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REIT generates robust leasing activity, completing 172,600 square feet of new and renewed leases with a weighted average lease term of 7.8 years and 1.4% positive leasing spread on renewed leases
TORONTO, March 17, 2026 /CNW/ - True North Commercial Real Estate Investment Trust (TSX: TNT.UN) (the "REIT") today announced its financial results for the three months ended December 31, 2025 ("Q4-2025") and year ended December 31, 2025 ("YTD-2025").
"We are pleased with the continued leasing momentum during Q4-2025 and completion of an additional non-core property sale," said Daniel Drimmer, the REIT's Chief Executive Officer. "The REIT continues to focus on strengthening its financial position, maintaining its strong leasing momentum and enhancing long term value for our unitholders."
Q4-2025 highlights
-- The REIT's core portfolio occupancy(1) at the end of Q4-2025 was
approximately 90% with a weighted average lease term ("WALT")(1) of 4.3
years.
-- The REIT contractually leased or renewed approximately 172,600 square
feet with a WALT of 7.8 years achieving positive leasing spreads on
renewals of 1.4% for Q4-2025.
-- The REIT's revenue increased from $31,682 in three months ended December
31, 2024 ("Q4-2024") to $40,331 in Q4-2025 representing a 27.3% increase
(YTD-2025 - increased by 2.5%) primarily due to Q4-2025 including $12,400
of early termination income related to a strategically executed lease
termination for one of the REIT's Ottawa properties. Excluding the impact
of the Ottawa property described above, Q4-2025 revenue would have
declined by approximately 3.0% primarily attributable to two properties
in the REIT's Greater Toronto Area ("GTA") portfolio that had higher
vacancy during Q4-2025 than Q4-2024 with such vacant space having been
re-leased with move-ins scheduled in 2026.
-- The REIT's net operating income ("NOI")(1) increased by approximately
63.3% in Q4-2025 relative to Q4-2024 primarily driven by the termination
income noted above.
-- Q4-2025 same property net operating income ("Same Property NOI")(1)
excluding the impact of termination income and free rent in both periods
decreased by approximately 2.2% (YTD-2025 - 3.8%) primarily due to a
reduction in occupancy in Q4-2025 relative to Q4-2024 isolated to certain
properties in British Columbia, Ottawa and GTA with the GTA space having
been re-leased to new tenants commencing in 2026, partially offset by
contractual rent increases achieved by the REIT.
-- The REIT's Q4-2025 funds from operations ("FFO")(1) and adjusted funds
from operations ("AFFO")(1) increased by $9,471 and $10,345 (YTD-2025 -
$4,263 and $3,738), respectively when compared to the same period in 2024
primarily due to the termination income described above, offset by the
reduction in NOI excluding termination income as well as increase in
interest costs.
-- Q4-2025 FFO and AFFO basic and diluted per trust units ("Unit")(1)
increased from $0.61 and $0.60 in Q4-2024 to $1.27 and $1.26 in Q4-2025
and AFFO basic and diluted per Unit increased from $0.63 and $0.62 in
Q4-2024 to $1.35 and $1.34 in Q4-2025, respectively, due to the reasons
outlined above for the changes in FFO and AFFO, as well as the impact of
a reduction in the number of the outstanding Units as a result of
repurchases under the normal course issuer bid (the "NCIB") program
during 2024 and 2025. Excluding termination income, Q4-2025 diluted FFO
and AFFO would have decreased by $0.17 and $0.11, respectively, relative
to Q4-2024.
__________________
(1) This is a non-IFRS financial measure, refer to
"Non-IFRS measures". Represents occupancy, excluding
assets held for sale and WALT.
YTD highlights
-- The REIT contractually leased and renewed approximately 778,500 square
feet with a WALT of 6.0 years and a 1.7% increase over expiring base
rents.
-- During the first half of 2025, the REIT completed the repurchase of
110,700 Units for cash of $1,021 under the NCIB program at a weighted
average price of $9.23 per Unit. No Units were repurchased during second
half of 2025.
-- On March 18, 2025, the REIT announced the reinstatement of the monthly
distribution ("Distribution Reinstatement") to Unitholders, which
commenced with a record date of March 31, 2025, payable on April 15,
2025, amounting to $0.0575 per Unit per month. For YTD-2025, the REIT's
AFFO payout ratio(1) was 20%.
