BTB Real Estate Investment Trust Q3 2026 Earnings Results & Report

BTB Real Estate Investment Trust EPS Results

• Actual EPS: C$0.07
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A
• EPS Beat Rate: 3 of last 7 quarters

BTB Real Estate Investment Trust Revenue Results

• Actual Revenue: C$31.50 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

BTB is a real estate investment trust listed on the Toronto Stock Exchange. BTB invests in industrial, suburban office and necessity-based retail properties across Canada for the benefit of their investors. As of today, BTB owns and manages 72 properties, representing a total leasable area of approximately 6 million square feet. People and their stories are at the heart of our success.

BTB Real Estate Investment Trust Q3 2026 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Q3 rental revenue fell 4.2% year over year, while cash same-property NOI declined 7% and adjusted FFO per unit decreased to CAD 0.093. Excluding prior-year lease cancellation penalties, the declines were smaller, but cash same-property NOI was still down 1.3% for the quarter.
• Positive Sentiment: BTB continued shifting its portfolio toward industrial assets, which now represent 38% of the portfolio versus 39% for suburban office, compared with 20% industrial in 2021. The REIT completed three acquisitions totaling about CAD 58 million in 2026, with expected annualized NOI of CAD 4.2 million, and is pursuing about CAD 87 million of additional office and retail dispositions.
• Negative Sentiment: Occupancy was 90.7%, and management highlighted two major vacancies: a roughly 100,000-square-foot Ottawa office property and a 132,000-square-foot industrial property in Laval. Management is seeking tenants for both and aims to raise year-end occupancy to slightly above 91%.
• Positive Sentiment: Leasing activity included 772,000 square feet year to date, and renewal rents increased 5.6% year to date, including 5.7% in industrial and 11% in suburban office. Management also expects about CAD 350,000 of Q4 revenue from free-rent periods ending.
• Negative Sentiment: Debt was 57.4% of total assets, with CAD 16.5 million of total liquidity at quarter-end. Management expects refinancing costs to rise, estimating spreads of 140–180 basis points on upcoming maturities through Q2 2027.

Presentation

[Operator]

Good morning. My name is Sylvie, and I will be your conference call facilitator today. At this time, I would like to welcome everyone to the BTB Real Estate Investment Trust 2026 third quarter conference call, for which management will discuss the quarter ended September 30th, 2026. All lines have been placed on mute to prevent any background noise. Should you wish to follow the presentation in greater detail, management has made the presentation available on BTB's website at www.btbreit.com/investors/presentations/quarterly-meeting-presentation. After the speaker's remarks, there will be a question-and-answer period reserved exclusively for analysts. If you would like to ask a question during this time, simply press star followed by the number one on your keypad. Before turning the meeting over to management, please be advised that some of the statements that may be made during this call may be forward-looking in nature.

[Operator]

Such statements involve numerous factors and assumptions and are subject to inherent risks and uncertainties, both general and specific, which gives rise to the possibility that predictions, forecasts, projections, and other forward-looking statements will not be achieved. Several important factors could cause BTB Real Estate Investment Trust's actual results to differ materially from the expectations expressed or implied by such forward-looking statements. These risks, uncertainties, and other factors that could influence actual results are described in BTB Real Estate Investment Trust's management's discussion and analysis and in its annual information form, which were filed on SEDAR+ and on BTB's website at www.btbreit.com/investors/reports. I would like to remind everyone that this conference call is being recorded. Thank you.

[Operator]

I will now turn the conference over to Michel Léonard, President and Chief Executive Officer, accompanied today by Mr. Marc-André Lefebvre, Executive Vice President, Chief Financial Officer, and Chief Operating Officer, and Mr. Charles Dorais Bédard, Vice President of Finance. Michel Léonard, you may begin.

