Automotive Properties Real Estate Investment Trust reported higher revenue and adjusted funds from operations in the first quarter as the real estate investment trust benefited from a series of property acquisitions completed over the past year.
The Toronto-based REIT said adjusted funds from operations, or AFFO, rose 19.1 per cent to $14.8 million for the quarter ended March 31, up from $12.4 million a year earlier. Diluted AFFO per unit increased to a record $0.262 from $0.247 in the same period last year.
Rental revenue for the quarter totalled $29.1 million, up 21.7 per cent from $23.9 million in the first quarter of 2025, while cash net operating income increased 19 per cent to $23.8 million.
“Our strong first quarter performance reflects the positive impact of the 13 property acquisitions we completed in 2025 and the partial contributions of two additional property acquisitions we completed during the quarter,” said Milton Lamb, chief executive of Automotive Properties REIT. “We generated strong year-over-year growth of 21.7% in rental revenue and 19.0% in cash NOI, resulting in record quarterly AFFO per unit.”
The REIT attributed the increase in revenue, funds from operations and cash net operating income primarily to properties acquired during and after the first quarter of 2025, as well as contractual rent increases.
Net income and comprehensive income for the quarter totalled $25.3 million, compared with $7.6 million a year earlier. The REIT said the increase reflected higher net operating income and changes in non-cash fair value adjustments tied to investment properties and interest rate swaps, partly offset by higher interest costs and changes related to unit-based compensation.
Funds from operations, or FFO, increased 20.4 per cent to $15.2 million, while diluted FFO per unit rose to $0.268 from $0.251 a year earlier.
The REIT declared regular cash distributions of $0.206 per unit during the quarter, up from $0.201 per unit a year earlier. Its AFFO payout ratio declined to 78.6 per cent from 81.4 per cent in the prior-year quarter.
During the quarter, the REIT completed two acquisitions funded primarily through its revolving credit facilities.
On Jan. 1, the company acquired a Hyundai dealership property in Québec City for approximately $13.25 million. On March 26, it acquired a Rivian automotive and service property in Vista, Calif., for US$16 million.
Subsequent to the end of the quarter, the REIT acquired two dealership properties in Santa Ana, Calif., for US$30.15 million. The properties, which house Audi South Coast and South Coast Volkswagen dealerships, are leased to Penske Automotive Group Inc.
“Subsequent to quarter end, we completed an additional property acquisition in southern California, adding two more dealership properties to our portfolio,” Lamb said. “We look forward to building on our positive momentum in the year ahead, supported by a growing property portfolio featuring high-quality tenants providing essential automotive retail and services, 100% occupancy and rent collection, locations in prime metropolitan markets featuring GDP and population growth, an attractive net lease structure, and embedded fixed or CPI-adjusted rental growth.”
As of March 31, the REIT’s debt-to-gross-book-value ratio stood at 46.3 per cent, compared with 43.8 per cent a year earlier. It also reported $69 million of undrawn capacity under its revolving credit facilities, $1 million in cash on hand and 11 unencumbered properties valued at approximately $152.9 million.
As of the date of the earnings release, the REIT said its debt-to-gross-book-value ratio had risen to 47.8 per cent following the April acquisition, while undrawn credit capacity stood at approximately $32.5 million. The trust also reported 13 unencumbered properties with an aggregate value of approximately $195.4 million.
The REIT said 77 per cent of its debt was fixed as of March 31, with a weighted average interest rate of 4.48 per cent.
Automotive Properties REIT said it continues to monitor risks related to inflation, interest rates, currency fluctuations and trade restrictions, including tariffs and broader geopolitical uncertainty.
The trust said it expects continued consolidation in the Canadian and U.S. automotive dealership and service sector over the medium to long term, driven by increasing capital requirements and efforts by operators to achieve greater scale.
The REIT’s portfolio includes 95 income-producing commercial properties across Canada and the United States, representing approximately 3.5 million square feet of gross leasable area.
More from Retail Insider:
