Q2 2024 Canadian Apartment Properties Real Estate Investment Trust Earnings Call

Cole: Good morning, and thank you for attending today's Canadian Apartment Properties second quarter 2024 results conference call. My name is Cole, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you'd like to queue for a question, you can do so by pressing * one on your telephone.

Operator: Thank you for attending today's Canadian Apartment Properties second quarter 2024 results conference call.

Good morning. Thank you for attending today's Canadian Apartment Properties second quarter 2024 results conference call.

Nicole Dolan: Quarter 2024 Results Conference Call. My name is Cole, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you'd like to queue for a question, you can do so by pressing star one on your telephone.

Operator: My name is Cole, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you'd like to cue for a question, you can do so by pressing star one on your telephone keypad.

Cole: My name is Cole and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end.

Nicole Dolan: If you'd like to queue for a question, you can do so by pressing star 1 on your telephone keypad. I'd now like to pass it over to Nicole Dolan. Please go ahead.

Nicole Dolan: I now like to pass it over to Nicole Dolan. Please go ahead.

Nicole Dolan: Thank you, operator, and good morning, everyone. Before we begin, let me remind everyone that during our conference call this morning, we may include forward-looking statements about expected future events and the financial and operating results of Capri, which are subject to certain risks and uncertainties. We direct your attention to slide two and our other regulatory filings for important information about these statements.

Nicole Dolan: Thank you, Operator, and good morning, everyone.

Unknown Executive: Good morning. Thank you for attending today's Canadian Apartment Properties Second Quarter 2024 Results Conference call. My name is Cole and I'll be the moderator for today's call.

Speaker Change: Before we begin, let me remind everyone that during our conference call this morning, we may include forward-looking statements about expected future events and the financial and operating results of CAPRI, which are subject to certain risks and uncertainties.

Unknown Executive: All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to queue for a question, you can do so by pressing star one on your telephone keypad.

Nicole Dolan: We direct your attention to slide 2 and our other regulatory filings for important information about these statements. I will now turn the call over to Mark Kenney, President and CEO .

Mark Kenney: I will now turn the call over to Mark Kenney, President and CEO. Thanks, Nicole, and good morning, everyone. Joining me this morning is Stephen Cove, our Chief Financial Officer and joining Sean Felt, our Chief Investment Officer. Let's begin with the operational results for a Canadian apartment portfolio. As shown on slide four, we've continued our historical trajectory of strong performance. Occupancies remained high at 98.2% on June 30th, 2024, across which our average rent was $1,577 from us. This was the primary driver of the 5.4% increase in operating revenues for the three months ended June 30th, 2024, as compared to the prior year period, which you can see on slide five.

Nicole Dolan: I now like to pass it over to Nicole Dolan. Please go ahead.

Unknown Executive: Thanks, Nicole. And good morning, everyone.

Unknown Executive: Thanks, Nicole. And good morning, everyone.

Nicole Dolan: Thank you operator and good morning everyone. Before we begin, let me remind everyone that during our conference call this morning, we may include forward-looking statements about expected future events and the financial and operating results of Capri, which are subject to certain risks and uncertainties. We direct your attention to slide two and our other regulatory filing for important information about these statements.

Mark Kenney: Thanks, Nicole, and good morning, everyone. Joining me this morning is Stephen Co, our Chief Financial Officer, and Julian Schonfeldt, our Chief Investment Officer.

Unknown Executive: Joining me this morning is Stephen Co, our Chief Financial Officer, and Julian Schonfeldt, our Chief Investment Officer. Let's begin with the operational results for a Canadian apartment portfolio. As shown on slide four, we continued our historical trajectory of strong performance, and occupancies remained high at 98.2% on June 30, 2024, across which our average rent was $1,577 per month. This was the primary driver of the 5.4% increase in operating revenues for the three months ended June 30, 2025, as compared to the prior year period, which you can see on slide 5.

Speaker Change: Let's begin with the operational results for a Canadian apartment portfolio.

Unknown Executive: Joining me this morning is Stephen Co, our Chief Financial Officer, and Julian Schonfeldt, our Chief Investment Officer. As shown on slide four, we continued our historical trajectory of strong performance. This was the primary driver of the 5.4% increase in operating revenues for the three months ended June 30, 2025. Combined with solid cost control, our NOI was up by 7.2%, and our margin expanded by 110 basis points to 67% in this second quarter.

Unknown Executive: As shown on slide four, we continued our historical trajectory of strong performance.

Unknown Executive: Occupancies remained high at 98.2% on June 30, 2024, across which our average rent was $1,577 per month.

Mark Kenney: I will now turn the call over to Mark Kenney, president and CEO. Thanks Nicole and good morning everyone.

Mark Kenney: Joining me this morning is Stephen Cove, our chief financial officer and joining Sean Felt, our chief investment officer. Let's begin with the operational results for a Canadian apartment portfolio. As shown on slide four, we've continued our historical trajectory of strong performance. Occupancies remained high at 98.2% on June 30th, 2024, across which our average rent was $1,577 from us. This was the primary driver of the 5.4% increase in operating revenues for the three months ended June 30, 2024, as compared to the prior year period which you can see on slide five.

Unknown Executive: This was the primary driver of the 5.4% increase in operating revenues for the three months ended June 30, 2024.

Unknown Executive: as compared to the prior year period which you can see on slide five

Mark Kenney: Combined with solid cost control, our NOI was up by 7.2%, and our margin expanded by 110 basis points to 67% for this second quarter. As a result of higher NOI, as well as lower trust expenses, partially offset by higher interest costs, we're pleased to report that our diluted FFO for unit was up by 9.2% to 64.4% this past quarter. Results for the six months ended June 30th, 2024, are summarized on slide six. You can again see robust operational performance for the same property portfolio, with Canadian residential occupancy at 98.3% and AMR growth at 6.5%. Our six month margin per same property and total portfolio expanded by 50 and 110 basis points, respectively, while our diluted FFO per unit was up by 8.3%.

Unknown Executive: Combined with solid cost control, our NOI was up by 7.2%, and our margin expanded by 110 basis points to 67% for this second quarter. As a result of higher NOI, as well as lower trust expenses, partially offset by higher interest costs, we're pleased to report that our diluted FFO per unit was up by 9.2 percent to 64.4 cents this past quarter. Results for the six months ended June 30, 2024 are summarized on slide 6.

Unknown Executive: combined with solid cost control or nnoi was up by seven point two percent and our margin expanded by one hundred ten basis points to sixty seven percent for the second quarter

Unknown Executive: As a result of higher NOI, as well as lower trust expenses, partially offset by higher interest costs, we're pleased to report that our diluted FFO per unit was up by 9.2 percent to 64.4 cents this past quarter. You can again see robust operational performance for the same property portfolio, with Canadian residential occupancy at 98.3% and AMR growth at 6.5%. Six-month margin for same property and total portfolio expanded by 50 and 110 basis points, respectively, while our diluted FFO per unit was up by 8.3%. This was driven by higher state property NOI alongside contribution from acquisitions and lower trust expense.

Unknown Executive: As a result of higher NOI as well as lower trust expenses, partially offset by higher interest costs, we're pleased to report that our diluted FFO per unit was up by 9.2% to $0.644 this past quarter.

Mark Kenney: Combined with solid cost control, our NOI was up by 7.2% and our margin expanded by 110 basis points to 67% for this second quarter. As a result of higher NOI, as well as lower trust expenses, partially offset by higher interest costs, we're pleased to report that our diluted FFO for unit was up by 9.2% to 64.4% this past quarter. Results for the six months ended June 30, 2024, are summarized on slide six.

Unknown Executive: results for the six months of june thirty twothousand and twenty-four are sumarized on slide six

Unknown Executive: You can again see robust operational performance for the same property portfolio, with Canadian residential occupancy at 98.3% and AMR growth at 6.5%. Six-month margin for same property and total portfolio expanded by 50 and 110 basis points, respectively, while our diluted FFO per unit was up by 8.3%. This was driven by higher state property NOI alongside contribution from acquisitions and lower trust expense. Net of Non-Routine Reorganization Costs Partially Offset by Disposition and Higher Interest Expense, Let's move on to slide 7.

Unknown Executive: You can again see robust operational performance for the same property portfolio with Canadian residential occupancy at 98.3% and AMR growth at 6.5%.

Unknown Executive: for six -months margin per see for property and total portfolio expanded by fifty and one hundred and ten basis points respectively while our a diluted ffo per unit was up by eight point three percent

Mark Kenney: This was driven by higher same property NOI alongside contribution from acquisitions and lower trust expenses. Net of non-routine reorganization costs, partially offset by disposition and higher interest expense.

Mark Kenney: You can again see robust operational performance for the same property portfolio, with Canadian residential occupancy at 98.3% and AMR growth at 6.5%. Our six month margin per same property and total portfolio expanded by 50 and 110 basis points respectively, while our diluted FFO per unit was up by 8.3%. This was driven by higher same property NOI alongside contribution from acquisitions and lower trust expenses. Net of non-routine reorganization costs, partially offset by disposition and higher interest expense.

Unknown Executive: This was driven by higher state property NOI alongside contribution from acquisitions and lower trust expenses, net of non-routine reorganization costs, partially offset by disposition and higher interest expense.

Mark Kenney: Let's move on to slide seven. I'm very excited about the ground we've covered on our strategy since the first quarter. Julian will shortly elaborate on our Canadian acquisition and disposition activity in detail, but at a very high level, we've completed nearly $500 million in strategic transactions since Q1. This has increased the portion of our property portfolio, represented by recently built properties in Canada, to 13% as of today, which is up from 11% at the prior quarter end. On top of that, in June, we were pleased to have fully disposed of a remaining equity interest in IRIS.

Unknown Executive: I'm very excited about the ground we've covered on our strategy since the first quarter. Julian will shortly elaborate on our Canadian acquisition and disposition activity in detail, but at a very high level, we've completed nearly $500 million in strategic transactions since Q1. This has increased the portion of our property portfolio represented by recently built properties in Canada to 13% as of today, which is up from 11% at the prior quarter end.

Unknown Executive: Let's move on to slide 7.

Speaker Change: I'm very excited about the ground we've covered on our strategy since the first quarter.

Unknown Executive: Julian will shortly elaborate on our Canadian acquisition and disposition activity in detail, but at a very high level, we've completed nearly $500 million in strategic transactions since Q1.

Unknown Executive: this is increased the portion of our property for property portfolio represented by recently built properties in canada to thirteen percent as of today which is up from eleven percent at the prior quarder end

Mark Kenney: Let's move on to slide seven. I'm very excited about the ground we've covered on our strategy since the first quarter. Julian will shortly elaborate on our Canadian acquisition and disposition activity in detail, but at a very high level, we've completed nearly $500 million in strategic transactions since Q1. This has increased the portion of our property portfolio, represented by recently built properties in Canada to 13% as of today, which is up from 11% at the prior quarter end.

Unknown Executive: On top of that, in June , we were pleased to have fully disposed of our remaining equity interest in IRIS, and we also announced the expected sale of our MHC portfolio for $740 million in gross proceeds.

Mark Kenney: And we also announced the expected sale of our MHC portfolio for $700,000 and $40 million in gross proceeds. These non-core dispositions are generating a significant amount of capital that we're using to fuel our high-grading strategy. Further to that, these deals are simplifying Capric business, and we're thrilled to be refocusing resources on our core apartment portfolio, where our competitive advantages are the strongest.

Unknown Executive: These non-core dispositions are generating a significant amount of capital that we're using to fuel our high-grading strategy.

Unknown Executive: On top of that, in June, we were pleased to have fully disposed of our remaining equity interest in IRAC, and we also announced the expected sale of our MHC portfolio for $740 million in gross proceeds. These non-core dispositions are generating a significant amount of capital that we're using to fuel our high-grading strategy. Further to that, these deals are simplifying CapRe's business, and we're thrilled to be refocusing resources on our core apartment portfolio, where our competitive advantage is the strongest. I will now turn things over to Julian to expand on our capital allocation program.

Mark Kenney: On top of that, in June, we were pleased to have fully disposed of a remaining equity interest in IRIS. $40 million in gross proceeds. These non-core dispositions are generating a significant amount of capital that we're using to fuel our high-grading strategy. Further to that, these deals are simplifying capric business, and we're thrilled to be refocusing resources on our core apartment portfolio where our competitive advantage are the strongest.

Unknown Executive: Further to that, these deals are simplifying CapReap business, and we're thrilled to be refocusing resources on our core apartment portfolio, where our competitive advantage are the strongest.

Unknown Executive: Our competitive advantage or the strongest I will now turn things over to Julian to expand on our capital allocation progress.

Julian Schonfeldt: I will now turn things over to Julian to expand on our capital allocation progress. Thanks, Mark. On slide 9, you can see how far we've come over the past couple of years. So far in 2024, we've closed on the acquisition of over 500 million in on-strategy, recently constructed apartment properties in Canada, which is the most we've done in any year to date since we started exclusively targeting new builds. We've also completed nearly $200 million in off-strategy dispositions in Canada, which brings our total Canadian transaction volume in 2024 to almost $700 million. This approximates the total volume we achieved in all of 2023, and we still have significant runway left in the year.

Mark: Thanks Mark.

Julian Schonfeldt: Mark, on slide 9, you can see how far we've come over the past couple of years. So far in 2024, we've closed on the acquisition of over $500 million in on strategy recently constructed apartment properties in Canada, which is the most we've done in any year to date since we started exclusively targeting new builds. We've also completed nearly $200 million in off-strategy dispositions in Canada, which brings our total Canadian transaction volume in 2024 to almost $700 million. This approximates the total volume we achieved in all of 2023. And we still have significant runway left in the year.

Unknown Executive: On slide nine you can see how far we've come over the past couple of years. So far in 2024, we've closed on the acquisition of over $500 million in.

Unknown Executive: On strategy recently constructed apartment properties in Canada, which is the most we've done in any year to date since we started exclusively targeting newbuild.

Unknown Executive: We've also completed nearly $200 million in off-strategy dispositions in Canada, which brings our total Canadian transaction volume in 2024 to almost $700 million. This approximates the total volume we achieved in all of 2023, and we still have significant runway left in the year.

Unknown Executive: We've also completed nearly $200 million and our strategy dispositions in Canada, which brings our total Canadian transaction volume in 2024 to almost $700 million.

Julian Schonfeldt: I will now turn things over to Julian to expand on our capital allocation progress. Thanks, Mark. On slide 9, you can see how far we've come over the past couple of years. So far in 2024, we've closed on the acquisition of over 500 million in on strategy recently constructed apartment properties in Canada, which is the most we've done in any year today since we started exclusively targeting new builds. We've also completed nearly $200 million in off-strategy dispositions in Canada, which brings our total Canadian transaction volume in 2024 to almost $700 million.

Unknown Executive: This approximates the total volume we achieved in all of 2023, and we still have significant runway left in the year.

Julian Schonfeldt: Slide 10 showcases our Canadian apartment transaction activity since the first quarter. You can see that we completed six acquisitions of high-quality premium rental properties for an aggregate of $387 million. These recently constructed buildings are exceptionally well located in growing markets with strong fundamentals across the country, and we purchased them at a weighted average cap rate, which exceeds that of our three non-core dispositions. We're also continuing to sell at prices that are at or above our previously reported IFRS fair values, and importantly, all three off-strategy properties were sold to not-for-profit organizations. We said before that we're eager to transfer more of our older regulated residences into the hands of nonprofits who can retain the affordabilities of these homes in perpetuity.

Unknown Executive: Slide 10 showcases our Canadian apartment transaction activity since the first quarter. You can see that we completed six acquisitions of high-quality premium rental properties for an aggregate of $387 million. These recently constructed buildings are exceptionally well located in growing markets with strong fundamentals across the country, and we purchased them at a weighted average cap rate that exceeds that of our three non-core dispositions. We're equally excited to be improving the quality of our portfolio with these strategic transactions, and we're aiming to maintain this momentum in the quarters ahead.

Julian Schonfeldt: Slide 10 showcases our Canadian apartment transaction activity since the first quarter. You can see that we completed six acquisitions of high-quality premium rental properties for an aggregate of $387 million. These recently constructed buildings are exceptionally well located in growing markets with strong fundamentals across the country, and we purchased them at a weighted average cap rate that exceeds that of our three non-core dispositions. We're also continuing to sell them at prices that are at or above our previously reported IFRS fair values. And importantly, all three off-strategy properties were sold to not-for-profit organizations.

Unknown Executive: Slide 10 showcases our Canadian apartment transaction activity since the first quarter you can see that we completed six acquisitions of high quality premium rental properties for an aggregate of $387 million. These recently constructed buildings are exceptionally well located in growing markets with strong fundamentals across.

Unknown Executive: Ross the country, and we purchased them at a weighted average cap rate, which exceeds that of our three non core dispositions.

Julian Schonfeldt: This approximates the total volume we achieved in all of 2023, and we still have significant runway left in the year. Slide 10 showcases our Canadian apartment transaction activities into the first quarter. You can see that we completed six acquisitions of high-quality premium rental properties for an aggregate of $387 million. These recently constructed buildings are exceptionally well located in growing markets with strong fundamentals across the country, and we purchased them at a weighted average cap rate which exceeds that of our three non-core dispositions.

Unknown Executive: We're also continuing to sell at prices that are at or above our previously reported IRS fair values and importantly, all three are strategy properties were sold to not for profit organizations. We said before that we're eager to transfer more of our older regulated residences into the hands of nonprofits, who can retain the affordability of these homes and purpose.

Julian Schonfeldt: We said before that we're eager to transfer more of our older regulated residences into the hands of non-profits who can retain the affordability of these homes in perpetuity. We're pleased to be executing on that priority and helping with the resolution of the Canadian housing crisis in this way. We're equally excited to be improving the quality of our portfolio with these strategic transactions, and we're aiming to maintain this momentum in the quarters ahead.

Speaker Change: Acuity, we're pleased to be executing on that priority and helping with the resolution of the Canadian housing crisis in this way.

Julian Schonfeldt: We're pleased to be executing on that priority and helping with the resolution of the Canadian housing crisis in this way.

Julian Schonfeldt: We're equally excited to be improving the quality of our portfolio with these strategic transactions, and we're aiming to maintain this momentum in the quarters ahead.

Unknown Executive: We're equally excited to be improving the quality of our portfolio with these strategic transactions and we're aiming to maintain this momentum in the quarters ahead.

Julian Schonfeldt: We're also continuing to sell at prices that are at or above our previously reported IFRS fair values, and importantly, all three off-strategy properties were sold to not-for-profit organizations. We said before that we're eager to transfer more of our older regulated residences into the hands of nonprofits who can retain the affordabilities of these homes and perpetuity. We're pleased to be executing on that priority and helping with the resolution of the Canadian housing crisis in this way. We're equally excited to be improving the quality of our portfolio with these strategic transactions, and we're aiming to maintain this momentum in the quarters ahead.

Julian Schonfeldt: Slide 11 provides an overview of our development model, which was covered previously, but I'll take a minute to highlight our latest application. On the left, you can see that we've submitted an application for an Intel development, proposing two new buildings containing a total of 635 residential suites at 1050 Markham Road in the GTA. This will provide for approximately 429,000 square feet of new residential GFA to be constructed on a vacant site that is adjacent to one of our longest owned properties, which is located within 300 meters of the future Gerome Scarborough bus rapid transit. We're also excited to have had our two Davisville applications approved, and we're looking forward to seeing more of our development pipeline progress through this program.

Unknown Executive: Slide 11 provides an overview of our development model, which we've covered previously, but I'll take a minute to highlight our latest application. On the left, you can see that we've submitted an application for an infill development proposing two new buildings containing a total of 635 residential suites at 1050 Markham Road in the GTA. This will provide for approximately 429,000 square feet of new residential GFA to be constructed on a vacant site that is adjacent to one of our longest-owned properties, which is located within 300 meters of the future Durham-Scarborough Bus Rapid Transit station.

