Nexus Industrial REIT Announces First Quarter 2026 Financial Results

Net Income of $32.2 million; NOI(1) growth of 5.4% to $33.8 million; Normalized AFFO payout ratio(1) of 96.6% TORONTO, May 11, 2026 (GLOBE NEWSWIRE) -- Nexus Industrial REIT (the “REIT”) (TSX: NXR.UN) announced today its results for the first quarter ended March 31, 2026. “In the first quarter we advanced our journey as Canada’s industrial building partner, delivering Normalized AFFO payout ratio(1) of 96.6%, a meaningful improvement over recent quarters and a significant step toward our 2026 guidance of delivering a ratio below 100% for the full year,” said Kelly Hanczyk, CEO of Nexus Industrial REIT. “We also demonstrated the strength of our balance sheet, achieving an investment grade credit rating and completing an inaugural $500 million bond issuance in April, adding financial flexibility, and reducing our cost of capital. This accomplishment marks a new stage in our evolution and is one that I am particularly proud of” concluded Mr. Hanczyk. First Quarter 2026 Highlights: Sold an industrial property located in Calgary, AB for a price of $8.5 million. In-place and committed industrial occupancy rate of 95%, representing a 100 basis point decrease compared to December 31, 2025. Completed 41,177 sq. ft. of leasing at an average spread of 32% over expiring and in-place rents. Net income was $32.2 million driven by NOI(1) of $33.8 million and fair value adjustments (gains) of $18.9 million, partially offset by finance expense, general and administrative expenses and loss on disposal of investment properties. NOI(1) increased by 5.4% versus a year ago to $33.8 million primarily attributed to NOI(1) generated from completed developments and newly acquired industrial properties, despite selling 19 legacy retail, office, and industrial properties in 2025 and one industrial property in the first quarter of 2026. Industrial Same Property NOI(1) increased 1.0% versus a year ago to $29.8 million. Normalized FFO(1) per unit decreased $0.005 versus a year ago to $0.182 and Normalized AFFO(1) per unit increased $0.008 versus a year ago to $0.162. Normalized AFFO payout ratio(1) improved by 7.5% to 96.6% as compared to the same period in the prior year. Unitholders' equity increased by $21.2 million to $1.1 billion or $15.38 per unit. NAV per unit(1) of $13.29 increased $0.07 or 0.5% versus December 31, 2025. (1) This is a Non-IFRS Financial Measure. Refer to Non-IFRS Measures for details. Subsequent events: On April 14, 2026, the REIT issued $300.0 million principal amount of 4.236% Series A senior unsecured debentures maturing on April 14, 2029 and $200.0 million principal amount of 4.641% Series B senior unsecured debentures maturing on April 14, 2031. Interest on the debentures is payable semi-annually in arrears, on April 14 and October 14 of each year, commencing on October 14, 2026. Net of financing fees, the REIT received $498.5 million and used the net proceeds to pay down existing indebtedness. On April 17, 2026, the REIT paid off and retired the unsecured term loan facility of $200.0 million (US$145.4 million) and partially paid down the unsecured revolving facility by $292.0 million (US$212.4 million). The REIT unwound the related cross-currency swaps with a notional value of $492.0 million and closed interest rates swaps with a notional value of $317.0 million. Summary of Results (In thousands of Canadian dollars, except per unit amounts) Three months ended March 31,   2026 2025   $ $ FINANCIAL INFORMATION     Operating Results     Property revenues 46,019   44,754   NOI (1) 33,807   32,090   Net income and comprehensive income 32,176   33,151   Adjusted EBITDA (LTM) (1) 121,276   121,151         FFO (1) 17,325   17,043   Normalized FFO (1) 17,714   17,580   AFFO (1) 15,302   14,397   Normalized AFFO (1) 15,691   14,478   Distributions declared (2) 15,160   15,073   Same Property NOI (1) 30,097   30,016   Industrial Same Property NOI (1) 29,783   29,484         Weighted average units outstanding (000s):     Basic (3) 97,069   94,203   Diluted (3) 97,421   94,477         Per unit amounts:     Distributions per unit – basic (2) (3) 0.160   0.160   Distributions per unit – diluted (2) (3) 0.160   0.160         Normalized FFO per unit – basic (1) (3) 0.182   0.187   Normalized FFO per unit – diluted (1) (3) 0.182   0.186         Normalized AFFO per unit – basic (1) (3) 0.162   0.154   Normalized AFFO per unit – diluted (1) (3) 0.161   0.153         AFFO payout ratio (1) (2) 99.1 % 104.7 % Normalized AFFO payout ratio – basic (1) (2) 96.6 % 104.1 % Normalized AFFO payout ratio – diluted (1) (2) 96.9 % 104.6 %       Same Property NOI Growth % (1) 0.3 % 5.9 % Industrial Same Property NOI Growth % (1) 1.0 % 6.6 % (1)   This is a Non-IFRS Financial Measure. Refer to Non-IFRS Measures for details. (2)   Includes distributions payable to holders of Class B LP Units which are accounted for as finance expense in the consolidated financial statements. (3)   Weighted average number of units includes Class B LP Units.         