Q4 2024 InterRent Real Estate Investment Trust Earnings Call
Good morning, ladies and gentlemen, and welcome to the interim read the Q4 earnings conference call and webcast.
There's some old lines are in listen only mode. Following the presentation. We will conduct a question and answer session. If at any time. During this call you require immediate assistance. Please press star zero for the operator.
Mr. Anyway: Call is being recorded on Tuesday February 25, 2025, I would now like to turn the conference over to Mr. Anyway. Please go ahead.
Speaker Change: Good morning, everyone and thank you for joining <unk> Q4, and full year 2024 earnings call. My name is we're in a way director of Investor Relations and sustainability you can find the presentation to accompany today's call and investors section of our website under Investor presentations. We're pleased to have Brad cut C President and CEO, Curt Miller, CFO and they've now been steel in them.
Speaker Change: Today as usual the team will present, some prepared remarks, and then open it up to questions.
Speaker Change: Before we begin we want to remind listeners that certain statements about future events made on this conference call are forward looking in nature and as such information is subject to risks uncertainties and assumptions that could cause actual results to differ materially for more information. Please refer to the cautionary statements on forward looking information and the recent news release an M. D. N. A dated February 24th 2025 during the call.
Speaker Change: Management will also refer to certain non ifr's measures. Although the REIT believes these measures provide useful supplemental information about its financial performance. They are not recognized measures and do not have standardized meanings under our forests. Please see the refund DNA for additional information regarding non <unk> financial measures, including reconciliations to the nearest ifr's measures right.
Good morning, ladies and gentlemen, and welcome to the intervention.
Q4 earnings conference call and webcast at this some old lines are in listen only mode. Following the presentation. We will conduct a question and answer session. If at any time. During this call do you require immediate assistance. Please press star zero for the operator. This call is being recorded on Tuesday February 25045.
Speaker Change: Over to you.
Speaker Change: Good day, and thank you everyone for joining us today 2024, it was a year of solid progress on many fronts. Despite a backdrop of many new and evolving challenges and opportunities the quality of our portfolio and our operating platform and the stability and resilience clearly demonstrating once again throughout the year.
Mr. Anyway: I would now like to turn the conference over to Mr. Anyway. Please go ahead.
Wera Neway: Good morning, everyone. Thank you for joining the Interbody rates Q4, and full year 2024 earnings call. My name is we're in a way director of Investor Relations and sustainability you can find the presentation to accompany today's call and investors section of our website under investor presentations. We're pleased to have Brad cut C placement CEO cart Miller CFO and they never see.
Speaker Change: With the steady off new rating system and rent growth collectively driving strong year over year same property revenue growth of five 1% for the quarter and seven 2% for the year overall total portfolio revenue grew by one point tubes to the quarter, 4% for the full year.
Wera Neway: On the line today as usual the team will present, some prepared remarks, and then open up to questions. Before we begin we want to remind listeners that certain statements about future events made on this conference call are forward looking in nature and as such information is subject to risks uncertainties and assumptions that could cause actual results to differ materially for more information. Please refer to the cautionary statements are forward looking.
Speaker Change: There was partially offset by lower revenues due to the impact of dispositions completed in the first half of the year, leveraging our strong operating platform and with a high quality portfolio.
Speaker Change: Tabulated topline growth into a solid seven 6% increase in same property NOI for the quarter and nine 4% for the year.
Wera Neway: Information and I read the news release and MD&A dated February 24th 2025 during the call management will also refer to certain non <unk> measures. Although that he believes these measures provide useful supplemental information about its financial performance. They are not recognized measures and do not have standardized meanings under ifr S. Please see the refund DNA for additional information.
Speaker Change: Annual NOI margins for the same property and total portfolio reached 67, 1% six 7% respectable Martin the highest levels when they reach history.
Speaker Change: Every year, we continued to deliver strong operational performance supported by a more favorable financing environment.
Speaker Change: A meaningful reduction in financing costs, delivering a strong 11, 2% increase in <unk> in Q4, despite the impact from dispositions earlier in the year and the resulting lower retail.
Wera Neway: And as far as financial measures, including reconciliations to the nearest ifr smashers right over to you. Thanks.
Speaker Change: Thanks, Renee and thank you everyone for joining us today 2024 hours a year of solid progress on many fronts. Despite a backdrop of many new and evolving challenges and opportunities.
Speaker Change: On a per unit basis <unk> for the quarter was $15 six.
Speaker Change: An increase of nine 9% in the same period last year and 61, 2%.
Speaker Change: Do you have a portfolio and the operating proper and that stability and resilience clearly demonstrated once again throughout the year.
Speaker Change: For the full year up 11, 1% from 2023.
The study off Uhm system rent growth collectively driving strong year over year same property revenue growth of five 1% for the quarter and seven 2% for the year overall total portfolio revenue grew by one 2% for the quarter and Forbes up at the full year and there was partially offset by lower revenues due to the impact of dispositions.
Speaker Change: Q4, we achieved a 13, 9% increase then they have people, reaching $20 6 million and 12, 1% increase in <unk> unit to reach $13 nine sets.
Speaker Change: All year, we delivered $85 million a year for pool.
Speaker Change: <unk> $54 three sense for you to an increase of 14, 3% and 12, 7% respectively.
Speaker Change: In the first half of the year that would give him a strong operating platform and with a high quality portfolio.
Speaker Change: We are under market conditions remained robust during the poor quarter and throughout 2024 as shown by occupancy rate holding steady year over year at 97% the total portfolio.
Speaker Change: And what are the top line growth into a solid seven 6% increase in same property NOI for the quarter and nine 4% for the year annual NOI margins for the same copy and total portfolio reached 67, 1% six 7% a respectable margin the highest level when they reach history throughout the year, we continue to deliver strong operational.
Speaker Change: And rather than by 10 basis points to $97 <unk> at the same property portfolio quarter over quarter total portfolio occupancy improved by 60 basis points same property occupancy improving by 70 basis points over the same period. The increase in the Ark series is accompanied by consistent growth in the EMR average monthly rents in the total portfolio, which one.
Speaker Change: Part of that's supported by a more favorable financing environment.
Speaker Change: She will have a meaningful reduction in financing costs delivering a strong 11, 2% increase in episodes in Q4, Despite that fact and dispositions earlier in the year and the resulting a lora retail.
Speaker Change: <unk> thousand $702 in December two on a year over year growth of six 6%.
Speaker Change: Dave will share more operational detail shortly but first a quick note on our strong balance sheet slide seven illustrates total debt to gross book value stood at a healthy 43% at year end with a weighted average interest rate of three 4% with 91% of our mortgages I'm just seeing we've seen insurers maintain actual.
Speaker Change: Unit basis <unk> for the quarter was $15.06, an increase of nine 9% and the.
Speaker Change: The same period last year and $61.02 for the full year up 11, 1% from 2023 in Q4, we achieved a 13, 9% increase than they had before reaching $20 6 million and a quad play a 1% increase in April and it reached 13.9 cents.
Speaker Change: And the resources to act.
Speaker Change: Circuitous route upholding the strength and integrity of the balance sheet will continue to be a key priority for us.
Speaker Change: I'll, let Dave take it from here, we're looking at some operating highlights.
Speaker Change: All year, we delivered 85 million of ethical or 54, three so that's for you to and that creates a 14, 3% and 12, 7% respectively.
Dave: Thanks, Brad as Brad highlighted the rental market conditions remain tight across all of our regions.
Dave: Same property occupancy rate in December improved by 70 basis points quarter over quarter, and 10 basis points year over year to reach 97, 1% the highest since 2020.
Speaker Change: Market conditions remained robust during the poor quarter throughout 2024 as shown by the occupancy rate holding steady year over year at 97 upsets the told them folio.
Dave: Compared to December 2023, same property occupancy rate in Ottawa decreased by 120 basis points.
Speaker Change: And by 10 basis points to 97.1, so the same property portfolio quarter over quarter total portfolio occupancy improved by 60 basis points. The same property occupancy improving by 70 basis points over the same period.
Dave: But remaining tight at 96, 6% and within the normal range. All other regions showed occupancy gains included 160 basis points year over year increase in the greater Vancouver area reached 94, 9%.
Speaker Change: The increase in the Arctic Sea rays, accompanied by consistent growth in the EMR.
Speaker Change: Luckily rents in the total portfolio reached 1000.
Dave: Order over quarter occupancy in Vancouver decreased by 240 basis points.
Speaker Change: $2 in December.
Dave: Driven by the impact of BC short term rental regulations that took effect last spring.
Speaker Change: On a year over year to six 6%.
Speaker Change: Dave will share more operational detail shortly but first a quick note on our strong balance sheet slide seven illustrates total debt to gross book value stood at a healthy 43% at year at what's the weighted average interest rate of 3.4% with 91% of our mortgages I'm just seeing we've seen ensures we maintain the actual clarkson.
Dave: As we discussed in our Q4 2023 call. The transition of these suites into long term rental market temporarily shifted leasing cycles away from the typical fall period.
Dave: We've also seen an increase in conventional supply and some softening in demand due to affordability challenges in the region.
