NorthWest Healthcare Properties Real Estate Investment Trust Releases Fourth Quarter and Year-End Results

TORONTO, March 1, 2012 /CNW/ - NorthWest Healthcare Properties Real Estate Investment Trust (the "REIT") (TSX: NWH.UN), Canada's largest non-government owner and manager of medical office buildings and healthcare real estate, today announced its results for the three month period and year ended December 31, 2011.

Highlights of the Quarter:

• Through recent investment property acquisitions, the REIT exceeded $1.0 billion in total assets.
• AFFO per unit for the quarter remained at $0.20.
• Occupancy decreased slightly from the previous quarter to 91.2% from 91.8%, partially due to the acquisition of Sunpark Plaza (74% occupied).
• On November 19, 2011, the approximate 4,500 square foot (27%) expansion of the Shoppers Drug Mart at Windsor Health Centre was completed. Such Shoppers Drug Mart lease was also extended by 5 years so that it now expires in September, 2028.
• On December 1, 2011 the REIT acquired a 15,000 square foot land parcel in Edmonton, immediately adjacent to the REIT's Hys Centre, for $1.83 million, free and clear of mortgage financing. The site is currently operating as a paid surface parking lot for the benefit of Hys Centre.
• On December 12, 2011, the REIT acquired 82% of 40 Sunpark Plaza SE, a 66,500 square foot medical office condominium property in Calgary for $11.85 million. The REIT assumed the vendor's existing mortgage, having a principal amount of approximately $10.12 million, an interest rate of 5.87% and a 2013 maturity.
• On December 12, 2011, the REIT transferred the security on the first mortgage at Canamera Medical Centre in Cambridge to the Alexander Medical Building in Peterborough.  Such mortgage had been assumed in the third quarter 2011 acquisition of Canamera Medical Centre and represented a loan to value of less than 40%. With the mortgage now transferred to Alexander Medical, it represents approximately 60% loan to value having an outstanding loan amount of approximately $5.35 million, an interest rate of 6.14% and a 2018 maturity.
• On December 21, 2011 the REIT acquired New Glasgow Medical Centre, a 33,800 square foot medical office and retail property in New Glasgow, Nova Scotia for $10.13 million. The REIT assumed the vendor's existing mortgages, having an aggregate principal amount of approximately $7.3 million, a weighted average interest rate of 5.07% and a 2015 maturity.
• On December 23, 2011, the REIT was granted a right of first offer to acquire the recently completed Owen Sound Medical Building, a 73,500 square foot medical office building in Owen Sound, Ontario located in close proximity to Owen Sound Hospital.  In exchange for the right of first offer, the REIT advanced an $8 million loan, with an interest rate of 7.5%, to a joint venture including a 50% partner who is a related party to the REIT.
• The REIT paid distributions of $0.06667 per unit on October 14, 2011, November 14, 2011 and December 15, 2011 consistent with its annualized target of $0.80 cents per unit.

Selected Financial Information:

(unaudited)	Three Months Ended		Three Months Ended
($000's, except unit and per unit amounts)	December 31, 2011		December 31, 2010
Revenue	31,502		21,857
Net Operating Income	17,013		11,689
Funds from Operations ("FFO")	10,055		6,479
Adjusted Funds from Operations ("AFFO")^(1)	8,504		5,374
Debt to Gross Book Value	50.2	%	50.5	%
Per unit data (Annualized, fully diluted)
FFO	$0.23		$0.20
AFFO	$0.20		$0.17
Distributions	$0.20		$0.20
AFFO Payout ratio	101	%	118	%

⁽¹⁾ AFFO amounts are calculated utilizing leasing and capital reserves of 4.5% of revenue.

Subsequent Events:

• On January 19, 2012, the REIT completed the acquisition of Centre Medicale de L'Hetriere, a 36,600 square foot medical office building in the Greater Quebec City Area. The property was acquired, free and clear of mortgage financing, for $7.0 million. The REIT has executed a conditional term sheet to finance the property with a $4.6 million 10 year mortgage at a projected interest rate of approximately 4.1%, subject to bond yield fluctuations prior to rate lock.
• On January 23, 2012, the REIT acquired Moncton Medical Clinic, a 42,700 square foot medical office building in Moncton, New Brunswick for $7.86 million. The REIT assumed the vendor's existing first mortgage and has agreed with the existing lender to increase the loan by way of a $1.5 million second mortgage. Once completed, the two mortgage loans will have an aggregate principal amount of approximately $5.1 million, a weighted average interest rate of approximately 4.75% and a 2016 maturity.
• On February 1, 2012, the REIT amended, expanded and extended its Revolving Credit Facility.  The Revolving Credit Facility was expanded to $50 million and now bears interest at a rate equal to the bank's prime rate plus 125 (previously plus 175) basis points or Bankers' Acceptances plus 225 (previously plus 275) basis points.  The term was also extended to March 25, 2014.  As part of the expansion, Polyclinique Val-Belair and Canamera Medical Centre were added to the security pool.
• On February 23, 2012, the REIT entered into a Commitment Letter to refinance Clinique Bois-de-Boulogne (1575 Henri-Bourassa Blvd. West), Montreal with a $10.5 million 10 year mortgage loan at an interest rate of 4.01%.
• The REIT declared distributions of $0.06667 per unit to unitholders of record as at January 31, 2012 and February 29, 2012.

Peter Riggin, CEO, commented that "The fourth quarter, and 2011, being the REIT's first full calendar year of operations, saw the REIT continue to achieve significant milestones. Through accretive acquisitions of approximately $250 million which added almost one million square feet, and same property improvements and value enhancements, our assets for the first time exceeded $1 billion and the overall quality of our portfolio continued to improve. At the same time, we maintained a conservative 50% debt to gross book value ratio while increasing our weighted average mortgage term to 5 years and reducing our weighted average mortgage interest rate to 5.22%."

"Our growth has solidified our market-leading position and extended our healthcare relationships as the country's largest non-government owner and manager of healthcare real estate, while also increasing the REIT's market capitalization and, therefore, the liquidity of our units to the benefit of our unitholders", continued Mr. Riggin.  "Further, these accretive acquisitions have helped decrease our payout ratio, which had increased as a result of our follow-on equity raise in March 2011, and we are confident that additional growth combined with enhanced portfolio performance will result in a further reduction in our payout ratio in 2012."

"Subsequent to year-end, we also took a number of steps to increase our liquidity to permit our continued growth, including increasing our revolving credit facility to $50 million, while at the same time reducing its borrowing rates and extending its term until March 2014, as well as entering into various mortgage commitments," Mr. Riggin concluded.

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 fourth quarter of 2011, which is available on the SEDAR website at www.sedar.com.  Also on SEDAR are the audited 2011 year-end 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 fourth quarter 2011 results on Friday, March 2, 2012 at 11:00 a.m. (Eastern).

The conference call can be accessed by dialing [phone] or 1-866-321-6651. The conference ID is 4754232.

Audio replay is available until March 9, 2012 by dialing 647-436-0148 or 1-888-203-1112. The passcode is 4754232.

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.

About NorthWest Healthcare Properties Real Estate Investment Trust

NorthWest Healthcare Properties Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. The REIT holds a portfolio of 60 income-producing properties, with a focus on medical office buildings and healthcare real estate, comprising approximately 4.1 million square feet of gross leasable area located in British Columbia, Alberta, Ontario, Québec, Nova Scotia and New Brunswick. 

 

Ernie Spraggs, CFO, [phone] ext. 262, or www.nwhp.ca