Nexus Industrial REIT Q1 2026 Earnings Report

Nexus Industrial REIT EPS Results

• Actual EPS: C$0.45
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Nexus Industrial REIT Revenue Results

• Actual Revenue: $46.02 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Nexus Industrial REIT Announcement Details

• Quarter: Q1 2026
• Date: 5/11/2026
• Time: After Market Closes
• Conference Call Date: Tuesday, May 12, 2026
• Conference Call Time: 10:00AM ET

Nexus Industrial REIT (TSE:NXR.UN) is a growth-oriented real estate investment trust focused on increasing unitholder value through the acquisition, ownership, and management of industrial, office and retail properties.

Nexus Industrial REIT Q1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Nexus reported a solid Q1 with NOI of CAD 33.8 million (+5.4% YoY) and normalized FFO of CAD 17.7 million, while adjusted EBITDA over the last 12 months reached CAD 121.3 million.
• Positive Sentiment: The REIT posted its first sub-100% payout ratio in 10 quarters, at 96.6%, and NAV per unit rose to CAD 13.29.
• Positive Sentiment: Leasing remained strong, with about 41,000 sq. ft. of new leases signed at an average 32% rent lift over expiring/in-place rents, and the company said its 2026 outlook for mid-single-digit same-property NOI growth is unchanged.
• Positive Sentiment: Nexus received an investment-grade BBB (low), stable rating from DBRS and completed a CAD 500 million inaugural bond offering, which management said should lower financing costs and improve funding flexibility.
• Neutral Sentiment: The quarter included some temporary occupancy pressure from new vacancies in Sherbrooke and London, but management expects these spaces to re-lease at materially higher rents over the next few quarters and said the full-year impact should be limited.

Presentation

[Operator]

I would now like to turn the conference over to Kelly Hanczyk, Chief Executive Officer. Please go ahead.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

Welcome everyone to the 2026 first quarter results conference call for Nexus Industrial REIT. Joining me today is Mike Rawle, Chief Financial Officer of the REIT. Before we begin, I'd like to caution with regard to forward-looking statements and non-GAAP measures. Certain statements made during this conference call may constitute forward-looking statements which reflect the REIT's current expectations and projections about future results. During this call, we'll be discussing non-GAAP measures. Please refer to our MD&A in the REIT's other securities filings, which can be found on our website and at sedar.com for cautions regarding forward-looking information and for information about non-GAAP measures. In the first quarter, income of CAD 33.8 million, an increase of 5.4% compared to last year, and normalized FFO increased to CAD 17.7 million.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

On a last 12 months basis, adjusted EBITDA grew to CAD 121.3 million, and this quarter marked the first quarter in 10 quarters of a sub-100% payout ratio as we posted a normalized AFFO payout ratio of 96.6%, resulting from a strong normalized AFFO per unit of CAD 16.2. NAV grew, seven

[Operator]

I'm so sorry to interrupt.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

Yeah.

[Operator]

Your line is dropping out quite consistently, and I think we should probably try to reconnect. Okay, I'm just gonna disconnect your line and then reconnect it quickly. Just one moment.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

What do you want me to do?

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

I know. Let's find that phone from.

[Operator]

I'll put the hold music on momentarily. We have the presenters reconnected. Mr. Hanczyk, please proceed.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

Once again, I'd like to welcome everyone to the 2026 first quarter results conference call for Nexus Industrial REIT. Joining me today is Mike Rawle, Chief Financial Officer of the REIT. Before we begin, I'd like to caution with regard to forward-looking statements and non-GAAP measures. Certain statements made during this conference call may constitute forward-looking statements which reflect the REIT's current expectations and projections about future results. During this call, we'll be discussing non-GAAP measures. Please refer to our MD&A in the REIT's other securities filings, which can be found on our website, sedar.com for cautions regarding forward-looking information and for information about non-GAAP measures. In the first quarter, we delivered healthy net operating income of CAD 33.8 million, an increase of CAD 5.4 million compared to last year, and normalized FFO increased to CAD 17.7 million.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

