Nexus Industrial REIT : 2025 Q3 Financial Statements

‌Nexus Industrial REIT

Condensed Consolidated Interim Financial Statements (Unaudited)

For the three and nine months ended September 30, 2025

Consolidated Statements of Financial Position
As at September 30, 2025 and December 31, 2024 (In thousands of Canadian dollars) (Unaudited)
‌Note(s)	September 30, 2025	December 31, 2024
	$	$
Non-current assets Investment properties 3,4	2,475,158	2,458,174
Equity investment in joint venture	13,346	12,912
Derivative financial instruments 15	2,165	4,479
Right-of-use assets	971	1,062
Other investment	7,950	7,950
Prepaid development costs 16	21,758	-
Other assets	68	339
	2,521,416	2,484,916
Current assets Cash	14,373	11,532
Tenant and other receivables 6	5,754	8,952
Prepaid expenses	3,168	2,222
Derivative financial instruments 15	7,969	785
Other assets	20,953	16,016
Assets held for sale 5	34,496	80,037
	86,713	119,544
Total assets	2,608,129	2,604,460
Non-current liabilities Mortgages payable 3,7	480,308	548,552
Credit facilities 8	684,463	576,729
Lease liabilities	10,533	10,613
Derivative financial instruments 15	20,890	18,561
Class B LP Units 9	-	16,506
Other liabilities 10	7,355	8,149
	1,203,549	1,179,110
Current liabilities Mortgages payable 3,7	98,754	41,740
Credit facilities 8	10,462	73,107
Class B LP Units 9	198,285	163,517
Distributions payable	3,802	3,773
Accounts payable and other liabilities	27,249	41,262
Liabilities associated with assets held for sale 5,7	5,340	40,227
	343,892	363,626
Total liabilities	1,547,441	1,542,736
Equity Unitholders' equity 11	667,580	663,444
Retained earnings	393,108	398,280
Total unitholders' equity	1,060,688	1,061,724
Total liabilities and unitholders' equity	2,608,129	2,604,460
Subsequent event 19
On behalf of the Board:
"Benjamin Rodney" Trustee "Floriana Cipollone" Trustee

The accompanying notes are an integral part of the consolidated financial statements.

Consolidated Statements of Income and Comprehensive Income

For the three and nine months ended September 30, 2025 and 2024 (In thousands of Canadian dollars) (Unaudited)

‌Three months ended Nine months ended September 30, September 30,

	Note(s)	2025	2024	2025	2024
		$	$	$	$
Net rental income
Property revenues	13	43,295	45,529	130,071	131,036
Property expenses		(11,098)	(12,961)	(33,634)	(37,314)
Net rental income		32,197	32,568	96,437	93,722
General and administrative expense		(2,200)	(1,905)	(6,679)	(6,182)
Fair value adjustments:
Investment properties	4,5	(4,295)	11,081	(6,563)	39,824
Class B LP Units	9	(4,178)	(47,477)	71	(15,592)
Incentive units		(39)	(322)	(296)	(175)
Derivative financial instruments	15	(1,364)	(22,243)	(4,646)	(17,794)
Income from equity accounted investment in
joint venture		183	79	434	383
Loss on disposal of investment properties	3	(2)	(282)	(283)	(533)
Foreign exchange (loss) gain		(70)	152	644	(207)
Other income		60	60	185	180
		20,292	(28,289)	79,304	93,626
Finance expense
Net interest expense	14	(13,099)	(13,957)	(39,175)	(40,889)
Distributions on Class B LP Units	9	(3,744)	(3,745)	(11,154)	(11,532)
		(16,843)	(17,702)	(50,329)	(52,421)
Net income (loss) and comprehensive income (loss)		3,449	(45,991)	28,975	41,205

Consolidated Statements of Changes in Unitholders' Equity For the nine months ended September 30, 2025 and 2024 (In thousands of Canadian dollars) (Unaudited)
‌Note Units			Unitholders' Equity	Retained Earnings	Total
#			$	$	$
Balance - January 1, 2025		70,748,855	663,444	398,280	1,061,724
Net income and comprehensive income		-	-	28,975	28,975
Distributions		-	-	(34,147)	(34,147)
REIT Units issued under Incentive Plan	10	73,352	555	-	555
REIT Units issued under Employee Purchase
plan	10	21,691	156	-	156
Class B LP Units exchanged for REIT Units	9	456,700	3,425	-	3,425
Balance - September 30, 2025		71,300,598	667,580	393,108	1,060,688

Note Units Unitholders' Equity Retained Earnings Total $ $ $

Balance - January 1, 2024		68,589,606	648,171	352,158	1,000,329
Net income and comprehensive income		-	-	41,205	41,205
Distributions		-	-	(33,441)	(33,441)
REIT Units issued under distribution reinvestment plan	12	418,631	3,045	-	3,045
REIT Units issued under Incentive Plan	10	65,383	526	-	526
REIT Units issued under Employee Purchase plan	10	10,506	78	-	78
Class B LP Units exchanged for REIT Units	9	1,657,863	11,596	-	11,596
Balance - September 30, 2024		70,741,989	663,416	359,922	1,023,338

Consolidated Statements of Cash Flows

For the three and nine months ended September 30, 2025 and 2024 (In thousands of Canadian dollars) (Unaudited)

‌Three months ended Nine months ended September 30, September 30,

Note(s)		2025	2024	2025	2024
		$	$	$	$
Operating activities
Net income (loss) and comprehensive income (loss)		3,449	(45,991)	28,975	41,205
Adjustment for items not involving cash:
Incentive unit expense	10	276	198	978	1,181
Income from equity accounted investment in
joint venture		(183)	(79)	(434)	(383)
Loss on disposals	3	2	282	283	533
Amortization	18	731	854	2,093	2,199
Straight-line adjustments of rent		(1,719)	(1,215)	(3,871)	(3,582)
Fair value adjustments		9,876	58,961	11,434	(6,263)
Foreign exchange loss (gain)		70	(152)	(644)	207
Changes in non-cash operating items	18	(5,653)	(1,989)	(24,136)	(4,973)
Total cash generated by operating activities		6,849	10,869	14,678	30,124
Investing activities
Acquisition of income producing properties	3,4	-	(12,436)	-	(75,209)
Acquisition of properties under development	3,4	-	-	(4,524)	-
Additions to properties under development	4	(4,075)	(12,572)	(15,981)	(48,488)
Net proceeds on disposal of properties	3	9,106	17,096	31,756	21,902
Capital expenditures, tenant incentives and leasing costs	4	(3,759)	(2,082)	(13,413)	(8,069)
Total cash generated (used) by investing
activities		1,272	(9,994)	(2,162)	(109,864)
Financing activities
New mortgage financing	7	-	34,800	15,500	34,800
Mortgage principal repayments	7	(4,079)	(18,617)	(28,403)	(45,556)
Financing costs	7,8	(855)	(295)	(1,104)	(1,169)
Lease principal repayments		(26)	(25)	(76)	(45)
Net borrowings on the Credit Facilities	8	16,970	(5,888)	38,526	123,896
Distributions to unitholders		(11,398)	(10,895)	(34,118)	(30,281)
Total cash generated (used) by financing activities		612	(920)	(9,675)	81,645
Change in cash during the period		8,733	(45)	2,841	1,905
Cash - beginning of period		5,640	7,868	11,532	5,918
Cash - end of period		14,373	7,823	14,373	7,823
Supplemental cash flow and non-cash information	18

The accompanying notes are an integral part of the consolidated financial statements.

