Crombie REIT Announces Third Quarter 2024 Results

Advancing strategic initiatives to drive long-term growth

NEW GLASGOW, NS, Nov. 6, 2024 /CNW/ - Crombie Real Estate Investment Trust ("Crombie") (TSX: CRR.UN) today announced results for its third quarter ended September 30, 2024. Management will host a conference call to discuss the results at 11:00 a.m. (EST), November 7, 2024.

"Crombie's performance demonstrates the resilience of our coast-to-coast, necessity-based portfolio, and our focus on our value creation strategy of delivering consistent healthy operational and financial results. In addition to adding two grocery retail locations and disposing of two non-core assets, we purchased the remaining 50% of Zephyr, our mixed-use rental residential asset in downtown Vancouver," said Mark Holly, President and CEO. "It is our solid foundation, including our strong financial condition and dedicated team, that allows us to seize opportunities and advance key priorities to create long-term sustainable growth for our Unitholders."

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

Operational Highlights

• Committed occupancy of 96.1% and economic occupancy of 95.9%; a 30 basis point decrease and a 10 basis point decrease, respectively, compared to the third quarter of 2023
• Renewals of 359,000 square feet at rents 9.7% above expiring rental rates
  • An increase of 11.8% using the weighted average rent during the renewal term
• Acquisition of one freestanding grocery retail property added 14,000 square feet of gross leasable area for a purchase price of $3,760 excluding transaction and closing costs
• Announced the strategic acquisition of the remaining 50% of Zephyr residential, in Vancouver, British Columbia, from its partner, Westbank Corp., for a purchase price of $133,000 excluding transaction and closing costs
  • The purchase price included $44,000 in cash, financed through a new unsecured credit facility, and the assumption of $89,071 of debt
  • The acquisition closed subsequent to the quarter on October 15, 2024
• Completed two non-major development projects, in addition to investing $4,719 in our modernization program
• Received 2-Star GRESB ratings for both the Standing Investments and Development benchmark assessments

Financial Highlights

	Three months ended September 30,
	2024		2023		Variance	%
Property revenue ^(1)	$            114,460		$            109,389		$                5,071	4.6 %
Revenue from management and development services	$                1,083		$                   297		$                   786	264.6 %
Operating income attributable to Unitholders	$              26,570		$              27,796		$               (1,226)	(4.4) %
FFO ^(2) per Unit - basic	$                  0.31		$                  0.31		$                     —	— %
AFFO ^(2) per Unit - basic	$                  0.27		$                  0.28		$                 (0.01)	(3.6) %
Same-asset property cash NOI ^(2)	$              78,707		$              76,721		$                1,986	2.6 %
Available Liquidity	$            676,649		$            564,903		$            111,746	19.8 %
Debt to gross fair value ^(2)(3)	42.9 %		42.4 %			0.5 %
Debt to trailing 12 months adjusted EBITDA ^(2)(3)	7.72x		8.13x		-0.41x	(5.0) %

(1)	Property revenue for the three months ended September 30, 2023 has been increased by $4,898 as a result of a change in the presentation of recoverable property taxes for certain properties where a tenant pays the property taxes on Crombie's behalf.
(2)	Non-GAAP financial measures used by management to evaluate Crombie's business performance. See "Cautionary Statements and Non-GAAP Measures" below for a reconciliation of FFO, AFFO,  same-asset property cash NOI, debt to gross fair value, and debt to trailing 12 months adjusted EBITDA.
(3)	At Crombie's proportionate share including joint ventures.

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 September 30, 2024 and Consolidated Financial Statements and Notes for the quarters ended September 30, 2024, and September 30, 2023. Full details on our results can be found at www.crombie.ca and www.sedarplus.ca. 

Operational Metrics

	September 30, 2024	September 30, 2023
Number of investment properties ^(1)	296	294
Gross leasable area^(2)	18,766,000	18,652,000
Economic occupancy ^(3)	95.9 %	96.0 %
Committed occupancy ^(4)	96.1 %	96.4 %
Total properties inclusive of joint ventures ^(5)	305	304
Gross leasable area inclusive of joint ventures	19,297,000	19,182,000

(1)	This includes properties owned at full and partial interests, excluding joint ventures.
(2)	Gross leasable area is adjusted to reflect Crombie's proportionate interest in partially owned properties, excluding joint ventures.
(3)	Represents space currently under lease contract and rent has commenced.
(4)	Represents current economic occupancy plus completed lease contracts for future occupancy of currently available space.
(5)	Inclusive of properties under development properties.

