Toronto, Ontario--(Newsfile Corp. - November 11, 2025) - Northwest Healthcare Properties Real Estate Investment Trust (TSX: NWH.UN) (the "REIT" or "Northwest"), a global investor and operator of healthcare infrastructure assets in North America, Australasia, Brazil, and Europe, announces results for the three and nine months ended September 30, 2025, and provides update on advances made to its portfolio strategy.
Zach Vaughan, CEO of Northwest, commented, "Our portfolio continues to benefit from the strong tailwinds supporting the healthcare infrastructure sector. We have been very active as we advanced our strategy to simplify the business while strengthening our balance sheet. The internalization of Vital and the active exploration of alternatives for our European portfolio demonstrate the actions we are taking to reduce costs, streamline our operations and reallocate capital back to North America to pursue accretive initiatives, including unit and convertible debenture buy backs through our NCIB. Looking ahead, our priority remains on execution and helping the market recognize the deep value inherent in our business."
Q3 2025 Highlights
Highlights for Q3 2025 and events subsequent to the quarter are set out below:
Revenue from investment properties was $104.3 million for Q3 2025, a decrease of 2.6% from Q3 2024, primarily reflecting the disposition of non-core assets during 2024 and 2025 year-to-date, partially offset by same property revenue growth.
Same Property Net Operating Income ("SPNOI") increased by 4.4% to $76.9 million compared to Q3 2024, reflecting steady growth across all regions (see Exhibit 1).
General and administrative expenses, excluding unit-based compensation expense and employee termination benefits and related expenses, were $12.0 million, a decrease of $0.6 million from Q3 2024, primarily due to headcount reductions and the simplification of the REIT's operations.
Net income for Q3 2025 was $31.2 million, compared to net loss of $157.3 million in Q3 2024, primarily due to lower interest expense, positive fair value adjustments on investment properties and financial instruments, partially offset by lower net operating income resulting from asset dispositions.
Adjusted funds from operations ("AFFO") was $0.11 per unit in Q3 2025 compared to $0.10 per unit in Q2 2025 and $0.09 per unit in Q3 2024, resulting in an AFFO payout ratio of 85%, down from 88% in Q2 2025 and 99% in Q3 2024 (see Exhibit 2).
The REIT recorded fair value gains on investment properties of $8.8 million in Q3 2025, compared to fair value losses of $94.7 million in Q3 2024. The movements were mainly attributable to changes in valuation parameters, incorporating market evidence and rent reviews. The REIT's portfolio capitalization rate as at September 30, 2025 was 6.3%.
Leverage decreased to 48.4% at the end of Q3 2025 from 50.0% as at December 31, 2024, driven by debt repayments funded through asset dispositions.
Operating performance remained strong in Q3 2025, supported by a stable, long-term lease maturity profile with a weighted-average lease expiry ("WALE") of 13.4 years and a global portfolio occupancy rate of 96.9%.
Operations and Leasing
The REIT's consolidated SPNOI increased by 4.4% in Q3 2025 compared to the prior year period, primarily driven by inflationary rent adjustments, rentalized capital investments, and improved recoveries, reflecting steady growth in the REIT's underlying lease income. Regionally, SPNOI increased by 2.9% in North America, 4.6% in Brazil, 4.8% in Europe, and 5.1% in Australasia (see Exhibit 1).
In Q3 2025, the REIT completed 200,000 square feet of new, renewal and early leasing with a renewal rate of 90%.
Healthscope Update
Healthscope Pty Ltd ("HSO"), is the REIT's second largest tenant, occupying 12 properties and accounting for 6.0% of the REIT's proportionate revenues. In May 2025, HSO's parent entities entered receivership, with its lenders appointing McGrathNicol Restructuring to work with HSO management to complete an orderly sale of the business. All hospitals continue to operate as usual, and the company has received an additional A$100m facility to support operations.
The REIT received notification from HSO stating their intention to end the existing rent deferral arrangement on October 31, 2025, in place in various forms since March 2025, and have repaid the outstanding balance of deferred rent in full plus accrued interest.
The receiver-led sale process of HSO commenced in late July, and the final bid date has been set for late November, with the transition process and timing of regulatory approvals to be determined. Northwest maintains constructive dialogue with the receiver and prospective operators participating in the process.
As of today, all rent owing to the REIT from HSO, including deferrals previously granted, has been paid and HSO continues to meet all lease obligations.
