Choice Properties Real Estate Investment Trust Reports Results for the Quarter and Year Ended December 31, 2024, and Announces Distribution Increase

TORONTO--(BUSINESS WIRE)--February 12, 2025-- 

Choice Properties Real Estate Investment Trust ("Choice Properties" or the "Trust") (TSX: CHP.UN) today announced its consolidated financial results for the quarter and year ended December 31, 2024. The 2024 Annual Report to Unitholders is available in the Investors section of the Trust's website at www.choicereit.ca, and has been filed on SEDAR+ at www.sedarplus.ca.

"We achieved another year of strong operational and financial results, delivering on our financial outlook and strategic priorities," said Rael Diamond, President and Chief Executive Officer of the Trust. "Our performance continues to be supported by the strength of our necessity-based portfolio and the stability and flexibility provided by our industry-leading balance sheet. We continue to be well-positioned to deliver stable and growing cash flows and are pleased to announce our third consecutive annual distribution increase for unitholders."

2024 Fourth Quarter Highlights

   -- 
 Reported net income for the quarter of $791.9 million compared to a net 
      loss of $445.7 million in the same prior year period. Income in the 
      current quarter is primarily due to a favourable fair value adjustment in 
      the Trust's Exchangeable Units(1). 
 
 
   -- 
 Reported FFO(2) per unit diluted of $0.260, an increase of 2.0% 
      compared to the same prior year period. 
 
 
   -- 
 Period end occupancy was 97.6%: Retail at 97.6%, industrial at 97.9%, 
      and mixed-use & residential at 94.1%. 
 
 
   -- 
 Achieved leasing spreads(3) on long-term renewals of 16.0% and 37.0% in 
      the Retail and Industrial portfolios, respectively. 
 
 
   -- 
 Same-Asset NOI on a cash basis(2) increased by 2.8% compared to the 
      same prior year period. 
 
          -- 
 Retail increased by 2.3%; 
 
 
          -- 
 Industrial increased by 6.4%; and 
 
 
          -- 
 Mixed-use & residential decreased by 1.9%. 
 
 
 
 
   -- 
 Completed $79.2 million of transactions in the quarter, including the 
      acquisition of a retail property, a 50% interest in a distribution centre, 
      and two land parcels, as well as the disposition of three non-core retail 
      properties. 
 
 
   -- 
 Obtained $48.4 million of net new financing in the quarter. 
 
 
   -- 
 Transferred $194.9 million of properties under development to income 
      producing status, delivering approximately 991,000 square feet of new 
      commercial GLA on a proportionate share basis(2), including the Loblaw 
      distribution centre at Choice Caledon Business Park located in Caledon, 
      ON. 
 
 
   -- 
 Invested $55.5 million of capital in development projects on a 
      proportionate share basis(2). 
 

2024 Select Annual Highlights

   -- 
 Reported net income of $784.4 million compared to a net income of 
      $796.7 million in 2023(1). 
 
 
   -- 
 On a full-year comparative basis, the Trust: 
 
          -- 
 Achieved 3.2% growth in Same-Asset NOI on a cash basis(2). 
 
 
          -- 
 Reported FFO(2) per unit diluted of $1.032, an increase of 
             2.9%. 
 
 
          -- 
 Ended the year in a strong liquidity position with $1.5 billion 
             of available credit under the revolving credit facility, a $13.0 
             billion pool of unencumbered assets and Adjusted Debt to 
             EBITDAFV(2) of 7.0x. 
 
 
          -- 
 Delivered Net Asset Value(2) ("NAV") per unit appreciation of 
             $0.40 to end the year at $14.07 per unit. 
 
 
          -- 
 Completed $426.5 million of real estate transactions. 
 
 
          -- 
 Delivered $299.4 million of development projects, adding 1.1 
             million square feet of new commercial retail and industrial space 
             and a new purpose-built residential rental building. 
 
 
 

Subsequent Events

Subsequent to year end, the Trust:

   -- 
 Announced an increase of distributions to $0.77 per unit per annum from 
      the previous rate of $0.76 per unit per annum (an increase of 1.3%). The 
      increase will be effective for Unitholders of record on March 31, 2025. 
 
 
   -- 
 Issued the $300.0 million Series V senior unsecured debentures, bearing 
      interest at 4.29% with a 5-year term. Proceeds were used to repay the 
      $350.0 million Series J senior unsecured debentures upon maturity, 
      bearing interest at 3.55%. 
 
