Q4 2021 SmartCentres Real Estate Investment Trust Earnings Call
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The conference is now being recorded.
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Yes.
Good day, ladies and gentlemen, and welcome to the Smart centers read Q4, plus it's only one conference call and I'd like to introduce Mitchell. Please go ahead.
Thank you Mary.
Good morning, and thank you for joining us today for our year end conference call I Am Mitchell Goldberg Executive Chairman and CEO and I am joined by Peter screening Chief Financial Officer, Rudi Goldman EVP portfolio management, and investments and Morro Pamby Yankee Chief Development Officer.
Today, we will provide you with our Q4 highlights and update you on some of our major projects.
Commentary will refer mostly to the outlook and mixed use development initiatives section of our MD&A, which were posted on our website I refer you specifically to the cautionary language on pages 26 of the MD&A materials.
Which also applies to comments any of the speakers make this afternoon.
Shall I say this for it.
Momentum from.
Early 2021 carried on throughout the fourth quarter with a strong performance, reflecting the strength and resilience our tenants portfolio.
Small and mid sized retailers were back and even with some intermittent restrictions occupancy and cash flow grew steadily throughout the year.
Reflecting the need.
For and we will well located.
All you oriented open format retail.
With Walmart and food store acreage centers, making up virtually 100% of our portfolio physical stores met the online challenge at all or was.
It's a quick pick up more selection delivery options and easy to navigate web sites, demonstrating that physical and online can work together.
Our portfolio comprised of.
Nearly 95% prominent strong national and regional tenants provides the financial covenants and stability.
Has returned us to over 98% rent collections and 97, 6% leased by the end of 2021.
While Covid test us operationally.
Our portfolio has remained strong retailers solidified their positions with us with new and renewing locations, while simultaneously enhance their product lines and improving the customer experience, which has allowed us to maintain full distributions to our unit holders.
Decision that we are proud of.
Our wholly owned smart living residential banner and the aim that you will hear a lot more about.
And.
Our other mixed use developments continue to enhance value through continued to enhance value throughout 2021, unlocking deeply embedded NAV and for unit holders our lands.
We already own here.
Here are a few highlights of the quarter and year.
Phase one of smart living artwork launched in Q4 Heart walk is a 12 acre mixed use art district in the heart of our flagship <unk>.
And connected smart B and C development and the von Metropolitan Center.
Located on the former Walmart Purcell when fully complete.
Art work will consist of approximately 5 million square feet of density.
Including 5000 residential units and up to 150000 square feet of nonresidential buildings. The phase one release in Q4.
Included over 320 condo units.
Nearly 95 of which sold by the end of the year.
It is worth noting that.
Smart centers REIT owns 50% of these Congress twice as much as the 25% is owned.
Some of the transit city tenders.
In December smart centers more than doubled its ownership and smart P. M. C by acquiring two thirds interest in 53 acres within the 105 acre Master planned smart B M C citycenter.
This acquisition United ownership across the property, making smart centers the largest owner in.
Bombs dynamic T T C subway connected downtown.
45000, new residents.
Are expected to call Smart V M C home.
Ultimately and it is of course, the jewel in the Crown of Smart series portfolio.
Within <unk>.
Smart B M C.
When you are expecting to launch.
Park place, which will be a new 1100 unit two tower project.
On the port on the west smartphones or N V. M C. The west portion of the Smart B M C, which we purchased just.
One and a half months ago.
Yeah.
Okay.
As you may recall in smart P. M. C. We completed the remaining 192 condo units clothing in the transit city three tower in 2021, bringing the total to 1741 units closed in the first three transit city towers delivering.
Over $60 million in F F O to the REIT and that's.
At 25%.
Also within the Smart P. M C Transit city, four and five continue to be on schedule with expected closings in 'twenty two 'twenty three.
<unk> bonds first proposed purpose built rental tower is now available to rent with first apartment units pitching occupancy.
Actually in the fall.
This is.
At least out of our sales center.
Relocated.
Oh on it at the heart of our.
Our hum.
Hum.
Hum.
At the heart of the B M C sorry.
These development updates are in addition to our current permissions.
In place in.
In 2021 we have advanced zoning applications for over 25.5 million square feet of additional density as we can continue to accelerate our transformational plans overtime, you'll begin to see the Nab growths and fair value increments on completion of successful.
Land use entitlements for our master plans combined.
With developments, having being already initiated.
We currently have over 3.1 million square feet under construction, which includes six rental apartment buildings. Two in discussion went in Laval, two in Ottawa and wondering our flagship smart B M C.
In total we have <unk>.
59 projects, either underway or for which work is currently being undertaken to start construction in the next two years.
Well smart D&C represents our vision of the future. It is only one of ninety-three REIT properties currently slated for intensification.
Pages 20 to 23 of the MD&A highlights over 'twenty mixed use project totaling in excess of 55 million square feet of net incremental density to be built some of our some with partners and mostly undergo an undeveloped land and.
Our.
Within our portfolio.
Upon approval of all.
On the financial side, maintaining a conservative balance sheet.
Because I always top of mind with them.
We will have in excess of $6.6 billion.
A 42.9% debt level and significant liquidity, which Peter will speak more about shortly.
We will continue.
We will continue to only move forward with capital intensive construction initiatives as market conditions warrant sufficient.
Sufficient pre sales occur.
In the case of condos and only when financing is in place.
We told you earlier in the year that we have we would undertake strategic and targeted capital recycling to strengthen the portfolio and assist with funding requirements. In this regard we completed just over $100 billion in dispositions during the year consisting of assets where no intensification.
<unk> identified and NOI was below market.
Lastly, the world is facing sustainable sustainability challenges, such as climate change and aging population and inequality.
At Smart centers, we prefer to do the right thing and have the results speak for themselves.
Our actions over the past three decades speak to our commitment to the communities. We serve ESG is woven into the fabric of our organization.
Smart centers was founded with the economic realities of the average Canadian household in mind, we focused on bringing value and convenience oriented reach out to the Canadian market.
With like minded retailers ESG is embedded in how we operate oversee our business age.
Engage with communities and develop and energize our associates, although he or she is getting much more air time today. It's.
It's not something we just started talking about it as being part of our DNA since the beginning and when you assess our portfolio you can see these principles apply everywhere, we have been working to form the improve our retail centers through Beaumont best certifications through improved resource management occupant safety and stakeholder.
Communications and we continue to work towards an 80% certification by the end of 'twenty to 'twenty two.