Disposition Activity
The REIT's investment property dispositions during the quarter generated total proceeds of $35.3 million. As at September 30, 2025, the REIT held two income-producing properties and one development property with an aggregate fair value of $79.7 million, which were classified as assets held for sale.
Financing Activity
During the quarter, the REIT refinanced several debt facilities including European and Canadian mortgages and the previously disclosed amendment to the REIT's revolving credit facility in July 2025.
As of today, the REIT has $20.9 million of Canadian mortgages maturing in 2025 that will be repaid with capacity from the revolving credit facility. Of the REIT's proportionate 2026 debt maturities totaling $440 million, over 50% or approximately $220 million are term debts maturing in the fourth quarter of 2026, with the remainder relating to mortgages. The REIT currently has approximately $250 million of available liquidity, consisting of cash and the unused portion of its credit facilities.
Portfolio Strategy Advancements
During the quarter, the REIT engaged third-party advisors to explore options for its European portfolio with the objective of reducing its capital invested in Europe. At this time no decisions have been made as to the course of action and there is no certainty that the process will culminate in a transaction. The REIT will provide further updates on its progress in Europe as circumstances warrant.
As announced on November 9, 2025, (see "Northwest Healthcare Properties REIT Reaches a Deal with Vital for Internalization of Management Rights for NZ$214 Million") the REIT has reached a conditional agreement with the independent directors of Vital Trust ("Vital") to internalize the management of Vital for proceeds of NZ$214 million ($170 million). The transaction is conditional on Vital lender consents, regulatory approvals, and a successful equity raise by Vital of no less than NZ$175 million, net. On November 11, 2025, Vital successfully completed a fully subscribed NZ$190 million equity placement, with settlement of the new units expected to occur on November 14, 2025. Closing of the internalization is expected on December 31, 2025 or, if more time is required to satisfy the conditions, in the first quarter of calendar year 2026.
These active initiatives, if and once completed, could generate total net proceeds of over $300 million which will further strengthen the balance sheet and position Northwest to pursue new investment opportunities.
Selected Operating and Financial Information:
| (unaudited) | September 30, 2025 | December 31, 2024 | ||||
| As at | ||||||
| Assets under management | $ | 8,379,000 | $ | 8,282,000 | ||
| Number of properties | 167 | 172 | ||||
| Gross leasable area (sf) | 15,694,829 | 15,886,309 | ||||
| Period end occupancy | 96.9 % | 96.4 % | ||||
| Weighted Average Lease Expiry (Years) | 13.4 | 13.6 | ||||
| Debt | $ | 2,922,531 | $ | 3,027,154 | ||
| Debt to Gross Book Value | 48.4 % | 50.0 % | ||||
| Weighted average capitalization rate | 6.3 % | 6.2 % | ||||
| Economic Weighted Average Interest Rate | 4.9 % | 5.5 % |
| (unaudited) | Three months ended September 30, | Nine months ended September 30, | ||||||||||
| ($000's, except per unit amounts) | 2025 | 2024 | 2025 | 2024 | ||||||||
| Net Operating Income | $ | 79,168 | $ | 82,216 | $ | 232,624 | $ | 271,644 | ||||
| Net income (loss) | $ | 31,167 | $ | (157,266 | ) | $ | 48,258 | $ | (323,132 | ) | ||
| Funds from Operations ("FFO") excluding accelerated amortization of deferred financing charges (1), (2), (3) | $ | 28,075 | $ | 26,093 | $ | 82,163 | $ | 75,512 | ||||
| Adjusted Funds from Operations ("AFFO") (1) | $ | 26,328 | $ | 22,352 | $ | 76,081 | $ | 71,365 | ||||
| FFO, excluding accelerated amortization of deferred financing charges, per unit - diluted (1), (2), (3) | $ | 0.11 | $ | 0.11 | $ | 0.33 | $ | 0.31 | ||||
| AFFO per unit - diluted (1), (2) | $ | 0.11 | $ | 0.09 | $ | 0.30 | $ | 0.29 | ||||
| Distributions per unit | $ | 0.09 | $ | 0.09 | $ | 0.27 | $ | 0.27 | ||||
| AFFO Payout Ratio - Basic | 85 % | 99 % | 88 % | 93 % | ||||||||
| (1) | FFO and AFFO are not measures recognized under IFRS and do not have standardized meanings prescribed by IFRS. See Performance Measurement in the REIT's MD&A. The adjustments to determine FFO and AFFO have been presented on a proportionate basis. See "Non-IFRS Financial Measures" and Exhibit 2. |
| (2) | Included in FFO and AFFO for the nine months ended September 30, 2024, is $6.7 million related to interest rate cap derivative arrangements, which matured during the three months ended March 31, 2024, the impact of which is $0.03 per unit. |