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

Thank you very much, Sylvie, and good morning, everybody. We are going to, as Sylvie mentioned, we're talking about the quarterly review for Q3 2026. We stand at the end of the quarter at 5.9 million square feet with 72 properties and a total asset value of CAD 1.3 billion. Before the end of the quarter, we closed on the disposition of an office property located in Trois-Rivières for CAD 20 million. After the end of the quarter, we disposed of an office property located on the South Shore of Montréal on Taschereau Boulevard for CAD 8 million. Those two dispositions obviously allow us to redeploy the proceeds into our investment activity by purchasing industrial assets with strong fundamentals and a good pipeline of value creation opportunities that we do have at our disposal right now.

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

We do have other dispositions on the go, totaling roughly CAD 87 million of office and retail dispositions where we have conditional agreements in place. The proceeds from these dispositions are going to be redeployed in industrial acquisitions where we are under negotiations right now, with the objective of closing these transactions during Q1 2027. We are still involved in changing the zoning of the same retail property that we own on the island of Montréal, and it is looking more and more favorable as the time allows us to do so. We think that during 2027, we will have a good conclusion of all our efforts. The acquisition that we did conclude recently on October 14th is basically the acquisition of an industrial property located at 100 Avenue in Alberta for a purchase price of CAD 18.75 million. The occupant of the property is Imperial Oil.

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

The acquisition is expected to contribute CAD 1.2 million in annualized net operating income for BTB. As I mentioned, the disposition for CAD 8 million of the office property located on Taschereau Boulevard in Longueuil. So far this year, 2026, we concluded three acquisitions, including the acquisition after the end of the quarter, which represent a total of roughly CAD 58 million. The total NOI that is expected to be gleaned from these acquisitions is CAD 4.2 million. If you are following me on the presentation, I am at page five. An interesting thing to note on page five is the fact that although we have been saying since 2018 that we are repositioning the portfolio into the industrial segment, we are now at the crossroads where the portfolio of office is just slightly above, on a percentage basis, the industrial portfolio.

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

Since 2018, the numbers that we report on are from 2021, where we were 20% industrial. Right now, we are at 38% industrial and 39%, so we are seeing a reduction from the suburban office segment from 54% to 39%. As we are continuing our dispositions and increasing the portfolio in industrial, the two lines are going to cross, and we are going to see that the industrial portfolio is going to be of a heavier weight within the portfolio very soon. If we look at the key metrics, turning to page six, as far as the fair value of our investment property, Marc-André is going to basically talk about the fact that we did receive external appraisals from outside appraisers for our portfolio. We did adjust the fair value of our office properties and also the fair value of our retail properties.

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

Regarding our leasing activities, we stand with an occupancy rate of 90.7%, slightly below Q3 2025, and we are definitely trying to catch up in order to finish the year on a positive note. A total area of 188,000 sq ft were renewed during the quarter, or leased, so new tenants, for a total activity of 772,000 sq ft for the year to date, which is a good number. We concluded new leases, specifically with GMACK Oilfield Services in Edmonton, and that is for a full building of 24,000 sq ft that was vacant and had been vacant for a good nine months. We did lease an office space with Cohere in Ottawa, in our property located in the Glebe district, representing 10,000 sq ft, which is a good sign for this building and the activity in Ottawa.

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

As far as we discussed the last time, is that our lease renewal rate has been affected by the fact that the government has left our 100,000 sq ft building in Ottawa, located on Walkley, and as such, we've put the property back on the market, and we do have interested parties for this property. However, we have nothing concrete to report so far. The early lease renewals totaled 45,000 sq ft for the quarter, and as I mentioned, our occupancy slightly decreased, but we achieved an average increase in lease renewal rates for the quarter of 6.6%, and that represents 5.7% in the industrial segment, suburban office at 11%, and necessity-based retail at 5%. What's important, I'm turning to page nine, basically, as far as the increase in lease renewal rates, we're slightly trending at 5.6% for the year, the year so far.

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

With this, I'm turning the mic to Marc in order to take you through the financial highlights of the quarter and the year to date.

