Whiterock REIT Announces Strong 2010 Second Quarter Results

TORONTO, Aug. 3 /CNW/ - Whiterock Real Estate Investment Trust ("Whiterock") a growth oriented REIT with a significant presence in major markets and a high quality long-term leased revenue stream, today announced financial results for the three and six months ended June 30, 2010. 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, 2010. These will be available on Whiterock's website at www.whiterockreit.ca.

"We are pleased with the strong progress made in all areas this quarter and continue to look forward to reporting further progress throughout the remainder of 2010," said Whiterock CEO Jason Underwood.

    HIGHLIGHTS - Second Quarter ended June 30, 2010

    -   Increasing FFO - FFO per unit was $0.43 for the three months ended
        June 30, 2010, up 9.3% year over year. This represents a 91.1% FFO
        cash payout ratio.

    -   Growing AFFO - AFFO per unit was $0.36 for the three months ended
        June 30, 2010, a second consecutive quarterly increase and up 10.3%
        from June 2009's AFFO per unit of $0.33 excluding non-recurring gains
        on disposition.

    -   Same Property NOI Growth - On a cash basis, same property NOI was
        $8.6 million, up 4.3% year over year and 2.8% from the first quarter
        of 2010.

    -   Decreasing Leverage - Debt to gross book value leverage ratio
        substantially improved to 60.3% at June 30, 2010 from 71.1% at June
        30, 2009 and from 64.1% at March 31, 2010.

    -   Rising Occupancy - 95.9% occupancy rate at June 30, 2010, a 63 basis
        point increase as compared to March 31, 2010.

    -   Growing Portfolio in Major Markets - Whiterock has acquired an
        interest in $403 million of owned or long-term leased assets in 2010,
        95% of which are in the Greater Toronto Area (GTA).


In the second quarter of 2010, Whiterock has again increased its AFFO per unit (to $1.45 annualized) as a result of accretive Class A office property acquisitions, primarily in the GTA. The Airway Centre acquisitions on June 18, 2010 added $0.02 annualized AFFO per unit in the second quarter and are expected to add an additional $0.08 annualized when they contribute for a full quarter. The Regina flex office property acquisitions added $0.02 to annualized AFFO in the second quarter and are expected to add an additional $0.01 annualized in the third quarter. Third party property management which began on July 19, 2010 is also expected to add approximately $0.03 annualized beginning in the third quarter.


                                                 Three months ended June 30,
    (in $000's except per unit data)                  2010           2009

    Total revenue - continuing operations              16,760         14,730
    Property net operating income ("NOI")
        - continuing operations (accrual basis)         9,558          8,996

    Funds from operations (FFO)                         6,017          3,403
    FFO per Unit
      - basic                                            0.43           0.39
      - diluted                                          0.41           0.39

    Adjusted funds from operations (AFFO)               5,122          3,188
    AFFO per Unit
      - basic(1)                                         0.36           0.37
      - diluted                                          0.35           0.35
    (1) June 2009 AFFO included $0.3 million of gains on disposition of
        income properties. Excluding this gain, June 2009 AFFO was $0.33 per

Balance sheet highlights for Whiterock as at June 30, 2010 and December 31, 2009 are as follows:

                                                      June 30,   December 31,
    (in $000's)                                          2010           2009

    Investment in real estate assets - wholly owned   475,185        436,638
    Investment in real estate asets - equity
     accounted(1)                                      62,487         17,741
    Investment in real estate assets - long-term
     leased(2)                                         24,933              -
    Mortgages payable and facilities                  287,994        266,482
    Convertible debentures (face value)                63,361         75,097
    Unitholders' equity                               159,288         77,939
    (1) Whiterock's net investment in its co-ownership share of $413 million
        of real estate assets at June 30, 2010 (December 31, 2009 - $164
        million) net of debt, all accounted for using the equity method.
    (2) Includes prepaid rent related to the $117 million Airway Centre 2-4
        under a 30 year land lease.

Selected financial ratios for Whiterock as at, and for the three months ended, June 30, 2010 and 2009 are as follows:

                                                      June 30,       June 30,
                                                         2010           2009

    FFO payout ratio(1)                                   99%           108%
    FFO cash payout ratio(2)                              91%           101%
    Occupancy level                                     95.9%          97.0%
    Interest coverage ratio(3)                           1.8x           1.7x
    Weighted average fixed mortgage rate                 5.7%           5.7%
    Weighted average debenture rate                      6.7%           6.8%
    (1) FFO payout ratio is calculated as distributions divided by FFO for
        the three months ended June 30, 2010 and 2009
    (2) FFO cash payout ratio is calculated as cash distributions divided by
        FFO for the three months ended June 30, 2010 and 2009.
    (3) 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 and other

FFO, AFFO and NOI 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, AFFO and NOI may be different from methods used by other REITs or corporations. A description of Whiterock's calculation of FFO, AFFO and NOI is included in Whiterock's Management's Discussion and Analysis ("MD&A") for the three and six months ended June 30, 2010.

Whiterock's consolidated Financial Statements and MD&A for the three and six months ended June 30, 2010 are posted on Whiterock's website. Readers are directed to these documents for a more detailed discussion of Whiterock's results.


Whiterock invites you to participate in its conference call with senior management on Tuesday, August 3, 2010 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, 2010. 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 on the homepage or access it directly using www.whiterockreit.ca/financial_reports.php.

You may participate in the live conference by calling 416-800-1066 or toll free at 1-866-212-4491. 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 for approximately 90 days 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 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; relatively stable capitalization rates; and more limited but available 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, Frank Bucys, CFO, 416-907-4864; Jennifer Kosloski, 416-979-3026

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