Crombie REIT Q3 2025: Portfolio Momentum Accelerates with Record Occupancy Rates

Crombie Real Estate Investment Trust (TSX: CRR.UN) wrapped up the third quarter with results that underscore the resilience of its coast-to-coast property holdings. The REIT achieved committed occupancy at 97.5%—the highest level on record—while pushing same-asset cash NOI growth to 4.6%, signaling sustained momentum in its core operations.

Financial Performance Hits Stride

The numbers paint a compelling picture for unit holders. Operating income attributable to Unitholders climbed 16% year-over-year to $30.8 million in Q3 alone. On a year-to-date basis through nine months, FFO per Unit reached $0.97 with 4.3% growth, while AFFO per Unit expanded 7.5% to $0.86. The FFO payout ratio compressed to 67.3% from 72.5% a year prior—a sign of improving cash generation relative to distribution commitments.

Mark Holly, President and CEO, emphasized the consistency: “Over the first nine months of the year, Crombie generated 3.5% same-asset cash NOI growth alongside FFO and AFFO per Unit growth of 4.3% and 7.5%, reinforcing the consistency of our performance and the durability of our strategy.”

Occupancy Strength and Leasing Wins

Occupancy metrics revealed the portfolio’s pull. Committed occupancy jumped 140 basis points year-over-year to 97.5%, while economic occupancy expanded 130 basis points to 97.2%. This wasn’t by accident—new commercial leases added 209,000 square feet at an average first-year rate of $16.68 per square foot.

Renewal activity showcased pricing power. In Q3, Crombie renewed 92,000 square feet with rents 10.6% above expiring rates. When measuring against the weighted average rent across the renewal term, the gain widened to 13.5%—primarily driven by retail renewals that spiked 10.6% over prior terms. This combination of volume and rate expansion demonstrates the cash and carry embedded in the portfolio’s income potential.

Capital Deployment and Balance Sheet Positioning

The REIT remained disciplined on the investment front. During Q3, $14.9 million was allocated to modernizations—enhancing portfolio quality while generating supplemental rent streams. Property revenue climbed 4.9% to $120.1 million, while revenue from management and development services surged 309% to $4.4 million, reflecting diversified income sources.

Balance sheet metrics remained healthy. Debt to gross fair value tightened to 41.9% from 43.6% year-to-date, while the debt-to-trailing-12-month adjusted EBITDA ratio compressed to 7.70x from 7.96x. Available liquidity stood stable at $676.1 million. The weighted average interest rate held at 4.1%, providing some stability amid the rate environment.

Portfolio Composition and Development Pipeline

The portfolio expanded to 306 properties comprising 18.8 million square feet inclusive of joint ventures. Among active projects, Marlstone—a 291-unit residential rental development in Halifax, Nova Scotia—continues construction with completion expected in H1 2026. Non-major development projects carrying an estimated total cost of $67.2 million remain underway, with $18.9 million estimated to complete.

Notably, Crombie announced an acquisition post-quarter: a 100% stake in a 51,000-square-foot grocery-anchored retail property in Etobicoke, Ontario for $28.5 million, acquired from a subsidiary of Empire effective October 30, 2025.

Distribution Guidance and Unitholder Value

The board approved an increase in distributions to $0.90 per Unit annually, effective for Unitholders of record as of August 31, 2025. This move reflects management’s confidence in underlying cash flow sustainability and the durability of the income streams underpinning the portfolio.

The ESG Report was also published this quarter, underscoring Crombie’s commitment to environmental, social, and governance standards across its holdings.

Looking Ahead

Same-asset property cash NOI growth of 3.5% year-to-date, paired with FFO and AFFO per Unit expansion of 4.3% and 7.5% respectively, demonstrates the portfolio’s capacity to compound value. With occupancy rates near all-time highs, leasing momentum intact, and a disciplined balance sheet supporting opportunistic acquisitions, Crombie appears positioned for continued contribution to unit holder returns in the quarters ahead.