TORONTO--(BUSINESS WIRE)-- Slate Grocery REIT (TSX: SGR.U) (TSX: SGR.UN) (the "REIT"), an owner and operator of U.S. grocery-anchored real estate, today announced its financial results and highlights for the three and nine months ended September 30, 2026.
“We continued to see healthy leasing momentum in the third quarter, driven by tenant demand across the grocery-anchored and retail sector,” said Blair Welch, Chief Executive Officer of Slate Grocery REIT. “Our team completed over 410,000 square feet of leasing at spreads of 8.4% above expiring rents. With occupancy of 93.5% and average in-place rents of $13.09 per square foot, portfolio fundamentals remain strong, and we continue to execute on our leasing and asset management priorities.”
Q3 2026 Highlights
- The REIT executed 80 leases totaling 410,673 square feet during the quarter.
- As at September 30, 2026, portfolio occupancy was 93.5%.
- 42 lease renewals were completed at 13.4% above expiring rents, and 10 new deals were completed at 18.2% above comparable average in-place rent.
- Adjusting for completed redevelopments, same property Net Operating Income ("NOI") increased by $2.7 million, or 1.6%, in the third quarter on a trailing twelve month basis.
- The REIT has a weighted average interest rate of 5.1%, with 90.2% of its debt having a fixed interest rate, providing a stable outlook for the REIT's near-term financing costs.
- On August 10, 2026, the REIT sold Heritage Heights, a Club 4 Fitness-anchored property in Grapevine, Texas, for gross proceeds of $17.2 million.
The Arrangement
- On September 27, 2026, the REIT entered into an arrangement agreement with a joint venture between an affiliate of Brixmor Property Group Inc. and affiliates of Everview Partners, L.P. (the “Purchaser”), pursuant to which the Purchaser will acquire all issued and outstanding units of the REIT for US$13.00 per unit in cash plus additional consideration of US$0.002482 per unit per day if closing occurs after January 20, 2027 (the "Transaction").
- The REIT mailed its management information circular (“Circular”) on November 2, 2026, in connection with a special meeting of unitholders to be held on November 25, 2026, at which unitholders will be asked to consider and, if thought advisable, approve the Transaction. Assuming the satisfaction or waiver of all conditions to closing, closing is expected to occur in Q1 2027, following which the REIT will be privately held and delisted from the TSX.
Includes the REIT's share of joint venture investments. Refer to “Non-IFRS Measures” section below. |
Summary of Q3 2026 Results
Three months ended September 30, | |||||
(thousands of U.S. dollars, except per unit amounts) | 2026 | 2025 | Change % | ||
Rental revenue | $ | 59,199 | $ | 53,313 | 11.0% |
NOI | $ | 43,262 | $ | 42,992 | 0.6% |
Net income | $ | 13,446 | $ | 11,238 | 19.6% |
Same-property NOI (3 month period, 112 properties) | $ | 42,618 | $ | 42,267 | 0.8% |
Same-property NOI (12 month period, 112 properties) | $ | 167,127 | $ | 164,708 | 1.5% |
New leasing (square feet) | 21,450 | 74,104 | (71.1)% | ||
New leasing spread | 18.2% | 34.8% | (47.7)% | ||
Total leasing (square feet) | 410,673 | 417,145 | (1.6)% | ||
Total leasing spread | 8.4% | 14.4% | (41.7)% | ||
New leasing – anchor / junior anchor | — | 24,554 | 100.0% | ||
Weighted average number of units outstanding ("WA units") | 60,441 | 60,419 | —% | ||
FFO | $ | 15,358 | $ | 16,474 | (6.8)% |
FFO per WA units | $ | 0.25 | $ | 0.27 | (7.4)% |
FFO payout ratio | 56.3% | 78.7% | (28.5)% | ||
AFFO | $ | 11,668 | $ | 12,984 | (10.1)% |
AFFO per WA units | $ | 0.19 | $ | 0.21 | (9.5)% |
AFFO payout ratio | 74.1% | 99.9% | (25.8)% | ||
Fixed charge coverage ratio | 1.9x | 1.9x | —% | ||
(thousands of U.S. dollars, except per unit amounts) | September 30, 2026 | December 31, 2025 | Change % | ||
Total assets | $ | 2,390,234 | $ | 2,357,080 | 1.4% |
Total assets, proportionate interest | $ | 2,484,163 | $ | 2,449,256 | 1.4% |
Debt | $ | 1,304,818 | $ | 1,303,456 | 0.1% |
Debt, proportionate interest | $ | 1,395,098 | $ | 1,392,100 | 0.2% |
Net asset value per unit | $ | 13.95 | $ | 13.65 | 2.2% |
Number of properties | 114 | 115 | (0.9)% | ||
Portfolio occupancy | 93.5% | 94.4% | (1.0)% | ||
Debt / GBV ratio | 54.6% | 55.3% | (1.3)% | ||
About Slate Grocery REIT (TSX: SGR.U / SGR.UN)
Slate Grocery REIT is an owner and operator of U.S. grocery-anchored real estate. The REIT owns and operates critical real estate infrastructure across major U.S. metro markets that communities rely upon for their everyday needs. Visit slategroceryreit.com to learn more about the REIT.
