Q1 2021 Choice Properties Real Estate Investment Trust Earnings Call
[music].
Ladies and gentlemen, thank you for standing by.
Welcome to the choice properties real estate investment Trust Q1 earnings announcement.
At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press Star then one on your telephone please be advised that today's conference is being recorded.
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I would now like to hand, the conference over to your speaker today doors Vaughan Senior Vice President General Counsel and Secretary. Thank you. Please go ahead.
Thank you good morning, and welcome to choice properties Q1, 2021 conference call.
And here this morning by rail Diamond, President and Chief Executive Officer, Mario bearer of Potholes, Chief Financial Officer, and and the erotic executive Vice President leasing and operations.
Before we begin today's call I would like to remind you that by discussing our financial and operating performance and in responding to your questions. We may make forward looking statements, including statements regarding choice properties subjective strategies to achieve those objectives as well as statements with respect to management's beliefs.
Plans estimates intentions outlook and similar statements concerning anticipated future events results circumstances performance or exceptions that are not historical facts.
These statements are based on our current estimates and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from the conclusions in these forward looking statements.
Additional information on the material risks that can impact our financial results and estimates and the assumptions that we remained in the applying in making these statements can be found in the recently filed Q1 2021 financial statements and management discussion and analysis, which are available on our website and on SEDAR.
I will now turn the call over to rail.
Doris and good morning, everyone. Thank you for taking the time to join our Q1 conference call. We are pleased to report a strong start to the year.
Our high quality portfolio continues to produce strong earnings and stable rent collections.
The still some uncertainty with the third wave of Lockdowns, we remain confident that the composition of our portfolio coupled with our active approach to asset management and our disciplined approach to financial management positions us well to weather this period of uncertainty.
Overall, we reported solid financial results for the first quarter, we continued to execute on our development program and our capital recycling initiatives I'll provide an update on both shortly but first Mary will provide you an update on our financial results for the first quarter Mario.
Thank you Bill good morning, everyone.
Real mentioned, we're pleased with our strong start to 2021 and our results for the first quarter I'd like to begin with a brief overview of our rent collections and then speak to our financial results and balance sheet activity.
Great collections for the first quarter were stable at 98% this.
This was consistent with the second half of 2020 and reflects the combination of our stable portfolio and the overall health of our tenant base.
Our rent relief measures last year and provided effective support for our tenants through these unprecedented times.
And instead of the most impacted by the Lockdowns, including fitness users sit down restaurants fashion retailers represent the majority of the uncollected rent.
Continuous rent collections for the quarter, we reported of bad debt expense of $1 9 million.
As outlined in our additional disclosures in our MD&A you can see that almost all of our IR for the first quarter has either been collected.
Of the FERC pursuant to the deferral arrangements will provided of guest leaving only $5 million of exposure, which we expect to recover over time.
Our reported funds from operations for the first quarter was $176 million.
Which is consistent with the first quarter of 2020.
This was a relatively clean quarter with the exception of the $1 $9 million of bad debt I referred to.
Being offset by approximately $1 1 million of non recurring revenue related to the lease surrender income.
It is important to note that while <unk> was flat on the quarter.
Flex over $1 billion of capital recycling recycling executed in the second half of 2020.
Recycling, mostly secondary and tertiary market retail properties with higher in place yields into more strategic urban assets and hartzell acquire industrial properties with better long term growth profile.
On a per unit diluted basis, our Q1 <unk> was $23.
Compared to $24 for the first quarter of 2020.
The decrease in net <unk> per unit for the current period was primarily due to the higher number of units outstanding as a result of the units issued last year to acquire the workforce development and our head off of 2002, St. Clair from <unk> and <unk>.
From units issued to acquire the Western foods industrial portfolio from George Weston Limited.
Despite the challenging operating environment occupancy has held up well declining by only 10 basis points from Q4, two of strong 97% as a result of some of absorption naval growth of 77000 square feet.
Retail occupancy is still steady at 97, 4%.
Industrial occupancy declined margin marginally up to 97% driven by an increase in vacancy in our small based portfolio in Alberta.
