WPT Industrial REIT announces strong results for third quarter of 2014

TORONTO, Nov. 11, 2014 /CNW/ - WPT Industrial Real Estate Investment Trust (the "REIT") (TSX: WIR.U - OTCQX: WPTIF) announced today its financial and operating results for the three and nine months ended September 30, 2014. All dollar amounts are stated in US funds.

Q3 2014 HIGHLIGHTS:

• Strong portfolio growth and solid operating performance drive continued increases in Revenues, NOI, FFO and AFFO
• Growth remains accretive as AFFO per Unit rises 19.8% despite a 22.3% increase in the weighted average number of Units outstanding compared to last year
• AFFO payout ratio remains conservative at 82.6% despite a significant increase in Units outstanding
• Occupancy rises to 98.9% from 97.0% as at June 30, 2014 and 96.4% as at December 31, 2013
• Conservative liquidity position of 51.3% debt-to-gross book value provides resources and flexibility for future growth

"The growth in our property portfolio, combined with the continued success of our leasing and property management initiatives, resulted in another quarter of solid performance," stated Scott Frederiksen, Chief Executive Officer. "With a strong pipeline of potential acquisition opportunities and solid liquidity position, we are confident our portfolio will continue to increase and diversify, generating further accretive growth and value for our unitholders."

SOLID OPERATING PERFORMANCE
For the three months ended September 30, 2014, investment properties revenue was $15.2 million, representing a 21.1% increase compared to the third quarter of 2013 due primarily to the contribution from acquisitions completed over the last twelve months and increased occupancy. For the nine months ended September 30, 2014 revenue was $41.9 million.

With the strong increase in revenue, Net Operating Income ("NOI") for the third quarter of 2014 was $11.6 million, representing a 23.9% increase compared to the third quarter of 2013. For the nine months ended September 30, 2014 NOI was $31.5 million.

Funds from Operations ("FFO") for the three months ended September 30, 2014 were $7.4 million ($0.252 per Unit), representing a 30.7% increase compared to $5.7 million ($0.236 per Unit) in the third quarter of 2013. Adjusted Funds from Operations ("AFFO") for the three months ended September 30, 2014 were $6.2 million ($0.212 per Unit), up 46.2% from $4.3 million ($0.177 per Unit) in the third quarter of 2013. For the nine months ended September 30, 2014, FFO and AFFO were $19.9 million ($0.740 per Unit) and $16.2 million ($0.602 per Unit), respectively. Per Unit amounts in the third quarter and first nine months of 2014 were impacted by the 22.3% and 16.2% increase in the weighted average number of Units outstanding, respectively, compared to the same periods last year mainly due to the REIT's successful April 2014 equity offering. Despite the significant increase in the number of Units outstanding, the REIT's AFFO payout ratio improved to 82.6% and 87.7% for the three and nine months ended September 30, 2014, respectively, compared to 99.3% and 97.9%, respectively, in the same periods last year.

STRONG FINANCIAL & LIQUIDITY POSITION
As at September 30, 2014 the REIT's debt-to-gross-book-value ratio was a conservative 51.3% with an interest coverage ratio of 3.3 times, a debt-to-EBITDA ratio of 7.9 times, and a fixed charge coverage ratio of 2.8 times, all slightly improved from December 31, 2013. The weighted average effective interest rate on its outstanding debt was 3.9%, down from 4.0% as at December 31, 2013, with a weighted average term to maturity on its mortgages payable of 6.3 years compared to 6.2 years as at December 31, 2013. The weighted average remaining lease term as at September 30, 2014 was 4.8 years.

As at September 30, 2014, availability on the REIT's $75.0 million revolving credit facility was $64.5 million, of which the REIT had drawn $59.0 million and had a $0.9 million letter of credit outstanding, leaving remaining availability of $4.6 million.

In the fourth quarter, the REIT is expected to finalize the addition of two existing unencumbered properties to the borrowing base, thereby increasing availability on the Revolving Facility by approximately $10.5 million to $15.0 million.

