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

InterRent Real Estate Investment Trust

May 14, 2009 06:00 ET

InterRent Announces First Quarter 2009 Financial Results

TORONTO, ONTARIO--(Marketwire - May 14, 2009) -

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 increases in Operating Revenues, Net Operating Income (NOI) and Funds From Operations (FFO), for the first quarter of 2009 compared to the same period in 2008. The increases were reported in conjunction with the REIT's financial results for the first quarter of 2009.

Operating Highlights from Continuing Operations

- Operating revenues increased to $8.74 million, up 6.2% from $8.23 million in the same quarter last year

- Net Operating Income (NOI) increased by 3.1% to $3.61 million from $3.50 million in the same period last year

- Funds From Operations (FFO) for the quarter was $0.5 million, up from $0.4 million last year. FFO per unit was flat at $0.03 per unit.

- Distributable Income (DI) per unit was also flat at $0.00 for the quarter.

- General & Administrative (G&A) costs were $722,000 or 8.2% of revenues compared to $729,000 or 8.8% of revenues for the first quarter of 2008. Approximately 10% of the 2009 G&A costs are attributable to one time legal expenses.

- Financing costs amounted to $3.01 million or 34.5% of revenues in the quarter, compared to $3.12 million or 37.9% of revenues in the same quarter last year. The decline in financing costs was a result of the refinancing of maturing mortgages at lower rates and lower interest rates on InterRent's operating credit facilities.

- Net loss from continuing operations for the quarter declined by 15% to $2.16 million from $2.55 million for the comparable quarter of 2008.

Business Highlights

- In January InterRent acquired a 68 suite apartment building in Sault Ste. Marie, Ontario for $3.23 million.

- Also in January InterRent sold two buildings with a total of 22 suites in Vanier, Ontario for $1.23 million.

- On February 23, 2009 InterRent announced that it was instituting a Unitholders' Rights Plan in response to receiving two unsolicited proposals from arms' length parties for the acquisition of all or a significant percentage of InterRent's trust units.

- On March 11, 2009 InterRent announced that it had formed a Special Committee, and retained Scotia Capital to evaluate any proposals. The evaluation process is continuing and management will advise unit holders of any significant developments.

"Our goal for the first quarter of 2009 was to continue improving the REIT's operating results, and through increases in revenues, NOI and FFO we made progress to this end. Management and the trustees are also continuing to explore and evaluate strategies to enhance unit holder value" said Michael Newman, InterRent's Chief Executive Officer.

Financial Results



Results from Continuing Operations for:
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Quarter Ended March 31, Quarter Ended March 31,
2009 2008
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Operating Revenues $ 8,741,000 $ 8,223,000
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Operating Expenses 5,131,000 4,735,000
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Net Operating Income (NOI) 3,610,000 3,498,000
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Financing Costs 3,011,000 3,121,000
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G&A 722,000 729,000
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Amortization 2,042,000 2,201,000
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Net (Loss) (2,166,000) (2,553,000)
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Funds From Operations (FFO) 492,000 405,000
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FFO per Unit 0.03 0.03
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Distributable Income (DI) 3,000 49,000
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DI per Unit 0.00 0.00
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Weighted Average Units O/S 18,279,057 17,936,816
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Results for the Three Months Ended March 31, 2009

Operating revenues for the three months ended March 31, 2009 were $8.74 million compared to $8.23 million in the first quarter of 2008, representing an increase of 6.2%. The increase was due primarily to the acquisition of income-producing properties made during 2008 and the beginning of 2009 along with higher average rents.

Net Operating Income (NOI) increased by 3.1%, to $3.61 million during the first quarter of 2008 from $3.50 million in the first quarter of 2008.

Net same property revenues grew by 1.9% to $8.4 million, from $8.2 million in the first quarter of 2008. Same building NOI declined by 2.6% to $3.4 million from $3.5 million in the first quarter of 2008.

Funds From Operations (FFO) increased to $0.5 million from $0.4 million in the first quarter of 2008. FFO per unit was flat at $0.03 per unit.

Distributable Income (DI) per units was $0.00 compared to $0.00 in the first quarter of 2008.

Operating costs were $1.58 million or 18.1% of revenue for the first quarter of 2009, compared to $1.50 million or 18.1% of revenue for the first quarter of 2008.

Property taxes for the first quarter of 2009 were $1.4. million, or 16.2%, of revenue, compared to $1.3 million, or 16.3% of revenues in the first quarter of 2008.

As a percentage of revenue, G&A costs decreased slightly to 8.2% of revenue, from 8.8% of revenue in the first quarter of 2008. Approximately 10% of G&A expenses in the first quarter of 2009 were as a result of one time legal expenses.

- Financing costs were $3.01 million, or 34.5% of revenue for the quarter, compared to $3.1 million or 37.9% of revenue for the comparable period last year. The decline in financing costs was a result of the refinancing of maturing mortgages at lower rates and lower interest rates on InterRent's operating credit facilities.

- Utility costs represented 24.5% of revenue, or $2.14 million for the three month period ended March 31, 2009, compared to 23.1% of revenue, or $1.90 million for the same period in 2008. The increase in year over year utility costs were mainly attributable to daily average temperatures being 14.2% lower in the first quarter of 2009 as compared to the same period in 2008.

- Bad debt declined by 39% in the first quarter of 2009 to $66,000 as compared to $108,000 in the first quarter of 2009, as a result of property repositioning programs instituted at a number of properties, and a tightening of credit and collection procedures and policies.

- Vacancy rates for the quarter declined across the entire portfolio to 2.3%, from 2.7% in the first quarter of 2008.

(i)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 ("DI"). 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 DI 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 growth oriented 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. InterRent currently owns and operates 4,033 apartment suites across Ontario. For additional information visit www.interrentreit.com.

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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