InterRent REIT Results for the Second Quarter of 2014

NEWS RELEASE TRANSMITTED BY Marketwired 
FOR: InterRent Real Estate Investment Trust 
TSX SYMBOL:  IIP.UN
TSX SYMBOL:  IIP.DB 
AUGUST 12, 2014 
InterRent REIT Results for the Second Quarter of 2014 
OTTAWA, ONTARIO--(Marketwired - Aug. 12, 2014) - NOT FOR DISTRIBUTION TO UNITED
STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES 
InterRent Real Estate Investment Trust (TSX:IIP.UN) (TSX:IIP.DB)
("InterRent" or the "REIT") today reported financial
results for the second quarter ended June 30, 2014.  
Highlights  
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--  Average monthly rent per suite increased to $947 (June 2014) from $909 
(June 2013), an increase of 4.2%. 
--  Average monthly rent per suite for the stabilized operations increased 
to $921 (June 2014) from $887 (June 2013), an increase of 3.8%. 
--  Gross rental revenue for the second quarter of 2014 increased by $0.6 
million, or 3.6%, over Q2 2013 while operating revenue increased by $0.2 
million, or 1.2% compared to Q2 2013.  
--  Gross rental revenue from stabilized operations for the second quarter 
of 2014 increased by $0.5 million, or 4.0%, over Q2 2013 while operating 
revenue increased by $0.1 million, or 1.0%.  
--  Economic vacancy increased to 5.8% (June 2014) from 4.0% (June 2013) as 
management continued to drive rents, reposition the suites added to the 
portfolio in 2013 and the first half of 2014, and transition to a new 
rental operations methodology. 
--  NOI decreased to $9.2 million for the quarter, or 58.6% of operating 
revenues, compared to $9.6 million, or 61.6%, for Q2 2013. 
--  The weighted average interest rate on mortgage debt was reduced further 
in the quarter from 3.37%  
(June 2013) to 3.28% (June 2014). 
--  Funds from operations (FFO) for the quarter decreased by $0.6 million to 
$4.5 million (or $0.08 per unit) compared to $5.1 million (or $0.09 per 
unit) for Q2 2013. 
--  Adjusted funds from operations (AFFO) for the quarter decreased by $0.6 
million. AFFO was $0.07 per unit for the quarter compared to $0.08 per 
unit for Q2 2013.   
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Financial Highlights 
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Selected Consolidated Information                                          
In $000's, except per Unit amounts          3 Months Ended  3 Months Ended 
and other non-financial data                 June 30, 2014   June 30, 2013 
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Total suites                                         6,128           6,040 
Occupancy rate (June)                                 94.2%           96.0%
Average rent per suite (June)              $           947 $           909 
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Operating revenues                         $        15,704 $        15,521 
Net operating income (NOI)                           9,201           9,568 
NOI %                                                 58.6%           61.6%
NOI per weighted average unit - basic      $          0.16 $          0.17 
NOI per weighted average unit - diluted    $          0.16 $          0.17 
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Funds from operations (FFO)                $         4,495 $         5,128 
FFO per weighted average unit - basic      $          0.08 $          0.09 
FFO per weighted average unit - diluted    $          0.08 $          0.09 
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Adjusted funds from operations (AFFO)      $         3,860 $         4,448 
AFFO per weighted average unit - basic     $          0.07 $          0.08 
AFFO per weighted average unit - diluted   $          0.07 $          0.08 
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Distributable income (DI)                  $         3,537 $         4,980 
DI per weighted average unit - basic       $          0.06 $          0.09 
DI per weighted average unit - diluted     $          0.06 $          0.09 
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Cash distributions per unit                $        0.0501 $        0.0467 
AFFO payout ratio                                       75%             60%
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Stabilized average rent per suite          $           921 $           887 
Stabilized NOI %                                      59.0%           61.7%
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Interest coverage (rolling 12 months)                2.50x           2.72x 
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Debt service coverage (rolling 12 months)            1.46x           1.72x 
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Debt to GBV                                           49.2%           46.6%
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Results for the Quarter  
Gross rental revenue for the quarter was $16.0 million, an increase of $0.6
million, or 3.6%, compared to Q2 2013. Operating revenue for the quarter was up
$0.2 million to $15.7 million, or 1.2% compared to the Q2 2013. The average
monthly rent across the entire portfolio for June 2014 increased to $947 per
suite from $909 (June 2013), an increase of 4.2%. On a stabilized portfolio
basis (stabilized properties are those owned by the REIT continuously for 24
months), the average monthly rent per suite increased from $887 to $921 over
the same period, an increase of 3.8%. Management expects to continue to grow
revenues organically through moving to market rent on suite turnovers,
guideline increases, continued roll-out of AGIs, as well as continuing to drive
other ancillary revenue streams.  
The June 2014 vacancy rate across the entire portfolio was 5.8%. "The
increase is as a result of transitioning to a new rental operations model which
better aligns rental operations to longer term value creation. We believe that
the short term pain of the transition will be beneficial to the long term
growth of the REIT. As of August 12, our suite occupancy has increased to
96%," said Mike McGahan, CEO. 
