InterRent Real Estate Investment Trust
TSX : IIP.UN

InterRent Real Estate Investment Trust

August 14, 2007 06:00 ET

InterRent Real Estate Investment Trust Reports Record Revenues, Net Operating Income and Funds From Operations for Second Quarter of 2007

TORONTO, ONTARIO--(Marketwire - Aug. 14, 2007) -

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

InterRent Real Estate Investment Trust (TSX:IIP.UN) ("InterRent") today reported record Net Operating Income (NOI) and Funds From Operations (FFO) in conjunction with the REIT's financial results for the second quarter of 2007.

Highlights:

- Suites owned at the end of the second quarter of 2007 increased by 607, or 23% to 3,246 from the end of the first quarter of 2007.

- Income producing assets grew to $217 Million as at June 30, 2007 from $105 Million at December 31, 2006.

- Revenues increased by 54.5% to $6.7 million in the second quarter from $4.3 million in the first quarter of 2007

- Net Operating Income (NOI) as a percentage of revenue increased to 54%, in the second quarter of 2007 from 36% in the first quarter, a 50% increase.

- Funds From Operations (FFO) increased to $1.29 million, or $0.082 per unit in the second quarter from $64,000, or $0.006 in the first quarter of 2007

- Adjusted Funds From Operations (AFFO) increased to $1.12 million or $0.071 per unit in the second quarter from ($2,000) or ($0.0002 per unit) in the first quarter of 2007

- Property operating costs as a percentage of revenues declined by 25% to $ 3.05 million in the second quarter as compared with $2.69 million in the first quarter of 2007

- Net loss declined to $285,000 in the second quarter from $955,000 in the first quarter of 2007,

- Completed the acquisition of six apartment buildings with 607 suites, for $42.85 million.

- Secured $50 million credit facility for future acquisitions

- Portfolio occupancy improved by 2.1% to 96.2% at the end of the second quarter of 2007 from 94.2% at the end of the first quarter of 2007

- Successfully listed its units on the TSX in April, 2007.

"Our strong property portfolio, combined with the accretive acquisitions we completed at the end of the first and in the second quarter, helped us achieve record FFO and NOI," said Michael Newman, Chief Executive Officer. "Our significantly improved operating and financial performance during the quarter, validates our aggressive growth and "up-management" strategy, and provides us with a substantial base to exploit additional growth opportunities arising in secondary multi-residential markets, to maximize unitholder value."

After successfully listing its units on the TSX in April, InterRent completed a $17.45 million acquisition of two apartment buildings, with 217 suites, located in London and St. Catharine's, Ontario. In May, the REIT completed a $22.25 million acquisition of three apartment buildings, with 333 suites, in London, Ontario, and in June, a 57 suite building in Brantford, Ontario.

In addition to completing six acquisitions, InterRent expanded its footprint into new Ontario markets in the second quarter of 2007, by acquiring an apartment complex with 223 suites in Sault Ste. Marie, Ontario for $9.53 million. The REIT also expanded its presence in Ottawa and Sarnia in the second quarter of 2007, with the acquisition of two buildings containing 179 suites for approximately $15.5 million in Ottawa, and the acquisition of two buildings in Sarnia with 60 suites for approximately $2.0 million.

During the second quarter, InterRent secured a $50 million credit facility to be used for the purchase of additional apartment buildings. The new credit facility provides InterRent with increased leverage capacity to make disciplined acquisitions, while continuing to establish it as the preeminent leader in multi-residential real estate in Ontario's secondary markets.

Financial Highlights

Following InterRent's change in legal entity status from a corporation to a trust, management has reviewed the required financial reporting requirements and determined that InterRent REIT is an entirely new reporting entity, and not a continuation of the predecessor company. As a result there are no comparative numbers from previous periods.

Rental revenues from the three months ended June 30, 2007, were $6.7 million, an increase of 54.5% from the first quarter of 2007. The increase was primarily due to the impact of acquisitions made since the beginning of Fiscal 2007. Rental revenues for the six months ended June 30, 2007 were $11.1 million.

Property operating costs declined by 25% compared to the first quarter of 2007, mainly as a result of the acquisition of buildings that had recently undergone major renovations, and seasonality factors.

InterRent's NOI as a percentage of revenue increased to 54% as compared with 36% in the first quarter of 2007. The increase was largely due to the REIT's accretive acquisitions made during the first six months of the fiscal year and to seasonality factors.

InterRent's FFO increased to $1.29 million from $64,000 in the first quarter of 2007. The REIT's FFO per unit increased to $0.082 from $0.006 in the first quarter of 2007. The increase was due to the accretive acquisitions made by InterRent during the first six months of fiscal 2007.

Distributable income increased to $1.12 million from ($2,000) in the first quarter of 2007. The REIT's distributable income per basic unit increased to $0.071 from ($0.0002) in the first quarter of 2007.



Results Of Operations For;
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Quarter Ending For Six Months Ending
June 30, 2007 June 30, 2007
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Revenues $ 6,708,905 11,053,540
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Operating Expenses 3,049,865 5,738,532
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Net Operating Income (NOI) 3,659,040 5,315,008
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G&A and Financing Costs 2,371,213 3,962,850
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Amortization 1,578,659 2,579,260
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Net (Loss) (284,617) (1,239,653)
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Net (Loss) per Unit (0.018) (0.093)
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Funds From Operations (FFO) 1,288,000 1,352,000
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FFO per Unit 0.082 0.101
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Distributable Income (DI) 1,124,000 1,122,000
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DI per Unit 0.071 0.084
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Weighted Average Units O/S 15,776,094 13,387,155
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Conference Call and Webcast

Management will hold a conference call and live audio webcast on Tuesday, August 14, 2007 at 10 a.m. ET to discuss InterRent's second quarter performance. The call may be accessed by dialing 416-644-3424 or 1-800-595-8550. The webcast will be accessible at www.interrentreit.com. A replay of the call will be available until midnight on August 21, 2007. It can be accessed by dialing 416-640-1917 or 1-877-289-8525 and entering the passcode 21242567#.

(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 ("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 rapidly expanding, 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, with 3,708 apartment suites under ownership and 258 suites under contract, for a total of 3,966 apartment suites.

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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