March 31, December 31,   2026 2025 (In thousands of Canadian dollars, unless stated otherwise) $ $ PORTFOLIO INFORMATION     Total Portfolio     Number of investment properties (2) 88   89   Investment properties fair value (excludes assets held for sale) 2,520,712   2,506,423   Gross leasable area (“GLA”) (in millions of sq. ft.) (at the REIT's ownership interest) 12.3   12.4   Industrial occupancy rate – in-place and committed (year-end) (3) 95 % 96 % Weighted average lease term (“WALT”) (years) 6.9   6.9   Industrial WALT (years) 6.9   6.9   Estimated spread between industrial portfolio market and in-place rents 15.8 % 18.7 %       FINANCING AND CAPITAL INFORMATION     Financing     Net debt (1) 1,328,891   1,307,119   Total Indebtedness Ratio (1) 49.5 % 49.3 % Net Debt to Adjusted EBITDA (1) 11.0   10.9   Adjusted Net Debt to Adjusted EBITDA (1) 10.5   10.5   Debt service coverage ratio (times) 1.72   1.70   Secured Indebtedness Ratio 21.4 % 22.4 % Unencumbered investment properties as a percentage of investment properties 50.3 % 49.7 % Total assets 2,687,057   2,650,360   Cash 17,876   6,111   Capital     Total equity (per consolidated financial statements) 1,104,484   1,083,289   Total equity (including Class B LP Units) 1,290,727   1,282,925   Total number of Units (in thousands) (4) 97,086   97,022   NAV per unit (1) 13.29   13.22   (1)   This is a Non-IFRS Financial Measure. Refer to Non-IFRS Measures for details. (2)   Includes three properties (four properties - December 31, 2025) classified as assets held for sale, and one property held for development in which the REIT has an 80% interest. (3)   Includes committed new leases for future occupancy. (4)   Includes Class B LP Units. Net income Net income for the three months ended March 31, 2026 was $32.2 million or $1.0 million lower as compared to the same period in 2025, primarily due to an decrease in fair value adjustments of investment properties of $6.8 million, a decrease in Class B LP Units fair value adjustments of $5.6 million, higher finance expenses by $0.7 million, lower foreign exchange expenses by $0.7 million, a higher loss on disposal of investment properties of $0.2 million, and a higher general and administrative expense of $0.2 million, partially offset by an increase in fair value adjustments of derivative financial instruments of $11.3 million, a higher NOI of $1.7 million, and a higher Incentive units fair value adjustment of $0.2 million. Net operating income NOI for the three months ended March 31, 2026 was $33.8 million or $1.7 million higher as compared to the same period in 2025, which was primarily due to $1.3 million relating to completed developments and expansions, $0.7 million from acquisitions of industrial income producing properties that closed subsequent to March 31, 2025, $0.6 million increase from non-recurring lease terminations and tenant reimbursed capital improvements, and $0.4 million relating to amortization of tenant improvements and leasing costs that was ceased during the three months ended March 31, 2026 as a result of change in application of accounting methodology, partially offset by a lower NOI of $0.6 million relating to straight-line rent adjustments attributed to changes in current lease arrangements, and $0.6 million relating to dispositions completed since Q1 2025. Fair value adjustment of investment properties The fair value adjustment (gain) on investment properties for the three months ended March 31, 2026 totaled $2.1 million. The REIT engaged external appraisers to value properties totaling $141.1 million during the quarter. Overall, the fair value gain recorded for the REIT’s portfolio primarily consists of a $29.8 million increase resulting from changes in stabilized NOI, partially offset by a $27.4 million decrease due to adjustments to capitalization rates, and a $0.3 million decrease resulting from a fair value adjustment on a disposal during the period. Outlook The REIT is focused on delivering total unitholder return through profitable long-term growth, and by pursuing its strategy as a Canada-focused pure-play industrial REIT. For 2026, the REIT anticipates mid-single digit Same Property NOI(1) growth in its industrial portfolio. The expected Same Property NOI(1) growth is primarily attributed to the lease-up of