Company Announcements

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REIT generates robust leasing activity, completing 172,600 square feet of new and renewed leases with a weighted average lease term of 7.8 years and 1.4% positive leasing spread on renewed leases

TORONTO , March 17, 2026 /CNW/ - True North Commercial Real Estate Investment Trust (TSX: TNT.UN) (the "REIT") today announced its financial results for the three months ended December 31, 2025 ("Q4-2025") and year ended December 31, 2025 ("YTD-2025").

"We are pleased with the continued leasing momentum during Q4-2025 and completion of an additional non-core property sale," said Daniel Drimmer, the REIT's Chief Executive Officer. "The REIT continues to focus on strengthening its financial position, maintaining its strong leasing momentum and enhancing long term value for our unitholders."

Q4-2025 highlights

• The REIT's core portfolio occupancy⁽¹⁾ at the end of Q4-2025 was approximately 90% with a weighted average lease term ("WALT")⁽¹⁾ of 4.3 years.
• The REIT contractually leased or renewed approximately 172,600 square feet with a WALT of 7.8 years achieving positive leasing spreads on renewals of 1.4% for Q4-2025.
• The REIT's revenue increased from $31,682 in three months ended December 31, 2024 ("Q4-2024") to $40,331 in Q4-2025 representing a 27.3% increase (YTD-2025 - increased by 2.5%) primarily due to Q4-2025 including $12,400 of early termination income related to a strategically executed lease termination for one of the REIT's Ottawa properties. Excluding the impact of the Ottawa property described above, Q4-2025 revenue would have declined by approximately 3.0% primarily attributable to two properties in the REIT's Greater Toronto Area ("GTA") portfolio that had higher vacancy during Q4-2025 than Q4-2024 with such vacant space having been re-leased with move-ins scheduled in 2026.
• The REIT's net operating income ("NOI")⁽¹⁾ increased by approximately 63.3% in Q4-2025 relative to Q4-2024 primarily driven by the termination income noted above.
• Q4-2025 same property net operating income ("Same Property NOI")⁽¹⁾ excluding the impact of termination income and free rent in both periods decreased by approximately 2.2% (YTD-2025 - 3.8%) primarily due to a reduction in occupancy in Q4-2025 relative to Q4-2024 isolated to certain properties in British Columbia, Ottawa and GTA with the GTA space having been re-leased to new tenants commencing in 2026, partially offset by contractual rent increases achieved by the REIT.
• The REIT's Q4-2025 funds from operations ("FFO")⁽¹⁾ and adjusted funds from operations ("AFFO")⁽¹⁾  increased by $9,471 and $10,345 (YTD-2025 - $4,263 and $3,738), respectively when compared to the same period in 2024 primarily due to the termination income described above, offset by the reduction in NOI excluding termination income as well as increase in interest costs.
• Q4-2025 FFO and AFFO basic and diluted per trust units ("Unit")⁽¹⁾ increased from $0.61 and $0.60 in Q4-2024 to $1.27 and $1.26 in Q4-2025 and AFFO basic and diluted per Unit increased from $0.63 and $0.62 in Q4-2024 to $1.35 and $1.34 in Q4-2025, respectively, due to the reasons outlined above for the changes in FFO and AFFO, as well as the impact of a reduction in the number of the outstanding Units as a result of repurchases under the normal course issuer bid (the "NCIB") program during 2024 and 2025. Excluding termination income, Q4-2025 diluted FFO and AFFO would have decreased by $0.17 and $0.11, respectively, relative to Q4-2024.

YTD highlights

• The REIT contractually leased and renewed approximately 778,500 square feet with a WALT of 6.0 years and a 1.7% increase over expiring base rents.
• During the first half of 2025, the REIT completed the repurchase of 110,700 Units for cash of $1,021 under the NCIB program at a weighted average price of $9.23 per Unit. No Units were repurchased during second half of 2025.
• On March 18, 2025, the REIT announced the reinstatement of the monthly distribution ("Distribution Reinstatement") to Unitholders, which commenced with a record date of March 31, 2025, payable on April 15, 2025, amounting to $0.0575 per Unit per month. For YTD-2025, the REIT's AFFO payout ratio⁽¹⁾ was 20%.
• During YTD-2025, the REIT successfully completed the renewal or refinancing of all debt maturing in 2025, including $250,036 of refinancing and $8,500 of new financing at a weighted average interest rate of approximately 4.82% and weighted average term of approximately 2.96 years. For the REIT's 2026 debt maturities, $47,025 of the approximate $242,000 of the debt maturing in 2026 has been refinanced at a weighted average interest rate of 4.48% and weighted average term of 5.00 years (see "Subsequent Events"). The remaining debt maturities in 2026 occur late in Q3-2026 and thereafter, and involve lenders with whom the REIT has longstanding and strong relationships. The REIT continues to proactively manage its debt maturity profile to strengthen the REIT's financial position.

