Retrocom Mid-Market REIT Announces 2009 Annual Financial Results

TORONTO, ONTARIO--(Marketwire - March 4, 2010) -

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

Retrocom Mid-Market Real Estate Investment Trust (TSX:RMM.UN) announced today its financial results for the year ended December 31, 2009.

Highlights

- Net Operating Income ("NOI") for the year ended December 31, 2009 was $31.5 million, an increase of $1.0 million or 3.3% over $30.5 million in 2008. The increase mainly relates to the full year impact of the July 2008 acquisition. Same-property NOI was $26.6 million for 2009 compared to $28.0 million for the prior year. The decrease mainly relates to vacancies due to tenant insolvencies and previously announced adjustments due to GROC Caps (gross occupancy cost caps, in which a tenant's exposure to gross rent costs for a property are capped at a predetermined percentage of their sales).

- FFO for the year ended December 31, 2009 was $13.7 million ($0.49 per unit, adjusted for non-controlling interest), compared to $11.7 million ($0.51 per unit, adjusted for non-controlling interest) for the year ended December 31, 2008. The FFO payout ratio for 2009 was 91%. After adjusting for the $2.4 million ($0.09 per unit) acquisition transaction cost incurred in 2008, FFO decreased by $0.4 million. This is the net result of higher NOI of $1.0 million from continuing properties, offset by increased trust expense of $0.3 million mainly relating to the cost of IFRS conversion project, increased interest expense of $1.0 million due to higher mortgage amount and the impact of property disposition in 2009 of $0.1 million.

- Our portfolio was leased at 89.9% at 2009 year-end, as compared to 90.2% at the end of Q3 2009 and 92.5% at 2008 year-end.

- Debt financing was one of the REIT's main focuses in 2009. We successfully renewed, refinanced or put in place new debt of over $60 million. We also renewed the operating line with a maximum availability of $10 million. At the end of 2009, the REIT's average cost of mortgage debt was 6.19%, as compared to 6.25% at the end of 2008.

- The REIT successfully managed to maintain a strong balance sheet and excellent liquidity position. At the end of 2009, leverage ratio remained conservative at 54.5% inclusive of all debentures and mortgages, as compared to 70% allowed under our Trust Indenture. As of December 31, 2009, the REIT had cash on hand of approximately $15.6 million and close to $10 million available under our operating line.

David Fiume, President and CEO of the REIT, said, "We see the signs of a recovery in the leasing market and remain cautiously optimistic that this activity will begin to take hold at our centres. Although the timing of increased activity is difficult to predict, we believe we are in a good position to capitalize on growth through lease up, and later, through future redevelopment opportunities in our existing portfolio."

Financial Highlights


(all amounts in   Three months   Three months           Year           Year
 $000's , except  ended Dec 31   ended Dec 31   ended Dec 31   ended Dec 31
 per unit amounts
 and ratios)           2009 (1)       2008 (1)       2009 (1)       2008 (1)
----------------------------------------------------------------------------
Rental revenue
 and other income       15,795         15,709         60,567         57,449
Property
 operating
 expenses                7,413          7,204         29,112         26,943
                 -----------------------------------------------------------
Net operating
 income (2)              8,382          8,505         31,455         30,506
Transaction-related
 costs                       -              -              -          2,400
Trust expenses             929            731          3,360          3,050
                 -----------------------------------------------------------
Income before
 interest,
 depreciation &
 amortization            7,453          7,774         28,095         25,056
Interest                 3,740          3,735         14,692         13,779
Depreciation &
 amortization            5,204          5,211         20,324         19,265
Impairment of
 income-producing
 property                    -          1,000              -          1,000
                 -----------------------------------------------------------
Loss before
 income tax,
 non-controlling
 interest and
 discontinued
 operations             (1,491)        (2,172)        (6,921)        (8,988)
Future income
 tax recovery                -          1,510          2,093          1,510
                 -----------------------------------------------------------
Loss before
 non-controlling
 interest and
 discontinued
 operations             (1,491)          (662)        (4,828)        (7,478)
Non-controlling
 interest                  492            219          2,284          1,462
                 -----------------------------------------------------------
Loss before
 discontinued
 operations               (999)          (443)        (2,544)        (6,016)
Discontinued
 operations                 21             57          1,415            (85)
                 -----------------------------------------------------------
Loss                      (978)          (386)        (1,129)        (6,101)
Funds From
 Operations (FFO)(3)     3,745          4,161         13,651         11,693
FFO per Unit
 (adjusted for
 conversion of
 non-controlling
 interest)                0.14           0.15           0.49           0.51
Transaction
 related costs
 expensed per
 unit (4)                                                              0.09
                                                                ------------
                                                                       0.60
FFO payout ratio
 based on accrued
 distributions            0.83           0.75           0.91           1.01
Distributions
 -accrual basis          3,108          3,108         12,433         11,772


Full Financial Results will be available on SEDAR (www.sedar.com) as well as
the Investors Relations section of the REIT's website
(http://www.rmmreit.com/investor_finance.htm).


(1) Based on unaudited financial statements, results of 2008 have been
    restated to reflect a change in accounting policy that was adopted on a
    retrospective basis.


(2) A non generally accepted accounting principle ("GAAP") measurement,
    calculated by the Trust as rental revenue (net rents, property tax and
    operating cost recoveries, as well as other miscellaneous income from
    tenants) less operating expenses from rental properties.


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


(4) In Q3 2008, the REIT recorded one-time acquisition cost of $2.4 million
    or $0.09 per unit related to the acquisition of the four properties.
    Full discussion of the transaction are included in the REIT's MD&A

The REIT's management considers Net Operating Income and Funds From Operations to be indicative measures in evaluating the REIT's performance. The table above 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.

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.

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