TORONTO--(BUSINESS WIRE)--April 29, 2026--
Choice Properties Real Estate Investment Trust ("Choice Properties" or the "Trust") (TSX: CHP.UN) today announced its consolidated financial results for the three months ended March 31, 2026. The First Quarter Report to Unitholders is available in the Investors section of the Trust's website at www.choicereit.ca, and has been filed on SEDAR+ at www.sedarplus.ca.
"Choice Properties started the year strong, with stable occupancy and robust leasing spreads. Same-Asset NOI and FFO per unit growth reflected this solid operating performance and the continued momentum across our portfolio," said Rael Diamond, President and Chief Executive Officer of the Trust. "With our business in excellent shape and an industry--leading balance sheet, we announced a transformational acquisition subsequent to quarter end. The potential opportunity to add high--quality urban retail assets will meaningfully strengthen our national platform and enhance long--term value for Unitholders."
2026 First Quarter Highlights
-- Reported a net loss of $87.2 million compared to a net loss of $96.2
million in the prior year period.
-- Reported FFO(1) per unit diluted of $0.271, representing year-over-year
growth of 2.7%.
-- FFO(1) per unit diluted, excluding lease surrender revenue and the
reduction in Allied Properties REIT's ("Allied") distribution, increased
by 3.5% compared to the prior year period.
-- Achieved Same-Asset NOI, Cash Basis(1) growth of 3.0% and Total NOI,
Cash Basis(1) growth of 4.2%.
-- Achieved long term renewal leasing spreads(2) of 21.8%.
-- Period end occupancy remained stable at 98.1%, with Retail at 97.9%,
Industrial at 98.6%, and Mixed-Use & Residential at 93.8%.
-- Completed $28.5 million of real estate transactions on a proportionate
share basis(1).
-- Delivered $9.3 million of development projects, adding approximately
21,900 square feet of new commercial GLA on a proportionate share
basis(1) through retail intensifications.
Subsequent Event
On April 16, 2026, the Trust announced that it entered into an agreement with First Capital Real Estate Investment Trust ("FCR") and KingSett Capital, on behalf of its investors (collectively, "KingSett") pursuant to which KingSett and the Trust will acquire FCR in a unit and cash transaction valued at approximately $9.4 billion, including the assumption of certain debt (the "Transaction").
Upon closing of the Transaction, the Trust will acquire approximately $5.0 billion of FCR's high-quality retail assets and KingSett will acquire approximately $4.4 billion of FCR's assets and all of FCR's issued and outstanding units.
For additional details regarding the agreement and the Transaction, refer to the April 16, 2026 press release posted on the Trust's website at www.choicereit.ca/investors/.
Performance Highlights
As at or for the
periods ended Three Months
----------------------------------- --------
($ thousands except
where otherwise March 31, March 31,
indicated) 2026 2025 Change Change %
-------------------- ------------ ------------ ------- --------
FFO(1) $ 196,020 $ 190,939 $ 5,081 2.7 %
FFO per unit
diluted(1) 0.271 0.264 0.007 2.7 %
Net Loss (87,194) (96,233) 9,039 (9.4) %
Weighted average
number of units
outstanding -
diluted(i) 723,810,797 723,770,677 40,120 -- %
--------------------- ----------- ----------- ------ --------
(i) Includes Trust
Units and
Exchangeable Units
Funds from Operations
FFO(1) increased by $5.1 million, or 2.7% per unit diluted for the three months ended March 31, 2026. The increase was primarily due to higher net operating income and lease surrender revenue, partially offset by higher interest expense, lower investment income as a result of the reduction in Allied's distribution, higher general and administrative expenses, and lower fee income.
Growth in FFO(1) per unit diluted was impacted by higher lease surrender revenue of $1.9 million in the current year and a reduction of Allied's distribution of $3.2 million. Excluding these items, FFO(1) per unit diluted for the three-month period increased by $0.009 or 3.5%.
Net Loss
Choice Properties reported a net loss of $87.2 million for the three months ended March 31, 2026, compared to a net loss of $96.2 million in the prior year period. The difference of $9.0 million was primarily due to changes in certain non-cash adjustments to fair value including:
-- a $49.0 million favourable change in the adjustment to fair value of
investment properties.
