Original News Release
True North Commercial REIT Reports Q1-2026 Results
True North Commercial REIT Reports Q1-2026 Results
Canada NewsWire
TORONTO, May 12, 2026
/NOT FOR DISTRIBUTION IN THE U.S. OR OVER U.S. NEWSWIRES/
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.UN) (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.
_____________________________
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
1,326
1,292
34
2.6 %
Nova Scotia
93.3 %
89.1 %
Nova Scotia
1,548
1,329
219
16.5 %
Ontario
96.9 %
94.2 %
Ontario
11,427
12,883
(1,456)
(11.3) %
Total
94.7 %
91.8 %
$ 17,532
$ 18,972
$ (1,440)
(7.6) %
(1) Excluding assets held for sale.
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.
Occupancy in the Alberta portfolio increased as a result of successful leasing activity, including the execution of 34,000 square foot lease for a ten year term, with rent commencing by the end of 2026. Q1-2026 Alberta Same Property NOI decreased by 4.9% relative to Q1-2025 primarily due to rental adjustments associated with rent recognition in the prior year.
Q1-2026 British Columbia Same Property NOI decreased by 16.5% primarily as a result of an expiring lease that was not renewed in February 2025 with the REIT continuing to focus on re-leasing such space.
Q1-2026 New Brunswick Same Property NOI remained relatively consistent with Q1-2025. Q1-2026 Nova Scotia Same Property NOI increased by 16.5% as a result of the increase in occupancy between the two periods as well as contractual rent increases.
Q1-2026 Ontario Same Property NOI decreased by 11.3% relative to Q1-2025 primarily attributable to higher termination income recognized in Q1-2025 related to an early lease termination in the GTA portfolio. Excluding termination income and free rent in both periods, Q1-2026 Same Property NOI for Ontario portfolio decreased by 2.0%, primarily due to loss in rental income in two of the GTA properties, with space having been re-leased to new tenants commencing in Q1-2026 and the third quarter of 2026, respectively.
Debt and liquidity
March 31,
2026
December 31,
2025
Indebtedness to GBV ratio(1)
62.7 %
62.5 %
Interest coverage ratio(1)
2.24 x
2.27 x
Indebtedness(1) - weighted average fixed interest rate
4.44 %
4.41 %
Indebtedness - weighted average term to maturity
2.31 years
2.21 years
(1) This is a non-IFRS financial measure, refer to "Non-IFRS measures".
As at March 31, 2026, the REIT had access to available funds ("Available Funds")(1) of approximately $34,570 with its mortgage portfolio carrying a weighted average term to maturity of 2.31 years and weighted average fixed interest rate of 4.44%.
During Q1-2026, 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 REIT continues to proactively manage its debt maturity profile to strengthen the REIT's financial position.
____________________________
1 This is a non-IFRS financial measure, refer to "Non-IFRS measures".
About the REIT
The REIT is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. The REIT currently owns and operates a portfolio of 37 commercial properties consisting of approximately 4.4 million square feet in urban and select strategic secondary markets across Canada focusing on long term leases with government and credit rated tenants.
The REIT is focused on growing its portfolio principally through acquisitions across Canada and such other jurisdictions where opportunities exist. Additional information concerning the REIT is available at www.sedarplus.ca or the REIT's website at www.truenorthreit.com.
Non-IFRS measures
Certain terms used in this press release such as FFO, AFFO, FFO and AFFO payout ratios, NOI, Same Property NOI, indebtedness ("Indebtedness"), gross book value ("GBV"), Indebtedness to GBV ratio, net earnings before interest, tax, depreciation and amortization and fair value gain (loss) on financial instruments and investment properties ("Adjusted EBITDA"), interest coverage ratio, net asset value ("NAV") per Unit, Available Funds, occupancy and WALT are not measures defined by IFRS Accounting Standards ("IFRS") as prescribed by the International Accounting Standards Board, do not have standardized meanings prescribed by IFRS and should not be compared to or construed as alternatives to profit/loss, cash flow from operating activities or other measures of financial performance calculated in accordance with IFRS. FFO, AFFO, FFO and AFFO payout ratios, NOI, Same Property NOI, Indebtedness, GBV, Indebtedness to GBV ratio, Adjusted EBITDA, interest coverage ratio, adjusted cash provided by operating activities, NAV per Unit, Available Funds, occupancy and WALT as computed by the REIT may not be comparable to similar measures presented by other issuers. The REIT uses these measures to better assess the REIT's underlying performance and provides these additional measures so that investors may do the same. Details on non-IFRS measures are set out in the REIT's Management's Discussion and Analysis for Q1-2026 and the Annual Information Form are available on the REIT's profile at www.sedarplus.ca.
