. Our total lease renewals for the quarter amounted to 255,000 square feet, including a 78,000 square foot renewal with a tenant in our industrial portfolio. Year-to-date, our total leasing activity stands at 719,000 square feet, showcasing our strong leasing momentum.
Despite the challenges posed by Nuera Air’s bankruptcy, we remain focused on actively managing our leasing activity and maintaining a strong occupancy rate across our portfolio. We are optimistic about the potential for future growth, especially with our strategic shift towards industrial assets and necessity-based retail investments.
I will now pass the presentation back to Michel to provide further insights on our financial performance and outlook.
Michel Léonard: Thank you, Stephanie. Moving on to our financial performance, we saw a 3.9% increase in rental revenue and a 3.8% increase in net operating income for the quarter. Our adjusted funds from operations (FFO) per unit increased to $0.107, demonstrating our ability to generate strong cash flow from our properties.
Despite the challenges posed by Nuera Air’s bankruptcy, we successfully repaid our Series J convertible debentures, optimizing our mortgage debt and reinforcing our financial stability. Our distribution remained at $0.30 per unit, with a 77% adjusted payout ratio, highlighting our commitment to delivering consistent returns to our unitholders.
Looking ahead, we are actively seeking city approval for densification projects that could lead to significant construction in 2026. These projects, coupled with our focus on industrial and necessity-based retail investments, position us for continued growth and success in the market.
In conclusion, we are pleased with our performance in the third quarter of 2024 and remain optimistic about the future of BTB Real Estate Investment Trust. We thank you for your continued support and look forward to updating you on our progress in the upcoming quarters.
Operator, we are now ready to take questions from our participants.
Operator: Thank you, Michel. We will now begin the question and answer session. As a reminder, if you have a question, please press *1 on your keypad to enter the queue. Our first question comes from the line of [Analyst Name] from [Analyst Firm]. Please go ahead.
[Analyst Name]: Thank you for taking my question. I wanted to ask about the impact of Nuera Air’s bankruptcy on your overall portfolio performance. Can you provide more details on how you plan to mitigate this impact and potentially lease out the vacant property?
Michel Léonard: Thank you for your question. The bankruptcy of Nuera Air did have a temporary impact on our occupancy rate, as the 132,000 square foot property in Laval is currently vacant. However, we have taken proactive steps to clean up the premises and put the property on the market through CBRE, the dominant player in the industrial landscape on the island of Laval. We are confident that with the improved condition of the property, we will be able to lease it out to a new tenant in the near future. Additionally, our strong leasing activity across the rest of our portfolio has helped mitigate the impact of Nuera Air’s bankruptcy on our overall performance.
[Analyst Name]: Thank you for the detailed response. I also wanted to ask about your plans for future densification projects and how they could contribute to your growth strategy. Can you provide more insights on the potential construction projects in 2026?
Michel Léonard: Absolutely. We are actively working on obtaining city approval for densification projects that could lead to significant construction in 2026. These projects present exciting opportunities for us to optimize the use of our existing properties and unlock additional value for our unitholders. We are currently awaiting the results of a zoning change vote on November 14th, which will provide us with more visibility on the potential construction projects. We believe that these densification projects, coupled with our focus on industrial and necessity-based retail investments, will position us for continued growth and success in the market.
[Analyst Name]: Thank you for the insights. I look forward to seeing how these projects unfold in the coming years. Thank you for taking my questions.
Operator: Thank you, [Analyst Name]. We have time for one more question. Our next question comes from the line of [Analyst Name] from [Analyst Firm]. Please go ahead.
[Analyst Name]: Thank you for taking my question. I wanted to ask about your decision to focus on industrial assets and necessity-based retail sectors. Can you provide more details on the rationale behind this strategic shift and how it aligns with your growth strategy?
Michel Léonard: Thank you for your question. Our decision to focus on industrial assets and necessity-based retail sectors is a strategic shift that aligns with our growth strategy and market trends. We believe that these sectors offer strong potential for growth and stability, especially in the current economic environment. Industrial properties have shown resilience and strong demand, driven by e-commerce and supply chain dynamics. Necessity-based retail, such as grocery-anchored centers, also provides stable cash flows and essential services to the community. By prioritizing investments in these sectors, we are positioning ourselves for continued success and value creation for our unitholders.
[Analyst Name]: Thank you for the insights. It’s interesting to see how your strategic focus aligns with market trends and growth opportunities. I look forward to seeing how this strategy unfolds in the future. Thank you for taking my question.
Operator: Thank you, [Analyst Name]. That concludes our question and answer session. I will now turn the call back over to Michel for closing remarks.
Michel Léonard: Thank you, everyone, for joining our call today. We appreciate your continued support and interest in BTB Real Estate Investment Trust. We are confident in our strategic direction and growth prospects, and we look forward to updating you on our progress in the future. If you have any further questions or would like more information, please feel free to reach out to our Investor Relations team. Thank you, and have a great day.
Operator: Thank you, Michel. That concludes today’s conference call. Thank you for participating. You may now disconnect.