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Hamilton Spectator
15-05-2025
- Business
- Hamilton Spectator
Nexus Industrial REIT Announces First Quarter 2025 Financial Results
Q1 Net Operating Income grew 8.6% from accretive acquisitions, development, and 6.6% industrial SPNOI Completed the strategic transition to a pure-play industrial REIT TORONTO, May 14, 2025 (GLOBE NEWSWIRE) — Nexus Industrial REIT (the 'REIT') (TSX: announced today its results for the first quarter ended March 31, 2025. 'In the first quarter we completed our strategic transition to a pure-play, Canada-focused industrial REIT' said Kelly Hanczyk, CEO of Nexus Industrial REIT. 'We sold fifteen legacy retail properties and an additional office building. Industrial assets now contribute over 99% of our NOI on a proforma basis. The sale proceeds reduced our debt and are being used to complete two ongoing development projects that will add $6.6 million of annual stabilized NOI after completion in the third quarter, representing an unlevered 9.4% return on development costs. 'Over the past five years we have successfully re-focused and grown Nexus to be a scale pure-play industrial REIT. Our updated portfolio of industrial properties positions us well to withstand the turbulent economic environment: our buildings are tenanted by high-quality lessees focusing on Canadian distribution, with long average lease terms. And, our buildings are geographically diversified within Canada. 'We have also had an excellent start to our 2025 leasing,' continued Mr. Hanczyk. 'We have already renewed over 80% of our expiring GLA, including three value-add renewals that will contribute another $2.6 million to NOI this year and $2.9 million in 2026, increasing thereafter. These renewals further demonstrate the quality of our portfolio and the strength of our tenant relationships. 'I am very excited with the progress that we have made, and I am confident that our strategy will continue to be rewarding for our unitholders' concluded Mr. Hanczyk. First Quarter 2025 Highlights: Subsequent events: Summary of Results Non-IFRS Measures Included in the tables above and elsewhere in this news release are non-IFRS financial measures that should not be construed as an alternative to net income / loss, cash from operating activities or other measures of financial performance calculated in accordance with IFRS and may not be comparable to similar measures as reported by other issuers. Certain additional disclosures for these non-IFRS financial measures have been incorporated by reference and can be found on page 3 in the REIT's Management's Discussion and Analysis for the three months ended March 31, 2025, available on SEDAR at and on the REIT's website under Investor Relations. See Appendix A of this earnings release for a reconciliation of the non-IFRS financial measures to the primary financial statement measures. NOI NOI for the three months ended March 31, 2025 was $32.1 million or $2.6 million higher than the prior year, which was primarily due to $1.1 million from acquisitions of industrial income producing properties completed subsequent to Q1 2024, an increase in Same Property NOI by $1.6 million, and $1.6 million relating to development projects, partially offset by $1.4 million relating to dispositions completed since Q1 2024, and $0.1 million relating to higher tenant incentives and leasing costs amortization. Fair value adjustment of investment properties The fair value gains on investment properties for the three months ended March 31, 2025, totalled $8.9 million. The REIT engaged external appraisers to value properties totaling $90.7 million in the quarter. Overall, fair value gains recorded for the REIT's portfolio primarily consists of $4.5 million relating to properties held for development based on development progress relative to the as-completed appraisal value and $10.0 million relating to changes in stabilized NOI and capitalization rates. Partially offsetting this is $2.9 million of capital expenditures net of adjustments that were not deemed to increase the fair value of the properties and therefore fair valued to zero and $2.7 million relating to investment property sale price adjustments prior to disposition. Outlook The REIT is focused on delivering total unitholder return through profitable long-term growth, and by pursuing its strategy as a Canada-focused pure-play industrial REIT. Overall, the REIT anticipates mid-single digit Same Property NOI growth in its industrial portfolio for the full year. In 