[Marc-André Lefebvre, EVP, CFO, and COO at BTB Real Estate Investment Trust]

Thank you, Michel, and good morning, everyone. For the quarter, rental revenue stood at CAD 31.5 million, a decrease of 4.2% compared to the same quarter last year. Excluding the lease cancellation penalty payment that BTB received, the amount is CAD 1.1 million. In the third quarter of 2025, the decrease would have been CAD 0.3 million or 0.9%. NOI and cash NOI both decreased by 10.1% and 6.3% respectively compared to the same quarter last year. Again, excluding the lease cancellation penalty of CAD 1.1 million received in Q3 2025, the decreases would have been 4.8% and 0.9% respectively. Cash same property NOI decreased by 7% for the quarter compared to the same period last year. For the nine-month period, cash same property NOI decreased by 5.9%. The year-to-date decrease was mainly driven by both the industrial and office segments.

[Marc-André Lefebvre, EVP, CFO, and COO at BTB Real Estate Investment Trust]

The industrial segment was impacted by, one, a CAD 1.1 million lease cancellation penalty that I just spoke about, and that was received in Q3 2025. And two, the planned tenant departures in 2025, one of which occupied a 24,000 sq ft industrial property in Edmonton. Note that this property was re-leased during the current quarter, and it is expected to have a positive contribution of CAD 0.6 million on an annualized basis. The office segment was negatively impacted by a partial lease, number one, by a partial lease cancellation payment of CAD 1 million received in the first quarter of 2025, and two, the known departure of a suburban office tenant occupying over 100,000 sq ft in Ottawa, Michel just spoke about that, and other planned tenant departures in Ottawa not yet fully replaced. That's a negative impact of CAD 1.8 million.

[Marc-André Lefebvre, EVP, CFO, and COO at BTB Real Estate Investment Trust]

These decreases were partially offset by new leases concluded in Québec City. It's a positive contribution of CAD 0.4 million. Finally, the necessity-based retail segment contributed positively to cash same property NOI by CAD 0.8 million, driven by leasing activities and the addition of a new tenant at our Saint-Bruno-de-Montarville property. Again, same exercise, excluding the two previously outlined lease cancellation penalties totaling CAD 2.1 million, these amounts were received in 2025. The cash SP NOI decreases would have been 1.3% for the quarter and 2.3% for the nine-month period respectively. For the quarter, FFO adjusted per unit was CAD 0.093, and AFFO adjusted per unit was CAD 0.088, representing a decrease of CAD 0.022 and CAD 0.013 respectively compared to the same quarter last year. The decreases were mainly driven by the previously explained decreases in NOI and cash NOI.

[Marc-André Lefebvre, EVP, CFO, and COO at BTB Real Estate Investment Trust]

Excluding the impact of the CAD 1.1 million lease cancellation penalty received in Q3 2025, FFO adjusted per unit and AFFO adjusted per unit would have decreased by CAD 0.001 and CAD 0.009 respectively. We maintain our distribution to unitholders at CAD 0.075 per unit for the quarter, which represents an annualized distribution of CAD 0.30 per unit. The value of our investment property portfolio remains stable at CAD 1.2 billion at the end of Q3. As Michel spoke about this quarter, we externally appraised 32% of the properties based on fair market value and internally appraised 64% of the portfolios for a total of 96%. The balance of the portfolio will be evaluated in the next quarter, in Q4 2026. The exercise resulted in a gain of CAD 3 million, and the weighted average cap rate for the entire portfolio was stable at 6.7%.

