Automotive Properties Real Estate Investment Trust reported a 19.9 per cent increase in rental revenue in the third quarter of 2026, driven primarily by property acquisitions and contractual rent increases.
The Toronto-based REIT, which owns automotive dealership and service properties across Canada and the United States, recorded rental revenue of $30.5 million for the three months ended Sept. 30, compared with $25.4 million in the same period last year.
“We continue to generate double-digit growth in rental revenue, cash NOI, and AFFO reflecting the positive impact of our property acquisitions during 2025 and to date in 2026, and our organic growth through contractual rent increases,” said CEO Milton Lamb. “We remain focused on opportunities to expand our property portfolio in prime metropolitan markets in Canada and the U.S. to drive continued growth. Subsequent to quarter end, we further expanded our presence in the U.S. sunbelt through the acquisition of a long-term leased Tesla facility in the greater Greensboro area in North Carolina.”
Acquisitions drive revenue and income growth
Cash net operating income (NOI) increased 18.6 per cent to $24.9 million, while adjusted funds from operations (AFFO) rose 15.8 per cent to $14.7 million, compared with $12.7 million in the third quarter of 2025.
AFFO per unit on a diluted basis increased to 26 cents from 25.2 cents a year earlier. The REIT’s AFFO payout ratio improved to 80 per cent from 81 per cent.
Net income and other comprehensive income totalled $35 million, up from $10.4 million in the year-earlier quarter. The increase reflected higher operating income and fair value adjustments to investment properties and interest rate swaps, partially offset by higher interest costs.
Same-property cash NOI, which excludes the impact of acquisitions and dispositions, increased 2.3 per cent to $21.3 million.
For the first nine months of 2026, rental revenue reached $89.8 million, up 21.5 per cent from $73.9 million in the same period last year. Cash NOI increased 19 per cent to $73.4 million, while AFFO rose 17.9 per cent to $44.5 million.
REIT increases distributions and completes property transaction
The REIT’s trustees approved an approximately two per cent increase in its annual cash distribution, from 82.2 cents to 83.9 cents per unit. The increased monthly distribution of 6.99 cents took effect with the August 2026 payment.
During the quarter, the REIT sold a 50 per cent interest in an automotive dealership property at 9088 Jane Street in Vaughan, Ont., to a member of the Dilawri Group for $16 million. The REIT retained the remaining half interest.
The property is now occupied by a Dilawri affiliate operating a Kia dealership under a 16-year triple-net lease.
REIT expands into North Carolina
After the quarter ended, on Oct. 1, the REIT acquired a Tesla sales, service and delivery facility in High Point, N.C., for approximately $30 million.
The property comprises about 50,000 square feet on nearly six acres and is leased to Tesla under a long-term net lease.
As of Sept. 30, the REIT reported a debt-to-gross-book-value ratio of 47.1 per cent, $48.5 million in available capacity under its revolving credit facilities and 11 unencumbered properties valued at approximately $166.1 million.
The REIT’s portfolio consists of 96 income-producing commercial properties totalling approximately 3.5 million square feet across Canada and the United States.
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