About Slate Asset Management
Slate Asset Management is a global alternative investor and manager focused on essential real estate and infrastructure assets. We focus on fundamentals with the objective of creating long-term value for our investors and partners across the real estate space. We are supported by exceptional people and flexible capital, which enable us to originate and execute on a wide range of compelling investment opportunities. Visit slateam.com to learn more, and follow Slate Asset Management on LinkedIn, X (Twitter), and Instagram.
Supplemental Information & Earnings Call
All interested parties can access Slate Grocery’s Supplemental Information online at slategroceryreit.com in the Investors section. These materials are also available on SEDAR+ or upon request to the REIT at info@slateam.com or (416) 644-4264.
The REIT will not conduct a conference call following the issuance of the release.
Forward Looking Statements
Certain information herein constitutes “forward-looking information” as defined under Canadian securities laws which reflect management’s expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the REIT. The words “plans”, “expects”, “does not expect”, "forecasts", “scheduled”, “estimates”, “intends”, “anticipates”, “does not anticipate”, “projects”, “believes”, or variations of such words and phrases or statements to the effect that certain actions, events or results “may”, “will”, “could”, “would”, “might”, “occur”, “be achieved”, or “continue” and similar expressions identify forward-looking statements. Management believes that the expectations reflected in its forward-looking statements are based upon reasonable assumptions, however, management can give no assurance that actual results, performance or achievements will be consistent with these forward-looking statements. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations.
Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management as of the date hereof, are inherently subject to significant business, economic and competitive uncertainties and contingencies. When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties, and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ, possibly materially, from the results discussed in the forward-looking statements. Additional information about risks and uncertainties is contained in the filings of the REIT with securities regulators.
Non-IFRS Measures
This news release and accompanying financial statements are based on IFRS® Accounting Standards (“IFRS Accounting Standards”), as issued by the International Accounting Standards Board (“IASB”).
We disclose a number of financial measures in this news release that are not measures used under IFRS Accounting Standards, including NOI, same-property NOI, FFO, FFO payout ratio, AFFO, AFFO payout ratio, adjusted EBITDA, fixed charges and the fixed charge coverage ratio, in addition to certain measures on a per unit basis.
- NOI is defined as rental revenue less operating expenses, prior to straight-line rent, International Financial Reporting Interpretations Committee ("IFRIC") 21, Levies ("IFRIC 21") property tax adjustments and adjustments for equity investments. Same-property NOI includes those properties owned by the REIT for each of the current period and the relevant comparative period, excluding those properties under development.
- FFO is defined as net income adjusted for certain items including transaction/disposition costs, change in fair value of properties, change in fair value of financial instruments, deferred income taxes, unit income (expense), adjustments for equity investments, IFRIC 21 property tax adjustments and other expenses.
- AFFO is defined as FFO adjusted for straight-line rental revenue and revenue sustaining capital, leasing costs and tenant improvements.
- FFO payout ratio and AFFO payout ratio are defined as distributions declared divided by FFO and AFFO, respectively.
