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

InterRent Real Estate Investment Trust

November 12, 2008 06:30 ET

InterRent REIT Posts Strong Gains in Third Quarter 2008

Strong Multi-Residential Sector Drives Operating Improvements

TORONTO, ONTARIO--(Marketwire - Nov. 12, 2008) -

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) Funds From Operations (FFO), and Distributable Income (DI) in the third quarter of 2008, over the same period in 2007. The increases were reported in conjunction with the REIT's financial results for the third quarter of 2008.

Third Quarter Highlights from Continuing Operations

- Operating revenues increased to $8.6 million, up 12.2% from the same quarter last year

- NOI increased by 17.4% to $4.8 million from the same period last year

- FFO for the quarter was $1.8 million, up from $1.2 million last year. FFO per unit rose to $0.10 per unit compared to $0.07 per unit in the comparable quarter of 2007

- Distributable Income for the quarter was $1.3 million, or $0.07 per unit compared to $0.9 million, and $0.06 per unit last year. This represented a 92.4% payout ratio for the third quarter of 2008 as compared to 171% in the comparable quarter of 2007.

- Same property net revenues increased by 4.1% to $7.0 million and same property NOI increased by 6.5% to $3.8 million, from September 30, 2007

- Occupancy levels increased to 97.9% from 96.9% over the third quarter of last year

- The TSX accepted the REIT's normal course issuer bid to purchase up to 874,552 Units, representing approximately 5% of the Units issued and outstanding. During the third quarter, 25,737 units were repurchased under the NCIB.

- Sold two 11 suite buildings in Ottawa for $1.2 million. The transaction is scheduled to close by the end of November 2008

- Subsequent to quarter-end the REIT increased its operating lines of credit to approximately $9.5 million. These credit lines will bear interest at an average of prime plus 1.24%

"Our goal for the second half of 2008 was to continue improving the REIT's operating results, and through increases in revenues, NOI and FFO we made strong progress to this end," said Mike Newman, Chief Executive Officer. "The multi residential real estate sector continues to show signs of strength even in these uncertain economic times."

Financial Results



Results from Continuing Operations for:
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Quarter Ended September 30, Quarter Ended September 30,
2008 2007
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Operating Revenues $ 8,617,000 $ 7,682,000
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Total Expenses 3,773,000 3,556,000
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Net Operating
Income (NOI) 4,844,000 4,126,000
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Financing Costs 3,269,000 2,463,000
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General and
Administrative
Costs (G&A) 713,000 746,000
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Amortization 2,341,000 1,946,000
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Net (Loss) (1,479,000) (1,029,000)
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Funds From
Operations (FFO) 1,751,000 1,211,000
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FFO per Unit 0.10 0.07
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Distributable
Income (DI) 1,304,000 894,000
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DI per Unit 0.07 0.06
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Weighted Average
Units O/S 18,289,407 16,163,452
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Results for the Three Months Ended September 30, 2008

Operating revenues for the three months ended September 30, 2008 were $8.6 million compared to $7.6 million in the third quarter of 2007, representing an increase of 12.2%. The increase was due primarily to the acquisition of income-producing properties made during 2007. Vacancy rates for the quarter declined across the entire portfolio to 2.1%, from 3.1% in the third quarter of 2007.

Net same property revenues grew by 4.1% to $7.0 million, from $6.7 million in the third quarter of 2007. Same building NOI increased by 6.5% to $3.8 million, from $3.6 million in the third quarter of 2007.

Operating costs were $1.5 million or 17.7% of revenue for the third quarter of 2008, compared to $1.4 million or 18.4% of revenue for the third quarter of 2007.

Property taxes for the third quarter of 2008 were $1.4 million, or 15.8%, of revenue, compared to $1.2 million, or 16.1% of revenues in the third quarter of 2007.

Utility costs were relatively stable, representing 10.3% of revenue, or $0.89 million for the three month period ended September 30, 2008, compared to 11.8% of revenue, or $0.9 million for the same period in 2007. The decline in year over year utility costs were mainly attributable to the energy cost savings initiatives, which begun in the first quarter 2008.

NOI increased by 17.4%, to $4.8 million during the third quarter of 2008 from $4.1 million in the third quarter of 2007.

Financing costs were $3.3 million, or 37.9% of revenue for the quarter, compared to $2.5 million or 32.1% of revenue for the comparable period last year. The increase in financing costs was due mainly to interest costs on the $25 million convertible debenture and the associated charge for the accretive portion of debenture interest.

As a percentage of revenue, G&A costs decreased slightly to $0.7 million or 8.3% of revenue, from $0.75 million or 9.7% or revenue in the third quarter of 2007.

Funds from operations increased to $1.8 million from $1.2 million in the third quarter of 2007. Funds from operations per unit increased to $0.10 per unit from $0.07 per unit in the third quarter of 2007.

Distributable income was $1.3 million compared to $0.9 million in the third quarter of 2007. Distributable income per unit was $0.07 per unit compared to $0.06 per unit in the third quarter of 2007. This represented a 92.4% payout ratio for the third quarter of 2008 as compared to 171% in the comparable quarter of 2007.

Results for the Nine Months Ended September 30, 2008

Operating revenues increased 37.7% to $25.2 million, from $18.3 million for the nine months ended September 30, 2007. The increase was due primarily to acquisitions of income-producing properties in 2007.

Total operating expenses increased to $12.5 million from $9.1 million for the period ended September 30, 2007 due to the larger size of the portfolio.

NOI increased to $12.7 million, representing an increase of $3.4 million or 37.2% from $9.3 million, over the same period last year.

Funds From Operations grew to $3.5 million during the nine months ended September 30, 2008, from $2.7 million for the period ended September 30, 2007. Funds From Operations per unit remained stable at $0.19, compared to the same period last year.

Distributable income was $2.2 million compared to $2.0 million during the nine months ended September 30, 2007. Distributable income per unit was $0.12 compared to $0.14 per unit for the nine months ended September 30, 2007.

Conference Call and Webcast

Management will hold a conference call and live audio webcast on November 12, 2008 at 10:30 a.m. ET to discuss InterRent's third quarter performance. The call may be accessed by dialing 416-915-5762 or 1-800-590-1817. The webcast will be accessible at www.interrentreit.com. A replay of the call will be available until midnight on November 19, 2008. It can be accessed by dialing 416-640-1917 or 1-877-289-8525 and entering the passcode 21286825#.

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. InterRent currently owns and operates 3,901 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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