HIGHLIGHTS – June 30, 2011
• Increasing FFO – FFO per unit was
.33 for the second quarter of 2011, up 18% year-over-year, representing an FFO payout ratio of 85.6%.• Increasing AFFO – AFFO per unit was
.30 for the second quarter of 2011, up 25% year-over-year, representing an AFFO payout ratio of 93.9%.• Strong Same-Property NOI Growth – Same-property NOI growth of 2.7% (4.0% on a cash NOI basis) in the second quarter of 2011 as compared to the second quarter of 2010.• Increasing Occupancy – Occupancy rate increased to 97.3% at June 30, 2011, up 60bps from March 31, 2011 and up 140bps year-over-year.• Strong Leasing Performance – Over 62% of the 2011 leasing program has been completed at June 30, 2011, with rental rates increasing by an average of 22% on renewals and re-leases.• Improving Leverage – Debt to gross book value leverage ratio at June 30, 2011 was 54.1%, an improvement of 190bps from the leverage ratio of 56.0% at June 30, 2010.• Improving Interest Coverage – Interest coverage ratio for the second quarter of 2011 improved to 2.5x, a 19% increase over the 2.1x coverage ratio for the second quarter of 2010.• Successful Equity Offering – In the second quarter of 2011, Whiterock launched a $75 million public offering of units, to fund its equity share of identified and accretive property acquisitions amounting to $295 million (before closing costs). The equity offering was completed subsequent to June 30, 2011 and thereafter the underwriters’ exercised their over-allotment option for additional proceeds to Whiterock of $10.8 million, bringing the total raised to $85.8 million.• Successful Issue of Unsecured Debentures – In the second quarter of 2011, Whiterock issued its first series of senior unsecured non-convertible debentures for $35 million in principal amount with a 5-year term and a coupon of 5.95%. The use of proceeds was to fund the early repayment of an outstanding series of convertible debentures, to fund identified and accretive property acquisitions, and to pay down acquisition and operating facilities.• Growing Portfolio of Properties – In the second quarter of 2011, Whiterock completed the acquisition of $73 million (before closing costs) of properties in British Columbia, consisting of a Class A office building and a grocery-anchored retail centre. Subsequent to June 30, 2011, Whiterock completed the acquisition of $218 million (before closing costs) of Class A office properties in Ontario and announced the acquisition of $77 million of Class A office and industrial properties in the United States.• New Deferred Compensation Plan – Subsequent to June 30, 2011, the Board of Trustees approved a new deferred compensation plan for the CEO, to promote greater alignment of interests between the CEO and unitholders. The plan will be structured as an equity performance unit plan, whereby 33% of the CEO’s bonus compensation will be awarded in the form of equity that will be deferred over 3 years. The value of this deferred equity will be directly based on the unit price and settlement will be in cash. Management anticipates that the plan will be implemented in the third quarter of 2011.Whiterock enjoyed the same strong pace of acquisitions and growth in the second quarter of 2011 that it experienced in the first quarter of 2011 and throughout 2010. In the second quarter of 2011, and subsequent thereto, we further improved the quality, stability, and diversity of our cash flows through the completed acquisitions of the British Columbia and Ontario properties. We continue to maintain strong occupancies, increase our in-place rents, and position ourselves to take advantage of higher market RENTS