These days Canadian walk Canadians want transit connected homes with urban amenities. So smart centers is evolving from smart some shopping centers to city centers and smart living has emerged with our 15.2 billion dollar transformational plan to enhance Canadian <unk>.
Introduce smart living apartments condos towns and seniors residents are designed around public squares and central parks within pedestrian focused transit connected masterplan communities, all of which contribute not only to the quality of the built environment, but also promote sustainability.
We're grateful for the exceptional work of our talented and dedicated associates, who represent the diversity of our community and the customers. We serve stay tuned for more formal E. S. G reporting to come.
Hum.
We will like what you will likely you will like what you will see.
Given all of this you should recognize that our team is capitalizing on what it does best executing and focusing unchanged centered around each community.
Now I would like to turn it over to Rudy Goldman.
Yeah.
Thanks Mitch.
Good morning, everyone.
Throughout the fourth quarter and in fact throughout all of 2021, we saw the underlying strength of our centers and driving leasing and customer traffic.
Tenants in most categories were back with an even better appreciation for our well located and open format centers.
And with virtually 100% of our REIT properties, having a full line grocery and near 70%, including a Walmart supercenter.
Wide variety of tenants, we're back doing deals such as dollar stores T. J S. Banners U S Army medical uses grocery stores distribution and logistics warehouses personal services home decor pet stores and a wide variety of service retailers, all driving traffic and improving.
Our tenant mix and occupancy.
Here are some highlights are.
Or at least occupancy continued to strengthen throughout the year approaching pre pandemic levels with a 97, 6% achievement by year end.
We completed $3 6 million square feet of renewals, representing 85% of the maturities.
During the year.
Over 925000 square feet of leases were executed for bill space within our portfolio.
Our tenants continue to work with us to adopt by expanding their e-commerce product line delivery model pick up and space utilization.
All while striving to maintain customer loyalty and sales.
And we are there to support them along the way.
Compared to the bankruptcies in <unk> filings in 2020, there were virtually none in 2021, reflecting and hopeful that the worst is behind us.
From a rent collection perspective, we ended the year I, just above 98% and that is climbing.
Demonstrating the sustained at the stability of the tenant mix and portfolio.
Regarding our premium outlets in Toronto and Montreal, both are now open and are at 100% occupancy.
With the pent up demand accumulated disposable savings and the reopening of the Canada U S border Christmas shopping was very strong and we expect to be back to full sales and rent collections by mid 2022 and these centers.
As we've highlighted previously Walmart, Canada plans to spend $3 5 billion to make the online and in store shopping center experience simpler faster and more convenient.
This continued commitment to its retail operations in Canada speaks to the ongoing strength of Wal Mart and its growing ability to drive traffic to our centers.
2021 demonstrated what you've heard us say all along that this portfolio was built for heavy weather.
Our high quality tenants are adopting customer traffic is improving occupancy and cash flow are back to near pre pandemic levels and most importantly, all of this is happening concurrently with the extensive mixed use development initiatives already identified or underway and more than half of our centers translating into.
Significant NAV growth and NAV growth to come.
And now I will turn it over to Peter swing.
Thanks, very much Rudy and good morning, everyone.
The financial results for the fourth quarter reflect the continued steady improvement in our core business that both Mitch and Rudy mentioned.
For the three months ended December 31 2021.
<unk> per unit increased by 12% or six cents.
Over the comparable quarter last year.
This increase resulted principally from lower ECL provisions lower overall financing costs and.
And contributions from our total return swap initiative as compared to the prior year's results.
It's important to note also that there were no condominium closings in the fourth quarter of 2021 as compared to the same period in 2020 that included <unk> <unk> per unit up nine cents from closings in the transit City two project.
In addition.
I F. R. S fair value adjustments in our investment properties portfolio increased by $581 million to $10 $7 billion.
At the end of the quarter.
This substantive increase resulted from progress any zoning and entitlement process associated with several strategic properties together with improved market conditions.
It is important to note that as we continue to advance additional properties through similar zoning and entitlement processes, we will be assessing the appropriateness of similar adjustments in.
In the future.
Lastly, note that our annual distribution level continues to be maintained at $1 85 per unit as mentioned as noted and.
And given the cash generated by the business.
Our 12 month, a CFO payout ratio ended the year at 93%.
Each of these financial metrics are representative of a common theme a steady and continuous improvement in our core business supported by our growing development pipeline that is now beginning to contribute to both earnings.
And cash flow.
We have also continued our focus on further fortifying the strength of our balance sheet.
In this regard we note the following strong debt metrics for the fourth quarter of 2021 as.
As compared to the same quarter in 2020.
Number one.
Our debt to aggregate assets ratio has now improved to 42, 9% as compared to 44, 6% in the prior year.
Number two in keeping with our strategy to repay maturing mortgages and to further grow our unencumbered pool of assets.
Unsecured debt in relation to total debt increased to 71% from 68% and as mentioned mentioned our unencumbered pool of assets continued to grow and now exceed $6 $6 billion growing by over $800 million over the past 12.
Months.
We continue to employ a strategy to repay most maturing mortgages and accordingly, we expect these metrics to further improve in the future.
This strategy provides us further agility, when considering opportunities and alternatives for our portfolio of mixed use developments.
Number three pursuant to our refinancing activity over the last 12 months, our weighted average interest rate for all debt continued to decrease and at the end of the quarter was $3, one 1% as compared to $3 two 8% for the prior year.
While concurrently our weighted average term of debt was maintained at approximately five years.
Excluding construction financing substantially all of the Trust's current outstanding debt is fixed rate debt.
This continued focus on both the weighted average term of our debt and fixing interest rates is deliberate and it's yet just another example of the risk mitigation strategy that we've employed to significantly insulate the trust from interest rate volatility and a rising interest rate Mark.
Right.
And lastly number four.
Our interest coverage ratio net of capitalized interest improved from the prior year level of three two times to three four times. This in spite of the impact that COVID-19 has had on our operating results over the last two years.
And in addition to reaffirming the foundational strength and stability of our core business provides us with a substantive advantage from which to fund our pipeline of development activity.
From a liquidity perspective, as we look to the immediate future and continue to manage through the current uncertain capital markets environment.
In addition to the conservative debt metrics noted previously consider also that we're.
When factoring in our cash on hand, together with our new $300 million facility that was established just subsequent to year end to support the $500 million of BMC West acquisition.
