Q1 2022 CT Real Estate Investment Trust Earnings Call

Operator: Today's discussion may include forward-looking statements. Such statements are based on management's exceptions and beliefs. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. Please see CT REIT's recent public filings for a discussion of these risk factors, which are included in its 2021 management's discussion and analysis, and the 2021 annual information form, which can be found on CT REIT's website and on SEDAR. I will now turn the call over to Ken Silver, Chief Executive Officer of CT REIT. Ken?

Such statements are based on management's exceptions and beliefs.

Operator: Today's discussion may include forwardlooking statements.

These forward-looking statements are subject to certainties and other factors that could cause actual results to differ materially from such statements.

Operator: Such statements are based on management's assumptions and beliefs.

Operator: These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements.

Please C public filings for a discussion of these risk factors, which are included in its 2021 management's discussion and analysis, and of 2021 annual information form, which it can be found on CP reach website in on SEDAR.

Operator: Please see CT`s public filings for a discussion of these risk factors, which are included in its 2021 management's discussion and analysis, and 2021 annual information form, which it can be found on CT`s website and on SEDAR.

I will now turn the call over to Ken silver, Chief Executive Officer of CP REIT Ken.

Operator: I will now turn the call over to Kenneth Silver, Chief and Executive Officer of CT REIT. Ken? 

Kenneth Silver: Thank you operator, and good morning everyone. We're very pleased to welcome you to CT REIT's first quarter 2022 investor conference call.

As this marks my last call as CEO before my retirement at the end of the month, I'll leave the bulk of the commentary on the quarter to Kevin and Leslie and share with you some departing thoughts.

Kenneth Silver: Thank you operator, and good morning everyone. We're very pleased to welcome you to CT REIT's first quarter 2022 investor conference call. As this marks my last call as CEO before my retirement at the end of the month, I'll leave the bulk of the commentary on the quarter to Kevin and Leslie, ensuring you on departing thoughts.

I couldn't imagine a better time to complete our succession plan. As you've seen throughout the pandemic and as you will hear, most recently in Q1, the business is performing wells and our balance sheet and credit metrics are in great shape.

Kenneth Silver: I couldn't imagine a better time to complete our succession plan. As you've seen throughout the pandemic, and as you will hear, most recently in Q1, the business is performing well and our balance sheet and credit metrics are in great shape.

In Kevin Salsberg, we have an incoming President and CEO with terrific real estate investment, leasing, and development skills and a deep background in public real estate markets. Take those skills, together with what is now an in-depth knowledge of Canadian [inaudible] corporation and its strategies, strong relationships, and shared values with CT REIT's leadership team, and you have the perfect leader to take CT REIT into the future.

Kenneth Silver: In Kevin Salsberg we have an incoming President and CEO with terrific real estate investment, leasing, and development skills, and a deep background in public real estate markets.

Take those skills, together with what is now an in-depth knowledge of Canadian to our corporation and its strategies, strong relationships and shared values with CTC's leadership team, and you have the perfect leader to take CT read into the future.

Kenneth Silver: Take those skills together with what is now an in depth knowledge of Canadian top corporation and its strategies, strong relationships and shared values with CTC's leadership team, and you have the perfect leader to take CT REIT into the future. Kevin will be heading up a highly capable and agile team with a great track record of value creation.

Kevin will be heading up a highly capable and agile team with a great track record of value creation. The foundation of our prospects going forward remains solidly tied to CT REIT's growth plan which is laid out in its recent Investor Day, includes significant expansion of its real estate store network and supply chain, investments that CT REIT is already participating in.

The foundation of our prospects going forward remains solidly tied to CTC's growth plans which, is laid out in its recent Investor Day, includes significant expansion of its real estate store network and supply chain investments that CT re is already participating in.

Kenneth Silver: The foundation of our prospects going forward remains solidly tied to CTC's growth plans, which is laid out in its recent Investor Day, includes significant expansion of its real estate store network and supply chain, investments that CT REIT is already participating in.

Our prospects beyond our core portfolio, including third-party acquisitions, intensification, and surfacing value in underutilized assets remain largely untapped opportunities.

Kenneth Silver: Our prospects, beyond our core portfolio, including third-party acquisition,  intensification and surfacing value in underutilized assets, remain largely untapped opportunities.

The confidence I'm projecting is shared by the Board of CT REIT, both in its support of Kevin and in our strategic direction. This confidence was displayed with the announcement yesterday of another distribution increase, the ninth since our IPO, to take effect with the distribution to be declared in June. What better time to hand over the reins? Kevin, over to you.

Both in its support of Kevin and in our strategic direction.

Kenneth Silver: The confidence I'm projecting is shared by the Board of CT REIT.

This confidence was displayed with the announcement yesterday of another distribution increase.

Kenneth Silver: Both in its support of Kevin and in our strategic direction.

The Ninth since our IPO to take effect, with the distribution to be declared in June .

Kenneth Silver: This confidence was displayed with the announcement yesterday of another distribution increase, the 9th since our IPO, to take effect, with the distribution to be declared in due.

What better time to hand over the reins Kevin, over to you.

Kevin Salsberg: Thanks Ken for the kind words, and good morning everyone. I can't imagine starting my remarks without talking about Ken and the tremendous legacy he leaves behind, both at Canadian Tire and CT REIT.

Kenneth Silver: What better time to hand over the reins? Kevin, over to you.

I can't imagine starting my remarks without talking about Ken and the tremendous legacy he leaves behind, both a Canadian Tire and CT re.

Kevin Salsberg: Thanks, Ken, for the kind words, and, good morning, everyone.

Kevin Salsberg: I can't imagine starting my remarks without talking about Ken and the tremendous legacy he leaves behind, both a Canadian Tire and CT REIT.

In his time with the Canadian Tire family, Ken has been responsible for many remarkable accomplishments. He was the architect of a new store network strategy that allowed Canadian Tire to successfully compete head to head with other new big box entrance to Canada. He was the point person on a new dealer contract which reimagined the way Canadian Tire engaged with one of their largest stakeholders, a key contributor to setting the stage for one of the most productive periods in the company's history. And he obviously not only led the charge to take CT Republic but has also been a great steward of the REIT's exceptional performance since that time.

Kevin Salsberg: In his time with the Canadian Tire family, Ken has been responsible for many remarkable accomplishments.

He was the architect of a new store network strategy that allowed Canadian Tire to successfully compete head to head with other new box big box entrance to Canada. He was the point person on a new dealer contract which reimagine the way Canadian Tire engagage with one of their largest stakeholders, a key contributor to setting the stage for one of the most productive periods in the company's history.

Kevin Salsberg: He was the architect of a new store network strategy, that allowed Canadian Tire to successfully compete head to head with other new big box entrance to Canada. He was the point person on a new dealer contract which reimagined the way Canadian Tire engage with one of their largest stakeholders, a key contributor to setting the stage for one of the most productive periods in the company's history.

And he obviously not only led the charge to take CT Republic but has also been a great steward of the REIT's exceptional performance since that time.

Kevin Salsberg: And he obviously not only led the charge to take CT REIT public, but he`s also been a great steward of the REIT's exceptional performance since that time.

Despite the fact that I'm [inaudible] Ken leaves me with some big shoes to fill. I feel confident, however, in the reachability to compete and outperform.

I feel confident however, in the reathability to compete and outperform.

Kevin Salsberg: Despite the fact that I'm 6 foot 4, Ken leaves me with some big shoes to fill.

Our business was created to deliver durable and growing results. Our privileged relationship with Canadian Tire provides us with an opportunity set and growth pipeline that is consistent and meaningful.

Kevin Salsberg: I feel confident, however, in the reasonability to compete and outperform.

Kevin Salsberg: Our business was created to deliver durable and growing results. Our privileged relationship with Canadian Tire provides us with an opportunity set and growth pipeline that is consistent and meaningful.

We have also significantly involved our own capabilities since growing public in 2013. At the time of our IPO, there were exactly two REIT employees that were primarily supported by a large team at Canadian Tire and by external service providers.

Kevin Salsberg: We have also significantly evolved our own capabilities since going public in 2013. At the time of our IPO, there were exactly two REIT employees that were primarily supported by a large team at Canadian Tire and by external service providers. Key functions since that time have been internalized and new capabilities added. Our team now numbers over 60 talented real estate legal, finance and accounting professionals, and is one of the strongest and most capable in the industry, and I'm pleased to report that our cost structure has remained one of the leanest in the sector.

Key functions since that time though, have been internalized and new capabilities added. Our team now numbers over 60 talented real estate, legal, finance, and accounting professionals, and is one of the strongest and most capable in the industry. And I'm pleased to report that our cost structure has remained one of the leanest in the sector.

And is one of the strongest and most capable in the industry, and I'm pleased to report that our cost structure has remained one of the leanest in the sector.

There has been one recent addition at the REIT that I would be remiss if I did not call out. I want to welcome  Jodi Shpigel  to our management team as Senior Vice President of Real Estate. I know that Jody will be a great addition to the group and I am positive that her skill set and experience will only serve to further enhance the way we work and our ability to execute on our strategy.

Kevin Salsberg: There has been one recent addition at the REIT that I would be remiss if I did not call out. I want to welcome Jodi Shpigel to our management team as Senior Vice president Real Estate.

I know that jody will be a great addition to the group and I am positive that her skill set and experience will only serve to further enhance the way we work and our ability to execute on our strategy.

Kevin Salsberg: I know that Jodi will be a great addition to the group, and I am positive that her skill set and experience will only serve to further enhance the way we work and our ability to execute on our strategy.