And office occupancy declined 100 basis point of 91, 1% due to increased vacancy in our Calgary office buildings and of tenant default by the fitness operator in our West Georgia Office tower in Vancouver.
The decrease in total occupancy was partially offset by the acquisition.
Completed development of fully occupied assets.
The massive cash NOI was relatively flat in the quarter decreasing by <unk>, 3% year over year, when excluding bad debt expense for the.
The client reflects a marginal decrease in occupancy across the portfolio and lower parking revenues offset by the annual step breath of embedded within the law of large portion of our portfolio.
Maintaining stable occupancy and consistent the CMS performance just demonstrates the stability inherent in our portfolio.
Turning to the balance sheet for the quarter, we reported an increase in our net asset value of $85 million.
Including an increase of the fair value of our investment properties of $61 million.
The changes in fair value of this quarter are less reflective of macro trends and more so on transactional activity.
The increase this quarter was primarily related to fair value gains including.
The advancement of certain development projects, including Golden mile and our new partnership with Daniels, which relative will expand upon.
A reevaluation of our office at 110 Young Street, which was revalued following our corner of sale of their interest to of third party for pricing in excess of our <unk> fair value.
Certain industrial leasing transactions completed the well above in place rents.
We had very little of finance activity in the quarter as the early redemption of the second quarter of last year of our two debentures maturing in 'twenty one of left us with no significant debt maturities until September of 2021.
We continue to maintain a strong balance sheet with an improved risk profile and significant financial flexibility and this includes ample liquidity with $1 5 billion available on our credit facility and approximately 200 million of cash on our balance sheet.
Okay.
We also have of approximately 12 billion of unencumbered assets that we can finance, our prune to raise capital and we have of well staggered debt maturity ladder with multiple sources of kind of available capital.
The off with our stable portfolio, our low debt level, our high liquidity level. We believe we are well positioned.
I'd now turn the call back to rail to address our development and investment activities.
Thank you Mario on the development front, we continue to deliver exceptional assets, our portfolio and we're making steady progress on the rezoning of our longer term hotline for.
For the quarter, we completed and transferred four development projects for approximately 35000 square feet of GLA at I'll share. This represents of total development cost of $26 million.
And includes the land lease for Costco business Center at our son walk to retail assets in northwest Edmonton.
This is the first cost per business centers opened in Alberta. This is of Great addition to the node and represents a great anchor to our existing retail side.
We've also been very busy with our residential development construction is wrapping up at the bricks in.
And the Queen West neighborhood of Toronto. The first tenants took occupancy this month and building and we will be transferring it to income producing next quarter the.
The remaining two buildings of finishing up construction and we expect that they will begin taking occupancy towards the end of this year.
Construction is also well underway at Liberty House, and Liberty village with tenants also taking occupancy later this year.
These projects transfer to the income producing real keeping our pipeline flow and have recently kicked off construction at Mount Pleasant religion brand and a real.
Kirkwood Avenue in Ottawa.
Looking forward, we are busy working through the final planning work at both our shipping revenue West and Greg will growth in the sites, we expect to break ground on both of these sites over the next 12 months.
All told the six residential projects will deliver over 1100 rental residential units and represents a meaningful addition to our residential asset class.
This quarter, we included enhanced disclosure on both of our residential and mixed use development projects.
<unk> team has been working on the rezoning of many existing shopping centers, including all of the mall during the quarter, we announced the new partnership with the Daniels Corporation for the first phase of our plan to read the revitalized and redevelop on 19 acre Golden Mall shopping center in the East end of Toronto.
The stock is adjacent to the Eglin from cost an MLP, which is scheduled for completion in 2020 true.
We're excited to partner once again with Daniel to transform the 67 year old shopping center into a mixed use mixed income multi generational and transit oriented community.
Focus is of building a complete community and we are thrilled to partner with Daniels, who shares our view of the importance in taking of community based approach to development the <unk>.
Partnership structure with Daniels is for phase, one and will be located on the corner of Victoria Park and mailing from Avenue and will include two condo towers of purpose built rental buildings ground floor retail institutional uses an office space that will create a vibrant new gateway to the neighborhood.
We will be selling 100% of the condo component being two towers in approximately 600000 square feet of density.