Julian Schonfeldt: Slide 11 provides an overview of our development model, which we've covered previously, but I'll take a minute to highlight our latest application. On the left, you can see that we've submitted an application for an infill development proposing two new buildings containing a total of 635 residential suites at 1050 Markham Road in the GTA. This will provide for approximately 429,000 square feet of new residential GFA to be constructed on a vacant site that is adjacent to one of our longest-owned properties, which is located within 300 meters of the future Durham-Scarborough Bus Rapid Transit station.

Unknown Executive: Slide 11 provides an overview of our development model, which was covered previously but I'll take a minute to highlight our latest application on the left you can see what we have some that we've submitted an application for an infill development proposing two new buildings containing a total of 635 residential suites at $10 50 market.

Unknown Executive: Road in the GTA. This will provide for approximately 429000 square feet of new residential GSA to be constructed on a vacant site that is adjacent to one of our longest owned properties, which is located within 300 meters of the future Jerome scar robust rapid transit station. We're also excited to have had.

Julian Schonfeldt: Slide 11 provides an overview of our development model, which was covered previously, but I'll take a minute to highlight our latest application. On the left, you can see that we've submitted an application for an Intel development proposing two new buildings containing a total of 635 residential suites at 1050 Markham Road in the GTA. This will provide for approximately 429,000 square feet of new residential GFA to be constructed on a vacant site that is adjacent to one of our longest-owned properties, which is located within 300 meters of the future Durham Scarborough bus rapid transit.

Unknown Executive: We're also excited to have had our two Davisville applications approved, and we're looking forward to seeing more of our development pipeline progress through this program. I will now turn things over to Stephen for his financial review. Slide 12

Julian Schonfeldt: We're also excited to have had our two Davisville applications approved, and we're looking forward to seeing more of our development pipeline progress through this program. I will now turn things over to Stephen for his financial review.

Unknown Executive: Our two Dave is fill applications approved and we're looking forward to seeing more of our development pipeline progress through this program I will now turn things over to Steven for his financial review. Thanks.

Stephen Co: I will now turn things over to Steven for his financials. Thank you, Julian, and good morning, everyone. Referring to slide 13, our balance sheet remains strong in the second quarter, with capacity on our Canadian credit facilities increasing to approximately $470 million. We have $285 million in Canadian mortgage principal maturity in the second half of 2024, representing 6.3% of the Canadian mortgage balance, and an overall weighted average term to maturity of 5.2 years, which is one of the longest in our multi-residential period universe. The weighted average interest rate on our Canadian mortgage portfolio remains low at just over 3%, and we continue to conservatively fix all our interest costs to mitigate volatility risk.

Stephen Co: Thanks, Julian, and good morning, everyone. Referring to slide 13, our balance sheet remains strong in the second quarter, with capacity on our Canadian credit facilities increasing to approximately $470 million. We have $285 million in Canadian mortgage principal maturing in the second half of 2024, representing 6.3% of the Canadian mortgage balance and an overall weighted average term to maturity of 5.2 years, which is one of the longest in our multi-residential peer universe.

Stephen: Thanks, Julian and good morning, everyone, referring to slide 13, our balance sheet remains strong in the second quarter with capacity on our Canadian credit facilities, increasing to approximately $470 million.

Unknown Executive: With capacity on our Canadian credit facilities increasing to approximately $470 million, Slide 14 shows our staggered maturity profile and highlights the fact that we have no more than 14% of our total Canadian mortgages coming due in any given year. Proactive management of our debt financing continues to form a key part of our overall capital reallocation program, and this has empowered us to efficiently execute on our strategy. We've also maintained our debt service and interest coverage ratios consistent with the previous quarter, at 1.8 times and 3.3 times, respectively.

Unknown Executive: We have $285 million and Canadian mortgage principal maturing in the second half of 2024, representing six 3% of the Canadian mortgage balance and an overall weighted average term to maturity of five two years, which is one of the longest in our multi residential peer universe.

Julian Schonfeldt: We're also excited to have had our two Davisville applications approved, and we're looking forward to seeing more of our development pipeline progress through this program.

Stephen Co: I will now turn things over to Steven for his financials. Thank you Julian and good morning everyone. Referring to slide 13, our balance she remains strong in the second quarter. With capacity on our Canadian credit facilities increasing to approximately $470 million. We have $285 million in Canadian mortgage principal maturity in the second half of 2024, representing 6.3% of the Canadian mortgage balance and an overall weighted average term to maturity of 5.2 years, which is one of the longest in our multi residential period universe.

Stephen Co: The weighted average interest rate on our Canadian mortgage portfolio remains low at just over 3%, and we continue to conservatively fix all our interest costs to mitigate volatility risks. Slide 14 shows our staggered maturity profile and highlights the fact that we have no more than 14% of our total Canadian mortgages coming due in any given year.

Unknown Executive: Weighted average interest rate on our Canadian mortgage portfolio remains low at just over 3% and we continue to conservatively fix all our our interest cost to mitigate volatility risk.

Stephen Co: Slide 14 shows our staggered maturity profile and highlights the fact that we have no more than 14% of our total Canadian mortgages coming due in any given year. Proactive management of our debt financing continues to form a key part of our overall capital reallocation program, and this has empowered us to effectively execute on our strategy. On slide 15, you can see that our total debt to gross value ratio remains relatively stable at 41.5% on June 30, 2024. We've also maintained our debt service and interest coverage ratios consistent with the previous quarter, at 1.8 times and 3.3 times, respectively.

Unknown Executive: Slide 14 shows our staggered maturity profile and highlights. The fact that we have no more than 14% of our total Canadian mortgages coming due in any given year proactive management of our debt financing continues to form a key part of our overall capital reallocation program and this has empowered us to.

Stephen Co: Proactive management of our debt financing continues to form a key part of our overall capital reallocation program, and this has empowered us to efficiently execute on our strategy. On slide 15, you can see that our total debt-to-gross book value ratio remained relatively stable at 41.5% on June 30, 2024. We've also maintained our debt service and interest coverage ratios consistent with the previous quarter at 1.8 times and 3.3 times, respectively.

Stephen Co: The weighted average interest rate on our Canadian mortgage portfolio remains low at just over 3%. And we continue to conservatively fix all our interest costs to mitigate volatility risk. Slide 14 shows our staggered maturity profile and highlights the fact that we have no more than 14% of our total Canadian mortgage is coming due in any given year. Proactive management of our debt financing continues to form a key part of our overall capital reallocation program and this has empowered us to effectively execute on our strategy.

Unknown Executive: Efficiently execute on our strategy.

Unknown Executive: Yes.

Unknown Executive: On slide 15, you can see that our total growth total debt to gross book value ratio remained relatively stable at 41, 5% on June 32024.

Unknown Executive: We've also maintained our debt service and interest coverage ratios consistent with the previous quarter at one eight times and three three times respectively.

Stephen Co: Finally, I want to take a minute to discuss slide 16, which demonstrates our strategic reallocation of capital, all of certain discretionary value-add improvements, and into increased repairs and maintenance, without impacting revenue growth. For extra clarity, this initiative excludes energy, structural, life and safety, and other critical non-discretionary catbacks. That said, you can see that we've been scaling back on common area and industry expenditures, which are capitalized to the balance sheet. Instead, we're reallocating a portion of that spend into additional R&M work, which negatively impacts our NOI margins. However, overall, we're spending less and therefore growing our cash return.

Stephen Co: Finally, I want to take a minute to discuss slide 16, which demonstrates our strategic reallocation of capital out of certain discretionary value-add improvements and into increased repairs and maintenance without impacting revenue growth. For extra clarity, this initiative excludes energy, structural, life and safety, and other critical non-discretionary CAPEX. That said, you can see that we've been scaling back on common area and in-suite expenditures, which are capitalized on the balance sheet. Instead, we're reallocating a portion of that spend into additional R&M work, which negatively impacts our NOI margins.

Unknown Executive: Finally, I want to take a minute to discuss slide 16, which demonstrates our strategic reallocation of capital all of certain discretionary value add improvements and into increased repairs and maintenance were felt impacting revenue growth for extra clarity. This initiative excludes energy star.

Stephen Co: On slide 15, you can see that our total debt to gross value ratio remains relatively stable at 41.5% on June 30, 2024. We have also maintained our debt service and interest coverage ratios consistent with the previous quarter at 1.8 times and 3.3 times respectively. Finally, I want to take a minute to discuss slide 16, which demonstrates our strategic reallocation of capital, all of certain discretionary value add improvements and into increased repairs and maintenance without impacting revenue growth.

Speaker Change: <unk> license safety and other critical non discretionary capex.

Unknown Executive: That said you can see that we've been scaling back on common area and <unk> expenditures, which are capitalized to the balance sheet. Instead, we're reallocating a portion of that spend into additional R&M work, which negatively impacts our NOI margins. However, overall, we're spending less and therefore growing our cash rich.

Unknown Executive: Instead, we're reallocating a portion of that spend into additional R&M work, which negatively impacts our NOI margin. Some of these are displayed on slide 18. As Julia mentioned earlier, we're proud to say that all three buyers of the regulated properties we sold since Q1 were non-profit organizations who will be able to maintain the affordability of those homes for substantially less than the cost of building new. We encourage all unit holders to visit that website and also our own to learn more about our ESG achievements and plans for the future.

Stephen Co: However, overall, we're spending less and therefore growing our cash return. For the current six-month period, other property operating costs increased by 4% on a total portfolio or 8.5% on the same property basis, with R&M representing the largest component of that.

Stephen Co: For extra clarity, this initiative excludes energy, structural, life and safety and other critical non discretionary catbacks. That said, you can see that we've been scaling back on common area and industry expenditures, which are capitalized to the balance sheet. Instead, we're reallocating a portion of that spend into additional R&M work, which negatively impacts our NNY margins. However, overall we're spending less and therefore growing our cash return. For the current six months period, other property operating costs increased by 4% on our total portfolio or 8.5% on the same property basis, with R&M representing the largest component of that.

Stephen Co: For the current six months period, other property operating costs increased by 4% on our total portfolio, or 8.5% on the same property basis, with R&M representing the largest component of that. During the same period, our common area and industry catbacks decline by 29%, evidencing the net savings achieved by the strategy without negatively impacting our top line growth. We're continuing to actively manage our capital in accordance with our operating environment, in order to enhance cash flows and ultimately returns for our unit orders.

Unknown Executive: For.

Speaker Change: For the current six month period other property operating costs increased by 4% on a total portfolio or eight 5% on a same property basis with R&M, representing the largest component of that during the same period, our common area and in Sweet Capex declined by 29% evidencing the net savings.

Unknown Executive: During the same period, our common area and in-suite CapEx declined by 29 percent, demonstrating the net savings achieved by this strategy without negatively impacting our top-line growth. We're continuing to actively manage our capital in accordance with our operating environment in order to enhance cash flows and, ultimately, returns for our unit holders. With that, I will now turn things back over to Mark to wrap things up. Thanks, Stephen.

Speaker Change: <unk> by the strategy without negatively impacting our topline growth.

Unknown Executive: We're continuing to actively manage our capital in accordance with our operating environment in order to enhance cash flows and ultimately returns for our unit holders with that I will now turn things back over to Mark to wrap up.

Mark Kenney: With that, I will now turn things back over to Mark to wrap up.

Stephen Co: During the same period, our common area and industry catbacks decline by 29%, evidencing the net savings achieved by the strategy without negatively impacting our top line growth. We're continuing to actively manage our capital and accordance with our operating environment in order to enhance cash flows and ultimately returns for our unit orders.

Mark Kenney: Thanks, David. We're proud to release our latest ESG report this past quarter, which highlights our many accomplishments in 2023. Some of these are displayed on Slide 18. For example, the fact that we invested 30.7 million in energy saving, resiliency, and water efficiency projects in Canada in 2021. 33, which represents an increase of nearly 50% from the 2027 million spent in 2022. This will lead to lower utility cost recovery and increased comfort for residents, while also reducing the environmental footprint of our legacy properties. Affordable housing also continues to be a key focus of our ESG strategy, and we've remained committed and active in our endeavor to help with the solution to the housing crisis in Canada.

Unknown Executive: We're proud to have released our latest ESG report this past quarter, which highlights our many accomplishments in 2023. Some of these are displayed on slide 18. For example, the fact that we invested $30.7 million in energy-saving, resiliency, and water efficiency projects in Canada in 2023 represents an increase of nearly 50% from the $20.7 million spent in 2022. This will lead to lower utility costs for Capri and increased comfort for our residents, while also reducing the environmental footprint of our legacy property.

Steven: Thanks Steven.

Speaker Change: We're proud to have released our latest ESG report this past quarter, which highlights our many accomplishments in 2023.

Speaker Change: Some of these are displayed on slide 18 for example, the socket, we invested $37 million in energy saving resiliency and water efficiency projects in Canada in 2023, which represents an increase of nearly 50% from the $20 7 million spent in 2022.

Mark Kenney: With that, I will now turn things back over to Mark to wrap up. Thanks, David. We're proud to release our latest ESG reports this past quarter, which highlights our many accomplishments in 2023. Some of these are displayed on slide 18. For example, the fact that we invested 30.7 million in energy saving, resiliency and water efficiency projects in Canada in 2021. 33, which represents an increase of nearly 50% from the 2027 million spent in 2022.

Capri: This will lead to lower utility costs for Capri and increased comfort for our residents while also reducing the environmental footprint of our legacy properties.

Unknown Executive: Affordable housing also continues to be a key focus of our ESG strategy, and we've remained committed and active in our endeavor to help with the solution to the housing crisis in Canada. As Julia mentioned earlier, we're proud to say that all three buyers of the regulated properties we sold since Q1 were non-profit organizations who will be able to maintain the affordability of those homes for substantially less than the cost of building new.

Speaker Change: Portable housing.

Speaker Change: Also continues to be a key focus of our ESG strategy, and we remain committed and active and our endeavor to help with the solution to the housing crisis in Canada as Julie mentioned earlier, we're proud to say that all three buyers of the regulated properties, we sold since Q1, where nonprofit organization.

Mark Kenney: As Julian mentioned earlier, we're proud to say that all three buyers of the regulated properties we sold since Q1 were nonprofit organizations, who will be able to maintain the affordability of those homes for substantially less than the cost of building new. In addition, work remains ongoing with our peers through the Canadian rental housing providers for affordable housing initiative, and its website for affordable.ca, which outlines all the ways in which we're advocating for changes in government policies and programs to address these important issues. We encourage all unit holders to visit that website and also our own to learn more about our ESG achievements and plans for the future.

Mark Kenney: This will lead to lower utility cost recovery and increased comfort for our residents while also reducing the environmental footprint of our legacy properties. Affordable housing also continues to be a key focus of our ESG strategy and we've remained committed and active in our endeavor to help with the solution to the housing crisis in Canada. As Julian mentioned earlier, we're proud to say that all three buyers of the regulated properties we sold since Q1 were nonprofit organizations who will be able to maintain the affordability of those homes for substantially less than the cost of building new.

Speaker Change: He will be able to maintain the affordability of those homes for substantially less than the cost of building new.

Unknown Executive: In addition, work remains ongoing with our peers through the Canadian Rental Housing Providers for Affordable Housing Initiative and its website, foraffordable.ca, which outlines all the ways in which we're advocating for changes in government policies and programs to address these important issues. We encourage all unit holders to visit that website and also our own to learn more about our ESG achievements and plans for the future.

Speaker Change: In addition work remains ongoing with our peers through the Canadian rental housing providers for affordable housing initiative and its website for affordable dossier, which outlines all the ways in which we're advocating for changes in government policies and programs to address these important issues we <unk>.

Speaker Change: <unk> all unit holders visit that website and also our own to learn more about our ESG achievements and plans for the future.

Mark Kenney: That brings me to Slide 19. Our overarching objective revolves around enhancing earnings, and we're proud of the robust financial results and strategic performance, which we've presented to you this morning. As a testament to that, and thank you to our value unit holders, we're announcing an increase in our annualized rate of distribution to $1.50 per trust unit effective for the August 2024 distribution and payable in September 2024. Moving forward, we remain focused on further optimizing and simplifying our business, especially with the upcoming sale of our MHC portfolio, which is expected to close in the fourth quarter of 2024.

Unknown Executive: Our overarching objective revolves around enhancing earnings, and we're proud of the robust financial results and strategic performance we've presented to you this morning. As a testament to that, and a thank you to our valued unit holders, we're announcing an increase in our annualized rate of distribution to $1.50 per trust unit, effective for the August 2024 distribution and payable in September 2024. Moving forward, we remain focused on further optimizing and simplifying our business, especially with the upcoming sale of our MHC portfolio, which is expected to close in the fourth quarter of 2024.

Mark Kenney: In addition, work remains ongoing with our peers through the Canadian rental housing providers for affordable housing initiative and its website for affordable.ca, which outlines all the ways in which we're advocating for changes in government policies and programs to address these important issues.

Julia: That brings me to slide 19, our overarching objective revolves around enhancing earnings and we're proud of the robust financial results and strategic performance.

Speaker Change: Which we presented to you. This morning is a testament to that and thank you to our valued unitholders. We are announcing an increase in our annualized rate of distribution to $1 50 per trust unit effective for the August 2024 distribution and payable in September 2024.

Mark Kenney: We encourage all unit holders to visit that website and also our own to learn more about our ESG achievements and plans for the future. That brings me to slide 19. Our overarching objective revolves around enhancing earnings and we're proud of the robust financial results and strategic performance which we've presented to you this morning. As a testament to that and thank you to our valued unit holders, we're announcing an increase in our annualized rate of distribution to $1.50 per trust unit effective for the August 2024 distribution and payable in September 2024.

Unknown Executive: Going forward, we remain focused on further optimizing and simplifying our business, especially with the upcoming sale of our MHC portfolio, which is expected to close in the fourth quarter of 2024 on that note. We're excited to continue to drive value and become an even better place to live.

Mark Kenney: On that note, we're excited to continue to drive value and become an even better place to live, work, and invest in the quarters ahead.

Unknown Executive: On that note, we're excited to continue to drive value and become an even better place to live, work, and invest in the quarters ahead. I would like to thank you for your time this morning, and we would now be pleased to take your questions.

Speaker Change: <unk> work and invest in the quarters ahead I would like to thank you for your time. This morning, and wed now be pleased to take your questions.

Operator: I would like to thank you for your time this morning, and we would now be pleased to take your question. If you'd like to queue for a question, you can do so by pressing star 1 to your telephone keypad, and if for any reason you'd like to remove your question, you can press star 2. Again, to join the question, please press *1.

Mark Kenney: Moving forward, we remain focused on further optimizing and simplifying our business, especially with the upcoming sale of our MHC portfolio, which is expected to close in the fourth quarter of 2024. On that note, we're excited to continue to drive value and become an even better place to live, work and invest in the quarters ahead.

Cole: If you'd like to queue for a question, you can do so by pressing star 1 on your telephone keypad. And if for any reason you'd like to remove your question, you can press star 2. Again, to join the question queue, please press star one. Our first question is from Fred Blondeau on Green Street. Your line is now open.

Speaker Change: If you'd like to queue for a question you can do so by pressing star one on your telephone keypad and if for any reason you'd like to remove your question you can press star two.

Speaker Change: Again to join the question queue. Please press Star one our first question is from Fred <unk> with Green Street. Your line is now open.

Fred Blondeau: Our first question is from Fred Blando with Green Street. Your line is now open.

Mark Kenney: Thank you, and good morning. Just three quick questions for me. Just on those 500 million acquisitions, I was wondering if you could provide a bit more color on the average LTV on these. And what kind of LTV should we be expecting on acquisition, expected to close in the second half of 2024?

