Nexus Industrial REIT (NXR-UN) Q4 2025 earnings summary

Executive summary

• Achieved record net operating income of $129.4 million for 2025, up 2.8% year-over-year, and record adjusted EBITDA of $120 million.

• Completed transition to a pure-play industrial REIT, divesting legacy retail and office assets and acquiring high-quality industrial properties in Montreal.

• Strengthened portfolio with two major developments and two acquisitions, adding significant high-quality industrial space, including 440,000 sq. ft. of new development at a 9.4% unlevered return.

• Achieved strong leasing activity, with 1.2 million sq. ft. leased at a 60% average spread over expiring rents.

• Opportunistically sold several non-core and surplus properties, using proceeds to delever and recycle capital.

Financial highlights

• FFO per unit increased to $0.742 and NAV grew to $13.22 per unit for 2025.

• Q4 net income was $30.6 million, down $19.1 million year-over-year due to fair value adjustments.

• Full-year 2025 NOI: $129.4 million, up 2.8% year-over-year; Industrial Same Property NOI up 2.6% to $109.1 million.

• Normalized FFO per unit for 2025: $0.742 (up $0.020); Normalized AFFO per unit: $0.611 (up $0.017).

• AFFO payout ratio (diluted) for 2025: 103.8%, with expectation to average below 100% in 2026.

Outlook and guidance

• Anticipates mid-single digit Same Property NOI growth in 2026, driven by lease-up of vacant space and positive rent spreads.

• Distributions expected to remain sustainable, with payout ratio normalizing below 100% for 2026.

• Targeting rapid deleveraging to achieve investment grade rating, aiming for mid-9x debt-to-EBITDA by year-end.

• Two new development projects to commence in 2026, with potential for mixed lease/sale strategies.

• Expects to benefit from recent developments and acquisitions, including projects in St. Thomas, Calgary, and Montreal.