We will enter into a 50 50 joint venture on the purposeful rent per building being one tower and approximately 400000 square feet.
As part of the rental component choice will maintain ownership of the land and we will enter into the 99 year ground lease with Daniels for its 50% share.
The partnership is still conditional on achieving achieving final zoning approvals.
We continue to work with the city to finalize these approvals and we expect to break ground on the first phase in 2023.
In addition to our development program, we continue to drive value and upgrade our portfolio through capital recycling.
The very active 2020 with over $1 billion of transactions, we executed on several new deals in the first quarter of 2021, including $163 million of new acquisitions and $96 million of dispositions the.
Most significant transaction this quarter was our acquisition of an 85% interest in approximately 300 net acres of future industrial development land.
The land is located in calendar <unk> and <unk>.
Interest was acquired for $138 million being initial cash payment of $100 million in future contingent payments of $38 million through uncertain milestones being met over the development. We believe this represents a very attractive cost per acre for industrial land in the GTA.
We acquired the thoughts in partnership with the rock commercial group with the longstanding development partner of choice Ross will act as the development manager on the project with choice acting.
Acting as leasing manager and property manager for the joint venture on completion of the development. We are currently working with the development partner to rezone the land to industrial.
The land is strategically located at the border of Caledon in Brampton with excellent access to major highways intermodal and of significant labor pool the.
Current development plan envisions, a multi phase industrial park with the potential 5 million square feet of new generation logistics space.
Contiguous land parcel of the size in the GTA is exceptionally rare. This acquisition is transformational is of transformational opportunity for choice to grow its industrial platform and has the potential to nearly double our current industrial footprint in the GTA.
In addition to the land acquisition I just spoke about of the past year, we have been fortunate grow of industrial platform by acquiring and developing $215 million of high quality assets.
I would like to take a moment to summarize the industrial platform. We believe the choice has one of the best industrial portfolios in the Canadian REIT landscape, we own a 122 assets comprising over 17 million square feet of GLA with an offer of carrying value of approximately $2 5 billion the.
The assets, we own are generic distribution warehousing and logistical assets. We also on purpose built distribution assets for loblaw at sort of of critical role to the operations.
We believe the industrial assets will continue to benefit from strong market fundamentals driven by the growth of E. Commerce and continued investment in supply chain and we will continue to look for opportunities to further grow our platform both through new development or acquisitions.
I'll now like to turn the call back to the operator for questions.
At this time, if you would like to ask a question. Please press Star then the number one on your telephone keypad.
Your first question comes from the line of Mark Rothschild with Canaccord.
Thanks, Good morning, guys.
Real maybe continuing with what you were just speaking about the industrial portfolio can you talk about your preference for large.
All of these properties versus the small bay and clearly the worst of the softness in some of the small day in Alberta, and maybe you can give some more.
Color on what we should expect there as leases roll over the next year.
Yes, so I'll start and end of Ken.
But just generally on the industrial week seeing very very good rent growth rent growth, even in Alberta, Marc just on the.
The mid band and the large base space as you pointed out we are having some softness on the small base space.
A small day space in Toronto is full we're getting great rent growth, maybe anakin just comments on Alberta for a moment.
Hi, Mark.
Alright.
In Alberta, we have had sort.
Net.
What we're seeing this quarter is actually an increase in our small and our small day occupancy the drop in our occupancy was actually.
A larger.
Well ill functional distribution space that.
It is now vacant, but we anticipate being able to lease quite easily.
We're optimistic to see small day activity pick up and we're also seeing that our rents are holding pretty steady in our small day, Alberta portfolio.
Okay, Great and maybe on this development is it possible to give some information on the timing and the return you're expecting on this project, it's obviously quite sizable.
Yes, Mark we are working through the zoning to industrial the timing is difficult to predict but we think call of the zoning process will take us.
Around two years, we just think that we have such an attractive land cost basis, nothing has traded in the GTA.
For this price in the wall and <unk>.
Services of <unk>. So we actually think we have a unique position to drive above average returns from this development.
The other thing I would just add quickly market is a development like this allows for phasing overtime. So unlike in a call. It a purpose built rental assets investing all of the capital that once we are able to face this overtime as the demand is there.
