H&R Real Estate Investment Trust (HR-UN-T) recorded a $791.56 million net loss in 2025 as it absorbed $969.28 million in writedowns on its real estate assets.

However, citing "a weak office market, the tariff war creating general market uncertainty and a weaker Canadian economy," chief financial officer Larry Froom said during a Feb. 13 conference call to discuss its 2025 financial report, "We are very pleased with our results."

H&R has a market cap of $2.91 billion on the Toronto Stock Exchange. Its stock price has dropped by approximately 30 cents to the $10.50 range since its results were released on Feb. 12: the REIT has traded at a 12-month high of $12.77 and a 12-month low of $8.95.

Toronto-based H&R invests in residential, industrial, office and retail properties in Canada and the U.S. But H&R continued its repositioning plan to be a more simplified growth and income-oriented REIT focused on residential and industrial properties during 2025.

H&R had total assets of $9.11 billion and a debt-to-total-assets ratio, at the REIT's proportionate share, of 49.8 per cent to end 2025. The trust had cash and cash equivalents of $52.1 million, $316.8 million available under its unused lines of credit and an unencumbered property pool of approximately $3.9 billion.

Properties sold and under contract in 2026 total approximately $1.6 billion. By the end of this process, 84 per cent of H&R’s portfolio would be comprised of residential and industrial properties, while the weighting of its assets in the U.S. would grow to 68 per cent.

Additional planned dispositions could generate from $500 million to over $1 billion in proceeds.

Lantower Residential

Lantower Residential is H&R’s residential subsidiary that was formed in 2014 and is based in Dallas. It owned 26 properties with 8,929 rental units in Texas, Florida and North Carolina, at H&R’s ownership interest, as of Dec. 31. 

Lantower’s same-property NOI for the year was $170.39 million, up from $168.42 million 12 months earlier. Same-asset occupancy ended the year at 92.8 per cent, a decrease of 2.2 per cent from the prior year.

“Collections remain strong and resident retention remains high,” said chief operating officer Emily Watson. “While new lease pricing remains pressured in certain markets, renewal performance continues to provide stability supported by a resident base that remains employed and financially healthy.”

Developments in the Florida cities of Tampa and Orlando are to be completed by mid-year. Nine properties with approximately 2,900 units, at Lantower’s ownership interest, are in the development pipeline.

“These projects reflect our conviction in the long-term growth of our Sun Belt market and our ability to capitalize on favourable land positions as construction costs stabilize,” Watson said.

Lantower will move its property management to a third party on April 1 and has entered into a master management agreement with Greystar. Watson said this would allow it to “pursue additional multifamily investments in additional high-growth Sun Belt markets without incurring the cost and complexity of expanding a property management organization.”

The transition is expected to yield cost savings of approximately US$5 million annually.

Industrial

H&R’s industrial segment consists of 65 properties throughout Canada and one in the U.S., comprising 8.3 million square feet at H&R’s ownership interest, with an average lease term to maturity of 5.7 years as of Dec. 31.

Same-property NOI for the industrial segment was $65.34 million, down from $67.85 million a year earlier.

The industrial occupancy rate declined to 90.7 per cent from 98.9 per cent a year earlier. Three industrial developments, comprising about 360,000 square feet at H&R’s ownership share, have been leased.

Office

Same-property NOI was $154.68 million in the office segment, up from $152.45 million in 2024.

Occupancy was 96 per cent with a weighted average lease term of 5.2 years at H&R’s 12 Canadian and three U.S. office properties, totalling 4.4 million square feet at the end of 2025. Two were sold in January and another two are expected to be sold this year, after which office will comprise 12 per cent of the REIT’s total assets.

RBC vacated 188,526 square feet at 330 Front St. W. in Toronto after its lease expired on Dec. 31, but H&R is in negotiations with several prospective tenants for part of the space.

H&R had its three interconnected buildings at 310-330 Front St. W. on the market last year but has since removed the 37-year-old complex from discussions. There’s still a plan to sell it after it stabilizes.

Retail

Same-property NOI was $99.32 million in the retail segment, up from $93.1 million a year earlier.

H&R’s retail segment consisted of 26 mostly single-tenant properties throughout Canada and one multi-tenant U.S. property as of Dec. 31. However, 23 Canadian retail assets were sold in January and three more are expected to be sold in March.

H&R also held a 33.1 per cent interest in ECHO Realty, a private real estate and development company with 229 properties that focuses on developing and owning a core portfolio of grocery-anchored shopping centres in the U.S. It sold that interest on Jan. 6.

Proceeds received from the sales are being used to repay debt.