Earnings release
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Mainstreet Equity Corp. Delivers Strong Q1 2026 Performance CALGARY , Alberta - February 10, 2026 – Mainstreet Equity Corp. (TSX:MEQ) delivered strong Q1 performance following a strategic pause in acquisiƟons in 2025 amid market uncertainty. MEQ reported an 8.2% increase in Net OperaƟng Income (NOI) and a 7.0% increase in Funds From OperaƟons (FFO) for the quarter, and operaƟng margins improved to 66.7% overall and 67.1% on same-asset properƟes; this reflects the company’s conƟnued operaƟonal strength despite seasonal leasing soŌness and a porƟon of unstabilized assets. With approximately $8181 million of available liquidity and improving market condiƟons, Mainstreet is well posiƟoned to accelerate growth through acquisiƟons throughout fiscal 2026. Bob Dhillon, Founder and Chief ExecuƟve Office of Mainstreet, said, ““AŌer puƫng the brakes on acquisiƟons in 2025 to allow markets to strengthen, Mainstreet is now hiƫng the gas pedal, puƫng more than $800 million in liquidity to work to grow our already impressive porƞolio. AŌer robust acquisiƟons in Q1, we are moving forward into a new cycle of countercyclical expansion for the rest of the year.” The Mainstreet Mission remains clear: We are passionately commiƩed to our role as a crucial provider of quality, affordable homes for Canadians, offering renovated apartments and customer services at a mid-market rental rate averaging $1,250. Key Metrics | Q1 2026 Performance Highlights Rental Revenue From operaƟons | Up 4.8% to $70.9 million (vs. $67.6 million in Q1 2025) From same asset properƟes | Up 2.5% to $68.9 million (vs. $67.3 million in Q1 2025) Net OperaƟng Income (NOI) From operaƟons | Up 8.2% to $47.3 million (vs. $43.7 million in Q1 2025) From same asset properƟes | Up 6.3% to $46.3 million (vs. $43.5 million in Q1 2025) Funds from operaƟons (FFO)2 FFO | Up 7.0% to $24.6 million (vs. $23.0 million in Q1 2025) FFO per basic share | Up 7.3% to $2.65 (vs. $2.47 in Q1 2025) OperaƟng Margin From operaƟons | 66.7% (vs. 64.7% in Q1 2025) From same asset properƟes | 67.1% (vs. 64.7% in Q1 2025) UnstabilizaƟon rate | 12% (providing potenƟal for future NOI growth) Stabilized Units | 445 properƟes (16,768 units, 14%) out of 498 properƟes (19,097 units) Net (Loss) Profit Net profit (Loss) per basic share | Net profit of $48.3 million (vs. profit of $56.2 million in Q1 2025, including change in fair value of $30.3 million in Q1 2026 vs. $40.2 million in Q1 2025) Total Capital Expenditures | $9.8 million (vs. $7.3 million in Q1 2025) Total Capital Expenditure (unstabilized assets) | $1.0M (vs. $0.9M in Q1 2025) Total Capital Expenditure (stabilized assets) | $8.8M (vs. $6.4M in Q1 2025) Vacancy rate From operaƟons | 5.4% (vs. 4.2% in Q1 2025) From same asset properƟes | 5.4% (vs. 4.2% in Q1 2025 ) Vacancy rate as of February 10, 2026 | 5.6% excluding unrentable units Total AcquisiƟon During Q1 2026 | $68.2 million 348 units (vs. $17.8 million 116 units in Q1 2025) Total Units As of December 31, 2025 | 19,147 units3 (vs. 18,455 units in 2025) 1 Including $148 million cash-on-hand, $535 million estimated funds that may be available through financing of maturing mortgages in 2026 and clear-titled assets after stabilization, and a $135 million line of credit. 2See “Non-IFRS Measures” and Note (1) in MANAGEMENT’S DISCUSSION AND ANALYSIS to the table titled “Summary of Financial Results” for additional information regarding FFO and a reconciliation of FFO to net profit, the most directly comparable IFRS measurement. 3 Include 50 units held for sale
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Fair Market Value | Up 3% to $3.8 billion (vs. $3.7 billion in 2025) Our Growth Mindset While some companies respond to economic slowdowns by reducing investment, Mainstreet has always seen them as meaningful opportuniƟes for growth; we are known to make catalyst moves in historically pivotal moments. Our proven countercyclical, value- add strategy focuses on invesƟng decisively during periods of market dislocaƟon, including opportunisƟc asset sell-offs. Canada simultaneously experienced the introducƟon of new rental supply and clawed back immigraƟon numbers last year. Despite new supply necessitaƟng significantly higher rents compared to Mainstreet, these factors had a ripple effect on the market. Achieving strong financial results amid mulƟple headwinds as we did in Q1 underscores the strength, resilience and durability of our plaƞorm. As these headwinds begin to subside, we believe that FY 2026 is a Ɵme to resume our growth through acquisiƟon. We are leveraging unprecedented liquidity, favourable interest rates, and economic condiƟons and increasing stability in the rental market— factors that collecƟvely posiƟon us for our next phase of accelerated acquisiƟon. We believe our strong foundaƟon will support conƟnued and enhanced growth, even within a challenging market environment. We are reporƟng acquisiƟons totalling $68 million (348 residenƟal apartment units and townhouses) for Q1 compared to $53 million for all of 2025. Our