1. ‌Organization

   Nexus Industrial REIT is an unincorporated, open-ended real estate investment trust governed by the laws of the Province of Ontario pursuant to an amended and restated declaration of trust dated March 7, 2022. Nexus Industrial REIT and its subsidiaries, (together, "the REIT") own and operate commercial real estate properties across Canada. The registered office of the REIT is located at 105-586 Argus Road, Oakville, ON, L6J 3J3.

2. ‌Material accounting policies Statement of compliance

   The condensed consolidated interim financial statements of the REIT have been prepared by management in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards") applicable to the preparation of interim financial statements, including International Accounting Standard 34, Interim Financial Reporting, and do not include all of the information required for full annual financial statements, and should be read in conjunction with the audited consolidated financial statements as at and for the year ended December 31, 2024.

   Basis of presentation

   The condensed consolidated interim financial statements have been prepared on a going concern basis and under the historical cost convention, except for the revaluation of investment properties, incentive units, Class B LP Units and derivative financial instruments classified as fair value through profit or loss ("FVTPL"), which are presented at fair value. These condensed consolidated interim financial statements are presented in thousands of Canadian dollars, which is the functional currency of the REIT. The condensed consolidated interim financial statements were authorized for issue by the Board of Trustees of the REIT on November 12, 2025.

   Significant accounting judgments, estimates and assumptions

   The preparation of financial statements in compliance with IFRS Accounting Standards requires management to make estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements and the reported amount of revenues and expenses during the period. Actual results may differ materially from these estimates. The estimates and judgments used in determining the recorded amount for assets, liabilities and equity in these condensed consolidated interim financial statements are based on information available to the REIT as at the end of the reporting period.

   Future Accounting Standards Not Yet Adopted

   The International Accounting Standards Board (IASB) has issued new standards and amendments that are not yet effective for the year ended December 31, 2025. The REIT is evaluating the potential impact of these changes on its financial reporting.

   IFRS 18 - Presentation and Disclosure in Financial Statements

   Issued in April 2024, IFRS 18 Presentation and Disclosure in Financial Statements replaces IAS 1 and is effective for annual reporting periods beginning on or after January 1, 2027, with earlier application permitted. IFRS 18 aims to enhance the comparability and transparency of financial statements by introducing:

   • Defined categories and subtotals in the statement of profit or loss, including operating, investing, and financing categories, along with mandatory subtotals such as "Operating profit or loss" and "Profit or loss before financing and income tax."

   • Disclosures on management-defined performance measures ("MPMs"), requiring entities to provide information about subtotals of income and expenses that management uses in public communications.

   • Enhanced aggregation and disaggregation principles, improving the clarity and usefulness of financial information presented.

     The REIT is currently assessing the impacts of this new standard on the presentation of its financial statements, particularly the statement of profit or loss, to align with the new categories and subtotals. The enhanced disclosure requirements will necessitate disclosing MPMs used in public communications, ensuring transparency and consistency in reporting.

     IFRS 9 and IFRS 7 - Classification and Measurement of Financial Instruments

     In May 2024, the IASB issued amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures, effective for annual reporting periods beginning on or after January 1, 2026, with earlier application permitted.

     These amendments address:

   • Clarifications on the classification and measurement of financial assets, particularly those with environmental, social, and governance (ESG)-linked features, ensuring consistent application of the contractual cash flow characteristics test.

   • Guidance on the derecognition of financial liabilities, specifying that a financial liability is derecognized on the settlement date, which is the date on which the liability is extinguished.

   • Enhanced disclosure requirements, including information about financial instruments with contractual terms that could change the timing or amount of contractual cash flows based on the occurrence (or non-occurrence) of a future event.

   The REIT is currently assessing the impacts of these amendments on its financial instruments, particularly regarding the timing of derecognition of financial liabilities. The enhanced disclosure requirements may necessitate additional information in the notes to the financial statements, providing greater transparency about the REIT's financial instruments and associated risks.

   The REIT will continue to monitor developments in these and other standards.

3. ‌Acquisitions and dispositions Acquisitions of income producing properties

   There were no acquisitions of income producing properties during the nine months ended September 30, 2025.

   The impact of the acquisitions of income producing properties completed during the year ended December 31, 2024, is as follows:

   Property location

   Acquisition

   date

   Contractual purchase

   price

   Fair value adjustment

   (1)

   Transaction

   costs

   Income producing properties acquired

   Working capital acquired

   Net assets acquired

   	$	$	$	$	$	$
   Sherbrooke, QC July 2024	16,567	(1,425)	580	15,722	(144)	15,578
   Kelowna, BC May 2024	34,950	-	856	35,806	(9,864)	25,942
   Dorval, QC (2) February 2024	1,463	-	32	1,495	9	1,504
   Rocky View, AB January 2024	35,060	-	267	35,327	-	35,327
   	88,040	(1,425)	1,735	88,350	(9,999)	78,351
   Consideration: Cash						75,209
   Class B LP Units issued						3,142
   						78,351

   (1) Fair value adjustment relating to the value of Class B LP Units issued as consideration for the acquisition.

   (2) This parcel of land was acquired and designated as an asset held for sale. See Note 5 for further details.

   Acquisitions of properties under development

   On April 14, 2025, the REIT acquired a land parcel adjacent to one of its existing properties in Kelowna, BC for a purchase price of $18,800 and transaction costs of $5. The purchase consideration was settled through the transfer of an industrial property in Fort St. John, BC valued at $7,000, receivables of $1,062 related to an industrial property in Richmond, BC and the Kelowna property, 2025 rental income totaling $6,219 from the Richmond and Kelowna properties, with the balance settled in cash. The land is intended for the future development of a Class A industrial building.

   Dispositions of income producing properties

   The following are dispositions completed for the nine months ended September 30, 2025:

   On September 16, 2025, the REIT sold an industrial property located in Saint-Laurent, QC for a price of

   $9,200. The property was previously classified as an asset held for sale. Net of closing costs and working capital adjustments of $94, the REIT received cash proceeds of $9,106.

   On June 3, 2025, the REIT sold an industrial property located in Edmonton, AB for a price of $4,175. The property was previously classified as an asset held for sale. Net of selling costs of $162, the REIT received cash proceeds of $4,013. At the time of disposal, the REIT repaid a mortgage that was on the property of

   $3,832.

   On April 14, 2025, the REIT sold an industrial property located in Fort St. John, BC for a price of $7,000 and a selling cost of $35. The property, which had previously been classified as an asset held for sale, was utilized as part of the purchase consideration for the acquisition of a land parcel adjacent to one of the REIT's existing properties in Kelowna, BC, as noted above.

   On March 27, 2025, the REIT completed the sale of its share of 15 retail properties in which it held a 50% ownership interest. These properties, previously classified as assets held for sale, were located across Quebec and sold for a price of $47,000 (at the REIT's 50% ownership interest). At the time of disposal, the purchaser also assumed the mortgage on the properties of $32,144 (at the REIT's 50% ownership interest). Net of selling costs of $59, the REIT received cash proceeds of $14,797.

