Construction/Building — November 8, 2012

Retrocom REIT Announces Third Quarter 2012 Results

TORONTO, ONTARIO--(Marketwire - Nov. 8, 2012) -

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) today announced results for the third quarter ended September 30, 2012.

Highlights

  • Net operating income for the three and nine months ended September 30, 2012 was $11.3 million and $33.5 million, representing increases of 4.1% and 9.5% over comparative periods in 2011.
  • Funds from Operations, adjusted ("FFO, adjusted") for the three and nine months ended September 30, 2012 was $5.5 million and $16.2 million, representing increases of 8.4% and 30.9% over comparative periods in 2011.
  • Debt to Gross Book Value ratio as at September 30, 2012 has decreased to 53.0% from 56.2% at December 31, 2011.
  • The REIT entered into a binding agreement with Canadian Tire to lease 135,000 square feet at Southland Mall, representing 2.6% of the portfolio GLA. Canadian Tire Corporation will operate four separate stores under the Canadian Tire, Sport Chek, Mark's, and Atmosphere banners. The REIT also plans a $6 million renovation of the property.
  • In place occupancy on September 30, 2012 was 88.1% and committed occupancy was 92.1%.
  • The REIT has entered into an agreement to sell to a syndicate of underwriters 7,150,000 trust units for gross proceeds of $40.0 million plus over-allotment option, exercisable for a period of 30 days following closing.
  • The REIT has agreed to acquire three investment properties consisting of 247,000 square feet of GLA for $61.4 million. Closing is expected in December 2012.

Richard Michaeloff, President and CEO of the REIT, said, "Our third quarter financial results are in line with our expectations and continue to trend positively. The addition of four new Canadian Tire banners, together with the pad development and revitalization project, will position Southland Mall to continue contributing to our growth. In addition, the soon to be completed acquisition of three quality properties will further enhance our portfolio with well leased assets producing stable cash flow. We will continue to seek opportunities to improve our portfolio wherever possible."

Financial Highlights
(all amounts in $000's, except per unit amounts and ratios) Three months
ended
Sept 30
2012
Three months
ended
Sept 30
2011
Nine months
ended
Sept 30
2012
Nine months
ended
Sept 30
2011
Rental revenue and other income 19,974 19,791 59,672 57,642
Property operating expenses 8,916 8,889 26,950 27,100
Property operating income 11,058 10,902 32,722 30,542
Share of joint venture net operating income 286 - 732 -
Net operating income (1) 11,344 10,902 33,454 30,542
Trust expenses 1,039 1,141 3,032 3,419
Transaction costs on issuance of convertible debentures - 16 - 1,973
Finance costs - joint venture operations 59 - 112 -
Finance costs-operations 4,737 5,003 14,207 15,116
Finance costs-distributions on Class B Units 1,025 1,025 3,075 3,075
Income before fair value gains (losses) and other income 4,484 3,717 13,028 6,959
Fair value gains (losses) associated with financial instrument (7,790 ) 17,685 (10,276 ) 9,170
Fair value gain (losses) on investment property 11,203 (26 ) 18,719 (3,438 )
Fair value gains (losses) on participant's rights under LTIP (56 ) 252 (34 ) 229
Fair value gains (losses) on joint venture property 1,100 (135 ) 629 (135 )
Loss from sale of investment property - - (105 ) -
Other income settlement 1,090 - 1,090 -
Income for the period 10,031 21,493 23,051 12,785
FFO, adjusted (2) 5,483 5,060 16,152 12,343
FFO, adjusted per unit 0.110 0.114 0.330 0.303
FFO, adjusted payout ratio 102.3 % 98.7 % 102.3 % 111.4 %
Distributions per unit 0.1125 0.1125 0.3375 0.3375

Full Financial Results and MD&A will be available on SEDAR (www.sedar.com) as well as the Investors Relations section of the REIT's website (www.rmmreit.com).

(1) A non-IFRS measurement, calculated by the REIT as rental revenue (net rents, property tax and operating cost recoveries, as well as other miscellaneous income from tenants) less operating expenses for properties.
(2) The reconciliations from net income (loss) to Funds from Operations, adjusted are included in the REIT's MD&A.

The REIT's management considers Net Operating Income, Funds from Operations, Funds from Operations, adjusted, and Debt to Gross Book Value ratio to be indicative measures in evaluating the REIT's performance. The table above includes non-IFRS information that should not be construed as an alternative to net income 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 IFRS.

Conference Call

Retrocom REIT will hold a conference call on Friday, November 9, 2012 at 12:00 noon (ET). Participating on the call will be members of the REIT's senior management.

Investors are invited to access the call by dialling 416-644-3418 or 1-800-814-4861. You will be required to identify yourself and the organization on whose behalf you are participating. A recording of this call will be made available Friday, November 9, 2012 beginning around 2:00 pm (ET) through to Friday, November 27, 2012. To access the recording, please call 416-640-1917 or 1-877-289-8525 and use the reservation number 4571160#.

About Retrocom REIT

Retrocom REIT is an unincorporated, open-end real estate investment trust which focuses on owning and acquiring retail properties across Canada with the goal of enhancing long-term Unitholder value.

Forward-Looking Information

This press release may contain forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", and by discussions of strategies that involve risks and uncertainties. The forward-looking statements are based on certain key expectations and assumptions made by the REIT. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Although management of the REIT believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that future results, levels of activity, performance or achievements will occur as anticipated. Neither the REIT nor any other person assumes responsibility for the accuracy and completeness of any forward-looking statements, and no one has any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or such other factors which affect this information, except as required by law.

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 Real Estate Investment Trust
Richard Michaeloff
Chief Executive Officer
(416) 741-7999
(416) 741-7993 (FAX)
rmichaeloff@rmmreit.com
www.rmmreit.com

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