Leslie will go into the details of the quarter shortly. As you will note, our results were once again strong. Our balance sheet remains in great shape and with our most recent unsecured debenture refinancing, we have now taken all of our public unsecured debenture maturities off the table until 2025, thereby significantly reducing interest rate-related risks- a key achievement given the context of today's markets. And our 99.3% occupancy rate, conservative payout ratio, and strong rent collections all remain at very healthy levels. It is based on this solid foundation, our positive outlook, and the strength of our team that our Board approved another distribution increase, our ninth since going public eight and a half years ago.

Kevin Salsberg: Leslie will go into the details of the quarter shortly. As you will note, our results were once again strong. Our balance sheet remains in great shape, and with our most recent unsecured debenture refinancing, we have now taken all of our public unsecure debenture maturities off the table until 2025, thereby significantly reducing interest rate-related risks, a key achievement given the context of today's markets.

And our 99% occupancy rate, conservative payout ratio and strong rent collections all remain at very healthy levels.

Kevin Salsberg: And our 99.3% occupancy rate, conservative pay-out ratio and strong rent collections, all remain at very healthy levels.

It is based on this solid foundation, our positive outlook, and the strength of our team that our Board approved another distribution increase, our ninth since going public eight and a half years ago.

Kevin Salsberg: It is based on this solid foundation, our positive outlook and the strength of our team that our Board approved another distribution increase, our 9th since-going public eight and a half years ago.

The distribution increase of 3.4% will be affected with the July 2022 payment to unitholders. I think it is also important to highlight that since our IPO, we have increased our distributions by more than 33%. We also continue to work closely with our largest tenant and majority unitholder on delivering very recently announced enhanced investment plans in both their store network and supply chain.

Kevin Salsberg: The distribution increase of 3.4% will be effective as of July 2022 payment to unitholders.

I think it is also important to highlight that since our IPO, we have increased our distributions by more than 33%.

Kevin Salsberg: I think it is also important to highlight that since our IPO, we have increased our distributions by more than 33%.

We also continue to work closely with our largest tenant and majority unitholder on delivering very recently announced enhanced investment plans in both their store network and supply chain.

Kevin Salsberg: We also continue to work closely with our largest tenant and majority unitholder, on delivering their recently announced enhanced investment plans, in both their store network and supply chain.

As highlighted in our press release yesterday, we were pleased to announce five new investments this quarter, totalling $60 million which, once completed, will add an incremental 286,000 square feet of GLA to the portfolio.

Kevin Salsberg: As highlighted in our press release yesterday, we were pleased to announce five new investments this quarter, totalling $60 million, which, once completed, will add an incremental 286 thousand square feet of GLA to the portfolio.

The new projects include the acquisition of land and the vendor of an existing Canadian Tire store in Kingston, Ontario, the acquisition of land from a third party adjacent to a re-owned property, and the expansion of an existing Canadian Tire store in Napanee, Ontario, the acquisition of land from a third party for the development of a new Canadian Tire store in [inaudible] Quebec. The vendan of land adjacent to an existing REIT-owned property and the expansion of an existing Canadian Tire store in Invermere, BC, and finally, the expansion of a Canadian Tire in Orleans, Ontario. At the end of the quarter, CT REIT had 29 properties that were at various stages of development, with five projects currently expected to be completed in Q2 of this year.

Kevin Salsberg: The new projects include the acquisition of land and the vending of an existing Canadian Tire store in Kingston, Ontario, the acquisition of land from a third party adjacent to a re-owned property, and the expansion of an existing Canadian Tire store in Napanee, Ontario, the acquisition of land from a third party for the development of a new Canadian Tire store in Sherbrooke, Quebec, the vending of land adjacent to an existing re-owned property and the expansion of an existing Canadian Tire store in Invermere, BC, and finally, the expansion of a Canadian Tire store in Orleans, Ontario. At the end of the quarter, CT REIT had 29 properties that were at various stages of development, with five projects currently expected to be completed in Q2 of this year.

The projects in our development pipeline represent a total committed investment of approximately $380 million upon completion, $83 million of which has already been spent and $162 million of which we anticipate will be spent in the next 12 months.

Kevin Salsberg: The projects in our development pipeline represent a total committed investment of approximately $380 million upon completion, $83 million of which has already been spent, and $162 million of which we anticipate will be spent in the next 12 months.

Upon completion, these projects will add a total incremental gross lease to the area close to 1.4 million square feet to the portfolio, 72% of which had been preleased at quarter end and nearly half of which consists of development related to industrial assets.

Kevin Salsberg: Upon completion, these projects will add a total incremental gross legible area of close to 1.4 million square feet to the portfolio, 72% of which had been preleased at quarter end, and nearly half of which consists of development related to industrial assets. As a further update on the new 350.000 square foot net zero distribution center that we are developing in Calgary, Alberta, I am happy to report that, subsequent to the quarter end, Canadian Tire is now committed to leasing the entire facility and will take occupancy upon its completion in Q4 2023.

As a further update on the new 350,000 square foot net zero distribution center that we are developing in Calgary, Alberta, I am happy to report that, subsequent to the quarter end, Canadian Tire is now committed to leasing the entire facility and will take occupancy upon its completion in Q4 2023. Factoring in this leasing update, our 1.4 million square foot development pipeline is now 97% preleased.

Factoring. In this leasing update, our one point four million square foot development pipeline is now 97% preleased.

Kevin Salsberg: Factoring in this leasing update, our 1.4 million square foot development pipeline is now 97% preleased.

As we have discussed with you previously, we also continue to work proactively to extend leases with Canadian Tire. To the extent possible, this activity provides increased certainty around lease turnover and allows us to avoid temporary vacancy and leasing CapEx for the most part, and securing continual annual rent escalations fosters ongoing growth in cash flows. In the quarter we completed agreements with CTC to extend the leases of three Canadian Tire stores.

Kevin Salsberg: As we have discussed with you previously, we also continue to work proactively to extend leases with Canadian Tire. To the extent possible, this activity provides increased certainty around lease turnover, and allows us to avoid temporary vacancy and leasing Capex, for the most part, and securing continual annual rent escalations fosters ongoing growth in cash flows.

In the quarter we completed agreements with CTC to extend the leases of three Canadian Tire stores.

As we work towards the final days of transition between Ken and myself, I would like to thank him personally for his mentorship, guidance, and friendship over the last six years. They have meant a great deal to me and I will certainly do my best to fill those shoes I discussed earlier and to continue to build off the amazing base he helped to create here at CT REIT. And with that, I will turn it over to Lesley to review our financial results.

Kevin Salsberg: In the quarter we completed agreements with CTC to extend co-leases of three Canadian Tire stores. As we work towards the final days of transition between Ken and myself, I would like to thank him personally for his mentorship, guidance and friendship over the last six years. They have meant a great deal to me, and I will certainly do my best to fill those shoes I discussed earlier, and to continue to build off the amazing base he helped to create here at CT REIT. And with that, I will turn it over to Leslie to review our financial results.

And with that I will turn it over to Leslie to review our financial results.

Lesley Patricia Gibson: Thanks Kevin, and good morning everyone. As Ken and Kevin highlighted, it was a strong first quarter and we are very pleased with the results delivered by the REIT.

As kenvinand Kevin him highlighted, it was a strong first quarter and we are very pleased with the results delivered by the REIT.

Lesley Patricia Gibson: Thanks Kevin, and good morning everyone. As Ken and Kevin have highlighted, it was a strong first quarter and we are very pleased with the results delivered by the REIT.

First quarter AFFO per unit on a diluted basis was 27.8 cents, an increase of 1.8% compared to the Q1 of 2021. NOI variances were partially offset by higher interest expense due to prepayment charges associated with the completion of our debenture refinancing and increased personnel costs, including those related to CEO transition. Excluding these onetime costs, AFFO was up 3.8%.

Lesley Patricia Gibson: First quarter`s AFFO per unit on a diluted basis was 27.8 cents, an increase of 1.8% compared to the Q1 of 2021.

Noi variances were partially offset by higher interest expense due to prepayment charges associated with the completion of our debenture refinancing and increased personnel costs, including those related to CEO transition.

Lesley Patricia Gibson: NOI variances were partially offset by higher interest expense, due to prepayment charges associated with the completion of our debenture refinancing and increased personnel costs, including those related to CEO transition.

Excluding these onetime costs, AFFO was up 3.8%.

Diluted FFO per unit for the quarter was 30.7 cents, a slight decrease compared to 30.8 cents in Q1 of 2021, as the growth in units outpaced the growth in FFO.

Lesley Patricia Gibson: Excluding these one-time costs, AFFO was up 3.8%.

Lesley Patricia Gibson: Diluted FFO per unit for the quarter was 30.7 cents, a slight decrease compared to 30.8 cents in Q1 of 2021, as the growth in units outpaced the growth in FFO.

Net operating income was 102.8 million of the quarter, an increase of 3.8% or 3.8 million dollars compared to Q1 last year.

Lesley Patricia Gibson: Net operating income was $102.8 million for the quarter, an increase of 3.8% or $3.8 million compared to Q1 last year.

This NOI growth was comprised primarily of 2.3% growth in same-store basis and 2.5% growth on a same property basis.

Lesley Patricia Gibson: This NOI growth was comprised primarily of 2.3% growth in same-store basis and 2.5% growth on a same property basis.

The same-store NOI for a quarter grew by 2.3 million or 2.3% as a result of contractual annual rent escalations, which contributed nearly 1.2 million, including the 1.5% average annual rent escalation contained with our Canadian entire leases with the balance of the growth from the continued recovery of maintenance capital and related interest carry along with no credit losses recorded in the quarter.

