REIT maintains strong leasing momentum in Q2-2025 with 291,600 square feet of new and renewed leases with a weighted average lease term of 4.4 years and 0.6% leasing spread on renewed leases
/NOT FOR DISTRIBUTION IN THE U.S. OR OVER U.S. NEWSWIRES/
TORONTO, Aug. 12, 2025 /CNW/ – True North Commercial Real Estate Investment Trust (TSX:TNT) (the “REIT”) today announced its financial results for the three months ended June 30, 2025 (“Q2-2025”) and six months ended June 30, 2025 (“YTD-2025”).
“We are pleased with the strong leasing momentum which continued during the second quarter including the renewal of 161,000 square feet with a major Canadian bank further highlighting the REIT’s commitment to maintaining strong relationships with high quality credit rated tenants,” said Daniel Drimmer, the REIT’s Chief Executive Officer. “Our core portfolio continued to achieve strong occupancy of 93% and the REIT completed the sale of two non-core assets, which combined with the REIT substantially completing the refinancing of its 2025 debt maturities, continued to strengthen the REIT’s financial position.”
Q2-2025 highlights
- The REIT’s core portfolio occupancy([1]) excluding assets held for sale at the end of Q2-2025 was approximately 93% which remained above the average occupancy for the markets in which the REIT operates. The REIT also had a weighted average lease term (“WALT”)(1) of 4.2 years excluding investment properties held for sale.
- The REIT contractually leased or renewed approximately 291,600 square feet with a WALT of 4.4 years with positive leasing spreads on renewals reported at 0.6% for the quarter.
- The REIT’s Q2-2025 revenue and Net Operating Income (“NOI”)(1) decreased relative to the three months ended June 30, 2024 (“Q2-2024”) by 13% and 21% (YTD-2025 – 9% and 17%), respectively, primarily due to the disposition activity in 2024, a decrease in occupancy for the REIT’s held for sale properties and termination income amounts included in Q2-2024 with no comparable amounts in Q2-2025 (the “Primary Variance Driver”), partially offset by contractual rent increases achieved by the REIT throughout 2024 and YTD-2025.
- Q2-2025 same property net operating income (“Same Property NOI”)(1) excluding the impact of termination income in both periods, decreased by approximately 5% primarily due to a reduction in occupancy for the REIT’s Alberta portfolio and the finalization of an early termination of a tenant in the REIT’s Greater Toronto Area (“GTA”) portfolio completed in Q1-2025, which space has been re-leased with a new tenant for a ten-year lease term commencing in 2026. Excluding the impact of these items, the REIT’s Same Property NOI would have been relatively in line with Q2-2024.
- The REIT’s Q2-2025 funds from operations (“FFO”)(1) and adjusted funds from operations (“AFFO”)(1) decreased by $3,440 and $4,063 (YTD-2025 – $4,199 and $4,894), respectively when compared to the same period in 2024 primarily due to the reduction in NOI described above and increase in interest costs.
- Q2-2025 FFO and AFFO basic and diluted per trust units (“Unit”)(1) decreased from $0.65 and $0.66 in Q2-2024 to $0.45 and $0.42 respectively due to the reasons outlined above, partially offset by the impact of a reduction in number of outstanding Units as a result of repurchases under the the normal course issuer bid (“NCIB”) program during 2024 and 2025.
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1 This is a non-IFRS financial measure, refer to “Non-IFRS measures”. |
YTD highlights
- The REIT contractually leased and renewed approximately 437,500 square feet with a WALT of 4.8 years and a 0.8% increase over expiring base rents relative to the six months ended June 30, 2024 (“YTD-2024”).
- The REIT continued the NCIB with YTD-2025 completing the repurchase of 110,700 Units for cash of $1,021 under 2024 NCIB at a weighted average price of $9.23 per Unit.
- 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 was 41%.
- During YTD-2025, the REIT successfully completed $215,800 of refinancing or approximately 86% of the 2025 maturities and $4,500 of new financing at a weighted average interest rate of approximately 4.72% and weighted average term of approximately 3.1 years and has substantially finalized terms on the remaining 2025 maturities which are with lenders the REIT has longstanding relationships with. Subsequent to June 30, 2025, the REIT successfully secured a second mortgage in the amount of $4,000, with a three-year term at an interest rate of 9%. The REIT continues to focus on managing its debt maturity profile to strengthen the REIT’s financial position.
Subsequent events
On July 16, 2025, the REIT completed the sale of 78 Meg Drive, London, Ontario totaling 11,300 square feet, for a sale price of $3,500.