Subsequent events

On January 2, 2026, the REIT collected $12,400 of early lease termination income (net of excise tax payable by the REIT) from a tenant, which was included in tenant receivables within the REIT's consolidated financial statement as at December 31, 2025.

Subsequent to December 31, 2025, the REIT successfully completed $47,025 of refinancing at a weighted average interest rate of 4.48% and weighted average term of 5.00 years.

Key performance indicators

Operating results

The REIT's revenue increased from $31,682 in Q4-2024 to $40,331 in Q4-2025 representing a 27.3% increase (YTD-2025 - increased by 2.5%) primarily due to Q4-2025 including $12,400 of early termination income related to a strategically executed lease termination related to one of the REIT's Ottawa properties and partially offset by a one-time non-recurring charge to write-off $1,609 of unamortized straight line rent adjustments relating to the same lease. Excluding the impact of the Ottawa property with the early termination income noted, Q4-2025 revenue would have declined by $898 or approximately 3.0% primarily attributable to two properties in the REIT's GTA portfolio that had higher vacancy during Q4-2025 than Q4-2024 with such vacant space having been re-leased with move-ins scheduled in 2026.

The REIT's NOI increased by approximately 63.3% in Q4-2025 relative to Q4-2024 primarily driven by the termination income noted above included in Q4-2025.

The REIT's Q4-2025 FFO and AFFO increased by $9,471 and $10,345 (YTD-2025 - $4,263 and $3,738), respectively when compared to the same period in 2024 primarily due to the termination income associated with a strategically executed lease termination by a tenant in the REIT's Ottawa portfolio, offset by the reduction in NOI excluding termination income and increase in interest costs.

FFO basic and diluted per Unit increased from $0.61 and $0.60 in Q4-2024 to $1.27 and $1.26 in Q4-2025 and AFFO basic and diluted per Unit increased from $0.63 and $0.62 in Q4-2024 to $1.35 and $1.34 in Q4-2025, respectively, due to the reasons outlined above for the changes in FFO and AFFO, as well as the impact of a reduction in the number of the outstanding Units as a result of repurchases under the NCIB program during 2024 and 2025. Excluding termination income, Q4-2025 diluted FFO and AFFO would have decreased by $0.17 and $0.11, respectively, relative to Q4-2024.

On March 18, 2025, the REIT announced the Distribution Reinstatement to Unitholders, which commenced with a record date of March 31, 2025, payable on April 15, 2025, amounting to $0.0575 per Unit per month. For YTD-2025, the REIT's AFFO payout ratio was 20%.

Same Property NOI

Q4-2025 Same Property NOI excluding assets held for sale increased by approximately 63.0% (YTD-2025 - 13.3%) compared to the same period in 2024 primarily due to Q4-2025 including $12,400 of early termination income. Q4-2025 Same Property NOI excluding the impact of termination income and free rent in both periods, decreased by approximately 2.0% primarily due to a reduction in occupancy in Q4-2025 relative to Q4-2024 for the REIT's British Columbia portfolio, one Ottawa property and one GTA property, of which the GTA space has been re-leased with new tenants commencing in 2026, partially offset by contractual rent increases achieved by the REIT. The REIT continues to focus on leasing activity and continues to maintain above occupancy levels across its portfolio.

Q4-2025 Alberta Same Property NOI remained relatively consistent with Q4-2024. Q4-2025 British Columbia Same Property NOI decreased by 37.1% primarily as a result of an expiring lease that was not renewed at the beginning of 2025 with the REIT continuing to focus on re-leasing such space.