Lesley Patricia Gibson: The same-store NOI for the quarter grew by $2.3 million or 2.3% as a result of contractual annual rent escalations, which contributed nearly $1.2 million, including the 1.5% average annual rent escalation contained with our Canadian Tire leases, with the balance of the growth from the continued recovery of maintenance capital and related interest carry, along with no credit losses recorded in the quarter.

With the balance of the growth from the continued recovery of maintenance capital and related interest carry along with no credit losses recorded in the quarter.

In the first quarter, adjusted G&A expenses as a percentage of property revenue were 3.2%, which is above the 2.8% in Q1 2021. As we pointed out last quarter, the accelerated amortization of long-term compensation costs related to CEO transition will run to the P&L and drive slightly higher G&A expenses, which amounted to 0.6 million in Q1 and will continue through Q2. Excluding these transition costs, G&A as a percentage of [inaudible] revenue would have been 2.8%, in line with Q1 of 2021.

Lesley Patricia Gibson: In the first quarter, adjusted GNA expenses, as a percentage of property revenue, were 3.2%, which was above the 2.8% in Q1 2021.

As we pointed out last quarter, the accelerated amortization of long-term compensation costs related to CEO transition will run to the pl and drive slightly higher GNA expenses, which amounted to zero six thousand in Q1 and will continue through Q2.

Lesley Patricia Gibson: As we pointed out last quarter, the accelerated amortization of long-term compensation costs, related to CEO transition will run to the PNL and drive slightly higher GNA expenses, which amounted to $0.6 million in Q1 and will continue through Q2.

Excluding these transition costs, G&A as a percentage of [inaudible] revenue would have been 2.8%, in line with Q1 of 2021.

Lesley Patricia Gibson: Excluding these transition costs, GNA as a percentage of property revenue would have been 2.8%, in line with Q1 of 2021.

The [inaudible] recorded a fair value increase of $22.1 million on our investment properties for the first quarter of 2022. The increase in the fair value adjustment on investment properties was mainly driven by continued slight compression to the investment metrics within the portfolio, based on recent market activity.

Lesley Patricia Gibson: The REIT recorded a fair value increase of $22.1 million on our investment properties for the first quarter of 2022.

The increase in the fair value adjustment on investment properties was mainly driven by continued slight compression to the investment metrics within the portfolio, based on recent market activity.

Lesley Patricia Gibson: The increase in the fair value adjustment on investment properties was mainly driven by continued slight compression to the investment metrics within the portfolio, based on recent market activity.

Distributions in the quarter were 21.0 cents, or 4.6% higher than the first quarter of 2021, due to the increase in distribution paid since last July, resulting in the AFFO payout ratio of about 75.5%, which continues to be within our targeted range.

Lesley Patricia Gibson: Distributions in the quarter were 21.0 cents, or 4.6% higher than the first quarter of 2021, due to the increase in distribution paid since last July, resulting in the AFFO pay-out ratio of about 75.5%, which continues to be within our targeted range.

Now turning to the balance sheet, our debt metrics remain solid, with interest coverage ratio of 3.57X in Q1 2022, compared to 3.68X in the first quarter of 2021. The decrease in the interest coverage ratio is primarily due to the one-time 750,000 debenture prepayment penalty included within interest and financing charges, which is partly offset by the growth in EBIT fair value.

The decrease in the interest coverage ratio is primarily due to the one-time 750,000 debenture prepayment penalty included within interest and financing charges, which is partly offset by the growth in EBIT fair value.

CT REITs indebtedness ratio has also improved and was 40.9% at the end of Q1, compared to 41.2% as at December 31st, 2021. The decrease in the ratio was due to the increase in the fair value adjustments made to the properties, as well as acquisition intensification development activities, exceeding the growth in total indebtedness.

The decrease in the ratio was due to the increase in the fair value adjustments made to the properties, as well as acquisition intensification, development activities, exceeding the growth in total and indebtedness.

With the successful issuance of $215 million of unsecured debentures at 3.03% per a seven-year term during the early part of the quarter, we completed the early refinancing of our obligations well ahead of the recent run-up rates. This leaves us in a strong liquidity position and largely insulated from refinancing risk, with no public debenture scheduled to mature until 2025 and with 294 million available in our committed credit facilities, along with $40 million of cash on hand. And with that, I will turn the call back to the operator for any questions.

This leaves us in a strong liquidity position and largely insulated from refinancing risk, with no public debenture scheduled to mature until 2025 and with 294 million available in our committed credit facilities, along with $4 million of cash on hand.

And with that I will turn the call back to the operator for any questions.

Operator: Thank you. At this time, I would like to remind everyone: in order to ask a question, please press star then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster.

Operator: Our first question is from Jenny Ma, with [inaudible] Capital Markets. Please go ahead.

Jenny Ma: Hi, thank you and good morning.

Multiple speakers: [Kevin Salsberg] Good morning. [Lesley Gibson] Good morning, Jenny.

Jenny Ma: Congratulations Ken on your retirement and welcome Kevin, I look forward to hearing more from you. Also great news that you leased the new DC to Canadian Tire, I had a question on the timing of that. I was just wondering if you could talk to us about whether or not you're able to get, I believe there's a 20% premium on bench that you had alluded to during the last call, to the green measures that are being fit into the facilities, and also whether or not you were able to get the contractual event steps that are characteristic of your [inaudible]

Kevin Salsberg: Yeah sorry, Jenny, you're coming through a little muffled. I think I got your question, but if I miss anything, just obviously type up and let me know. You know we're not going to come out specifically on the rent [inaudible] One specific I can say in terms of the range of market, we feel we're certainly at the upper end of it. We also feel pretty good about where our pro forma has shaken out relative to where we thought it was going to be and obviously this is a win-win for both Canadian Tire and the REIT in terms of the sustainability initiative and being a leader in net zero buildings in Canada and certainly we feel the value of the building will also command a premium at the end of the day. You also have that believe whether or not we were able to achieve our typical contractual rent escalations, as we do in our retail leases and the answer is: yes, we got similar bumps on an annual basis in this lease.

I can say, you know, in terms of the range of market Ren, we feel we're certainly at the upper end of it. We also feel pretty good about where our pro forma shaken out relative to where we thought it was going to beand obviously this is a win. Win for both Canadian Tire and the re terms of the sustainability initiative and being a leader in in net zero buildings in Canada and and certainly we feel the value, the value of the building.

We'll also command a premium. At the end of the day, you also have that believe whether or not we were able to achieve our typical contractual rent escalations, as we do, and our retail leases and the answerers: yes, we got a similar to similar bumps on an annual basis in this lease.

Jenny Ma: Ok, great. You know what? That is all from me. Thank you.

You know what that is ultim me, Thank you.

Multiple speakers: [Kevin Salsberg] Thank you. [Kenneth Silver] Thanks, Jenny.

Operator: Thank you. Our next question is from [inaudible] with RBC capital markets. Please go ahead.

Iron. Next question is from pony berd with RBC capital markets. Please go ahead.

Multiple speakers: [Unknown Speaker] Thanks and good morning and Ken, congrats again and all the best on the next chapter. [Kenneth Silver] Great, thank you. Just maybe curious, in light of what's happening across the markets and bond yields, are you seeing any new acquisition opportunities out there, or maybe start to surface, or is it kind of pent down at this stage?

Just maybe curious and, light of what's happening across the markets and bond yields, are you seeing any new acquisition opportunities out there, or maybe start to surface, or is it kind of pentned down at this stage?

Kevin Salsberg: I think it's pretty pent down at the stage. I think Q1 had a lot of activity kind of flowing out of the end of the last year. I think Q2 has been busy enough and that there was activity in Q1 that sort of ramp finishing up. I think Q3 and Q4 will be quite slow as things are certainly on pause. We've heard about a couple of deals thus far being repriced to get done or being dropped- not in any significant way, but it's kind of qualitative and anecdotal. I'm hopeful that they'll bring some opportunities in the marketplace relative to a change in pricing. Things we're getting a little overheated, especially in our space, so we're going to keep our eye on the markets and trying to be opportunistic as we always have been. But certainly, investors are being considerate of the macro environment and I think as private investors sort of discover what their new cost of financing looks like over the next couple of months, there certainly could be some some interesting data points that we watch out for from a [inaudible] perspective.

Finishing up. I think Q3 and Q4 will be quite slow as things are certainly on pause. We've heard about a couple of deals, thuss our being repriced to get done or being dropped- not in any significant way, but it's kind of qualitative and anecdotal.

I'm, you know, hopeful that they'll bring some opportunities in the marketplace relative to, you know, a change in pricing things. We're getting a little overheated, especially in our space, So we're going to keep our eye on the markets and and trying to be opportunistic, as we always have. But certainly investors are being considerate of the, the macro environment and I think, as private investors sort of discover what their new cost of financing looks like over the next couple of months, there certainly could be some some interesting data points that we watch out for from a capprrate perspective.

Unknown Speaker: Thanks, Kevin, that's good color. I'm maybe just curious with respect to the Tire tight portfolios or assets other than in terms of any transactions in the market with third parties, have you seen any changes in pricing at all with respect to the type of real estate that you target?

Kevin Salsberg: I think it's too early at this point, so my short answer would be no, we haven't seen it. In the last three months, I would say there haven't been a lot of data points.

In the last three months, I would say there haven't been a lot of data points.

