Tricon Residential Inc.

Q3 net income from continuing operations was $81 million versus $178 million last year, including $73 million of fair value gains on rental properties versus $107 million last year. Core FFO per share was $0.14, down $0.01 year over year, and AFFO per share was $0.11 with a 46% AFFO payout ratio. IFRS book value was $14.30, or CAD 19.30, up just over 4% year over year. Same-home NOI grew 6%, same-home NOI margin was 68.5%, occupancy was 97.4%, turnover was 18.8%, and blended rent growth was 6.8%. On the full year, management reiterated Core FFO per share guidance of $0.55 to $0.58, tightened same-home revenue/expense/NOI growth guidance to 6% to 6.5%, and lowered acquisitions guidance to 1,850 homes. Management said annualized AFFO less dividends is about $60 million and liquidity is $433 million.

Gary Berman framed the quarter as evidence that the business is performing well despite a difficult macro backdrop, emphasizing durable SFR fundamentals, loss-to-lease recapture, and a resident-friendly operating model. He highlighted capital recycling, a planned JV-3 with lower leverage, and the Canadian multifamily build-to-core portfolio as key long-term value drivers. His tone was confident and upbeat, but he repeatedly stressed discipline, balance sheet flexibility, and patience on acquisitions.

Wissam Francis said the quarter was solid and pointed to the main drivers of the year-over-year FFO change: strong SFR NOI was offset by higher borrowing costs, lower acquisition and performance fees, and the absence of Core FFO from the sold U.S. multifamily portfolio. He said overhead expenses were down 4% year over year, the company had repaid or extended all remaining 2023 maturities, and the 2017-2 securitization is on track for refinancing, with all-in debt cost expected around 6.2% to 6.4% based on current indications. He also said the ERP implementation could cost about $7 million to $10 million overall and should start contributing to efficiency in 2024.

Analysts pressed management on shareholder proposals to mark rents to market faster, cut overhead, and exit Canadian multifamily; Gary Berman declined to comment on specific strategy suggestions but said the stock is mispriced and there is significant upside for patient investors. Questions also focused on JV-3 sizing and funding, refinancing costs, and whether higher cap-rate sales should be used to pay down debt or repurchase stock; management said JV-3 should have lower leverage, a smaller co-investment for Tricon, and that capital allocation next year could include debt reduction or buybacks. On rent growth, Gary said the portfolio has about $40 million of annualized revenue opportunity from loss-to-lease and that renewal increases of about 6% to 7% annually could be possible over the next few years, subject to the economy.