Crombie Real Estate Investment Trust (TSE:CRR.UN) highlighted record occupancy, strong rent growth, and higher per-unit cash flow in its fourth-quarter and year-end 2025 earnings call, while outlining continued investment in grocery-anchored retail and retail-related industrial assets. Management emphasized disciplined execution across its “Building Together” strategy and said it entered 2026 with significant liquidity and a largely fixed-rate debt profile.
2025 performance: record occupancy and rent growth
President and CEO Mark Hawley called 2025 a “standout year,” pointing to four consecutive quarters of record committed occupancy, ending the year at 97.7%. Hawley also cited average annual minimum rent growth of 4.8%, commercial same asset property cash NOI growth of 3.7% (above Crombie’s long-term 2%–3% target), 6.5% growth in AFFO per unit, a distribution increase, and a credit rating upgrade from Morningstar DBRS.
Leasing metrics were a major theme. Cameron said Crombie completed 239,000 square feet of renewals in the fourth quarter at a 10% year-one increase over expiring rental rates. For the full year, Crombie renewed 768,000 square feet at an average 10.4% increase over expiring rents and signed 259,000 square feet of new leases at an average first-year rate of CAD 16.67 per square foot. Hawley added that the weighted average lease term remained 7.9 years.
Portfolio moves: acquisitions, dispositions, and an industrial expansion
Management described continued “high-grading” of the portfolio through acquisitions and dispositions. Hawley said Crombie added five Empire-bannered grocery properties totaling 197,000 square feet for CAD 49.7 million in 2025. The fifth acquisition was The Queensway property, a 3.6-acre, newly constructed 51,000 square foot Longo’s-anchored site with two freestanding bank pads, acquired for CAD 28.5 million (excluding closing and transaction costs). He said the property is 100% leased and operating.
On the disposition side, Hawley said Crombie sold two non-core New Brunswick properties: the 140,000 square foot Main Street office in Moncton, which he said had persistent vacancy, and Loch Lomond Place, a non-grocery retail property in Saint John. He also noted a strategic land swap at Barrington Street in Halifax intended to strengthen Crombie’s position for future development.
Subsequent to quarter-end, Crombie announced a binding agreement to acquire a grocery-related industrial asset in Whitby, Ontario for approximately CAD 115 million (Cameron cited CAD 115.4 million). Hawley described the property as a 42-acre site with a 484,000 square foot high-bay distribution facility, fully leased to Sobeys under a long-term lease. He highlighted 37-foot clear heights, roughly 90 loading dock doors, and approximately 240,000 square feet of temperature-controlled cooler space, along with proximity to Highway 401 and the Whitby GO Station.
Management did not provide a cap rate, noting it does not disclose individual cap rates. On funding, Cameron said Crombie expects to initially finance the Whitby acquisition through its unsecured revolving credit facility and said the company had nothing drawn on the revolver at year-end, adding that it does not need to link the purchase to incremental dispositions.
Development and “Optimize” initiatives
Crombie reiterated a focus on smaller, shorter-duration “non-major” projects, including modernizations, intensifications, and small-scale redevelopments typically under CAD 50 million and often completed within 12 months. Hawley said the REIT targets 6%–8% yields on cost for these projects and noted Crombie completed more than 60 modernization projects with Empire in 2025.
Within the major development pipeline, Hawley said entitlements remained the priority, and of 26 identified major development sites, six are now zoned and three have applications in process. He said The Marlstone in Halifax is the only major project currently under construction, with pre-leasing underway.
Cameron said The Marlstone was progressing on time and on budget, with an estimated CAD 22 million cost to complete at Crombie’s share at year-end and expected 4.5%–5.5% yields on cost. She added that construction financing is expected to convert to CMHC mortgage financing upon completion, with anticipated rates lower than conventional mortgages.
In the Q&A, leasing executives provided additional detail on Marlstone. Executive Vice President of Leasing and Operations Arie Bitan said leasing has begun, with signed applications and tenants expected to move in as of May 1, and occupancy starting in Q2.
Balance sheet, fees, and 2026 commentary
Cameron said Crombie ended the year with CAD 669.2 million of available liquidity (undrawn credit facilities and cash) and an unencumbered asset pool exceeding CAD 3.9 billion in fair value. Leverage metrics included debt to gross fair value of 42.1% and debt to trailing 12-month adjusted EBITDA of 7.69x. Crombie’s interest coverage improved to 3.39x, and Cameron said about 61% of total debt is unsecured, with approximately 97% fixed rate and a weighted average term to maturity of roughly 4 years.
Management and development fees were also a notable contributor. Cameron reported fee revenue of CAD 2.5 million in the fourth quarter (up from CAD 1.4 million a year earlier) and CAD 11.4 million for 2025 (up 113% from CAD 5.3 million in 2024), driven by programmatic partnerships in Halifax and Vancouver and Empire-related projects. In Q&A, management said a baseline of about CAD 2.4 million per quarter from the two programmatic partnerships is considered consistent, with potential upside from additional work.
Looking to 2026, Hawley said Crombie was still targeting 2%–3% long-term same-asset NOI growth but expected to be on the higher end of that range. Management also said it expects continued high tenant demand amid constrained supply, while noting occupancy may fluctuate only modestly from current levels.
On tenant-specific items, management addressed Toys “R” Us, noting a 35,000 square foot exposure and that the lease was terminated in January, with Crombie working with the receiver on a temporary reopening and longer-term backfill options. Hawley also discussed Empire’s announced changes to e-commerce operations in Alberta involving Crombie’s Calgary customer fulfillment centre asset, stating the long-term lease remains in place and Crombie expects no material financial impacts. In Q&A, he said total investment in that property was around CAD 100 million and described it as a 300,000 square foot warehouse under a “very long-term lease.”
About Crombie Real Estate Investment Trust (TSE:CRR.UN)
Crombie Real Estate Investment Trust is a Canada-based open-end REIT that focuses on the retail industry. The company invests, operates, and develops a portfolio of grocery-store- and drugstore-anchored shopping centres, freestanding stores, offices, and mixed-use developments. The properties are located primarily in Canada’s urban and suburban markets. Crombie’s major tenants include retailers such as Sobeys, Shoppers Drug Mart, Cineplex, and Province of Nova Scotia. The company’s property portfolio includes Aberdeen Business Centre, Barrington Place, Brunswick Place, Kenmount Business Centre, Barrington Tower, CIBC Building, Amherst Centre, Avalon Mall, County Fair Mall, and others.
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