Unknown Speaker: Got it. Just the last one for me, on the store expansions that were announced in the $60 million of new investments, what can you share with us with respect to maybe how the format of those doors is going to change to accommodate the expansion? Is it more back end for e-commerce related or online orders or are they adding more skews to the actual store layouts?

Kevin Salsberg: I think just as a general comment, each store would be unique in the intervention that you might see both from whether the building is being expanded at the back, at the side, if it's more warehousing they're delivering more of a customer fulfillment portion, generally, most of the store projects have some sort of fulfillment portion to the work that they're doing to better facilitate pick up in the store. But I think they are certainly increasing the number of skews. They're trying to be more mindful in terms of the way they warehouse and store goods and obviously make customer shopping a better experience and a more durable experience and an easier experience. So I would say each one is sort of custom tailored to the unique attributes of the store and what it requires. But all of this sort of flows from the Canadian Tire reinvestment in their store network supply chain to better integrate both the digital and the physical to continue to improve customer performance. That's what's really driving all of this in background.

Unknown Speaker: Thanks very much, that's good color. I'll turn it back.

Kevin Salsberg: Thank you.

Operator: Thank you. Our next question is from Himanshu Gupta with ScotiaBank. Please go ahead.

Her next question is from humanugrouupta with the skotia bank. Please go ahead.

Himanshu Gupta: Thank you and good morning. Congratulations to Ken first. Clearly, CT REIT has accomplished so much under your leadership Ken and best of luck to Kevin, you really have big shoes to fill there.

Multiple speakers: So in terms of the question, really on the Calgary distribution center, I understand you can't share the rents on the property. Can you provide a range over [inaudible] cost will shake out to be, just a range there? [Kevin Salsberg] A range on the cost side? [Himanshu Gupta] On the cost side [inaudible] That's right.

The are rigned on. The carst side is all the cost side. You have to form a cost St right here.

Kevin Salsberg: Yeah, I think we had talked about it on the last call. The building costs is in the low $40 million range.

Himanshu Gupta: Low $40 million, okay. And then sticking to Calgary, I think you have stuff in place coming for renewal as well this year. Any color on when is that coming for the renewal?

Okay So, and then, sticking to canorary, I think you have the dufin in place coming for renewval asge. Well, this year, any color. When is that coming off? A renew?

Kevin Salsberg: Yeah, to remind our listeners, we own one distribution center that's 625,000 square feet leased to Canadian Tire. In our [inaudible] District we have the new net zero DC we were developing on adjacent lands and we also own a 200,000 square foot building that we call [inaudible]. It has two tenants in there, one is on a longer-term lease and there is a 100,000 square feet that is coming up for renewal- I think in Q3 of this year. We're in discussions with a prospective tenant. The existing tenant is vacated. We've already had a couple showings and there are some options on the table, but we don't have any firm commitments at this point.

We've already had a couple showings and there's some options on the table, but we don't have any commitments at this point.

Himanshu Gupta: Got it, thank you. Thank you, guys and I'll turn it back.

Operator: Thank you. Our next question is from Tal Woolley with National Bank. Please go ahead.

Multiple speakers: [Tal Woolley] Hi, good morning. [Kevin Salsberg] Good morning, Tal.

Tal Woolley: Just wondering Kevin if you could sort of take on the top jobs here, you've obviously added Jody to help [inaudible] your position. Are you thinking of adding any other depth to the management team?

Kevin Salsberg: At this point Tal, no. I think with Jodi's addition we're fully well-rounded out. I think, based on where the business is at, obviously were adding capabilities and people as needed throughout the organization but from a senior management team, no, that'll be it.

Tal Woolley: And you say you're sort of adding some more depth below the senior management team level, is that just normal course kind of business, or are you sort of- I was just wondering like, as you sort of build up for like Canada square project, that kind of thing, would you be planning to hire more along those lines?

Kevin Salsberg: I mean, specific to [inaudible] if you'll recall, Oxford is the development manager on that file, so I don't think we need any additional resources. We certainly are adding people in the normal course and as the portfolio grows and as we continue to over time internalize functions or help new capabilities-I mean, one example of a new hire we just brought on recently was a manager of sustainability. So that's a function that didn't use to be in the REIT and we are now obviously taking that a little bit more to heart and bolstering our internal resources as it relates to ESG. So that's the type of thing that we would add as necessary going forward.

We certainly are adding people in the normal course and as as the portfolio grows and as we continue to, you know, over time, internalized functions or help, new capabilities I mean. one example of the new hire we just brought on recently was a, a manager of sustainability. So you know that's a function that.

What didn't used to be in the ref, and we are now obviously taking that a little bit more to heart and bolstering our internal resources as it relates to ESG. So that's the type thing that we would add as necessary going forward.

Tal Woolley: Okay. And then lastly, maybe you can just talk a bit about-I appreciate that you don't have any major refinancing to do for quite some time, but can you just talk about where you think you would see mortgage and unsecured rates right now if you were to be in market?

Lesley Patricia Gibson: Sure, Tal. I mean just to reference the compared deal that we had done in early part of the quarter, it's a seven-year deal is probably in the range of 200 basis points wider today on that front. Mortgage rates for us were not actively in the sort of secured market, so it would be the price discovery to see what that would be for us, but definitely things have crept wider and there's still obviously a lot of volatility, things are moving quite quickly. So yeah, considerably wider than they would have been obviously early in the quarter but-So yeah, happy to have taken that off the table early.

So you re happy to have taken that off the table early but.

Tal Woolley: Okay. And so if you guys were to find some acquisitions to do, it's probably then smart for us to sort of think about cost of debt maybe in the [inaudible] does that feel right?

Lesley Patricia Gibson: That's in the right ballpark. Obviously, we've got some cash tilt to spend on the balance sheet and lots of ample room on our line of credits, so we have a few different options for us as well as we go forward.

Tal Woolley: Okay. That's it for all my questions. I'll just say congratulations Ken, best of luck.

Kenneth Silver: Thank you, Tal.

Operator: Thank you. Our next question is from Sam Damiani with [inaudible] Securities. Please go ahead.

Sam Damiani: Thanks and good morning. I just wanted to follow up on the lease announced this morning, and Kevin you mentioned the cost in a low $40 million range. Does that cost change as a result of the lease and does it include everything like land and everything that are all in cost?

Kevin Salsberg: So to answer your second question first, no, that's just the building cost and that doesn't include the land, and the lease does not change the cost structure. I think I mentioned this on our last conference call, we had designed the building such that it would work for Canadian Tire if they wanted it, so the spec was designed in collaboration with them and to suit their needs.

Sam Damiani: And is your cost and what you're delivering to Canadian Tire just a base building like you would normally do to any third-party tenant, or are you investing any more inside the building than you might otherwise?

Kevin Salsberg: Pretty much it's the base building. I would call it an enhanced supply chain spec and what I mean by that is there's the dock levels that are of a certain caliber. The roof and the column spacing were designed to accommodate their racking things like that. So, as I mentioned, designed with them in mind and certainly we felt it could have worked for any tenant on spying awareness, but we're mindful of the potential future occupant at the time it was designed and [inaudible].

I would call an enhanced supply chains back and what I mean by that is you know there's some.

The DOC levelers are of a certain caliber, you know. The roof ICE and the column spacing was designed, you know, to accommodate their irracking things like that. So, as I mentioned, designed with them in mind and certainly we felt it could have worked for for any tenant spying awareness, but were we'were mindful of the potential future occupant at the time it was designed and costed.

Sam Damiani: Yes, so attributes certainly would be valuable to any user it sounds like. And I guess, with their commitment to this building, does it maybe raise the possibility of Canadian Tire having some surplus warehouse space in the Dufferin District down the road?

Kevin Salsberg: No, no, it's a completely different use facility.

Sam Damiani: Okay. Alright, well, that was it for me, and I just want to congratulate Ken, Kevin, and Jodi as well. So great all around, and look forward to catching up soon and hearing what your plans are next quarter.

Kevin Salsberg: Thanks, Sam.

Operator: Thank you. As there are no further questions at this time, I will turn the call over to Ken Silver, CEO, for closing remarks.

As there are no further questions at this time, I will turn the call over to Ken silver CEO , for closing remarks.

Kenneth Silver: Thank you, operator. When we were preparing for our IPO in 2013, we came up with a tag line for CT REIT: reliable, durable, growing. Almost nine years later, we still use it and CT REIT's combination of attractive defensive characteristics and solid growth are still compelling. To have performed as well as we did through the pandemic, raising distributions as others were forced to cut theirs, and to have delivered one of the strongest compound growth rate since our IPO in AFFO and [inaudible] per unit reflects CT REIT's unique characteristics in an uncertain world.

When we were preparing for our IPO in 2013, we came up with a tagglline for ctd: reliable durable, growing.

Almost nine years later, we still use it and CT REIT's combination of attractive defensive characteristics and solid growth are still compelling.

To have performed as well as we did through the pandemic raising distributions as others were forced to cut theirs, and to have delivered one of the strongest compound growth rate since our IPO in AFFO and napper unit reflects CT REITs's unique characteristics in an uncertain world.

As I prepare to hand over the leadership to Kevin, to have delivered on and continue to deliver on our original promise is one of the things of which I am most proud.

As a final thought, I'd like to thank all of our listeners today who I've had the opportunity to meet with over the years. I truly enjoy telling your story, answering your questions, and most importantly, learning from you. With that, we look forward to welcoming you to our annual meeting of unitholders, which we will conduct virtually later today. I know Kevin and Leslie will also look forward to speaking to you again in August after we release our Q2 results.

I truly enjoy telling your story, answering your questions and, most importantly, learning from you.