Dave: We expect some near term pressure as leasing activities adjust our portfolio is well positioned.
Speaker Change: And resources to execute our strategy I pulled in the strength and integrity of the balance sheet continues to be a key priority for us.
Dave: And the GVA represents less than 5% of Ryan Hawaii.
Dave: Blended average rent per suite growth continued at a healthy pace of six 6% for the total portfolio and 5% for the same property portfolio with consistent year over year gains across all regions.
Speaker Change: Now I'll, let Dave take it from here, we're looking at some operating highlights.
Dave Clarkson: Thanks, Brett as Brad highlighted the rental market conditions remain tight across all of our regions.
Dave Clarkson: Same property occupancy rate in December improved by 70 basis points quarter over quarter, and 10 basis points year over year to reach 97, 1% the highest as 2020.
Dave: Outperforming CMA sea data in each regional market.
Dave: We continue to capture embedded rental upside in our portfolio during the fourth quarter, we signed 635, new leases and realized positive gain on lease and all of our markets with an average gain on lease of seven 4% to top off an already substantial 12, 9% year over year increase in our outgoing ammar.
Dave Clarkson: Compared to December 2023, same property occupancy rate in auto have decreased by 120 basis points.
Dave Clarkson: But remaining tight at 96, 6% and within the normal range. All other regions showed occupancy gains, including 160 basis points year over year increase in the greater Vancouver area reached 94, 9%.
Dave: With market rent growth moderating, we're starting to see a decline in the 10 year of residents who move out in the fourth quarter compared to a year ago.
Dave Clarkson: Quarter over quarter occupancy in Vancouver decreased by 240 basis points.
Dave: Resulting in a smaller gain on lease compared to previous periods. However, trailing 12 months turnover rate held steady at 24% new leases signed in the fourth quarter resulted in an annualized incremental revenue gain of approximately $2 million for.
Dave Clarkson: Driven by the impact of BC short term rental regulations that took effect last spring.
Dave Clarkson: As we discussed in our Q4 2023 call. The transition of these suites into long term rental market temporarily shifted leasing cycles away from the typical fall period.
Dave: For the full year, we executed 3015, new leases with an average gain on lease of 12, 7%, which translated into incremental annualized revenue gain of $8 6 million or three 5% of 2020 for proportionate revenue our estimated mark to market gap remains at approximately 26% providing installation.
Dave Clarkson: We've also seen an increase in conventional supply and some softening in demand due to affordability challenges in the region.
Dave Clarkson: We expect some near term pressure as leasing activities adjust our portfolio is well positioned.
Dave Clarkson: And the GVA represents less than 5% of Ryan Hawaii.
Dave Clarkson: Blended average rent per suite growth continued at a healthy pace of six 6% for the total portfolio and 5% for the same property portfolio with consistent year over year gains across all regions.
Dave: <unk> for market rent fluctuations and a foundation for long term rental income growth Canada.
Dave: Canada revised population outlook macroeconomic uncertainties and affordability challenges have contributed to a moderation in market rent growth.
Dave Clarkson: But before we see may see data in each regional market.
Dave Clarkson: We continue to capture embedded rental upside in our portfolio during the fourth quarter, we signed 635, new leases and realized positive gain on lease and all of our markets with an average gain on lease of seven 4% to top off an already substantial bulk quite 9% year over year increase in our outgoing ammar.
Dave: However, we take comfort in our competitive positioning in the multifamily market that remains largely fragmented and dominated by non institutional operators, while the volume of rental leads have come in from peak levels of 2021, our lead to approval conversion rate as notably increase reflecting a strong demand.
Dave Clarkson: Rent growth moderating, we're starting to see a decline in the tenure of residents who move out in the fourth quarter compared to a year ago.
Dave: For a well position and high quality communities rent to income ratios for new leases signed in 2024 remain at a healthy low 30% range. We continue to closely monitor market conditions in each region and remain flexible in our strategy include.
Dave Clarkson: And a smaller gain on lease compared to previous periods. However, trailing 12 months turnover rate held steady at 24% newly signed in the fourth quarter, resulting in an annualized incremental revenue gain of approximately $2 million for the full year, we executed 3015, new leases with an average gain on lease of $12 seven.
Dave: Including adjusting target occupancy levels as needed to optimize portfolio performance our efforts to manage operating costs continue to pay off during Q4 and throughout 2024, we.
Dave Clarkson: <unk> percent, which translated into incremental annualized revenue gain of $8 $6 million or three 5% of 'twenty 'twenty four proportionate revenue our estimated mark to market cap remains at approximately 26%, providing insulation from market rent fluctuations and a foundation for long term rental income growth Canada.
Dave: We delivered a five 1% increase in same property proportionate operating revenue growth during Q4, and a seven 2% the full year of 2024.
Dave: Outpacing the increase in the same property operating expenses, which were up by 4% in the quarter at two 7% for the year on a per fleet basis. Our operating expenses came in at $1697 per suite for Q4 and $6790 per suite for the year up <unk>.
Speaker Change: The revised population outlook macroeconomic uncertainties and affordability challenges.
Dave Clarkson: Contributed to a moderation in market rent growth.
Dave Clarkson: However, we take comfort in our competitive positioning in the multifamily market that remains largely fragmented and dominated by non institutional operators, while the volume of rental fleets have come in from peak levels of 2021, our lead to approval conversion rate, but notably increase reflecting a strong demand for.
Dave: One, 5% and five 2% respectively.
Dave: <unk> operating expenses at a percentage of revenue declined by 140 basis points compared to last year.
Dave: Contributing to our strong NOI margin expansion for the full year same property NOI margin reached 67, 1%, while the portfolio NOI margin came in at 67%.
Ah well position and high quality communities rent to income ratios for new leases signed in 2024 remain at a healthy low 30% range. We continue to closely monitor market conditions in each region and remain flexible in our strategy include.
Dave: Marking the highest levels in our operating record a key driver of this improvement was utility cost, which for the year declined by 70 basis points as a percentage of revenue year over year to six 9% from seven 6% in 2023, our energy efficiency upgrade played a role in reducing our natural gas usage by 8%.
Dave Clarkson: Including adjusting target occupancy levels as needed to optimize portfolio performance our efforts to manage operating costs continue to pay off during Q4 and throughout 'twenty 'twenty four we delivered a five 1% increase in same property proportionate operating revenue growth.
Dave: Outpacing the 5% decline in heating degree days this compounded with a 13% decline in rates drove meaningful savings.
In Q4, and a 7.2% for full year of 2024.
Dave: Pretty taxes as a percentage of revenue came in at 10, 5% for the year.
Dave Clarkson: Oh pacing the increase in the same property operating expenses, which were up by <unk>, 4% in the quarter at two 7% for the year on a personal basis. Our operating expenses came in at $1697 per suite for Q4 and $6790 per sweep for the year up one.
Dave: 10, 7% in 2023 on a per suite basis, we saw a seven 1% increase reflecting the impact of annual rate of adjustments and impact from dispositions and acquisitions completed during the year.
Dave: Of note property taxes increases for four 4% on a same property basis.
Dave Clarkson: 5% and five 2% respectively.
Dave: Turning to Capex maintenance spending for reposition suites came in at below $1000 per suite in 2024 in line with previous years, our focus remains on value enhancing investments, which continue to make up the bulk of our spending I will now turn it over to Curt to provide an update on our balance sheet.
Dave Clarkson: Annual operating expenses as a percentage of revenue declined by 140 basis points compared to last year.
Dave Clarkson: Contributing to our strong NOI margin expansion for the full year same property NOI margin reached 67, 1%, while the portfolio NOI margin came in at 67%, both marking the highest levels in our operating record a key driver of this improvement was utility costs, which for the year declined by <unk>.
Curt Miller: Thanks, Dave.
Curt Miller: As part of our quarterly review, we assessed our internal cap rates in property valuations in collaboration with both our acquisition team and external appraisers based.
Curt Miller: Based on recent transactions industry reports available at quarter end and input from our internal team and external appraisers, we've adjusted cap rates in four of our regional markets summarized here on slide 14.
Dave Clarkson: 90 basis points as a percentage of revenue year over year to six 9% from seven 6% in 2023.
Dave Clarkson: Our energy efficiency upgrade played a role in reducing our natural gas usage by 8% outpacing the 5% decline in heating degree days this compounded with a 13% decline in rates drove meaningful savings.
Curt Miller: Due to the adjustments in the GTH eight NCR Montreal, another Ontario markets.
Curt Miller: Average cap rates for total investment properties increased by 15 basis points quarter over quarter.
Dave Clarkson: Property taxes as a percentage of revenue came in at 10, 5% for the year compared to 10, 7% in 2023 on a per suite basis, we saw a seven 1% increase reflecting the impact of annual rate of adjustments and impact from dispositions and acquisitions completed during the year.
Curt Miller: The weighted average cap rate for the entire portfolio to 449%.
Curt Miller: This reflects an expansion of 67 basis points since March of 2022.
Curt Miller: This adjustment has offset our strong operational performance, resulting in a fair value loss of $143 6 million for the quarter on a proportionate basis, we continue to keep a close eye on the transaction market, taking comfort in our evaluation from our recent dispositions.
