Whiterock REIT Announces Q2 2007 Results, Outlook and Achievements

    TORONTO, Aug. 14 /CNW/ - Whiterock Real Estate Investment Trust
("Whiterock") today announced financial results for the three and six months
ended June 30, 2007. 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, 2007. These will be available on Whiterock's website at


    -   High Yield - Distribution yield of 10.2% annualized, based on per
        Unit distributions for the six months totaling $0.56, and the
        August 10, 2007 Unit closing price of $11.02.

    -   Strong FFO Growth - Q2 recurring FFO per Unit (basic) increased by
        50% to $0.27 per Unit compared to $0.18 per Unit (basic) for the same
        period in the prior year.

    -   Positive AFFO Outlook - AFFO run rate (basic) expected to grow to
        approximately $1.14 per Unit and exceed distributions early in 2008.

    -   NAV Exceeds Current Unit Price - Process to solicit proposals to
        acquire or merge with the REIT confirms NAV in excess of current Unit

    -   Process to Review Strategic Alternatives Completed - Trustees
        determined that continuing to operate the business is the best means
        to build and deliver value to Unitholders. Independent review
        confirms the quality of the revenue stream and absence of any
        material due diligence issues. Whiterock is resuming its acquisition
        program with an additional focus on internal growth opportunities.

    -   $3.5 Million Gain from Sale of Three Jointly Owned Quebec Properties
        - Effective April 10, 2007, completed the sale to the existing co-
        owners through the exercise of buy-sell provisions in its co-
        ownership agreements, of its 50% non-managed interests in three
        Quebec City office properties. The $3.5 million gain represents a
        return of over 20% in 11 months of ownership, reinforcing the
        strength of Whiterock's acquisition criteria.

    -   Solid Leasing Performance - 83% of 2007's expiring leases were
        renewed during the first half of the year with an average rate
        increase of 9%. Tenant inducements on renewals were minimal at $1.43
        per square foot.

    -   Same Property Growth - Q2 Property operating income increased 5.4% on
        a same property basis from the prior year comparative period.

    -   Continued Acquisition Capacity - $14 million from excess cash and
        unlevered assets available for acquisitions; $45 million acquisition
        facility is undrawn.

    -   Investment Grade Tenants on Long-Term Leases - At June 30, 2007, 70%
        of revenues from government and other investment grade tenants.
        Average lease term of portfolio is 9 years.

    -   Long-Term Fixed Rate Debt - Average 9 year debt term at a weighted
        average rate of 5.4% with 95% at fixed rates.

    -   Geographically Balanced Portfolio - 19% in Saskatchewan, 27% in
        Ontario, 38% in Quebec and 16% in Atlantic Canada.

    -   Unit Price Appreciation - An increase of 70%, including reinvestment
        of distributions, in the two years since the June 2005 initial public


    -   Continued deleveraging - $2.3 million of Series A convertible
        debentures converted to equity since June 30, 2007.

    (including discontinued operations, except as noted)

                                      Three Months Ended    Six Months Ended
                                             June 30,            June 30,
                                      ------------------- -------------------
    (in $000's except per Unit data)      2007      2006      2007      2006

    Total revenue - continuing
     operations                         11,938     6,129    23,904    11,314
    Property operating income
     - continuing operations             7,249     3,891    14,317     7,028
    Income (loss)                        1,978    (1,298)    1,754    (1,791)

    Income (loss) per unit -
     basic and diluted
      - basic                             0.20     (0.22)     0.18     (0.32)
      - diluted                           0.20     (0.22)     0.17     (0.32)

    Funds From Operations (FFO)(1)       2,682     1,056     5,481     1,707
    FFO per Unit
      - basic                             0.27      0.18      0.55      0.31
      - diluted                           0.27      0.17      0.54      0.30

    Adjusted Funds From
      Operations (AFFO)(1)               2,133       756     4,306     1,255
    AFFO per Unit
      - basic                             0.21      0.13      0.43      0.23
      - diluted                           0.21      0.12      0.42      0.22
    (1) FFO, FFO per unit, AFFO and AFFO per Unit exclude non-recurring

    Balance sheet highlights for Whiterock as at June 30, 2007 and
December 31, 2006 are as follows:

    (in $000's)                            June 30, 2007   December 31, 2006

    Investment in real estate                    335,284             376,927
    Mortgages payable and acquisition
     facility                                    212,215             250,886
    Convertible debentures (face value)           50,677              51,000
    Cash                                          14,894               9,298
    Unitholders' equity                           77,604              80,252

    Selected financial ratios for Whiterock as at, and for the period ended,
June 30, 2007 and 2006 are as follows:

                                           June 30, 2007       June 30, 2006
    Weighted average fixed mortgage rate            5.4%                5.6%
    Weighted average debenture rate                 7.1%                8.5%
    Interest coverage ratio(1)                      1.7                 1.3
    Occupancy level                                98.7%               98.3%
    FFO payout ratio(2)                             102%                182%
    (1) Interest coverage for the quarter 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) FFO payout ratio is calculated as year-to-date distributions divided
        by recurring FFO.

    The improvement in the financial results reflects the accretive
acquisitions completed and the increase in same asset property operating
income 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. 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, 2007.


    Whiterock has a solid business platform of high quality assets with
investment grade tenants, a committed management team and Board of Trustees
(the majority of which is independent), and established relationships in
select markets across Canada.
    In the six months ended June 30, 2007, Whiterock significantly improved
its recurring FFO, AFFO, FFO per Unit, AFFO per Unit, property operating
income, weighted average debenture interest rate, and increased its interest
coverage ratio while reducing its payout ratio compared to the prior year
comparative period.
    Further, the requirements for future increases in FFO and AFFO per Unit
at Whiterock have been, and continue to be, successfully put into place.
Management expects that completed and anticipated new leasing and renewals,
the reinvestment of balance sheet cash, selected property management and G&A
improvements, the refinancing of floating rate debt and in-place rent
increases will result in basic AFFO per Unit exceeding distributions in early


    Whiterock Real Estate Investment Trust ("Whiterock") invites you to
participate in its live conference call with senior management on Wednesday
August 15, 2007 at 10:00 a.m. E.D.T., to discuss the REIT's results and
achievements for the three and six months ended June 30, 2007.
    You may participate in the live conference call toll free at
1-888-373-5705 and you will be prompted by the operator to provide the
confirmation code 451098. 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 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 dated March 21, 2007 which can be obtained at www.sedar.com.
In particular, but without limitation, there is no assurance that Whiterock
will be able to increase its AFFO as anticipated.

    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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