Reconciliation of non-IFRS financial measures
The following tables reconcile the non-IFRS financial measures to the comparable IFRS measures for Q1-2026 and Q1-2025. These non-IFRS financial measures do not have any standardized meanings prescribed by IFRS and may not be comparable to similar measures presented by other issuers.
NOI
The following table calculates the REIT's NOI, a non-IFRS financial measure:
Q1-2026
Q1-2025
Revenue
$ 29,830
$ 31,086
Expenses:
Property operating
(11,354)
(11,488)
Property taxes
(4,915)
(4,933)
NOI
13,561
14,665
Same Property NOI
Same Property NOI is measured as the NOI for the properties owned and operated by the REIT for the current and comparative period. The following table reconciles the REIT's Same Property NOI to NOI:
Q1-2026
Q1-2025
Number of properties
37
37
Revenue
$ 29,830
$ 30,988
Expenses:
Property operating
(11,354)
(11,169)
Property taxes
(4,915)
(4,798)
$ 13,561
$ 15,021
Add:
Amortization of leasing costs and tenant inducements
3,442
3,511
Straight-line rent
(93)
826
Same Property NOI
$ 16,910
$ 19,358
Less: NOI related to properties held for sale included in the above
(622)
386
Same Property NOI excluding investment properties held for sale
$ 17,532
$ 18,972
Reconciliation to condensed consolidated interim financial statements:
Acquisition, dispositions and investment properties held for sale
(622)
30
Amortization of leasing costs and tenant inducements
(3,442)
(3,511)
Straight-line rent
93
(826)
NOI
$ 13,561
$ 14,665
FFO and AFFO
The following table reconciles the REIT's FFO and AFFO to net income and comprehensive income, for Q1-2026 and Q1-2025:
Q1-2026
Q1-2025
Net income and comprehensive income
$ 537
$ 563
Add / (deduct):
Distributions on Class B LP Units
59
24
Fair value adjustment on Class B LP Units
(272)
(306)
Fair value adjustment of investment properties and investment properties held for sale
3,692
3,832
Unrealized gain (loss) on change in fair value of derivative instruments
(18)
525
Fair value adjustment of Unit-based compensation
(84)
(66)
Amortization of leasing costs and tenant inducements
3,442
3,510
FFO
$ 7,356
$ 8,082
Add / (deduct):
Unit-based compensation expense
108
122
Straight-line rent
(93)
826
Instalment note receipts
—
11
Amortization of mortgage premiums
(12)
(3)
Amortization of financing costs
233
330
Capital reserve
(1,085)
(1,139)
AFFO
$ 6,507
$ 8,229
FFO per Unit:
Basic
$ 0.51
$ 0.56
Diluted
0.51
0.56
AFFO per Unit:
Basic
$ 0.45
$ 0.57
Diluted
0.45
0.57
AFFO payout ratio:
Basic
38 %
10 %
Diluted
38 %
10 %
Distributions declared
$ 2,484
$ 828
Weighted average Units outstanding (000s):
Basic
14,399
14,458
Add:
Unit options and Incentive Units
111
78
Diluted
14,510
14,536
Indebtedness to GBV ratio
The table below calculates the REIT's Indebtedness to GBV ratio as at March 31, 2026 and December 31, 2025. The Indebtedness to GBV ratio is calculated by dividing the Indebtedness by GBV:
March 31,
2026
December 31,
2025
Total assets
$ 1,170,904
$ 1,169,296
Deferred financing costs
5,259
5,264
GBV(1)
$ 1,176,163
$ 1,174,560
Mortgages payable
$ 687,090
$ 692,289
Credit facility ("Credit Facility")
48,407
40,682
Unamortized financing costs and mark to market mortgage adjustments
1,411
1,639
Indebtedness
$ 736,908
$ 734,610
Indebtedness to GBV ratio
62.7 %
62.5 %
(1) This is a non-IFRS financial measure, refer to "Non-IFRS measures".
Adjusted EBITDA
The table below reconciles the REIT's Adjusted EBITDA to net income and comprehensive income for the twelve months period ended March 31, 2026 and 2025:
Twelve months ended March 31
2026
2025
Net loss and comprehensive loss
$ (32,598)
$ (25,528)
Add (deduct):
Interest expense
33,439
31,619
Amortization of leasing costs, tenant inducements, mortgage premium and financing costs
14,017
12,704
Fair value adjustment of Unit-based compensation
(105)
177
Transaction costs on sale of investment properties
2,031
1,969
Distributions on Class B LP Units
267
24
Fair value adjustment on Class B LP Units
(676)
245
Fair value adjustment of investment properties and investment properties held for sale
58,299
45,142
Unrealized loss on change in fair value of derivative instruments
291
2,886
Adjusted EBITDA(1)
$ 74,965
$ 69,238
(1) This is a non-IFRS financial measure, refer to "Non-IFRS measures".
