AH Realty Trust Q3 Same-Store NOI Rises, 2026 FFO Outlook Revised

AH Realty Trust (NYSE: AHRT) reported stronger same-store cash net operating income across both its retail and office portfolios in the third quarter of 2026, while revising its full-year outlook for adjusted funds from operations to $0.57 to $0.59 per diluted share. The midpoint represents an 11.5% increase over the REIT’s original guidance, according to the presentation.

For the quarter ended September 30, adjusted FFO was $15.3 million, or $0.16 per diluted share, compared with $14.1 million, or $0.14 per share, in the second quarter. Adjusted funds from operations excludes results from the company’s discontinued general contracting and real estate services, multifamily and real estate financing businesses. AFFO was $14.2 million, or $0.15 per diluted share.

On a GAAP basis, AH Realty Trust recorded a net loss available to the company and operating partnership unitholders of $6.6 million, or $0.07 per diluted share, compared with a loss of $3.6 million, or $0.04 per share, a year earlier. The latest result included a $3.3 million loss from discontinued operations, including impairments related to The Everly and Solis Gainesville II.

Third-quarter rental revenue decreased to $52.3 million from $53.1 million a year earlier. Operating income fell to $11.7 million from $13.9 million, while interest expense declined to $13.1 million from $15.3 million.

Same-store NOI and leasing

Same-store cash NOI increased 6.1% year over year to $30.6 million. Retail same-store cash NOI rose 6.8% to $17.0 million as rental revenue increased 4.6% and real estate taxes declined 7.0%. Office same-store cash NOI advanced 5.2% to $13.6 million, with a 5.2% increase in rental revenue offset in part by higher operating expenses and real estate taxes.

For the first nine months of 2026, total same-store cash NOI increased 4.4%, including growth of 4.1% in retail and 4.7% in office. AH Realty Trust’s revised full-year assumptions call for retail same-store cash NOI growth of 2.5% to 3.5% and office growth of 3.0% to 4.0%.

Leasing spreads remained positive during the quarter. New retail leases carried a 16.5% cash releasing spread, while retail renewals produced a 5.8% spread. New office leases generated a 23.3% cash spread, and office renewals had a 1.5% spread. The new-lease figures covered relatively limited volumes of 2,426 square feet in retail and 15,499 square feet in office.

At September 30, the stabilized retail portfolio was 95.0% leased and 91.0% economically occupied. Stabilized office properties were 96.6% leased and 89.6% economically occupied. The combined stabilized portfolio’s weighted leased occupancy was 95.7%, compared with economic occupancy of 90.3%, reflecting space under signed leases that was not yet generating full rent.

Revised outlook and portfolio exit

AH Realty Trust expects 2026 adjusted FFO of $56.3 million to $58.3 million. Its outlook assumes total commercial NOI of $134.1 million to $136.9 million, including retail NOI of $70.3 million to $71.5 million and office NOI of $60.2 million to $61.4 million. The company also projects general and administrative expenses of $19.0 million to $20.0 million and interest expense of $54.6 million to $55.6 million.

The outlook assumes no acquisitions during 2026 and incorporates the company’s exit from most of its multifamily portfolio and remaining real estate financing investments. AH Realty Trust expects about $57 million of additional secured-debt repayments using proceeds from The Everly and the anticipated sale of Greenside. It also assumes approximately $100 million of remaining net unsecured-debt repayments in 2026, funded by expected asset-sale proceeds and including the effect of anticipated credit-line borrowings.

The company completed the sales of The Everly and Solis Gainesville II on October 30, after the quarter ended. The note secured by Solis Kennesaw was fully redeemed on October 29. Greenside Apartments is expected to be sold in the fourth quarter, while Premier Apartments is under a purchase and sale agreement with an expected second-quarter 2027 closing. AH Realty Trust cautioned that those transactions may not close on the anticipated schedules or at all.

Debt restructuring and capital allocation

Total debt stood at $1.03 billion at September 30, down from $1.53 billion at the end of 2025. Net debt to total adjusted EBITDAre was 7.1 times, unchanged from the second quarter and down from 8.3 times in the first quarter. Total liquidity was $262.4 million.

At quarter-end, 61.4% of debt was fixed or hedged, and the portfolio’s weighted-average maturity was two years. On October 28, AH Realty Trust recast its credit facilities into a $150 million five-year revolving facility, two term loans totaling $400 million with four- and five-year maturities, and a separate $100 million seven-year term loan. Combined with new swaps and asset-sale proceeds used to repay variable-rate debt, the company said its debt would become 100% fixed or hedged. The refinancing increased the weighted-average debt maturity to 4.4 years.

AH Realty Trust repurchased $4.9 million of shares during the third quarter. Through September 30, it had bought back 6.4 million shares for $38.2 million.

The company’s outlook remains dependent on completing planned dispositions and receiving proceeds consistent with broker-underwritten valuations. AH Realty Trust said actual proceeds could differ materially from its assumptions, which could affect the scale and timing of expected debt repayments.