- FFO per WA unit and AFFO per WA unit are defined as FFO and AFFO divided by the weighted average class U equivalent units outstanding, respectively.
- Adjusted EBITDA is defined as NOI less general and administrative expenses at the REIT's proportionate interest.
- Fixed charges include principal payments and cash interest paid, net at the REIT's proportionate interest.
- Fixed charge coverage ratio is defined as adjusted EBITDA divided by fixed charges at the REIT's proportionate interest.
- Net asset value is defined as the aggregate of the carrying value of the REIT's equity, deferred income taxes and exchangeable units of subsidiaries.
- Proportionate interest represents financial information adjusted to reflect the REIT's equity accounted joint ventures and financial real estate assets and its share of net income (losses) from equity accounted joint ventures and financial real estate assets on a proportionately consolidated basis at the REIT's ownership percentage of the related investment.
We utilize these measures for a variety of reasons, including measuring performance, managing the business, capital allocation and the assessment of risk. Descriptions of why these non-IFRS measures are useful to investors and how management uses each measure are included in Management’s Discussion and Analysis. We believe that providing these performance measures on a supplemental basis to our IFRS Accounting Standards results is helpful to investors in assessing the overall performance of our businesses in a manner similar to management. These financial measures should not be considered as a substitute for similar financial measures calculated in accordance with IFRS Accounting Standards. We caution readers that these non-IFRS financial measures may differ from the calculations disclosed by other businesses, and as a result, may not be comparable to similar measures presented by others.
SGR-FR
Calculation and Reconciliation of Non-IFRS Measures
The table below summarizes a calculation of non-IFRS measures based on financial information in accordance with IFRS Accounting Standards.
Three months ended September 30, | ||||
(in thousands of U.S. dollars, except per unit amounts) | 2026 | 2025 | ||
Rental revenue | $ | 59,199 | $ | 53,313 |
Straight-line rent revenue | (257) | (54) | ||
Property operating expenses | (10,371) | (9,098) | ||
IFRIC 21 property tax adjustment | (7,575) | (6,701) | ||
Contribution from joint venture investments | 2,266 | 5,532 | ||
NOI | $ | 43,262 | $ | 42,992 |
Cash flow from operations | $ | 7,609 | $ | 10,714 |
Changes in non-cash working capital items | 3,204 | 7,373 | ||
Other expenses | 8,664 | — | ||
Disposition costs | (439) | — | ||
Finance charge and mark-to-market adjustments | (1,341) | (1,144) | ||
Interest income and TIF note adjustments | 77 | 145 | ||
Adjustments for joint venture investments | 840 | 3,015 | ||
Non-controlling interest | (3,048) | (3,172) | ||
Taxes on dispositions | 251 | — | ||
Capital expenditures | (2,156) | (1,860) | ||
Leasing costs | (1,043) | (1,026) | ||
Tenant improvements | (950) | (1,061) | ||
AFFO | $ | 11,668 | $ | 12,984 |
Net income | $ | 13,446 | $ | 11,238 |
Change in fair value of financial instruments | (348) | (543) | ||
Other expenses | 8,664 | — | ||
Change in fair value of properties | 750 | 12,132 | ||
Deferred income tax expense | 4,464 | 3,345 | ||