The $150 million new revolving line of credit that was completed last year and the $250 million accordion feature associated with our existing Undrawn $500 million operating line, our current liquidity position of in excess of $1 billion.
Provide the appropriate flexibility for the capital funding requirements associated with our development pipeline activity.
Recall also that the next series of debentures and our debt ladder does not mature until may of 2023, and notwithstanding the challenges associated with Covid over the last 24 months. Our business has continued to demonstrate its ability to generate sufficient cash flow.
To fund, both our operating needs and our distributions.
Accordingly.
We anticipate a requirement for additional funding over the next 12 months to be limited to construction financing and any potential acquisition financing requirements that may arise.
However, we continue to review opportunities to early redeemed debentures and mortgages when appropriate.
And with that now I will turn it back to Mitch.
Thanks Peter.
As you can tell the portfolio remains strong with significant NAV growth.
On its way.
With much work to do for us.
And with that I will now turn it over to the operator and addressing your questions. Thank you.
Yeah.
Perfect. Thank you so our of course funding participants would like to ask a question. Please.
Please press star one and they feel like they will drive your question you can press star two so against the star one to ask a question.
And we do have some questions already queued up.
Our first question is going to be from Dean Wilkinson from CIBC World markets. Please go ahead.
Thanks, Good morning, everybody.
Good morning, Good morning, Mike.
Probably for Peter I, just one question.
The fair value gains that you booked for the HUD, which added about $2 per unit was that all thresholds or milestones that were met in the quarter or was that my judgment to methodology that perhaps there was some catch up in that in that number.
Yeah, It's a great question and I'm sure others will have similar questions Deane I think it's it's important that all of us understand that.
This was not an adjustment in methodology per se. It really represents in the bumping value represents progress.
Progress in advancement, that's been made on in this case several what we described I think in our press releases strategic properties.
And their zoning and entitlements process, that's principally what's taken place over the course of the last several months.
Together with this I think all of US can appreciate are improved.
Improved market conditions, Mitch any further thoughts on your side on that question.
Yeah, I mean, there is oh, an aspect of that process that relates to you know.
When is when when is the moment.
But we're satisfied that our project is kind of cleared for takeoff.
Got.
There's lots of I mean, there is some I think you know probably some room for.
Oh food for.
Being more or less control, but we're probably on the probably on the conservative side.
Of that spectrum so yeah.
Things that happened on several properties that give us.
Confidence that we're we're sort of clue particular somewhat zoning related so it's restrictions.
We negotiate our way through.
That's the only at a handful of properties. So we will be continuing to do those make those adjustments.
Properties as we.
Because we are a coach.
I feel like with Quickbooks kickoff.
Got it and and the methodology there Peter that's it is is that based upon just a marker or is that a DCF and then in and if it is a DCF is that predicated on locked in construction costs or just the budget at this point.
It's principally a function of third party appraisals, and and where our third party valuation experts are telling us.
These properties.
Today at least our value based on what is expected to be developed on those sites net of any cost that might be incurred to get us to as Mitch said you know the takeoff point so.
At least for now Deane that is the approach and and as Michel mentioned, we believe that were on the more conservative side of that approached evaluation.
Perfect. That's it for me I'll hand, it back.
To the call thanks, guys.
Yeah.
Yes.
Thank you.
Our next question is going to be from Mega sorry from Scotiabank. Please go ahead.
I'm married I'm sorry your.
Your line maybe on mute.
My question to predict.
Hi, good morning, and thank you for taking the questions.
Just following up on being one of them.
Questioning.
The roughly $500 million, there's always being taken.
Can you confirm whether that like what is the cumulative fair value gains taken on.
Hugs or your Densification potential upsides.
Or is that a relatively new number.
Yes.
Yeah, I think Mario it's fair to say that the amounts that were reflected in the fourth quarter are intended to represent at least for now the initial components associated with as Mitch described at fair value.
Take off for the expected clearance for takeoff associated with again this handful of properties. We we do have as we as you would expect many others to come that we will be assessing their status over the coming quarters, but for now as we got to the end of 2021.
We thought it was appropriate and certainly our appraisers confirmed it to be appropriate that given the status of zoning and entitlements are associated with again, a handful of properties that it was appropriate to.
To fair values and based on what the market is telling us again conservatively.
They are worth net of some expected costs that it may take us to get to begin to take off point.
Okay, So just to be clear.
Or is fairly close to the accumulators.
Yeah Yeah.
That's fair I mean, there may have been some some what we'll describe as immaterial amounts that may have been factored in in prior years, but again, they they would be immaterial.
Okay, and then you've mentioned a couple of times kind of several properties with a fair value gain.
It was attributable to a do you have a percentage of your quoted 40.6 million square feet of intensification upside over time.
It won't be 500 million correspond to.
[laughter].
Uh huh.
I mean.
The the 500 plus million.
Is this the several properties are.
Or.
Certainly their G T a properties and her.
A higher density.
And.
Some of them are on mass transit.
So.
Hum.
I will try and do that calculation before we hang up.
The question period, or I'm, sorry, I'm just.
I can give you guidance on that before we think.
Okay.
I guess, we're just trying to figure out.
What are the kind of price per buildable square foot or whatnot I'm not going to go.
So it's very hard like the the numbers that they're being used on a per square foot basis are really quite conservative these projects where we.
Were sold.
<unk> to the market.
Thank you.
Just because of the market if it was today they would probably achieve.
Maybe you know just saying because the markets or if that's what it is right now but this is more based on you know just a more average level hybrid market.
So yeah, I mean real estate it does sound like a big number but on the other hand, so yes.
Of things.
I mean with the city, that's expanding the Toronto, it's Tim the pricing, it's actually yeah, it's only a handful of properties.
Properties big entities, but there's.
There's a lot of value in going from a single story you know 25% of coverage. You know you know 12 acres of land and it's Scott you know 120000 feet on it and you go from about two 2 million square feet mass transit.
It's a.
Big numbers real estate public.
So I'll try and give them alphabet for you just try and stay up before we hang up.
Okay. Thanks, much maybe one last question just on the sort of all you name it.
Given the value of some of these properties does the recognition of a fair value gain make you more or less likelihood of countries all partial stakes.
Some of these upside projects in the near to medium term or is it just not correlated.
No. It's part of our strategy I mean to to raise some capital.
We want to maintain or we want to maintain a conservative balance sheet throughout.
This pool system program.
Yeah. It is it is a very mature.
One of our leaders who bring in.
<unk> partners on some of these projects open for a vote.
