REIT reports solid quarterly leasing activity, completing 110,000 square feet of new and renewed leases with a weighted average lease term of 6.9 years and 5.0% positive leasing spread on renewed leases
TORONTO, May 12, 2026 /CNW/ - True North Commercial Real Estate Investment Trust (TSX:TNT) (the "REIT") today announced its financial results for the three months ended March 31, 2026 ("Q1-2026").
"We were pleased with the level of leasing activity completed during the first quarter of 2026, reflecting the REIT's continued focus on tenant engagement and supporting strong core portfolio occupancy of 95%," said Daniel Drimmer, the REIT's Chief Executive Officer. "Management remains focused on maintaining leasing continuing to strengthen the REIT's financial position and enhancing the long term value for our unitholders."
Q1-2026 highlights
The REIT's core portfolio occupancy(1) at the end of Q1-2026 was approximately 95% with a weighted average lease term ("WALT")(1) of 4.2 years.
The REIT contractually leased or renewed approximately 110,000 square feet with a WALT of 6.9 years achieving positive leasing spreads on renewals of 5.0% for Q1-2026.
The REIT's revenue decreased from $31,086 in three months ended March 31, 2025 ("Q1-2025") to $29,830 in Q1-2026 representing a 4.0% decrease primarily due to higher vacancy in Ottawa and Greater Toronto Area ("GTA") in Q1-2026 relative to Q1-2025, partially offset by one time non-cash adjustments recorded in Q1-2026. The reduction in Q1-2026 occupancy in the Ottawa portfolio was due to the strategically executed early lease termination completed in three months ended December 31, 2025 ("Q4-2025") with the property since being classified as held for sale. The reduction in Q1-2026 occupancy in the GTA property is due to the move-out of certain tenants throughout 2025 with the space being re-leased to commence later in 2026.
Q1-2026 same property net operating income ("Same Property NOI")(1) excluding assets held for sale decreased by approximately 7.6% compared to the same period in 2025, primarily attributable to early termination income recognized in Q1-2025 at a GTA property with no comparable income in Q1-2026. Excluding the impact of termination income and free rent in both periods, Same Property NOI in Q1-2026 would have declined by approximately 0.4% primarily due to reductions in rental income at certain properties in the GTA where tenants had moved out throughout 2025 with such space being re-leased with lease commencement dates later in 2026. The REIT continues to focus on leasing activity and continues to maintain above market occupancy levels across its portfolio.
The REIT's Q1-2026 funds from operations ("FFO")(1) and adjusted funds from operations ("AFFO")(1) decreased by $726 and $1,722, respectively when compared to the same period in 2025 primarily due to the reductions in Same Property NOI primarily due to the termination income in the prior year described above as well as an increase in interest costs related to increases in the REIT's weighted average interest rate from the refinancing activity completed throughout 2025.
Q1-2026 FFO basic and diluted per trust units ("Unit")(1) decreased from $0.56 in Q1-2025 to $0.51 in Q1-2026 and AFFO basic and diluted per Unit(1) decreased from $0.57 in Q1-2025 to $0.45 in Q1-2026, respectively, due to the reasons outlined above for the changes in FFO and AFFO. Excluding termination income, Q1-2026 diluted AFFO would have decreased by $0.03 per Unit relative to Q1-2025.
The REIT successfully completed the refinancing of $47,025 for debt maturing in 2026 at a weighted average interest rate of 4.74% and weighted average term of 5.00 years. The remaining debt maturities in 2026 occur in the third and fourth quarters of 2026 or thereafter with the REIT having longstanding and strong relationships with the respective lenders. The REIT continues to proactively manage its debt maturity profile to strengthen the REIT's financial position.
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1 This is a non-IFRS financial measure, refer to "Non-IFRS measures". Represents occupancy, excluding assets held for sale and WALT.
Subsequent event
On April 23, 2026, the REIT renewed the 2025 normal course issuer bid ("2026 NCIB"), as approved by the TSX. Under the 2026 NCIB, the REIT has the ability to purchase for cancellation up to a maximum of 1,235,415 of its Units, representing 10% of the REIT's public float of 12,354,156 Units as of April 9, 2026 through the facilities of the TSX or through a Canadian alternative trading system and in accordance with applicable regulatory requirements at a price per Unit equal to the market price at the time of acquisition.
