Q1 2024 Artis Real Estate Investment Trust Earnings Call
Operator: Good afternoon, ladies and gentlemen. My name is Flora, and I'll be your conference operator today. I would like to welcome everyone to Artis Real Estate Investment Trust's first quarter 2020 results conference call. At this time, I would like to turn the conference over to Heather Nikkel, please go ahead.
Yeah, Ladies and gentlemen, my name is Glenn and I'll be your conference operator today.
Speaker Change: I would like to welcome everyone to <unk>.
Speaker Change: First quarter 2024 results conference call.
Speaker Change: At this time I would like to turn the conference over to Heather Nicole. Please go ahead.
Heather Nikkel: Thank you, Operator. Good afternoon, everyone. Welcome and thank you for joining us for Artis Real Estate's first quarter 2024 results conference call. Our results were disseminated yesterday and are available on CDAR Plus 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, Bill Martens.
Thank you operator, good afternoon, everyone welcome and thank you for joining us for artist rates first quarter 2024 results conference call. Our results were disseminated yesterday and are available on SEDAR class and on our website.
Heather Nikkel: With me on today's call is artist as President and CEO, Samir Manji CFO Jacqueline colleague.
Heather Nikkel: Well, Kim Reilly and executive Vice President U S region Bill Martin.
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 these 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
Heather Nikkel: As we discussed our performance today, we wanted to acknowledge the discussion may include forward looking statements and 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: Identify these factors there's a couple of filings with securities regulators and suggest that you already have them.
Heather Nikkel: In addition, we may refer to non-GAAP in supplementary financial measures that are not defined under ifr at 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.
Heather Nikkel: Financial performance calculated in accordance with IRS.
Heather Nikkel: Throughout this discussion, 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, May 31st. You can access it by using the telephone numbers and passcode that were provided in yesterday's press release. Additionally, a recording will be made available on our website. I will now turn the call over to Samir to discuss Artis's first quarter results.
Heather Nikkel: Throughout this discussion all figures will be presented in Canadian dollars unless otherwise.
Before we proceed I would like to note that a replay of this conference call will be available until Friday.
You can access it by using the telephone numbers in fact that was provided in yesterday's press release. Additionally, a recording will be made available on our website.
I'll now turn the call over to Sameer to discuss <unk> first quarter.
Heather Nikkel: Okay.
Samir A. Manji: Thank you, Heather. Hello, everyone, and thank you for joining Artis' first quarter earnings call. We are pleased to report our Q1 2024 results and provide an update on our progress thus far in 2024. While the real estate sector continues to face pressure related to the current interest rate environment. Our board and management team remain squarely focused on levers within our control to achieve our goal of maximizing value for unit owners. With that in mind, we continue to pursue our primary near-term objective, reducing leverage and increasing liquidity to strengthen our balance sheet.
Sameer: Thank you Heather Hello, everyone and thank you for joining <unk> first quarter earnings call.
Sameer: We are pleased to report our Q1 2024 results and provide an update on our progress thus far in 2024.
Sameer: Okay.
Sameer: While the real estate sector continues to face pressure related to the current interest rate environment.
Sameer: Board and management team remains squarely focused on levers within our control to achieve our goal of maximizing value for unit holders.
Sameer: With that in mind, we continue to pursue our primary near term objectives, reducing leverage and increasing liquidity to strengthen our balance sheet.
Samir A. Manji: This objective is key to ensuring artists' position to withstand less favorable market conditions that may continue to impact the real estate sector, including the potential higher-for-longer interest rate environment. We are executing on strategies designed to achieve our internal targets related to liquidity enhancement, including asset dispositions, refinancing existing mortgages, and securing new mortgage financing. So far this year, Artis has unlocked $174.3 million through key asset dispositions.
Sameer: This objective is key to ensuring artist is positioned to withstand less favorable market conditions that may continue to impact the real estate sector, including the potential higher for longer interest rate environment.
