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Press release from CNW Group

Morguard Real Estate Investment Trust Announces 2010 Third Quarter Results

Friday, October 29, 2010

Morguard Real Estate Investment Trust Announces 2010 Third Quarter Results17:52 EDT Friday, October 29, 2010MISSISSAUGA, ON, Oct. 29 /CNW/ - Morguard Real Estate Investment Trust ("the Trust") (TSX: MRT.UN) today announced its financial results for the three months and nine months ended September 30, 2010 ("Q3").Morguard REIT's Q3 2010 Financial Statements, and Management's Discussion and Analysis along with its 2009 Annual Report are available on Morguard REIT's website at and have been filed with SEDAR at operating income for Q3 2010 was $30.9 million compared to $27.2 million for the same period in 2009.Net income for Q3 2010 totaled $6.4 million or $0.12 per unit compared to $3.5 million or $0.06 per unit for the same period in 2009.  Net income for Q3 2009 was affected by a $4.1 million charge for issue costs related to the Trust's $103.5 million issue of 6.50% convertible unsecured subordinated debentures completed on September 22, 2009.Recurring distributable income ("RDI") totaled to $15.4 million or $0.27 per unit (basic and diluted) compared to $14.1 million or $0.25 per unit (basic and diluted) for the same period in 2009.Funds from operations ("FFO") increased to $17.8 million or $0.31 per unit (basic) and $0.30 per unit (diluted) compared to $12.4 million or $0.22 per unit (basic and diluted) for the same period in 2009.Overall portfolio occupancy levels were at 94%.Net Income(In thousands of dollars, except per-unit amounts)For the three months ended September 30, 2010 2009    Income from real estate properties$ 55,396$ 49,582Property operating income30,94727,214   Net income for the period from continuing operations6,4173,294Income for the period from discontinued operations—233Net income for the period$ 6,417$ 3,527   Net income per unit (basic and diluted) Continuing operations$ 0.12$ 0.06 Discontinued operations—— $ 0.12$ 0.06Distributable IncomeDistributable income is net income after adjusting for the amortization of buildings and intangible assets, accretion and issue costs of convertible debentures and providing for any reserves, provisions and allowances established by the Board of Trustees ("Trustees") of the Trust plus any amount the Trustees, in their discretion, determine to be appropriate.RDI is distributable income excluding gain or loss on sale of real estate properties, unusual or non-recurring items and provisions for diminution in value of real estate properties.  Distributed income, which is income distributed to unitholders, is expressed as a percentage of RDI to arrive at a payout ratio.The following table outlines the Trust's distributable income, recurring distributable income and payout ratios for the three months ended September 30, 2010 and 2009.(In thousands of dollars, except per-unit amounts and percentages)For the three months ended September 30,20102009   Net income for the period$     6,417$     3,527   Add/(deduct)  Amortization - buildings6,9905,941Amortization - intangibles2,129925Amortization - above/(below) market-rate leases, net(277)(213)Amortization - stepped rents(152)(237)Accretion of convertible debentures33223Issue costs - convertible debentures—4,145   Recurring distributable income$    15,439$   14,111   Distributed income$    12,793$   12,936   Payout ratio:       Recurring distributable income82.9%91.7%   Recurring distributable income - per unit (basic)$       0.27$      0.25Recurring distributable income - per unit (diluted)$       0.27$      0.25   Weighted average number of units - (basic) (in thousands)56,85257,498Weighted average number of units - (diluted) (in thousands)64,24557,704Funds from OperationsThe real estate industry has adopted a measure of FFO to supplement net income as an operating performance measurement.  The Trust's calculation of FFO is consistent with the definition provided by the Real Property Association of Canada ("REALPac").FFO is defined as net income adjusted for amortization of buildings, leasehold improvements, intangible items, deferred leasing costs, accretion of convertible debentures and any gain or loss on sale of real estate properties as well as any provisions against capital.  FFO per unit is calculated by dividing FFO attributable to unitholders by the weighted average number of units outstanding for the period.FFO was calculated as follows:Three months ended,September 30, 2010September 30, 2009(In thousands of dollars,except per-unit amounts)ContinuingDiscontinued ContinuingDiscontinued OperationsOperationsTotalOperationsOperationsTotal       Net income for the period$    6,417$     —$   6,417$     3,294$      233$   3,527       Add/(deduct) items not affecting cash:    Amortization - buildings6,990—6,9905,871705,941Amortization - leasehold improvements1,395—1,3951,46661,472Amortization - intangibles2,129—2,129925—925Amortization - deferred leasing costs547—5475545559Accretion of convertible debentures332—33223—23Funds from operations$   17,810$     —$  17,810$    12,133$      314$  12,447       Funds from operations      per unit (basic)$      0.31$      —$     0.31$        0.21$     0.01$     0.22Funds from operations      per unit (diluted)$      0.30$      —$     0.30$        0.21$     0.01$     0.22Readers are cautioned that although the terms "Operating Income", "Funds from Operations", "Distributable Income" and "Recurring Distributable Income" are commonly used to measure, compare and explain the operating and financial performance of Canadian real estate investment trusts and such terms are defined in the Management's Discussion and Analysis, such terms are not recognized terms under Canadian generally accepted accounting principles.  Such terms do not necessarily have a standardized meaning and may not be comparable to similarly titled measures presented by the other publicly traded entities.Morguard is a closed-end real estate investment trust, which owns a diversified portfolio of 50149 retail, office, and mixed-use properties in Canada with a book value of $1.23 billion and approximately 78.937 million square feet of leasable space.  For more information, visit the Trust's website at further information: Rai Sahi, President and Chief Executive Officer, Tel: 905.281.4800, or; Tim Walker, Vice President and Chief Financial Officer, Tel: 905.281.4800