Full Year 2023 Artis Real Estate Investment Trust Earnings Call
Good afternoon, ladies and gentlemen, my name is lesser and I will be your conference operator today.
Operator: Good afternoon, ladies and gentlemen. My name is Lester, and I will be your conference operator today. At this time, I would like to welcome everyone to Artis Real Estate Investment Trust's 2023 Annual Results Conference Call. At this time, I would like to turn the conference over to Heather Nikkel. Please go ahead.
At this time I would like to welcome everyone to our real estate investment Trust 2023 annual results Conference call.
At this time I would like to turn the conference over to Heather Nicole. Please go ahead.
Okay.
Thank you operator, Hello, and welcome everyone. Thank you for joining us for artist REIT fourth quarter 2023 results conference call. Our results were disseminated yesterday and are available on SEDAR and on our website.
Heather Nikkel: Thank you, operator. Hello, and welcome everyone. Thank you for joining us for Artis REIT's fourth quarter 2023 results conference call. Our results were disseminated yesterday and are available on CDAR and on our website. With me on today's call is Artis president and CEO, Samir Manji, CFO, Jaclyn Koenig, COO, Kim Riley, and Executive Vice President, U.S. Region, Phil Mart
On today's call is artist as President and CEO sooner 90, CFO Jacqueline Ko Nag C O L. Kim Reilly and executive Vice President U S region fell Martin.
As we discuss our performance today, we want to acknowledge that the discussion may include forward looking statements that involve known and unknown risks and uncertainties. These risks and uncertainties may cause actual results to differ materially from those expressed or implied today.
Heather Nikkel: As we discuss our performance today, we want to acknowledge that the discussion may include forward-looking statements that involve known and unknown risks and uncertainties. These risks and uncertainties may cause actual results to differ materially from those expressed or implied today. We have identified those factors in our public filings with the securities regulators, and we suggest that you review those filings. In addition, we may refer to non-GAAP and supplementary financial measures that are not defined under IFRS and are not intended to represent financial performance, financial position, or cash flows for the period, nor should these measures be viewed as an alternative to net income, cash flow from operations, or other measures of financial performance calculated in accordance with
Have identified those factors in our public filings with the securities regulators and we suggest that your views of both bags.
In addition, we may refer to non-GAAP in supplementary financial measures that are not defined under IRS and are not intended to represent financial performance financial position or cash flows for the period, nor should these measures be viewed as an alternative to net income cash flow from operations or other measures of financial performance calculated in accordance with IRS.
Throughout this discussion. Please note that all figures will be presented in Canadian dollars unless otherwise specified.
Heather Nikkel: Throughout this discussion, please note that all figures will be presented in Canadian dollars unless otherwise specified. Before we proceed, I'd like to note that a replay of this conference call will be available until Friday, March 8th. You can access it by using the telephone numbers and passcode that were provided in yesterday's press release.
Before we proceed I'd like to note that a replay of this conference call will be available until Friday March eight.
You can access it by using the telephone numbers and pass code provided in yesterday's press release. Additionally, a recording will be made available on our website.
Heather Nikkel: Additionally, a recording will be made available on our website. I will now turn the call over to Samir to discuss Artis' fourth quarter results. Heather, can you hear me?
I will now turn the call over to Sameer to discuss artifice fourth quarter results.
Yeah.
Hello can you hear me.
Hi, Yes, I can.
Samir A. Manji: Hi, Samir. Yes, I can. Okay, I got it. I don't know what happened.
Okay, I don't know what happened I got cutoff site to dial back in.
But ready.
Samir A. Manji: I got cut off. So I had to dial back in. But I'm ready to start. Okay, I just turned the call over to you to discuss Artis' fourth quarter results. Thank you very much. My apologies for the technical challenge there.
We're ready to start.
Okay.
I just turn the call over to you to discuss artist as fourth quarter results.
Okay. Thank you very much.
My apologies for the technical challenge here will get started on my part for the call and thank you Heather.
Samir A. Manji: We'll get started on my part of the call, and thank you, Heather. Hello, everyone, and thank you for joining Artis' fourth quarter earnings call. We're pleased to report our Q4 2023 results and provide an update on the 2023 fiscal year and our progress thus far in 2024. Throughout the fourth quarter of 2023, the real estate sector continued to face challenges spurred by adverse macroeconomic conditions. We have remained focused on managing factors within our control as we navigate the current environment.