2025, the REIT expects to benefit from the completion of two significant development projects. Combined, these properties will add annual stabilized NOI of approximately $6.6 million when complete: Earnings Call Management of the REIT will host a conference call at 10:00 AM Eastern Standard Time on Thursday May 15, 2025 to review the financial results and operations. To participate in the conference call, please dial 647-846-8414 or 1-833-752-3601 (toll free in Canada and the US) at least five minutes prior to the start time and ask to join the Nexus Industrial REIT conference call. A recording of the conference call will be available until June 15, 2025. To access the recording, please dial 1-412-317-0088 or 1-855-669-9658 (toll free in Canada and the US) and enter access code 4446040. May and June Distributions The REIT will make a cash distribution in the amount of $0.05333 per unit, representing $0.64 per unit on an annualized basis, payable June 13, 2025, to unitholders of record as of May 30, 2025. The REIT will also make a cash distribution in the amount of $0.05333 per unit, representing $0.64 per unit on an annualized basis, payable July 15, 2025, to unitholders of record as of June 30, 2025. Annual Meeting Voting Results Each of the matters set out in the REIT's management information circular dated March 26, 2025 (the 'Circular') for the annual meeting of unitholders held on May 14, 2025 (the 'Meeting') was approved by the requisite majority of unitholders, and each of the trustee nominees listed in the Circular was elected as a trustee of the REIT. Voting results for the individual trustees are as follows: The voting results for the audit committee, including Ms. Floriana Cipollone, Mr. Bradley Cutsey, and Mr. Ben Rodney, have been negatively impacted by Glass Lewis and Institutional Shareholder Services ('ISS') recommendation to the REIT's unitholders to withhold votes for these trustees due to excessive non-audit fees paid by the REIT to the REIT's auditor PricewaterhouseCoopers LLP ('the REIT's auditor'). This recommendation is based on Glass Lewis' and ISS' assessment ('their assessment') of the audit fees disclosed in the REIT's annual information form (AIF) for the year ended December 31, 2024. The REIT disagrees with their assessment. Audit fees paid by the REIT to the REIT's auditor during the year ended December 31, 2024, were $0.35 million as compared to non-audit fees of $0.28 million. This demonstrates that the audit fees paid exceeded non-audit fees by $0.07 million. The amounts referenced by Glass Lewis and ISS are fees billed by the REIT's auditor and disclosed as such in the REIT's AIF, and not amounts paid by the REIT. Final results on all matters considered at the Meeting are reported in the Report of Voting Results as filed on SEDAR ( ). About Nexus Industrial REIT Nexus is a growth-oriented real estate investment trust focused on increasing unitholder value through the acquisition of industrial properties located in primary and secondary markets in Canada, and the ownership and management of its portfolio of properties. The REIT currently owns a portfolio of 89 properties (including one property held for development in which the REIT has an 80% interest) comprising approximately 11.7 million square feet of gross leasable area. The REIT has approximately 94,234,000 voting units issued and outstanding, including approximately 71,128,000 REIT Units and approximately 23,106,000 Class B LP Units of subsidiary limited partnerships of Nexus, which are convertible to REIT Units on a one-to-one basis. Forward Looking Statements Certain statements contained in this news release constitute forward-looking statements which reflect the REIT's current expectations and projections about future results. Often, but not always, forward-looking statements can be identified by the use of words such as 'plans', 'expects' or 'does not expect', 'is expected', 'estimates', 'intends', 'anticipates' or 'does not anticipate', or 'believes', or variations of such words and phrases or state that certain actions, events or results 'may', 'could', 'would', 'might' or 'will' be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the REIT to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Such forward-looking statements are based on a number of assumptions that may prove to be incorrect. While the REIT anticipates that subsequent events and developments may cause its views to change, the REIT specifically disclaims any obligation to update these forward-looking statements except as required by applicable law. These forward-looking statements should not be relied upon as representing the REIT's views as of any date subsequent to the date of this news release. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The factors identified above are not intended to represent a complete list of the factors that could affect the REIT. For further information please contact: Kelly C. Hanczyk, CEO at (416) 906-2379 or Mike Rawle, CFO at (647) 823-1381 APPENDIX A – NON-IFRS FINANCIAL MEASURES SAME PROPERTY RESULTS ADJUSTED EBITDA ADJUSTED NET DEBT
