Q4 2019 Earnings Call

February 12, 2020

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[music].

Good day and walk them through the Summer Center Threed Q4, 2019 Conference call. Today's conference is being recorded at this time I would like to turn the conference over to Mr., Peter Florida, President and Chief Executive Officer. Please go ahead Sir.

Operator: Good day, and welcome to the SmartCentres REIT Q4 2019 Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Peter Forde, President and Chief Executive Officer. Please go ahead, sir.

Okay. Thank you good evening and welcome to the Smart centers Q4, 2019 conference call.

Peter Forde: Okay, thank you. Good evening and welcome to the SmartCentres Q4 2019 Conference Call. Joining me on the call today are Mitch Goldhar, our Executive Chairman.

Joining me on the call today are much gold or executive chairman.

Peter Forde: Peter Sweeney, Chief Financial Officer, Mauro Pambianchi, Chief Development Officer, Rudy Gobin, EVP Portfolio Management and Investments, and Paula Bustard, EVP Development. Today, we'll begin with a few overall comments by me, followed by Peter Sweeney, who will talk about our results for the quarter and financing activities, followed by an update on some of our exciting project developments, and then we will take your questions. Our comments will mostly refer to the first 10 pages and page 24 and 25 of our supplemental information package and the outlook section of our MD&A, which are posted on our website. I refer you specifically to the cautionary language at the front of the supplemental market material, which also applies to comments any of the speakers make this evening. You will hear two main themes during this call.

Peter Sweeney, Chief Financial Officer, more MBK Chief Development Officer.

Rudy Gobain GBP portfolio management and investments.

And Paul a bust or E V P development.

Today, we will begin with a few overall comments by me followed by Peter Somebody who will talk about our results for the quarter.

Then financing activities, followed by an update on some of our exciting project development and then when you take your questions.

Our comments were moved to refer to the first 10 pages and pages 20, 425 of our supplemental information package.

And the outlook section over in dealing with.

Which are posted on our website.

Refer you specifically to the cautionary language.

The front the supplemental market material, which also applies to comments hey, the speakers make diseases.

You are here to make screens during this call.

Peter Forde: First, we continue to focus on our highly stable portfolio, 98.2% leased portfolio of 34 million sq ft of well-located, value-oriented shopping centers. Two, our accelerating mixed-use intensification and development programs with growing positive results from these initiatives to commence later this year. On the first theme, we had another strong and stable quarterly performance from our existing retail portfolio, with notable mention going to strong results from the Toronto Premium Outlet expansion, which opened in November 2018, with average tenant sales for the full center at almost CAD 1,200 per sq ft. High overall tenant retention with 84% of 2019 maturing tenants renewing at an average net rent increase of 4%, excluding anchors, 3.3% overall.

First we continue to focus on are highly stable portfolio, 98.2% leased portfolio looks 34 million square feet, a well located.

Oh, you oriented shopping centers.

Two or accelerating mixed use.

That's a vacation and development programs with growing positive results from these initiatives to commence later this year.

On the first thing we had another strong and stable quarterly performance from our existing retail portfolio with notable mentioned going to strong results from the trona premium outlet expansion, which opened in November 2018 would average tenant sales for the full center at almost $100 per square foot.

[music].

Hi, overall tenant retention was 84% of 2019 maturing tenants renewing.

At an average net.

The increase of 4% excluding anchors, 3.3% overall.

Her shopping centers continue to lead the industry at 98.2% leased.

Peter Forde: Our shopping centers continue to lead the industry at 98.2% leased, inclusive of all executed deals for future positions. Going forward for 2020 and 2021, profits from the first of many recurring residential condo developments and from the variety of new business initiatives and developments, some of which are described this evening and in our quarterly report. As has always been the case in our business, a handful of retailers come and go. In that respect, some good news on the re-leasing of premises vacated by bankrupt tenants. 21 Bombay and Bowring locations totaling 103,000 sq ft that we had are 60% leased or spoken for with strong expressions of interest.

Super Bowl executed deals for future positions.

And then going forward for 2020 in 2021.

Profits from the first of many recurring residential condo development.

And from the variety of new business initiatives and developments some of which are described this evening and in our quarterly report.

As has always been the case and our business a handful that retailers come and go.

And in that respect some good news on the releasing a premises vacated by bankrupt tenants 21, Bombay empowering locations totaling 103000 square feet.

We had or 60% leased or spoken for with strong expressions of interest.

And for the 46 Payless shoes locations that we had totally 107000 square feet.

Peter Forde: For the 46 Payless Shoes locations that we had, totaling 107,000 square feet, we are pleased to report that we are in advanced discussions and/or have executed deals for approximately 80% of the locations, and in both cases, with rents equal to or higher than the previous rents. A few general reminders about our development pipeline and capabilities. Most of the development initiatives we are planning are on land we already own, unlocking value, supplemented by select acquisitions with existing or new strategic partners. We use our in-house development team to drive these initiatives, all contributing to enhanced yields and profits over the long term. Remember, this in-house development team developed over 85% of our current retail area. We know the markets, the municipalities, and every detail about the properties.

We're pleased to report that we already that advance discussions.

Pandora has executed deals for approximately 80% of the locations.

In both cases with rents equal to or higher than the previous threats.

A few general reminders about her development pipeline and capabilities.

Most of the development initiatives, we're we're planning on land, we already own unlocking value supplemented by select acquisitions with existing or new strategic partners.

We use our in house development team to drive these initiatives all contributing to enhanced yields and profits over the long term.

Remember this enhanced development team developed over 85% with work for retail area.

We know the markets the municipalities and every detail what was the properties.

It is this team of Green host planning experts developers engineers government relations people leasing environmental Geo technical specialists and construction managers and architects.

Peter Forde: It is this team of in-house planning experts, developers, engineers, government relations people, leasing, environmental, geotechnical specialists, construction managers, and architects that makes us very unique in our sector. We continue to enhance the team, offering exciting and challenging learning opportunities for new associates joining our organization. With 34 million sq ft built on approximately 3,500 acres of land with less than 24% land utilization, and primarily all at ground level, we have over 100 million sq ft of land within our shopping centers to accommodate mixed-use growth throughout the country. That does not include the nearly 14 million sq ft of undeveloped lands we also own, much of which we have plans for building out mixed use. The potential intensification and development program continues to grow as we further review our portfolio for opportunities.

That makes us very unique in our sector.

Yeah, we continue to enhance the team offering exciting and challenging learning opportunities for new associates to any organization.

With 34 million square feet built on approximately 3500 acres of land with less than 24% land utilization.

And primarily all at ground level, we have over 100 million square feet of land.

Within our shopping centers to accommodate mixed use growth throughout the country.

It is not and that does not include good nearly 14 million square feet of undeveloped legs. We also.

Much of which we have plans for building and mixed use.

The potential intensification end development program continues to grow as we further review our portfolio for opportunities.

The number of potential projects and towers to commence construction. In addition to our regional development pipeline within the next five years.

Peter Forde: The number of potential projects and towers to commence construction, in addition to our retail development pipeline within the next five years, is currently estimated at 105, comprising some 12.4 million sq ft, our share, of mixed-use space. This development will have an estimated cost of CAD 12.1 billion on completion, with SmartCentres REIT's estimated share of that being over CAD 5.5 billion. In addition, another 151 projects and towers, 15.5 million sq ft at our share, have been identified on which we will commence rezoning, design, site plan approvals, and marketing during the same five years, with construction commencing after that. A total of 256 projects, 27.9 million sq ft in our share of mixed-use space, and the review of the portfolio continues.

It's currently estimated at 105.

Comprising some 12.4 million square feet, our share of mixed used to be.

This development will have an estimated cost of 12.1 billion on completion with smart tender rigs estimated share is that the over $5.5 billion.

In addition to another 151 projects in towers.

15.5 million square feet at our share have been identified which will commence rezoning.

As I say plan approvals and marketing during the same five years.

Construction commencing after that.

So a total of 256 projects.

27.9 million square feet in our share of mix you space and the review of the portfolio continues.

A breakdown of these projects by asset type is provided in our mdna.

Peter Forde: A breakdown of these projects by asset type is provided in our MD&A. Retailers and the new users we are bringing to the centers, residential, condos, and apartments, seniors residences, office, and self-storage, are aware of the synergistic benefits of bringing this all together in one location. The new uses benefit from the great locations, access, and visibility of our centers, while progressive retailers in the centers recognize the benefit of having these additional customers at their front doors. As we've stated before, we carefully select our development partners, looking for expertise in these asset classes and with a good cultural fit and complementary skills. I'm pleased to report that all new relationships are going extremely well. Revera, SmartStop, CentreCourt, Selection Group, Jadco, Greenland, and of course, our longstanding relationships with Walmart and others.

Retailers and the new users, we're bringing to the centers residential condos and apartments seniors residences office in self storage.

Our aware of the synergistic benefits are bringing this all together in one location.

The new uses benefit from the great locations access and visibility of our centers.

Progressive retailers in the sectors recognize the benefit of having these additional customers have had their friend doors.

As we've stated before we carefully selected developing partners looking for expertise in these asset classes and with a good cultural fit and complementary skills.

I'm pleased to report that all new relationships are going extremely well Rivera Smartstop Center Court selection group.

Genco Greenway and of course, our longstanding relationships with Walmart and others.

Peter Forde: We continue to be approached by many others about partnering, interest in both our outstanding land opportunities and our in-house development team. Mitch will provide more details on several of these partner relations. I first wanted to review a significant transaction announced during Q4. We entered into a joint venture with Penguin with respect to a 15.4-acre site, let's call it the new JV site, proximate to the Smart VMC lands already jointly owned by SmartCentres and Penguin. 10.76 acres of this new JV site will be used for the development of the latest new Walmart prototype store. This new Walmart store is a relocation of the existing Walmart store currently located on 15.7 acres, with up to 78 more years remaining on that lease.

