Press release from Marketwire
InterRent REIT Reports on Operations for First Quarter 2010
Thursday, May 06, 2010
InterRent REIT Reports on Operations for First Quarter 201019:57 EDT Thursday, May 06, 2010TORONTO, ONTARIO--(Marketwire - May 6, 2010) - NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATESInterRent Real Estate Investment Trust (TSX:IIP.UN)(TSX:IIP.DB) ("InterRent") today reported continued progress in the implementation of its strategic plan along with the financial results for the three months ended March 31, 2010 over the three months ended March 31, 2009. Highlights for the Three Months Ended March 31, 2010 -- In keeping with management's repositioning strategy, the average monthly rent for the quarter increased to $780 per unit from $758 a year ago. -- The capital investments in rental units and common areas over the last quarter are expected to positively impact the ability to achieve market rents, attract stable tenants and reduce vacancies. -- Operating revenues were $8.6 million, a 2.2% decrease over the three months ended March 31, 2009. This decrease is as a result of the decision of management to move to market rates and increased screening criteria for new tenants. -- Net Operating Income (NOI) decreased by 17.4% to $3.0 million over the three months ended March 31, 2009. Operating costs increased, primarily due to the property specific reorganizational expenses that began being implemented late in fiscal 2009 required to achieve market rents. -- Funds from Operations (FFO) was ($0.12) million, down from $0.5 million over the three months ended March 31, 2009. FFO per REIT unit was ($0.12) million for the three months ended March 31, 2010 compared to $0.03 in 2009. -- Distributable Income (DI) was ($0.65) million, or ($0.02) per unit compared to ($0.03) million, or ($0.00) per REIT unit over the three months ended March 31, 2009. Financial HighlightsIn 000's, except for per Unit Results from Continuing Operations for: For the three months ended March 31, 2010 March 31, 2009 Operating Revenues $8,604 $8,800 Net Operating Income (NOI) $2,974 $3,600 Net Income (Loss) before Amortization ($821) ($162) Net Loss from Continuing Operations ($2,618) ($2,203) Funds from Operations (FFO) ($119) $460 Funds from Operations per Unit ($0.00) $0.03 Distributable Income (DI) ($645) ($34) Distributable Income per Unit ($0.02) ($0.00) Weighted Average Units Outstanding 28,045,435 18,279,057 Results for the Three Months Ended March 31, 2010 Operating revenues were $8.6 million, a 2.2% decrease over the three months ended March 31, 2009. The decrease is consistent with management's strategic plan to move vacant units to market rent. Net Operating Income (NOI) decreased by 17.4% to $3.0 million over the three months ended March 31, 2009. Operating costs increased, primarily due to the property specific reorganizational expenses that management began implementing late in fiscal 2009 required to achieve market rents.Funds from Operations (FFO) was ($0.12) million, down from $0.46 million over the three months ended March 31, 2009. FFO per REIT unit was ($0.00) for the three months ended March 31, 2010 compared to $0.03 in 2009.Distributable income (DI) was ($0.65) million compared to ($0.03) million in the first quarter of 2009. DI per unit was ($0.02) per unit compared to ($0.00) per unit in the first quarter of 2009. Net same property revenues decreased by 2.4% to $8.2 million, from $8.4 million over the three months ended March 31, 2009. Same building NOI decreased to $2.9 million from $3.5 million over the three months ended March 31, 2009. "The implementation of management's strategic plan is well underway. The upgrades to property common areas and first impression upgrades will significantly impact our ability to achieve market rents, attract stable tenants and reduce vacancies" said Mike McGahan, Chief Executive Officer. InterRent continues to focus on investing in energy efficient devices including boilers as well as water and hydro saving devices. InterRent will be upgrading common areas throughout the portfolio in order to maximize the potential to increase rents on turnover throughout the portfolio. These investments help to drive down operational costs while benefiting the environment.In keeping with the management strategy of maximizing returns for unitholders and focusing on clusters of buildings within geographical proximity to each other in order to build operational efficiencies and attract focused, professional staff, properties are reviewed on a regular basis to determine if they should be kept or disposed of. In early May of 2010, 4 properties within the GTA were listed to be sold: 1471 King Street; 1485 King Street; 85 King Street and 166 Queens Street. The review and listing process will continue through Q2 and Q3.(i)Non-GAAP MeasuresInterRent 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 measurements most comparable to FFO and DI are 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 InterRentInterRent 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 4,033 apartment suites under ownership.Forward Looking StatementsThis 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.FOR FURTHER INFORMATION PLEASE CONTACT: InterRent REIT Mike McGahan Chief Executive Officer (416) 769-0769 Ext 239 (416) 769-9919 (FAX) firstname.lastname@example.org or InterRent REIT Curt Millar, CA Chief Financial Officer (416) 769-0769 (416) 769-9919 (FAX) email@example.com www.interrentreit.com The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.