On a last 12 months basis, adjusted EBITDA grew to CAD 121.3 million. This quarter marked the first quarter in 10 quarters of a sub 100% payout ratio as we posted a normalized AFFO payout ratio of 96.6%, resulting from a strong normalized AFFO per unit of CAD 0.162. NAV grew CAD 0.07 compared to December 31st, 2026, ending the quarter at CAD 13.29 per unit. While very pleased with these headline earnings, the results were impacted by a number of different puts and takes, which I'll outline in a minute. The quarter, we also made good headway on several strategic initiatives. We advanced our leasing. We were granted an investment-grade credit rating from DBRS, which led to our inaugural bond offering in April.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

Lastly, we have firm sales for two of the four buildings that we had for sale at year-end and also advanced our development. I will now discuss each of these items in more detail. Starting with our operating performance, we made good progress this quarter. We completed roughly 41,000 sq ft of new leases and an average rent lift of 32% over expiring and in-place rents. This demonstrates our continued ability to capture the market lift on lease renewals, which bodes well for our future. Since March 31st, we had an attractive average spread between market and in-place rents of 15.8%. From an occupancy perspective, the progress we made on renewals was overshadowed by two unplanned vacancies in the quarter, which led to a drop in occupancy to 95%, but which interestingly also had a positive impact on our financial results.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

Roughly half or 0.5% of the occupancy decrease came from our property at 4590 Portland Boulevard in Sherbrooke, Quebec. We early terminated the tenant for non-payment. This resulted in additional termination income of approximately CAD 1.2 million since we expect to fully collect on a guarantee from the tenant's parent company. While this quarter our NOI and AFFO benefited from the lease termination, the 62,000 sq ft property is now vacant and will likely take several months to find a new tenant. Overall, on a full year basis, I don't expect any impact. The benefit from the lease termination income that we earn this quarter will be offset by some downtime over the next couple of quarters, leaving us whole on a full year basis. The remaining vacancy came from our building at 1020 Adelaide Street in London.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

A tenant who had 88,000 sq ft decided to vacate at the end of February. The tenant was paying gross rent of only CAD 6.80 per sq ft, which is significantly under market. We have already had good interest and expect to fill it over the next couple of quarters at market rents of about CAD 9-CAD 10 per sq ft net, resulting in a significant longer term value creation for us. In total, we delivered industrial same property NOI growth of 1% in the quarter as our positive leasing activities outweighed the impact of the temporary vacancies. In 2026, a total of 998,000 sq ft of gross leasable area was scheduled to expire.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

To date, the REIT has successfully renewed 510,000 sq ft at an average increase of 7% over the expiring rental rates. We had one reset renewal in Alberta that was a long-term deal that expired, and that has dragged this percentage down. If we exclude this, the rental lift was 26%. Of the 380,000 sq ft remaining for the year, we are currently in solid discussions with two tenants that represent 240,000 sq ft that expires in Q4. Of the remaining expiring GLA, 140,000 sq ft is represented by mostly three strategic vacancies, where we anticipate achieving higher rents upon re-leasing. Overall, our outlook for 2026 remains unchanged.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

We continue to expect our industrial same property NOI to be in the mid-single digits for the year, and we expect our normalized AFFO payout ratio to average below 100% for the full year. In the first quarter, DBRS granted Nexus an investment grade rating of BBB triple B low, stable. In April, we completed an inaugural bond issuance of CAD 500 million. The debentures were issued in two tranches, CAD 300 million of a three-year bond with a coupon of 4.236% and CAD 200 million of a five-year bond with coupon of 4.641%. These issuances marked a significant milestone in our evolution, and I'm incredibly proud of this achievement. The capital pool company that we started 13 years ago with CAD 5 million in cash is now investment grade rated with assets of nearly CAD 2.7 billion.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

It has created nearly CAD 1.3 billion equity for our Class A and B unitholders, while also having paid cumulative distributions of CAD 361 million. Looking forward, the ability to access bond markets will save on financing costs and will significantly increase funding flexibility and reduce financial risk. At the year-end, we had four buildings identified as being held for sale, and we have already addressed two of them. In February, we closed on the sale of 41 Royal Vista Drive in Calgary. An existing tenant in the building submitted an unsolicited offer above our market value to secure long-term control of the site. They offered us CAD 8.5 million, which was equal to a cap rate of 5.7%. Given the competitive pricing and strategic rationale, we accepted the offer and closed the sale. We have used the proceeds to repay debt.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

