Q3 2021 H&R Real Estate Investment Trust Earnings Call
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Good morning, and welcome to HCR Real estate investment Trust 2021 third quarter earnings conference call.
Before beginning the call ETR I would like to remind listeners that certain statements, which may include predictions conclusions forecasts or projections in our remarks that follow may contain forward looking information, which reflect our current expectations of management regarding future events and performance and speak only of today's date.
Forward looking information requires management to make assumptions or rely on certain material factors and are subject to inherent risks and uncertainties that could cause actual results to differ materially from the statements and the forward looking information.
In discussing <unk> financial and operating performance and in responding to your questions. We may reference certain financial measures, which do not have a meaning recognized or standardized under I FRS, our Canadian generally accepted accounting principles and are therefore unlikely to be comparable to similar measures presented by other reporting issue.
Worse.
Non-GAAP measures should not be considered as alternatives to net income are comparable metrics determined in accordance with I F. R. S. As indicators of H&R is performance liquidity cash flows and profitability.
H nurse management uses these measures to aid in assessing the underlying performance and provides these additional measures so that investors can do the same.
Additional information about the material factors assumptions risks and uncertainties that could cause actual results to differ materially from the statements and the forward looking information and the material factors or assumptions that may have been applied in making such statements together with details on each nurse use of non-GAAP financial measures are described are described in more.
<unk> and HRS public filings, which can be found on our website at www Dot SEDAR dot com.
I would now like to introduce Mr. Kam Hofstetter, Chief Executive Officer of H&R Reed. Please go ahead Mr. Hofstetter.
Thank you operator, and good morning, everyone.
Tom offset H&R CEO and I like to thank you for joining us today to discuss our third quarter financial and operating results and an update on our strategic repositioning Gwen with me on the call are Larry from our CFO, Alex Avery Executive Vice President asset management, and strategic initiatives and future Steel primary Street.
CLO may charge, primarily division in future President CLO primary Street, which leaflet Bryant President Atlanta residential.
I'm very pleased to report strong third quarter results, reflecting the quality of our portfolio and strength of our balance sheet. Our transformational strategic repositioning plan announced just a few weeks ago provides a clear path forward to supplying our business model, creating significant value and growth for our unit holders.
With that path forward now clearly established our team turned to execution, we are committed to executing efficiently and effectively on our plan to create a simplified growth oriented company focusing on multi residential industrial properties to surface to surface value for our unit holders.
It has to be a leading owner operator and developer of multi residential and industrial properties, creating value through redevelopment and greenfield developments in prime locations within Toronto, Montreal, Vancouver, and high growth U S Sunbelt and gateway cities.
As a reminder, our strategic repositioning plan comprises four key steps the tax free spinoff of primary sorry unit holders, including Olive H&R is in closed malls is exiting time HR is remaining retail assets by selling our grocery anchored a central service retail properties and our interest in <unk> Realty.
Exiting all office properties did not have any significant near term future redevelopment potential finally, growing our multi residential industrial portfolio through development and redevelopment of properties in prime locations, primarily within the GTA and high growth U S Sunbelt and gateway cities.
Our $3 4 billion dollar disposition program is ambitious and achievable our $600 million grocery anchored in central service disposition portfolio is comprised of high quality properties anchored by strong covenant tenants, such as Lowe's Metro <unk> and Walmart.
56 property, two 8 million square foot portfolio, primarily located in Ontario was 98, 5% leased and it's a ready source of capital at favorable pricing.
In fact, both our press release last month, we have had numerous inquiries inquiries from retail property owners investors looking to buy a retail assets individually or as a portfolio and they can indicative pricing is very attractive.
The nickel Realty L. P comprised 236 grocery anchored shopping centers, which is 95, 9% occupied primarily by giant Eagle the largest supermarket chain in Ohio, Pennsylvania markets.
We recognize that there may be some questions about the timing and pricing of the planned disposition of our $2 3 billion dollar office portfolio are two important things to note in this regard number one H&R onto a uniquely high quality office properties located in key business districts in major cities across nine states and Canada.
Properties, including this decision to dismiss this portfolio at 99% occupied with a very long weighted average remaining lease term was nine five years at least the strong investment grade credit rated tenants and number two we recently commenced the execution of our strategy to exit the office market with the successful sale of the Vo 2 million square foot office building in Calgary, Alberta as well.
Is there a bell campus in Mississauga, Ontario, selling the remainder of this this is the disposition portfolio. It should be relatively straightforward. It's what we have already accomplished.