With that, we look forward to welcome you to our annual meeting of unitholders, which we will conduct with virtually later today.

I knowte Kevin and Leslie will also look forward to speaking to you again in August after we release our Q2 results.

Operator: Thank you. This concludes today's call, you may now disconnect.

The the.

Good morning name. My name is valerie and I will be your conference operator today at this time. I would like to welcome everyone to CT reached Q1, 20 and 20. two earnings results. Conference call. alllines have been pleased on you to prevent any background noise. After the speaker's remarks said, there will be a question-and answer session. If you would like to ask a question during that time, simply press Star, then the number one on your telephone T pad.

alllines have been pleased on you to prevent any background noise.

After the speaker's remarks said, there will be a question-and answer session.

If you would like to ask a question during that time, simply press Star, then the number one on your telephone T pad.

To withdraw your question. P Star than the number two. The speakers on the call today are kensilver, Chief Executive Officer of ctreit, Kevin salsburg, President and Chief Operating Officer, CT re, and Leslie gibson, a Chief of financial Officer, ctreit. Today's discussion may include forwardlooking statements. Such statements are based on management's exceptions and beliefs. These forward-looking statements are subject to certainties and other factors that could cause actual results to differ materially from such statements. Please C public filings for a discussion of these risk factors, which are included in its 2021 management's discussion and analysis, and of 2021 annual information form, which it can be found on CP reach website in on SEDAR. I will now turn the call over to Ken silver, Chief Executive Officer of C REIT Ken.

The speakers on the call today are kensilver, Chief Executive Officer of ctreit, Kevin salsburg, President and Chief Operating Officer, CT re, and Leslie gibson, a Chief of financial Officer, ctreit.

Today's discussion may include forwardlooking statements.

Such statements are based on management's exceptions and beliefs.

These forward-looking statements are subject to certainties and other factors that could cause actual results to differ materially from such statements.

Please C public filings for a discussion of these risk factors, which are included in its 2021 management's discussion and analysis, and of 2021 annual information form, which it can be found on CP reach website in on SEDAR.

I will now turn the call over to Ken silver, Chief Executive Officer of C REIT Ken.

Thank you operator, and good morning everyone. We're very pleased to welcome you to CT REIT's first quarter 2022 investor conference call. As this marks my last call as CEO before my retirement at the end of the month, I'll leave the bulk of the commentary on the quarter to Kevin and Leslie ensure with use on departing thoughts. I couldn't imagine a better time to complete our succession plan. As you've seen throughout the pandemic and as you will hear, most recently in Q1, the business is performing well and our balance sheet and credit metrics are in great shape. In Kevin salzburg we have an incoming President and CEO with terrific real estate investment leasing and development skills and a deep background in public real estate markets. Take those skills, together with what is now an in-depth knowledge of Canadian to our corporation and its strategies, strong relationships and shared values with CTC's leadership team, and you have the perfect leader to take CT read into the future. Kevin will be heading up a highly capable and agile team with a great track record of value creation. The foundation of our prospects going forward remains solidly tied to CTC's growth plans, which is laid out in its recent Investor Day inclproes, significant expansion of its real estate store network and supply chain investments that ctre is already participating in. Our prospects beyond our core portfolio, including third-party acquisitions, intensification and servfacing value in underutilized assets remain largely untapped opportunities.

As this marks my last call as CEO before my retirement at the end of the month, I'll leave the bulk of the commentary on the quarter to Kevin and Leslie ensure with use on departing thoughts.

I couldn't imagine a better time to complete our succession plan. As you've seen throughout the pandemic and as you will hear, most recently in Q1, the business is performing well and our balance sheet and credit metrics are in great shape.

In Kevin salzburg we have an incoming President and CEO with terrific real estate investment leasing and development skills and a deep background in public real estate markets.

Take those skills, together with what is now an in-depth knowledge of Canadian to our corporation and its strategies, strong relationships and shared values with CTC's leadership team, and you have the perfect leader to take CT read into the future.

Kevin will be heading up a highly capable and agile team with a great track record of value creation.

The foundation of our prospects going forward remains solidly tied to CTC's growth plans, which is laid out in its recent Investor Day inclproes, significant expansion of its real estate store network and supply chain investments that ctre is already participating in.

Our prospects beyond our core portfolio, including third-party acquisitions, intensification and servfacing value in underutilized assets remain largely untapped opportunities.

The confidence I'm projecting is shared by the Board of ctre. Both in its support of Kevin and in our strategic direction. This confidence was displayed with the announcement yesterday of another distribution increase. The Ninth since our IPO to take effect, with the distribution to be declared in June . What better time to hand over the reins Kevin, over to you. Thanks Ken, for the kind words and good morning everyone. I can't imagine starting my remarks without talking about Ken and the tremendous legacy he leaves behind, both a Canadian Tire and CT re. In his time with Canadian, with the Canadian entire family- Ken has been responsible for many remarkable accomplishments. He was the architect of a new store network strategy that allowed Canadian Tire to successfully compete head to head with other new box big box entrance to Canada. He was the point person on a new dealer contract which reimagine the way Canadian Tire engage with one of their largest stakeholders, a key contributor to setting the stage for one of the most productive periods in the company's history. And he obviously not only led the charge to take CT Republic but has also been a great steward of the REIT's exceptional performance since that time.

Both in its support of Kevin and in our strategic direction.

This confidence was displayed with the announcement yesterday of another distribution increase.

The Ninth since our IPO to take effect, with the distribution to be declared in June .

What better time to hand over the reins Kevin, over to you.

Thanks Ken, for the kind words and good morning everyone.

I can't imagine starting my remarks without talking about Ken and the tremendous legacy he leaves behind, both a Canadian Tire and CT re.

In his time with Canadian, with the Canadian entire family- Ken has been responsible for many remarkable accomplishments.

He was the architect of a new store network strategy that allowed Canadian Tire to successfully compete head to head with other new box big box entrance to Canada. He was the point person on a new dealer contract which reimagine the way Canadian Tire engage with one of their largest stakeholders, a key contributor to setting the stage for one of the most productive periods in the company's history.

And he obviously not only led the charge to take CT Republic but has also been a great steward of the REIT's exceptional performance since that time.

Despite the fact that I'm fixed book for Ken leaves me with some big shoes to fill. I feel confident however, in the reability to compete and outperform. Our business was created to deliver durable and growing results. Our privileged relationship with Canadian Tire provides us with an opportunity set and growth pipeline that is consistent and meaningful. We have also significantly inolved our own capabilities since going public in 2013. at the time of our IPO, there were exactly two re employees that were primarily supported by a large team at Canadian Tire and by external service providers. Key functions. Who, that time though, have been internalized and new capabilities added. Our team now numbers over 60 talented real estate legal, finance and accounting professionals. And is one of the strongest and most capable in the industry, and I'm pleased to report that our cost structure has remained one of the leanest in the sector. There has been one recent addition at the REIT that I would be remiss if I did not call out. I want to welcome jodish beiegel to our management team as Senior Vice president- real estate.

I feel confident however, in the reability to compete and outperform.

Our business was created to deliver durable and growing results. Our privileged relationship with Canadian Tire provides us with an opportunity set and growth pipeline that is consistent and meaningful.

We have also significantly inolved our own capabilities since going public in 2013. at the time of our IPO, there were exactly two re employees that were primarily supported by a large team at Canadian Tire and by external service providers.

Key functions. Who, that time though, have been internalized and new capabilities added. Our team now numbers over 60 talented real estate legal, finance and accounting professionals.

And is one of the strongest and most capable in the industry, and I'm pleased to report that our cost structure has remained one of the leanest in the sector.

There has been one recent addition at the REIT that I would be remiss if I did not call out. I want to welcome jodish beiegel to our management team as Senior Vice president- real estate.

I know that jody will be a great addition to the group and I am positive that her skill set and experience will only serve to further enhance the way we work and our ability to execute on our strategy. Leslie ll go into the details of the quarter shortly. As you will note, our results were once again strong. Our balance sheet remains in great shape and, with our most recent unsecured debenture refinancing, we have now taken all of our public unsecured debenture maturities off the table until 2025, thereby significantly reducing interest rate-related risks- a key achievement given the context of today's markets. And our 99% occupancy rate, conservative payout ratio and strong rent collections all remain at very healthy levels. It is based on this solid foundation, our positive outlook and the strength of our team that our Board approved another distribution increase, our Ninth since going public eight and a half years ago. The distribution increase of 3% will be affected with the July 20.022 thousand payment to unitholders. I think it is also important to highlight that since our IPO, we have increased our distributions by more than 33%. We also continue to work closely with our largest tenant and majority uniolder, on delivering their recently announced enhanced investment plans in both their store network and supply chain. As highlighted in our press release yesterday, we were pleased to announ five new investments this quarter, totally $6 million which, once completed, will add an incremental 286 thousand square feet of glla to the portfolio.

Leslie ll go into the details of the quarter shortly. As you will note, our results were once again strong. Our balance sheet remains in great shape and, with our most recent unsecured debenture refinancing, we have now taken all of our public unsecured debenture maturities off the table until 2025, thereby significantly reducing interest rate-related risks- a key achievement given the context of today's markets.

And our 99% occupancy rate, conservative payout ratio and strong rent collections all remain at very healthy levels.

It is based on this solid foundation, our positive outlook and the strength of our team that our Board approved another distribution increase, our Ninth since going public eight and a half years ago.

The distribution increase of 3% will be affected with the July 20.022 thousand payment to unitholders.

I think it is also important to highlight that since our IPO, we have increased our distributions by more than 33%.