Sameer: We are executing on strategies designed to achieve our internal targets related to liquidity enhancement, including asset dispositions refinancing existing mortgages and securing new mortgage financing.
Sameer: So far this year artist has unlocked $174 $3 million to key asset dispositions.
Samir A. Manji: This is demonstrating the healthy demand for quality real estate despite the challenging interest rate environment. In addition, we have $184.4 million of unconditional Canadian asset sales and US $272.9 million of unconditional U.S. asset sales scheduled to close in the coming months. This includes the sale of Park 890, a significant milestone in addition to our list of unconditional asset sales expected to close in the near term. Collectively, we anticipate that these dispositions will reduce our overall leverage below 45% and will lower our overall borrowing costs moving forward. At the same time, the fact that we are achieving sale prices in line with IFRS provides compelling validation of our $14.06 net asset value per unit.
Sameer: <unk> the healthy demand for quality real estate, despite the challenging interest rate environment.
Sameer: In addition, we have $184 $4 million of unconditional Canadian asset sales and U S $272 $9 million of unconditional U S asset sales scheduled to close in the coming months.
Sameer: This includes the sale of park 890, a significant milestone in addition to our list of unconditional asset sales expected to close in the near term.
Sameer: Collectively we anticipate that these dispositions will reduce our overall leverage below 45% and will lower our overall borrowing cost moving forward.
Sameer: At the same time, the fact that we are achieving sale prices in line with Ifr S provides compelling validation of our $14 <unk> net asset value per unit.
Sameer: Okay.
Samir A. Manji: We view the successful progress of our disposition plan as a positive reflection of the quality of our real estate and anticipate that the traction we've been able to achieve with our dispositions will continue through the remainder of 2024. We have ongoing discussions with potential buyers for additional asset 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 higher interest rates, inflation, and market volatility.
Sameer: We view in the successful progress of our disposition plan.
Sameer: Positive reflection of the quality of our real estate and anticipate that the traction we have been able to achieve with our dispositions will continue for the remainder of 2024.
Sameer: We have ongoing discussions with potential buyers for additional asset sales.
Sameer: 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 higher interest rates inflation and market volatility.
Samir A. Manji: During the first quarter, we announced that Artis, together with our joint actors, had increased our ownership position in Dream Office to 16.76% and, subsequent to the end of the quarter, had further increased our ownership position to 18.77%. Our investment in Dream Office represents a capital allocation decision that followed the monetization of real estate assets at fair market value. We then allocated a portion of the sale proceeds to a company that we believe is materially undervalued.
Sameer: During the first quarter, we announced that artists together with our joint doctors and increased our ownership position in dream office to $16, 76% and subsequent to the end of the quarter had further increased our ownership position to 18, 77%.
Sameer: Our investment in Dream office represents a capital allocation decision that followed the monetization of real estate assets at fair market value.
Sameer: We then allocated a portion of the sale proceeds.
Sameer: To accompany that we believe is materially undervalued.
Samir A. Manji: We see value in Dream Office's portfolio and, more specifically, in the downtown Toronto office market, where Dream Office has a high concentration of well-located assets. 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 owner. 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 $211.9 million of mortgage debt maturing in the remainder of 2024.
Sameer: We see value in <unk> portfolio and more specifically in the downtown Toronto Office market. The Dream office has a high concentration of well located assets.
Sameer: 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.
Sameer: 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.
Sameer: We have 211 $211 9 million of.
Sameer: Mortgage debt maturing in the remainder of 2024.
Samir A. Manji: We have renewed 14% of these maturities, have extension options in place for 50% of these maturities, and anticipate no difficulty in managing the remaining 36% of the maturities in the normal course. With a substantial pool of unencumbered assets in our portfolio, looking ahead, securing new mortgage financing and refinancing existing mortgages will remain an important tool available to us. Turning now to our credit facilities, in Q1 2024, we renewed our $100 million non-revolving credit facility for a two-year term, and we are in active discussions with respect to the renewal of our $150 million non-revolving credit facility that expires in July.