Hello, everyone and thank you for joining artist this fourth quarter earnings call. We're pleased to report our Q4.
23 results and provide an update on the 2023 fiscal year.
And our progress thus far in 2024.
Throughout the fourth quarter of 2023, the real estate sector continued to face challenges spurred by adverse macroeconomic conditions.
We have remained focused on managing factors within our control as we navigate the current environment.
In doing so our primary near term objective remains clear.
Samir A. Manji: In doing so, our primary near-term objective remains clear: reduce leverage and increase liquidity to strengthen our balance sheet. As we continue to work toward this objective, our goal is to position artists to withstand current and potential future economic headwinds and ultimately deliver long-term value for unit holders. There are several levers available to us to strengthen our balance sheet and enhance liquidity, including asset dispositions, refinancing existing mortgages, securing new mortgage financing, and monetizing public security investments. Thank you. Thank you.
<unk> leverage and increased liquidity to strengthen our balance sheet.
As we continue to work towards this objective our goal is to position artist to withstand current and potential future economic headwinds and.
And ultimately deliver long term value for unit holders.
There are several levers available to us to strengthen our balance sheet and enhance liquidity, including asset dispositions refinancing existing mortgages security, securing new mortgage financing and monetizing public security investments.
Okay.
Samir A. Manji: Thank you. In Q4, we sold two properties for a total of 17 asset sales in 2023, totaling $332 million. In addition, subsequent to December 31st, 2023.
In Q4.
We sold two properties for a total of 17 asset sales in 2023 totaling $332 million.
In addition, subsequent to December 31 2023.
Samir A. Manji: We sold one industrial, one office, and one retail property and have an additional 12 properties under unconditional sale agreements amounting to an additional $445 million of dispositions. As we have communicated in prior quarters, the liquidity unlocked from these sales, including the retail portfolio sale, will be reallocated primarily towards debt reduction. We are in discussions with potential buyers for additional sales, the proceeds of which will enable us to continue reducing our overall debt and improving financial flexibility, important steps in navigating the current environment marked by rising interest rates, inflation, and market volatility. As we have previously disclosed, in June last year, we monetized a portion of our equity securities and, most notably, participated in Dream Office REIT's substantial issuer bid, pursuant to which we sold approximately 2.2 million units for aggregate sale proceeds of nearly $34 million.
We sold one industrial one office and one retail property and have an additional 12 properties under unconditional sale agreements.
Amounting to an additional $445 million of disposition.
As we have conveyed in prior quarters.
Liquidity unlocked from these sales, including the retail portfolio sale will be reallocated primarily towards debt reduction.
We are in discussions with potential buyers for additional sales the proceeds from which will enable us to continue reducing our overall debt and improving financial flexibility important steps in navigating the current environment marked by rising interest rates inflation and market volatility.
As we have previously disclosed in June last year, we monetized a portion of our equity securities and most notably participated in Dream office reached substantial issuer bid.
Pursuant to which we sold approximately $2 2 million units for aggregate sale proceeds of nearly $34 million.
Samir A. Manji: This capital allocation decision supported our liquidity objectives, and building on this, during the third and fourth quarters, we continued to monetize equity securities. Going forward, we will continue to evaluate our public securities from a capital allocation standpoint as we navigate the current environment and prioritize capital allocation opportunities that will maximize net asset value per unit for our owners. With higher interest rates and other macroeconomic factors impacting the real estate sector, we have been working closely with our lenders to manage our upcoming debt maturities. We have $261.4 million of mortgage debt maturing in 2024.
This capital allocation decision supported our liquidity objectives and building on this during the third and fourth quarters, we continued to monetize equity securities.
Going forward, we will continue to evaluate our public securities from a capital allocation standpoint, as we navigate the current environment and prioritize capital allocation opportunities that will maximize net asset value per unit for our owners.
With higher interest rates and other macro macroeconomic factors impacting the real estate sector.
I've been working closely with our lenders to manage our upcoming debt maturity.
We have $261 $4 million of mortgage debt maturing in 2024.