-- During YTD-2025, the REIT successfully completed the renewal or
refinancing of all debt maturing in 2025, including $250,036 of
refinancing and $8,500 of new financing at a weighted average interest
rate of approximately 4.82% and weighted average term of approximately
2.96 years. For the REIT's 2026 debt maturities, $47,025 of the
approximate $242,000 of the debt maturing in 2026 has been refinanced at
a weighted average interest rate of 4.48% and weighted average term of
5.00 years (see "Subsequent Events"). The remaining debt maturities in
2026 occur late in Q3-2026 and thereafter, and involve lenders with whom
the REIT has longstanding and strong relationships. The REIT continues to
proactively manage its debt maturity profile to strengthen the REIT's
financial position.
______________________
(1) This is a non-IFRS financial measure, refer to
"Non-IFRS measures".
Subsequent events
On January 2, 2026, the REIT collected $12,400 of early lease termination income (net of excise tax payable by the REIT) from a tenant, which was included in tenant receivables within the REIT's consolidated financial statement as at December 31, 2025.
Subsequent to December 31, 2025, the REIT successfully completed $47,025 of refinancing at a weighted average interest rate of 4.48% and weighted average term of 5.00 years.
Key performance indicators
Q4-2025 Q4-2024 YTD-2025 YTD-2024
Number of properties(1) 37 40
Portfolio gross leasable 4,399,200 sf 4,618,800 sf
area ("GLA")(1)
Occupancy(1)(2) 90 % 93 %
WALT(1) 4.3 years 4.2 years
Revenue from government and
credit rated tenants(1) 75 % 75 %
Revenue $ 40,331 $ 31,682 $ 130,119 $ 126,908
NOI 25,245 15,457 69,082 65,821
Net loss and comprehensive
loss (15,995) (15,160) (32,572) (20,953)
Same Property NOI(3) 30,385 18,433 86,073 75,705
FFO $ 18,353 $ 8,882 $ 41,039 $ 36,776
FFO per Unit - basic 1.27 0.61 2.85 2.42
FFO per Unit - diluted 1.26 0.60 2.83 2.42
AFFO $ 19,501 $ 9,156 $ 41,565 $ 37,827
AFFO per Unit - basic 1.35 0.63 2.88 2.49
AFFO per Unit - diluted 1.34 0.62 2.86 2.48
AFFO payout ratio - diluted 13 % -- % 20 % -- %
Distributions declared $ 2,484 $ -- $ 8,279 $ --
(1) This is presented as at the end of the applicable
reporting period, rather than for the quarter.
(2) Represents same property occupancy excluding assets
classified as held for sale as at December 31, 2025.
The REIT's occupancy for all assets owned as at the
end of each reporting period (including any held for
sale assets) was 88% as at the end of Q4-2025 (Q4-2024
- 87%).
(3) Represents Same Property NOI including assets
classified as held for sale during Q4-2025 and Q4-2024.
Same Property NOI excluding assets classified as held
for sale have been presented separately in this press
release.
Operating results
The REIT's revenue increased from $31,682 in Q4-2024 to $40,331 in Q4-2025 representing a 27.3% increase (YTD-2025 - increased by 2.5%) primarily due to Q4-2025 including $12,400 of early termination income related to a strategically executed lease termination related to one of the REIT's Ottawa properties and partially offset by a one-time non-recurring charge to write-off $1,609 of unamortized straight line rent adjustments relating to the same lease. Excluding the impact of the Ottawa property with the early termination income noted, Q4-2025 revenue would have declined by $898 or approximately 3.0% primarily attributable to two properties in the REIT's GTA portfolio that had higher vacancy during Q4-2025 than Q4-2024 with such vacant space having been re-leased with move-ins scheduled in 2026.
The REIT's NOI increased by approximately 63.3% in Q4-2025 relative to Q4-2024 primarily driven by the termination income noted above included in Q4-2025.
The REIT's Q4-2025 FFO and AFFO increased by $9,471 and $10,345 (YTD-2025 - $4,263 and $3,738), respectively when compared to the same period in 2024 primarily due to the termination income associated with a strategically executed lease termination by a tenant in the REIT's Ottawa portfolio, offset by the reduction in NOI excluding termination income and increase in interest costs.
