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NorthWest Healthcare Properties Real Estate Investment Trust Releases Third Quarter Results
TORONTO, Nov. 11, 2010 (Canada NewsWire via COMTEX) -- NorthWest Healthcare Properties Real Estate Investment Trust (the "REIT") (TSX: NWH.UN), Canada's largest non-government owner and operator of medical office buildings and healthcare real estate, today announced its results for the three month period ended September 30, 2010 and the period that commenced March 25, 2010, the date of its initial public offering ("IPO"), and ended September 30, 2010. The REIT had no operations prior to March 25, 2010. For 2010 the REIT will be comparing its results to the 2010 Forecast of Financial Information ("FOFI") disclosed in the REIT's offering prospectus dated March 16, 2010 ("Prospectus") which is available on the SEDAR website at www.sedar.com.
Highlights of the Quarter:
-- On July 7, 2010 the REIT closed the acquisition of a newly
constructed, multi-tenant medical office building, Queen Street
Place, in Spruce Grove Alberta (near Edmonton) for
approximately $21.2 million. Queen Street Place is the dominant
medical building in its market and is the REIT's third asset in
the Edmonton market. Subsequent to the acquisition, the REIT
completed a $14 million first mortgage financing on the
property with a 10 year term at a fixed interest rate of
-- On September 1, 2010, the REIT closed the acquisition of a
117,000 square foot property portfolio of two buildings in the
Montreal and Quebec City areas respectively, for a total
purchase price of approximately $21.7 million, subject to
adjustments. Both properties are fully leased to government
tenants, newly constructed, and collectively have an average
remaining lease term of approximately 12.7 years. The REIT
assumed first mortgages on the properties totaling $13.3
million with fixed interest rates of 4.91%, maturing April
2014, as part of the transaction.
-- Quarter-end debt to gross book value ratio of 56%.
-- Operating Results and AFFO generally in line with FOFI.
-- Quarter-end occupancy rate of 90.4%, with current contracted
occupancy rate of 91.7%
-- The REIT has completed 83% of all renewal leasing and 65% of
all new leasing budgeted for the calendar year 2010.
-- Solid progress on head lease space, with 43% of the total head
lease space, including 72% (36,714 sf) of Rockyview
Professional Centre II in Calgary and 25% (7,346 sf) of
HealthPark in Sydney, currently leased or conditionally leased
to third party tenants.
-- Distributions paid at the monthly rate of $0.06667 per unit
consistent with annualized target of $0.80 per unit.
-- Continued focus on strong acquisition pipeline, including
several potential transactions currently under review.
-- The REIT approved and implemented a distribution reinvestment
plan (the "DRIP") that took effect on September 15, 2010 to
those unitholders of record on August 31, 2010 who enrolled in
the DRIP. Participants in the DRIP have their cash
distributions used to purchase units of the REIT and also
receive a "bonus distribution" of units equal in value to 3% of
-- Subsequent to the quarter, the REIT announced the acquisition
of Glenmore Professional Center located in Calgary, Alberta
which is expected to close in the fourth quarter of 2010, and
is expected to be immediately accretive. Glenmore Professional
Center is a modern 137,800 square foot class A suburban office
building completed in 2007. The REIT will acquire 100% of the
shares/units of the registered and beneficial owners of
Glenmore Professional Centre for a purchase price of
approximately $29.45 million, subject to the usual adjustments.
The purchase values the building at approximately $65.5
million, less the assumption of an existing mortgage of
approximately $39 million at 5.65% which matures March 31,
2011, plus $2.95 million for a development parcel located
immediately adjacent to the building. The purchase price is
expected to be settled 50% in cash and 50% in Class B LP Units
and REIT units.
-- Subsequent to the quarter the REIT announced the acquisition of
the Alexander Medical Building, located in Peterborough,
Ontario. The purchase is expected to close in the fourth
quarter of 2010, and is expected to be immediately accretive.