-- a $19.8 million favourable change in the adjustment to fair value of
the Trust's Exchangeable Units(3) due to the change in the Trust's unit
price; partially offset by
-- a $40.5 million unfavourable change in the adjustment to fair value of
the investment in real estate securities of Allied, driven by the change
in Allied's unit price; and
-- a $18.9 million decrease in income from equity accounted joint ventures
resulting from the unfavourable change in the adjustment to fair value of
related investment properties.
Select Proportionate Share(1) Operational and Financial Highlights
As at or for the
periods ended Three Months
----------------------------------- --------
($ thousands except
where otherwise March 31, March 31,
indicated) 2026 2025 Change Change %
-------------------- ------------ ------------ ------- --------
NOI, Cash Basis(1) $ 273,085 $ 262,070 $11,015 4.2 %
Same-Asset NOI, Cash
basis(1) $ 255,532 $ 247,986 $ 7,546 3.0 %
Long term renewal
spreads(2) 21.8 % 11.7 % 10.1 % n/a
Occupancy (% of GLA) 98.1 % 97.7 % 0.4 % n/a
NAV(1) per unit $ 14.53 $ 14.17 $ 0.36 2.5 %
--------------------- -------- -------- ------ --------
-- Same-Asset NOI, Cash Basis(1) increased by 3.0% for the three months
ended March 31, 2026 compared to the prior year period.
-- Retail increased by 3.2%;
-- Industrial increased by 6.2%; and
-- Mixed-Use & Residential decreased by 15.4% due to the impact of
a property tax incentive recognized in the prior year period.
Excluding the mixed-use & residential portfolio, Same-Asset NOI on
a cash basis(1) increased by 3.8%.
-- Period end occupancy decreased by 10 basis points from December 31,
2025 to 98.1%, with:
-- Retail at 97.9%, Industrial at 98.6%, and Mixed-Use &
Residential at 93.8%.
-- Achieved leasing spreads(2) on long-term renewals of 21.8%, with 17.2%
and 46.2% in the Retail and Industrial portfolios, respectively.
Outlook
We are focused on capital preservation, delivering stable and growing cash flows and net asset value appreciation. Our high-quality portfolio is primarily leased to necessity-based tenants and logistics providers, who are less sensitive to economic volatility and therefore provide stability to our overall portfolio. We will continue to advance our development program, with a focus on commercial developments, which provides us with the best opportunity to add high-quality real estate to our portfolio at a reasonable cost and drive net asset value appreciation over time.
We are confident that our business model, stable tenant base, strong balance sheet, and disciplined approach to financial management will continue to benefit us. We cannot predict the timing of the closing of the Transaction with FCR and KingSett, and its impact on our financial results. In 2026, excluding this impact, Choice Properties is targeting:
-- Stable occupancy across the portfolio, resulting in approximately 2%-3%
year-over-year growth in Same-Asset NOI, Cash Basis(1);
-- Annual FFO per unit diluted(1) in a range of approximately $1.08 to
$1.10; and
-- Strong leverage metrics, targeting Adjusted Debt to EBITDAFV(1) below
7.5x.
Issuance of ESG Report
On April 29, 2026, the Trust issued its 2025 Environmental, Social and Governance Report, available on the Trust's website at www.choicereit.ca/sustainability.
Conference Call and Webcast
Management will host a conference call on Thursday, April 30, 2026 at 9:00 AM (EDT) with a simultaneous audio webcast. To access via teleconference, please dial +1 (888) 330-2454 or +1 (240) 789-2714 and enter the event passcode: 4788974. The link to the audio webcast will be available on www.choicereit.ca/investors.
Choice Properties' Annual Meeting of Unitholders will be held on Thursday, April 30, 2026 at 11:00 AM $(ET)$ in a virtual meeting format via live webcast. Unitholders can attend the meeting by joining the live webcast online at https://meetings.lumiconnect.com/400-970-939-471. Refer to "How do I attend and participate in the virtual Meeting?" in the Management Proxy Circular, which is available to be viewed online at www.choicereit.ca or under Choice Properties' SEDAR+ profile at www.sedarplus.ca for detailed instructions on how to attend and vote at the meeting. The webcast of the meeting will be archived on our website following the meeting. Please refer to the events page at www.choicereit.ca for additional details on the virtual meeting.
