Agellan Commercial Real Estate Investment Trust Releases Second Quarter Results

Agellan Commercial Real Estate Investment Trust Releases Second Quarter Results 
TORONTO, Aug. 2, 2013 /CNW/ - AGELLAN COMMERCIAL REAL ESTATE INVESTMENT TRUST 
(the "REIT") (TSX:ACR.UN) is pleased to report its financial results for the 
three and six month periods ended June 30, 2013. For 2013 the REIT will be 
comparing its results to the 2013 Forecast of Financial Information 
("Forecast") disclosed in the REIT's offering prospectus dated January 17, 
2013 ("Prospectus") which is available on the SEDAR website at www.sedar.com. 
Summary of Financial Information:  
FINANCIAL AND                     January 25, 2013          June 30, 2013
OPERATIONAL
HIGHLIGHTS
(in 000's) 
                                                                      
Summary of                                                               
Operational
Information 
Number of                                                                
Properties                                      23                     24 
Gross                                        4,210                  4,310
Leasable Area
("GLA") (in
000's) 
Occupancy %                                    91%                    92%
(Current) 
Average lease                                                            
term to                                        4.4                    4.5
maturity
(years) 


                                                                         

Summary of                                                               
Financial
Information

Gross Book                                $430,984               $480,674
Value

Debt                                      $243,695               $267,037

Debt to Gross                                  57%                    56%
Book Value

Interest                                       N/A                       
Coverage                                                              3.3

Weighted                                      4.0%                   3.8%
average
mortgage
interest rate
                                                                         
                         For the year to date period ending June 30, 2013
                  Actual                  Forecast               Variance

Total            $25,102                   $24,865                   $237
property and
property
related
revenue

Net Operating    $15,152                   $14,719                   $433
Income
("NOI")

Funds from        $9,853                    $9,374                   $479
Operations
("FFO")

Adjusted          $7,135                    $6,920                   $215
Funds from
Operations
("AFFO")
                                                                         

Basic FFO per      $0.51                     $0.48                  $0.03
unit

Basic AFFO         $0.37                     $0.35                  $0.02
per unit

Distributions      $0.34                     $0.34                  $0.00
per unit
                                                                         

Payout Ratio         92%                                                 

Units         19,403,536                                                 
outstanding
at
period-end:

Weighted      19,334,978                                                 
average Units
outstanding

((1) )Forecast figures have been prorated to reflect the REIT's actual 
operational period to date, being January 25, 2013 to June 30, 2013.

Highlights of the Quarter:
    --  On June 12, 2013, the REIT acquired 11000 Corporate Centre
        Drive, Houston, Texas ("Beltway 8 Corporate Centre II") for a
        total purchase price of USD $18.25 million excluding
        acquisition costs, representing an implied capitalization rate
        of 8.16%. The property is a two-storey commercial office
        facility located in the fast growing Techway and Energy
        Corridor in Houston, Texas. The property has approximately
        101,000 square feet of gross leasable area, and is 100%
        occupied by three tenants.  Constructed in 2003, the building
        is part of a larger corporate office park which has attracted
        many investment grade tenants. The lead tenant, National
        Oilwell Varco, is S&P rated "A", and will occupy approximately
        75% of the property until 2020.
    --  On June 28, 2013, the REIT completed an early lease renewal of
        IBM Canada's premises comprising 102,099 square feet at Parkway
        Place for an additional ten years at market rates.  IBM
        Canada's renewal premises comprises both office and data centre
        space.  This space does not include approximately 22,000 square
        feet of additional space outside of the building's GLA which is
        used to support IBM's data centre space.  The early renewal
        extends the life of the lease until 2025.  In addition, the
        REIT has reduced the scope of the prior restrictive covenant in
        favour of IBM Canada, which allows for greater leasing
        flexibility moving forward.
    --  On July 8, 2013, subsequent to the end of the second quarter,
        the REIT completed an early lease renewal with CH2M Hill Canada
        for one additional year at market rates. CH2M Hill Canada
        occupies 57,713 square feet at Parkway Place. CH2M Hill
        Canada's lease now matures in March 2018.
    --  Subsequent to the end of the second quarter, the REIT entered
        into two new leases at Parkway Place for a combined 36,289
        square feet, resulting in a reduction of approximately 36% of
        the original 101,000 square feet of vendor lease space at
        Parkway Place.
    --  Operating results for the three month period ended June 30,
        2013 were generally in line with management's expectations and
        assumptions used in the REIT's Forecast included in the
        Prospectus, with occupancy increasing from 90.7% to 92.3%.
    --  AFFO for the three month period ended June 30, 2013 was $4,212,
        against forecasted AFFO of $4,112, favourable by $100, or 2.4%,
        due primarily to higher than anticipated revenue and interest
        savings.
    --  During the three month period ended June 30, 2013, the REIT
        declared distributions of $0.06458 per Unit on April 15, 2013,
        May 22, 2013 and June 18, 2013 consistent with its annualized
        target of $0.775 per Unit.