We also continue to work closely with our largest tenant and majority uniolder, on delivering their recently announced enhanced investment plans in both their store network and supply chain.

As highlighted in our press release yesterday, we were pleased to announ five new investments this quarter, totally $6 million which, once completed, will add an incremental 286 thousand square feet of glla to the portfolio.

The new projects include the acquisition of land and the vendon of an existing Canadian tiire storein kingston, Ontario. The acquisition of land from a third party adjac to a REIT owned property and the acansion of an existing Canadian tiire store in nappany, Ontario. The acquisition of land from a third party for the development of a new Canadian tiire store in sherbu, Quebec. The vendant of land adjacent to an existing REIT owned property and the expansion of an existing Canadian tiire store in invermeir, BC. And finally, the expansion of a Canadian tiire store in Orleans, Ontario. At the end of the quarter, CT REIT had 29 properties that were at various stages of development, with five projects currently expected to be completed in Q2 of this year. The projects in our development pipeline represent a total committed investment of approximately $38 million upon completion, 83 million doars of which has already been spent and $162 million of which we anticipate will be spent in the next 12 months.

The projects in our development pipeline represent a total committed investment of approximately $38 million upon completion, 83 million doars of which has already been spent and $162 million of which we anticipate will be spent in the next 12 months.

Upon completion, these projects will add a total incrementally gross leasble area have closed to one point four million square feet to the portfolio, 72% of which had been preleased at quarter end and nearly half of which consists of development related to industrial assets. As a further update on the new 35 thousand square foot net zero distribution center that we are developing in Calgary Alberta, I am happy to report that, subsequent to the quarter end, Canadian Tire is now committed to leasing the entire facility and will take occupancy upon its completion in Q4 2020. -three. Factoring. In this leasing update, our one point four million square foot development pipeline is now 97% preleased. As we have discussed with you previously, we also continue to work proactively to extend leases with Canadian Tire to the extent possible. This activevity provides increased certainty around lease turnover and allows us to avoid temporary vacancy and leasing CapEx for the most part, and securing continual annual rent escalations fosters ongoing growth in cash flows. In the quarter we completed agreements with CTC to extend the leases of three Canadian Tire stores.

As a further update on the new 35 thousand square foot net zero distribution center that we are developing in Calgary Alberta, I am happy to report that, subsequent to the quarter end, Canadian Tire is now committed to leasing the entire facility and will take occupancy upon its completion in Q4 2020. -three.

Factoring. In this leasing update, our one point four million square foot development pipeline is now 97% preleased.

As we have discussed with you previously, we also continue to work proactively to extend leases with Canadian Tire to the extent possible. This activevity provides increased certainty around lease turnover and allows us to avoid temporary vacancy and leasing CapEx for the most part, and securing continual annual rent escalations fosters ongoing growth in cash flows.

In the quarter we completed agreements with CTC to extend the leases of three Canadian Tire stores.

As we work towards the final days of transition between Ken and myself, I would like to thank him personally for his mentorship, guidance and friendship over the last six years. They have meant a great deal to me and I will certainly do my best to fill those shoes I discussed earlier and to continue to build off the amazing base he helped to create here at CP. And with that i'will turn it over to Leslie to review our financial results. Thanks Kevin, and good morning everyone. As kenvinand Kevin him highlighted, it was a strong first quarter and we are very pleased with the results delivered by the REIT. First quarter, AFFO per unit on a diluted basis was 27.8 cents, an increase of 2% compared to the Q1 of 2021. Noi variances were partially offset by higher interest expense due to prepayment charges associated with the completion of our deeventure refinancing and increased personnel costs, including those related to CEO transition. Excluding these onetime costs, AFFO was up 4%. Diluted FFO per unit for the quarter was thirty-point seven cents, a slight decrease compared to 30.8 cents in Q1 of 2021, as the growth in units outpaced the growth in FFO.

And with that i'will turn it over to Leslie to review our financial results.

Thanks Kevin, and good morning everyone.

As kenvinand Kevin him highlighted, it was a strong first quarter and we are very pleased with the results delivered by the REIT.

First quarter, AFFO per unit on a diluted basis was 27.8 cents, an increase of 2% compared to the Q1 of 2021.

Noi variances were partially offset by higher interest expense due to prepayment charges associated with the completion of our deeventure refinancing and increased personnel costs, including those related to CEO transition.

Excluding these onetime costs, AFFO was up 4%.

Diluted FFO per unit for the quarter was thirty-point seven cents, a slight decrease compared to 30.8 cents in Q1 of 2021, as the growth in units outpaced the growth in FFO.

Net operating income was 103 millions of the quarter, an increase of 4% or three pointeight million dollars compared to Q1 last year. This NOI growth was comprised primarily of 2% growth in same-store basis and 2% growth on a same property basis. The same-store NOI for a quarter grew by two point three million or 2% as a result of contractual annual rent escalations, which contributed nearly one point two million, including the 2% average annual rent escalation contained with our Canadian entire leases. With the balance of the growth from the continued recovery of maintenance capital and related interest carry along with no credit losses recorded in the quarter. In the first quarter, adjusted GNA expenses as a percentage of property revenue were 3%, which was above the 3% in Q1 2021. As we pointed out last quarter, the accelerated amortization of long-term compensation costs related to CEO transition will run to the pl and drive slightly higher GNA expenses, which amounted to zero six thousand in Q1 and will continue through Q2. Excluding these transition costs, G as a percentage of property revenue would have been 3%, in line with Q1 of 2021. The reprecorded a fair value increase of $22.1 million on our investment properties for the quarter, the first quarter of 2020 -two. The increase in the fair value adjustment on investment properties was mainly driven by continued slight compression to the investment metrics within the portfolio, based on recent market activity.

This NOI growth was comprised primarily of 2% growth in same-store basis and 2% growth on a same property basis.

The same-store NOI for a quarter grew by two point three million or 2% as a result of contractual annual rent escalations, which contributed nearly one point two million, including the 2% average annual rent escalation contained with our Canadian entire leases.

With the balance of the growth from the continued recovery of maintenance capital and related interest carry along with no credit losses recorded in the quarter.

In the first quarter, adjusted GNA expenses as a percentage of property revenue were 3%, which was above the 3% in Q1 2021.

As we pointed out last quarter, the accelerated amortization of long-term compensation costs related to CEO transition will run to the pl and drive slightly higher GNA expenses, which amounted to zero six thousand in Q1 and will continue through Q2.

Excluding these transition costs, G as a percentage of property revenue would have been 3%, in line with Q1 of 2021.

The reprecorded a fair value increase of $22.1 million on our investment properties for the quarter, the first quarter of 2020 -two.

The increase in the fair value adjustment on investment properties was mainly driven by continued slight compression to the investment metrics within the portfolio, based on recent market activity.

Distributions in the quarter were 21.0 cents, or four point six was on higher than the first quarter of 2021 due to the increase in distribution paid since last July , resulting in the AFFO pyout ratio of about 76%, which continues to be within our targeted range. Now turning to the balance sheet. Our debt metrics remain solid, with interest coverage ratio three point five seven times in Q1 2022, compared to three point six eight times the first quarter of 2021. The decrease in the interest coverage ratio is primarily due to the onetime 75 thousand debenture prepayment penalty included within interest and financing charges, which is partly offset by the growth in ebitfair value. Ct REITs indebtedin Ness ratio has also improved and was 40 onepoint 9% at the end of qy 1, compared to 40 one point two percent as at December thir-first 2021. The decrease in the ratio was due to the increase in the fair value adjustments made to the properties, as well as acquisition intensification, development activities, exceeding the growth in total and indebtedness. With the successful issuance of $215 million of unsecured debentures at 3% per a seven -year term during the early part of the quarter, we completed the early refinancing of our obligations well ahead of the recent run-up in rates. This leves us in a strong liquidity position and largely insulated from refinancing risk, with no public debenture scheduled to mature until 2025 and with 294 million available in our committed credit facilities, along with $4 million of cash on hand.

Now turning to the balance sheet. Our debt metrics remain solid, with interest coverage ratio three point five seven times in Q1 2022, compared to three point six eight times the first quarter of 2021.

The decrease in the interest coverage ratio is primarily due to the onetime 75 thousand debenture prepayment penalty included within interest and financing charges, which is partly offset by the growth in ebitfair value.

Ct REITs indebtedin Ness ratio has also improved and was 40 onepoint 9% at the end of qy 1, compared to 40 one point two percent as at December thir-first 2021.

The decrease in the ratio was due to the increase in the fair value adjustments made to the properties, as well as acquisition intensification, development activities, exceeding the growth in total and indebtedness.

With the successful issuance of $215 million of unsecured debentures at 3% per a seven -year term during the early part of the quarter, we completed the early refinancing of our obligations well ahead of the recent run-up in rates.

This leves us in a strong liquidity position and largely insulated from refinancing risk, with no public debenture scheduled to mature until 2025 and with 294 million available in our committed credit facilities, along with $4 million of cash on hand.

