Q2 2024 SmartCentres Real Estate Investment Trust Earnings Call

August 9, 2024

Speaker Change: The look of love The look of love The look of love The look of love The look of love If you judge a book by the cover Then you judge the look by the lover

Speaker Change: I hope you'll remember this kind of love, and I don't give one next ring to one another And the next one is just my next ring, so I'll have them out and maybe one that you'll find to look for [inaudible]

Speaker Change: [inaudible]

Speaker Change: I'll see you in the next video.

Operator: The conference is now being recorded.

Peter Slan: The conference is now being recorded. Good morning, ladies and gentlemen, welcome to the SmartCentres REIT Q2 2024 conference. I would like to introduce Mr. Peters, [inaudible] Good morning, and welcome to our second quarter 2024 results call. I'm Peter Slan, Chief Financial Officer, and I'm joined on today's call by Mitch Goldhar, SmartCentres Executive Chairman and CEO, and by Rudy Gobin, our Executive Vice President of Portfolio Management and Investment. We will begin today's call with some comments from Mitch.

Unknown Executive: The conference is now being recorded. Good day, ladies and gentlemen.

Speaker Change: The conference is now being recorded.

Speaker Change: You

Speaker Change: Episode 2

Operator: Good day, ladies and gentlemen. Welcome to the SmartCentres REIT Q2 2024 conference call. I would like to introduce Mr. Peter Slan. Please go ahead.

Unknown Executive: Welcome to the SmartCentres Read Q2 2024 conference call.

Speaker Change: [inaudible]

Speaker Change: Good day, ladies and gentlemen. Welcome to the SmartCenters REIT Q2 2024 conference call.

Unknown Executive: I would like to introduce Mr. Peter Slan.

Speaker Change: I would like to introduce Mr. Peter Slan...

Peter Slan: Rudy will then provide some operational highlights, and I will review our financial results. We will then be pleased to take your questions. Just before I turn the call over to Mitch, I would like to refer you specifically to the cautionary language about forward-looking information, which can be found at the front of our MD&A materials. This also applies to comments from any of the speakers this morning.

Peter Slan: Good morning, and welcome to our second quarter 2024 results call. I'm Peter Slan, Chief Financial Officer, and I'm joined on today's call by Mitch Goldhar, SmartCentres Executive Chairman and CEO, and by Rudy Gobin, our Executive Vice President of Portfolio Management and Investment. We will begin today's call with some comments from Mitch. Rudy will then provide some operational highlights, and I will review our financial results. We will then be pleased to take your questions.

Speaker Change: Please go ahead.

Speaker Change: Good morning and welcome to our second quarter 2024 results call. I'm Peter Slan, Chief Financial Officer, and I'm joined on today's call by Mitch Goldhar, SmartCentres Executive Chair and CEO , and by Rudy Gobin, our Executive Vice President of Portfolio Management and Investments.

Peter Slan: We will begin today's call with some comments from Mitch. We will then provide some operational highlights, and I will review our financial results. We will then be pleased to take your questions.

Peter Slan: We will begin today's call with some comments from Mitch. Rudy will then provide some operational highlights, and I will review our financial results. We will then be pleased to take your questions.

Peter Slan: Just before I turn the call over to Mitch, I would like to refer you specifically to the cautionary language about forward-looking information, which can be found at the front of our MD&A materials. This also applies to comments of any of the speakers this morning.

Speaker Change: Just before I turn the call over to Mitch, I would like to refer you specifically to the cautionary language about forward-looking information, which can be found at the front of our MD&A materials. This also applies to comments of any of the speakers this morning. Mitch, over to you.

Mitchell Goldhar: Mitch, over to you. Thank you, Peter. Good morning and welcome, everyone.

Mitchell Goldhar: Mitch, over you. Thank you, Peter.

Peter Slan: Thank you, Peter. Good morning and welcome everyone.

Mitchell Goldhar: Good morning, and welcome, everyone. The second quarter delivered strong results, building on the momentum we spoke of last quarter, with over 272,000 square feet of new lease deals executed in the quarter. Committed occupancy in our portfolio improved to 98.2 percent. From the largest retail in the world, Walmart, and many of our great Canadian brands, our tenant partner relationships continue to deepen with same-store expansions and new stores. New locations are either underway or will begin construction shortly with names such as Canadian Tire, Winners, Home Sense, LCBO, some full-line grocery, Dollarama, Golf Town, banks, QSRs, and more.

Mitchell Goldhar: The second quarter delivered strong results, building on the momentum we spoke of last quarter. With over 272,000 square feet of new lease deals executed in the quarter, committed occupancy in our portfolio improved to 92, rather than 98.2%. From the largest retail in the world, Walmart, and many of our great Canadian brands, our tenant-partner relationships continue to deepen with same-store expansions and new stores. New Locations are either underway or will begin construction shortly with names such as Canadian Tire, Winners, and HomeCentres. LCBO, Some Full Line Grocery, Dollarama, and Golf Town.

Mitchell Goldhar: The second quarter delivered strong results, building on the momentum we spoke of last quarter, with over 272,000 square feet of new lease deals executed in the quarter. Committed occupancy in our portfolio improved to 92, rather than 98.2%, from the largest retail in the world, Walmart, and many of our great Canadian brands are tenant partner relationships continued to deepen with same store expansions and new stores. New locations are either underway or will begin construction shortly with names such as Canadian Tire, Winners, and HomeCentre. LCBO, Some Full Line Grocery, Dollarama, Golftown, banks, QSRs, and more.

Mitch Goldhar: Thank you, Peter. Good morning and welcome everyone.

Speaker Change: The second quarter delivered strong results, building on the momentum we spoke of last quarter.

Mitch Goldhar: with over 272,000 square feet of new lease deals executed in the quarter.

Speaker Change: Committed Occupancy in our portfolio improved to 98.2%.

Speaker Change: From the largest retail in the world, Walmart, and many of our great Canadian brands, our tenant-partner relationships continue to deepen with same-store expansions and new stores.

Speaker Change: New Locations

Speaker Change: are either underway or will begin construction shortly with names such as Canadian Tire Winners, HomeSense.

Speaker Change: LCBO, Some Full Line Grocery, Dollarama, Golf Town

Mitchell Goldhar: Banks, QSRs, and more. You may have already noticed the higher traffic or selection and wider array of tenants in our SmartCentres locations as we enhance the experience beyond the everyday essentials with health and beauty, recreation, fitness, education, clinics, pet stores, datecares, and specialty foods. As we work closely with our tenants, no detail is too small in ensuring SmartCentres is a good option for the growth plans of the country's strongest retailers and a desirable location to continue operating profitable stores, which not surprisingly has culminated in us already extending 86% of our over 5 million square feet of space, maturing this year.

Speaker Change: Banks, QSRs, and more.

Mitchell Goldhar: You may have already noticed the higher traffic or selection in a wider array of tenants in our Smart Centers locations. As we enhance the experience beyond the everyday essentials with health and beauty, recreation, fitness, education, clinics, pet stores, daycares, and specialty foods. As we work closely with our tenants, no detail is too small in ensuring Smart Centers is a good option for the growth plans of the country's strongest retailers and a desirable location to continue operating profitable stores, which, not surprisingly, has culminated in us already extending over 86 percent of our over 5 million square feet, maturing this year.

Mitchell Goldhar: You may have already noticed the higher traffic or selection and wider array of tenants in our SmartCentres locations, as we enhance the experience beyond the everyday essentials with health and beauty, recreation, fitness, education, clinics, pet stores, daycares, and specialty foods. As we work closely with our tenants, no detail is too small in ensuring SmartCentres is a good auction for the growth plans of the country's strongest retailers and a desirable location to continue operating profitable stores, which not surprisingly has culminated in us already extending 86% of our over 5 million square feet of space maturing this year. Also positive is the 8.5% rental rate lift achieved on these extensions. Excluding anchor tenets.

Speaker Change: You may have already noticed the higher traffic.

Speaker Change: or Selection.

Speaker Change: and wider array of tenants in our SmartCenters locations.

Speaker Change: as we enhance the experience beyond the everyday essentials with health and beauty, recreation, fitness, education, clinics, pet stores, daycares, and specialty foods.

Speaker Change: as we work closely with our tenants.

Speaker Change: No detail is too small in ensuring smart centers is a good option.

Speaker Change: for the growth plans.

Speaker Change: of the country's strongest retailers and a desirable location to continue operating profitable stores.

Speaker Change: which, not surprisingly, has culminated in us already extending over 86% of our over 5 million square feet maturing this year.

Mitchell Goldhar: Also positive is the 8.5 percent rental rate lifts achieved on these extensions, exclusive for the tenant. This rental rate lift is pure. It's a pure lift, not buoyed up by tenant inducements or other costly considerations, which can sometimes be offered. This rental rate increase is a direct reflection of the value of SmartCentres Real Estate and the amount of business being done on our properties.

Mitchell Goldhar: Also positive is the 8.5% rental rate lift achieved on these extensions, exclusive of 8.10%. This rental rate lift is pure. It's a pure lift, not buoyed up by tenant inducements or other costly considerations which can sometimes be offered.

Speaker Change: Also positive is the 8.5% rental rate lifts achieved on these extensions, exclusive of anchor tenants.

Mitchell Goldhar: This rental rate lift is pure. It's a pure lift, not buoyed up by tenant inducement or other costly considerations which can sometimes be offered. This rental rate increase is a direct reflection of the value of SmartCentres Real Estate and the amount of business being done on our property. Rudy will provide some further details in a minute, but here are a few more operational highlights. Same property NOI for the six months ending June is up 3% excluding income.

Speaker Change: This rental rate lift is pure, it's a pure lift, not buoyed up by tenant inducements.

Speaker Change: or other costly

Speaker Change: consideration, which can sometimes be offered. This rental rate increase is a direct reflection of the value of SmartCenter's real estate and the amount of business being done on our properties.

Mitchell Goldhar: This rental rate increase is a direct reflection of the value of SmartCentres Real Estate and the amount of business being done on our property. Rudy will provide some further details in a minute, but here are a few more operational highlights. Same property NOI for the six months ending June is up 3% excluding acreage. Our industrial vacant space was quickly released in the quarter, along with the additional new build adjacent space and at higher rents than the previous tenant.

Mitchell Goldhar: Rudy will provide some further details in a minute, but here are a few more operational highlights. Same property NOI for the six months ending June is up three percent excluding acres. Our industrial vacant space was quickly released in the quarter, along with the additional new build adjacent space, and at higher rents than previous than the previous tenant. Our payout ratio will still high from my perspective, and while it is working its way down, in the meantime, is not a concern because of the quality of our income. Cash collections at over 99 percent reflects the quality of that income, and we expect leasing renewals, renewal rate momentum to carry on through year end.

Speaker Change: Rudy will provide some further details in a minute, but here are a few more operational highlights.

Rudy Gobin: Same property and OI for the six months ending June is up 3% excluding acres.

Mitchell Goldhar: Our industrial vacant space was quickly released in the quarter, along with the additional new build adjacent space and at higher rents than the previous tenant. Our payout ratio will still, Hi, from my perspective. And while it is working its way down, in the meantime, it is not a concern because of the quality of our income. Cash Collections at over 99% reflects the quality of vetting.

Rudy Gobin: Our industrial vacant space was quickly released in the quarter along with the additional new built adjacent space and at higher rents than the previous tenant.

Mitchell Goldhar: Our payout ratio will still, Hi, from my perspective, and while it is working its way down, in the meantime, it is not a concern because of the quality of our income. Cash collections at over 99% reflect the quality of that income.

Speaker Change: Our payout ratio, we'll still...

Speaker Change: Hi, from my perspective.

Speaker Change: and while it is working its way down in the meantime is not a concern because the quality of our income.

Speaker Change: Cash collections at over 99% reflects the quality of that income.

Mitchell Goldhar: And we expect leasing, renewals, and renewal rate momentum to carry on through year end. While enjoying a strong foundation of stable rental income, we continue to build significant, with nearly 57 million square feet already zoned. This, of course, on land we already own and have for many years.

Mitchell Goldhar: And we expect leasing, renewals, and renewal rate momentum to carry on through year end. Meanwhile, while enjoying a strong foundation of stable rental income, we continue to build significant mixed-use permission, with nearly 57 million square feet already zoned. This, of course, is land we already own and have had for many years. We will, of course, be prudent and strategic in executing any development project, that is, when market conditions permit [inaudible] with appropriate financing in place. Here are some specific highlights.

Speaker Change: And we expect leasing, renewals, renewal rate momentum to carry on through year-end.

Mitchell Goldhar: While enjoying a strong foundation of stable rental income, we continue to build significant mix use permissions with nearly 57 million square feet already zoned. This, of course, on lands we already own and have for many years.

Speaker Change: While enjoying a strong foundation of stable rental income, we continue to build significant mixed-use permissions.

Speaker Change: with nearly 57 million square feet already zoned. This, of course, on lands we already own and have for many years.

Mitchell Goldhar: We will, of course, be prudent and strategic in executing any development project that is, when market conditions permit, with appropriate financing in place.

Mitchell Goldhar: We will, of course, be prudent and strategic in executing any development project that when market conditions permit, with appropriate financing in place, Here are some specific highlights. Site works are continuing for our 36-story artwork project here in the BMC comprising 320 sold out, Connie, many of you. Through our smart living brand, The Millway, our 458-unit apartment rental project, which was completed late last year, was 88% leased at quarter end, above planned rental rates, and now stands at 90%.

Speaker Change: We will, of course, be prudent and strategic in executing any development project, that is, when market conditions permit.

Mitchell Goldhar: Here are some specific highlights. Siteworks are continuing for our 36 story artwork project here in the BMC comprising 320 sold out condominium and even units. Through our smart living brand, the Millway, our 458 unit apartment rental project, which was completed late last year, was 88 percent leased at the quarter end, above planned rental rates, and now stands at 90 percent. We are in the near end. Construction of our bond north west town homes with our partners progressing well, with 25 closings taking place this quarter and nearly all pre sold units expected to close on schedule by year end.

Speaker Change: with appropriate financing in place.

Mitchell Goldhar: Site works are continuing for our 36-story artwork project here in the BMC comprising 320 sold-out conium. Through our smart living brand, The Millway, our 458-unit apartment rental project, which was completed late last year, was 88% leased at quarter end, above planned rental rates, and now stands at 90%. We expect to be 95% leased by year end. Construction of our Vaughan Northwest Townhomes with our partner is progressing well, with 25 closings taking place this quarter and nearly all pre-sold units expected to close on schedule by year end. Thanks for watching, and don't forget to like, share, and subscribe to our channel.

Speaker Change: Here are some specific highlights.

Speaker Change: Site works are continuing for our 36-story artwork project here in the BMC comprising

Speaker Change: 320 sold out condominium units.

Speaker Change: Through our smart living brand, The Millway, our 458 unit apartment rental project, which was completed late last year, was 88% leased at quarter end, above planned rental rates.

Mitchell Goldhar: We expect to be 95% leased by year end. Construction of our Vaughan Northwest Townhomes with our partner is progressing well, with 25 closings taking place this quarter and nearly all pre-sold units expected to close on schedule by year end. Thanks for watching, and don't forget to like, share, and subscribe to our channel.

Speaker Change: and now stands at 90%. We expect to be 95% leased by year-end.

Speaker Change: Construction of our Vaughan Northwest Townhomes with our partner is progressing well with 25 closings taking place this quarter and nearly all pre-sold units expected to close on schedule by year-end.

Speaker Change: Thank you for watching!

Mitchell Goldhar: In East Side, construction is well on its way for a 224,000 square foot retail center comprised of a 200,000 square foot Canadian Tire store. Adding to our self storage portfolio, our market facility opened in May, bringing the operational portfolio to 10 projects, and four remain under construction. This portfolio continues to excel, and we intend to continue the expansion, as we are doing with two new locations: one in Laval East and the other in Victoria, British Columbia, just off the downtown core. Our development teams continue to work diligently on obtaining residential and other permissions, and just recently we were successful in our Eglinton West Center, called West Side Mall, in obtaining entitlements for 2.7 million square feet of density and a 327,000 square feet phase one residential building with that grade retail.

Mitchell Goldhar: In Leaside, construction is well on its way for a 224,000 square foot retail center comprised of a 200,000 square foot Canadian Tire store. Adding to our self-storage portfolio, our Markham Facility opened in May, bringing the operational portfolio to 10 projects, and four remain under construction. This portfolio continues to excel, and we intend to continue The Expansion, as we are doing with two new locations, one in Laval East and the other in Victoria, British Columbia, just off the downtown core.

Mitchell Goldhar: In Leaside, construction is well on its way for a 224,000 square foot retail center comprised of a 200,000 square foot Canadian tire store. Adding to our self storage portfolio, our Markham facility opened in May, bringing the operational portfolio to 10 projects, and four remain under construction. This portfolio continues to excel, and we intend to continue The Expansion, as we are doing with two new locations, one in Laval East and the other in Victoria, British Columbia, just off the downtown core.

Speaker Change: In Leaside, construction is well on its way for a 224,000 square foot retail center comprised of a 200,000 square foot Canadian tire store.

Speaker Change: Adding to our self-storage portfolio, our Markham facility opened in May, bringing the operational portfolio to 10 projects, and four remain under construction. This portfolio continues to excel, and we intend to continue.

Speaker Change: The Expansion.

Speaker Change: as we are doing with two new locations, one in Laval East and the other in Victoria, British Columbia.

Mitchell Goldhar: Our development teams continue to work diligently on obtaining residential and other permissions, and just recently, we were successful in our Eglinton West Centre, called Westside Mall, in obtaining entitlements for 2.7 million square feet of density and a 327,000 square feet phase one residential building with that grade of retail. Note that this mixed-use development is immediately adjacent to the soon-to-be-open Caledonian LRT station, which will also be integrated with a soon-to-be-constructed Berry GO Line station.

Mitchell Goldhar: Our development teams continue to work diligently on obtaining residential and other permissions. And just recently, we were successful in our Eglinton West Center, called Westside Mall, in obtaining entitlement for 2.7 million square feet of density and a 327,000 square feet phase one residential building with at-grade retail. Note that this mixed-use development is immediately adjacent to the soon-to-be-open Caledonian LRT station, which will also be integrated with a soon-to-be-constructed Berry GO Line station.

Speaker Change: just off the downtown core.

Speaker Change: Our development teams continue to work diligently on obtaining residential and other permissions. And just recently, we were successful in our Eglinton West Center, called Westside Mall, in obtaining entitlements.

Speaker Change: for 2.7 million square feet of density.

Speaker Change: and a 327,000 square feet Phase 1 residential building with at-grade retail.

Mitchell Goldhar: Note that this mixed-use development is immediately adjacent to the soon-to-be-open Caledonian LRT station, which will also be integrated with a soon-to-be-constructed Berry Go-Line station.

Speaker Change: Note that this mixed-use development is immediately adjacent to the soon-to-be open Caledonian LRT station, which will also be integrated with a soon-to-be constructed Berry GO Line station.

Mitchell Goldhar: Overall, we continue to be strategic with our development team, and expect to execute. On some capital recycling this year, where market appetite exists, we expect that with further interest rate reductions and reduced inflation in late 2024 and 2025, market conditions may be more conducive to a more meaningful capital cycle. And finally, we are pleased to announce that our annual environment, social, and governance Report will be released shortly, reflecting the significant progress we have made in all areas of our business. As I've said previously, ESG is woven into the fabric of our organization.