   On February 21, 2025, the REIT sold an office property located in Laval, QC for a price of $3,900. This property was previously classified as an asset held for sale. Net of selling costs of $25, the REIT received cash proceeds of $3,875. At the time of disposal, the REIT repaid a mortgage that was on the property of

   $2,420.

   The following are dispositions completed for the year ended December 31, 2024:

   On December 20, 2024, the REIT sold four industrial properties located in Regina and Saskatoon, SK for a total selling price of $27,780. These properties were not classified as assets held for sale because they did not meet the required criteria until the quarter in which they were sold. Net of selling costs of $474, the REIT received cash proceeds of $27,306. Concurrent with disposal, the REIT repaid three mortgages that were on three of the properties totaling $10,700.

   On December 13, 2024, the REIT sold an office property located in Dorval, QC for a selling price of $10,900. This property was previously classified as an asset held for sale. Net of selling costs of $327, the REIT received cash proceeds of $10,573. At the time of disposal, the REIT repaid a mortgage that was on the property of $7,010.

   On December 3, 2024, the REIT sold an office property located in Saint John, NB for a selling price of $2,800. This property was previously classified as an asset held for sale. Net of selling costs of $108, the REIT received cash proceeds of $2,692.

   On October 8, 2024, the REIT completed the sale of one office property and one industrial property in which it held a 50% interest. These properties, previously classified as assets held for sale, were located in Montreal, QC and sold for a price of $13,500 ($6,750 at the REIT's 50% ownership interest), of which $4,000 was received in cash and the remaining $2,750 was settled through the issuance of a vendor take back loan (VTB) that matured on April 8, 2025 at an interest rate of prime plus 3%. The VTB was recorded in tenant and other receivables in the consolidated statement of financial position as at December 31, 2024. Net of selling costs of $13, the REIT received cash proceeds of $6,737.

   On September 26, 2024, the REIT sold excess land associated with an income property located in Fort St. John, BC for a selling price of $2,350. Net of selling costs of $128, the REIT received cash proceeds of

   $2,222.

   On September 11, 2024, the REIT completed the sale of six office properties in which it held a 50% ownership interest. These properties, previously classified as assets held for sale, were located in Montreal, QC and sold for a price of $34,500 ($17,250 at the REIT's 50% ownership interest). Net of selling costs of $154, the REIT received cash proceeds of $17,096. At the time of disposal, the REIT repaid mortgages on the properties of

   $28,116 ($14,058 at the REIT's 50% ownership interest).

   On June 21, 2024, the REIT sold an office property located in Blainville, QC for a selling price of $5,057. This property was previously classified as an asset held for sale. Net of selling costs of $251, the REIT received cash proceeds of $4,806. At the time of the disposal, the REIT repaid a mortgage on the property of $3,602.

4. ‌Investment properties

   The following table summarizes the primary components of investment properties as at September 30, 2025, and December 31, 2024:

   September 30,		December 31,
   2025		2024
   $		$
   Income producing properties	2,432,738	2,351,966
   Properties held for development	42,420	106,208
   	2,475,158	2,458,174

   The following table summarizes the changes in investment properties for the nine months ended September 30, 2025:

   Note Income producing properties Properties held for development Investment properties $ $ $

   Balance - January 1, 2025		2,351,966	106,208	2,458,174
   Acquisitions	3	-	18,805	18,805
   Additions - capital expenditures, net of adjustment		9,164	-	9,164
   Additions - tenant incentives and leasing costs		3,051	-	3,051
   Additions - development		-	19,661	19,661
   Amortization of tenant incentives and leasing costs		(1,001)	-	(1,001)
   Fair value adjustments		(8,651)	5,146	(3,505)
   Transfers from properties held for development to income producing properties		107,400	(107,400)	-
   Investment properties reclassified as assets held
   for sale	5	(29,191)	-	(29,191)
   Balance - September 30, 2025		2,432,738	42,420	2,475,158

   The following table summarizes the changes in investment properties for the year ended December 31, 2024:

   Income producing Note properties $			Properties held for development $	Investment properties $
   Balance - January 1, 2024		2,256,677	107,350	2,364,027
   Acquisitions	3	86,855	-	86,855
   Additions - capital expenditures		9,393	-	9,393
   Additions - tenant incentives and leasing costs		4,871	-	4,871
   Additions - development		-	70,232	70,232
   Amortization of tenant incentives and leasing costs		(1,478)	-	(1,478)
   Disposal on investment properties		(30,130)	-	(30,130)
   Fair value adjustments		34,004	35,678	69,682
   Transfers from properties held for development to income producing properties		113,052	(113,052)	-
   Transfers from income producing properties to properties held for development		(6,000)	6,000	-
   Investment properties reclassified as assets held
   for sale	5	(115,278)	-	(115,278)
   Balance - December 31, 2024		2,351,966	106,208	2,458,174

   Acquisitions of income producing properties include $nil of transaction costs (December 31, 2024 - $1,735).

   During the nine months ended September 30, 2025, the REIT capitalized borrowing costs of $2,621 (December 31, 2024 - $2,724) to qualifying development properties.

   The REIT's investment property policy requires externally appraising at least 15 to 20% of the value of the portfolio each year, and 50% of the portfolio over a 3-year period. The REIT targets having 100% of its portfolio valued over 6 years. The selection of properties is based on management's judgment, and includes the following criteria: materiality of property; leasing activities during the period; changes in NOI, capitalization rate, or other assumptions; the date of the last appraisal; financing; and any underwriting requirements (acquisitions or dispositions). The REIT obtains third party appraisals to supplement internal management valuations in support of the determination of the fair market value of investment properties. Investment properties with an aggregate fair value of $295,960 were valued by qualified external valuation professionals during the nine months ended September 30, 2025.

   The fair value of the investment properties as at September 30, 2025, represents the REIT's best estimate based on available information as at the end of the reporting period.

   The calculation of the fair value of investment properties using the direct income capitalization method results in the measurement being classified as Level 3 in the fair value hierarchy. Significant unobservable inputs used in the Level 3 valuation of the investment properties are the stabilized net operating income and the capitalization rate applied in the valuations. Generally, an increase in stabilized net operating income or a decrease in capitalization rates will result in an increase in the fair value of investment properties. Conversely, a decrease in stabilized net operating income or an increase in capitalization rates will generally result in a decrease in the fair value of investment properties.

   The key valuation metrics used in determining the fair value of the investment properties are summarized below:

   	September 30,	December 31,
   	2025	2024
   Weighted average capitalization rate	5.85%	5.82%
   Range of capitalization rates	4.60% - 10.00%	4.50% - 10.00%
   Stabilized net operating income	$ 142,157	$ 139,283

   The fair value of the investment properties is most sensitive to changes in capitalization rates. As at September 30, 2025, a 0.25% increase in the weighted average capitalization rate would result in a decrease of approximately $99,600 in the determination of the fair value of the investment properties. A 0.25% decrease in the weighted average capitalization rate would result in an increase of approximately $108,500 in the determination of the fair value of the investment properties. Further, an increase (decrease) of 1% in stabilized net operating income would result in an increase (decrease) of approximately $24,300 in the determination of the fair value of the investment properties.