Alexander Medical Building is prominent in its market with a
location near the recently-built Peterborough Regional
Hospital. It is a 30,500 square foot, multi-tenant medical
building that is 95% occupied with a strong tenancy mix which
includes: specialist physicians, general practitioners, a
diagnostic imaging facility, a blood laboratory, a pharmacy and
other medically-related tenants. The total purchase price is
expected to be approximately $8.6 million, subject to
adjustments. The property will be acquired free and clear of
-- Subsequent to the quarter the REIT closed a follow-on equity
offering of 6,495,000 trust units at a price of $11.55 per unit
representing gross proceeds of approximately $75.0 million. The
net proceeds after underwriting and other fees are expected to
be approximately $71.4 million. The REIT also granted the
underwriters an over-allotment option to purchase up to an
additional 974,250 units at the same offering price, which was
exercised in full and then closed on November 5, 2010,
generating additional net proceeds of approximately $10.8
Selected Financial Information:
(unaudited) Three Months Ended Three Months Ended
($000's, except unit and per unit June 30, 2010 September 30, 2010
Revenue 19,801 21,234
Net Operating Income 11,725 11,978
Funds from Operations ("FFO") 6,998 7,234
Adjusted Funds from Operations 5,212 5,566
Debt to Gross Book Value 52.9 % 56.0%
Per unit data (Annualized, fully
FFO $1.06 $1.09
AFFO $0.79 $0.84
Distributions $0.80 $0.80
AFFO Payout ratio 101.7 % 95.2%
((1) )AFFO amounts are calculated utilizing leasing and capital reserves of the 6% of revenue as reflected in the IPO Prospectus.
"With nearly $120 million of completed or soon-to-be-completed acquisitions, a strong acquisition pipeline, continued progress against our leasing targets and the positive market reaction to the REIT's recent follow-on equity issuance, the REIT continues to be well positioned to achieve its objectives of creating unitholder value through growth by way of acquisitions and by maximizing net income from the existing portfolio," said Peter Riggin, CEO.
The REIT ended its second quarter with a debt ratio of 56%, all comprised of fixed-rate mortgages plus amounts drawn upon the Credit Facility. The weighted average interest rate on the debt is 5.53%. Mortgage refinancing for the next two years is negligible with only one mortgage of $1.4 million scheduled to mature in 2010, and no mortgages scheduled to mature in 2011 other than in relation to the prospective Glenmore Professional Centre acquisition. The REIT's credit facility had $16.5 million drawn at quarter end, originally drawn upon closing of the acquisition of Queen Street Place when the REIT elected not to assume the vendor's existing debt, but subsequent to quarter end the facility was paid down in full.
The non-GAAP measures used in this press release, such as FFO and AFFO, are key financial measures used by the real estate industry to measure and compare the operating performance of real estate companies, but they do not have any standardized meaning prescribed by Canadian generally accepted accounting principles ("GAAP"). As such, they are unlikely to be comparable to similar measures presented by other real estate companies. These non-GAAP measures are more fully defined and discussed in the REIT's management discussion and analysis (the "MD&A") for the third quarter of 2010, which is available on the SEDAR website at www.sedar.com. Also on SEDAR are the interim financial statements of the REIT.
This press release may contain forward-looking statements with respect to the REIT, its operations, strategy, financial performance and condition. These statements generally can be identified by use of forward-looking words such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe", or "continue" or the negative thereof or similar variations. The REIT's actual results and performance discussed herein could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations, including that the transactions contemplated herein are completed. Important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulations and the factors described under "Risk Factors" in REIT's Prospectus and the risks and uncertainties set out in the MD&A which are available on www.sedar.com. These cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release, and, except as expressly required by applicable law, the REIT assumes no obligation to update such statements.
The REIT invites you to participate in its conference call with senior management to discuss our second quarter 2010 results on Friday, November 12, 2010 at 11:00 a.m. (Eastern).
The conference call can be accessed by dialing (416) 800-1066 or 1-866-212-4491.
Audio replay is available until November 19, 2010 by dialing 1-866-583-1035 and entering access code 3240582, followed by the number sign.
The webcast of the conference call can be accessed from the "Investor Relations" page of the REIT's web site at www.nwhp.ca, and will be archived for 30 days.
SOURCE: NorthWest Healthcare Properties Real Estate Investment Trust
Ernie Spraggs, CFO (416) 366-2000 ext. 262, or www.nwhp.ca