Yahoo
15-05-2025
- Business
- Yahoo
Nexus Industrial REIT Announces First Quarter 2025 Financial Results
Q1 Net Operating Income grew 8.6% from accretive acquisitions, development, and 6.6% industrial SPNOI Completed the strategic transition to a pure-play industrial REIT TORONTO, May 14, 2025 (GLOBE NEWSWIRE) -- Nexus Industrial REIT (the 'REIT') (TSX: announced today its results for the first quarter ended March 31, 2025. 'In the first quarter we completed our strategic transition to a pure-play, Canada-focused industrial REIT' said Kelly Hanczyk, CEO of Nexus Industrial REIT. 'We sold fifteen legacy retail properties and an additional office building. Industrial assets now contribute over 99% of our NOI on a proforma basis. The sale proceeds reduced our debt and are being used to complete two ongoing development projects that will add $6.6 million of annual stabilized NOI after completion in the third quarter, representing an unlevered 9.4% return on development costs. 'Over the past five years we have successfully re-focused and grown Nexus to be a scale pure-play industrial REIT. Our updated portfolio of industrial properties positions us well to withstand the turbulent economic environment: our buildings are tenanted by high-quality lessees focusing on Canadian distribution, with long average lease terms. And, our buildings are geographically diversified within Canada. 'We have also had an excellent start to our 2025 leasing,' continued Mr. Hanczyk. 'We have already renewed over 80% of our expiring GLA, including three value-add renewals that will contribute another $2.6 million to NOI this year and $2.9 million in 2026, increasing thereafter. These renewals further demonstrate the quality of our portfolio and the strength of our tenant relationships. 'I am very excited with the progress that we have made, and I am confident that our strategy will continue to be rewarding for our unitholders' concluded Mr. Hanczyk. First Quarter 2025 Highlights: Completed the transition to a pure-play industrial REIT by selling 15 legacy retail properties and one legacy office property for total proceeds of $50.9 million. Industrial in-place and committed occupancy increased to 97% from 96% in 2024. Net income was $33.2 million driven by net operating income ("NOI")(1) of $32.1 million and by fair value gains on Class B LP units and on investment properties, partially offset by financing expense, general and administrative expense and fair value losses on derivative instruments. NOI increased 8.6% versus year ago to $32.1 million from the acquisition of high-quality, tenanted income-producing industrial properties, and growth in industrial Same Property NOI(1). Industrial Same Property NOI(1) increased 6.6% year over year to $27.4 million. Normalized FFO(1) per unit increased $0.022 versus a year ago to $0.187 and Normalized AFFO(1) per unit increased $0.019 versus a year ago to $0.154. Unitholders' equity increased by $24.5 million and NAV(1) per unit of $13.21 increased $0.02 or 0.2% versus Q4 2024. Advanced construction on the 325,000 sq. ft. expansion project in St. Thomas, ON, and on the 115,000 sq. ft. new industrial small-bay complex in Calgary, AB. Combined, these projects will add annual stabilized NOI of $6.6 million when complete. Completion of both projects is planned for the third quarter.