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Aggregate Sale Price: $70.5 million from the sale of two industrial and two retail properties in Canada.
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Debt to Gross Book Value: 39.2% at March 31, down from 40.2% at December 31.
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Net Asset Value per Unit: $13.76 at March 31, compared to $13.75 at December 31.
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Occupancy Rate: 89.1% at March 31, slightly down from 89.2% at December 31.
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Leasing Activity: New 80,000 sq ft lease in Minnesota and a 99,000 sq ft seven-year renewal in Arizona.
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Renewal Increase: 4% weighted average increase on 123,000 sq ft of renewals.
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Same Property NOI Increase: 4.5% in mixed dollars.
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Credit Facilities: $520 million in new three-year senior secured credit facilities, with $39 million drawn on the revolving credit facility and $170 million on the non-revolving credit facility as of March 31.
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Mortgage Debt Maturities: $275 million maturing in 2025, with plans to extend, repay, or renew portions.
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NCIB Purchases: 1,825,666 common units at $7.58 per unit, 31,000 Series E, and 14,400 Series I preferred units at $20.75 per unit.
Release Date: May 09, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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Artis Real Estate Investment Trust (ARESF) successfully reduced its debt to gross book value ratio from 40.2% to 39.2% by the end of Q1 2025.
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The company executed significant leasing activities, including an 80,000 square foot lease in Minnesota and a 99,000 square foot renewal in Arizona.
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Artis Real Estate Investment Trust (ARESF) reported a 4.5% increase in same property net operating income (NOI) for the quarter.
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The company has been actively buying back units at a significant discount to net asset value (NAV), enhancing unit holder value.
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Artis Real Estate Investment Trust (ARESF) has secured new credit facilities totaling $520 million, providing financial flexibility for future operations.
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The company’s payout ratios were higher than desired, with income and AFFO metrics expected to remain lumpy.
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Occupancy rates slightly decreased to 89.1% from 89.2% at the end of the previous quarter.
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Artis Real Estate Investment Trust (ARESF) faces $275 million in mortgage debt maturing in 2025, requiring strategic management.
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The company anticipates continued asset dispositions, which may impact short-term income and leverage ratios.
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Despite strategic efforts, Artis Real Estate Investment Trust (ARESF) continues to trade at a significant discount to its IFRS fair value.
Q: With the lumpy income strategy, are you confident that Artis can cover the dividend with full-year AFFO, maybe not this year, but going forward? A: (Samir Manji, CEO) We believe that over the medium to longer term, the successful execution of our strategy will result in generating sufficient AFFO to cover the full-year distribution. While there may be instances where the payout ratio exceeds 100%, we remain confident in our strategy’s ability to cover the distribution in the long term.
Q: Are you comfortable with the current 40% leverage, and can we expect the disposition program to slow down? A: (Samir Manji, CEO) We intend to continue monetizing assets strategically to maintain liquidity and reduce leverage further to around 35%. This will provide us with dry powder to allocate capital opportunistically in the future.
Q: When might we see Artis start to make acquisitions, and will you focus on Canada or the US? A: (Samir Manji, CEO) We anticipate allocating capital to growth opportunities in the second half of 2025. While we have cross-border operations, we will likely focus on Canada and US markets where we already have a presence.
Q: How much in additional assets do you plan to sell in the next 12 months? A: (Samir Manji, CEO) Ideally, we aim to monetize another $300 million to $400 million of assets over the course of 2025, depending on market conditions and opportunities.
Q: Given the significant discount to IFRS fair value, how much patience does Artis have to continue its current strategy? A: (Samir Manji, CEO) We are focused on controlling what we can and making decisions that maximize value for our unit holders. While macro factors are beyond our control, we believe that with stabilizing interest rates, we may see a correction in public markets or increased M&A activity, which could help achieve our goals.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.