5. ‌Assets held for sale

As at September 30, 2025, two investment properties with a combined fair value of $34,496 were classified as assets held for sale (December 31, 2024 - $80,037). The mortgages associated with these properties are classified as liabilities associated with assets held for sale, totaling $5,340 (See Note 7 for details).

During the nine months ended September 30, 2025, a fair value adjustment (loss) of $3,058 was recognized directly in the statement of income (loss) and comprehensive income (loss) for the investment properties classified as assets held for sale. This fair value adjustment reflects a write-down of the assets held for sale to align their carrying amounts with the REIT's best estimate of their fair market value.

The following table summarizes the fair value changes in properties classified as assets held for sale for the nine months ended September 30, 2025, and the year ended December 31, 2024:

		September 30,	December 31,
	Note	2025	2024
		$	$
Balance, beginning of period		80,037	29,150
Acquisition of property	3	-	1,495
Investment properties reclassified as assets held for sale	4	29,191	115,278
Fair value adjustment		(3,058)	(21,771)
Disposal of properties	3	(71,275)	(42,757)
Other adjustments (1)		(399)	(1,358)
Balance, end of period		34,496	80,037
(1) Other adjustments comprise the reclassification of straight-line rent relating to assets held for sale from other current assets.
‌6	Tenant and other receivables
		September 30,	December 31,
		2025	2024
		$	$
	Tenant receivables	4,090	4,236
	Unbilled other tenant receivables	921	1,472
	Note receivable(1)	-	2,750
	Other receivables	1,066	601
		6,077	9,059
	Less: Allowance for expected credit loss	(323)	(107)
	Tenant and other receivables, net	5,754	8,952

(1) This pertains to a Vendor Take-Back (VTB) loan provided as part of the consideration for the sale of an office property in Montreal, Quebec, on October 8, 2024. The outstanding balance of the loan was settled in April 2025.

The carrying value of amounts receivables approximates fair value due to their current nature. The REIT determines the allowance for expected credit loss using historical information, probability of collection, lease terms, the tenants' financial condition and other factors.

The following table summarizes the reconciliation of changes in the provision for impairment of tenant receivables for the nine months ended September 30, 2025, and the year ended December 31, 2024:

	September 30,	December 31,
	2025	2024
	$	$
Balance, beginning of period	107	370
Additional provision	216	90
Write-offs	-	(353)
Balance, end of period	323	107

The REIT leases industrial, office and retail properties to tenants under operating leases. Minimum rental commitments on non-cancellable tenant operating leases over their remaining terms are as follows:

September 30, 2025 $

Remainder of 2025	30,492
2026	128,525
2027	121,908
2028	114,769
2029	105,940
Thereafter	492,273
Balance, end of period	993,907

‌7 Mortgages payable

As at September 30, 2025, the mortgages payable are secured by charges against 35 of the REIT's investment properties (December 31, 2024 - 55 investment properties). The weighted average interest rate, including deferred financing costs and interest rate swap agreements, of the mortgages payable is 3.36% (December 31, 2024 - 3.43%) and the weighted average term to maturity is 5.05 years (December 31, 2024 -

5.50 years).

The following table summarizes the changes in mortgages payable for the nine months ended September 30, 2025, and the year ended December 31, 2024:

Note		September 30, 2025 $	December 31, 2024 $
Mortgages payable, beginning of period		631,957	674,506
New mortgage financing		15,500	34,800
Mortgage repayments on maturity		(9,584)	(23,834)
Mortgages repaid on disposal of investment properties	3	(38,396)	(35,650)
Mortgage principal installment repayments		(12,567)	(17,865)
Mortgages payable, end of period		586,910	631,957
Less: Deferred financing costs, beginning of period		(1,874)	(2,138)
Less: Additions to deferred financing costs		(173)	(345)
Plus: Amortization of deferred financing costs		288	609
Plus: Fair value adjustment of mortgages, beginning of period		436	470
Less: Adjustment to fair value of mortgages		(1,198)	-
Plus: Amortization of fair value adjustments		13	(34)
Balance, end of period		584,402	630,519
Less: Mortgages payable associated with assets held for sale		(5,340)	(40,227)
Less: Current portion		(98,754)	(41,740)
Non-current balance, end of period		480,308	548,552

The breakdown of future principal repayments, including mortgage maturity, is presented in the following table:

Scheduled repayments Principal maturities Total $ $ $

Remainder of 2025	4,084	17,366	21,450
2026	15,103	79,793	94,896
2027	13,202	38,705	51,907
2028	12,640	17,984	30,624
2029	11,046	55,411	66,457
Thereafter	71,626	249,950	321,576
Balance as at September 30, 2025	127,701	459,209	586,910

‌8 Credit Facilities

As at September 30, 2025, the REIT had the following credit facilities ("the Credit Facilities"):

Facility Interest Rate Maturity Date Security Facility Limit Amount Drawn $ $ Secured Credit Facility:

Term construction facility(2)

Prime rate + 1.25% or floating CORRA + 2.85%

August 31, 2026 One

investment property

16,368 10,462

Unsecured Credit Facilities:

Revolving facility(3)	Prime rate + 0.70% or floating CORRA or SOFR + fixed	August 5, 2028	Unsecured	575,000	484,272 (4)
	CORRA or SOFR adjustment
	spread +1.70% (1)
Term loan facility(3)	Prime rate + 0.70% or floating CORRA or SOFR + fixed	August 5, 2027	Unsecured	200,000	202,201 (4)
	CORRA or SOFR adjustment
	spread +1.70% (1)
Swingline facility	Prime rate + 0.70% or floating CORRA or SOFR + fixed	August 5, 2028	Unsecured	10,000	-
	CORRA or SOFR adjustment
	spread +1.70% (1)
				801,368	696,935

(Secured Credit Facility and Unsecured Credit Facilities, collectively "the Credit Facilities")

(1) Represents the spreads in effect as at September 30, 2025. The Canadian Overnight Repo Rate Average (CORRA) adjustment spread is fixed at 0.29547% for an interest period of one month and is fixed at 0.32138% for an interest period of 3 months. The Secured Overnight Financing Rate (SOFR) adjustment spread is fixed at 0.10%. The applicable spread is set based on the REIT's total debt to total assets, unless the REIT receives an external credit rating, at which time the applicable spread will be based on the REIT's external credit rating.

(2) Balances presented are at the REIT's 80% interest. Includes a non-revolving letter of credit facility totaling $1,600 of which $477 was drawn as at September 30, 2025 (December 31, 2024 - $477).

(3) The Credit Facility can be drawn in Canadian or US dollars at the REIT's option and bears interest payable monthly based on Banker's Acceptance and Prime rates for Canadian dollar loans, and based on the Secured Overnight Financing Rate (SOFR) for US dollar loans. As at September 30, 2025, the Revolving facility and Term loan facility were drawn in US dollars for US$347,653 ($484,272 equivalent) and US$145,154 ($202,201 equivalent), respectively.

(4) These balances are drawn in US dollars and hedged to Canadian dollars, with a fixed notional amount of $775,000.

