OPERATIONAL AND BALANCE SHEET HIGHLIGHTS
On April 13, 2026, Morningstar DBRS upgraded the Company's issuer rating and senior unsecured debentures to an investment grade rating of BBB (low), stable trend from BB (high), positive trend.
The Company ended the first quarter in a strong liquidity position with $488.5 million of cash and available credit facilities, and has a $1.1 billion pool of unencumbered properties and other investments.
The Company has a binding commitment to sell its leasehold interest in an office property consisting of 328,500 square feet located in Ottawa, Ontario, for gross proceeds of $148.2 million (or $451 per square foot), excluding closing costs. The transaction is scheduled to close on August 31, 2026.
On February 25, 2026, The Company announced, together with Morguard North American Residential REIT, a $1.0 billion investment in a Canadian multi-suite residential portfolio owned by TD Asset Management Inc. ("TDAM"), representing an approximate 20% interest in 106 properties. During the quarter, the Company progressed due diligence and continued to evaluate the allocation of ownership interests. The transaction is expected to close in the second half of 2026, subject to completion of due diligence and customary approvals. Subsequent to quarter end, the Company entered into property and asset management agreements with TDAM and commenced a phased transition of management services.
During the first quarter, the Company refinanced maturing mortgages for gross proceeds of $106.2 million at an average interest rate of 4.50% and an average term of 3.4 years.
As at March 31, 2026, shareholders' equity per common share was $419.33, compared to $410.70 at December 31, 2025.
REPORTING HIGHLIGHTS
Total revenue from real estate properties decreased by $8.5 million, or 3.3%, to $254.5 million for the three months ended March 31, 2026, compared to $263.0 million for the same period in 2025.
Normalized funds from operations(1) ("Normalized FFO") was $46.1 million, or $4.31 per common share, for the three months ended March 31, 2026. This represents a decrease of $3.9 million, or 7.8%, compared to $50.0 million, or $4.66 per common share for the same period in 2025.
Adjusted NOI(1) decreased by $6.6 million, or 4.8%, to $130.5 million for the three months ended March 31, 2026, compared to $137.1 million for the same period in 2025.
Comparative NOI(1) decreased by $7.2 million, or 5.3%, to $130.5 million for the three months ended March 31, 2026, compared to $137.7 million for the same period in 2025.
Net income increased by $6.4 million to $61.2 million for the three months ended March 31, 2026, compared to $54.8 million for the same period in 2025, primarily due to an increase in non-cash net fair value gain, partially offset by lower NOI.
1) Refer to Specified Financial Measures
FINANCIAL HIGHLIGHTS
For the three months ended March 31
(in thousands of dollars)
2026
2025
Revenue from real estate properties
$254,489
$263,049
Revenue from hotel properties
6,907
5,374
Management and advisory fees
9,060
9,491
Interest and other income
4,590
4,285
Total revenue
$275,046
$282,199
Revenue from real estate properties
$254,489
$263,049
Revenue from hotel properties
6,907
5,374
Property operating expenses
(168,720)
(173,651)
Hotel operating expenses
(5,795)
(4,698)
Net operating income ("NOI")
$86,881
$90,074
Net income attributable to common shareholders
$58,471
$58,135
Net income per common share, basic and diluted
$5.48
$5.42
Funds from operations(1)
$39,639
$47,242
FFO per common share, basic and diluted(1)
$3.71
$4.41
Normalized funds from operations(1)
$46,071
$49,964
Normalized FFO per common share, basic and diluted(1)
$4.31
$4.66
(1) Refer to Specified Financial Measures.
Total revenue during the three months ended March 31, 2026, decreased by $7.2 million, or 2.5%, to $275.0 million compared to $282.2 million in 2025, mainly due to a decrease in revenue from real estate properties in the amount of $8.5 million, primarily due to an increase in vacancy within the office segment and an increase in vacancy, net of higher average monthly rent ("AMR") within the multi-suite residential segment as well as a change in foreign exchange rate, partially offset by an increase in revenue from hotel properties in the amount of $1.5 million from an increase in occupancy and increase in average daily daily rate ("ADR").
Net income for the three months ended March 31, 2026 was $61.2 million, compared to $54.8 million in 2025. The increase in net income of $6.4 million for three months ended March 31, 2026 was primarily due to the following:
An increase in non-cash net fair value gain of $10.6 million, mainly due to an increase in fair value gain on Morguard Residential REIT units and an increase in fair value gain on marketable securities, partially offset by a decrease in fair value gain on real estate properties and an increase in fair value loss on other real estate investments; and
A decrease in NOI of $3.2 million, mainly due to higher vacancy within the office and multi-suite residential segments, and the change in foreign exchange rate, partly offset by a lower IFRIC 21 adjustment.
AVERAGE OCCUPANCY LEVELS