Our disposition program will carefully synchronized property sales to match our capital funding requirements in the valley.
Right.
Positioning opportunity, whether it's one off asset sale of a portfolio sale, while considering in managing tax implications, our investment grade credit rating and the impact on our earnings our strategic repositioning will create a more compelling investment profile for unit holders by exiting retail and office, we are streamlining our operating platform expanding our exposure to high <unk>.
Growth in multi residential industrial properties, our exposure to major markets will increase over time as our development pipeline completions begin to come online. The streamlined operating platform will allow us to focus on development and redevelopment opportunities in our existing portfolio to drive future growth.
I'll turn it over now to our team to provide details of the third quarter financial and operating results and to provide an update on our strategic repositioning plan execution to date, Alex and Pat will provide an update on the primary spinout and its performance Felipe will follow with a review of our multi residential operations followed by Larry who will provide a brief update on office and industrial portfolios before provide.
Some context for our financial results and finally, I'll make some closing remarks over to you Alex.
Thank you Tom and good morning, we are very excited about the upcoming spinoff expected to close December 31 2021.
Primary suite will be exceptionally well positioned to take advantage of market opportunities at an extraordinary moment in the evolution of the Canadian retail property landscape.
We will have significant scale with a $3 2 billion national portfolio of enclosed shopping centers that are dominant in their trade areas.
Economies of scale are achieved through its full service internal national management platform, which will comprise over 300 dedicated team members. The spinoff will result, and H&R and <unk>, primarily becoming two completely independent entities.
The primary <unk> business plan is anchored in beginning with and maintaining a very well capitalized financial position.
This will limit the rights reliance on external capital sources and allow them to grow with an optimal cost of capital we anticipate leverage to be one of the lowest amongst its Canadian peers.
With a debt to gross book value of 29% forecast debt to EBITDA of just five three times and are targeting an <unk> payout ratio in the range of 45% to 50%.
These metrics reflect a clearly differentiated financial profile.
Size scale portfolio composition and capital structure were designed to allow primary suite to grow and thrive in the new retail landscape.
Primarily this strategy will focus on three key strategic pillars number one providing affordable retail space to profitable retailers' number two the disciplined internal capital allocation across investment opportunities and number three consolidation of retail assets in a market with limited institutional competition.
<unk>.
The primary spinoff is proceeding as planned with a broad variety of activities underway to deliver on our year end closing.
We have advanced our financial our financing plans towards final commitments and are pursuing a credit rating.
<unk> management information circular relating to the primary spinoff was filed on SEDAR on November 11th and the unit holder meeting is scheduled for December 13th 2021, we've applied the TSS for the listing of primarily <unk>.
And expect the stock to trade under the ticker symbol Pms, Ed Yuen in the new year.
Since our announcement, we've received a warm reception from the investment community with interest in our strategy, our unique positioning within the market and our exceptionally low leverage structure. We've also caught the attention of institutional investors as a well capitalized owner of enclosed shopping centers.
The team and I are very excited about the future of primary suite.
We are ready to tackle the opportunities and challenges ahead at such a unique and exciting time in the Canadian retail property environment with that I will turn it over to Pat.
Thank you Alex and good morning.
During the third quarter, we continued to see positive signs at retail is rebounding.
Leasing activity is strong committed occupancy is growing in rental collections have improved to a normalized status.
Retail sales across our portfolio of shopping centers are trending upwards with the majority of our malls posting retail sales during the past few months.
That are on average, 90% to 110% as compared to pre pandemic levels.
The transition of primary to a fully integrated independent entity is well underway and we are on track with all operational changes required.
We are actively recruiting for a number of new physicians, including our CFO and experienced in closed mall leasing professionals and are pleased to announce that we are in advanced discussions with these individuals for these key role.
In January of 2022 upon the closing of the spinoff primarily will welcome eight new properties being contributed from whom.
Price have been closed shopping centers and one large format open air retail center into our portfolio. Our team is experienced at on boarding significant acquisition and we anticipate a smooth integration of the properties into our platform.
Lastly, primarily and drop its shipping a leading multichannel digital retail platform announced an exclusive Canada first strategic partnership and the launch of the digital marketplace primary Shay.
Primary Shea with launched across by primary shopping centers earlier, this month, including Dr. <unk> mall in Toronto with additional malls default primaries will capture retail sales at the mall and will receive a percentage of marketplace sales the.
The primary online collection allows customers to purchase products from different brands and stores, adding items to one card with orders process as a single shipment for a faster more sustainable operation Prime Marci a unique proposition is its ability to utilize the existing store inventory and convert the physical shelf into a distal.