(1) Non-IFRS Financial Measure Subsequent events: On April 14, 2025, the REIT acquired a land parcel adjacent to one of its existing properties in Kelowna, BC for a purchase price of $18.8 million. The land is intended for the future development of Class A industrial buildings. The purchase consideration was settled through the transfer of a non-core industrial property in Fort St. John valued at $7.0 million and the balance settled in cash. Concurrent with the above transaction, the REIT entered into an agreement with the vendor of the REIT's Richmond, BC property, The REIT will develop 51,467 square feet for additional courts and parking, representing a value of approximately $29 million. The Developer will manage the development and assume the costs of the construction. The agreement provides that, as long as certain conditions are met, the fee may be paid by issuing to the Developer Class B LP Units of a subsidiary limited partnership of the REIT, valued at $10.50 per unit and exchangeable on a 1 for 1 basis for REIT units. In accordance with the agreement, the REIT has agreed to issue 2,764,464 Class B LP units which will be released in stages as consideration for the construction costs. Summary of Results (In thousands of Canadian dollars, except per unit amounts) Three months ended March 31, 2025 2024 $ $ FINANCIAL INFORMATION Operating Results Property revenues 44,754 41,597 NOI (1) 32,090 29,537 Net Income 33,151 43,671 Adjusted EBITDA (LTM) (1) 121,151 107,206 FFO (1) 17,043 14,355 Normalized FFO (1) (2) 17,580 15,378 AFFO (1) 14,397 11,588 Normalized AFFO (1) (2) 14,478 12,611 Distributions declared (3) 15,073 14,940 Same Property NOI (1) 27,824 26,268 Industrial Same Property NOI (1) 27,353 25,650 Weighted average units outstanding (000s): Basic (4) 94,203 93,341 Diluted (4) 94,477 93,448 Per unit amounts: Distributions per unit – basic (3) (4) 0.160 0.160 Distributions per unit – diluted (3) (4) 0.160 0.160 Normalized FFO per unit – basic (1) (2) (4) 0.187 0.165 Normalized FFO per unit – diluted (1) (2) (4) 0.186 0.165 Normalized AFFO per unit – basic (1) (2) (4) 0.154 0.135 Normalized AFFO per unit – diluted (1) (2) (4) 0.153 0.135 Normalized AFFO payout ratio – basic (1) (2) (3) 104.1 % 118.5 % Normalized AFFO payout ratio – diluted (1) (2) (3) 104.6 % 118.5 % Same Property NOI Growth % (1) 5.9 % -1.5 % Industrial Same Property NOI Growth % (1) 6.6 % 1.0 %(1) This is a Non-IFRS Financial Measure. (2) Until Q1 2024, Normalized FFO and Normalized AFFO included adjustments for vendor rent obligation amounts due from the vendor of the REIT's Richmond, BC property, until certain conditions were satisfied. During Q2 2024, these conditions were satisfied and the vendor settled all outstanding amounts. (3) Includes distributions payable to holders of Class B LP Units which are accounted for as finance expense in the consolidated financial statements. (4) Weighted average number of units includes Class B LP Units. As at March 31, 2025 and December 31, 2024 2025 2024 (In thousands of Canadian dollars, unless stated otherwise) $ $ PORTFOLIO INFORMATION Total Portfolio Number of Investment Properties (2) 90 106 Number of Properties Under Development 2 2 Investment Properties Fair Value (excludes assets held for sale) 2,469,045 2,458,174 Gross leasable area ('GLA') (in millions of sq. ft.) (at the REIT's ownership interest) 11.7 12.5 Industrial occupancy rate – in-place and committed (period-end) (3) 97 % 96 % Weighted average lease term ('WALT') (years) 6.7 6.8 Industrial WALT (years) 6.8 7.0 Estimated spread between industrial portfolio market and in-place rents 21.8 % 25.3 % FINANCING AND CAPITAL INFORMATION Financing Net debt (1) 1,255,667 1,279,538 Total Indebtedness Ratio (1) 48.8 % 49.1 % Net Debt to Adjusted EBITDA (1) 10.36 10.87 Adjusted Net Debt to Adjusted EBITDA (1) 10.31 10.27 Debt service coverage ratio (times) 1.64 1.62 Secured Indebtedness Ratio 26.3 % 27.4 % Unencumbered investment properties as a percentage of investment properties 40.2 % 39.5 % Total assets 2,574,184 2,604,460 Cash and cash equivalents 9,080 11,532 Capital Total equity (per consolidated financial statements) 1,086,233 1,061,724 Total equity (including Class B LP Units) 1,244,968 1,241,747 Total number of Units (in thousands) (4) 94,221 94,159 NAV per Unit 13.21 13.19 (1) See Non-IFRS Financial Measure. (2) Includes 3 properties (17 properties - December 31, 2024) classified as assets held for sale. (3) Includes committed new leases for future occupancy. (4) Includes Class B LP Units. Non-IFRS Measures Included in the tables above and elsewhere in this news release are non-IFRS financial measures that should not be construed as an alternative to net income / loss, cash from operating activities or other measures of financial performance calculated in accordance with IFRS and may not be comparable to similar measures as reported by other issuers. Certain additional disclosures for these non-IFRS financial measures have been incorporated by reference and can be found on page 3 in the REIT's Management's Discussion and Analysis for the three months ended March 31, 2025, available on SEDAR at