Dave Clarkson: I have no property taxes increases were four 4% on a same property basis.
Dave Clarkson: Turning to Capex maintenance spending for reposition suites came in at below $1000 per suite in 2024 in line with previous years, our focus remains on value enhancing investments, which continue to make up the bulk of our spending.
Curt Miller: We closed out the year in a healthy financial position.
Curt Miller: Throughout most of 2024, we benefited from a reduced weighted average interest rate cost in.
In Q4 financing costs were reduced by $1 2 million or seven 7% compared to the same period last year and.
Dave Clarkson: I'll now turn it over to Curt to provide an update on our balance sheet.
Curt: Thanks, Dave.
Curt Miller: For the full year, they were reduced by $1 6 million or two 3%, both our interest coverage and debt service coverage improved consistently throughout the year and ended the year at two five times and one seven times.
Curt: As part of our quarterly review, we assessed our internal cap rates in property valuations in collaboration with both our acquisition team and external appraisers.
Curt: Just on recent transactions industry reports available at quarter end and input from our internal team and external appraisers, we've adjusted cap rates in four of our regional markets summarized here on slide 14.
Curt Miller: Third to two three and one five for last year. This reflects the work we've done to optimize our financing structure and improve our cash flow resilience, helping our strong operational performance translate into significant bottom line gains.
Curt: The adjustments in the GTH a N C. Our Montreal, another Ontario markets average cap rates for total investment properties increased by 15 basis points quarter over quarter, bringing the weighted average cap rate for the entire portfolio to $4 49%.
Curt Miller: Moving on to slide 17, as we continue to navigate an evolving market, we're being deliberate and strategic with our sustainability initiatives as Dave mentioned earlier, our investment in energy efficiency upgrades as delivered tangible results in reducing utility cost with year over year savings both across the portfolio and on a per suite basis.
Curt: This reflects an expansion of 67 basis points since March of 2022.
Curt: This adjustment is offset our strong operational performance, resulting in a fair value loss of $143 6 million for the quarter on a proportionate basis, we continue to keep a close eye on the transaction market, taking comfort in our valuation from our recent dispositions.
Curt Miller: Looking ahead, our focus will be on initiatives that enhance our resilience reduce emissions lower operating costs and create lasting value for our stakeholders to ensure we're prioritizing the right initiatives and to meet upcoming sustainability reporting requirements. We are in the process of completing our first formal double materiality assessment, which will guide our.
Curt: We closed out the year in a healthy financial position.
Curt: Correct most of 'twenty 'twenty four we benefited from a reduced weighted average interest rate cost in Q4 financing costs were reduced by $1 2 million or seven 7% compared to the same period last year.
Curt Miller: Next steps youll be able to learn more about these key priorities and our progress and our 2020 for sustainability report set for release in the coming months on.
Curt: For the full year, they were reduced by $1 6 million or two 3%.
Curt Miller: On that note I'll turn it over to Brad to discuss our asset allocation strategy and provide closing remarks. Thanks.
Curt: Both our interest coverage and debt service coverage improved consistently throughout the year and ended the year at two five times and one seven times compared to 2.3 and $1 five for last year. This reflects the work we've done to optimize our financing structure and improve our cash flow resilience, helping our strong operational performance.
Speaker Change: Thanks, Kurt and 2024, we strategically advance our capital recycling program. This 43 communities at or above their <unk> values.
Speaker Change: Putting the valuation of our portfolio, while generating $93 3 million net proceeds after accounting for closing costs and mortgage discharges. After year end, we sold another convenient in Ottawa agreements in place yourself in one more closing scheduled for next month, our disposition strategy is a very deliberate process focusing on properties, where we have successfully.
Curt: Translate into significant bottom line gains moving.
Curt: Moving on to slide 17.
Curt: As we continue to navigate an evolving market, we're being deliberate and strategic with our sustainability initiatives.
Dave Clarkson: Dave mentioned earlier, our investment in energy efficiency upgrades has delivered tangible results in reducing utility cost with year over year savings both across the portfolio and on a per suite basis. Looking ahead, our focus will be on initiatives that enhance our resilience reduce emissions lower operating costs and create lasting value for our state.
Speaker Change: <unk> objectives. These assets had a strong performance, but did not have the same growth profile as compared to the rest of the indirect portfolio.
Speaker Change: Next phase of the program will target a portfolio of noncore assets in the range of 200 250 million.
Speaker Change: Which are anticipated to generate net equity proceeds of $125 million to $140 million.
Speaker Change: Including the dispositions that have closed Don term since year end, approximately $135 million and Thats created of our program is in negotiation or under contract.
Dave Clarkson: Holders to ensure we're prioritizing the right initiatives and to meet upcoming sustainability reporting requirements. We're in the process of completing our first formal double materiality assessment, which will guide our next steps.
Speaker Change: This will generate net proceeds of approximately $90 million.
Dave Clarkson: To learn more about these key priorities and our progress in our 2020 for sustainability report set for release in the coming months.
Speaker Change: Both Canadian and U S government policies and interest rate volatility towards the end of this year put pressure on the real estate sector.
On that note I'll turn it over to Brad to discuss our asset allocation strategy and provide closing remarks. Thanks.
Speaker Change: At our units are no exception, we became more active within CIB program to capitalize on the significant disconnect between the intrinsic value of our trust units and the trading price.
Speaker Change: Thanks, Kurt the 'twenty 'twenty four we strategically advance our capital recycling program. This forward you have to reach Muni is at or above their I offer us value. According the valuation of our portfolio, while generating $93 3 million net proceeds after the accounting would say closing costs and mortgage discharges after year end, we sold another chameleon Ottawa.
Speaker Change: Over the course of 2024, we acquired and cancelled over one 3 million units for a total investment of $14 1 million, reflecting a weighted average cost per unit at $10 88.
Speaker Change: Compared to our <unk> NAV per unit at year end of $16. Two increases in 2025, we continue to purchase and KFC units under automatic unit purchase plan.
Speaker Change: The agreements in place yourself in one more closing schedule for the next month or disposition tried to use a very deliberate process focusing on properties, where we have successfully achieved our objectives. These apps has had strong performance, but did not have the same growth profile as compared to the rest of the indirect portfolio.
Speaker Change: The end of January we have bought back close to 2 million units were $19 7 million at an average price of $10.01 per unit.
Speaker Change: The next phase of the program will target a portfolio of noncore assets in the range of 250 million.
Speaker Change: This repurchase in 2024 and as of January 31, 2025 reps up two 3% of issue M O standing Trust us while our second half was converted in project continues to progress with construction onsite underway, we have decided to pause on breaking ground on that I mean credit developments for now.
Speaker Change: Do you anticipate it to generate net equity proceeds of 125 to 140 million <unk>.
Speaker Change: Putting the dispositions that have closed dawn firm since you're at approximately 35 million. The next phase of our program is in negotiation or under contract.
Speaker Change: We continue to whole well located land and it will continue to monitor market conditions observed the optionality for when the market makes sense near term asset allocation priorities will continue to include paying down debt and be not too on the NCI b cohort.
Speaker Change: So generating net proceeds of approximately $90 million.
Speaker Change: Both Canadian and U S government policies and interest rate volatility towards the end of this year put pressure on the real estate sector.
Speaker Change: The units are no exception, we became more active with the N C. I B program to capitalize on the significant disconnect between the intrinsic value of our trust units and their trading price.
Speaker Change: All the while balancing this with medium to long term growth opportunities.
Speaker Change: Over to slide 22.
Speaker Change: We are prepared to navigate through a period of increased uncertainty and competition, we couldnt be better positioned with our high quality portfolio. The combined us with a solid run rate organic growth.
Speaker Change: Over the course of 2024, we acquired and cancelled over one 3 million units for a total investment of $14 1 million.
Speaker Change: In fact in our weighted average cost per unit of $10.88.
Speaker Change: <unk> of our portfolio build of two key factors first we have a well maintained high quality assets and the start of 2025, 90% of the portfolio has been repositioned with modernize them in these bigger systems and then sweep foundations. These communities offer high quality living experience attract stronger.
Speaker Change: Parents, who are up for us that I mean per unit at year end up $16.23 in 2025, and we're continuing to purchase and cancel units under automatic unit purchase plan.
Speaker Change: At the end of January we have bought back close to 2 million units for $19 7 million at an average price of $10.01 per unit.
Speaker Change: Generally require low maintenance and generate higher income.
Speaker Change: Our remaining non reposition portfolio is relatively young with the weighted average age of just 23 years.
Speaker Change: This repurchase in 'twenty 'twenty, four and as of January 31st 2025 reps up two 3% up issue and outstanding trusts us while their second of all just conversion project continues to progress with construction onsite underway.
Speaker Change: Our portfolio is located in exceptional central urban areas 87 settlement proposals class cut is urban.
Speaker Change: According to statistics, Canada that position.
Speaker Change: That is a pause I'm breaking ground or let me put it into a wellness for now.
Speaker Change: Our properties I would average walk score of 81, which is considered very walkable by 39% of our communities both to walk score of 90 or more at the highest level achievable refiners, having amenities within a five minute walk.
