Mainstreet Delivers 15th Straight Quarter of Double-Digit Growth Amid Economic Uncertainty

Executive Summary

• Mainstreet Equity Corp. reported its 15th consecutive quarter of double-digit year-over-year growth for Q3 2025, driven by strong operational performance in its mid-market rental portfolio across Western Canada.
• The company highlighted a robust liquidity position of $815 million, signaling readiness to deploy capital for counter-cyclical acquisitions and value-add renovations despite broader economic uncertainty and immigration policy changes.
• Key financial metrics showed significant improvements, with Funds from Operations (FFO) up 10% and Net Operating Income (NOI) up 16% compared to Q3 2024, while operating margins expanded to 67.5%.

Key Details

• Financial Performance (Q3 2025 vs. Q3 2024):
  • Rental Revenue: Increased 10% to $69.7 million (from operations) and 6% to $64.2 million (same-asset basis).
  • Net Operating Income (NOI): Increased 16% to $47.0 million (from operations) and 12% to $43.6 million (same-asset basis).
  • Funds from Operations (FFO):
    • FFO-before current income tax: Up 17% to $27.5 million ($2.95 per basic share).
    • FFO-after current income tax: Up 10% to $24.3 million ($2.61 per basic share).
  • Operating Margin: Increased from 63.9% to 67.5% (from operations) and from 64.5% to 67.9% (same-asset properties).
  • Net Profit: Reported net profit of $46.6 million, including a change in fair value of $29.6 million (vs. $19.5 million in Q3 2024).
• Portfolio and Operational Metrics:
  • Stabilized Units: 434 properties comprising 16,390 units (12% of total portfolio).
  • Total Units: 18,771 units as of August 7, 2025 (including 50 units held for sale).
  • Vacancy Rate: 5.0% from operations (vs. 2.8% in Q3 2024); 4.9% on same-asset basis. Vacancy rate as of August 7, 2025, was 4.4% excluding unrentable units.
  • Unstabilization Rate: 12% of the portfolio is currently undergoing stabilization, offering potential for future NOI growth.
  • Capital Expenditures: Total CapEx was $8.1 million ($2.0 million on unstabilized assets, $6.1 million on stabilized assets).
• Acquisitions and Liquidity:
  • Q3 Acquisitions: $15.5 million for 183 units (vs. $91.6 million for 632 units in Q3 2024).
  • Post-Q3 Acquisitions: 87 units acquired for $14.9 million ($171,000 per suite) in Alberta and BC.
  • YTD Acquisitions (2025): 387 units for $49.2 million.
  • Liquidity Position: $815 million total liquidity, comprising $216 million cash-on-hand, $105 million estimated funds in Q4 2025, $364 million available through financing of clear-titled assets, and $130 million from lines of credit.
  • Fair Market Value: Increased 2% to $3.6 billion.
• Strategic Outlook:
  • Management plans to leverage the $815 million liquidity to acquire underperforming assets and close the NOI gap through stabilization.
  • Estimated potential upside from mark-to-market gaps in the BC market alone is approximately $28 million.
  • The company intends to buy back shares opportunistically under its existing NCIB when shares trade below Net Asset Value (NAV).
  • CEO Bob Dhillon emphasized the strategy of "unleashing" liquidity for counter-cyclical growth into 2026, citing resilience against global trade disruptions and immigration policy shifts.

Notable Quotes

• “Despite persistent uncertainty—from global trade disruptions to changing policies—Mainstreet has continued to perform and grow,” said Bob Dhillon, Founder and CEO of Mainstreet Equity Corp. “Our long-standing strategy of acquiring and revitalizing undervalued and underperforming mid-market rental assets has created a consistent pattern of non-dilutive growth. While we kept our powder relatively dry in the first two quarters, MEQ is ready to unleash $815 million of liquidity to generate a new wave of counter-cyclical growth going into 2026.”