Okay, Great and then maybe just one last question continuing on the development you.
You gave some more information on your MD&A on the different development projects is there any significant capital that will be spent on the golden mile or maybe some of the other major projects such as down the street over the next year or two.
The bulk of the capital on those projects will be rezoning.
Nothing really significant until 2023.
Okay, great. Thank you so much.
Yes.
Yes.
Your next question.
Comes from the line of <unk> <unk> with National Bank Finance.
Hello.
Hey, Tal.
Alright.
Uh huh.
Just on the leasing on the Brixton can you talk a little bit just about where you are seeing.
Net rents on the initial leases and how far through the lease up process you are.
I understand.
You are just starting out.
Net interest and demand right now.
Yes.
The marketing the space at around 300 <unk> floods.
We've just started leasing up I think we've done about 20 leases the.
Of the rents we have received the net rents we are achieving of say net because we've been offering some incentives or in the mid threes right now.
But we do expect demand to pick up as things open up.
Okay.
And.
Just in terms of the office on the on the office side can you just talk a little bit more about where you kind of thing the occupancy losses, and how youre thinking about recovering that over time.
Hi, Scott.
Well, we're seeing the occupancy losses right now.
Sorry.
It's really been driven.
Hi.
A few bankruptcies that we've had tenants whose businesses were actually Werent really office, we had a conference facility and a fitness.
And we're working on sort of repurposing of that space and.
That that sort of drove our declines of this.
This quarter.
But we expect.
We do have some additional.
Vacancy that we know about the split.
It's going to be reflected in a little bit in Q2, and then into Q3 tenant in Toronto that we've known.
Well pre COVID-19 is relocating and consolidating their operations.
Yes.
The Toronto.
It's the space and.
We were.
We were pleased to see tour activity in office pick up in the first two months of the year, but we're seeing it quite down again.
As Lockdowns were reinstituted in Toronto, So we anticipate things are going to be slow and channel until we return to a more sort of normalized operating.
Operating.
Platform, but we are bullish on the long term as we are starting to see we know our tenants are coming back and we haven't really seen any of our tenants indicate that theyre going to be utilizing less space than already come to us looking to downsize as of yet.
Okay, and then just going back to the Calvin land purchase.
Is it expected over time that loblaw would absorb a fair amount of that space.
We obviously will speak to the loblaw.
But at the moment, there's no discussions on that.
Okay, and then just lastly.
Given all the changes sort of the western in terms of capital allocation strategy and there's been some management changes too.
In your conversations with them do you expect any some of the changes that they're making the will it have any impact sort of on how you guys need to think about capital allocation of the choice.
Look we are of great relationship with both George Weston and Loblaw.
From the George Weston point of view, they've been very supportive of our business plans and our growth and we don't expect any changes.
Okay, that's great. Thanks, gentlemen.
Thank you.
Your next question comes from the line of Sam ISI, Ed with CIBC.
Thanks, Good morning.
Just firstly on the active residential developments I see the from Neil disclosure around stabilized yields.
Of these stayed consistent from your I guess your initial expectations have you seen any expansion I guess over the course of the last year.
So.
Semi.
If you ask the 12 months ago, we would have expected slightly better yields.
But.
Our view right now we've taken kind of grants given COVID-19.
So I would say yields have compressed a little bit but long term, we are very bullish on the asset class.
Okay, and then just moving on to the industrial side can you kind of speak to the magnitude of rent spreads you're seeing especially in the GTA.
Yes, we're seeing.
Pretty pretty strong rental lifts in the GTA.
When we are spreads this quarter were north of 15% in terms of the.
Sorry, Amy.
For all day, we're north of 15%, but in the GTA, we saw a lift of of over 60% relative to expiring rent and that.
And I would say looking looking ahead, we expect to see less of between 30 and 60% across the the GTA portfolio.
Okay great.
Lastly on industrial can you just remind me what proportion of that portfolio is.
Ontario versus Alberta.
Okay.
So I don't have the exact status right now.
We will get back to you on that I think I think about of Thirty's is Alberta and Nevada.
And I believe of I think it's around equal but.
We'll come back to you exactly.
Okay, Great. That's all from me. Thank you.