 
   -- 
 Completed a $136.0 million mortgage financing at share secured by the 
      Loblaw distribution centre at Choice Caledon Business Park which was 
      completed in the fourth quarter of 2024, bearing interest at 4.88% with a 
      25-year term. Proceeds were used to repay $26.2 million of the 
      construction loan secured by the property. 
 
 
____________________ 
(1)    Exchangeable Units are required to be classified as financial 
       liabilities at fair value through profit and loss under GAAP. They are 
       recorded at their fair value based on the market trading price of the 
       Trust Units, which results in a negative impact to the financial 
       results when the Trust Unit price rises and a positive impact when the 
       Trust Unit price declines. 
(2)    Refer to Non-GAAP Financial Measures and Additional Financial 
       Information section. 
(3)    Long-term renewal spread is calculated as the difference between the 
       average rate during the renewal term and the expiring rental rate. 
 

Summary of GAAP Basis Financial Results

 
                                     Three Months                               Year Ended 
--------------------   -----------------------------------------  --------------------------------------- 
($ thousands except 
where otherwise 
indicated)             December 31,   December 31,                December 31,  December 31, 
(audited)                      2024           2023     Change $           2024          2023  Change $ 
--------------------   ------------   ------------   ----------   ------------  ------------  -------- 
Net income (loss)      $    791,916   $   (445,684)  $1,237,600   $    784,437  $    796,691  $(12,254) 
 
Net income (loss) per 
 unit diluted                 1.094         (0.616)       1.710          1.084         1.101    (0.017) 
 
Rental revenue              344,861        329,109       15,752      1,358,105     1,309,170    48,935 
 
Fair value gain 
 (loss) on 
 Exchangeable 
 Units(i)                   704,500       (502,649)   1,207,149        237,472       320,587   (83,115) 
 
Fair value (losses) 
 gains excluding 
 Exchangeable 
 Units(ii)                  (50,439)       (49,310)      (1,129)        57,606        51,082     6,524 
 
Cash flows from 
 operating 
 activities                 242,441        207,667       34,774        724,729       641,972    82,757 
 
Weighted average 
 number of units 
 outstanding - 
 diluted(iii)           723,726,328    723,662,727       63,601    723,680,890   723,666,503    14,387 
---------------------   -----------    -----------    ---------    -----------   -----------   ------- 
 
 
 
(i)      Exchangeable Units are required to be classified as financial 
         liabilities at fair value through profit and loss under GAAP. They 
         are recorded at their fair value based on the market trading price of 
         the Trust Units, which results in a negative impact to the financial 
         results when the Trust Unit price rises and a positive impact when 
         the Trust Unit price declines. 
(ii)     Fair value gains (losses) excluding Exchangeable Units includes 
         adjustments to fair value of investment properties, investment in 
         real estate securities, and unit-based compensation. 
(iii)    Includes Trust Units and Exchangeable Units. 
 

Quarterly Results

Choice Properties reported a net income of $791.9 million for the three months ended December 31, 2024 compared to a net loss of $445.7 million in the same prior year period. The increase of $1,237.6 million compared to the prior year period was primarily due to changes in certain non-cash adjustments to fair value including:

   -- 
 a $1,207.1 million favourable change in the adjustment to fair value of 
      the Trust's Exchangeable Units due to the decrease in the Trust's unit 
      price; and 
 
 
   -- 
 a $58.3 million favourable change in the adjustment to fair value of 
      investment properties; partially offset by 
 
 
   -- 
 a $62.8 million unfavourable change in the adjustment to fair value of 
      the investment in real estate securities of Allied, driven by the 
      decrease in Allied's unit price in the quarter. 
 

Annual Results

Choice Properties reported a net income of $784.4 million for the year ended December 31, 2024 compared to a net income of $796.7 million in the prior year. The decrease of $12.3 million compared to the prior year was primarily due to changes in certain non-cash adjustments to fair value including:

   -- 
 a $83.1 million unfavourable change in the adjustment to fair value of 
      the Trust's Exchangeable Units due to the change in the Trust's unit 
      price; and 
 
 
   -- 
 a $21.4 million unfavourable change in the adjustment to fair value of 
      investment properties; partially offset by 
 
 
   -- 
 a $28.2 million favourable change in the adjustment to fair value of 
      the investment in real estate securities of Allied, driven by change in 
      Allied's unit price year over year. 
 

The changes described above were partially offset by a $36.4 million increase in net operating income and a reversal of a $38.6 million transaction related provision during the second quarter of 2024 that was determined to be no longer required.

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February 12, 2025 18:21 ET (23:21 GMT)