FFO basic and diluted per Unit increased from $0.61 and $0.60 in Q4-2024 to $1.27 and $1.26 in Q4-2025 and AFFO basic and diluted per Unit increased from $0.63 and $0.62 in Q4-2024 to $1.35 and $1.34 in Q4-2025, respectively, due to the reasons outlined above for the changes in FFO and AFFO, as well as the impact of a reduction in the number of the outstanding Units as a result of repurchases under the NCIB program during 2024 and 2025. Excluding termination income, Q4-2025 diluted FFO and AFFO would have decreased by $0.17 and $0.11, respectively, relative to Q4-2024.
On March 18, 2025, the REIT announced the Distribution Reinstatement to Unitholders, which commenced with a record date of March 31, 2025, payable on April 15, 2025, amounting to $0.0575 per Unit per month. For YTD-2025, the REIT's AFFO payout ratio was 20%.
Same Property NOI
Occupancy(1) As at December Same Property NOI(1)
31
2025 2024 Q4-2025 Q4-2024 Variance Variance %
Alberta 87.6 % 88.1 % Alberta $ 2,888 $ 2,941 $ (53) (1.8) %
British British
Columbia 74.8 % 100.0 % Columbia 512 814 (302) (37.1) %
New
New Brunswick 91.3 % 88.3 % Brunswick 1,379 1,344 35 2.6 %
Nova
Nova Scotia 91.3 % 85.7 % Scotia 1,455 1,302 153 11.8 %
Ontario 90.5 % 95.3 % Ontario 24,375 12,383 11,992 96.8 %
Total 89.8 % 92.9 % $ 30,609 $ 18,784 $ 11,825 63.0 %
(1) Excluding assets held for sale.
Q4-2025 Same Property NOI excluding assets held for sale increased by approximately 63.0% (YTD-2025 - 13.3%) compared to the same period in 2024 primarily due to Q4-2025 including $12,400 of early termination income. Q4-2025 Same Property NOI excluding the impact of termination income and free rent in both periods, decreased by approximately 2.0% primarily due to a reduction in occupancy in Q4-2025 relative to Q4-2024 for the REIT's British Columbia portfolio, one Ottawa property and one GTA property, of which the GTA space has been re-leased with new tenants commencing in 2026, partially offset by contractual rent increases achieved by the REIT. The REIT continues to focus on leasing activity and continues to maintain above occupancy levels across its portfolio.
Q4-2025 Alberta Same Property NOI remained relatively consistent with Q4-2024. Q4-2025 British Columbia Same Property NOI decreased by 37.1% primarily as a result of an expiring lease that was not renewed at the beginning of 2025 with the REIT continuing to focus on re-leasing such space.
Q4-2025 New Brunswick Same Property NOI remained relatively consistent with Q4-2024. Q4-2025 Nova Scotia Same Property NOI increased by 11.8% as a result of the increase in occupancy between the two periods as well as contractual rent increases.
Q4-2025 Ontario Same Property NOI increased by 96.8% relative to Q4-2024 primarily due to the termination income associated with a strategically executed lease termination by a tenant in the REIT's Ottawa portfolio. Q4-2025 Same Property NOI excluding termination income and free rent for Ontario portfolio, decreased by 2.2% primarily due to reductions in occupancy at one of the REIT's Ottawa properties and two of the REIT's GTA properties, with that space having been re-leased to new tenants commencing in 2026.
Debt and liquidity
December 31, December 31,
2025 2024
Indebtedness to GBV ratio(1) 62.5 % 61.8 %
Interest coverage ratio(1) 2.27 x 2.21 x
Indebtedness(1) - weighted average
fixed interest
rate 4.41 % 3.94 %
Indebtedness - weighted average 2.21 years 2.16 years
term to maturity
(1) This is a non-IFRS financial measure, refer to
"Non-IFRS measures".
As at December 31, 2025, the REIT had access to available funds ("Available Funds")((1) () of approximately $41,956 with its mortgage portfolio carrying a weighted average term to maturity of 2.21 years and weighted average fixed interest rate of 4.41%.