Your next question comes from the line of Himanshu Gupta with Scotiabank.
Thank you and good morning.
So staying on the industrial segment.
Look at same office cash NOI was flat on the.
The basis.
How should we think about the same property NOI growth.
For the full year 2021.
Hey, Amit.
Really right now with industrial.
It's just a function of timing right now of the stuff Thats rolling mostly Alberta base. So there.
Pedro rent spreads and the potential for vacancy so we do expect it sequentially as we go.
Yeah.
Not going to see Youll see more.
The averaging low single digits.
But really the pop comes when we get more Ontario rollover.
Care to Alberta.
Okay, that's fair enough and maybe.
What's the occupancy in the button on the industrial right now.
That's the compared with the last year.
It's that it's about 94% right now.
As of about 94%, Okay. That's it thank you.
And then on the calendar the property, obviously very sizable acquisitions remember they go through just a couple of clarifications. So you mentioned the zoning might take around two years.
<unk> 5 million square feet of GLA is that correct.
That is correct.
Okay.
And as you mentioned just on the zoning we are working through it I tried to give you some outside of dates but obviously reliance on.
The municipality and the province.
Fair enough.
This development will be done non stick related this is Greg.
No.
The property has not been bought the keeping the loblaw has in mind.
Correct correct correct, we hope we can accommodate loblaw if they if they want to look at the property, but no.
It's got to be generic industrial space.
Okay.
<unk>.
Is it towards the oven isn't going to be big box format is going to be small day any thoughts.
In terms of what the format to look like.
It's primarily going to be.
The Big box had mid box space.
Okay.
I guess, you know development of you list in the quarterly but any thoughts there in terms of.
What are you looking for in terms of development.
Look we I think we will disclose it as we start construction, but I think we have to ground you have to go back to what we look what we purchased the landfall.
We have an exceptional land cost base versus what land is trading at in the GTA for development.
Okay.
And then just switching over to Gordon.
Given the exciting project flow choice.
What was the fair value gains I think all of it.
Gordon My read of lump it in Q1.
So.
Within our.
We said, we had $61 million of gains on fair values.
I think probably.
Round.
In total of $35 million were related to development and the bulk of that would've been the Golden model.
Got it and and just with net zoning application has been submitted on golden mile but not approved.
Can you say this.
This was driven on the other thing about new game. The once the application is approved.
A smaller one so the way.
The way the accounting works for the development of fair value is as.
As you hit certain milestones.
The report gains over time.
That's the policy of the auditors of looking to that.
So from our point of view with Golden mile.
Got to the point, where after our our deal with Daniels with the media release with the participation of the mayor of definitely in the air in the community. We just felt that.
It was derisked a bit more so there were still process.
All of that the risk profile changed.
As time, so what Youll see is fair value increases related to at the time those away as opposed to the building itself, but it will be somewhat smaller.
Got it Okay, and then from <unk>.
On the you know the donlin.
Project, so to condo towers will be built by <unk> right and the purposes.
The mix of 2% choice since 50% of Romulans.
Correct.
Correct, yes.
Yes sure.
The $200 it will be built by the <unk> have you recorded anything of value gains all of that transaction.
This is taking the NDS seem too yes.
For the quarter Douglas.
Technically it's all in net amount.
You mentioned so the.
The gain use of this quarter related to growth.
The the contingent sale of air rights and as well.
Got it okay.
And maybe last question from my side on capital recycling all.
Obviously, that's been the focus had been very active last year as well.
Do you think the key is going to be exactly the same in 2021, sending some.
The Kenzie does show the routines and buying more of industrial.
Is that doesn't go into default from.
The investment.
Yes, it's hard to say at this point.
The opportunity based.
Pat.
Given given the size of our retail platform, it's likely that we may recycle out of some of those stable assets in the into higher growth assets.
It's hard to say right now given <unk>.
Given we have so much liquidity on the balance sheet and some of this cash will probably the dispositions of appropriately.
We'll probably be towards the end of the year.
Alright.
Okay, and maybe just one final one of the event of collection.
The hain in the Lockdown now.
Any impact on the interconnections.
Collections can cause of that.
