Wilshire Real Estate Investment Trust Announces Second Quarter Results

Business Wire, August 6, 1998

PORTLAND, Ore.--(BUSINESS WIRE)--Aug. 6, 1998--Wilshire Real Estate Investment Trust Inc. (NASDAQ:WREI) a hybrid REIT specializing in diversified real estate investments, which began operations in April 1998, today reported net income of $3.0 million for the quarter ended June 30, 1998.

Earnings per share for the quarter was $0.27 per share. Funds From Operations (FFO) was $3.2 million or $0.29 per share for the quarter. As announced on June 25, 1998, the company's Board of Directors declared a quarterly dividend of $0.27 per common share, paid on July 16, 1998, to stockholders of record on June 30, 1998.

"Net income, FFO and the dividend payout for the quarter were in line with our stated objectives, and reflect the successful execution of our asset acquisition plan for the REIT," stated Andrew Wiederhorn, chairman and chief executive officer.

"We are ahead of our asset acquisition goals for 1998. Assets of approximately $440 million at the end of the quarter exceeded our goal of $330 million, and we currently anticipate being fully invested and fully levered with more than $750 million of assets by the end of the third quarter, versus our original plan to reach that level by year-end."

Interest income for the quarter was $5.1 million and net interest income was $3.6 million, generated primarily from investments in mortgage-backed securities and mortgage loans. Gross rental income from operating properties totaled approximately $0.9 million for the quarter.

Investment Activity

Since the company's initial public offering (IPO) and purchase of initial assets totaling $130.1 million, during the second quarter the company purchased an additional $260.4 million of interest-earning and operating assets. As of June 30, 1998, additional transactions of approximately $279 million were committed, of which approximately $110 million had closed and funded by July 31, 1998. A summary of the closed transactions and commitments are as follows: -0-

                                Subsequent
                                Purchases                     Total
                      Initial   Through June   Commitments    Closed &
                      Assets    30, 1998       to Purchase   Committed

Mortgage-backed
 securities        $   95.0     $  140.7         $   28.6     $  264.3
Other securities        0.0         21.8              0.0         21.8
U.S. Commercial
 loans                 17.7         36.3             80.0        134.0
International
 loans                  3.4          0.0            160.0        163.4
Investment in
 real estate           14.0         61.6             10.2         85.8
                      -----        -----            -----        -----
                   $  130.1     $  260.4         $  278.8     $  669.3

Purchases Subsequent to IPO:

--   In April, the company purchased for approximately $28.5 million a
     portfolio consisting of five commercial properties totaling
     445,000 square feet of retail, warehouse, and office space, and
     11 acres of excess buildable land. All buildings are leased to
     the seller, an automotive and sporting goods retailer in the
     Pacific Northwest. All leases are on 15-year terms with optional
     extensions. The company plans to develop the excess land with
     additional warehouse/distribution facilities.

--   In June, the company purchased for approximately $23.6 million, a
     21 property portfolio totaling more than 225,000 square feet of
     office, retail, and industrial space in suburban London and
     outlying township locations, which are fully leased.

--   In June, the company purchased a 387,000 square foot
     warehouse/distribution facility and 13.6 acres of excess land in
     Salem, Ore. for approximately $7.4 million and commenced
     development of a 2.3 acre transportation facility in Valencia,
     Calif.

--   On July 7, the company purchased a downtown Portland commercial
     property for approximately $1.0 million.

--   Since the acquisition of the initial assets, the company has
     acquired 89 subordinated residential mortgage-backed securities
     from 15 different issuers for an aggregate purchase price of
     approximately $140.7 million. The weighted average rating of
     these securities is BB.

--   Since the acquisition of the initial assets, the company has
     purchased U.S. commercial loans totaling $50.3 million, including
     $14.0 million that closed in July.

--   On July 27, the company closed and funded a mezzanine loan of
     approximately $66 million for the purchase of an office property
     in California.

Commitments to Purchase:

--   The company has committed to invest in the majority of Wilshire
     Financial Services Group Inc.'s interests of approximately $110
     million in two portfolios of International Investments in France.
     Such investments may be structured in the form of preferred
     equity.

--   The company has committed to provide mezzanine financing of
     approximately $50 million for the purchase of several commercial
     properties in the United Kingdom. This transaction is expected to
     close in August.

--   The company has committed to provide financing to a subprime
     mortgage lender to finance certain residual securities.