On August 6, 2025, the REIT successfully secured a second mortgage in the amount of $4,000, with a three-year term at an interest rate of 9%.
Key performance indicators
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Q2-2025 |
Q2-2024 |
YTD-2025 |
YTD-2024 |
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Number of properties(1) |
39 |
40 |
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Portfolio gross leasable area (“GLA”)(1) |
4,470,800 sf |
4,608,800 sf |
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Occupancy(1)(2) |
93 % |
90 % |
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WALT(1) |
4.2 years |
4.3 years |
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Revenue from government and credit rated tenants(1) |
74 % |
76 % |
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Revenue |
$ 28,116 |
$ 32,325 |
$ 59,202 |
$ 64,789 |
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NOI |
13,803 |
17,521 |
28,468 |
34,107 |
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Net loss and comprehensive loss |
(11,927) |
(7,548) |
(11,364) |
(2,410) |
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Same Property NOI(3) |
17,692 |
19,956 |
37,325 |
38,637 |
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FFO |
$ 6,499 |
$ 9,939 |
$ 14,581 |
$ 18,780 |
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FFO per Unit – basic |
0.45 |
0.65 |
1.01 |
1.20 |
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FFO per Unit – diluted |
0.45 |
0.65 |
1.00 |
1.20 |
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AFFO |
$ 6,035 |
$ 10,098 |
$ 14,264 |
$ 19,158 |
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AFFO per Unit – basic |
0.42 |
0.66 |
0.99 |
1.23 |
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AFFO per Unit – diluted |
0.42 |
0.66 |
0.98 |
1.23 |
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AFFO payout ratio – diluted(4) |
41 % |
— % |
23 % |
— % |
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Distributions declared |
$ 2,483 |
$ — |
$ 3,311 |
$ — |
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(1) This is presented as at the end of the applicable reporting period, rather than for the quarter. |
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(2) Represents same property occupancy excluding assets classified as held for sale as at June 30, 2025. 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 Q2-2025 (Q2-2024 – 88%). |
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(3) Represents Same Property NOI including assets classified as held for sale during Q2-2025 and Q2-2024. Same Property NOI excluding assets classified as held for sale have been presented separately in this press release. |
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(4) This is a non-IFRS financial measure, refer to “Non-IFRS Financial Measures”. YTD-2025 AFFO payout ratio was lower as a result of the reinstatement of the REIT’s distribution commencing the March 2025 record date. |
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Operating results
The REIT’s Q2-2025 revenue and NOI decreased relative to Q2-2024 by 13% and 21% (YTD-2025 – 9% and 17%), respectively, primarily due to the Primary Variance Driver, partially offset by contractual rent increases achieved by the REIT throughout 2024 and YTD-2025.
The REIT’s Q2-2025 FFO and AFFO decreased by $3,440 and $4,063 (YTD-2025 – $4,199 and $4,894), respectively when compared to the same period in 2024 primarily due to the reduction in NOI described above and increase in interest costs.
Q2-2025 FFO and AFFO basis and diluted per Unit decreased from $0.65 and $0.66 in Q2-2024 to $0.45 and $0.42 respectively due to the reasons outlined above, partially offset by the impact of a reduction in number of outstanding Units as a result of repurchases under the NCIB program during 2024 and 2025.
YTD-2025 FFO basic and diluted per Unit decreased $0.19 and $0.20 to $1.01 and $1.00, whereas AFFO basic and diluted per Unit decreased $0.24 and $0.25 to $0.99 and $0.98 respectively, compared to YTD-2024 with variance driven by reasons noted above for Q2-2025 FFO and AFFO per Unit.
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 41%.
Same Property NOI
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Occupancy(1) |
As at June 30 |
Same Property NOI(1) |
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2025 |
2024 |
Q2-2025 |
Q2-2024 |
Variance |
Variance % |
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Alberta |
87.8 % |
93.3 % |
Alberta |
$ 2,675 |
$ 3,174 |
$ (499) |
(15.7) % |
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British Columbia |
74.8 % |
100.0 % |
British Columbia |
541 |
809 |
(268) |
(33.1) % |
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New Brunswick |
91.8 % |
86.7 % |
New Brunswick |
1,333 |
1,223 |
110 |
9.0 % |
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Nova Scotia |
89.5 % |
82.3 % |
Nova Scotia |
1,283 |
1,065 |
218 |
20.5 % |
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Ontario |
94.8 % |
95.9 % |
Ontario |
11,860 |
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