Leon’s Furniture Limited has put a $1.17-billion appraised value on its Canadian real estate portfolio, bringing new attention to a collection of properties accumulated over more than a century and to the retailer’s longstanding plan to establish a publicly traded real estate investment trust.
The valuation provides a clearer picture of the property holdings sitting beneath one of Canada’s largest home furnishings retailers. Leon’s has identified approximately 50 owned properties encompassing about 5.5 million square feet and 430 acres of land, including retail locations, distribution facilities and sites with redevelopment potential.
Many of those assets have been owned for years or decades and remain recorded on the company’s balance sheet at historical cost. In investor materials earlier this year, Leon’s highlighted a carrying value of more than $284 million for the portfolio, well below the newly disclosed appraisal.
Management says the valuation was commissioned to establish a market-based reference for assets whose current value is not reflected in their historical accounting figures.
“I think analysts have taken a shot at what the value of our real estate is or was, and we thought it was time and important for us to establish a market-based reference point for our portfolio,” CFO Victor Diab told analysts during Leon’s second-quarter earnings call.
Diab said the appraisal validates what the company has been saying about the value of its holdings for several years. The disclosure comes as Leon’s continues to pursue a strategy that could eventually place a portion of those properties into a publicly traded REIT, with the retailer maintaining a majority interest in the new vehicle.
A National Real Estate Portfolio Built Over Generations
Leon’s property holdings stretch across Canada, with the largest concentrations in Ontario and Alberta.
Company investor materials indicate Ontario accounts for approximately 40 per cent of the portfolio, followed by Alberta at 27 per cent. British Columbia represents about 10 per cent, Quebec nine per cent, Saskatchewan and Nova Scotia five per cent each, and Manitoba approximately four per cent.
Leon’s describes the portfolio as the product of more than 100 years of property accumulation. Founded in 1909, the company has historically owned many of the properties supporting its retail and distribution operations, leaving it with a sizeable asset base as land values increased and Canadian cities expanded around some longstanding locations.
The holdings include large-format stores, warehouses and distribution properties, some accompanied by substantial parcels of land. Leon’s has identified opportunities to intensify or redevelop portions of the portfolio as its retail and distribution requirements evolve.
The company’s overall physical footprint, including leased locations, is considerably larger than the owned portfolio. The land and buildings held directly by Leon’s, however, have increasingly become a strategic part of the business.
Decades of Ownership Create a Wide Valuation Gap
The $1.17-billion appraisal puts the value accumulated within those properties into perspective.
Real estate acquired decades ago can remain recorded at amounts far below current market values. Leon’s March 2026 investor materials put the portfolio’s carrying value at more than $284 million, meaning the new appraisal is more than four times that figure.
The difference does not represent an immediate gain or cash available to the company. It does show how little the historical balance-sheet value says about what the portfolio could be worth in today’s market.
Stifel Managing Director and analyst Martin Landry calculated that substituting the newly disclosed market value for the historical carrying value of Leon’s real estate would increase book value per share by approximately 66 per cent, from roughly $18 to about $30.
That gap has been one of the considerations behind Leon’s efforts to surface more of the value associated with its property holdings.
REIT Strategy Dates Back to 2023
Leon’s first announced its intention to create a REIT in May 2023 as part of a broader strategy for its real estate portfolio.
At the time, the company was evaluating structures that included an initial public offering or a spinout. By November 2023, Leon’s board had approved plans to create the REIT through an IPO.
Under the model subsequently outlined by the company, Leon’s would contribute a portfolio of income-producing properties to the REIT and retain an ownership interest of more than 50 per cent at launch. The REIT is also expected to have an independent management team.
Not every Leon’s property is expected to move into the vehicle at once. Company materials describe a longer-term strategy under which LFL can continue owning and developing properties, with additional completed income-producing assets potentially transferred into the REIT over time.
That would create a pipeline of future properties while leaving development opportunities within LFL. The REIT could eventually acquire assets beyond those occupied by Leon’s businesses, giving it scope to develop a more diversified real estate portfolio.
Leon’s continues to describe the REIT as a strategic priority, although management has not established a launch date and says timing remains dependent on market conditions and regulatory approvals.
Toronto Site Shows the Development Opportunity
One of the clearest examples of the potential embedded in Leon’s land holdings sits near the intersection of Highways 401 and 400 in Toronto.
The company controls more than 40 acres in the area, including properties on Gordon Mackay Road and Suntract Road that have long housed Leon’s corporate operations. Leon’s has occupied the site since the company went public in 1969.
The land is now being positioned for a substantially more intensive use.
In 2024, Leon’s announced plans for a major mixed-use redevelopment after a change in the property’s land-use designation opened the site to a broader range of uses. The long-term concept includes approximately 4,000 residential units along with retail, commercial and community space.
Leon’s has said the first phase is expected to include a new flagship store and corporate headquarters, with residential development to follow. Plans contemplate townhouses as well as mid- and high-rise buildings, and the company expects to work with development partners as the project moves forward.