Our building at 40th Avenue in Red Deer, Alberta is under firm sale contract for CAD 11.25 million. This building went vacant when Peavey Mart filed for CCAA in April 2025. At 190,000 sq ft, it is large for the area and was challenging to re-lease. The buyer is obtaining a development permit from the city, after which the sale will close. In the meantime, the buyer is paying us monthly rent starting in May of CAD 95,000, which is a great outcome for us. In Hamilton, we are still looking for a buyer or a tenant for our 115,000 sq ft new build in Glover Road. We own 80% of this property, and it has been a challenging market in Hamilton, but we have a brand-new facility.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

Once sold, it will contribute significantly to our AFFO per unit as the carrying costs are significant, and we'll be able to use the sale proceeds to pay down debt. The last building is our sole remaining retail property, Les Halles d'Anjou, which we are marketing gently. Cash flows well for us. We're not in a rush to make a sale. In addition, we are close on a deal to sell our 80% interest in development land on South Service Road in Hamilton. The property doesn't fit into our strategy anymore, and we will use the sale proceeds to reduce debt. As we shared in March, we are in the planning stage of two additional development projects which will get underway later this year.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

At our Savage Road property in Richmond, B.C., we're adding 80,000 sq ft for a combination of cash and CAD 29 million in REIT units issued at CAD 10.50 per unit. We'll earn 6% on the REIT units issued during the construction period, and we'll earn a contractual 6% yield upon completion. At Adams Road property in Kelowna, we'll build up to 180,000 sq ft of micro industrial units on vacant land surrounding our existing industrial building for a total estimated cost of approximately CAD 47 million. Turning to our outlook, we continue to expect Nexus to deliver a strong 2026, driven by our completed development projects, embedded rent steps, the lease-up of vacant space, and the re-leasing of space at market rents above expiring rents.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

We see no change in our outlook and anticipate mid-single digit same property NOI growth in our industrial portfolio for the year and normalize AFFO payout ratio to an average below 100% for the full year. I'll now turn the call over to Mike to give some more color on our financials.

[Mike Rawle, CFO at Nexus Industrial REIT]

Thank you, Kelly, and good morning, everyone. Starting with headline earnings in the quarter, net income was CAD 32.2 million, a CAD 1 million decrease compared to a net income of CAD 33.2 million last year. The decrease was primarily due to lower fair value adjustments on our investment properties by CAD 6.8 million and a decrease in the Class B LP unit fair value adjustments by CAD 5.6 million, partially offset by higher fair value adjustments on derivative financial instruments by CAD 11.3 million and an increase in net operating income by CAD 1.7 million. As Kelly mentioned, our Q1 net operating income increased 5.4% or CAD 1.7 million year-over-year to CAD 33.8 million.

[Mike Rawle, CFO at Nexus Industrial REIT]

This was primarily due to the completion of our St. Thomas and Calgary developments, which combined added CAD 1.3 million, the acquisition of the two Montreal buildings in November, which added CAD 700,000, and an increase in lease termination income by CAD 600,000 from the eviction of a tenant at 4590 Portland Boulevard in Sherbrooke that Kelly spoke about. NOI also benefited from a change in how we treat improvements and leasing commissions to better align our approach with our peers. For this quarter onwards, we have stopped amortizing TIs and LCs, and instead, we are now adjusting these balances through fair value. When compared to prior periods, this resulted in a CAD 400,000 benefit to NOI this quarter and has no impact to other metrics such as net income, FFO, or AFFO.

[Mike Rawle, CFO at Nexus Industrial REIT]

In the quarter, the benefits to NOI were partially offset by a one-time write-off of straight line rent of CAD 600,000 resulting from a lease change and a CAD 600,000 decrease from forgone rents from properties that we have sold since Q1 2025. Normalized AFFO for the period was CAD 0.162 per unit compared to CAD 0.154 from a year ago, primarily due to a higher normalized AFFO of CAD 1.2 million driven by the higher NOI discussed earlier, partially offset by higher interest expense of CAD 700,000 and a CAD 200,000 increase in general and administrative expense due to higher compensation and legal fees.

[Mike Rawle, CFO at Nexus Industrial REIT]

Total general and administrative expense for the quarter was CAD 2.5 million, which was CAD 200,000 higher than a year ago, predominantly due to higher non-recurring compensation costs and legal fees. Net interest expense in the quarter was CAD 14.1 million, a CAD 700,000 increase from the same period in 2025, driven by higher interest on the credit facility by CAD 800,000 resulting from higher borrowings during the period to fund mortgage maturities and development expenditures and lower capitalized interest by CAD 400,000 due to the completion of development properties. These increases were partially offset by a lower mortgage interest by CAD 500,000 resulting from principal repayments and property dispositions.

