Slate Grocery REIT Reports First Quarter 2026 Results

TORONTO--(BUSINESS WIRE)--Slate Grocery REIT (TSX: SGR.U) (TSX: SGR.UN) (the "REIT"), an owner and operator of U.S. grocery-anchored real estate, today announced its financial results and highlights for the three months ended March 31, 2026.

"Our first quarter results reflect the enduring strength and resilience of grocery-anchored real estate," said Blair Welch, Chief Executive Officer of Slate Grocery REIT. "We completed over 725,000 square feet of leasing at double-digit rental spreads, highlighting the embedded growth and pricing power within our portfolio. With rents that remain meaningfully below market, a stable balance sheet, and sustained demand for high-quality grocery spaces, we believe we are well-positioned for continued strong performance."

For the CEO's letter to unitholders for the quarter, please follow the link here.

Highlights¹

• The REIT completed over 725,000 square feet of total leasing throughout the quarter at consistently high rental spreads that continue to drive strong performance
  • Renewals were completed at 18.9% above expiring rents, and new deals were completed at 49.0% above comparable average in-place rent
  • Adjusting for completed redevelopments, same-property Net Operating Income (“NOI”) increased by 3.5 million or 2.1% in the first quarter on a trailing twelve-month basis
  • Portfolio occupancy remained stable at 94.4% as at March 31, 2026
  • The REIT's average in-place rent of $12.98 per square foot remains well below the market average of $24.59², providing meaningful runway for continued rent increases
    
    
• The REIT has a weighted average interest rate of 5.0%¹, with 90.2%¹ of its debt having a fixed interest rate, providing a stable outlook for the REIT's near term financing costs
  • The REIT's weighted average capitalization rate remains well above its weighted average interest rate for outstanding debt, allowing the REIT to maintain positive leverage; this attractive valuation, combined with continued NOI growth, is expected to increase portfolio valuation over time

^1Includes the REIT's share of joint venture investments. Refer to “Non-IFRS Measures” section below.

^2CBRE Econometric Advisors, Q1 2026.

Summary of Q1 2026 Results

	Three months ended March 31,
(thousands of U.S. dollars, except per unit amounts)			2026			2025	Change %
Rental revenue		$	59,322		$	53,067		11.8%
NOI^1 2		$	42,478		$	41,239		3.0%
Net income ^2		$	18,897		$	16,082		17.5%
Same-property NOI (3 month period, 113 properties) ^1 2		$	41,892		$	40,647		3.1%
Same-property NOI (12 month period, 113 properties) ^1 2		$	166,802		$	163,575		2.0%
New leasing (square feet) ^2			113,272			43,098		162.8%
New leasing spread ^2			49.0%			22.2%		120.7%
Total leasing (square feet) ^2			725,657			222,886		225.6%
Total leasing spread ^2			15.3%			15.6%		(1.9)%
New leasing – anchor / junior anchor ^2			59,480			11,000		440.7%
Weighted average number of units outstanding ("WA units")			60,448			60,385		0.1%
FFO^1 2		$	15,043		$	15,757		(4.5)%
FFO per WA units^1 2		$	0.25		$	0.26		(3.9)%
FFO payout ratio^1 2			86.2%			82.3%		4.7%
AFFO ^1 2		$	11,593		$	12,388		(6.4)%
AFFO per WA units^1 2		$	0.19		$	0.21		(9.5)%
AFFO payout ratio^1 2			111.9%			104.7%		6.9%
Fixed charge coverage ratio^1		1.9x			1.9x			— %
(thousands of U.S. dollars, except per unit amounts)	March 31, 2026			December 31, 2025			Change %
Total assets		$	2,367,702		$	2,357,080		0.5%
Total assets, proportionate interest ^1 2		$	2,462,409		$	2,449,256		0.5%
Debt		$	1,303,096		$	1,303,453		— %
Debt, proportionate interest ^1 2		$	1,393,814		$	1,392,097		0.1%
Net asset value per unit		$	13.79		$	13.65		1.0%
Number of properties ^2			115			115		— %
Portfolio occupancy^2			94.4%			94.4%		— %
Debt / GBV ratio			55.0%			55.3 %		(0.5)%
^(1) Refer to “Non-IFRS Measures” section below.
^(2) Includes the REIT's share of joint venture investments.

Conference Call and Webcast

Due to scheduling considerations, senior management will be foregoing the previously announced live conference call scheduled for 9:00 am ET on Wednesday, May 13, 2026. The REIT’s financial results and supplemental materials have been filed on SEDAR+ and are also available on the REIT’s website in the Investors section. For any questions related to the REIT’s financial results or ongoing business initiatives, please contact the REIT’s investor relations ream at [e-mail] or [phone].