Mitchell Goldhar: Overall, we continue to be strategic with our development and expect to execute on some capital recycling this year where market appetite exists. We expect that with further interest rate reductions and reduced inflation in late 2024 and 2025, market conditions may be more conducive to more meaningful capital recycling. And finally, we are pleased to announce that our annual environment, social, and governance Report will be released shortly, reflecting the significant progress we have made in all areas of our business.

Speaker Change: Overall, we continue to be strategic with our development and expect to execute.

Speaker Change: on some capital recycling this year, where market appetite exists. We expect that with further interest rate reductions and reduced inflation in late 2024 and 2025,

Speaker Change: Market conditions may be more conducive for more meaningful capital recycling.

Mitchell Goldhar: And finally, we are pleased to announce that our annual environment, social and governance report will be released shortly, reflecting the significant progress we have made in all areas of our business. As I've said previously, ESG is woven into the fabric of our organization. It is a part of how we oversee our business, interact with our tenants, and engage with our employees and communities. Look out for this in the next week or so.

Speaker Change: And finally, we are pleased to announce that our annual Environment, Social,

Speaker Change: and governance report will be released shortly reflecting the significant progress we have made in all areas of our business.

Mitchell Goldhar: As I've said previously, ESG is woven into the fabric of our organization. It is a part of how we oversee our business, interact with our tenants, and engage with our employees and community. Look out for this in the next week or so. As you can see, we are quite active in enhancing value in our core retail operations, prudent in our governance, and strategic in our development pipeline. We also take great care in maintaining a conservative balance sheet and improving liquidity, which we did when increasing our operating line by $250 million to $750 million, increasing our unencumbered asset pool to $9.3 billion, and raising $350 million subsequent to the quarter, which Peter will speak to in a few minutes. Before that, let me pass the call over to Rudy for some operational highlights.

Speaker Change: As I've said previously, ESG is woven into the fabric of our organization.

Mitchell Goldhar: It is a part of how we oversee our business, interact with our tenants, and engage with our employees and communities. (Inaudible) Look out for this in the next week or so. As you can see, we are quite active in enhancing value in our core retail operations, prudent in our governance, and strategic with our development pipeline. We also take great care in maintaining a conservative balance sheet and improving liquidity, which we did when increasing our operating line by $250 million to $750 million, increasing our unencumbered asset pool to $9.3 billion, and raising $350 million subsequent to the quarter, which Peter will speak to in a few minutes. But before that, let me pass the call over to Rudy for some operational highlights. Thank you. Thanks, Rich, and good morning everyone.

Speaker Change: It is a part of how we oversee our business, interact with our tenants, and engage with our employees and communities.

Mitchell Goldhar: As you can see, we are quite active in enhancing value in our core retail operations, prudent in our governance, and strategic with our development pipeline. We also take great care of maintaining a conservative balance sheet and improving liquidity, which we did when increasing our operating line by $250 million to $750 million. Increasing our unencumbered asset pool to $9.3 billion and raising $350 million subsequent to the quarter, which Peter will speak to in a few minutes.

Speaker Change: Look out for this in the next week or so.

Speaker Change: As you can see, we are quite active in enhancing value in our core retail operations, prudent in our governance and strategic with our development pipeline.

Speaker Change: We also take great care in maintaining a conservative balance sheet and improving liquidity, which we did when increasing our operating line by $250 million to $750 million.

Speaker Change: Increasing our unencumbered asset pool to $9.3 billion and raising $350 million substance to the quarter which Peter will speak to in a few minutes.

Rudy Gobin: But before that, let me pass the call over to Rudy for some operational highlights. Thanks, Mitch, and good morning, everyone. As Mitch mentioned, strong momentum in tenant demand has increased our occupancy, now at 98.2%, a reflection of the quality tenants responding to the need for value inconvenience within each community. Smart centers have a long history of providing value-oriented, essential goods and services to communities across Canada with access to the best value-brand needs. As Mitch mentioned, at the core of our shopping centers and income, our Walmart can the entire DJX. Loblaws, sobies, Metro. Dollar-Rama, Lowe, LTVO, and Shoppers to name a few.

Speaker Change: But before that, let me pass the call over to Rudy for some operational highlights.

Rudy Gobin: CLEARING THROAT Thanks, Mitch, and good morning, everyone. As Mitch mentioned, strong momentum in tenant demand has increased our occupancy now at 98.2%, a reflection of the quality of tenants responding to the need for value and convenience within each community. SmartCentres has a long history of providing value-oriented, essential goods and services to communities across Canada with access to the best value brand names. As Mitch mentioned, at the core of our shopping centers and income are Walmart, Canadian Tire, and TJX. Blah Blah, Sobeys, Metro, Dollarama, Lowe's, LCBO, and Shoppers, to name a few.

Rudy Gobin: Thanks, Mitch, and good morning, everyone.

Rudy Gobin: As Mitch mentioned, strong momentum in tenant demand has increased our occupancy. Now, at 98.2%, a reflection of quality tenants responding to the need for value convenience within each community. [Inaudible] SmartCentres has a long history of providing value-oriented, essential goods and services to communities across Canada with access to the best value brand name. As Mitch mentioned, at the core of our shopping centers and income are Walmart, Canadian Tire, TJX, Loblaws, Sobis, Metro Role, Dollarama, Lowe's, LCBO, and Shoppers, to name a few.

Rudy Gobin: As Mitch mentioned, strong momentum in tenant demand has increased our occupancy now at 98.2 percent, a reflection of the quality of tenants responding to the need for value and convenience within each community.

Speaker Change: Smart Centers has a long history of providing value-oriented, essential goods and services to communities across Canada with access to the best value brand names.

Mitch Goldhar: As Mitch mentioned, at the core of our shopping centres and income are Wal-Mart, Canadian Tire, TJX, BlaBla's, Sobeys, Metro.

Speaker Change: Dollarama, Lowe's, LTVO and Shoppers to name a few.

Rudy Gobin: There is increasing activity from these core tenants, further strengthening the income and covenant of the portfolio. In response to the needs of each community, we are also adding family medical, dental, daycares, recreational, education, health and beauty, and more, providing that convenient one-stop place to shop that is SmartCentres. Demand for existing and new-built space continues to escalate from Chalauac, BC, to Lashine, Quebec. We have also executed over 272,000 square feet of deals in the quarter for small and large units. And we have extended over 86% of leases maturing in 2024, with rental lifts at 8.5%. And as Mitch mentioned, this increases a pure rental increase and does not involve financial inducements or landlord work.

Mitch Goldhar: There is increasing activity from these core tenants, further strengthening the income and covenant of the portfolio.

Speaker Change: In responding to the needs of each community, we are also adding family medical, dental, daycares, recreational, education, health and beauty, and more, providing that convenient one-stop place to shop, that is SmartCentres.

Speaker Change: Demand for existing and new built space continues to escalate from Chilliwack, B.C. to La Chesnaye, Quebec.

Rudy Gobin: We have also executed over 272,000 square feet of deals in the quarter for small and large units, and we have extended over 86 percent of leases maturing in 2024 with rental increases at 8.5 percent. And as Mitch mentioned, this increase is a pure rental increase and does not involve financial inducements or landlord work. We also released our vacant industrial space above the prior rent, a reflection of the demand for such quality buildings and highway location.

Speaker Change: We have also executed over 272,000 square feet of deals in the quarter for small and large units. And we have extended over 86% of leases maturing in 2024 with rental lifts at 8.5%.

Speaker Change: And as Mitch mentioned, this increase is a pure rental increase and does not involve financial inducements or landlord work.

Rudy Gobin: We also released our vacant industrial space above the prior rent, a reflection of the demand for such quality building and highway location. Same property in Hawaii increased by 2.3% in the quarter and 3% for the first half of the year, excluding anchors. And we expect this to be higher in the next several quarters. Our premium outlets continue to excel in driving traffic and improving sales, leading to meaningful increases in EBITDA and value to the REIT. Ten in sales places our Toronto Premium Outlets in the top three highest performers in Canada and ranks among the top performers in the Simon Properties portfolio.

Mitch Goldhar: We also released our vacant industrial space above the prior rent, a reflection of the demand for such quality building and highway location.

Rudy Gobin: Same property NOI increased by 2.3% in the quarter and 3% for the first half of the year, excluding anchors, and we expect this to be higher in the next several quarters. Our premium outlets continue to excel in driving traffic and improving sales.

Mitch Goldhar: Same property NOI increased by 2.3% in the quarter and 3% for the first half of the year, excluding anchors. And we expect this to be higher in the next several quarters.

Rudy Gobin: Our premium outlets continue to excel in driving traffic and improving sales, leading to meaningful increases in EBITDA and value to the company. Tenant Sales places our Toronto Premium Outlets in the top three highest performers in Canada and ranks amongst the top performers in the Simon Properties portfolio. Our Toronto and Montreal locations remain fully leased, with rental lifts and EBITDA coming in above budget. These affordable luxury centers and world-class brands augment the SmartCentres portfolio well, and our relationship with our partner continues to be strong and collaborative as we discuss possible expansion.

Mitch Goldhar: Our premium outlets continue to excel in driving traffic and improving sales.

Rudy Gobin: Leading to meaningful increases in EBITDA and value to the REIT, Tenant Sales places our Toronto Premium Outlets in the top three highest performers in Canada and ranks amongst the top performers in the Simon Properties portfolio. Our Toronto and Montreal locations remain fully leased, with rental lifts and EBITDA coming in above budget. These affordable luxury centers and world-class brands augment the SmartCentres portfolio well, and our relationship with our partner remains strong and collaborative as we discuss possible expansion. Overall, a great first half of 2024 with a strong rental list. NOI Growth

Mitch Goldhar: leading to meaningful increases in EBITDA and value to the REIT.

Mitch Goldhar: Tenant Sales places our Toronto Premium Outlets in the top three highest performers in Canada and ranks amongst the top performers in the Simon Properties portfolio.

Rudy Gobin: Our Toronto and Montreal locations remain fully leased, with rental lifts and EBITDA coming in above budget. These affordable luxury centers and world-class brands augment the smart centers portfolio well, and our relationship with our partner continues to be strong and collaborative as we discuss possible expansion. Overall, a great first half of 2024 with strong rental lifts, NOI growth, cash collection, and tenant retention while delivering a broader array of tenants to meet the changing needs of each community. We anticipate a continuation of strong interest from our core tenants, our tenant base, as we strengthen and grow smart centers.

Mitch Goldhar: Our Toronto and Montreal locations remain fully leased, with rental lifts and EBITDA coming in above budget.

Mitch Goldhar: These affordable luxury centers and world-class brands augments the SmartCenters portfolio well and our relationship with our partner continues to be strong and collaborative as we discuss possible expansion.

Rudy Gobin: Fulgerall, a great first half of 2024 with a strong rest of the list. N.O.I. Growl, Cash Collection, and Tenant Retention while delivering a broader array of tenants to meet the changing needs of each community. We anticipate a continuation of strong interest from our core tenants, our tenant base, as we strengthen and grow SmartCentres. With that, I will turn it over to Peter.

Mitch Goldhar: Thank you. Thank you. Thank you.

Mitch Goldhar: Overall, a great first half of 2024 with strong rental lifts.

Peter Slan: Cash Collection and Tenant Retention while delivering a broader array of tenants to meet the changing needs of each community. We anticipate a continuation of strong interest from our core tenants, our tenant base, as we strengthen and grow SmartCentres. With that, I'll turn it over to Peter. Thank you, Rudy.

Speaker Change: NOI growth, cash collection, and tenant retention while delivering a broader array of tenants to meet the changing needs of each community.

Speaker Change: We anticipate a continuation of strong interest from our core tenants, our tenant base, as we strengthen and grow smart centers.

Peter Slan: With that, I will turn it over to Peter. Thank you, Rudy. The financial results for the second quarter once again reflect the strong performance in our core retail business, with improved occupancy and a continued contribution from our mixed use development portfolio. At June 30, 2024, net operating income decreased by $8 million, or 5.5%, from the same quarter last year, largely due to the decrease in condo closings, which were only partially offset by new town home closings. NOI was partially impacted by a decrease in net recoveries, primarily due to the timing of certain operating costs, which we expect to normalize over the remainder of the year.

Speaker Change: With that, I will turn it over to Peter.

Peter Slan: The financial results for the second quarter once again reflect the strong performance in our core retail business with improved occupancy and a continued contribution from our mixed-use development portfolio. However, three months into June 30, 2024, net operating income decreased by $8 million, or 5.5% from the same quarter last year, largely due to the decrease in condo closings, which were only partially offset by new townhome closings. NOI was partially impacted by a decrease in net recoveries, primarily due to the timing of certain operating costs, which we expect to normalize over the remainder of the year.

Peter Slan: The financial results for the second quarter once again reflect the strong performance in our core retail business with improved occupancy and a continued contribution from our mixed-use development portfolio. However, three months into June 30th, 2024, net operating income decreased by $8 million, or 5.5% from the same quarter last year, largely due to the decrease in condo closings, which were only partially offset by new townhome closings. NOI was partially impacted by a decrease in net recoveries, primarily due to the timing of certain operating costs, which we expect to normalize over the remainder of the year.

Rudy Gobin: Thank you, Rudy.

Speaker Change: For the three months ended June 30th, 2024, net operating income decreased by $8 million or 5.5% from the same quarter last year, largely due to the decrease in condo closings, which were only partially offset by new townhome closings.

Speaker Change: NOI was partially impacted by a decrease in net recoveries, primarily due to the timing of certain operating costs, which we expect to normalize over the remainder of the year.

Peter Slan: Same property and OI, including equity-accounted investments, but excluding anchor tenants, increased by 2.2% compared to the same period in 2023, and by 3% for the first six months of the year. FFO, her fully diluted unit, was 50 cents compared to 55 cents from the comparable quarter last year. The decline is primarily due to the condo closings that occurred in the prior year, which did not repeat this quarter, as well as an increase in net interest expense due to higher interest rates and lower interest capitalization from completed development projects that are currently in lease-up. During Q2, we also delivered and closed on 25 units of our Vaughan Northwest Town Home project for net profit of $2.5 million at the Reeds share.

Peter Slan: Same property NOI, including equity-accounted investments but excluding anchor tenants, increased by 2.2% compared to the same period in 2023 and by 3% for the first six months of the year. FFO per fully diluted unit was $0.50 compared to $0.55 for the comparable quarter last year. The decline is primarily due to condo closings that occurred in the prior year, which did not repeat this quarter, as well as an increase in net interest expense due to higher interest rates and lower interest capitalization from completed development projects that are currently in lease up.

Speaker Change: Same property NOI, including equity accounted investments, but excluding anchor tenants, increased by 2.2% compared to the same period in 2023, and by 3% for the first six months of the year.

Peter Slan: Same property NOI, including equity accounted investments but excluding anchor tenants, increased by 2.2% compared to the same period in 2023 and by 3% for the first six months of the year. FFO per fully diluted unit was $0.50 compared to $0.55 for the comparable quarter last year.

Speaker Change: FFO per fully diluted unit was $0.50 compared to $0.55 from the comparable quarter last year.

Peter Slan: The decline is primarily due to the condo closings that occurred in the prior year, which did not repeat this quarter, as well as an increase in net interest expense due to higher interest rates and lower interest capitalization from completed development projects that are currently in lease up. During Q2, we also delivered and closed on 25 units of our Vaughan Northwest Townhome project, for a net profit of $2.5 million at the REITs share.

Speaker Change: The decline is primarily due to the condo closings that occurred in the prior year, which did not repeat this quarter, as well as an increase in net interest expense due to higher interest rates and lower interest capitalization from completed development projects that are currently in lease-up.

Peter Slan: During Q2, we also delivered and closed on 25 units of our Vaughan Northwest Townhome Project for a net profit of $2.5 million at the REITs share. FFO with adjustments, which excludes both the Town Omen condo profits and the total return swap, was 51 cents per unit for the second quarter.

Speaker Change: During Q2, we also delivered and closed on 25 units of our Vaughan Northwest Townhome project for net profit of $2.5 million at the REITs share.

Peter Slan: FFO with adjustments, which excludes both the Town home and condo profits and the total return swap, was 51 cents per unit for the second quarter. The decrease of 3 cents from the comparable quarter last year was primarily due to an increase in net interest expense due to higher interest rates and lower interest capitalization. In terms of distributions, we maintained our distributions during the quarter at an annualized rate of $1.85 per unit. The payout ratio to AFFO with adjustments for the three months ended June 30th was 96.9%. Adjust the debt to adjusted EBITDA was 9.9 times for the rolling 12-month period ending in Q2, which is unchanged from the prior year, but a slight increase from 9.8 times last quarter due to additional development spending and fewer condo closings.

Peter Slan: FFO with adjustments, which excludes both the Town Omen condo profits and the total return swap, was $0.51 per unit for the second quarter. The decrease of 3 cents from the Comparable Quarter last year was primarily due to an increase in net interest expense due to higher interest rates and lower interest capitalization.

Speaker Change: FFO with adjustments, which excludes both the townhome and condo profits and the total return swap, was 51 cents per unit for the second quarter.

Peter Slan: The decrease of three cents from the comparable quarter last year was primarily due to an increase in net interest expense due to higher interest rates and lower interest capitalization. In terms of distributions, we maintained our distributions during the quarter at an annualized rate of $1.85 per unit. The payout ratio to AFFO with adjustments for the three months ended June 30th was 96.9%.

Speaker Change: The decrease of three cents from the comparable quarter last year was primarily due to an increase in net interest expense due to higher interest rates and lower interest capitalization.

Peter Slan: In terms of distributions, we maintained our distributions during the quarter at an annualized rate of $1.85 per unit. The payout ratio to AFFO with adjustments for the three months ended June 30th was 96.9%. Adjusted debt to adjusted EBITDA was 9.9 times for the rolling 12-month period ending in Q2, which is unchanged from the prior year but a slight increase from 9.8 times last quarter due to additional development spending and fewer condo closings.

Speaker Change: In terms of distributions, we maintained our distributions during the quarter at an annualized rate of $1.85 per unit. The payout ratio to AFFO with adjustments for the three months ended June 30th was 96.9%.

Peter Slan: Adjusted debt to adjusted EBITDA was 9.9 times for the rolling 12 month period ending in Q2, which is unchanged from the prior year but a slight increase from 9.8 times last quarter due to additional development spending and fewer condo closings. Our debt to aggregate assets ratio was 43.7% at the end of the quarter, a 50 basis point increase compared to the same period a year earlier. Our unencumbered asset pool increased by $100 million to $9.3 billion in Q2 compared to last year.

Speaker Change: Adjusted debt to adjusted EBITDA was 9.9 times for the rolling 12-month period ending in Q2, which is unchanged from the prior year but a slight increase from 9.8 times last quarter due to additional development spending and fewer condo closings.

Peter Slan: Our debt to aggregate assets ratio was 43.7% at the end of the quarter, a 50 basis point increase compared to the same period a year earlier. Our unencumbered asset pool increased by $100 million to $9.3 billion in Q2 compared to last year. Unsecured debt, including our share of equity-accounted investments, was $4.4 billion, virtually unchanged from the prior quarter and represents approximately 82% of our total debt of $5.4 billion. From a liquidity perspective, we remain comfortable with our current liquidity position. During Q2, as Mitch noted, we upsized our main revolving operating credit facility by $250 million to $750 million, with strong support from our banking syndicate.

