Mr. Mark Holly reports

CROMBIE ANNOUNCES FIRST QUARTER 2024 RESULTS

Crombie Real Estate Investment Trust has released its results for its first quarter ended March 31, 2024. Management will host a conference call to discuss the results at 12:00 p.m. (EDT), May 9, 2024.

"Crombie's unwavering focus on operational excellence and financial strength, once again, guided us to deliver solid and consistent quarterly results," said Mark Holly, President and CEO. "In the first quarter, our residential asset, The Village at Bronte Harbour, reached occupancy stabilization and secured CMHC financing. We also advanced key priorities including the substantial completion of our 52,000 square foot retail-related industrial asset in Calgary, Alberta, co-owned with Empire. It is our dedication to pursuing strategic initiatives, paired with a strong financial condition, that position us well for sustained growth and value creation."

FIRST QUARTER SUMMARY

(In thousands of Canadian dollars, except per Unit amounts and square feet and as otherwise noted)

Operational Highlights

Committed occupancy 96.2% and economic occupancy 95.7%; a 50 basis point decrease and a 120 basis point increase, respectively, compared to the first quarter of 2023

Renewals of 249,000 square feet at rents 10.1% above expiring rental rates (an increase of 10.6% using the weighted average rent during the renewal term)

The Village at Bronte Harbour reached occupancy stabilization in the first quarter of 2024, ending the quarter with committed occupancy of 93.3%

Financial Highlights

Completed offering of $200,000 Series L senior unsecured notes maturing March 29, 2030, bearing an interest rate of 5.14% per annum

Closed on a 4.35% mortgage loan of $243,457, with our joint venture partner, for a residential property held within an equity-accounted investment maturing June 1, 2029

  
   Three months ended March 31,           
                                                  2024       2023       Variance %      
Property revenue (1)                              $ 118,609  $ 112,449  $ 6,160  5.5 %  
Revenue from management and development services  $ 749      $ -        $ 749    100.0 %
Operating income attributable to Unitholders      $ 26,205   $ 25,173   $ 1,032  4.1 %  
FFO (2) per Unit - basic                          $ 0.30     $ 0.30     $ -      - %    
AFFO (2) per Unit - basic                         $ 0.26     $ 0.26     $ -      - %    
Same-asset property cash NOI (2)                  $ 76,532   $ 74,141   $ 2,391  3.2 %  
Available Liquidity                               $ 736,990  $ 735,877  $ 1,113  0.2 %  
Debt to gross fair value (2)(3)                   42.9 %     41.9 %              1.0 %  
Debt to trailing 12 months adjusted EBITDA (2)(3) 7.97x      7.96x      0.01x    0.1 %  

Information in this press release is a select summary of results. This press release should be read in conjunction with Crombie's Management's Discussion and Analysis for the quarter ended March 31, 2024 and Consolidated Financial Statements and Notes for the quarters ended March 31, 2024, and March 31, 2023. Full details on our results can be found at www.crombie.ca and www.sedarplus.ca.

Operational Metrics
  
  
   March 31, 2024 March 31, 2023
Number of investment properties (1)             295            291           
Gross leasable area (2)                         18,709,000     18,550,000    
Economic occupancy (3)                          95.7 %         94.5 %        
Committed occupancy (4)                         96.2 %         96.7 %        
Total properties (5)                            304            303           
Gross leasable area inclusive of joint ventures 19,239,000     19,080,000    


  
  

Committed occupancy of 96.2% included 94,000 square feet of space committed in the quarter. Approximately 67,000 square feet of committed space was in VECTOM and Major Markets, including 31,000 square feet in Burlington, Ontario and 27,000 square feet in Calgary, Alberta. The decrease in committed occupancy compared to March 31, 2023 is due to natural lease expiries and attrition including early lease terminations and tenants downsizing.

New leases increased occupancy by 64,000 square feet at March 31, 2024, at an average first year rate of $23.04 per square foot.

Renewal activity for the first quarter of 2024 consisted of 249,000 square feet with an increase of 10.1% over expiring rental rates. The primary driver of renewal growth in the quarter was 228,000 square feet of retail renewals with an increase of 11.6% over expiring rental rates. When comparing the expiring rental rates to the weighted average rental rate for the renewal term, Crombie achieved an increase of 10.6% for the three months ended March 31, 2024.