Unknown Executive: Thank you and good morning. I have three quick questions for you. Just on those 500 million acquisitions, I was wondering if you could provide a bit more color on the average LTV on these, and what kind of LTV should we be expecting on acquisitions expected to close in the second half of 2024?

Fred Blondeau: Thank you and good morning. Just on those 500 million acquisitions, I was wondering if you could provide a bit more color on the average LTV on these, and what kind of LTV should we be expecting on acquisitions expected to close in the second half of 2024?

Speaker Change: Thank you.

Julia: Good morning.

Unknown Executive: I would like to thank you for your time this morning and we would now be pleased to take your question. If you'd like to queue for a question, you can do so by pressing star one to your telephone keypad and if for any reason you'd like to remove your question, you can press star two. Again to join the question, please press star one.

Unknown Executive: Three quick questions from me.

Unknown Executive: And just on those.

Unknown Executive: Those $500 million acquisitions I was wondering if you could provide a bit more color on the.

Unknown Executive: The average LTV on these and what kind of.

Unknown Executive: Ltvs should we be expecting on the acquisition expected to close in the.

Speaker Change: The second half of <unk>.

Unknown Executive: 24.

Unknown Executive: Hey Fred, thanks for the question. Look, it really depends on the property. You'll see some of them in the disclosure, but the ones that close, I think if you looked in our press release, you'll actually see the mortgages that came on them, but you know, Grafton Park had nothing, Axiar had nothing, The View had a pretty, pretty favorable one that we took in that it was in the 80s percent LTV.

Fred Blondeau: Our first question is from Fred Blando with Green Street. Your line is now open. Thank you and good morning. Just three quick questions for me. Just on the those 500 million acquisitions, I was wondering if you could provide a bit more color on the the average LTV on these and what kind of LTV should we be expecting on acquisition expected to close in the in the second half of 2024. Hey Fred, thanks for the question.

Mark Kenney: Hey Fred, thanks for the question. Look, it really depends on the property. You'll see some of them in the disclosure. But the ones that close, I think if you look in our press release, you'll actually see the mortgages that came on them. But, you know, Graffin Park had nothing; Axir has nothing. The view had a pretty favorable one that we took in that it was in the, I think, in the 80s percent LTV. But overall, we intend to manage the leverage more globally. And, you know, if an acquisition has over levered or under levered, we can take it in the portfolio and manage it after that.

Unknown Executive: Hey, Brad Thanks for the question.

Speaker Change: Look it really depends on the property youll see some of them in the disclosure but.

Speaker Change: The ones that closed I think if you look in our press release, you'll actually see the mortgages that came on them but.

Speaker Change: Grafton Park had nothing ask here has nothing.

Speaker Change: Have you had a pretty a pretty favorable one that we took in that it was in the I think in the eighties percent LTV, but overall, we attempt to manage the leverage mark globally.

Unknown Executive: But overall, we attempt to manage the leverage more globally. And, you know, if an acquisition is over-leveraged or under-leveraged, we can take it in the portfolio and manage it after that. But generally, when there are favorable mortgage terms, whether it's high LTV or low LTV, we'll take them on.

Speaker Change: If an acquisition has over levered or under Levered, we can take it in the portfolio and manage it after that but generally when there is favorable mortgage terms of whether it's high LTV or low LTV, we will take them on.

Fred Blondeau: Look, it really depends on the property. You'll see some of them in the disclosure, but the ones that close, I think if you look in our press release, you'll actually see the mortgage that came on them, but, you know, graph in park had nothing, Axir has nothing. The view had a pretty favorable one that we took in that it was in the I think in the 80s percent LTV, but overall we intend to manage the leverage more globally.

Mark Kenney: But generally, when there's favorable mortgage terms, whether it's high LTV or low LTV, we'll take them on.

Unknown Executive: How do you feel about the NCIB at this stage versus acquisitions?

Mark Kenney: No, fair enough. And how do you feel about the NCIB at this stage versus acquisitions? Well, I think the stock is still incredibly good value. We are, as I think we've said before, playing and balancing active how to use our liquidity or inbound liquidity with this position.

Speaker Change: No fair enough.

Speaker Change: How do you feel about the NCI b at this stage versus acquisitions.

Unknown Executive: I think the stock is still incredibly good value. We are, as I think we've said before, playing a balancing act of how to use our liquidity, our inbound liquidity with dispositions, and, you know, management will take a very thoughtful view of opportunities in the marketplace that we think a window may be closing in the next 12, 18 months. We're not exactly sure, obviously, but we love the real estate that we bought. We're incredibly excited about this real estate we bought, actually.

Speaker Change: Well I think the stock is still incredibly good value.

Unknown Executive: <unk>.

Speaker Change: So I think we've said before putting in balancing active.

Fred Blondeau: And, you know, if an acquisition has over levered or under levered, we can take it in the portfolio and manage it after that, but generally when there's favorable mortgage terms, whether it's high LTV or low LTV will take them on.

Speaker Change: How to use our liquidity or inbound liquidity with dispositions and management will take a very thoughtful view to opportunities in the marketplace that we think.

Mark Kenney: And we think a window may be closing in the next 12-18 months. We're not exactly sure, obviously. But we love the real estate that we've bought. We're incredibly excited about this real estate we bought, actually. The revolver remains a wonderful place to get a creative dollar to work. And just a kind of circle back, overall leverage as well. We don't mind storing some of the value in the assets that we've bought. It's really a cheaper revolver in our mind for the future.

Speaker Change: Window may be closing in the next 12 to 18 months, we're not exactly sure obviously, but we love the real estate that we bought were incredibly excited about this real estate, we bought actually.

Mark Kenney: No, fair enough. And how do you feel about the NCIB at this stage versus acquisitions? Well, I think the stock is still incredibly good value. We are, as I think we've said before, playing in balancing active, how to use our liquidity or inbound liquidity with this position. And management will take a very thoughtful view to opportunities in the marketplace that we think window may be closing in the next 12-18 months. We're not exactly sure, obviously, but we love the real estate that we thought were incredibly excited about this real estate we bought, actually.

Unknown Executive: The Revolver remains a wonderful place to get a bunch of dollars to work. And just to kind of circle back, overall leverage as well, we don't mind storing some of the value in the assets that we bought. It's really a cheaper revolver in our minds for the future. So we are in no rush to put additional leverage on those assets, Fred, because it'll be capped CMHEC insured money in the quarters ahead.

Speaker Change: The revolver remains a wonderful place.

Speaker Change: Get accretive dollars to work.

Speaker Change: And just to kind of circle back.

Unknown Executive: Overall overall leverage as.

Speaker Change: Well, we don't mind storing some of the value in the assets that we bought it's really a cheaper revolver in our mind for the future. So we are in no rush to put additional leverage on those asset spread because it'll be Scott <unk> C insured.

Mark Kenney: So we are in no rush to put additional leverage on those assets, Fred, because it'll be CAP, CMHC-insured money in the quarters ahead.

Speaker Change: Money in the quarters ahead.

Mark Kenney: The revolver remains a wonderful place to get a creative dollars to work. And just a kind of circle back overall leverage as well. We don't mind storing some of the value in the assets that we bought. It's really a cheaper revolver in our mind for the future. So we are in no rush to put additional leverage on those assets, Fred, because it'll be caught, C-M-H-C, insured money in the quarters ahead.

Unknown Executive: Okay.

Mark Kenney: Perfect. And then last one for me, in terms of the new supply of rental units, especially in Ontario, was wondering if you were starting to see an impact or some pressures on the portfolio, or it remains, I guess, a bit manageable given the strength of the demand.

Unknown Executive: And then last one for me, in terms of the new supply of rental units, especially in Ontario, I was wondering if you're starting to see an impact or some pressures on the portfolio, or it remains, I guess, a bit manageable, given, you know, the strength of the demand.

Speaker Change: Perfect and then last one for me in terms of the new supply of rental units, especially in Ontario was wondering if you're starting to see an impact with some pressures on.

Speaker Change: On the portfolio or it remains I guess a bit manageable given the strength of the demand.

Mark Kenney: Well, I think 2025 is set stage for record condo deliveries in the GTA. So that is a big monetary effect. I think that we've also seen the effects of inflation creep into the wallets of young Canadians. Rents are peaking out. We're seeing evidence at the top end of the market that things are flattening. And so, just with inflation, I think in general, there's less money for people to spend, and that's finding itself in rent payments now. So we are seeing a flattening at the top end. And by top end, I mean, we're plus by dollar end; I think it's going to be very challenged.

Unknown Executive: Well, I think 2025 is setting the stage for record condo deliveries in the GTA, so that is a big Ontario effect. I think that we've also seen the effects of inflation creep into the wallets of young Canadians. Rents are peaking out, and we're seeing evidence at the top end of the market that things are flattening. So just with inflation, I think, in general, there's less money for people to spend, and that's showing up in rent payments now.

Unknown Executive: Well, I think 2025 is setting the stage for record condo deliveries in the GTA, so that is a big Ontario effect. I think that we've also seen the effects of inflation creep into the wallets of young Canadians. Rents are peaking out. We're seeing evidence at the top end of the market that things are flattening, but...

Speaker Change: Well I think.

Speaker Change: 2025 is set.

Unknown Executive: Set the stage for a record condo deliveries in the GTA. So that is a big material effect.

Mark Kenney: Perfect. And then last one for me, in terms of the new supply of rental units, especially in Ontario, was wondering if you were starting to see an impact or some pressures on the portfolio or it remains, I guess, a bit manageable. Given, you know, the strength of the demand. Well, I think 2025 is set stage for record condo deliveries in the GTA. So that is a big, Ontario effect. I think that we've also seen the effects of inflation creep into the wallets of young Canadians.

Unknown Executive: We've also seen.

Unknown Executive: The effects of inflation creep into the.

Unknown Executive: Wallets of young Canadians.

Unknown Executive: Rents are peaking out we're seeing evidence that the top end of the market that things are flattening.

Unknown Executive: And.

Unknown Executive: So they're just with inflation I think in general there is less money for people to spend and that's finding itself in rent payments now. So we are seeing a flattening at the top end and by top end I mean were plus five dollar and us.

Unknown Executive: So we are seeing a flattening at the top end, and by top end, I mean we're plus $5 end is, I think, going to be very challenged. Um, but... You know, delivery in 2026 fall to a record trough low. So the market's in for some interesting adjustments here over the next 24 months because you've got, you know, one year of a record high followed by another year of a record low, and the years that follow appear to be even worse in terms of delivery. So, there's a moment in time here, and then the supply problem gets dramatically worse. So that story is kind of revealing itself across the country, Fred, and probably more so in the GTA.

Unknown Executive: It's going to be very challenged.

Mark Kenney: But the deliveries in 2026 fall to a record trough low. So the market is in for some interesting adjustments here over the next 24 months, because you've got one year of a record high and followed by another year of a record low, and the years that follow appear to be even worse in terms of deliveries. So there's a moment in time here, and then the supply problem just dramatically worse. So that story is kind of revealing itself across the country, Brett, and probably more so in the GTA. But the outlook is incredibly robust.

Unknown Executive: But.

Unknown Executive: The deliveries in 2026 fall to a record trough low so the market for some interesting adjustments here over the next 24 months because you've got.

Mark Kenney: Rents are peaking out. We're seeing evidence at the top end of the market that things are flattening. And so they're just with inflation, I think, in general. There's less money for people to spend, and that's finding itself in rent payments now. So we see, we are seeing a flattening at the top end. And by top end, I mean, we're plus five dollar end is, I think, going to be very challenged. But, you know, the deliveries in 2026 fall to a record trough low.

Unknown Executive: One year of a record high and followed by another year of record low in the years that follow appear to be even worse in terms of deliveries. So.

Speaker Change: There is a moment in time here and then.

Unknown Executive: The supply problem getting dramatically worse.

Unknown Executive: So that story is kind of revealing itself across the country and probably more so in the GTA, but.

Mark Kenney: So the market is in for some interesting adjustments here over the next 24 months, because you've got, you know, one year of a record high and followed by another year of a record low. And the years that follow up here to be even worse in terms of delivery. So there's a moment in time here. And then the supply problem gets dramatically worse. So that story is kind of revealing itself across the country, Fred, and probably more so in the GTA, but the outlook is incredibly robust. But, you know, the next 12 months will be interesting. I think the cap report fully is exceptionally well protected from that, because we're not playing at that end of the market.

Unknown Executive: The outlook is incredibly robust, but you know the next 12 months will be interesting. I think the Capri portfolio is exceptionally well protected from that because we're not playing at that end of the market. In fact, we could become an affordable option in the GTA, but those would be my comments, completely speculative, of course.

Speaker Change: The outlook is incredibly robust, but you know the next 12 months will be interesting I think the Calgary portfolio is exceptionally well protected from that because we're not playing at that end of the market in fact, we could become the affordable.

Mark Kenney: But the next 12 months will be interesting. I think the cap report quality is exceptionally well protected from that, because we're not playing at that end of the market. In fact, it could become an affordable option in the GTA.

Unknown Executive: Option in the GTA, but.

Mark Kenney: But those would be my comments, completely speculative, of course.

Speaker Change: Those would be my comments completely speculative of course.

Unknown Executive: Mhm.

Jonathan Kelcher: That's great, Colorado. Thank you so much. Our next question is from Jonathan Kelcher with TD Cowan. Your line is now open.

Fred Blondeau: That's great color. Thank you so much.

Speaker Change: That's great color. Thank you so much.

Jonathan Kelcher: Our next question is from Jonathan Kelcher with TD Cowan.

Jonathan Culture: Our next question is from Jonathan culture with TD Cowen. Your line is now open.

Jonathan Kelcher: Your line is now open. Thanks, just keeping with the affordability scene here, Mark. Like how would the rent income ratio for new leases get for between some of the new build properties you guys have been buying this year versus some of your older dogs for property. Well, I love that question.

Unknown Executive: Thanks. Just keeping with the affordability theme here, Mark, like how would you?

Unknown Executive: Thanks.

Unknown Executive: Just keeping with the affordability.

Mark Kenney: In fact, it could become a affordable option in the GTA, but those would be my comments completely speculative, of course.

Mark: Being here Mark.

Unknown Executive: Wood.

Mark: The rent to income ratio.

Mark: For new leases differ between some of the.

Mark: The Newbuild properties you guys have been buying this year versus some of your older non core properties.

Unknown Executive: That's great color.

Unknown Executive: Thank you so much.

Unknown Executive: Well, I love that question. Jonathan, thank you very much. The upside-down world of Canadian rental is that our most affordable buildings are new construction assets because the incomes for the folks that are attracted to those assets are exceptionally high, and therefore, the rent to income ratios are exceptionally low. On the other side of the spectrum, in some of the buildings that we sold to nonprofits, we were seeing the complete opposite, where the rents are the current lowest, we're seeing incomes, obviously, that are attracting folks that are the lowest, and therefore, Not necessarily, but what we're actually seeing in the math is that the income to rent ratios are incredibly high.

Mark: Well I love that question, Jonathan Thank you very much.

Jonathan Kelcher: Our next question is from Jonathan Kelcher with TD Cowan. Your line is now open. Thanks, just keeping with the affordability scene here Mark. Like how would the rent income ratio for new lease is different between some of the illegal properties you guys have been buying this year versus some of your older dogs for profit? Well, I love that question. Jonathan, thank you very much. The upside down world of Canadian rental is that our most affordable buildings are our new construction assets because the incomes for the folks that are attracted to those assets are exceptionally high.

Mark Kenney: Jonathan, thank you very much. The upside down world of Canadian rental is that our most affordable buildings are new construction assets because the incomes for the folks that are attracted to those assets are exceptionally high. And therefore, the rent income ratios are exceptionally low. On the other side of the spectrum, in some of the buildings that we had sold to nonprofits, we were seeing the complete opposite, where the rents are the current lowest. We're seeing incomes, obviously, that are attracting folks that are the lowest. And therefore, not there for, but what we're actually seeing in the math is that the income to rent ratios are incredibly high.

Unknown Executive: <unk>.

Unknown Executive: The.

Mark: Upside down on World of Canadian rental is that our most affordable buildings are new construction assets because the incomes for the folks that are attracted to those assets are exceptionally high.

Mark: And therefore, the rent to income ratios are exceptionally low.

Speaker Change: On the other side of the spectrum in some of the buildings that we had sold to nonprofits. We were seeing the complete opposite where the rents are the current lowest we're seeing income obviously that are tracking folks that are the lowest and therefore.

Mark: Therefore, but what we're actually seeing in the math is that the income to rent ratios are incredibly high.

Mark Kenney: So the most affordable assets are tending to be our new construction assets, and our least affordable buildings are the rent rental buildings that we are selling to nonprofits, as an example. There are other examples of that too. But this again is the upside down world of Canada and a lack of understanding of we have an income distress problem in Canada more than we have a rent problem in Canada. And this is something that, that cap rate in our industry peers are working very hard to get the understanding across the policymakers.

Unknown Executive: So the most affordable assets are tending to be our new construction assets, and our least affordable buildings are the rental buildings that we are selling to non-profits, as an example. There are other examples of that too, but this, again, is the upside-down world of Canada and a lack of understanding of... We have an income distress problem in Canada more than we have a rent problem in Canada, and this is something that Capri and our industry peers are working very hard to get the word across to policymakers.

Speaker Change: So the most affordable assets are tending to be our new construction assets and are least affordable buildings are the rents rental buildings that we are selling to nonprofit as an example, there are other examples of that too but this again is the upside down world of Canada, and a lack of understanding of we haven't.

Jonathan Kelcher: And therefore the rent income ratios are exceptionally low. On the other side of this spectrum, in some of the buildings that we had sold to nonprofits, we were seeing the complete opposite where the rents are the current lowest. We're seeing incomes, obviously, that are tracking folks that are the lowest. And therefore, not therefore, but what we're actually seeing in the math is that the income to rent ratios are incredibly high. So the most affordable assets are pending to be our new construction assets. And our least affordable buildings are the rent rental buildings that we are selling to nonprofits as an example. There are other examples of that too.

Mark: Income distress problem in Canada more than we have a rent problem in Canada.

Speaker Change: And this is something that.

Mark: Cap rate than our industry peers are working very hard to get the understanding across the policymakers.

Mark Kenney: Okay, I guess in the keeping on that would be fair to say that you guys are getting better lips on your on your new build properties versus the older stuff or how should we think about that? Well, I think, I think a cautionary note, like every building is different depends on the competency of the developer depends on the stage of lease up that we're getting it out. A lot of things, but what we are seeing clear evidence of is our ability in these unregulated assets to bring the entire rent will to market, unlike some of our other apartment peers.

Unknown Executive: Okay, I guess in keeping on that, would it be fair to say that you guys are getting better bang for your buck on your new build properties versus the older stuff, or how should we think about that? Well, I think I should think cautionary note like every bill.

Mark: Okay I guess in the.

Speaker Change: Keeping on that what would it be fair to say that you guys are getting better lifts on your on your newbuild properties versus the older stuff or how should we think about that.

Mark Kenney: But this again is the upside down world of Canada and a lack of understanding of we have an income distress problem in Canada more than we have a rent problem in Canada. And this is something that Calprey and our industry peers are working very hard to get the understanding across the policymakers. Okay, I guess in the keeping on that would would it be fair to say that you guys are getting better lips on your on your new build properties versus the older stuff or how should we think about that?

Unknown Executive: The older stuff, or what should we think about that?

Unknown Executive: Well, I think a cautionary note: every building is different, depends on the competency of the developer, depends on the stage of lease-up that we're getting it at, a lot of things. But what we are seeing clear evidence of is our ability in these unregulated assets to bring the entire rent rule to market, not unlike some of our other apartment peers, with the benefits of new construction and geographical diversification. Really, what we're doing here is diving into unregulated investment versus regulated investment that we're seeing constraints on, in places like Ontario, for example, with the 2.5% guideline.

