True North Commercial REIT Reports Q3-2025 Results

The REIT completes 168,400 square feet of new and renewed leases with a weighted average lease term of 7.1 years and 1.1% leasing spread on renewed leases

/NOT FOR DISTRIBUTION IN THE U.S. OR OVER U.S. NEWSWIRES/

TORONTO, Nov. 11, 2025 /CNW/ - True North Commercial Real Estate Investment Trust (TSX: TNT.UN) (the "REIT") today announced its financial results for the three months ended September 30, 2025 ("Q3-2025") and nine months ended September 30, 2025 ("YTD-2025").

"We are pleased with the continued leasing momentum, relatively strong occupancy for the REIT's core portfolio at 94% and the successful completion of the refinancing of all of its 2025 debt maturities during the quarter," said Daniel Drimmer, the REIT's Chief Executive Officer. "These achievements demonstrate the REIT's proactive approach to strengthening its financial position and maintaining flexibility, while sales of non-core properties reflect our ongoing commitment to disciplined capital recycling and long term value for our unitholders."

Q3-2025 highlights

• The REIT's core portfolio occupancy⁽¹⁾ excluding assets held for sale at the end of Q3-2025 was approximately 94% which remained above the average occupancy for the markets in which the REIT operates. The REIT also had a weighted average lease term ("WALT")⁽¹⁾ of 4.3 years excluding investment properties held for sale.
• The REIT contractually leased or renewed approximately 168,400 square feet with a WALT of 7.1 years with positive leasing spreads on renewals reported at 1.1% for the quarter.
• The REIT's revenue increased from $30,437 in three months ended September 30, 2024 ("Q3-2024") to $30,586 in Q3-2025 (YTD-2025 - decreased by 6%) primarily as a result of termination income of $1,375 recorded in Q3-2025 relating to one of the REIT's Greater Toronto Area ("GTA") tenants with the space having been re-leased for a ten-year term commencing 2026, offset by a decrease in occupancy for the REIT's held for sale properties as well as reductions in revenue resulting from property dispositions in 2025.
• The REIT's net operating income ("NOI")⁽¹⁾ decreased by approximately 5% in Q3-2025 relative to Q3-2024 primarily due to the disposition activity in 2025, a decrease in occupancy for the REIT's held for sale properties and a decrease in same property net operating income ("Same Property NOI")⁽¹⁾, partially offset by contractual rent increases achieved by the REIT throughout late 2024 and YTD-2025.
• Q3-2025 Same Property NOI excluding assets held for sale decreased by approximately 2% (YTD-2025 - 3%) compared to the same period in 2024 including the impact of termination income described above. Q3-2025 Same Property NOI excluding the impact of termination income and free rent in both periods, decreased by approximately 7% primarily due to a reduction in occupancy in Q3-2025 relative to Q3-2024 for the REIT's Alberta portfolio, one of the REIT's properties in British Columbia portfolio and one of the REIT's GTA properties which space has been re-leased with new tenants commencing in 2026, partially offset by contractual rent increases achieved by the REIT. The REIT continues to focus on leasing activity and continues to maintain above occupancy levels across its portfolio.
• The REIT's Q3-2025 funds from operations ("FFO")⁽¹⁾ and adjusted funds from operations ("AFFO")⁽¹⁾ decreased by $1,009 and $1,713 (YTD-2025 - $5,208 and $6,607), respectively when compared to the same period in 2024 primarily due to the reduction in total portfolio NOI and increase in interest costs.
• Q3-2025 FFO and AFFO basic and diluted per trust units ("Unit")⁽¹⁾ decreased from $0.61 and $0.64 in Q3-2024 to $0.56 and $0.54 respectively due to the reasons outlined above, partially offset by the impact of a reduction in the number of outstanding Units as a result of repurchases under the the normal course issuer bid ("NCIB") program during 2024 and 2025.

YTD highlights

• The REIT contractually leased and renewed approximately 605,900 square feet with a WALT of 5.5 years and a 0.9% increase over expiring base rents.
• During the first and second quarters of 2025, the REIT completed the repurchase of 110,700 Units for cash of $1,021 under the NCIB program at a weighted average price of $9.23 per Unit. No Units were repurchased during Q3-2025.
• On March 18, 2025, the REIT announced the reinstatement of the monthly distribution ("Distribution Reinstatement") to Unitholders, which commenced with a record date of March 31, 2025, payable on April 15, 2025, amounting to $0.0575 per Unit per month. For YTD-2025, the REIT's AFFO payout ratio⁽¹⁾ was 26%.
•  During YTD-2025, the REIT successfully completed $228,300 of refinancing and $8,500 of new financing at a weighted average interest rate of approximately 4.87% and weighted average term of approximately 3.00 years. Subsequent to September 30, 2025, the REIT successfully refinanced all remaining 2025 debt maturities at a weighted average interest rate of approximately 4.39% and weighted average term of approximately 2.83 years.

Subsequent events

Subsequent to September 30, 2025, the REIT successfully refinanced the remaining 2025 debt maturities at a weighted average interest rate of approximately 4.39% and weighted average term of approximately 2.83 years.