Samir A. Manji: We have received term sheets for new or renewed loans for 17% of these maturities, have extension options in place for 50% of these maturities, and we anticipate no difficulty in managing the remaining 33% of maturities in the normal course. In 2024, both of Artis' non-revolving credit facilities and its revolving credit facility mature. Subsequent to the end of the year, we renewed the $100 million non-revolving credit facility for a two-year term, and we are in active discussions with respect to the renewal of the $150 million non-revolving credit facility that expires in July. Looking Ahead. Securing new mortgage financing and refinancing existing mortgages will continue to be an important tool available to us, especially considering our portfolio's substantial unencumbered asset pool. Through these and other capital management strategies, we are seeing a reduction in current liabilities on our balance sheet.
We have received term sheets for new or renewed loans were 17% of these maturities have extension options in place for 50% of these maturities and we anticipate no difficulty in managing the remaining 33% of maturities in the normal course.
In 2024, both of artist as non revolving credit facilities and its revolving credit facility mature.
Subsequent to the end of the year, we renewed the $100 million non revolving credit facility for a two year term and we are in active discussions with respect to the renewal of the $150 million non revolving credit facility that expires in June in July.
Looking ahead.
Securing new mortgage financing and refinancing existing mortgages will continue to be an important tool available to us, especially considering our portfolio's substantial unencumbered asset pool.
Thanks to these and other capital management strategies, we are seeing a reduction in current liabilities on our balance sheet.
Samir A. Manji: We're committed to maintaining this positive momentum in the upcoming quarters. Turning to Artis' operational performance, leasing activity remained strong throughout 2023. Occupancy rates, including commitments, remain consistently near or over 91% during the year. Additionally, lease renewals that commenced during the fourth quarter were negotiated at a weighted average rate increase of 5.8% over expiring rates, continuing a 12-quarter streak of growth in weighted average net rental rates secured upon renewal. Year-over-year same property NOI growth for the three months ended December 31st was strong at 9.2%.
We're committed to maintaining this positive momentum in the upcoming quarters.
Turning to artists as operational performance leasing activity remained strong throughout 2023.
Occupancy rates, including commitments remained consistently near or over 91% during the year.
Additionally lease renewals that commenced during the fourth quarter were negotiated at a weighted average rate increase of five 8% over expiring rates.
Renewing a 12 quarter streak of closed and weighted average net rental rates secured upon renewal.
Year over year same property NOI growth for the three months ended December 31 was strong at nine 2%.
Samir A. Manji: These fundamentals are critical measures of our portfolio stability and are reflective of the leasing momentum that has been growing in recent quarters, underscoring the foundational strength of our real estate operation. This continued operational strength serves as a signal that Artis' properties are well positioned for sustained positive momentum. Earlier in the year, we completed Park Lucero East and Blaine 35, and during the fourth quarter, we completed construction of our 40-story residential development in Winnipeg 300 Main. Tenants began moving into the first 20 floors on July 1st, and lease efforts for the remaining suites are underway.
Continental is a critical measures of our portfolio stability and are reflective of the leasing momentum that has been growing over recent year recent quarters underscoring the foundational strength of our real estate operations.
This continued operational strength serves as a signal that artist as properties are well positioned for sustained positive momentum.
Earlier in the year, we completed Parker's Cerro East and Blaine 35, and during the fourth quarter. We completed construction of our 40 storey residential development in Winnipeg 300 Meg.
Tenants began moving into the first two floors on July one and lease efforts for the remaining suites is underway.
As occupancy grows in the property's NOI rises we foresee positive impacts on our adjacent office buildings Theyre tenants and parkade, all thanks to the vibrant live work and play downtown lifestyle.
Samir A. Manji: As occupancy grows and the property's NOI rises, we foresee positive impacts on our adjacent office buildings, their tenants, and parquets, all thanks to the vibrant live, work, and play downtown lifestyle this development brings to the downtown Winnipeg area. With respect to our Cominar investment, our collaboration with our partners is ongoing, advancing us towards our objectives. To date, we have finalized several additional asset sales with additional transactions in the pipeline. Lastly, as many of you know, on August 2nd, 2023, Artis' board formed a special committee to initiate a strategic review process to consider and evaluate alternatives that may be available to the REIT to unlock and maximize value for unit holders. The Special Committee, along with its advisors, has explored several options, including the potential sale of the REIT. However, given the current market conditions, we do not believe that there is a buyer prepared to acquire the REIT at a reasonable value relative to our NAF. However, there remains healthy interest from potential buyers of high-quality retail and industrial assets and certain office assets.