And we continue to be approach by many others about partnering interest in <unk> in both our outstanding land opportunities and our in house development team.

Mitchell provide more details on several of these partner relations.

But I first wanted to review a significant transaction announced during the last quarter.

We entered into a joint venture with Penguin with respect to 15.4 acre site.

Call it the new JV site proximate to the smart Vmc lands already jointly owned by smart centers and payment.

10.76 acres Oh, this new JV site will be used for the development of the latest new Walmart prototype store.

This new Walmart stores or relocation of the existing Walmart store currently located.

On 15.7 acres with up to 78 more years remaining on that lease.

It's termination is expected to unlock significant value for smart centers and payment in the near and medium term.

Peter Forde: Its termination is expected to unlock significant value for SmartCentres and Penguin in the near and medium term, as it is steps from the new TTC VMC University Line subway station and the York Region Bus Terminal, as it will allow for full realization of the master plan vision for Smart VMC. Once the old Walmart store is relocated in August of this year, it will unlock significant value and development opportunity for mixed-use density, comprising of at least six additional, not previously announced, residential condominiums and/or purpose-built rental towers that will also allow for the permanent use of the lands already being partially used to complete the Transit City One and Transit City Two, and the two sold-out 55-story condo towers, and the 225,000 sq ft mixed-use tower that houses PwC's recently opened 77,000 sq ft offices.

As it is steps from the new TTC VNC University line subway station and the New York Region Bus terminal.

As it will allow for full realization of the master planned vision for smart Vmc.

Once the old Walmart stores relocated in August of this year, it will unlock significant valley and development opportunity for mixed use density comprising of at least six additional not previously announced residential condominium and or purpose built rental towers.

That will also allow for the permanent use of the lands already being partially used to complete the transit city, one and transit city too.

And the twos, the two sold and 55 storey condo towers and the 225000 square foot mixed use tower that holds Pwc was recently opened.

77000 square foot offices.

The total mixed use density available from the old Walmart store lens is expected to exceed 4.5 million square feet.

Peter Forde: The total mixed-use density available from the old Walmart store lands is expected to exceed 4.5 million square feet. As part of that joint venture for the new JV site, SmartCentres purchased a 50% interest in the JV site from Penguin for CAD 109.2 million in cash, all in accordance with terms reviewed by a special committee of the independent trustees of our board.

As part of that joint venture for the new JV site.

Smart Smartstrand is purchased a 50% interest in the JV strayed from England for 109.2 million in cash.

All in accordance with terms reviewed by a special committee of independent trustees of our board.

Peter Forde: The transaction provided us with the unique value creation opportunity resulting from the relocation of the old Walmart store, substantially increasing the value of the existing 15.7 acre parcel, and also gave us the opportunity to acquire a 50% interest in additional lands around the VMC to develop an additional 1.7 million sq ft of residential condo and/or purpose-built residential rental density on that portion of the JV site that will not be subject to the lease for the new Walmart store. Just as a general reminder, throughout our entire intensification program across our portfolio of properties, virtually none of the additional land value associated with the density we are creating is reflected in our balance sheet IFRS values.

The transaction provided us with the unique value creation opportunity, resulting from the relocation of the old Walmart store.

Substantially increasing the value of the existing 15.7 acre parcel.

And also gave us the opportunity to acquire a 50% interest in additional lands around the vmc to develop an additional 1.7 million square feet of residential.

Conduit or purpose build residential rental density.

That portion of the JV sake that will not be subjects at least for the new Walmart store.

[music].

And just as a general reminder, throughout our entire intensification program across our portfolio properties.

[noise] virtually none of the additional land value associated with the density we are creating as reflected in our balance sheet fire for us values.

To date, we have only recognized the increased land values. When we closed the sale of an interest in the land to a JV partner.

Peter Forde: To date, we have only recognized the increased land values when we close the sale of an interest in the land to a JV partner, at which time we recognize the uplift on our retained portion as well through an IFRS fair value adjustment. As a reminder, when we present the development project yields or profits from our condo projects, land is included in the cost side of the equation at an estimated market price, and all internal fees and capitalized costs are included in costs, which I understand is not the way others may be presenting these same yields.

At which time, we recognize the uplift on our retained portion as well through and I have for a fair value adjustments.

And as also as a reminder, when we present the development project yields or profits from our condo projects.

Land is included in the cost side of the equation at an estimated market price and all internal fees and capitalized costs are included in cost.

Which I understand is not the way others may be presenting you say meals.

Given the significance of the land redevelopment and intensification.

Peter Forde: Given the significance of the land redevelopment and intensification, which may not be reflected in our NAV or recognized in our unit price, we will be reviewing in 2020 the appropriateness of recognizing some of this land value bump in our balance sheet IFRS values. Stay tuned. More about these developments from Mitch in a few minutes, but first, I'll turn it over to Peter Sweeney.

Which may not be reflected in our NAV or recognized in our enterprise, we will be reviewing in 2020 the appropriateness.

Recognizing some of this land value bump in our balance sheet IRS values.

Stay tuned.

More about these developments from Mitch and a few minutes, but first I'll turn it over to Peter Sweetie.

Thank you Peter and good evening everyone.

Peter Sweeney: Thank you, Peter, and good evening, everyone. Our financial results for Q4 2019 reflect the continued strength, stability, and security of our 34 million sq ft, predominantly Walmart-anchored shopping center portfolio. During the quarter, this portfolio generated the following strong results. Number one, rental revenue from investment properties of CAD 209 million was CAD 8 million or 4% higher than CAD 201 million recorded in the comparable quarter last year. Number two, net operating income increased by CAD 4 million or 3.4% to CAD 131 million from CAD 127 million in the comparable quarter. Number three, NOI as a percentage of net base rent was 101%, higher than the 100% level experienced in the comparable quarter in 2018.

Our financial results for the fourth quarter of 2019 reflect the continued strength stability and security of our 34 million square foot predominantly Walmart anchored shopping center portfolio.

During the quarter this portfolio generated the following strong results.

Number one.

Rental revenue from investment properties of $209 million was $8 million or 4% higher than $201 million recorded in the comparable quarter last year.

Number two.

Net operating income increased by $4 million or 3.4% to $131 million from $127 million in the comparable quarter.

And three.

And Hawaii as a percentage of net base rent was 101%.

Higher than the 100% levels experienced in the comparable quarter in 2018.

These continued strong operating metrics are indicative of our portfolios continued unique ability to demonstrate steady growth even in uncertain times.

Peter Sweeney: These continued strong operating metrics are indicative of our portfolio's continued unique ability to demonstrate steady growth even in uncertain times. These improving operating results contributed to a CAD 8.5 million or 9.2% increase in FFO after one-time adjustments to CAD 101 million for the quarter. On a per unit basis, FFO after one-time adjustments was CAD 0.59 per unit, which is 2 cents higher than the comparable quarter last year. This increase was experienced even after factoring in the dilutive impact of our CAD 230 million equity issuance in January 2019.

These improving operating results contributed to an 8.5 million dollar or 9.2% increase NFV follow after onetime adjustments to $101 million for the quarter.

On a per unit basis.

After the call after onetime adjustments was 59 cents.

Per unit, which is two cents higher than the comparable quarter last year.

This increase was experienced even after factoring in the diluted impact of our $230 million equity issuance in January of 2019.

From a cash generating perspective during the quarter Ace CFO with onetime adjustments increased by $2.7 million or 3.2%.

Peter Sweeney: From a cash generating perspective, during the quarter, ACFO with one-time adjustments increased by CAD 2.7 million dollars or 3.2% to CAD 88.6 million dollars and exceeded both distributions declared, and distributions paid by CAD 8.9 million, and CAD 28 million dollars respectively. Again, representing the business's continued ability to demonstrate steady and consistent cash flow growth. Excluding the impact of Payless and Bombay and Bowring bankruptcies, same property growth would have increased by 1% for the quarter. When factoring in the impact of these bankruptcies, same property NOI growth was virtually flat for the quarter. We renewed or are near completion of renewing approximately 3 million square feet of tenancies, which represents approximately 84% of our 2019 lease maturities at an average rental increases, excluding anchor tenants, of 4%.

To $88.6 million and exceeded both distributions declared and distributions paid by 8.9 million and $28 million respectively.

Again, representing the businesses continued ability demonstrated steady and consistent cash flow growth.

Excluding the impact of pay less and Bombay in barring bankruptcies same property growth would have increased by 1% for the quarter when factoring in the impact of these bankruptcy same property NOI growth was virtually flat for the quarter.

We renewed or near completion of renewing approximately 3 million square feet of tendencies, which represents approximately 84% of our 2019 lease maturities at an average rental increases excluding anchor tenants.

4%.

Peter Sweeney: This is consistent with the improving growth rates that we have been experiencing over the last several quarters, and as Peter mentioned earlier, is indicative of an improving retail leasing market. These improved quarterly results can be attributed to the following primary factors. A, the incremental NOI now being generated from new tenants at both the KPMG Tower and PwC-YMCA Tower. B, the incremental NOI now being generated from both the 144,000 sq ft expansion at TPO and recent earn-outs and developments. C, our portfolio of maturing mortgages and unsecured debt continues to provide unsecured fixed rate refinancing opportunities at lower rates than the outgoing maturing rates. And lastly, D, additional percentage rent, parking revenue, and other miscellaneous revenue. Now let's focus on our balance sheet.

This is consistent with the improving growth rates that we've been experiencing over the last several quarters and as Peter mentioned earlier is indicative of an improving retail leasing market.

These improved quarterly results can be attributed to the following primary factors eight.