And with that I will turn the call back to the operator for any questions. Thank you at this time. I would like to remind everyone: in order to ask a question, Please press Star in the number one on your telephone. Ke ad will pause for just a moment to compile the Q and a roster. Our firstish question is from geneniemaile. We have a conbe, MO capital markets. Please go ahead. Hi Thank you, good morning. ornning monj. congratulation 10 on your retirement and well compeitant before to very more from you. Also great news that you lease the new DC to Canadian entire levision. You had a question on the timing of that wecess. I just wondering if you could talk to us about whether or not you're able to get, I believe, for the 20% premium on bench that you had alluded to during the last call, the the green measures that are being into the facility and also whether or not you were is a debt and contractual events deps that are characteristic of your dcvc. Yes sorry Jenny, you're coming through a little mufcle to. I think I got your question, But if I miss anything just obviously type up and let me know. You know we're not going to come out specifically on the Ren, on the work for one specific. I can say, you know, in terms of the range of market Ren, we feel we're certainly at the upper end of it. We also feel pretty good about where our pro forma shaken out relative to where we thought it was going to beand obviously this is a win. Win for both Canadian Tire and the read in terms of the sustainability initiative and being a leader in in net zero buildings in Canada. And and certainly we feel the value, the value of the building. We'll also command a premium at the end of the day. You also thought that believe whether or not we were able to achieve our typical contractual rent escalations, as we do, and our retail leases? And the answerers: yes, we got similar bumps on an annual basis in this lease.

Thank you at this time. I would like to remind everyone: in order to ask a question, Please press Star in the number one on your telephone. Ke ad will pause for just a moment to compile the Q and a roster.

Our firstish question is from geneniemaile. We have a conbe, MO capital markets. Please go ahead.

Hi Thank you, good morning.

ornning monj.

congratulation 10 on your retirement and well compeitant before to very more from you. Also great news that you lease the new DC to Canadian entire levision. You had a question on the timing of that wecess. I just wondering if you could talk to us about whether or not you're able to get, I believe, for the 20% premium on bench that you had alluded to during the last call, the the green measures that are being into the facility and also whether or not you were is a debt and contractual events deps that are characteristic of your dcvc.

Yes sorry Jenny, you're coming through a little mufcle to. I think I got your question, But if I miss anything just obviously type up and let me know. You know we're not going to come out specifically on the Ren, on the work for one specific.

I can say, you know, in terms of the range of market Ren, we feel we're certainly at the upper end of it. We also feel pretty good about where our pro forma shaken out relative to where we thought it was going to beand obviously this is a win. Win for both Canadian Tire and the read in terms of the sustainability initiative and being a leader in in net zero buildings in Canada. And and certainly we feel the value, the value of the building.

We'll also command a premium at the end of the day. You also thought that believe whether or not we were able to achieve our typical contractual rent escalations, as we do, and our retail leases? And the answerers: yes, we got similar bumps on an annual basis in this lease.

ok great. You know what that is ultim me, Thank you. Thank you, thanks Jenny. Thank you. Iron. Next question is from palmy berd with RBC capital markets. Please go ahead. Thanks and good morning and Ken, Congrats again and all the best on the next chapter. greatay, Thank you. Just may be curious and, light of what's happening across the markets and bond yields, are you seeing any new acquisition opportunities out there or maybe start to surface, or is it kind of pentned down at this stage? I think it'sprettenent down at the stage. You know, I think Q1 had a lot of activity kind of flowing out of the end of the last year. I think Q2 has been busy enough and that there was activity in Q1, that sort of ramp. Finishing up. I think Q3 and Q4 will be quite slow as things are certainly on pause. We've heard about a couple of deals thatuss our being repriced to get done or being dropped- not in any significant way, but it's kind of qualitative and anecdotal. I'm, you know, hopeful that they'll bring some opportunities in the marketplace relative to, you know, a change in pricing things. We're getting a little overheated, especially in our spaceso we're going to keep our eye on the markets and and trying to be opportunistic, as we always have. But certainly investors are being considerate of the, the macro environment and I think, as private investors sort of try to discover what their new cost of financing looks like. Over the next couple of months there certainly could be some some interesting data points that we watch out for from a capprpriate perspective.

You know what that is ultim me, Thank you.

Thank you, thanks Jenny.

Thank you.

Iron. Next question is from palmy berd with RBC capital markets. Please go ahead.

Thanks and good morning and Ken, Congrats again and all the best on the next chapter. greatay, Thank you.

Just may be curious and, light of what's happening across the markets and bond yields, are you seeing any new acquisition opportunities out there or maybe start to surface, or is it kind of pentned down at this stage?

I think it'sprettenent down at the stage. You know, I think Q1 had a lot of activity kind of flowing out of the end of the last year. I think Q2 has been busy enough and that there was activity in Q1, that sort of ramp.

Finishing up. I think Q3 and Q4 will be quite slow as things are certainly on pause. We've heard about a couple of deals thatuss our being repriced to get done or being dropped- not in any significant way, but it's kind of qualitative and anecdotal.

I'm, you know, hopeful that they'll bring some opportunities in the marketplace relative to, you know, a change in pricing things. We're getting a little overheated, especially in our spaceso we're going to keep our eye on the markets and and trying to be opportunistic, as we always have. But certainly investors are being considerate of the, the macro environment and I think, as private investors sort of try to discover what their new cost of financing looks like. Over the next couple of months there certainly could be some some interesting data points that we watch out for from a capprpriate perspective.

skevin, that's. That's good coleror, maybe just curious. With respect to the Tire tight portfolios or out that they'll, other than in terms of any transactions in the market with third parties, have you seen any changes in pricing at all with respect to the techpe of real estate that you target? I think it's too early at this point, So my short answer would be no, we haven't seen it. In the last three months, I would say there haven't been a lot of data points. Got it just last month from me on the store expansions that were announced in the six million of new investments. What can you share with us with respect to maybe, how to format of those stores is want to change to accommodate the expansion? Is it more back end for e-commerceulrelated or online orders or are they adding more skwus to the actual store layouts? I think, just as a general comment each, each store would be unique in the intervention that you might see both from. You know whether the building is being expanded at the back of the sideyou know if it's more wareousing. They're delivering more of a customer fulfillment portion. Generally, most of the store projects have some sort of fulfillment portion to the, to the work that they're doing to to better facilitate pick up in the storebut you know, I think they are certainly increasing the number of sks. They're trying to be more mindful in terms of the way they warehouse and and store goods and obviously make customer shopping a better experience and more joriable experience and an easi experience. So I would say each one is the sort of custom tailored to the unique attributes of the store and what it requires. But all of this sort of flows from can entire reinvestment in their store networks of ly chain to better integrate, you know, both the digital and the physical to to date to improve customer performance. That's what's really driving all of it in thebackground.

I think it's too early at this point, So my short answer would be no, we haven't seen it.

In the last three months, I would say there haven't been a lot of data points.

Got it just last month from me on the store expansions that were announced in the six million of new investments. What can you share with us with respect to maybe, how to format of those stores is want to change to accommodate the expansion? Is it more back end for e-commerceulrelated or online orders or are they adding more skwus to the actual store layouts?

I think, just as a general comment each, each store would be unique in the intervention that you might see both from. You know whether the building is being expanded at the back of the sideyou know if it's more wareousing. They're delivering more of a customer fulfillment portion. Generally, most of the store projects have some sort of fulfillment portion to the, to the work that they're doing to to better facilitate pick up in the storebut you know, I think they are certainly increasing the number of sks. They're trying to be more mindful in terms of the way they warehouse and and store goods and obviously make customer shopping a better experience and more joriable experience and an easi experience. So I would say each one is the sort of custom tailored to the unique attributes of the store and what it requires. But all of this sort of flows from can entire reinvestment in their store networks of ly chain to better integrate, you know, both the digital and the physical to to date to improve customer performance. That's what's really driving all of it in thebackground.

Thanks very much. That's good color. 'alternativeit back. Thank you. Thank you. My next question is from humanugrouupta with the Scotia bank. Please go ahead. Thank you and good morning. You know. Congratulations to can for clearly CT read has accomplished so much under your leadership. canamp and you know better fluck to kvin. You really have been choose to fill there. So yes, in terms of the question any on the calcgory distribution center, I understand you know you can't share the rents on the property. Can you provide a range over performma cost? Will Sha out to be just arranged. The arrigned on the cost side is I on the cost side. You have to form a cost St right here. Yes I think we had talked about it on the last call. The building cost is in the low $4 million range. Look fully been okay okay. Okay So, and then sticking to cananorary, I think you have the dupt in place coming for renewval as well this year, any color. When is that coming off? A renewte? Yeah to remind our listeners, we own one distribution cent, ate a 625 thousand square feet, least two can a tiire in our deaf District. We have the new net zero D C we were developing on adjacent lands and we also own a two hundred thousand square foot building that we call 11. duffin has two tenants in there. one is on a longer term lease and there is one hundred thousand square feet that is coming up for renewal, I think in Q3 of this year. We're in discussions with the perspective 10. the existing tenant is vacated.

Thank you.

Thank you.

My next question is from humanugrouupta with the Scotia bank. Please go ahead.

Thank you and good morning. You know. Congratulations to can for clearly CT read has accomplished so much under your leadership. canamp and you know better fluck to kvin. You really have been choose to fill there.

So yes, in terms of the question any on the calcgory distribution center, I understand you know you can't share the rents on the property. Can you provide a range over performma cost? Will Sha out to be just arranged.

The arrigned on the cost side is I on the cost side. You have to form a cost St right here.

Yes I think we had talked about it on the last call. The building cost is in the low $4 million range.

Look fully been okay okay.

Okay So, and then sticking to cananorary, I think you have the dupt in place coming for renewval as well this year, any color. When is that coming off? A renewte?

Yeah to remind our listeners, we own one distribution cent, ate a 625 thousand square feet, least two can a tiire in our deaf District. We have the new net zero D C we were developing on adjacent lands and we also own a two hundred thousand square foot building that we call 11. duffin has two tenants in there. one is on a longer term lease and there is one hundred thousand square feet that is coming up for renewal, I think in Q3 of this year. We're in discussions with the perspective 10. the existing tenant is vacated.