<unk> brings to the downtown Winnipeg area.
With respect to our common our investment our collaboration with our partners is ongoing advancing us towards towards our objectives to date, we have finalized several additional asset sales. It was additional transactions in the pipeline.
Lastly, as many of you know on August <unk> 2023 artist Suite Board formed a special committee to initiate a strategic review process to consider and evaluate alternatives that may be available to the REIT to unlock and maximize value for unit holders.
Special Committee, along with its advisers have explored several options, including the potential sale of the reach.
Given the current market conditions, we do not believe that there is a buyer prepared to acquire to REIT at a reasonable value relative to our NAV. However.
However, there remains healthy interest from potential buyers of high quality retail and industrial assets and certain office assets.
Samir A. Manji: The Special Committee and its advisors continue to evaluate options, including the sale of additional properties, with a focus on Artis' industrial portfolio, in an effort to further deleverage, strengthen the balance sheet, grow NAV per unit, and enhance liquidity. We continue to view our normal course issuer bid as an effective mechanism for increasing unit order value and will consider allocating capital to unit buybacks using the NCIB if Artis' units remain substantially undervalued relative to their net asset value per unit. The work we have undertaken over the past several months has enabled us to properly assess the current environment and options available to us to maximize value for our unit holders. We will continue with our efforts to strengthen the balance sheet and enhance liquidity.
A special committee and its advisors continue to evaluate options, including the sale of additional properties with a focus on artist as industrial portfolio in an effort to further deleverage and strengthen the balance sheet grow NAV per unit and enhance liquidity.
We continue to view, our normal course issuer bid as an effective mechanism for increasing unitholder value and will consider allocating capital to unit buybacks using the in CIB if artist as units.
Remained substantially undervalued relative to its net asset value per unit.
The work we've undertaken over the past several months has enabled us to properly assess the current environment and options available to us to maximize value for our unitholders.
We'll continue with our efforts to strengthen our balance sheet and it has liquidity.
Samir A. Manji: And as our balance sheet and liquidity continue to strengthen, look at capital allocation opportunities that we believe will ultimately grow the net asset value per unit objectives that we have been focused on since 2021. We look forward to providing further updates on the strategic review process in due course. I will now turn it back to the operator to moderate the question and answer session. Thank you, ladies and gentlemen.
And as our balance sheet and liquidity continued to strengthen look at capital allocation opportunities that we believe will ultimately grow net asset value per unit objectives that we have been focused on since 2021.
We look forward to providing further updates on the strategic review process in due course.
I will now turn it back to the operator to moderate the question and answer session.
Thank you, ladies and gentlemen, we will now conduct the question and answer session.
Operator: We will now conduct the question and answer session. If you have a question, please press star one on your touchpad. If you wish to cancel your request, please press start.
If you have a question. Please press star one on your touch pad.
If you wish to cancel your request please press star two.
Jonathan Kelcher: Your first question comes from John Kelcher from TD Cowen. Your line is now open. Thanks. Good afternoon.
Your first question comes from John Kessler, Sir from J D Cawood.
Your line is now open.
Thanks, Good afternoon.
Samir A. Manji: First question just on the I-RES prep. I'm just doing some simple math. Based on the interest you booked or the income you booked on that, it looks to be like a 23 or 24 percent interest rate based on the Q3 balance versus the 18% original. Can you sort of help me out on what I might be missing here? No, Jonathan, your math is correct. The terms of the press included payment or artists being entitled to an additional 6% for one quarter.
First question just on the Iras crafts.
Just just doing some math.
Based on me.
Yes.
Interest you broker the income you booked on that it looks to be like a 23% or 24%.
Interest rate.
The Q3 balance versus the 18% original can you sort of help me at all.
What I might be missing here.
Merrell, Jonathan your math is correct the terms of the crash.
Included the.
Payment or.
Artists being entitled to an additional 6% for one quarter.
Samir A. Manji: There's no assurance that that would be recurring. So we did book one quarter of that additional 6% interest, and that's how you reconcile your math. Okay, so how should I think about that for 2024? We would, we would recommend, and I'll pass over to Jackie to comment further if she has anything to add, but we would recommend maintaining, for conservatism purposes, the 18% coupon as the rate to consider.
There is no assurance that that would be recurring so we did book one quarter of that additional 6% interest and that's how you reconcile your best.
