InterRent Real Estate Investment Trust
TSX : IIP.UN
TSX : IIP.DB

InterRent Real Estate Investment Trust

March 29, 2010 17:05 ET

InterRent REIT Reports 2009 Fourth Quarter and Year End Results

TORONTO, ONTARIO--(Marketwire - March 29, 2010) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

InterRent Real Estate Investment Trust (TSX:IIP.UN)(TSX:IIP.DB) ("InterRent") today reported results for the fourth quarter and year ended December 31, 2009.

2009 Highlights

  • Annual operating revenues grew to $35.4 million in 2009, a 3.4% increase over the year ended December 31, 2008.
  • Net Operating Income (NOI) decreased to $16.6 million from $16.8 million the previous year.
  • Funds from Operations (FFO) was $0.9 million or $0.04 per Unit, down from $4.4 million, or $0.24 per Unit, the previous year. The decrease was as the result of a $3.7 million charge incurred in the strategic review process to improve Unitholder value, re-organizational costs and the litigation costs associated with Northwest Value Partners Inc.. Excluding this charge, FFO was $4.6 million or $0.21 per unit for the year ended December 31, 2009 compared to $4.4 million or $0.24 per unit for the year ended December 31, 2008.
  • Distributable Income (DI) was ($1.4 million), or $(0.06) per Unit for the year ended December 31, 2009 compared to $2.5 million, or $0.14 per Unit, for the year ended 2008. Excluding the charge of $3.7 million, DI was $2.3 million or $0.11 per unit compared to $$2.5 million or $0.14 per unit for the year ended December 31, 2008.
  • On September 30, 2009, InterRent's unitholders elected a new board of trustees and approved the Property Management Agreement with CLV Group Inc.
  • InterRent completed a $14million private placement of Units at $1.50 per Unit. On September 30, 2009 the board of trustees appointed Mike McGahan as InterRent's new Chief Executive Officer.

Financial Highlights

In 000's, except for per Unit

For the year ended  December 31, 2009  December 31, 2008
     
Operating Revenues $35,417 $34,267
     
Net Operating Income (NOI) $16,567 $16,826
     
Financing costs $12,070 $11,856
     
Administrative $6,962 $3,351
     
Net (Loss) for the year ($10,077) ($9,086)
     
Net (Loss) from Continuing Operations ($10,004) ($8,166)
     
Funds from Operations $878 $4,379
     
Funds from Operations per Unit $0.04 $0.24
     
*Funds from Operations $4,562 $4,379
     
*Funds from Operations per Unit $0.21 $0.24
     
Distributable Income -$1,356 $2,530
     
Distributable Income per Unit -$0.06 $0.14
     
*Distributable Income $2,328 $2,530
     
*Distributable Income per Unit $0.11 $0.14
     
Weighted Average Units Outstanding 21,817,403 18,149,603
     
*excluding costs associated with the strategic review process and one-time re-organization costs

"The costs associated with the REIT's strategic review process and one-time re-organizational costs, affected our 2009 financial performance," said Mike McGahan, Chief Executive Office. "In 2010, we are committed to improving our operations through the repositioning of the REIT's properties. Currently, we are well underway with many common area and first impression upgrades to our buildings which makes the apartment suites more welcoming and easier to rent at higher rates. We are also focused on reducing costs through energy management and other operational expenses. We expect to see improved results once all operational efficiencies are in place which should be in the medium term".

Results for the Year Ended December 31, 2009

Operating revenues increased 3.4% to $35.4 million from $34.3 million for the year ended December 31, 2009. The increase was due primarily to higher monthly rents along with an acquisition of an income-producing property in 2009.

Net Operating Income decreased to $16.6 million in 2009 from $16.8 million for the period ended December 31, 2008 as a result of property repositioning costs and reorganizational costs.

General and Administrative Costs (G&A) increased to $7.0 million from $3.4 million over the previous year. Of the $7.0 million in G&A expenses, costs associated with the Strategic Planning process and corporate restructuring costs amounted to $3.7 million.

Financing costs for the 2009 year amounted to $12.1 million from $11.9 million over the previous year.

Funds From Operations was $0.9 million compared to $4.4 for the period ended December 31, 2008. Funds From Operations per Unit decreased to $0.04 per Unit from $0.24 per Unit in the same period last year. Excluding the costs associated with the strategic review process and one-time re-organization costs the FFO was $4.6 million or $0.21 per Unit compared to $4.4 million or $0.24 per Unit compared to the previous year.

Distributable income decreased to ($1.4) million compared to $2.5 million at December 31, 2008. Distributable income per Unit was ($0.06) compared to $0.14 from the same period last year. Excluding the costs associated with the strategic review process and one-time re-organizational costs, DI was $2.3 million and $0.11 per Unit compared to $2.5 million and $0.14 per Unit for 2008.

Results for the Three Months Ended December 31, 2009

Operating Revenues for the three months ended December 31, 2009 were $8.9 million compared to $8.7 million over the three months ended December 31, 2008, representing an increase of 1.5%. The increase was due primarily to increased monthly rents over the previous year and the acquisition of income-producing properties made during 2009.

Net Operating Income for the three months ended December 31, 2009 was $3.5 million as compared to $4.0 million for the three months ended December 31, 2008.

FFO decreased to $0.3 million from $1.7 million over the three months ended December 31, 2008. FFO per Unit declined to $0.01 per Unit from $0.09 per Unit over the three months ended December 31, 2008. This decline was due primarily to corporate restructuring and property repositioning costs.

Net same property revenues remained flat over 2008 at $8.5 million.

2009 Distributions

The distributions for 2009 were 100% return of capital.

*Non-GAAP Measures

InterRent REIT assesses and measures segmented operating results based on performance measures referred to as "Funds From Operations" ("FFO") and Distributable Income ("Dl"). Both FFO and DI are widely accepted supplemental measures on the performance of a Canadian real estate investment trust; however, they are not measures defined by Canadian generally accepted accounting principles ("GAAP"). The GAAP measurement most comparable to FFO and DI is total cash flow from operating activities and net earnings. FFO and DI, however, should not be construed as an alternative to net earnings or cash flow from operating activities determined in accordance with GAAP as indicators of InterRent REIT's performance. In addition, InterRent REIT's calculation methodology for FFO and Dl may differ from that of other real estate companies and trusts and therefore readers should not place reliance on these measures.

About InterRent

InterRent is a real estate investment trust engaged in building unitholder value through the accretive acquisition, ownership and operation of strategically located income producing multi-residential real estate, with 4,033 apartment suites under ownership.

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. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "anticipated", "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". InterRent is subject to significant risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements contained in this release. A full description of these risk factors can be found in InterRent's publicly filed information which may be located at www.sedar.com. InterRent cannot assure investors that actual results will be consistent with these forward looking statements and InterRent assumes no obligation to update or revise the forward looking statements contained in this release to reflect actual events or new circumstances.

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

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