The incremental NOI now being generated from new tenants at both the KPMG tower, and Pwc why and see a towers.

The incremental NOI now being generated from both the 144000 square foot expansion at CTO.

And recent burnt out some developments.

See our portfolio of maturing mortgages and unsecured debt continues to provide an unsecured fixed rate refinancing opportunities at lower rates than the first one maturing race and lastly, D. Additional percentage rent parking revenue and other miscellaneous revenue.

And now let's focus on our balance sheet.

Peter Sweeney: From a financing perspective, we began 2019 with a strong reminder to the capital markets of our conservative management of capital. We applied the proceeds of our very successful issuance of CAD 230 million of equity against some of our credit facilities to reduce our overall debt levels and improve our related debt metrics to appropriately accommodate future levels of expected development financing. The impact of these debt reductions continue to be reflected in all of our debt and financial metrics. In this regard, at the end of the year, we note the following further improvements. Number one, our unencumbered pool of assets has now increased by 33% since last year to CAD 5.7 billion from CAD 4.3 billion last year.

From a financing perspective, we began 2019 with a strong reminder, to the capital markets of our Conservative management of capital.

We applied the proceeds of our very successful issuance of $230 million of equity again, some of our credit facilities to reduce our overall debt levels and improve our related debt metrics to appropriately accommodate future levels of expected development financing.

The impact could be that reductions continue to be reflected in all of our debt and financial metrics.

In this regard at the ended the year. We note the following further improvements.

Number one our unencumbered pool of assets has now increased by 33% since last year to 5.7 billion from $4.3 billion last year.

Peter Sweeney: Number two, our debt to aggregate assets ratio was reduced to 42.3% from 43.9%. Number three, our weighted average interest rate for secured and unsecured financing decreased further to 3.55% from 3.73%. Number four, our adjusted debt to adjusted EBITDA multiple was further reduced to 8.0x from 8.2x. Number five, our interest coverage ratio improved further to 4.0x from 3.8x. Number six, our unsecured to secured debt ratio has now improved to 63 to 37% from 48 to 52%. Lastly, number seven, as a result of these continued strong credit metrics that reflect our ongoing commitment to the balance sheet, we received an upgrade to our credit rating from DBRS to BBB high.

Number two.

Our debt to aggregate assets ratio was reduced to 42.3% from 43.9%.

Number three.

Our weighted average interest rate for secured and unsecured financing decreased further to 3.55%.

3.73%.

Number four our adjusted debt to adjusted EBITDA multiple was further reduced to 8.0 times.

From 8.2 times.

Number five.

Our interest coverage ratio improved further to 4.0 times from 3.8 times.

Number six.

Our unsecured to secure debt ratio has now improved to 63% to 37% from 48% to 52%.

And lastly number seven.

As a result of these continued strong credit metrics that reflect our ongoing commitment to the balance sheet. We received an upgrade to our credit rating from DDR rescue Triple B high.

Recall plays that when we embarked upon the strategic initiatives just over two years ago, two thirds of our adaptive source from secured lenders.

Peter Sweeney: Recall, please, that when we embarked upon this strategic initiative just over two years ago, two-thirds of our debt was sourced from secured lenders. Just as we began 2019 with a strong statement tied to our equity issuance, this credit rating enhancement allowed us to successfully end 2019 with the successful issuance of CAD 450 million in new ten-year debentures. For our payout ratio and distributions, our ACFO payout ratio with one-time adjustments for the twelve months increased to 87.4% from the comparable year's level of 83% and was primarily influenced by the equity issuance earlier in 2019, and continues to reflect the healthy level of cash flow generated by the portfolio.

And just as we began 2019 with a strong statement tied to our equity issuance. This credit rating enhancement allowed us to successfully in 2019 with the successful issuance of $450 million in new tenure debentures.

For our payout ratio and distribution.

Our 80, AFFO payout ratio with onetime adjustments for the 12 months increased to 87.4% from the comparably comparable years level of 83% and was primarily influenced by the equity instruments equity issuance earlier in 2019 and continues to reflect the healthy.

Level of cash flow generated by the portfolio.

Our surplus of eight CFO at one time adjustments over distributions declared a $44.7 million reflects the continued strength.

Peter Sweeney: Our surplus of ACFO with one-time adjustments over distributions declared of CAD 44.7 million reflects the continued strength, excuse me, and core stability of our business model. When factoring in our highly successful DRIP program, the surplus of ACFO over distributions actually paid totaled CAD 116.2 million. This substantive surplus of cash flow is distinctive in our industry and is funding substantive portions of the development capital required for our large pipeline of mixed-use projects. Our financial and operating results for Q4 reflect our strong and stable business model, and we believe positions us to continue to provide our unit holders with stable and growing distributions.

Excuse me and course stability of our business model.

When factoring in our highly successful drip program the surplus of eight CFO over distributions actually paid totaled $116.2 million.

This substantives surplus of cash flow is distinctive in our industry and its funding substantial portions of the development capital required for our large pipeline of mixed use projects.

Our financial and operating results for the fourth quarter reflect our strong and stable business model and we believe positions us to continue to provide our unitholders with stable and growing distributions.

Peter Sweeney: As we have previously noted, the very successful bought deal that was completed in January of 2019 diluted our growth expectations in 2019 by approximately 3%, thus resulting in limited FFO per unit growth for 2019 as compared to the prior year. However, the expected closings of the first two phases of Transit City Condos in 2020 will signify a profound change in the evolution of the growth profile of SmartCentres as these initial closings are expected to result in significant growth in FFO per unit in 2020. I will now turn things over to Mitchell Goldhar, our executive chairman, who will provide you with an update on some of our upcoming development initiatives. Mitch?

As we've previously noted the very successful bought deal that was completed in January 2019 diluted our growth expectations in 2019 by approximately 3%.

Thus, resulting in limited FFO per unit growth for 2019 as compared to the prior year.

However, the expected closings of the first two phases of transit city condos in 2020, well signify a profound change the evolution of the growth profile of smart sensors. As these initial <unk> closings are expected to result in significant growth.

In F AFFO per unit in Twentytwenty.

Ill now turn things over to Mitchell goals, our executive Chairman, who will provide you with an update on some of our upcoming development initiatives.

[noise] Thanks Peter.

Mitch Goldhar: Thanks, Peter. There is so much happening on the development side, it's impossible for me to cover everything during this call, but here's some of the key highlights. In our seniors residence JV with Revera, we announced four more conditional retirement living site-specific deals to develop in strategic urban locations. Three of the four new locations are joint ventures between SmartCentres and Revera. They're in Barrie, Markham, and Oakville. On downtown sites in each of those markets that Revera already owns, and one of the four joint ventures is between my company, Penguin, and Revera in Toronto on Wilson near Bathurst, and that's on a Penguin-owned site. This is in addition to previously announced three retirement residence joint venture projects between SmartCentres and Revera in Vaughan, two projects, and Oakville.

There are so much happening on the development side, it's impossible for me to cover everything during this call.

But heres.

Some of the key highlights.

And our seniors residents JV with Rivera, we announced for more conditional retirement living site specific deals.

To develop in strategic urban locations throughout the four new locations, our joint ventures between smart centers and Rivera there in varying Mark Im hopeful.

[noise] downturn.

And.

Okay I'm downtown sites in each of those markets. The Rivera already owns and one of the for joint ventures is between like company Penguin and Rivera in Toronto.

We'll sooner Bathurst.

And that's what I went on site.

This is in addition to previously announced three retired and resistance joint venture projects between spark centers and Rivera involving two projects and Oak Hill.

Mitch Goldhar: The seven locations represents a total of 1,565 units comprising of a mix of seniors apartments, assisted living units, independent living units, and memory care units. The total investment by the joint venture partners for these projects is approximately CAD 825 million, expected to generate a yield of 6% to 7.5% once stabilized. We have also entered into a joint venture with Greenland and acquired 1.15 acres in Toronto's Yonge and Davisville neighborhood. SmartCentres has a 75% interest in the joint venture site and will be the developer. This urban infill development site represents a strategic opportunity to jointly develop, construct, own, and manage a newly built rental apartment building in an established urban neighborhood.

The seven locations represents a total of 1565 units.

Pricing or by mix of seniors apartments.

This thing living units.

Independent living units and memory care units.

The total investment by the joint venture partners for these projects is approximately $825 million expected to generate a yield of 6% to 7.5% once stabilized [noise].

We have also entered into a joint venture with Greenland.

And acquire 1.15 acres in Toronto Young Mtvs fill neighborhood [noise].

Smart centers has a 75% interest in the joint venture site and we will be the developer.

Urban infill development site represents a strategic opportunity to jointly develop construct phone and manage a newly built rental apartment building and an established urban neighborhoods.

The acquisition of this site falls on the recent success of the previously announced joint venture.

Mitch Goldhar: The acquisition of this site follows on the recent success of the previously announced joint venture of 7.8 acres on Barrie's waterfront. Together, these two acquisitions represent a development pipeline of over 2,000 purpose-built rental units with an aggregate development value in excess of CAD 1 billion. This will be part of the continuous growth of the apartment platform. This acquisition reaffirms our commitment to focus on recurring revenue growth in purpose-built apartments. We recently announced that we have executed agreements for three additional self-storage locations in our joint venture arrangement with SmartStop Asset Management. Three new locations are in Aurora, Markham, and Whitby. The total number of SmartCentres SmartStop joint venture locations is now 10, comprising of over 9,100 units, approximately 1.2 million square feet, with a total joint venture investment of approximately CAD 200 million.

7.8 acres on berries waterfront.

Together these two acquisitions represent a development pipeline of over 2000 purpose built rental units.

Yes.

[noise], an aggregate developing value in excess of $1 billion.