and on the REIT's website under Investor Relations. See Appendix A of this earnings release for a reconciliation of the non-IFRS financial measures to the primary financial statement measures. NOI NOI for the three months ended March 31, 2025 was $32.1 million or $2.6 million higher than the prior year, which was primarily due to $1.1 million from acquisitions of industrial income producing properties completed subsequent to Q1 2024, an increase in Same Property NOI by $1.6 million, and $1.6 million relating to development projects, partially offset by $1.4 million relating to dispositions completed since Q1 2024, and $0.1 million relating to higher tenant incentives and leasing costs amortization. Fair value adjustment of investment properties The fair value gains on investment properties for the three months ended March 31, 2025, totalled $8.9 million. The REIT engaged external appraisers to value properties totaling $90.7 million in the quarter. Overall, fair value gains recorded for the REIT's portfolio primarily consists of $4.5 million relating to properties held for development based on development progress relative to the as-completed appraisal value and $10.0 million relating to changes in stabilized NOI and capitalization rates. Partially offsetting this is $2.9 million of capital expenditures net of adjustments that were not deemed to increase the fair value of the properties and therefore fair valued to zero and $2.7 million relating to investment property sale price adjustments prior to disposition. Outlook The REIT is focused on delivering total unitholder return through profitable long-term growth, and by pursuing its strategy as a Canada-focused pure-play industrial REIT. Overall, the REIT anticipates mid-single digit Same Property NOI growth in its industrial portfolio for the full year. In 2025, the REIT expects to benefit from the completion of two significant development projects. Combined, these properties will add annual stabilized NOI of approximately $6.6 million when complete: The REIT expects to complete its 325,000 sq ft Dennis Rd. expansion project in St. Thomas, ON in the third quarter of 2025. This project is being constructed for an existing tenant. The REIT earns 7.8% on capital expenditures during the construction phase, and will earn a contractual going-in yield of 9.0% on the total development costs of $54.9 million upon completion. The REIT is constructing a 115,000 sq ft small-bay industrial building adjacent to an existing building that it owns in Calgary, AB. The project is now expected to be completed in the third quarter of 2025 and to earn a going-in yield of approximately 11% on total development costs of $15.4 million. Earnings Call Management of the REIT will host a conference call at 10:00 AM Eastern Standard Time on Thursday May 15, 2025 to review the financial results and operations. To participate in the conference call, please dial 647-846-8414 or 1-833-752-3601 (toll free in Canada and the US) at least five minutes prior to the start time and ask to join the Nexus Industrial REIT conference call. A recording of the conference call will be available until June 15, 2025. To access the recording, please dial 1-412-317-0088 or 1-855-669-9658 (toll free in Canada and the US) and enter access code 4446040. May and June Distributions The REIT will make a cash distribution in the amount of $0.05333 per unit, representing $0.64 per unit on an annualized basis, payable June 13, 2025, to unitholders of record as of May 30, 2025. The REIT will also make a cash distribution in the amount of $0.05333 per unit, representing $0.64 per unit on an annualized basis, payable July 15, 2025, to unitholders of record as of June 30, 2025. Annual Meeting Voting Results Each of the matters set out in the REIT's management information circular dated March 26, 2025 (the 'Circular') for the annual meeting of unitholders held on May 14, 2025 (the 'Meeting') was approved by the requisite majority of unitholders, and each of the trustee nominees listed in the Circular was elected as a trustee of the REIT. Voting results for the individual trustees are as follows: Nominee Number of Votes For Percentage of Votes For Number of Votes Withheld Percentage of Votes Withheld Floriana Cipollone 23,448,607 59.583% 15,906,168 40.417% Bradley Cutsey 27,573,968 70.065% 11,780,807 29.935% Daniel Oberste 39,198,350 99.603% 156,425 0.397% Mary Vitug 29,108,794 73.965% 10,245,981 26.035% Kelly C. Hanczyk 33,109,525 84.131% 6,245,250 15.869% Ben Rodney 27,578,382 70.076% 