FINANCIAL AND OPERATIONAL HIGHLIGHTS

			Three months ended
	(In thousands of USD, except where noted)		September 30, 2014		June 30,  2014		March 31, 2014		December 31, 2013			September 30, 2013
Operating Results:
	Investment properties revenue	$	15,227	$	13,846	$	12,847	$	12,649		$	12,577
	NOI (1)	$	11,610	$	10,480	$	9,432	$	9,370		$	9,370
	FFO (1), (2)	$	7,431	$	6,541	$	5,928	$	5,731		$	5,686
	AFFO (1), (3)	$	6,234	$	5,155	$	4,816	$	4,680		$	4,264
	FFO per Unit (1)	$	0.252	$	0.238	$	0.249	$	0.241		$	0.236
	AFFO per Unit (1)	$	0.212	$	0.188	$	0.202	$	0.197		$	0.177
Distributions:
	Distributions per Unit	$	0.175	$	0.175	$	0.175	$	0.175		$	0.175
	Distributions declared	$	5,149	$	4,896	$	4,161	$	4,161		$	4,234
	AFFO payout ratio (1)		82.6%		95.0%		86.4%		88.9%			99.3%
	Weighted-average number of Units (4)		29,435,714		27,441,017		23,791,909		23,797,779			24,069,551
As at			September 30, 2014		December 31, 2013
Operational Information:
	Number of investment properties		42		38
	GLA		12,756,313		9,879,961
	Occupancy		98.9%		96.4%
	Average remaining lease term (years)		4.8		5.0
	Fair value of investment properties		631,367		493,006
Ratios:
	Weighted-average effective interest rate (5)		3.9%		4.0%
	Variable interest rate debt as percentage of total debt		18.2%		29.1%
	Variable interest rate debt as a percentage of total debt adjusted for interest rate cap (6)		2.8%		9.9%
	Debt-to-gross book value		51.3%		52.9%
	Interest coverage ratio		3.3x		3.2x
	Fixed charge coverage ratio		2.8x		2.8x
	Debt to EBITDA (1)		7.9x		8.0x
Unit Information:
	REIT Units outstanding		14,210,400		10,732,200
	Class B Units outstanding		15,225,314		13,059,709
	Welsh Retained Interest (7) (assuming all Class B Units held are redeemed for REIT Units)		54.3%		54.9%
	(1) NOI, FFO, AFFO, FFO per Unit, AFFO per Unit, AFFO payout ratio, EBITDA, 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 for the three and nine months ended September 30, 2014.
	(2) Reconciliations of FFO to net income can be found on page 19 of the REIT's MD&A for the three and nine months ended September 30, 2014. The       reconciliations of FFO to net income for the three months ended June 30, 2014, March 31, 2014 and September 30, 2013 can be found in the REIT's       MD&A for the three months ended June 30, 2014, March 31, 2014, and September 30, 2013, respectively. The reconciliations of FFO to net income for       the three months ended December 31, 2013 can be found in the REIT's MD&A for the period from March 4, 2013 to December 31, 2013.
	(3) Reconciliations of AFFO to FFO can be found on page 19 of the REIT's MD&A for the three and nine months ended September 30, 2014. The       reconciliations of AFFO to FFO for the three months ended June 30, 2014, March 31, 2014 and September 30, 2013 can be found in the REIT's       MD&A for the three months ended June 30, 2014, March 31, 2014, and September 30, 2013, respectively. The reconciliations of AFFO to FFO for the              three months ended December 31, 2013 can be found in the REIT's MD&A for the period from March 4, 2013 to December 31, 2013.
	(4) Includes REIT Units and Class B Units (collectively, the "Units").
	(5) Includes mortgages payable, bank indebtedness, mark-to-market adjustments and financing costs.
	(6) Includes $59,000 outstanding under the Revolving Facility, adjusted for interest rate cap covering a principal amount of $50,000.
	(7) Excludes options and DTUs outstanding under the REIT's equity compensation plans.

INVESTOR CONFERENCE CALL
A conference call will be hosted by the REIT's management team on Wednesday, November 12, 2014 at 11:00 am ET.  The telephone numbers to participate in the conference call are Canada Toll Free: [phone], U.S. Toll Free [phone] and International: [phone].  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 [phone], U.S. Toll Free [phone] and International [phone]. The Passcode for the Instant Replay is 10053362#. A recording of the call will also be archived on the REIT's web site at www.wptreit.com.

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 warehouse and distribution industrial real estate. WPT Industrial, LP (the REIT's operating subsidiary) indirectly owns a portfolio of properties consisting of approximately 12.8 million square feet of gross leasable area, comprised of 40 industrial properties and two office properties located in 12 states in the United States. Welsh Property Trust, LLC is the external asset manager and property manager of the REIT. The REIT pays monthly cash distributions, currently at $0.0583 per Trust Unit, or approximately $0.70 per Trust 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 period ended December 31, 2013, 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

Scott Frederiksen, Chief Executive Officer, WPT Industrial Real Estate Investment Trust, Tel: [phone], Fax: [phone]

Related Links

www.wptreit.com