Sameer: We have renewed 14% of these maturities.
Sameer: Have extension options in place for 50% of these maturities and anticipate no difficulty in managing the remaining 36% of the maturities in the normal course.
Sameer: With a substantial pool of unencumbered assets in our portfolio looking ahead.
Sameer: <unk>, new mortgage financing and refinancing of existing mortgages will remain an important tool available to us.
Sameer: Turning now to our credit facilities in Q1, 2024, we renewed our $100 million non revolving credit facility for a two year term and we are in active discussions with respect to the renewal of our $150 million non revolving credit facility that expires in July.
Samir A. Manji: Also, in 2024, the first tranche of the revolving credit facility matures, and we are in active discussions regarding this maturity. Our operational fundamentals, key to the resilience of any real estate portfolio, continue to demonstrate stability quarter over quarter. Occupancy rates, including commitments, remained near 91% this quarter. Additionally, lease renewals that commenced in Q1 were negotiated at a weighted average rate increase of 2.2% over expiring rates, continuing a 13-quarter streak of growth in weighted average rental rates. Secured Upon Renewal. Year over year same property NOI growth for the three months ended March 31st was strong at 4%.
Sameer: Also in 2020 for the first tranche of the revolving credit facility matures and we are in active discussions regarding this maturity.
Sameer: Our operational fundamentals key to the resilience of any real estate portfolio continues to demonstrate stability quarter over quarter.
Sameer: Occupancy rates, including commitments remained near 91% this quarter.
Sameer: Additionally lease renewals that commenced in Q1 were negotiated at a weighted average rate increase of two 2% over expiring rates, continuing our 13 quarter streak of growth in weighted average rental rates secured upon renewal.
Sameer: Year over year same property NOI growth for the three months ended March 31 was strong at 4%.
Samir A. Manji: These fundamentals are critical measures of our portfolio's performance and are reflective of the leasing momentum that has been growing in recent quarters, underscoring the foundational strength and potential growth profile of our real estate operations. With respect to our Cominar investment, we continue, alongside our partners, to collaborate and make progress towards our objectives. To date, we have finalized several additional asset sales, with additional transactions in the pipeline. In summary, during the first quarter of 2024, Artis achieved several important internal objectives and generated positive momentum to build on throughout the remainder of the year.
Sameer: These fundamentals are critical measures of our portfolio's performance and are reflective of the leasing momentum that has been growing over recent quarters underscoring the foundational strength and potential growth profile of our real estate operations.
Sameer: With respect to our common in our investments we continue alongside our partners to collaborate and make progress towards our objectives to date, we have finalized several additional asset sales with additional transactions in the pipeline.
In summary during the first quarter of 2024 artists achieved several important internal objectives and generated positive momentum.
Sameer: Build on throughout the remainder of the year.
Samir A. Manji: Going forward, we will continue with our efforts to strengthen the balance sheet and enhance liquidity. And as our balance sheet and liquidity continue to improve, we will look at capital allocation opportunities that we believe will ultimately grow NAV per unit, objectives that we have been focused on since 2021. We are optimistic about the remainder of 2024 and confident that with the continued execution of our plan, we will be able to narrow the gap between the intrinsic value and market price of our unit. I will now turn it back over to the operator to moderate the question and answer session.
Sameer: Going forward, we will continue with our efforts to strengthen the balance sheet and enhance liquidity and as our balance sheet and liquidity continue to improve we will look at capital allocation opportunities that we believe will ultimately grow NAV per unit.
Sameer: Objectives that we have been focused on since 2021.
Sameer: We are optimistic about the remainder of 2024 and confident that with the continued execution of our plan, we will be able to narrow the gap between the intrinsic value and market price of our units.