11,776,393 29.924% The voting results for the audit committee, including Ms. Floriana Cipollone, Mr. Bradley Cutsey, and Mr. Ben Rodney, have been negatively impacted by Glass Lewis and Institutional Shareholder Services ("ISS") recommendation to the REIT's unitholders to withhold votes for these trustees due to excessive non-audit fees paid by the REIT to the REIT's auditor PricewaterhouseCoopers LLP ("the REIT's auditor"). This recommendation is based on Glass Lewis' and ISS' assessment ("their assessment") of the audit fees disclosed in the REIT's annual information form (AIF) for the year ended December 31, 2024. The REIT disagrees with their assessment. Audit fees paid by the REIT to the REIT's auditor during the year ended December 31, 2024, were $0.35 million as compared to non-audit fees of $0.28 million. This demonstrates that the audit fees paid exceeded non-audit fees by $0.07 million. The amounts referenced by Glass Lewis and ISS are fees billed by the REIT's auditor and disclosed as such in the REIT's AIF, and not amounts paid by the REIT. Final results on all matters considered at the Meeting are reported in the Report of Voting Results as filed on SEDAR ( About Nexus Industrial REIT Nexus is a growth-oriented real estate investment trust focused on increasing unitholder value through the acquisition of industrial properties located in primary and secondary markets in Canada, and the ownership and management of its portfolio of properties. The REIT currently owns a portfolio of 89 properties (including one property held for development in which the REIT has an 80% interest) comprising approximately 11.7 million square feet of gross leasable area. The REIT has approximately 94,234,000 voting units issued and outstanding, including approximately 71,128,000 REIT Units and approximately 23,106,000 Class B LP Units of subsidiary limited partnerships of Nexus, which are convertible to REIT Units on a one-to-one basis. Forward Looking Statements Certain statements contained in this news release constitute forward-looking statements which reflect the REIT's current expectations and projections about future results. Often, but not always, forward-looking statements can be identified by the use of words such as 'plans', 'expects' or 'does not expect', 'is expected', 'estimates', 'intends', 'anticipates' or 'does not anticipate', or 'believes', or variations of such words and phrases or state that certain actions, events or results 'may', 'could', 'would', 'might' or 'will' be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the REIT to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Such forward-looking statements are based on a number of assumptions that may prove to be incorrect. While the REIT anticipates that subsequent events and developments may cause its views to change, the REIT specifically disclaims any obligation to update these forward-looking statements except as required by applicable law. These forward-looking statements should not be relied upon as representing the REIT's views as of any date subsequent to the date of this news release. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The factors identified above are not intended to represent a complete list of the factors that could affect the REIT. For further information please contact: Kelly C. Hanczyk, CEO at (416) 906-2379 orMike Rawle, CFO at (647) 823-1381 APPENDIX A – NON-IFRS FINANCIAL MEASURES (In thousands of Canadian dollars, except per unit amounts) Three months ended March 31, 2025 2024 Change FFO $ $ $ Net income 33,151 43,671 (10,520 ) Adjustments: Loss on disposal of investment properties 85 - 85 Fair value adjustment of investment properties (8,878 ) (15,183 ) 6,305 Fair value adjustment of Class B LP Units (19,037 ) (10,828 ) (8,209 ) Fair value adjustment of incentive units 199 (9 ) 208 Fair value adjustment of derivative financial instruments 7,989 (7,491 ) 15,480 Adjustments for equity accounted joint venture (1) 76 (42 ) 118 Distributions on Class B LP Units expensed 3,713 3,938 (225 ) Amortization of tenant incentives and leasing costs 366 273 93 Lease principal payments (26 ) (4 ) (22 ) Amortization of right-of-use assets 30 30 - Net effect of unrealized foreign exchange on USD debt and related hedges (625 ) - (625 ) Funds from operations (FFO) 17,043 14,355 2,688 Weighted average units outstanding (000s) Basic (4) 94,203 93,341 862 FFO per unit – basic 0.181 0.154 0.027 FFO 17,043 14,355 2,688 Add: Vendor rent obligation (2) - 628 (628 ) Add: Non-recurring personnel