vacant space, and releasing space at market rents that exceed expiring rents, thereby continuing to benefit from positive spreads between market rental rates and the REIT's in-place rental rates. In 2026, the REIT expects to benefit from: the 325,000 sq. ft. expansion project at St. Thomas, ON for an existing tenant that was completed in Q3 2025, which is contributing $4.9 million in annual stabilized NOI(1), representing a contractual going-in yield of 9.0% on total development costs of $55.1 million, the 115,000 sq. ft. small-bay industrial building that was constructed in Q3 2025 adjacent to an existing building that the REIT owns in Calgary, AB, which, once stabilized, is expected to earn a yield of 11.0% on total development costs of $14.8 million, and the acquisition of two industrial properties in Montreal and Longueuil, QC in November 2025 totalling 282,721 sq. ft., that are expected to contribute $2.6 million in annual stabilized NOI(1), representing a going-in yield of 6.6% on the purchase price of $40.1 million. The normalized AFFO payout ratio(1) for the three months ended March 31, 2026 was 96.6%. The REIT believes that the current distributions are sustainable, and anticipates the normalized AFFO payout ratio(1) to average below 100% for the full fiscal year in 2026. (1) This is a Non-IFRS Financial Measure. Refer to Non-IFRS Measures for details. Earnings Call Management of the REIT will host a conference call at 10:00 AM Eastern Standard Time on Tuesday May 12, 2026, to review the financial results and operations. To participate in the conference call, please dial 1-647-846-8414 or 1-833-752-3601 (toll free in Canada and the US) at least five minutes prior to the start time and ask to join the Nexus Industrial REIT conference call. A recording of the conference call will be available until June 12, 2026. To access the recording, please dial 1-412-317-0088 or 1-855-669-9658 (toll free in Canada and the US) and enter access code 9157568. May and June Distributions The REIT will make a cash distribution in the amount of $0.05333 per unit, representing $0.64 per unit on an annualized basis, payable June 15, 2026, to unitholders of record as of May 29, 2026. The REIT will also make a cash distribution in the amount of $0.05333 per unit, representing $0.64 per unit on an annualized basis, payable July 15, 2026, to unitholders of record as of June 30, 2026. Annual Meeting Voting Results Each of the matters set out in the REIT’s management information circular dated March 30, 2026 (the “Circular”) for the annual meeting of unitholders held on May 11, 2026 (the “Meeting”) was approved by the requisite majority of unitholders, and each of the trustee nominees listed in the Circular was elected as a trustee of the REIT. Voting results for the individual trustees are as follows: Nominee Number of Votes For Percentage of Votes For Number of Votes Withheld Percentage of Votes Withheld Floriana Cipollone 39,117,151 99.605% 155,068 0.395% Bradley Cutsey 39,094,541 99.548% 177,678 0.452% Kelly C. Hanczyk 39,159,055 99.712% 113,164 0.288% Daniel M. Oberste 37,957,629 96.653% 1,314,590 3.347% Ben Rodney 32,784,443 83.480% 6,487,776 16.520% Mary Vitug 32,199,652 81.991% 7,072,567 18.009% Final results on all matters considered at the Meeting are reported in the Report of Voting Results as filed on SEDAR (www.sedarplus.ca). About Nexus Industrial REIT Nexus is a growth-oriented real estate investment trust focused on increasing unitholder value through the acquisition of industrial properties located in primary and secondary markets in Canada, and the ownership and management of its portfolio of properties. The REIT currently owns a portfolio of 88 properties (including one property held for development in which the REIT has an 80% interest) comprising approximately 12.3 million square feet of gross leasable area. The REIT has approximately 97,089,000 voting units issued and outstanding, including approximately 72,169,000 REIT Units and approximately 24,920,000 Class B LP Units of subsidiary limited partnerships of Nexus, which are convertible to REIT Units on a one-to-one basis. Non-IFRS Measures Information in this news release is a select summary of results. This news release should be read in conjunction with the MD&A and the Trust's consolidated financial statements and the accompanying notes for the three months ended March 31, 2026 (the “Financial Statements”). The Financial Statements are prepared in accordance with IFRS accounting standards as issued by the IASB, however, included in the tables above and elsewhere in this news release are non-IFRS financial measures or non-IFRS ratios which do not have a standardized