Commercial value or sell them, even outrageous, let her first choice, but if it's the.
Best choice and easiest choice, we might sell a few of them just because they are so valuable we've got lots and lots to do so it's definitely definitely part of our and we're actively doing that right now.
Actively pursuing but I am just kind of in discussions on that bill.
Bill.
My last question maybe for Peter.
Is there a <unk>.
Two it looks like the Oh.
Development gains will be more weighted 23, then 22 with that in mind is there a target.
That's a whole put unit growth rate.
What's your target in 'twenty two excluding games.
Yeah, Mario we prefer I mean, I think particularly over the last couple of years given the experience that Covid has has impacted our industry with we took the approach two years ago.
Not providing that kind of guidance to the market and I think given that theres still so much uncertainty notwithstanding that we seem to be coming out of a.
More problematic period of course, but there is still we think at least a lot of uncertainty associated with.
This pandemic in so I think it would be our preference for now at least to not provide guidance again at least for now on on the 20 to a growth trajectory.
Okay. Thanks.
Thank you Peter.
Thank you.
Yeah.
Perfect. Thank you.
Our next question is going to be going to be from <unk> from RBC capital markets. Please go ahead.
Thanks, and good morning.
Just when you look at maybe what you've submitted to date in terms of the mixed use intensification rezoning application.
And those that are still in the process, where you have not received the economy in terms of doing.
What are your thoughts on you know what may actually get approved over the course of <unk>.
Think about 2022 or even <unk>.
Have any visibility on a one to two year basis.
The square footage.
You mean more like the the amount of sort of approvals or whatnot in 2022 and 2023.
Yeah, Yeah exactly thanks Mitch.
Think it's gonna be Oh, I don't have the number right in front of me, but.
No rezoning is as follows.
Emerging Theres big.
But it's going to be I think 2022 in 'twenty two it should be very big years for us in terms of approvals.
So I would rather not just sort of speculate up high.
Give me a chance I can.
To that calculation.
Call you or send it out to everybody who is interested.
But we've been doing with the apathy applications for zoning amendments are being in for for a long time, and so I think a lot of things are going to come together in 2022 'twenty three.
But I don't want to I don't want to sort of.
Yes.
Got it and then I guess.
Again, you mentioned that today too or I guess, what you booked in Q4. It sounds like most of that was in the G. T. A is what's in the pipeline the pipeline.
It's quite large in bands over many many markets is is the bulk of whats maybe coming through in the next one to two years is it predominantly GTA, Ontario, or Quebec or.
But anything you can share.
It is yes.
A big bulk of it it would be Ontario, and Quebec got quite a bit going on in Montreal by the way of Montreal is.
The market has come around nicely actually has cooperated really very well with her with our tiny because we've been pursuing the approval.
Approvals in Quebec for for a number of years now coming through and the market's pretty good there.
But the bulk of it in terms of breakdown was as Ontario in G. T. A most of the GTA Super G T. A.
And.
In Montreal now there are some you know.
Developments just before the truth interesting developments, we've got going on to postpone in places like Charleston.
We're approved.
Time to proceed with.
A rental.
Or just sort of where are we.
Rental.
Development, there from including you know for example, Allison and I say that also you know were approved and Barry.
Sorry barriers also there's quite a quite a good market right now I'm not including that when I say G. T. A but it is you know part of the.
When I say, Ontario barriers. So good people, we're talking density there where we're approved for.
Hum for 'twenty.
20, plus core towers, there, including a hotel on the waterfront so.
That is also an example of somebody that's true, but you know those those types of markets or the bulk of it.
Okay.
And then maybe just comparing perhaps your approach to some of your peers are among the retail rates are maybe outside of the retail reach.
You know some have not necessarily taken.
Booked these games that you know for what these properties might be worth if they were to be sold in the market after receiving successful entitlements and Tony So I'm just curious if you could help us think about your approach.
How that might differ I guess cause somebody to your peers and your decision I guess to book. These these amounts.
Yeah, I mean, we can't speak to our peers, but I mean, I think it's what we're meant to be doing well.
But where are we understand I mean, you know it's.
They were meant to reflect killed the value core properties.
Accurately it's obviously.
It was what you said a few minutes ago, I mean zoning approvals entitlements and other restrictions you know theres lots of steps, but you know at some point you know you need to.
I'm a teacher values based on your intentions, you can have value you kind of zoning and entitlements. So something you don't plan on doing.
So, but we are very much planning to execute opinions here.
It's our core expertise. So we are planning to execute on things do we get our entitlements, but we're pushing very hard to do that maybe others are not as much but I think we're doing what we're supposed to be doing.
Okay. Thanks, Mitch last one for me and this was more focused on the actual operations of the business from a retail standpoint.
Just on the leasing spreads.
Slight perhaps marginal improvement relative to last quarter.
Some of that is some of this sort of muted spreads are really just I guess a function of the leasing that was done perhaps during the height of Colgate. However.
However, the spreads trending on leases that you're renewing today and I guess the effect of those may not be seen for several quarters or so so I'm just curious how those compare to what we're seeing actually come through in the numbers.
I can't really answer are the ones that I am involved in let's see actually studied rudi's more cool.
They will use more overall, it's the ones I've seen are actually have been.
Okay great.
Great you did.
Decent decent bumps.
The early renewals that I've been involved in muni.
Yeah.
<unk> you know we have the we have are essential and nonessential type tenancies in north Central as you know make up almost 70% of our tenancies in our major markets.
And those tenancies are doing quite well and there are there are the standard sort of bumps in those and then for the on essentially the ones that Covid had a bigger impact on those are still coming together and trying to bring their business back and those are are those are the ones I would say.
When you combine them together, it's generating the slightly positive.
Growth Youre seeing in our in our at least in our lease renewals. So it's that combination it's getting better it's improving every month as we can as we move further out of this pandemic.
But that's the you know.
The 70% of the portfolio is doing quite well and then there's the smaller ones or are coming along.
Thanks, very much that Rudy I will now turn it back thank you.
Okay.
Thank you.
Our next question is going to be from kind of a standing from a capital markets. Please go ahead.
Thanks, Good morning, everyone I'm, just going back to that fair value gains for a minute could you comment on and if any of the gains were attributable to the repurchase of the two thirds interest in smart BMC west and the corresponding potential corresponding revaluation of you're interested in smart B M C.
Okay.
Short Answer's, yes computers do you want to expand.