The Toronto site illustrates how the economics of a longstanding retail property can change as the surrounding city develops. Land acquired to accommodate a store, offices and related operations decades ago can eventually support considerably greater density while allowing Leon’s to maintain a presence on the property.
Burlington Offers Another Example
A sizeable Leon’s property in Burlington, Ont., provides another example of the redevelopment opportunities management sees within the portfolio.
The approximately 32-acre site includes a roughly 73,000-square-foot retail store and a warehouse of approximately the same size. Leon’s has identified development potential associated with the property’s zoning and existing configuration.
The Burlington site also shows that the real estate strategy extends beyond the large Toronto redevelopment.
Leon’s has discussed optimizing some stores toward smaller, higher-traffic footprints where comparable profitability can be maintained. On large owned sites, changing the amount of space required for retail operations could create opportunities to use portions of the land differently over time.
The company’s retail and property strategies are therefore increasingly connected. Changes to the store network can influence how much land is required for existing operations, while redevelopment can create additional value from properties already owned by LFL.
Edmonton Distribution Centre Adds Another Piece
Leon’s is also consolidating ownership of a major distribution property in Western Canada.
The company has agreed to acquire the remaining 50-per-cent interest in its Edmonton distribution centre for $45.75 million in cash, giving LFL full ownership once the transaction closes. The facility is an important part of the company’s Western Canadian distribution network and also houses The Brick’s corporate headquarters.
Management has presented the transaction in operational terms. CEO Mike Walsh has described the property as a high-quality asset that is already central to LFL’s business, with full ownership representing a disciplined investment in a facility the company knows well.
Stifel sees a possible additional significance.
Landry highlighted the Edmonton acquisition alongside the newly disclosed $1.17-billion appraisal and said the developments may represent steps toward positioning Leon’s to eventually proceed with the REIT process.
Leon’s has not said the Edmonton acquisition was undertaken to facilitate the REIT, and management has given no indication that an IPO is imminent. Full ownership gives the company greater control over a strategically important distribution property regardless of how the asset fits into its longer-term real estate plans.
Is a Leon’s REIT Getting Closer?
The recent developments add another chapter to a real estate strategy that has been taking shape for more than three years.
Leon’s now has a defined plan to create the REIT through an IPO, an identified national portfolio, a pipeline of development opportunities and an independent appraisal placing the property holdings at $1.17 billion. The company is also continuing to invest directly in its real estate while advancing large-scale redevelopment planning on selected sites.
Asked about the REIT during the second-quarter earnings call, Diab reiterated the company’s interest but stopped short of providing a timetable.
“It does remain a strategic priority for us,” he said, adding that market conditions and regulatory approvals continue to factor into the timing.
The appraisal and Edmonton transaction do not establish that an IPO is approaching. They do provide considerably more visibility into the assets behind the proposed REIT and the value Leon’s believes has accumulated within its property portfolio.
Stifel Sees Substantial Real Estate Value
Stifel’s analysis illustrates why the eventual structure has attracted investor attention.
The firm estimates that Leon’s real estate could represent approximately $13 to $15 per share. In a more optimistic sum-of-the-parts scenario, Stifel estimates the retail operating business at approximately $25 per share, producing a theoretical combined value of about $38 to $40 per share when the real estate component is included.
Landry also identifies considerable uncertainty around any eventual transaction. The outcome would depend on which assets Leon’s transfers into the REIT, how investors value the remaining retail operation, the timing of the transaction and how LFL uses any proceeds.
A REIT would also change the relationship between parts of the retail operation and the underlying properties. Depending on the final structure, stores or facilities currently owned directly by LFL could become leased locations occupied by the retailer, while Leon’s retains a significant ownership position in the real estate vehicle.
Development could add another dimension. Properties completed or repositioned by LFL could provide future assets for the REIT, creating a potential connection between the company’s land-development pipeline and the growth of the real estate vehicle.
A Billion-Dollar Property Business Beneath the Retailer
For much of Leon’s history, its real estate served the practical needs of a growing furniture and appliance business. Decades of property ownership have left the company with something considerably larger.
Large parcels can support intensification, while existing retail footprints can be reconsidered as store formats evolve. Development projects can create new income-producing properties, and selected assets could eventually become part of a publicly traded real estate platform.
The strategy remains closely tied to the retail company. Leon’s plans to retain majority ownership of the REIT at launch, and many of the properties under consideration support the operations of Leon’s, The Brick and other LFL businesses.
There is still no timetable for an IPO, and management continues to point to market conditions and regulatory approvals when discussing when the REIT might proceed. The new appraisal nevertheless puts a much clearer number on what Leon’s has accumulated: approximately 50 properties, 5.5 million square feet and 430 acres of land now carrying an appraised value of $1.17 billion.
For a company best known for selling furniture and appliances, real estate has become an increasingly significant part of the Leon’s story.
