Calloway Real Estate Investment Trust

Calloway Real Estate Investment Trust

February 28, 2008 18:41 ET

Calloway Real Estate Investment Trust Releases Fourth Quarter and Year End Results; Ends Year at Record Occupancy

TORONTO, ONTARIO--(Marketwire - Feb. 28, 2008) - Calloway Real Estate Investment Trust (TSX:CWT.UN) is pleased to report its results for the quarter and year ended December 31, 2007.

Highlights of the Quarter:

- Increased cash flow (funds from operations) by 14.8% over last year (4.8% increase on a per unit basis).

- Invested $71.0 million to complete the development and lease up of over 400,000 square feet of leaseable area.

- Portfolio occupancy rate improved to 99.3%.

Highlights of the Year:

- Acquired 798,000 square feet of retail space in six properties for $150.0 million.

- Invested $180.1 million to complete the development and lease up of 937,000 square feet of leaseable area.

- Entered into 10 new mezzanine loans and advanced $141.2 million on these and previously existing mezzanine loans.

- Increased Unit distributions to $1.548 per Unit, an increase of 3.3%.

Mr. Simon Nyilassy, President and CEO said, "Leasing was again the main contributor to the solid performance in Calloway's portfolio of 133 properties in the quarter. It is a testament to the strength of our portfolio that we were able to improve our already high occupancy rate to 99.3%, while adding over 400,000 square feet of newly built, fully occupied buildings. Leasing of our future expansion and development pipeline also ended the year on a positive note, with over 23% of the total available area pre-leased.

For the year as a whole, our growth continued to drive both revenue and cash flow, with revenue increasing by almost 28% over last year and cash flow by almost 23%."

As at December 31, 2007, Calloway's $3.9 billion real estate portfolio included 20.2 million square feet of built gross leasable area and 6.4 million square feet of future developable in 119 operating and 14 development properties.

Developments completed during the quarter comprised approximately 411,000 square feet of leasable area at a cost of $71.0 million. Calloway acquired a 50.0% interest in one development property during the quarter.

Calloway entered into three new mezzanine loans with a total commitment of $36.0 million. During the quarter $16.6 million was advanced under the mezzanine loan program.

Calloway's debt to gross book value of 55.2% at quarter end remains at the low end of the Trust's target range of 55.0%-60.0%.

The income-producing portfolio generated revenue of $102.7 million in the fourth quarter, a $6.9 million increase over the prior quarter. Rental revenues from income properties increased by $5.3 million and interest income increased $1.6 million due to increased investment in mezzanine loans. Net operating income of $64.4 million has increased $1.2 million or 2.0% over the third quarter 2007. The increase is primarily due to acquisitions and development activities during the third and fourth quarter of 2007. Quarterly cash flow as measured by funds from operations "FFO" totaled $42.3 million (excluding a one-time bond forward contract loss), a 1.8% increase over previous quarter. "FFO" per unit (fully diluted) was $0.458 compared to $0.454 in the previous quarter, representing almost a 1.0% increase, due to increases in rental income from acquisitions and development, higher interest income due to additional advances under mezzanine loans, offset by higher interest expense and increased outstanding units. The Trust's quarterly distribution of $0.387 per unit represents a payout ratio (to FFO) of 88.5% compared to 84.4% in the previous quarter.

During the year, Calloway's real estate assets grew from $3.3 billion in 2006 to $3.7 billion, an increase of 12.1% and unit equity increased from $1.6 billion to $1.7 billion, a growth of 5.8%. Rental revenues increased 27.8% from $289.5 million to $370.0 million. Net income for 2007 was $30.5 million, an increase from $20.8 million in 2006. Net income for 2006 was adversely affected by the one-time expense of $14.4 million relating to the internalization of property management. Net income for 2007 was adversely affected by a one-time bond forward contract loss of $1.9 million and a writedown of properties under development totalling $1.1 million.

Full reports of the financial results are outlined in the unaudited financial statements and the management discussion and analysis, available on SEDAR. In addition, supplemental information is available on Calloway's website at

Calloway will hold a conference call on Friday, February 29, 2008 at 10.00 a.m. eastern time (ET). Participating on the call will be members of Calloway's senior management. Investors are invited to access the call by dialing 1-800-733-7560. You will be required to identify yourself and the organization on whose behalf you are participating. A recording of this call will be made available Friday, February 29, 2008 beginning at 1:00 p.m. (ET) through to 11:59 p.m. (ET) on Friday, March 7, 2008. To access the recording please call 1-877-289-8525 and use the reservation number 21260209#.

This press release contains "forward looking statements" subject to various significant risks and uncertainties which may cause actual results, performances and achievements of Calloway to be materially different from any future results, performances or achievements, expressed or implied by such forward looking statements. Such risk factors include, but are not limited to, risks associated with real property ownership, availability of cash flow, restrictions on redemption, general uninsured losses, future property acquisition, environmental matters, tax related matters, debt financing, Unitholder liability, potential conflicts of interest, potential dilution, and reliance on key personnel. Calloway cannot assure investors that actual results will be consistent with these forward looking statements and Calloway assumes no obligation to update or revise them to reflect new events or circumstances.

The Toronto Stock Exchange neither approves nor disapproves of the contents of this Press Release.

Contact Information

  • Calloway Real Estate Investment Trust
    Simon Nyilassy
    President and Chief Executive Officer
    (905) 326-6400 x 7649
    Calloway Real Estate Investment Trust
    Bart Munn
    Chief Financial Officer
    (905) 326-6400 x 7631