Nov. 09, 2025 at 4:30 pm

BTB Real Estate Investment Trust (BTBIF) Q3 2025 Earnings Call Highlights: Resilient …

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This article first appeared on GuruFocus.

Portfolio Size: 6 million square feet.
Lease Renewals and New Leases: 280,000 square feet for the quarter.
Fair Value of Investment Properties: $1.2 billion.
Occupancy Rate: 91.5%.
Rental Revenue: $32.9 million, a 1.1% increase year-over-year.
Net Operating Income (NOI): Increased by 5.9% year-over-year.
Cash NOI: Increased by 4.2% year-over-year.
FFO Adjusted Per Unit: $0.115, a 7.5% increase year-over-year.
AFFO Adjusted Per Unit: $0.101, a 4.1% increase year-over-year.
Distribution to Unitholders: $0.075 per unit for the quarter.
AFFO Adjusted Payout Ratio: 74.3%, improved from 77.2% last year.
Total Debt Ratio: 56.8%.
Cash and Credit Facilities: $5.5 million in cash and $25 million available under credit facilities.

Release Date: November 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

BTB Real Estate Investment Trust (BTBIF) achieved a 14.5% increase in renewal rates, marking the highest spread for the third quarter compared to previous years.
The company successfully concluded lease renewals and new leases totaling 280,000 square feet during the quarter.
Rental revenue increased by 1.1% compared to the same quarter last year, reflecting the resilience of BTBIF’s business.
The fair value of investment properties remained stable at $1.2 billion, with a gain of $2 million from external appraisals.
BTBIF maintained a strong financial position with an AFFO adjusted payout ratio of 74.3%, an improvement from the previous year.

The occupancy rate was impacted by a 132,000 square foot industrial vacancy, affecting the rate by 221 basis points.
Lease renewal rates were affected by tenant departures, resulting in a 36% reduction in renewal rates for the quarter.
Cash NOI was negatively impacted by the departure of an industrial tenant and a short-term lease with Lion Electric.
The total debt ratio stood at 56.8%, which may pose a risk if interest rates rise further.
The company is still facing challenges in leasing out certain office properties, with slow traction in receiving offers.

Q: Can you clarify the lease cancellation income and its impact on Q3 results? A: Michel Leonard, President and CEO, explained that there were two lease cancellations in 2025. The first was at the beginning of the year with no downtime, and the second was a recent cancellation where the tenant exercised their right to cancel after seven years. The funds from this cancellation were received in Q3, and the $1.1 million income was included in the NOI for the quarter.

Q: How have you managed to improve margins this quarter? A: Marc Lefebvre, VP & CFO, stated that the improvement in margins is due to efficient management of expenses, rather than any specific timing-related factors.

Q: Can you provide details on the prospective lease for the industrial property in Laval? A: Michel Leonard mentioned that they are negotiating with a AAA tenant for the entire property. Although details are under a nondisclosure agreement, the net rents are within expectations, and they hope to finalize the transaction soon.

Q: What is the current demand for office space in your portfolio? A: Stephanie Leonard, Senior Director of Leasing, noted sustained interest in their suburban office assets due to back-to-work mandates. Quebec City and Laval are experiencing significant leasing activity, and they expect demand to increase as companies finalize their office return plans.

Q: How are borrowing costs affecting your asset classes? A: Marc Lefebvre indicated that borrowing costs have remained stable, with refinancing spreads flat year-to-date. They expect a slight increase of 40 basis points in spreads for upcoming refinancings.

Q: How did the Kraft-Heinz lease impact your occupancy and rent rates? A: Michel Leonard explained that the previous tenant was paying $7.75, and Kraft-Heinz is now paying $13.50, reflecting a significant increase. The one-day difference in lease commencement affected occupancy reporting but not the actual occupancy.

Q: Are there any changes in asking rents and incentives for office leases? A: Stephanie Leonard stated that there have been no significant changes in asking rents and incentives over the past year. However, investment in office spaces by tenants, particularly the federal government, is increasing.

Q: What is the outlook for government office space usage amid potential budget cuts? A: Michel Leonard mentioned that there is no specific direction yet, but there is a trend of vacating downtown Ottawa in favor of suburban areas. No official statements have been made regarding budget impacts.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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BTB Real Estate Investment Trust (BTBIF) Q3 2025 Earnings Call Highlights: Resilient …