Peter Slan: Our debt-to-assets ratio was 43.7% at the end of the quarter, a 50 basis point increase compared to the same period a year earlier. Our unencumbered asset pool increased by $100 million to $9.3 billion in Q2 compared to last year.

Speaker Change: Our debt to aggregate assets ratio was 43.7% at the end of the quarter, a 50 basis point increase compared to the same period a year earlier.

Speaker Change: Our unencumbered asset pool increased by $100 million to $9.3 billion in Q2 compared to last year.

Peter Slan: Unsecured debt, including our share of equity-accounted investments, was $4.4 billion, virtually unchanged from the prior quarter, and represents approximately 82% of our total debt of $5.4 billion. From a liquidity perspective, we remain comfortable with our current liquidity position. During Q2, as Mitch noted, we upsized our main revolving operating credit facility by $250 million to $750 million with strong support from our banking syndicate. As a result, as of June 30, 2024, we have approximately $652 million of undrawn liquidity, including our share of equity-accounted investments and cash on hand, but excluding any accordion features.

Speaker Change: Unsecured debt, including our share of equity-accounted investments, was $4.4 billion, virtually unchanged from the prior quarter, and represents approximately 82% of our total debt of $5.4 billion.

Speaker Change: From a liquidity perspective, we remain comfortable with our current liquidity position.

Speaker Change: During Q2, as Mitch noted, we upsized our main revolving operating credit facility by 250 million dollars to 750 million dollars with strong support from our banking syndicate.

Peter Slan: As a result, as at June 30th, 2024, we have approximately $652 million of undrawn liquidity, including our share of equity-accounted investments and cash on hand, but excluding any accordion features. As Mitch noted, subsequent to the quarter end, we increased our liquidity further through the issuance of $350 million of senior unsecured debentures at a rate of 5.162% for a term of six years. The proceeds from this offering will be used to repay the upcoming maturity of our Series O debentures and higher interest floating rate debt on our operating line. The weighted average terms and maturity of our debt, including debt on equity-accounted investments, is 3.1 years, or 3.3 years, pro forma of the recent adventure offering.

Speaker Change: As a result, as of June 30, 2024, we have approximately $652 million of undrawn liquidity, including our share of equity-accounted investments and cash on hand, but excluding any accordion features.

Peter Slan: As Mitch noted, subsequent to the quarter end, we increased our liquidity further through the issuance of $350 million of senior unsecured debentures at a rate of 5.162% for a term of six years. The proceeds from this offering will be used to repay the upcoming maturity of our Series O adventures and higher interest floating rate debt on our operating line. The weighted average term to maturity of our debt, including debt on equity accounted investments, is 3.1 years or 3.3 years pro forma for the recent debenture offering.

Peter Slan: As Mitch noted, subsequent to the quarter end, we increased our liquidity further through the issuance of $350 million of senior unsecured debentures at a rate of 5.162% for a term of six years. The proceeds from this offering will be used to repay the upcoming maturity of our Series O debentures and higher interest floating rate debt on our operating lines. The weighted average term to maturity of our debt, including debt on equity-accounted investments, is 3.1 years, or 3.3 years pro-former, the recent adventure offering. Our weighted average interest rate was 4.25%, an increase of 8 basis points from the prior quarter.

Speaker Change: As Mitch noted, subsequent to the quarter end, we increased our liquidity further through the issuance of $350 million of senior unsecured debentures at a rate of 5.162% for a term of six years.

Speaker Change: The proceeds from this offering will be used to repay the upcoming maturity of our Series O debentures and higher interest floating rate debt on our operating lines.

Speaker Change: The weighted average term to maturity of our debt, including debt on equity-accounted investments, is 3.1 years, or 3.3 years, pro forma the recent debenture offering.

Peter Slan: Our weighted average interest rate was 4.25%, an increase of 8 basis points from the prior quarter. Our debt ladder remains conservatively structured, where the most significant aggregate maturities are in 2025 and 2027. Approximately 80% of our debt is at fixed interest rates.

Speaker Change: Our weighted average interest rate was 4.25%, an increase of 8 basis points from the prior quarter.

Peter Slan: Our debt ladder remains conservatively structured, where the most significant aggregate maturities are in 2025 and 2027. Additionally, approximately 80% of our debt is at a fixed interest rate. Just before we open the call up to questions, I want to touch briefly on our development projects that are underway. Once again, we have updated our MD&A disclosure, focusing on those development projects that are currently under construction. As you will see on page 17, there are currently nine projects under construction, down from ten last quarter.

Speaker Change: Our debt ladder remains conservatively structured, where the most significant aggregate maturities are in 2025 and 2027.

Speaker Change: Approximately 80% of our debt is at fixed interest rates.

Peter Slan: Just before we open the call up to questions, I want to touch briefly on our development projects that are underway. Once again, we have updated our MDNA disclosure, focusing on those development projects that are currently under construction. As you will see on page 17, there are currently nine projects under construction, down from 10 last quarter. The one project that was completed during the quarter was a self-storage project in Markham. The reeds' share of total capital costs of these nine development projects is approximately $499 million, with the estimated cost to complete, standing at $307 million. Subsequent to the quarter end, all of the debt drawn to fund phase one of the bond Northwest Town Homes has been repaid.

Peter Slan: Just before we open the call up to questions, I want to touch briefly on our development projects that are underway. Once again, we have updated our MDNA disclosure, focusing on those development projects that are currently under construction. As you will see on page 17, there are currently nine projects under construction, down from ten last quarter. The one project that was completed during the quarter was a self-storage project in Markham. The REIT's share of the total capital costs of these nine development projects is approximately $499 million, with the estimated cost to complete standing at $307 million.

Speaker Change: Just before we open the call up to questions, I want to touch briefly on our development projects that are underway.

Speaker Change: Once again, we have updated our MD&A disclosure, focusing on those development projects that are currently under construction.

Speaker Change: As you will see on page 17, there are currently nine projects under construction, down from ten last quarter. The one project that was completed during the quarter was a self-storage project in Markham.

Peter Slan: The one project that was completed during the quarter was a self-storage project in Markham. The READS share of total capital costs of these nine development projects is approximately $499 million, with the estimated cost to complete standing at $307 million. Subsequent to the quarter end, all of the debt drawn to fund phase one of the Vaughan Northwest townhomes has been repaid.

Speaker Change: The REIT's share of total capital costs of these nine development projects is approximately $499 million, with the estimated cost to complete standing at $307 million.

Peter Slan: Subsequent to the quarter end, all of the debt drawn to fund Phase 1 of the Vaughan Northwest Townhomes has been repaid. In addition, all the construction debt related to funding the development of three SmartStop projects has been replaced with permanent financing from an external lender. And with that, we would be pleased to take your questions. Operator, can we have the first question on the line, please?

Speaker Change: Subsequent to the quarter end, all of the debt drawn to fund phase one of the Vaughan Northwest Townhomes has been repaid. In addition, all of the construction debt related to funding the development of three Smart Stop projects has been replaced with permanent financing from an external lender.

Peter Slan: In addition, all of the construction debt related to funding the development of three smart stop projects has been replaced with permanent financing from an external lender.

Unknown Attendee: In addition, all the construction debt related to funding the development of three smart stock projects has been replaced with permanent financing from an external lender. And with that, we would be pleased to take your questions. So operator, can we have the first question on the line, please? Hi, good morning, and thank you for taking my question. Starting off with Rudy, both occupancy and blended lease spreads were up quite nicely sequentially. I'm curious about whether there's a direct connection between the two.

Peter Slan: And with that, we would be pleased to take your questions.

Unknown Executive: So, operator, can we have the first question on the line, please? Certainly. As a reminder for people, if you'd like to keep up to ask a question, please dial *1 on your phone.

Speaker Change: And with that, we would be pleased to take your questions.

Operator: Certainly. As a reminder for people, if you'd like to queue up to ask a question, please dial star 1 on your phone's keypad. The first question is from Mario Saric from Scotiabank. Please go ahead, Mario. Hi, good morning, and thank you for taking

Speaker Change: So, operator, can we have the first question on my line please?

Speaker Change: Certainly. As a reminder for people, if you'd like to queue up to ask a question, please dial star one on your The first question is from Mario Sarek from Scotiabank. Please go ahead Mario

Mario Therrick: The first question is from Mario Therrick from Scotia Bank. Please go ahead, Mario. Hi, good morning, and thank you for taking my questions. Maybe starting off with Rudy, both occupancy and blend of these spreads were up quite nicely sequentially. I'm curious about whether there's a direct connection between the two. So I'm trying to understand how the turning back to peak occupancy or on your way back to peak occupancy may impact your ability to continue expanding that least, but going forward. No, I think we obviously, as we lease up the portfolio, there is going to be, and we are at market, we expect that that least spread to, I'm going to call even out during the by the end of the year.

Mario Saric: Hi, good morning, and thank you for taking my questions. Maybe starting off with Rudy, both occupancy and blended lease spreads were up quite nicely sequentially. I'm curious about whether there's a direct connection between the two. So I'm trying to understand how returning back to peak occupancy or on your way back to peak occupancy may impact your ability to continue expanding that lease from the

Mario Sarek: Hi, good morning and thank you for taking my questions. Maybe starting off with a really both arts you can see and blended these probes are quite nicely sequentially.

Speaker Change: I'm curious about the whether there's a direct connection between the two. So I'm trying to understand how returning back to peak occupancy or on your way back to peak occupancy may impact your ability to continue expanding that lease spread going forward.

Rudy Gobin: So I'm trying to understand. I'll be turning back to peak occupancy, or on your way back to peak occupancy, it may impact your ability to expand that lease. [inaudible] Bye.

Rudy Gobin: No, I think we as we obviously as we lease up the portfolio, there's going to be, and we are at market, we expect that that lead to spread to, I'm going to call it even out during the year. So quarter by quarter, you'll see a little bit of change. But we do expect that to continue to maintain that current current spread year to, Okay, sorry, to maintain this spread, or do you see the possibility to increase it?

Rudy Gobin: No, I think we, as we obviously as we lease up the portfolio, there's going to be, and we are at market, we expect that that lead to spread to, I'm going to call it even out during the year. So quarter by quarter, you'll see a little bit of change. But we do expect that to continue to maintain that current spread year to year.

Speaker Change: Bye.

Speaker Change: No, I think we, as we obviously as we lease up the portfolio

Speaker Change: There is going to be, and we are at market, we expect that lead spread to even out by the end of the year. So quarter by quarter you will see a little bit of change, but we do expect that to continue to maintain that current spread year to year.

Rudy Gobin: So, quarter by quarter, you'll see a little bit of change, but we do expect that to continue to maintain that current, that current spread year. Okay, sorry, to maintain the spread, or do you see the possibility to increase it further? This for the, for the, again, for the balance of this year, we are budgeting that that will be like you see in first quarter, second quarter. And then we expect that that sort of blended rate will increase, but that does not include the lease-up of space. So we will have it increased as we lease up space, but on the existing portfolio to maintain that alignment with the first half of the year.

Rudy Gobin: Okay, sorry. To maintain the spread, or do you see the possibility to increase it further? Yes.

Speaker Change: Okay, sorry to maintain the spread or do you see the possibility to increase it further?

Rudy Gobin: This, again, for the balance of this year, we are budgeting that this will, like you've seen in the first quarter and second quarter, and then we expect that that sort of blended rate will increase, but that does not include the lease up of space. So we will have it increased as we lease up space, but on the existing portfolio to maintain that alignment with the first half of the year.

Rudy Gobin: This, again, for the balance of this year, we are budgeting that this will, like you see in the first quarter and second quarter, and then we expect that that sort of blended rate will increase, but that does not include the lease up of space. So we will have it increased as we lease up space, but on the existing portfolio to maintain that alignment with the first half of the year. Okay, the genesis of the question, try to understand the relationship between pricing power and occupancy within your portfolio. There's a very direct, and it sounds like

Speaker Change: This, again, for the balance of this year, we are budgeting that you see in first quarter, second quarter, and then we expect that that sort of blended rate will increase, but that does not include the least up of space, so we will have it.

Speaker Change: Thank you for your time.

Rudy Gobin: Okay, the dentist is a question. You can try to understand the relationship between pricing power and occupancy within your portfolio because there's a very direct relationship between the two. And it sounds like a risk. Absolutely, absolutely. Okay, and then just follow up for you, Rudy, what percentage, roughly, would you estimate of your non-anchor tendencies would have fixed price renewal options in place? I don't know that off the cuff; I'll have to get back to you on that, Mario. Yeah, I just don't know about my fingertips.

Rudy Gobin: Got it. Okay, the, the, the, the question you try to understand, kind of, the little relationship between pricing power and occupancy within your portfolio. There's a very direct relationship.

Rudy Gobin: Thank you. Thank you. Thank you.

Speaker Change: Got it. Okay. The genesis of the question, try to understand kind of the relationship between pricing power and occupancy within your portfolio. There's a very direct relationship between the two.

Speaker Change: And it sounds like there is.

Rudy Gobin: Absolutely.

Rudy Gobin: Absolutely. Okay, and then just a follow-up question for you, Rudy, what percentage roughly would you estimate of your non-anchor tenancies would have fixed price renewal? I don't know that off the cuff. I'll have to get back to you on that, Mario. Yeah, I just don't have that at my fingertips. Okay, and then maybe I'll shift over to Peter.

Rudy Gobin: Okay, and then just a follow-up question for you, Rudy, what percentage roughly would you estimate of your non-anchor tenancies would have fixed price renewal options?

Speaker Change: Absolute, absolute.

Speaker Change: Okay and then just a follow-up for you Rudy, what percentage roughly would you estimate of your non-anchor tenancies would have fixed price renewal options in place?

Rudy Gobin: I don't know that off the cuff. I'll have to get back to you on that, Mario. Yeah, I just don't have that at my fingertips.

Rudy Gobin: I don't know that off-the-cuff I'll have to get back to you on that Mario

Speaker Change: yeah I just don't have that at my fingertips

Peter Slan: Okay, and then maybe shifting over to Peter. I think the variable rate that was roughly about 20% this quarter that may become a tailwind in the coming months with central central bank using as much alluded to as prepared remarks. Just curious, what your target variable rate exposure would be by the end of this year, by the end of next year. What's a good stabilized figure? Yeah, that's right, Mario. It's been about 20%. There's been two rate cuts I would note since the last time we hosted a quarterly call. Also, that benefited us slightly, only slightly, in this quarter because it was late in Q2, and it'll benefit us again in Q3 with the most recent rate cut.

Peter Slan: Okay, and then maybe shifting over to Peter, I think the variable rate that was roughly about 20% this quarter may become a tailwind in the coming month with Central Bank Easing, as Mitch alluded to in his prepared remarks. Just curious what your kind of target variable rate exposure would be, you know, by the end of this year, by the end of next year, and what's a good stabilized figure to use?

Peter Slan: I think the variable rate that was roughly about 20% this quarter may become a tailwind in the coming months, with the Central Central Bank using, as Mitch alluded to this prepared remark. I'm curious what your target variable rate exposure would be by the end of this year, by the end of next year, and what's a good stabilizer. Yeah, that's right, Mario.

Peter Slan: Okay and then maybe shifting over to Peter, I think the variable rate that was roughly about 20% this quarter that may become a tailwind in the coming months.

Speaker Change: with Central Central Bank Easing, as Mitch alluded to in his prepared remarks. I was curious what your target variable rate exposure would be by the end of this year, by the end of next year, and what's a good stabilized figure to use?

Peter Slan: Yeah, that's right, Mario. It's been about 20%. There have been two rate cuts, I would note, since the last time we hosted a quarterly call. So that benefited us only slightly in this quarter because it was late in Q2, and it'll benefit us again in Q3 with the most recent rate cut. And your guess is as good as mine about future rate cuts, but I do agree with you that it could certainly become a tailwind. I expect we're going to maintain roughly the same proportion. It's not going to move all that meaningfully. But with the most recent raise, the debenture issue, of course, we did repay.

Peter Slan: It's been about 20%. There have been two rate cuts, I would note, since the last time we hosted a quarterly call. So that benefited us slightly, only slightly in this quarter, because it was late in Q2.

Peter Slan: Yeah, that's right Mario, it's been about 20%.

Speaker Change: There's been two rate cuts, I would note, since the last time we hosted a quarterly.

Speaker Change: call. So that benefited us slightly, only slightly in this quarter because it was late in Q2 and it will benefit us again in Q3 with the most recent rate cut and, you know,

Peter Slan: And it'll benefit us again in Q3, with the most recent rate cut. And, you know, your guess is as good as mine about future rate cuts. But I do agree with you that it could certainly become a tailwind.

Peter Slan: And your guess is as good as mine about future rate cuts, but I do agree with you; it could certainly become a tailwind. I expect we're going to maintain roughly the same proportion. It's not going to move all that meaningfully, but with the most recent raise, a debenture issue. Of course, we did repay mostly floating-rate debt. Right.

Peter Slan: I expect we're going to maintain roughly the same proportion. It's not going to move all that meaningfully. But with the most recent raised debenture issue, of course, we did repay mostly floating rate debt. Okay, and then can you give us a sense of how much of the variable rate is in place today? and the interest thereupon. Currently being topped off, I'm just trying to get a sense of what the potential benefit could be.

Speaker Change: Your guess is as good as mine about future rate cuts, but but I do agree with you It could certainly become a tailwind I expect we're going to maintain roughly the same proportion

Speaker Change: It's not going to move all that meaningfully, but with the most recent raise debenture issue, of course, we did repay mostly floating rate debt.

Peter Slan: Right. Okay. And then, can you give us a sense of how much of the variable rate debt in place today the interest thereon is currently being capitalized? Yeah, I'm just trying to get a sense of what the potential benefit could be.

Peter Slan: Okay, and then can you give us a sense of how much of the variable rate debt in place today? The interest thereupon is currently being capitalized. I'm just trying to get a sense of what the potential method could be. Yeah, so most of it is being capitalized. Certainly, all of our construction facilities are floating rate debt.

Speaker Change: Right.

Speaker Change: Okay and then can you give us a sense of how much of the variable rate debt in place today, the interest thereupon, is currently being capitalized?

Peter Slan: Yeah, so most of it is being capitalized. Certainly, all of our construction facilities are floating rate debt, Mario. Okay, and then maybe just lastly, for Mitch, in terms of capital recycling, you kind of highlighted a potentially more favorable interest rate environment as being a possible catalyst for increased activity or for some activity. Are you at the stage where you might be able to quantify the magnitude of the potential decisions, whether it be development and transportation?

Peter Slan: Yeah, so most of it is being capitalized. Certainly, all of our construction facilities are floating right there, Mario.

Speaker Change: Yeah, I'm just trying to get a sense of what the potential benefit could be if...

Speaker Change: Yeah, so most of it is being capitalized, certainly all of our construction facilities are floating rate debt. Mario?

Mitchell Goldhar: Mario. Okay, and then maybe just lastly for Mitch in terms of capital recycling. You kind of highlighted the potentially more favorable interest rate environment is being a possible catalyst for increased activity or for some activity. Are you at the stage where you might be able to quantify the magnitude of potential decisions, whether it be development intensification or IPP. And would the catalyst still plan of interest rates might be for that? I think more magnitude we look at trying to achieve something in the 250 to $300 million range or more. And I mean, you know, we're okay.