On August 5, 2025, the REIT increased the Unsecured Credit Facilities by $160,000, from $625,000 to

$785,000, increasing the term loan facility from $175,000 to $200,000 and the revolving facility from $440,000 to $575,000. The REIT also amended the maturity date of the Unsecured Credit Facilities by extending the term loan facility, the revolving facility, and the swingline facility from March 1, 2027 to August 5, 2027, August 5, 2028, and August 5, 2028, respectively.

During the three months ended September 30, 2025, the REIT paid down a secured credit facility (previously referred to as "Secured Credit Facility 1") totalling $66,100, which was funded through the increase of the Unsecured Credit Facilities discussed above.

The following table summarizes the changes in the Credit Facilities for the nine months ended September 30, 2025, and the year ended December 31, 2024:

September 30,		December 31,
2025		2024
$		$
Drawn against the Credit Facilities, beginning of period	651,616	520,125
Repayment of a secured credit facility (previously referred to as "Secured Credit Facility 1")	(66,100)	-
Net borrowings during the period	104,626	130,811
Unrealized foreign exchange adjustments	6,793	680
Drawn against the Credit Facilities, end of period	696,935	651,616
Less: Deferred financing costs, beginning of period	(1,780)	(1,581)
Less: Deferred financing costs incurred	(931)	(964)
Plus: Amortization of deferred financing costs	701	765
Balance, end of period	694,925	649,836
Less: Current portion	(10,462)	(73,107)
Non-current balance, end of period	684,463	576,729

The following table summarizes interest rate exposure on the Credit Facility borrowings as at September 30, 2025:

Credit Facility borrowings covered by fixed interest

Total principal amount $ Weighted average interest rate Repricing date

rate swaps(1) 632,961 5.24% (2) October 31, 2025 Credit Facility borrowings not covered by fixed interest

rate swaps 53,507 4.50 % October 31, 2025

Prime rate borrowings not covered by fixed interest

rate swaps 10,467 5.39 % Variable Total drawn against the Credit Facilities 696,935

(1) Amounts are represented in CAD equivalents inclusive of unrealized revaluation loss of $6,793 relating to the REIT's US denominated debt.

(2) Represents the weighted average interest rate net of the effect of swaps in place. The REIT is party to swaps that fix the interest rate on the borrowings under the Credit Facilities.

The REIT is party to interest rate swaps, which are used to manage floating interest rate exposure. See Note 15 for details.

To reduce interest expense, at September 30, 2025, debt of $686,468 (Canadian dollar equivalent) was drawn in US dollars, representing US$492,807, and economically converted into Canadian dollars using cross-currency interest rate swap contracts. See Note 15 for hedge and foreign exchange risk details.

The primary financial covenants of the REIT's Credit Facilities are interest coverage, distribution, and loan to value covenants, for which non-compliance would result in an event of default, allowing the lender to demand repayment of amounts outstanding under the Credit Facilities. As at September 30, 2025, the REIT was compliant with all externally imposed financial covenants.

‌9 Class B LP Units

The following table summarizes the changes in Class B LP Units for the nine months ended September 30, 2025:

	Units #	Amount $
Balance - January 1, 2025	23,410,193	180,023
Class B LP Units exchanged for REIT Units	(456,700)	(3,425)
Class B LP Units issued (1)	2,764,464	21,758
Fair value adjustment	n/a	(71)
Balance - September 30, 2025	25,717,957	198,285
Less: Current portion, end of period	(25,717,957)	(198,285)
Non-current portion, end of period	-	-

(1) During the nine months ended September 30, 2025, the Trust issued 2,764,464 Class B LP Units to satisfy the construction costs in connection with the development at Richmond, BC property (1751 and 1771 Savage Road). As at September 30, 2025, 447,619 Units were released to the counterparty while the remaining 2,316,845 were still held in escrow and subject to trading restrictions and not entitled to distributions. For more details, refer to Note 16, Commitments and contingent obligations.

Distributions in the amount of $3,744 (2024 - $3,745) and $11,154 (2024 - $11,532) were declared payable to holders of Class B LP Units for the three and nine months ended September 30, 2025, of which $1,248 were accrued as at September 30, 2025 (December 31, 2024 - $1,248). These amounts have been recognized as finance expense in the consolidated statement of income and comprehensive income.

Those Class B Units where the holder has unrestricted rights to convert the Class B Units to REIT Units, or where such unrestricted rights will become available within 12 months of the balance sheet date, are classified as current liabilities. Conversion of certain Class B Units to REIT units is restricted by date, i.e., the holder of such Class B Units can only exercise the conversion option on or after a specified date.

‌10 Other Liabilities
Other liabilities are comprised of the following:
	September 30,	December 31,
	2025 $	2024 $
Deferred purchase consideration	6,400	7,547
Unit-based compensation	955	602
	7,355	8,149

Deferred Purchase Consideration

As at September 30, 2025, $6,400 (US$4,594) (December 31, 2024 - $7,547 (US$5,245)) represents the non-current portion of the deferred consideration related to the acquisition of an investment property. The current portion of the deferred consideration $1,145 (US$822) (December 31, 2024 - $1,117 (US$776)) is classified as accounts payable and other liabilities in the REIT's consolidated statement of financial position. The deferred consideration is denominated in US dollars and payable in quarterly installments amortized over a 10-year period which commenced October 1, 2021.

Unit-based compensation

1. Incentive unit plan

   The REIT adopted an incentive unit plan (the "Incentive Plan") effective June 22, 2018. Under the Incentive Plan, the Board of Trustees may grant restricted share units ("RSUs") or performance share units ("PSUs") of the REIT (collectively, the "Incentive Units") to trustees, officers and employees of the REIT and consultants. The REIT is authorized to issue up to 1,112,176 Incentive Units under the Incentive Plan. The maximum number of Incentive Units that may be reserved under the Incentive Plan is 10% of the outstanding units of the REIT.

   The following table summarizes the changes in Incentive Units liabilities for the nine months ended September 30, 2025 and the year ended December 31, 2024:

   September 30, December 31, 2025 2024 $ $

   Balance, beginning of period 602 300

   Incentive units expense 978 1,381

   Fair value adjustment 296 (3)

   Incentive Units exercised (921) (1,076)

   Balance, end of period 955 602

   September 30, 2025 December 31, 2024

   	Number of Incentive Units	Weighted average Unit price $	Number of Incentive Units	Weighted average Unit price $
   Outstanding, beginning of period	163,001	7.69	106,798	8.09
   Granted	222,243	7.13	173,410	7.73
   Vested and issued	(147,038)	7.57	(127,645)	8.43
   Distribution entitlement	14,763	7.37	10,438	7.76
   Outstanding, end of period	252,969	7.71	163,001	7.69

   The following table summarizes the Incentive Units granted during the nine months ended September 30, 2025:

   Incentive plan Date Granted Expiry Date Number of Units granted Fair value grant price Number of Units vested

   RSU (1) January 13, 2025	January 13, 2025	24,743	7.68	24,743
   RSU (2) January 14, 2025	January 14, 2027	22,918	7.68	7,639
   RSU (2) March 18, 2025	March 18, 2027	87,291	6.98	29,097
   PSU (3) March 18, 2025	March 18, 2028	87,291	6.98	-

   1. These RSUs vest on the date of issuance.

   2. These RSUs vest one-third on the date of issuance, one-third on the first anniversary and one-third on the second anniversary.