"For the second consecutive quarter, our results demonstrate our ability to 
drive leasing and deliver both internal and external growth in our portfolio" 
says Frank Camenzuli, Chief Executive Officer of the REIT. "Moving forward, we 
will continue to focus on leasing in both Canada and the US to drive AFFO 
growth, and work towards our long term goals of decreasing our payout and 
leverage ratios."

The REIT ended its second quarter with a debt ratio of 56%, comprised of a 
combination of fixed and floating rate debt. The weighted average interest 
rate on the REIT's debt is 3.8%. Refinancing is not a primary focus of 2013, 
with no mortgages maturing during the year, and no debt scheduled to mature 
until 2015. The REIT has approximately $10 million undrawn on its credit 
facility.

Senior management will host a conference call to discuss the results on 
Wednesday, August 7, 2013 at 3:00 p.m. EST. In order to participate, please 
dial 1-416-340-2217 or 1-866-696-5910 and enter participant pass code: 
4526238. You will be required to identify yourself and the organization on 
whose behalf you are participating. For operator assistance during the call, 
please press *0.

If you cannot participate on August 7, 2013, a replay of the conference call 
will be available by dialing 1-905-694-9451 or 800-408-3053 and entering 
participant pass code: 3880896. The replay will be available until August 21, 
2013.

Other information:

Information appearing in this news release is a select summary of results. The 
consolidated financial statements along with management's discussion and 
analysis for the REIT are available at www.agellancommercialreit.com and on 
www.sedar.com.

The REIT 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 created for the purpose of acquiring and owning 
industrial, office and retail properties in select major urban markets in the 
United States and Canada.

The REIT's current portfolio aggregates approximately 4.3 million square feet 
of gross leasable area in 24 properties. The properties are primarily located 
in Texas, Ontario and the U.S. Midwest. The REIT's portfolio is well 
diversified by geographic location, asset class and tenant mix.

Non-IFRS supplemental measures:

NOI, FFO and AFFO are key measures of performance used by real estate 
operating companies; however, they are not defined by International Financial 
Reporting Standards ("IFRS"), do not have standard meanings and may not be 
comparable with other industries or income trusts. These Non-IFRS measures are 
more fully defined and discussed in the REIT's Management Discussion and 
Analysis for the period ended June 30, 2013, which is available on SEDAR at 
www.sedar.com.

Forward looking information:

This press release may contain forward-looking information within the meaning 
of applicable securities legislation. Forward-looking information is based on 
a number of assumptions and is subject to a number of risks and uncertainties, 
many of which are beyond the REIT's control, which could cause actual results 
to differ materially from those that are disclosed in or implied by such 
forward-looking information. These risks and uncertainties include, but are 
not limited to, general and local economic and business conditions; the 
financial condition of tenants; the REIT's ability to refinance maturing debt; 
leasing risks, including those associated with the ability to lease vacant 
space; and interest and currency rate functions. The REIT's objectives and 
forward-looking statements are based on certain assumptions, including that 
the general economy remains stable, interest rates remain stable, conditions 
within the real estate market remain consistent, competition for acquisitions 
remains consistent with the current climate and that the capital markets 
continue to provide ready access to equity and/or debt. All forward-looking 
information in this press release speaks as of the date of this press release. 
The REIT does not undertake to update any such forward-looking information 
whether as a result of new information, future events or otherwise. Additional 
information about these assumptions and risks and uncertainties is contained 
in the REIT's filings with securities regulators, including its latest annual 
information form and MD&A.



SOURCE  Agellan Commercial Real Estate Investment Trust 
Derek Dermott President (416) 593-6800 ext 269 ddermott@agellancapital.com 
Frank Camenzuli Chief Executive Officer (416) 593-6800 ext 226 
fcamenzuli@agellancapital.com 
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CO: Agellan Commercial Real Estate Investment Trust
ST: Ontario
NI: FIN MNG OIL UTI ERN CONF  
-0- Aug/02/2013 22:33 GMT