Mitchell Goldhar: Okay, and then maybe just lastly for Mitch, in terms of capital recycling, you kind of highlighted a potentially more favorable interest rate environment as being a possible catalyst for increased activity or for some activity. Are you at the stage where you might be able to quantify the magnitude of potential disposition, whether it be development, intensification, or IPP, and what the catalyst outside of interest rates might be?

Speaker Change: Okay and then maybe just lastly for Mitch, in terms of capital recycling you kind of highlighted a potentially more favorable interest rate environment as being a possible catalyst.

Speaker Change: for increased activity or for some activity. Are you at the stage where you might be able to quantify the magnitude of potential dispositions, whether it be development intensification or IPP and what the catalyst outside of interest rates might be for that?

Mitch Goldhar: I think more than magnitude we look at trying to achieve something in the 250 days.

The conference is now being recorded.

Mitch Goldhar: or more.

Mitchell Goldhar: Hanging out until parking conditions improve a bit. It's likely to be most likely to be dispositions of lands with permissions that we've talked about. And that market really didn't exist even a year ago or a year and a half ago. It does exist now. It's not quite where we want it to be yet, but it's moving in the right direction. Okay, so you have so many attractive options across the portfolio geographically, so it's hard to generalize. But what's your guess in terms of how much the value of those types of properties or that type of land has come off and peak?

Speaker Change: and I mean you know we're okay hanging out until parking conditions improve a bit

Unknown Executive: Good day, ladies and gentlemen. Welcome to the SmartCentres Read Q2 2024 conference call.

Speaker Change: S.E.M.

Speaker Change: It's likely to be

Unknown Executive: I would like to introduce Mr. Peter Slan. Please go ahead.

Speaker Change: most likely to be dispositions of

Peter Slan: Good morning, and welcome to our second quarter 2024 results call. I'm Peter Slan, Chief Financial Officer, and I'm joined on today's call by Mitch Goldhar, SmartCentres Executive Chair and CEO, and by Rudy Gobin, our Executive Vice President of Portfolio Management and Investments. We will begin today's call with some comments from Mitch. We will then provide some operational highlights, and I will review our financial results.

Speaker Change: lands with permissions that we've talked about and that market you know really didn't exist even a year ago or a year and a half ago it does exist now it's not quite

Speaker Change: where we want it to be yet, but it's moving in the right direction.

Mitchell Goldhar: Okay, and you have so many attractive options across the portfolio geographically, so it's hard to generalize. But what's your guess in terms of how much the value of those types of properties or that type of land has come off the peak?

Speaker Change: And you have so many attractive options across the portfolio geographically, so it's hard to generalize.

Peter Slan: We will then be pleased to take your questions. Just before I turn the call over to Mitch, I would like to refer you specifically to the cautionary language about forward-looking information, which can be found at the front of our MD&A materials. This also applies to comments of any of the speakers this morning.

Speaker Change: But what's your guess in terms of...

Speaker Change: how much the value of those types of properties or that type of land has come off and peak.

Mitchell Goldhar: You know, maybe I won't be as specific, but, you know, an example of a property we have on the east side of the GTA, let's say by example, at the peak, it was probably worth, you know, some would say between $90, $95 a square foot of buildable land. Let's say phase one would have been a million square feet. Phase 1, meaning a couple of towers that are approved. Um... As I said, there wasn't much of a market a year or a year and a half ago, but maybe the market now is... Goodness. I don't know.

Mitchell Goldhar: Maybe I won't be a specific, but an example of a property we have in the east side of the GTA, let's say, by example, at the peak it was probably worth, you know, some would say between $90, $95 a square foot of buildable. You know, let's say the phase one would have been a million square feet; phase one, meaning a couple of towers that are approved. As I said, there wasn't much of a market a year or a year and a half ago, but maybe the market now is goodness; I don't know. I mean, I would like to think it's better than half that, but maybe it is as bad as half that.

Mitchell Goldhar: Mitch, over you. Thank you, Peter. Good morning, and welcome, everyone. The second quarter delivered strong results, building on the momentum we spoke of last quarter, with over 272,000 square feet of new lease deals executed in the quarter. Committed occupancy in our portfolio improved to 98.2 percent. From the largest retail in the world, Walmart, and many of our great Canadian brands, our tenant partner relationships continue to deepen with same-store expansions and new stores.

Speaker Change: You know, maybe I won't be as specific, but an example of a property we have in the east side of the GTA, let's say, by example, at the peak, it was probably worth,

Speaker Change: Some would say between $90, $95 a square foot of buildable. Let's say the phase one would have been a million square feet.

Mitchell Goldhar: Phase 1, meaning a couple of towers that are approved. Um, um, As I said, there wasn't much of a market a year, year and a half ago, but you know, maybe, maybe the market now is, Goodness. I don't know, I mean, I would like to think it's better than half that, But, um... But maybe it is as bad as half that.

Speaker Change: As I said, there wasn't much of a market a year or a year and a half ago, but, you know, maybe the market now is...

Mitchell Goldhar: I mean, I would like to think it's better than half that. But maybe it is, you know, as bad as half that. It's still highly accretive to us, even at half that, because it's just, you know, it's basically vacant land that we have on an operating shopping center. These mid-rise, high-rise buildings don't take up much land, so we'll just be watching closely. We certainly aren't going to wait for what was the peak of the market a few years ago, but we're monitoring it closely, and that's an example of something when the time is right, we would probably sell properties like that, phase one.

Speaker Change: goodness

Speaker Change: Pah!

Mitchell Goldhar: New locations are either underway or will begin construction shortly with names such as Canadian Tire, Winners, Home Sense, LCBO, some full-line grocery, Dollar Rama, Golf Town, Banks, QSRs, and more. You may have already noticed the higher traffic or selection in wider array of tenants in our Smart Centers locations. As we enhance the experience beyond the everyday essentials with health and beauty, recreation, fitness, education, clinics, pet stores, daycares, and specialty foods. As we work closely with our tenants, no detail is too small in ensuring Smart Centers is a good option for the growth plans of the country's strongest retailers and a desirable location to continue operating profitable stores, which not surprisingly has culminated in us already extending over 86 percent of our over 5 million square feet, maturing this year.

Speaker Change: I don't know. I mean, I would like to think it's better than half that.

Mitchell Goldhar: It's still highly accretive to us even at half that because it's basically vacant land that we have on an operating shopping center. These mid-rise, high-rise buildings don't take up much land, so we'll just be watching closely. We certainly aren't going to wait for what was the peak of the market a few years ago, but we're monitoring it closely, and that's an example of something when the time is right, we would probably sell properties like that, phase one. That's a property that is zoned for, say, Goodness, six or six and a half million square feet.

Mitchell Goldhar: It's still highly accretive to us even at half that because it's just, you know, it's basically vacant land that we have on an operating shopping center. You know, these mid-rise, high-rise buildings don't take up much land. So, you know, we'll just be watching closely. We certainly aren't going to wait for, you know, the, what was the peak of the market a few years ago. But, you know, what we're monitoring closely and you know, that's an example of something when the time is right, we would probably, you know, sell properties like that, phase ones. You know, that's a property that is owned for say, goodness, six or six and a half million square feet.

Speaker Change: But maybe it is, you know, as bad as half that. It's still, you know, highly accretive to us even at half that.

Speaker Change: because it's just, you know, it's basically vacant land that we have on an operating shopping center.

Speaker Change: You know, these high-rise, mid-rise, high-rise buildings don't take up much land.

Speaker Change: So, you know, we'll just be watching closely. We certainly aren't going to...

Speaker Change: Wait for...

Speaker Change: You know the what was the peak of the market

Speaker Change: you know, a few years ago.

Speaker Change: but

Speaker Change: We're monitoring it closely. And that's an example of something when the time is right, we would probably sell properties like that, phase ones. That's a property that is zoned for say,

Mitchell Goldhar: That's a property that is zoned, per se, goodness, six or six and a half million square feet. So, you know, we've got lots and lots more there to do in the house if we want to, but phase one being a million square feet, you know, we've got a lot of that around the GTA and other major cities. When the market, you know, when the market, Your World, recovers a little bit more, that's really helpful.

Mitchell Goldhar: So, you know, we've got lots and lots more there to do in house if we want to. But phase one being a million square feet, you know, we've got a lot of that around the GTA and other major cities when the market, you know, when the market recovers a little bit more. That's a really helpful call.

Mitchell Goldhar: So, you know, we got lots and lots more there to do in house if we want to, but phase one being a million square feet, you know, we've got a lot of around the GTA and other major cities when the market, you know, when the market, you know, recovers a little bit more.

Speaker Change: Goodness, six or six and a half million square feet. So, you know, we've got lots and lots more there to do.

Speaker Change: in-house if we want to but phase one being a million square feet, you know We've got a lot of that around the GTA and other major cities When the market, you know when the market you know

Mitchell Goldhar: And is it, in your opinion, when you're talking to potential buyers, is it simply a function of the Interstates coming down, or is there an element to desire for better economic visibility and going forward? I'm just curious what the catalyst could be in your view. Revive the, Yeah, I mean, most of the buyers of what I was just describing, it's not the only thing, you know, the, the, the only lever we have for, uh, capital recycling.

Mitchell Goldhar: That's a really helpful call. And is it, in your opinion, when you're talking to potential buyers, is it simply a function of interest rates coming down? Or is there an element of a desire for better economic visibility going forward? So I'm just curious what the catalyst could be, in your view, that could Revive Demand.

Mitchell Goldhar: That's really helpful, Colin. And is it in your opinion when you're talking to potential buyers? Is it simply a function of interest rates coming down, or is there an element to a desire for better economic visibility and going forward? So I'm just curious what the catalyst could be, in your view, that could revive demand? Yeah, I mean, most of the buyers of what I was just describing, it's not the only thing, you know, the only lever we have for our capital recycling, but in that particular area, it's usually private developers, you know, and private developers are really on the sidelines until they're, you know, suddenly hot to trot.

Speaker Change: recovers a little bit more.

Mitchell Goldhar: Also positive is the 8.5 percent rental rate lifts achieved on these extensions exclusive for the tenant. This rental rate lift is pure. It's a pure lift, not buoyed up by tenant inducements or other costly consideration which can sometimes be offered. This rental rate increase is a direct reflection of the value of SmartCentres Real Estate and the amount of business being done on our properties. Rudy will provide some further details in a minute but here are a few more operational highlights.

Speaker Change: That's a really helpful call. Is it, in your opinion, when you're talking to potential buyers, is it simply a function of...

Speaker Change: interest rates coming down or is there an element of a desire for better economic visibility going forward? So I'm just curious what the catalyst could be in your view that could revive demand?

Mitchell Goldhar: Yeah, I mean, most of the buyers of what I was just describing, it's not the only thing, you know, the only lever we have for capital recycling. But in that particular area, it's usually private developers, you know, and private developers are really on the sidelines until they're, you know, suddenly hot to trot. So when they're not hot to trot, they're very careful buyers.

Speaker Change: Yeah, I mean, most of the buyers of what I was just describing, it's not the only thing, you know, the only lever we have for capital recycling.

Mitchell Goldhar: But in that particular area, it's usually private developers, you know, and private developers are really on the sidelines until they're, you know, suddenly hot to trot. So when they're not hot to trot, they're very careful buyers.

Speaker Change: but in that in in in that particular

Speaker Change: It's usually private developers, you know, and private developers.

Mitchell Goldhar: Same property NOI for the six months ending June is up three percent excluding acres. Our industrial vacant space was quickly released in the quarter along with the additional new build adjacent space and at higher rents than previous than the previous tenant our payout ratio will still high from my perspective and while it is working its way down in the meantime is not a concern because of the quality of our income. Cash collections at over 99 percent reflects the quality of that income and we expect leasing renewals, renewal rate momentum to carry on through year end.

Speaker Change: are really on the sidelines until they're, you know, suddenly hot to trot, so...

Mitchell Goldhar: So when they're not hot to trot, they're very careful buyers. So right now, they're very careful buyers. So there's this, you know, there's this theoretical value, and then there's just, you know, what does the deal actually look like, you know? Private developers are super, you know, careful when, you know, there isn't a clear path. You know, right now there's not a clear path. There's a, you know, the fog is lifting. Private developers, there's a lot of them with a lot of money, are still not ready to, you know, to buy straight up; they want to buy on terms, they want to buy conditional, they want to buy with all kinds of, you know, potential adjustments.

Mitchell Goldhar: So right now, they're very careful buyers. So there's this, you know; there's this theoretical value. And then there's just, you know, what the deal actually looks like? You know, private developers are super, you know, careful when when, you know, there isn't a clear path. You know, right now, there's not a clear path. There's a, you know, the fog is lifting.

Mitchell Goldhar: So right now, they're very careful buyers. So there's this, you know, there's this theoretical value, and then there's just, you know, what does the deal actually look like? You know, private developers are super careful when when there isn't a clear path. You know, right now, there's not a clear path, there's a, you know, the fog is lifting.

Speaker Change: When they're not hot to trot, they're very careful buyers. So right now, they're very careful buyers. So there's this, you know, there's this theoretical value. And then there's just, you know, what does the deal actually look like? You know, private developers are super, you know,

Speaker Change: You know careful when when you know, there isn't a clear path

Mitchell Goldhar: Private developers, there are a lot of them with a lot of money, are still not ready to, you know, buy straight up; they want to buy on terms, they want to buy conditionally, they want to buy with all kinds of potential adjustments. So, when the fog lifts a little bit more, and there's a real clear path to, you know, an exit, you know, development, you know, the market warms up, probably with a little bit of..., a little bit of momentum in the condo market, you know, the end user or the investor, then you'll see developers start to come off the sidelines.

Speaker Change: You know, right now there's not a clear path. There's a, you know, the fog is lifting.

Mitchell Goldhar: Private developers, there are a lot of them with a lot of money, are still not ready to, you know, buy straight up; they want to buy on terms, they want to buy conditionally, they want to buy with all kinds of potential adjustments. So, you know, when the fog lifts a little bit more, and there's a real clear path to the other, you know, to an exit, you know, development, you know, the market warms up, probably with a little bit of..., a little bit of momentum in the condo market, you know, for the end user or the investor, then you'll see developers start to come off the sidelines.

Speaker Change: Private developers, there's a lot of them with a lot of money, are still not ready to, you know, to buy straight up. They want to buy on terms, they want to buy conditional, they want to buy with all kinds of potential adjustments.

Mitchell Goldhar: So, but, you know, when the fog lifts a little bit more and there's a real clear path to, to the other, you know, the, you know, to an exit, you know, development, you know, the market warms up, probably a little bit of a little bit of momentum in the condo market, you know, the end user or the investor, then you'll see the developers start to come off the sidelines. And that can go quickly from being what I speculate is the market today to something better and in less conservative, you know, structured buying terms. So, yeah, well, wait and see; there's other levers we have that would be dealing with more institutional types, but, you know, that type of buyer, I think that's a fair, you know, profile.

Speaker Change: So, but, you know, when the fog lifts a little bit more and there's a real clear path to the other, you know, to an exit, you know, development, you know, the market warms up probably a little bit of.

Mitchell Goldhar: While enjoying a strong foundation of stable rental income we continue to build significant mix use permissions with nearly 57 millions square feet already zoned. This of course on lands we already own and have for many years. We will of course be prudent and strategic in executing any development project that is when market conditions permit with appropriate financing in place.

Speaker Change: a little bit of momentum in the condo market.

Speaker Change: You know, the end user or the investor, then you'll see the developers start to come off the sidelines. And that can go quickly from being what I speculate is the market today to something better.

Mitchell Goldhar: And that can go quickly from being what I speculate is the market today to something better and in less conservative, you know, structured buying terms. So yeah, we'll wait and see. There are other levers we have that would be dealing with more institutional types. Thank you. For that type of buyer, I think that's a fair price. Profile, That's really a really interesting color. Thank you, operator. Good morning, everybody.

Mitchell Goldhar: And that can go quickly from being what I speculate is the market today to something better, and in less conservative, you know, structured buying terms. So yeah, we'll wait and see. There are other levers we have that would be dealing with more institutional types, but you know, that type of buyer, I think that's a fair price.

Speaker Change: and in less conservative, you know, structured buying terms. So, yeah, we'll wait and see. There's other levers we have that would be dealing with more institutional types, but...

Mitchell Goldhar: Here are some specific highlights. Siteworks are continuing for our 36 story artwork project here in the BMC comprising 320 sold out condium and even units. Through our smart living brand the millway our 458 unit apartment rental project which was completed late last year was 88 percent leased at the quarter end above planned rental rates and now stands at 90 percent. We are in the near end. Construction of our bond north west town homes with our partners progressing well with 25 closings taking place this quarter and nearly all pre sold units expected to close on schedule by year end.

Speaker Change: You know, that type of buyer, I think that's a fair, you know, profile.

Unknown Executive: That's really a really interesting color.

Mitchell Goldhar: That's really a really interesting color. Thanks, Mitch. Okay.

Unknown Executive: Thanks much, thank you.

Speaker Change: That's really a really interesting color. Thanks Mitch. Thanks guys.

Operator: All right, thank you, Mario. The next question is from Mike Markidis from BMO Capital. Marcus, please go ahead, Mike.

Unknown Executive: Right, thank you, Mario.

Mike Marquitis: The next question is from Mike Marquitis from BMO Capital Markets. Please go ahead, Mike. Thank you, operator. Good morning, everybody. Out of consideration for all participants, I'll limit my questions to two. Just first off on the Peter on the drag that you mentioned, the decapitalization of interest, I guess Milway is probably a big component of that, maybe self storage. Do you have a sense of what the, the, the quantum of that drag was this quarter from an FFO, for your perspective? Just trying to get a sense of the reversal as you lease up. Yeah, good morning, Mike.

Speaker Change: All right, thank you Mario. The next question is from Mike Markidis from BMO Capital. Marcus, please go ahead Mike.

Mike Markidis: Thank you, operator. Good morning, everybody.

Unknown Attendee: Out of consideration for all participants, I'll limit my questions to two. Just first off, Peter, on the drag that you mentioned, the decapitalization of interest, I guess, Millway is probably a big component of that, maybe self-storage. Do you have a sense of what the quantum of that drag was this quarter from an FFO perspective?

Operator: Out of consideration for all participants, I'll limit my questions to two. Just first off on the drag that you mentioned, the decapitalization of interest, I guess, Millway is probably a big component of that, maybe self-storage. Do you have a sense of what the quantum of that drag was this quarter from an FFO perspective? Just trying to get a sense of the reversal, as you Lisa did.

Speaker Change: Thank you, operator. Good morning, everybody. Out of consideration for all participants, I'll limit my questions to two.

Mike Markidis: Just first off, Peter, on the drag that you mentioned, the decapitalization of interest, I guess Millway is probably a big component of that, maybe self-storage. Do you have a sense of what the quantum of that drag was this quarter from an FFO perspective?

Peter Slan: Just trying to get a sense that the rehearsal is yours. Yeah, good morning, Mike. Yeah, Millway was certainly the largest by far. It would have accounted for more than half of DREG.