   3. PSUs vest 100% on the third anniversary of issuance.

      The following table summarizes the Incentive Units granted during the year ended December 31, 2024:

      Incentive plan Date Granted Expiry Date Number of Units granted Fair value grant price Number of Units vested

      RSU (1) January 15, 2024	January 15, 2026	12,422	8.31	8,281
      RSU (2) March 20, 2024	March 20, 2024	26,020	7.69	26,020
      RSU (1) March 20, 2024	March 20, 2026	52,849	7.69	35,233
      RSU March 20, 2024	July 8, 2025	29,270	7.69	29,270
      PSU (3) March 20, 2024	March 20, 2027	52,849	7.69	-

      1. These RSUs vest one-third on the date of issuance, one-third on the first anniversary and one-third on the second anniversary.

      2. These RSUs vest on the date of issuance.

      3. PSUs vest 100% on the third anniversary of issuance.

      During the nine months ended September 30, 2025, 73,352 REIT units were issued for the settlement of vested Incentive Units at the amount of $555, net of withholding taxes.

      The initial fair value of each Incentive Unit granted is determined based on the volume-weighted average trading price of units of the REIT for the five trading days prior to the valuation date. The Incentive Units are remeasured to fair value at each reporting date with gains and losses reported within the REIT's statement of income and comprehensive income.

2. Employee unit purchase plan

During the nine months ended September 30, 2025, 21,691 REIT units (September 30, 2024 - 10,506 REIT units) were issued from treasury at an average of $7.22 per unit in respect of $92 of Employee Contributions, and $64 of REIT Contributions net of withholding taxes.

28,557 REIT units issued remain in the Employee Purchase Plan at September 30, 2025 (December 31, 2024 - 17,372 REIT units), of which, 11,735 REIT units are unvested (December 31, 2024 - 7,181 REIT units).

1. ‌Unitholders' equity

   The REIT is authorized to issue an unlimited number of units and special voting units. Each unit entitles the holder to a single vote at any meeting of unitholders and entitles the holder to receive a pro rata share of all distributions and in the event of termination or winding up of the REIT, in the remaining net assets of the REIT after satisfaction of all liabilities. The units are redeemable at any time at the demand of the holders to receive a price per unit as determined by the REIT's declaration of trust. Among other conditions for redemption, the total amount payable by the REIT in respect of units surrendered for redemption shall not exceed $50 in any one calendar month.

   The declaration of trust provides for the issuance of special voting units which have no economic entitlement in the REIT or in the distribution of assets of the REIT but are used to provide voting rights proportionate to the votes of the units to holders of securities exchangeable into units, including Class B LP Units.

2. ‌Distribution reinvestment plan

   The REIT adopted a distribution reinvestment plan ("DRIP)" on February 20, 2014, pursuant to which resident Canadian holders were entitled to elect to have all or some of the cash distributions of the REIT automatically reinvested in additional REIT units at a price per REIT unit calculated by reference to the weighted average of the trading price for the REIT units for the five trading days immediately preceding the relevant distribution date. Eligible unitholders who so elect would receive a bonus distribution of REIT units equal to 4% of each distribution that was reinvested by them under the DRIP. On June 21, 2024, the REIT suspended the distribution reinvestment plan effective July 16, 2024.

   The following table summarizes units issued under the DRIP:

   Three months ended Nine months ended

   	September 30,	September 30,	September 30,	September 30,
   	2025	2024	2025	2024
   Number of units issued	-	62,195	-	418,631
   Stated value ($)	-	419	-	3,045

3. ‌Property revenues

   The following table summarizes the main components of property revenues according to their nature:

   Three months ended Nine months ended

   September 30,		September 30,	September 30,	September 30,
   2025		2024	2025	2024
   $		$	$	$
   Rental income and recoveries	41,397	42,955	122,215	123,533
   Revenue from services	1,775	2,354	7,405	6,819
   Other revenue	123	220	451	684
   Property revenues	43,295	45,529	130,071	131,036

4. ‌Net interest expense

   Net interest expense consists of the following:

   Three months ended Nine months ended

   September 30,		September 30,	September 30,	September 30,
   2025		2024	2025	2024
   $		$	$	$
   Interest expense(1)	13,693	14,374	41,033	42,345
   Amortization of acquisition date fair value adjustments on assumed mortgages	12	(4)	13	(30)
   Amortization of deferred financing costs	331	383	989	1,037
   	14,036	14,753	42,035	43,352
   Less: Interest income	(114)	(6)	(239)	(307)
   Less: Interest capitalized to properties under development	(823)	(790)	(2,621)	(2,156)
   Net interest expense	13,099	13,957	39,175	40,889

   (1) This balance is net of the impact from interest rate swap agreements.

5. ‌Financial instruments

   Liquidity risk

   Liquidity risk is the risk that the REIT will not have the financial resources required to meet its financial obligations as they come due. The REIT manages this risk by ensuring it has sufficient cash on hand or borrowing capacity to meet obligations as they come due by forecasting cash flows from operations, cash required for investing activities and cash from financing activities.

   	Note	September 30,	December 31,
   		2025 $	2024 $
   Working capital deficit Excluding: Current portion of mortgage payables	7	(257,179) 98,754	(244,082) 41,740
   Current portion of credit facilities	8	10,462	73,107
   Current portion of Class B LP Units	9	198,285	163,517
   Liabilities associated with assets held for sale		5,340	40,227
   Assets held for sale	5	(34,496)	(80,037)
   Adjusted working capital surplus (deficit)		21,166	(5,528)

   The Class B LP Units are settled in equity and may not be redeemed for cash. The REIT expects that it will be able to renew the mortgages and current portion of credit facilities on their maturities. The REIT has access to undrawn funds on operating facilities of $98,527 as at September 30, 2025, under the Credit Facilities and expects to generate sufficient cash from operations to satisfy its financial liabilities as they come due.

   The contractual maturities and repayment obligations of the REIT's financial liabilities are as follows:

   	Accounts			Interest on
   	payable		Credit	fixed term
   	and	Lease	Facilities	portion of
   	other	Liabilitie	principal	Credit	Mortgages	Mortgage
   	liabilities	s	repayment	Facilities(1)	payable(2)	interest(1)(2)	Total
   	$	$	$	$	$	$	$
   Remainder of 2025	26,386	131	-	8,264	21,450	4,701	60,932
   2026	1,155	525	10,462	32,747	94,896	17,253	157,038
   2027	1,194	526	202,201	32,729	51,907	14,701	303,258
   2028	1,235	528	484,272	19,374	30,624	13,451	549,484
   2029	1,276	466	-	-	66,457	11,311	79,510
   Thereafter	2,403	21,045	-	-	321,576	27,623	372,647
   	33,649	23,221	696,935	93,114	586,910	89,040	1,522,869

   1. Net of interest rate swap agreements where applicable.

   2. Includes mortgages on properties classified as Asset Held for Sale.

      Interest rate risk

      Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. There is a risk that the REIT may not be able to renegotiate its mortgages and the Credit Facilities at maturity on terms as favourable as the existing mortgages payable and the Credit Facilities. As at September 30, 2025, there was a total of $826,744 (December 31, 2024 - $807,187) of mortgage and the Credit Facilities borrowings which bear interest at CORRA, SOFR or Canadian prime rates plus a fixed spread. There is a risk that prevailing interest rates could increase, and those increases could be significant. The REIT mitigates interest rate risk by maintaining reasonable levels of debt to investment property value and aims to structure new debt to stagger the maturities to ensure that the majority of debt does not come due for repayment in any one particular year. As at September 30, 2025, the REIT has interest rate swap agreements totaling $754,150 (December 31, 2024 - $780,709) to mitigate interest rate risk arising from floating rate debt, which represents 58.5% of total debt outstanding and 90.8% of total credit facility debt outstanding, as at September 30, 2025.

