Automotive Properties REIT Announces 2025 Second Quarter Financial Results, Agreements to Acquire Seven Automotive Properties and Distribution Increase

Executive Summary

• Automotive Properties REIT reported Q2 2025 financial results showing growth in rental revenue, Cash NOI, and AFFO per unit, alongside a 2.2% increase in its annual cash distribution.
• The REIT entered into agreements to acquire seven automotive properties: a portfolio of five properties and one collision center in Île-Perrot, Québec, for ~$70.5 million, and a Rivian-tenanted property in Orlando, Florida, for ~US$16.8 million.
• The acquisitions are expected to close in Q3 2025 and are anticipated to be immediately accretive to AFFO per unit, with funding primarily through credit facility draws and the issuance of Class B LP Units.

Key Details

• Q2 2025 Financial Highlights:
  • Rental Revenue: $24.6 million (up 4.6% YoY).
  • Cash NOI: $20.6 million (up 5.6% YoY).
  • Same Property Cash NOI: $19.5 million (up 2.4% YoY).
  • AFFO: $12.6 million (up 7.4% YoY); AFFO per Unit (diluted) was $0.249.
  • FFO: $12.8 million (up 6.6% YoY); FFO per Unit (diluted) was $0.254.
  • Net Income: $11.2 million (down 69.9% YoY, primarily due to fair value adjustments on investment properties and unit-based compensation).
  • AFFO Payout Ratio: 80.7% (down from 86.3% in Q2 2024).
• Distribution Increase:
  • Board approved a 2.2% increase in annual cash distribution from $0.804 to $0.822 per Unit.
  • New monthly distribution: $0.0685 per Unit (up from $0.0670).
  • Effective for August 2025 distribution, payable on or about September 15, 2025, to unitholders of record on August 29, 2025.
• Property Acquisitions:
  • Île-Perrot Properties (Québec):
    • Aggregate purchase price: ~$70.5 million.
    • Assets: Five automotive properties and one collision center (GM, Toyota, Mazda, Hyundai, Ford, and a body shop).
    • Size: 177,932 sq ft gross leasable area on ~28.0 acres.
    • Funding: $10.0 million via issuance of Class B LP Units at $12.00/unit; balance via credit facility draws.
    • Terms: Long-term net leases with annual CPI adjustments; indemnified by Groupe AutoForce Inc.
    • Contingency: If the 5-day VWAP of REIT Units is below $12.00 two years post-closing, the REIT must pay Groupe AutoForce Inc. the difference (max $1.25 million).
  • Orlando Property (Florida):
    • Purchase price: US$16.8 million (~C$23.0 million).
    • Asset: 34,938 sq ft facility on 6.4 acres.
    • Tenant: Rivian LLC under a long-term net lease with fixed annual rent increases.
    • Funding: Increase and draw on existing credit facilities.
• Liquidity and Capital Resources:
  • Debt to Gross Book Value (GBV) ratio: 44.4% as of June 30, 2025.
  • Undrawn credit facility capacity: $68.5 million (as of June 30, 2025); ~$69.4 million as of release date.
  • Cash on hand: $0.6 million.
  • Unencumbered properties: Five properties valued at ~$85.8 million.
  • Projected Debt to GBV post-acquisitions: ~47.6%.
  • Debt profile: 91% fixed rate, weighted average interest rate of 4.36%, weighted average maturity of 2.4 years.
• Recent Activity:
  • Completed acquisition of a Rivian-tenanted property in Tampa, Florida, on April 11, 2025, for ~US$13.1 million (C$18.8 million), funded by credit facility draws.

Notable Quotes

• "We generated continued growth in our rental revenue, Cash NOI, Same Property Cash NOI and AFFO per Unit in the quarter and our AFFO payout ratio declined to 80.7%... Supported by this strong financial performance, the Trustees and management of the REIT have determined that an increase to our unitholder distributions is appropriate at this time." — Milton Lamb, CEO
• "We continue to advance our strategy of acquiring properties in growing metropolitan markets and enhancing our tenant and geographic diversification... Upon closing, we expect these Property Acquisitions to be immediately accretive to our AFFO per Unit." — Milton Lamb, CEO