About Choice Properties Real Estate Investment Trust
Choice Properties is Canada's largest real estate investment trust, guided by a clear purpose: to create places where people thrive. This is how we build enduring value. As a national owner, operator, and developer of high-quality commercial and residential real estate, we go beyond managing assets. We create places that strengthen how tenants and communities live, work, and connect. Our platform is built on industry leadership in sustainability, community engagement, and social impact, embedded across how we operate, build, and grow. As a trusted steward of capital, we are committed to disciplined execution, long-term value creation, and responsible growth. Everything we do is guided by our core values of Care, Ownership, Respect, and Excellence. For more information, visit Choice Properties' website at www.choicereit.ca and Choice Properties' issuer profile at www.sedarplus.ca.
(1) Refer to Non-GAAP Financial Measures and Additional Financial Information section. (2) Long term renewal spreads are calculated as the difference between the average rate during the renewal term and the expiring rental rate. (3) Exchangeable Units are required to be classified as financial liabilities at fair value through profit and loss under GAAP. They are recorded at their fair value based on the market trading price of the Trust Units, which results in a negative impact to the financial results when the Trust Unit price rises and a positive impact when the Trust Unit price declines.
Non-GAAP Financial Measures and Additional Financial Information
Choice Properties prepares and releases unaudited interim and audited annual consolidated financial statements in accordance with International Financial Reporting Standards ("IFRS" or "GAAP"), along with its MD&A, which should be read in conjunction with this news release.
In addition to results provided in accordance with IFRS, Choice Properties also measures its performance using certain non-GAAP measures, which are provided in this news release so that investors may do the same. These non-GAAP measures include FFO, NOI Cash basis, Same-Asset NOI Cash basis, NAV, Proportionate share, and Adjusted Debt to EBITDAFV. Such measures and related per-unit amounts are not defined by IFRS and therefore should not be construed as alternatives to net income or cash flows from operating activities determined in accordance with IFRS. Furthermore, the supplemental measures used by management may not be comparable to similar measures presented by other real estate investment trusts or enterprises. The non-GAAP measures included in this news release are defined and reconciled to the most comparable GAAP measure below. Choice Properties believes these non-GAAP financial measures provide useful information to both management and investors in measuring the financial performance and financial condition of the Trust for the reasons outlined below.
Proportionate share represents financial information adjusted to reflect the Trust's equity accounted joint ventures and financial real estate assets and its share of net income (loss) from equity accounted joint ventures and financial real estate assets on a proportionately consolidated basis at the Trust's ownership percentage of the related investment. Management views this method as relevant in demonstrating the Trust's ability to manage the underlying economics of the related investments, including the financial performance and cash flows and the extent to which the underlying assets are leveraged, which is an important component of risk management.
