Choice Properties Real Estate Investment Trust (“Choice Properties” or the “Trust”) (TSX: CHP.UN) today announced its consolidated financial results for the quarter and year ended December 31, 2025. The Annual Report to Unitholders is available in the Investors section of the Trust’s website at www.choicereit.ca , and has been filed on SEDAR+ at www.sedarplus.ca .
“Choice Properties delivered strong operational and financial results in the fourth quarter and throughout 2025. Our high-quality portfolio of grocery anchored centres and well-located industrial assets continued to benefit from strong tenant demand, driving improved occupancy and cash flow growth,” said Rael Diamond, President and Chief Executive Officer of the Trust. “The strength of our balance sheet and our disciplined approach to operations, capital recycling, and development execution position us for continued stability and growth in line with our proven strategy for long-term value creation. Looking ahead, we remain confident in our business and are pleased to announce our fourth consecutive annual distribution increase for unitholders.”
2025 Fourth Quarter Highlights
- Reported a net loss of $53.4 million compared to net income of $791.9 million in the prior year. The decrease was primarily due to an unfavourable fair value adjustment in the Trust’s Exchangeable Units (1) compared with a favourable adjustment in the prior year.
- Reported FFO (2) per unit diluted of $0.262, representing year-over-year growth of 0.8%.
- Achieved Same-Asset NOI, Cash Basis (2) growth of 2.4% and Total NOI, Cash Basis (2) growth of 4.4%.
- Achieved long term renewal leasing spreads (3) of 21.5%.
- Reached period end occupancy of 98.2%, with Retail at 98.0%, Industrial at 98.8%, and Mixed-Use & Residential at 93.7%.
- Completed $261.3 million of real estate transactions on a proportionate share basis (2) .
- Delivered $160.5 million of development projects, adding approximately 600,500 square feet of new commercial GLA on a proportionate share basis (2) , including a 530,000 square foot logistics facility at Choice Caledon Business Park.
2025 Select Annual Highlights
- Reported a net loss of $61.2 million compared to net income of $784.4 million in the prior year.
- Reported FFO (2) per unit diluted of $1.069, representing year-over-year growth of 3.6%.
- Achieved Same-Asset NOI, Cash Basis (2) growth of 2.2% and Total NOI, Cash Basis, growth of 4.7%.
- Achieved long term renewal leasing spreads (3) of 13.9%.
- Improved occupancy by 60 basis points to 98.2% as at December 31, 2025.
- Completed $800.8 million of real estate transactions on a proportionate share basis (2) .
- Delivered $222.2 million of development projects, generating $46.9 million of value and adding 836,000 square feet of GLA on a proportionate share basis (2) at an average yield of 7.4%.
- Delivered NAV (2) per unit appreciation of $0.36 or 2.6% due to contributions from FFO (2) and fair value gains on investment properties on a proportionate share basis (2) , partially offset by distributions to unitholders and a fair value loss on the investment in real estate securities due to the change in the unit price of Allied Properties REIT (“Allied”).
- Maintained healthy and stable debt metrics with Adjusted Debt to EBITDA (2) of 7.0x, Adjusted Debt to Total Assets (2) at 40.5%, and Interest Coverage ratio (2) of 3.2x.
- Maintained a strong liquidity position with approximately $1.5 billion of available credit and a $13.8 billion pool of unencumbered properties.
Subsequent Events
Subsequent to the year end, the Trust:
- Announced an increase of distributions to $0.78 per unit per annum from the previous rate of $0.77 per unit per annum (an increase of 1.3%). The increase will be effective for Unitholders of record on March 31, 2026; and
- Completed acquisitions totaling approximately $27.7 million.
