Logistic Properties of the Americas (LPA) Q3 2026 earnings review
LPA grows warehouse rent 26%, but financing costs cut profit
Logistic Properties of the Americas, a warehouse landlord across Latin America, grew rent quickly in the third quarter while financing bills and partner payouts cut profit for ordinary shareholders. Rental revenue climbed 26% to $15 million on new warehouse leases in Peru and Colombia, keeping the stabilized portfolio 100% occupied. However, property operating costs rose faster than rent, and higher interest bills plus minority partner shares pushed profit per share down 40% to $0.09.
| Rental revenue | $15.3M +26% from a year ago (+18% excluding currency and M&A by our math) |
|---|---|
| Net operating income | $12.6M +21% from a year ago |
| Profit per share for company owners | $0.09 -40% from $0.15 a year ago |
| Cash and cash equivalents | $122.0M up from $27.3M at year-end 2025 |
⚖️ Verdict: 🔴 Bearish
The story got worse because the cornerstone $145 million Peru warehouse sale included a four-year buyback option, forcing accountants to book the $85 million upfront cash as a new debt-like liability rather than a clean disposal. The landlord also borrowed another $55 million at 8.5% interest against the remaining buyer payments and will book the buyer's share of future rent as a financing cost. On the positive side, the company signed a separate $152 million agreement in October to sell its Bogotá park to Bancolombia and entered a new Peru development partnership.
The question now is whether putting the new cash pile into Mexican warehouses will earn enough to cover the financing drain from the Peru and Colombia deals. One view is that trading mature parks for Mexican buildings and management fees builds scale to cover corporate overhead; the other is that high interest bills and surrendered rent will keep cash earnings negative during a slow buildout. Fourth-quarter financing costs and the first Mexican acquisition closings will tell.
🐂 Bull Case
New Leases in Peru and Colombia Drove 26% Rental Growth
Logistic Properties of the Americas develops and leases modern industrial warehouses across Latin America. Rental revenue rose 26.1% from a year ago to $15.3 million, outpacing the 19.3% rise in total revenue because last year included a one-time contract termination fee in El Salvador. By our math, rental revenue from properties owned a year ago still grew 18.4% after stripping out currency gains and the Mexican buildings bought last August.
- Peru rental revenue: $5.1 million, up 45.1% from a year ago on new leases at Parque Logístico Callao
- Colombia rental revenue: $3.5 million, up 45.7% reported and 16.9% excluding currency gains by our math
- Costa Rica rental revenue: $6.3 million, up 4.2% on lease renewals and annual rent step-ups
- Mexico rental revenue: $0.5 million, up 107.4% with a full quarter from two warehouses in Puebla
Peru led the expansion, which the company said was "primarily attributable to higher base rent and tenant improvement income, principally related to PepsiCo" at Building 300B, alongside initial leases at Building 200. Colombia also added a full quarter of rent from Building 300 at the Calle 80 park, which sat vacant a year ago.
What to watch: fourth-quarter rental revenue in Peru and Colombia as Building 400 at Callao opens. Continued double-digit underlying growth will prove the new Peruvian warehouses can replace income from older parks slated for sale.
Portfolio Keeps 100% Occupancy While Rents Rise 11%
The landlord kept its stabilized operating portfolio 100.0% occupied for a third straight quarter, up from 97.9% a year ago across 32 operating buildings covering 5.7 million square feet. Average rent across the portfolio climbed 10.6% from a year ago to $9.00 per square foot, and rose $0.12 per square foot from the second quarter.
Most lease contracts include automatic annual increases tied to United States or local consumer inflation, and management also signed renewals in Costa Rica and Colombia at higher rates. That pricing power matters because only 2.6% of leased floor space expires during the rest of 2026, while 17.3% comes up for renewal across 2027.
What to watch: average rent per square foot in the first half of 2027 as that 17.3% block of leases rolls over. A further step-up above $9.00 will confirm that older contracts still sit below current market rates.
Bancolombia Deal Unlocks $152 Million From Colombia
After the quarter closed on October 5, the company signed a definitive agreement to sell warehouse assets at Parque Logístico Calle 80 in Bogotá to Bancolombia "for cash consideration of COP 500 billion", or about $152 million. Those buildings carried an appraised book value of $157.8 million on September 30, and the seller will stay on to run the park for a fee "equal to 1.5% of rental revenues".
Ten days earlier, the board also approved a plan to sell two warehouses in Heredia, Costa Rica, moving $6.7 million of properties into assets held for sale. Selling mature buildings near their appraised values turns paper real estate appraisals into cash that management can put toward higher-yielding projects.
What to watch: the closing date and net cash proceeds after debt payoff and taxes on the Calle 80 sale. Timely receipt will show how much cash remains to buy properties in Mexico.
🐻 Bear Case
Peru Property Sale Booked as Debt Keeps Leverage High
Management previously framed the $145 million transaction for its Lurín warehouses in Peru as a full property sale to fund Mexican expansion. On September 30, the company transferred legal title and received $85 million upfront, with two $30 million payments due in 13 and 25 months. However, it kept a four-year option to buy the park back, so its accountants ruled that the "substantive repurchase option prevents transfer of control for accounting purposes".
Instead of removing the buildings and booking a clean disposal, the company kept the properties on its balance sheet and recorded an $85 million financial liability. It also borrowed another $55 million at 8.5% fixed interest from Banco BTG Pactual against the $60 million of future buyer payments, while paying off a $60 million BBVA loan at a $2.3 million extinguishment loss. Worse, "Rental income assigned to the buyer is recognized with a corresponding financing expense", which will inflate interest costs every quarter.