liquidity remains strong, with an esƟmated $818 million available in the remaining FY 2026. The Mainstreet Advantage Mainstreet’s value-add strategy in the mid-market segment has demonstrated consistent success across Western Canada and delivered meaningful returns to the shareholders. Coupled with disciplined, non-diluƟve growth, this approach has generated the liquidity required to support our next phase. The core strengths of our plaƞorm include: Affordable rents: With average monthly rents of approximately $1,250, Mainstreet provides high-quality rental opƟons with renovated suites and customer services that remain accessible to middle-income Canadians. As revenue growth across the sector begins to moderate, the rental growth rate is also showing signs of easing in some markets. While certain markets, parƟcularly new purpose-built rental supply, are experiencing noƟceable rate adjustments as a result, we expect the impact on our affordable rental apartment porƞolio to be limited and more gradual. Diverse porƞolio: With more than 19,100 units concentrated in numerous major inner-city urban centres in Western Canada, our geographic diversificaƟon reduces exposure to volaƟlity in any single market. For example, while we are headquartered in Calgary, 43% of our net asset value (based on IFRS value) is in BC. Market Fundamentals Despite periods of economic and policy uncertainty over the past several quarters, underlying favourable macroeconomic trends are expected to contribute to Mainstreet’s conƟnued growth. These trends include: Supply vs Demand: Canada’s long-standing housing shortage conƟnues to support strong rental fundamentals despite the increase of purpose-built rental starts. While provincial and federal governments are encouraging housing construcƟon, building starts peaked in spring and summer 2025 and steadily declined for the second half of the year. We believe that this suggests we are at the tail-end of new supply entering some markets. Building starts are expected to be flat in 2026, but even those projects that will be completed experience high construcƟon costs which pushes required rent up in order to achieve acceptable returns. This does not increase supply of affordable rental units and does liƩle to address the immediate need for housing which benefits Mainstreet’s posiƟon in the market. Canada Year Total Purpose Built Supply (Source CMHC) Year-Over-Year Growth Total Population (Source Statistics Canada) Year-Over-Year Growth 2021 2,215,712 41,339 38,460,257 432,851 2022 2,269,937 54,225 39,284,491 824,234 2023 2,307,577 37,640 40,467,722 1,183,231 2024 2,404,284 96,707 41,494,132 1,026,410 2025 2,474,297 70,013 41,575,585 81,453
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Total Growth 299,924 3,548,179 Favourable interest rates: With mortgage interest being our largest expense line, lower borrowing costs improve cash flow plus FFO and increase our capacity to pursue acquisiƟons. Interest rates peaked at approximately 4.5% at the end of 2023, began declining in early 2024, and currently sits around 3.5% for a five-year term, with sluggish economic growth in Canada expected to keep rates at this rate or possibly lower. Tariff Opportunity: Rising tariff-related costs may further constrain new rental supply which exacerbates the exisƟng supply-demand imbalance. Importantly, MEQ’s business model is built on acquiring assets below market replacement cost. As tariffs push replacement costs even higher, the economic advantage of purchasing exisƟng assets rather than building new ones grows stronger. These dynamics reinforce the compeƟƟveness of our strategy and support conƟnued growth in our core markets. Draw to Western Canada: The federal government’s policy to recalibrate immigraƟon volumes includes limiƟng internaƟonal students, temporary workers and other temporary residents to under 5% of the total populaƟon by the end of 2027. For 2026, the target for temporary workers and internaƟonal students is 385,000, while the permanent resident target is 380,000. This number sƟll far outpaces rental supply available to house them. Despite a cooling trend over the past year, Alberta conƟnues to lead the country with a net populaƟon gain of 0.2% in Q3 2025, and investment in energy projects is expected to create an influx to Alberta, as well as Saskatchewan and BriƟsh Columbia. Overall, Western Canada remains an aƩracƟve desƟnaƟon for Canadians and newcomers, with affordability, employment opportunity and quality of life driving populaƟon growth. CHALLENGES Uncertain Economy Many economists are cauƟously opƟmisƟc that Canada will avoid a recession and instead see modest growth in 2026. We are seeing the same, with Q1 NOI from same asset properƟes up 6.3% to $46.3 million versus $43.5 million in Q1 2025. However, issues like inflaƟon and tariffs remain wildcards in the economic landscape. InflaƟon raises costs for materials, labour/wages, uƟliƟes, supply chain and renovaƟon/repairs which can Ɵghten margins or trigger rental rate adjustments. However, during a slower economy, more households delay homeownership in