Mark: Well I think I think a cautionary note like every building is different depends on the competency of the developer it depends on the stage of lease up that we're getting it at.

Mark: A lot of things, but what we are seeing clear evidence of is our ability in these unregulated assets to bring the entire rent roll to market not unlike some of our other apartment peers.

Mark Kenney: With the benefits of new construction and geographical diversification, really what we're doing here is diving into unregulated investment versus the regulated investment that we're seeing constraints in places like Ontario, for example, with the two and a half percent guideline. So yeah, we're seeing that, but the, you know, the lease renewal spreads in some of the other provinces on the legacy assets are excellent. So it's just blending out the risk. That's all we're really doing here, and delving into unregulated markets in a more serious past pace than the company's ever known.

Mark: With the benefits of new construction of geographical diversification.

Speaker Change: Really what we're doing here is diving into unregulated investment versus the regulated investment that we're seeing constraints.

Mark Kenney: Well, I think I think a cautionary note, like every building is different, depends on the competency of the developer, depends on the stage of lease up that we're getting it at. A lot of things, but what we are seeing clear evidence of is our ability in these unregulated assets to bring the entire rent will to market, unlike some of our other apartment peers. With the benefits of new construction and geographical diversification, really what we're doing here is diving into unregulated investment versus the regulated investment that we're seeing constraints in places like Ontario, for example, with the two and a half percent guideline.

Mark: In places like Ontario for example, with the two 5% guideline.

Unknown Executive: So, yeah, we're seeing that, but the lease renewal spreads in some of the other provinces on the legacy assets are excellent. It's just blending out the risk. That's all we're really doing here and delving into unregulated markets at a more serious, fast pace than the company has ever done before.

Unknown Executive: So, yeah, we're seeing that, but the lease renewal spreads in some of the other provinces on the legacy assets are excellent.

Mark: So, yes, we're seeing that but the.

Speaker Change: The lease renewal spreads in some of the other provinces on the legacy assets are excellent. So.

Speaker Change: It's just blending out the risk that's all we're really doing here and delving into Unrig unregulated markets.

Speaker Change: More serious fast pace.

Speaker Change: The company has ever done it before.

Speaker Change: Okay. Thanks, that's helpful I'll turn it back.

Mark Kenney: So yeah, we're seeing that, but the, you know, the lease renewal spreads in some of the other provinces on the legacy assets are excellent. So it's just blending out the risk. That's all we're really doing here and delving into unregulated markets in a more serious past pace than the company's ever known.

Mario Saric: We have a question from Mario Saric with Scotia Bank. Your line is now open.

Mario Saric: We have a question from Mario Saric with Scotiabank. Your line is now open.

Speaker Change: We have a question from Mario starch with Scotiabank. Your line is now open.

Unknown Executive: Hi, good morning, everyone. And thanks for taking the call or the questions.

Unknown Executive: Hi, good morning, everyone. And thanks for taking the call or the questions. Mark, just maybe maybe sticking to the last point on lease renewal spreads. They're up almost 100 basis points this quarter, so they averaged 4% versus

Mario Saric: Good morning everyone, thanks for taking the call or the questions. Mark just maybe sticking to the last point on lease renewal spreads. There were up almost 100 bases point with quarter, so averaged 4% versus 3% last quarter. Is that sustainable? Or are there some kind of one-off phenomenal items in there? Or is that simply just a reflection of the portfolio transition to new construct over time?

Unknown Executive: Hi.

Mark: Good morning, everyone and thanks for taking the call or the questions.

Unknown Executive: Mark, just maybe maybe sticking to the last point on lease renewal spreads. They're up almost 100 basis points this quarter, so averaged 4% versus 3% last quarter. Is that sustainable? Or are there some kind of one-off anomalous items in there? Or is that simply just a reflection of the portfolio transition to the new construct over time?

Mark: Mark just maybe maybe sticking to the last point on lease renewal spreads they were up almost 100 basis points. This quarter, so averaged 4% versus.

Speaker Change: 3% last quarter.

Speaker Change: Is that sustainable or are there some kind of one off of almost items in there or is that simply just a reflection of the portfolio transition to the new construct over time.

Mario Saric: We have a question from Mario Saric with Scotia Bank. Your line is now open. Hi, good morning, everyone. Thanks for taking the call or the questions. Mark, just maybe sticking to the last point on Lee's renewal spread, there were up almost 100 basis points with quarter, so average 4% versus 3% last quarter. Is that sustainable, or are there some kind of one off phenomenal items in there, or is that simply just a reflection of the portfolio transition to new construct over time? It's a bit of both.

Unknown Executive: It's a bit of both. Why don't I let Stephen get some regional color on what we're seeing because it really is in the details of where it's happening. Yeah, so Mario, a lot of our renewals that were stuck at the 2.5% really occurred in Q1, that's mainly Ontario. Q2, you can see really came across the board. We're in Quebec.

Stephen Co: It's a bit of both. Why don't I let Stephen get some regional color on what we're seeing, because it really is in the details of where it's happening? Yeah, so Mario, a lot of our renewals that were stuck at the 2.5% really occurred in Q1. That's mainly Ontario. Q2, you can see really it came across a board where in Quebec we had, you know, significant renewal increases; Nova Scotia, even on the unregulated markets like Alberta. So that really pushed up the renewal rates for the 2nd quarter versus the 1st quarter.

Unknown Executive: It's a bit of both why don't I, let Steven give some regional color on on what we're seeing because it really is.

Speaker Change: And the details of where it's happening.

Maryann: Maryann will look a lot of our renewals that were stuck at the two 5% really occurred in Q1, that's mainly Ontario Q.

Speaker Change: Q2, you can see really came across the board we're in Quebec, We had <unk>.

Unknown Executive: We had significant renewal increases.

Speaker Change: Difficult renewal increases.

Unknown Executive: Nova Scotia, even in unregulated markets like Alberta.

Speaker Change: With Scotia, even on the unregulated markets like Alberta, so that really pushed up the renewal rates for.

Stephen Co: You know, why don't I let Stephen get some regional color on what we're seeing because it really is in the details of where it's happening. Yeah, so Mario, a lot of our renewals that were stuck at the two and a half percent really occurred in Q1, that's mainly Ontario. Q2, you can see really it came across a board where in Quebec, we had significant renewal increases, Nova Scotia, even on the unregulated markets like Alberta. So that really pushed up the renewal rates for the second quarter versus the first quarter.

Unknown Executive: So that really pushed up the renewal rates for the second quarter.

Unknown Executive: Rates for the second quarter compared to the first quarter.

Unknown Executive: For the second quarter versus the first quarter.

Mario Saric: I'm glad. Okay.

Unknown Executive: Got it. Okay. And then my second question, just coming back to the conversation about affordability and kind of the acquisition strategy, the comment that market rents are flattening at the higher end seems to make sense. We're hearing that. At the same time, Mark, you're mentioning affordability, and the new construct is actually higher than the older assets; the rent-income ratios are lower. So what do you think is kind of flattening market rents at the higher end if affordability there isn't actually there?

Speaker Change: Got it okay.

Mario Saric: And then my second question is coming back to the conversation about affordability and kind of the acquisition strategy. One of the comments that market rents are flattening at their higher end seems to make sense. We're hearing that at the same time, Mark, you're mentioning the affordability and the new construct is actually higher than the older assets; the rent income ratios are lower. So what do you think is kind of flattening market rents at the higher end if affordability there is actually not that bad? If you were to break it into tranches, it really does depend on what level of rent level you're at.

Speaker Change: And then my second question, just coming back to the conversation about affordability and come back with it.

Unknown Executive: This strategy.

Speaker Change: Kind of a comment that market rents are flattening at the higher end it seems to make sense, we're hearing that at.

Speaker Change: At the same time that Mark had mentioned the affordability and the new construct is actually higher than the older assets. We went to income ratios are lower.

Speaker Change: So what what do you think is kind of flattening market rents at the higher end.

Speaker Change: Stability, there is actually not that.

Mark Kenney: Okay, and then my second question, just coming back to the conversation about affordability and kind of yak with this strategy. One of the comment that market rents are flattening at their higher end seems to make sense. We're hearing that. At the same time, Mark, you're mentioning the affordability and the new construct is actually higher than older assets, the rent income ratios are lower. So what do you think is kind of flattening market rents at the higher end if affordability there is actually not that bad?

Unknown Executive: If you were to break it into tranches, it really does depend on what level of rent you're at. So I'll make it simple.

Speaker Change: If you were to break it into tranches.

Speaker Change: It really does depend on what level of rent level you're right.

Unknown Executive: The market above $5 a foot is very different than the market of $4 to $5. Condo deliveries, for example, are having an effect. There's no question.

Mark Kenney: So I'll make it simple. The market above $5 a foot is very different than the market of $4 to $5. The condo deliveries, for example, are having an effect. There's no question. You've got condos coming online at a time when, you know, the folks that left money in their pocket, and that's probably definitely starting to the effect is being felt. Again, I know the whole COVID effect here, right? Like we had a slow down and construction followed by a surge, and we're now seeing those deliveries followed by an interest rate shock. And we're seeing the, like you look forward at the delivery, it is astonishingly low.

Speaker Change: I'll make it simple the market above $5 a foot is very different than the market of 422.

Speaker Change: Five the condo deliveries for example are having an effect. There is no question, you've got condos coming online at a time when folks have less money in their pocket and that's probably definitely starting to the effect is being felt again an old COVID-19.

Unknown Executive: You've got condos coming online at a time when folks have less money in their pockets. And that's probably definitely starting to – the effect is being felt. Again, I know the whole COVID effect here, right?

Mark Kenney: If you were to break it into tranches, it really does depend on what level of rent level you're at. So I'll make it simple. The market above $5 a foot is very different than the market of $4 to $5. The condo deliveries, for example, are having an effect. There's no question. You've got condos coming online at a time when folks have less money in their pocket and that's probably definitely starting to the effect is being felt.

Unknown Executive: Like we had a slowdown in construction followed by a surge. And we're now seeing those deliveries followed by an interest rate shock. You can look forward to the deliveries.

Speaker Change: Effect here right like we had a slowdown in construction followed by a surge and we are now seeing those deliveries followed by an interest rate.

Unknown Executive: Shock.

Speaker Change: And we're seeing the like you look forward at the deliveries. It is astonishingly low so that that speaks well for sort of the stabilization of those rents but.

Unknown Executive: It is astonishingly low, so that speaks well for the stabilization of those rents. The biggest effect is definitely across the country in the plus five dollar a foot range, with some exceptions, obviously, but we just think it is affordability at the end of the day on the high end, and that affordability problem starts to diminish as you move down the rent per foot ladder.

Mark Kenney: So that speaks well for the sort of, you know, the stabilization of those rents. But the biggest effect is definitely across the country in the plus $5 foot range, with some exceptions, obviously. But we just think it is affordability at the end of the day at the high end, and that affordability problem starts to diminish as you move down the rent for footlobs.

Speaker Change: The biggest effect is definitely occur.

Speaker Change: Cross the country in the plus $5 a foot range with some exceptions obviously.

Mark Kenney: Again, I know the whole COVID effect here, right? We had a slowdown in construction followed by a surge and we're now seeing those deliveries followed by an interest rate shock. And we're seeing the, like you look forward at the delivery, it is astonishingly low. So that speaks well for the stabilization of those rents. But the biggest effect is definitely across the country in the plus $5 foot range with some exceptions, obviously. But we just think it is affordability at the end of the day at the high end and that affordability problem starts to diminish as you move down the rent for footlobs.

Speaker Change: But we just think it is affordability at the end of the day at the high end and that affordability problem starts to diminish as you move down the rent per foot ladder.

Julian Schonfeldt: Okay, and so just as a follow-up, I look at slide 10 of the call deck where you're highlighting your acquisitions and distributions. Are you able to highlight what the average reference for a split would be on the six acquisitions and perhaps even the rent income ratios that you're modeling there? There are obviously very, there's one in there that I'm incredibly proud of; it is on the high end, but let me get Julian to kind of give some examples of some of them. Yeah, I mean the Vancouver ones are going to be in having a market rents in the five, and I mean that's just the dynamic of that market.

Unknown Executive: Okay, and so just as a follow-up, like if I look at slide 10 of the call deck where you're highlighting your acquisitions and dispositions, are you able to highlight what the average rent per square foot would be on the six acquisitions and perhaps even the rent to income ratios that you're modeling there?

Speaker Change: Got it okay and so.

Speaker Change: Just as a follow up let's look at slide 10.

Speaker Change: The call deck, where you're highlighting your acquisitions and dispositions are you able to highlight what the average rent per square foot.

Speaker Change: Would be on the six acquisitions and perhaps even the rent income ratios that you're modeling there.

Unknown Executive: There's one in there that I'm incredibly proud of that is on the high end, but why don't I get Julian to kind of give some examples of that?

Unknown Executive: They're obviously very there's one in there that I'm incredibly proud of it is on the high end, but Julian to kind of give some examples of some of them, yes, I mean, the Vancouver ones are going to be in.

Unknown Executive: Yeah, I mean, the Vancouver ones are going to be in, you know, having market rents in the fives. And I mean, that's just the dynamic of that market. You know, one of the AXA ones, a brand new one, so that rent will be pretty close to market. We picked it up, leased it out. But it's pretty new.

Stephen Co: Okay, and so just as a follow-up, I look at slide 10 of the call deck where you're highlighting your acquisitions and distributions, are you able to highlight what the average reference work foot would be on the six acquisitions and perhaps even the Renting Conracias that you're modeling there. There are obviously very just one in there that I'm incredibly, you know, proud of it is on the high end but luckily it kind of gives some examples of some of them.

Speaker Change: Having a market rents in the fives and I mean, that's just the dynamic of that market.

Julian Schonfeldt: You know, one of the actual ones of brand new ones that that rent will be pretty close to market. We picked it up least up, but it's pretty new. Pendrell was constructed in 2019, so even though those market rents are in the five, you know, the in place is our below, and so we're still the rent will still have some room to grow in there. You know, the other ones would be in the just I'm looking at them and call it in the high twos range per foot. The other ones that we acquired, you know, give or take a bit, but that's just given those markets between Halifax Auto and Edmonton, it's a little bit lower on a per foot basis.

Speaker Change: One of the Axa, one is a brand new ones that rent will be pretty close to market. We picked it up leased up but it's pretty new pendril was constructed in 2019, so even though those market rents are in the fives.

Unknown Executive: Pendrell was constructed in 2019. So even though those market rents are in the fives, you know, the end places are below. And so we're still, the rent will still have some room to grow in there. You know, the other ones would be in the, I'm looking at them in the, call it, in the high twos range per foot, the other ones that we acquired, you know, give or take a bit. But that's just given those markets between Halifax, Ottawa, and Edmonton; it's a little bit lower on a per foot basis. And the problem here is that we speak in the micro and we speak in the macro; they're two different things, obviously.

Speaker Change: In places or below and so we're still.

Speaker Change: The rent will still have some some room to grow in there.

Speaker Change: The other ones.

Speaker Change: It would be in the just I'm looking at them in the call. It in the high twos range per foot.

Stephen Co: Yeah I mean the Vancouver ones are going to be in you know having a market rents in the five and I mean that's just the dynamic of that market. You know one of the the actual ones a brand new one so that that rent will be pretty close to market. We picked it up least up but it's pretty new. Pendrell was constructed in 2019 so even though those market rents are in the five you know the in place is dark below and so we're still the rent will still have some room to grow in there.

Speaker Change: The other ones that we acquired give or take a bit.

Speaker Change: But thats just given those markets between Halifax, Ottawa, Edmonton, it's a little bit a little bit lower on a per foot basis than the problem here is that we speak of the mic microphone, we speak in the macro they are two different things obviously, the five that are in high density high condo delivery neighborhoods Cannibalized competition amongst.

Mark Kenney: And the problem here is that when we speak of the micro and we speak of the macro, there's two different things, obviously. The five that are in high density, high condo delivery neighborhoods, you know, cannibalized competition amongst different parties. The assets that Julian just referred to are on their own; there is no competition in those neighborhoods of the vintage of the assets that we bought. So they would be the exceptions to where, like, we're not seeing resistance very different. I'm going to say in the downtown for Toronto where you have condos popping up on every other block.

Unknown Executive: The fives that are in high density, high condo delivery neighborhoods, you know, cannibalized competition amongst different parties, the assets that Julian just referred to are on their own. There is no competition in those neighborhoods of the vintage of the assets that we bought. So they would be the exception where, like, we're not seeing resistance. Very different, I'm going to say, than the downtown core of Toronto, where you have condos popping up on every other block. Those will be under, you know, generalized pressure because they're concentrated and there's a volume of offers.

Stephen Co: You know the other ones would be in the just I'm looking at them and call it in the high-tooth range per foot. The other ones that we acquired you know get give or take a bit but that's just given those markets between Halifax, Ottawa and Edmonton it's a little bit a little bit lower on a per foot basis.

Unknown Executive: Different.

Speaker Change: Parties the assets the Julian just referred to are on their own there is no competition in those neighborhoods.

Speaker Change: The vintage of the assets that we bought so they would be the exception to we're like we're not seeing resistance very different I'm going to say that in the downtown core of Toronto, where you have kind of popping up on every other block those will be under generalized pressure because they are concentrated in the volume of offering.

Mark Kenney: And the problem here is that when we speak of the micro and we speak of the macro there's two different things obviously. The five that are in high density high condo delivery neighborhoods you know cannibalized competition amongst different parties. The assets that Julian just referred to are on their own there is no competition in those neighborhoods of the of the vintage of the assets that we bought so they would be the exceptions to where like we're not seeing resistance.

Julian Schonfeldt: Those will be under, you know, generalized pressure because they're concentrated in, and there's the volume of offering. Yeah, I mean, one thing that's worth noting to Mario is like, I'm sure you've looked at these, but if you look at the locations of, you know, at least five of the six of those that are exceptionally well located. I mean, you know, the types of locations that, frankly, are replaceable. We honestly, we had a little bit possibly ahead of ourselves and excitement on this, but we think that we are actually buying some of the best locations in the country.

Unknown Executive: Yeah, I mean, one thing that's worth noting, too, Mario, is that, I'm sure you've looked at these, but if you look at the locations of, you know, at least five of the six of those, they're exceptionally well located. I mean, you know, the types of locations that, frankly, are replaceable for many of these.

Mario: I mean, one thing Thats worth, noting too Mario as I'm sure you've looked at these but if you look at the locations of at least five or six of those are exceptionally well located.

Speaker Change: The types of locations.

Speaker Change: Banco irreplaceable.

Unknown Executive: We honestly, we get a little bit too excited about this, but we think that we are actually buying some of the best locations in the country. Like, when you look at the... Zero in on Google Maps, you will see that these are unbelievable centralized locations for the cities in which they're located.

Unknown Executive: We honestly, we get a little bit too excited about this, but we think that we are actually buying some of the best locations in the country. Like, when you look at the... Zero in on Google Maps, you will see that these are unbelievable centralized locations for the cities in which they're located.

Speaker Change: Honestly, we get a little bit possibly ahead of ourselves with excitement on this but we think that we are actually buying some of the best locations in the country. When you look at the.

Mark Kenney: Very different I'm going to say them the downtown for Toronto where you have you know condos popping up on every other block those will be under you know generalized pressure because they're concentrated and there's the volume of offering.

Mario Saric: Like when you look at the zero and on Google Maps, you will see that these are unbelievable centralized locations for the cities in which they're located in. You got it. I'm sure I'll take a closer look.

Unknown Executive: Zero in a Google map you will see that these are built.

Unknown Executive: Believable centralized locations for the cities in which they are located in.