Financial Metrics
  
  
   Three months ended March 31,          
                                             2024       2023      Variance  %      
Net property income (1)                      $ 73,641   $ 68,648  $ 4,993   7.3 %  
Operating income attributable to Unitholders $ 26,205   $ 25,173  $ 1,032   4.1 %  
Same-asset property cash NOI (1)             $ 76,532   $ 74,141  $ 2,391   3.2 %  
Funds from operations ("FFO") (1)                                                  
Basic                                        $ 54,868   $ 52,835  $ 2,033   3.8 %  
Per Unit - Basic                             $ 0.30     $ 0.30    $ -       - %    
Payout ratio (1)                             73.6 %     75.3 %              (1.7) %
Adjusted funds from operations ("AFFO") (1)                                        
Basic                                        $ 46,947   $ 45,909  $ 1,038   2.3 %  
Per Unit - Basic                             $ 0.26     $ 0.26    $ -       - %    
Payout ratio (1)                             86.1 %     86.6 %              (0.5) %


  

First Quarter 2024 Results

Operating income attributable to Unitholders

The increase in operating income in the quarter resulted mainly from growth in property revenue from recently completed developments, renewals, new leasing activity, lower interest expense on floating rate debt, revenue from management and development services, and increased capitalized interest. This was offset in part by higher interest expense on senior unsecured notes and a decrease in income from equity-accounted investments related to the sale of land within a joint venture in the first quarter of 2023.

Same-asset property cash NOI

The increase in same-asset property cash NOI for the quarter was primarily driven by increased property revenue from renewals and new leasing.

FFO

The increase in total FFO was driven primarily by higher property revenue from recently completed developments, renewals, and new leasing. Reduced interest expense on floating rate debt, revenue from management and development services, and higher capitalized interest further contributed to FFO growth. This was offset in part by an increase in interest expense on senior unsecured notes and a decrease in income from equity-accounted investments related to the sale of land within a joint venture in the first quarter of 2023.

AFFO

Total AFFO increased in the quarter primarily due to higher property revenue from recently completed developments, renewals, and new leasing, reduced interest expense on floating rate debt, revenue from management and development services, and higher capitalized interest. This was partially offset by increased interest expense on senior unsecured notes and decreased income from equity-accounted investments related to the sale of land within a joint venture in the first quarter of 2023.

Financial Condition Metrics
  
  
   March 31, 2024 December 31, 2023 March 31, 2023
Unencumbered investment properties (1)            $ 2,771,000    $ 2,608,000       $ 2,291,000   
Available liquidity (2)                           $ 736,990      $ 583,770         $ 735,877     
Debt to gross book value - cost basis (3)         45.1 %         45.2 %            44.9 %        
Debt to gross fair value (4)(5)                   42.9 %         43.0 %            41.9 %        
Weighted average interest rate (6)                4.2 %          4.1 %             4.0 %         
Debt to trailing 12 months adjusted EBITDA (4)(5) 7.97x          8.03x             7.96x         
Interest coverage ratio (4)(5)                    3.23x          3.06x             3.24x         


  
   

Portfolio Optimization

Our development program is divided into major development; projects with a total estimated cost greater than $50,000, and non-major development; projects with a total estimate cost below $50,000.

Major Development

Crombie currently has one active major development, The Marlstone, a 291-unit residential rental project in Halifax, Nova Scotia, under construction. Demolition and existing building upgrades commenced in May 2023 and construction continues to progress well. Completion is expected in the first half of 2026.

Non-major Development

Non-major developments are accretive with shorter project durations and less overall risk than our major development projects. These projects have the ability to create value while enhancing the overall quality of the portfolio.

Non-major development added 26,000 square feet of gross leasable area to the portfolio in the first quarter of 2024.

Highlighted Subsequent Event

On April 30, 2024, Crombie disposed of its 50% interest in a co-owned retail property totalling 15,000 square feet. Total proceeds, before closing adjustments and transaction costs, were $13,000, half of which will be in the form of a vendor take-back financing for six months at 5.0% interest.

Conference Call and Webcast

Crombie will provide additional details regarding its period ended March 31, 2024 results on a conference call to be held Thursday, May 9, 2024, beginning at 12:00 p.m. (EDT). Accompanying the conference call will be a presentation that will be available on the Investors section of Crombie's website. To join this conference call, you may dial (416) 764-8688 or (888) 390-0546. To join the conference call without operator assistance, you may register and enter your phone number at https://emportal.ink/3IUOHFd to receive an instant automated call back. You may also listen to a live audio webcast of the conference call by visiting the Investors section of Crombie's website at www.crombie.ca.

Replay will be available until midnight May 16, 2024 by dialing (416) 764-8677 or (888) 390-0541 and entering passcode 158216 #, or on the Crombie website for 90 days following the conference call.

About Crombie REIT

Crombie invests in real estate with a vision of enriching communities together by building spaces and value today that leave a positive impact on tomorrow. As one of the country's leading owners, operators, and developers of quality real estate assets, Crombie's portfolio primarily includes grocery-anchored retail, retail-related industrial, and mixed-use residential properties. As at March 31, 2024, our portfolio contains 304 properties comprising approximately 19.2 million square feet, inclusive of joint ventures at Crombie's share, and a significant pipeline of future development projects. Learn more at www.crombie.ca.

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