Retrocom Mid-Market Real Estate Investment Trust
TSX : RMM.UN

Retrocom Mid-Market Real Estate Investment Trust

April 01, 2009 16:22 ET

Retrocom Mid-Market REIT Announces Financing Update and Conditional Sale of Properties

TORONTO, ONTARIO--(Marketwire - April 1, 2009) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY NON-CANADIAN SOURCE

Retrocom Mid-Market Real Estate Investment Trust (the "REIT") (TSX:RMM.UN) announced today that it has closed a new financing of approximately $5 million, at an interest rate of 5.75%, on 1480 / 1490 Dundas St. East, Mississauga, Ontario, one of four properties purchased in July 2008 from a vendor group represented by SmartCentres, and it has closed a new $5 million undrawn operating line secured on 1100 - 1170 Burnhamthorpe Road, Mississauga, Ontario. The REIT has also entered into a conditional agreement to sell Island Lakes Village and First Victoria Mall, both located in Manitoba, for approximately $7.3 million.

After the new financing the REIT has approximately $10 million in cash and approximately $15 million in undrawn operating lines. The REIT's leverage ratio, Debt to Gross Book Value, is now approximately 54.7% including unsecured debentures.

The proceeds of the refinancing were used to repay an outstanding mortgage on the property of approximately $0.65 million. The remaining funds as well as the funds available under the operating line will be used for general purposes including, as necessary, the funding of capital work at the REIT's properties to attract new tenants.

The agreement to sell the two assets in Manitoba is conditional upon the purchaser's due diligence and is expected to close in Mid-June 2009. As previously announced, the REIT initiated an extensive review of its portfolio with a view to repositioning and redeveloping certain properties, and these properties were identified as non-core and as such have been classified on the balance sheet as discontinued properties for a number of quarters.

David Fiume Chief Executive Officer of the REIT said "These are two excellent properties, but they did not fit into the long term plans of the REIT and will be more effectively operated by local ownership and management. The proceeds of this sale will be used to ensure sufficient funds will be available to undertake the repositioning and redevelopment of other properties in the portfolio." Fiume continued, "We are pleased to have completed these financings in this difficult economic environment with two new lenders to the REIT. Seeking out and completing financings with new lenders has been key to our success of the refinancing. With a $10 million cash position and undrawn operating lines of $15 million we believe the REIT is in a good cash position, and based on our track record and on-going discussions with lenders we are cautiously optimistic that we will meet our financing targets for 2009."

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 commercial 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 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 x227
    (416) 741-7993 (FAX)
    dfiume@rmmreit.com