MONTREAL, Nov. 11, 2026 /CNW/ -- PRO Real Estate Investment Trust ("PROREIT") (TSX: PRV.UN) today reported its financial and operating results for the three months ended September 30, 2026 ("Q3" or "third quarter") and nine-month period ended September 30, 2026.

Third Quarter of Fiscal 2026 Highlights

• Net operating income (NOI) increased by 17.5% year-over-year
• Same Property NOI* rose 7.6% year-over-year; industrial Same Property NOI* growth of 7.6% 
• Funds from Operations* (FFO) increased by 36.3% year-over-year
• AFFO Payout Ratio- Basic* improved to 93.1% from 98.9% in the second quarter of 2026
• Total debt to total assets decreased to 47.8% at September 30, 2026, compared to 49.0% at the same date last year
• Adjusted Debt to Gross Book Value* decreased to 48.2% at September 30, 2026, compared to 49.1% at the same date last year
• Available Liquidity* totalled $102.1 million at quarter-end, comprising $42.1 million in cash and a fully undrawn $60.0 million revolving credit facility
• Completed previously announced acquisition of a 100% interest in four industrial properties totalling 164,900 square feet of gross leasable area ("GLA") located in Winnipeg, Manitoba, for $21.7 million 
• 89.2% of GLA renewed as of the date of this press release at positive average spread of 37.4%; 87.8% of industrial GLA maturing in 2026 renewed at positive average spread of 41.0%
• Occupancy rate at 95.4% at September 30, 2026 (including committed space), compared to 95.5% a year earlier

"We continued to execute our growth strategy with discipline in the third quarter, both operationally and financially. Our results benefited from continued organic growth and the first full quarter of contributions from the 17 properties acquired in June. We also expanded our Winnipeg portfolio with four additional industrial properties, integrating them within our existing operating platform. In Québec City, we opened a local office to support our growing presence and build closer relationships with our tenants," said Gordon Lawlor, President and Chief Executive Officer of PROREIT.

"We continue to capture rental upside across the portfolio. Net operating income increased by 17.5% year-over-year, Same Property NOI* rose 7.6% year-over-year, and industrial lease renewals and new industrial leases signed during the quarter achieved positive rental spreads of 37.6%. Rental growth and the contribution from our recent acquisitions helped bring our AFFO Payout Ratio-Basic* down to 93.1% from 98.9% in the second quarter. We expect further cash flow growth in the fourth quarter as higher rents on more than 400,000 square feet of renewed leases contribute for a full quarter.

"Beyond this near-term growth, announced defence, energy and infrastructure investments across several of our markets are expected to support demand across the supply chain. Shipbuilding in Halifax and Lévis, naval base spending in Halifax, aircrew training in Winnipeg and military defence spending around Moncton as well as other military facilities in New Brunswick are expected to create opportunities for our small- and mid-bay properties. Our presence in these markets positions us to capitalize on this growing demand, both through our existing portfolio and accretive acquisitions.

"Our sound financial position gives us the flexibility to pursue the right growth opportunities. Total debt to total assets stood at 47.8%, an improvement over the 49.0% reported at September 2025 and Adjusted Debt to Gross Book Value* stood at 48.2%, down from 49.1% a year earlier, and we remain focused on our medium-term target of 45%. With all scheduled 2026 mortgage maturities refinanced or repaid and ample liquidity at quarter-end, we are well positioned to deploy capital selectively and build long-term value for our unitholders," concluded Mr. Lawlor.

 * Measures followed by the suffix "*" in this press release are non-IFRS measures. See "Non-IFRS Measures".

Financial Results
Table 1 - Financial Highlights

At September 30, 2026, PROREIT owned 125 investment properties (including a 50% ownership interest in 39 investment properties), compared to 106 investment properties (including a 50% ownership interest in 40 investment properties), a year earlier. At September 30, 2026, total assets amounted to $1.30 billion, representing a 20.3% increase from $1.08 billion at September 30, 2025.

As at September 30, 2026, the industrial segment represented 93.7% of total GLA and 92.3% of base rent, compared with 91.7% and 89.4%, respectively, as at September 30, 2025. Atlantic Canada accounted for 40.1% of base rent at September 30, 2026, down from 45.4% at September 30, 2025, while the combined contribution from Manitoba and Western Canada increased to 20.2% from 19.1%.

