The following is a summary of the Nexus Industrial REIT (EFRTF) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Nexus Industrial REIT reported a net loss of $46.0 million this quarter due to non-cash fair value adjustments. Last year, there was a net income of $77.0 million.

• The normalized FFO increased by 5.6% to $0.188 per unit, and the normalized AFFO increased by 6.8% to $0.158 per unit, driven by a stronger net operating income which rose by 11% or $3.2 million compared to last year.

Business Progress:

• Nexus Industrial REIT is focusing on becoming a pure play industrial REIT by streamlining its portfolio through the sale of non-core assets, including all legacy retail and office properties.

• Significant developments include the completion of the Titan Park and Hubrey Road Industrial projects. Titan Park is now fully operational with a healthy NOI, and a new tenant at Hubrey Road took occupancy in July.

• Following the strategic divestments, total expected asset sales for the second half of 2024 targets approximately $110 million. Proceeds will be utilized to reduce the REIT's debt.

Opportunities:

• With the evolution into a pure play industrial REIT, Nexus is positioned to capitalize on the strong demand in the industrial sector. Further, anticipated rental escalations across their property portfolio promise beneficial revenue streams.

Risks:

• The transition towards exclusively industrial properties involves divesting from non-core assets, which may impact short-term financial liquidity and operational adjustments.

• The development and leasing of new properties, like the Glover Road project, face competitive market conditions which could affect leasing timelines and revenue generation.

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