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Whiterock REIT Announces All-Time High AFFO Run Rate Following Completion of $112 Million in Acquisitions

^{Published on 2011-03-08 04:10:41 - Market Wire}
 

TORONTO, March 8 /CNW/ - Whiterock Real Estate Investment Trust (TSX: WRK.UN), a growth oriented REIT with a significant presence in major Canadian markets, announced that it has closed the $19.3 million (before closing costs) acquisition of 2010 Winston Park Drive. This now completes the previously-announced acquisitions of office and industrial buildings located in the Greater Toronto Area (GTA) and Montréal for an aggregate purchase price of $112 million (before closing costs). Approximately $96 million of the $112 million in acquisitions were purchased in a co-ownership with Return on Innovation Capital Ltd. ("ROI Capital Ltd.") with Whiterock owning a 40% interest and providing property management for all buildings.

As previously announced, management expects these acquisitions, along with refinancings, to add $0.06 per unit (or $0.09 on a pre-split basis) to Whiterock's annualized ongoing AFFO. The full impact of this expected increase to AFFO should be realized starting in the second quarter of 2011. The average cap rate on the assets is 7.8% and the average interest rate on Whiterock's share of the first mortgages and refinancings is approximately 4.4%.

Based on historic performance, if the full impact of Whiterock's completed acquisitions and refinancings to date were added to Q3/2010's AFFO run rate, Whiterock's annualized pro-forma AFFO run rate would become $1.16 (or $1.74 on a pre-split basis), an all-time high.

Property Description

The GTA and Montréal portfolio acquisitions consist of multi-tenant office and single tenant industrial buildings that represent a combined 960,000 square feet and offer excellent visibility, a diverse tenant base and easy access to major arterial highways. The average remaining lease term across the assets is approximately 10 years.

2010 Winston Park Drive is a five storey, 80,000 square foot office building that is 100% leased with an average remaining lease term of 4.2 years. The property fronts the QEW (one of the GTA's major arterial highways) offering excellent access and visibility.

First mortgage debt on 2010 Winston Park Drive totals $13 million, a 67% loan-to-value ratio, with a five year term and a 4.29% interest rate. Whiterock's 40% equity investment in the property, net of the first mortgage debt and including closing costs, totals approximately $2.9 million. Whiterock used funds available under its credit facility to finance its investment.

A more complete description of the properties recently acquired can be found in the January 31, 2011 press release on Whiterock's website at [ www.whiterockreit.ca ].

With the completion of these acquisitions, Whiterock's wholly-owned, co-owned and managed aggregate real estate portfolio now totals approximately 7.7 million square feet across 74 properties.

Whiterock's co-owner in the GTA and Montréal acquisitions is ROI Capital Ltd., an investment firm based in Toronto that specializes in private placement investments, including a focus on high quality properties with visible growing cash flow streams backed by solid covenants and long term leases. With over $1 billion in assets, ROI Capital Ltd. is one of the fastest growing investment firms in Canada. 

Forward-Looking Statements

This news release contains "forward-looking statements" within the meaning of applicable securities legislation. These forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect" "estimate", "anticipate", "intend", "believe" or "continue", the negative forms thereof and similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. These statements are not guarantees of future events or performance and, by their nature, are based on Whiterock's estimates and assumptions, which are subject to known and unknown risks, uncertainties and other factors that may cause the actual events, results or prospects to be materially different from those expressed or implied herein. Readers are cautioned that a number of factors, including those discussed in the section entitled "Risk Factors" in Whiterock's Annual Information Form, which can be obtained at [ www.sedar.com ], could cause actual events, results or prospects to differ materially from those stated or implied. These factors should be considered carefully, and a reader should not place undue reliance on forward-looking statements, as there can be no assurance that actual events, results or prospects will be consistent with such statements. In particular, but without limitation, there can be no assurance that Whiterock will be to able to increase its AFFO. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include, but are not limited to: a relatively stable leasing environment, stable interest costs, limited dilution from conversion of convertible debentures; stable acquisition capitalization rates and available access to equity and debt capital markets to fund, at acceptable costs, Whiterock's future growth plans, and to enable Whiterock to refinance its debt as it matures.  In addition, historic performance is not necessarily indicative of future results.  Except as required by law, Whiterock does not undertake, and specifically disclaims, any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.