Speaker Change: We continue to hold well located land and it will continue to monitor market conditions to preserve the optionality for when the market makes sense.
Speaker Change: Near term asset allocation priorities will continue to include paying down debt and be not too on the M. C. I b cohort all the while balancing this with medium to long term growth opportunities.
Speaker Change: In closing, we look ahead to 2025 with cautious optimism.
Speaker Change: While we face many evolving uncertainties, we remain confident that the longstanding systemic nature of Canada's housing shortage.
Speaker Change: Over to slide 22.
Speaker Change: Always support medium to long term demand for well located high quality communities square retrofits.
Speaker Change: We are prepared to navigate through a period of increased uncertainty and competition, we couldn't be better positioned with our high quality portfolio. The combined us with a solid run rate organic growth a conventional or a kubota has built a two key factors first we have a well maintained high quality assets and at the start of 2025, 90% of the portfolio has been read.
Speaker Change: I would like to thank everyone, who supported us throughout the year and with that let's open it up to Q&A.
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the one on your telephone keypad.
Speaker Change: Possession with modernize them in these bigger systems, and then speak nowadays shows.
Speaker Change: You will hear from that Johan has been raised and should you wish to cancel your request. Please press star followed by the tier if youre using a speakerphone. Please lift the handset before pressing any keys one moment. Please for your first question.
Speaker Change: These communities offer high quality living experience attract stronger resin generally require low maintenance and generate higher income.
Speaker Change: Our remaining non repositioning folio is relatively young with the weighted average age of just 23 years.
Speaker Change: Okay.
Speaker Change: Our portfolio is located in the conceptual central urban areas, 87% of our proposals classified as urban.
Speaker Change: Your first question comes from the line of Frank <unk> from BMO capital markets. Please go ahead.
Frank: Thanks, operator, and good morning, guys.
According to statistics, Canada that position.
Speaker Change: Our properties have an average walk score of 81, which is considered very walkable by 39% of our communities both to walk score of 90 or more the highest level achievable defined as having a movie's within a five minute walk.
Speaker Change: Good morning, Craig.
Speaker Change: Just on the leasing front I guess the turnover.
Speaker Change: Continued to moderate.
Speaker Change: <unk> holds fairly wall and I guess more leases turn recently had a less tenure given this dynamic what's kind of your expectation on the throne risk spread for the next 12 years I'm, sorry next 12 months.
Speaker Change: In closing, we look ahead to 2025 with cautious optimism.
Speaker Change: While we face many evolving uncertainties, we remain confident that the long standing systemic nature of Canada's housing shortage should always support medium to long term demand for well located high quality communities square wrestlers.
Speaker Change: Okay.
Speaker Change: Right.
Speaker Change: Great.
Speaker Change: Yeah.
Speaker Change: We don't provide forward guidance to that level.
Speaker Change: Wed like to thank everyone, who supported us throughout the year and with that let's open it up to Q&A.
Speaker Change: The Q4 and Q1 months such as most people know there is seasonality.
Speaker Change: So.
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session.
Speaker Change: They are the lowest from that perspective, so typically you'll lift on churn in those months.
Speaker Change: Do you have a question. Please press star followed by the one on your telephone keypad.
Speaker Change: The baby.
Speaker Change: Do you want to hear your problem that you had has been raised and should you wish to cancel your request. Please press star followed by the two if you're using a speaker phone. Please lift the handset before pressing any keys one moment. Please for your first question.
Speaker Change: For 12 months and as you saw from us double digits, I'm, not suggesting it's going to be double digits.
Speaker Change: We have seen lift alternatives come in but.
Speaker Change: From what we're seeing in Q4, and so far Q1, we've seen modest improvement on the lepton camera. So you may have.
Speaker Change: Oh, yes.
Speaker Change: Your first question comes from the line of Frank are you from BMO capital markets. Please go ahead.
Speaker Change: Encouraged and cautiously optimistic.
Speaker Change: Maybe we've seen the floor.
Frank: Thanks, operator, and good morning, guys.
Speaker Change: Countries.
Speaker Change: Understood.
Speaker Change: Okay great.
Speaker Change: Great color and just switching to the spread on renewals can you kind of give some color on how the renewal spread has been and what's.
Speaker Change: Just on the leasing front I guess, the tone versus right continue to moderate but M.
Speaker Change: M T M hold fairly well and I guess more leases turn recently had a less tenure given this dynamic what's kind of your expectation on the throne risk spread for the next 12 years I'm, sorry next 12 months.
Speaker Change: What's your kind of like like a range you're looking at for 2025, including like Hei adjustments potentially you can get.
Speaker Change: Okay.
Speaker Change: So I mean, it varies quite a bit in the different provinces with rent controls in BC and Ontario as you can appreciate.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Guidance from the.
Speaker Change: We don't provide forward guidance, so that was great.
Mine, Quebec is actually quite elevated through 2025.
Speaker Change: So I think overall when you blended across everywhere, we expect to be in and around that two to two 5%.
Speaker Change: The Q4 and Q1 months as most people know there is seasonality to me, saying.
Speaker Change: So.
Speaker Change: They are the lowest from that perspective, so typically you'll look on trend in those months will be more reflective of maybe.
Speaker Change: With <unk>, leading the way given the guidance there.
Speaker Change: I see.
Speaker Change: Great.
Speaker Change: Just turning to the capital recycling front the hunger for suite property in Montreal. The contract you guys commentary in the MD&A I believe that's a 695 year old facility Colson Luke.
Speaker Change: Full 12 months and as you saw our Oklahoma installed, it's just I'm not suggesting it's going to be double digits.
Speaker Change: We have seen lepton heritage coming in but.
Speaker Change: So what we're seeing in Q4, and so far Q1, we've seen modest improvement on the lift alternatives. So the domain.
Speaker Change: And also like I hadn't noticed that several probably sold last couple from last year. While also in this area just could you kind of provide some color on what makes sense.
Speaker Change: And cautiously optimistic.
Speaker Change: We've seen before.
Speaker Change: Market less appealing to interact.
Speaker Change: The conference.
Speaker Change: Artist at and that's great color and just switching to the spread on renewals can you kind of give some color on how the renewal spread has been and what's your kind of like like a range you're looking at for 2025, including like Hei adjustments potentially you can get.
Speaker Change: Okay.
Speaker Change: I think when you so I think if you if it.
Speaker Change: To make sure we understood what Youre asking there frankly, we're just saying that the dispositions that we've had some of them in last year and then the one we just announced have all been in a similar area in Montreal.
Speaker Change: If there is something about the areas specifically.
Speaker Change: Yes, that's correct.
Speaker Change: Okay.
Speaker Change: Yes no.
Speaker Change: So I mean, it varies quite a bit in the different provinces with rent controls in BC and Ontario as you can appreciate.
Speaker Change: Foundation program, we earmarked.
Speaker Change: Different communities within the portfolio looking out to.
Speaker Change: <unk> from the mine in Quebec is actually quite elevated for 2025.
Speaker Change: To see where the growth profile is relative to our corporate profile and it just a coincidence what has actually concluded has been in nickel sandy.
Speaker Change: So I think overall when you blend it across everywhere, we expect to be in and around that two to two 5%.
Speaker Change: Where we are.
Speaker Change: With <unk>, leading the way given the guidance there.
Barry: Sure Barry.
Speaker Change: We very much like a core focus area of Montreal.
Speaker Change: I see that that's great I'm, just turning to the capital recycling front.
Speaker Change: So I think it's more onesies.
Speaker Change: For suite property in Montreal, and the contract you guys commentary in the MD&A I believe that's a 695 year old facility Colson Luke.
Speaker Change: Then.
Speaker Change: Draw any conclusion at.
Speaker Change: Specific more to the property in the area.
Speaker Change: Got it. Thank you guys. So that's.
Speaker Change: And also like I noticed that several probably so last couple of last year. While also in this area.
Speaker Change: That's all my question I'll turn it back.
Speaker Change: Thanks, Greg.
Speaker Change: Thank you and your next question comes from the line of Mark Rothschild from Canaccord. Please go ahead.
Speaker Change: Could you kind of provide some color on what makes this message.
Mark Rothschild: Thanks, everyone.
Speaker Change: Market less appealing to to interact.
Speaker Change: Everyone Hey.
Speaker Change: In regards to the asset sales, which.
Speaker Change: Yeah.
Speaker Change: I think when you. So I think if you if it just to make sure we understand what you're asking there. Frank are you just saying that the dispositions that we've had some of them in the last year and then the one we just announced have all been in a similar area in Montreal, and if theres something about the areas specifically.
Speaker Change: Clearly provides a lot of capital for buying back units just.
Speaker Change: Spend a little bit more on your on your thoughts now as far as.
Speaker Change: How much you ultimately would like to do with us and how connected is this.
Speaker Change: Having the ability to purchase units well below what you would consider.
Speaker Change: Yeah, that's correct is that it.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: No I mean, our disposition program we earmarked.
Speaker Change: Great question, Mark I think.
Speaker Change: We're very happy with our overall portfolio, but when your units are trading where they are.