Q4-2025 New Brunswick Same Property NOI remained relatively consistent with Q4-2024. Q4-2025 Nova Scotia Same Property NOI increased by 11.8% as a result of the increase in occupancy between the two periods as well as contractual rent increases.

Q4-2025 Ontario Same Property NOI increased by 96.8% relative to Q4-2024 primarily due to the termination income associated with a strategically executed lease termination by a tenant in the REIT's Ottawa portfolio. Q4-2025 Same Property NOI excluding termination income and free rent for Ontario portfolio, decreased by 2.2% primarily due to reductions in occupancy at one of the REIT's Ottawa properties and two of the REIT's GTA properties, with that space having been re-leased to new tenants commencing in 2026.

Debt and liquidity

As at December 31, 2025, the REIT had access to available funds ("Available Funds")⁽¹⁾ of approximately $41,956 with its mortgage portfolio carrying a weighted average term to maturity of 2.21 years and weighted average fixed interest rate of 4.41%.

During YTD-2025, the REIT successfully completed $250,036 of refinancing making up all the 2025 maturities and $8,500 of new financing at a weighted average interest rate of approximately 4.82% and weighted average term of approximately 2.96 years. Subsequent to December 31, 2025, the REIT successfully completed $47,025 of refinancing at a weighted average interest rate of 4.48% and weighted average term of 5.00 years

About the REIT

The REIT is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. The REIT currently owns and operates a portfolio of 37 commercial properties consisting of approximately 4.4 million square feet in urban and select strategic secondary markets across Canada focusing on long term leases with government and credit rated tenants.

The REIT is focused on growing its portfolio principally through acquisitions across Canada and such other jurisdictions where opportunities exist. Additional information concerning the REIT is available at www.sedarplus.ca or the REIT's website at www.truenorthreit.com.

Non-IFRS measures

Certain terms used in this press release such as FFO, AFFO, FFO and AFFO payout ratios, NOI, Same Property NOI, indebtedness ("Indebtedness"), gross book value ("GBV"), Indebtedness to GBV ratio, net earnings before interest, tax, depreciation and amortization and fair value gain (loss) on financial instruments and investment properties ("Adjusted EBITDA"), interest coverage ratio, net asset value ("NAV") per Unit, Available Funds, occupancy and WALT are not measures defined by IFRS Accounting Standards ("IFRS") as prescribed by the International Accounting Standards Board, do not have standardized meanings prescribed by IFRS and should not be compared to or construed as alternatives to profit/loss, cash flow from operating activities or other measures of financial performance calculated in accordance with IFRS. FFO, AFFO, FFO and AFFO payout ratios, NOI, Same Property NOI, Indebtedness, GBV, Indebtedness to GBV ratio, Adjusted EBITDA, interest coverage ratio, adjusted cash provided by operating activities, NAV per Unit, Available Funds, occupancy and WALT as computed by the REIT may not be comparable to similar measures presented by other issuers. The REIT uses these measures to better assess the REIT's underlying performance and provides these additional measures so that investors may do the same. Details on non-IFRS measures are set out in the REIT's Management's Discussion and Analysis for Q4-2025 and the Annual Information Form are available on the REIT's profile at www.sedarplus.ca.

Reconciliation of non-IFRS financial measures

The following tables reconcile the non-IFRS financial measures to the comparable IFRS measures for Q4-2025, Q4-2024, YTD-2025 and YTD-2024. These non-IFRS financial measures do not have any standardized meanings prescribed by IFRS and may not be comparable to similar measures presented by other issuers.

NOI

The following table calculates the REIT's NOI, a non-IFRS financial measure:

Same Property NOI

Same Property NOI is measured as the NOI for the properties owned and operated by the REIT for the current and comparative period. The following table reconciles the REIT's Same Property NOI to NOI:

FFO and AFFO

The following table reconciles the REIT's FFO and AFFO to net loss and comprehensive loss, for Q4-2025, Q4-2024, YTD-2025 and YTD-2024:

Indebtedness to GBV ratio

The table below calculates the REIT's Indebtedness to GBV ratio as at December 31, 2025 and December 31, 2024. The Indebtedness to GBV ratio is calculated by dividing the Indebtedness by GBV:

Adjusted EBITDA

The table below reconciles the REIT's Adjusted EBITDA to net loss and comprehensive loss for YTD-2025 and YTD-2024:

Interest coverage ratio

The table below calculates the REIT's interest coverage ratio for YTD-2025 and YTD-2024. The interest coverage ratio is calculated by dividing Adjusted EBITDA by interest expense.

