H&R Real Estate Investment Trust

For Q2 2026, FFO was 24.7¢ per unit, down from 31.4¢ in Q2 2025. The FFO payout ratio was 60.7%. Same-property NOI cash basis declined 0.1% year over year for residential in U.S. dollars, 0.7% for industrial, 6.5% for office excluding the Bouchard termination payment, and 5.9% for retail in U.S. dollars. On the balance sheet, debt to total assets was 41.8%, debt to adjusted EBITDA was 7.1x, and unencumbered assets to unsecured debt coverage was 3.21x. Corporate debt consisted of $550 million of debentures, a $250 million unsecured term loan, and $225 million of lines of credit. H&R also redeemed its $250 million Series R debentures at maturity. Looking ahead, the company said it expects its two REDT properties under development to reach substantial completion next quarter; it also noted the Florida REDT project completed construction in July and received TCOs, with leasing underway. Management did not give traditional quarterly or full-year FFO guidance on this call.

Tom Hofstedter framed the announced transaction as the culmination of a multi-year repositioning plan that included the Primaris spin-out, more than $2.6 billion of nonstrategic asset sales, and leverage reduction from 10x to 7x debt to adjusted EBITDA. He argued there is no single natural buyer for H&R’s complex portfolio, and that the chosen partners are the right buyers for each asset group. His tone was strongly supportive of the deal and emphatic that it maximizes value for unitholders, while also acknowledging that many investors still have questions that will be addressed in the circular.

Cheryl Fried focused on execution and the balance sheet. She highlighted $773 million of assets held for sale at June 30, with $124 million sold after quarter-end, and noted the two Slate properties in Mississauga reached substantial completion in June and are fully leased to a single tenant for roughly 11 years. She also pointed to the 200 Bouchard lease termination payment of $15.7 million, and then the final $56.1 million payment received in July, explaining that the first payment had no impact on Q2 NOI or FFO because of a matching noncash straight-line rent adjustment, though it did benefit cash-basis NOI and AFFO. She closed with leverage and liquidity metrics that remained conservative for a REIT undergoing major asset sales.

There was no Q&A on this call; management explicitly declined to open the lines, saying most answers would be in the upcoming management information circular. Instead, Tom Hofstedter used the closing remarks to address the announced transaction, including why H&R unitholders receive $4.28 per unit in cash plus a rollover stake in the residential platform, and why certain family-controlled units are being redeemed and canceled as part of the structure. He also said Crowell has committed to provide up to approximately $71 million of income support and other payments to Goreit over the first two years after closing.