Okay. So how should I think about that for 2024.
We would.
We would recommend and I'll pass over to Jacky to comment further if she has anything to add but we would recommend maintaining for conservatism purposes, the 18% in coupon as the rate to consider.
Samir A. Manji: Okay, so it's not like it's based on a spread or anything to do with the overnight rate? No, that's correct. Okay, and then, just just sticking with that, that those March 1 next year, I guess you can redeem them. Maybe thoughts on that and what happens, or is this income you expect to get, expect to keep getting? Yeah, I think it's too early to look out to next March.
Okay. So it's not like it's based on a spread or anything to do with.
The overnight rate no that's correct.
Okay and then.
Just just sticking with that that does March 1st next year, I guess, you can redeem them.
Maybe thoughts on that and what happens or is this income you expect to get.
We expect to keep got it.
Yes, I think it's too early to look out to next March so likely something for us.
Samir A. Manji: So, likely something for us to comment on as we go further down the road into 2024. But I can say that there are efforts underway within the IRIS structure to look at other refinancing opportunities that would enable for the repayment of some or all of the outstanding prepayment balance. Okay, and any chance that they start, it starts being cash paying instead of accruing, it's starting to get it to be a pretty big balance. Yeah, that's a fair comment, Jonathan.
To comment on as we go further down the road into 2024.
But I can say that there there are efforts underway within the Iris.
Structure to look at other.
Refinancing opportunities that would enable for.
The repayment of some or all of the outstanding balance.
Okay, and any chance that they it starts.
It starts being cash paying instead of accruing, it's starting to get it to be a pretty big balance.
Yeah, that's a that's a fair comment Jonathan and I don't think at this point, we can accurately predict whether that pik.
Samir A. Manji: And I don't think at this point we can accurately predict whether the pick will continue in in in, of Canada. Okay, well, quarter to quarter, so Q1 probably will be payment in kind. Yes, I think it's fair to assume it's payment in kind for Q1. Okay, and then just secondly, on the mortgages that you have coming due this year, what percent are in the US versus Canada? And what sort of spread are you seeing in each country? I'll let Jackie handle that question. Hi, so hi Jonathan.
<unk> will continue in <unk>.
<unk>.
A full or partial component of satisfying the interest obligation and so again something that we're happy to comment on on a quarter to quarter basis.
Yeah.
Okay well.
The quarter saw Q1, probably payment and Cai.
Yes, I think it's fair to assume it's fits.
Fits payment in kind of Q1.
Okay, and then just secondly on the mortgages that you have coming due this year.
What percent of those are in the U S versus Canada.
Sort of spreads are you seeing in in.
In each country.
I'll, let Jackie look after that question.
Hi, Bill Hi, gentlemen.
Maturing mortgages are all U S mortgages this year.
Jaclyn Koenig: The maturing mortgages are all US mortgages this year, and the spreads vary depending on the property, but we're seeing somewhere between like SOFR plus somewhere in the range of one and a half, ish, I should say one and a half to two and a half. Okay, and are any of those non-recourse? No. Okay, so all your mortgages are recourse, then, correct? Yeah, that's, Okay, I'll, I'll, I'll turn it back for now. Thanks. Thanks. Your next question comes from Mario Saric from Scotiabank. Your line is now open. Hi, thank you, and good afternoon.
And the spreads vary depending on the property, but we're seeing.
Somewhere between like Stoper flat.
Somewhere in the range of <unk>.
One an ambition I should say what can happen.
Okay.
Any of those.
Non recourse.
No.
Okay. So all your all your mortgages are recourse then correct.
Yes, that's correct.
Okay.
I'll turn it back for now thanks.
Thanks, Jonathan.
Your next question comes from Mario <unk> from.
Scotiabank.
Your line is now open.
Hi, yes. Thank you and good afternoon, just one quick clarification on Jonathan's question with respect to the recourse versus non recourse nature for the direct mortgages in the portfolio.
Mario Saric: Just one quick clarification on Jonathan's question with respect to the recourse versus non-recourse nature of the direct mortgages in the portfolio. Are you saying that all of the assets have recourse debt in the portfolio or just the ones that have debt maturing in 24? know all of our work. Okay. Okay, that's helpful. Sticking to the balance sheet and mortgage refi, the floating rate debt exposure is still quite high. Strategically, as you're going through the debt refinancing, are you looking to reduce that as much as possible? Or are you kind of taking the position that you feel comfortable keeping it relatively high going into the expected Fed and Bank of Canada rate cuts, presumably later? I would say Mario. It's a combination.