And this will be part of the continuous growth of the apartment platform.

This acquisition reaffirms our commitment to focus on recurring revenue growth and purpose built apartments.

We recently announced that we have executed agreements for three additional self storage locations in or joint venture arrangement with Smartstyle passive management.

Three new locations are in a rural market and with me.

The total number of smart centers Smartstop joint venture locations is now Tim comprising of over 9100 units approximately 1.2 million square feet.

With a total joint venture investments of approximately $200 million.

No quick update on the phone Metropolitan Center project with a summary, commuters and the 2000 employees working out of the KPMG building and the Pwc why MCB Swimsuit building. Our project is quickly becoming a metropolitan area. If you have not being here recently.

Mitch Goldhar: Now a quick update on the Vaughan Metropolitan Centre project. With the subway commuters and the 2,000 employees working out of the KPMG building and the PwC-YMCA building, our project is quickly becoming a metropolitan area. If you have not been here recently, you should come and visit, by the way, make sure you take the subway. The YMCA opens mid-2020. An additional estimated 1,200 daily visits will be made to the YMCA. The three sold out 55-story Transit City condo towers scheduled for delivery in 2020 and 2021, 1,741 units are under construction and costs are below budget. These sold at an average price of CAD 710 per square foot.

You should come and visit by the by the way to make sure you take the summary.

The the white LMCA opens mid 2020, and additional estimated 1200 daily visits will be made it to the why Mcf.

The three sold out 55 storey transit city condo towers scheduled for delivery in 2020, and 2021 1741 units are under construction and costs are below budget.

Sold at an average price of $710 per square foot construction activity has reached a 50 50 floor.

Mitch Goldhar: Construction activity has reached the 55th floor of towers 1 and 2, and tower 3 has reached the 29th floor. We commenced construction on two additional residential condo towers, one of them 45 and one of them 50 stories, totaling 1,015 units. Again, sold out in less than a month. The 45-story tower at an average of CAD 835 per sq ft, and the 50-story tower at an average of CAD 865 per sq ft. These two towers are in our partnership with CentreCourt and are connected to our 451-unit residential rental tower that my company, Penguin, and the REIT are developing, constructing, and operating together.

Towers wanting to and tower three has reached the 29 floor.

We commenced construction on two additional residential condo towers one of them.

45, and one of them 50 series totaling 1015 units.

Sold out in less than a month to 45 storey tower at an average of a peak 35 per square foot and the 50 story tower at an average of $865 per square foot. These two towers are in our partnership with centric or.

Our connected to our 451 unit residential rental tower that my company Penguin and the read or developing constructing.

[noise] and operating together.

Mitch Goldhar: In fact, this past Monday, the Minister of Housing and Municipal Affairs, Steve Clark, MPP Gila Martow, Minister of Education Stephen Lecce, along with Vaughan Mayor Maurizio Bevilacqua and other councilors were on site for the official groundbreaking of this purpose-built rental tower, a significant milestone in the VMC. We also commenced construction on a new Walmart store in Vaughan on the site of our former office. Once the new location is opened in July 2020. Yes, July 2020. Walmart will be moving from its current location, and this will free up 15 acres of additional development lands zoned with permissions on the VMC site. We are already designing the next phase of the VMC to include a 600,000sq ft office tower and additional residential towers.

This past Monday, the minister of housing and municipal Affairs, Stephen Clark MPP Gila Martel.

This sort of education, Steven let Shane along with von May or May Origio member Laughlin and other cancers were onsite for the official groundbreaking of this purpose built.

Rental tower and significant.

Milestone in the Vmc.

We also commenced construction on a new Walmart store in bar on the site of our former office.

Once the new locations opened in July 20 to 20.

Yes July Twentytwenty Walmart will be.

From its current location and this will free up 15 acres of additional development lands.

So with permissions on the Vmc site.

We are already.

Designing the next phase of the Vmc to include a 600000 square foot office tower and additional residential towers.

Overall, we continue to see nine to 11 million square feet being developed on the approximately 50 acres of the Vmc lands. The response in partnership with my company.

Mitch Goldhar: Overall, we continue to see 9 to 11 million sq ft being developed on the approximately 50 acres of the VMC lands the REIT owns in partnership with my company. Another recent testament to the growing sentiment of a downtown community feel of the Smart VMC was when it was showcased to millions of Canadians on 12 January with Rogers Hometown Hockey festivities and the broadcast from our transit square, directly adjacent to the Vaughan Metropolitan Centre subway station. We are reviewing and planning for residential, rental condo, rental condos and/or townhouses on all our sites over time. Master planning activity participation with the various municipalities are underway on most of these sites. There are too many to mention, but here is just a sampling of some of the new projects recently approved by our board of trustees.

Another listen Testament to the growing sentiment of a downturn community few overview of the smart AMC was when you were showcased to millions of Canadians on January 12, with Rogers hometown hockey festivities and the broadcast from our transit square directly adjacent to the bond Mitchell said sensors.

Subway station.

We are reviewing and planning for residential rental condo rental condos and or townhouses on all our sites overtime Master planning activity participation.

With the various missed those are underway on most of these sites.

There are too many dimensions, but here is just to sampling of some of the new projects recently approved by our board of trustees quite clear on the West Island, Montreal 22 acre shopping center approved.

Mitch Goldhar: Pointe-Claire, on the West Island of Montreal, a 22-acre shopping center approved for 2 15-story apartment towers, 300 units, without impacting the operating shopping center. Alliston, north of the GTA, 36 acres, including 170,000 sq ft of retail, approved a master plan involving 12 acres of residential with a phase one 4-story purpose-built rental apartment of 56 rental units. Ottawa South Keys, 517,000 sq ft shopping center, approved a phase one of 21-story rental apartment building containing 242 units on Ottawa's mass transit line. Pickering, in the east end of the GTA, a 48-acre shopping center, a master plan involving 5 million sq ft of density. We approved a phase one 2 residential tower, 25- and 27-story, 482-unit phase one project.

For 215 story apartment towers 300 units without impacting the operating shopping center Alstom North of a GTK 36 interest, including a 170000 square feet of retail approved a master plan involving 12 acres of residential with a phase one four story purpose film rental apartment of 56 rent.

We'll units Ottawa Soak is 517000 square foot shopping center.

Approved a phase one of 21 story rental apartment building containing 242 units.

Auto was.

Mass transit line.

Okay, great and Eastender the GE, a 40 acre shopping center, a master plan involving 5 million square feet of density we approved a phase one.

Residential tower 20, 527 story 482 unit Phase one project.

As far northwest as part of the Master plan of this 41 acre site.

Mitch Goldhar: Vaughan Northwest, as part of the master plan of this 41-acre site, two residential towers, 12 and 16 stories, 248 units. Vaughan 407. Across a shopping center directly west on Highway 400 of our Smart VMC project. The board approved a master plan of approximately 5 million sq ft and the first two condominium towers of 45 stories, approximately 400, I'm sorry, 780 units operating together. In fact, this past Monday, the minister. Mascouche North, Quebec, just north of Montreal. A 20-acre site adjacent to our Walmart anchor shopping center. The board approved a master plan involving 1,600 residential units with a phase 1 consisting of two 10-story rental apartment buildings, approximately 240 units. That is just to name a few of the projects underway.

Two residential towers.

12, and 16 stories 248 units of on 407.

[laughter] shopping center directly west.

And I was 400 of our.

Smart PMC bridging the board approved Master plan of approximately 5 million square feet and the first two condominium towers at 45 stores.

Ultimately 400, sorry, 780 units operating together.

In fact, this past Monday, the minister hopes.

[noise] Scrooge North Tibet, just north of Montreal.

Hey, 20 acre site adjacent to our Walmart anchored shopping center. The board approved Master plan involving 1600 residential units with a phase one consisting of two Tim story rental apartment buildings approximately 240 years.

And that was just to name a few of the projects underway. We estimate the tenure. So now we will be generating recurring Anwar from these new rental businesses seniors homes.

Mitch Goldhar: We estimate that 10 years from now, we will be generating recurring NOI from these new rental businesses, seniors homes, apartments, office, and storage facilities, representing up to 25% of our total rental NOI, plus significant profits in CAD tens of millions every year starting in 2020 from the sale of condominiums and townhouses. With that, we will turn it back to the operator to coordinate us in addressing your questions. Thank you.

<unk> costs and storage facilities, representing up to 25% of our total rental and white plus significant profits in the tens of millions every year starting in 2020 from the sale of condominiums and town houses.

With that we will turn it back to the operator to coordinate us in addressing your questions. Thank you. Thank you.

Operator 2: Thank you. Thank you, gentlemen. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question, and we will pause for just a moment to allow everyone an opportunity to signal for questions. Your first question comes from Brendon Abrams of Canaccord Genuity. Please go ahead.

Operator: Thank you. Thank you, gentlemen. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question, and we will pause for just a moment to allow everyone an opportunity to signal for questions. Your first question comes from Brendon Abrams of Canaccord Genuity. Please go ahead.

Thank you gentlemen, if you would like to ask your question. Please signal by pressing star one on your telephone keypad. If you are using a speaker phone. Please make sure immune function is turned off to like a signal to reach our equipment I got press star one to ask a question and we will pause for just a moment to allow everyone an opportunity to signal for questions.

And your first question comes from Brendan Abrams of Canaccord Genuity. Please go ahead.

Hi, good evening everyone.

Brendon Abrams: Hi, good evening, everyone.

With respect to the a new Walmart TV site acquired in December I'm wondering if you can provide any color.

Mitch Goldhar: Evening.

Brendon Abrams: Just with respect to the new Walmart JV site acquired in December, I'm wondering if you could provide any color with respect to maybe the breakdown of the purchase price with respect to, you know, the portion that would be retail or the new Walmart versus, looks like, the 4.5 acres that would be high-density residential.