I think the way to answer the question Kyle would be in two parts.
A timing perspective, we announced as you know the acquisition of the B M C West property in December .
The process to get to the finish line on that acquisition.
Did not happen as you would probably imagine overnight it was.
A lengthy process that required a tremendous amount of negotiation.
Over time.
The fair value increments that we've now spoken about over the last half hour or so.
I think it's fair to say those increments.
Are really a function of.
As we've said now of the changes and improvements in zoning status that has occurred and again a handful of properties coupled with the movements in the market and when we see movements in the market the movements in the market, we're not predicated on what our experience was on the App.
Positioned to BMC lands in fact.
The appraisers that we spoke to and used to to give us guidance on this.
We're reflecting in commenting on so so many other.
Our properties in the GTA area and many of which are in the bond area. In particular that have recently traded or are currently under contract to close shortly at values well in excess of now what we've done what we valued some of our properties at so I think it's fair to say that the general market Kyle.
Particularly as it applies to the GTA area has improved considerably over the last several months.
As a minimum and when factoring in those improvements and value in the continuous seemingly on satiated or non satiable demand for development land.
We thought it was appropriate to us.
Again fair value of these properties as Mitch said on the basis that they're really now reflect it should be reflected that as opposed to using the historical approach that we've used since the IRS.
Initiatives came in and I think it was 2010 or 11.
So what does all that mean it means that we.
We paid what we thought was a fair price for the BMC West lands.
But to get to how we approached fair value of the southern handful of properties, we didn't rely exclusively on.
The amount that we paid on the BMC West lands in fact, it was probably just the opposite where we're relying heavily on what the appraisers were telling us where other properties that were trading in the marketplace concurrently.
Okay. Okay that makes sense. Thanks for that I'm just looking in your disclosure you mentioned that a D. B R. S confirm the triple B high rating by change the trend to negative back in December and you know there was some commentary about the trust continuing to work on alternatives with the intent to improve the credit ratings just want.
If you could elaborate a bit on what those alternatives could be.
I'm sorry.
What.
You mentioned that you would continue to work on alternatives to improve the credit rating I'm. Just wondering if you know what those alternatives could be.
Well I mean.
I mentioned before which is we.
We would so.
Porsche and bringing a partner and some of our developments at market so that would be one selling.
Selling of phase one of our other master plan.
Yeah, It would be another selling a project terribly.
You know it would be it will be another.
I mean.
Those are.
Those are some examples.
We're not satisfied with where you could pursue.
Yeah.
Got it.
Pretty much speaks for itself so.
Hmm.
And those those are those are examples of silver leavers.
Peter do you want to.
Hmm.
Yeah, I think Kyle mentioned meshes really referenced what are our thinking is that.
Given where our unit price is currently trading we don't see that as for now at least and alternatives. So we are considering and focusing on.
Other opportunities to sell interest or partial interest in some of the properties that are particularly development focused.
To some institutional type investors, so that's certainly an opportunity and an alternative.
As Mitch mentioned, we are pursuing and theres. Some other sort of related themes to that we're also considering again with the ultimate goal of raising equity that would be used to repay some of the debt. That's currently on the balance sheet again with the ultimate objective.
Permitting our credit rating to be restored to.
You know what it was prior to December .
Does that help okay. Yeah, yeah, no very helpful. Thanks for that and just one last one this one will be for you Peter Sweeney just housekeeping on.
Could you remind us what the total return swap is four and then you know just where the offsetting expenses in the P&L.
Thanks, I'll turn it back.
Yeah. So the total return swap we initiated a believe it or not now a year ago. It was intended as as an opportunity.
For the REIT to over a several year period to look at opportunities to deploy some of this liquidity to generate returns on an interim basis that again would help during a period during the period that COVID-19 was impacting the business.
We engaged with a well known.
Canadian Bank debts. It has helped us through the process now for well over a year.
And the intent is.
To allow for that Trs or total return swap to continue hopefully to augment the operating results of the REIT.
With respect to expenses.
There are two potential expenses, our <unk> expenses that we would incur number one are fees associated with the Trs that are paid to the bank <unk>.
Involved and they are netted obviously through the returns as they are incurred and then potentially in.
In the event that the unit price were to move in a contrary direction as opposed to where it's been moving over the last 12 months or so then there would be an impact coil to <unk> that would be an adverse impact as opposed to the positive impact that we experienced in 2021, there's a I think we mentioned this last year there.
Some safeguards that.
We established.
Coming through the process to find a way to me.
Mitigate some of those risks and concerns by either.
Modifying the terms of the total return swap or reducing the exposure in the total return swap again just to potentially mitigate any concerns over.
Material changes to <unk>, but for now for the first 12 months at least of this.
Of this initiative, we have seen some substantial returns as you've seen in our public disclosure on moving this forward. So we're very pleased on how it is done so far.
Okay, great. Thanks, very much I'll turn it back.
Thank you.
Perfect. Thank you.
Next question is going to be from Tao.
National Bank financial please go ahead, though.
Hi, good morning, everyone.
Thanks Al.
Just wanted to start on the development side so.
In your MD&A you breakout your development pipeline I mean, just sort of projects underway active projects some future projects and if I just focus on the underway section.
Section of it you've got about 59 projects for $9 4 million square feet.
Roughly $5 billion total costs that you're sure that works out to about 532 Bucks a square foot.
Give or take and then if I look at like Q3, you had 52 projects.
7 million square feet $3 2 billion unexpected costs, it's about 478.
<unk> a square foot. So it's about 11% increase in that quarter over quarter I'm. Just wondering if you can talk to me about how much of that is attributable just to the project mix. Obviously, you've added some stuff that might be more expensive I can understand that also.
Also just wondering too though.
You know you're sort of thinking that you know some of the stuff you got in the pipeline.
Those costs are going up and how we should think about.
Those numbers going forward.
Hum.
Or do you Wanna Yep Yep.
I tell us all from one quarter to next year, where there were some changes to the two.
To the product mix, but it was minor.
And.
The it would also include Dfc West as you can imagine are.
Being added in the quarter, so each quarter when we do this review we would.
Build it ground up so so to speak so again, it's just a measure of each market and how each market is evolving from a development perspective, and and Ah the numbers end up being where they are it's not a it's not a top down bottom up build.
Okay.
And.
How like how are you feeling I guess it was a bigger sort of questions just on development like given that.
You know, we're sort of in the middle of that shift economically here.
And.
I'm not sure you know you could say that.
