ARTIS REAL ESTATE INVESTMENT TRUST RELEASES FIRST QUARTER RESULTS

Canada NewsWire

WINNIPEG, MB, May 8, 2025

WINNIPEG, MB, May 8, 2025 /CNW/ - Artis Real Estate Investment Trust ("Artis" or the "REIT") (TSX: AX.UN) (TSX: AX.PR.E) (TSX: AX.PR.I) announced today its financial results for the three months ended March 31, 2025. The first quarter results in this press release should be read in conjunction with the REIT's consolidated financial statements and Management's Discussion and Analysis ("MD&A") for the three months ended March 31, 2025. All amounts are in thousands of Canadian dollars, except per unit amounts or otherwise noted.

"During the first quarter we continued to make progress towards our goal of reducing overall leverage and strengthening the balance sheet," said Samir Manji, President and Chief Executive Officer of Artis. "We sold two industrial and two retail properties in Canada for $70.5 million, and continued to use our normal course issuer bid to repurchase our units at a weighted-average price per unit of $7.58, a significant discount to our net asset value per unit of $13.76. We were able to maintain a conservative debt to gross book value of 39.2% at March 31, 2025, compared to 40.2% at December 31, 2024. We will continue to monetize assets opportunistically to enhance our liquidity while also exploring opportunities to harness the dry powder on our balance sheet. Given the nature of our strategy, we continue to expect our income (and as a result, our FFO and AFFO metrics) to be lumpy from one quarter to the next. Ultimately, we believe that the successful execution of our strategy will provide long-term sustainability with our current distribution. We look forward to providing further updates as we continue to pursue opportunities that are aligned with our long-term objective of growing net asset value per unit and maximizing value for our unitholders."

FIRST QUARTER HIGHLIGHTS

Portfolio Activity

   -- Disposed of two industrial and two retail properties located in Canada 
      for an aggregate sale price of $70.5 million. 
 
   -- Entered into an unconditional agreement to sell a retail property located 
      in Canada for a sale price of $4.8 million, which closed subsequent to 
      the end of the quarter. 

Balance Sheet and Liquidity

   -- Utilized the NCIB to purchase 1,825,666 common units at a 
      weighted-average price of $7.58 and 45,400 preferred units at a 
      weighted-average price of $20.74. 
 
   -- Reported NAV per Unit (1) of $13.76 at March 31, 2025, compared to $13.75 
      at December 31, 2024. 
 
   -- Improved Total Debt to GBV (1)  to 39.2% at March 31, 2025, compared to 
      40.2% at December 31, 2024. 
 
   -- Reported total Debt to Adjusted EBITDA (1) of 7.0 at March 31, 2025, 
      compared to 6.2 at December 31, 2024. 
 
   -- Improved Adjusted EBITDA Interest Coverage Ratio (1) to 2.33 for the 
      first quarter of 2025, compared to 1.92 for the first quarter of 2024. 

Financial and Operational

   -- Same Property NOI (1) in Canadian dollars for the first quarter of 2025 
      increased 4.5% compared to the first quarter of 2024. 
 
   -- Reported portfolio occupancy of 87.1% (89.1% including commitments) at 
      March 31, 2025, compared to 88.2% at December 31, 2024. 
 
   -- Renewals totalling 122,760 square feet and new leases totalling 65,178 
      square feet commenced during the first quarter of 2025. 
 
   -- Weighted-average rental rate on renewals that commenced during the first 
      quarter of 2025 increased 4.0%. 
 
(1) Represents a non-GAAP measure, ratio or other 
 supplementary financial measure. Refer to the Notice 
 with Respect to Non-GAAP & Supplementary Financial 
 Measures Disclosure. 
 

BALANCE SHEET AND LIQUIDITY

The REIT's balance sheet metrics are as follows:

 
                                              March 31,    December 31, 
                                              2025         2024 
 
Total investment properties                   $ 2,316,081   $ 2,372,878 
NAV per unit (1)                                    13.76         13.75 
Total Debt to GBV (1)                              39.2 %        40.2 % 
Total Debt to Adjusted EBITDA (1)                     7.0           6.2 
Adjusted EBITDA interest coverage ratio (1)          2.33          2.47 
 
 
(1) Represents a non-GAAP measure, ratio or other 
 supplementary financial measure. Refer to the Notice 
 with Respect to Non-GAAP & Supplementary Financial 
 Measures Disclosure. 
 

