Retrocom Mid-Market REIT Announces Second Quarter 2009 Financial Results

TORONTO, ONTARIO--(Marketwire - Aug. 13, 2009) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY NON-CANADIAN SOURCE

Retrocom Mid-Market Real Estate Investment Trust (TSX:RMM.UN) announced today the results for the second quarter ended June 30, 2009.

Highlights

- Net Operating Income ("NOI") for the second quarter was $7.9 million, compared to $6.9 million for the same quarter in 2008. Acquisitions of the four SmartCentres properties (the "GTA properties") in July 2008 were the primary driver behind this growth. NOI for the six months was $15.5 million, increased by $2.0 million compared to the same period in 2008.

- Funds from Operations ("FFO") for the second quarter was $3.2 million ($0.12 per unit, adjusted for non-controlling interest), compared with $3.4 million ($0.18 per unit) for the same quarter in 2008. This result is comprised of the addition of $1.3 million NOI from the GTA properties, offset by one-time allowance of $0.3 million due to tenant bankruptcy or proposal under the Bankruptcy and Insolvency Act, $0.2 million lower operating income from discontinued operation, increased trust expenses of $0.3 million and increased interest expense of $0.7 million. The increase in interest was mainly the result of mortgages securing the GTA properties, lower interest income and one-time costs related to financing of approximately $0.2 million.

- FFO for the six months ended June 30, 2009 was $6.7 million ($0.24 per unit, adjusted for non-controlling interest), compared to $6.2 million ($0.34 per unit) for the same period in 2008. The $0.5 million increase in FFO is primarily comprised of $2.5 million NOI from the GTA properties, partially offset by one-time allowance of $0.5 million due to tenant bankruptcy or proposal under the Bankruptcy and Insolvency Act, $0.3 million lower operating income from discontinued operation, increased trust expense of $0.2 million and increased interest expense of $1.0 million mainly as a result of higher debt securing the GTA properties, lower interest income and one-time costs related to financing of approximately $0.2 million.

- Completed $3 million new financing resulting in incremental cash of approximately $1.1 million. The REIT's average cost of mortgage debt at the end of second quarter is 6.23%, a decrease from 6.29% as at March 31, 2009.

- The REIT maintained a conservative leverage ratio of 54.4% inclusive of all debentures and mortgages. At the quarter end, the REIT had cash on hand of approximately $11.3 million and unused operating lines capacity of approximately $15 million;

- At the end of the second quarter, the REIT's occupancy rate was 89.7%, down from 90.0% at the end of first quarter. This decrease was primarily the result of the disposition of two fully occupied Manitoba properties as well as the impact of one tenant that filed for bankruptcy at the end of the first quarter.

/T/

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Financial Highlights
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(in thousands of
dollars except
per unit amounts three months three months six months six months
and ratios) ended June 30 ended June 30 ended June 30 ended June 30
2009 2008(i) 2009 2008(i)
(unaudited) (unaudited) (unaudited) (unaudited)
Rental revenue
and other income 14,890 13,210 30,339 26,679
Property operating
expenses 7,048 6,342 14,817 13,136
--------------------------------------------------------
Net operating income 7,842 6,868 15,522 13,543
Trust expenses 898 634 1,656 1,488
--------------------------------------------------------
Income before
interest,
depreciation
& amortization 6,944 6,234 13,866 12,055
Interest 3,813 3,122 7,240 6,294
Depreciation
& amortization 5,023 4,333 10,035 8,809
--------------------------------------------------------
Loss before
income tax,
non-controlling
interest and
discontinued
operations (1,892) (1,221) (3,409) (3,048)
Future income
tax recovery 332 - 1,772 -
--------------------------------------------------------
Income (loss)
before
non-controlling
interest and
discontinued
operations (1,560) (1,221) (1,637) (3,048)
Non-controlling
interest 624 - 1,125 -
--------------------------------------------------------
Income (loss)
before
discontinued
operations (936) (1,221) (512) (3,048)
Gain (loss)
from discontinued
operations 1,298 66 1,326 437
--------------------------------------------------------
Net income (loss) 362 (1,155) 814 (2,611)

Funds From
Operations(ii) 3,203 3,375 6,740 6,231

Funds From
Operations per Unit
(basic-adjusted for
conversion of
non-controlling
interest) 0.12 0.18 0.24 0.34

Funds From
Operations
Payout Ratio
Accrual Basis 0.97 0.82 0.92 0.89
Distributions
-accrual basis 3,108 2,778 6,216 5,556

/T/

Full Financial Results will be available on SEDAR (www.sedar.com) as well as the Investors Relations section of the REIT's website (http://www.rmmreit.com/investor_finance.htm).

(i) Previously reported results have been reclassified for discontinued operations. Results of 2008 have been restated to reflect a change in accounting policy that was adopted on a retroactive basis.

(ii) The reconciliations Funds From Operations to Net income (loss) after Discontinued Operations are included in the REIT's MD&A

The REIT's management considers Funds From Operations to be an indicative measure in evaluating the REIT's performance. The table above, however, includes non-GAAP information that should not be construed as an alternative to net earnings or cash flows from operations and may not be comparable to similar measures presented by other issuers as there is no standardized meaning prescribed by GAAP.

About Retrocom Mid-Market REIT

Retrocom Mid-Market REIT is an Ontario unincorporated open-end real estate investment trust which focuses on owning and acquiring mid-market properties in primary and secondary cities across Canada with the objective of producing a geographically diversified portfolio of properties with stable and growing cash flows.

This document may contain forward-looking statements, which although based on Management's best estimates as well as the current operating environment are subject to risks and uncertainties. As such, terms such as "anticipate", "believe", "expect", "plan" or other similar words should be taken as forward-looking statements. As a result of these potential uncertainties, any future results could differ materially from the predictions listed herein. Although Retrocom makes every effort to meet our predictions as listed in this document, we are unable to control certain circumstances such as economic, competitive or commercial real estate conditions.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made only by means of a prospectus, nor shall there be any sale of the Units in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under securities laws of any such state, province or other jurisdiction. The Units of the Retrocom Mid-Market REIT have not been, and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold or delivered in the United States absent registration or an application for exemption from the registration requirements of U.S. securities laws.