For the three-month period ended September 30, 2026:

• Property revenue amounted to $31.2 million, an increase of $4.1 million or 15.1%, compared to the same prior year period. The increase was mainly driven by an increase in the number of properties owned, along with contractual rent increases, and higher rental rates on lease renewals and new leases.
• Net operating income (NOI) amounted to $20.0 million for the quarter, compared to $17.1 million in the third quarter of 2025, an increase of 17.5%, which was mainly driven by the same factors impacting property revenue.
• Same Property NOI*, which represented 102 properties out of the 125 properties in the portfolio, totalled $16.7 million for the quarter, an increase of $1.2 million or 7.6%, compared to the same quarter last year. The increase was primarily driven by contractual rent increases, and higher rental rates on lease renewals and new leases. Same Property NOI* for industrial assets rose by $1.1 million or 7.6% for the quarter, compared to the same period in 2025.
• FFO* was $10.8 million, up $2.9 million or 36.3% from $8.0 million in the third quarter of 2025. The increase was mainly driven by the increase in the number of properties owned, the increases in contractual base rent, and higher rates on renewals and new leases, partially offset by an increase in interest and financing costs.
• AFFO Payout Ratio – Basic* stood at 93.1%, an improvement from 98.9% in the second quarter of 2026, reflecting a full quarter of contributions from the properties acquired in June and continued rental growth. Compared to 91.1% in the third quarter of 2025, the year-over-year increase primarily reflects the timing difference between the issuance of trust units under the June 2026 bought deal offering and concurrent private placement ("Offering and Private Placement") and the earnings contribution from the related acquisitions, together with higher interest and financing costs. These impacts were partially offset by contractual rent increases and higher rental rates on lease renewals and new leases. A portion of the net proceeds remained available for future acquisitions at September 30, 2026.

For the nine-month period ended September 30, 2026:

• Property revenue amounted to $85.0 million, an increase of $7.2 million or 9.2% compared to the same prior year period. The increase was driven by the same factors noted for the three-month period above.
• NOI amounted to $52.6 million, compared to $47.4 million in the same period in 2025, an increase of 11.0% driven by the same factors noted for the three-month period above.
• Same Property NOI* totalled $43.3 million, an increase of $2.5 million or 6.1%, compared to the same prior year period. Contractual rent increases and higher rental rates on lease renewals and new leases more than offset the impact of lower average occupancy, primarily attributable to vacancies at industrial properties in Saint-Hyacinthe, Quebec, and Woodstock, Ontario. Same Property NOI* for industrial assets rose by $2.3 million or 6.3% for the nine-month period, compared to the same period in 2025.
• FFO* reached $28.0 million, compared to $23.8 million in the first nine months of 2025, an increase of $4.2 million or 17.7%. The increase was mainly driven by the same factors noted for the three-month period above.
• AFFO Payout Ratio – Basic* was 96.1%, compared to 91.6% for the same prior year period, an increase driven by the same factors noted for the three-month period above.

Sustained Operating Environment

As at September 30, 2026, PROREIT's portfolio comprised 125 investment properties totalling 7.4 million square feet of GLA, with a weighted average lease term to maturity of 4.2 years, compared to 4.4 years a year earlier. Portfolio occupancy, including committed space, stood at 95.4%, compared to 95.5% as at September 30, 2025.

Portfolio occupancy reflects the remaining vacant space at industrial properties in Woodstock, Ontario, and Saint-Hyacinthe, Quebec. In Woodstock, an 80,915-square-foot space became vacant on April 1, 2026. As at September 30, 2026, approximately 17,000 square feet of this space was leased and occupied by an adjacent tenant on a month-to-month basis and was included in the reported occupancy rate.

In Saint-Hyacinthe, the previously announced 15-year lease for approximately 74,250 square feet, representing 42.2% of the property's 176,070 square feet of GLA, commenced on July 1, 2026. The lease was signed at market rent, representing an increase of over 122% compared to the rent paid by the previous tenant for the same space under its five-year lease.