Committed occupancy of 96.1% included 42,000 square feet of space committed in the quarter. VECTOM and Major Markets represent 22,000 square feet of committed space. The decrease in committed occupancy compared to September 30, 2023 is primarily due to natural lease expiries, early terminations, and tenant downsizing, partially offset by new leasing activity.

New leases increased occupancy by 187,000 square feet at September 30, 2024, at an average first year rate of $24.00 per square foot.

Renewal activity for the third quarter of 2024 consisted of 359,000 square feet with an increase of 9.7% over expiring rental rates. The primary driver of renewal growth in the quarter was 348,000 square feet of retail renewals with an increase of 9.8% 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 11.8% for the three months ended September 30, 2024.

Financial Metrics

	Three months ended September 30,				Nine months ended September 30,
	2024	2023	Variance	%	2024	2023	Variance	%
Net property income ^(1)	$    75,006	$    71,453	$      3,553	5.0 %	$   223,535	$   211,543	$       11,992	5.7 %
Operating income attributable to Unitholders	$    26,570	$    27,796	$     (1,226)	(4.4) %	$     82,122	$     72,526	$         9,596	13.2 %
Same-asset property cash NOI ^(1)	$    78,707	$    76,721	$      1,986	2.6 %	$   233,542	$   226,555	$         6,987	3.1 %
Funds from operations ("FFO") ^(1)
Basic	$    56,170	$    56,510	$        (340)	(0.6) %	$   168,918	$   155,413	$       13,505	8.7 %
Per Unit - Basic	$        0.31	$        0.31	$           —	— %	$         0.93	$         0.87	$           0.06	6.9 %
Payout ratio ^(1)	72.5 %	70.9 %		1.6 %	72.0 %	77.1 %		(5.1) %
Adjusted funds from operations ("AFFO") ^(1)
Basic	$    48,742	$    49,962	$     (1,220)	(2.4) %	$   146,006	$   134,989	$       11,017	8.2 %
Per Unit - Basic	$        0.27	$        0.28	$       (0.01)	(3.6) %	$         0.80	$         0.75	$           0.05	6.7 %
Payout ratio ^(1)	83.6 %	80.2 %		3.4 %	83.4 %	88.7 %		(5.3) %

(1)

Net property income, same-asset property cash NOI, FFO, FFO payout ratio, AFFO, and AFFO payout ratio are non-GAAP financial measures used by management to evaluate Crombie's business performance. See "Cautionary Statements and Non-GAAP Measures" below for a reconciliation of net property income, same-asset property cash NOI, FFO, FFO payout ratio, AFFO, and AFFO payout ratio.

Third Quarter and Year-to-Date 2024 Results

Operating income attributable to Unitholders

The decrease in operating income in the third quarter was mainly due to higher Unit-based compensation costs resulting from an increase in Crombie's Unit price, higher interest expense, and reduced income from equity-accounted investments resulting from the sale of land at Crombie's Opal Ridge joint venture in 2023. This was offset in part by growth in property revenue from new developments, renewals, new leasing activity, and higher supplemental rent from modernization investments.

The year-to-date increase was driven primarily by reduced general and administrative expenses due to lower employee transition costs compared to the same period in 2023 and organizational changes in 2024. Further contributing to the increase was growth in property revenue due to the factors discussed above, increased revenue from management and development services, and higher gain on disposal of investment properties. The increase was partially offset year to date by increased interest expense and lower income from equity-accounted investments resulting from the sale of land at Crombie's Opal Ridge joint venture in 2023. Further offsetting the increase in operating income was impairment of an investment property in the second quarter of 2024, an increase in depreciation and amortization, and higher tenant incentive amortization primarily from modernizations.

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, contractual rent step-ups, and new leasing.

The year-to-date increase was due to the factors discussed above and by higher supplemental revenue from modernization investments.