Key performance indicators

Operating results

The REIT's revenue increased from $30,437 in Q3-2024 to $30,586 in Q3-2025 (YTD-2025 - decreased by 6%) primarily as a result of termination income of $1,375 recorded in Q3-2025 relating to one of the REIT's GTA tenants with the space having been re-leased for a ten-year term commencing 2026, offset by a decrease in occupancy for the REIT's held for sale properties as well as reductions in revenue resulting from property dispositions in 2025.

The REIT's NOI decreased by approximately 5% in Q3-2025 relative to Q3-2024 primarily due to the disposition activity in 2025, a decrease in occupancy for the REIT's held for sale properties and a decrease in Same Property NOI, partially offset by contractual rent increases achieved by the REIT throughout late 2024 and YTD-2025.

The REIT's Q3-2025 FFO and AFFO decreased by $1,009 and $1,713 (YTD-2025 - $5,208 and $6,607), respectively when compared to the same period in 2024 primarily due to the reduction in total portfolio NOI and increase in interest costs.

Q3-2025 FFO and AFFO basic and diluted per Unit decreased from $0.61 and $0.64 in Q3-2024 to $0.56 and $0.54 respectively due to the reasons outlined above, partially offset by the impact of a reduction in the number of outstanding Units as a result of repurchases under the NCIB program during 2024 and 2025.

YTD-2025 FFO basic and diluted per Unit decreased by $0.25 and $0.26 to $1.57 and $1.56, whereas AFFO basic and diluted per Unit decreased by $0.34 and $0.35 to $1.53 and $1.52 respectively, compared to nine months ended September 30, 2024 ("YTD-2024") with variance driven by reasons noted above for Q3-2025 FFO and AFFO per Unit.

On March 18, 2025, the REIT announced the Distribution Reinstatement to Unitholders, which commenced with a record date of March 31, 2025, payable on April 15, 2025, amounting to $0.0575 per Unit per month. For YTD-2025, the REIT's AFFO payout ratio was 26%.

Same Property NOI

Q3-2025 Same Property NOI excluding assets held for sale decreased by approximately 2% (YTD-2025 - 3%) compared to the same period in 2024 including the impact of termination income described above. Q3-2025 Same Property NOI excluding the impact of termination income and free rent in both periods, decreased by approximately 7% primarily due to a reduction in occupancy in Q3-2025 relative to Q3-2024 for the REIT's Alberta portfolio, one of the REIT's properties in British Columbia portfolio and one of the REIT's GTA properties which space has been re-leased with new tenants commencing in 2026, partially offset by contractual rent increases achieved by the REIT. The REIT continues to focus on leaving activity and continues to maintain above occupancy levels across its portfolio.

Q3-2025 Alberta Same Property NOI decreased by 11% primarily attributable to the downsizing of a tenant in the REIT's Calgary portfolio. Q3-2025 British Columbia Same Property NOI decreased by 35% primarily as a result of an expiring lease that was not renewed at the beginning of 2025 where the REIT continues to focus on re-leasing such space.

Q3-2025 New Brunswick Same Property NOI remained relatively consistent with Q3-2024. Q3-2025 Nova Scotia Same Property NOI increased by 11% as a result of the increase in occupancy between the two periods as well as contractual rent increases.

Q3-2025 Ontario Same Property NOI increased by 2% relative to Q3-2024 primarily due to termination income received in Q3-2025 from a tenant in the GTA Ontario portfolio which space has since been re-leased. Q3-2025 Same Property NOI excluding termination income and free rent for Ontario portfolio, decreased primarily due to reductions in occupancy at three of the REIT's GTA properties. These reductions in occupancy between Q3-2024 and Q3-2025 have been re-leased with leases commencing in 2026.

Debt and liquidity

As at September 30, 2025, the REIT had access to available funds ("Available Funds")^([3]) of approximately $42,790 with its mortgage portfolio carrying a weighted average term to maturity of 2.39 years and weighted average fixed interest rate of 4.38%.

During YTD-2025, the REIT successfully completed $228,300 of refinancing and $8,500 of new financing at a weighted average interest rate of approximately 4.87% and weighted average term of approximately 3.00 years. Subsequent to September 30, 2025, the REIT successfully refinanced all remaining 2025 debt maturities at a weighted average interest rate of approximately 4.39% and weighted average term of approximately 2.83 years.

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 38 commercial properties consisting of approximately 4.5 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 Q3-2025 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 Q3-2025, Q3-2024, YTD-2025 and YTD-2024. 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:

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:

FFO and AFFO

The following table reconciles the REIT's FFO and AFFO to net loss and comprehensive loss, for Q3-2025, Q3-2024, YTD-2025 and YTD-2024:

Indebtedness to GBV ratio

The table below calculates the REIT's Indebtedness to GBV ratio as at September 30, 2025 and December 31, 2024. The Indebtedness to GBV ratio is calculated by dividing the Indebtedness by GBV:

Adjusted EBITDA

The table below reconciles the REIT's Adjusted EBITDA to net loss and comprehensive loss for the twelve months period ended September 30, 2025 and 2024:

Interest coverage ratio

The table below calculates the REIT's interest coverage ratio for the twelve months period ended September 30, 2025 and 2024. The interest coverage ratio is calculated by dividing Adjusted EBITDA by interest expense.

Available Funds

The table below calculates the REIT's Available Funds as at September 30, 2025 and December 31, 2024:

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 the 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, 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 REIT'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