Excluding the remaining vacant space at these two properties, portfolio occupancy, including committed space, would have been approximately 97.6% as at September 30, 2026.

As of the date of this press release, PROREIT had renewed approximately 89.2% of the GLA associated with leases expiring in 2026, achieving an average positive rental spread of 37.4%.

In October 2026, PROREIT also renewed an industrial lease covering approximately 58,000 square feet of GLA for an additional five-year term, expected to commence February 1, 2027. The renewal provides for an increase in base rent of over 95% compared to the expiring rent, with annual rent escalations throughout the renewed term.

Portfolio Transactions

During the third quarter of 2026, PROREIT completed the following transactions:  

On July 15, 2026, PROREIT completed the previously announced acquisition of a 100% interest in four industrial properties in Winnipeg, Manitoba, totalling 164,900 square feet of GLA, for $21.7 million, excluding closing costs. The acquisition represented a going-in capitalization rate of approximately 6.8% and was financed through a new eight-year mortgage of approximately $14.1 million bearing interest at 4.95% per annum, together with approximately $7.6 million from the net proceeds of the Offering and Private Placement.

On August 6, 2026, PROREIT completed the sale of one retail property located in Bathurst, New Brunswick, totalling approximately 14,750 square feet of GLA for gross proceeds of $1.4 million (excluding closing costs). The net proceeds were used for general business and working capital purposes.

Subsequent to quarter-end, on October 5, 2026, PROREIT completed the sale of one retail property located in Laurier-Station, Quebec, totalling approximately 2,400 square feet of GLA for gross proceeds of $2.5 million (excluding closing costs). The net proceeds were used for general business and working capital purposes.

On November 9, 2026, PROREIT entered into a binding agreement with a third party purchaser to sell two non-core industrial properties in Quebec City totalling approximately 85,449 square feet of GLA for gross proceeds of $14.8 million (excluding closing costs). Net proceeds of the sale will be used to repay approximately $2.8 million of a related demand loan, with the balance to be used for future acquisitions or for general business and working capital purposes. The closing of the sale is expected to occur in the fourth quarter of 2026 and is subject to customary closing conditions.

Financial Position

Total debt, including current and non-current portions, was $623.8 million as at September 30, 2026, compared to $531.1 million a year earlier.

As at September 30, 2026, PROREIT had $42.1 million in cash and a fully undrawn $60.0 million revolving credit facility, providing financial flexibility to fund future acquisitions and other capital requirements.

During the third quarter, PROREIT completed the following mortgage refinancings and renewals:

• On July 30, 2026, PROREIT refinanced five mortgages totalling approximately $32.9 million that matured during the month. The new mortgages total $40.4 million, have seven-year terms and bear interest at 4.98% per annum.
• On September 30, 2026, PROREIT renewed first and second mortgages secured by a property in Ottawa, Ontario, totalling approximately $38.8 million, for a one-year term at an annual interest rate of 4.55%.

As at September 30, 2026, PROREIT had no remaining mortgage maturities for the year.

Mortgage maturities total $83.5 million in 2027 and $58.6 million in 2028, with weighted average interest rates of 4.7% and 3.5%, respectively. These maturities relate to industrial properties and are expected to provide opportunities to generate additional liquidity through refinancing at market rates.

Total debt to total assets was 47.8% at September 30, 2026, compared to 49.0% at September 30, 2025. Adjusted Debt to Gross Book Value* was 48.2% at September 30, 2026, compared to 49.1% at September 30, 2025.

The Adjusted Debt to Annualized Adjusted EBITDA Ratio*, based on annualized third-quarter Adjusted EBITDA*, was 8.4x, unchanged from the same period in 2025.

Board of Trustees Update

On November 11, 2026, PROREIT appointed Mr. Michael McAloon, CPA, to its Board of Trustees. Mr. McAloon is Managing Director, Investments, at the Bragg Group of Companies, which includes Collingwood Investments Incorporated, a significant unitholder of PROREIT. Having previously served as Chief Financial Officer of the Bragg Group from 2015 to 2025, Mr. McAloon brings more than 35 years of leadership experience in financial management, mergers and acquisitions and corporate governance. His appointment further strengthens the Board's financial and investment expertise and supports PROREIT's commitment to Board renewal.