The write down I mentioned with the last few quarters has kind of been the same we've been at 98.
Percentage plus collections and so the.
Right now I think we're we're watching the right now we're just supporting its the same group of tenants really that are still.
The mix of the Lockdowns and everybody else is kind of performing well. So we don't anticipate the.
Lockdown.
Yeah.
Different macro trends there might be some isolated 10, Keith but overall, we're kind of expecting to be at the same.
The same collection point or hopefully better.
Sure. Thank you guys I'll turn the back.
Your next question comes from the line of Mike Mark Cadiz with digital audience.
Pardon me.
Good morning, everybody.
One of my three sort of many questions just on that are interesting development parcel of metropolitan calling in.
Number one was it off market or marketed number two is there anything unique associated with the 300 acres that you see as being presenting the challenge associated with the zoning process I know you sort of two years and then number three.
Just focusing on that exceptional cost basis, you have I, just wonder if you'd be able to hazard a guess as to what a fully zoned parcel of that nature would trade at a price per acre in the market today. Thank you.
Yeah.
So Mike.
We've had long standing development partners.
And Ross commercial group has been a very good partner of ours. So this was off market.
They they got.
They've got the land under contract through against where an existing relationship with them.
<unk>.
We actually acquiring 400 acres.
And the is.
In a space that we believe will be included in the Green belts. That's why we're saying it's 300 net but we don't think of as anything unique we just think it's the whole.
Area is going through a rezoning process. So its just time.
We would think that zoned land ready to go is probably trading at around call. It the $1 $5 million to $2 million an acre.
Thank you.
Your next question comes from the line of Sam.
Damiani with TD Securities.
Good morning, first off congratulations on the industrial acquisition great to see.
My questions are more on the on the retail side I Wonder if you could just give us a bit of an update on.
The third party leasing trends both from the grocery anchored and in the power Center properties, how that's evolved the.
Year to date.
Hi, Sam our occupancy is holding very strong and we're really pleased to see that and we're really actually pleased to see that.
There are many retailers that are looking to grow.
Their retail footprint and we're seeing that across the country. We're in active negotiations to expand existing tenants and bring new one.
The segments that are growing our share of off price department store as the sort of pone.
Furnishing discount banners quick serve restaurants.
Our banks seem to be renewing and we're talking to them about a few more locations. So I'm really pleased to see the activity and we're also pleased to see some new fashion retailers entering Canada L. L Bean Josh.
They are opening in our center in Dartmouth crossing and we're talking and then on the other location Forever 21 is reopening in Canada, we're talking to them about our location in the back.
The <unk>.
I don't think I would might of been stainless like 12 months ago, but I'm really really optimistic.
That's great to hear.
And what about the investment market for for retail I guess, specifically grocery anchored.
Can you speak to any of your activity Youre seeing in the market and everything you expect them to come to life in the near term.
Yes, it's the same theme as last quarter, there's really lots of liquidity looking for stable grocery anchored retail.
And we really think of separated itself from from other types of retail and it's all types of investors institutional foreign profit et cetera. So.
Lack of transactions is a function as I said earlier of the fact that we are pushing of.
Dispositions towards the end of the year, it's not a lack of capital.
That's helpful and just finally, the additional disclosure on the developments very much appreciate it I wonder if you could just give a little bit of insight on the Eglinton Gould mile.
Disclosure it looks like the investment to date of about $7 million just for clarification.
Vacation that is just in respect of the redevelopment of the existing shopping center would be would have of cost.
Both of that is that correct or was that the whole cost per the entire existing properties.
No you're correct Sam of the existing shopping center the cost about that it's included in income producing and we are carrying it with low density attributed to it other than the fair value gain the various spoke about.
Earlier, so it would be included in our existing assets.
Very good.
Thats It from me thank you.
Thanks, Ed.
Your next question comes from the line of Ginnie Mae <unk> with BMO capital markets.
Thank you and good morning.
Most of my questions have been answered, but I was wondering at Golden mile. You mentioned that there was a 99 year ground lease with Daniel I'm. Just wondering if you can expand on that because I know you have a longer term investment horizon and the difference perspective on sort of development and its rolling of portfolio. So.