| (3) | For the nine months ended September 30, 2025, FFO excludes $3.4 million of accelerated amortization of deferred financing charges related to the early repayment of debt, funded by proceeds from the sale of Assura units in Q2 2025 and the issuance of $500 million of senior unsecured debentures in February 2025. Including accelerated amortization of deferred financing charges, FFO was $28.1 million or $0.11 per unit for the quarter and $82.2 million or $0.33 per unit year-to-date. For the three and nine months ended September 30, 2024, FFO and FFO per unit excludes $10.3 million of accelerated amortization of deferred financing costs due to early repayment of debt upon sale of the UK portfolio in August 2024. FFO and FFO per unit including amortization of transactional deferred financing charges is $15.8 million or $0.06 per unit, and $65.2 million or $0.26 per unit, respectively. |
Normal Course Issuer Bid
The REIT announced today that the Toronto Stock Exchange (the "TSX") has approved the REIT's intention to make a normal course issuer bid ("NCIB") for a portion of its outstanding 6.25% convertible unsecured debentures due August 31, 2027 ("Series H Debentures"), a portion of its outstanding 7.75% convertible unsecured debentures due April 30, 2028 ("Series I Debentures" and, together with the Series H Debentures, "Debentures"), and a portion of its outstanding trust units ("Units" and, together with the Debentures, the "Securities") as appropriate opportunities arise from time to time.
Pursuant to the NCIB notice filed with the TSX, the REIT intends to acquire up to a maximum of $15,515,000 aggregate principal amount of Series H Debentures, or approximately 10% of its public float of Series H Debentures as of October 31, 2025, $8,625,000 aggregate principal amount of Series I Debentures, or approximately 10% of its public float of Series I Debentures as of October 31, 2025, and 22,177,862 Units, or approximately 10% of its public float of Units as of October 31, 2025, for cancellation over the next 12 months. As of October 31, 2025, the REIT had $155,250,000 aggregate principal amount of Series H Debentures outstanding, $86,250,000 aggregate principal amount of Series I Debentures outstanding, and 249,992,670 issued and outstanding Units.
Purchases under the NCIB will be made through the facilities of the TSX or through Canadian alternative trading systems and in accordance with applicable regulatory requirements at a price per Security representative of the market price at the time of acquisition. The aggregate principal amount of Series H Debentures that can be purchased will be subject to a daily maximum of $37,000 aggregate principal amount of Series H Debentures (which is equal to 25% of $151,000, being the average daily trading volume of the Series H Debentures from May 1, 2025 through October 31, 2025), the aggregate principal amount of Series I Debentures that can be purchased will be subject to a daily maximum of $14,000 aggregate principal amount of Series I Debentures (which is equal to 25% of $57,000, being the average daily trading volume of the Series I Debentures from May 1, 2025 through October 31, 2025), and the Units that can be purchased pursuant to the NCIB will be subject to a daily maximum of 138,358 Units (which is equal to 25% of 553,434 Units, being the average daily trading volume of the Units from May 1, 2025 through October 31, 2025), subject to the REIT's ability to make one block purchase of Series H Debentures, Series I Debentures, and Units per calendar week that exceeds such limits. All Securities purchased under the NCIB will be cancelled upon their purchase. The REIT intends to fund the purchases out of its available resources.
The REIT may begin to purchase Securities on November 14, 2025 and the NCIB will terminate on November 13, 2026, or such earlier time as the REIT completes its purchases pursuant to the NCIB or provides notice of termination. The REIT believes that the repurchase by the REIT of a portion of outstanding Securities is an appropriate use of resources and is in the best interests of the REIT.
The REIT intends to adopt an automatic securities purchase plan in connection with its NCIB that contains strict parameters regarding how Securities may be repurchased during times when it would ordinarily not be permitted to purchase Securities due to regulatory restrictions or self-imposed blackout periods. The automatic securities purchase plan is expected to be effective on November 14, 2025.