About Slate Grocery REIT (TSX: SGR.U / SGR.UN)

Slate Grocery REIT is an owner and operator of U.S. grocery-anchored real estate. The REIT owns and operates critical real estate infrastructure across major U.S. metro markets that communities rely upon for their everyday needs. The REIT’s resilient grocery-anchored portfolio and strong credit tenants are expected to provide unitholders with durable cash flows and the potential for capital appreciation over the longer term. Visit slategroceryreit.com to learn more about the REIT.

About Slate Asset Management

Slate Asset Management is a global alternative investor and manager focused on essential real estate and infrastructure assets. We focus on fundamentals with the objective of creating long-term value for our investors and partners across the real estate space. We are supported by exceptional people and flexible capital, which enable us to originate and execute on a wide range of compelling investment opportunities. Visit slateam.com to learn more, and follow Slate Asset Management on LinkedIn, X (Twitter), and Instagram.

Supplemental Information

All interested parties can access Slate Grocery’s Supplemental Information online at slategroceryreit.com in the Investors section. These materials are also available on SEDAR+ or upon request to the REIT at [e-mail] or [phone].

Forward Looking Statements

Certain information herein constitutes “forward-looking information” as defined under Canadian securities laws which reflect management’s expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the REIT. The words “plans”, “expects”, “does not expect”, "forecasts", “scheduled”, “estimates”, “intends”, “anticipates”, “does not anticipate”, “projects”, “believes”, or variations of such words and phrases or statements to the effect that certain actions, events or results “may”, “will”, “could”, “would”, “might”, “occur”, “be achieved”, or “continue” and similar expressions identify forward-looking statements. Management believes that the expectations reflected in its forward-looking statements are based upon reasonable assumptions, however, management can give no assurance that actual results, performance or achievements will be consistent with these forward-looking statements. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations.

Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management as of the date hereof, are inherently subject to significant business, economic and competitive uncertainties and contingencies. When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties, and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ, possibly materially, from the results discussed in the forward-looking statements. Additional information about risks and uncertainties is contained in the filings of the REIT with securities regulators.

Non-IFRS Measures

This news release and accompanying financial statements are based on IFRS® Accounting Standards (“IFRS Accounting Standards”), as issued by the International Accounting Standards Board (“IASB”).

We disclose a number of financial measures in this news release that are not measures used under IFRS Accounting Standards, including NOI, same-property NOI, FFO, FFO payout ratio, AFFO, AFFO payout ratio, adjusted EBITDA, fixed charges and the fixed charge coverage ratio, in addition to certain measures on a per unit basis.

• NOI is defined as rental revenue less operating expenses, prior to straight-line rent, International Financial Reporting Interpretations Committee ("IFRIC") 21, Levies ("IFRIC 21") property tax adjustments and adjustments for equity investments. Same-property NOI includes those properties owned by the REIT for each of the current period and the relevant comparative period, excluding those properties under development.

• FFO is defined as net income adjusted for certain items including transaction/disposition costs, change in fair value of properties, change in fair value of financial instruments, deferred income taxes, unit income (expense), adjustments for equity investments, IFRIC 21 property tax adjustments and other expenses.

• AFFO is defined as FFO adjusted for straight-line rental revenue and revenue sustaining capital, leasing costs and tenant improvements.

• FFO payout ratio and AFFO payout ratio are defined as distributions declared divided by FFO and AFFO, respectively.

• FFO per WA unit and AFFO per WA unit are defined as FFO and AFFO divided by the weighted average class U equivalent units outstanding, respectively.

• Adjusted EBITDA is defined as NOI less general and administrative expenses at the REIT's proportionate interest.

• Fixed charges include principal payments and cash interest paid, net at the REIT's proportionate interest.

• Fixed charge coverage ratio is defined as adjusted EBITDA divided by fixed charges at the REIT's proportionate interest.

• Net asset value is defined as the aggregate of the carrying value of the REIT's equity, deferred income taxes and exchangeable units of subsidiaries.

• Proportionate interest represents financial information adjusted to reflect the REIT's equity accounted joint ventures and financial real estate assets and its share of net income (losses) from equity accounted joint ventures and financial real estate assets on a proportionately consolidated basis at the REIT's ownership percentage of the related investment.