Speaker Change: Different communities within the portfolio looking out.
Speaker Change: Do you see where the growth profile of those relative to our.
Speaker Change: How attractive the training out today and we're quite confident.
But the profile and it just a coincidence what has actually concluded.
Speaker Change: Our overall portfolio selling selling communities that don't exceed the overall growth profile and I think that makes a lot of sense.
Speaker Change: It has been in nickel sandy.
Speaker Change: We're we're very we're.
Speaker Change: It also provides us with limited liquidity and helps us balance near term capital allocation, maybe in CIB down at these levels paying down debt or balancing the medium to longer term growth.
Speaker Change: Very much like a core focus area of Montreal.
Speaker Change: So I think it's more than.
Speaker Change: And then.
Speaker Change: Driving.
Speaker Change: Specific to the property in the area.
Speaker Change: Generational global opportunities.
Got it Yep. Thank you guys Oh, that's all my question I'll turn it back.
Speaker Change: Okay great.
Speaker Change: Different comments in regards to shortage of housing.
Speaker Change: Thanks, Greg.
Speaker Change: Thank you and your next question comes from the line of Mark Rothschild from Canaccord. Please go ahead.
Speaker Change: Doug.
Doug: Idea of holding back on putting new money to development considering it does take.
Mark Rothschild: Thanks, everyone.
Doug: Some time to get projects, whether it's an office to residential or redevelopment to get a project to completion is it something that you would actually think about starting because ultimately there is a shortage.
In regards to the asset sales, which.
Mark Rothschild: Clearly provides a lot of capital for buying back units just expand a little bit more on your on your talk now as far as.
Mark Rothschild: How much you ultimately would like to do with us and how connected is this.
Doug: If there's no if there's less new development that will just get worse.
Mark Rothschild: To have the ability to purchase units are well below what you would consider.
Doug: Well Theres no question. So there's two points I think while there might be a record.
Mark Rothschild: Yeah.
Speaker Change: It's a great question Mark I think.
Doug: Supply being delivered in the GTH, a Vancouver office in Ottawa.
Speaker Change: We're very happy with our overall portfolio, but when your units are trading where they are.
Doug: What you will see it does it's going to follow up there is a shortage of starts and there is quite a long development lead time, which will eventually put pressure back on rents upward so.
Speaker Change: How attractive the training out today and we're quite confident.
Speaker Change: Our portfolio selling.
Speaker Change: Selling selling communities that don't exceed the overall.
Mark Rothschild: Your comment is well taken mark.
Speaker Change: I think it makes a lot of sense.
Mark Rothschild: Our commentary on the pods and developments really about breaking new ground.
It also provides us with a little bit into liquidity and helps us balance near term capital allocation may be M. CIB down at these levels paying down debt or balancing the medium to longer term growth the generational opportunities.
Mark Rothschild: Relative to the opportunity.
Mark Rothschild: And CIB presents us so as not if we're going to add again with those developments, we love location loved the land.
Mark Rothschild: A lot of the work hasn't been done so when we do decide to.
Speaker Change: Okay great.
Speaker Change: You make different comments in regards to a shortage of housing in there.
Mark Rothschild: Go ahead, we'll be in good stead, but we rather right now.
Speaker Change:
Speaker Change: The idea of holding back on putting new money to development considering it does take.
Mark Rothschild: Take any of that development capital and just really look towards.
Speaker Change: Quite some time to get projects, whether it's and office to residential or redevelopment to get a project to completion.
And CIB activity.
Speaker Change: Okay, Great got it thanks, so much.
Mark Rothschild: Thanks Mark.
Speaker Change: Is it something that you would actually think about starting because ultimately there is a shortage in.
Speaker Change: Thank you and your next question comes from the line of Dana Wilkinson from CIBC. Please go ahead.
Speaker Change: If there's no if there's less new development that will just get worse.
Dana Wilkinson: Thanks, Good morning, guys.
Speaker Change: Well Theres always Blackstone, so there's two points I think while there might be a record.
Dana Wilkinson: Brad just want to circle back on that in CIB I think last quarter. You said there was a small window to be able to go by sort of new assets at a discount to replacement value.
Speaker Change: Supply being delivered in the GTH, a vancouver in some pockets in Ottawa.
Speaker Change: What you will see it does assume a follow up there is a shortage of starts and there's quite a long development lead time, which will eventually put pressure back on rents upward so.
Dana Wilkinson: One has that window closed given that those rents are probably closer to market or is it just that the utilization of your capital to buy back your own stock at a mid five or better cap rate with that mark to market is just that much more attractive.
Speaker Change: Your comment is well taken mark.
Speaker Change: Our commentary on the pause on development, it's really about breaking new ground and where our cost of capital.
Dana Wilkinson: It's more the latter D I think I think that window.
Speaker Change: Relative to the opportunity.
Dana Wilkinson: Continued to close I think those opportunities.
Speaker Change: The NCI be presents us so it's not if we're gonna go ahead again, we're talking about honestly love location loved the land.
Dana Wilkinson: But it's not a window of three or four years is likely a window less than 24 months, but from where we sit today and thats really the opportunity. So the challenge with capital allocation is always always balancing the near term.
Speaker Change: A lot of the work hasn't been done so when we do decide to.
Speaker Change: Go ahead, we'll be in good stead, but we rather right now.
Speaker Change: Take any of that development capital and just really look towards.
Dana Wilkinson: Opportunity.
Dana Wilkinson: That's a really great opportunity either in CIB today versus one medium long term growth, but I think.
Speaker Change: In CIB activities.
Speaker Change: Okay, Great got it thanks, so much.
Speaker Change: I think youre right. It was more of the latter.
Mark Rothschild: Thanks Mark.
Speaker Change: Tomorrow. The latter so is it fair to say, you're probably a net seller of real estate net buyer of.
Speaker Change: Thank you and your next question comes from the line of screen out Wilkinson from CIBC. Please go ahead.
Speaker Change: Of your own units.
Mark Rothschild: Thanks, Good morning, guys.
Speaker Change: 2025, unless something materially changes.
Brad just want to circle back on that in CIB I think last quarter. You said there was a small window to be able to go by sort of new assets at a discount to replacement value. I guess, one has that window closed given that those rents are probably closer to market or is it just that the youth.
Speaker Change: Yeah Yeah.
Speaker Change: Yes.
Speaker Change: Second question just on the occupancy I guess in prior periods of I don't want to say upheaval.
Speaker Change: You've you've let the occupancy kind of come down to build some growth in there with it holding steady is that more a reflection of you think that there is a normalization.
Mark Rothschild: <unk> of your capital to buy back your own stock at a mid five or better cap rate with that mark to market is just that much more attractive.
Speaker Change: All of these spreads or how are you just looking at at that 97% level.
Mark Rothschild: It's more the latter Deane I think I think that window.
Speaker Change: Yes, so I think it's a floor.
Speaker Change: MACRA unknowns and uncertainties out in the marketplace I think.
Mark Rothschild: Turning to flows I think those opportunities exist.
Mark Rothschild: But it's not a window of three or four years, it's likely window less than 24 months, but from where we sit today against amazing opportunity. So the challenge with capital allocation is always always balancing the near term opportunities.
Speaker Change: We kind of highlighted some of that in the queue.
<unk>.
Speaker Change: We remain cautiously optimistic in Q3.
Speaker Change: <unk> Barry.
Speaker Change: Only time will tell to see how the new.
Speaker Change: Immigration policy to pay out and unfortunately now all the tariffs will play out.
Mark Rothschild: That's a really great opportunity.
Speaker Change: I think we.
Mark Rothschild: CIB today versus more medium long term growth, but I think.
Speaker Change: Really solid Q4.
Speaker Change: All things point to us continuing to be able to I think.
Mark Rothschild: I think youre right its much more of the latter.
Speaker Change: Outperform the industry as a whole also but I think Dan is just remaining cautious that you've taken.
Mark Rothschild: More of the latter so is it fair to say, you're probably a net seller of real estate net buyer of <unk>.
Mark Rothschild: Of your own units.
Mark Rothschild: For 2025, unless something materially changes.
Speaker Change: Three months as it comes and recognize that the landscape is changing.
Mark Rothschild: Yeah Yeah.
Mark Rothschild: Yeah.
Mark Rothschild: Second question just on the occupancy I guess in prior periods of eye on let's say upheaval you you've you've let the occupancy kind of come down to to build some growth in there.
Speaker Change: No that makes sense I mean, the last count Theres more people today than there was at the end of Q3 and I'm sure that continues to go up.
Speaker Change: That's all I've got I'll hand, it back thanks, guys.
Speaker Change: Thanks C J.
Speaker Change: Thank you. Your next question comes from the line of <unk> <unk>.
Mark Rothschild: Is it holding steady is that more a reflection of you think that there's a normalization.
Allen: Allen. Please go ahead.
All of these spreads or how are you just looking at that that 97% level.
Speaker Change: Thanks.
Speaker Change: Good morning.
Speaker Change: Good morning, first question just going back to.
Mark Rothschild: Yeah. So I think this is more of the.
So dave's comments in the prepared remarks.
Mark Rothschild: <unk> owns and uncertainties out in the marketplace I think.
