Key Takeaways
- • Nexus Industrial REIT (TSX: NXR.UN) reported Q1 2026 net income of $32.2 million, with NOI up 5.4% year over year to $33.8 million.
- • Normalized AFFO payout ratio improved to 96.6% from 104.1% a year earlier, moving the REIT toward its 2026 guidance of a ratio below 100% for the full year.
- • The REIT completed an inaugural $500 million bond issuance in April 2026 and achieved an investment grade credit rating, per CEO Kelly Hanczyk.
- • Industrial in-place and committed occupancy fell 100 basis points to 95% from year-end 2025, while leasing of 41,177 sq. ft. was completed at an average spread of 32% over expiring rents.
- • Industrial Same Property NOI grew just 1.0% to $29.8 million, and Normalized FFO per unit declined to $0.182 from $0.187.
Summary
Nexus Industrial REIT (TSX: NXR.UN) reported first quarter 2026 results for the period ended March 31, 2026, in a release issued May 11, 2026 via GlobeNewswire. The Toronto-based REIT posted net income of $32.2 million, compared with $33.2 million in the same period of 2025. The decline was driven by lower fair value gains on investment properties, partially offset by a $11.3 million increase in fair value adjustments on derivative instruments. Net operating income rose 5.4% to $33.8 million, primarily from completed developments and newly acquired industrial properties, despite the disposal of 19 legacy retail, office and industrial properties in 2025 and one industrial property in the first quarter of 2026.
Operating metrics were mixed. Industrial Same Property NOI increased 1.0% to $29.8 million, down from 6.6% growth a year earlier. Normalized AFFO per unit rose to $0.162 from $0.154, while Normalized FFO per unit eased to $0.182 from $0.187. The Normalized AFFO payout ratio improved to 96.6% from 104.1%. Industrial occupancy, on an in-place and committed basis, stood at 95%, down from 96% at year-end 2025. The REIT completed 41,177 sq. ft. of leasing at an average spread of 32% over expiring and in-place rents. NAV per unit rose $0.07 to $13.29 from December 31, 2025, and unitholders' equity increased $21.2 million to $1.1 billion, or $15.38 per unit.
Balance sheet activity was a central theme of the release. The REIT sold an industrial property in Calgary, Alberta for $8.5 million. Subsequent to quarter-end, on April 14, 2026, it issued $300.0 million of 4.236% Series A senior unsecured debentures due 2029 and $200.0 million of 4.641% Series B debentures due 2031, receiving $498.5 million net of fees. Proceeds were used to retire a $200.0 million term loan and pay down $292.0 million on the revolving facility. Net debt rose to $1.33 billion from $1.31 billion at year-end, while the Total Indebtedness Ratio reached 49.5%. CEO Kelly Hanczyk said the results marked progress toward the REIT's 2026 payout guidance and described the investment grade rating and bond issuance as reducing the cost of capital.
Operating metrics were mixed. Industrial Same Property NOI increased 1.0% to $29.8 million, down from 6.6% growth a year earlier. Normalized AFFO per unit rose to $0.162 from $0.154, while Normalized FFO per unit eased to $0.182 from $0.187. The Normalized AFFO payout ratio improved to 96.6% from 104.1%. Industrial occupancy, on an in-place and committed basis, stood at 95%, down from 96% at year-end 2025. The REIT completed 41,177 sq. ft. of leasing at an average spread of 32% over expiring and in-place rents. NAV per unit rose $0.07 to $13.29 from December 31, 2025, and unitholders' equity increased $21.2 million to $1.1 billion, or $15.38 per unit.
Balance sheet activity was a central theme of the release. The REIT sold an industrial property in Calgary, Alberta for $8.5 million. Subsequent to quarter-end, on April 14, 2026, it issued $300.0 million of 4.236% Series A senior unsecured debentures due 2029 and $200.0 million of 4.641% Series B debentures due 2031, receiving $498.5 million net of fees. Proceeds were used to retire a $200.0 million term loan and pay down $292.0 million on the revolving facility. Net debt rose to $1.33 billion from $1.31 billion at year-end, while the Total Indebtedness Ratio reached 49.5%. CEO Kelly Hanczyk said the results marked progress toward the REIT's 2026 payout guidance and described the investment grade rating and bond issuance as reducing the cost of capital.
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