transition costs 107 260 (153 ) Add: Non-recurring adjustments from asset dispositions (5) 472 - 472 Add: Other non-cash items (6) (42 ) 135 (177 ) Normalized FFO 17,580 15,378 2,202 Weighted average units outstanding (000s) Basic (4) 94,203 93,341 862 Normalized FFO per unit – basic 0.187 0.165 0.022 (In thousands of Canadian dollars, except per unit amounts) Three months ended March 31, 2025 2024 Change AFFO $ $ $ FFO 17,043 14,355 2,688 Adjustments: Straight-line adjustments ground lease and rent (1,046 ) (1,167 ) 121 Capital reserve (3) (1,600 ) (1,600 ) - Adjusted funds from operations (AFFO) 14,397 11,588 2,809 Weighted average units outstanding (000s) Basic (4) 94,203 93,341 862 AFFO per unit – basic 0.153 0.124 0.029 AFFO 14,397 11,588 2,809 Add: Vendor rent obligation (2) - 628 (628 ) Add: Non-recurring personnel transition costs 107 260 (153 ) Add: Non-recurring adjustments from asset dispositions (5) 16 - 16 Add: Other non-cash items (6) (42 ) 135 (177 ) Normalized AFFO 14,478 12,611 1,867 Weighted average units outstanding (000s) Basic (4) 94,203 93,341 862 Normalized AFFO per unit – basic 0.154 0.135 0.019 (1) Adjustment for equity accounted joint venture relates to a fair value adjustment of swaps in place at the joint venture to swap floating rate bankers' acceptance rates to a fixed rate and a fair value adjustment of the joint venture investment property. (2) Until Q1 2024, Normalized FFO and Normalized AFFO included adjustments for vendor rent obligation amounts due from the vendor of the REIT's Richmond, BC property, until certain conditions were satisfied. During Q2 2024, these conditions were satisfied and the vendor settled all outstanding amounts. (3) Capital reserve includes maintenance capital expenditures, tenant incentives and leasing costs. Reserve amounts are established with reference to building condition reports, appraisals, and internal estimates of tenant renewal, tenant incentives and leasing costs. The REIT believes that a reserve is more appropriate given the fluctuating nature of these capital expenditures. (4) Weighted average number of units includes the Class B LP Units. (5) These adjustments represent balance sheet write-offs, early mortgage repayment charges, and other costs associated with the disposals made during the period. Given the one-time, non-recurring, nature of these costs, the REIT has adjusted for these in determining normalized FFO and normalized AFFO. (6) This adjustment represents unrealized foreign exchange losses (gains) on transactions relating to deferred purchase consideration. Note that the comparative periods for 2024 have been updated to conform with the current period PROPERTY RESULTS (In thousands of Canadian dollars) Three months ended March 31, 2025 2024 Change $ $ $ Property revenues 44,754 41,597 3,157 Property expenses (12,664 ) (12,060 ) (604 ) NOI 32,090 29,537 2,553 Add/(Deduct): Amortization of tenant incentives and leasing costs 366 273 93 Straight-line adjustments of rent (1,045 ) (1,164 ) 119 Development and expansion (1,622 ) (70 ) (1,552 ) Acquisitions (1,335 ) (248 ) (1,087 ) Disposals (630 ) (2,025 ) 1,395 Termination fees and other non-recurring items - (35 ) 35 Same Property NOI 27,824 26,268 1,556 Industrial same property NOI 27,353 25,650 1,703 ADJUSTED EBITDA (In thousands of Canadian dollars) Three months ended March 31, 2025 2024 Change $ $ $ Net income 80,362 199,984 (119,622 ) Add (deduct): Net interest expense 55,049 46,680 8,369 Distributions on Class B LP Units 15,053 14,606 447 Fair value adjustments (1) (30,593 ) (151,931 ) 121,338 Amortization expense (1)(2) (3,151 ) (3,732 ) 581 Loss on disposal of investment properties 1,540 807 733 Unrealized foreign exchange loss (gain) 123 (53 ) 176 Income from development property 2,374 325 2,049 Non-recurring personnel transition costs 191 520 (329 ) Non-recurring costs related to asset dispositions 203 - 203 Adjusted EBITDA 121,151 107,206 13,945 (1) Includes equity accounted investments adjustments. (2) Includes amortization of straight line rent, tenant improvement, and leasing NET DEBT (In thousands of Canadian dollars) March 31, December 31, 2025 2024 $ $ Current and non-current: Mortgages payable 581,204 590,292 Credit facilities 663,632 649,836 Lease liabilities 10,689 10,715 Liabilities associated with assets held for sale 9,222 40,227 Total indebtedness 1,264,747 1,291,070 Less: Unrestricted cash (9,080 ) (11,532 ) Less: Additions to properties under development (7,130 ) (70,232 ) Adjusted net debt 1,248,537 1,209,306