Performance Highlights
|
As at or for the periods ended |
Three Months |
Years Ended |
||||||||||||||||||||||||||
|
($ thousands except where
|
December 31,
|
December 31,
|
Change |
Change
|
December 31,
|
December 31,
|
Change |
Change
|
||||||||||||||||||||
|
FFO (2) |
$ |
189,922 |
$ |
188,220 |
$ |
1,702 |
0.9 |
% |
$ |
773,844 |
$ |
746,770 |
$ |
27,074 |
3.6 |
% |
||||||||||||
|
FFO per unit diluted (2) |
0.262 |
0.260 |
0.002 |
0.8 |
% |
1.069 |
1.032 |
0.037 |
3.6 |
% |
||||||||||||||||||
|
Net (loss) income |
(53,357 |
) |
791,916 |
(845,273 |
) |
(106.7 |
)% |
(61,188 |
) |
784,437 |
(845,625 |
) |
(107.8 |
)% |
||||||||||||||
|
Weighted average number of units outstanding - diluted (i) |
723,810,797 |
723,726,328 |
84,469 |
— |
% |
723,800,904 |
723,680,890 |
120,014 |
— |
% |
||||||||||||||||||
|
(i) |
Includes Trust Units and Exchangeable Units |
Funds from Operations
FFO (1) increased by $1.7 million, or 0.8% per unit diluted for the three months ended December 31, 2025. The increase was primarily due to an increase in net operating income, partially offset by higher interest expense, lower lease surrender revenue, lower interest income, and lower investment income as a result of the reduction in Allied’s distribution.
Net (Loss) Income
Choice Properties reported a net loss of $53.4 million for the three months ended December 31, 2025, compared to net income of $791.9 million in the prior year period. The decrease of $845.3 million was primarily due to changes in certain non-cash adjustments to fair value including:
- a $748.0 million unfavourable change in the adjustment to fair value of the Trust’s Exchangeable Units (1) due to the change in the Trust’s unit price;
- a $60.4 million decrease in income from equity accounted joint ventures resulting from the unfavourable change in the adjustment to fair value of related investment properties; and
- a $50.8 million unfavourable change in the adjustment to fair value of the investment in real estate securities of Allied, driven by the change in Allied’s unit price in the quarter; partially offset by
- a $18.3 million favourable change in the adjustment to fair value of investment properties.
Select Proportionate Share (2) Operational and Financial Highlights
|
As at or for the periods ended |
Three Months |
Years Ended |
||||||||||||||||||||||||||||
|
($ thousands except where otherwise indicated) |
December 31,
|
December 31,
|
Change |
Change
|
December 31,
|
December 31,
|
Change |
Change
|
||||||||||||||||||||||
|
NOI, Cash Basis (2) |
$ |
271,444 |
$ |
259,966 |
$ |
11,478 |
4.4 |
% |
$ |
1,072,647 |
$ |
1,024,119 |
$ |
48,528 |
4.7 |
% |
||||||||||||||
|
Same-Asset NOI, Cash basis (2) |
$ |
249,579 |
$ |
243,684 |
$ |
5,895 |
2.4 |
% |
$ |
982,757 |
$ |
961,606 |
$ |
21,151 |
2.2 |
% |
||||||||||||||
|
Long term renewal spreads (3) |
21.5 |
% |
21.6 |
% |
(0.1 |
)% |
n/a |
13.9 |
% |
20.2 |
% |
(6.3 |
)% |
n/a |
||||||||||||||||
|
Occupancy (% of GLA) |
98.2 |
% |
97.6 |
% |
0.60 |
% |
n/a |
|||||||||||||||||||||||
|
NAV (2) per unit |
$ |
14.43 |
$ |
14.07 |
$ |
0.36 |
2.6 |
% |
||||||||||||||||||||||
-
Same-Asset NOI, Cash Basis
(2)
increased by 2.4% for the three months ended December 31, 2025 compared to the prior year period.
- Retail increased by 1.6%. Growth in the retail segment was impacted by bad debt reversals in the prior year. Excluding bad debt expense, retail increased by 2.1%.
- Industrial increased by 6.2%; and
- Mixed-Use & Residential decreased by 1.8%.
-
Period end occupancy increased by 20 basis points from September 30, 2025 to 98.2%, with:
- Retail at 98.0%, Industrial at 98.8%, and Mixed-Use & Residential at 93.7%.
- Achieved leasing spreads (3) on long-term renewals of 21.5%, with 16.8% and 26.0% in the Retail and Industrial portfolios, respectively.
Outlook
We are focused on capital preservation, delivering stable and growing cash flows and net asset value appreciation. Our high-quality portfolio is primarily leased to necessity-based tenants and logistics providers, who are less sensitive to economic volatility and therefore provide stability to our overall portfolio. We will continue to advance our development program, with a focus on commercial developments, which provides us with the best opportunity to add high-quality real estate to our portfolio at a reasonable cost and drive net asset value appreciation over time.