Interest coverage ratio
The table below calculates the REIT's interest coverage ratio for the twelve months period ended March 31, 2026 and 2025. The interest coverage ratio is calculated by dividing Adjusted EBITDA by interest expense.
Twelve months ended March 31
2026
2025
Adjusted EBITDA
$ 74,965
$ 69,238
Interest expense
33,439
31,619
Interest coverage ratio
2.24 x
2.19 x
Available Funds
The table below calculates the REIT's Available Funds as at March 31, 2026 and December 31, 2025:
March 31,
2026
December 31,
2025
Cash and cash equivalents
$ 7,977
$ 7,638
Undrawn Credit Facility
26,593
34,318
Available Funds
$ 34,570
$ 41,956
Forward-looking statements
Certain statements contained in this press release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking statements are provided for the purposes of assisting the reader in understanding the REIT's financial performance, financial position and cash flows as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future. Readers are cautioned that such statements may not be appropriate for other purposes. Forward-looking information may relate to future results, performance, debt financing, achievements, events, prospects or opportunities for the REIT or the real estate industry and may include statements regarding the financial position, business strategy, budgets, projected costs, capital expenditures, financial results, taxes, distributions, plans, the benefits and renewal of the NCIB, or through other capital programs and objectives of or involving the REIT. In some cases, forward-looking information can be identified by such terms as "may", "might", "will", "could", "should", "would", "expect", "plan", "anticipate", "believe", "intend", "seek", "aim", "estimate", "target", "goal", "project", "predict", "forecast", "potential", "continue", "likely", or the negative thereof or other similar expressions suggesting future outcomes or events.
Forward-looking statements involve known and unknown risks and uncertainties, which may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, assumptions may not be correct and objectives, strategic goals and priorities may not be achieved. A variety of factors, many of which are beyond the REIT's control, affect the operations, performance and results of the REIT and its business, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to: risks and uncertainties related to the Units and trading value of Units; risks related to the REIT and its business; fluctuating interest rates and general economic conditions, including potential higher levels of inflation; the impact of any tariffs and retaliatory tariffs on the economy, the effects of global economic uncertainly and geopolitical instability on financial markets and borrowing costs, credit, market, operational and liquidity risks generally; occupancy levels and defaults, including the failure to fulfill contractual obligations by tenants; lease renewals and rental increases; the ability to re-lease and secure new tenants for vacant space; the timing and ability of the REIT to acquire or sell certain properties; work-from-home flexibility initiatives on the business, operations and financial condition of the REIT and its tenants, as well as on consumer behavior and the economy in general; the ability to enforce leases, perform capital expenditure work, increase rents, raise capital through the issuance of Units or other securities of the REIT; the benefits of any NCIB program, or through other capital programs, the ability of the REIT to continue to pay distributions in future periods; and obtain mortgage financing on the REIT's properties and for potential acquisitions or to refinance debt at maturity on similar terms. The foregoing is not an exhaustive list of factors that may affect the REIT's forward-looking statements. Other risks and uncertainties not presently known to the REIT could also cause actual results or events to differ materially from those expressed in its forward-looking statements. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements as there can be no assurance actual results will be consistent with such forward-looking statements.
Information contained in forward-looking statements is based upon certain material assumptions applied in drawing a conclusion or making a forecast or projection, including management's perception of historical trends, current conditions and expected future developments, as well as other considerations believed to be appropriate in the circumstances. There can be no assurance regarding: (a) work-from-home initiatives on the REIT's business, operations and performance, including the performance of its Units; (b) the its's ability to mitigate any impacts related to fluctuating interest rates, potential higher levels of inflation, the impact of any current or future tariffs and the shift to hybrid working; (c) the factors, risks and uncertainties expressed above in regards to the hybrid work environment on the commercial real estate industry and property occupancy levels; (d) credit, market, operational, and liquidity risks generally; (e) the availability of investment opportunities for growth in Canada and the timing and ability of the REIT to acquire or sell certain properties; (f) repurchasing Units under the NCIB; (g) Starlight Group Property Holdings Inc., or any of its affiliates, continuing as asset manager of the REIT in accordance with its current asset management agreement; (h) the benefits of the NCIB, or through other capital programs; (i) the availability of debt financing for potential acquisitions or refinancing loans at maturity on similar terms; (j) the ability of the REIT to continue to pay distributions in future periods and (k) other risks inherent to the REIT's business and/or factors beyond its control which could have a material adverse effect on the REIT.
The forward-looking statements made relate only to events or information as of the date on which the statements are made. Except as specifically required by applicable Canadian law, the REIT undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
SOURCE True North Commercial Real Estate Investment Trust
View original content: http://www.newswire.ca/en/releases/archive/May2026/12/c1235.html
Contact:
For further information: Daniel Drimmer, Chief Executive Officer, (416) 234-8444; or Martin Liddell, Chief Financial Officer, (416) 234-8444
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