We utilize these measures for a variety of reasons, including measuring performance, managing the business, capital allocation and the assessment of risk. Descriptions of why these non-IFRS measures are useful to investors and how management uses each measure are included in Management’s Discussion and Analysis. We believe that providing these performance measures on a supplemental basis to our IFRS Accounting Standards results is helpful to investors in assessing the overall performance of our businesses in a manner similar to management. These financial measures should not be considered as a substitute for similar financial measures calculated in accordance with IFRS Accounting Standards. We caution readers that these non-IFRS financial measures may differ from the calculations disclosed by other businesses, and as a result, may not be comparable to similar measures presented by others.

SGR-FR

 

Calculation and Reconciliation of Non-IFRS Measures

The table below summarizes a calculation of non-IFRS measures based on financial information in accordance with IFRS Accounting Standards.

	Three months ended March 31,
(in thousands of U.S. dollars, except per unit amounts)			2026		2025
Rental revenue		$	59,322	$	53,067
Straight-line rent revenue			(302)		(201)
Property operating expenses			(41,690)		(38,071)
IFRIC 21 property tax adjustment			22,773		20,867
Contribution from joint venture investments			2,375		5,577
NOI^1 2		$	42,478	$	41,239
Cash flow from operations		$	24,095	$	19,559
Changes in non-cash working capital items			(6,356)		(2,543)
Other expenses			1,080		—
Finance charge and mark-to-market adjustments			(1,327)		(1,014)
Interest income and TIF note adjustments			109		155
Adjustments for joint venture investments			829		2,763
Non-controlling interest			(3,062)		(3,232)
Capital expenditures			(1,481)		(1,169)
Leasing costs			(1,158)		(633)
Tenant improvements			(1,136)		(1,498)
AFFO^1 2		$	11,593	$	12,388
Net income^2		$	18,897	$	16,082
Change in fair value of financial instruments			(707)		1,214
Other expenses			1,080		—
Change in fair value of properties			(27,297)		(20,299)
Deferred income tax expense			4,759		3,035
Unit (income) expense			(94)		452
Adjustments for joint venture investments			(490)		(1,605)
Non-controlling interest			(3,878)		(3,989)
IFRIC 21 property tax adjustment			22,773		20,867
FFO^1 2		$	15,043	$	15,757
Straight-line rental revenue			(302)		(201)
Capital expenditures			(1,481)		(1,169)
Leasing costs			(1,158)		(633)
Tenant improvements			(1,136)		(1,498)
Adjustments for joint venture investments			(189)		(625)
Non-controlling interest			816		757
AFFO^1 2		$	11,593	$	12,388
^(1) Refer to “Non-IFRS Measures” section above. ^(2) Includes the REIT's share of joint venture investments.
	Three months ended March 31,
(in thousands of U.S. dollars, except per unit amounts)			2026		2025
NOI^1 2		$	42,478	$	41,239
General and administrative expenses			(4,038)		(4,198)
Cash interest, net			(16,643)		(14,226)
Finance charge and mark-to-market adjustments			(1,327)		(1,014)
Current income tax expense			(494)		(67)
Adjustments for joint venture investments			(1,546)		(2,814)
Non-controlling interest			(3,062)		(3,232)
Capital expenditures			(1,481)		(1,169)
Leasing costs			(1,158)		(633)
Tenant improvements			(1,136)		(1,498)
AFFO^1 2		$	11,593	$	12,388
^(1) Refer to “Non-IFRS Measures” section above.
^(2) ^Includes the REIT's share of joint venture investments.

	Three months ended March 31,
(in thousands of U.S. dollars, except per unit amounts)			2026		2025
Net income ^1		$	18,897	$	16,082
Interest and finance costs			17,970		15,240
Change in fair value of financial instruments			(707)		1,214
Other expenses			1,080		—
Change in fair value of properties			(27,297)		(20,299)
Deferred income tax expense			4,759		3,035
Current income tax expense			494		67
Unit (income) expense			(94)		452
Adjustments for joint venture investments			767		286
Straight-line rent revenue			(302)		(201)
IFRIC 21 property tax adjustment			22,773		20,867
Adjusted EBITDA^1 2		$	38,340	$	36,743
NOI^1 2			42,478		41,239
General and administrative expenses ^1 2			(4,138)		(4,496)
Adjusted EBITDA^1 2		$	38,340	$	36,743
Cash interest paid			(17,819)		(16,452)
Principal payments			(2,305)		(2,854)
Total fixed charges^1		$	(20,124)	$	(19,306)
Fixed charge coverage ratio^1 2		1.9x		1.9x
^(1) Includes the REIT's share of joint venture investments.
^(2) Refer to “Non-IFRS Measures” section above.