Sustainability

PROREIT's 2025 Sustainability Report is now available. Prepared with reference to recognized sustainability reporting frameworks, the report highlights the REIT's progress and initiatives across environmental, social and governance priorities. The full report can be accessed at https://proreit.ca/en/about/sustainability/.

Distributions

Distributions to unitholders of $0.0375 per trust unit of the REIT were declared monthly during the three months ended September 30, 2026, representing distributions of $0.45 per unit on an annualized basis. Equivalent distributions are paid on the Class B limited partnership units of PRO REIT Limited Partnership ("Class B LP Units"), a subsidiary of the REIT.

On October 22, 2026, the REIT announced a cash distribution of $0.0375 per trust unit for the month of October 2026. The distribution is payable on November 16, 2026 to unitholders of record as at October 30, 2026.   

Strategy

PROREIT remains focused on the successful execution of its strategy for growth by expanding the portfolio organically and through disciplined acquisitions, while optimizing its balance sheet and capital allocation.  Having successfully completed its transition to a pure-play industrial real estate investment trust, PROREIT is focused on strengthening its position as a prominent Canadian light industrial real estate investment trust in strong primary and secondary markets and on delivering long-term, sustainable value for its stakeholders. In the medium-term, PROREIT is targeting goals of $2 billion in assets and 45% Adjusted Debt to Gross Book Value* in the next three to five years. These medium-term goals are based on PROREIT's current business plan and strategies and are not intended to be a forecast of future results. See "Forward-Looking Statements".

Investor Conference Call and Webcast Details

PROREIT will hold a conference call to discuss its third quarter results for fiscal 2026 results on Thursday November 12, 2026 at 9:00 a.m. (ET). The call will include a question period reserved for financial analysts. To access the conference call, please dial 1-800-990-4777 or 514-400-3794, conference ID: 23515.

A recording of the call will be available until November 19, 2026 by dialing 1-888-660-6345 or 1-289-819-1450 and using access code: 23515 #

The conference call will also be accessible via live webcast on PROREIT's website at www.proreit.com or at https://app.webinar.net/7LpgQGnPO5b

About PROREIT

Founded in 2013, PROREIT (TSX: PRV.UN) is a Canadian industrial real estate investment trust that owns and operates a portfolio of high-quality properties. With a presence in strong primary and secondary Canadian markets, PROREIT is committed to delivering stable cash flow, disciplined growth and long-term value for its unitholders.

For more information on PROREIT, please visit the website at: https://proreit.com.

Non-IFRS Measures

PROREIT's consolidated financial statements are prepared in accordance with IFRS® Accounting Standards ("IFRS"), as issued by the International Accounting Standards Board. In addition to reported IFRS measures, industry practice is to evaluate real estate entities giving consideration, in part, to certain non-IFRS financial measures, non-IFRS ratios and other specified financial measures (collectively, "non-IFRS measures"). Without limitation, measures followed by the suffix "*" in this press release are non-IFRS measures.

As a complement to results provided in accordance with IFRS, PROREIT discloses and discusses in this press release (i) certain non-IFRS financial measures, including: Adjusted Debt, adjusted earnings before interest, tax, depreciation and amortization ("Adjusted EBITDA"); adjusted funds from operations ("AFFO"); annualized adjusted earnings before interest, tax, depreciation and amortization ("Annualized Adjusted EBITDA"); Available Liquidity, funds from operations ("FFO"); gross book value ("Gross Book Value"); net asset value ("NAV") and Same Property NOI and (ii) certain non-IFRS ratios, including: Adjusted Debt to Annualized Adjusted EBITDA Ratio; Adjusted Debt to Gross Book Value; AFFO Payout Ratio – Basic; AFFO Payout Ratio – Diluted; Basic AFFO per Unit; Diluted AFFO per Unit; Basic FFO per Unit; Diluted FFO per Unit; Debt Service Coverage Ratio; Interest Coverage Ratio; and NAV per Unit. These non-IFRS measures are not defined by IFRS and do not have a standardized meaning under IFRS. PROREIT's method of calculating these non-IFRS measures may differ from other issuers and may not be comparable with similar measures presented by other income trusts or issuers. PROREIT has presented such non-IFRS measures and ratios as management believes they are relevant measures of PROREIT's underlying operating and financial performance. For information on the most directly comparable financial measure disclosed in the primary financial statements of PROREIT, composition of the non-IFRS measures, a description of how PROREIT uses these measures and an explanation of how these measures provide useful information to investors, refer to the "Non-IFRS Measures" section of PROREIT's management's discussion and analysis for the three and nine months ended September 30, 2026, dated November 11, 2026, available on PROREIT's SEDAR+ profile at www.sedarplus.ca, which is incorporated by reference into this press release. As applicable, the reconciliations for each non-IFRS measure are outlined below. Non-IFRS measures should not be considered as alternatives to net income, net cash flows provided by operating activities, cash and cash equivalents, total assets, total equity, or comparable metrics determined in accordance with IFRS as indicators of PROREIT's performance, liquidity, cash flows and profitability.