Peter Slan: Yeah, good morning, Mike. Yeah, Millway was certainly the largest by far. It would have accounted for more than half of that. And you're right, self-storage as well. I did mention that a couple of quarters ago, we had put some permanent takeout financing on a portfolio of completed self-storage, smart stop projects. And so that, you know, obviously ceased capitalizing interest on those projects.

Peter Slan: Yeah, Milway was certainly the largest by far. Milway would have counted for more than half of that drag. And you're right, self storage as well. I did mention that a couple of quarters ago, we had put some permanent takeout financing on a portfolio of completed self stop. So that's about a smokes the self storage smart stop for projects. And so that.

Lisa: I'm just trying to get a sense of the reversal as you, Lisa.

Mitchell Goldhar: In east side construction is well on its way for a 224,000 square foot retail center comprised of a 200,000 square foot Canadian tire store. Adding to our self storage portfolio our market facility opened in May bringing the operational portfolio to 10 projects and four remain under construction. This portfolio continues to excel and we intend to continue the expansion, as we are doing with two new locations, one in Laval East and the other in Victoria, British Columbia, just off the downtown core.

Lisa: Yeah, good morning, Mike. Yeah, Millway was certainly the largest by far. Millway would have accounted for more than half of the drag.

Peter Slan: And you're right, self-storage as well. I did mention that a couple of quarters ago, we had put some permanent takeout financing on a portfolio of completed self-storage smart stop projects. And so that, you know, obviously ceased capitalizing interest on those projects. Okay, great, thanks. And then, um, I mentioned your comments earlier.

Lisa: And you're right, self storage as well. I did mention that.

Lisa: A couple of quarters ago, we had put some permanent takeout financing on a portfolio of completed self-storage, smart stop projects. And so that,

Peter Slan: Obviously ceased capitalizing interest on those projects. Okay, great, thanks. And then mention your comments earlier. You made a comment that you weren't concerned about the payout ratio, but that you did think it was too high for maybe too high. I'm not sure if you're liking or the markets. Just wanted to get a sense of what your ideal payout ratio would be in your mind for the long term. You know, we're low 90, 85 to, you know, you're talking ideal. And we're talking in the foreseeable future. I'd like to see it down below 98s; find if it's low 90s.

Lisa: obviously ceased capitalizing interest on on those projects.

Speaker Change: Okay, great. Thanks and then

Mitchell Goldhar: I made a comment that you weren't concerned about the payout ratio, but that you did think it was too high for, maybe too high, I'm not sure, for your liking or the market's. Just wanted to get a sense of what your ideal payout ratio was in your mind for the loss. You know, we're in the low 90s, you know, 85 to, You know, I'm, you're talking ideal, and we're talking in the, you know, foreseeable future. I'd like to see it, down below the 90s; fine if it's in the low 90s.

Speaker Change: Mitchell, in your comments earlier, you made a comment that you weren't concerned about the payout ratio, but that you did think it was too high for, maybe too high, I'm not sure for your liking, or the market's, just wanted to get a sense of what your ideal payout ratio would be in your mind for the long term.

Mitchell Goldhar: Our development teams continue to work diligently on obtaining residential and other permissions, and just recently we were successful in our Eglinton West Center, called West Side Mall, in obtaining entitlements for 2.7 million square feet of density and a 327,000 square feet phase one residential building with that grade retail. Note that this mixed-use development is immediately adjacent to the soon-to-be-open Caledonian LRT station, which will also be integrated with a soon-to-be-constructed berry go-line station.

Mitchell Goldhar: You know, we're in the low 90s, you know, 85 to You're talking ideal. And we're talking in the, you know, foreseeable future. I'd like to see it, down below the 90s; fine if it's in the low 90s.

Mitchell: You know, we're low 90, you know, 85 to...

Speaker Change: You're talking ideal. And we're talking in the foreseeable future. I'd like to see it.

Mitchell Goldhar: We sort of use 88 to 92. I think right now, you know, sort of the short, medium term goal. But yeah, we're very motivated to get that down. But we're also very comfortable with where it is because, you know, we can maintain everything that we've got going on and plan to do with our tenant, Profile, and everything that's going on here on the, you know, on the leasing side and so on.

Mitchell Goldhar: We sort of use 88 to 92. I think right now, you know, sort of a short- and medium-term goal. But yeah, we're very motivated to get that down. But we're also very comfortable with where it is because we can maintain everything that we've got going on, plan to do with our tenant, and everything that's going on here on the, you know, on the leasing side and so on. So we'll. We've got our eye on it, and we hope that there will be moments in the future to make the moves to bring that down. Thanks very much. Have a great weekend, everyone.

Peter Slan: We sort of use 88 to 92, I think, right now, you know, sort of short medium term or goal. But yeah, we're very motivated to get that down, but we're also very comfortable with where it is because, you know, we can maintain everything that we've got going on and planned to do with our tenant profile and everything that's going on here on the, you know, on the leasing side, and so on. So we'll, you know, we've got our eye on it. We hope that we'll, there'll be moments that in the future to make the moves to bring that down.

Speaker Change: down below 90 it's fine if it's low 90s we sort of use 88 to 92 I think right now you know sort of short medium term our goal but yeah we're

Speaker Change: We're very motivated to to get that down, but we're also very comfortable with where it is because You know we can maintain everything that we've got going on and plan to do with our tenant

Peter Slan: [inaudible] Neocodalist, Bill Clinton, Grinck, Grinckon, Um... Mortar magnitude, we look at trying to achieve something in the $250 to, $300 million range or more, and I mean, you know, we're okay, hanging out until parking conditions improve a bit, which is likely to be most likely to be dispositions of, Lands with permissions that we've talked about. And that market really didn It does, however, exist now.

Speaker Change: profile.

Mitchell Goldhar: So we'll. You know, we've got our eye on it. We hope that there will be moments not in the too distant future to make moves to bring that down.

Speaker Change: and everything that's going on here on the leasing side and so on.

Mitchell Goldhar: And finally, we are pleased to announce that our annual environment, social and governance report will be released shortly reflecting the significant progress we have made in all areas of our business. As I've said previously, ESG is woven into the fabric of our organization. It is a part of how we oversee our business, interact with our tenants and engage with our employees and communities.

Speaker Change: You know, we've got our eye on it. We hope that we'll, there'll be moments not in the too distant future to make moves to bring that down.

Unknown Executive: Got it. Thanks very much. Have a great weekend, everyone. Thank you.

Operator: Got it. Thanks very much. Have a great weekend, everyone!

Speaker Change: Got it. Thanks very much. Have a great weekend, everyone.

Operator: Alright, thank you, Mike. The next question is from Matt Kornack from National Bank Financial. Please go ahead, Matt.

Matt Kornack: All right. Thank you, Mike. The next question is from Matt Kornack from National Bank Financial. Please go ahead, Matt. Good morning, guys. Just quickly going back to capillaries like Ling.

Unknown Attendee: Thank you. All right. Thank you, Mike. The next question. Good morning, guys.

Speaker Change: Thank you.

Speaker Change: All right. Thank you, Mike.

Matt Kornack: Good morning, guys. I'm just quickly going back to capital recycling. By the time, I guess, interest rates have come down and developers are coming back to look at some of these projects, it may actually be attractive for you guys to participate in developing. What is your thought process around where the destination for some of that potential capital coming in would be? Would it be exclusively for deleveraging, or would it be to kind of re-participate in or ramp up the development pipeline again at that point?

Speaker Change: The next question is from Matt Cornack from National Bank Financial. Please go ahead, Matt.

Unknown Attendee: Just quickly going back to Capitol or cycling. By the time I guess interest rates have come down, and the developers are coming back to look at some of these projects that may actually be attractive for you guys. Patents and Development. And again, just your thought process around where the destination for some of that potential capital coming in would be, would it be exclusively for deleveraging, or would it be to... re-participate or ramp up the development pipeline again.

Matt Kornack: By the time I guess interest rates have come down and developers are coming back to look at some of these projects that may actually be attractive for you guys to participate in development. Again, just your thought process around like where the destination for some of that potential capital coming in would be. Would it be exclusively for de-leveraging, or would it be to kind of reparticipate or ramp up development pipeline again at that point? Yeah, I mean, that's a good question. So, I mean, I think what will likely happen will the market will come back to a point where we're, you know, we're happy with the deals and will probably sell those properties most likely, right?

Matt Cornack: Good morning, guys. Just quickly going back to capital recycling. By the time, I guess, interest rates have come down and developers are coming back to look at some of these projects that may actually

Mitchell Goldhar: Look out for this in the next week or so. As you can see, we are quite active in enhancing value in our core retail operations, prudent in our governance and strategic with our development pipeline. We also take great care of maintaining a conservative balance sheet and improving liquidity, which we did when increasing our operating line by $250 million to $750 million. Increasing our unencumbered asset pool to $9.3 billion and raising $350 million subsequent to the quarter, which Peter will speak to in a few minutes.

Speaker Change: Be attractive for you guys.

Speaker Change: to participate in developing again. Just your thought process around where the destination for some of that potential capital coming in would be. Would it be exclusively for deleveraging or would it be to kind of re-participate or ramp up the development pipeline again at that point? Thank you.

Unknown Attendee: Yeah, I mean, that's a good question. So, I think what will likely happen is the market will come back to a point where we're able to, you know, we're happy with the deals, and we'll probably sell those properties, most likely, outright. You know, we've severed these properties in a lot of cases, and in some cases, they're even site plan approved. I mean, it's like building permit applications are the next step. So it'll be very appealing. It's when it becomes appealing that it becomes very appealing. You know, right now, it's not appealing.

Mitchell Goldhar: Yeah, I mean, that's a good question. So I think what will likely happen is the market will come back to a point where we're able to, you know, we're happy with the deals, and we'll probably sell those properties, most likely, outright. You know, we've separated these properties in a lot of cases, their zone, and in some cases, they're even site plan approved. I mean, it's like building permit applications.

Speaker Change: Yeah, I mean, that's a good question. So,

Speaker Change: I mean, I think what will likely happen, will the market

Speaker Change: Come back to a point where we're able to, you know, we're happy with the deals and we'll probably sell those properties most likely outright.

Rudy Gobin: But before that, let me pass the call over to Rudy for some operational highlights. Thanks, Mitch, and good morning, everyone. As Mitch mentioned, strong momentum in tenant demand has increased our occupancy now at 98.2%, a reflection of the quality tenants responding to the need for value inconvenience within each community. Smart centers have a long history of providing value-oriented, essential goods and services to communities across Canada with access to the best value-brand needs.

Mitchell Goldhar: You know, we've severed these properties in a lot of cases. There's own some case of the even site plan approved. I mean, it's like building permit applications is the next step. So it'll be very appealing. It's when it becomes appealing, becomes very appealing. You know, right now it's not appealing. But that'll probably be what happens first, and we'll bring in as much from that as we think we need. We know to get where we want to be. And then we'll maybe start considering some joint ventures. Maybe we'll do a couple ourselves, but you know, obviously we'll just be, you know, assessing the mark, you know, the conditions and the weather in the overall marketplace, whether we'll do any of those ourselves or whether we'll just continue to sell them.

Speaker Change: You know, we've severed these properties in a lot of cases, their zone, some cases they're even site plan approved. I mean, it's like building permit applications.

Mitchell Goldhar: So this is the next step. So it would be very appealing. When it becomes appealing, it becomes very appealing. You know, right now, it's not appealing.

Speaker Change: is the next step. So it'll be very appealing. When it becomes appealing, it becomes very appealing. You know, right now it's not appealing.

Mitchell Goldhar: But that'll probably be what happens first, and we'll get we'll bring in as much from that as we think we need, you know, to get where we want to be. And then we'll maybe start considering some joint ventures. Maybe we'll do a couple ourselves.

Mitchell Goldhar: But that'll probably be what happens first. We'll bring in as much from that as we think we need to get where we want to be. And then we'll maybe start considering some joint ventures. Maybe we'll do a couple ourselves.

Speaker Change: But that will probably be what happens first, and we'll bring in as much from that as we think we need.

Speaker Change: You know to get where we want to be and then we'll maybe start considering some joint ventures

Rudy Gobin: As Mitch mentioned, at the core of our shopping centers and income, our Walmart can the entire DJX. Loblaws, sobies, Metro. Dollar-Rama, Lowe, LTVO and shoppers to name a few. There is increasing activity from these core tenants further strengthening the income and covenant of the portfolio. In response to the needs of each community, we are also adding family medical, dental, daycares, recreational, education, health and beauty, and more, providing that convenient one-stop place to shop that is SmartCentres.

Mitchell Goldhar: But you know, obviously, we'll just be, you know, assessing the market, the conditions and the weather in the overall marketplace, whether we'll do any of those ourselves, or whether we'll just continue to sell them. I'd say the first bunch of capital that we bring in will not necessarily be directed to new development. I'd say at this moment in time, my hunch is that we just continue to finish the developments that we have and lower our leverage, and then, if the market continues to be strong enough, we'll keep doing that until we get to a point where we're comfortable using that capital to do some of our own developments, whether in joint ventures ourselves.

Speaker Change: maybe we'll do a couple ourselves but you know obviously we'll just be you know assessing

Speaker Change: the conditions and the weather in the overall marketplace, whether we'll do any of those ourselves or whether we'll just continue to sell them. I'd say the first bunch of...

Mitchell Goldhar: I'd say the first bunch of.

Mitchell Goldhar: The capital that we bring in will not be directed to necessarily be directed to new development. I'd say at this moment in time, my hunch is that, you know, we just continue to finish the developments that we have and lower our leverage. And then the market continues to be strong enough, we'll keep doing that until we get to a point where we're comfortable to, you know, use that capital to, you know, to do some of our own developments, whether enjoying ventures ourselves. I don't want to commit to it, but, you know, I mentioned 250 to 300 million, probably want to pass through that first. And then, you know, it's just a theory, just a hunch, that that's when we might start looking at, you know, directing some of those funds to some of the developments that we might want to do ourselves.

Speaker Change: Capital that we bring in will will not be...

Speaker Change: directed to necessarily be directed to new development.

Speaker Change: I'd say at this moment in time.

Speaker Change: My hunch is that, you know, we just continue to finish the developments that we have.

Speaker Change: and lower our leverage and then yeah the market continues to be strong enough we'll keep doing that until we get to a point where we're comfortable to

Rudy Gobin: Demand for existing and new-built space continues to escalate from Chalauac, BC to Lashine, Quebec. We have also executed over 272,000 square feet of deals in the quarter for small and large units. And we have extended over 86% of leases maturing in 2024 with rental lifts at 8.5%. And as Mitch mentioned, this increases a pure rental increase and does not involve financial inducements or landlord work. We also released our vacant industrial space above the prior rent, a reflection of the demand for such quality building and highway location.

Speaker Change: use that capital to

Mitchell Goldhar: I don't want to commit to it, but you know I mentioned 250 to 300 million probably want to pass through that first, and then it's just a theory, just a hunch, that that's when we might start looking at you know directing some of those funds to some of the developments that we might want to do ourselves. Now that makes sense, and I guess it's all in the context of where Costa Capital goes, and that' Can you quantify what that dollar value impact would have been in the quarter in terms of just the NOI and where we should expect that addition to go, that addition being, the subsequent two quarters? Run rate next year as well. It's actually quite modest, Matt. I'm not going to throw out a number, but I can tell you it's quite modest.

Speaker Change: You know, to do some of our own developments, whether in joint ventures or ourselves. I don't want to commit to it, but, you know, I mentioned $250 to $300 million. Probably want to pass through that.

Speaker Change: first, and then, you know, it's just a theory, just a hunch, that that's when we might start looking at, you know, directing some of those funds to some of the developments that we might want to do ourselves. Now that makes sense, and I guess it's all in the context.

Peter Slan: Now, that makes sense, and I guess it's all in the context of where cost the capital goes, and that's anybody who gets, so we'll see. But just on the quarter itself, Peter, you mentioned recoveries had an impact and that we'll see a normalization into the second half of this year. Can you quantify what that dollar value impacts would have been in the quarter? In terms of just the NOI and where we should kind of think of that addition being in each of the subsequent three quarters and maybe run right into the next year as well.

Peter Slan: Now that makes sense. And I guess it's all in the context of where the cost of capital goes, and that's anybody's guess. So we'll see. But just on the quarter itself, Peter, you mentioned recoveries had an impact and that we'll see a normalization in the second half of this year. Can you quantify what that dollar value impact would have been in the quarter in terms of just the NOI and where we should think of that addition being in each of the subsequent quarters? run right into next year as well.

Peter Slan: where Costa Capital goes, and that's anybody's guess, so we'll see, but just on the quarter itself, Peter, you mentioned...

Rudy Gobin: Same property in Hawaii increased by 2.3% in the quarter and 3% for the first half of the year, excluding anchors. And we expect this to be higher in the next several quarters. Our premium outlets continue to excel in driving traffic and improving sales, leading to meaningful increases in EBITDA and value to the REIT. Ten in sales places our Toronto premium outlets in the top three highest performers in Canada and ranks among the top performers in the Simon Properties portfolio.

Peter Slan: recoveries had an impact and that we'll see a normalization into the second half of this year. Can you quantify what that...

Peter Slan: dollar value impact would have been in the quarter in terms of just the NOI and where we should kind of think of that addition being in each of the subsequent two quarters and maybe run right into next year as well.

Peter Slan: It's actually quite modest, Matt, so no, I'm not going to throw out a number, but I can tell you, you know, it's quite modest. Our recovery levels remain very high, and we expect them to continue with that, you know, for the bounce of the year to remain very high. In terms of specific dollars, though, it's, you know, it's pretty small; it's less than a million dollars, but it could be up to a million dollars, which, anyway, okay, that's there.

Peter Slan: Our recovery levels remain very high, and we expect them to continue for the rest of the year to remain very high. In terms of specific dollars, though, it's... You know, it's pretty small; it's less than a million dollars. But it could be up to a million dollars. Anyway, okay, that's fair. And then last one is, sorry to get into the minutiae, but for your secured debt, it looks like the 2024 maturity, the way that average interest rate was up a fair bit sequentially, but presumably, then you can just pay that. Was that just a variable rate debt component? Or was it something else?

Peter Slan: It's actually quite modest, Matt. So no, I'm not gonna throw out a number, but I can tell you it's quite modest. Our recovery levels remain very high, and we expect them to remain very high for the balance of the year. In terms of specific dollars, though, it's pretty small. It's less than a million dollars.

Peter Slan: It's actually quite modest, Matt. So, no, I'm not going to throw out a number, but I can tell you, you know, it's quite modest. Our recovery levels remain very high and we expect them to continue, you know, for the balance of the year to remain very high. In terms of specific dollars, though, it's...

Rudy Gobin: Our Toronto and Montreal locations remain fully leased with rental lifts and EBITDA coming in above budget. These affordable luxury centers and world-class brands augment the smart centers portfolio well and our relationship with our partner continues to be strong and collaborative as we discuss possible expansion. Overall, a great first half of 2024 with strong rental lifts, NOI growth, cash collection and tenant retention while delivering a broader array of tenants to meet the changing needs of each community. We anticipate a continuation of strong interest from our core tenants, our tenant base, as we strengthen and grow smart centers.

Peter Slan: But it could be up to $2 million. $2 million. Anyway, okay, that's fair.