Are you, saying that all of the assets of recourse debt in the portfolio or just the ones that are maturing in 'twenty four.
No all of our work.
Okay.
Got it okay.
That's helpful.
Sticking to the balance sheet and mortgage refi the floating rate debt exposure is still quite high.
Strategically as youre going through the debt refinancing, they're looking to reduce that as much as possible or are you kind of taken the position that we feel comfortable keeping it relatively high going into the expected fed bank of Canada rate cuts, presumably later this year.
I would say Mario it's a combination there is a very.
Samir A. Manji: There is a very clear path in front of us based on, as we've commented, the firm disposition transactions that have been confirmed and communicated in our quarterly press release, and we should see that overall leverage come down over the course of Q1 and Q2 and, hopefully, beyond with other transactions in the pipeline. Having said that, I think you, like most in the financial community, know that there is a reasonable expectation of rate cuts over the course of 2024, and the fact that we will continue to have a component of our debt exploding, we should benefit from that through lower interest costs as those rate cuts take place. Welcome to Prussian, Okay?
Very clear path in front of us based on as we've commented.
The firm disposition transactions that have been confirmed and communicated in our quarterly press release.
Should see that overall leverage come down over the course of Q1, and Q2 and hopefully beyond with other transactions in the pipeline, having said that I think you like most in the financial community know that there is a reasonable expectation of rate cuts.
For the course of 2024 and the <unk>.
We will continue to have a component of our debt is floating rate.
We should benefit from that through lower interest costs as those rate cuts take.
That will come to fruition.
Got it okay.
Samir A. Manji: I may have missed it, but I just wanted to know what the NOI and FFO contribution during the quarter was relative to your expected stabilized quarterly FFO contribution from the end of the year. Thank you for the question. We'll have to look into what the contribution was for the quarter and circle back.
And then.
Last question, just pertains more of a technical one to 300 vein.
I just wanted to I may have missed it but I just wanted to know what the NOI.
<unk> contribution during the quarter was relative to your expected stabilized.
<unk> contribution.
Thank you for the question, we will have to look into what the contribution was for the quarter and circle back with you.
Samir A. Manji: Okay, thank you. Your next question comes from Jimmy Shaw from RBC Capital Markets. Your line is now open.
Okay. Thank you.
Yeah.
Your next question comes from Jimmy Shaw from RBC Capital markets. Your line is now open.
Jimmy Shaw: Thanks. So just to follow up on that 300 Maine, what do you think would be the stabilizing OI then on 300 Maine? Because it seems like it would be a pretty good material.
Thanks, So just to follow up on that to her name.
Do you think would be the stabilized NOI then on 300 main because it seems like it would be a pretty material.
Samir A. Manji: Number and, I guess where's the occupancy, approximately where is it today? Yeah, sure, I can take that one as well. So stabilized NOI, we expect to be around 10 million. And right now, we've only released the bottom half of the tower to the market. So that's around 200 suites.
Number and I guess, where is the occupancy approximately where that's at today.
Yes, I can take that one as well as the stabilized NOI, we expect to be around $10 million.
And right now we've only released the bottom half of the tower to the market. So that's around 200 suites and we're sitting just below 70% occupancy.
Samir A. Manji: And we're sitting just below 70% occupancy, the balance of the suites we expect to release within the coming months and then continue to lease up over the summer. Okay, and so this NOI is sitting in retail, the retail category, correct? Okay, so if I look at quarter Q4 versus Q3, I don't really see that much movement in the retail NOI.
Of the three three X factor really within the coming months.
And then continue to lease up over the summer.
Okay, and so then this NOI sitting in retail the retail category correct.
Yeah, yeah, Okay. So if I look at quarter Q4 versus Q3.
See that much movement in the retail NOI, So I guess, it's safe to assume.
Samir A. Manji: So I guess it's safe to assume, I know you're going to get us the precise number, but it's probably not material in the quarter. Yes, that's safe to assume. Given where we are in terms of releasing the suites to the market and current lease-up, the impact this quarter will not be material, but going forward, it should be significantly more. www.realestate.com. And then on the equity securities, do you still hold both securities, you know, post the sale that happened after the quarter?