We are confident that our business model, stable tenant base, strong balance sheet, and disciplined approach to financial management will continue to benefit us. In 2026, Choice Properties is targeting:
- Stable occupancy across the portfolio, resulting in approximately 2%-3% year-over-year growth in Same-Asset NOI, Cash Basis (2) ;
- Annual FFO per unit diluted (2) in a range of approximately $1.08 to $1.10; and
- Strong leverage metrics, targeting Adjusted Debt to EBITDAFV (2) below 7.5x.
Conference Call and Webcast
Management will host a conference call on Thursday, February 19, 2026 at 10:00 AM (EDT) with a simultaneous audio webcast. To access via teleconference, please dial +1 (240) 789-2714 or +1 (888) 330-2454 and enter the event passcode: 4788974. The link to the audio webcast will be available on
www.choicereit.ca/events-webcasts
.
About Choice Properties Real Estate Investment Trust
Choice Properties is Canada’s largest real estate investment trust, guided by a clear purpose: to create places where people thrive. This is how we build enduring value. As a national owner, operator, and developer of high-quality commercial and residential real estate, we go beyond managing assets. We create places that strengthen how tenants and communities live, work, and connect. Our platform is built on industry leadership in sustainability, community engagement, and social impact, embedded across how we operate, build, and grow. As a trusted steward of capital, we are committed to disciplined execution, long-term value creation, and responsible growth. Everything we do is guided by our core values of Care, Ownership, Respect, and Excellence. For more information, visit Choice Properties’ website at
www.choicereit.ca
and Choice Properties’ issuer profile at
www.sedarplus.ca
.
| ______________________________________________ | ||
|
(1) |
Exchangeable Units are required to be classified as financial liabilities at fair value through profit and loss under GAAP. They are recorded at their fair value based on the market trading price of the Trust Units, which results in a negative impact to the financial results when the Trust Unit price rises and a positive impact when the Trust Unit price declines. |
|
|
(2) |
Refer to Non-GAAP Financial Measures and Additional Financial Information section. |
|
|
(3) |
Long term renewal spreads are calculated as the difference between the average rate during the renewal term and the expiring rental rate. |
|
Non-GAAP Financial Measures and Additional Financial Information
Choice Properties prepares and releases unaudited interim and audited annual consolidated financial statements in accordance with International Financial Reporting Standards (“IFRS” or “GAAP”), along with its MD&A, which should be read in conjunction with this news release.
In addition to results provided in accordance with IFRS, Choice Properties also measures its performance using certain non-GAAP measures, which are provided in this news release so that investors may do the same. These non-GAAP measures include FFO, NOI Cash basis, Same-Asset NOI Cash basis, NAV, Proportionate share, and Adjusted Debt to EBITDAFV. Such measures and related per-unit amounts are not defined by IFRS and therefore should not be construed as alternatives to net income or cash flows from operating activities determined in accordance with IFRS. Furthermore, the supplemental measures used by management may not be comparable to similar measures presented by other real estate investment trusts or enterprises. The non-GAAP measures included in this news release are defined and reconciled to the most comparable GAAP measure below. Choice Properties believes these non-GAAP financial measures provide useful information to both management and investors in measuring the financial performance and financial condition of the Trust for the reasons outlined below.
Proportionate share represents financial information adjusted to reflect the Trust’s equity accounted joint ventures and financial real estate assets and its share of net income (loss) from equity accounted joint ventures and financial real estate assets on a proportionately consolidated basis at the Trust’s ownership percentage of the related investment. Management views this method as relevant in demonstrating the Trust’s ability to manage the underlying economics of the related investments, including the financial performance and cash flows and the extent to which the underlying assets are leveraged, which is an important component of risk management.