Speaker Change: You know, it's it's pretty small. It's less than a million dollars

Peter Slan: And then last one is, sorry to get into the minutiae, but for your secured debt, it looks like the 2024 maturity, the way the average interest rate was up a fair bit sequentially, but presumably then you can just pay it down. Was that just a variable rate debt component, or was there something else? And will it be repaid in? Q3 or is it a Q4 maturity?

Speaker Change: But it could be up to a million dollars, which...

Peter Slan: And then last one, it's already going to be minutia, but for your secured debt, it looks like the 2020 for maturity, the way the average interest rate was up. Fair bits clentially, but presumably then you can just pay that was that just a variable rate debt component, or is there something else in there, and will it be repaid in Q3 or is it a Q4 maturity? I don't have the full schedule of each of the mortgage mortgages in front of me, Matt, but I can tell you that the plans are that some will be repaid and some will be refinanced.

Matt Cornack: Anyway, okay, that's fair. And then last one, sorry to get into the minutiae, but for your secured debt, it looked like the 2024 maturity, the way that average interest rate was up.

Speaker Change: a fair bit sequentially, but presumably then you can just pay it down. Was that just a variable rate debt component or was there something else?

Peter Slan: and will it be repaid? [inaudible] Three years as a key form of... I don't have the full schedule of each of the mortgages in front of me, Matt, but... I can tell you that the plans are that some will be repaid, and some will be refinanced. But I don't think it's going to make a material difference to our model. The smaller ones we tend to just pay off; the ones where we have JV partners, we may refinance. Okay, fair enough. Thanks, Matt.

Speaker Change: And will it be repaid in...

Peter Slan: I don't have the full schedule of each of the mortgages in front of me, Matt, but... I can tell you that the plans are that some will be repaid, and some will be refinanced.

Speaker Change: in Q3 or is it a Q4 maturity?

Matt Cornack: I don't have the full schedule of each of the mortgages in front of me, Matt, but I can tell you that the plans are that some will be repaid and some will be refinanced.

Peter Slan: So I don't think it's going to make a material difference to our model. It's, it's not the smaller ones; the smaller ones we tend to just pay off. The ones where we have JV partners, we may refinance. Okay, fair enough, thanks.

Peter Slan: Okay, that's fair enough. I don't think it's going to make a material difference to our model. It's not.

Speaker Change: Okay, no, sorry, I don't think it's going to make a material difference to our model anyway. It's not. The smaller ones we tend to just pay off. The ones where we have JV partners, we may refinance.

Peter Slan: The smaller ones, we tend to just pay off. The ones where we have JV partners, we may refinance.

Peter Slan: At June 30, 2024, net operating income decreased by $8 million or 5.5% from the same quarter last year largely due to the decrease in condo closings, which were only partially offset by new town home closings. NOI was partially impacted by a decrease in net recoveries primarily due to the timing of certain operating costs which we expect to normalize over the remainder of the year. Same property and OI, including equity-accounted investments, but excluding anchor tenants, increased by 2.2% compared to the same period in 2023, and by 3% for the first six months of the year.

Unknown Executive: All right, thank you, Matt.

Matt Cornack: Okay, fair enough. Thanks, Beth.

Operator: Alright, thank you Matt. The next question is from Sam Damiani, from TD Coat, please go ahead Sam Sam Damiani, from TD Coat, please go ahead Sam Damiani, from TD Coat,

Peter Slan: All right, thank you, Matt. The next question is from Sam Damiani. Thank you, and good morning, everyone.

Sam Daviani: The next question is from Sam Daviani from TD Cohen. Please go ahead, Sam. Thank you, and good morning, everyone. Just wanted to touch on the development of retail. We talked about last year, I think around 300,000 square foot pipeline of discussions, which then translated into 200,000 square feet of active development projects, as I recall from last quarter. Just wondering if you could give us an update on that. And also Mitch, I think you mentioned that there were talks with Simon with respect to TPO and maybe an expansion. Does that mean a third project in the country, or yet another expansion to TPO?

Matt Cornack: All right, thank you Matt.

Matt Cornack: The next question is from Sam Damiani from TD Coward. Please go ahead, Sam.

Operator: Thank you and good morning, everyone. Just wanted to touch on the development of retail. We talked about last year, I think around a 300,000 square foot pipeline of discussions, which then translated into 200,000 square feet of active development projects, as I recall from last quarter. Just wondering if you could give us an update on that.

Sam Damiani: Thank you and good morning everyone.

Sam Damiani: Just wanted to touch on the development of retail we talked about last year, I think around 300,000 square feet of pipeline discussions with Ben, translated into 200,000 square feet of active development projects, as I recall from last quarter. Just wondering if you could give us an update on that.

Sam Damiani: Just wanted to touch on the development of retail. We talked about last year, I think around 300,000 square foot pipeline of discussions which then...

Sam Damiani: Translated into 200,000 square feet of active development projects as I recall from last quarter. Just wondering if you give us an update on that.

Mitchell Goldhar: And also, Mitch, I think you mentioned that there were, you know, talks with Simon with respect to TPO and maybe an expansion. Does that mean a third project in the country or, you know, yet another expansion to TPO? Um... Sam, I'll answer, I'll start, is the first to go in reverse order.

Mitchell Goldhar: And also Mitch, I think you mentioned that there were, you know, talks with Simon with respect to TPO and maybe an expansion. Does that mean a third project in the country or, you know, yet another expansion to TPO? Um... Sam, I'll answer, I'll start, is the first to go in reverse order, and it's pretty much in the end, Dean Wilkinson, Sam Damiani. Good for you to pick up on Hunt that TPO question or the Simon question.

Mitch Goldhar: Also, Mitch, I think you mentioned that there was talks with Simon with respect to TPO and maybe an expansion. Does that mean a third project in the country or yet another expansion to TPO?

Peter Slan: FFO, her fully diluted unit, was 50 cents compared to 55 cents from the comparable quarter last year. The decline is primarily due to the condo closings that occurred in the prior year, which did not repeat this quarter, as well as an increase in net interest expense due to higher interest rates and lower interest capitalization from completed development projects that are currently in lease-up. During Q2, we also delivered and closed on 25 units of our Vaughan Northwest Town Home project for net profit of $2.5 million at the reeds share.

Sam Daviani: Sam, I'll start in the first, going reverse order. The, that's pretty good for you to pick up on that TPO question or the Simon question. We're looking at everything. Yeah, so it's too early to say anything about what that may look like. So clearly TPO could be much bigger from a demand point of view. So we're just looking at it. But we just finished expanding it. So, to expand it again is just something we're looking at. And it was respect to the sort of magnitude of new deals, net new space retail. It's quite a bit, actually.

Mitchell Goldhar: Okay, great, thanks. And then, mentioning your comments earlier, you made a comment that, um, you weren't concerned about the payout ratio, um, but that you did think it was too high for, maybe too high. I'm not sure if you like it or the markets just wanted to get a sense of what your ideal payout ratio would be in your mind for the long term.

Mitch Goldhar: Sam, I'll answer. I'll start.

Mitchell Goldhar: The It's pretty, Thank you, good for you to pick up on that TPO question or the Simon question. We're looking at everything. Yeah, so it's too early to say anything about what that may look like. So clearly, TPO could be much bigger from a demand point of view. So we're just looking at it. We just finished expanding it.

Speaker Change: in the first go in reverse order the it's pretty

Mitchell Goldhar: We're looking at everything. Yeah, so it's too early to say anything about what that may look like. So clearly, TPO could be much bigger from a demand point of view. So we're just looking at it. But we just finished expanding it, so to expand it again is just something we're looking at. And with respect to the sort of.., magnitude of new deals, net new space retail, it's quite a bit actually. We've got a lot cooking in terms of new deals. A lot of the large, large..., cap and large floor plate retail chains in the country did not expand a lot in the last 10 years.

Speaker Change: Premium

Sam Damiani: Good for you to pick up on that TPO question, or the Simon question. We're looking at everything. So it's too early to say anything about what that may look like.

Mitchell Goldhar: Grinck, Grinckon, Ehm... Mortar Magnitude, we look at trying to achieve something in the 250 to, 300 million dollar range or more, and I mean, you know, we're okay, hanging out until parking conditions improve a bit, is likely to be most likely to be dispositions of lands with permissions that we've talked about. And that market, you know, really didn't exist even a year ago or It does exist now, but it's not quite where we want it to be yet. But it's moving in the right direction.

Peter Slan: FFO with adjustments, which excludes both the Town Home and condo profits and the total return swap, was 51 cents per unit for the second quarter. The decrease of 3 cents from the comparable quarter last year was primarily due to an increase in net interest expense due to higher interest rates and lower interest capitalization. In terms of distributions, we maintained our distributions during the quarter at an annualized rate of $1.85 per unit.

Speaker Change: Clearly, TPO could be much bigger from a demand point of view, so we're just looking at it. We just finished expanding it.

Mitchell Goldhar: So, to expand it again is just something we're looking at. And with respect to the sort of.., magnitude of new deals, net new space retail, it's quite a bit. Actually, we've got a lot cooking in terms of new deals, a lot of the large, large cap, and large floor plate. Retail chains in the country did not expand a lot in the last ten years.

Speaker Change: So to expand it again, is just something we're looking at. And with respect to the sort of...

Speaker Change: magnitude of new deals, net new space, retail, it's quite a bit, actually. We've got a lot cooking in terms of new deals. A lot of the large, large

Mitchell Goldhar: We've got a lot cooking in terms of new deals. A lot of the large, large-cap and large floor plate retail chains in the country did not expand a lot in the last 10 years. So, you know, they're looking at it now. And, and we're one of the go-to's for sure for that. So, you know, we're in discussions. But, you know, deals take a long time to do, and then, you know, you got to get it approved. I mean, we're zoned for it, but we still got to get its site plan approved and bailing permits and build them.

Peter Slan: The payout ratio to AFFO with adjustments for the three months ended June 30th was 96.9%. Adjust the debt to adjusted EBITDA was 9.9 times for the rolling 12-month period ending in Q2, which is unchanged from the prior year, but a slight increase from 9.8 times last quarter due to additional development spending and fewer condo closings. Our debt to aggregate assets ratio was 43.7% at the end of the quarter, a 50 basis point increase compared to the same period a year earlier.

Speaker Change: cap and large floor plate.

Speaker Change: retail chains in the country did not expand a lot in the last 10 years.

Mitchell Goldhar: So, you know, they're looking at it now, and we're one of the go-tos for sure for that. So we're in discussions, but deals take a long time to do, and then you've got to get it approved. I mean, we're zoned for it, but we've still got to get a site plan approved, and building permits, and build it. So it takes time. But I would say their interest is not superficial or flippant.

Mitchell Goldhar: So, you know, they're looking at it now. And we're one of the go-tos for sure for that. So, you know, we're in discussions, but, you know, deals take a long time to do, and then, you know, you got to get it approved. I mean, we're zoned for it, but we still got to get the site plan approved, and building permits, and build it.

Speaker Change: So, you know, they're looking at it now, and...

Speaker Change: and we're one of the go-tos for sure for that. So, you know, we're in discussions, but you know, deals take a long time to do and.

Speaker Change: And then, you know, you've got to get it approved, I mean, we're zoned for it, but we've still got to...

Peter Slan: Our unencumbered asset pool increased by $100 million to $9.3 billion in Q2 compared to last year. Unsecured debt, including our share of equity-accounted investments, was $4.4 billion virtually unchanged from the prior quarter and represents approximately 82% of our total debt of $5.4 billion. From a liquidity perspective, we remain comfortable with our current liquidity position. During Q2, as Mitch noted, we upsized our main revolving operating credit facility by $250 million to $750 million with strong support from our banking syndicate. As a result, as at June 30th, 2024, we have approximately $652 million of undrawn liquidity, including our share of equity-accounted investments and cash on hand, but excluding any accordion features.

Mitchell Goldhar: So, it takes time, but I would say the interest is not superficial or flippant. I mean, we're well along, and I would rank the likelihood of doing quite a bit of new retail space, you know, starting next year to be very high and to continue for the next few years unless there's some major catastrophic event. Their interest is based on population growth, actual sales trends, and their strategic plans, large corporate strategic changes in their plans.

Mitchell Goldhar: So, it takes time. But I would say the interest is not superficial or flippant. I mean, we're well along. And I would rank the likelihood of doing quite a bit of new retail space, you know, starting next year to be very high and to go in to continue for the next few years. Unless there's some, you know, major calves shrubbing event, their interest is based on population growth, you know, actual, you know, sales trends and strategic, you know, their strategic plans, large corporate strategic changes in their, in their plans. So, we're one of the go-to's, I think, for sure for a lot of the companies.

Speaker Change: get a site plan approved and building permits and build them, so it takes time. But I would say, uh...

Mitchell Goldhar: I mean, we're well along, and I would rank the likelihood of doing quite a bit of new retail space, starting next year, to be very high and to go on to continue for the next few years unless there's some, you know, major catastrophic event. Their interest is based on population growth, you know, you know, actual, you know, sales trends, and strategic, you know, their strategic plans, large corporate strategic changes in their plans.

Speaker Change: The interest is not superficial or flippant, I mean we're well along and I would rank the likelihood of doing quite a bit of new retail space. You know...

Speaker Change: starting next year to be very high and to go in to continue for the next few years.

Speaker Change: unless there's some, you know, major catastrophic event. Their interest is based on population growth, you know, actual sales trends and strategic, you know, their strategic plans.

Mitchell Goldhar: So we're one of the go-tos, I think, for sure, for a lot of companies. You might forget how many of them there are, including Walmart, you know, who haven't done a lot of expanding on the retail side. They've done a lot of expanding on the warehouse and distribution fulfillment side. So, you know, we've got a lot of things cooking with a lot of the, you know, Core Retailers in this country. We're great.

Speaker Change: large corporate strategic changes in their plans. So we're one of the go-tos, I think for sure, for a lot of the companies. You might forget how many of them there are, including Walmart.

Mitchell Goldhar: So, we're one of the go-tos, I think, for sure, for a lot of companies. You might forget how many of them there are, including Walmart, you know, who haven't done a lot of expanding on the retail side. They've done a lot of expanding on the warehouse and distribution fulfillment side. So, you know, we've got a lot of things cooking with a lot of the, you know, Core Retailers in This Country. Okay, great. Thank you. That's very helpful. The second and last question is just on the disclosure of the same property, which was broken out, you know, between them, with them without the anchors. I think this was the first quarter.

Unknown Executive: You haven't done a lot of expanding on the retail side. They've done a lot of expanding on the warehouse and distribution fulfillment side. So, you know, we've got a lot of things cooking with, with a lot of, you know, core retailers in this country. The great thank you. That's helpful.

Speaker Change: who haven't done a lot of expanding on the retail side. They've done a lot of expanding on the warehouse and distribution fulfillment side. So, we've got a lot of things cooking with a lot of the, you know.

Peter Slan: As Mitch noted, subsequent to the quarter end, we increased our liquidity further through the issuance of $350 million of senior unsecured debentures at a rate of 5.162% for a term of six years. The proceeds from this offering will be used to repay the upcoming maturity of our Series O debentures and higher interest floating rate debt on our operating line. The weighted average terms and maturity of our debt, including debt on equity-accounted investments, is 3.1 years, or 3.3 years, pro forma of the recent adventure offering.

Speaker Change: core retailers in this country.

Mitchell Goldhar: Thank you. That's helpful. The second and last question is just on the disclosure of the same property, which was broken out, you know, between, with and without the anchors. I think this was the first quarter.

Sam Damiani: Just wondering what the rationale for doing that is; does it indicate a new way you're thinking about the business? I'm just wondering, I guess, why, why, why, why separate out those business orders?

Unknown Executive: Second and the last question is just on the disclosure of same property, which was broken out, you know, between, like, with and without the anchors. I think this was the first quarter. Just wondering if the rationale for doing that does indicate a new way you're thinking about the business? I'm just wondering, I guess, why, why, why separate out that disclosure. Hey Sam. No, we've in fact disclosed that in many prior quarters. We just wanted to make sure that everyone you've given that we have a predominance of larger tenants in our portfolio, that everyone would understand the retro lifts and for what I'm going to call our CRU, which includes obviously we know that a bulk of a lot of renewals this year were Wal-Mart, and Wal-Mart for the most part don't have bumps in their rents.

Speaker Change: Okay, great, thank you, that's helpful. Second and last question is just on the disclosure of same property, which was broken out, you know, between

Speaker Change: Good riffing without the anchors. I think this was the first quarter. Just wondering what the rationale for doing that does it indicate a new way you're thinking about the business. I'm just wondering, I guess, why, why, why separate out that score.

Unknown Executive: Just wondering what the rationale for doing that is? Does it indicate a new way you're thinking about the business? I'm just wondering, I guess, why, why, why, why, why separate out that disclosure? Hey, Sam.

Unknown Executive: Hey, Sam. No, we've actually disclosed that in many prior quarters, but we just wanted to make sure that everyone knew given that we have a predominance of larger tenants in our portfolio, that everyone would understand the rental list and for what I'm going to call our CRU, which includes our mid-box size. Mitchell, Mitchell, do you want to? Yeah, I mean, Sam.

Unknown Executive: No, we've actually disclosed that in many prior quarters, but we just wanted to make sure that everyone you've given that we have a predominance of larger tenants in our portfolio so everyone would understand the rental lifts and for what I'm going to call our CRU, which includes our midbox size. So, Mitchell, Mitchell, do you want to? Yeah, I mean, Sam, obviously, we know that a bulk of a lot of renewals this year were Walmart, and Walmart, for most parts, doesn't have bumps in their rents.

Speaker Change: Hey, Sam. Noah, we've, in fact, disclosed that in many prior quarters. We just wanted to make sure that everyone knew, given that we have a predominance of larger tenants in our portfolio, that everyone would understand the rental lists.

Peter Slan: Just before we open the call up to questions, I want to touch briefly on our development projects that are underway. Once again, we have updated our MDNA disclosure, focusing on those development projects that are currently under construction. As you will see on page 17, there are currently nine projects under construction, down from 10 last quarter. The one project that was completed during the quarter was a self-storage project in Markham. The reeds share of total capital costs of these nine development projects is approximately $499 million, with the estimated cost to complete, standing at $307 million.

Speaker Change: and for what I'm going to call our CRU, which includes our mid-box size.

Mitchell Goldhar: Yeah, I mean, Sam, obviously, we know that a lot of renewals this year were Walmart, and Walmart, for the most part, don't have bumps in their rent. It's not a reflection of the market, and so the non-anchor, particularly the non-Walmart number, has got some value in just understanding what the market is for our properties. It's more of a reflection of market value.

Speaker Change: Yeah, I mean, Sam, obviously we know that a bulk of a lot of renewals this year were Walmart and Walmart, for the most part, don't have bumps in their rent. It's not a reflection of the market.

Peter Slan: It's not a reflection of the market, and so the non-anchor, particularly the non-Wal-Mart number, gives some value in just understanding what the market is for our properties. It's more of a reflection of market value.

Unknown Executive: It's not a reflection of the market, and so the non-anchor, particularly the non-Walmart number gives some value in just understanding what the market is for our properties. It's more of a reflection of market value. Perfect. Thank you very much, and I'll turn it back.

Speaker Change: Um...

Speaker Change: and so the non-anchor.

Sam Damiani: particularly the non-Walmart number gives some, you know, got some value in just understanding what, you know, what the market is for for our properties. It's more of a reflection of market value.