<unk> point for online fulfillment.
As store stock can be simultaneously simultaneously available for sale in the mall and online primarily is enhancing the sales potential of its retailers beyond traditional shopping hours.
The primary approach reduces shipping costs by shortening transit time within the primary portfolio of shopping centers already located in highly populated areas across Canada. This enables high speed delivery reduces delivery costs and overcoming supply chain bottlenecks last mile challenges and other logical disruption logistical disruption.
I encourage you all to try out the new primary service primary foodservice and the smooth simple user experience. Thank you and I will now turn the discussion over to Philippe.
Good morning, everyone.
I'm delighted to be on this call today to provide you with the latest progress made with Atlanta residential as we continue to make strides in our pursuit of becoming among the best fully integrated residential operating and development platforms in North America.
On the topic of portfolio performance when excluding Jackson Parc same asset property operating income from our portfolio in U S dollars increased by 12, 3%.
Seven 4%, respectively for the three and nine month periods ending on September 32021, compared to the respective 2020 periods.
As we mentioned last quarter, we are experiencing substantial rental growth momentum in all of our U S. Sunbelt markets by way of example, our new lease trade out for our entire portfolio. Excluding Jackson Park was approximately 18% across all of the third quarter.
This represents five consecutive months of over 14% lease trade out increases over new leases across our entire portfolio.
As an additional interesting data point, we have only renewed or re leased approximately one third of our entire rent roll during those five months. Thus we are encouraged by the strong demand fundamentals in the residential sector and are very excited by the future potential value creation.
As mentioned in <unk> recent strategic repositioning plan one of the primary growth strategies will be led tower residential and we plan on delivering on those growth plans as we always have by way of three initiatives.
Firstly through the opportunistic acquisition of newly constructed properties and our existing U S. Sunbelt markets are.
Our local expertise and in depth market knowledge allow us to unlock hidden value.
Evidenced by our last acquisitions that have outperformed their respective submarkets.
Secondly, through our value add program, which consists of acquired five to 15 year old properties and our existing sunbelt markets and renovating the apartments. The current classic standards.
And lastly, and frankly the primary focus for US is <unk> wholly owned development platform. We currently have five active development projects and our U S on both markets.
Firstly I would like to provide an update on led tower West Love, our infill site in Dallas, Texas with proximity to the Dallas Love Field Airport and its medical district.
Five story 413 unit wrap development is expected to break ground around the end of this year.
Also in Dallas is land terror, Midtown a four two acre infill site with direct frontage and visibility to north Central Expressway and it's over 275000 vehicles per day.
The five story wrap development will include approximately 351 units and we expect to break ground in the first quarter of 2022.
Additionally, in the Dallas market, we've just kicked off this month the schematic design process for Atlanta City line of 365 store development in the city line mixed use development and the Richardson, Texas market.
The 186 acres C line development includes major employers like Steve <unk> regional headquarters that employees over 10000 employees with walkable access to a whole foods market, we're expecting to break ground on this development of the third quarter 2022.
In Florida, we are finalizing construction drawings for garden style property called later, our base side in Tampa, Florida. This development was approximately 271 units is expected to break ground in the first quarter of 2022.
Lastly, we have recently launched schematic design for phase one of our Sunrise development in Orlando, Florida. This 320 unit Garden style development is located within a short drive of Disney World and the <unk> for commercial corridor of Orlando.
Disney recently announced that they're moving over 2000 corporate jobs from its California headquarters to Orlando over the next 24 months.
An example of yet another white collar employer choosing Orlando for the long term corporate relocation.
And we expect to break ground on this development in the third quarter of 2022.
In addition to these active developments, we have additional owned and under contract land sites that we expect to soon joined the layer to our active development pipeline.
From a return perspective, we are targeting development yields between $5 five 6% for all projects in <unk> development pipeline do.
Do you expect the development yields relatively to historically low class a cap rates provides strong value creation with over 175 to 200 bps of yield coverage.
In addition to these active developments excluding redevelopment opportunities in Canada Landstar has over 6800 units of potential development properties on its own sites to drive future growth.
On the light Tower River landing front, our leasing pace continues to beat our budget expectations as of today, we have 93% occupied and 95% lease thus reaching stabilization over a year earlier than originally budgeted.
River landing is truly a one of a client asset for the Miami market.
And we believe that its exceptional design will provide us with a tremendous competitive advantage for years to come I.
