First Capital Real Estate Investment Trust

Q4 2025 operating FFO was $72 million, up 7% from $68 million in Q4 2024; operating FFO per unit was $0.34, up 6.6% from $0.32. Same-property NOI, excluding bad debt expense and lease termination fees, was $112 million, up $6 million or 5.7% year over year. Full-year 2025 NOI was $466 million, up $11 million, and operating FFO was $286 million, or $1.33 per unit, versus $270 million, or $1.26 per unit, in 2024. For 2026, management guided to same-property NOI growth of approximately 3% excluding lease termination fees and bad debt expense or recovery, development expenditures of $200 million-$240 million, and $55 million-$65 million of retail development/redevelopment deliveries with a stabilized NOI yield of 6.5%-7%.

Adam Paul said 2025 was a very strong year and that leasing outperformed expectations, driving same-property NOI growth and keeping occupancy at 97.1%. He emphasized that the portfolio still has a long runway for rent growth because demand for FCR-type retail space continues to exceed supply. He also highlighted that the REIT remains on track under its 3-year plan, with OFFO growth and debt metrics improving, and framed the 2.5% distribution increase as evidence of confidence in sustainable cash flow growth.

Neil Downey focused on the operating and balance-sheet details, pointing to Q4 same-property NOI of $112 million, Q4 OFFO of $72 million, and full-year OFFO of $286 million. He said G&A was $11 million in Q4 and held flat at $43.5 million for the year, and noted interest expense was $40 million in Q4, versus $42 million a year ago, with the prior-year figure including a $1.7 million realized swap loss. On financing, he said FCR issued $500 million of senior unsecured debentures with an 8.7-year weighted average term at a 149 bps spread, ended the year with more than $700 million of liquidity, and extended the debt ladder to a 4.6-year weighted average term to maturity. He also said 2026 same-property NOI growth should be about 3%, debt servicing will carry about a $6 million annual interest cost increase from the November debenture issuance, and 2026 development spend should be $200 million-$240 million.

Analysts pressed on how much 2026 growth would look like excluding One Bloor East, but management said it was not prepared to provide a property-by-property adjusted number. They also asked about condo monetization and debt-to-EBITDA; management said condo profits will be included in OFFO, while the company still focuses on core recurring FFO and expects Edenbridge and 400 King to deliver cash and deleveraging over time. On leasing risk, management said Toys "R" Us stopped paying rent in January at two locations, but temp tenants are in place and permanent backfills are being negotiated, with rents expected to be higher than Toys paid. Management also said tenant demand remains strong despite macro uncertainty, and that there is no broader unusual turnover expected beyond normal churn.