Peter Slan: Subsequent to the quarter end, all of the debt drawn to fund phase one of the bond Northwest Town Homes has been repaid. In addition, all of the construction debt related to funding the development of three smart stop projects has been replaced with permanent financing from an external lender.

Unknown Executive: Perfect.

Operator: Perfect. Thank you very much. And I'll turn it back.

Unknown Executive: Thank you very much, and I'll turn it back.

Speaker Change: Perfect. Thank you very much and I'll turn it back.

Pammi Bir: All right. Thank you, Sam. The next question is from Pammi Bir from RBC Capital Markets. Just go ahead, Pammi. Thanks. Just maybe on that last comment regarding the Wal-Mart reels and maybe coming back to the overall commenter around the same property and the wide growth and the recoveries, et cetera. Should we then expect maybe the same property and the wide to pick up through the back, huh? I guess given the leasing that was done as well, or is it expected to continue to track in that 2% range for the year? Pick up. And you know, yeah, pick up.

Pammi Bir: The next question is from Pammi Bir from RBC Capital Market. Please go ahead, Pammi.

Speaker Change: Good.

Sam Damiani: All right. Thank you, Sam.

Sam Damiani: The next question is from Pammy Burr from RBC Capital Market. Please go ahead, Pammy.

Unknown Executive: Thanks, just maybe on that last comment regarding the Walmart renewals and maybe coming back to the overall commentary around same property and why growth and the recoveries, etc. You know, should we then expect maybe same property and why to pick up through the back talk, I guess, given the leasing that was done as well? Or is it sort of, you know, you expected it to kind of continue to track at, you know, in that 2% range for the year?

Unknown Attendee: And just maybe on that last comment regarding the Walmart renewals, and maybe coming back to the overall commentary around same property NOI growth and recoveries, etc. You know, should we then expect same property NOI to pick up through the backtalk, I guess, given the leasing that was done as well? Or is it sort of, you know, you expect it to kind of continue to track at, you know, in that 2% range? Pickup, and you know, yeah, pick up.

Unknown Executive: And with that, we would be pleased to take your questions. So, operator, can we have the first question on the line, please? Certainly. As a reminder for people, if you'd like to keep up to ask a question, please dial star one on your phone.

Pammy Burr: Thanks, just maybe on that last comment regarding the Walmart reels and maybe coming back to the overall commentary around same property and why growth.

Speaker Change #100: and the recoveries, et cetera, you know, should we then expect maybe St. Robert-Anne-au-Maine to pick up through the backtalk, I guess, given the leasing that was done as well? Or is it sort of, you know, you expect it to kind of continue to track at, you know, in that 2% range for the year?

Mario Saric: The first question is from Mario Therrick from Scotia Bank. Please go ahead, Mario. Hi, good morning, and thank you for taking my questions. Maybe starting off with Rudy, both occupancy and blend of these spreads were up quite nicely sequentially. I'm curious about the whether there's a direct connection between the two. So I'm trying to understand how the turning back to peak occupancy or on your way back to peak occupancy may impact your ability to continue expanding that least, but going forward.

Speaker Change #101: Pick up.

Speaker Change #102: And, you know, yeah, pick up.

Pammi Bir: Yeah, we'll leave it at that. All right.

Unknown Attendee: Yeah, we'll live in it here. Okay. All right. I wanted to maybe just come back to the commentary on capital recycling and the 250 to 300. Mitch, you know, just given where we sit today, you mentioned developers are obviously being careful. But if you were to transact on any of that, would you be providing, or would you consider providing, any BTBs, or are you looking to get that cash back and, you know, take leverage?

Speaker Change #103: Ruh roh. Ruh roh. Ruh roh.

Mitchell Goldhar: Okay. All right. I wanted to maybe just come back to the commentary on capital recycling and the 250 to 300. Mitch, you know, just given where we sit today, you mentioned developers are obviously being careful, but if you were to transact on any of that, would you be providing or would you consider providing any BTBs, or are you looking to get that cash back and, you know, take leverage?

Speaker Change #104: Yep, we'll leave it at that.

Mitchell Goldhar: I wanted to maybe just come back to the commentary on the capital recycling and the 250 to 300. Mitch, you know, just given where we sit today, you mentioned, you know, developers, obviously being careful. But if you were to transact on any of that, would you be providing, or would you consider providing any BTPs, or you're looking to get that cash back and, you know, take leverage down? Yeah, I mean, that's what I was trying to say there. You know, right now, I think they just want too much of a BTP. I mean, they weren't there a year and a bit ago, but now they're there, but they, I guess, they want BTPs.

Speaker Change #105: Okay, all right. I wanted to maybe just come back to the commentary on capital recycling and the 250 to 300.

Mario Saric: No, I think we obviously as we lease up the portfolio, there is going to be, and we are at market, we expect that that least spread to, I'm going to call even out during the by the end of the year. So, quarter by quarter, you'll see a little bit of change, but we do expect that to continue to maintain that current that current spread year. Okay, sorry, to maintain the spread, or do you see the possibility to increase it further?

Speaker Change #105: Mitch, you know, just given where we sit today, you mentioned, you know, developers obviously being careful, but if you were to transact on any of that, would you be providing or would you consider providing any BTBs or are you looking to get that cash back and, you know, take leverage down?

Mitchell Goldhar: Yeah, I mean, that's what I was trying to say there. You know, right now, I think they just want too much of a VTB. I mean, they weren't there a year and a bit ago, but now they're there, but they, I guess they want VTBs. And so I guess just, it's not really helpful to us, you know, to, it just doesn't move the needle enough to do the kind of deals that developers want to do today, private developers.

Unknown Attendee: Yeah, I mean, that's what I was trying to say there. You know, right now, I think they just want too much of a VTB. I mean, they weren't there a year and a bit ago, but now they are.

Speaker Change #106: Yeah, I mean that's what I was trying to say there. You know right now I think they just want too much of a VTB. I mean they weren't there a year and a bit ago but now they're there but they I guess they want VTBs and so I guess...

Mitchell Goldhar: But I guess, just, it's not really helpful to us, you know, to, you know, it just doesn't move the needle enough to do the kind of deals that developers want to do today, private developers. So, If in the future, you know, the price goes up in the percentage of the price as a VTB goes down, you know, we would give a VTB if it was... you know, enough cash and it was not, you know, too long a VTB and a decent, you know, decent interest rate. We'll consider it all, but right now, none of it's quite there yet.

Mitchell Goldhar: And so I guess just it's not really helpful to us, you know, to, you know, it just doesn't move the needle enough to do the kind of deals that the developers won't want to do today, private developers. So if in the future, you know, the price goes up and the percentage of the price as a VTB goes down, you know, we would give a VTB if it was, you know, enough cash and it was not, you know, too long of VTB and decent, you know, decent interest rate, you know, we'll consider it all, but right now, it's sort of not, none of it's quite there yet.

Mario Saric: This for the, for the, again, for the balance of this year, we are budgeting that that will be like you see in first quarter, second quarter. And then we expect that that sort of blended rate will increase, but that does not include the lease up of space. So we will have it increased as we lease up space, but on the existing portfolio to maintain that alignment with the first half of the year.

Speaker Change #106: just it's not really helpful to us you know to you know it's just not doesn't move the needle enough to to do the kind of deals that that developers want to do today private developers so

Mitchell Goldhar: So If, in the future, you know, the price goes up, and the percentage of the price as a VTB goes down, you know, we would give a VTB if it was, You know, enough cash, and it was not, You know, too long of an ETB and a decent, you know, decent interest rate, we'll consider it all, but right now, none of it's quite there yet. So, um, to kick things off, you know, there might be a small or some kind of VTB at the right price.

Speaker Change #107: If in the future, you know, the price goes up and the percentage of the price as a VTB goes down, you know, we would give a VTB if it was...

Mario Saric: Okay, the dentist is a question, you can try to understand the relationship between pricing power and occupancy within your portfolio because there's a very direct relationship between the two. And it sounds like a risk. Absolutely, absolutely. Okay, and then just follow up for you, Rudy, what percentage roughly would you estimate of your non-anchor tendencies would have fixed price renewal options in place? I don't know that off the cuff, I'll have to get back to you on that, Mario. Yeah, I just don't know about my fingertips.

Speaker Change #107: You know enough cash, and it was Not you know too long of ETB and decent you know decent interest rate You know we'll consider it all but right now. It's sort of not none of its quite there yet, so

Mitchell Goldhar: So I can see the kick things off, you know, there might be a small or some kind of a VTB at the right price. And then I guess, yeah, no, that's helpful, and I guess, you know, as you think of what you put all this together, it sounds like, you know, hitting that type of level from a disposition sort of target standpoint. Yeah, it's really unlikely this year. This is, you know, if anything, maybe a more 2025 event or just curious again, your sense of timing. Yeah, I don't know, maybe we're, yeah, I would say you're most likely, but actually, there is a chance it could happen this year.

Mitchell Goldhar: So, I can see to kick things off, you know, there might be a small or some kind of a VTB at the right price. And then I guess, yeah, no, that's helpful. And I guess, you know, as you think of what you put all this together, it sounds like, you know, hitting that type of level from a disposition sort of target standpoint is really unlikely this year.

Speaker Change #107: I can see to kick things off, you know, there might be a small or some kind of a VTB at the right price.

Mitchell Goldhar: And then I guess, yeah, no, that's helpful. And I guess, you know, as you think of what you put all this together, it sounds like, you know, hitting that type of level from a disposition sort of target standpoint is really unlikely this year. This is, you know, if anything, maybe more of a 2025 event or I'm just curious to get any sense of timing. Yeah.

Speaker Change #108: And then I guess, yeah, no, that's helpful. And I guess, you know, as you put all this together, it sounds like, you know, hitting that type of level from a disposition sort of target standpoint. Yeah, it's really unlikely this year. This is.

Mario Saric: Okay, and then maybe shifting over to Peter. I think the variable rate that was roughly about 20% this quarter that may become a tailwind in the coming months with central central bank using as much alluded to as prepared remarks. Just curious what your target variable rate exposure would be by the end of this year, by the end of next year. What's a good stabilized figure? Yeah, that's right, Mario. It's been about 20%.

Unknown Attendee: This is, you know, if anything, maybe a 2025 event. I'm just curious to get any sense of, Yeah, I don't know. Maybe we're, Yeah, I would say you're most likely, but actually, there is a chance it could happen this year, as I was saying, when when the market's where it is, I mean, it just seems like that and it seems like it's going to be forever, you know, but then suddenly, you know, some things happen. You know, they get, you know, pretty anxious, and things can change very quickly.

Speaker Change #108: You know if anything maybe

Speaker Change #108: more 2025 event or

Mitchell Goldhar: Yeah, I don't know, maybe we're... Yeah, I would say you're most likely, but actually, there is a chance it could happen this year. As I was saying, you know, when the market's where it is, I mean, it just seems like that, and it seems like it's going to be forever, you know, but then suddenly, you know, some things happen, and they get, you know, pretty anxious, and things can change very quickly.

Speaker Change #108: Elito.

Speaker Change #109: I'm just curious to get any sense of timing.

Speaker Change #110: yeah I don't know maybe we're

Speaker Change #111: Yeah, I would say most likely, but actually there is a chance it could happen this year. As I was saying, you know, when the market's where it is, I mean, it just seems like that and it seems like it's going to be forever.

Mitchell Goldhar: As I was saying, you know, when the markets, where it is, I mean, it just seems like that and it seems like it's going to be forever. You know, but then suddenly, you know, some things happen and, you know, they get, you know, pretty anxious and things can change very quickly. So I would say you're, you know, if I was a betting man, I would agree with you, but it's still, I'd say there's still a small chance that there could be, you know, a transaction this year and enclosed this year. But yeah, I would say for conservative estimated estimates, I'd say the box or I would say that on 2025 at this point.

Mario Saric: There's been two rate cuts I would note since the last time we hosted a quarterly call. Also, that benefited us slightly only slightly in this quarter because it was late in Q2 and it'll benefit us again in Q3 with the most recent rate cut. And your guess is as good as mine about future rate cuts, but I do agree with you it could certainly become a tailwind. I expect we're going to maintain roughly the same proportion.

Speaker Change #111: You know, but then suddenly, you know, some things happen and

Speaker Change #111: You know, they get, you know, pretty anxious and things can change very quickly.

Mitchell Goldhar: So I would say you're, you know, if I were a betting man, I would agree with you, but there's still, I'd say, there's still a small chance that there could be, you know, a transaction this year and close this year, but, Yeah, I would say for conservative estimates, I'd say the bulk, or I would say a bet on 2025 at this point. Okay.

Mitchell Goldhar: So I would say if I were a betting man, I would agree with you, but there's still a small chance that there could be a transaction this year and close this year, but Yeah, I would say for conservative estimates, I'd say the bulk, or I would say that in 2025 at this point. Last one for me, just Peter, maybe you can remind us, you know, the manufacturer, sorry, just from a leverage standpoint where you want to get to on a debt-tea bit of basis, on a longer term.

Speaker Change #111: So, I would say you're, you know, if I was a betting man, I would agree with you, but there's still, I'd say, there's still a small chance there could be, you know, a transaction.

Speaker Change #111: this year and in close this year, but.

Speaker Change #112: Yeah, I would say for conservative estimates, I'd say the bulk, or I would say I would bet on 2025 at this point.

Mario Saric: It's not going to move all that meaningfully, but with the most recent raise a debenture issue. Of course, we did repay mostly floating rate debt. Right. Okay, and then can you give us a sense of how much of the variable rate debt in place today? The interest there upon is currently being capitalized. I'm just trying to get a sense of what the potential method could be. Yeah, so most of it is being capitalized. Certainly all of our construction facilities are floating rate debt. Mario.

Unknown Executive: Okay.

Peter Slan: Okay, last one for me, just Peter, maybe you can remind us, you know, when you factor, or sorry, just from a leverage standpoint, where you want to get to on a debt-to-debit basis on a longer term basis.

Peter Slan: Last one for me, just Peter, maybe you can remind us, you know, any factor, sorry, just from a leverage standpoint, where, where you want to get to end a debt, even a basis on a longer term basis. Well, so I have indicated on fire calls, Tommy, that, you know, we are going to see it tick up slightly, not because we're adding debt, but because the EBITDAW from the 1000 Transit City, 4 and Transit City, 5 condo, you know, the closed in 2023 will roll off. And so that's exactly what we saw this quarter. But, you know, we would like to see it, you know, remain in the single digits, certainly.

Speaker Change #112: Okay last one for me just Peter maybe you can remind us you know when you factor but sorry just from a leverage standpoint where where you want to get to on a debt-to-debt basis on a longer term basis

Mitchell Goldhar: Well, on prior calls, Pammi, I indicated that, you know, we are going to see it tick up slightly, not because we're adding debt, but because the EBITDA from the 1,000 Transit City 4 and Transit City 5 condo units that closed in 2023 will roll off. And so that's exactly what we saw this quarter.

Peter Slan: Well, on prior calls, Pammi, I indicated that, you know, we are going to see it tick up slightly, not because we're adding debt, but because the EBITDA from the 1000 Transit City 4 and Transit City 5 condo units that closed in 2023 will roll off. And so that's exactly what we saw this quarter. But, you know, we would like to see it remain in the single digits, certainly. And so I don't think we've articulated a particular target, but we would like to see it trend down, of course.

Pommy: Well, so I have indicated on prior calls, Pommy, that, you know, we are going to see it tick up slightly, not because we're adding debt, but because the EBITDA from the 1,000 Transit City 4 and Transit City 5 condo units that closed in 2023 will roll off.

Peter Slan: But, you know, we would like to see it remain in the single digits, certainly. And so I don't think we've articulated a particular target, but we would like to see it trend down, of course. I will turn it back over to you. Thank you. Thanks. Good morning. I think most of the questions have been answered, but I just had one quick follow-up on the discussion around the retail development. What type of yields would you need to see before you move forward? And how realistic is it?

Mitchell Goldhar: Okay, and then maybe just lastly for Mitch in terms of capital recycling. You kind of highlighted the potentially more favorable interest rate environment is being a possible catalyst for increased activity or for some activity. Are you at the stage where you might be able to quantify the magnitude of potential decisions, whether it be development intensification or IPP. And would the catalyst still plan of interest rates might be for that? I think more magnitude we look at trying to achieve something in the 250 to $300 million range or more.

Speaker Change #114: And so that's exactly what we saw this quarter, but, you know, we would like to see it, you know, remain in the single digits, certainly. And so I don't think we've articulated a particular target, but we would like to see it trend down, of course.

Unknown Executive: And so I don't think we've articulated a particular target, but we would like to see it trend down, of course. Okay. I will. I'll turn it back. Thank you. All right.

Operator: Okay, I will I'll turn it back. Thank you. Alright, thank you, Pammi. The next question is from Lorne Kalmar from Desjardins Capital Markets. Please go ahead. Thanks, good morning.

Pommy: Okay, I will, I'll turn it back. Thank you.

Lauren Kalmar: Thank you, Tommy.

Lauren Kalmar: The next question is from Lauren Kalmar from Digital Bank Capital Marcus. Please go ahead. Thanks. Good morning. I think most of the question of an answer, but I just had one quick follow-up on the discussion on the retail developments.

Operator: All right, thank you, Pammi. The next question is from Lorne Kalmar from Desjardins Capital Markets. Please go ahead. Thanks. Good morning.

Pommy: All right, thank you, Pommy.

Speaker Change #115: The next question is from Lorne Calmar from Desjardins Capital Markets, please go ahead.

Lorne Calmar: Thanks, good morning. I think most of the questions have been answered, but I just had one quick follow-up on the discussion around the retail developments. What type of yields would you need to see before you move forward and how realistic is it, you know, you think you can achieve those if you start developing kind of next yearish?

Mitchell Goldhar: What type of yields would you need to see before you move forward, and how realistic is it, you know, you can achieve those if you start developing kind of next year. Yeah, I mean, it varies. It depends. The retailers aren't super. The retailers recognize the cost of construction, and they recognize, you know, the value of land. So they don't, they don't. And I think we're all the development community are experiencing the same thing. So retailers appreciate that, you know, they got to pay more rent. So. Yeah, for the most part, there's reasonably a creative day one with bumps, you know, decent high spaces.

Mitchell Goldhar: Yeah, I mean, it varies. It depends. The retailers aren't super-rich, and they recognize the cost of construction, and they recognize, you know, the value of land. So they don't, they don't.

Unknown Attendee: You know, you think you can achieve those goals if you start developing them kind of next year as, Yeah, I mean, it varies. It depends. The retailers recognize the cost of construction, and they recognize the value of land, and I think we're all in the development community experiencing the same thing, so retailers appreciate that they've got to pay more rent. Yeah, for the most part, there's, you know, reasonably a creative day one with bumps, you know, recent high spaces, in our case, we're doing multiple deals, so with most of these retailers. Well, say almost all of these retailers.

Mitchell Goldhar: And I mean, you know, we're okay, hanging out until parking conditions improve a bit. It's likely to be most likely to be dispositions of lands with permissions that we've talked about. And that market really didn't exist even a year ago or a year and a half ago. It does exist now. It's not quite where we want it to be yet, but it's moving in the right direction. Okay, so you have so many attractive options across the portfolio geographically, so it's hard to generalize.