I would also like to commend our onsite property management and operations team on this outstanding achievement.
Regarding Jackson Parc the asset has experienced a remarkable recovery and leasing activity as New York City reopen from COVID-19 as.
As we mentioned on last quarter's call Jackson park's occupancy percentage was able to catch up with the extra ordinary amount of leases signed in the second quarter.
The asset is currently 98% occupied and successful be burning off concessions that were used to re stabilize the property.
Q3 operating income growth is still suppressed this was primarily due to concessions the move in concessions and broker fees are payable at time of moving and thus our operating income is temporarily impaired by the cascade of tenants moving in during the third quarter.
At least over the summer.
The largest driver was approximately $10 million of tenant concession of broker fees that the property paid in the third quarter for context, we're expecting those same concessions in fees to total approximately $2 million in the fourth quarter and is the property skills back commissions and concessions, we expect operating income to normalize in the very near future.
On the JV development front, the Pearl in Austin, Texas is scheduled to fully deliver before the end of the year strong leasing absorption has continued over the quarter. As you may remember from last quarter. We are taking advantage of the favorable disposition environment by selling some of our JV developments and to that end. We are soon to be under contract to sell the Pearl and are substantial.
Spread to our cost basis.
Preliminary return calculations are yielding an IRR to <unk> unit holders of over 50% illustrating our desire and disposing at great returns to then redeploy in new ground up development projects.
Construction of phase two of our Hercules Department. The development named the Grant US Bayfront is nearing completion and has received a temporary certificate of occupancy which has allowed move ins to begin <unk>.
Lastly, shoreline gateway or 35 story tower in long Beach, California has remained on schedule and have obtained final CEO over the quarter.
The project is now 19% leased and is achieving rental rates higher than originally budgeted.
Paramount to your future growth plans forging or long term executive leadership team has been a primary focus of mine in 2021.
With that and I am delighted to announce the promotions of two very key personnel in our operating platform.
I would like to congratulate Emily Watson light towers, New Chief operating officer, and Colleen <unk> promotion to president of property management.
Together, they make one of the most impactful duals in a multifamily property management industry.
We're delighted that they are leading our platform to quickly becoming one of the premier multifamily operating companies in our industry.
I also take tremendous pride in reporting the lighthouse executive team not only consists of 50% of women, but it is also fully prepared to take on the challenges of the upcoming repositioning years and I'm thankful to have such a committed team as we continue our important work Atlanta residential.
In summary, I've never been as excited about the future value creation at <unk> since our inception, we have consistently delivered compelling investment returns for our unit holders and on behalf of our entire team I can confidently state that we will continue to build on our strong track record and with that I will pass along the conversation back to Larry.
Thank you Felipe and good morning, everyone.
Our Q3 2021, <unk> was <unk> 40 per unit compared to <unk> 41 for Q3 2020.
On last quarter's call. We spoke about a few options, which are expected to influence 2021 financial results and I'd like to now review the impact on Q3 results.
Firstly.
River land and development was completed in Q2 less interest has been capitalized for the project, which has negatively impacted <unk>. The aggregate interest capitalized on all development projects amounted to 595000 for Q3 2021 compared to 5 million for Q3 2020.
With accelerated leasing momentum as Philippe mentioned the property operating income from our lending will begin to offset the interest factor.
Property operating income on a cash basis from <unk> lending was $3 4 million U S. Dollars for Q3, 2021, and we expect that to grow to approximately $6 2 million.
Third quarter in 2022.
Secondly, Jackson Parc in long Island City, New Yorkers, particularly hard hit by Covid as Felipe mentioned it has also recovered.
Property operating income on a cash basis from this property in 2021 was approximately $1 1 million U S dollars <unk> ownership interest.
So the pre Covid stabilized property property operating income of approximately $8 million per quarter.
This quarter's result, the Jackson cost reflects a significant improvement in occupancy.
But also have a significant amount of leasing costs.
We are encouraged by the recent pickup in leasing activity on our committed occupancy, which should result in a significant improvement in the results from Jackson path in Q4 office here.
Finally, bad debt expense continues to decrease dramatically from a $12 6 million recorded last year in Q3.
To 116000 for Q3 of this year.
As of September 32021, who had a provision for expected credit losses of $12 million against the gross accounts receivable of $25 million.
Turning to our office segment.
Thats a property property operating income on a cash basis increased by one 2% as compared to Q3 2020 and was primarily due to contractual rental escalations.
On a sequential quarterly basis, Q3, 2021 asset office property operating income increased 12, 9% from Q2 2021, driven by hits US free rent period ended in June 2021.
