Retrocom Mid-Market Real Estate Investment Trust

Retrocom Mid-Market Real Estate Investment Trust

March 20, 2009 19:31 ET

Retrocom Mid-Market REIT Announces Annual Financial Results

TORONTO, ONTARIO--(Marketwire - March 20, 2009) -


Retrocom Mid-Market Real Estate Investment Trust (TSX:RMM.UN) announced today its financial results for the year ended December 31, 2008.


- To date, renewed four mortgages maturing in 2009 totalling approximately $21 million at a weighted average interest rate of 6.19% per annum; Two additional mortgages totalling $14.9 million mature in September and December the renewal or refinancing of these mortgages will be pursued starting in the second quarter of 2009;

- Occupancy rate at year end was a stable 92.5% up from 91.5% occupancy at 2007 year end and consistent with the 92.5% reported in Q3 2008;

- Subsequent to the year end, closed $10.4 million of new financing at an interest rate of approximately 6.95% per annum, resulting in a $5 million cash position and an undrawn operating line of $10 million;

- Additional financings of approximately $10 million secured by two of the properties purchased in July, 2008 have been committed by lenders, and are expected to provide approximately $8.9 million in additional cash availability to the REIT and are anticipated to close in the second quarter;

- Average cost of debt at year end was 6.25% consistent with 6.30% at December 31, 2007. The leverage ratio was 53.8% inclusive of debentures and mortgages down from 59.3% at December 31, 2007;

- Net Operating Income ("NOI") for the year was $30.3 million, compared to $27.2 million achieved on 2007 results. The $3.1 million increase in NOI is primarily the result of the addition of four Greater Toronto Area properties purchased in July;

- The REIT has recorded an impairment provision on one income-producing property in Wetaskiwin, Alberta in the amount of $1 million. A $3.7 million mortgage secured by this property of was repaid, on maturity, in March 2009. The property is approximately 55% leased;

- Funds From Operations ("FFO") decreased for the year to $11.1 million or $0.48 per unit (adjusted for conversion of non-controlling interest) as compared to $12.3 million or $0.66 per unit in 2007. After allowing for $2.4 million (or $0.09 per unit) for non-recurring transaction costs related to the purchase of four properties, FFO increased by $1.2 million. This increase reflects the impact of increased FFO of $2.5 million from the property portfolio, including an increase of $2.2 million from the addition of the four properties for half a year, as well as lower trust costs of $0.5 million net of reduced FFO of $1.8 million resulting from the sale of properties.

Financial Highlights:

Actual Actual
three three Actual Actual
months months year year
(in thousands ended ended ended ended
of dollars December December December December
except per unit 31, 31, 31, 31,
amounts and ratios) 2008 2007(i) 2008 2007(i)
(unaudited) (unaudited) (audited) (audited)

Rental Revenue and Other
Income 15,742 14,123 57,919 53,517
Property Operating
Expenses 7,388 6,640 27,628 26,289
Net Operating Income 8,354 7,483 30,291 27,228
Transaction Related
Costs - - 2,400 -
Trust Expenses 731 912 3,050 3,557
Income before Interest,
Depreciation &
Amortization 7,623 6,571 24,841 23,671
Interest 3,768 3,316 14,166 13,611
Depreciation and
Amortization 5,060 4,379 18,712 17,910
Impairment of Income-
producing Property 1,000 - 1,000 -
Loss Before Income Tax,
Non-controlling Interest
and Discontinued Operations (2,205) (1,124) (9,037) (7,850)
Future Income Tax
Recovery 1,224 - 1,224 -
Loss Before Non-controlling
Interest and Discontinued
Operations (981) (1,124) (7,813) (7,850)
Non-controlling Interest 324 - 1,549 -
Loss Before Discontinued
Operation (657) (1,124) (6,264) (7,850)
Gain (Loss) from
Discontinued Operations 57 1,934 (84) 24,585
Net Income (loss) (600) 810 (6,348) 16,735

Funds From
Operations(ii) 3,977 3,567 11,092 12,276
Funds From Operations
per Unit (Basic-adjusted
for conversion of
interest) 0.14 0.19 0.48 0.66
Funds From Operations
Payout Ratio Accrual
Basis 0.78 0.78 1.06 0.91
Funds From Operations
Payout Ratio Accrual
Basis-adjusted for one
time fees(iii) N/A N/A 0.87 0.87
Distributions - Accrual
basis 3,108 2,778 11,772 11,112

Full Financial Results will be available on SEDAR ( as well as
the Investors Relations section of the REIT's website

(i) Previously reported results have been reclassified for discontinued

(ii) The reconciliations Funds From Operations to Net income (loss) after
Discontinued Operations are included in the REIT's MD&A

The REIT's management considers Funds From Operations to be an
indicative measure in evaluating the REIT's performance. The table
above, however, includes non-GAAP information that should not be
construed as an alternative to net earnings or cash flows from
operations and may not be comparable to similar measures presented by
other issuers as there is no standardized meaning prescribed by GAAP.

(iii) In Q3 2007, the REIT recorded adjustments for prior period items and
incurred one-time charges totalling $0.5 million. After adjusting for
these one-time items, the year to date FFO Payout Ratio based on
accrued distribution is 0.87. In Q3 2008, the REIT recorded one-time
charges totalling $2.4 million or $0.09 per unit related to the
purchase of four properties. After adjusting for these one-time items,
the FFO Payout Ratio based on accrued distribution is 0.87.

About Retrocom Mid-Market REIT

Retrocom Mid-Market REIT is an Ontario unincorporated open-end real estate investment trust which focuses on owning and acquiring mid-market properties in primary and secondary cities across Canada with the objective of producing a geographically diversified portfolio of properties with stable and growing cash flows.

This document may contain forward-looking statements, which although based on
Management's best estimates as well as the current operating environment are subject to risks and uncertainties. As such, terms such as "anticipate", "believe", "expect", "plan" or other similar words should be taken as forward-looking statements. As a result of these potential uncertainties, any future results could differ materially from the predictions listed herein. Although Retrocom makes every effort to meet our predictions as listed in this document, we are unable to control certain circumstances such as economic, competitive or commercial real estate conditions.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made only by means of a prospectus, nor shall there be any sale of the Units in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under securities laws of any such state, province or other jurisdiction. The Units of the Retrocom Mid-Market REIT have not been, and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold or delivered in the United States absent registration or an application for exemption from the registration requirements of U.S. securities laws.

Contact Information

  • Retrocom Mid-Market Real Estate Investment Trust
    David Fiume
    Chief Executive Officer
    (416) 741-7999
    (416) 741-7993 (FAX)