meaning prescribed under generally accepted accounting principles (“GAAP”) in accordance with IFRS and that should not be construed as an alternative to net income / loss or other measures of financial performance calculated in accordance with IFRS and may not be comparable to similar measures as reported by other issuers. A definition of each non-IFRS financial measure or ratio used herein and an explanation of management's reasons as to why it believes the measure is useful to investors are incorporated by reference and can be found on page 1 in the REIT’s Management’s Discussion and Analysis for the three months ended March 31, 2026, available on SEDAR+ at www.sedarplus.ca and on the REIT’s website under Investor Relations. See Appendix A of this earnings release for a reconciliation of the non-IFRS financial measures to the primary financial statement measures. Forward Looking Statements Certain statements contained in this news release constitute forward-looking statements which reflect the REIT’s current expectations and projections about future results, including statements under the heading "Outlook" and regarding the REIT's expectations relating to growth in NOI, benefits from developments and the sustainability of its distributions. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the REIT to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Such forward-looking statements are based on a number of assumptions that may prove to be incorrect. While the REIT anticipates that subsequent events and developments may cause its views to change, the REIT specifically disclaims any obligation to update these forward-looking statements except as required by applicable law. These forward-looking statements should not be relied upon as representing the REIT’s views as of any date subsequent to the date of this news release. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The factors identified above are not intended to represent a complete list of the factors that could affect the REIT. For further information please contact: Kelly C. Hanczyk, CEO at (416) 906-2379 or Mike Rawle, CFO at (647) 823-1381 APPENDIX A – NON-IFRS FINANCIAL MEASURES (In thousands of Canadian dollars, except per unit amounts) Three months ended March 31,   2026 2025 Change FFO(6) $   $   $           Net income and comprehensive income 32,176   33,151   (975 ) Adjustments:       Loss on disposal of investment properties 309   85   224   Fair value adjustments (18,855 ) (19,727 ) 872   Adjustments for equity accounted joint venture (1) 76   76   —   Distributions on Class B LP Units expensed 3,672   3,713   (41 ) Amortization of tenant improvements and leasing costs —   366   (366 ) Lease principal payments (27 ) (26 ) (1 ) Amortization of right-of-use assets 31   30   1   Net effect of unrealized foreign exchange on USD debt and related hedges (57 ) (625 ) 568   Funds from operations (FFO)(6) 17,325   17,043   282   Weighted average units outstanding (000s) - basic (3) 97,069   94,203   2,866   FFO per unit – basic(6) 0.178   0.181   (0.003 )         FFO(6) 17,325   17,043   282   Add: Non-recurring personnel transition costs 220   107   113   Add: Non-recurring adjustments from asset dispositions (4) 43   472   (429 ) Add: Other one-time adjustments (5) 126   (42 ) 168   Normalized FFO(6) 17,714   17,580   134   Weighted average units outstanding (000s) - basic (3) 97,069   94,203   2,866   Normalized FFO per unit – basic(6) 0.182   0.187   (0.005 )                 (In thousands of Canadian dollars, except per unit amounts) Three months ended March 31,   2026 2025 Change AFFO(6) $   $   $           FFO(6) 17,325   17,043   282   Adjustments:       Straight-line adjustments, ground lease and rent (423 ) (1,046 ) 623   Capital reserve (2) (1,600 ) (1,600 ) —   Adjusted funds from operations (AFFO)(6) 15,302   14,397   905   Weighted average units outstanding (000s) Basic (3) 97,069   94,203   2,866   AFFO per unit – basic(6) 0.158   0.153   0.005   Distributions declared 15,160   15,073   87   AFFO payout ratio - basic(6) 99.1 % 104.7 % (5.6 )%                 AFFO(6) 15,302   14,397   905   Add: Non-recurring personnel transition costs 220   107   113   Add: Non-recurring adjustments from asset dispositions (4) 43   16   27   Add: Other one-time adjustments (5) 126   (42 ) 168   Normalized AFFO(6) 15,691   14,478   1,213   Weighted average units outstanding (000s) Basic (3) 97,069   94,203   2,866   Normalized AFFO per unit – basic(6) 0.162   0.154   0.008   Distributions declared 15,160   15,073   87   Normalized AFFO payout ratio - basic(6) 96.6 % 104.1 % (7.5 )% (1)   Adjustment for equity accounted joint venture relates to a