The successful sale of the bond office campus, which closed on October seven significantly reduced <unk> Calgary office exposure improve the reef asset and concentration risk and improve the overall credit metrics.
This transaction was critical to enable the spin out of <unk>.
Turning briefly to our industrial segment.
Same assets property operating income on a cash basis decreased <unk>, 8% compared to Q3 2021 due to the decrease in occupancy from 98, 4% to 97, 4%.
July H&R sold its 50% ownership interest in a portfolio of nine single tenants storage properties located across Canada for $117 5 million equating to a weighted overall capitalization rate of approximately 4%.
Moving to the balance sheet at quarter end debt to total assets.
The reach proportionate share was 48, 5% compared to 51, 1% at the start of the year and unencumbered assets as a percentage of unsecured debt was one eight times coverage and improvement from 165 times at Q2 2021.
At quarter end H&R had ample liquidity with cash on hand of approximately $42 million and $1 1 billion available under our lines of credits.
In addition, we have an unencumbered property pool of approximately $4 3 billion.
And with that I'll turn it back to Tom.
Thanks, Larry.
As a result by 2021 dispositions H&R is declared a special distribution to all unit holders of record as at December 31, 2021, 73% 73 cents per unit in total payable 63 per unit in units and cash of <unk> 10 cents per unit the permissible.
A special distribution is to distribute distribute capital gains realized from transactions completed during 2021.
H&R is making the special distribution.
Payables, partially in cash units to provide unitholders with the cash to help fund any additional tax that may arise most of the net cash proceeds generated by the sale transactions have been used to repay debt to enable the primary spinoff.
Immediately following the special distribution the outstanding units of the REIT will be consolidated such that each unit holder will hold after the consolidation. The same number of units held prior to the special distribution the amount of the special distribution payable units will increase tax cost basis unitholders.
Holders consolidated units.
<unk> portion of the special distribution, we paid in cash on January 12 2022.
We are executing on our strategic repositioning plan a result of the recently closed Berlin Boophilus transactions, we have significantly reduced our Calgary office exposure from $1 1 billion at June 32021 to $377 $7 million on a pro forma basis immediately post spin enhanced our balance sheet with reduced lab.
From 50% to 46, 8%. In addition, immediately post primarily in our retail exposure falls from $4 2 billion.
At September 30 to $1 8 million or.
Our repositioning initiatives will have a favorable impact on operating and credit metrics.
We are we are very excited about the future of H&R, we plan to complete the balance of the transformation within the next five years investing in high quality distribution facilities and upscale monthly residential through our land type platform targeting the GTA in Canada in the Sunbelt and gateway regions in the United States.
As I mentioned at the top of the call. Our teams have to turn to execution, where we are committed to executing efficiently and effectively on our plan to create a simplified growth oriented company focusing on multi residential industrial properties to surface significant value for our unitholders.
Before I turn the call over to the operator for questions. This will be the last earnings call, which we have Alex impact with us until the back out and tremendous hard work that you've done during your time with US here at H&R played an instrumental and a valuable role in the evolution of H&R integration formulations of our transformation plan and packed with your excellent retail property Apricate operating.
<unk>, we are confident of the primaries and continues to position itself as a leading Canadian enclosed mall operating platform. Thank you for your valuable contribution to H&R. We're excited to watch both of you lead primarily to thrive into growth. We're now pleased to answer any questions from all participants operator. Please open the line for questions.
Certainly if you would like to ask a question. Please press star followed by the number one on your telephone keypad.
Your question. Please press Star one again, we'll pause for just a moment to compile the Q&A roster.
Your first question comes from Matt Logan from RBC Capital markets. Please go ahead. Your line is open.
Thank you and good morning.
Good morning.
Okay.
Looking at your residential segment the same property NOI growth was 12% excluding Jackson Park, how much of this was driven by the top line and maybe some color on what sort of lease trade out figures youre seeing for the portfolio.
Okay.
Hey, Matt.
So great question. So most of that is driven.
By topline.
We've had a lot of revenue growth very strong revenue growth leading into the year.
Obviously second quarter, we saw things.
Turning up in a pretty aggressive matter in third quarter.
Our rental growth ramped up quite significantly so as I mentioned in our call you'll find last five months, 14% last quarter, 18%.
I think moving forward as we look forward frankly, we're particularly excited about the fact that two thirds of our portfolio still hasnt turned either renewals or new leases.