What to watch: fourth-quarter financing expense once the buyer takes its first full quarter of Lurín rent. That charge will show the true ongoing cost of this financing structure before any Mexican warehouses replace the cash flow.
Property Taxes and Ground Leases Cut Into Margins
Direct costs of running the warehouses—investment property operating expenses—jumped 54.6% from a year ago to $2.8 million, rising 4.1 percentage points to 18.0% of total revenue. Because operating costs grew more than twice as fast as rent, net operating income as a share of rental revenue dropped 3.3 percentage points by our math, from 85.3% a year ago to 82.0%.
- Peru operating margin: down 4.6 percentage points to 76.9% on Callao ground lease and electricity costs
- Colombia operating margin: down 3.5 percentage points to 84.1% on electrical upkeep and security bills
- Costa Rica operating margin: down 2.3 percentage points to 83.9% on higher municipal real estate taxes
In Peru, new warehouses at the Lima airport park sit on leased land, pushing land lease interest inside property operating costs up to $0.18 million from $0.06 million a year ago. In Costa Rica, expenses rose because of "the effect of the municipal reassessment of property taxes for Parque La Verbena".
What to watch: tenant expense recoveries in the fourth quarter. If modified gross leases do not let the landlord pass along Costa Rica's higher tax assessments, segment margins will stay near 82%.
Interest and Overhead Leave Almost No Cash Profit
Even with 100% occupancy and $12.6 million of net operating income, corporate overhead and interest bills consumed almost every dollar the properties earned. General and administrative expenses—staff pay, legal bills, and office overhead—rose 3.5% from a year ago to $4.7 million, or 30.3% of total revenue. Meanwhile, gross interest expense before one-off refinancing charges climbed 31.2% to $6.8 million as the company stopped capitalizing interest on completed buildings and took on new loans.
By our math, subtracting $4.7 million of overhead and $6.8 million of gross interest from $12.6 million of property operating income leaves just $1.2 million before taxes and one-off debt charges. Headline profit of $9.4 million relied on a $17.4 million non-cash appraisal gain, and $6.5 million of net profit went to minority joint-venture partners, cutting profit per share for ordinary owners by 40% to $0.09.
What to watch: fourth-quarter gross interest expense and corporate overhead against net operating income. Once Lurín's assigned rent adds to financing costs, recurring property income may not cover interest and overhead.
Risks This Quarter Didn't Answer
Several standing concerns around cash flow metrics, Mexican acquisition timing, and interest rate exposure remained unresolved in the third-quarter filing.
- Funds from operations (FFO and AFFO): omitted from the interim filing after swinging negative in Q2; investors need the earnings release supplement to see cash earnings.
- Mexican property expansion: Mexican warehouses stayed at $21.0 million (3% of the portfolio) with zero Central Park 57 closings in Q3; Q4 asset additions will test the 50% target.
- Floating-rate debt load: 71.1% of the $323.3 million bank debt still carries variable interest rates by our math, leaving cash flow exposed until Costa Rican or Colombian loans are fixed or paid down.
👓 Other Themes
Stronger Colombian Peso Lifted Revenue and Debt
Unlike its leases in Costa Rica, Peru, and Mexico that bill in United States dollars, the company prices its Colombian warehouse leases and bank loans in Colombian pesos. The peso strengthened from an average of 4,004 per dollar a year ago to 3,192 this quarter. That currency move added $0.7 million to Q3 revenue and $0.6 million to Colombian operating income, while also adding $7.3 million to the dollar balance of Colombian debt over the first nine months.
💲 Other KPIs
Unrestricted cash jumped to $122.0 million on September 30 from $27.3 million at year-end 2025. The increase came from the $85.0 million upfront Lurín financing proceeds and the new $55.0 million BTG credit line in late September, after paying off $60.0 million of BBVA debt in Peru.
Total leased floor space across operating properties, developments, and land banks grew 4.1% from a year ago, slowing from 10.8% growth in the second quarter. Sequentially, leased area fell by 104,517 square feet by our math because the firm removed two Heredia warehouses in Costa Rica after classifying them as held for sale.
The appraised value of warehouses under construction in Peru climbed to $34.9 million from $24.3 million in the first quarter and $12.9 million at the end of 2025. During the third quarter, the Peruvian subsidiary signed a new airport land lease to begin developing Building 500, adding a $2.1 million right-of-use asset.
❓ Key Questions
How much quarterly rent will the Lurín buyer take?
Because the $145 million Lurín transaction sits on the books as a financing liability, tenant rent assigned to the buyer becomes a financing expense. Management did not disclose the quarterly dollar amount of rent assigned starting in the fourth quarter.
What were Q3 Funds From Operations and Same-Property NOI?
The Form 6-K filing includes IFRS financial statements and MD&A but omits the supplemental non-GAAP tables for Funds From Operations (FFO), Adjusted FFO, and constant-currency Same-Property NOI. After Adjusted FFO dropped to negative $4.95 million in Q2, investors need the Q3 reading.
When will the first Central Park 57 buildings close?
With $122 million of cash now on the balance sheet from the Peru transactions and another $152 million agreed in Colombia, Mexican investment properties still sat unchanged at $21.0 million on September 30. Management has not given a closing schedule for the $200 million Mexico pipeline.
How much debt and tax sit against Calle 80?
The company agreed to sell Calle 80 assets in Bogotá to Bancolombia for about $152 million against a $157.8 million carrying value, and holds $66.9 million of Colombian debt. Management has not stated how much debt must be repaid at closing or the cash tax bill.