      The REIT is a party to interest rate swap agreements to swap floating rate interest for fixed rate interest over the terms of certain mortgages. The interest rate swap agreements expire coterminous with the maturity of the corresponding mortgages, with the remaining agreements expiring through February 2032.

      The fair value measurements of the interest rate swap agreements have been classified as Level 2, as they are based mainly on observable market data.

      The following table summarizes relevant information on interest rate swap agreements:

      Effective date Fixed interest rate on swap Maturity date Original notional amount Current notional amount Fair value asset (liability) $ $ $

      November 2020	2.820% (1)	November 2, 2027	7,650	6,559	215
      December 2020	3.610% (1)	December 1, 2025 (5)	18,500	16,138	71
      December 2020	3.350% (1)	December 30, 2030	18,000	15,848	967
      April 2021	3.080% (1)	April 1, 2026 (5)	19,750	17,267	109
      November 2021	4.080% (1)	June 1, 2028	22,600	19,565	(22)
      February 2022	3.280% (1)	February 23, 2032	29,500	27,302	527
      February 2022	3.280% (1)	February 23, 2032	20,000	18,510	357
      March 2022	3.410% (1)	March 1, 2027	17,800	16,122	99
      October 2023	4.140%	October 31, 2028	25,000	25,000	(1,092)
      October 2023	4.156%	October 31, 2028	50,000	50,000	(2,208)
      October 2023	4.110%	October 31, 2028	25,000	25,000	(1,070)
      October 2023	4.140%	October 31, 2028	25,000	25,000	(1,092)
      October 2023	4.055%	October 31, 2028	25,000	25,000	(1,029)

      November 2023 4.260% (1)(3) June 1, 2028 8,272 6,839 (42)

      May 2024	3.440%	May 31, 2029	50,000	50,000	(1,807)
      October 2024	2.500% (4)	October 2, 2029	60,000	60,000	(703)
      April 2025	3.050% (2)	February 28, 2029	50,000	50,000	(732)

      April 2025 3.950% (2) August 31, 2029 100,000 100,000 (4,651)

      April 2025	3.845% (2)	September 29, 2029	50,000	50,000	(2,174)
      April 2025	3.270% (2)	May 31, 2030	50,000	50,000	(1,803)
      April 2025	2.920% (2)	June 29, 2030	50,000	50,000	(1,173)
      May 2025	2.970% (2)	July 1, 2030	50,000	50,000	(1,292)
      			772,072	754,150	(18,545)

      1. Effective fixed interest rate of mortgage debt and borrowings under the Credit Facilities, including the applicable spread.

      2. The counterparties to these swaps have one-time options to terminate the swaps one year after the effective date.

      3. Amortizing swap assumed November 1, 2023, as part of the 1040 Wilton Grove acquisition. The underlying BA debt was repaid with funds drawn on the unsecured facilities and the swap was maintained.

      4. The counterparty to this swap has one-time options to terminate the swaps two years after the effective date.

      5. This swap is scheduled to mature within one year and is therefore classified as current assets on the consolidated statement of financial position.

      It is estimated that, all else constant, a hypothetical increase of 1% in the variable interest rate would result in an increase in the fair value of the REIT's interest rate swaps of $21,744 and a hypothetical decrease of 1% in the variable interest rate would result in a decrease in the fair value of the REIT's interest rate swaps of

      $23,412.

      Foreign exchange risk

      Foreign exchange risk arises from the possibility that fluctuations in exchange rates may adversely affect the value of financial instruments. The REIT is able to draw its unsecured credit facilities in US dollars or Canadian dollars as described in Note 8 above. As at September 30, 2025, debt of US$492,807 ($686,468 Canadian dollar equivalent) was outstanding under the Credit Facilities. To mitigate the foreign exchange risk on these drawings, the REIT entered into cross-currency interest rate swaps to economically convert the US

      dollar drawings into Canadian dollars. These swaps involve exchanging principal and interest payments in US dollars for Canadian dollar payments. Gains and losses resulting from these swaps are recorded as foreign exchange (loss) gain in the consolidated statement of income (loss) and comprehensive income (loss).

      The following table summarizes the cross-currency interest rate swaps at September 30, 2025:

      Current Effective date Pay / Receive interest rate Maturity date notional amount Fair value asset $ $

      September 2025	CORRA(CAD) / SOFR(USD) October 31, 2025	230,000	2,429
      September 2025	CORRA(CAD) / SOFR(USD) October 31, 2025	171,500	1,975
      September 2025	CORRA(CAD) / SOFR(USD) October 31, 2025	171,500	1,936
      September 2025	CORRA(CAD) / SOFR(USD) October 31, 2025	105,995	1,174
      		678,995	7,514

      Fair value risk

      During the nine months ended September 30, 2025, the REIT entered into Total Return Swaps ("TRS") to manage its economic exposure arising from employee incentive unit compensation. The TRS is carried at fair value with gains or losses arising from the remeasurement of the instrument recognized as fair value adjustments of derivative financial instruments. The net monthly returns generated from the TRS are recorded in net interest expense upon receipt. The REIT does not apply hedge accounting for the TRS.

      The following table summarizes the total return swaps at September 30, 2025:

      Effective date	Maturity date	Notional Amount	Notional Amount	Hedged Unit Price	Fair value asset
      		$	units	$	$
      April 2025	April 1, 2026	750	109,649	$6.84	100
      April 2025	April 1, 2026	750	119,237	$6.29	175
      		1,500	228,886	$6.55	275

      For the nine months ended September 30, 2025, the REIT has entered into TRS for 228,886 units with a fair value of $275 as at September 30, 2025.

      Credit risk

      Credit risk is the risk that one party to a financial instrument will cause a loss to another party by failing to settle its obligations. The REIT is subject to credit risk with respect to its cash deposited with financial institutions, derivative hedge contracts, and tenant and other receivables. As at September 30, 2025, one tenant accounted for approximately 11% of the REIT's base rental income, resulting in a concentration of credit risk. The REIT monitors the creditworthiness of its tenants on an ongoing basis. The REIT mitigates credit risk by monitoring the credit ratings of the institutions holding the REIT's deposits.

      The REIT has examined its tenant receivables for indications of impairment. The tenant receivables default rate of the REIT is less than 1.0%. The REIT continues to assess the effect of economic conditions on the creditworthiness of its tenants. As part of this assessment, the REIT reviews contractual rent receivables on a regular basis and reduces carrying amounts using an allowance for expected credit losses recognizing the amount of any loss in the consolidated statements of income and comprehensive income within property expenses. As at September 30, 2025, the REIT had an allowance for expected credit losses of $323 (December 31, 2024 - $107).