FFO

Without impacting FFO per Unit, total FFO decreased in the quarter, driven primarily by higher Unit-based compensation costs resulting from an increase in Crombie's Unit price, higher interest expense, and reduced income from equity-accounted investments resulting from the sale of land at Crombie's Opal Ridge joint venture in the third quarter of 2023. This was offset in part by higher property revenue from new developments, renewals, new leasing activity, and supplemental rent from modernization investments.

The year-to-date increase in FFO per Unit was driven by reduced general and administrative expenses due to lower employee transition costs compared to the same period in 2023 and organizational changes in 2024. Further contributing to the increase was growth in property revenue from new developments, renewals, new leasing activity, supplemental rent from modernization investments, and increased revenue from management and development services. The increase was partially offset by increased interest expense and lower income from equity-accounted investments resulting from the sale of land at Crombie's Opal Ridge joint venture in 2023.

FFO per Unit, excluding employee transition costs of $784 in the second quarter of 2024, was $0.93 year to date, an increase of 2.2% over 2023 ($0.91 year to date excluding employee transition costs of $7,172 in the second quarter of 2023).

AFFO

Total AFFO decreased in the quarter primarily due to higher Unit-based compensation costs resulting from an increase in Crombie's Unit price, higher interest expense, and reduced income from equity-accounted investments resulting from the sale of land at Crombie's Opal Ridge joint venture in the third quarter of 2023. This was partially offset by higher property revenue from new developments, renewals, contractual rent step-ups, new leasing activity, and supplemental rent from modernization investments.

On a year-to-date basis, the growth in total AFFO was primarily driven by reduced general and administrative expenses due to lower employee transition costs compared to the same period in 2023 and organizational changes in 2024. Growth in property revenue due to the factors discussed above and increased revenue from management and development services further contributed to the year-to-date increase in AFFO. This was partially offset by higher interest expense and reduced income from equity-accounted investments resulting from the sale of land at Crombie's Opal Ridge joint venture in 2023.

AFFO per Unit, excluding employee transition costs of $784 in the second quarter of 2024, was $0.81 year to date, an increase of 2.5% over 2023 ($0.79 year to date excluding employee transition costs of $7,172 in the second quarter of 2023).

Financial Condition Metrics

	September 30, 2024	December 31, 2023	September 30, 2023
Unencumbered investment properties ^(1)	$                2,651,000	$                2,608,000	$                2,582,000
Available liquidity ^(2)	$                   676,649	$                   583,770	$                   564,903
Debt to gross book value - cost basis ^(3)	45.2 %	45.2 %	45.3 %
Debt to gross fair value^(4)(5)	42.9 %	43.0 %	42.4 %
Weighted average interest rate ^(6)	4.2 %	4.1 %	4.0 %
Debt to trailing 12 months adjusted EBITDA ^(4)(5)	7.72x	8.03x	8.13x
Interest coverage ratio ^(4)(5)	3.31x	3.06x	3.41x

(1)	Represents fair value of unencumbered properties.
(2)	Represents the undrawn portion on the credit facilities, excluding joint facilities with joint operation partners.
(3)	See Capital Management note in the Financial Statements.
(4)	Non-GAAP financial measures used by management to evaluate Crombie's business performance. See "Cautionary Statements and Non-GAAP Measures" below for a reconciliation of debt to gross fair value, debt to trailing 12 months adjusted EBITDA, and interest coverage ratio.
(5)	See Debt Metrics section in the Management's Discussion and Analysis.
(6)	Calculated based on interest rates for all outstanding fixed rate debt.

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 shorter in duration and thus boast less overall risk as compared to Crombie's major development pipeline. These projects have the ability to create value while enhancing the overall quality of the portfolio.

In the third quarter of 2024, non-major development, via land-use intensification, added 2,000 square feet of gross leasable area to the portfolio.

			Three months ended
Asset Class	Location	Market Class	September 30, 2024	Tenant
Retail	Edmonton	VECTOM	2,000	Wendy's

Also in the third quarter of 2024, Crombie completed a non-major redevelopment that repurposed existing space within the portfolio into a new grocery store without adding incremental gross leasable area and invested $4,719 into our modernization program.

