RFA Financial said its second-quarter results reflected progress on its strategy of selling real estate assets, expanding lending operations and redeploying capital into higher-return opportunities.
President and Chief Executive Officer Ben Rodney said the company’s medium-term targets remain unchanged. Over the next three to five years, RFA plans to complete between C$1.3 billion and C$1.5 billion in asset sales, grow its lending portfolio to between C$8 billion and C$12 billion, and reinvest capital in lending growth, strategic acquisitions and share repurchases.
Real Estate Sales and Leasing
Chief Financial Officer Jaclyn Koenig said RFA closed the sale of 13 properties during the second quarter for an aggregate C$94 million. As of June 30, the company held about C$442 million of investment properties for sale.
Chief Operating Officer Melody Lo said RFA had closed C$231 million of dispositions across 25 properties through the second quarter, including C$60 million in the first quarter, C$94 million in the second quarter and C$77 million closed after quarter-end. Total year-to-date disposition activity, including closed, unconditional and conditional transactions, was C$541 million.
Lo said closed sales and unconditional contracts year to date were completed at an average of 4.6% above IFRS values. Closed sales were completed 2.4% above IFRS values, while unconditional contracts were 9% above those values. The company also had a C$310 million pipeline of conditional and unconditional transactions.
Following recent sales, RFA’s real estate portfolio consisted of 76 properties in Canada and the United States, totaling about 8.7 million square feet, as well as 395 multi-residential suites. Occupancy including committed leases was 84.4% at quarter-end, while weighted-average rental rates on lease renewals rose 3% during the quarter.
Rodney also highlighted a new 20-year lease with IG Wealth Management covering more than 120,000 square feet at RFA’s 360 Main Street and 300 Main Street properties in downtown Winnipeg. The lease is expected to increase committed occupancy in the company’s core Winnipeg office portfolio to about 95.1% from 79.6% and lift net rental income for that portfolio by approximately 59.7%.
Lending Growth and Credit Performance
RFA reported that year-to-date originations at RFA Bank and RFA Mortgage Corporation increased 35% from the prior-year period. RFA Bank’s origination volume rose 50% from the second quarter of 2025, supported by alternative and off-balance-sheet multifamily originations.
RFA Mortgage Corporation posted a 27% increase in quarterly originations compared with a year earlier. Lo said the business funded C$573 million in prime originations during June, its largest monthly volume on record and a 43% increase from June of the prior year.
The company reported a net interest margin of 2.1%, excluding non-cash purchase-price adjustments. RFA Bank’s common equity tier 1 ratio was 17.5% at quarter-end.
Credit metrics remained low, according to management. RFA Bank’s actual credit losses represented 0.08%, or 8 basis points on an annualized basis, of average mortgage and loan assets. The company’s mortgage arrears rate was 0.032% during the second quarter, which Lo said was about 89% below the national average. Average borrower credit scores in RFA’s prime portfolio remained above 790.
Integration and Capital Allocation
Lo said the company continued to advance integration work during the quarter, including aligning governance and operating processes and pursuing its disposition strategy. Management said the combined platform’s greater capital flexibility is intended to support investments in opportunities expected to produce stronger long-term returns.
Rodney said the company remains in the early stages of realizing the full potential of its combined platform, but described the quarter’s leasing activity, property sales, lending growth and credit performance as evidence that its capital-recycling strategy is progressing.
About Artis Real Estate Investment Trust Unit (TSE:AX.UN)
Artis is a diversified Canadian real estate investment trust with a portfolio of industrial, office and retail properties in Canada and the United States.
