True North Commercial REIT outperformed Canada’s office market in the second quarter, although results varied by region.

Core occupancy reached 96 per cent, while same-property net operating income, excluding held-for-sale assets, increased 7.1 per cent.

“The REIT delivered strong same property NOI growth during the quarter, supported by robust leasing activity and high occupancy across the portfolio,” chief executive Daniel Drimmer said.

True North completed 69,900 square feet of leases. New leases averaged 11 years and renewal rents increased 1.3 per cent. Government and credit-rated tenants generated 73 per cent of revenue.

Ontario occupancy reached 97.9 per cent, while same-property NOI increased 7.3 per cent. Alberta occupancy climbed to 94.4 per cent from 87.8 per cent, supported by a 34,000-square-foot, 10-year lease. Nova Scotia NOI jumped 29.5 per cent as occupancy reached 93.7 per cent.

British Columbia NOI fell 28.5 per cent because of incentives provided to a renewing tenant, not vacancy.

Ottawa was the larger drag after an early lease termination at a 148,100-square-foot property that True North subsequently classified as held for sale. Consolidated revenue declined 0.9 per cent to $27.9 million but would have risen 5.3 per cent without that asset.

The pattern reflects an uneven office recovery. Colliers reported national vacancy declined for a fourth consecutive quarter to 13.4 per cent. Toronto recorded more than 523,000 square feet of positive absorption and Halifax had the lowest major-market vacancy, while Ottawa was the only major market reporting an increase as public-sector tenants reduced space.

Pictured: True North’s 61 Bill Leathem Dr. office property in Ottawa.