The below table summarizes active non-major developments within Crombie's portfolio at September 30, 2024.

			At Crombie's Share
Type	Project Count	Estimated GLA on Completion	Estimated Total Cost	Estimated Cost to Complete^(2)
Land-use intensification, redevelopments and other	1	52,000	$                   26,494	$                   21,025
Modernizations^(1)	84	—	31,156	—
Total non-major developments	85	52,000	$                   57,650	$                   21,025

(1)	Modernizations are capital investments to modernize/renovate Crombie-owned grocery-anchored properties in exchange for a defined return and potential extended lease term. The spend on completed modernizations for the three and nine months ended September 30, 2024 was $4,719 and $31,156, respectively (three and nine months ended September 30, 2023 - $4,170 and $16,977, respectively).
(2)	Estimated cost to complete reflects approved projects currently in progress. It does not include potential future projects for which approvals have not yet been obtained.

Highlighted Subsequent Events

On October 8, 2024, Crombie disposed of a 100% interest in two retail properties to a third party totalling 338,000 square feet. Total proceeds, before closing and transaction costs, were $6,000, half of which will be in the form of interest free vendor take-back financing for three years. As part of this transaction, Crombie will retain the grocery component at one location through a long term land lease. 

On October 11, 2024, Crombie issued, on a private placement basis, $300,000 of Series M notes (senior unsecured) maturing January 15, 2032. The net proceeds were used to repay, redeem, or refinance existing indebtedness, including maturing mortgage financing, indebtedness under existing bank credit facilities, and outstanding debt securities, as well as general trust purposes. The notes were priced with a contractual interest rate of 4.732%. Interest is payable in equal semi-annual installments on January 15 and July 15.

On October 15, 2024, Crombie acquired its partners' interest in the Davie Limited Partnership joint venture and obtained control of the property. As a result, Crombie derecognized its share of the Davie Limited Partnership joint venture and recognized the property as an asset acquisition, which resulted in a gain of approximately $52,000 following the remeasurement of its previously held interest in Davie Limited Partnership joint venture. Consideration paid for the property included $44,000 in cash, financed through a new unsecured credit facility, and the assumption of $89,071 of debt, net of a $24,622 mortgage payable to the joint venture for the commercial component of the Davie Street development, 100% of which is already recognized in Crombie's financial statements. 

On October 24, 2024, Crombie acquired a land parcel at an existing property for $2,000, excluding closing and transaction costs.

On October 31, 2024, Crombie redeemed $175,000 principal amount of its 4.80% Series E senior unsecured notes which were originally scheduled to mature on January 31, 2025.  

Conference Call and Webcast

Crombie will provide additional details regarding its third quarter ended September 30, 2024 results on a conference call to be held Thursday, November 7, 2024, beginning at 11:00 a.m. (EST). 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 [phone] or [phone]. To join the conference call without operator assistance, you may register and enter your phone number at https://emportal.ink/3ZHA4ic 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 November 14, 2024 by dialing [phone] or [phone] and entering passcode 02422 #, or on the Crombie website for 90 days following the conference call.

Non-GAAP Measures and Cautionary Statements

Net property income, same-asset property cash NOI, FFO, AFFO, FFO payout ratio, AFFO payout ratio, debt to trailing 12 months adjusted EBITDA, debt to gross fair value, and interest coverage ratio are non-GAAP financial measures that do not have a standardized meaning under International Financial Reporting Standards ("IFRS"). These measures as computed by Crombie may differ from similar computations as reported by other entities and, accordingly, may not be comparable to other such entities. Management includes these measures as they represent key performance indicators to management, and it believes certain investors use these measures as a means of assessing Crombie's financial performance. For additional information on these non-GAAP measures see our Management's Discussion and Analysis for the three and nine months ended September 30, 2024.

The reconciliations for each non-GAAP measure included in this press release are outlined as follows:

Net Property Income

Management uses net property income as a measure of performance of properties period over period.

