Keeping You Informed - Q1 2026

To our Investors and Partners,

As we release our Q1 results for 2026, the commercial real estate market is shifting from re-pricing to re-engagement. Liquidity is improving, capital is returning, and price discovery is becoming more orderly. The headlines around growth, geopolitics, valuations, and AI, remain noisy and it is clear that this will not be a rising tide.

Market Backdrop

Capital availability, which had been constrained over the past two years, is improving meaningfully.  Debt markets are active, and lenders are increasingly competitive as they look to grow originations. The result is improving liquidity and an uptick in transaction activity.

As the market moves beyond repricing, underwriting is focused on income and asset-level performance. Dispersion continues to widen between higher and lower-quality assets, most notably in the office sector where Crown is focused.  Leasing trends are reinforcing this pattern:  Premium buildings are leasing, while older, less competitive assets in less accessible locations, remain challenged.

In downtown Toronto, leasing activity strengthened materially through 2025, especially in the second half of the year. As a result, vacancy declined to a three-year low of approximately 14.5% (down from 17.7% a year ago).  This was driven by several 200,000 + sq. ft. leases in the financial services and technology sectors and a continued return to office push.  Large-block availability has contracted, sublease inventory continues to decline, and demand remains concentrated in those sectors.

Crown Highlights of the Quarter

• Crown has leased over 250,000 sq. ft. across 29 transactions, with the majority driven by renewals.
• 88% of leases renewed or replaced are at or above in-place rents.
• 16% of leasing volume in the quarter was from new deals, with activity supported by improving tenant engagement and a growing pipeline.
• At the Milverton Complex (CR V), we secured a renewal with GlaxoSmithKline (24,320 sq. ft.) and reclaimed the fitness facility, improving the building’s tenant experience and competitive positioning in the market.

As dispersion increases, value is being determined at the asset level, not at the asset class level. Performance is driven by leasing execution, operational excellence, and the ability to position assets competitively.

Positioning for 2026

Looking ahead, our priorities are clear:

• Drive leasing across the portfolio, with a focus on operational excellence, which will lead to retention and long-term income durability.
• Invest intelligently in our assets to ensure they are best positioned in the market and remain market-leading.
• Deploy capital selectively where pricing reflects current conditions and business plans are actionable.
• Capitalize on the opportunities available in a market increasingly aligned with a value-add strategy by deploying the remaining capital in Fund V and launching our next fund.

In a period where many participants, particularly open-ended funds, have struggled to meet redemptions, we have consistently generated liquidity for our investors by selling well-positioned assets at market pricing.  That experience reinforces a simple point:  liquidity is not a market promise…it is earned through asset quality and income durability.

This is a consistent element of Crown’s approach over the past 25 years.

As we mark our 25^th anniversary we look forward to continuing to work with you and appreciate your continued support and partnership.

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