securities Act of 1933 and, accordingly, will not be offered, sold or delivered, directly or indirectly within the United States, its possessions and other areas subject to its jurisdiction or to, or for the account or for the benefit of a U.S. person, except in limited circumstances.

Management expects the impact from the acquisitions along with the related financing to add approximately $0.03 to annualized ongoing AFFO. The full impact of this expected increase to AFFO will be realized starting in the third quarter of 2011. The average capitalization rate on the assets is 7.5% and the average interest rate on the first mortgages is expected to be approximately 4.8%.

Kamloops Property Description

350-450 Lansdowne Street ("Lansdowne") is a 191,000 square foot multi-tenanted retail plaza, grocery anchored by Coopers Foods, as well as London Drugs and Tim Horton's. The Property is located in the heart of Kamloops with an impressive 2,500 ft frontage exposure on Lansdowne Street, the main thoroughfare in downtown Kamloops. The property is 96% leased, has an average lease term of 7 years, is occupied by an array of tenants providing for diversified cash flows and is prime retail space in the downtown core.

Victoria Property Description

2261 Keating Cross Road ("Gateway") is a 2-storey, 181,000 square foot Class A office building that is 100% leased with an average remaining lease term of 4.1 years. Approximately 52% of the gross leaseable area is occupied by government or investment grade tenants including B.C. Emergency and Health Services Commission, B.C. Ambulance Services, B.C. Provincial Emergency Programs and Telus Corporation (TSX: T), which has a $16 billion market capitalization and is the largest telecommunications company in Western Canada. Gateway is centrally located in Victoria's largest and most successful business park only 20 minutes from downtown Victoria as well as 10 minutes to the Victoria International Airport and Swartz Bay ferry terminal to Vancouver.

Subsequent to these acquisitions, Whiterock's wholly-owned, co-owned and managed aggregate real estate portfolio will total approximately 8.1 million square feet across 76 properties.

Whiterock's co-owner in the Lansdowne and Gateway acquisitions will be ROI Capital Ltd., an investment firm based in Toronto with over $1 billion in assets that specializes in private placement investments, including a focus on quality properties with growing cash-flow streams.

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 able to: deleverage its overall balance sheet over the medium or long term; increase its AFFO; or achieve the expected capitalization rate on the assets to be acquired or the expected average interest rate on the first mortgages.  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 relatively stable leasing environment, stable interest costs, limited dilution from conversion of convertible debentures; stable acquisition capitalization rates and available access to equity and debt capital markets to fund, at acceptable costs, Whiterock's future growth plans, and to enable Whiterock to refinance its debt as it matures.  In addition, historic performance is not necessarily indicative of future results.  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.

SOURCE Whiterock Real Estate Investment Trust

For further information:


Frank Bucys, CFO, 416-907-4864
Esam El-Makkawy, 416-642-4726

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Whiterock Real Estate Investment Trust

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