Income growth is necessarily looking super robust for individuals in the near term but.
It's clear like construction costs are rising.
How are you feeling about green lighting, new stuff and getting getting underway on new stuff right now.
Oh good.
No.
You read about.
Do you do you read about construction.
Cost increases and it's and it's.
Generally yes.
True true.
But each individual project.
As you.
Yeah, we value engineering project around you know around controlling that did around the mature.
Horizon, the most or whatnot.
So there's lots of things and stuff that we can do in the industry are things, we know about how to do it.
Industry there.
To stay away from me.
You know the highest.
Increases in construction.
Items, but.
It's on it's sort of overall kind of unavoidable they are prescribed but so our sell price is going up.
So in fact, I mean, you know, we'll do better on.
Yeah.
On.
Hum artwork than let's say, a transit city and we locked in at pretty low prices.
Transit City.
And that's just because you know.
We found ways to save money materials, and we've also a pill.
We're getting a lot of demand and we're creating something there so price was growing up.
Expert exponentially.
So everyone every time will be assessed based upon what the market is and.
Or acuity aware when exposed to construction Christian Christmas.
You know we won't commit a fault, we were not going to build for the sake of building but.
<unk> as much as you hear about price was quite per.
Per screen up still still makes sense, especially out of properties where we.
So where we already own or we're not buying the properties of Mercury.
So that helps a lot.
Okay.
And then both Hugh you mentioned, Peter you know you'd made some references to expanding partnerships on some of your your marquee sites can you can.
Can you give us a flavor of what that might look like is it a series of individual deals or is the day.
A bigger sort of master deal type joint venture with a you know a solo partner like how how do you think about structuring next much on budget.
Yeah.
They are both are probably going to go I mean, you know it was that going to be one master I don't think there's going to be one master deal, where you know there's one big institution you know them you know.
Every deal.
But I wouldn't be surprised if we do a deal with you know with a larger institution or whatnot for a handful of deals.
But I don't know I mean, we find that just doing one at a time is the best way to go.
So sometimes at least two and three and four so we're just focused on you know.
The the bucket of properties, we think or are candidates for.
Institutional investors or investors in general and we see ourselves as being the development manager and the construction manager and if it's a rental.
Property manager.
And that would be.
The entity you would buy in say between 25, and 50% I think for the most part we wouldnt, we wouldnt take less than 50%.
Oh the partnership.
And you know and they would buy them initially at market. So that would be the big cut a careful hum event and then we just go let's say, it's 50 50 would go shoulder to shoulder going forward, though we sometimes have you know.
A feature where you know.
We have a kicker potentially in our favor.
Yeah, we.
If we do the budget you know the returns where we adjust what is really an adjustment to the to the value of the land. There was rolled in at the end of the deal that's kind of how it would be structure wise and maybe he'll just in terms of the players who are the players other stage type of players at this stage and how it would go.
I also wanted you to know I imagine you reminded me we're doing things. We're also doing something for example, with a with a general contractor, where we are negotiating a deal with a general contractor to be.
Or.
Kind of partner in a sense that can be a partner in the land, but that you know will make a master agreement with a general contractor.
So that they will be with us and beside us from design and help US you know find ways to value engineer, our our our massive program and of course, we'll you know we'll be able to lower price, so they'll be able to set themselves up.
Certain amount of efficiencies there they'll have enough.
Enough of our deals that they'll be able to order certain materials.
In bulk and we will take the benefit of that because we're gonna be it's gonna be a construction management contract. So you know for example, there's lots of things that you can do when you've got a large program and it is our as you know it is.
Or are they sort of sweet spot in terms of our expertise. So in terms of our partners or even construction and construction customers because theres number of.
Leavers were doing.
Okay, and then just lastly, Peter.
The gain on the Trs swap is that on the P&L or is that something you bring out of other comprehensive income into your ethical.
It is included in both the accounting income and our F O.
And so where would it be in the accounting income.
I don't have it in front of me tell but let me let me respond to you offline and I'll tell you exactly where you can find it.
Perfect. Thanks, Peter I appreciate it alright.
Alright.
Alright. Thank you we do have two more questions in the queue.
Our next question.
He's going to be from Jenny.
Jenny My from BMO capital markets. Please go ahead.
Thanks, and good afternoon.
I want to turn the focus to the operating portfolio just looking at the average term to maturity at the leases putting at what 0.4 years at year end, but that's been a pretty consistent downward trend for a number of years now five years ago.
Takes time, so I'm, just wondering particularly lately is there anything to read into it in terms of the shift.
Shifting preferences in terms of how long tenants when they commit for is it okay for safety I do make has there been any change I have some tenant behavior post pandemic like anything we can read into it and.
Where do you think that number stabilizes that or if there's an inflection point, that's moving up again.
Yeah. It's a good question, there's a lot of factors.
Yeah, I'll, let you jump in here one second.
You know I think you know the last number of years, we haven't done a lot of new.
You know ground up construction, where you know the the leases are longer.
And so you know it's been less of that although there is some of that going on and that will kick in soon Rudi do you want to.
William Yep, Yep, and and that's mostly it I mean, when we were building out of the shopping centers. Most of the deals were 10 year deals with five year options and or 15 year deals with five year options and if you're a 20 year initial term deals journey with five year options. So as soon as the 10 years are up and.
Moving to the five year options, then all of a sudden the math works out that the average term to maturity keeps.
Sitting down so it is exactly as Mitch described a greater proportion of the five year options that we're now into and even a few tenants coming in wanting flexibility will do a five year deal with two or three five year options versus before they would have done when we were building out lots of these shopping centers are 10 or 15 year.
So it's just a matter of tenants moving into their optional option periods.
Okay.
You also you know we we in some cases are not as open to longer terms in some places because it may be part of our fees.
Two or three of a development.
Okay. So I mean, it reflects to some extent the maturation of the smart sensors business well when we look forward like what are what are tenants asking for is it in around five years, that's where they're comfortable that which would suggest I guess your weighted average term probably settles out around.
So call it mid threes to mid fours, it kind of weapons that all that.
I mean, the new deal is five years I mean.
Any renewals, usually five years and the new deals.
Yes.
There are scenarios, where you know we're talking to existing buildings.
Were there 10 years, but we're a little bit you know really were reluctant subjects on certain on certain projects for 10 years, but where there's work to be done or it's larger premises.
You know.
10 years is 10 years. This is also happening, but but but most deals on existing space started off with a with a five year lease. It's just normal which was kind of the industry with options. If you built from scratch, usually 10 years is the minimum.