With respect to maybe that breakdown of the purchase price.

Back to.

The portion that would be retail or the new Walmart versus.

Looks like for not acres that would be high density residential.

Yeah, maybe Peter Peter for.

Mitch Goldhar: Yeah. Maybe Peter Forde.

Yes, well basically.

Peter Forde: Yeah. Well, basically, the entire site, when we valued the entire site, we valued it all as, you know, using a value for what it was suited best for, which is high-rise residential. That was the basis for the value we paid. We paid basically the same price per acre for the entire 15 acres, 10 and a half of which are being used for the new Walmart, and the rest will be used for high-rise residential that we will do in that joint venture.

The entire safety when we valued the entire say.

We value the all as.

Using.

Value for what it was suited best for which is.

High rise residential.

And so that was the basis for the value. We paid so we paid basically the same price per acre for the entire.

15 acres.

And of which tenant half of which are being used for the new Walmart and the rest being you will be used for high rise residential that we will do in that joint venture.

But what it did the same time is of course freed up.

Peter Forde: What it did at the same time is, of course, freed up the 15 acres here right next to the subway station, on which we'll be able to immediately start building high-rise residential, again, very close to the subway station and close to the towers that we were so successful on already.

Indeed acres here right next to the subway station.

On which will be able to.

Immediately built a started building high rise residential.

Again, very close to the subway station and close to the towers that we were still successful on already.

Right. Okay. That's helpful. I think in your opening remarks.

Brendon Abrams: Great. Okay. That's helpful. I think in your opening remarks, you mentioned the releasing of the, I guess, Bombay and Payless spaces. I'm just wondering if you could provide any color, or insights into, kind of the new tenants moving into these spaces or leasing the space, whether there's any trends in terms of, you know, the type of service offerings or retailers entering them, or if there's one or two dominant retailers taking, you know, a lot of the spaces.

You mentioned, the releasing of the gets Bombay and Payless spaces.

I'm just wondering if you could provide any color or insights into.

Kind of that new tenants moving into these spaces are leasing the space, whether there's any trend.

In terms of the type of.

Service offerings are retailers and during them or if there's one or two dominant retail or thinking.

A lot of thought into spaces.

Sure, Yeah, probably best Rudy.

Mitch Goldhar: Sure. Yeah. Probably best, Rudy, you wanna take a shot at that?

Sure the when those spaces became available you know a lot of our.

Rudy Gobin: Sure. When those spaces became available, you know, a lot of our typical 4,000 and 5,000sq ft spaces, because these spaces are, you know, the Bombay, Bowring were all 5,000sq ft, and the Payless were about 3,000 to 3,500sq ft. They ignited a flurry of activity from the types of tenants that would be in food, restaurants, fitness, you know, everything, small pet stores, a variety of service offerings that has come in, everything including telecommunications. A lot of these tenants who would typically not have access to those small areas in our large shopping center now did. It is a wide variety.

Typical four and 5000 square foot basis, because these spaces are lumpy if our girls 5000 square feet for about 3000, 3500 square feet. So they ignited a flurry of activity from the types of tenants that would be in the food restaurants fitness.

You know.

Everything a small pet stores a variety of service.

Offerings.

That has come in.

Everything including telecommunications so.

A lot of these tenants, who typically not have access to those small areas in our large shopping center now did so.

So it is a wide variety is the right across the country. So there is no one particular use that would be dominant across all of the.

Rudy Gobin: It's right across the country, so there is no one particular use that would be dominant across all of the, you know, 60-plus locations that we were referring to.

60, plus locations that were referring to.

Okay, Yeah, I would just wondering if there's any concentration.

Brendon Abrams: Okay. Yeah. I was just wondering if there was any concentration, but it sounds like it's pretty mixed. Just turning to the acquisition, it seems until recently, the diversification by asset class has been primarily focused on your existing sites, and I guess it still will be going forward. The REIT has made a few acquisitions, whether it's the self-storage on Dupont, the Davisville for apartment and the 50% from Revera most recently. Just wondering if there's been a, I should say, shift or from the board or management's perspective on acquisitions in terms of outside of the retail space, and is this something we should expect more of going forward?

It sounds like it's pretty pretty next.

Turning to the acquisition.

It seems and until recently the diversification by asset classes.

In front merely focused on your existing sites and I guess, it's still will be going forward, but.

Read it made a few acquisitions.

Whether the self storage on coupon the Davis Phil.

For apartments, and a 50% from Rivera. Most recently just wondering if there's been a.

I should say shifts store or from the border management's perspective on.

On acquisitions in terms of outside of the retail space and that's something we should expect more going forward.

Yeah.

Mitch Goldhar: Yeah. I'll answer that. I wouldn't say a shift per se, but when the opportunities present themselves, you know, we'll certainly assess those. In those cases, they're really extensions of our relationships. They're not per se things that went on the market. I mean, if there was a common theme or strain between all of those, doesn't mean there won't be an acquisition that's out on the market. We're really focused on intensifying sites we already own with the caveat or asterisk that, you know, if something comes along that makes sense, of course, we're in the business. We're always gonna be interested in looking at that, and these came through very good relationships. They made sense to us. We, yeah, we seized the moment.

I'll answer that.

Quinsair shift per se, but a win when the opportunities.

Present themselves.

You know a wheel well certainly assess those.

In those cases, they're really extensions of our relationships are not per say things that.

On the market I mean, if there was a common theme or strain between all of those.

Doesn't mean, there won't be an acquisition that showed on the market but.

But.

We're really focused on intensifying sites, we already own with the caveat or Astro said.

Something comes along that makes sense.

Of course or were in the business, we're always going to be interested in looking at that means came through.

Very very good relationships, so they made sense to us.

So we yeah, we cease the moment.

Okay, that's great all right.

Brendon Abrams: Okay. That's great.

Peter Forde: I might just add on Revera that it was sort of always contemplated. When we originally did the deal with them, there was a number of our sites that were identified for them to have an opportunity to come in on. Likewise, they had identified certain sites that they owned that we would have an opportunity to come in on. The three that we just did were always part of that original list, not that we had to, but once we had a look, then we chose to go and get involved with those three sites.

I make his dad Rivera under Revera I might just add that it was sort of always contemplated doing we originally did the deal with them. There was a number of our sites that were identified.

For them to have an opportunity to come in on and likewise, they had identified certain sites that they owned that we would have an opportunity to come in on so the three that we just did were always part of that original list not that we had two but once we had a look good we chose to go it could get involved with those three sites.

Right. Okay. That's helpful I'll turn it over thank you.

Brendon Abrams: Great. Okay. That's helpful. I'll turn it over. Thank you.

And your next question comes on the line not that Mr., Mike and my Kids from Desjardins Capital markets. Please go ahead Sir.

Operator 2: Your next question comes from the line of Mr. Mike Markidis of Desjardins Capital Markets. Please go ahead, sir.

Operator: Your next question comes from the line of Mr. Mike Markidis of Desjardins Capital Markets. Please go ahead, sir.

Hi, Thanks for taking my questions.

Mike Markidis: Hi. Thanks for taking my questions. Sort of a bit of a laundry list here. First of all, in the outlook in the supplemental, I think the wording before would've been FFO growth to accelerate in 2020 in excess of 10%. I guess, the 10% or in excess of 10% was removed. Just wondering if you could provide your thoughts as to whether or not that was purposeful or just an oversight.

Serve a bit of a laundry list here, but first of all any outlook in the supplemental I think are worrying before would have been AFFO accelerate.

FFO growth picks already 2020 in excess of 10%.

The 10% or in excess of 10% was removed.

Just wonder if you could provide your thoughts as to whether or not that was purposeful or just to an oversight.

Yeah, maybe Peter.

Peter Forde: Yeah, maybe Peter.

Rudy Gobin: Yeah.

Hi, Mike its Peter suite.

Peter Sweeney: Yeah, Mike, it's Peter Sweeney. We had reflected that previously. It wasn't an oversight. We're still trying to refine with some level of precision the expected FFO growth levels from the closings of TC one and two this year. As you can imagine, there's still a lot of work to be done to get to the finish line on those closings. It potentially is a moving target. I think as Mitch said, you know, I think the point from these development income initiatives is to provide the REIT with continuous and continuing income over the longer term timeframe in CAD tens of millions. As I say, we're trying to refine with some level of precision the number of units that we will be able to close this year.

We had did reflected that previously it wasn't oversight, we're still trying to refine with some level of precision.

The expected FFO growth levels from the closings of TC one into this year and as you can imagine.

Theres still a lot of work to be done to get to the finish line on those closings. So it actually is a moving target, but I think as Mitch said.

The I think the point from these.

Development income initiatives is to provide the re with continuous and continuing.

Income over the longer term timeframe in tens of millions of dollars. So as I say, we're trying to refine with some level of precision. The number of units that we are will be able to close this year and so at least for now we're trying to defer or hold back on giving any for the guy.

Peter Sweeney: At least for now, we're trying to defer or hold back on giving any further guidance on what that expected level of growth will be this year.

Somewhat that expected level of growth will be this year.

Okay, and just from the mechanics, I think when you guys would have entered those projects into the or sold your interest and kept a retained interest.

Mike Markidis: Okay. Just from the mechanics, I think when you guys would've ventured those projects or sold your interest and kept a retained interest, you would've recognized a fair value gain on your books or some transactional FFO. What happens subsequent, Peter, when you transfer to residential inventory? Is there a write-up that's associated at all with future expected gross proceeds, or can we simply look at the gross margin that you put out and back into what the transactional amount would be irrespective of timing? Do you see where I'm going with that?