Net property income, which excludes revenue from management and development services and certain expenses such as interest expense and indirect operating expenses, is as follows:

	Three months ended September 30,							Nine months ended September 30,
	2024		2023	^(1)	Variance			2024		2023	^(1)	Variance
Property revenue	$   114,460		$   109,389		$      5,071			$   349,430		$   334,703		$     14,727
Property operating expenses	(39,454)		(37,936)		(1,518)			(125,895)		(123,160)		(2,735)
Net property income	$     75,006		$     71,453		$      3,553			$   223,535		$   211,543		$     11,992

(1)

Property revenue and property operating expenses for the three and nine months ended September 30, 2023 have been increased by $4,898 and $14,694, respectively, as a result of a change in the presentation of recoverable property taxes for certain properties where a tenant pays the property taxes on Crombie's behalf.

Same-Asset Property Cash NOI

Crombie measures certain performance and operating metrics on a same-asset basis to evaluate the period-over-period performance of those properties owned and operated by Crombie. "Same-asset" refers to those properties that were owned and operated by Crombie for the current and comparative reporting periods. Properties that will be undergoing a redevelopment in a future period and those for which planning activities are underway are also in this category until such development activities commence and/or tenant leasing/renewal activity is suspended. Same‐asset property cash NOI reflects Crombie's proportionate ownership of jointly operated properties (and excludes any properties held in joint ventures).

Management uses net property income on a cash basis (property cash NOI) as a measure of performance as it reflects the cash generated by properties period over period.

Net property income on a cash basis, which excludes non-cash straight-line rent recognition and amortization of tenant incentive amounts, is as follows:

	Three months ended September 30,							Nine months ended September 30,
	2024		2023		Variance			2024		2023		Variance
Net property income	$       75,006		$       71,453		$         3,553			$     223,535		$     211,543		$       11,992
Non-cash straight-line rent	(1,271)		(774)		(497)			(4,163)		(2,917)		(1,246)
Non-cash tenant incentive amortization ^(1)	7,663		7,838		(175)			21,502		19,987		1,515
Property cash NOI	81,398		78,517		2,881			240,874		228,613		12,261
Acquisitions and dispositions property cash NOI	177		83		94			587		94		493
Development property cash NOI	2,514		1,713		801			6,745		1,964		4,781
Acquisitions, dispositions, and development property cash NOI	2,691		1,796		895			7,332		2,058		5,274
Same-asset property cash NOI	$       78,707		$       76,721		$         1,986			$     233,542		$     226,555		$         6,987

(1)	Refer to "Amortization of Tenant Incentives" in the Management's Discussion and Analysis for a breakdown of tenant incentive amortization.

Funds from Operations (FFO)

Crombie follows the recommendations of the January 2022 guidance of the Real Property Association of Canada ("REALPAC") in calculating FFO. 

The reconciliation of FFO for the three and nine months ended September 30, 2024 and 2023 is as follows:

	Three months ended September 30,							Nine months ended September 30,
	2024		2023		Variance			2024		2023		Variance
Decrease in net assets attributable to Unitholders	$   (17,671)		$   (11,090)		$     (6,581)			$   (41,897)		$   (43,936)		$      2,039
Add (deduct):
Amortization of tenant incentives	7,663		7,838		(175)			21,502		19,987		1,515
Gain on disposal of investment properties	—		(477)		477			(2,163)		(588)		(1,575)
Impairment of investment properties	—		—		—			2,000		—		2,000
Depreciation and amortization of investment properties	19,995		19,453		542			59,228		57,637		1,591
Adjustments for equity-accounted investments	1,212		1,243		(31)			3,707		3,515		192
Principal payments on right-of-use assets	61		60		1			180		175		5
Internal leasing costs	669		597		72			2,342		2,161		181
Finance costs - distributions to Unitholders	40,735		40,077		658			121,698		119,773		1,925
Change in fair value of financial instruments ^(1)	3,506		(1,191)		4,697			2,321		(3,311)		5,632
FFO as calculated based on REALPAC recommendations	$     56,170		$     56,510		$        (340)			$   168,918		$   155,413		$     13,505
Basic weighted average Units (in 000's)	182,958		180,003		2,955			182,201		179,332		2,869
FFO per Unit - basic	$        0.31		$        0.31		$           —			$        0.93		$        0.87		$        0.06
FFO payout ratio (%)	72.5 %		70.9 %		1.6 %			72.0 %		77.1 %		(5.1) %

(1)	Includes the fair value changes of Crombie's deferred unit plan.