fair value adjustment of swaps in place at the joint venture to swap floating rate bankers’ acceptance rates to a fixed rate and a fair value adjustment of the joint venture investment property. (2)   Capital reserve includes maintenance capital expenditures, tenant improvements and leasing costs. Reserve amounts are established with reference to building condition reports, appraisals, and internal estimates of tenant renewal, tenant improvements and leasing costs. The REIT believes that a reserve is more appropriate given the fluctuating nature of capital expenditures. (3)   Weighted average number of units includes the Class B LP Units. (4)   These adjustments represent one-time balance sheet write-offs, early mortgage repayment charges, and other costs associated with the disposals made during the period. (5)   The adjustments are primarily related to unrealized foreign exchange losses (gains) on transactions relating to deferred purchase consideration and other one-time adjustments. (6)   This is a Non-IFRS Financial Measure. Refer to Non-IFRS Measures for details. SAME PROPERTY RESULTS (In thousands of Canadian dollars)         Three months ended March 31,   2026 2025 Change   $   $   $           Property revenues 46,019   44,754   1,265   Property expenses (12,212 ) (12,664 ) 452   NOI(1) 33,807   32,090   1,717   Add/(Deduct):       Amortization of tenant improvements and leasing costs —   360   (360 ) Straight-line adjustments of rent (422 ) (1,045 ) 623   Development and expansion (1,287 ) —   (1,287 ) Acquisitions (665 ) —   (665 ) Disposals (74 ) (718 ) 644   Termination fees and tenant reimbursed capital improvements (1,262 ) (671 ) (591 ) Same Property NOI(1) 30,097   30,016   81           Industrial Same Property NOI(1) 29,783   29,484   299   (1)   This is a Non-IFRS Financial Measure. Refer to Non-IFRS Measures for details.   ADJUSTED EBITDA (In thousands of Canadian dollars) Trailing twelve months ended March 31,   2026 2025 Change   $   $   $           Net income 58,573   80,362   (21,789 ) Add (deduct):       Net interest expense 53,866   55,049   (1,183 ) Distributions on Class B LP Units 14,809   15,053   (244 ) Fair value adjustments(1) (5,124 ) (30,593 ) 25,469   Amortization expense(1)(2) (3,608 ) (3,151 ) (457 ) Loss on disposal of investment properties 921   1,540   (619 ) Unrealized foreign exchange (gain) loss (34 ) 123   (157 ) Income from development property 1,605   2,374   (769 ) Non-recurring personnel transition costs 220   191   29   Non-recurring costs related to asset dispositions 48   203   (155 ) Adjusted EBITDA(3) 121,276   121,151   125   (1)   Includes equity accounted investments adjustments. (2)   Includes amortization of straight line rent, tenant improvements, and leasing commissions. (3)   This is a Non-IFRS Financial Measure. Refer to Non-IFRS Measures for details. NAV per unit (In thousands of Canadian dollars, except per unit amounts) March 31, December 31,   2026 2025 NAV per unit (1) $   $         Total assets 2,687,057   2,650,360   Less: Total liabilities (1,582,573 ) (1,567,071 ) Total unitholders equity 1,104,484   1,083,289   Add: Class B LP Units 186,243   199,636   NAV (1) 1,290,727   1,282,925         Units outstanding (000s) – basic:     REIT Units 71,816   71,752   Class B LP Units 25,270   25,270     97,086   97,022   NAV per unit – basic (1) 13.29   13.22         (1)   This is a Non-IFRS Financial Measure. Refer to Non-IFRS Measures for details. TOTAL INDEBTEDNESS RATIO (In thousands of Canadian dollars) March 31, December 31,   2026 2025 Total Indebtedness Ratio (1) $   $   Current and non-current:     Mortgages payable 544,227   563,231   Credit facilities 772,569   731,019   Lease liabilities 10,586   10,613   Liabilities associated with assets held for sale 19,385   8,367   Total indebtedness (1) 1,346,767   1,313,230   less: unrestricted cash (17,876 ) (6,111 ) Net debt 1,328,891   1,307,119   Total assets 2,687,057   2,650,360   Total Indebtedness Ratio (1) 49.5 % 49.3 %       (1)   This is a Non-IFRS Financial Measure. Refer to Non-IFRS Measures for details. ADJUSTED NET DEBT (In thousands of Canadian dollars) March 31, December 31,   2026 2025   $   $   Current and non-current:     Mortgages payable 544,227   563,231   Credit facilities 772,569   731,019   Lease liabilities 10,586   10,613   Liabilities associated with assets held for sale 19,385   8,367   Total indebtedness(1) 1,346,767   1,313,230   Less: Unrestricted cash (17,876 ) (6,111 ) Less: Additions to properties under development (50,801 ) (44,943 ) Adjusted net debt(1) 1,278,090   1,262,176         (1)   This is a Non-IFRS Financial Measure. Refer to Non-IFRS Measures for details.