Key performance indicators
Q1-2026
Q1-2025
Number of properties(1)
37
40
Portfolio gross leasable area ("GLA")(1)
4,403,100 sf
4,619,000 sf
Occupancy(1)(2)
95 %
92 %
WALT(1)
4.2 years
4.2 years
Revenue from government and credit rated tenants(1)
74 %
74 %
Revenue
$ 29,830
$ 31,086
Net operating income ("NOI")(3)
13,561
14,665
Net income and comprehensive income
537
563
Same Property NOI(4)
16,910
19,358
FFO
$ 7,356
$ 8,082
FFO per Unit - basic
0.51
0.56
FFO per Unit - diluted
0.51
0.56
AFFO
$ 6,507
$ 8,229
AFFO per Unit - basic
0.45
0.57
AFFO per Unit - diluted
0.45
0.57
AFFO payout ratio - diluted(3)
38 %
10 %
Distributions declared
$ 2,484
$ 828
(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 March 31, 2026. The REIT's occupancy for all assets owned as at the end of each reporting period (including any held for sale assets) was 89% as at the end of Q1-2026 (Q1-2025 was 86%).
(3) This is a non-IFRS financial measure, refer to "Non-IFRS measures".
(4) Represents Same Property NOI including assets classified as held for sale during Q1-2026 and Q1-2025. Same Property NOI excluding assets classified as held for sale have been presented separately in this press release.
Operating results
The REIT's revenue decreased from $31,086 in Q1-2025 to $29,830 in Q1-2026 representing a 4.0% decrease primarily due to higher vacancy in Ottawa and GTA in Q1-2026 relative to Q1-2025, partially offset by one time non-cash adjustments recorded in Q1-2026. The reduction in Q1-2026 occupancy in the Ottawa portfolio was due to the strategically executed early lease termination completed in Q4-2025 with the property since being classified as held for sale. The reduction in Q1-2026 occupancy in the GTA property is due to the move-out of certain tenants throughout 2025 with the space being re-leased to commence later in 2026.
Q1-2026 Same Property NOI excluding assets held for sale decreased by approximately 7.6% compared to the same period in 2025, primarily attributable to early termination income recognized in Q1-2025 at a GTA property with no comparable income in Q1-2026. Excluding the impact of termination income and free rent in both periods, Same Property NOI in Q1-2026 would have declined by approximately 0.4% primarily due to reductions in rental income at certain properties in the GTA where tenants had moved out throughout 2025 with such space being re-leased with lease commencement dates later in 2026. The REIT continues to focus on leasing activity and continues to maintain above market occupancy levels across its portfolio.
The REIT's Q1-2026 FFO and AFFO decreased by $726 and $1,722, respectively when compared to the same period in 2025 primarily due to reductions in Same Property NOI primarily due to the termination income in the prior year described above as well as an increase in interest costs related to increases in the REIT's weighted average interest rate from the refinancing activity completed throughout 2025.
FFO basic and diluted per Unit decreased from $0.56 in Q1-2025 to $0.51 in Q1-2026 and AFFO basic and diluted per Unit decreased from $0.57 in Q1-2025 to $0.45 in Q1-2026, respectively, due to the reasons outlined above for the changes in FFO and AFFO. Excluding termination income, Q1-2026 diluted AFFO would have decreased by $0.03 per Unit relative to Q1-2025.
For Q1-2026, the REIT's AFFO payout ratio was 38%, compared to 10% in Q1-2025. The increase is primarily attributable to the entire quarter of distributions in Q1-2026 compared to one month in Q1-2025.
Same Property NOI
Occupancy(1)
As at March 31
Same Property NOI(1)
2026
2025
Q1-2026
Q1-2025
Variance
Variance %
Alberta
92.9 %
87.6 %
Alberta
$ 2,741
$ 2,881
$ (140)
(4.9) %
British Columbia
74.8 %
74.8 %
British Columbia
490
587
(97)
(16.5) %
New Brunswick
91.5 %
89.8 %
New Brunswick
