WPT Industrial REIT Announces Strong Results and Portfolio Growth in the First Quarter of 2015

TORONTO, May 13, 2015 /CNW/ – WPT Industrial Real Estate Investment Trust (the “REIT“) (TSX: WIR.U – OTCQX: WPTIF) announced today strong growth and operating performance for the three months ended March 31, 2015. All dollar amounts are stated in US funds.

Q1 2015 HIGHLIGHTS:

• Portfolio growth and solid operating performance drove 27.5% increase in revenues over Q1 2014
• Occupancy improved to 98.9% from 96.1% at March 31, 2014
• FFO and AFFO are up 35% and 39% from Q1 2014
• Completed successful $46.6 million bought-deal equity offering on January 28, 2015
• Acquired six property portfolio in Memphis, TN totaling 2.3 million sq. ft. of GLA for $86.7 million on February 20, 2015
• Management fully aligned with Unitholders through 47.3% retained interest

“Following a very strong first full year of operations in 2014, our growth and solid operating performance continued in the first quarter of 2015,” stated Scott Frederiksen, Chief Executive Officer. “We are very pleased to enter the Memphis Tennessee market with the purchase of a high-quality six property portfolio of class A, institutional quality distribution facilities.”

SOLID OPERATING PERFORMANCE
For the three months ended March 31, 2015, investment properties revenue was $16.4 million, representing a 27.5% increase compared to the first quarter of 2014 due primarily to the contribution from ten property acquisitions completed over the last twelve months and increased occupancy.

With the strong increase in revenue, Net Operating Income (“NOI”) for the first quarter of 2015 was $12.5 million, representing a 32.0% increase compared to the first quarter of 2014.

Funds from Operations (“FFO”) for the three months ended March 31, 2015 were $8.0 million ($0.247 per Unit), representing a 34.8% increase compared to $5.9 million ($0.249 per Unit) in the first quarter of 2014. Adjusted Funds from Operations (“AFFO”) for the three months ended March 31, 2015 were $6.7 million ($0.207 per Unit), up 39.1% from $4.8 million ($0.202 per Unit) in the first quarter of 2014. The REIT’s AFFO payout ratio remained conservative at 88.1% for the three months ended March 31, 2015.  Per Unit amounts and the AFFO payout ratio in the first quarter of 2015 were negatively impacted due to timing lag between the closing of the $46.6 million equity offering and the closing of the Memphis Portfolio acquisition. Although the January 2015 Offering was completed on January 28, 2015, the proceeds weren’t deployed until the acquisition of the Memphis Portfolio on February 20, 2015.

STRONG FINANCIAL & LIQUIDITY POSITION
As at March 31, 2015 the REIT’s debt-to-gross-book-value ratio was a conservative 50.8% with an interest coverage ratio of 3.3 times, a debt-to-EBITDA ratio of 7.7 times, and a fixed charge coverage ratio of 2.9 times. The weighted average effective interest rate on its outstanding debt was 3.8%, down from 3.9% as at December 31, 2014, with a weighted average term to maturity on its mortgages payable of 5.7 years compared to 6.1 years as at December 31, 2014. The weighted average remaining lease term as at March 31, 2015 was 4.2 years.

As at March 31, 2015, availability on the REIT’s revolving credit facility was $75.0 million, of which the REIT had drawn $49.9 million, leaving remaining availability of $25.1 million.

RECENT EVENTS
On January 28, 2015 the REIT issued 4,312,500 REIT Units (including REIT Units issued pursuant to the exercise in full of the over-allotment option granted to the underwriters by the REIT) at a price of $10.80 per REIT Unit to a syndicate of underwriters on a bought deal basis for gross proceeds to the REIT of approximately $46.6 million. Issue costs related to the January 2015 Offering were $2.3 million.

On February 20, 2015, the REIT indirectly acquired from a third party vendor a 100% leased, 2.3 million square foot portfolio of six industrial investment properties located in Memphis, Tennessee for a purchase price of approximately $86.7 million (exclusive of closing costs and acquisition fee). The purchase price was paid in cash using a portion of the net proceeds from the January 2015 equity offering described above, and a new $51.75 million five-year mortgage bearing a fixed interest rate of 2.87%.

With the completion of the above acquisition, the REIT’s property portfolio now comprises 46 industrial investment properties and two office investment properties totaling 15.1 million square feet of GLA well located in 13 states in the U.S.

FINANCIAL AND OPERATIONAL HIGHLIGHTS

INVESTOR CONFERENCE CALL
A conference call will be hosted by the REIT’s management team on Thursday, May 14, 2015 at 10:00 am ET.  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 10063351#. A recording of the call will also be archived on the REIT’s web site at www.wptreit.com.

ANNUAL UNITHOLDERS’ MEETING
The REIT will hold its Annual Meeting of the REIT’s Unitholders on Thursday, May 14, 2015 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 warehouse and 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. 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, 2014, 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