I know you and I guess, the precise number, but it's probably not material in the quarter.
Yes, that's safe to assume given where we are in terms of releasing the market currently.
The impact this quarter will be not material, but going forward should be significantly more.
Okay.
And then on the equity Securities.
We still hold both both securities.
Post the sale that happened after the quarter.
Yes, we do.
Samir A. Manji: Yes, we do. Okay. And then I noticed that you also bought, you know, some securities. Would this be a new position? Or would this be an existing position?
Okay, and then I noticed that you also bought.
Some securities would this be a new position that would be an existing position.
This too.
Gary.
It's not in your position.
Samir A. Manji: It's not a new position. Okay. I guess the last question for me would be just on the distribution. You kept it unchanged. The payout ratio is picking up above 100 percent. I just wanted to know, sort of, what's your take on that?
Okay.
Okay.
<unk>.
I guess last question for me would be just on the distribution you kept it unchanged.
Payout ratio is picking up above 100% I just wanted to know.
Any updated thoughts the board in terms of making that decision.
Samir A. Manji: Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. The updated thoughts of the board in terms of making that decision. As we've conveyed in the press release, the board is making the distribution at this point in time. I can tell you that. There is a clear commitment, and one of the medium to longer-term objectives for artists as we right-size our balance sheets and strengthen our liquidity is to begin to reallocate capital so as to grow FFO and AFFO, and through that, hopefully, to see the payout ratio come down. Oh, sorry, one last. On 300 Main. So there's a mortgage on that. I'm just trying to think about the FFO impact for 24 on that property. Yes, that's correct. There is a mortgage on the property.
Thanks, Jamie as we conveyed in the press release the board has maintained the distributions at this point in time.
I can tell you that.
There is a clear.
Our commitment and.
One of the medium to longer term objectives for <unk>.
<unk> as we right sized our balance sheet strengthened our liquidity is to begin to reallocate capital so as to grow <unk> and <unk> and so that ultimately see the payout ratio come down.
Okay.
Oh, sorry.
Mm 300 main.
So there is a mortgage on that I'm, just trying to think about the <unk> impact for 24 on that property.
Yes that is correct there is a mortgage on the property.
Samir A. Manji: There is. And what would be, okay, so that will be the size of that. I believe right now it's sitting around $175 million.
There is and will be.
Okay, so that will be the size of that point.
I believe right now, it's sitting around $175 million.
Samir A. Manji: Okay. But to be clear to me, that mortgage is not limited to 300 Maine, that mortgage from a security perspective, www.artisrealestate.com, Okay. I guess it'd be helpful to know, just for modeling, what the ultimate FFO impact would be once it's stabilized, so we'll know what the NOI is going to be, just trying to think through, again, what the FFO impact would be. Yeah, that's a fair question, Jim. We have our team come back to you Mario and Jonathan with that additional visibility once we just confirm some numbers on our end, if that' Okay, thank you. Ladies and gentlemen, as a reminder, should you have a question, please press the star followed by the number one. There are no further questions at this time. Heather, please proceed to the closing remarks. Thank you, operator. That concludes our Q4 results call. We appreciate you taking the time to join us today and hope that you enjoy the rest of your day. Ladies and gentlemen, this concludes today's conference call. Thank you for joining. You may now disconnect.
Okay.
But to be clear to me that mortgage is not limited to 300 million that mortgage from a security perspective.
Covers multiple.
Opponents of the overall a mixed use project we have on that site.
Okay.
I guess it would be helpful to know just for modeling.
What the ultimate ethical impact would be once it's stabilized. So we know what the NOI is going to be would be.
I'm just trying to think through.
Sure why don't we absolutely yes, yes.
Yes, that's a fair.
A question Jim why don't.
We have.
<unk> come back to you Mario and Jonathan with that additional visibility.
Once we just confirm some numbers on iron if that's okay.
Thank you.
Ladies and gentlemen, as a reminder, should you have a question. Please press star followed by the number one.
There are no further questions at this time Heather. Please proceed with your closing remarks.
Thank you operator that concludes our Q4 results call. We appreciate your taking the time to join US today and hope that you enjoy the rest of your day.
Ladies and gentlemen, this concludes today's conference call. Thank you for joining you may now disconnect.