Speaker Change: So the decline.
Speaker Change: Sort of saw a decline in the tenure on Q4 move outs as that.
Mark Rothschild: We kind of highlighted some of that in the Q3 call.
Speaker Change: Is that seasonal or is that more of a near term trend that you expect to continue.
Barry: Your main cautiously optimistic in Q3, but could be Barry.
Barry: Only time will tell to see how the new.
Speaker Change: Okay.
Speaker Change: Yes, I think thats more of a near term trends that we're seeing.
Barry: Immigration policies will play out and unfortunately now all the tariffs will play out.
Speaker Change: It's not surprising you Jonathan I mean, we've always maintained.
Barry: I think we don't see that.
Barry: Really solid Q4.
All things point to us continuing to be able to I think.
Speaker Change: What how are turnovers stayed pretty sticky in the mid twenties range, but of the people that are moving out that is we're seeing a lower tenured.
Barry: Outperform industry as a whole also.
Barry: I think Daniel just remaining cautious about taking on each.
Speaker Change: No for sure that's what are they.
Barry: These three months as it comes and recognize that the landscape is changing.
Speaker Change: I would have expected.
Speaker Change: Just clarifying and secondly, just on the.
Speaker Change: No that makes sense I mean, the last count Theres more people today than there was at the end of Q3 and I'm sure that continues to go up.
Speaker Change: Operating margins, obviously Q1, you're going to have a little bit of a utilities headwind, but how should we think about growth.
Barry: That's all I've got I'll hand, it back thanks, guys.
Speaker Change: Thanks Lee.
Speaker Change: And margins for 2025.
Speaker Change: Yes.
Speaker Change: Thank you. Your next question comes from the line of Ben Couch or thank you to Cowen. Please go ahead.
Speaker Change: I think to that point, it's going to depend a little bit on that utility line, which always drives a few things and it's going to depend a little bit on what happens with the carbon tax.
Speaker Change: Thanks.
Speaker Change: Good morning.
Speaker Change: Hey, guys good morning.
Speaker Change: So, let's see what happens at this point.
Speaker Change: First question, just going back to sort.
Speaker Change: Sort of I think.
Speaker Change: Dave's comments in the prepared remarks I think.
Speaker Change: Hit a record NOI margin this quarter this year.
Speaker Change: The so the decline.
Speaker Change: Can you sort of saw a decline in the tenure on on Q4 move outs is that.
Speaker Change: Don't see it going backwards on us.
Speaker Change: It's staying flat to modestly improving from a margin perspective.
Speaker Change: Is that seasonal or is that more of a near term trend that you expect to continue.
Speaker Change: And on an NOI perspective, considering.
Speaker Change: Expect we could see still a net.
Speaker Change: Okay.
Speaker Change: Yes, I think that's more of a near term trends that we're seeing.
Speaker Change: Mid single digit NOI same store growth.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: It's not surprising you Jonathan I mean, we've always maintained.
Helpful. And then lastly, just sounds like you've got another 100 million or so under contract for asset sales.
Speaker Change: But what how our turnovers stayed pretty sticky in the mid twenties range, but of the people that are moving out that is we're seeing a lord tenure.
Speaker Change: What markets would those be in.
Speaker Change: The aircrafts are across all of our Americas.
Speaker Change: No for sure that's what I would've expected.
Speaker Change: Okay Fair enough I'll turn it back.
Speaker Change: I'll clarify the only one that I would say I've said also only one I would say the.
Speaker Change: Just just clarifying and secondly, just on the.
Speaker Change: It would be.
Speaker Change: Market outlets.
Speaker Change: Operating margins are obviously Q1, you're going to have a little bit of a utilities headwind, but how should we think about growth.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: That's helpful I'll turn it back thanks.
Speaker Change: And margins for 2025.
Speaker Change: Thanks.
Speaker Change: Thank you and your next question comes from the line of Mario <unk> from Scotiabank. Please go ahead.
Speaker Change: I think to that point, it's going to depend a little bit on that utility line, which always drives a few things and it's good it's been a little bit on what happens with the carbon tax.
Mario: Hi, good morning.
Speaker Change: Good morning.
Speaker Change: Coming back to the tenant 10 year.
Speaker Change: So, let's see what happens at this point.
Speaker Change: Sort of I think it was weak.
Speaker Change: Can you quantify in any way.
Speaker Change: Hit a record NOI margin this quarter this year.
Speaker Change: How much that's come down.
Speaker Change: In Q4 relative sorry, I'm, referring to the 635 new leases.
Speaker Change: Don't see it going backwards on us I see it staying flat to modestly improving from a margin perspective.
Speaker Change: The tenant 10 year olds.
Speaker Change: Replacement leases.
Speaker Change: How much is that shifting quarter to quarter year over year.
Speaker Change: And on an NOI perspective, considering.
Speaker Change: Expect will cause he still does that.
Speaker Change: Yes.
Mid single digit NOI same store growth.
Speaker Change: So there is like Brad mentioned earlier, I think Dave mentioned too is.
Speaker Change: Okay.
Speaker Change: The 10 year tends to change a little bit quarter over quarter, you tend to see Q4, and Q1 people with a little.
Speaker Change: Helpful. And then and then lastly, just it sounds like you've got another 100 million or so under contract for asset sales, which what markets would those be in.
Speaker Change: Shorter or sorry, a little longer tenure than you do in Q2, and Q3, but overall comparative quarter, we've seen that 10 year come in a little bit.
Speaker Change: They're across there across all of our markets.
Speaker Change: Okay Fair enough I'll turn it back.
Speaker Change: It's not like it jumped from.
Speaker Change: I'll clarify the only one that I would say I've said, all the only one I wouldn't say, that's not would be our market outlets.
Speaker Change: Two year or four years to two years, but it's it's a decline that is noticeable and that has continued over the last year and a half two years.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Helpful I'll turn it back thanks.
Speaker Change: As you see more people get that are earlier in their lease cycles.
Speaker Change: Thanks, guys.
Speaker Change: Thank you and your next question comes from the line of Matt Your stomach from Scotiabank. Please go ahead.
Speaker Change: <unk>.
Speaker Change: Okay.
Speaker Change: And then.
Speaker Change: Just on.
Speaker Change: Hi, good morning.
Speaker Change: Yes.
Speaker Change: Good morning.
Speaker Change: The same store revenue growth was five 1%.
Speaker Change: Coming back to the tenant 10 year.
Speaker Change: In Q4.
Speaker Change: Can you quantify in any way how much that's come down.
Speaker Change: Given the start to the year is that Oh, I think Curt you mentioned mid single digit same store NOI growth is achievable or.
Speaker Change: In Q4 relative sorry, I'm, referring to a 635 new leases.
Speaker Change: Reasonable in 'twenty five mid single digit kind of same store revenue growth. Similarly achievable this year.
Speaker Change: The tenant 10 year olds replacement leases.
Speaker Change: Much of that shifting quarter to quarter year over year.
Speaker Change: Yes.
Speaker Change: It's early in the year to tell for sure.
Speaker Change: Yeah I mean it is so there is like Brad mentioned earlier and I think Dave mentioned too is.
Speaker Change: And we don't provide guidance, but I think.
Speaker Change: Given what we're seeing in the market somewhere between 4% and 6%.
Speaker Change: The tenure tends to change a little bit quarter over quarter, you tend to see Q4, and Q1 people with a little.
Speaker Change: So landing on the middle point of that puts you right there.
Speaker Change: Perfect. Okay and then my last question just on the 144.
Speaker Change: Shorter sorry, little longer tenure than you do in Q2, and Q3, but overall comparative quarter, we've seen that 10 year come in a little bit.
Speaker Change: Fair value losses, this quarter, how much of that roughly would be attributable to the $200 million to $250 million of assets that you've noted that our plan for disposition in the next 12 months.
Speaker Change: It's not like it jumped from two.
Speaker Change: Two year or four years to two years, but it's it's a decline that is noticeable and that has continued over the line.
Speaker Change: Not not more than the average overall like when I look at the disposed versus the overall portfolio.
Speaker Change: Year to half two years.
Speaker Change: As you see more people get that are earlier in their lease cycle moving.
Speaker Change: The cap rate change on those versus the other ones is roughly equal, but I think it's like one basis point.
Speaker Change: Okay.
Speaker Change: And then.
Speaker Change: It's pretty even across the whole portfolio.
Speaker Change: Just on <unk>.
Speaker Change: Yep.
Speaker Change: The same store revenue growth was five 1%.
Speaker Change: Last Q and Q3, the CBRE report and some other data came came out pretty.
Speaker Change: In Q4.
Speaker Change: Pretty late like we're already reporting as a sort of carved them out.
Speaker Change: Given the start to the year is that Oh, I think Curt you mentioned mid single digit same store NOI growth is achievable or.
Speaker Change: And you saw that rolled through there wasn't much changes in Q4 report.
Speaker Change: Reflecting sort of that activity late Q3 early Q4.
Speaker Change: Reasonable in 'twenty five.
Speaker Change: Digital kind of same store revenue growth some really achievable this year.
Speaker Change: Okay. Okay.
