CAPREIT Expects About C$1.2 Billion in Mortgage Financing in 2026
Key Facts
CAPREIT expects to complete about C$1.2 billion in total mortgage financing during 2026, according to its third-quarter results, based on its current portfolio and assuming no further acquisitions or dispositions. The estimate follows the completion of, or commitments to, C$959.6 million in financing as of the results announcement on November 4, 2026. The weighted average interest rate on that financing was 4.08%, while its weighted average term to maturity was 7.6 years. The figures set the expected financing volume alongside what has already been completed and its terms, as the company faces operating pressures and higher interest costs. CAPREIT had forecast financing of between C$1.2 billion and C$1.3 billion for 2026 in its second-quarter results, on the same assumptions, before reporting an estimate of about C$1.2 billion in the third quarter.
On rents, the monthly blended change in rent on unit turnover returned to positive territory in the third quarter, recording an increase of 0.3%. The reading was negative 1.2% in the second quarter and negative 2.1% in the first quarter, according to the company's earnings call transcript. The improvement over the quarters points to easing pressure on rents as tenants move, after earlier increases turned into declines. In October, monthly rents on tenant turnover in Canada rose 0.4%, while rents on lease renewals increased 1.9%. Occupancy at same-property Canadian residential assets was 97.2% on September 30, 2026, compared with 97.8% on the same date a year earlier, then stood at 97.1% on October 31.
The improvement in rents on unit turnover did not carry through to all operating measures in the quarter, as net operating income at same-property Canadian assets fell 0.3%. The company attributed the decline to the amortization of tenant incentives and higher maintenance costs. For the nine months ended September 30, 2026, same-property net operating income rose 0.8% year over year, putting the quarterly result in the context of a weaker outcome than the period's cumulative figure. Diluted funds from operations per unit were C$0.652 in the third quarter, down 1.7% from a year earlier. CAPREIT said the decline was mainly due to lost operating income from dispositions and higher interest expense.
The chief executive said that "the next few quarters will remain challenging as the rental market continues to absorb new supply amid slower population growth." The company also noted that higher mortgage refinancing costs are adding pressure to earnings. These challenges combine a market absorbing new units and slower population growth with higher financing costs, despite the return to positive rent increases on tenant turnover in the quarter. Investor relations listed the third-quarter earnings call on November 5, 2026. Executives said they would discuss further strategic priorities and capital allocation at the next investor day.