Adjusted Funds from Operations (AFFO)

Crombie follows the recommendations of REALPAC's January 2022 guidance in calculating AFFO and has applied these recommendations to the AFFO amounts included in this press release and Management's Discussion and Analysis.

The reconciliation of AFFO for the three and nine months ended September 30, 2024 and 2023 is as follows:

	Three months ended September 30,							Nine months ended September 30,
	2024		2023		Variance			2024		2023		Variance
FFO as calculated based on REALPAC recommendations	$      56,170		$      56,510		$        (340)			$   168,918		$   155,413		$     13,505
Add (deduct):
Straight-line rent adjustment	(1,271)		(774)		(497)			(4,163)		(2,917)		(1,246)
Straight-line rent adjustment included in income (loss) from equity-accounted investments	40		9		31			155		165		(10)
Internal leasing costs	(669)		(597)		(72)			(2,342)		(2,161)		(181)
Maintenance expenditures on a square footage basis	(5,528)		(5,186)		(342)			(16,562)		(15,511)		(1,051)
AFFO as calculated based on REALPAC recommendations	$     48,742		$     49,962		$     (1,220)			$   146,006		$   134,989		$     11,017
Basic weighted average Units (in 000's)	182,958		180,003		2,955			182,201		179,332		2,869
AFFO per Unit - basic	$        0.27		$        0.28		$       (0.01)			$        0.80		$        0.75		$        0.05
AFFO payout ratio (%)	83.6 %		80.2 %		3.4 %			83.4 %		88.7 %		(5.3) %

Debt Metrics

When calculating debt to gross fair value, debt is defined as obligations for borrowed money, including obligations incurred in connection with acquisitions, excluding trade payables and accruals in the ordinary course of business, and distributions payable. Debt includes Crombie's share of debt held in equity-accounted joint ventures.

Gross fair value includes investment properties measured at fair value, including Crombie's share of those held within equity-accounted joint ventures. All other components of gross fair value are measured at the carrying value included in Crombie's financial statements. Crombie's methodology for determining the fair value of investment properties includes capitalization of trailing 12 months net property income using biannual capitalization rates from external property valuators. The majority of investment properties are also subject to external, independent appraisals on a rotational basis over a period of not more than four years. Valuation techniques are more fully described in Crombie's year-end audited financial statements.

The fair value included in this calculation reflects the fair value of the properties as at September 30, 2024 and December 31, 2023, respectively, based on each property's current use as a revenue-generating investment property. Additionally, as properties are prepared for redevelopment, Crombie considers each property's progress through entitlement in determining the fair value of a property.

	September 30, 2024	December 31, 2023	September 30, 2023
Fixed rate mortgages	$                     767,572	$                     838,957	$                     799,190
Senior unsecured notes	1,375,000	1,175,000	1,175,000
Unsecured non-revolving credit facility	—	93,297	77,397
Construction financing facility	1,207	—	—
Revolving credit facility	4,643	47,591	84,820
Joint operation credit facility	3,520	3,503	3,326
Bilateral credit facility	43,500	—	—
Debt held in joint ventures, at Crombie's share ^(1) (2)	275,555	274,115	273,953
Lease liabilities	35,651	36,292	34,698
Adjusted debt	$                   2,506,648	$                   2,468,755	$                  2,448,384
Investment properties, fair value	$                   5,272,000	$                   5,096,000	$                  5,170,000
Investment properties held in joint ventures, fair value, at Crombie's share ^(2)	428,000	472,500	442,000
Other assets, cost ^(3)	100,222	136,081	115,673
Other assets, cost, held in joint ventures, at Crombie's share ^(2) (3) (4)	26,381	26,214	28,380
Cash and cash equivalents	—	—	110
Cash and cash equivalents held in joint ventures, at Crombie's share ^(2)	4,279	3,004	8,849
Deferred financing charges	7,937	7,560	7,617
Gross fair value	$                   5,838,819	$                   5,741,359	$                  5,772,629
Debt to gross fair value	42.9 %	43.0 %	42.4 %

(1)	Includes Crombie's share of fixed rate mortgages, floating rate construction loans, revolving credit facility, and lease liabilities held in joint ventures.
(2)	See the "Joint Ventures" section in the Management's Discussion and Analysis.
(3)	Excludes tenant incentives, accumulated amortization, and accrued straight-line rent receivable.
(4)	Includes deferred financing charges.