Unit expense | 298 | 2 | ||
Adjustments for joint venture investments | (714) | 961 | ||
Non-controlling interest | (3,878) | (3,960) | ||
Taxes on dispositions | 251 | — | ||
IFRIC 21 property tax adjustment | (7,575) | (6,701) | ||
FFO | $ | 15,358 | $ | 16,474 |
Straight-line rental revenue | (257) | (54) | ||
Capital expenditures | (2,156) | (1,860) | ||
Leasing costs | (1,043) | (1,026) | ||
Tenant improvements | (950) | (1,061) | ||
Adjustments for joint venture investments | (115) | (277) | ||
Non-controlling interest | 831 | 788 | ||
AFFO | $ | 11,668 | $ | 12,984 |
Three months ended September 30, | ||||
(in thousands of U.S. dollars, except per unit amounts) | 2026 | 2025 | ||
NOI | $ | 43,262 | $ | 42,992 |
General and administrative expenses | (4,200) | (4,077) | ||
Cash interest, net | (17,107) | (15,558) | ||
Finance charge and mark-to-market adjustments | (1,341) | (1,144) | ||
Current income tax (expense) recovery | (323) | 407 | ||
Adjustments for joint venture investments | (1,424) | (2,517) | ||
Non-controlling interest | (3,050) | (3,172) | ||
Capital expenditures | (2,156) | (1,860) | ||
Leasing costs | (1,043) | (1,026) | ||
Tenant improvements | (950) | (1,061) | ||
AFFO | $ | 11,668 | $ | 12,984 |
Three months ended September 30, | ||||
(in thousands of U.S. dollars, except per unit amounts) | 2026 | 2025 | ||
Net income | $ | 13,446 | $ | 11,238 |
Interest and finance costs | 18,449 | 16,702 | ||
Change in fair value of financial instruments | (348) | (543) | ||
Other expenses | 8,664 | — | ||
Change in fair value of properties | 750 | 12,132 | ||
Deferred income tax expense | 4,464 | 3,345 | ||
Current income tax expense (recovery) | 574 | (407) | ||
Unit expense | 298 | 2 | ||
Adjustments for joint venture investments | 486 | 3,037 | ||
Straight-line rent revenue | (257) | (54) | ||
IFRIC 21 property tax adjustment | (7,575) | (6,701) | ||
Adjusted EBITDA | $ | 38,951 | $ | 38,751 |
NOI | 43,262 | 42,992 | ||
General and administrative expenses | (4,311) | (4,241) | ||
Adjusted EBITDA | $ | 38,951 | $ | 38,751 |
Cash interest paid | (18,238) | (17,868) | ||
Principal payments | (2,305) | (2,378) | ||
Total fixed charges | $ | (20,543) | $ | (20,246) |
Fixed charge coverage ratio | 1.9x | 1.9x | ||
September 30, 2026 | December 31, 2025 | |||||||||||
(in thousands of U.S. dollars, except per unit amounts) | Statement of Financial Position | Joint Venture Investments | Proportionate Share (Non-IFRS) | Statement of Financial Position | Joint Venture Investments | Proportionate Share (Non-IFRS) | ||||||
ASSETS | ||||||||||||
Non-current assets | ||||||||||||
Properties | $ | 2,244,678 | $ | 149,700 | $ | 2,394,378 | $ | 2,231,184 | $ | 147,000 | $ | 2,378,184 |
Joint venture investments | 62,768 | (62,768) | — | 63,138 | (63,138) | — | ||||||
Interest rate swaps | 9,400 | — | 10,327 | — | — | — | ||||||
Other assets | 3,255 | — | 3,255 | 3,379 | — | 3,379 | ||||||
$ | 2,320,101 | $ | 87,859 | $ | 2,407,960 | $ | 2,297,701 | $ | 83,862 | $ | 2,381,563 | |
Current assets | ||||||||||||
Cash | 27,736 | 2,297 | 30,033 | 21,819 | 2,798 | 24,617 | ||||||
Accounts receivable | 28,239 | 1,165 | 29,404 | 24,774 | 1,117 | 25,891 | ||||||
Other assets | 3,675 | 1,707 | 5,382 | 6,980 | 3,904 | 10,884 | ||||||
Prepaids | 8,478 | 901 | 9,379 | 5,806 | 495 | 6,301 | ||||||
Interest rate swaps | 2,005 | — | 2,005 | — | — | — | ||||||
