ARTIS REAL ESTATE INVESTMENT TRUST RELEASES SECOND QUARTER RESULTS

Executive Summary

• Artis Real Estate Investment Trust released its financial results for the three and six months ended June 30, 2025, reporting a significant decline in revenue, net income, and Funds From Operations (FFO) compared to the prior year period.
• The REIT reported a net loss of $23.5 million for Q2 2025, driven largely by a $26 million expected credit loss on preferred investments and fair value losses on investment properties.
• Operational highlights include an occupancy rate of 87.8%, a 3.6% increase in weighted-average rental rates on renewals, and the repayment of $200 million in Series E senior unsecured debentures.

Key Details

• Financial Performance (Three Months Ended June 30, 2025):
  • Revenue: $59.1 million (down 30.3% from $84.7 million in Q2 2024).
  • Net Operating Income (NOI): $30.7 million (down 35.8% from $47.9 million).
  • Net Loss: $(23.5) million (vs. Net Income of $0.8 million in Q2 2024).
  • Total Comprehensive Loss: $(70.3) million.
  • Funds From Operations (FFO): $17.0 million (down 40.9% from $28.7 million).
  • FFO per Unit (Diluted): $0.17 (down from $0.27).
  • Adjusted Funds From Operations (AFFO): $8.2 million (down 51.9% from $17.1 million).
  • AFFO per Unit (Diluted): $0.08 (down from $0.16).
  • Distributions per Common Unit: $0.15 (unchanged).
• Financial Performance (Six Months Ended June 30, 2025):
  • Revenue: $121.4 million (down 26.5% from $165.1 million).
  • Net Loss: $(12.1) million (vs. Net Loss of $(6.4) million).
  • FFO: $34.5 million (down 37.5% from $55.2 million).
  • FFO per Unit (Diluted): $0.34 (down from $0.51).
  • AFFO: $16.9 million (down 46.5% from $31.6 million).
  • AFFO per Unit (Diluted): $0.17 (down from $0.29).
• Balance Sheet and Liquidity:
  • Total Debt to Gross Book Value (GBV): 41.1% (up from 40.2% at Dec 31, 2024).
  • Total Debt to Adjusted EBITDA: 7.4x (up from 6.2x).
  • Adjusted EBITDA Interest Coverage Ratio: 2.29x (up from 2.05x in Q2 2024).
  • Cash on Hand: $16.6 million.
  • Available Revolving Credit: $78.4 million.
  • Total Borrowing Capacity (Secured Credit Facilities): Limited to $514.5 million.
  • NAV per Unit: $12.98 (down from $13.75 at Dec 31, 2024).
• Portfolio Activity and Operations:
  • Disposed of one retail property in Canada for $4.8 million.
  • Repaid Series E senior unsecured debentures upon maturity ($200.0 million).
  • Utilized NCIB to purchase 1,771,089 common units (weighted avg price $7.28) and 58,900 preferred units (weighted avg price $20.04).
  • Portfolio Occupancy: 87.8% (89.0% including commitments) at June 30, 2025, up from 87.1% at March 31, 2025.
  • Leasing Activity: Renewals of 210,643 sq ft and new leases of 126,306 sq ft commenced in Q2.
  • Rental Rate Growth: Weighted-average rental rate on renewals increased 3.6%.
  • Lease Expiry Profile: 47.0% of gross leasable area expires in 2029 or later.
  • In-place Rents: $16.91/sq ft (vs. Market Rents of $16.15/sq ft).

Notable Quotes

• "Leasing activity remained steady across all of Artis's asset classes during the second quarter," said Samir Manji, President and Chief Executive Officer of Artis. "Occupancy improved to 87.8% as of June 30, 2025, up from 87.1% at the end of Q1, driven by the commencement of a significant 80,600 square foot lease at a U.S. industrial property. We delivered solid rental rate growth of 3.6% on 210,643 square feet of renewals, reflecting the strength of our portfolio and leasing strategy."