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.

• Added 440,000 sq. ft. of new development with an unlevered return of 9.4% on costs, including major projects in St. Thomas and Calgary.

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

• Entering 2026 with strong momentum and well-positioned for growth despite a challenging economic environment.

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 year-over-year due to fair value adjustments; full-year net income was $59.5 million.

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

• Weighted average cap rate increased by 3 bps to 5.8% in Q4.

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 de-levering to achieve investment grade (mid-9x debt/EBITDA) by year-end 2026.

• Two new development projects to commence in 2026, with completion expected next year.

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