The following table reconciles net loss, as determined in accordance with GAAP, to net loss on a proportionate share basis for the three months ended March 31, 2026:
Three Months
-------------------------------------------------
Adjustment to
Proportionate Share Proportionate
($ thousands) GAAP Basis Basis Share Basis
---------------- ---------- ------------------- ----------------
Net Operating
Income
Rental revenue $ 361,192 $ 31,298 $ 392,490
Property
operating
costs (105,095) (9,614) (114,709)
---------------- --------- ---- ------------- --- -----------
256,097 21,684 277,781
Other Income and
Expenses
Interest income 11,009 (4,484) 6,525
Investment
income 2,126 -- 2,126
Fee income 1,167 -- 1,167
Net interest
expense and
other financing
charges (150,063) (7,390) (157,453)
General and
administrative
expenses (16,058) -- (16,058)
Share of income
from equity
accounted joint
ventures (2,765) 2,765 --
Amortization of
intangible
assets (250) -- (250)
Adjustment to
fair value of
unit-based
compensation (296) -- (296)
Adjustment to
fair value of
Exchangeable
Units (217,683) -- (217,683)
Adjustment to
fair value of
investment
properties 79,003 (12,575) 66,428
Adjustment to
fair value of
investment in
real estate
securities (49,480) -- (49,480)
---------------- --------- ---- ------------- --- -----------
Loss before
Income Taxes (87,193) -- (87,193)
Income tax
expense (1) -- (1)
---------------- --------- ---- ------------- --- -----------
Net Loss $ (87,194) $ -- $ (87,194)
---------------- --------- ---- ------------- --- -----------
The following table reconciles net loss, as determined in accordance with GAAP, to net loss on a proportionate share basis for the three months ended March 31, 2025:
Three Months
-------------------------------------------------
Adjustment to
Proportionate Share Proportionate
($ thousands) GAAP Basis Basis Share Basis
---------------- ---------- ------------------- ----------------
Net Operating
Income
Rental revenue $ 346,912 $ 25,134 $ 372,046
Property
operating
costs (101,063) (7,830) (108,893)
---------------- --------- ---- ------------- --- -----------
245,849 17,304 263,153
Other Income and
Expenses
Interest income 11,661 (4,310) 7,351
Investment
income 5,315 -- 5,315
Fee income 2,470 -- 2,470
Net interest
expense and
other financing
charges (146,189) (6,859) (153,048)
General and
administrative
expenses (14,737) -- (14,737)
Share of income
from equity
accounted joint
ventures 16,155 (16,155) --
Amortization of
intangible
assets (250) -- (250)
Transaction
costs and other
related
expenses -- -- --
Adjustment to
fair value of
unit-based
compensation (18) -- (18)
Adjustment to
fair value of
Exchangeable
Units (237,472) -- (237,472)
Adjustment to
fair value of
investment
properties 29,958 10,020 39,978
Adjustment to
fair value of
investment in
real estate
securities (8,974) -- (8,974)
---------------- --------- ---- ------------- --- -----------
Loss before
Income Taxes (96,232) -- (96,232)
Income tax
expense (1) -- (1)
---------------- --------- ---- ------------- --- -----------
Net Loss $ (96,233) $ -- $ (96,233)
---------------- --------- ---- ------------- --- -----------
Net Operating Income ("NOI"), Accounting Basis, is defined as property rental revenue including straight-line rental revenue, reimbursed contract revenue and lease surrender revenue, less direct property operating expenses and realty taxes, and excludes certain expenses such as interest expense and indirect operating expenses in order to provide results that reflect a property's operations before consideration of how it is financed or the costs of operating the entity in which it is held. Management believes that NOI is an important measure of operating performance for the Trust's commercial real estate assets that is used by real estate industry analysts, investors and management, while also being a key input in determining the fair value of the Choice Properties portfolio.
NOI, Cash Basis, is defined as property rental revenue and reimbursed contract revenue, excluding straight-line rental revenue and lease surrender revenue, less direct property operating expenses and realty taxes. Management believes NOI, Cash Basis is a useful measure in understanding period-over-period changes in income from operations due to occupancy, rental rates, operating costs and realty taxes.
The following table reconciles net loss, as determined in accordance with GAAP, to Net Operating Income, Cash Basis for the periods ended as indicated:
Three Months
-------------------------------- -------------------------------
For the periods ended March 31
($ thousands) 2026 2025 Change $
-------------------------------- -------- -------- ---------
Net Loss $(87,194) $(96,233) $ 9,039
Residential inventory income -- -- --
Interest income (11,009) (11,661) 652
Investment income (2,126) (5,315) 3,189
Fee income (1,167) (2,470) 1,303
Net interest expense and other
financing charges 150,063 146,189 3,874
General and administrative
expenses 16,058 14,737 1,321
Share of income from equity
accounted joint ventures 2,765 (16,155) 18,920
Amortization of intangible assets 250 250 --
Adjustment to fair value of
unit-based compensation 296 18 278
Adjustment to fair value of
Exchangeable Units 217,683 237,472 (19,789)
Adjustment to fair value of
investment properties (79,003) (29,958) (49,045)
Adjustment to fair value of
investment in real estate
securities 49,480 8,974 40,506
Income tax expense (recovery) 1 1 --
--------------------------------- -------- -------- --------
Net Operating Income, Accounting
Basis - GAAP 256,097 245,849 10,248
Straight-line rental revenue 1,104 367 737
Lease surrender revenue (1,926) (84) (1,842)
--------------------------------- -------- -------- --------
Net Operating Income, Cash Basis
- GAAP 255,275 246,132 9,143
Adjustments for equity accounted
joint ventures and financial
real estate assets 17,810 15,938 1,872
--------------------------------- -------- -------- --------
Net Operating Income, Cash Basis
- Proportionate Share $ 273,085 $ 262,070 $ 11,015
--------------------------------- -------- -------- --------
Same-Asset NOI, Cash Basis represents NOI only for those assets that were owned and operated by the Trust since January 1, 2025 inclusive.