Speaker Change: I will now turn it back over to the operator to moderate the question and answer session.
Speaker Change: Thank you Sir.
Operator: Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number 1 on your touch-tone phone. You will hear a three-tone prompt acknowledging your request. Should you wish to decline from the polling process, please press star followed by the number 2. If you are using a speakerphone, please lift your hands up before pressing any button. One moment, please for your first question. Our first question comes from the line of Jonathan Kelcher from TD Kallen. Go ahead.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star.
Speaker Change: Followed by the number one on your Touchtone phone.
Speaker Change: Thanks, Tom.
And your request should you wish to decline from the polling process. Please press star followed by the number too.
Speaker Change: If you are using a speaker phone please lift your handset before pressing any one.
Speaker Change: One moment please.
Speaker Change: First question.
Our first question comes from the line of Jonathan <unk> from TD Cowen go ahead. Please.
Jonathan Kelcher: Thanks, good afternoon. First, congratulations on getting Park 8 90 sold. Would you be able to give us a cap rate on that asset?
Thanks, Good afternoon.
Jonathan: First question first congrats on.
Jonathan: Getting <unk>.
Jonathan: 90.
Jonathan: Sold would you would you be able to give us a cap rate on that asset.
Heather Nikkel: Hi Jonathan. We can't actually disclose the cap rate on that asset, but we would direct you back to the MD&A. So for US industrial cap rates, they're around 6%, and what we can say is that we did slightly better than that.
Speaker Change: Hi, Jonathan we can't actually disclose the cap rate on that asset, but we would direct you back to the MD&A, So far U S industrial cap rates around 6% and what we can say is that we did slightly better than that.
Jonathan Kelcher: Okay, fair enough. And I guess, just looking at your asset sales, you've got another, you've got 550 unconditional now, and it looks like another 300 in the held per sale. And that gets you, I guess, below 45%. What's, like, how much? Is too much. How much like how small will you take this your investment portfolio?
Speaker Change: Okay fair enough.
And I guess just looking at your asset sales you got another <unk> got 550 unconditional now it looks like another 300 in the in the held for sale.
Speaker Change: And I get to your I guess below 45% whats like how much.
Speaker Change: There's too much how much like how small will you take this your investment portfolio.
Samir A. Manji: Thanks for the question. Just to be clear, it's not the assets held for sale that will take us under 45. It's just the 550 Canadian dollar equivalent figure that you referenced, Jonathan, that will take us below 45%. And anything above and beyond that will only further improve that objective of ours of lowering our debt to total asset ratio. I think the question related to sort of how low can we go or are we prepared to go, you know, at this point. We're not setting a target.
Speaker Change: Thanks for the question just to be clear, it's not the asset for assets held for sale that will take us. Some 45 years. It's just a 550 approximately Canadian dollar equivalent figure that you referenced Jonathan that'll take us sub 45% and anything above and beyond that will only further.
Speaker Change: Improve that.
Speaker Change: That objective of ours of lowering our debt to total asset ratio.
Speaker Change: I think the.
The question related to sort of how low can we go or are we prepared to go.
Speaker Change: At this point.
We're not we're not setting a target.
Speaker Change: Would suggest that.
Samir A. Manji: I would suggest that you know, subject to the ability to achieve IFRS values on assets that have been earmarked for disposition or, as is the case from time to time, we get unsolicited offers on. We're prepared. We're prepared to, as a board and management team, to push the envelope as much as we can to bring that ratio as low as possible, and, as I conveyed in my remarks, in doing so, to really put artists in a position of financial flexibility so that we can then be more opportunistic in the current environment from a capital allocation standpoint.
Speaker Change: Subject to the ability to achieve.
Speaker Change: <unk> values.
Speaker Change: On assets that have been earmarked for disposition.
Speaker Change: Or that as is the case from time to time, we get unsolicited offers on.
Speaker Change: We're we're prepared we're prepared to as a board and management team.