Table 2 - Reconciliation of net operating income to net income and comprehensive income

Table 3 - Reconciliation of Same Property NOI to net operating income (as reported in the consolidated financial statements)

Table 4 - Summary of Same Property NOI by asset class

Table 5 - Reconciliation of AFFO and FFO to net income and comprehensive income

Table 6 - Reconciliation of Adjusted EBITDA to net income and comprehensive income

Table 7 - Calculation of Adjusted Debt to Annualized Adjusted EBITDA Ratio

Table 8 - Calculation of the Interest Coverage Ratio

Table 9 - Calculation of the Debt Service Coverage Ratio

Table 10 - Calculation of Gross Book Value, Adjusted Debt and Adjusted Debt to Gross Book Value

Table 11 - Calculation of NAV and NAV per Unit

Table 12 - Available Liquidity

Forward-Looking Statements

This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities legislation, including statements relating to certain expectations, projections, growth plans and other information related to PROREIT's business strategy and future plans. Forward-looking statements are based on a number of assumptions and are subject to a number of risks and uncertainties, many of which are beyond PROREIT's control, that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking statements.

Forward-looking statements contained in this press release include, without limitation, statements pertaining to the execution by PROREIT of its growth strategy, the future financial and operating performance of PROREIT, expected cash flow growth in the fourth quarter of 2026, the anticipated effects of announced defence, energy and infrastructure investments on demand for PROREIT's properties, refinancing opportunities in respect of future mortgage maturities, the pending disposition of two properties in Quebec City, including its expected closing and use of proceeds, and the medium-term goals of PROREIT. PROREIT's objectives and forward-looking statements are based on certain assumptions, including that (i) PROREIT will receive financing on favourable terms; (ii) the future level of indebtedness of PROREIT and its future growth potential will remain consistent with PROREIT's current expectations; (iii) there will be no changes to tax laws adversely affecting PROREIT's financing capacity or operations; (iv) the impact of the current economic climate and the current global financial conditions on PROREIT's operations, including its financing capacity and asset value, will remain consistent with PROREIT's current expectations; (v) the performance of PROREIT's investments in Canada will proceed on a basis consistent with PROREIT's current expectations; and (vi) capital markets will provide PROREIT with readily available access to equity and/or debt.

The medium-term goals of PROREIT disclosed under "Strategy" are based on PROREIT's current business plan and strategies and are not intended to be a forecast of future results. The medium-term goals contemplate PROREIT's historical growth and certain assumptions including but not limited to (i) current global capital market conditions, (ii) access to capital, (iii) interest rate exposure, (iv) availability of high-quality industrial properties for acquisitions, and (v) capacity to finance acquisitions on an accretive basis.

The forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement. All forward-looking statements in this press release are made as of the date of this press release. PROREIT does not undertake to update any such forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.

Additional information about these assumptions and risks and uncertainties is contained under "Risk Factors" in PROREIT's latest annual information form and "Risks and Uncertainties" in PROREIT's management's discussion and analysis for the three and nine month periods ended September 30, 2026, which are available under PROREIT's profile on SEDAR+ at www.sedarplus.ca.

SOURCE Pro Real Estate Investment Trust