We've ever done a new deal ground up construction with five years. So 10 years 15 years as Rudy said you know the Walmart for 20 years without doing a lot of new Walmart you're not doing a lot of you know new food stores.
So from that point of view that there was this was our maturing, but theyre cheaper and some have many options and the renewed at five years at a time and it's going away.
It's going to weigh on that average lease.
Term that you're referring to.
Okay, I've got a window.
That makes sense I wanted to turn to talk about inflation sensitivity in the portfolio not so much on the development side it looks like the same property NOI.
Al was it down and there were some expenses involved so I'm just wondering you know within the leases that you have is there any sort of linkage to CP I, what potential pass through of cost without that so that the inflation basket goes to dependent like how would you characterize that the cash flow from personal sensitivity on the portfolio.
[laughter] you know early days.
I always get C P I am but.
But CPI is very good on you to get you know see our portfolio is focused on strength.
And high occupancy.
So you know we give up if you will things like C. P. R.
For yeah, we'd rather have.
Montreal is attendance than you know a.
Sue blocky.
Restaurant.
With no covenant or a sub subway subway sort of sub sandwich with no covenant.
So we would get C. P I from the independent restaurant, operator, but we will not get shipyard from.
Bank of Montreal.
So you know we're approved for.
We say we're built for heavy weather, we collect rent through good times and bad from from BMO.
Not necessarily from from the restaurant. So the restaurants give you. The CPO that example, the independents would give me the shipyard, but the strokes from Nationals shipyard so.
Our hedge against inflation as occupancy and Collectability.
And you know you know conservative, but but collectible bumps in our rents.
Okay. So when I look at the same property NOI are the higher costs.
Somewhat related to inflation.
Or is there some lumpy items in there that would result in a slight decline in C&I.
I'm, sorry, I didn't I'm.
Sorry, I don't understand the question.
So the same property NOI when you exclude the.
Covering in bad debt expense.
The only negative so it looked like there were some miscellaneous expenses on time on Cam recovery shortfalls that.
Aiding to the Bancorp that you did have so I'm just wondering how much of that is inflation related I'm, what I'm getting at really as to how we should think about internal quote right given a slightly inflationary environment. Yeah. I don't think we're not I mean, Rudy you can touch on some of it here, but I would not.
Say that the inflation.
Issue has weighed in yet wait and then you know maybe it will but we didn't yet in terms of.
In terms of your slate you know what you're talking about the sleep two maybe erosion there but.
Hum.
Moody's do you want to weigh in on that as well.
Certainly.
I would say most of our.
The cost increases we're seeing a broad based they're not particular to a market and not particular to week type of costs, it's pretty broad based and and recall that our operating costs of our properties are if not the lowest amongst the lowest in the industry because it's not it's.
Open format space. So we don't have enclosed space, where were you know looking after an internal cleaning and in HVAC and roofs and all of these things. So our starting point is a much better point for our tenants.
In terms of cost and and then the other thing to mention is a year ago, we were at slightly higher occupancy and we're building to back to that so you might be seeing a little bit of the slippage to Jenny from the 98 plus percent 90 899 over the last several years, we were at 99.
For a long time, and so that slippage is now being built back so that's probably a little bit of what we're seeing given the what's happened in the pandemic in 2020 in 2021, yeah. Okay. Okay. And then just lastly, Mitch you mentioned that early days you sound more CPI and I'm just wondering if maybe there's a bit of a history lesson.
You know, where the CPI and PPI for both types of tenants that included high Covenant tenants and then it kind of went away because like.
Like I said I wasn't really an issue for a very very long time.
You know if the inflationary environment persists.
You know I do see CPI sort of returning back into what discussions.
Yeah, I mean C. P I used to be normal really early days.
Talking like <unk> or even the business in the Eighty's.
And do I happen to know that it went into the seventies, because I was dealing with.
He is there to operate through the seventies and the eighties and CPI was normal used to be in your big landlords were you know so the the the lora parts in Atlanta, and the landlord was kind of you know sort of a hangover from from bygone days landlords dictated stuff like that.
But it changed very quickly I mean, nowadays the late Eighty's ninety's.
And it's been a tenants you know pretty much a tenant's world almost ever since in CPR went away with.
With value oriented retail and.
The de Malling of the world.
So I mean, you see some C P I hear there and.
Honestly I haven't seen it for like really mainstream it's just about mainstream opposed to the strength of the company you can stick them in an independent deal and will go find it no problem, but.
We'll collect them you know most of the people have.
But anyway I'm looking I don't think like our leases are all net we're not really a company that grows you know kind of you know we're not a rapidly growing company from from rental bumps.
Okay, we all have our standard which ones, we want to tell them spending money and stay with US and then we can expand them.
You know first of all we collect the rent they make money they want more space a lot of the times and we do more deals with something we stay highly occupied we benefited from lower interest rates so along the way.
Sweet, but at least we get the bumps or we stay highly occupied.
But net net leases I mean, we have the lowest average ramp probably like our portfolio. When you talk about these fair value adjustments I mean, our portfolio is valued based on our rents.
But our rents are based on the lowest coverage ratio, where we have 25% or lower coverage of our property. So 75% of our properties are parking lot with low income and in that 25% coverage or the lowest average rents and then we value. The company. So one thing that they are though is fully.
So that helps a lot against certain inflationary factors and we have about pumps, which generally speaking though.
They're not geared to CPI, but they do bump probably aren't that far off from CPI, because I'd say most of our rents and don't quote me on this and don't.
Okay.
The book kept me on this I.
I would say are our bumps kind of probably somewhere in the one two.
Probably one and a quarter I don't know maybe in some cases more per year, but at a five year you know.
No trip timeframe.
For what it's related to you know over over a five year period.
M a.
You know like a 20 dollar we got rent no. It should be probably go you'll probably be cut 10% in the slides you bumped up that tenants generally I mean, Nashville would go from 20 to $22 would be normal.
Just to give you. An example, but we I can look at that and I'm sure. It's somewhere in our documents anyway, but but it's not geared to inflation, but it's a fully net lease and it's probably pretty too probably pretty close to inflation anyway, and probably be much better than inflation for a number of years.
Hmm.
That's very helpful. Thank you very much.
Alright, Thank you and we do have our last question in the queue.
It is from Sam Damiani from TD Securities. Please go ahead Sir.
Thanks, Hello, everyone.