Corporate Presentation
Download the Company's Updated Corporate Presentation:
https://www.nwhreit.com/investors/unitholders/presentations
Q3 2025 Results Conference Call
The REIT will be hosting its Q3 2025 conference call on Wednesday, November 12, 2025 at 10:00 a.m. ET. The dial-in numbers for the conference call are as follows:
North America (toll free): 1-833-752-3625
Overseas or local (Toronto): 1-647-846-8435
Link to audio webcast: https://www.gowebcasting.com/14154
A replay will be available until November 19, 2025, by accessing:
US/Canada (toll free): 1-855-669-9658
International: 1-412-317-0088
Replay Access Code: 1130353
About Northwest
Northwest provides investors with access to a portfolio of high-quality international healthcare real estate infrastructure comprised as at November 11, 2025, of interests in a diversified portfolio of 167 income-producing properties and 15.7 million square feet of gross leasable area located throughout major markets in North America, Australasia, Brazil and Europe. The REIT's portfolio of medical outpatient buildings, clinics, and hospitals is characterized by long-term indexed leases and stable occupancies. Northwest leverages its global workforce in eight countries to serve as a long-term real estate partner to leading healthcare operators. For additional information please visit: www.nwhreit.com.
Contacts
Zach Vaughan, CEO, zach.vaughan@nwhreit.com.
Stephanie Karamarkovic, CFO, Stephanie.Karamarkovic@nwhreit.com.
Alyssa Barry, Investor Relations, Alyssa.Barry@nwhreit.com, investors@nwhreit.com, (416) 366-2000 Ext. 2202
Non-IFRS Measures
Some financial measures used in this press release, such as SPNOI, FFO, FFO per Unit, AFFO, AFFO per Unit, AFFO Payout Ratio, NAV, NAV per unit, and Proportionate Investment Properties are used by the real estate industry to measure and compare the operating performance of real estate companies, but they do not have any standardized meaning prescribed by IFRS.
These non-IFRS financial measures and non-IFRS ratios should not be construed as alternatives to financial measures calculated in accordance with IFRS. The REIT's method of calculating these measures and ratios may differ from the methods of other real estate investment trusts or other issuers, and accordingly may not be comparable. Further, the REIT's definitions of FFO and AFFO differ from the definitions recommended by REALPAC. These non-IFRS measures are more fully defined and discussed in the exhibits to this news release and in the REIT's Management's Discussion and Analysis ("MD&A") for the three and nine months ended September 30, 2025, in the "Performance Measurement" and "Results from Operations" sections. The MD&A is available on SEDAR+ at www.sedarplus.ca.
Forward-Looking Statements
This press release may contain forward-looking statements with respect to the REIT, its operations, strategy, financial performance and condition. These statements generally can be identified by words such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe", "normalized", "contracted", or "continue" or the negative thereof or similar variations. Forward-looking statements in this press release may include statements concerning the receiver-led sale process for HSO, the ongoing operation of HSO's hospitals, the impact of its sustainability efforts, future debt repayment and renewal, and the REIT being well positioned for growth, to deliver on its objectives and create long term value for unitholders, the exploration of options for the REIT's European portfolio and corresponding reduction of capital invested in Europe, the expected completion of the internalization of management at Vital (the "Internalization"), the expected proceeds from the Internalization and European portfolio initiatives, and the number of Securities to be acquired under the NCIB and other related matters. The REIT's actual results and performance discussed herein could differ materially from those expressed or implied by such statements. The forward-looking statements contained in this press release are based on numerous assumptions which may prove incorrect, and which could cause actual results or events to differ materially from the forward-looking statements. Such assumptions include, but are not limited to (i) the REIT's ability to identify and execute on anticipated disposition and other initiatives to strengthen its balance sheet, improve efficiencies and unlock embedded value, (ii) assumptions relating to the continued operation of HSO's hospitals, (iii) the REIT's properties continuing to perform as they have recently, (iv) various general economic and market factors, including exchange rates remaining constant, local real estate conditions remaining strong, and interest rates remaining at current levels or decreasing, (v) the availability of equity and debt financing to the REIT and the REIT's ability to refinance, or extend the maturity of, its existing debt, (vi) the REIT's commitment to sustainability objectives and the impact thereof, (vii) the REIT's ability to successfully complete its European portfolio initiatives, reduce its capital invested in Europe and realize the anticipated benefits and proceeds thereof, and (viii) the successful completion of the Internalization, including satisfaction of all necessary closing conditions and the REIT's ability to realize the expected benefits and cost savings from the Internalization. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations, including the risk that the transactions contemplated herein are not completed on the terms proposed or at all. Important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulations, and the factors described under "Risks and Uncertainties" in the REIT's Annual Information Form and the risks and uncertainties set out in the MD&A which are available on SEDAR+ at www.sedarplus.ca.
These cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release, and, except as expressly required by applicable law, the REIT assumes no obligation to update such statements.
| NORTHWEST HEALTHCARE PROPERTIES REAL ESTATE INVESTMENT TRUST | ||||||||||||
| Condensed Consolidated Interim Statements of Income (Loss) | ||||||||||||
| Unaudited | ||||||||||||
| For the three months ended | For the nine months ended | |||||||||||
| (in thousands of Canadian dollars) | September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | ||||||||
| Net Property Operating Income | ||||||||||||
| Revenue from investment properties | $ | 104,286 | $ | 107,015 | $ | 314,937 | $ | 359,701 | ||||
| Property operating costs | (25,118 | ) | (24,799 | ) | (82,313 | ) | (88,057 | ) | ||||
| 79,168 | 82,216 | 232,624 | 271,644 | |||||||||
| Other Income (Expenses) | ||||||||||||
| Interest and other income | 2,386 | 6,151 | 11,115 | 12,910 | ||||||||
| Management fees | 4,016 | 4,117 | 11,379 | 11,333 | ||||||||
| Share of income (loss) from equity accounted investments | 4,666 | (22,100 | ) | 572 | (32,084 | ) | ||||||
| Interest expense | (31,122 | ) | (44,332 | ) | (96,987 | ) | (153,521 | ) | ||||
| General and administrative expenses | (16,218 | ) | (16,003 | ) | (45,957 | ) | (45,019 | ) | ||||
| Transaction costs | (3,201 | ) | (5,366 | ) | (15,023 | ) | (12,300 | ) | ||||
| Foreign exchange gain (loss) | (2,638 | ) | (500 | ) | 4,655 | 12,369 | ||||||
| Amortization of financing costs | (1,380 | ) | (11,366 | ) | (7,525 | ) | (20,817 | ) | ||||
| Accretion of financial liabilities | (970 | ) | (937 | ) | (4,786 | ) | (5,369 | ) | ||||
| Fair value adjustment of convertible debentures | (6,850 | ) | (34,179 | ) | (17,541 | ) | (35,871 | ) | ||||
| Other finance expenses | - | - | - | (169 | ) | |||||||
| Fair value adjustment of financial instruments | 4,248 | (21,490 | ) | 24,670 | (10,141 | ) | ||||||
| Fair value adjustment of investment properties | 8,781 | (94,747 | ) | (23,947 | ) | (338,867 | ) | |||||
| Net loss on disposals of assets | (311 | ) | (21,299 | ) | (5,089 | ) | (31,396 | ) | ||||
| Fair value adjustment of unit-based compensation liabilities | (380 | ) | (1,641 | ) | (1,262 | ) | (480 | ) | ||||
| Income (loss) before taxes | 40,195 | (181,476 | ) | 66,898 | (377,778 | ) | ||||||
| Current income tax (expense) recovery | (6,241 | ) | (6,641 | ) | (13,379 | ) | (13,035 | ) | ||||
| Deferred income tax (expense) recovery | (2,787 | ) | 30,851 | (5,261 | ) | 67,681 | ||||||
| Income tax (expense) recovery | (9,028 | ) | 24,210 | (18,640 | ) | 54,646 | ||||||
| Net income (loss) | $ | 31,167 | $ | (157,266 | ) | $ | 48,258 | $ | (323,132 | ) | ||
| Net income (loss) attributable to: | ||||||||||||
| Unitholders | $ | 16,165 | $ | (138,252 | ) | $ | 41,235 | $ | (308,222 | ) | ||
| Non-controlling interests | 15,002 | (19,014 | ) | 7,023 | (14,910 | ) | ||||||
| $ | 31,167 | $ | (157,266 | ) | $ | 48,258 | $ | (323,132 | ) | |||
Exhibit 1 - Constant Currency Same Property NOI
Constant Currency Same Property NOI ("SPNOI"), sometimes also presented as "Same Property NOI", is a non-IFRS financial measure, defined as net operating income ("NOI") for investment properties that were owned for a full reporting period in both the current and comparative year, subject to certain adjustments including: (i) straight-line rental revenue recognition; (ii) amortization of operating leases; (iii) lease termination fees; and (iv) non-recurring transactions that are not expected to recur; (v) excluding properties held for redevelopment and (vi) excluding impact of foreign currency translation by converting the foreign currency denominated SPNOI from the comparative period at the current period's average exchange rates. SPNOI is more fully defined and discussed in the REIT's MD&A (see "Performance Measurement").