Speaker Change: To push the envelope as much as we can to bring that ratio as low as possible and as I conveyed in my remarks in doing so to really put artist in.
Speaker Change: Physician.
Speaker Change: Of financial flexibility.
Speaker Change: So that we can then be more opportunistic in the current environment.
Speaker Change: From a capital allocation standpoint.
Jonathan Kelcher: Okay, so does that mean that you might be, like you are, buying dream office units? I guess two things on that one. Is it fair to say that all of the equity dispositions that you did in Q1 would be first capital, and then the acquisitions would all be Dream Office?
Speaker Change: Okay. So does that.
Speaker Change: Can I take that to mean that you might be.
Speaker Change: Thank you <unk>.
Speaker Change: <unk> Dream office units.
Speaker Change: I guess two things on that one is it fair to say that the.
Speaker Change: Basically all of the equity dispositions that you did in Q1 would be first capital and then the acquisitions All Dream office.
Heather Nikkel: That's a fair assumption.
That's a fair assumption.
Jonathan Kelcher: Okay, and would you, if you keep selling here and improve your liquidity position, would you be looking to ramp up your equity securities program, or how do you think about capital allocation going forward?
Okay and would you if you if you keep selling here and improve your liquidity position would you be looking to ramp up your equity Securities program or how do you think about capital allocation going forward.
Samir A. Manji: From a near-term perspective, Jonathan, I don't, I don't anticipate, we don't anticipate that we're going to be ramping up the public securities investments, as opposed to, again, from a near-term perspective, looking at continuing to monetize assets, continue to deliver. If we can take 45% to below 40%, then even better. Again, the whole...
Speaker Change: From a near term perspective, Jonathan I don't.
Speaker Change: I don't anticipate we don't anticipate that.
Speaker Change: Are going to be ramping up.
Speaker Change: The public securities investments.
Speaker Change: As opposed to again from a near term perspective.
Speaker Change: Looking at continuing to monetize assets continue to de lever.
Speaker Change: If we can take 45%.
Speaker Change: To below 40% then even better.
Speaker Change: Again the whole.
Speaker Change: The.
Samir A. Manji: The uncertainty that we continue to experience from a macro perspective with respect to interest rates and this higher for longer scenario. We're, as a board and management team, heavily focused on risk mitigation. And we believe just de-levering is, in and of itself, going to enable us to materially reduce the number of artists at risk. And then again, we can be opportunistic, you know, whether Unknown Attendee, Khing Shan, Matt Kornack, Frederic Blondeau, Heather Nikkel, Kim Riley, You are in a good position to explore any and all possibilities.
The uncertainty that we continue to experience from a macro perspective with respect to interest rates and this higher for longer.
Scenario.
Speaker Change: We're as a board and management team.
Speaker Change: Heavily focused on.
Speaker Change: Risk mitigation.
Speaker Change: And we believe just de levering.
Speaker Change: That is in and of itself going to enable us to materially reduce artist at risk and then again, we can be opportunistic.
Speaker Change: It's.
Speaker Change: 234 quarters from now and whether that opportunistic.
Speaker Change: Or those opportunity opportunities are through direct acquisitions, whether it's public securities whatever theyre different.
Speaker Change: Buckets.
Speaker Change: The opportunities are that are out there, we're going to we're going to be.
Speaker Change: In a good position to explore any and all possibilities.
Jonathan Kelcher: Okay, fair enough. And then just one last one for me, just in the cash flow statement, I noticed a $50 million addition to joint ventures. Can you give us some color on what that relates to?
Speaker Change: Okay Fair enough and then just one last one for me just in the cash flow statement.
Speaker Change: I noticed some $50 million addition to.
Speaker Change: Joint ventures can you.
Speaker Change: Give us some color on what that relates to.