The following table reconciles net loss, as determined in accordance with GAAP, to net loss on a proportionate share basis for the three months and year ended December 31, 2025:
|
Three Months |
Year Ended |
||||||||||||||||||||||||
|
($ thousands) |
GAAP Basis |
Adjustment to
|
Proportionate
|
GAAP Basis |
Adjustment to
|
Proportionate
|
|||||||||||||||||||
|
Net Operating Income |
|||||||||||||||||||||||||
|
Rental revenue |
$ |
354,444 |
$ |
27,713 |
$ |
382,157 |
$ |
1,414,621 |
$ |
103,663 |
$ |
1,518,284 |
|||||||||||||
|
Property operating costs |
(100,504 |
) |
(8,323 |
) |
(108,827 |
) |
(399,144 |
) |
(31,661 |
) |
(430,805 |
) |
|||||||||||||
|
253,940 |
19,390 |
273,330 |
1,015,477 |
72,002 |
1,087,479 |
||||||||||||||||||||
|
Other Income and Expenses |
|||||||||||||||||||||||||
|
Interest income |
9,829 |
(3,386 |
) |
6,443 |
41,892 |
(14,558 |
) |
27,334 |
|||||||||||||||||
|
Investment income |
4,249 |
— |
4,249 |
20,194 |
— |
20,194 |
|||||||||||||||||||
|
Fee income |
1,213 |
— |
1,213 |
5,157 |
— |
5,157 |
|||||||||||||||||||
|
Net interest expense and other financing charges |
(150,770 |
) |
(7,570 |
) |
(158,340 |
) |
(597,632 |
) |
(28,101 |
) |
(625,733 |
) |
|||||||||||||
|
General and administrative expenses |
(18,042 |
) |
— |
(18,042 |
) |
(63,725 |
) |
— |
(63,725 |
) |
|||||||||||||||
|
Share of income from equity accounted joint ventures |
(22,619 |
) |
22,619 |
— |
488 |
(488 |
) |
— |
|||||||||||||||||
|
Amortization of intangible assets |
(250 |
) |
— |
(250 |
) |
(1,000 |
) |
— |
(1,000 |
) |
|||||||||||||||
|
Adjustment to fair value of unit-based compensation |
(610 |
) |
— |
(610 |
) |
(1,941 |
) |
— |
(1,941 |
) |
|||||||||||||||
|
Adjustment to fair value of Exchangeable Units |
(43,536 |
) |
— |
(43,536 |
) |
(577,848 |
) |
— |
(577,848 |
) |
|||||||||||||||
|
Adjustment to fair value of investment properties |
2,212 |
(31,053 |
) |
(28,841 |
) |
144,332 |
(28,855 |
) |
115,477 |
||||||||||||||||
|
Adjustment to fair value of investment in real estate securities |
(87,034 |
) |
— |
(87,034 |
) |
(44,638 |
) |
— |
(44,638 |
) |
|||||||||||||||
|
Loss before Income Taxes |
(51,418 |
) |
— |
(51,418 |
) |
(59,244 |
) |
— |
(59,244 |
) |
|||||||||||||||
|
Income tax expense |
(1,939 |
) |
— |
(1,939 |
) |
(1,944 |
) |
— |
(1,944 |
) |
|||||||||||||||
|
Net Loss |
$ |
(53,357 |
) |
$ |
— |
$ |
(53,357 |
) |
$ |
(61,188 |
) |
$ |
— |
$ |
(61,188 |
) |
|||||||||
The following table reconciles net income, as determined in accordance with GAAP, to net income on a proportionate share basis (2) for the three months and year ended December 31, 2024:
|
Three Months |
Year Ended |
||||||||||||||||||||||||
|
($ thousands) |
GAAP Basis |
Adjustment to
|
Proportionate
|
GAAP Basis |
Adjustment to
|
Proportionate
|
|||||||||||||||||||
|
Net Operating Income |
|||||||||||||||||||||||||
|
Rental revenue |
$ |
344,861 |
$ |
23,515 |
$ |
368,376 |
$ |
1,358,105 |
$ |
91,539 |
$ |
1,449,644 |
|||||||||||||
|
Property operating costs |
(97,375 |
) |
(7,416 |
) |
(104,791 |
) |
(381,568 |
) |
(31,319 |
) |
(412,887 |
) |
|||||||||||||
|
247,486 |
16,099 |
263,585 |
976,537 |
60,220 |
1,036,757 |
||||||||||||||||||||
|
Residential Inventory Income |
|||||||||||||||||||||||||
|
Gross sales |
— |
— |
— |
11,268 |
— |
11,268 |
|||||||||||||||||||
|
Cost of sales |
— |
— |
— |
(9,234 |
) |
— |
(9,234 |
) |
|||||||||||||||||
|
— |
— |
— |
2,034 |
— |
2,034 |
||||||||||||||||||||
|
Other Income and Expenses |
|||||||||||||||||||||||||
|
Interest income |
10,247 |
(2,298 |
) |
7,949 |
52,593 |
(14,434 |
) |
38,159 |
|||||||||||||||||
|
Investment income |
5,315 |
— |
5,315 |
21,260 |
— |
21,260 |
|||||||||||||||||||
|
Fee income |
712 |
— |
712 |
3,389 |
— |
3,389 |