[Mike Rawle, CFO at Nexus Industrial REIT]

The carrying value of our investment properties increased by CAD 14.3 million in the quarter, primarily due to capital expenditures, tenant improvements, and leasing costs by CAD 7.8 million, CAD 4.2 million of development expenditures and CAD 2.1 million of fair value gains. At March 31st, our NAV per unit was CAD 13.29, a CAD 0.07 per unit increase from last quarter. Our weighted average cap rate increased by 6 basis points to 5.94% in the quarter, compared to 5.88% at December 31st. I will now turn the call back to Kelly.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

Thanks, Mike. I will now pass it back to the operator to open up the line for questions.

[Operator]

Thank you. We'll now begin the question and answer session. To join the question queue you may press star then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone. Please pick up your handset before pressing any keys. To withdraw your question, please press star then two. Our first question is from Brad Sturges with Raymond James. Please go ahead.

[Brad Sturges, Analyst at Raymond James]

Hey, good morning. Congrats on the investment grade credit rating. Just curious, you know, with the unwind of some of the currency swaps, just would there be a one-time cost associated that we should expect in Q2?

[Mike Rawle, CFO at Nexus Industrial REIT]

No, no income impact because it's already been accrued. Like I said, the derivatives are already carried at fair value. There was a cash impact of just under CAD 2 million.

[Brad Sturges, Analyst at Raymond James]

Perfect. Appreciate that. Then just, you know, given the lease termination fee income in the quarter, but no change to the guidance, would that assume, I guess, your the guidance is including the lease termination fee income going forward? Then if so, I guess if we were to strip that out, what would be the growth guidance for the rest of the year?

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

No, it is stripped out from that SPNOI.

[Brad Sturges, Analyst at Raymond James]

Okay

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

another CAD 1.2 million we could add if we were to include it in that calculation.

[Brad Sturges, Analyst at Raymond James]

Okay. No major changes to guidance as you said. Okay, understood. I guess my last question would be on Kelowna. I guess you're making progress on that front. When would the project be complete from a construction point of view, and when would you be looking to start the sales process on the micro units?

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

I think we're just still in the drawing phase right now, finalizing. I think probably not till the end of the year, start. Well, Richmond's a little different and that one we're in for permit on that one as we finalize design. It's kind of a unique, cool design. There could be further upside there. At the end of the day, each of them kind of will go in stages.

[Brad Sturges, Analyst at Raymond James]

Okay. I'll turn it back. Thank you.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

Yeah.

[Operator]

The next question is from Kyle Stanley with Desjardins. Please go ahead.

[Kyle Stanley, Analyst at Desjardins]

Thanks. Morning, guys. Maybe just going back to the guidance Brad asked about there. Obviously reiterated the guidance, softer print this quarter. We understand because of the, you know, the vacancy, but that would imply pretty significant acceleration into the, you know, the last three quarters of the year. I'm just wondering, you know, where is that growth really coming from over the balance of the year? What are the drivers that maybe didn't contribute this quarter that we should expect to really ramp?

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

Yeah, that's a fair comment, Kyle. A couple of things there. One is the primary thing is leasing of empty space. We had a big one that was a drag versus prior year is 102 Avenue in Calgary. That was the old Peavey Mart space that was occupied Q1 of last year, and it was vacant this year, and we anticipate filling that later this year. Another one is the other Peavey Mart space that we're looking at selling. We have that under firm contract now, and we're actually going to receive rent from it from May forwards before it ends up closing, the sale ends up closing in October. You know, those will both benefit SPNOI going forward.

[Kyle Stanley, Analyst at Desjardins]

Okay. Thank you for that. Would you say just as you know, you look for, I think you highlighted, I just want to confirm another maybe 140,000 sq ft of expected non-renewals later this year. Is that correct?

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

That's correct.

