WPT Industrial REIT announces first quarter 2016 results

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WPT Industrial REIT announces first quarter 2016 results

Canada NewsWire

TORONTO, May 12, 2016 /CNW/ - WPT Industrial Real Estate Investment Trust (the "REIT") (TSX: WIR.U - OTCQX: WPTIF) announced today its results for the three months ended March 31, 2016. All dollar amounts are stated in U.S. funds.


  • Occupancy strong at 98.0% at March 31, 2016
  • Revenues increased due to the contribution of the 2015 acquisitions and increased average rents when compared to the same period last year
  • AFFO up 7.2% to $7.2 million and AFFO per Unit up 2.9% over 2015 driven by portfolio growth and strong operating performance
  • Key lease renewed with the REIT's sixth largest tenant, CEVA Logistics U.S. Inc.
  • Revolving credit facility extended for three years

"We continue to benefit from the accretive acquisitions completed last year and our solid operating performance across the property portfolio," commented Scott Frederiksen, Chief Executive Officer. "Looking ahead, we continue to evaluate potential acquisition and development opportunities, as we look for further growth through the remainder of the year." 

For the three months ended March 31, 2016, investment properties revenue was $17.6 million compared to $16.4 million in the same period last year. The increase is primarily due to the full quarter's contribution of the acquisition of a portfolio of six properties in Memphis, Tennessee on February 20, 2015, as well as an increase in base rent and higher recoveries of operating expenses.  With the increase in revenues, Net Operating Income ("NOI") rose 4.6% to $13.0 million compared to $12.5 million in the same period last year.

Funds from Operations ("FFO") for the three months ended March 31, 2016 was $7.5 million ($0.223 per Unit) compared to $8.0 million ($0.247 per Unit) in the same period last year. FFO in the first quarter of 2016 includes approximately $0.6 million in costs associated with the REIT's strategic review process, completed in January 2016. Not including these costs, FFO would have been approximately $8.1 million ($0.241 per Unit) for the three months ended March 31, 2016. The REIT does not expect to incur further costs related to the strategic review process.

Adjusted Funds from Operations ("AFFO") for the three months ended March 31, 2016 was $7.2 million ($0.213 per Unit) compared to $6.7 million ($0.207 per Unit) in the same period last year. The REIT's AFFO payout ratio was 89.3% for the three months ended March 31, 2016 compared to 88.1% in the same period last year.

As at March 31, 2016 the REIT's debt-to-gross-book-value ratio was a conservative 48.2% with an interest coverage ratio of 3.3 times, a debt-to-EBITDA ratio of 8.1 times, and a fixed charge coverage ratio of 2.9 times, all consistent or improved from the prior year end. The weighted average effective interest rate on its outstanding debt was 3.8%, consistent with the prior year end. The weighted average term to maturity on its mortgages payable was 4.7 years at March 31, 2016, with a weighted average remaining lease term of 3.8 years.

As at March 31, 2016, availability on the REIT's revolving credit facility was $75.0 million, of which the REIT had drawn $46.0 million, leaving remaining availability of $29.0 million.

On April 21, 2016 the REIT announced that it had renewed a 648,750 square foot lease with CEVA Logistics U.S. Inc., a leading supply chain company and one of the REIT's top-ten tenants, located at 5166 Pleasant Hill Drive, Memphis, Tennessee. The original lease term, set to expire on May 31, 2016, has been renewed for a period of three years, expiring May 31, 2019, with contractual rent increasing 2.4% per square foot beginning June 1, 2016 and annual escalations of 1.5% thereafter. In connection with the lease renewal, the tenant has the right to terminate in May 2017 with six months prior notice and payment of a termination penalty.

On April 21, 2016, the REIT amended and extended its revolving credit facility, thereby increasing availability from $75,000 to $100,000 (subject to requisite borrowing base collateral) and extending the term for a period of three years maturing on April 21, 2019. The revolving credit facility continues to include an accordion feature which could increase the facility to $200,000. The REIT has the option to extend the revolving credit facility for an additional one-year period. The REIT's availability on the revolving credit facility on April 21, 2016 was $77.6 million, of which the REIT has drawn $46.0 million, leaving remaining availability of $31.6 million.