Heather Nikkel: I can take that one, Jonathan. That was one of our Park 890 properties had a mortgage within the joint venture, and it was a contribution to pay out that mortgage prior to acquiring the remaining 100%. That was on Park 895. So it wasn't for CapEx, it was just for the mortgage repayment. Okay.
Speaker Change: Yes, I can take that one Jonathan that was.
One of our part D 90 properties that have mortgage within the joint venture and it was the contribution to payout that mortgage prior to acquiring the remaining 100% perfect 95.
Speaker Change: And for Capex. It was just for the mortgage repayment.
Jonathan Kelcher: Okay, that helps. I'll turn it back on. Thanks.
Speaker Change: Okay that helps I'll turn it back thanks.
Thanks, Jonathan.
Operator: Ladies and gentlemen, just a reminder, should you have a question, please press star followed by the number one on your touchtone phone. We have our next question coming from the line of Jimmy Shan from RBC Capital Markets.
Speaker Change: Ladies and gentlemen, just a reminder, so do you have a question. Please press star followed by the number one on your Touchtone phone.
Speaker Change: We have our next question coming from the line of Jamie Shen from RBC capital markets go ahead. Please.
Jimmy Shan: Yeah, thanks. It also looks that you've had some success with Office, you know, the five Office assets that you sold post-quarter. I was wondering if you could provide, similarly, a rough cap rate on those assets.
Jamie Shen: Yes. Thanks.
Jamie Shen: Is it also looks like <unk> had some success selling office.
Jamie Shen: <unk> office assets that you sold fourth quarter I was wondering if you could provide similarly.
Jamie Shen: A rough cap rate on those assets.
Heather Nikkel: Yeah, I can take that one. I don't have a breakdown in terms of cap rate by asset class, but I can say overall on our disposition program, we're achieving a weighted average cap rate of around 6%. So some are a little bit higher, some are a little bit lower, but they're all kind of in and around that 6% mark. Okay, so to be clear.
Speaker Change: Yes, I can take that one.
Speaker Change: Don't have a breakdown in terms of cap rate on asset class, but I can say overall on our disposition program are achieving a weighted average cap rate of around 6%. So some are a little bit higher some are a little bit lower but they are all kind of in and around that 6% Mark.
Jimmy Shan: Okay, so just to be clear, so that 6% is in reference to total sales so far year-to-date? Yeah, yeah, that's correct. Okay, including Park 890.
Speaker Change: Okay, essentially the claim so thats exercises in reference to.
Speaker Change: And tire sales so far year to date.
Speaker Change: Yes, yes, that's correct.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Including.
Speaker Change: 90.
Speaker Change: Yes, yes.
Speaker Change: Yes, okay.
Speaker Change: Yeah.
Heather Nikkel: Yes. [inaudible] Okay, and then I wondered, maybe Samir, if you could comment more in general about the investment market today and whether you see, if it's changed at all, levels of interest. We've seen bond rates being a little bit more volatile. And so maybe anything you could share would be appreciated.
Speaker Change: Okay, and then I wondered.
Maybe if you could comment more in general about the.
Speaker Change: Investment market today.
Speaker Change: Or whether you see if it's changed at all levels of interest we've seen.
Speaker Change: Rates being a bit more volatile and so maybe anything you could share would be <unk>.
Speaker Change: David.
Jimmy Shan: Sure, thanks Jimmy. I don't think I'm going to.
David: Sure. Thanks, Jimmy.
David: I don't think I'm going to.
Samir A. Manji: I don't want to hear anything that is earth shattering here. We're seeing an interesting dynamic at play between Canada and the US, and having exposure in both markets is, certainly, beneficial to us. To be more specific, it is really interesting with some of the recent office asset sales and then the upcoming firm retail asset sales on the Canadian side. These are largely all private buyers, family offices, that are looking to allocate capital in an environment on the Canadian side where we're not yet seeing any significant institutional buying activity.
Speaker Change: Sharon anything Thats Earth shattering here.
Speaker Change: We're seeing.