|||||||||||||||||||
|
Net interest expense and other financing charges |
(147,490 |
) |
(5,733 |
) |
(153,223 |
) |
(586,388 |
) |
(22,332 |
) |
(608,720 |
) |
|||||||||||||
|
General and administrative expenses |
(16,987 |
) |
— |
(16,987 |
) |
(67,833 |
) |
— |
(67,833 |
) |
|||||||||||||||
|
Share of income from equity accounted joint ventures |
37,820 |
(37,820 |
) |
— |
49,138 |
(49,138 |
) |
— |
|||||||||||||||||
|
Amortization of intangible assets |
(250 |
) |
— |
(250 |
) |
(1,000 |
) |
— |
(1,000 |
) |
|||||||||||||||
|
Transaction costs and other related expenses |
(55 |
) |
— |
(55 |
) |
38,560 |
— |
38,560 |
|||||||||||||||||
|
Adjustment to fair value of unit-based compensation |
1,927 |
— |
1,927 |
657 |
— |
657 |
|||||||||||||||||||
|
Adjustment to fair value of Exchangeable Units |
704,500 |
— |
704,500 |
237,472 |
— |
237,472 |
|||||||||||||||||||
|
Adjustment to fair value of investment properties |
(16,112 |
) |
29,752 |
13,640 |
92,731 |
25,684 |
118,415 |
||||||||||||||||||
|
Adjustment to fair value of investment in real estate securities |
(36,254 |
) |
— |
(36,254 |
) |
(35,782 |
) |
— |
(35,782 |
) |
|||||||||||||||
|
Income before Income Taxes |
790,859 |
— |
790,859 |
783,368 |
— |
783,368 |
|||||||||||||||||||
|
Income tax recovery |
1,057 |
— |
1,057 |
1,069 |
— |
1,069 |
|||||||||||||||||||
|
Net Income |
$ |
791,916 |
$ |
— |
$ |
791,916 |
$ |
784,437 |
$ |
— |
$ |
784,437 |
|||||||||||||
Net Operating Income (“NOI”), Accounting Basis , is defined as property rental revenue including straight-line rental revenue, reimbursed contract revenue and lease surrender revenue, less direct property operating expenses and realty taxes, and excludes certain expenses such as interest expense and indirect operating expenses in order to provide results that reflect a property’s operations before consideration of how it is financed or the costs of operating the entity in which it is held. Management believes that NOI is an important measure of operating performance for the Trust’s commercial real estate assets that is used by real estate industry analysts, investors and management, while also being a key input in determining the fair value of the Choice Properties portfolio.
NOI, Cash Basis , is defined as property rental revenue and reimbursed contract revenue, excluding straight-line rental revenue and lease surrender revenue, less direct property operating expenses and realty taxes. Management believes NOI, Cash Basis is a useful measure in understanding period-over-period changes in income from operations due to occupancy, rental rates, operating costs and realty taxes.
The following table reconciles net (loss) income, as determined in accordance with GAAP, to Net Operating Income, Cash Basis for the periods ended as indicated:
|
For the periods ended December 31
|
Three Months |
Years Ended |
||||||||||||||||||||||
|
2025 |
2024 |
Change $ |
2025 |
2024 |
Change $ |
|||||||||||||||||||
|
Net (Loss) Income |
$ |
(53,357 |
) |
$ |
791,916 |
$ |
(845,273 |
) |
$ |
(61,188 |
) |
$ |
784,437 |
$ |
(845,625 |
) |
||||||||
|
Residential inventory income |
— |
— |
— |
— |
(2,034 |
) |
2,034 |
|||||||||||||||||
|
Interest income |
(9,829 |
) |
(10,247 |
) |
418 |
(41,892 |
) |
(52,593 |
) |
10,701 |
||||||||||||||
|
Investment income |
(4,249 |
) |
(5,315 |
) |
1,066 |
(20,194 |
) |
(21,260 |
) |
1,066 |
||||||||||||||
|
Fee income |
(1,213 |
) |
(712 |
) |
(501 |
) |
(5,157 |
) |
(3,389 |
) |
(1,768 |
) |
||||||||||||
|
Net interest expense and other financing charges |
150,770 |
147,490 |
3,280 |
597,632 |
586,388 |
11,244 |
||||||||||||||||||
|
General and administrative expenses |
18,042 |
16,987 |
1,055 |
63,725 |
67,833 |
(4,108 |
) |
|||||||||||||||||
|