You would have recognized a fair value gain on your books for some transactional AFFO, but what happened subsequent Peter when you transfer to residential inventory is there a a write up that's associated at all with future expected gross proceeds or can we simply look at the.

Gross margin that you put out and back into what the transaction that would be irrespective of timing.

Sure I'm worried about.

I think so I mean, we don't characterize it Mike.

Peter Sweeney: I think so. I mean, we don't characterize it, Mike, as transactional, at least the net proceeds that we're gonna recognize from the sale and closing of the units as they start to occur later this year and into 2021. Because it's becoming, and has become, in fact, a big part of our operations, for us, it is conventional earnings or conventional FFO. If you're trying to model it's simply taking the yield expectations or return on cost expectations that we've got in the supplemental document and doing the math on that.

Transactional that at least the net proceeds that we're going to recognize from the sale in closing of the units as they start to occur later this year and into 2021.

Because it is becoming an has become in fact, a big part of our operations for us It is conventional.

Earnings or conventional EFO.

And so if you're trying to model that simply taking the.

The yield expectations or return on cost expectations that we got in the supplemental.

Document and doing the math on that.

Mike Markidis: Okay. That's fair. Just another quick one here. I think last year, you transferred 355,000 sq ft from the rental pool or income producing to PUD. I mean, I didn't look back to see if that was a Q4 event or if it was earlier, but could you remind us what that would refer to?

Okay, that's fair I'm.

Just a another quick one here I think last year, you tranche for 355000 square feet from rental pool or income producing to pod.

I can't imagine look back to see if that was forcier vendor for was earlier, but could you remind us what that would prefer to.

Maybe Peter.

Peter Forde: Maybe Peter, you wanna answer that?

Rudy Gobin: Maybe Peter, you wanna answer that?

Yeah, we do that yes.

Rudy Gobin: Yeah, Rudy.

Peter Forde: Yeah, Rudy.

Peter Forde: Yeah.

Peter Forde: Okay.

Peter Forde: You wanna answer it?

Rudy Gobin: Yeah. Those would have been, again, I'm trying to remember the list, but it would have included some Home Outfitters, some boxes where we are looking to add or subdivide the space, change the use of the space to a different use, where it makes sense to do so in those shopping centers. In 2019, in each of the quarters, again, they would have been maybe a RONA box, maybe a Home Outfitters box. Home Outfitters closed, I think, a couple locations. In those locations where we're going to add the mixed use, obviously, you know, the rezonings and so on have to carry on. It's a variety of change in uses.

Those are there's been a again I'm trying to.

Remember the list, but what does included.

Some homeowner bidders some boxes, where we are looking to in.

I had a or subdivide the statement change the use of the space through a different views.

Where it makes sense to do so in that in those shopping centers. So in 2019 to each of the quarters.

Again, they would have been maybe rona box, maybe a whole lot better suboxone authors, both I think a couple locations and in those locations, where where where we're going to add the mixed use obviously.

Reasonings until it has to carry on so it's a variety of change in uses and I want to do take a look through.

Rudy Gobin: I wanted to take a look through if we have a list. I don't have the list in front of me, but I can get a list and have that to you. Basically, that's what it is. It's spaces where we're doing one of the following three things. Subdividing the space to re-lease the space and add new uses and/or to add mixed uses to the shopping center in that location.

We have a I don't have the list in front me, but I can get back and get a lift in.

And have that to you, but basically that's what it is it it's bases, where we're doing what of the quality three days subdividing the space to lease the space and add new uses and or two added.

Next uses to the shopping center in the in that location.

Okay, and I guess, just especially right I'm not 375 wouldn't include the following day or to the bearing space.

Mike Markidis: Okay. I guess, just to specify then, that 355 wouldn't include the Bombay or the Bowring space, or the Payless?

The parallel snow petulant no gotcha gotcha, okay.

Rudy Gobin: No. Absolutely no.

Mike Markidis: Gotcha.

Rudy Gobin: No.

Mike Markidis: Okay. All right. Thanks. Last one for me. Just in the supplemental information package on, I guess, page 23, you guys have the layout of the developments and the earn-outs, you know, expected income and gross commitment on the developments and the earn-outs, and then the equity accounted piece, which is, I guess, arguably where most of the future stuff is, has an invested to date, but not a gross commitment or a net commitment line. I was just wondering if that is outlined somewhere else in more detail in terms of how that looks, or if you guys plan to break that out anytime soon.

All right. Thanks last one for me just I'm going to supplemental information.

Package on guess pitch country, you guys have the layer to the developments in the earn outs.

Expected in kind of course commitment on the government's Mariano what's going on the equity accounted piece, which is I guess arguably world most of the future stuff. There's a hasn't been invested to date, but not a gross commitment or in that commitment.

Line I was just wondering if that is aligned somewhere else in more detail in terms of.

How that looks or if you guys trying to break that out.

Hey, Thompson.

Do you like Mike its Peter.

Peter Forde: Peter.

Peter Sweeney: Mike, it's Peter. I think we've mentioned this or referenced it in the MD&A. We're still working on disclosing those future commitment amounts. At least for now, they're not in the public materials.

The I think we've mentioned this or references in the M&A, we're still working on.

On disclosing those future commitment amounts and so at least for now they're not they're not in the.

In the public materials.

And this chart. This chart is a retail development through Peter with so most of the equity accounted for.

Peter Forde: This chart is retail developments, right, Peter? Which, so most of the equity accounted for investments are not of the retail. They're all the other mixed-use things that we're gonna be doing. Mike and the tables, you know, page 24 and 25 talk about some of the mixed-use initiatives, which include things that are in the equity accounted for category but are not retail.

Westwoods or not or retail there all the other mixed use things that we're going to be doing.

Mike and the tables on page 20, 425 talk about some of the new mixed use initiatives, which include things that are in.

The equity accounted for category, but are not retail.

Yeah, No I I see that schedule and that's very helpful. I'm, just trying to get essentially the equity investor 38, and but what's to come sort of in the next couple of years.

Mike Markidis: Yeah. No, I see that schedule there, and that's very helpful. I'm just trying to get a sense of the, you know, the equity invested to date and what's to come sort of in the next couple of years, from a, from a spend perspective. That's great. Thanks very much.

From a from our spend perspective, but from.

That's great thanks very much.

Yes.

And if you find that your question has been answered you may remover itself from the Q by pressing star too I mean, we will now take our next question from time, you Dare of RBC capital markets. Please go ahead.

Operator 2: If you find that your question has been answered, you may remove yourself from the queue by pressing star two, and we will now take our next question from Tom Dicker of RBC Capital Markets. Please go ahead.

Operator: If you find that your question has been answered, you may remove yourself from the queue by pressing star two, and we will now take our next question from Tom Dicker of RBC Capital Markets. Please go ahead.

[noise], Thanks, and hi, everyone.

Tom Dicker: Thanks, hi, everyone. Just on the back of your commentary on re-leasing progress at Bombay and Payless, you know, how are you feeling about overall same-property NOI growth for 2020?

Pammi Bir: Thanks, hi, everyone. Just on the back of your commentary on re-leasing progress at Bombay and Payless, you know, how are you feeling about overall same-property NOI growth for 2020?

Just on the back to your commentary on pre leasing progress has been named Payless, just how you're feeling about overall same property NOI growth for 2020.

I had probably it's Peter.

Peter Forde: Go ahead.

Peter Sweeney: Tommy, it's Peter. I guess for now at least, we're expecting it to be conventional, a conventional year somewhere between 0% and 1%. Keep in mind that most of the new leasing that was referred to earlier will be commencing at different points over the course of 2020, so we will not get sort of a full pop, if you will, in the results for 2020. I think the bigger impact, certainly from a positive perspective, will be felt in 2021. I think notwithstanding that timing difference, we are expecting based on the budget that we've got in place that 2020's same property growth rate will be somewhere between 0.5% to 1%.

Did the I guess for now at least were expecting it to be conventional a conventional years somewhere between zero and 1% keep in mind that most of the new leasing that.

That was referred to earlier will be commencing at different points over the course of 2020. So we will not get sort of a full pop if you will in the results for 2020.

But I think the bigger impact certainly from a.

A positive perspective will be felt in 2021.

But I think notwithstanding that timing difference we are expecting based on the budget that we got in place that 2000 and Twentys.

Same property growth rate will be somewhere between.

I have to 1%.

That's helpful.

Tom Dicker: That's helpful. I guess, maybe coming back to the question earlier on guidance, you know, if we maybe just exclude the condo gains, you know, there's some refinancing savings. If you strip out the condo gains, what sort of range of FFO growth would you anticipate?

Pammi Bir: That's helpful. I guess, maybe coming back to the question earlier on guidance, you know, if we maybe just exclude the condo gains, you know, there's some refinancing savings. If you strip out the condo gains, what sort of range of FFO growth would you anticipate?

I guess, maybe coming back to that question earlier on guidance can you maybe just exclude the condo gains.

Yes, there's some refinancing savings.

If you strip out sorry did the comedy and what sort of range of that from FFO growth would you anticipate.

If we're removing the gains.

Peter Sweeney: If we're removing the gains, Tom, from the development income initiatives, we would expect, at least for now, the growth rate to be somewhere in the 2% to 2.5% range.

Paul Me from.

From the development income initiatives, we would expect at least for now the growth rate to be somewhere in the two 2.5% room.

Got it and.

Tom Dicker: Great. Got it. Maybe just coming back to your comments on potentially recording density value for some of your land or I guess unutilized land, can you maybe just expand on what you're contemplating there, maybe the methodology or, you know, what sites that could apply to or any sort of initial estimates that you might have?

Pammi Bir: Great. Got it. Maybe just coming back to your comments on potentially recording density value for some of your land or I guess unutilized land, can you maybe just expand on what you're contemplating there, maybe the methodology or, you know, what sites that could apply to or any sort of initial estimates that you might have?