During YTD-2025, the REIT successfully completed $250,036 of refinancing making up all the 2025 maturities and $8,500 of new financing at a weighted average interest rate of approximately 4.82% and weighted average term of approximately 2.96 years. Subsequent to December 31, 2025, the REIT successfully completed $47,025 of refinancing at a weighted average interest rate of 4.48% and weighted average term of 5.00 years
_______________ (1) This is a non-IFRS financial measure, refer to "Non-IFRS measures".
About the REIT
The REIT is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. The REIT currently owns and operates a portfolio of 37 commercial properties consisting of approximately 4.4 million square feet in urban and select strategic secondary markets across Canada focusing on long term leases with government and credit rated tenants.
The REIT is focused on growing its portfolio principally through acquisitions across Canada and such other jurisdictions where opportunities exist. Additional information concerning the REIT is available at www.sedarplus.ca or the REIT's website at www.truenorthreit.com.
Non-IFRS measures
Certain terms used in this press release such as FFO, AFFO, FFO and AFFO payout ratios, NOI, Same Property NOI, indebtedness ("Indebtedness"), gross book value ("GBV"), Indebtedness to GBV ratio, net earnings before interest, tax, depreciation and amortization and fair value gain (loss) on financial instruments and investment properties ("Adjusted EBITDA"), interest coverage ratio, net asset value ("NAV") per Unit, Available Funds, occupancy and WALT are not measures defined by IFRS Accounting Standards ("IFRS") as prescribed by the International Accounting Standards Board, do not have standardized meanings prescribed by IFRS and should not be compared to or construed as alternatives to profit/loss, cash flow from operating activities or other measures of financial performance calculated in accordance with IFRS. FFO, AFFO, FFO and AFFO payout ratios, NOI, Same Property NOI, Indebtedness, GBV, Indebtedness to GBV ratio, Adjusted EBITDA, interest coverage ratio, adjusted cash provided by operating activities, NAV per Unit, Available Funds, occupancy and WALT as computed by the REIT may not be comparable to similar measures presented by other issuers. The REIT uses these measures to better assess the REIT's underlying performance and provides these additional measures so that investors may do the same. Details on non-IFRS measures are set out in the REIT's Management's Discussion and Analysis for Q4-2025 and the Annual Information Form are available on the REIT's profile at www.sedarplus.ca.
Reconciliation of non-IFRS financial measures
The following tables reconcile the non-IFRS financial measures to the comparable IFRS measures for Q4-2025, Q4-2024, YTD-2025 and YTD-2024. These non-IFRS financial measures do not have any standardized meanings prescribed by IFRS and may not be comparable to similar measures presented by other issuers.
NOI
The following table calculates the REIT's NOI, a non-IFRS financial measure:
Q4-2025 Q4-2024 YTD-2025 YTD-2024
Revenue $ 40,331 $ 31,682 $ 130,119 $ 126,908
Expenses:
Property operating (10,325) (11,470) (41,494) (41,511)
Property taxes (4,761) (4,755) (19,543) (19,576)
NOI $ 25,245 $ 15,457 $ 69,082 $ 65,821
Same Property NOI
Same Property NOI is measured as the NOI for the properties owned and operated by the REIT for the current and comparative period. The following table reconciles the REIT's Same Property NOI to NOI:
Q4-2025 Q4-2024 YTD-2025 YTD-2024
Number of properties 37 37 37 37
Revenue $ 40,331 $ 30,836 $ 129,907 $ 120,588
Expenses:
Property operating (10,210) (11,271) (40,839) (39,615)
Property taxes (4,720) (4,658) (19,194) (18,757)
$ 25,401 $ 14,907 $ 69,874 $ 62,216
Add:
Amortization of leasing costs and
tenant inducements 3,132 2,631 12,872 10,017
Straight-line rent 1,852 895 3,327 3,472
Same Property NOI $ 30,385 $ 18,433 $ 86,073 $ 75,705
Less: NOI related to properties
held for sale included
in the above (224) (351) (932) (1,074)
Same Property NOI excluding
investment properties
held for sale $ 30,609 $ 18,784 $ 87,005 $ 76,779
Reconciliation to consolidated
financial statements:
Acquisition, dispositions and
investment properties
held for sale (380) 265 (1,724) 2,940
Amortization of leasing costs and
tenant inducements (3,132) (2,631) (12,872) (10,033)
Straight-line rent (1,852) (961) (3,327) (3,865)
NOI $ 25,245 $ 15,457 $ 69,082 $ 65,821
FFO and AFFO
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