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||
| 2025 | 2024 | Var % | 2025 | 2024 | Var % | |||||||||||||
| Same property NOI (1) | ||||||||||||||||||
| North America | $ | 20,794 | $ | 20,206 | 2.9% | $ | 61,925 | $ | 59,819 | 3.5% | ||||||||
| Brazil | 14,405 | 13,770 | 4.6% | 42,309 | 40,437 | 4.6% | ||||||||||||
| Europe | 8,901 | 8,491 | 4.8% | 25,385 | 24,567 | 3.3% | ||||||||||||
| Australasia | 32,807 | 31,213 | 5.1% | 93,174 | 88,713 | 5.0% | ||||||||||||
| Same property NOI (1) | $ | 76,907 | $ | 73,680 | 4.4% | $ | 222,793 | $ | 213,536 | 4.3% | ||||||||
| Impact of foreign currency translation | - | (746 | ) | - | (769 | ) | ||||||||||||
| Straight-line rental revenue recognition | 244 | 212 | 197 | 2,415 | ||||||||||||||
| Amortization of operating leases | (25 | ) | (31 | ) | (80 | ) | (99 | ) | ||||||||||
| Lease termination income (2) | 537 | 2 | 551 | 104 | ||||||||||||||
| Other transactions | 129 | 385 | 823 | 981 | ||||||||||||||
| Developments | 1,062 | 507 | 5,534 | 1,442 | ||||||||||||||
| Dispositions | 314 | 8,207 | 2,806 | 54,034 | ||||||||||||||
| NOI | $ | 79,168 | $ | 82,216 | (3.7)% | $ | 232,624 | $ | 271,644 | (14.4)% | ||||||||
| (1) | Same property NOI is a non-IFRS measure, defined and discussed in the REIT's MD&A. |
| (2) | Lease termination income includes $0.4 million earned within Vital Trust, of which the REIT's 28.2% proportionate share is approximately $0.1 million. |
Exhibit 2 - Funds From Operations and Adjusted Funds from Operations Reconciliation
FFO is a supplemental non-IFRS industry wide financial measure of a REIT's operating performance. The REIT calculates FFO based on certain adjustments to net income (loss) (computed in accordance with IFRS) as detailed below. FFO is more fully defined and discussed in the REIT's MD&A (see "Performance Measurement" and "Funds From Operations").
For the nine months ended September 30, 2025, FFO was $78.8 million, including accelerated amortization of deferred financing costs as a result of early repayment of the underlying debt, using proceeds from the senior unsecured debentures. Excluding the impact of $3.4 million of accelerated amortization of deferred financing costs, FFO for the nine months ended September 30, 2025 is $82.2 million or $0.33 per unit.
For the three and nine months ended September 30, 2024, FFO was $15.8 million and $65.2 million, respectively, including $10.3 million of accelerated amortization of deferred financing costs recognized upon the early repayment of certain debt using proceeds from the sale of the REIT's UK portfolio. Excluding this non-recurring item, FFO for the three and nine months ended September 30, 2024 was $26.1 million and $75.5 million or $0.11 and $0.31 per unit, respectively.