Julian Schonfeldt: Yeah I mean one thing that's worth knowing too Mario's like I'm sure you've looked at these but if you look at the locations of you know at least five of the six of those there is exceptionally well located I mean you know the types of locations that are frankly irreplaceable. We honestly we had a little bit possible ahead of ourselves and excitement on this but we we think that we are actually buying some of the best locations in the country. Like when you look at the zero and on Google maps you will see that these are unbelievable centralized locations for the cities in which they're located in. We got it.

Unknown Executive: Got it. I'll make sure I take a closer look. And then on the rent income ratio, is it fair to say that kind of those are in the low 30s, like the low to mid 30s?

Speaker Change: Got it.

Speaker Change: I'll take a closer look and then on the on the rental commercial is it fair to say kind of those are in the low <unk> low to mid <unk>.

Stephen Co: And then on the rental commercial, is it fair to say kind of those are in the low 30s, like a little bit 30s. Yeah, we don't store those due to privacy reasons, but it is fair to say that it would be a little bit more of an absolute tendency where it's less sensitive. And the indicator that we do have is leg receivables and just bad debt in general. And we can definitely say that we're seeing a trend of extremely low trailing trailing receivables and ultimately bad debt in the new construction app that versus the legacy asset.

Unknown Executive: Yeah, we don't store those due to privacy reasons, but it is fair to say that it would be a little bit more of an affluent tenancy where it's less sensitive.

Unknown Executive: Yeah, we don't store those due to privacy reasons, but it is fair to say that it would be a little bit more of an affluent tenancy where it's less sensitive.

Speaker Change: Yeah, we don't store those due to privacy reasons, but it is fair to say that it would be a little bit more of an affluent tenancy, where it's less sensitive.

Unknown Executive: And the indicator that we do have is lagging receivables and just bad debt in general, and we can definitely say that we're seeing a trend of extremely low trailing receivables and ultimately bad debt in the new construction assets versus the legacy assets.

Speaker Change: And the indicators that we do have is lagging receivables are just bad debt in general and we can definitely.

Speaker Change: See that we're seeing a trend of extremely low.

Speaker Change: Trailing trailing receivables and ultimately bad debt in the new construction assets versus the legacy asset.

Mark Kenney: I'm sure I'll take a closer look and then on the on the rental commercial is it fair to say kind of those are in the low 30s like the limit 30s. Yeah we don't store those due to privacy reasons but it is fair to say that it would be a little bit more of an absolute tendency where it's less sensitive. And the indicator that we do have is lagging receivables which is bad debt in general and we can definitely say that we're seeing a trend of extremely low trailing trailing receivables and ultimately bad debt in the new construction assets versus the legacy assets.

Unknown Executive: Okay, that's it for me. Thank you.

Mario Saric: Okay, that's it for me. Thank you.

Unknown Executive: Okay.

Speaker Change: Is it from me thanks, guys.

Operator: Thanks.

Unknown Executive: Thanks.

Kyle Stanley: Our next question is from Kyle Stanley with Jordans; your line is now open.

Kyle Stanley: Our next question is from Kyle Stanley with Jardins. Your line is now open. Thanks. Good morning, guys.

Operator: Our next question is from Kyle Stanley with Jardins. Your line is now open.

Unknown Executive: Our next question is from Kyle Stanley with Jordans. Your line is now open.

Kyle Stanley: Thanks.

Kyle Stanley: Thanks, Good morning, guys maybe.

Mark Kenney: Morning, guys. Maybe you're just kind of sticking in the mark just because you just kind of mentioned bad debts. I mean, it's very small, but it looks like inducements and bad debt did creep up just a little bit this quarter. Is there anything to read into there, given maybe the softening economic climate or just kind of normal course and inducements given that you're maybe leasing up a few newer build assets? It's more of the inducements side, and I would say nothing, nothing no early there.

Unknown Executive: Maybe just kind of sticking with Mark just because you just kind of mentioned bad debts. I mean, it's very small, but it looks like inducements and bad debt did creep up just a little bit this quarter. You know, is there anything to read into there given maybe the softening economic climate or just kind of normal course and inducements given that you're maybe leasing up a few newer built assets?

Kyle Stanley: Maybe you can just kind of sticking mark just because you just kind of mentioned bad debt I mean, it's very small, but it looks like inducements and bad debt did creep up just a little bit. This quarter is there anything to read into there given maybe the softening economic climate or just kind of normal course, and inducements given that youre, maybe leasing up a few newer build assets.

Unknown Executive: Okay that's it for me time to. Thanks.

Unknown Executive: It's more on the inducement side, and I would say nothing noteworthy there to kind of point to. Perhaps, Stephen, you could give some additional color. Yeah, I mean, what we're seeing on the inducement side, there are some inducements related to the new builds, but I would say they're only temporary as we try to fill them up.

Speaker Change: It's more of the inducement side and I would say nothing nothing noteworthy there.

Kyle Stanley: Our next question is from Kyle Stanley with Jardins. Your line is now open. Thanks, morning guys. Maybe you're just kind of sticking in the mark just because you just kind of mentioned bad debts. I mean, it's very small, but it looks like inducements in bad debt did creep up just a little bit this quarter. Is there anything to read into there given maybe the softening economic climate or just kind of normal course and inducements given that you're maybe leasing up a few newer build assets?

Stephen Co: To kind of point to perhaps Stephen, you could give some additional color. Yeah, I mean, what we seeing in the inducements are there are some some inducements related to the new bills, but I mean, I would say there's only temporary as we try to fill them up and Kyle, when we're buying these, they're totally they're completely modeled in. It's just a regular part of a piece of the building to put an issue. It shows up in the statements, but part of the model. Yeah. Okay, no, that makes sense.

Kyle Stanley: To kind of point to.

Speaker Change: Perhaps Stephen you could give some additional color yeah. I mean, what are we seeing an inducement side there are some.

Kyle Stanley: Some inducements related to the Newbuild, but I would say there is only temporary as we've tried to fill them up and kind of when we are buying these they're totally theyre completely modeled in just regular part of the lease up of our building to put any ships that shows up in our statements with part of the model.

Unknown Executive: And Kyle, when we're buying these, they're completely modeled in; it's just a regular part of a lease of a building to put in shapes. It shows up in the statements as part of the model.

Unknown Executive: This has been part of the model path.

Kyle Stanley: It's more of the inducements side and I would say nothing, nothing no early there. To kind of point to perhaps Stephen, you could give some additional color. Yeah, I mean what we're seeing in the inducements are there are some some inducements related to the new bills, but I mean I would say there's only temporary as we try to fill them up and Kyle, when we're buying these, they're totally they're completely modeled in. It's just a regular part of a piece of the building to put an issue. It shows up in the statements, but part of the model. Yeah.

Unknown Executive: Okay, nope, that doesn't make sense. Maybe just going back to your kind of commentary on Mario's question a minute ago, you know, would you say that maybe we're in a temporary, softer patch for market rent growth, and that's driven by affordability and this uptick in supply, but as supply is delivered and absorbed, and over the next 12 to 18 months, you'd expect market rents to pick up again. I mean, you know, we're well aware of the kind of supply-demand dynamic. So it seems only logical that that would be the trajectory. But I am just curious about your thoughts.

Kyle Stanley: Okay, no that makes sense.

Mark Kenney: Maybe just going back to your kind of commentary on Mario's question, a minute ago, you know, would you say that then maybe we're in a temporary softer patch for market rent growth and that's driven by affordability and this up thick and supply, but as supplies delivered and absorbed kind of over the next 12 to 18 months, you'd expect market rent to pick up again. I mean, we're well aware of the kind of supply-demand dynamics. So it seems only logical that that would be the trajectory, but just curious in your thoughts.

Kyle Stanley: Maybe just going back to your kind of commentary on Mario's question a minute ago would you say that then maybe we're in a temporary softer patch for market rent growth and that's driven by affordability and this uptick in supply, but as supply is delivered and absorbed kind of over the next say 12 to 18 months, you would expect market rents to pick up again.

Kyle Stanley: We're well aware of the kind of supply demand dynamics. So it seems only logical that that would be the trajectory, but I'm just curious in your thoughts.

Mark Kenney: Okay, nope, that makes sense. Maybe just going back to your kind of commentary on Mario's question, a minute ago, you know, would you say that then maybe we're in a temporary software patch for market rent growth and that's driven by affordability and this up thick and supply, but as supplies delivered and absorbed kind over the next 12 to 18 months, you'd expect market rent to pick up again. I mean, we're well aware of the kind of supply demand dynamics.

Mark Kenney: I hate using this phrase; we kind of have to unpack the environment and say what is actually happening here. In the GTA, I would say you can expect at the highest end of the market to see anemic rent growth because of competition primarily and an inflationary effect of folks just having less less money in their pockets. It was very different when we had run away wage inflation six to eight months ago. You know, people are getting $20,000, $30,000 raises. So rent wasn't really the biggest focus in their life. That dynamic is changing. So that's at that end on the more affordable end of the spectrum.

Unknown Executive: I hate using this phrase. You kind of have to unpack the environment and say what is actually happening here. In the GTA, I would say you can expect at the highest end of the market to see anemic rent growth because of competition, primarily, and an inflationary effect. (Inaudible) in Canada.

Speaker Change: I hate using this phrase, but kind of have to unpack the environment and say what is actually happening here.

Unknown Executive: In the GTA, I would say you can expect at the highest end of the market to see anemic rent growth because of competition, primarily, and an inflationary effect of Ireland.

Speaker Change: In the GTA I would say you can expect at the highest end of the market to see anemic rent growth because of competition, primarily and an inflationary effect.

Speaker Change: Folks just having less less money in their pockets. It was very different when we had runaway wage inflation.

Mark Kenney: So it seems only logical that that would be the trajectory, but just curious in your thoughts. I hate using this phrase, we kind of have to unpack the environment and say what is actually happening here in the GTA, I would say you can expect at the highest end of the market to see anemic rent growth because of competition primarily and an inflationary effect of folks just having less. Less money in their pockets.

Speaker Change: Six to eight months ago people were getting 2000 and $30000 raises so rent wasn't really the biggest focus in their life.

Speaker Change: <unk> is changing so that to that end.

Unknown Executive: On the more affordable end of the spectrum, you know, the opportunity is fantastic. However, our ability to harvest that is going to be difficult because the bargains that people are sitting on are just, you know, too good to be true. So that end will be extremely solid. In terms of the overall environment for rents to rise, again, it's a tale of two cities. On the legacy assets, absolutely, if you can get at them.

Speaker Change: On the more affordable end of the spectrum.

Mark Kenney: You know, the opportunities fantastic. Our ability to harvest that is going to be difficult because the bargains that people are sitting in are just, you know, too good to be true. So that end will be extremely solid in terms of the overall environment for rents to rise. Again, it's a tale of two cities on the legacy assets.

Speaker Change: The opportunity is fantastic our ability to harvest that is going to be difficult because the bargains that people are sitting in or just too good to be true.

Mark Kenney: It was very different when we had run away wage inflation six to eight months ago, you know, people are getting $20,000, $30,000 raises. So rent wasn't really the biggest focus in their life. That dynamic is changing. So that's at that end on the more affordable end of this spectrum. You know, the opportunities fantastic our ability to harvest that is going to be difficult because the bargains that people are sitting in are just, you know, too good to be true.

Speaker Change: With that and we'll be extremely.

Unknown Executive: Solid.

Speaker Change: In terms of the overall environment for rents to rise again, it's a tale of two cities on the legacy assets, absolutely. If you can get at it and on the Newbuild side.

Mark Kenney: So that end will be extremely solid in terms of the overall environment for rents to rise. Again, it's a tale of two cities on the legacy assets. Absolutely. If you can get at it and on the new build side, you know, there is a plateau that happens. So the wonderful thing about a regulated market is you can, you know, the tide lifts on all the rents and then it kind of studies.

Mark Kenney: Absolutely. If you can get at it and on the new build side, you know, there is a plateau that happens. So the wonderful thing about a regulated market is you can, you know, the tide lifts on all the rents and then it kind of studies. It's not perpetual. So we do think we're finding that right blend of having assets that we can get at the upside fast and the changing market and then having that blend of assets that have a runway of growth that will probably want for decades. So I don't know if that directly answers the question, but the general dynamic is indicating that we can see sort of a, you know, a leveling off here followed by another ramp up. How dramatic that is.

Unknown Executive: And on the new build side, you know, there is a plateau that happens. The wonderful thing about an unregulated market is you can, you know, the tide lifts on all the rents, and then it kind of steadies. Not perpetual, but we do think we're finding that right blend of having assets that are, we can get at the upside fast in a changing market and then having that blend of assets that have a runway of growth that will probably go on for decades.

Speaker Change: Is a plateau that happened so the wonderful thing a better unregulated market as you can the tide lifts on all the rents and then it kind of studies it's.

Speaker Change: It's not perpetual so we do think we're finding that right blend of having assets that or we can get at the upside fast in a changing market and then having that blend of assets that have a runway of growth that will probably go on for decades.

Unknown Executive: So I don't know if that directly answers the question, but the general dynamic is indicating that we can see sort of a leveling off here, followed by another ramp up. How dramatic that is, I really can't say. But when you're seeing deliveries going from 40,000 to 7,000 in 12 months, that tells you a lot.

Speaker Change: So I don't know if that directly answers the question, but the general dynamic is indicating that we can see sort of a leveling off here followed by another another ramp up how dramatic that is I really can't say, but when youre seeing deliveries going from 40000 to 7000 in 12 months that tell.

Mark Kenney: I really can't say, but when you're seeing deliveries going from, you know, 40,000 to 7,000 in 12 months, that tells you a lot. Yeah, no, that's very helpful.

Mark Kenney: It's not perpetual. So we do think we're finding that right blend of having assets that are we can get at the upside fast and the changing market and then having that blend of assets that have a run way of growth that will probably go on for decades. So I don't know if that directly answers the question, but the general dynamic is indicating that we can see sort of a, you know, a leveling off here followed by another another ramp up how dramatic that is. I really can't say, but when you're seeing deliveries going from, you know, 40,000 to 7,000 in 12 months, that that tells you a lot.

Mark Kenney: Yes, no, that's very helpful.

Speaker Change: You a lot.

Unknown Executive: Yeah, no, that's very helpful. And just my last question, would you be able to talk about the market for development land today? I know we've talked about it over the last few quarters, but just curious if there's been any changes or signs of firming values given maybe the changing rate environment, you know, as we think about the potential, you know, timing towards monetizing the development rights at Davisville.

Unknown Executive: Yes.

Kyle Stanley: Very helpful. And then just my last question.

Julian Schonfeldt: And then just my last question: you know, would you be able to talk about the market for development land today? I know we've talked about it over the last few quarters, but just curious if there's been any changes or signs of firming values given maybe the changing rate environment. You know, as we think about the potential timing towards monetizing the development rights at David Schill.

Kyle Stanley: Would you be able to talk about the market for development land today I know we've talked about it over the last few quarters, but just curious if theres been any changes or signs of firming values, given maybe the changing rate environment.

Speaker Change: As we think about the potential timing towards monetizing the development rights at that Dave itself.

Mark Kenney: Well, I'll let Julian take the question, but I don't know. At the end of the day, I think you talked to any broker, they'll say it's a little soft out there for development land. However, however, anybody with a right mind that capitalized should be jumping on that opportunity. When you look at the deliveries in the next 24 months, the delivery spike, and then there's nothing. And it doesn't take, you know, 24 hours to be able to do that. We're talking seven-year cycle. So if you actually look at the seven-year cycle, you are in, or let's call it five, if you're really efficient, or four, if you've got some land, you're looking at the perfect time to build now.

Unknown Executive: Well, I'll let Julian take the question, but I don't know. At the end of the day, I think you talk to any broker, and they'll say it's a little soft out there for development land. However, however, anybody with a semblance of mind that's capitalized should be jumping on that opportunity when you look at the deliveries in the next 24 months, the deliveries spike, and then there's nothing, and it doesn't take, you know, 24 hours to build a building. We're talking a seven-year cycle.

Unknown Executive: Well, I'll let Julian take the take the question, but

Unknown Executive: Well I'll, let Julian take the take the question but.

Julian: I don't know at the end of the day I think you talked to any broker they'll say, it's a little soft out there for development land. However, however, anybody with the right mind.

Julian Schonfeldt: And just my last question, would you be able to talk about the market for development land today? I know we've talked about it over the last few quarters, but just curious if there's been any changes or signs of firming values given maybe the changing rate environment. As we think about the potential timing towards monetizing the development rights at David Schill.

Julian: Capitalize should be jumping on that opportunity when you look at the deliveries in the next 24 months the delivery Spike and then Theres nothing and it doesn't take.

Unknown Executive: So if you actually look at the seven-year cycle, you are in, or let's call it five, if you're really efficient, or four, if you've got some land. You're looking at the perfect time to build now. Now is the perfect time to get in the ground, but, you know, there's a lot of skepticism obviously around that because of interest rates, a lot of skepticism about delivery, a lot of skepticism for a lot of reasons.

Julian: 24 hours to build a building we're talking seven year cycle. So if you actually look at the seven year cycle, you are in or let's call. It five if youre really efficient or for if you've got zoned land.

Mark Kenney: Well, I'll let Julian take the question, but I don't know. At the end of the day, I think you're talking to your broker, they'll say it's a little soft out there for development land. However, however, anybody with a right mind that capitalized should be jumping on that opportunity when you look at the deliveries in the next 24 months, the delivery spike, and then there's nothing, and it doesn't take 24 hours to build a building.

Julian: If you look at the perfect time to build now now is the perfect time to get into the ground, but theres a lot of skepticism obviously around that because of interest rates loss skepticism that the deliveries a lot of skepticism for a lot reasons, that's normally the environment to get serious and get into it. So.

Mark Kenney: Now is it the perfect time to get in the ground? But, you know, there's a lot of skepticism, obviously, around that. It's interest rates; a lot of skepticism because it delivers a lot of skepticism for a lot of reasons. That's normally the environment to get serious and get into it. So I think the prospects for land value are actually quite good. But you know, it's a matter of the cost of capital right now; it is relatively high on a historic basis.

Unknown Executive: That's normally the environment to get serious and get into it. So I think the prospects for land value are actually quite good. But, you know, it's a matter of, you know, the cost of capital right now is relatively high on a historic basis. So I don't know what Julian would add to that.

Julian: I think the prospects for land value were actually quite good.

Mark Kenney: We're talking seven-year cycle. So if you actually look at the seven-year cycle, you are in, or let's call it five, if you're really efficient, or four, if you've got zone band, you're looking at the perfect time to build now. Now is it's a perfect time to get in the ground, but there's a lot of skepticism obviously around that because it's interest rates, a lot of skepticism because it's a delivery, a lot of skepticism for a lot of reasons.

Unknown Executive: But it's a matter of the cost of capital right now is relatively high on a historic basis. So I don't know Julian would add to that.

Julian Schonfeldt: So I don't know what Julian would add to that. No, I think Mark said it perfectly. The rates are still high, and the condo market has been a bit soft. We think the long-term fundamentals are good. But having said all that, those data still sites are just, you know, again, using the same word, but exceptionally well located. So, while the market still remains a bit soft, as interest rates are elevated and the condo market soft, it's, you know, we still think that we could generate pretty good demand, just given how marquee those locations are.

Unknown Executive: No, I think Mark said it perfectly. The rates are still high, and the condo market has been a bit soft. We think the long-term fundamentals are good. But having said all that, those Davisville sites are just, again, I'm using the same word, but exceptionally well-located. So while the market still remains a bit soft, interest rates are elevated, and the condo market's soft, we still think that we could generate pretty good demand, just given how marquee those locations are.

Julian: I think mark said it perfectly the rates or rates are still high.

Julian: The condo market has been a bit soft we think the long term fundamentals are good but having said all of that goes David cell sites or just.