Share of income from equity accounted joint ventures |
22,619 |
(37,820 |
) |
60,439 |
(488 |
) |
(49,138 |
) |
48,650 |
|||||||||||||||
|
Amortization of intangible assets |
250 |
250 |
— |
1,000 |
1,000 |
— |
||||||||||||||||||
|
Transaction costs and other related expenses |
— |
55 |
(55 |
) |
— |
(38,560 |
) |
38,560 |
||||||||||||||||
|
Adjustment to fair value of unit-based compensation |
610 |
(1,927 |
) |
2,537 |
1,941 |
(657 |
) |
2,598 |
||||||||||||||||
|
Adjustment to fair value of Exchangeable Units |
43,536 |
(704,500 |
) |
748,036 |
577,848 |
(237,472 |
) |
815,320 |
||||||||||||||||
|
Adjustment to fair value of investment properties |
(2,212 |
) |
16,112 |
(18,324 |
) |
(144,332 |
) |
(92,731 |
) |
(51,601 |
) |
|||||||||||||
|
Adjustment to fair value of investment in real estate securities |
87,034 |
36,254 |
50,780 |
44,638 |
35,782 |
8,856 |
||||||||||||||||||
|
Income tax expense (recovery) |
1,939 |
(1,057 |
) |
2,996 |
1,944 |
(1,069 |
) |
3,013 |
||||||||||||||||
|
Net Operating Income, Accounting Basis - GAAP |
253,940 |
247,486 |
6,454 |
1,015,477 |
976,537 |
38,940 |
||||||||||||||||||
|
Straight-line rental revenue |
1,135 |
675 |
460 |
2,483 |
2,194 |
289 |
||||||||||||||||||
|
Lease surrender revenue |
— |
(2,558 |
) |
2,558 |
(10,050 |
) |
(11,204 |
) |
1,154 |
|||||||||||||||
|
Net Operating Income, Cash Basis - GAAP |
255,075 |
245,603 |
9,472 |
1,007,910 |
967,527 |
40,383 |
||||||||||||||||||
|
Adjustments for equity accounted joint ventures and financial real estate assets |
16,369 |
14,363 |
2,006 |
64,737 |
56,592 |
8,145 |
||||||||||||||||||
|
Net Operating Income, Cash Basis - Proportionate Share |
$ |
271,444 |
$ |
259,966 |
$ |
11,478 |
$ |
1,072,647 |
$ |
1,024,119 |
$ |
48,528 |
||||||||||||
Same-Asset NOI, Cash Basis represents NOI only for those assets that were owned and operated by the Trust since January 1, 2024 inclusive.
The following table reconciles NOI, Cash Basis to Same-Asset NOI, Cash Basis for the periods ended as indicated:
|
For the periods ended December 31
|
Three Months |
Years Ended |
||||||||||||||||||||||
|
2025 |
2024 |
Change $ |
2025 |
2024 |
Change $ |
|||||||||||||||||||
|
Net Operating Income, Cash Basis - Proportionate Share |
$ |
271,444 |
$ |
259,966 |
$ |
11,478 |
$ |
1,072,647 |
$ |
1,024,119 |
$ |
48,528 |
||||||||||||
|
Less: |
||||||||||||||||||||||||
|
Transactions NOI, Cash Basis - Proportionate Share |
(21,865 |
) |
(16,282 |
) |
(5,583 |
) |
(89,890 |
) |
(62,513 |
) |
(27,377 |
) |
||||||||||||
|
Same-Asset NOI, Cash Basis - Proportionate Share |
$ |
249,579 |
$ |
243,684 |
$ |
5,895 |
$ |
982,757 |
$ |
961,606 |
$ |
21,151 |
||||||||||||
Funds from Operations (“FFO”) is calculated in accordance with the Real Property Association of Canada’s (“REALpac”) Funds From Operations (FFO) & Adjusted Funds From Operations (AFFO) for IFRS issued in January 2022. Management considers FFO to be a useful measure of operating performance as it adjusts for items included in net income (or loss) that do not arise from operating activities or do not necessarily provide an accurate depiction of the Trust’s past or recurring performance, such as adjustments to fair value of Exchangeable Units, investment properties, investment in real estate securities, and unit-based compensation. From time to time, the Trust may enter into transactions that materially impact the calculation and are eliminated from the calculation for management’s review purposes.
Management uses and believes that FFO is a useful measure of the Trust’s performance that, when compared period over period, reflects the impact on operations of trends in occupancy levels, rental rates, operating costs and realty taxes, acquisition activities and interest costs.