The following table presents a reconciliation of operating income attributable to Unitholders to adjusted EBITDA. Adjusted EBITDA is a non-GAAP measure and should not be considered an alternative to operating income attributable to Unitholders, and may not be comparable to that used by other entities.

In calculating adjusted EBITDA, Crombie includes its share of revenue, operating expenses, and general and administrative expenses in joint ventures, and excludes its share of amortization of tenant incentives in joint ventures. Interest coverage calculations also include Crombie's share of finance costs - operations.

	Three months ended
	September 30, 2024	December 31, 2023	September 30, 2023
Operating income attributable to Unitholders	$                       26,570	$                       26,295	$                       27,796
Amortization of tenant incentives	7,663	6,529	7,838
Gain on disposal of investment properties	—	—	(477)
Depreciation and amortization	20,359	20,087	19,834
Finance costs - operations	22,677	23,839	20,665
(Income) loss from equity-accounted investments	469	980	(876)
Property revenue in joint ventures, at Crombie's share	5,325	7,222	9,691
Amortization of tenant incentives in joint ventures, at Crombie's share	79	—	—
Property operating expenses in joint ventures, at Crombie's share	(1,815)	(3,684)	(4,270)
General and administrative expenses in joint ventures, at Crombie's share	(110)	(23)	(145)
Taxes - current	—	6	—
Adjusted EBITDA [1]	$                       81,217	$                       81,251	$                       80,056
Trailing 12 months adjusted EBITDA [3]	$                     324,680	$                     307,356	$                     300,970
Finance costs - operations	$                       22,677	$                       23,839	$                       20,665
Finance costs - operations in joint ventures, at Crombie's share	2,726	3,279	3,428
Amortization of deferred financing charges	(558)	(588)	(604)
Amortization of deferred financing charges in joint ventures, at Crombie's share	(277)	—	—
Adjusted interest expense [2]	$                       24,568	$                       26,530	$                       23,489
Debt outstanding (see Debt to Gross Fair Value) ^(1) [4]	$                   2,506,648	$                   2,468,755	$                   2,448,384
Interest coverage ratio {[1]/[2]}	3.31x	3.06x	3.41x
Debt to trailing 12 months adjusted EBITDA {[4]/[3]}	7.72x	8.03x	8.13x

(1)        Includes debt held in joint ventures, at Crombie's share.

This press release contains forward-looking statements that reflect the current expectations of management of Crombie about Crombie's future results, performance, achievements, prospects, and opportunities. Wherever possible, words such as "may", "will", "estimate", "anticipate", "believe", "expect", "intend", and similar expressions have been used to identify these forward-looking statements. These statements reflect current beliefs and are based on information currently available to management of Crombie. Forward-looking statements necessarily involve known and unknown risks and uncertainties. A number of factors, including those discussed in the 2023 annual Management's Discussion and Analysis under "Risk Management" and the Annual Information Form for the year ended December 31, 2023 under "Risks", could cause actual results, performance, achievements, prospects, or opportunities to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully, and a reader should not place undue reliance on the forward-looking statements. There can be no assurance that the expectations of management of Crombie will prove to be correct, and Crombie can give no assurance that actual results will be consistent with these forward-looking statements.

Specifically, this document includes, but is not limited to, forward-looking statements regarding expected timing and cost of development, which may be impacted by ordinary real estate market cycles, the availability of labour, ability to attract tenants, estimated GLA, tenant rents, building sizes, financing and the cost of any such financing, capital resource allocation decisions and general economic conditions, as well as development activities undertaken by related parties not under the direct control of Crombie.

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 September 30, 2024, our portfolio contains 305 properties comprising approximately 19.3 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.

SOURCE Crombie REIT

Media Contacts: Kara Cameron, CPA, CA, Chief Financial Officer, Crombie REIT, [phone]; Ruth Martin, CPA, CA, CPIR, Senior Director, Investor Relations & ESG Reporting, Crombie REIT, [phone]