Speaker Change: Yes.
Speaker Change: Yes, I mean, it's it's early in the year to tell for sure.
Speaker Change: Thanks Maria.
Speaker Change: Thank you and your next question comes from the line of Matt <unk> from National Bank Financial. Please go ahead.
Speaker Change: And we don't provide guidance, but I think it.
Speaker Change: Given what we're seeing in the market somewhere between four and 6%.
Speaker Change: Morning.
Speaker Change: Matt.
Speaker Change: We're approaching the spring leasing season at this point can you give us a sense of.
Speaker Change: So landing on the middle point of that puts you right there.
Speaker Change: Perfect. Okay and then my last question just on the 144.
Kind of how things are shaping up and I think your peers have generally said theres good depth to the rental market. It's a question of a little bit more price sensitivity.
Speaker Change: Fair value losses, this quarter, how much of that roughly would be attributable to the 200 to 250 million of assets that you've noted on their plans for disposition in the next coming months.
Speaker Change: But is that what youre seeing and it sounded like Youre also seeing a bit of a firming on your spreads.
Speaker Change: Any sense early indication as to how spring is shaping up.
Speaker Change: No not not more than the average overall like when I look at the dispose versus the overall portfolio.
Speaker Change: Yes, I think I think that's fair.
Speaker Change: Good day have a chance to speak but I do think.
Speaker Change: The cap rate change on those versus the other ones is roughly close I think it's like one basis point.
Speaker Change: The traffic is relative to call it a critical and more.
Speaker Change: It's pretty even across the whole portfolio.
Speaker Change: Is down for this time of year that where it would be.
Speaker Change: Last Q and Q3, the CBRE report and some other data came came out pretty late like we're already reporting as assertive cars to come out.
Speaker Change: I don't think that it would be surprising so we're hopeful that our operating costs.
Speaker Change: <unk> got a stabilized environment Cherokee modest lift, but the one area I Wouldnt say youre going to see an increase in the line.
Speaker Change: And you saw that rolled through there wasn't much changes in Q4 report, but that's reflecting sort of that activity late Q3 early Q4.
Speaker Change: Line item in our meat on the outside.
Speaker Change: I think we're going to have to spend a little more Gary.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: More traffic.
Speaker Change: Thanks Maria.
Speaker Change: We're gonna have continued to see.
Speaker Change: Thank you and your next question comes from the line of Matt <unk> from National Bank Financial. Please go ahead.
Speaker Change: And we have we have been somewhat painful on that but we're going to continue to work extremely hard.
Speaker Change: Morning, guys.
Speaker Change: Matt.
Speaker Change: We're approaching the spring leasing season at this point can you give us a sense of kind of how things are shaping up and I think your peers are generally said theres good depth to the rental market. It's a question of a little bit more price sensitivity, but.
Speaker Change: Bettering our burden because reality is the traffic is down a little.
Speaker Change: Theres less the rental demand fall in love with Gulfport.
Speaker Change: Is it going to become less.
Speaker Change: I don't know if that helps answer.
Speaker Change: But is that what you're seeing and it sounds like you're also seeing a bit of a firming on your spreads but.
Speaker Change: So we are a little lower than where it normally would be.
Speaker Change: Matt.
Speaker Change: But from a comparison basis in stepping up.
Speaker Change: Any sense early indication as to how spring is shaping up.
Speaker Change: Fair enough.
Speaker Change: Yeah, I think I think that's fair I think in a lot.
Speaker Change: And then on Quebec.
Speaker Change: I mean.
Speaker Change: I think we were generally surprised with what the Reggie Lewis.
Speaker Change: Good day have a chance to speak but I do think.
Speaker Change: We came out with last year and this year is higher.
Traffic is relative to call. It a pre COVID-19 norm is down at this time of year that were and what it means.
Speaker Change: Anticipate being able to push that through to tenants this year or will it be a mix of some where you're pushing above and somewhere maybe.
Speaker Change: I don't think that would be surprising so we're hopeful that our operating costs Bridgepoint because I hope you got a stabilized environment Cherokee modest lift, but the one area I wouldn't say you're going to see an increase in the line item in our knee on the appetite.
Speaker Change: You pushed at a lesser rate than what's allowed.
Speaker Change: Alright.
Speaker Change: No I think I think that's fair.
Speaker Change: Yes.
Speaker Change: We're hopeful that will continue and be able to see the success that we're having on the renewal rates.
I think we're going to have to spend a little more to get more traffic.
Speaker Change: Montreal I'll leave it at that.
Speaker Change: Fair enough.
Speaker Change: Lastly for me on the Capex front I mean, it's pretty noticeable Q4 in particular, but for all of 2024, you've really been able to dial back the capex and you're still getting pretty good rent growth is that something that you would anticipate that we continue to see I mean, there is some question as to whether you kind of go back in.
They have continued to see.
Speaker Change: And we have we have been somewhat painful on that but we're going to continue to work extremely hard at bettering our virtually because reality is the traffic is down a little.
Speaker Change: Or is it was less than that total demand fall in love with Gulfport.
Speaker Change: We're doing suite renovation to get at.
Speaker Change: There isn't going to become less.
Speaker Change: I don't know if that helps answer.
Speaker Change: Bigger less or more.
Speaker Change: Or should we kind of expect the capex profile to remain pretty muted.
Speaker Change: So we are a little lower than where it normally would be.
Speaker Change: Well it is.
Speaker Change: Alright.
Speaker Change: It's a tale of two cities is very good news bad news, it's great that our portfolio is.
Speaker Change: Basis.
Speaker Change: No.
Speaker Change: Fair enough.
And then on Quebec, Yeah, I mean.
Speaker Change: On.
Speaker Change: Subsequent to the U N or we're in less than 5% non reposition the reason why I say as you can tell two cities is as we know when we're active in the acquisition front.
Speaker Change: I think we were generally surprised with what the rest of you look large amount came out with last year and then this year is higher.
Speaker Change: Anticipate being able to push that through to tenants this year or will it be a mix of some where you're pushing above and somewhere maybe.
Speaker Change: When our cost of capital there.
<unk> got a pretty good job of your history of repositioning of assets and really driving growth.
Speaker Change: You pushed at a lesser rate than than what's allowed.
Speaker Change: No I think I think that's fair right.
Speaker Change: Unfortunately talks capital hasn't been there so.
Speaker Change: <unk> taken a.
Speaker Change: We're hopeful that we'll continue to be able to see the success that we're having on the renewal rates.
Speaker Change: And our approach to the capital allocation.
Speaker Change: With that with our non repositioning from them and obviously comes less dollars needed to be said that said when you look at 2024, we will be up a little on Capex over 2024.
Speaker Change: Much I'll leave it at that.
Speaker Change: Fair enough lastly for me on the Capex front I mean, it's pretty noticeable Q4 in particular, but for all of 2024, you've really been able to dial back the capex and you're still getting pretty good rent growth is that something that you would anticipate that we continue to see I mean, there's some.
Speaker Change: There are a couple of projects that we have identified that are.
Speaker Change: Little larger in scope than the army with Intel.
Speaker Change: Question as to whether you kind of go back and start doing suite renovations due to get at a bigger less ore or should we kind of expect the capex profile to remain pretty muted.
Speaker Change: And would that be in sort of common area or mechanics, no more at this morning on for Scott here.
Speaker Change: Site infrastructure to be to be fair, one projects electrical project in Stony Creek encounter parking garage.
Speaker Change: Well it is a.
Speaker Change: <unk> said he is very good news bad news, it's great that our portfolio is.
Speaker Change: Come on.
Speaker Change: Another one until the slope stabilization in one of our properties.
Speaker Change: Subsequent to the U N or we're in less than 5% non repossession and the reason why I say this to tell two cities is as we know when we're active in the acquisition front and when our cost of capital there.
Speaker Change: And we have another property in London.
Speaker Change: Another parking garage.
Speaker Change: Got it.
Speaker Change: Got a pretty good job of your history of repositioning of assets and really driving growth.
Speaker Change: And it's just it's where it is.
Speaker Change: Where it is in the lifecycle.
Speaker Change: Fair enough sorry in bottom line.
Speaker Change: Unfortunately talks capital hasn't been there so.
Speaker Change: One last last one in terms of the purchases that you've made in Montreal can you give us a sense as to how.
Speaker Change: We take them out.
Speaker Change: And our approach to capital allocation.
Speaker Change: With that what's there.
Speaker Change: The leasing is performing relative to your expectations.
Speaker Change: Some of them in obviously comes less dollars needed to be spent that said when you look at 2024, we will be up a little on capex over 2024.
Speaker Change: Yeah, so relative to expectations, it's been it's been pretty pretty good we made some.
Speaker Change: We made some good strides relative to what Youre looking at in the quarter and were happy where it is and I think we underwrote it pretty considerably and gave ourselves a buffer to make sure that we gave ourselves some time to get the programming.
Speaker Change: There are a couple of projects that we have identified that are a little larger in scope than the army, we didnt pals.
Speaker Change: And would that be in sort of common area or mechanics, no more at this more infrastructure.
Speaker Change: The change of ownership and reputation.