	March 31, 2026									December 31, 2025
(in thousands of U.S. dollars, except per unit amounts)	Statement of Financial Position			Joint Venture Investments			Proportionate Share (Non-IFRS)			Statement of Financial Position			Joint Venture Investments			Proportionate Share (Non-IFRS)
ASSETS
Non-current assets
Properties		$	2,226,138		$	147,800		$	2,373,938		$	2,231,184		$	147,000		$	2,378,184
Joint venture investments			62,368			(62,368)			—			63,138			(63,138)			—
Interest rate swaps			1,624			31			1,655			—			—			—
Other assets			3,203			—			3,203			3,379			—			3,379
		$	2,293,333		$	85,463		$	2,378,796		$	2,297,701		$	83,862		$	2,381,563
Current assets
Cash			25,153			2,481			27,634			21,819			2,798			24,617
Accounts receivable			24,492			1,407			25,899			24,774			1,117			25,891
Property held for sale			16,200			—			16,200			—			—			—
Other assets			3,400			4,345			7,745			6,980			3,904			10,884
Prepaids			5,021			1,011			6,032			5,806			495			6,301
Interest rate swaps			103			—			103			—			—			—
		$	74,369		$	9,244		$	83,613		$	59,379		$	8,314		$	67,693
Total assets		$	2,367,702		$	94,707		$	2,462,409		$	2,357,080		$	92,176		$	2,449,256
LIABILITIES
Non-current liabilities
Debt		$	1,295,336		$	54,400		$	1,349,736		$	1,225,490		$	37,042		$	1,262,532
Interest rate swaps			322			—			322			2,655			—			2,655
Deferred income taxes			162,778			—			162,778			157,211			—			157,211
Other liabilities			4,930			492			5,422			4,793			488			5,281
		$	1,463,366		$	54,892		$	1,518,258		$	1,390,149		$	37,530		$	1,427,679
Current liabilities
Debt			7,760			36,318			44,078			77,966			51,602			129,568
Accounts payable and accrued liabilities			42,517			3,497			46,014			39,880			3,044			42,924
Exchangeable units of subsidiaries			8,443			—			8,443			8,612			—			8,612
Distributions payable			4,323			—			4,323			4,323			—			4,323
		$	63,043		$	39,815		$	102,858		$	130,781		$	54,646		$	185,427
Total liabilities		$	1,526,409		$	94,707		$	1,621,116		$	1,520,930		$	92,176		$	1,613,106
EQUITY
Unitholders' equity		$	662,469		$	—		$	662,469		$	659,124		$	—		$	659,124
Non-controlling interest			178,824			—			178,824			177,026			—			177,026
Total equity		$	841,293		$	—		$	841,293		$	836,150		$	—		$	836,150
Total liabilities and equity		$	2,367,702		$	94,707		$	2,462,409		$	2,357,080		$	92,176		$	2,449,256

	Three months ended March 31, 2026									Three months ended March 31, 2025
	Statement of Income			Joint Venture Investments			Proportionate Share (Non-IFRS)			Statement of Income			Joint Venture Investments			Proportionate Share (Non-IFRS)
Rental revenue		$	59,322		$	4,116		$	63,438		$	53,067		$	8,527		$	61,594
Property operating expenses			(41,690)			(4,319)			(46,009)			(38,071)			(7,158)			(45,229)
General and administrative expenses			(4,038)			(100)			(4,138)			(4,198)			(298)			(4,496)
Interest and finance costs			(17,970)			(1,247)			(19,217)			(15,240)			(1,891)			(17,131)
Share of income in joint venture investments			1,508			(1,508)			—			4,993			(4,993)			—
Other expenses			(1,080)			—			(1,080)			—			—			—
Change in fair value of financial instruments			707			31			738			(1,214)			(81)			(1,295)
Change in fair value of properties			27,297			3,027			30,324			20,299			5,894			26,193
Net income before income taxes and unit expense		$	24,056		$	—		$	24,056		$	19,636		$	—		$	19,636
Deferred income tax expense			(4,759)			—			(4,759)			(3,035)			—			(3,035)
Current income tax expense			(494)			—			(494)			(67)			—			(67)
Unit income (expense)			94			—			94			(452)			—			(452)
Net income		$	18,897		$	—		$	18,897		$	16,082		$	—		$	16,082
Net income attributable to
Unitholders		$	14,374		$	—		$	14,374		$	12,302		$	—		$	12,302
Non-controlling interest			4,523			—			4,523			3,780			—			3,780
Net Income		$	18,897		$	—		$	18,897		$	16,082		$	—		$	16,082