Calloway Real Estate Investment Trust

Calloway Real Estate Investment Trust

March 09, 2005 16:42 ET

Calloway Real Estate Investment Trust: Year End Results


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: CALLOWAY REAL ESTATE INVESTMENT TRUST

TSX SYMBOL: CWT.UN
TSX SYMBOL: CWT.DB

MARCH 9, 2005 - 16:42 ET

Calloway Real Estate Investment Trust: Year End Results

CALGARY, ALBERTA--(CCNMatthews - March 9, 2005) - Calloway Real Estate
Investment Trust (TSX:CWT.UN) (TSX:CWT.DB) is pleased to report that the
financial results for the year ending December 31, 2004 are
characterized by dynamic growth.

Calloway's asset base more than quadrupled in size as a result of the
completion of four separate asset acquisition transactions. These asset
acquisitions included the purchase of 32 retail properties for a total
acquisition cost of $724 million. The portfolio increased from 23
properties with 1.85 million square feet of rentable area at the end of
December 31, 2003 to 55 properties comprising 7.5 million square feet at
December 31, 2004.

This growth has continued into 2005. During the first quarter of 2005,
Calloway has or is expected to complete the acquisition of an interest
in ten retail properties with 1.6 million square feet of rentable area
for a cost of approximately $252 million. We have continued with our
strategy of focusing on retail properties by disposing of two office
properties in January 2005 and will continue to dispose of non-core
assets as appropriate.

With the dramatic growth of our portfolio, real estate assets increased
from $227 million as at December 31, 2003 to $994 million as at December
31, 2004. Revenues increased more than six fold from $12.8 million for
the year ending December 31, 2003 to $87.9 million for the year ending
December 31, 2004. Net income increased from $8.9 million for the year
ending December 31, 2003 to $13.4 million for the year ending December
31, 2004. Net income was affected significantly by certain changes in
accounting policies for amortization of buildings, recognition of
revenue from step leases, and allocation of purchase price of
acquisitions to tenant improvements and intangibles. If these changes
had not been implemented, net income would have increased by a further
$15.7 million to $29.1 million, an increase of 227% over the same period
in 2003. Distributable income increased from $8.6 million for the year
ending December 31, 2003 to $35.8 million for the year ending December
31, 2004 an increase of 416%. Distributable income per unit increased
from $1.24 for the year ended December 31, 2003 to $1.37 for the year
ended December 31, 2004 an increase of 10%. Distributions to unitholders
were $1.2177 per unit in 2004 compared to $1.1508 per unit in 2003, an
increase of 5.8%. The annualized distribution rate increased from
$1.1508 at December 31, 2003 to $1.26 at December 31, 2004, an increase
of 9.5%.

The portion of distributions in 2004 that will be taxed as income is
57.1031% and the portion that will be taxed as return of capital is
42.8969%.

Occupancy rates were as follows during the period: December 31, 2004 -
97.8%; September 30, 2004 - 98.1%; December 31, 2003 - 97.9%.

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

Calloway will hold a conference call on Thursday March 10, 2005 at
3:30pm Eastern Time. Participating on the call will be members of
Calloway's senior management.

Investors are invited to access the call by dialing 1-800-354-6885. 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 March 10 beginning at 6:00 pm (ET) through to 11:59pm (ET) on
March 17. To access the recording please call 1-800-558-5253 and use the
reservation number 21234631.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Calloway Real Estate Investment Trust
    J. Michael Storey
    (403) 266-6437
    (403) 266-6522 (FAX)
    Website: www.callowayreit.com
    The TSX has neither approved nor disapproved of the information
    contained herein.