Property operating costs for the three months ended June 30, 2014 amounted to
$2.8 million or 18.0% of revenue compared to $2.5 million or 16.0% of revenue
for the three months ended June 30, 2013. As a percentage of revenue, operating
costs increased by 2.0% as compared to Q2 2013. The increase in operating costs
are primarily as a result of costs associated with transitioning to a new
rental operations model.  
Property taxes for the three months ended June 30, 2014 amounted to $2.2
million or 13.8% of revenue compared to $2.0 million or 13.1% of revenue for
the three months ended June 30, 2013. The overall increase in taxes is mainly
attributable to the overall increase in assessed property values.  
Utility costs for the three months ended June 30, 2014 amounted to $1.5 million
or 9.5% of revenue compared to $1.4 million or 9.2% of revenue for the three
months ended June 30, 2013. As a percentage of operating revenues and on a per
suite basis, heating costs increased over the same quarter last year due to
cooler months in April and May.  
NOI for the three months ended June 30, 2014 amounted to $9.2 million or 58.6%
of operating revenue compared to $9.6 million or 61.6% of operating revenue for
the three months ended June 30, 2013. The growth in revenue was offset by
increased vacancy and leasing costs, stemming from the transition to a new
rental operations model. The redevelopment property in Ottawa and the property
damaged by fire in Hamilton both had positive contributions to NOI in the
second quarter of 2013 and no NOI contribution in the second quarter of 2014.
The net effect of the two properties on NOI is a $0.4 million decrease as
compared to Q2 2013.   
Given the amount of capital required to acquire and reposition properties,
being able to access mortgage debt and the interest rate thereon is crucial for
the long term success of the REIT. At the end of the quarter, the weighted
average interest rate was 3.28% and the average life to maturity was
approximately 4.4 years. The REIT regularly reviews mortgages and maturities in
order to capitalize on the availability of long term funds at the historically
low rates that we continue to experience.  
About InterRent  
InterRent REIT is a growth-oriented real estate investment trust engaged in
increasing Unitholder value and creating a growing and sustainable distribution
through the acquisition and ownership of multi-residential properties.  
InterRent's strategy is to expand its portfolio primarily within markets
that have exhibited stable market vacancies, sufficient suites available to
attain the critical mass necessary to implement an efficient portfolio
management structure and, offer opportunities for accretive acquisitions. 
InterRent's primary objective is to use the proven industry experience of
the Trustees, Management and Operational Team to: (i) provide Unitholders with
stable and growing cash distributions from investments in a diversified
portfolio of multi-residential properties; (ii) enhance the value of the assets
and maximize long-term Unit value through the active management of such assets;
and (iii) expand the asset base and increase Distributable Income through
accretive acquisitions.  
(i)Non-GAAP Measures  
InterRent prepares and releases unaudited quarterly and audited consolidated
annual financial statements prepared in accordance with IFRS (GAAP). In this
and other earnings releases, as a complement to results provided in accordance
with GAAP, InterRent also discloses and discusses certain non-GAAP financial
measures, including NOI, FFO, AFFO, DI and EBITDA. These non-GAAP measures are
further defined and discussed in the MD&A dated August 12, 2014, which
should be read in conjunction with this press release. Since NOI, FFO, AFFO, DI
and EBITDA are not determined by GAAP, they may not be comparable to similar
measures reported by other issuers. InterRent has presented such non-GAAP
measures as Management believes these measures are relevant measures of the
ability of InterRent to earn and distribute cash returns to Unitholders and to
evaluate InterRent's performance. These non-GAAP measures should not be
construed as alternatives to net income (loss) or cash flow from operating
activities determined in accordance with GAAP as an indicator of
InterRent's performance. 
Cautionary Statements 
The comments and highlights herein should be read in conjunction with the most
recently filed annual information form as well as our consolidated financial
statements and management's discussion and analysis for the same period.
InterRent's publicly filed information is located at www.sedar.com.  
This news release contains "forward-looking statements" within the
meaning applicable to Canadian securities legislation. Generally, these
forward-looking statements can be identified by the use of forward-looking
terminology such as "plans", "anticipated",
"expects" or "does not expect", "is expected",
"budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such
words and phrases or state that certain actions, events or results
"may", "could", "would", "might" or
"will be taken", "occur" or "be achieved".
InterRent is subject to significant risks and uncertainties which may cause the
actual results, performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by the forward
looking statements contained in this release. A full description of these risk
factors can be found in InterRent's most recently publicly filed
information located at www.sedar.com. InterRent cannot assure investors that
actual results will be consistent with these forward looking statements and
InterRent assumes no obligation to update or revise the forward looking
statements contained in this release to reflect actual events or new
circumstances. 
-30-
FOR FURTHER INFORMATION PLEASE CONTACT: 
Mike McGahan
Chief Executive Officer
(613) 569-5699 Ext 244
(613) 569-5698
mmcgahan@interrentreit.com
or
Curt Millar, CA
Chief Financial Officer
(613) 569-5699 Ext 233
(613) 569-5698
cmillar@interrentreit.com 
The Toronto Stock Exchange has not reviewed and does not accept responsibility
for the adequacy or accuracy of this release. 
INDUSTRY:  Financial Services - Commercial and Investment Banking, Financial
Services - Venture Capital, Real Estate and Construction - Commercial Real
Estate 
SUBJECT:  ERN 
-0-
-0- Aug/12/2014 12:00 GMT
 
 
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