Maybe just coming back to your your comments on potentially recording density value for some of your land or I guess on utilize land can you maybe just to expand on what you what you're contemplating there and maybe the methodology or what sites that could apply to or or any sort of initial estimates that you might Oh my God.

Yeah I think.

Peter Forde: Yeah. I think, as I said, it's something we're looking into, so we're at early stages of looking into it in terms of how we will measure it. But certainly what we're planning to do is take into account when we look at it, the program, the new initiatives that we've been talking about now for a while, and looking at the permissions that we have are in the process of getting through the municipalities and factoring that in. Obviously looking at what's happening in the marketplace around us, you know, in those various sites and the projects that Mitch was listing that we're working on would certainly be candidates for to be looked at, as well as many of the other sites that we're working on as well.

As I said, it's something we're looking into so we're at early stages are looking into it in terms of how we will measure.

But certainly what we're planning to do is take into account when we look at it the program the new initiatives that we've been talking about now for a while.

And looking at the permissions that we have our and in the process of.

Getting through the municipalities and factoring that in and obviously looking at what's happening in the marketplace around US you know in those various.

Sites and the projects that.

That Mitch.

Listing that we're working on would certainly be candidates for it to be looked at.

As well as many of the other sites that were working on as well.

Got it.

Tom Dicker: Got it. Maybe just lastly, on the Yonge and Davisville site with Greenland, what was your cost of the land, and what's the estimated density on that site?

Pammi Bir: Got it. Maybe just lastly, on the Yonge and Davisville site with Greenland, what was your cost of the land, and what's the estimated density on that site?

Maybe just lastly on the on the young and Dave is still site with Greenland what was your your cost of the land and what's the estimated density on that site.

[noise] [noise] cities.

Peter Forde: Any estimates? No, we didn't. Well, we happened to actually talk about-

So we didnt.

They happened through targeted at all the density I don't know did we announced a degree denounce.

Peter Sweeney: The density, I don't know. Did we announce the density? We certainly didn't announce the density. The density is to be determined. It is zoned, and it's designated for high density. The specific density that we will achieve there is not yet determined. We have a sense for what we think it will, you know, a range that we think we'll achieve, so it will be a high rise, a high-rise building. It's also proposed to be a rental building, so that's, you know, also looked favorably upon by the municipality. It's already designated, so it's not an issue. But the exact number of square feet and number of floors is not yet determined.

We certainly didn't announce the density densities threw me determined it is zone.

Yes, it dedicated.

For high density.

Meet specific density that we will.

She's there is not yet determined we have.

Offense for what we think it will.

We'll arrange that we think we'll achieve so we'll be a high rise a high rise building. Its also proposed to be a rental building. So that's.

You know also look favorably upon by but still it's already designated so it's not an issue, but the exact number of square feet and a number of floors is not yet the German.

Okay, I will all kind of dot thanks very much.

Tom Dicker: Okay. I will, I'll turn it back. Thanks very much.

Pammi Bir: Okay. I will, I'll turn it back. Thanks very much.

Well now take our next question from Sam Damiani of TD Securities. Please go ahead.

Operator 2: We'll now take our next question from Sam Damiani of TD Securities. Please go ahead.

Operator: We'll now take our next question from Sam Damiani of TD Securities. Please go ahead.

Thank you and good evening.

Sam Damiani: Thank you and good evening. Just sort of following on the last question, some of the recent development announcements, be it residential, rental, storage, or senior housing, have been on lands that the REIT had not owned, so being acquired from the partners or jointly acquiring from third parties. How do you balance, with all of the potential on the existing SmartCentres land, you know, investing in new land to do development versus just building on existing SmartCentres properties?

Just sort of falling on the last question the number of the some of the recent development announcements.

Residential rental storage or senior housing did not.

Lands that does every telkomsel being required for the partners or shortly acquired.

From third parties, how do you balance.

With all the potential on existing smart so there's land.

You know, we're investing in do Lance to two development versus just building on existing Smartservice properties.

Yeah, it's much.

Mitch Goldhar: Yeah, it's Mitch. Well, first of all, we have the development horsepower in-house as is. So that in terms of balancing is not an issue. You know, you have to look at each and every one of these developments. Barrie, you know, it depends on your take on Barrie. We're bullish on Barrie. This is a city that's always been sort of mid-sized city that we think is gonna become more significant, and it is a strategic property. The price was right. The municipality's interest in seeing density there is strong, and the partner is an experienced developer and owner of residential rental, you know. So I won't go through each one, but each one is really a thoughtful decision, a unique opportunity.

Well first of all.

We have been development.

Horsepower in house as it so that in terms of balancing is not an issue.

You have to look at each and every one of these development Barry.

Yeah. It depends on your take on Barry.

We are we're bullish on a Barry this is a city that's always been sort of midsize either we think is going to become more significant and that is a strategic property.

Price was right.

The municipalities or interest and Im seeing density there.

It was strong and the partner is an experience.

Developer and owner or residential rental.

You know so I won't go through each one but each one is really a thoughtful decision.

Our unique opportunity, we look at a lot of things and we say we pass on.

Mitch Goldhar: We look at a lot of things, and we say, you know, we pass on 99% of things we look at. But these are compelling. Each and every one of them is compelling. If you look at each one, I mean, we can talk later, I mean, offline. You know, we see them as being, you know, high standard. You know, in the case of Davisville, sort of even a jewel in the crown of our future portfolio. Yeah, there's the crème de la crème, and they're coming through relationships, so it's not a bidding exercise per se, and it's not a, you know, high pressure situation. It's not to say we wouldn't look at -- we don't look at everything.

99% of things religion.

But these are compelling each and every one of them is compelling and if you look at each one I mean can talk later offline.

You know.

We see them as being you know high standard a case of Dave is filled sort of even a jewel in the crown.

A a port of of our of our future portfolio. So.

Yeah, there's the crime of a crime and they're coming through relationships. So it's not a bidding biddings exercise per se and it's not a HM.

Hi pressure situation. So sought to say, we wouldn't look or we don't look at everything but these.

Mitch Goldhar: These, you know, had all the right ingredients for us, and that's how these very specific properties ended up in joint ventures.

We had all the right ingredients for us and that so these.

Very specific properties ended up a enjoyed ventures.

Okay. Thank you and just a follow up the.

Sam Damiani: Okay. Thank you. Just to follow up the sort of first question on the call, the acquisition of the land at the VMC, I think the math is correct here, CAD 7 million an acre. Any reason that is not fair to apply to the rest of the lands, for future development at the VMC?

First question on the call these acquisition of the land up the CMC.

I think the math is correct here $7 million an acre.

Any reason that is not fair to apply to the rest of the lands for future development at the BMC.

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Mitch Goldhar: Well, we're looking at that now, as Peter mentioned. Well, when we look at it, we are gonna be looking at from the point of view of what we could achieve in the marketplace based on the, you know, the market value of land on each of our properties. Then we're gonna be conservative because we're talking about, you know, a lot of properties. It is possible, it's conceivable, but we haven't done that yet. We are now putting our minds to, you know, updating our NAV across the portfolio. Yes, of course, that'll be taken into consideration, of course. As we'll look at, sorry, I mean, you know, we've sold land in the VMC to Seneca. They bought, you know, into VMC lands.

Well, we're looking at that now as Peter mentioned.

When we.

Well when when we look at it we are going to be looking at some point of view of what we could achieve.

In the marketplace based on me.

<unk> market value of lab.

On each of our properties.

And.

And then we're going to be conservative because we're talking about a lot of properties.

So it is possible, it's conceivable, but we haven't done that yet.

But we are now putting our minds too.

Updating our our NAV across across the portfolio in this of course that will be taken into consideration of course.

Haswell choice as well look at I mean, we've sold land.

The vmc too.

Seven sackler, they but you know in true BMC lives.

Mitch Goldhar: We'll take every variable into consideration, and then we'll, you know, we'll present that in the near future.

We'll take every variable into consideration of nimble.

We'll we'll present that.

However, in the near future.

Great. Thank you I'll turn it back.

Sam Damiani: Great. Thank you. I'll turn it back.

Your next question comes from the line of Tali of National Bank Financial. Please go ahead.

Operator 2: Your next question comes from the line of Tal Woolley of National Bank Financial. Please go ahead.

Operator: Your next question comes from the line of Tal Woolley of National Bank Financial. Please go ahead.

Hi, Good afternoon are good evening, I guess I just wanted to ask.

Tal Woolley: Hi. Good afternoon or good evening, I guess. I just wanted to ask your annual run rate NOI that you offer in the MD&A. It's about CAD 510 million, I think is what you're quoting. If I look at like what you're putting up right now on a proportionate basis, it's obviously, you know, it's probably closer to like CAD 525 million, CAD 530 million. Is there a reason why the number would be that much lower than sort of where you're kind of tracking right now?

Your annual run rate and the line that you offer any mdna, it's about $510 million because what you're quoting.

And if I look like what you're putting up right now on a proportional basis obviously.

Looking to like 525 530.

There are reason why that number will be done much lower than sort of where you kind of tracking right now.

A big so tell its Peter and I think it's just the way we took the math at Q4 the unfortunate the annual run rate is a function.

Peter Sweeney: I don't think so, Tal. It's Peter. I think it's just the way we took the math at Q4. Unfortunately, the annual run rate is a function of the current quarter's metrics and just applying it therefrom. Your point's well taken. When you look at the 12 months ending December, you get a much higher number, certainly. It's really just math. It has nothing else to do with that. Also maybe just to one of the earlier points that was made, the annual run rate numbers in the MD&A do not reflect any of the development income that's anticipated from the condominium closings later this year. I wouldn't place too much reliance on that annual run rate number.