Good morning.
Yeah, good afternoon, and I, certainly don't want to keep the people from their their lunch. So we'll try and trying to make these the last question is quick but just.
I got on the call a little bit late I apologize, but was there was there a maximum.
So development or pod as a percentage of total assets under the reach declaration of trust.
That is a factor with our with the fair value gains that have been booked and the acquisition of course.
Yeah.
San it's Peter we're assessing that and it may require an amendment to our declaration of trust, which we will think about doing it at our next AGM.
Yeah.
And then just on the on the fair value gains again, it sort of came out I think through some Q&A earlier that the V. M. C was a part of it may be a big part of it.
It seems like perhaps the acquisition in December was marked up because you know that the price was negotiated several months or longer ago than that obviously the existing as well. So is it fair to think that perhaps of the total fair value gain in the fourth quarter.
Perhaps over 50% of it was at the V M C.
Yeah.
Yeah, I I think Sam and I think you know and perhaps others on the line know that historically for a variety of appropriate reasons, we have not believed that it was.
For us to provide values Sam on a per property basis, and I think we prefer to maintain this approach.
To public disclosure of our portfolios values going forward. So.
Not our intent at least for now two to provide specific valuation parameters for each property and I think for competitive reasons, we think it's appropriate to continue in that realm.
And I'm not trying we're not trying to be coy or duck. Your question. We just think for the benefit of our unitholders.
And our ability to generate these developments and progressing through the appropriate channels going forward. It's just not the right idea to publicly disclose how much we think each one of these things is worth.
Yeah, Yeah, no that's fair and I'm totally not surprised but.
But I guess I think your comments earlier I mean.
Maybe it was peters.
Part of the process was.
Appraisers market comps or deals in process, but the unique thing with the V. M. C of course is that.
This is actually under development, you're actively selling a.
Condo units you've closed on Colorado units, you know you've been all that so theres a very high visibility there that you don't have let's say for a 1900 Eglinton Caledonia west side.
But this was it fair to say that the approach in Q4 with these fair valuation.
Pumps was more exacting on the V. M C that it would be for another site that perhaps is further away from from actually.
Selling condos or renting apartments.
[laughter] Sam.
Uh huh.
We we have.
Each one of the properties ultimately.
Oh.
Valued.
It wasn't exact amounts literal exacting amounts based on I guess, the assessment of what the market would.
You'll pay for them.
So real quick obviously, you talk when there's I love. The fact that you can just real off but how do you go and buy side that's great.
Chosen to.
Excellent projects and their.
Their value.
Even though we're not going to the ground.
Okay.
The market would recognize there's value there and in many other perjured so.
Yeah I mean.
I think that's maybe the only way I can.
Hum.
Hum.
The address that or address that question Peter.
Peter do you want to.
That's found in all of them.
No I think I think that your description matches appropriate.
You know our approach Sam it's really too as we did in Q4 was to identify those projects that we think have.
Have come through the zoning process and are at a point, where and Mitch mentioned this earlier and I think it was it really hit the nail on the head by describing these things as being the appropriate way to value them in.
In keeping with what you know and I have a ras expectation would be these would be fair value. So.
I think it's again, we're not we're not at a point, where we are at liberty to describe or disclose.
I use on a per property basis, but you should expect in the coming quarters for us to look at each of the other properties in the portfolio as they as well continue to sort of go through the entitlement and zoning processes, respectively into consider whether or not it may be appropriate to enhance their value.
Again, keeping in mind, whatever may be happening in the market at that time.
Okay. Thanks, that's that's all very helpful. Just last real quick one.
Maybe it was Tim I, just and again you know Mitch was time of history earlier on.
CPI bumps and inflation I think it's important that everybody understand that this whole approach to valuation and maybe back to your first question Sam on R.
Our threshold for development that may be in the declaration of trust all of those initiatives predate the advent of ire for us. So they all reflect what any account on the line may recall as being cost accounting.
And so when original ceilings or or thresholds were established they they really sort of took into account what companies like smart cities. We're paying for actual properties and you know were restrictive on development as a as a percentage of total cost of actually amounts incurred and as we know.
Now for the last 10 or 11 years with the advent of ire for S and fair value accounting, we now have to look at and include bumps or losses as we experienced in 2020 from Covid that may appear from fair value. These properties and so I think it's fair to say that.
Those gains or losses.
No doubt not contemplated when most of the at least larger Canadian rights were first established in what May or may not be included in a declaration of trust okay.
Yeah, well, that's a very good point.
Hey, just quick last one 3 million of lease termination fees in the quarter or anything.
Oh no.
Wanted to share on that.
Yep.
The significance of the the you.
Units that those that generated those fees are.
Interestingly enough we are in discussions with a 75% of that space be released in the first quarter. So a good or bad news is we had some turnover and that's the bad news. The good news is we've got some good solid leasing interest up.
Tenants that want to come in and enhance the mix of usage within our centers for those so those were just the remnants of going through what we went through in 2000 2010 and into 2021 and it's it's wrapped up most of our all of our major challenges with tenants.
That's great. Thanks, Rudy and thanks, everyone.
One can enjoy the Watson.
[laughter].
I'm not retired who did this call during lunch where you'd be sure.
Sure for sure the questions I'm sure [laughter], Mitch I just wanted to come back to towels earlier question, maybe before we actually go to lunch, but tallied asked the question earlier about how we account for our.
Gain on the total return swap and where that might be found tell and our team will will directly to two places.
If I'm in your Bedtime reading you get to page 68 of our financial statements note 26 unfair.
On fair value adjustments, you'll see it under the financial instruments section in.
In note 26 of the financials. Alternatively, if you don't want to review the financial statements that you want a quick peek you can see it on pages 36, and 37 of the quarterly and year to date.
Results on how we add back amounts to get to our F. One line and Youll see the add back for fair value on financial instruments, which is an all inclusive number time again back into know 'twenty six and then the add back from that number of the total return swap into F. F. O. So hopefully you can follow that and if you need any further.
And let us know thing.
Okay.
Mitch.
Yeah Okay.
I guess.
The total is the operator.
Hi, sorry, yeah, Yeah. So that was the last question in the queue exactly okay.
So thank you all for taking the time to participate in our year end call.
And please resort to any of us are any further questions.
Stay safe and have a good rest of your day.
Okay.
Thank you and ladies and gentlemen, this concludes the smart centers read Q4, 'twenty go to one conference call. Thank you for your participation and have a nice day.