The following table reconciles net (loss) income, as determined in accordance with GAAP, to Funds from Operations for the periods ended as indicated:
|
For the periods ended December 31
|
Three Months |
Years Ended |
||||||||||||||||||||||
|
2025 |
2024 |
Change $ |
2025 |
2024 |
Change $ |
|||||||||||||||||||
|
Net (Loss) Income |
$ |
(53,357 |
) |
$ |
791,916 |
$ |
(845,273 |
) |
$ |
(61,188 |
) |
$ |
784,437 |
$ |
(845,625 |
) |
||||||||
|
Add (deduct) impact of the following: |
||||||||||||||||||||||||
|
Amortization of intangible assets |
250 |
250 |
— |
1,000 |
1,000 |
— |
||||||||||||||||||
|
Transaction costs and other related expenses |
— |
55 |
(55 |
) |
— |
(38,560 |
) |
38,560 |
||||||||||||||||
|
Adjustment to fair value of unit-based compensation |
610 |
(1,927 |
) |
2,537 |
1,941 |
(657 |
) |
2,598 |
||||||||||||||||
|
Adjustment to fair value of Exchangeable Units |
43,536 |
(704,500 |
) |
748,036 |
577,848 |
(237,472 |
) |
815,320 |
||||||||||||||||
|
Adjustment to fair value of investment properties |
(2,212 |
) |
16,112 |
(18,324 |
) |
(144,332 |
) |
(92,731 |
) |
(51,601 |
) |
|||||||||||||
|
Adjustment to fair value of investment properties to proportionate share |
31,053 |
(29,752 |
) |
60,805 |
28,855 |
(25,684 |
) |
54,539 |
||||||||||||||||
|
Adjustment to fair value of investment in real estate securities |
87,034 |
36,254 |
50,780 |
44,638 |
35,782 |
8,856 |
||||||||||||||||||
|
Interest otherwise capitalized for development in equity accounted joint ventures |
2,264 |
2,975 |
(711 |
) |
9,395 |
11,671 |
(2,276 |
) |
||||||||||||||||
|
Exchangeable Units distributions |
76,189 |
75,199 |
990 |
304,096 |
300,137 |
3,959 |
||||||||||||||||||
|
Internal expenses for leasing |
2,616 |
2,695 |
(79 |
) |
9,647 |
9,916 |
(269 |
) |
||||||||||||||||
|
Income tax expense (recovery) |
1,939 |
(1,057 |
) |
2,996 |
1,944 |
(1,069 |
) |
3,013 |
||||||||||||||||
|
Funds from Operations |
$ |
189,922 |
$ |
188,220 |
$ |
1,702 |
$ |
773,844 |
$ |
746,770 |
$ |
27,074 |
||||||||||||
|
FFO per unit - diluted |
$ |
0.262 |
$ |
0.260 |
$ |
0.002 |
$ |
1.069 |
$ |
1.032 |
$ |
0.037 |
||||||||||||
|
Weighted average number of units outstanding - diluted (i) |
723,810,797 |
723,726,328 |
84,469 |
723,800,904 |
723,680,890 |
120,014 |
||||||||||||||||||
|
(i) |
Includes Trust Units and Exchangeable Units. |
Earnings before Interest, Taxes, Depreciation, Amortization, and Fair Value (“EBITDAFV”) is defined as net income (loss) attributable to Unitholders, reversing, where applicable, income taxes, interest expense, amortization expense, depreciation expense, adjustments to fair value and other adjustments on a proportionate share basis as allowed in the Trust Indentures, as supplemented. Management believes EBITDAFV is useful in assessing the Trust’s ability to service its debt, finance capital expenditures and provide distributions to its Unitholders.
Total Adjusted Debt is defined as variable rate debt (construction loans, mortgages, and credit facility) and fixed rate debt (senior unsecured debentures, construction loans and mortgages), as measured on a proportionate share basis, including the impact of other finance charges and defeasance or other prepayments of debt. It does not include the Exchangeable Units which are included as part of unit equity on account of the Exchangeable Units being economically equivalent and receiving equal distributions to the Trust Units.