Julian: Again, using the same word but exceptionally well located.

Mark Kenney: That's normally the environment to get serious and get into it. So I think the prospects for land value are actually quite good, but it's a matter of the cost of capital right now is relatively high on historic basis, so I don't know what Julian would add to that. No, I think Mark said it perfectly. The rates are still high, and the condo market has been a bit soft. We think the long-term fundamentals are good, but having said all that, those data still sites are just, you know, again, using the same word, but exceptionally well-located.

Julian: So while the market still remains a bit soft at all as interest rates are elevated in the condom kind of market softness.

Julian: We still think that we could generate pretty good demand just given how mark Hughes those locations are.

Julian Schonfeldt: Okay, that makes sense.

Mark Kenney: So while the market still remains a bit soft as interest rates are elevated, and the condo market soft, it's, you know, we still think that we could generate pretty good demand just given how marquee those locations are. Okay, that makes sense.

Unknown Executive: Okay, that makes sense. I'll turn it back up to three.

Speaker Change: Okay that makes sense I'll turn it back that's it for me.

Operator: I'll turn it back up to three.

Unknown Executive: Okay.

Jimmy Shan: We have a question from Jimmy Shan with RBC. Your line is now open. That's just to follow up on the renewal rate comment. So it sounds like the mix was the main reason for the bump. But when we look at the second half of this year, is the mix skewed more to Q1 or Q2? We're going to see 4% or 3% in the second half. Yeah, Jimmy, I think we're going to see probably more of a Q2 effect versus Q1 because the majority of the renewals that occur to Q1 were on in Ontario.

Unknown Executive: Okay, that makes sense. I'll turn it back up to three. We have a question from Jimmy Shan with RBC. Your line is now open.

Speaker Change: We have a question from Jamie Shen with RBC. Your line is now open.

Jimmy Shan: Thanks. Just to follow up on the renewal rate comment, so it sounds like mix was the main reason for the bump, but when we look at the second half of this year, is the mix skewed more to Q1 or Q2? Are we going to see 4% or 3% in the second half?

Julian: Thanks, just to follow up on the on the renewal rate on that so it sounds like mix was the main reason for the bump, but when we look at.

Julian: In the second half of this year.

Julian: Is the mix skewed more to Q1 or Q2.

Unknown Executive: 4%.

Julian: In the second half.

Unknown Executive: I'll turn it back up to three.

Unknown Executive: Yeah, Jimmy, I think we're probably going to see more of a Q2 effect versus Q1 because the majority of the renewals that occurred in Q1 were in Ontario. So I would say if you look at it in the second half of the year, it's going to be more Q2 as being the benchmark.

Julian: Yeah, Jimmy I think we're going to see probably more of a Q2.

Jimmy Shan: We have a question from Jimmy Shan with RPC. Your line is now open. That's just a follow-up on the renewal rate comment. So it sounds like the mix was the main reason for the bump, but when we look at the second half of this year, is the mix queued more to Q1 or Q2? Are we going to see 4% or 3% in the second half? Yeah, Jimmy, I think we're going to see probably more of a Q2 effect versus Q1 because the majority of the renewals that occur to Q1 were in the Ontario.

Julian: Effect versus Q1, because the majority of the renewals that occurred in Q1 were on and on.

Unknown Executive: Terry.

Jimmy Shan: So I would say if you look at it in the second half of the year, it's going to be more. Q2 has been the benchmark.

Julian: So I would say if you look at it.

Jimmy Shan: So I would say, if you look at it in the second half of the year, it's going to be more queued to as being the benchmark.

Julian: In the second half of the year, it's going to be more of a Q2 has been the benchmark.

Mark Kenney: Okay, and then given all the acquisitions and dispositions, I wondered if you could speak generally about sort of whether or not that's going to have any impact on the operations side of things, like, you know, integration work or, you know, whether you need to buck up, releasing startups because some results are maybe more leasing intensive, maybe speak to that a little bit. Well, one thing we pride ourselves on at Capri is we are integration experts. We were able to, you know, go to other countries and new markets overnight and adapt quickly. There's no question that we're, and the company is rallied around the fact that we are becoming a different type of operation.

Unknown Executive: Okay.

Unknown Executive: And then given all the acquisitions and dispositions, I wondered if you could speak generally about sort of whether or not that's going to have any impact on the operations side of things, like, you know, integration work, or, you know, whether you need to bulk up the leasing staff because some of these assets are maybe a little bit more leasing intensive. Maybe you could speak to that a little bit. Well, one thing we pride ourselves on at Capri is that

Unknown Executive: And then.

Speaker Change: Given all the acquisitions and dispositions and I wondered if you could speak.

Julian: Generally about to the weather.

Julian: Whether or not that's going to have any impact on the operation side of things like.

Julian: Integration work or you know what.

Julian: You need to bulk up leasing staff because some of these assets maybe.

Julian: More leasing attached to it maybe you can speak to that a little bit.

Unknown Executive: Well, one thing we pride ourselves on at Capri is that

Unknown Executive: Well, one thing we pride ourselves on at Capri is we are integration experts, we were able to you know, go to other countries and new markets overnight and adapt quickly, there's no question that we're, and the company is rallied around the fact that we are becoming a different type of operation, the needs and requirements of new construction are very different from the customer service side of things and the sales side of things and a whole host of what you're offering is dramatically different, I'll say, than the legacy assets where it does tend to be more administrative customer focused but still not as amenitized and it's just a different business, we're in the project management repositioning business in that part of our portfolio than the, you know, customer service rent maximizing side of new construction, so we are working our way through that and Stephen has done, we've had to make some difficult choices here at Capri and those choices have been reflected in some of our restructuring costs but we are working our way through it and we do expect to be a different company, you know, we are already becoming a very different company and very excited about that but there will be additional change as we move into next year.

Julian: Well one thing we pride ourselves on a cap rate is where integration experts we were able to.

Mark Kenney: Okay, and then given all the acquisitions and dispositions, and I wonder if you could speak generally about whether or not that's going to have any impact on the operations side of things, like, you know, integration work or, you know, whether you need to buck up reaching Starhouse because some disaster sort of maybe a more leasing intensive maybe if you could speak to that a little bit. Well, one thing we pride ourselves on at Capri is we are integration experts.

Julian: Go to other countries in new markets overnight and adapt quickly.

Julian: There is no question that were then the company has rallied.

Julian: Rallied around the fact that we are becoming a different type of operation the needs and requirements of new construction are very different from.

Mark Kenney: The needs and requirements of new construction are very different from the customer service side of things and the sales side of things, and a whole host of what you're offering. It's dramatically different, I'll say, than the legacy assets where it does tend to be more administrative customer focus, but still not as a man of tie, and it's just a different business. We're in the project management repositioning business in that part of our portfolio than the customer service rent maximizing side of new construction. So we are working our way through that. And Stephen has done, we've had to make some difficult choices here at Capri, and those choices have been reflected in some of our restructuring costs, but we are working our way through it.

Julian: From the customer service side of things in the sales side of things.

Julian: And a whole host of.

Julian: What you are offering.

Mark Kenney: We were able to, you know, go to other countries and new markets overnight and adapt quickly. There's no question that we're in the company is rallied around the fact that we are becoming a different type of operation. The needs and requirements of new construction are very different from the customer service side of things and the sales side of things and and a whole host of what you're offering is dramatically different. I'll say that the legacy assets where it does tend to be more administrative customer focus, but still not as a man of tie and it's just a different business.

Julian: Is dramatically different lets say than the legacy assets, where it does tend to be more administrative customer focus but still.

Julian: In order to monetize.

Julian: It's just a different business we're in the project management repositioning business in that part of our portfolio then.

Julian: Customer service.

Steven: Rent maximizing side on new construction, so we're working our way through that and Steven has done.

Speaker Change: We've had to make some difficult choices here in Calgary and those choices have been reflected in some of our restructuring costs.

Speaker Change: But we are working our way through it and we do expect to be a different company.

Mark Kenney: And we do expect to be a different company in that, you know, we are already becoming a very different company and very excited about that. But there will be additional change as we move into next year.

Mark Kenney: We're in the project management repositioning business in that part of our portfolio than the customer service rent maximizing side of new construction. So we are working our way through that and Stephen has done we've had to make some difficult choices here at Capri and those choices have been reflected in some of our restructuring costs. But we are working our way through it and we do expect to be a different company in the, you know, we are already becoming a very different company and very excited about that, but there will be additional change as we move into next year.

Unknown Executive:

Julian: We are already becoming a very different company and I'm very excited about that but there will be additional change.

Julian: We move into next year.

Unknown Executive: Okay, thank you.

Mark Kenney: Okay, thank you.

Speaker Change: Okay. Thank you.

Matt Hornack: Our next question is from Matt Hornack with National Bank. Your line is now open.

Matt Kornack: Our next question is from Matt Kornack with National Bank. Your line is now open.

Matt <unk>: Our next question is from Matt <unk> with National Bank. Your line is now open.

Matt Hornack: Good morning, guys. Just going to the renewal variance here. That's the legacy of the COVID rent moratorium in Ontario. But like obviously, given low turnover in that portfolio, that's going to be an issue probably for quite some time. But broadly speaking, I mean, Ontario seems to be way off the rest of the nation in terms of allowable rent increases. Do you think that creates a distance incentive to invest in some of these assets going forward? I know you get on new; there's no rent control. It also helps with supply, but you do need people to actively manage some of these older assets in Ontario as well.

Unknown Executive: Good morning, guys. Just going to the renewal variants here because that's the legacy of the COVID rent moratorium in Ontario. But, obviously, given low turnover in that portfolio, that's going to be a seasonal issue probably for quite some time. But, broadly speaking, I mean, Ontario seems to be way off the rest of the nation in terms of allowable rent increases. Do you think that creates a disincentive to invest in some of these assets going forward? I know you get on new, there's no rent control, so it helps with supply, but you do need people to actively manage some of these older assets in Ontario as well?

Speaker Change: Good morning, guys.

Julian: Just go into the renewal.

Julian: Variance here.

Julian: Legacy of the Covid rent moratorium in Ontario.

Unknown Executive: <unk>.

Unknown Executive: Obviously, given the low turnover in that portfolio, that's going to be a seasonal issue, probably for quite some time. But broadly speaking, I mean, Ontario seems to be way off the rest of the nation in terms of allowable rent increases. Do you think that creates a disincentive to invest in some of these assets going forward? I know you get on with new, there's no rent control, so it helps with supply, but you do need people to actively manage some of these older assets in Ontario as well.

Julian: Like obviously, given the low turnover in that portfolio, that's going to be a seasonal issue probably for quite some time, but broadly speaking I mean, Ontario seems to be way off the rest of the nation in terms of the allowable rent increases.

Matt Kornack: Our next question is from Matt Hornack with National Bank. Your line is now open. Good morning, guys. Just going to the renewal variance here, that's that's the legacy of the COVID rent moratorium and Ontario. But like obviously given low turnover in that portfolio, that's going to be a issue probably for quite some time. But broadly speaking, I mean, Ontario seems to be way off the rest of the nation in terms of allowable rent increases.

Unknown Executive: Do you think that creates a disincentive to invest in some of these assets going forward I know you've got a new theres no rent control. So it helps with supply, but you do need people to back to.

Unknown Executive: Manage some of these older assets in Ontario as well.

Mark Kenney: Well, it's not going to attract investment. If that's the question, we're very fortunate, Capri, because the heavy lifting of investment has happened. And our Ontario portfolio is going to be actually good physical condition. It is very hard to say what's going to happen here.

Unknown Executive: Well, it's not going to attract investment if that's the question. We're very fortunate that the heavy lifting of investment has happened, and our Ontario portfolio is in exceptionally good physical condition.

Unknown Executive: Well, it's not going to attract investment if that's the question. We're very fortunate that the heavy lifting of investment has happened, and our Ontario portfolio is in exceptionally good physical condition.

Speaker Change: Well, it's not going to attract investment if that's the question. We're very fortunate to have the heavy lifting of investment has has happened and our Ontario portfolio has been exceptionally good.

Unknown Executive: Physical condition.

Matt Kornack: Do you think that creates a distance incentive to invest in some of these assets going forward. I know you get on new, there's no rent control, so it helps with supply, but you do need people to actively manage some of these older assets in Ontario as well. Well, it's not going to attract investment. If that's the question, we're very fortunate, Capri, because the heavy lifting of investment has, has happened. And our Ontario portfolio is going in such a good physical condition.

Unknown Executive: It is very hard to say what's going to happen here. The most difficult decision for, I'll say, Ontario policymakers to make is to do the right thing and allow something closer to inflation to exist as a guideline. Sadly, Matt, it was just not an issue.

Unknown Executive: It is very hard to say what's going to happen here. The most difficult decision for, I'll say, Ontario policymakers to make is to do the right thing and allow something closer to inflation to exist as a guideline. Sadly, Matt, it was just not an issue.

Speaker Change: It is very hard to see what's going to happen here. The most difficult decision core I'll say, Ontario policymakers to make has to do the right thing and allow something closer to inflation to exist.

Mark Kenney: The most difficult decision for all, say Ontario policymakers, to make is to do the right thing and allow something closer to inflation to exist as a guideline. Sadly, Matt, it was just not an issue. When we were talking along with inflation, we were unhappy when the Wind government put this in place. But really, we never got there because inflation was taking so low. So what's happened is it's not really the guideline that's the problem. It's the lotion that we're focused on, and we're coming up with some offerings to our residents, upgrade offerings to our residents, where you can in fact get it above-guidelines increase or negotiate a new rent in some instances.

Unknown Executive: As a guideline.

Matt: I believe that it was just not an issue when we were chugging along with inflation we were unhappy.

Unknown Executive: When we were chugging along with inflation, we were unhappy when the wind government put this in place, this cap in place, but really, we never got there because inflation was ticking so low. So, what's happened is it's not really the guidelines that's the problem; it's the low churn that we're focused on, and we're coming up with some offerings to our residents, upgrade offerings to our residents where you can, in fact, get an above-guideline increase or negotiate a new rent in some instances.

Unknown Executive: When we were chugging along with inflation, we were unhappy when the wind government put this in place, this cap in place, but really, we never got there because inflation was ticking so low. So, what's happened is it's not really the guidelines that're the problem; it's the low churn that we're focused on. We're coming up with some upgrade offerings for our residents where you can, in fact, get an above-guideline increase or negotiate a new rent in some instances.

Unknown Executive: When the.

Unknown Executive: When government put this in place with cap in place, but really we never got there because inflation was ticking so low.

Matt Kornack: It is very hard to say what's going to happen here. The most difficult decision for all say Ontario policymakers to make is to do the right thing and allow something closer to inflation to exist as a guideline. Sadly, Matt, it was just not an issue. When we were talking along with inflation, we were unhappy when the wind government put this in place, this cap in place. But really, we never got there because inflation was taking so low.

Unknown Executive: What's.

Unknown Executive: <unk> is not really the guidelines is the problem. It's the little churn that we're focused on and we're coming up with some.

Unknown Executive: Some offerings to our residents upgrade offerings to our residents where you can in fact.

Unknown Executive: Get it above guidelines increase or negotiated a new rent in some instances. So we aren't working on those kind of plans for the folks that do you want to upgrade their suites, we're not forcing it.

Mark Kenney: So we are working on those kinds of plans for the folks that do want to upgrade their suites. We're not forced again. We're accepting requests. So I'm going to say it's people that want to do upgrades, and we may be able to work with that a little bit. There's plans in the background to deal with it.

Unknown Executive: So, we are working on those kinds of plans for the folks that do want to upgrade their suites. We're not forcing it. We're accepting requests, I'm going to say, of people that want to do upgrades, and we may be able to work with that a little bit. There are plans in the background to deal with this, is all I know.

Unknown Executive: So, we are working on those kinds of plans for the folks that do want to upgrade their suites. We're not forcing it. We're accepting requests, I'm going to say, of people that want to do upgrades, and we may be able to work with that a little bit. There are plans in the background to deal with this, is all I know.

Unknown Executive: Accepting requests so I'm going to say of people that wanted to do upgrades and we may be.

Matt Kornack: So what's happened is it's not really the guideline that's the problem. It's the lotion that we're focused on. And we're coming up with some offerings to our residents, upgrade offerings to our residents where you can, in fact, get it above guidelines, increase or negotiate a new rent in some instances. So we are working on those kinds of plans for the folks that do want to upgrade their suites. We're not forcing it. We're accepting requests. So I'm going to say it's people that want to do upgrades and we may be able to work without a little bit. There's plans in the background to deal with it.

Unknown Executive: Be able to work with that a little bit there's there's plants in the background to deal with this is all isn't really going to say.

Mark Kenney: This is all I'm really going to say. Okay, no, that's there.

Unknown Executive: When we look at turnover, it seems to have stabilized, albeit at a very low level. Can you give us a sense of the nature of the turnover? Presumably, it's geographically more outside of Ontario. Can you give us a sense of the duration of leases that are turning? I don't know if you have that at your fingertips relative to maybe the average duration of a lease in the portfolio.

Unknown Executive: Okay.

Unknown Executive: That's fair and then when we look at turnover it seems to have stabilized, albeit at a very low level.

Matt Hornack: And then when we look at turnover, it seems to have stabilized. I'll be at a very low level.

Matt Hornack: But can you give us a sense of the nature of the turnover, presumably. It's geographically more outside of Ontario.

Unknown Executive: But can you give us a sense of the nature of the turnover, presumably it's geographically more outside of Ontario, and then Mike can you give a sense as to the duration of leases that are turning I don't know if you have that.

Mark Kenney: And then, like, can you give a sense of the duration of Lisa's attorney? I don't know if you have that at your fingertips relative to kind of maybe the average. The average duration of a lease in the portfolio. Yeah, it's a great question.

Speaker Change: At your fingertips relative to kind of maybe the average duration of our lease in the portfolio.

Mark Kenney: This is all I'm really going to say. Okay, no, that's there. And then when we look at turnover, it seems to have stabilized. I'll be at a very low level. But can you give us a sense of the nature of the turnover presumably. It's geographically more outside of Ontario. And then like, can you give a sense of the duration of Lisa's attorney? I don't know if you have that at your fingertips relative to kind of maybe the average.

Unknown Executive: Yeah, it's a great question, but one I want to be careful in answering because I would basically just say, again, a tale of two different businesses. In the market-rented buildings, we have historical turnover numbers. There's nothing unusual happening there.

Speaker Change: Yes, it's a great question why don't want to be careful in answering because I would basically just say, it's again a tale of two different businesses and the market rent buildings, we have historical turnover numbers happening there's nothing unusual happening there. It's in the legacy assets in particular, Ontario, where the guidelines are so low.

Mark Kenney: One, I want to be careful to the answering because I would basically just say, again, a tale of two, two different businesses. In the market rent buildings, we have historical turnover numbers happening. There's nothing unusual happening there. It's in the legacy office that, in particular around here, where the guidelines are so low that we're seeing these, you know, caving of turns.

Unknown Executive: It's in the legacy assets, in particular Ontario, where the guidelines are so low that we're seeing these, you know, caving of churn. Stephen can share some numbers that, or We haven't disclosed. We haven't disclosed. You know, Matt, something we'll give consideration in our disclosure on, but it is an important question.

Unknown Executive: That we're seeing these key thing of churn Steve.

Mark Kenney: Stephen can share some numbers that we haven't disclosed. We haven't disclosed. You know, that's something we'll give consideration on in our disclosure on. And, but it is an important question. We understand. Yeah, no fair enough. I think we look at some of these turnover spreads that have bumped around a bit, but I don't think they're probably indicative of the market market in the portfolio at this point in some regions. Yeah, just on that though, that is an incredibly important question because one might say, well, what was happening, you know, Capri, 30% increases and it's come down to 21.