favour of affordable rental opƟons, reinforcing demand for Mainstreet’s properƟes. Also, tariffs and protecƟonist policies from the United States are creaƟng trade uncertainty and ballooning construcƟon costs in a number of industries across Canada. ImmigraƟon and MigraƟon Slowdown Across the country, all provinces other than Alberta are experiencing negaƟve growth due to immigraƟon policy changes and a decline in interprovincial migraƟon, with BriƟsh Columbia marking a populaƟon drop of 0.3% in Q3 2025. We were already seeing the effects of immigraƟon policy in late-2025 as Canada experienced the largest and only second-ever decline in populaƟon since 1946; with populaƟon growth expected to be neutral throughout 2026. This reducƟon in immigraƟon can have a negaƟve effect on labour, as the rental housing market relies in part on internaƟonal workers, immigrants, and internaƟonal students to fill lower-skilled posiƟons. Vacancy Rates According to CMHC, Canada’s naƟonal vacancy rate for rental apartments rose to 3.1% in late 2025, up from 2.2% in 2024, stemming from new supply built to help address the housing shortage. CMHC expects that new supply starts will be absorbed in 2026, especially in stronger markets like Calgary, Edmonton, Regina and Saskatoon. While the vacancy rates eased for the most affordable rental units, these units remain in high demand. OUTLOOK Opening the Energy Corridor With Canada seeking new trade partners in the face of tensions with the United States, the federal government has commiƩed to major energy infrastructure and naƟon-building mega projects, most notably relaƟng to LNG. We believe that if completed, this will once again open up the West and elevate Canada into a global energy superpower. Growth in the energy corridor will sƟmulate job creaƟon, increase populaƟon inflows and energize economic acƟvity across Western Canada, directly increasing demand for rental housing. With a well-established presence across the region, Mainstreet is strategically posiƟoned to capture the growth as this economic sector develops.
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Puƫng the S in ESG Canada’s persistent housing supply shortage highlights the need for affordable rental opƟons. Mainstreet remains dedicated to providing high-quality, affordable housing for middle-income Canadians, contribuƟng to social well-being while offering an aƩainable rental alternaƟve as homeownership becomes less accessible for many households. Nominal Dividends With strong free cash flow, Mainstreet introduced a nominal dividend in 2024 to broaden our shareholder base, enhance trading liquidity and support market capitalizaƟon while preserving capital for future non-diluƟve growth. In 2026, we raised the dividend by 100% to $0.32 per share annually, or $0.08 per quarter. As a CorporaƟon, this underscores our commitment to delivering shareholder value while maintaining financial flexibility to support strategic organic expansion and non-diluƟve growth of our asset base. Runway on ExisƟng Porƞolio/Non-DiluƟve Growth 1. Trading at a Discount: We believe MEQ shares conƟnue to trade below their net asset value (NAV), a trend that may be amplified by ongoing macroeconomic volaƟlity. As we see a significant drop in our market cap due to these macroeconomic headwinds, Mainstreet has ability to repurchase its own shares for cancellaƟon pursuant to its Normal Course Issuer Bid (NCIB). In Q1, we repurchased 5,400 shares under this program and management intends to conƟnue to do so, boosƟng ownership value for conƟnuing shareholders. 2. Expanding the portfolio: With approximately $818 million in available liquidity in the remaining FY 2026, after already expending $68 million cash for the acquisition of unstabilized assets in Q1 2026, Mainstreet has substantial capacity to acquire underperforming assets at attractive valuations without issuing new equity, thus supporting long-term asset growth on a non-dilutive basis. It is currently anticipated that the next three quarters will be focussed around aggressive growth through acquisition. 3. Closing the NOI gap: At any given time, roughly 12% of the portfolio is undergoing active repositioning. Upon stabilization, these units are expected to generate approximately $45 million in incremental annualized NOI, highlighting significant embedded value and the earnings potential based on mark-to-market gaps within the existing portfolio. 4. Rezoning for growth: Persistent housing shortages are prompting municipalities to support increased density through rezoning initiatives. Our dedicated in-house land planning team is advancing land optimization strategies, including subdividing underutilized parcels, converting unused space into additional rental units, and pursuing density relaxations. These initiatives enhance long-term portfolio value with minimal incremental capital. For further information: Bob Dhillon, Founder, President & CEO D: +1 (403) 215-6063 Executive Assistant: +1 (403) 215-6070 100, 305 10 Avenue SE, Calgary, AB T2G 0W2 Canada TSX: MEQ https://www.mainst.biz/ https://www.sedarplus.ca