(in thousands of USD, except per Unit amounts)

As at and for the quarter ended March 31,



Operating Results:

Investment properties revenue





NOI (1)



Net income (loss) and comprehensive income (loss)



FFO (1) (2)



AFFO (1) (3)



FFO per Unit (1) (4) (5) (6)



AFFO per Unit (1) (4) (5)




Distributions per Unit (4) (5) (7)



Distributions declared (5) (7)



AFFO payout ratio (1) (7)



Weighted average number of Units (4) (5)




As at

March 31, 2016

December 31, 2015

March 31, 2015

Operational Information:

Number of investment properties












Average remaining lease term (years)




Fair value of investment properties








Weighted average effective interest rate (8)




Variable interest rate debt as percentage of total debt (9)




Debt-to-gross book value (1)




Interest coverage ratio (1)




Fixed charge coverage ratio (1) 




Debt to EBITDA (1)





NOI, FFO, AFFO, FFO per Unit, AFFO per Unit, AFFO payout ratio, EBITDA, debt-to-gross book value, interest coverage ratio, fixed charge coverage ratio and debt to EBITDA are key measures of performance used by real estate operating companies, however, they are not defined by IFRS, do not have standard meanings and may not be comparable with other industries or trusts.  This data should be read in conjunction with the "Non-IFRS Measures" section of the REIT's MD&A.


Reconciliations of FFO to net income (loss) can be found in the "Financial and Operational Highlights" section of the REIT's MD&A.  


Reconciliations of AFFO to FFO can be found in the "Financial and Operational Highlights" section of the REIT's MD&A.


Includes REIT Units and Class B Units (collectively, the "Units").


Excludes options and DTUs outstanding under the REIT's equity compensation plans.


Excluding strategic process expenses, FFO per Unit (basic) would have been $0.241 for the three months ended March 31, 2016.


Includes distributions on REIT Units and Class B Units.


Includes mortgages payable, the revolving credit facility, mark-to-market adjustments and financing costs.


Includes amounts outstanding under the revolving credit facility.


A conference call will be hosted by the REIT's management team on Friday, May 13, 2016 at 10:00 am Eastern Time.  The telephone numbers to participate in the conference call are Canada Toll Free: (855) 669-9657, U.S. Toll Free (888) 249-8268 and International: (412) 902-4153.  The live audio conference call will also be available as a webcast.  To access the live audio webcast please access the link on the "Investors" page on our web site at www.wptreit.com.  The telephone numbers to listen to the call after it is completed (Instant Replay) are Canada Toll Free (855) 669-9658, U.S. Toll Free (877) 344-7529 and International (412) 317-0088. The Passcode for the Instant Replay is 10083581#. A recording of the call will also be archived on the REIT's web site at www.wptreit.com.

The REIT will hold its Annual and Special Meeting of the REIT's Unitholders on Friday, May 13, 2016 at 1:00 pm Eastern Time, at 333 Bay Street, Suite 3400, Toronto, Ontario M5H 2S7.

About WPT Industrial Real Estate Investment Trust
WPT Industrial Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. The REIT has been formed to own and operate an institutional-quality portfolio of primarily industrial properties located in the United States, with a particular focus on distribution industrial real estate. WPT Industrial, LP (the REIT's operating subsidiary) indirectly owns a portfolio of properties consisting of approximately 15.1 million square feet of gross leasable area, comprised of 46 industrial properties and two office properties located in 13 states in the United States. The REIT pays monthly cash distributions, currently at $0.0633 per Unit, or approximately $0.76 per Unit on an annualized basis, in US funds.

Forward-Looking Statements
This press release contains "forward-looking information" as defined under applicable Canadian securities law ("forward-looking information" or "forward-looking statements") which reflect management's expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the REIT. The words "plans", "expects", "does not expect", "scheduled", "estimates", "intends", "anticipates", "does not anticipate", "projects", "believes" or variations of such words and phrases or statements to the effect that certain actions, events or results "may", "will", "could", "would", "might", "occur", "be achieved" or "continue" and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management of the REIT as of the date of this press release, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The REIT's estimates, beliefs and assumptions, which may prove to be incorrect, include the various assumptions set forth herein, including, but not limited to, the REIT's and the property's future growth potential, anticipated amounts of expenses, results of operations, future prospects and opportunities, the demographic and industry trends remaining unchanged, no change in legislative or regulatory matters, future levels of indebtedness, the tax laws as currently in effect remaining unchanged, the continual availability of capital, the current economic conditions remaining unchanged, and continued positive net absorption and declining vacancy rates in the markets in which the REIT's properties are located.

When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under "Risk Factors" in the REIT's annual information form for the year ended December 31, 2015, which is available under the REIT's profile on SEDAR at www.sedar.com. These forward-looking statements are made as of the date of this press release and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

SOURCE WPT Industrial Real Estate Investment Trust

Copyright CNW Group 2016

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