Unknown Executive: Stephen can share some numbers that are.

Mark Kenney: The average duration of a lease in the portfolio. Yeah, it's a great question. One, I want to be careful to the answering because I would basically just say, again, a tale of two, two different businesses. In the market rent buildings, we have historical turnover numbers happening. There's nothing unusual happening there. It's in the legacy office that in particular around here where the guidelines are so low that we're seeing these, you know, caving of turns.

Unknown Executive: We haven't disclosed anything. We haven't disclosed anything. You know, Matt, something we'll give consideration to in our disclosure, but it is an important question.

Speaker Change: We havent disclose we haven't disclosed.

Unknown Executive: That's something we will give consideration in our disclosure on and but it is an important question we understand.

Unknown Executive: Yeah, no, fair enough. I think we look at some of these turnover spreads that have bumped around a bit, but I don't think they're probably indicative of the mark to market in the portfolio at this point in some regions. Yeah, just on that, though, that is an incredibly important question, because one might say, well, what was happening, you know, Capria 30% increases, and it's come down to 21. But the reality is that the turn is effectively getting even lower, because it is the market rents that are rising, that are competing with the legacy rents that are slowing down even more.

Matt: Yeah, No fair enough.

Speaker Change: Because like we look at some of these turnover spreads that have bumped around a bit but I don't think there are probably indicative of the mark to market in the portfolio at this point in some regions.

Unknown Executive: Just last one.

Matt: Yes, just just on that though that is an incredibly important question because one may say, well what was happening Capri at 30%.

Mark Kenney: Stephen can share some numbers that that we haven't disclosed. We haven't disclosed. You know, that's something we'll give consideration on in our disclosure on and but it is an important question. We understand. Yeah, no fair enough. I think we look at some of these turnover spreads that have bumped around a bit, but I don't think they're probably indicative of the market market in the portfolio at this point in some regions. Yeah, just just on that though, that is an incredibly important question because one might say, well, what was happening, you know, capriot 30% increases and it's come down to 21 and the reality is that the turn is effectively getting even lower because it is the market rents that are turning that are competing with the legacy rents that are slowing down even more.

Speaker Change: Creases and it's come down to 21 and the reality is that the churn is effectively getting even lower because it is the market rents that are turning that are competing with the legacy rents that are slowing down even more so.

Mark Kenney: And the reality is that the turn is effectively getting even lower because it is the market rents that are turning that are competing with the legacy rents that are slowing down even more. So as we work through this, we've seen the effect of mine goodness. The turn less the market rent turn is actually even lower. So you can't look at turn on its own like we have stories we did because there's a certain factor of that turn, which are market rents in the legacy building. If that makes any sense, Matt. Yeah, Matt, I think that's in the terms of like the; you see the more recent leases are the ones that are turning more than obviously the older leases, and, you know, you still see the very significant mark to market rents on the older leases.

Unknown Executive: So as we work through this, we've seen the effect of, my goodness, the churn. The market rent churn is actually even lower. So you can't look at churn on its own like we historically did, because there's a certain factor of that churn, which is market rents in the legacy bill. If that makes any sense, Matt.

Speaker Change: So as we work through this we've seen the effect of my goodness, they churn less the market rent churn is actually even lower.

Speaker Change: So you can't look at churn on its own like we historically did because theres a certain factor of that churn, which are market rents in the legacy buildings.

Matt: If that makes any sense, Matt yeah, Matt I think Edison alarms of Ash.

Unknown Executive: Yeah, Matt, I think just in terms of like the, you'll see the more recent leases are the ones that are turning more than obviously the older leases. And, you know, you still see very significant mark-to-market rents on the older leases. And now you just have a blend that's getting to that 20% uplift on our portfolio, but not as much as I would have said in the past.

Speaker Change: Youll see the more recent leases are the ones are turning more that obviously the older leases.

Mark Kenney: So as we work through this, we've seen the effect of mine goodness, the churn left the market rent churn is actually even lower. So you can't look at churn on its own like we had stories we did because there's a certain factor of that churn which are market rents in the legacy buildings. If that makes any sense, Matt. Yeah, Matt, I think you see the more recent leases are the ones that are turning more than obviously the older leases and, you know, you still see the very significant market rents on the older leases and now you just have a blend that's getting to that 20% uplift on our portfolio.

Speaker Change: You still see the very significant mark to market rents on on the older leases.

Mark Kenney: And now you just have a one that's getting to that 20% uplift on our portfolio, but not like I would say in the past of the market. Market is really the market rents because there was a steady, steady release of units. It's being skewed.

Matt: Now you just have it blend thats getting to that 20%.

Speaker Change: Uplift on our portfolio, but not like I would say in the past of the Mark to market is really the market rent because there was a steady steady release of units being skewed.

Mark Kenney: I would just say that the comfort that unit, this sounds like a negative conversation, but the comfort that unit holders should take is the runway of released value for a cap rate is absolutely astonishing because it might be coming slow, but it's going to become a long, long, long time. That's the benefit of becoming slow versus where you have a rent role that lifts with a tide and one giant shock event, and then it's over. So that we're very, very mindful of the fact that we want our portfolio to have a mix of the, you know, marquee locations on the legacy side of the fence and new construction assets that are below replacement cost on the other side of the fence.

Speaker Change: I would just say that the comfort that unit does this sounds like a negative conversation, but the comfort that unitholders should take is the runway of released value for a cap rate is absolutely astonishing because it might be coming slow, but it's going to be coming for a long long long time, that's the bench.

Mark Kenney: But not like I would say in the past of the market market is really the market rent because there was a steady, steady release of units, it's being skewed. I would just say that the comfort that unit, this sounds like a negative conversation, but the comfort that unit holders should take is the runway of released value for capriot is absolutely astonishing because it might be coming slow, but it's going to be coming for a long, long, long time.

Speaker Change: <unk>, becoming slope versus where you have the rent roll that list with the tide in one giant shock event and then it's over so we're very very minor.

Unknown Executive: It's over. So we're very, very mindful of the fact that we want our portfolio to have a mix of marquee locations on the legacy side of the fence and new construction assets that are below replacement cost on the other side.

Speaker Change: <unk> of the stock that we want our portfolio to have a mix of the marquee locations on the legacy side of the fence and new construction assets that are below replacement cost on the other side of the fence. So that's really what we're trying to create here.

Mark Kenney: That's really what we're trying to create.

Unknown Executive: Yeah said otherwise. I guess in the context of an economy that's softening, those legacy assets are incredibly defensive, to say the least, but last one for me is Aaron M. Stephen, I know we've seen an uptick on a year-over-year basis. I think you said that that should persist and then stabilize into the second half of the year. Is that still kind of the thought process? That was a great slide.

Stephen Co: Yeah, it's that. Otherwise, I guess in the context of an economy that's happening, those legacy assets are incredibly defensive. But last one for me is, Stephen, like I know we've seen an uptick on a year-over-year basis. I think you said that that should persist and then stabilize into the second half of the year. Is that that's still kind of the thought process.

Unknown Executive: Said otherwise, I guess, in the context of an economy that's softening, those legacy assets are incredibly defensive, to say the least. But the last one for me is... Stephen.

Speaker Change: Yes, it's that otherwise they got them in the context of a an economy softening both legacy assets are incredibly defensive.

Mark Kenney: That's the benefit of becoming slow versus where you have a rent roll that lifts with a tide in one giant shock event and then it's over. So that we're very, very mindful of the fact that we want our portfolio to have a mix of the, you know, marquee locations on the legacy side of the fence and new construction assets that are below replacement cost on the other side of the fence. That's really what we're trying to create.

Unknown Executive: But.

Speaker Change: Last one for me.

Unknown Executive: Steven.

Unknown Executive: Even.

Unknown Executive: I know we've seen an uptick on a year-over-year basis, but I think you said that that should persist and then stabilize into the second half of the year. Is that still the thought process? That was a great slide.

Speaker Change: Like I know, we've seen an uptick on a year over year basis, I think you've said, but that should persist and then stabilized since the second half of the year is that that's still kind of the thought process I know that was great I appreciate the incremental disclosure on capex versus <unk>.

Stephen Co: I know that was great, but I appreciate the incremental disclosure on CapEx versus R&M. Just any color as to how. Yeah, yeah, I think I stand by what I said previously in the prior quarters as well. I mean, you're going to have a base effect in Q3 that likely will be the increase in R&M is going to be a lot lower than what you saw in Q1 and Q2 of this year. You know, and again, I wanted, I take a lot of pride in what the group is doing here, and investors should take comfort in the fact that a dollar is a dollar, and which side and where it's classified should not matter, even though it does have an effect on earnings.

Unknown Executive: I appreciate the incremental disclosure on CapEx versus R&M, but just any color as to how... Yeah, yeah. I think I stand by what I said previously in the prior quarters as well. I mean, you're going to have a base effect in Q3.

Unknown Executive: I appreciate the incremental disclosure on CapEx versus R&M, but just any color as to how... Yeah, yeah. I think I stand by what I said previously in the prior quarters as well. I mean, you're going to have a base effect in Q3. The increase in R&M is going to be a lot lower than what you saw in Q1 and Q2.

Mark Kenney: Here. Yeah, it's that otherwise, I guess, in the context of an economy that's happening, those legacy assets are incredibly defensive, but last one for me, I'm Stephen, like, I know we've seen an uptick on a year over your basis. I think you said that such persists and then stabilized into the second half of the years that that's still kind of the thought process. You know, that was great. I appreciate that being a comment told disclosure on CapEx versus R&M, but just any color as to how.

Speaker Change: But just any color.

Speaker Change: Yes, I think.

Unknown Executive: Stand by what I.

Unknown Executive: Previously in the prior quarters as well.

Unknown Executive: Youre going to have a base effect in.

Unknown Executive: In Q3 that likely will be the increase in R&M is going to be a lot lower than what you saw in Q1 and Q2 of this year.

Unknown Executive: The increase in R&M is going to be a lot lower than what you saw in Q1 and Q2. You know, and again, I want to say that I take a lot of pride in what the group is doing here, and investors should take comfort in the fact that a dollar is a dollar, and which side and where it's classified should not matter even though it does have an effect on earnings. We don't care.

Unknown Executive: And again I wanted I think a lot of pride in what the group is doing here and investors should take comfort in the fact that a dollar is a dollar and which side and where its classified it should not matter, even though it does have an adverse effect on earnings. We don't care. We are very focused on the cash flow of the business and I'm exceptionally proud of what the comp.

Mark Kenney: Yeah, yeah, I think I understand by what I said, said previously in the in the prior quarters as well. I mean, you're going to have a base effect in Q3 that likely will be the increase in R&M is going to be a lot lower than what you saw in Q1 and Q2 this year. You know, and again, I wanted I take a lot of pride in what the group is doing here and investors should take comfort in the fact that a dollar is a dollar and which side and where it's classified should not matter, even though it does have an effect on earnings.

Stephen Co: We don't care. We are very focused on the cash flow of the business, and I'm exceptionally proud of what the company's been able to do here, regardless of its impact. A dollar is a dollar.

Unknown Executive: We are very focused on the cash flow of the business, and I'm exceptionally proud of what the company's been able to do here regardless of its impact. A dollar is a dollar. Yeah, I know the CapEx trend has been remarkable. Thanks, and congrats on a good quarter.

Speaker Change: He has been able to do here regardless of its impact a dollar is a dollar.

Stephen Co: Yeah, and the CapEx trend has been remarkable. Thanks. Congrats on a good course. Thanks. I appreciate it.

Speaker Change: Yes, no the Capex trend has been remarkable.

Speaker Change: Thanks, Congrats on a good quarter.

Unknown Executive: Thanks. I appreciate it.

Unknown Executive: Thanks. Bye.

Speaker Change: Thanks I appreciate it.

Sairam Srinivas: Our next question is from Siram Srinvath with Kormar Securities. Your line is now open. Thank you. Good morning, guys. Congrats on the good quarter.

Sairam Srinivas: Our next question is from Sairam Srinivas with Cormar Securities. Your line is now open.

Speaker Change: Our next question is from <unk> <unk>.

Speaker Change: <unk> with <unk> Securities. Your line is now open.

Mark Kenney: We don't care. We are very focused on the cash flow of the business and I'm exceptionally proud of what the company's been able to do here, regardless of its impact. A dollar is a dollar. Yeah, and the CapEx trend has been remarkable. Thanks. Congrats on a good course. Thanks. Appreciate it.

Unknown Executive: Thank you. Good morning, guys, and congratulations on a good quarter. Just looking at the acquisitions completed so far and, you know, the potential acquisitions coming in, can you comment a bit about the vendors that are essentially sourcing these assets from? And you know the potential sources you're looking over the next 12 months for new assets in the acquisition program.

Speaker Change: Thank you operator, good morning, guys and congrats on a good quarter.

Unknown Executive: Just looking at the acquisitions completed so far and, you know, the potential acquisitions coming in, can you comment a bit about the vendors that are essentially sourcing these assets from?

Julian Schonfeldt: Just to give the acquisitions completed so far and the potential acquisition is coming in. Can you comment a bit about the vendor that is essentially sourcing these assets from? And the potential sources are looking over the next 12 months for new assets in the acquisition program.

Speaker Change: Just looking at the acquisitions completed so far and.

Unknown Executive: The potential acquisitions coming in.

Speaker Change: Can you comment a bit about the vendor with essentially schools can these assets from.

Speaker Change: And the potential sources Youre looking over the next 12 months plug the new assets that quick ship program.

Julian Schonfeldt: Our next question is from Siram Srinvath with Cormar Securities. Your line is now open. Thank you. Good morning, guys. Congrats on the good quarter. Just to give the acquisition completed so far and the potential acquisition is coming in. Can you comment a bit about the vendor that is essentially sourcing these assets from? And the potential sources are looking for the next 12 months for new assets in the acquisition program.

Unknown Executive: It's a mix of, I'll take the question, it's a mix of merchant developers. So folks that, you know, their business model is to build and sell. But also, you know, we've been dealing with other kinds of longer-term holders that are just seeking to raise new capital to redeploy elsewhere in their business. And so, you know, I do think there's a higher interest rate environment has caused some folks that otherwise may not have been sellers to be sellers.

Speaker Change: It's a mix of.

Julian Schonfeldt: I'll take the question. It's a mix of merchant developers, so folks that their business model is to build and sell. But also we've been dealing with other longer-term holders that are just seeking to raise new capital to redeploy elsewhere in their business. And so I do think the higher interest rate environment has caused some folks that otherwise may not have been sellers to be sellers. And we're very well capitalized, and we'll continue to work with that same mix of folks going forward. It's really been a great opportunity to acquire irreplaceable properties. You know, we're not of the view that this will be open forever, but we still think the window's there for us to capitalize, and we'll continue to work hard to keep getting property like the ones that you've seen us transact on.

Speaker Change: I'll take the question, it's a mix of merchant developers, so folks that their business model is to build and sell but also.

Speaker Change: We've been dealing with other kind of longer term holders that are just seeking to raise raise new capital to redeploy elsewhere in their business and so.

Speaker Change: I do think there is a higher interest rate environment has.

Speaker Change: Cause some folks that otherwise may not have been sellers to be sellers.

Unknown Executive: And, you know, we're very well capitalized, and we'll continue to work with that same mix of folks going forward. It's been, it's really been a great opportunity to acquire, you know, irreplaceable properties. We, you know, are not of the view that this will be open forever, but we still think the window's there for us to capitalize, and we'll continue to work hard to keep getting properties like the ones that you've seen us transact.

Julian Schonfeldt: I'll take the question. It's a mix of merchant developers, so folks that their business model is to build and sell, but also we've been dealing with other kind of longer term holders that are just seeking to raise new capital to redeploy elsewhere in their business. And so I do think the higher interest rate environment has caused some folks that otherwise may not have been sellers to be sellers and we're very well capitalized and we'll continue to work with that same mix of folks going forward.

Speaker Change: We're very well capitalized and we will continue to work with that same mix of folks going forward.

Unknown Executive: It's really been a great opportunity to acquire.

Speaker Change: Irreplaceable irreplaceable properties, we're not of the view that this will this will be open forever, but we still think the windows windows there for us to capitalize and will continue to work hard to keep getting property like the ones that you've seen us transact on.

Julian Schonfeldt: So definitely a very opportunistic moment for these assets.

Unknown Executive: So definitely, it's a very opportunistic moment for these assets. Looking at Mark's comments on, you know, the softness broadly in the condo market, would that be something that could probably be a source of acquisitions ahead? And, like, I mean, just from a naive question, but in terms of product, does it really make a lot of difference in terms of, you know, the condo product versus the part of the purpose-built rental product that you're seeing out there?

Unknown Executive: So definitely, it's a very opportunistic moment for these assets. Looking at Mark's comments on, you know, the softness broadly in the condo market, would that be something that could probably be a source of acquisitions ahead? And, like, I mean, just from a naive question, but in terms of product, does it really make a lot of difference in terms of, you know, the condo product versus the part of the purpose-built rental product that you're seeing out there?

Speaker Change: So definitely today opportunistic moment for these assets.

Julian Schonfeldt: Looking at most comments on the softness broadly in the condo market, would that be something that could probably be a source of acquisition ahead? I mean, just from a very naive question, but in terms of product, that is really make a lot of difference in terms of, you know, the condo product versus the part of the purpose of trying to product that you're seeing out there. Well, we remain optimistic always. It's hard to predict the future. The good news is we're getting great visibility in Julian's group with things that are available in the marketplace, and let's hope.

Unknown Executive: Looking at Mark comment on you know the softness broadly in the condo market.

Speaker Change: That would be something that could probably be a source of acquisition ahead. Then I mean, just from a I mean, it's a pretty nice question, but in terms of product that doesn't really make a lot of difference in terms of.

Julian Schonfeldt: It's really been a great opportunity to acquire irreplaceable properties. We're not of the view that this will be open forever, but we still think the windows there for us to capitalize and we'll continue to work hard to keep getting property like the ones that you've seen us transact on. Definitely a very opportunistic moment for these assets.

Speaker Change: Condo product Boston.

Speaker Change: Pulp has been trying to put up that you're seeing on that.

Unknown Executive: Well, we remain optimistic always. It's hard to predict the future. The good news is we're getting great visibility in Julian's group of things that are available in the marketplace, and let's hope, you know, it feeds into our strategy and if we can buy below replacement cost and we can buy marquee locations, we're really trying to find that right mix in the portfolio, so it's a wait and see, but we've heard from several sources now that they might be interesting in the future. We'll,

Unknown Executive: Well, we remain always optimistic. It's hard to predict the future.

Speaker Change: Well, we remain optimistic always it's hard to predict the future.

Julian: The good news is we're getting great visibility julians grouped with things that are available in the marketplace.

Mark Kenney: Looking at most comments on the softness broadly in the condo market, would that be something that could probably be a source of acquisition ahead? I mean, just from a very naive question, but in terms of product that is really make a lot of difference in terms of, you know, the condo product versus the part of the purpose of trying to product that you're seeing out there. Well, we remain optimistic always. It's hard to predict the future.

Speaker Change: Let's hope.

Julian Schonfeldt: It feeds into our strategy, and if we can buy below replacement cost and we buy marquee locations, we're really trying to find that right mix in the portfolio. So, it's a wait-and-see, but it's something we've heard from several sources now that might be interesting in the future. Let's hope.

Speaker Change: It feeds into our strategy.

Speaker Change: And if.

Speaker Change: If we can buy below replacement cost and we buy marquee locations, we're really trying to find that right mix in the portfolio. So it's a wait and see but it's something we've heard.

Speaker Change: From several sources now that it might be interesting in the future. We will let's let's hope we are starting to see a little bit as the condo markets struggled, particularly pre construction sales.

