Realex Properties Corp. - Third quarter results for the three months ended June 30, 2007 and declaration of dividend


    CALGARY, Aug. 13 /CNW/ - Realex Properties Corp. ("Realex") today
announced its third quarter results since completing the going public
initiative on September 29, 2006.
    Financial highlights for the three and nine months ended June 30, 2007
are as follows:

    Financial Highlights


    Income Statement Summary Data

    (unaudited)            Three Months Ended,           Nine Months Ended,
                   ----------------------------  ----------------------------
    ($000's except
     per share          June 30,      March 31,       June 30,       June 30,
     amounts)              2007           2007           2007           2006
                   -------------  -------------  -------------  -------------

    Revenues              6,925          6,556         19,718             23

    Net Income (loss)        47            332            651           (531)
    Net income (loss)
     per share            0.001          0.003          0.006         (0.084)

    FFO(1)                1,981          2,308          6,443           (261)
    FFO per share         0.017          0.020          0.057         (0.041)

    Dividends paid to
     common and
     shareholders           850            850          1,700              -

    Weighted average
     (000's)            113,302        113,302        112,724          6,313

    Balance Sheet Summary Data

                                                      June 30,  September 30,
                                                         2007           2006
                                                 -------------  -------------

    Assets                                            250,570         39,036
    Mortgages payable                                 118,713              -
    Shares outstanding (000's)                        113,302          7,664

    (1) Management utilizes a measure called Funds From Operations ("FFO") to
    evaluate the Corporations's ability to generate cash, evaluate its return
    on projects and evaluate the performance of the enterprise as a whole.
    FFO does not have a standardized meaning prescribed by GAAP, and
    therefore may not be comparable to similar measures presented by other
    issuers. Realex defines FFO as being net income for the period before
    amortization (which includes amortization of buildings, tenant
    improvements, in place lease values, tenant relationship values and
    deferred leasing costs), amortization of below-market leases, straight-
    lining of rents, amortization of fair value mortgages payable adjustment
    and deferred financing costs, debenture liability accretion expense,
    stock-based compensation expense, and future income tax expense. Users
    should be cautioned that this measure should not be construed as an
    alternative to net income or cash flow from operating activities.

    Third Quarter Highlights

    On June 1, 2007, Realex entered into a partnership with G.E. Real Estate
and completed the acquisition of a $92 million, 5-building, 422,147 square
foot office portfolio located in Calgary and Edmonton. Realex's 25% interest
in the partnership effectively added over 105,500 square feet of rentable
space to its existing portfolio, an increase of over 16%. This portfolio
acquisition represents a significant growth opportunity for Realex in that it
is characterized by a significant component of in-place leases which are well
below market rents and have near term lease expiries. The in-place rents
across this portfolio average $11.08 per square foot with current market rents
running in the $15.00 to $20.00 per square foot range. This acquisition, along
with other increases in rental income, increased third quarter rental revenue,
compared to the second quarter, by 6.3%. Total revenue, which includes
interest earned from the mezzanine lending program, rose by 5.6%.
    The strategy of aligning ourselves with financial institutions for
purposes of jointly acquiring real estate allows Realex to leverage its
management expertise. In this regard, the asset manager and the independent
members of the Realex Board of Directors have continued with discussions with
the intent of internalizing management. Indicative of this objective, the
Asset Manager in the interim has agreed to waive asset management fees in
respect of Realex's joint ownership with a financial institution of a
$92 million office portfolio located in Edmonton and Calgary.
    For the three months ended June 30, 2007, legal and due diligence costs
totaling $554,000, relating to Realex's efforts to purchase a large property
portfolio were charged to general and administrative expenses, as Realex has
not been able to satisfactorily enter into a binding agreement with the vendor
or obtain comfort from the vendor that continuing negotiations will take
place. As a result of this charge, funds from operations decreased by 14.2%
over the previous quarter.
    During the quarter, Realex's mezzanine lending program investment
increased from $5.4 million to $5.6 million with annualized yields ranging
from 12% to 16% per annum. The weighted average yield of the mezzanine loan
portfolio is 12.75% per annum. Realex plans to invest in mezzanine loans
totalling up to $15 million at any one time. The majority of loans are
scheduled to be repaid within 9 to 12 months and are secured by charges on
property and by guarantees.
    The Board of Directors of Realex authorized the payment of a dividend to
common and non-voting shareholders of $0.0075 per share. Such dividend will be
paid September 15, 2007 to shareholders of record on August 31, 2007 and is
designated as an eligible dividend pursuant to subsection 89(14) of the Income
Tax Act. An eligible dividend paid to a Canadian resident individual is
entitled to the enhanced dividend tax credit.
    "During the first three quarters of our 2007 fiscal year, we have made
positive strides toward achieving our growth expectations for Realex and have
explored a number of opportunities for expanding the asset and operational
base of the corporation", comments Mr. Marc Sardachuk, President and CEO. "The
experience and credibility we have gained over these first nine months of our
inaugural year, coupled with the advancement of a number of strategic
relationships, bodes well for the future of Realex. We remain optimistic as we
look forward to the growth opportunities that lie ahead, confident in the
ability of our management team and Board of Directors to guide Realex toward
building shareholder value."
    Full reports of the financial results are outlined in the unaudited
Interim Consolidated Financial Statements and Management's Discussion and
Analysis of Financial Condition and Results of Operations, which are available
on SEDAR and on the Realex Properties Corp. website at

    The TSX Venture Exchange has neither approved nor disapproved the
    contents of this news release. The TSX Venture Exchange does not accept
    responsibility for the adequacy or accuracy of this news release.

    This news release contains forward looking statements subject to various
significant risks and uncertainties which may cause actual results,
performances and achievements of Realex to be materially different from any
future results, performances or achievements, expressed or implied by such
forward looking statements. Realex cannot assure investors that actual results
will be consistent with these forward looking statements and Realex assumes no
obligation to update or revise them to reflect new events or circumstances.

    %SEDAR: 00024324E

For further information:

For further information: Marc Sardachuk, President and Chief Executive
Officer, Realex Properties Corp., Telephone: (403) 264-5889, Facsimile: (403)
264-5892; Mark Suchan, Chief Financial Officer, Realex Properties Corp.,
Telephone: (403) 264-5889, Facsimile: (403) 264-5892

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