Speaker Change: Local marketplace, but.
Early in the early days flat, but so far we're happy.
Speaker Change: Outside infrastructure to be to be fair one projects electrical project in Stony Creek domain College parking garage.
Speaker Change: Perfect. Thanks.
Speaker Change: Yeah.
Speaker Change: Thank you and your next question comes from the line of Jamie Shen from RBC capital markets. Please go ahead.
Speaker Change: Another one until the slope stabilization in one of their total needs.
Speaker Change: Hey, Jimmy.
Speaker Change: Then we have another property in London.
Speaker Change: So you are in the market looking to sell assets I wondered if you could talk a little bit about the transaction market.
Speaker Change: Yes.
Speaker Change: Another parking slash garage.
Speaker Change: Got it.
Speaker Change: In terms of buyer appetite buyer debts that sort of thing.
Speaker Change: And it's just it's just it's where it is.
Speaker Change: Just where it is in the lifecycle.
Speaker Change: Yeah I mean.
Speaker Change: Okay.
Speaker Change: Fair enough sorry in bottom line.
Speaker Change: It still tends to be at this point I mean, it looks like there is more velocity.
Speaker Change: One last last one in terms of the the purchase that you've made in Montreal can you give us a sense as to how the leasing is performing relative to your expectations.
Speaker Change: Craig the kind of Trump slash tariff trade and uncertainty.
Speaker Change: Great.
Speaker Change: It was.
Speaker Change: Yeah, so relative to expectations.
Speaker Change: It looked like it was broadening to institutional and private.
Speaker Change: It's been pretty pretty good estimate based on.
Speaker Change: We've made some good strides relative to what Youre looking at in the quarter and we're happy with where it is and I think we underwrote it pretty considerably and gave myself some buffer to make sure that we gave ourselves some time to get the programming.
Speaker Change: It appears now that institutional and box.
Speaker Change: Ends up again, so there's been a lot of.
Speaker Change: Stops and starts from the institutional community elastic cloud, but what has not gone away and really encouraging.
Speaker Change: Jimmy makes up the majority of the overall apartment American Canada, the private buyers still there now the private buyer doesn't have the same appetite for deal size and call it $50 million.
Speaker Change: The change of ownership and reputation.
Speaker Change: Local marketplace, but.
Early in the early days, but so far we're happy.
Speaker Change: Perfect. Thanks.
Speaker Change: Normally I would say is the ticket size is probably a CLO.
Speaker Change: Yeah.
Speaker Change: Thank you and your next question comes from the line of Jamie Shen from RBC capital markets. Please go ahead.
Speaker Change: There's a lot more.
Speaker Change: A lot more of an audience.
Speaker Change: 25.
Speaker Change: Oh, sorry, Jimmy Thanks.
Speaker Change: But.
Speaker Change: So you are in the market looking to sell assets I Wonder if you could talk a little bit about the transaction market.
Speaker Change: There's still a lot of.
Speaker Change: There's still a lot of activity.
Speaker Change: Desire from that product.
Speaker Change: In terms of buyer appetite buyer gets that sort of thing.
Speaker Change: Mhm.
Speaker Change: And pricing wise I mean, you did it.
Speaker Change: Yeah, I mean, it's still tends to be at this point I mean, it looks like theres more velocity.
Speaker Change: Lumpier cap a little bit is that consistent what you're seeing too.
Speaker Change: The cap.
Speaker Change: Made the comment trunk slash tariff trade and uncertainty.
Speaker Change: Cap rates have moved up a little bit.
Speaker Change: I think we've seen cap rates move up through the course of the year and we've sort of brought them up last couple of quarters to try and reflect what we're seeing both from transactions on the street and from.
Speaker Change: Great.
Speaker Change: It was.
Speaker Change: It is what it looks like it was broadening to institutional and private.
Speaker Change: And it appears now that institutional bats.
Speaker Change: Different reports from different whether its office or cushman or whoever.
Speaker Change: Ends up again, so there's been a lot of.
Speaker Change: And it's just a reflection of what's going on with the overall macro interest rate environment.
Speaker Change: Stops and starts from the institutional community elastic cloud, but what has not gone away and which is really encouraging.
Speaker Change: Okay.
Speaker Change: So the sales are that you're targeting you mentioned, yes, it has a lower growth profile.
Speaker Change: Jimmy makes up the majority of the overall apartment American Canada, the private buyers. So that now the private buyer doesn't have the same appetite for deal size and call. It $50. What if he normally I would say is the ticket size is probably as Sheila and thanks a lot.
Speaker Change: Am I to assume that the mark to market rent spread on those assets are also.
Speaker Change: Smaller relative to the portfolio, yes, Jeremy.
Speaker Change: I went in and make those assumptions are all there.
Speaker Change: <unk>.
Speaker Change: There are a lot more of a modest salary out of $25 million.
Speaker Change: And identified for various reasons sometimes.
Speaker Change: Well sometimes.
Speaker Change: Ticket, but there's still a lot of.
Speaker Change: Operating synergies and whatnot and we've got to be somewhat careful adds were.
Speaker Change: There's still a lot of activity and.
Speaker Change: Tied up in some of these currently and we don't want to.
Speaker Change: Desire from that product.
Speaker Change: Mhm and.
Speaker Change: Still against US also.
Speaker Change: And pricing wise I mean, you did did bump your cap a little bit is that consistent what you're seeing too.
Speaker Change: We just asked the guys kind of respect.
Speaker Change: This is.
Speaker Change: It's a fluid process and respect the process.
Speaker Change: Yeah.
Speaker Change: The cap rates have moved up a little bit.
Speaker Change: Sure Fair enough.
Speaker Change: Last clarification on the N CIB.
Speaker Change: Yeah.
Speaker Change: I think we've seen cap rates move up through the course of the year and we've sort of brought them up last couple of quarters to try and reflect what we're seeing both from transactions on the street and from <unk>.
Speaker Change: You purchased a $197 million in January and the subsequent event note.
Speaker Change: You've noted to viewpoint 2 million is that just an additional purchase February.
Speaker Change: <unk> reports from different whether its office or cushman or whoever.
Speaker Change: Yes, so we as we.
Speaker Change: And it's.
Speaker Change: We're in blackout, we have to sort of give guidance to the brokers.
Speaker Change: Just as a reflection of what's going on with the overall macro interest rate environment.
Speaker Change: Brokers that are doing the activity for us before going into blackout.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change: We set parameters and then they buy through the whole cycle, while until we come out of black as we can't really speak to them. So.
Speaker Change: These deals are that you're targeting are you mentioned, yes, it sounds as though what growth profile I mean, I'm I am I to assume too that the mark to market rent spread on those assets are also.
Speaker Change: We reported the January number in there and then up to date in February.
There was another.
Speaker Change: <unk> sorry for January and February combined.
Speaker Change: Smaller relative to the portfolio.
Speaker Change: At about three 2 million units.
Speaker Change: I went in and make those assumptions, they're all they're all been identified for various reasons, sometimes just growth profile, sometimes do with operating synergies and whatnot and we've got to be somewhat careful odds were at were tied up in some of these currently and we don't want it.
Speaker Change: So that's sort of the activity to date and as we come out of blackout, then we'll be able to sort of speak to the broker again.
Speaker Change: Okay.
Speaker Change: Makes sense.
Speaker Change: Yes.
Speaker Change: Thanks, Jamie.
Speaker Change: Thank you there are no further question at this time I would now hand, the call back to Mr. Anyway for any closing remarks.
Speaker Change: Dale against this also.
Speaker Change: Just ask the guys kind of respect Scott this is.
Speaker Change: Thank you again, everyone for joining the call. If you have any questions. Please feel free to reach out.
Speaker Change: As a fluid process and respect the process.
Speaker Change: Sure.
Speaker Change: Yeah.
Speaker Change: Thank you and this concludes today's call. Thank you for participating you may all disconnect.
Speaker Change: Last clarification on the N CIB you.
Speaker Change: <unk> purchased a $197 million in January and it's up in the subsequent event note. Even noted to be point 2 million is that just an additional purchase February.
Speaker Change: Yes, so we as we.
Speaker Change: We're in blackout, we have to sort of give guidance to the brokers.
Speaker Change: Brokers that are doing the activity for us before going into blackout.
Speaker Change: We set parameters and then they buy through the whole cycle until we come out of black as we can't really speak to them. So.
Speaker Change: We reported the January number in there and then up to date in February.
Speaker Change: There was another.
Speaker Change: <unk>, sorry January and February combined.
Speaker Change: At about three 2 million units.
So that's sort of the activity to date and as we come out of blackout, then we'll be able to sort of speak to the broker again.
Speaker Change: Okay makes sense.
Speaker Change: Yes.
Speaker Change: Thanks, Jamie.
Speaker Change: Thank you Sir.
Speaker Change: No further question at this time I would now hand, the call back to Mr anyway for any closing remarks.
Speaker Change: Thank you again, everyone for joining the call. If you have any questions. Please feel free to reach out.
Speaker Change: Sure.
Speaker Change: Thank you and this concludes today's call. Thank you for participating you may all disconnect.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Yeah.