The following table reconciles NOI, Cash Basis to Same-Asset NOI, Cash Basis for the periods ended as indicated:
Three Months
--------------------------------- ------------------------------
For the periods ended March 31 ($
thousands) 2026 2025 Change $
--------------------------------- -------- -------- --------
Net Operating Income, Cash Basis -
Proportionate Share $ 273,085 $ 262,070 $ 11,015
Less:
Transactions NOI, Cash Basis -
Proportionate Share (17,553) (14,084) (3,469)
---------------------------------- -------- -------- -------
Same-Asset NOI, Cash Basis -
Proportionate Share $ 255,532 $ 247,986 $ 7,546
---------------------------------- -------- -------- -------
Funds from Operations ("FFO") is calculated in accordance with the Real Property Association of Canada's Funds From Operations (FFO) & Adjusted Funds From Operations (AFFO) for IFRS issued in January 2022. Management considers FFO to be a useful measure of operating performance as it adjusts for items included in net income (or loss) that do not arise from operating activities or do not necessarily provide an accurate depiction of the Trust's past or recurring performance, such as adjustments to fair value of Exchangeable Units, investment properties, investment in real estate securities, and unit-based compensation. From time to time, the Trust may enter into transactions that materially impact the calculation and are eliminated from the calculation for management's review purposes.
Management uses and believes that FFO is a useful measure of the Trust's performance that, when compared period over period, reflects the impact on operations of trends in occupancy levels, rental rates, operating costs and realty taxes, acquisition activities and interest costs.
The following table reconciles net loss, as determined in accordance with GAAP, to Funds from Operations for the periods ended as indicated:
Three Months
-------------------------- -------------------------------------
For the periods ended
March 31 ($ thousands
except where otherwise
indicated) 2026 2025 Change $
-------------------------- ----------- ----------- ---------
Net Loss $ (87,194) $ (96,233) $ 9,039
Add (deduct) impact of the
following:
Amortization of intangible
assets 250 250 --
Adjustment to fair value of
unit-based compensation 296 18 278
Adjustment to fair value of
Exchangeable Units 217,683 237,472 (19,789)
Adjustment to fair value of
investment properties (79,003) (29,958) (49,045)
Adjustment to fair value of
investment properties to
proportionate share 12,575 (10,020) 22,595
Adjustment to fair value of
investment in real estate
securities 49,480 8,974 40,506
Interest otherwise
capitalized for
development in equity
accounted joint ventures 2,594 2,496 98
Exchangeable Units
distributions 76,519 75,529 990
Internal expenses for
leasing 2,819 2,410 409
Income tax expense 1 1 --
--------------------------- ----------- ----------- --------
Funds from Operations $ 196,020 $ 190,939 $ 5,081
--------------------------- ----------- ----------- --------
FFO per unit - diluted $ 0.271 $ 0.264 $ 0.007
Weighted average number of
units outstanding -
diluted(i) 723,810,797 723,770,677 40,120
--------------------------- ----------- ----------- --------
(i) Includes Trust Units
and Exchangeable Units.