Speaker Change: An interesting dynamic.
Speaker Change: At play between Canada, and the U S and having exposure in both markets.
Speaker Change: Certainly in some respects is beneficial to us and to be more specific there, it's really interesting with some of the.
Speaker Change: Recent office asset sales and then the upcoming firm retail asset sales on the Canadian side.
Speaker Change: These are largely all private buyers.
Speaker Change: Family offices.
Speaker Change: That are looking to.
Speaker Change: Allocate capital in an environment on the Canadian side, where.
Speaker Change: We're not seeing yet any significant.
Speaker Change: Institutional.
Speaker Change: Buying activity.
Samir A. Manji: On the U.S. side, and Park 890 will be the reference point here, it was quite interesting and quite beneficial to us in that exercise, where, ultimately, through a multi-round process, we had a very strong universe of institutional buyers, including many all-cash buyers. And that allowed us to achieve an outcome that we feel very good about. And while the price that we reported on that sale is in line with IFRS, that IFRS number for Q1 was marked up.
Speaker Change: On the U S side in park 890 will be the reference points here.
Speaker Change: Is quite.
Speaker Change: It was interesting and quite beneficial to us in that exercise where.
Speaker Change: Ultimately through a multi round process.
Speaker Change: We had.
Speaker Change: A very strong universe.
Speaker Change: Institutional buyers.
Speaker Change: <unk>, many all cash buyers and.
Speaker Change: And that allowed us to achieve an outcome that we feel very good about and while the price that we reported on that sale is in line with the with <unk> that <unk> number for Q1 was marked up.
Samir A. Manji: Relative to the Q4 IFRS value for that asset, and Again, I think it speaks to what we're seeing on the U.S. side, particularly with respect to industrial appetite and a very, very healthy seller's market for good quality, institutional grade industrial assets.
Speaker Change: Relative to the Q4 <unk> value.
Speaker Change: For that asset.
Speaker Change: <unk>.
Speaker Change: Again, I think it speaks to what we're seeing on the U S side, particularly with respect to industrial appetite.
Speaker Change: And a very very healthy.
Speaker Change: Sellers market for good quality.
Speaker Change: Institutional grade industrial assets.
Speaker Change: I hope that's helpful.
Jimmy Shan: I hope that's helpful. Yeah, that is. And then, so just to follow up on the side of the border, you mentioned here, it sounds like it's mostly small private buyers. Are you having to, Provide Vendor Take Back Financing on those sales because presumably if you can sell them in that 6% range, you know, there's not a lot of spread for the for the buyer. Unknown Attendee, Khing Shan, Matt Kornack, Frederic Blondeau, Heather Nikkel, Kim Riley,
Yes that is and then so just to follow up on.
Speaker Change: This side of the border you mentioned here it sounds like it's mostly small private buyers.
Speaker Change: Are you having to.
Speaker Change: Provides <unk> onto the sales.
Speaker Change: Presumably if you can sell them in that 6% range.
Speaker Change: Theres not a lot of spread for the buyer.
Speaker Change: A lot of investing spread.
Speaker Change: What does that look like in terms of structuring the deal.
Samir A. Manji: Generally speaking, when it comes to retail assets, these are all cash transactions. Generally speaking, very little requirement or need to provide vendor financing, and then as it relates to office assets, which we've had some success with. It's been a mixed bag. We've done all cash transactions, i.e. No VTB. And then, in a couple of instances, in order to achieve a higher price and better overall terms for artists, we've agreed to carry some vendor financing. But again, it really is case by case. Directionally, we have obviously a leaning towards cash transactions that require vendor financing, but we're going to look at this on a case-by-case basis.
Speaker Change: Yes, generally speaking when it comes to retail assets. These are these are all cash transactions. There is there is.
Speaker Change: Generally speaking.
Speaker Change: Very little requirement or need to provide vendor financing.