[Marc-André Lefebvre, EVP, CFO, and COO at BTB Real Estate Investment Trust]

As Michel previously mentioned on the acquisition and disposition front, for the first nine-month period, acquisitions contributed CAD 1.3 million to NOI, and it was partially offset by an estimated CAD 0.5 million impact from disposition, resulting in a net positive contribution of approximately CAD 0.8 million. On an annualized basis, we completed four acquisitions so far in 2026, and the positive contribution from these acquisitions is CAD 4.2 million, as Michel previously stated. On the disposition front, we completed the disposition of four office properties, and the NOI loss from these dispositions is CAD 3.6 million, so for a net positive contribution of CAD 0.6 million. We concluded the quarter with a total debt ratio of 57.4% and a mortgage debt ratio of 50.9%, down by 40 basis points since year-end.

[Marc-André Lefebvre, EVP, CFO, and COO at BTB Real Estate Investment Trust]

The weighted average interest rate on our mortgage portfolio was 4.47%, a slight increase of eight basis points compared to the same period last year, and it primarily reflects the refinancing of certain fixed-rate mortgages at slightly higher rates. Finally, at the end of the quarter, we have CAD 1.4 million in cash, and CAD 15.1 million was available under our credit facilities for total liquidity of CAD 16.5 million. This completes our presentation. We will now open the call to questions. Operator, can we please have the first question on the line?

[Operator]

Thank you. Ladies and gentlemen, if you do have any questions, please press star followed by one on your touchtone phone. You will then hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by two. If you are using a speakerphone, you will need to lift the handset first before pressing any keys. Please go ahead and press star one now if you have any questions. Thank you. First question will be from Matt Kornack at National Bank. Please go ahead.

[Matt Kornack, Analyst at National Bank Financial]

Good morning, guys. Just want to quickly touch on Ottawa and what you're seeing there. Obviously, Cohere would be a good tenant. Just in terms of the prospects for backfilling some of the vacant space, but also any anticipation you may have within the suburban office portfolio there and in Montréal in terms of leasing in 2026 and 2027.

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

Well, Ottawa, over the last three years, Ottawa suffered from the fact that the federal government started to not renew its leases as a result of the work from home or outside of the office. So it created some kind of uncertainty in the market. Now, with the new government in place, there's return to work, and as a result, there is demand for office space in Ottawa. Surprising demand in the office landscape in Ottawa. So the tenant that left us, and the address of the property is 2204 Walkley, was a federal government, a federal entity. Now we're getting traction from other, it's not the same government entity, but other federal government entities that are looking at our building. As far as our confidence level is that we think that we're going to get traction. We think that we're going to be successful.

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

With anything with the government, I think it moves slower than other entities. As a result, I can't give you any kind of judgment as far as, is it going to lease in January or in June of next year? I would anticipate by June of next year, it should be under contract. I don't know if it's going to be occupied, but I would surmise that if all goes well, I think that this property should be leased, at least on paper, leased by June of next year. We have another property in Ottawa that it's on Aberdeen that suffered the departure of a tenant that was linked to the government operations. They basically manage leases for the government, and as the government basically reduced its leasing footprint, then all of a sudden, they were out of work, and so they did not renew their lease.

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

We do have traction again on this property. These are really the two properties where we're having a high vacancy rate. If we look at the property that we own in the Glebe district, where in Q3 and Q4 last year, we had a vacancy as a result of a tenant that had sublet its space, basically did not renew the lease because the space was under sublet. We were able to conclude a lease for a smaller area with the subtenant. Now we have a tenant instead of having a sublandlord or a subtenant.

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

As I reported, we did a lease with Cohere, and one of our main tenants, if you look at the picture of the building on our website, you'll see the name of the main tenant of the property, and we're negotiating an expansion, and we think that this expansion of this main tenant would be closed within 30 days. Also, one of the tenants that we just leased space to needs to expand. I surmise that this property is going to be 100% leased within the next three months. Really, the focus on leasing in Ottawa is on Walkley and Aberdeen. The Brewer Hunt is full. Menten Place is full. Our main target is to ensure that these two properties are going to be leased, and it is an exercise that we're doing obviously seriously.

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

We've always looked at leasing on a serious basis, but we're all hands on deck on this one.