And I would probably say that in light of what we've seen in the last month or two those figures, although obviously, they're going to change.
Have not slowed down one bit and so we anticipate having a very very strong 2022 in terms of top line revenue.
Excellent. So just if you think about your mark to market opportunity, it's probably somewhere in the mid to high teens potentially excluding Jackson Parc.
Yes, I think.
It's a tricky question only because we do daily pricing and it moves all the time and so I think the question Youre trying to ask is what is our loss to lease in comparison to market rates.
Without giving you a specific figure only because it's a moving bogey.
If you utilize anything between 14, and 18% I think you'd be pretty safe.
Yes, I appreciate the color and maybe just changing gears to your development pipeline can you talk about what impact inflation is having on your costs.
Labor shortages are delaying timelines at all.
So labor shortages have not I hope I don't Jinx myself by saying that on today's call, but so far they have not been impactful to our scheduled starts as it relates to inflation, we're certainly feeling it.
Both obviously on the labor cost and frankly, the materials costs, but we're also seeing all the numerator of the yield which is obviously underwriting today's rents.
And so as of right now the numerator, which is obviously the NOI has outstripped the increasing costs that we're seeing due to inflation. The returns that we've shared with you guys are very very conservative there we've embedded.
The assumption that there continued to be a continued runoff in material prices and labor costs in our developments and so we feel pretty comfortable.
Assuming.
No major changes.
And those development yields that we've communicated.
Yes.
Thanks, Felipe and maybe just changing gears to the office portfolio.
You guys have a few assets held for sale can you give us a little bit of color on timing would be what those assets are if there is a kind of ballpark you will begin soon.
Okay.
So that's a general question, we have no assets that are currently on the market as we as we stated it will be timing of sales to when we need.
It needs for the cash and we Didnt have any need for the cash right now as we are basically having $800 million of free.
<unk> available to us post.
Post the Bell Lindsay boat interactions, so my guesstimate than us.
It may be one operator, one office asset that maybe come to the market.
Mid 2022 guests so it could be retail, but there's nothing right now.
Organized plan, which will come first as it relates to come an opportunistic decision at the time when we wanted to sell some assets to raise funds.
So just to clarify the $525 million held for sale is the Bell campus.
Yes.
Yes, Thats right. Okay. Thank you.
I'll turn it back.
Okay.
As a reminder to ask a question. Please press star followed by the number one on your telephone keypad.
Your next question comes from Sam Damiani from TD Securities. Please go ahead. Your line is open.
Thanks, and good morning, just on the on the retail side I Wonder if you could give a little more color on what youre seeing with respect to.
The lease amendments that you've had to put through during COVID-19 and how NOI might.
Evolve over the next couple of quarters.
Results of that.
Sure Hi, Sam.
As you know Toronto, Ontario malls were closed for the first six months of the year, our resin collections that really normalized across the country, Ontario, we have a little bit of catch up to do from the periods well tenants were closed that should that should be settled out by the end of this year and really we're back basically back to normal.
I would think more or less December forward for the entire portfolio.
And then just in terms of the NOI it should be much more stabilized number next year.
Okay.
Sorry was that stabilize in the first quarter or are there some lease amendments that will sort of trickle in over the course of 2022 and it should be stabilized in the first quarter.
Okay.
With respect to the subsidy change any.
Any impact that you expect as a result of the change in the subsidy programs.
No for the most part of our sales are trending.
Would say that I said between 90, and 110% of 2019 comparable periods and to be honest with you. There is a number of tenants that are exceeding 100% of what they were doing in 2019 traffic to the.
Back to the mall has been very strong and a lot of the retailers are really experiencing.
Strong sales right now and I expect that to continue.
Yes. It was that one of your malls last week and the trouble finding a parking spot actually.
And then just on the on the on the balance sheet. What is Larry if you could just give it a little bit of a.
Sort of prediction into Q4 with the sale of the boat with the Bell campus closing.
What do you what's your best guess on the debt to total assets on a proportionate share for for the REIT today and also.
Or post spin.
Good morning, Sam I think we've put out in our deck when we did the.
When we announced the spin off which we expect.
To finish off the year around 47% 47, 48% somewhere between that flux with debt to total assets.
So that Hasnt changed.
That's still the number.
Okay, great, Thanks, and I'll turn it back.
We have no further questions in queue I'd like to turn the call back over to the presenters for any closing remarks.
Thanks, operator, and thanks, everybody for joining us have a great ended the year all the best.
This concludes today's conference call. Thank you for your participation you may now disconnect.
Okay.
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