Speaker Change: And then as it relates to office assets that we've had some success with its been a mixed bag, we've done all cash transactions.
E Dolby TB and then in a couple of instances.
Speaker Change: In order to achieve.
Speaker Change: A higher price and.
Speaker Change: Better overall terms for artists.
Speaker Change: We've agreed to carry.
Speaker Change: Some vendor financing, but again it really is case by case.
Speaker Change: Directionally.
Speaker Change: We have obviously a leaning towards cash transactions versus.
Speaker Change: Structured transactions.
Speaker Change: That required vendor financing, but we're going to look at this on a case by case basis.
Jimmy Shan: Okay, and then just a couple of small ones. So, on 300 Maine, was there any NOI contribution in the quarter? And I'm assuming that $10 million that you referenced, the $10 million NOI that you talked about last quarter, that's still the case?
Speaker Change: Okay.
Speaker Change: And then just a couple of small until.
Speaker Change: 300 <unk>.
Speaker Change: Was there any NOI contribution in the quarter.
And then assuming that $10 million that you referenced 10 million of NOI that you talked about last quarter Thats still the case.
Heather Nikkel: Yeah, that's correct. So we've done a little bit of leasing over the last couple months since we had our last call. We're taking up occupancy, and we're starting to work on phase two leasing. Now we've released In the middle of April, we released 50 suites to the market, and we're seeing good leasing momentum on those. So, all moving in the right direction, but still, the first phase of the building is really the part that's occupied. So we'll start to see more contributions to NOI as we get closer to full occupancy and start leasing up that top half of the building.
Speaker Change: Yes, that's correct. So we've done a little bit of leasing over the last couple of months since we had our last call. We are taking up occupancy we're starting to work on phase two leasing now we've released in the Middle of April We released 50 suites to the market.
Speaker Change: Seen good leasing momentum at NOLA.
Speaker Change: All moving in the right direction, but still really.
Speaker Change: The first phase of the building is really the part that's occupied.
Speaker Change: We will start to see more contribution to NOI as we get closer.
Speaker Change: Occupancy at the top half of the building.
Speaker Change: Okay.
Jimmy Shan: And then the last one for me is the retail occupancy jumped, going up to 300 basis points in Q4 to Q1. Can you remind me what that related to?
Speaker Change: And then the last one for me is the retail occupancy jumped.
More than 300 basis points from Q4 to Q1 can you remind me.
Speaker Change: What that related to.
Heather Nikkel: Retail Occupancy Moves Up. Yeah, I moved up too.
Speaker Change: Retail occupancy.
Speaker Change: Yes, yes.
Heather Nikkel: I think it's actually related to the removal of Prairie Ridge; it's moved to underdevelopment. So right now, we're working on redeveloping the former space that was occupied by Sears, and we're splitting it into multi-tenant space. So that was contributing to occupancy. And so that was really why it moved. I see. Okay.
Speaker Change: So I think it's actually related to.
Speaker Change: The removal of Prairie Sandra.
Speaker Change: Under development, So right now we're working on Redeveloped ing.
Speaker Change: The former space that was occupied by Sears or splitting it into a multi tenant space.
Speaker Change: That was contributing to occupancy and so that was really what it does.
Speaker Change: I see okay.
Speaker Change: Thank you.
Speaker Change: Thanks Julie.
Jimmy Shan: Thank you. Again, ladies and gentlemen, just a reminder, should you have a question, please press star followed by the number one on your touchstone phone. There seem to be no further questions at this time. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your line. Have a lovely day.
Speaker Change: Thank you.
Operator: ?? ?? ?? ??
Speaker Change: Ladies and gentlemen, just a reminder, should you have a question. Please press star followed by the number one on your Touchtone phone.
Speaker Change: That seems to be no further questions at this time, ladies and gentlemen. This concludes your conference call for today, we thank you for participating and ask that you. Please disconnect your lines have a lethal.
Okay.
Speaker Change: [music].