We've already had a couple of showings and there's some options on the table, but we don't have any for commitments at this point. But thank you, TE you very and pu L. Thank you. Our next question is from Paul williewood, national bank. Please go ahead. Hi good morning. Good mor moreanttal. Just wondering Kevin, is you sort of take on the top jobs here? You've obviously added joury to help backseill your position. Are you thinking of adding any other dep to the Ministry team? At this point town. No, you know, I think with chy' edition we're fully well rounded out. You know, I think, based on where the business is at, obviously we're, you know we're adding you capabilities and people as needed throughout the organization of from a senior management team. Know that will be, that ll be in. And say you're sort of adding some more depth below the senior management team level. Is that in but just normal course kind of business, or are you sort of- I was just wondering like, as you sort of build up for like Canada square project, that kind of thing, would you be planning to hire more along those lines? I mean today to canquare. If you'll recall, oxd is the development manager on that file, So I don't think we need any additional resources. We certainly are adding people in the normal course and as as the portfolio grows and as we continue to, you know, over time, internalized functions or help, new capabilities. I mean one example of the new hire we just brought on recently with us, a manager of sustainability. So you know that's a function that.

But thank you, TE you very and pu L.

Thank you. Our next question is from Paul williewood, national bank. Please go ahead.

Hi good morning.

Good mor moreanttal. Just wondering Kevin, is you sort of take on the top jobs here? You've obviously added joury to help backseill your position. Are you thinking of adding any other dep to the Ministry team?

At this point town. No, you know, I think with chy' edition we're fully well rounded out. You know, I think, based on where the business is at, obviously we're, you know we're adding you capabilities and people as needed throughout the organization of from a senior management team. Know that will be, that ll be in.

And say you're sort of adding some more depth below the senior management team level. Is that in but just normal course kind of business, or are you sort of- I was just wondering like, as you sort of build up for like Canada square project, that kind of thing, would you be planning to hire more along those lines?

I mean today to canquare. If you'll recall, oxd is the development manager on that file, So I don't think we need any additional resources.

We certainly are adding people in the normal course and as as the portfolio grows and as we continue to, you know, over time, internalized functions or help, new capabilities. I mean one example of the new hire we just brought on recently with us, a manager of sustainability. So you know that's a function that.

What didn't used to be in the REIT, and we are now obviously taking that a little bit more to heart and bolstering our internal resources as it relates to ESG. So that's the type of thing that we would add as necessary going forward. Okay and then lastly, maybe you can just talk bit about. I appreciate that you don't have any major refinancing to do for quite some time, but could you just talk about where you think you would see mortgage and unsecured rates right now if you were to be in market? Sure how I mean just just I guess we reference the for compared to the deal that we had done in early part of the quarter. it'sort of a seven-year deal is probably in the range of 200 basis points wider. Today you know on that front you know mortgage rates for us. We're So not in the actively in the sort of secured market. So it would be the price discovery to to see what that would be for us but definitely things of have crept wider and there's still obviously a lot of volatility sort of weak. Things are moving quite quickly. So considably wider than they would have been obviously early in the quarter but. So you re happy to have taken that off the table early but.

Okay and then lastly, maybe you can just talk bit about. I appreciate that you don't have any major refinancing to do for quite some time, but could you just talk about where you think you would see mortgage and unsecured rates right now if you were to be in market?

Sure how I mean just just I guess we reference the for compared to the deal that we had done in early part of the quarter. it'sort of a seven-year deal is probably in the range of 200 basis points wider. Today you know on that front you know mortgage rates for us. We're So not in the actively in the sort of secured market. So it would be the price discovery to to see what that would be for us but definitely things of have crept wider and there's still obviously a lot of volatility sort of weak. Things are moving quite quickly. So considably wider than they would have been obviously early in the quarter but.

So you re happy to have taken that off the table early but.

Okay And so if you guys were who find some acquisitions to do, probably then smart for us to sort of think about cost of debt, maybe in the bidfourceus. Does that feel that right? That's in the right ballparks. Obviously we've got some cash Til to spend on the balance sheet and lots of ample roommo line of credits, but we have a few different, different options for us as well as we go forward. Okay that's upon the questions. I'll just say congratulations can best of luck. Thank you town. Thank you. Our next question is from samdm. damani with peace Securities, Please go ahead. Thanks sen. good morning. I just wanted to follow up on on the the lease announced this morning and Kevin and mentioned the cost in a low $4 million range. Does does that cost changed as a result of the lease and does it include everything like land and everything that are all in cost? So answer your second question first. No, that's just the ING cost and that doesn't include the land and the least does not changed the cost structure we had. I think I mentioned this on our last conference call. We had designed the building such that it would work for can entre if they wanted it, So the spec was designed in collaboration with them and suits their needs. And is your cost in your and what you're delivering to? Can Y tiire just a base building like you would normally do to any third-party tenant, or are you investing any more inside the building than you might otherwise?

That's in the right ballparks. Obviously we've got some cash Til to spend on the balance sheet and lots of ample roommo line of credits, but we have a few different, different options for us as well as we go forward.

Okay that's upon the questions. I'll just say congratulations can best of luck.

Thank you town.

Thank you. Our next question is from samdm. damani with peace Securities, Please go ahead.

Thanks sen. good morning. I just wanted to follow up on on the the lease announced this morning and Kevin and mentioned the cost in a low $4 million range. Does does that cost changed as a result of the lease and does it include everything like land and everything that are all in cost?

So answer your second question first. No, that's just the ING cost and that doesn't include the land and the least does not changed the cost structure we had. I think I mentioned this on our last conference call. We had designed the building such that it would work for can entre if they wanted it, So the spec was designed in collaboration with them and suits their needs.

And is your cost in your and what you're delivering to? Can Y tiire just a base building like you would normally do to any third-party tenant, or are you investing any more inside the building than you might otherwise?

Pretty much is the base building. I would call an enhanced ofsupply chains back and what I mean by that is you know there's some. The DOC levelers are of a certain caliber, you know. The roof ICE and the column spacing was designed, you know, to accommodate their irracking things like that. So, as I mentioned, designed with them in mind and certainly we felt it could have worked for for any tenant buying awareness, but were we're mindful of the potential future occupant at the time it was designed and costedit. Yes what attributes So? Certainly would be valuable to any user, it sounds like, and I guess, with their commitment to this building does it maybe raise the possibility of a key entire having some surplus warehouse space in the different District down the road. No no, it's a completely different use facility. Okay okay, all right. Well, that was it for me, and I just want to congratulate Ken, Kevin and jody as well. So great all around, and look forward to catching up soon and hearing what your plans are next again. Thank So. Thank you. As there are no further questions at this time, I will and turn the call over to Ken silver CEO , for closing remarks. Thank you, operator. When we were preparing for our IPO in 2013, we came up with a tagline for ctd: reliable durable, growing.

I would call an enhanced ofsupply chains back and what I mean by that is you know there's some.

The DOC levelers are of a certain caliber, you know. The roof ICE and the column spacing was designed, you know, to accommodate their irracking things like that. So, as I mentioned, designed with them in mind and certainly we felt it could have worked for for any tenant buying awareness, but were we're mindful of the potential future occupant at the time it was designed and costedit.

Yes what attributes So? Certainly would be valuable to any user, it sounds like, and I guess, with their commitment to this building does it maybe raise the possibility of a key entire having some surplus warehouse space in the different District down the road.

No no, it's a completely different use facility.

Okay okay, all right. Well, that was it for me, and I just want to congratulate Ken, Kevin and jody as well. So great all around, and look forward to catching up soon and hearing what your plans are next again.

Thank So.

Thank you.

As there are no further questions at this time, I will and turn the call over to Ken silver CEO , for closing remarks.

Thank you, operator.

When we were preparing for our IPO in 2013, we came up with a tagline for ctd: reliable durable, growing.

Almost nine years later, we still use that, and CT REIT's combination of attractive defensive characteristics and solid growth are still compelling. To have performed as well as we did through the pandemic raising distributions as others were forced to cut theirs, and to have delivered one of the strongest compound growth rate since our IPO in AFFO and napper unit reflects CT REITs's unique characteristics in an uncertain world. As I prepared to hand over the leadership to Kevin. To have delivered on and continue to deliver on our original promise is one of the things of which I am most proud. As a final thought, I'd like to thank all of our listeners today who I've had the opportunity to meet with over the years. I truly enjoy telling your story, answering your questions and, most importantly, learning from you. With that, we look forward to welcome you to our annual meeting of unitholders, which we will conduct with virtually later today. I knowte Kevin and Leslie will also look forward to speaking to you again in August after we release our Q2 results. Thank you. This concludes today's call. You may now disconnect.

To have performed as well as we did through the pandemic raising distributions as others were forced to cut theirs, and to have delivered one of the strongest compound growth rate since our IPO in AFFO and napper unit reflects CT REITs's unique characteristics in an uncertain world.

As I prepared to hand over the leadership to Kevin. To have delivered on and continue to deliver on our original promise is one of the things of which I am most proud.

As a final thought, I'd like to thank all of our listeners today who I've had the opportunity to meet with over the years.

I truly enjoy telling your story, answering your questions and, most importantly, learning from you.

With that, we look forward to welcome you to our annual meeting of unitholders, which we will conduct with virtually later today.

I knowte Kevin and Leslie will also look forward to speaking to you again in August after we release our Q2 results.

Thank you. This concludes today's call. You may now disconnect.