$ | 70,133 | $ | 6,070 | $ | 76,203 | $ | 59,379 | $ | 8,314 | $ | 67,693 | |
Total assets | $ | 2,390,234 | $ | 93,929 | $ | 2,484,163 | $ | 2,357,080 | $ | 92,176 | $ | 2,449,256 |
LIABILITIES | ||||||||||||
Non-current liabilities | ||||||||||||
Debt | $ | 1,005,850 | $ | 24,671 | $ | 1,030,521 | $ | 1,225,490 | $ | 37,042 | $ | 1,262,532 |
Interest rate swaps | — | — | — | 2,655 | — | 2,655 | ||||||
Deferred income taxes | 170,700 | — | 170,700 | 157,211 | — | 157,211 | ||||||
Other liabilities | 4,917 | 468 | 5,385 | 4,793 | 488 | 5,281 | ||||||
$ | 1,181,467 | $ | 25,139 | $ | 1,206,606 | $ | 1,390,149 | $ | 37,530 | $ | 1,427,679 | |
Current liabilities | ||||||||||||
Debt | 298,968 | 65,609 | 364,577 | 77,966 | 51,602 | 129,568 | ||||||
Accounts payable and accrued liabilities | 56,013 | 3,181 | 59,194 | 39,880 | 3,044 | 42,924 | ||||||
Exchangeable units of subsidiaries | 9,061 | — | 9,061 | 8,612 | — | 8,612 | ||||||
Distributions payable | — | — | — | 4,323 | — | 4,323 | ||||||
$ | 364,042 | $ | 68,790 | $ | 432,832 | $ | 130,781 | $ | 54,646 | $ | 185,427 | |
Total liabilities | $ | 1,545,509 | $ | 93,929 | $ | 1,639,438 | $ | 1,520,930 | $ | 92,176 | $ | 1,613,106 |
EQUITY | ||||||||||||
Unitholders' equity | $ | 663,707 | $ | — | $ | 663,707 | $ | 659,124 | $ | — | $ | 659,124 |
Non-controlling interest | 181,018 | — | 181,018 | 177,026 | — | 177,026 | ||||||
Total equity | $ | 844,725 | $ | — | $ | 844,725 | $ | 836,150 | $ | — | $ | 836,150 |
Total liabilities and equity | $ | 2,390,234 | $ | 93,929 | $ | 2,484,163 | $ | 2,357,080 | $ | 92,176 | $ | 2,449,256 |
Three months ended September 30, 2026 | Three months ended September 30, 2025 | |||||||||||
Statement of Income | Joint Venture Investments | Proportionate Share (Non-IFRS) | Statement of Income | Joint Venture Investments | Proportionate Share (Non-IFRS) | |||||||
Rental revenue | $ | 59,199 | $ | 4,230 | $ | 63,429 | $ | 53,313 | $ | 8,562 | $ | 61,875 |
Property operating expenses | (10,371) | (1,227) | (11,598) | (9,098) | (1,438) | (10,536) | ||||||
General and administrative expenses | (4,200) | (111) | (4,311) | (4,077) | (164) | (4,241) | ||||||
Interest and finance costs | (18,449) | (1,215) | (19,664) | (16,702) | (2,076) | (18,778) | ||||||
Share of income in joint venture investments | 1,669 | (1,669) | — | 2,331 | (2,331) | — | ||||||
Other expenses | (8,664) | — | (8,664) | — | — | — | ||||||
Change in fair value of financial instruments | 348 | 653 | 1,001 | 543 | (87) | 456 | ||||||
Change in fair value of properties | (750) | (661) | (1,411) | (12,132) | (2,466) | (14,598) | ||||||
Net income before income taxes and unit expense | $ | 18,782 | $ | — | $ | 18,782 | $ | 14,178 | $ | — | $ | 14,178 |
Deferred income tax expense | (4,464) | — | (4,464) | (3,345) | — | (3,345) | ||||||
Current income tax (expense) recovery | (574) | — | (574) | 407 | — | 407 | ||||||
Unit expense | (298) | — | (298) | (2) | — | (2) | ||||||
Net income | $ | 13,446 | $ | — | $ | 13,446 | $ | 11,238 | $ | — | $ | 11,238 |
Net income attributable to | ||||||||||||
Unitholders | $ | 7,863 | $ | — | $ | 7,863 | $ | 8,230 | $ | — | $ | 8,230 |
Non-controlling interest | 5,583 | — | 5,583 | 3,008 | — | 3,008 | ||||||
Net Income | $ | 13,446 | $ | — | $ | 13,446 | $ | 11,238 | $ | — | $ | 11,238 |
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