Available Funds

The table below calculates the REIT's Available Funds as at December 31, 2025 and December 31, 2024:

Forward-looking statements

Certain statements contained in this press release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking statements are provided for the purposes of assisting the reader in understanding the REIT's financial performance, financial position and cash flows as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future. Readers are cautioned that such statements may not be appropriate for other purposes. Forward-looking information may relate to future results, performance, debt financing, achievements, events, prospects or opportunities for the REIT or the real estate industry and may include statements regarding the financial position, business strategy, budgets, projected costs, capital expenditures, financial results, taxes, distributions, plans, the benefits and renewal of the NCIB, or through other capital programs and objectives of or involving the REIT. In some cases, forward-looking information can be identified by such terms as "may", "might", "will", "could", "should", "would", "expect", "plan", "anticipate", "believe", "intend", "seek", "aim", "estimate", "target", "goal", "project", "predict", "forecast", "potential", "continue", "likely", or the negative thereof or other similar expressions suggesting future outcomes or events.

Forward-looking statements involve known and unknown risks and uncertainties, which may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, assumptions may not be correct and objectives, strategic goals and priorities may not be achieved. A variety of factors, many of which are beyond the REIT's control, affect the operations, performance and results of the REIT and its business, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to: risks and uncertainties related to the Units and trading value of the Units; risks related to the REIT and its business; fluctuating interest rates and general economic conditions, including potential higher levels of inflation; the impact of any tariffs and retaliatory tariffs on the economy, credit, market, operational and liquidity risks generally; occupancy levels and defaults, including the failure to fulfill contractual obligations by tenants; lease renewals and rental increases; the ability to re-lease and secure new tenants for vacant space; the timing and ability of the REIT to acquire or sell certain properties; work-from-home flexibility initiatives on the business, operations and financial condition of the REIT and its tenants, as well as on consumer behavior and the economy in general; the ability to enforce leases, perform capital expenditure work, increase rents, raise capital through the issuance of the Units or other securities of the REIT; the benefits of any NCIB program, or through other capital programs, the ability of the REIT to continue to pay distributions in future periods; and obtain mortgage financing on the REIT's properties and for potential acquisitions or to refinance debt at maturity on similar terms. The foregoing is not an exhaustive list of factors that may affect the REIT's forward-looking statements. Other risks and uncertainties not presently known to the REIT could also cause actual results or events to differ materially from those expressed in its forward-looking statements. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements as there can be no assurance actual results will be consistent with such forward-looking statements.

Information contained in forward-looking statements is based upon certain material assumptions applied in drawing a conclusion or making a forecast or projection, including management's perception of historical trends, current conditions and expected future developments, as well as other considerations believed to be appropriate in the circumstances. There can be no assurance regarding: (a) work-from-home initiatives on the REIT's business, operations and performance, including the performance of its Units; (b) the its's ability to mitigate any impacts related to fluctuating interest rates, potential higher levels of inflation, the impact of any current or future tariffs and the shift to hybrid working; (c) the factors, risks and uncertainties expressed above in regards to the hybrid work environment on the commercial real estate industry and property occupancy levels; (d) credit, market, operational, and liquidity risks generally; (e) the availability of investment opportunities for growth in Canada and the timing and ability of the REIT to acquire or sell certain properties; (f) repurchasing the Units under the NCIB; (g) Starlight Group Property Holdings Inc., or any of its affiliates, continuing as asset manager of the REIT in accordance with its current asset management agreement; (h) the benefits of the NCIB, or through other capital programs; (i) the availability of debt financing for potential acquisitions or refinancing loans at maturity on similar terms; (j) the ability of the REIT to continue to pay distributions in future periods and (k) other risks inherent to the REIT's business and/or factors beyond its control which could have a material adverse effect on the REIT.

The forward-looking statements made relate only to events or information as of the date on which the statements are made. Except as specifically required by applicable Canadian law, the REIT undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

SOURCE True North Commercial Real Estate Investment Trust