[Matt Kornack, Analyst at National Bank Financial]

That's great color, I appreciate it. Maybe if we could expand the discussion to the industrial portfolio and also on retail, then maybe just a clarification. I think there was some mention of existing free rent periods. If you could give us a sense as to when those burn off and how that would impact same property NOI growth as well, that'd be helpful.

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

I'll leave that portion to Marc. As far as industrial leasing is concerned, it's going well. There's only one property where we're not getting the traction that we want. It's the industrial property in Laval, 132,000 sq ft. We're getting interest from tenants that want part of the building, and the difficulty is not splitting the building because it is splittable, but what are we left with is the big question in the sense that if we lease 60,000 to one, 40,000 to the other, is it the 32,000 sq ft that's going to be left, is it going to be leasable? That in part is a certain uncertainty that it may create, but this is something that we can solve given the velocity. But in essence, we've decided firmly that we were going to subdivide the property.

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

Instead of having one tenant, we will have two or three tenants on this property, but we're hopeful that we'll be able to at least lease part of it by year's end. But I'm saying it's not 100%. It's going to be a part of it, maybe 30%, something like that. But at least we'll start the velocity on that front. The rest of the properties, we leased in Edmonton, the 24,000 sq ft property that was left vacant as a result of a non-renewal because the building was too small for the occupier, and as a result, left. So we were successful in finding a tenant for that space, so we were happy. As far as Edmonton and Saskatoon are concerned, we're pretty well leased.

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

But the area of concern for us or where we're spending a lot of time, energy, and effort is basically the property located on Highway 15 in Laval, in a suburb of Montréal.

[Marc-André Lefebvre, EVP, CFO, and COO at BTB Real Estate Investment Trust]

Yep. For the free rent question, so we have around, I would say, CAD 600 thousand of free rent in the current quarter. I would say that half of that will be, if I could say, translated into actual rent in Q4. So maybe around CAD 350 thousand of positive revenue in Q4 that's stemming from free rent in the current quarter.

[Matt Kornack, Analyst at National Bank Financial]

Okay, great. That is helpful. Last one for me on the acquisition and disposition activity. I missed it earlier. I know you had spoken to the NOI contribution, but can you give it to me kind of in a cap rate for the Trois-Rivières assets, the one in Longueuil, and then also the acquisition in Alberta?

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

Yeah. Well, it is difficult to give you a cap rate for Trois-Rivières because it was 80% occupied. So if you calculate it on the basis of the NOI, the cap rate was, I think, was like a 5%. If you calculate it on the full building and so on, it was 8.5%-8.6%. However you calculate it. As far as the Taschereau property, it was 8%. The Taschereau property, we paid, I think, way back in 2007, we had purchased that property for CAD 4 million something. It is not a bad deal.

[Matt Kornack, Analyst at National Bank Financial]

Okay. The acquisition cap rate for Alberta?

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

Alberta, the cap rate that we used for what is going to be called, may be called eventually the Imperial Oil Building, was at 6.4%.

[Matt Kornack, Analyst at National Bank Financial]

Is that It sounds like it's fully occupied, and would we call those market rents at this point in terms of what they're going to pay?

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

Yes, absolutely. Yeah.

[Matt Kornack, Analyst at National Bank Financial]

Okay, perfect. Thanks, guys.

[Operator]

Ladies and gentlemen, a reminder to please press star one on your telephone keypad should you have any questions. Next question will be from Sumayya Syed at CIBC. Please go ahead.

[Sumayya Syed, Analyst at CIBC Capital Markets]

Thanks. Good morning. Just looking out to the leases maturing in 2027, bit of a larger bucket for industrial. It looks like a pretty low in-place rents. Industrial and office maturing next year as well. How should we think about the spreads to market rent for each of those buckets?