Mitchell Goldhar: And I think we all in the development community are experiencing the same thing. So retailers appreciate that, you know, they got to pay more rent. So, Yeah, for the most part, they're, you know, reasonably accretive day one with pumps, you know, decent sized spaces. In our case, we're doing multiple deals with most of these retailers. Well, say almost all these retailers.

Speaker Change #117: The retailers aren't super, the retailers recognize.

Speaker Change #118: The cost of construction and they recognize, you know, the value of land, so...

Speaker Change #119: They don't they don't And I think we're all the development community are experiencing the same thing so retailers appreciate that You know they got a pay more rent so

Speaker Change #119: yeah for the most part they're you know reasonably accretive day one with bumps you know decent sized spaces in our case we're doing multiple deals so

Mitchell Goldhar: In our case, we're doing multiple deals. So, with most of these retailers, well, almost all of these retailers, so they're, you know, they're, for the most part, day one, a creative. Everything's moving all the time. So, when it actually kicks in and when we, you know, actually spend the money and borrow the money, you know, we'll see. But based on our, you know, our establishing rents, fixing rents, you know, each one of these deals is calculated on an accretive basis with bumps with long-term leases.

Mitchell Goldhar: But what's your guess in terms of how much the value of those types of properties or that type of land has come off and peak? Maybe I won't be a specific, but an example of a property we have in the east side of the GTA, let's say, by example, at the peak it was probably worth, you know, some would say between $90, $95 a square foot of buildable. You know, let's say the phase one would have been a million square feet, phase one meaning a couple of towers that are approved.

Mitchell Goldhar: So they're, you know, they're, for the most part, day one, accretive. Everything's moving all the time. So when it actually kicks in, and when we, you know, actually spend the money and borrow the money, you know, we'll see, but based on our, you know, our establishing rents, fixing rents, you know, each one of these deals is calculated on an accretive basis with bumps with long-term leases.

Operator: Okay, great. Thank you, Mitch. I will turn it back on.

Speaker Change #119: DERP!

Speaker Change #119: You know, they're, for the most part, day one accretive. Everything's moving all the time, so when it actually kicks in, and when we actually spend the money and borrow the money...

Speaker Change #119: We'll see, but based on our establishing rents, fixing rents, each one of these deals is calculated on an accretive basis with bumps, with long-term leases.

Unknown Executive: Okay, great. Thank you, Mitch.

Mitchell Goldhar: Okay, great. Thank you, Mitch. I will... Okay, well, thank you for participating in our Q2 Analyst Call. Please feel free to reach out to any of us if you have any further questions, and have a great rest of your day and weekend. Thank you very much.

Unknown Executive: I will turn it back. All right.

Operator: All right. Thank you, Lorne. There are no further questions in the queue.

Speaker Change #120: Okay, great. Thank you, Mitch. I will turn it back.

Unknown Executive: Thank you, Lorne.

Unknown Executive: There are no further questions in the queue. Okay.

Speaker Change #120: [inaudible]

Speaker Change #121: Alright, thank you Lauren. There are no further questions in the queue.

Operator: Okay, well, thank you for participating in our Q2 Analyst Call. Please feel free to reach out to any of us if you have any further questions, and have a great rest of your day and weekend. Thank you very much.

Unknown Executive: Well, thank you for participating in our Q2 analyst call.

Mitchell Goldhar: As I said, there wasn't much of a market a year or a year and a half ago, but maybe the market now is goodness, I don't know. I mean, I would like to think it's better than half that, but maybe it is as bad as half that. It's still highly accretive to us even at half that because it's just, you know, it's basically vacant land that we have on an operating shopping center.

Speaker Change #121: That's...

Unknown Executive: Please feel free to reach out to any of us if you have any further questions, and have a great, great rest of your day and weekend. Thank you very much.

Speaker Change #122: Okay, well thank you for participating in our Q2 Analyst Call. Please feel free to reach out to any of us if you have any further questions and have a great rest of your day and weekend. Thank you very much.

Operator: Ladies and gentlemen, this concludes the SmartCentres REIT Q2 2020 earnings call.

Unknown Executive: Ladies and gentlemen, this.

Mitchell Goldhar: You know, these mid-rise, high-rise buildings don't take up much land. So, you know, we'll just be watching closely. We certainly aren't going to wait for, you know, the, what was the peak of the market a few years ago. But, you know, what we're monitoring closely and you know, that's an example of something when the time is right, we would probably, you know, sell properties like that, phase ones, you know, that's a property that is owned for say, goodness, six or six and a half million square feet.

Mitchell Goldhar: It's not quite where we want it to be yet, but it's moving in the right direction, and so you have so many. Repractive Options Across the Portfolio Geographically, so it's hard to generalize. But what's your guess, in terms of the value of those types of properties or that type of land? Um.., you know, maybe I won't be as specific, but an example of a property we have on the east side of the GTA, let's say by example, at the peak, it was probably worth, you know, some would say between 90, $95 a square foot of buildable land. You know, let's say phase one would have been a million square feet.

Mitchell Goldhar: And is it in your opinion when you're talking to potential buyers? Is it simply a function of interest rates coming down or is there an element to a desire for better economic visibility and going forward? So I'm just curious what the catalyst could be in your view that could revive demand? Yeah, I mean, most of the buyers of what I was just describing it's not the only thing, you know, the only lever we have for our capital recycling, but in that particular area, it's usually private developers, you know, and private developers are really on the sidelines until they're, you know, suddenly hot to trot.

Mitchell Goldhar: So when they're not hot to trot, they're very careful buyers. So right now, they're very careful buyers. So there's this, you know, there's this theoretical value, and then there's just, you know, what is the deal actually look like, you know, private developers are super, you know, you know, careful when, you know, there isn't a clear path, you know, right now there's not a clear path. There's a, you know, the fog is lifting private developers, there's a lot of them with a lot of money are still not ready to, you know, to buy straight up, they want to buy on terms, they want to buy conditional, they want to buy with all kinds of, you know, potential adjustments.

Mitchell Goldhar: So, but, you know, when the fog lifts a little bit more and there's a real clear path to, to the other, you know, the, you know, to an exit, you know, development, you know, the market warms up, probably a little bit of a little bit of momentum in the condo market, you know, the end user or the investor, then you'll see the developers start to come off the sidelines. And that can go quickly from being what I speculate is the market today to something better and in less conservative, you know, structured buying terms. So, yeah, well, wait and see, there's other levers we have that would be dealing with more institutional types, but, you know, that type of buyer, I think that's a fair, you know, profile.

Mario Saric: That's really a really interesting color. Thanks much, thank you. Right, thank you, Mario.

Mike Marquitis: The next question is from Mike Marquitis from BMO Capital Marcus, please go ahead, Mike. Thank you operator, good morning everybody.

Peter Slan: Out of consideration for all participants, I'll limit my questions to two. Just first off on the Peter on the drag that you mentioned, the decapitalization of interest, I guess Milway is probably a big component of that, maybe self storage. Do you have a sense of what the, the, the quantum of that drag was this quarter from an FFO, for you perspective? Just trying to get a sense of the reversal as you lease up.

Peter Slan: Yeah, good morning Mike. Yeah, Milway was the certainly the largest by far. Milway would have counted for more than half of that drag. And you're right, self storage as well. I did mention that a couple of quarters ago, we had put some permanent takeout financing on a portfolio of completed self stop. So that's about a smokes the self storage smart stop for projects. And so that. Obviously ceased capitalizing interest on those projects.

Mitchell Goldhar: Okay, great, thanks. And then mention your comments earlier. You made a comment that you weren't concerned about the payout ratio, but that you did think it was too high for maybe too high. I'm not sure if you're liking or the markets just wanted to get a sense of what your ideal payout ratio would be in your mind for the long term. You know, we're low 90, 85 to, you know, you're talking ideal.

Mitchell Goldhar: And we're talking in the foreseeable future. I'd like to see it down below 98s, find if it's low 90s. We sort of use 88 to 92 I think right now, you know, sort of short medium term or goal. But yeah, we're, we're very motivated to get that down, but we're also very comfortable with where it is because, you know, we can maintain everything that we've got going on and planned to do with our tenant profile and everything that's going on here on the, you know, on the leasing side and so on. So we'll, you know, we've got our eye on it. We hope that we'll, there'll be moments that in the future to make the moves to bring that down. Got it.

Mike Marquitis: Thanks very much. Have a great weekend everyone. Thank you.

Unknown Executive: All right. Thank you, Mike.

Matt Kornack: The next question is from Matt Kornack from National Bank Financial. Please go ahead, Matt. Good morning, guys. Just quickly going back to capillaries like Ling. By the time I guess interest rates have come down and developers are coming back to look at some of these projects that may actually be attractive for you guys to participate in development. Again, just your thought process around like where the destination for some of that potential capital coming in would be would it be exclusively for de-leveraging or would it be to kind of reparticipate or ramp up development pipeline again at that point?

Unknown Executive: And you know, yeah, pick up. Pam. Yeah, we'll leave it at that.

Matt Kornack: Yeah, I mean, that's a good question. So I mean, I think what will likely happen will the market will come back to a point where we're we're able to, you know, we're happy with the deals and will probably sell those properties most likely right? You know, we've severed these properties in a lot of cases there's own some case of the even site plan approved. I mean, it's like building permit applications is the next step.

Matt Kornack: So it'll be very appealing. It's when it becomes appealing becomes very appealing, you know, right now it's not appealing. But that'll probably be what happens first and we'll get we'll bring in as much from that as we think we need. We know to get where we want to be. And then we'll maybe start considering some joint ventures. Maybe we'll do a couple ourselves, but you know, obviously we'll just be, you know, assessing the mark, you know, the conditions and the weather in the overall marketplace, whether we'll do any of those ourselves or whether we'll just continue to sell them. I'd say the first bunch of.

Mitchell Goldhar: The capital that we bring in will not be directed to necessarily be directed to new development, I'd say at this moment in time, my hunch is that, you know, we just continue to finish the developments that we have and lower our leverage and then the market continues to be strong enough, we'll keep doing that until we get to a point where we're comfortable to, you know, use that capital to, you know, to do some of our own developments, whether enjoying ventures ourselves, I don't want to commit to it, but, you know, I mentioned 250 to 300 million, probably want to pass through that first, and then, you know, it's just a theory, just a hunch, that that's when we might start looking at, you know, directing some of those funds to some of the developments that we might want to do ourselves.

Matt Kornack: Now, that makes sense, and I guess it's all in the context of where cost the capital goes and that's anybody who gets, so we'll see, but just on the quarter itself, Peter, you mentioned, recoveries had an impact and that we'll see a normalization into the second half of this year, can you quantify what that dollar value impacts would have been in the quarter. In terms of just the NOI and where we should kind of think of that addition being in each of the subsequent three quarters and maybe run right into the next year as well.

Matt Kornack: It's actually quite modest, Matt, so no, I'm not going to throw out a number, but I can tell you, you know, it's quite modest, our recovery levels remain very high and we expect them to continue with that, you know, for the, for the bounce of the year to remain very high. In terms of specific dollars, though, it's, you know, it's, it's pretty small, it's less than a million dollars, but it could be up to a million dollars, which, anyway, okay, that's there.

Matt Kornack: And then last one, it's already going to be minutia, but for your secured debt, it looks like the 2020 for maturity, the way the average interest rate was up. Fair bits clentially, but presumably then you can just pay that was that just a variable rate debt component, or is there something else in there, and will it be repaid in Q3 or is it a Q4 maturity? I don't have the full schedule of each of the mortgage mortgages in front of me, Matt, but I can tell you that the plans are that some will be repaid and some will be refinanced.

Matt Kornack: So I don't think it's going to make material difference to our model. It's, it's not the smaller ones, the smaller ones we tend to just pay off, the ones where we have JV partners, we may refinance. Okay, fair enough, thanks.

Unknown Executive: All right, thank you, Matt.

Sam Damiani: The next question is from Sam Daviani from TD Cohen, please go ahead, Sam. Thank you, and good morning, everyone. Just wanted to touch on the development of retail, we talked about last year, I think around 300,000 square foot pipeline of discussions, which then translated into 200,000 square feet of active development projects as I recall from last quarter, just wondering if you could give us an update on that. And also Mitch, I think you mentioned that there was talks with Simon with respect to TPO and maybe an expansion. Does that mean a third project in the country or yet another expansion to TPO?

Mitchell Goldhar: Sam, I'll start in the first, going reverse order. The, that's pretty good for you to pick up on on that TPO question or the Simon question. We're looking at everything. Yeah, so it's too early to say anything about about what that may look like. So clearly TPO could be much bigger from a demand point of view. So we're just looking at it. But we just finished expanding it. So to expand it again is just something we're looking at.

Mitchell Goldhar: And it was respect to the sort of magnitude of new deals, net new space retail. It's quite a bit, actually. We've got a lot cooking in terms of new deals. A lot of the large, large cap and large floor plate retail chains in the country did not expand a lot in the last 10 years. So, you know, they're looking at it now. And, and we're one of the go-to's for sure for for that.

Mitchell Goldhar: So, you know, we're in discussions. But, you know, deals take a long time to do and, and then, you know, you got to get it approved. I mean, we're zone for it, but we still got to get its site plan approved and bailing permits and build them. So, it takes time. But I would say the interest is not superficial or flippant. I mean, we're well along. And I would rank the likelihood of doing quite a bit of new retail space, you know, starting next year to be very high and to go in to continue for the next few years.

Mitchell Goldhar: Unless there's some, you know, major calves shrubbing event, their interest is based on population growth, you know, actual, you know, sales trends and strategic, you know, their strategic plans, large corporate strategic changes in their, in their plans. So, we're one of the go-to's, I think, for sure for a lot of the companies. You haven't done a lot of expanding on the retail side. They've done a lot of expanding on the warehouse and distribution fulfillment side. So, you know, we've got a lot of things cooking with, with a lot of, you know, core retailers in this country.

Sam Damiani: The great thank you. That's helpful.

Sam Damiani: Second and the last question is just on on the disclosure of same property, which was broken out, you know, between, like, with and without the anchors. I think this was the first quarter. Just wondering what the rationale for doing that does it indicate a new way you're thinking about the business? I'm just wondering, I guess, why, why, why separate out that disclosure. Hey Sam. No, we've in fact disclosed that in many prior quarters, we just wanted to make sure that everyone you've given that we have a predominance of larger tenants in our portfolio, that everyone would understand the retro lifts and for what I'm going to call our CRU, which includes obviously we know that a bulk of a lot of renewals this year were Wal-Mart and Wal-Mart for the most part don't have bumps in their rents. It's not a reflection of the market and so the non-anchor, particularly the non-Wal-Mart number, gives some value in just understanding what the market is for our properties. It's more of a reflection of market value. Perfect.

Unknown Executive: Thank you very much and I'll turn it back. All right.

Unknown Executive: Thank you Sam.

Pammi Bir: The next question is from Pammi Bir from RBC Capital Market. Just go ahead, Pammi. Thanks. Just maybe on that last comment regarding the Wal-Mart Reels and maybe coming back to the overall commenter around the same property and the wide growth and the recoveries, et cetera. Should we then expect maybe the same property and the wide to pick up through the back huh? I guess given the leasing that was done as well, or is it expected to continue to track in that 2% range for the year? Pick up. And you know, yeah, pick up. Yeah, we'll leave it at that. All right.

Pammi Bir: I wanted to maybe just come back to the commentary on the capital recycling and the 250 to 300. Mitch, you know, just given where we sit today, you mentioned, you know, developers, obviously being careful. But if you were to transact on any of that, would you be providing, or would you consider providing any BTPs, or you're looking to get that cash back and, you know, take leverage down? Yeah, I mean, that's what I was trying to say there.

Pammi Bir: You know, right now, I think they just want too much of a BTP. I mean, they weren't there a year and a bit ago, but now they're there, but they, I guess they want BTPs. And so I guess just it's not really helpful to us, you know, to, you know, it just doesn't move the needle enough to do the kind of deals that the developers won't want to do today, private developers.

Pammi Bir: So if in the future, you know, the price goes up and the percentage of the price as a VTB goes down, you know, we would give a VTB if it was, you know, enough cash and it was not, you know, too long of VTB and decent, you know, decent interest rate, you know, we'll consider it all, but right now, it's sort of not, none of it's quite there yet. So I can see the kick things off, you know, there might be a small or some kind of a VTB at the right price.

Pammi Bir: And then I guess, yeah, no, that's helpful and I guess, you know, as you think of what you put all this together, it sounds like, you know, hitting that type of level from a disposition sort of target standpoint. Yeah, it's really unlikely this year, this is, you know, if anything maybe a more 2025 event or just curious again, you sense of timing. Yeah, I don't know, maybe we're, yeah, I would say you're most likely, but actually, there is a chance it could happen this year.

Pammi Bir: As I was saying, you know, when the markets, where it is, I mean, it just seems like that and it seems like it's going to be forever. You know, but then suddenly, you know, some things happen and, you know, they, they get, you know, pretty anxious and things can change very quickly. So I would say you're, you know, if I was a betting man, I would agree with you, but it's still, I'd say there's still a small chance that there could be, you know, a transaction this year and enclosed this year. But yeah, I would say for conservative estimated estimates, I'd say the box or I would say that on 2025 at this point. Okay.

Peter Slan: Last one for me, just Peter, maybe you can remind us, you know, any factor, sorry, just from a leverage standpoint, where, where you want to get to end a debt, even a basis on a longer term basis. Well, so I have indicated on fire calls, Tommy, that, you know, we are going to see it tick up slightly, not because we're adding debt, but because the EBITDAW from the 1000 transit city, 4 and transit city, 5 condo, you know, the closed in 2023 will roll off.

Peter Slan: And so that's exactly what we saw this quarter. But, you know, we would like to see it, you know, remain in the single digits, certainly. And so I don't think we've articulated a particular target, but we would like to see it trend down, of course. Okay. I will. I'll turn it back. Thank you.

Unknown Executive: All right. Thank you, Tommy.

Lauren Kalmar: The next question is from Lauren Kalmar from Digital Bank Capital Marcus, please go ahead. Thanks. Good morning. I think most of the question of an answer, but I just had one quick follow up on the discussion on the retail developments.

Mitchell Goldhar: What type of yields would you need to see before you move forward and how realistic is it, you know, you can achieve those if you start developing kind of next year. Yeah, I mean, it varies. It depends. The retailers aren't super. The retailers recognize the cost of construction and they recognize, you know, the value of land. So they don't, they don't. And I think we're all the development community are experiencing the same thing.

Mitchell Goldhar: So retailers appreciate that, you know, they got a pay more rent. So. Yeah, for the most part, there's reasonably a creative day one with bumps, you know, decent high spaces. In our case, we're doing multiple deals. So, with most of these retailers, well, almost all of these retailers, so they're, you know, they're, for the most part, day one, a creative. Everything's moving all the time. So, when it actually kicks in and when we, you know, actually spend the money and borrow the money, you know, we'll see. But based on our, you know, our establishing rents, fixing rents, you know, each one of these deals is calculated on an accretive basis with bumps with long-term leases. Okay, great.

Mitchell Goldhar: Thank you, Mitch. I will turn it back. All right. Thank you, Lorne.

Unknown Executive: There are no further questions in the queue. Okay. Well, thank you for participating in our Q2 analyst call. Please feel free to reach out to any of us if you have any further questions and have a great, great rest of your day and weekend. Thank you very much. Ladies and gentlemen, this.

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