The current quarters metrics and and just applying it there from.

And your points well taken a when you look at the.

12 months ending December you get it.

It's really a much higher number.

And is it really is just math it has nothing else to do that and also maybe just to one of the earlier points.

That was made the annual run rate numbers in the Mdna do not reflect any of the development income that is anticipated.

From the condominium closings later this year, so I wouldn't place too much for Lyons.

On that annual run rate number.

Tal Woolley: Okay. Then, you know, you'd flagged a couple leases that really started, I believe, to come on in the last half of 2019 that helped drive NOI higher. I think, you know, there's the second office building at VMC, and I think you mentioned TPO as well. When were those sort of like fully occupied and like, you know, contributing to FFO? Was that mostly in Q4, mostly in Q3, like starting in Q3?

Okay.

And then I you know you flagged a couple of leases that are really started I believe to.

Come on and last half of 2019 that helps drive kind of why higher I think you know there's the.

Second office building, a BMC and it could you mentioned TPL as well.

When did those like new lease were those sort of like fully occupied and Mike.

Contributing to AFFO.

That mostly in Q4 and most in Q3 like starting in Q3.

You know it really depends on the lead so that so the the way that we include.

Peter Sweeney: You know, it really depends on the lease. The way that we include for revenue recognition purposes income, Tal, is we take a building like the PwC building. We take the tenant, in this case, PwC, and we determine when the commencement of their lease is. I think in PwC's case, that might've been in Q2 or Q3. Q2?

For for revenue recognition purposes income Dallas, we we take a building like with Pwc building.

And we take the tenant in this case pwc and we determine when the commencement of their leases I think VW seascape that might have been in.

Q2 in Q3.

HM two yeah. It was earlier than Q4 or at least talent. So what wasn't Q4. So we were recognizing income from Pwc lease prior to Q4 part of their part of their opening because their lease.

Tal Woolley: Yeah.

Peter Sweeney: It was earlier than Q4, at least, Tal. It wasn't Q4, so we were recognizing income from PwC's lease prior to Q4, prior to their opening, because their lease formally, if you will, prior to that. They just had a fixturing period of X months prior to their opening in November, I guess. The reality was in December, we did pick up, however, some new earn-outs and developments. I think there was perhaps some other tenants in the PwC building, probably Scotiabank, in the PwC tower whose lease commenced that also affected positively that metric.

Commence.

Formally if you will prior to that they just had a fixturing period.

X months prior to their opening in November I guess so.

So the reality wasn't December we did pick up however, some new earn outs and developments.

I think it was perhaps some other tenants in the.

Pwc building probably Scotia.

In the Pwc tower that whose lease commenced that also affected positively that them.

That said metric.

Okay.

Tal Woolley: Okay. Just last, quickly, an accounting question. The transactional FFO, the CAD 2.8 million you recognized in that FFO walkback, where is that CAD 2.8 million on your income statement when you report the quarter? Is that in the fair value gains?

And then just last quickly had an accounting question.

The transactional impact for the 2.8 million you recognize them a AFFO walk back.

Where is that 2.8 million on the balance or sorry on your income statement. When you report the quarter not in the fair value gains.

The transaction life that follow it.

Peter Sweeney: The transactional FFO, it. I guess the reality is it's partially, over time, reflected in unrealized gains for IFRS purposes. Keep in mind, the way the transactional FFO is calculated is it represents the difference between the purchase price that a third party is paying us for their share of an interest in a joint venture with us and our cost. That difference between essentially sale value and cost represents the transactional component that's being sold to that third party.

Yes. The reality is it's partially overtime reflected in trend in unrealized gains fry for us purposes, but.

Keep in mind the way the transactional at that fall is calculated as it represents the difference between the purchase price that a third party is paying that's for their share.

And interest in a joint venture with us.

And our cost.

And so that difference between essentially sale value and cost represents a transactional component that's being sold to that too that the party.

Right and so I guess like when thinking about that.

Tal Woolley: Right. I guess, like, what I'm saying is that number in the equity account of JV?

That number is.

It does any equity accounted JB.

Is the and I'm sorry, yeah, everything it would it would be it would be in the equity kinda JV in this case its.

Peter Sweeney: I'm sorry. Yeah, yeah. It would be in the equity account of JVs. In this case, it's the Transit City 4 and 5 projects that closed earlier on.

It's the transit city, four and five projects that closed earlier on.

Tal Woolley: Okay, I got it. Thanks very much, Peter.

Okay I got it thanks very much better.

All right.

Peter Sweeney: All right.

No. We haven't additional question then Oh from Mike Mckee to some desert in capital markets. Please go ahead.

Operator 2: We have an additional question from Mike Markidis of Desjardins Capital Markets. Please go ahead.

Operator: We have an additional question from Mike Markidis of Desjardins Capital Markets. Please go ahead.

Thanks, just a last one here on Peter in the Fs depot.

Mike Markidis: Thanks. Just a last one here. Peter, in the FFO reconciliation, there's been an amount that was pretty small, but it's starting to grow pretty materially. It's the adjustment for supplemental contribution. Can you remind us what that relates to?

Reconciliation there's been a.

An amount that was pretty small, but it's it's starting to grow pretty materially it's the adjustment for supplemental contribution.

Can you remind us what that.

Relates to.

Yeah. They I mean, it's funny accounting is accounting is a wonderful wonderful art that sometimes doesn't hold a lot of weighted reality.

Peter Sweeney: Yeah. I mean, it's funny. Accounting is a wonderful art that sometimes doesn't hold a lot of weight in reality. What that represents are costs that are incurred that would ordinarily be capitalized to the projects involved that we're equity accounting for. Because of the restrictions in equity accounting under IFRS, we're precluded from adding them to the balance sheet. They are in effect expensed for accounting purposes. Just to be able to sort of balance the scorecard from a reporting point of view and not to penalize groups like ourselves that have a tremendous amount of activity in these equity accounted initiatives, we get the opportunity to add them back for FFO purposes.

And so what that represents our costs that are incurred that would ordinarily Mike I'd be capitalized to the projects involve that were equity accounting for but because of the restrictions in equity accounting underwriting for us we're precluded.

From adding them too.

To the balance sheet and so.

They are in effect expense for accounting purposes, and then just to be able to sort of balance scorecard from a reporting point of view and not to penalize groups like ourselves that has a tremendous amount of activity in these equity accounted initiatives. We then get the opportunity to add them back for.

FFO purposes.

Got it sort of I guess would be stated alternately similar to the indirect interest just just other cost started on interest that yet.

Mike Markidis: Got it. I guess it'd be stated alternatively similar to the indirect interest, just other costs other than interest that you get.

Peter Sweeney: Yeah. Yeah. That's probably the right way of looking at it. It's just an inequity in the accounting for equity investments, if you will.

Looking at it it's just that an equity in the accounting for equity investments if you will.

Is there any.

Mike Markidis: Is there any thought to perhaps as the pipeline grows, the amount of JVs grow, to structuring these things in a manner which would qualify for proportionate consolidation, or is it just not feasible?

Thought to perhaps or is this the pipeline grows a month amount of JV as gross structuring these things in a manner, which would qualify for proportionate consolidation or is it just not feasible.

Great question, Mike and I have to tell you.

Peter Sweeney: Great question, Mike. I have to tell you, it's a discussion that has taken place at both the audit committee level and the board level with our group over the last two days. We're gonna spearhead an initiative both at the REALPAC level and perhaps other levels with our auditors as well to see if there is a way that we can potentially find a way to proportionally consolidate these types of initiatives.

It's a discussion that has taken place at both the audit committee level and the board level with our group over the last two days.

We're going to spearhead an initiative both at there.

Real pack level, and perhaps other levels with our auditors as well see if there is a way that we can potentially or find a way to proportionately consolidate.

These types of initiatives. So you may not have had a chance to see it but if you look at our mdna for the quarter, we have actually taking the approach of proportion consolidating anything that is equity accounted in the in the accounting statements.

Peter Sweeney: You may not have had a chance to see it, but if you look at our MD&A for the quarter, we have actually taken the approach of proportionally consolidating anything that is equity accounted in the accounting statements, hopefully with the intent of giving you and others like you a better picture, a better perspective on what's actually taking place as opposed to trying to understand equity accounting.

Hopefully with the on the intent of giving you and others like you.

Better picture better perspective on with actually taking place as opposed to try to understand equity accounting.

Got it how to look at the end demand if you need to some supported in your efforts with real pack in terms of the cheering section, let us know [laughter] will take you up on that Michael.

Mike Markidis: Got it. I'll have a look at the MD&A, and if you need some support in your efforts with REALPAC in terms of the cheering section, let us know.

Peter Sweeney: We'll take you up on that, Michael.

And it appears there no further questions at this time Mr. first I'd like to turn the conference back to you for any additional that closing remarks.

Operator 2: It appears there are no further questions at this time. Mr. Forde, I'd like to turn the conference back to you for any additional or closing remarks.

Operator: It appears there are no further questions at this time. Mr. Forde, I'd like to turn the conference back to you for any additional or closing remarks.

Okay. Good again, thank you all for taking the time to participate in our fourth quarter call and again. Thank you for your continuing interest and investment in our Reid.

Peter Forde: Okay, good. Again, thank you all for taking the time to participate in our Q4 call. Again, thank you for your continuing interest and investment in REIT. Good night.

Good night.

This concludes today's call. We thank you for your participation you may now disconnect your lines and have a wonderful day, everyone take care.

Operator 2: This concludes today's call. We thank you for your participation. You may now disconnect your lines, and have a wonderful day, everyone. Take care.

Operator: This concludes today's call. We thank you for your participation. You may now disconnect your lines, and have a wonderful day, everyone. Take care.

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