At March 31, 2025, Artis had $26.3 million of cash on hand and $311.0 million available on its revolving credit facilities. Under the terms of the secured credit facilities, the REIT must maintain certain financial covenants which limit the total borrowing capacity of the credit facilities. At December 31, 2024, the total borrowing capacity of the secured credit facilities was limited to $518.5 million.

Liquidity and capital resources may be impacted by financing activities, portfolio acquisition, disposition and development activities or debt repayments occurring subsequent to March 31, 2025.

FINANCIAL AND OPERATIONAL RESULTS

 
                                  Three months ended March 31, 
$000's, except per unit amounts   2025            2024            % Change 
 
Revenue                                 $ 62,302        $ 80,420   (22.5) % 
Net operating income                      31,167          43,557   (28.4) % 
Net income (loss)                         11,427         (7,121)  (260.5) % 
Total comprehensive income                10,638          21,942   (51.5) % 
Distributions per common unit               0.15            0.15       -- % 
 
FFO (1)                                 $ 17,535        $ 26,467   (33.7) % 
FFO per unit - diluted (1)                  0.17            0.24   (29.2) % 
FFO payout ratio (1)                      88.2 %          62.5 %     25.7 % 
 
AFFO (1)                                 $ 8,735        $ 14,578   (40.1) % 
AFFO per unit - diluted (1)                 0.09            0.13   (30.8) % 
AFFO payout ratio (1)                    166.7 %         115.4 %     51.3 % 
 
 
(1) Represents a non-GAAP measure, ratio or other 
 supplementary financial measure. Refer to the Notice 
 with Respect to Non-GAAP & Supplementary Financial 
 Measures Disclosure. 
 

Artis reported portfolio occupancy of 87.1% (89.1% including commitments) at March 31, 2025, compared to 88.2% at December 31, 2024. Weighted-average rental rate on renewals that commenced during the first quarter of 2025 increased 4.0%.

Artis's portfolio has a stable lease expiry profile with 44.4% of gross leasable area expiring in 2029 or later. Information about Artis's lease expiry profile is as follows:

 
           Current  Monthly  2025     2026     2027     2028     2029&    Total 
           vacancy  tenants                                      later    portfolio 
 
Expiring 
 square 
 footage    12.8 %    0.5 %    9.5 %   13.4 %    8.8 %   10.6 %   44.4 %    100.0 % 
In-place 
 rents         N/A      N/A  $ 17.28  $ 16.58  $ 15.98  $ 16.42  $ 17.28    $ 16.94 
Market 
 rents         N/A      N/A  $ 16.27  $ 15.79  $ 15.56  $ 15.33  $ 16.35    $ 16.05 
 

UPCOMING WEBCAST AND CONFERENCE CALL

A conference call with management will be held on Friday, May 9, 2025, at 12:00 p.m. CT (1:00 p.m. ET). In order to participate, please dial 1-437-900-0527 or 1-888-510-2154. You will be required to identify yourself and the organization on whose behalf you are participating.

Alternatively, you may access the simultaneous webcast by following the link from our website at https://www.artisreit.com/investor-link/conference-calls/. Prior to the webcast, you may follow the link to confirm you have the right software and system requirements.

If you cannot participate on Friday, May 9, 2025, a replay of the conference call will be available by dialing 1-289-819-1450 or 1-888-660-6345 and entering passcode 24883#. The replay will be available until Monday, June 9, 2025. The webcast will be archived 24 hours after the end of the conference call and will be accessible for 90 days.

CAUTIONARY STATEMENTS

This press release contains forward-looking statements within the meaning of applicable Canadian securities laws. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. These forward-looking statements include, among others, statements regarding the timing and amount of distributions and the future financial position, business strategy, potential acquisitions and dispositions, plans and objectives of Artis. Without limiting the foregoing, the words "outlook", "objective", "expects", "anticipates", "intends", "estimates", "projects", and similar expressions or variations of such words and phrases suggesting future outcomes or events, or which state that certain actions, events or results "may", "would", "should" or "will" occur or be achieved are intended to identify forward-looking statements. Such forward-looking information reflects management's current beliefs and is based on information currently available to management.

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