The following table reconciles net (loss) income, as determined in accordance with GAAP, to EBITDAFV for the periods ended as indicated:
|
Three Months |
Years Ended |
|||||||||||||||||||||||
|
For the periods ended December 31
|
2025 |
2024 |
Change $ |
2025 |
2024 |
Change $ |
||||||||||||||||||
|
Net (Loss) Income |
$ |
(53,357 |
) |
$ |
791,916 |
$ |
(845,273 |
) |
$ |
(61,188 |
) |
$ |
784,437 |
$ |
(845,625 |
) |
||||||||
|
Add (deduct) impact of the following: |
||||||||||||||||||||||||
|
Transaction costs and other related expenses |
— |
55 |
(55 |
) |
— |
(38,560 |
) |
38,560 |
||||||||||||||||
|
Adjustment to fair value of unit-based compensation |
610 |
(1,927 |
) |
2,537 |
1,941 |
(657 |
) |
2,598 |
||||||||||||||||
|
Adjustment to fair value of Exchangeable Units |
43,536 |
(704,500 |
) |
748,036 |
577,848 |
(237,472 |
) |
815,320 |
||||||||||||||||
|
Adjustment to fair value of investment properties |
(2,212 |
) |
16,112 |
(18,324 |
) |
(144,332 |
) |
(92,731 |
) |
(51,601 |
) |
|||||||||||||
|
Adjustment to fair value of investment properties to proportionate share |
31,053 |
(29,752 |
) |
60,805 |
28,855 |
(25,684 |
) |
54,539 |
||||||||||||||||
|
Adjustment to fair value of investment in real estate securities |
87,034 |
36,254 |
50,780 |
44,638 |
35,782 |
8,856 |
||||||||||||||||||
|
Interest expense on a proportionate share basis (1) |
159,018 |
153,671 |
5,347 |
629,382 |
609,156 |
20,226 |
||||||||||||||||||
|
Amortization of other assets |
301 |
315 |
(14 |
) |
1,249 |
1,254 |
(5 |
) |
||||||||||||||||
|
Amortization of intangible assets |
250 |
250 |
— |
1,000 |
1,000 |
— |
||||||||||||||||||
|
Income tax expense (recovery) |
1,939 |
(1,057 |
) |
2,996 |
1,944 |
(1,069 |
) |
3,013 |
||||||||||||||||
|
EBITDAFV - Proportionate Share |
$ |
268,172 |
$ |
261,337 |
$ |
6,835 |
$ |
1,081,337 |
$ |
1,035,456 |
$ |
45,881 |
||||||||||||
Net Asset Value (“NAV”) is an alternative measurement of equity. It is calculated by summing Unitholder’s Equity and the fair value of the Trust’s Exchangeable Units. Under IFRS Exchangeable Units are considered debt. The Exchangeable Units are not required to be repaid and the holder of these units has the right to convert them into Units, therefore Management considers the Exchangeable Units to be equivalent to equity. NAV is a useful measure as it reflects Management’s view of the intrinsic value of the Trust. NAV per unit allows Management to determine if the Trust is trading at a discount or premium to its intrinsic value.
The following table reconciles Net Asset Value as at the dates indicated below:
|
($ thousands except where otherwise indicated) |
As at December 31, 2025 |
As at December 31, 2024 |
Change $ |
|||||||
|
Unitholders’ equity |
$ |
4,584,809 |
$ |
4,899,800 |
$ |
(314,991 |
) |
|||
|
Exchangeable Units |
5,861,598 |
5,283,750 |
577,848 |
|||||||
|
NAV |
$ |
10,446,407 |
$ |
10,183,550 |
$ |
262,857 |
||||
|
NAV per unit |
$ |
14.43 |
$ |
14.07 |
$ |
0.36 |
||||
|
Trust Units and Exchangeable Units, end of year |
723,810,797 |
723,710,497 |
100,300 |
|||||||
Cautionary Statements Regarding Forward-looking Statements
This news release contains forward-looking statements relating to Choice Properties’ operations and the environment in which the Trust operates, which are based on management’s expectations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Therefore, actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. Management undertakes no obligation to publicly update any such statement, to reflect new information or the occurrence of future events or circumstances, except as required by law.
Numerous risks and uncertainties could cause the Trust’s actual results to differ materially from those expressed, implied or projected in the forward-looking statements, including those described in Section 12 “Enterprise Risks and Risk Management” of the Trust’s MD&A for the year ended December 31, 2025 and those described in the Trust’s Annual Information Form for the year ended December 31, 2025.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260212534621/en/
For further information, please contact
investor@choicereit.ca
Erin Johnston
Chief Financial Officer
e:
Erin.Johnston@choicereit.ca