[Kyle Stanley, Analyst at Desjardins]

Okay. Would you say anything has changed in the leasing environment? Is it more challenging maybe than it was? Is there, you know, different areas of strength or weakness or, you know, secondary markets coming under any pressure? Just, you know, would love to hear, I guess, your thoughts on the leasing environment.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

Yeah. We have one in Montreal. It's a 91,000 sq ft. That tenant, I mentioned this before, but that tenant had three, five-year renewal options at no more than 2.5% of their expiring rent. Last year, they wanted to stay for one year, and so we moved their rent to CAD 9 from CAD 5. That was strategic. We knew it would be a one-year hit. CAD 9 is still well under market for that area in Montreal. That comes up at the end of the year. That's one of them. Another one, a 20,000 sq ft in London where they were paying CAD 6 gross. CAD 6 gross is very under market.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

Not willing to pay the increase, we're out to market with that. Another one in Ajax where they were sitting at, I believe, CAD 11 a square foot. CAD 13 a square foot. We'll get an uptick on that. We also did a buyout with them, a termination. We got full income, full income till the end of the year from them. At the end of the day, those were all strategic where we saw a significant amount of upside. To answer your question on the actual leasing, I feel London is, I wouldn't say slowed down. People are just more cautious.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

It is a little bit harder to get the deals done right now, although the leasing market's still pretty healthy. We have two larger ones that we're in paper with back and forth that we hope to have wrapped up in the next quarter or so. That represents, call it 230,000 sq ft. I'm still pretty positive on those to renew. Overall, I think things have calmed down, but it's still a fairly healthy leasing market.

[Kyle Stanley, Analyst at Desjardins]

Okay. Thank you for the color. Just the last one for me. Just on the, you know, just wondering where we stand on the stabilization of the Calgary kind of industrial condo development. How much NOI was realized this quarter versus how much you expect it to ramp throughout the year?

[Mike Rawle, CFO at Nexus Industrial REIT]

It was 56% occupied. We probably had about half by the end of the quarter, we had about, probably about half of that contributed during the quarter. You know, I do have full, that full 56% we'd receive next quarter. We see, we've made pretty good progress on the leasing. I think there's one out for signature of the remaining four units. Two are in negotiation, then one we're still looking for a tenant. Our expectation is to have that done by the end of September, have it fully stabilized in September.

[Kyle Stanley, Analyst at Desjardins]

Okay, perfect. I will turn it back. Thanks.

[Operator]

The next question is from Sam Damiani with TD Securities. Please go ahead.

[Sam Damiani, Analyst at TD Securities]

Thank you, and I'll echo the congratulations on the investment grade and the inaugural debenture offerings. Just on that, Mike, how do you see the interest cost run rate changing, you know, in, I guess, Q3 will be the first clean quarter with the debentures versus the CAD 14 million booked in Q1?

[Mike Rawle, CFO at Nexus Industrial REIT]

I think overall the benefit of the bonds where credit spreads are, they'll save us in the order of 10 basis points-20 basis points. That's, you know, like variable depending on credit spreads of the credit facility at the time. Yeah, what we've locked in there is basically 10 basis points-20 basis points relative to what we were paying.

[Sam Damiani, Analyst at TD Securities]

You're saying the all else the same in terms of debt levels, the interest cost should be a snick lower?

[Mike Rawle, CFO at Nexus Industrial REIT]

That's it.

[Sam Damiani, Analyst at TD Securities]

-on an annual basis in, you know, by Q3, I guess. Okay.

[Mike Rawle, CFO at Nexus Industrial REIT]

Yeah. Yeah. On, you know, on the CAD 500 million that we've raised. Yeah.

[Sam Damiani, Analyst at TD Securities]

On the CAD 500 million. Got it. Okay.

[Mike Rawle, CFO at Nexus Industrial REIT]

Yeah.

[Sam Damiani, Analyst at TD Securities]

Okay. Just also on the new vacancies in the quarter. Thank you for the color you provided there. I'm just curious, could you identify who the parent company is of the former tenant at Sherbrooke?

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

Yeah. I believe it's Coco Frutti.

[Sam Damiani, Analyst at TD Securities]

Okay. The tenant in London, what was the reason they chose to vacate the premises there? Was that at the end of their lease term, or do they have an early termination right?

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

Yeah. No, that was an expiry. It actually was, I call him our partner, Ian McLaughlin.

