High-yield monthly income from a Canadian Real Estate Investment Trust (REIT) sounds like a dream — until you check the portfolio and spot an office building. Since the pandemic, office properties have been a pain for real estate investors. So when a REIT generating 50.9% of rental income from suburban office properties offers a 7.6% distribution yield, the natural reaction is skepticism.
But BTB REIT (TSX:BTB.UN) is celebrating 20 years in business this year. That kind of longevity doesn’t happen by accident. Let’s dig into whether this monthly income payer deserves a spot in your passive income portfolio.
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A diversified portfolio with stubborn office exposure
BTB REIT owns 72 properties spanning 6 million square feet of gross leasable area (GLA), with total assets worth $1.2 billion. The portfolio is heavily concentrated in Quebec, providing geographic focus that management knows well.
The trust’s tenant roster provides real comfort. Nearly 43% of revenue comes from leases with federal, provincial, and municipal governments, plus publicly traded companies. That’s a quality anchor in any market.
The portfolio breakdown going into 2026 tells a more nuanced story than the headline office weight suggests.
Suburban office properties comprise 41.2% of portfolio value and contribute 50.9% of total revenue. With a committed occupancy at 87.6%, office assets still do the heavy lifting for revenue and net operating income (NOI).
Industrial properties, (36.3% of portfolio value, 24% of revenue) have seen occupancy drop to 90.6% from near‑full levels after two Alberta tenants vacated in 2025. A leasing agent is engaged to backfill the space.
Necessity‑based retail (22.5% of portfolio value, 25.1% of revenue) remains the quiet hero, with committed occupancy at an impressive 98.9%.
Total portfolio committed occupancy ended 2025 at 91.3%, stable enough to support BTB REIT’s monthly distribution.
A safer 7.6% monthly distribution than you might expect
Despite the office overhang, BTB REIT’s distribution is well covered.
The REIT’s AFFO payout ratio improved from 78.7% in 2024 to 77.3% in 2025. AFFO represents a REIT’s most recurring distributable cash flow from operations. BTB’s 77.3% payout rate is a comfortable cushion, especially compared to some Canadian REITs struggling with ratios north of 100%.
The monthly distribution of $0.025 per unit (reduced from $0.035 during the pandemic) appears sustainable at current levels.
Lease renewals in 2025 provided a welcome tailwind. The office segment led the way with average renewal rates up 12.4%, followed by necessity retail at 6.4%. Overall, renewals closed at rates 10.6% higher than expiring leases — BTB still commands pricing power where it matters.
Why the market punishes BTB REIT — and why that may change
Let’s address the elephant in the room: office occupancy at 87.6% remains below pre‑pandemic levels, and the market hates office REITs with a passion. BTB’s units trade as if its office portfolio were terminal rather than manageable.
But office properties contributed 50.1% of revenue and 44.4% of net operating income (NOI) in 2025. These assets are still throwing off significant cash flow, even at reduced occupancy. The portfolio’s weighted average lease term of 5 years provides revenue visibility well into the next decade.
Management is slowly shifting the portfolio’s weights towards more industrial exposure.
BTB REIT ended 2025 with a debt ratio at 57%, an improvement from 57.9% a year earlier. While still on the higher side, the trend is moving in the right direction.
A TFSA is the right home for this 7.6% passive income
BTB REIT’s distribution is no longer 100% tax‑deferred. For 2025, it’s 66% tax‑deferred, 27% capital gains, and 7% other income. That’s the first change since 2006.
To avoid tax complexity, holding BTB units in a registered account, preferably a Tax-Free Savings Account (TFSA), makes eminent sense. The 7.6% yield flows into your pocket monthly, completely tax‑free, and you never need to track the components.
The Foolish bottom line
BTB REIT is a middle‑aged REIT with suburban office baggage trading at a discount because of it. But beneath the market’s disdain sits a 7.6% monthly dividend payer with a well-covered distribution, nearly half its revenue from government and public tenants, and a robust retail segment operating at 99% occupancy.
The office segment’s recovery will be slow, but for income investors willing to look past the office stigma and collect monthly cash while waiting, BTB REIT offers a compelling risk‑reward setup.