Varia US Properties Posts Q1 2026 Operating Profit After Three Multifamily Real Estate Asset Sales

ZUG, Switzerland — May 28, 2026 — Varia US Properties AG reported an operating result including revaluation of USD 2.2 million for the first quarter of 2026, swinging from a loss of USD 0.3 million in the same period a year earlier, following the completion of three multifamily real estate asset dispositions during the quarter. The Switzerland-based company, which focuses exclusively on U.S. multifamily real estate, also disclosed it is actively pursuing a recapitalization process that has drawn interest from a broad range of potential capital partners.

Three Older Assets Sold to Optimize Portfolio

Varia US Properties completed the sale of three properties with an average vintage of 1977 during the first quarter, reducing its portfolio from 22 to 19 properties and from 6,571 to 5,769 units — a decline of approximately 12.2% in unit count and 9.5% in total portfolio value. The portfolio's aggregate value fell from USD 1.046 billion as of December 31, 2025, to USD 947.2 million as of March 31, 2026.

Manuel Leuthold, Chairman of the Board of Directors of Varia US Properties, described the rationale behind the dispositions: "Our Company continued to make meaningful progress on its strategic objectives during the first quarter of 2026. These objectives include optimizing the portfolio by selling properties of a certain vintage, freeing up capital from assets with high ongoing expenditure requirements, and improving the long-term growth profile of Varia US."

Despite the reduction in portfolio size, like-for-like rental income remained essentially flat at USD 20.3 million compared to USD 20.2 million in Q1 2025, a gain of 0.4%. Like-for-like net operating income rose 4.6% to USD 12.4 million from USD 11.9 million in the prior-year period, driven in part by what the company described as significant insurance savings expected to persist throughout the remainder of 2026, alongside modest total revenue growth. The like-for-like portfolio value remained relatively constant compared to December 2025.

Financing Costs Fall as Debt Is Repaid

The dispositions also enabled Varia US Properties to reduce its financing burden. Total financing costs fell to USD 11.0 million in Q1 2026 from USD 12.1 million in Q1 2025. The company attributed the decline to the repayment of a CHF 50.0 million bond — designated VAR21 — which it said significantly reduced foreign currency exposure on Swiss franc-denominated borrowings. Higher-interest-rate property-level debt was also retired in connection with the three dispositions, bringing the weighted average interest rate on remaining property-level debt to approximately 4.36%, which the company described as well below current market rates.

Varia US Properties further strengthened its balance sheet during Q1 2026 with a CHF 19.5 million partial repayment on a short-term loan. The company said the remaining CHF 5.5 million of that loan was repaid shortly after the quarter's close using proceeds from two additional dispositions — one completed at the end of April and a second expected to close on May 28, 2026, the date of the announcement.

Total current assets declined sharply from USD 178.8 million at December 31, 2025, to USD 76.8 million at March 31, 2026, a drop of 57.1%, reflecting the deployment of cash from asset sales toward debt repayment. Total current liabilities fell from USD 160.3 million to USD 63.9 million, a reduction of 60.1%. Total equity edged down 1.9% to USD 316.8 million from USD 323.1 million.

Key Financial Figures: Narrowing Losses, Stable Operational Metrics

While the operating result turned positive, Varia US Properties still recorded a net loss for Q1 2026 after accounting for financing costs and an income tax benefit of USD 2.4 million. The company's key financial figures table lists the net loss as USD 6.4 million, while the narrative text references a loss of USD 6.3 million; the company noted that some amounts may not add due to rounding. That compares to a net loss of USD 9.5 million in Q1 2025, representing an improvement of approximately 32.9%. Loss per share narrowed from USD 0.94 to USD 0.63.

Total income rose 8.7% to USD 22.7 million from USD 20.9 million in Q1 2025, while total operating expenses declined 3.4% to USD 20.5 million from USD 21.3 million. Rental income on a total portfolio basis fell 13.1% to USD 22.3 million from USD 25.7 million, reflecting the smaller portfolio, though the like-for-like comparison showed near-flat performance.

Normalized EBITDA decreased to USD 5.6 million from USD 8.7 million in Q1 2025, a decline the company attributed primarily to the reduced portfolio size and relatively fixed corporate costs. The company's key financial figures table separately lists EBITDA (operating profit less unrealized revaluation) at USD 5.8 million for Q1 2026. Normalized Funds from Operations remained relatively stable at USD 2.0 million compared to USD 2.1 million in Q1 2025.

A detailed calculation of alternative performance measures can be found in the Q1 2026 report on pages 28 through 30, according to the company.

On a like-for-like basis, monthly rent per unit increased from USD 1,292 as of December 2025 to USD 1,300 as of March 2026. The total portfolio monthly rent per unit stood at USD 1,300 at quarter-end, compared to USD 1,277 at December 31, 2025, a gain of 1.8%. Economic occupancy on a like-for-like basis held at approximately 90%, compared to 91% in Q1 2025, while total portfolio occupancy was 92.7% at March 31, 2026, versus 93.2% at December 31, 2025.

Recapitalization Process Underway; Multifamily Outlook Points to 2027 Recovery

Varia US Properties said it is currently pursuing a recapitalization to support what it described as value-accretive expansion. The company said the process has attracted robust interest from a wide range of potential capital partners and that it expects to close the transaction before year-end 2026.

Matthew Levy, Managing Partner Americas at Stoneweg — the external asset manager of Varia US Properties — commented on the company's positioning: "With a healthier baseline portfolio, reduced leverage, and improved financial flexibility, Varia US expects to be well positioned to return to growth mode as transaction activity increases and fundamentals continue to strengthen, timing this transition ahead of a broader return to market equilibrium."

In its outlook, Varia US Properties described the U.S. multifamily real estate market as continuing to show signs of improvement while navigating an extended period of normalization following several years of elevated construction activity and macroeconomic volatility. The company said ongoing affordability challenges in the homeownership market underpin rental demand, particularly in the workforce housing segments where it operates. Near-term rent growth is expected to remain moderate across most markets in 2026, with stronger and more sustained growth anticipated in 2027 as new supply pressures subside.

Operationally, the company said it will continue to prioritize non-discretionary capital expenditures to preserve asset quality and protect long-term cash flow, while also planning to execute select value-add capital expenditures later in 2026. The company said it expects strong leasing velocity consistent with typical summer seasonality to support performance in the second half of 2026 and into 2027.

Varia US Properties is headquartered in Zug, Switzerland, and was established in 2015. The company focuses on acquiring, holding, and repositioning U.S. multifamily housing in secondary and tertiary markets within metropolitan regions. Its Q1 2026 report is available on the company's website. The company's next scheduled financial disclosure is its half-year results 2026, expected on August 31, 2026.

Sources: Varia US Properties AG, Q1 2026 Media Release, May 28, 2026. https://variausproperties.com/wp-content/uploads/2026/05/20260528_Varia_US_Media_Release_Q1-26_EN_final.pdf