6. ‌Commitments and contingent obligations Development Management Agreement

   On April 3, 2025, the REIT entered into a Letter Agreement (the "Agreement") with 0768723 BC LTD ("0768"), outlining significant development initiatives and future contingent obligations. Pursuant to the Agreement, 0768, acting as Designer-Builder, will manage the design and construction of additional tennis courts at the REIT's Richmond, BC property (1751 and 1771 Savage Road) totaling 52,000 additional square feet for an estimated cost of $29,028.

   The REIT satisfied these construction costs through the issuance of Class B LP Units of a subsidiary limited partnership of the REIT exchangeable 1:1 into Nexus REIT units, valued at $10.50 per unit.

   In accordance with the Agreement, 2,764,464 Class B LP Units, representing a fair market value of $21,758 at the date of issuance, was legally transferred to 0768 on July 4, 2025, of which 447,619 Class B LP Units were issued without restrictions and released as an advance deposit for the commencement of development activities, and 2,316,845 Class B LP Units were issued subject to trading restrictions until specific constructions milestones are met.

   Upon completion of construction, Studio Events Ltd., an affiliate of 0768, has agreed to lease all newly constructed square footage at a rate equal to a 6% capitalization rate on the REIT's total construction costs.

7. ‌Related party transactions

   Trustee fees and key management compensation

   Key management personnel are comprised of the Chief Executive Officer and the Chief Financial Officer. The following table presents the compensation relating to key management personnel and trustees:

   September 30,	September 30,	September 30,	September 30,
   2025	2024	2025	2024
   $	$	$	$
   Key management personnel: Salaries and other short-term employee 518	514	1,469	1,541
   Unit-based compensation 244	313	812	940
   762	827	2,281	2,481
   Trustees: Retainer fees 69	69	208	208
   Unit-based compensation 50	50	150	150
   119	119	358	358
   Total 881	946	2,639	2,839

   Three months ended Nine months ended

   benefits

   Transactions with RFA Capital Partners Inc. ("RFA"), an entity related to Ben Rodney, a trustee of the REIT

   The REIT understands that Ben Rodney, a trustee of the REIT, is a Managing Partner of RFA Capital Partners Inc. ("RFA"). The REIT has a strategic relationship with RFA, through which the REIT expects to have unique access to properties identified through RFA's expansive network of favourable industry relationships developed through over 25 years of successful investing in the Canadian real estate industry.

   The REIT's investment to acquire its interest in 190 Glover Road, 1540 South Service Road and 844 Glancaster Road (collectively "the RFA Development Properties") is proportionately the same as the other limited partners and co-owners' investments.

   The REIT is entitled to receive a guarantee fee in respect of debt related to the RFA Development Properties which is guaranteed by the REIT. Acquisition fees, asset management fees and development management fees are payable to entities related to RFA in respect of the RFA Development Properties. If certain return thresholds are met, RFA will also receive a preferential allocation of income related to the RFA Development Properties at the completion of their development. These fees receivable and payable in respect of the RFA Development Properties are consistent with market terms.

   On November 16, 2023, the REIT guaranteed up to $9,405 of debt relating to a co-ownership for a property held for development in Hamilton, Ontario ("190 Glover Road"). The guaranteed debt increased from $9,405 to $10,230 in September 2025.

   On November 16, 2021, the REIT guaranteed up to $17,500 of debt relating to a limited partnership which holds land for development in Hamilton, Ontario ("844 Glancaster Road"). On August 3, 2023, the guaranteed debt increased from $17,500 to $23,200.

   The REIT recognized $50 (2024 - $47) and $150 (2024 - $142) of guarantee fees during the three and nine months ended September 30, 2025, respectively.

   Fees to RFA related entities in respect of the RFA Development Properties totaled $nil (2024 - $179) and

   $233 (2024 - $472), respectively, for the three and nine months ended September 30, 2025. Transactions with 1803299 Ontario Inc. ("1803299") and E&E McLaughlin Ltd.

   The REIT purchased several properties from 1803299 in recent years and issued Class B LP Units to 1803299 as purchase price consideration. 1803299 owns 18,209,828 Class B LP Units of a subsidiary limited partnership of the REIT, representing approximately 18.8% of the REIT's outstanding voting units as at September 30, 2025. E&E McLaughlin Ltd, an entity which the REIT understands to be related to 1803299, is a tenant of the REIT and provides property management services to the REIT for which it is paid fees on market terms. During the three and nine months ended September 30, 2025, the REIT incurred fees for property management services on the properties the REIT previously acquired from 1803299, totaling $117 (2024 - $70) and $301 (2024 - $248), respectively. During the three and nine months ended September 30, 2025, the REIT earned property revenues from an entity related to 1803299 totaling $809 (2024 - $967) and

   $2,561 (2024 - $2,539), respectively.

8. ‌Supplemental cash flow and non-cash information

   The following summarizes the changes in amortization and other non-cash operating items included in operating activities:

   Three months ended Nine months ended

   		September 30,	September 30,	September 30,	September 30,
   Note(s)		2025	2024	2025	2024
   		$	$	$	$
   Amortization:
   Amortization of deferred financing costs	7, 8	331	383	989	1,037
   Amortization of mortgage fair value adjustments	7	12	(4)	13	(30)
   Amortization of right-of-use assets		30	30	90	90
   Amortization of tenant
   incentives and leasing costs	4	358	445	1,001	1,102
   Total amortization		731	854	2,093	2,199

   Changes in non-cash working capital - increase/

   (decrease) to cash flow:
   Tenant and other receivables	(262)	1,905	(248)	5,858
   Prepaid expenses	2,222	920	(946)	(827)
   Deposits	-	150	-	2,850
   Other currents assets	(785)	(2,229)	(667)	(1,119)
   Accounts payable and other liabilities	(6,728)	(3,775)	(21,399)	(12,503)
   Total changes in non-cash working capital	(5,553)	(3,029)	(23,260)	(5,741)

   Changes in other non-current assets

   Changes in restricted cash Changes in other non-current

   liabilities

   Total changes in other non-cash

   (2)	14	271	54
   -	1,453	-	1,444

   (98) (427) (1,147) (730)

   operating items (5,653) (1,989) (24,136) (4,973)

   The following details cash paid included in operating activities and non-cash items included in investing and financing activities:

   	Three months ended September 30, September 30, 2025 2024 $ $		Nine months ended September 30, September 30, 2025 2024 $ $
   Interest paid included in operating activities	17,449 16,934		52,200 52,290
   Non-cash investing and financing activities:
   REIT Units issued under distribution reinvestment plan	-	419	-	3,045
   Class B LP Units issued as purchase
   price or development consideration	21,758	3,142	21,758	3,142
   Class B LP Units exchanged for REIT
   Units	1,174	-	3,425	11,596

9. ‌Subsequent event

On October 2, 2025, the REIT closed on the disposition of excess lands at Les Galeries d'Anjou, Quebec, for gross proceeds of $8,524 (at the REIT's 50% share).