[Sam Damiani, Analyst at TD Securities]

Oh, okay. Yeah. That's what I thought. Yeah.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

80,000 sq ft at a gross rent of CAD 6.80. We want more. They have some of their own vacant space in one of their buildings that was an old manufacturing site that they just moved into to take some of that space there. It's pretty good space and at only CAD 6.80 gross, we see upside there.

[Sam Damiani, Analyst at TD Securities]

For sure. Okay. That's it for me. Thanks. Thanks very much.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

Thanks.

[Operator]

The next question is from Jimmy Shan with RBC. Please go ahead.

[Jimmy Shan, Analyst at RBC]

Thanks. Just to follow up on that interest, savings comment of 20, 10 basis points-20 basis point savings. I just want to make sure I understand. The debenture blended rate is about 4.4%.

[Mike Rawle, CFO at Nexus Industrial REIT]

Yeah.

[Jimmy Shan, Analyst at RBC]

Isn't the term facility at 53?

[Mike Rawle, CFO at Nexus Industrial REIT]

The term facility was 170 basis points over CDOR or CORRA. We still have the swaps in place. Well, some of the swaps in place I guess. Or to say it another way, we have unwound the swaps. We have the impact of the swaps because we've paid them off, we have the additional debt of the swaps. The real savings here is the credit spread that we're paying. We're paying effectively, this credit spread is slightly tighter, 10 basis points-20 basis points tighter than the effective credit spread on the credit facility.

[Jimmy Shan, Analyst at RBC]

All right. I think I get it. Maybe just in general then on the leasing comments, where are you seeing potential tenant stress? Then you made a comment about, you know, leasing people a little bit more cautious. Kinda what would you attribute that to? Is it the oil environment, the tariff? Anything that you could point out?

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

I'd say Alberta in the west is still really strong. There's no doubt. Montreal, I mean, it's a slowdown in Montreal from what it used to be. London, Southwestern Ontario, it's an interesting market. Windsor, for example, has literally almost no availability. You think that would be the opposite of what's happening in the auto industry. It's a little bit bizarre. Windsor itself has, like, very little vacancy at all. London, we've just seen some larger manufacturers for that kind of have disappeared that have left, you know, a big space. Like the one that our partner has, it's a pretty big building.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

You know, on that note, they're making pretty good headway of filling it back up, in subdividing it into warehousing. You know, I feel that when you look at the tenant base right now, They're having trouble forecasting what's going to happen. The growth plans have paused. I think until we get through the tariff thing, I think that's going to be the case. You know, guys are just pausing on decisions and taking their time and waiting and until that, it's just gonna be uncertain times. Overall, it hasn't hurt us too much. The ones that we have are kind of planned ones because we're going to get a pretty good lift.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

When you think about CAD 6.80 gross, you know that sits down to a CAD 4 and, you know, CAD 4.20 net rent that we can take to CAD 9 or CAD 10. The short downtime is worth the lift that gives.

[Jimmy Shan, Analyst at RBC]

Okay. Okay, thanks for that.

[Operator]

Once again, if you have a question, please press star then one. The next question is from Tal Woolley with CIBC. Please go ahead.

[Tal Woolley, Analyst at CIBC]

Hi, good morning. Just on the Glover Road development, can you even estimate of, like, what your quarterly carrying costs are on that asset right now?

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

I believe and this somewhere around in between CAD 80,000 and CAD 90,000 a month. It's significant.

[Tal Woolley, Analyst at CIBC]

Okay.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

You know, when we sell that, it's going to make a significant improvement to our NOI.

[Tal Woolley, Analyst at CIBC]

Okay. In terms of price talk around the asset, are you comfortable you'll be able to recoup your development costs here?

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

Yeah, we believe so.

[Tal Woolley, Analyst at CIBC]

Okay. That's great. Thanks very much.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

Yeah.

[Operator]

This concludes the question and answer session. I'd like to turn the conference back over to Kelly Hanczyk for any closing remarks.

[Kelly Hanczyk, CEO at Nexus Industrial REIT]

All right. I wanna thank everybody for attending, and we'll talk to you next quarter.

[Operator]

This brings to an end today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

Participants

Executives

• Kelly Hanczyk, CEO
• Mike Rawle, CFO

Analysts

• Brad Sturges, Analyst at Raymond James
• Jimmy Shan, Analyst at RBC
• Kyle Stanley, Analyst at Desjardins
• Sam Damiani, Analyst at TD Securities
• Tal Woolley, Analyst at CIBC