| (unaudited) | Three months ended September 30, | Nine months ended September 30, | ||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||
| Net income (loss) attributable to unitholders | $ | 16,165 | $ | (138,252) | $ | 41,235 | $ | (308,222 | ) | |||
| Add / (Deduct): | ||||||||||||
| Fair value (gains) losses (2) | 348 | 146,541 | 7,288 | 391,899 | ||||||||
| Accretion of financial liabilities | 970 | 937 | 4,786 | 5,369 | ||||||||
| Unrealized foreign exchange loss (gain) | 33 | 1,858 | (5,853 | ) | (11,433 | ) | ||||||
| Deferred tax expense (recovery) | 3,958 | (26,027 | ) | 5,460 | (64,539 | ) | ||||||
| Transaction costs | 3,201 | 5,011 | 15,017 | 12,041 | ||||||||
| Net loss on disposal of assets | 593 | 20,990 | 5,159 | 30,805 | ||||||||
| Internal leasing costs | 526 | 312 | 1,365 | 963 | ||||||||
| Property taxes accounted for under IFRIC 21 | (20 | ) | (108 | ) | 8 | (47 | ) | |||||
| Net adjustment for lease liabilities | 25 | (189 | ) | 46 | (439 | ) | ||||||
| Employee termination benefits and related expenses | 2,078 | 3,807 | 3,693 | 3,807 | ||||||||
| Other FFO adjustments | 198 | 895 | 609 | 4,990 | ||||||||
| FFO (1) (2) | $ | 28,075 | $ | 15,775 | $ | 78,813 | $ | 65,194 | ||||
| FFO per Unit - Basic (1) (2) | $ | 0.11 | $ | 0.06 | $ | 0.32 | $ | 0.26 | ||||
| FFO per Unit - Diluted (3) | $ | 0.11 | $ | 0.06 | $ | 0.32 | $ | 0.26 | ||||
| Weighted average number of units outstanding | ||||||||||||
| Basic | 249,662,325 | 246,832,144 | 248,879,957 | 246,084,555 | ||||||||
| Diluted (3) | 250,712,935 | 247,870,148 | 249,944,171 | 247,334,010 | ||||||||
| (1) | FFO and AFFO are not measures recognized under IFRS and do not have standardized meanings prescribed by IFRS. See Performance Measurement in the REIT's MD&A. The adjustments to determine FFO and AFFO have been presented on a proportionate basis. |
| (2) | Included in FFO for the nine months ended September 30, 2024 is $6.7 million related to premiums paid in connection with interest rate cap derivatives, the impact of which is $0.03 per unit. |
| (3) | Diluted units include the impact of vested deferred trust units and the convertible debentures, which would have a dilutive effect upon conversion |
.
AFFO is a supplemental non-IFRS financial measure of a REIT's operating performance and is intended to reflect a stabilized business environment. The REIT calculates AFFO as FFO, plus/minus certain adjustments as detailed below. AFFO is more fully defined and discussed in the MD&A (see "Performance Measurement" and "Adjusted Funds From Operations").
| (unaudited) | Three months ended September 30, | Nine months ended September 30, | ||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||
| FFO (1)(2) | $ | 28,075 | $ | 15,775 | $ | 78,813 | $ | 65,194 | ||||
| Add / (Deduct): | ||||||||||||
| Amortization of transactional deferred financing charges | - | 10,318 | 3,350 | 15,134 | ||||||||
| Unit-based compensation expense | 2,118 | (458 | ) | 5,709 | 2,361 | |||||||
| Straight-line rental revenue | (824 | ) | (416 | ) | (2,673 | ) | (2,115 | ) | ||||
| Leasing costs and non-recoverable maintenance capital expenditures | (3,041 | ) | (2,867 | ) | (9,118 | ) | (9,209 | ) | ||||
| AFFO (1) | $ | 26,328 | $ | 22,352 | $ | 76,081 | $ | 71,365 | ||||
| AFFO per Unit - Basic (1)(2) | $ | 0.11 | $ | 0.09 | $ | 0.31 | $ | 0.29 | ||||
| AFFO per Unit - Diluted (2) | $ | 0.11 | $ | 0.09 | $ | 0.30 | $ | 0.29 | ||||
| Distributions per Unit | $ | 0.09 | $ | 0.09 | $ | 0.27 | $ | 0.27 | ||||
| Weighted average number of units outstanding | ||||||||||||
| Basic | 249,662,325 | 246,832,144 | 248,879,957 | 246,084,555 | ||||||||
| Diluted (2) | 250,712,935 | 247,870,148 | 249,944,171 | 247,334,010 | ||||||||
| (1) | FFO and AFFO are not measures recognized under IFRS and do not have standardized meanings prescribed by IFRS. See Performance Measurement in the REIT's MD&A. The adjustments to determine FFO and AFFO have been presented on a proportionate basis. |
| (2) | Included in FFO for the nine months ended September 30, 2024 is $6.7 million related to premiums paid in connection with interest rate cap derivatives, the impact of which is $0.03 per unit. |
| (3) | Diluted units include the impact of vested deferred trust units and the convertible debentures, which would have a dilutive effect upon conversion. |
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