Mark Kenney: The good news is we're getting great visibility in Julian's group with things that are available in the marketplace and let's hope. It feeds into our strategy and if we can buy below replacement cost and we buy marquee locations, we're really trying to find that right mix in the portfolio. So, it's a wait and see, but it's something we've heard from several sources now that might be interesting in the future. Let's hope.

Unknown Executive: Well, what we are starting to see a little bit is as the condo markets struggle, particularly pre-construction sales, some developers are pivoting from otherwise building condo buildings to building purpose-built, and particularly as the HST has been relieved, and you can still get some pretty decent financing from CMHC-insured sources, and so it's a possibility that we'll see a shift more towards purpose-built and provide us with more acquisition opportunities, You can only imagine an environment where deposits start getting cancelled, like dropped and en masse, and there are buildings that are nearing completion. If we find those opportunities that were built with construction contracts six, seven years ago that are being built below replacement costs, and that, again, we're here to talk.

Julian Schonfeldt: Well, we are starting to see a little bit. Is that the condo market's struggle, particularly pre-construction sales? Some developers are pivoting from otherwise building condo buildings to building purpose-built, and particularly as the HST was relieved. And you can still get some pretty decent financing from CMHC, insured sources, and so it's potential that we'll feel a shift more towards purpose-built and providing that with more acquisition opportunities. But, as Mark said, we'll see how this all plays out. So, you can only imagine an environment where deposits start getting canceled, dropped on mass, and there's buildings that are nearing completion.

Speaker Change: Some developers are pivoting from otherwise building condo buildings to building purpose built and particularly as the HST was relieved and.

Speaker Change: You can still get some pretty decent financing from from CMA Sea insured.

Speaker Change: Sources, and so its potential that we will see a.

Speaker Change: A shift more towards purpose built and.

Speaker Change: Providing us with more acquisition opportunities, but as Mark said, we'll see how this all plays out you can have you can only imagine an environment where deposits like start getting cancer like dropped in on that.

Julian Schonfeldt: Well, we are starting to see a little bit. Is that the condo market's struggle, particularly pre-construction sales? Some developers are pivoting from otherwise building condo buildings to building purpose built and particularly as the HST was relieved. And you can still get some pretty decent financing from CMHC, insured sources and so it's potential that we'll feel a shift more towards purpose built and providing that with more acquisition opportunities. But as Mark said, we'll see how this all plays out.

Speaker Change: And there's a there's buildings that are nearing completion, if we find.

Julian Schonfeldt: If we find those opportunities that were built with construction contracts six, seven years ago that are being built below replacement cost, then again, we're here to talk. That's amazing. That's really going to back.

Speaker Change: Those are opportunities that were built with construction contracts of six seven years ago that are being built below replacement cost and that again.

Speaker Change: We're here to talk.

Unknown Executive: That's amazing. Thanks for the call, guys. We'll turn it back.

Speaker Change: That's amazing.

Speaker Change: I'll turn it back.

Unknown Executive: Okay.

Julian Schonfeldt: So, you can only imagine an environment where deposits start getting cancer dropped on mass and there's buildings that are nearing completion. If we find those opportunities that were built with construction contracts six, seven years ago that are being built below replacement cost, then again, we're here to talk. That's amazing. That's really going to back.

Mario Saric: We have a follow-up from Mario Sarch with Scotia Bank. Your line is now open.

Mario Saric: We have a follow-up from Mario Saric with Scotiabank. Your line is now open.

Speaker Change: We have a follow up from Mario <unk> with Scotiabank. Your line is now open.

Mark Kenney: I thank you. Just a quick one for me. Mark, coming back to this upgrade program that you're offering to tenants. I mean, I'll be able to answer the question. We'll give it a shot.

Unknown Executive: Thank you. Just a quick one for me.

Unknown Executive: Thank you. Just a quick one for me. Mark, coming back to this upgrade program that you're offering to tenants.

Mark: Alright. Thank you just a quick one for me Mark coming back to this upgrade program a draw from the tenants.

Unknown Executive: Mark, coming back to this upgrade program that you're offering to tenants. You may not be able to answer the question, but we'll give it a shot. Is there a target acceptance rate that you're thinking about when offering the program in terms of what percentage of the portfolio? And then, secondly, the increases in rent on the upgrades, would those funnel through your renewal rates or turnover rates?

Speaker Change: May not be able to answer the question I will give it a shot.

Mark Kenney: Is there a target acceptance rate that you're thinking about when offering the program in terms of what percentage of the portfolio, and then secondly, the increases in rent on the upgrades with those funnel through your new rates or channel the rates on the loose platform? Well, it's too soon to say, I guess, but what we've been surprised by is that we've been approached by a large number of tenants that are trying to get in the queue to rent apartments in a building that they already live in. And in that case, they would; they're prepared. They want to stay.

Speaker Change: Is there a target acceptance range that youre thinking about or not from the program in terms of what percentage of the portfolio and then secondly.

Speaker Change: The increases in rent on the upgrades would those kind of three year renewal rates or turnover rate, although we.

Mario Saric: We have a follow up from Mario Sarch with Scotia Bank. Your line is now open. I thank you just a quick one for me.

Unknown Executive: I'm always

Unknown Executive: Spokesman.

Unknown Executive: Well, it's too soon to say, I guess, but what we've been surprised by is that we've been approached by a large number of tenants that are trying to get in the queue to rent apartments in a building that they already live in. And in that case, they're ready, they want to stay, they want an upgraded unit, and they'd be prepared to be a source of income for us within our own building.

Speaker Change: Well, it's too soon to say I guess, but what we've been surprised by is that we've been approached by a large number of tenants that are trying to get in the queue to rent apartments in a building. They are already live in and in that case. They would they are prepared they are.

Mark Kenney: Mark, coming back to this upgrade program that you're offering to tenants. I mean, I'll be able to answer the question. We'll do it a shot.

Mark Kenney: Is there a target acceptance rate that you're thinking about when offering the program in terms of what percentage of portfolio and then secondly, the increases in rent on the upgrades with those funnel through your new rates or turnover rates on the loose platform? Well, it's too soon to say, I guess, but what we've been surprised by is that we've been approached by a large number of tenants that are trying to get in the queue to rent apartments in a building that they already live in.

Mark Kenney: They want an upgraded unit. And they'd be prepared to be a source of market for us within our own building. And that creates a cascading effect of then their unit is available. Maybe somebody else in the building is looking for the same thing. And it starts to release turnover.

Mark: Wanted to stay they wanted upgraded unit and they would be prepared to be a source of market for us within our own building and that creates a cascading effect than their unit has appealed maybe somebody else in the building is looking for the same thing and it starts to release turnover. Okay. We have had a few examples of this where we said of course.

Unknown Executive: And that creates a cascading effect: then their unit is available, maybe somebody else in the building is looking for the same thing. And it starts to release turnover, okay? We have had a few examples of this where we said, of course, we would make our units available, maybe even at a more attractive rate to our existing residents, but it's too early to say. We've had some exciting success, but I would hate to kind of send a message here that this is something that could be more widely rolled out. It's just exciting.

Mark Kenney: We have had a few examples of this where we said, of course, we would make our units available, maybe even out of a more attractive rate to existing residents, but it's too early to say we've had some exciting success.

Mark: We would we would make our units available maybe even at a more attractive rate to our existing residents, but it's too early to say we've had some exciting success, but I would hate to kind of send a message here that this is something that could be more widely rolled out. It's just exciting that's one scenario.

Mark Kenney: And in that case, they would they're prepared. They want to stay. They want an upgraded unit and they'd be prepared to be a source of market for us within our own building. And that creates a cascading effect of then their unit is available. Maybe somebody else in the building is looking for the same thing and it starts to release turnover. We have had a few examples of this where we said, of course, we would we would make our units available.

Mark Kenney: But I would hate to kind of send a message here that this is something that could be more widely rolled out. It's just exciting.

Mark Kenney: That's one scenario. The other scenario is we have had been approached by residents that are wanting a new kitchen and are wanting a new bathroom. And then that's the kind of situation we have to kind of do the math and see if a voluntary AGI is applicable. Very different than an AGI that's forced to even actually do a voluntary AGI in Ontario as well. So that's not doing it. It's really driven by the camera.

Unknown Executive: That's one scenario. The other scenario is we have been approached by residents that are wanting a new kitchen or wanting a new bathroom, and then that's the kind of situation we have to kind of do the math on. See if a voluntary AGI is applicable. Very different than an AGI that's forced. You can actually do a voluntary AGI in Ontario as well, so that's something that is really driven by the tenant. Noted.

Speaker Change: The other scenario is we have had been approached by residents that are wanting a new kitchen are wanting a new bathroom and then that's the kind of situation we have to kind of do the math and see if a voluntary hei is applicable very different than an Adi. That's forced that you can actually do a voluntary agi in Ontario.

Mark Kenney: Maybe even out of more attractive rate to existing residents, but it's too early to say we've had some exciting success, but I would hate to kind of send a message here that this is something that could be more widely rolled out. It's just exciting. That's one scenario.

Unknown Executive: As well so that's something that is really driven by the tenant.

Unknown Executive: Okay, thank you.

Unknown Executive: Yeah.

Unknown Executive: Okay. Thank you.

Speaker Change: Got it okay.

Unknown Executive: Thanks.

Mark Kenney: The other scenario is we have had been approached by residents that are wanting a new kitchen and are wanting a new bathroom. And then that's the kind of situation we have to kind of do the math and see if a voluntary AGI is applicable. Very different than an AGI that's forced to even actually do a voluntary AGI in Ontario as well. So that's something that is really driven by the task.

Dean Wilkinson: We have a question from Dean Wilkinson with CIBC. Your line is now open.

Dean Wilkinson: We have a question from Dean Wilkerson with CIBC. Your line is now open. Thanks.

Unknown Executive: We have a question from Deane Wilkerson with CIBC. Your line is now open.

Dean Wilkinson: Thanks, morning guys. Mark, more of a philosophical question. What do you think is the biggest gating factor for new purpose-built supply? Is it, you know, the development and construction? Is it the realizable rents or is it the cost of capital? Or, you know, maybe it's a combination of all three, but how would they rank in sort of the matrix of putting a shovel on the ground?

Speaker Change: Thanks, Good morning, guys.

Unknown Executive: Mark, more of a philosophical question, what do you think is the biggest gating factor for new purpose-built supply? Is it the development and construction costs? Is it the realizable rents? Or is it the cost of capital? Or, you know, maybe it's a combination of all three, but how would they rank in sort of the matrix of?

Unknown Executive: Mark, more of a philosophical question. What do you think is the biggest gating factor for new purpose-built supply? Is it the development and construction costs? Is it the realizable rents? Or is it the cost of capital? Or, you know, maybe it's a combination of all three, but how would they rank in sort of the matrix of?

Unknown Executive: Mark.

Speaker Change: More of a film philosophical question. What do you think is the biggest gating factor for new purpose built supply is is it development.

Unknown Executive: different for every developer. So, there's that.

Unknown Executive: The development and construction costs is it the realizable rents or is it the cost of capital.

Unknown Executive: Maybe it's a combination of all three but how would they rank in sort of the matrix of putting.

Dean Wilkinson: We have a question from Dean Wilkinson with CIBC. Your line is now open. Thanks. Morning, guys.

Speaker Change: Putting a shovel in the ground.

Mark Kenney: It's different for every developer. What we, you know, round one was always development fees, and they become more prohibitive, and that hasn't gone away. When you talk to most developers, there was, you know, a bit of a sigh of relief on the HST friend because development fees had just made properties completely not viable. You know, I heard stories of an entrony was $400,000 in before you get to the land and a shovel. So how does that create an affordable unit? So there's that. Today, the distress we see in development is around mesfinancing and, you know, guys that were performing very different financing rates.

Speaker Change: It's different for every developer.

Unknown Executive: different for every developer, but what we, you know, round one was always development fees, and they've become more prohibitive. And that hasn't gone away.

Speaker Change: What we you know round, one was always development fees and they become more prohibitive and that hasn't gone away. When you talk to most developers there was a bit of a sigh of relief on the H S T front.

Mark Kenney: Mark, more of a philosophical question. What do you think is the biggest gating factor for new purpose built supply? Is it the development and construction costs? Is it the realizable rents or is it the cost of capital? Or maybe it's a combination of all three, but how would they rank in sort of the matrix of putting a shovel on the ground? It's different for every developer. What we, you know, round one was always development fees and they become more prohibitive and that hasn't gone away.

Unknown Executive: When you talk to most developers, there was, you know, a bit of a sigh of relief on the HST front because development fees have just made properties completely unviable. You know, and I heard stories of it in Toronto; it was $400,000 before you got to the land and the shovel. So how does that create an affordable unit? So, there's that. Today, the distress we see in development is around MES financing and, you know, guys that were proposing very different financing rates, and that is, I'd say, the overarching theme of the conversation that Julian's having.

Speaker Change: Because development teams, who just need property is completely not viable I heard right oriented and Toronto $400000 in before you.

Speaker Change: You get to the land and the shovel. So how does that create for an affordable unit.

Speaker Change: So so there's that.

Unknown Executive: That.

Unknown Executive: Today.

Speaker Change: The distress, we see in development is around Mezz financing and you know guys that we're pro forming very different financing rates and that is I'd say the overarching theme.

Mark Kenney: When you talk to most developers, there was, you know, a bit of a sigh of relief on the HST friend because development fees had just made properties completely not viable. I heard stories of an entrony was $400,000 in before you get to the land and the shovel. So how does that create a affordable unit?

Julian Schonfeldt: And that is, I'd say, the overarching theme. Of the, I'll say conversation that Julian's getting.

Speaker Change: Of I'll.

Unknown Executive: I'll say compensation that Julien getting.

Julian Schonfeldt: Yeah, I mean with Dean, if you look at all the acquisitions we did, you know, we're below replacement cost and, you know, those values that we pay tend to be IRR driven. And when you've got IRR driven values below replacement cost, who's going to build into that, right? No, yeah. It's remarkable that you can buy. Yeah. It's remarkable that you can buy a new asset below replacement cost. Someone's taken a bath on her.

Unknown Executive: I mean, if you look at all the acquisitions we did, you know, we're below replacement cost, and, you know, the values that we pay tend to be IRR-driven. And when you've got IRR-driven values below replacement cost,

Speaker Change: If you look at all the acquisitions we did.

Speaker Change: We're below replacement cost.

Speaker Change: The values that we've paid tend to be IRR, driven and when you've got IRR driven values below replacement cost who's going to build into that right.

Mark Kenney: So there's that. Today, the distress we see in development is around mesfinancing and guys that were performing very different financing rates. And that is, I'd say, the overarching theme of the alpha conversation that Julian's getting. Yeah, I mean, if you look at all the acquisitions we did, you know, we're below replacement cost and, you know, those values that we pay tend to be IRR driven. And when you've got IRR driven values below replacement cost, who's going to build into that, right?

Unknown Executive: Oh yeah, it's remarkable that you can buy a new asset below replacement cost. Someone's taking a bath on it, right? Sorry, we're all interrupting each other here. But this is the first time in Canada that we've seen this. It showed up 24 months ago.

Unknown Executive: Yes.

Speaker Change: <unk> you can buy yeah.

Unknown Executive: It's remarkable that you can buy a new asset below its replacement cost. Someone's taking a bath on it, right?

Speaker Change: It's remarkable that you can buy a new asset below replacement someone's taken a bath.

Unknown Executive: It's actually, sorry, we're all interrupting each other here. But this is the first time in Canada that we've seen this. It showed up 24 months ago. And it's never, like... In many cases, preferential financing in strong markets like

Mark Kenney: It's actually, we're all interrupting each other here. But it is the first time in Canada that we've seen this. It showed it 10 to 24 months ago, and it's never. We used to have these calls, and we used to talk about where below replacement cost and the value of the portfolio. Imagine we're seeing this with brand new asset. It's like, it's unbelievable.

Speaker Change: It's a story, where all interrupting each other here, but it is the first time in Canada that we've seen this it's it showed a 10 or 24 months ago and it's never like.

Speaker Change: We used to have these calls and we used to talk about we're below replacement cost and the value of the portfolio.

Unknown Executive: We're seeing this as a brand new asset it looks like it's unbelievable and so what Julian He's got a great line that that would.

Mark Kenney: No, yeah. It's remarkable that you can buy. Yeah. It's remarkable that you can buy a new asset below replacement cost. Someone's taking a bath on her. It's actually, we're all interrupting each other here. But it is the first time in Canada that we've seen this. It showed a 10 to 24 months ago. And it's never like we used to have these calls and we used to talk about where below replacement cost and the value of the portfolio.

Mark Kenney: And so what, Julian, you had a great line that, you know, would people ask us about development and say, well, why would we be building when we can buy something for 80 cents on the dollar? New with it with people that are already renting, no development risk. In many cases, preferential financing in strong markets. Like, you know, people can tell us, whoa, what a brilliant strategy, and we just don't think it's not complicated. No, it's, I mean, it's great. I mean, you're doing what we all want to do: get younger and less regulated. But, you know, that's something.

Speaker Change: When people ask us about development and say well why would we be building when we can buy something for 80 cents on the dollar new with it with people that are already renting no development risk.

Unknown Executive: risk, in many cases, preferential financing in strong markets, like You know, people tell us, well, what a brilliant strategy, and we just don't think it's that complicated.

Speaker Change: Many cases preferential financing in strong markets.

Unknown Executive: Mike.

Speaker Change: You know people.

Speaker Change: Can you tell us what what a brilliant strategy and we just don't think it's not complicated.

Mark Kenney: Imagine we're seeing this with brand new asset. It's like, it's unbelievable. And so what Julian, you had a great line that, you know, would people ask us about development and say, well, why would we be building when we can buy something for 80 cents on the dollar? New with it with people that are already renting, no development risk. In many cases, preferential financing in strong markets. Like, you know, people can tell us, whoa, what a brilliant strategy. And we just don't think it's not complicated. No, it's, I mean, it's great. I mean, you're doing what we all want to do, get younger and less regulated.

Unknown Executive: No, it did. I mean, it's great. You're doing what we all want to do, get younger and less regulated. But you know, that's something, Thanks guys. I appreciate it.

Unknown Executive: No.

Speaker Change: It's great I mean, youre doing what we all want to do get younger unless regulate it but you know that.

Unknown Executive: [laughter].

Unknown Executive: Carl Helfrich

Unknown Executive: Okay.

Mark Kenney: Thanks, guys. Appreciate it.

Speaker Change: Thanks, guys I appreciate it.

Operator: We have no additional questions at this time.

Unknown Executive: Thanks.

Operator: We have no additional questions at this time, so I'll pass the call back to the management team for any closing remarks.

Unknown Executive: We have no additional questions at this time, so I'll pass the call back to the management team for any closing remarks.

Speaker Change: We have no additional questions at this time, so I'll pass the call back to the management team for any closing remarks.

Operator: So I'll pass the call back to the management team for a closing remark. Also, thank everybody for your time today. If you have further questions, please do not hesitate to contact us at any time. Thank you again, and have a great day.

Unknown Executive: I also want to thank everybody for their time today. If you have further questions, please do not hesitate to contact us at any time. Thank you again, and have a great day!

Speaker Change: I also want to thank everybody for your time today. If you have further questions. Please do not hesitate to contact us at any time. Thank you again and have a great day.

Mark Kenney: But, you know, that's something.

Unknown Executive: That concludes today's call. Thank you all for your participation. You may now disconnect your line.

Speaker Change: That concludes today's call. Thank you all for your participation you may now disconnect your line.

Unknown Executive: Thanks, guys. Appreciate it.

Unknown Executive: We have no additional questions at this time.

Unknown Executive: So I'll pass the call back to the management team for an closing remark. Also, thank everybody for your time today. If you have further questions, please do not hesitate to contact us at any time.

Unknown Executive: Thank you again and have a great day.