Is that something that was unique to daniel's or the specific property or is that just the different way of thinking about how your partner on future development.
Yeah, Jamie Thanks, we actually think it's a different way of thinking it's actually the second ground lease structure. We did all kirkwood after the loss in Ottawa has the has a similar structure.
As of long term owner of real estate, we like.
We like the income we locked the steady income so we actually think it's a unique way of looking at it as well our balance sheets in such great shape, it's not like we need the capital. So we are able to essentially reinvest that capital back into it.
Essentially of the development.
So with the way the structure of it then.
I presume the don't book any sort of fair value change as a result of that versus just doing an outright sale of half of the property.
It would.
I think it all depends.
There wouldn't be journey, because what you would do is you have to present value of the land lease of the other cash flow includes the paying with the lesson was carried on before the delta between the carrying value of the land and the present value of the cash flow of the year of fair value day.
Okay, and maybe I missed it but was that disclosed for this particular property.
This particular property.
So on on the Golden model.
On the Golden mile flow conditional.
So all of our disclosure discloses the conditional nature of the transaction at the conditional zoning Kirkwood was disclosed and I believe it was disclosed last year.
Okay great.
Thanks for that and then turn it over to the multifamily leasing. The you had mentioned that there were some incentives being offered and I know, it's still a little bit early.
Early days on leasing multifamily demand coming back from Canada, but could you speak to what kind of tenant profile, you're seeing who is coming back to the market for multifamily properties, particularly the AP.
The higher.
The higher cost of downtown properties.
It's generally professionals looking.
The upgrade this space or operate the units or just moving into the market, but as I say.
We've only done sub 20 leases.
He can give you more color as time goes by.
Okay, Great and then lastly can you just remind me on the branded properties.
The rent control of or whether or not there's any rent control on these are these new multifamily.
These two are excluded from rent control.
Okay, that's what I thought great.
Great. Thank you very much.
Okay.
Again, if you would like to ask a question. Please press star one.
Your next question comes from the line of Tammy <unk> with RBC capital markets.
Thanks, Ed and good morning.
I realize the again it might still be early but.
Four of the Golden Bear project, what can you share perhaps in terms of the.
Estimated costs for the.
Phase one or at least maybe even just the first portion of the phase one as it kicks off in 2023.
So coming out in the sorry, then of those.
The numbers with me, but you can pretty easily work it out with call. It the 1 million feet of density at.
The call it 700 Bucks a foot so call it $700 million of investment.
Yeah.
Got it Thats helpful.
And Brian you mentioned growth the appetite for grocery anchored properties as oxy is still quite strong from an investment standpoint.
And understandably so.
I'm curious your thoughts on pricing with respect to perhaps from larger power Center space.
We did see an interest in Walmart acre property traded granted secure scan the thoughts here as well.
Yeah.
Yeah, Truthfully I haven't followed it as closely but it is definitely a bit soft.
Then the grocery anchored.
<unk>.
But look I think for well located power center with good tenants.
There'll be lots of liquidity.
Got it just maybe just one last one perhaps getting more high level.
The industrial program is already.
Sounds like it's the <unk>.
Okay.
The expanding and asking I guess per a little bit of time now.
Maybe longer term sort of.
An ideal mix that you, perhaps strength that the portfolio of couldnt move toward over time.
Yes.
We do think of ourselves as a diversified REIT, but others think of us as the.
The quality grocery anchored REIT store or a retail REIT.
So so we think in order to get sort of as a diversified REIT call. It retail has to represent.
70% of.
Of your NOI, So we would like the other asset classes to make up the balance.
Right now it's call it <unk>.
20%. So so we've led the way to go in and the mix will be industrial and residential will be up office will be up primarily through office components on mixed use developments.
It is unlikely is to purchase.
The Standalone office assets.
Got it thanks, very much I will turn it back.
And at this time there are no further questions I would now turn the call back to rail diamond for any closing remarks.
Thank you fellas, so we want to thank everyone for joining us on the call. Today Q2, all you can to stay healthy and be safe and have a good weekend. Thank you.
Thank you that does conclude today's conference. We thank you for participating you may now disconnect.
Okay.
[music].
Yes.
Okay.
Yes.