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

That is a great question, but I do not think we can provide you an answer on this call. But it is something that we could look at individual assets and give you. We are right smack in the middle of our budget, so if you give us maybe three weeks, we will be able to answer that question specifically, looking at our rent roll and being able to increase it. There are industrial leases, and you are right, when you look at the number, because in our MD&A, you have certain leases that are expiring at CAD 6 and something. So you are right in thinking that there is going to be a lift. But overall, we have to look on a lease-by-lease basis.

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

I cannot just make a statement on that front as a result of options to renew, because if a lease contains an option to renew that is at a fixed net rent, then it is the fixed net rent that would apply. So we have to go through lease by lease in order to give you that answer, Sumayya. It is not because I do not want to answer your question. It is just that it is a very precise question, and it needs a precise answer.

[Sumayya Syed, Analyst at CIBC Capital Markets]

Okay. I will call back in three weeks, it sounds like.

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

Yeah. Please do.

[Sumayya Syed, Analyst at CIBC Capital Markets]

Okay. I wanted to go over refinancing, and just curious what are the latest rates you are seeing, and what rate should we be modeling for your 2027 maturities?

[Marc-André Lefebvre, EVP, CFO, and COO at BTB Real Estate Investment Trust]

Yeah. That is a good question. Looking at Q4 2026, we have six properties, call it for shy of CAD 80 million to be refinanced, and we are expecting a spread of 150 basis points. This increase is mainly due to the fact that these deals were concluded in late 2021, and rates were very low at that time. So, that explains the uplift for Q4 2026. In Q1 2027, we have five properties for about CAD 40 million to be refinanced, and we are estimating a spread of 140 basis points. For Q2 2027, three properties, CAD 12 million, and a spread of 180 basis points.

[Sumayya Syed, Analyst at CIBC Capital Markets]

Okay. So they would be H1 loaded for next year?

[Marc-André Lefebvre, EVP, CFO, and COO at BTB Real Estate Investment Trust]

Say that again, Sumayya. Sorry.

[Sumayya Syed, Analyst at CIBC Capital Markets]

The bulk of next year's maturities would be coming to you in H1?

[Marc-André Lefebvre, EVP, CFO, and COO at BTB Real Estate Investment Trust]

Well, only CAD 40 million. Yeah, well, CAD 50 million pretty much in H1.

[Sumayya Syed, Analyst at CIBC Capital Markets]

Okay.

[Marc-André Lefebvre, EVP, CFO, and COO at BTB Real Estate Investment Trust]

Yeah.

[Sumayya Syed, Analyst at CIBC Capital Markets]

Okay. That's all I had. Thank you.

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

Thank you.

[Operator]

Again, ladies and gentlemen, please press star one should you have any questions. At this time, Mr. Léonard, it appears we have no other questions registered. Please proceed.

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

Thank you very much for joining us this morning. I know it's Remembrance Day, and maybe some of you will listen to the recording were on their day off today. It is important to remember this day. We're tracking towards We talked about leasing, and I think that it is something that we are going to achieve a better number by Q4 than we're posting for Q3, and on a very positive way. We do have two large vacancies that we have to tackle in 2026 and 2027. We talked about them, which is number one, the Walkley property in Ottawa, number two, the industrial property in Laval. Other than those two, which are flagrant and big, I agree with anybody that would be on the call and say that they're significant. They are significant.

[Michel Léonard, President and CEO at BTB Real Estate Investment Trust]

Trending on the occupancy rate and getting to a target of a little bit better than 91% for the year's end, I think that's what we're working on. We are deploying all the efforts in order to achieve that number. With this, I thank you very much for participating today, and we'll see you or hear you in the next call for Q4 of 2026. Thank you.

[Operator]

Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we ask that you please disconnect your lines. Enjoy the rest of your day.

Participants

Executives

• Michel Léonard, President and CEO
• Marc-André Lefebvre, EVP, CFO, and COO

Analysts

• Matt Kornack, Analyst at National Bank Financial
• Sumayya Syed, Analyst at CIBC Capital Markets