Earnings before Interest, Taxes, Depreciation, Amortization, and Fair Value ("EBITDAFV") is defined as net income (loss) attributable to Unitholders, reversing, where applicable, income taxes, interest expense, amortization expense, depreciation expense, adjustments to fair value and other adjustments on a proportionate share basis as allowed in the Trust Indentures, as supplemented. Management believes EBITDAFV is useful in assessing the Trust's ability to service its debt, finance capital expenditures and provide distributions to its Unitholders.
Total Adjusted Debt is defined as variable rate debt (construction loans, mortgages, and credit facility) and fixed rate debt (senior unsecured debentures, construction loans and mortgages), as measured on a proportionate share basis, including the impact of other finance charges and defeasance or other prepayments of debt. It does not include the Exchangeable Units which are included as part of unit equity on account of the Exchangeable Units being economically equivalent and receiving equal distributions to the Trust Units.
The following table reconciles net loss, as determined in accordance with GAAP, to EBITDAFV for the periods ended as indicated:
Three Months
-------------------------------
For the periods ended March 31
($ thousands) 2026 2025 Change $
-------------------------------- -------- -------- ---------
Net Loss $(87,194) $(96,233) $ 9,039
Add (deduct) impact of the
following:
Transaction costs and other
related expenses -- -- --
Adjustment to fair value of
unit-based compensation 296 18 278
Adjustment to fair value of
Exchangeable Units 217,683 237,472 (19,789)
Adjustment to fair value of
investment properties (79,003) (29,958) (49,045)
Adjustment to fair value of
investment properties to
proportionate share 12,575 (10,020) 22,595
Adjustment to fair value of
investment in real estate
securities 49,480 8,974 40,506
Interest expense on a
proportionate share basis 157,560 154,571 2,989
Amortization of other assets 293 316 (23)
Amortization of intangible assets 250 250 --
Income tax expense 1 1 --
--------------------------------- -------- -------- --------
EBITDAFV - Proportionate Share $ 271,941 $ 265,391 $ 6,550
--------------------------------- -------- -------- --------
Net Asset Value ("NAV") is an alternative measurement of equity. It is calculated by summing Unitholder's Equity and the fair value of the Trust's Exchangeable Units. Under IFRS Exchangeable Units are considered debt. The Exchangeable Units are not required to be repaid and the holder of these units has the right to convert them into Units, therefore Management considers the Exchangeable Units to be equivalent to equity. NAV is a useful measure as it reflects Management's view of the intrinsic value of the Trust. NAV per unit allows Management to determine if the Trust is trading at a discount or premium to its intrinsic value.
The following table reconciles Net Asset Value as at the dates indicated below:
($ thousands except where otherwise As at March 31, As at December indicated) 2026 31, 2025 Change $ -------------------- ----------------- ---------------- ---------- Unitholders' equity $ 4,434,568 $ 4,584,809 $(150,241) Exchangeable Units 6,079,281 5,861,598 217,683 --------------------- ------------- ------------ --------- NAV $ 10,513,849 $ 10,446,407 $ 67,442 --------------------- ------------- ------------ --------- NAV per unit $ 14.53 $ 14.43 $ 0.10 --------------------- ------------- ------------ --------- Trust Units and Exchangeable Units, end of period 723,810,797 723,810,797 -- --------------------- ------------- ------------ ---------
Cautionary Statements Regarding Forward-looking Statements
This news release contains forward-looking statements relating to Choice Properties' operations and the environment in which the Trust operates, which are based on management's expectations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Therefore, actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. Management undertakes no obligation to publicly update any such statement, to reflect new information or the occurrence of future events or circumstances, except as required by law.
Numerous risks and uncertainties could cause the Trust's actual results to differ materially from those expressed, implied or projected in the forward-looking statements, including those described in Section 11 "Enterprise Risks and Risk Management" of the Trust's MD&A for the year ended December 31, 2025 and those described in the Trust's Annual Information Form for the year ended December 31, 2025.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260423871719/en/
CONTACT:
For further information, please contact investor@choicereit.ca.
Erin Johnston
Chief Financial Officer
e: Erin.Johnston@choicereit.ca
(END) Dow Jones Newswires
April 29, 2026 16:47 ET (20:47 GMT)