Q4 2024 Chartwell Retirement Residences Earnings Call
Unknown Executive: All participants please stand by, your conference is ready to begin.
All participants please standby your conference is ready to begin.
Unknown Executive: Good morning ladies and gentlemen, and welcome to the Chartwell Retirement Residences Q4 2024 Financial Results Conference Call.
Speaker Change: Good morning, ladies and gentlemen, and welcome to the Chartwell retirement residences Q4, 2024 financial results Conference call.
Vlad Volodarski: I would now like to turn the meeting over to the CEO, Vlad Volodarski. Thank you, Alana. Good morning and thank you for joining us today.
Darcie: I'd now like to turn the meeting over to the CEO slot filler darcie.
Speaker Change: Thank you Liana good morning, Thank you for joining us today.
Unknown Executive: There is a slide presentation to accompany this conference call available on our website at Chartwell.com under the Investor Relations tab.
Speaker Change: A slide presentation to accompany this conference call are available on our website at <unk> Dot com under the Investor Relations tab.
Vlad Volodarski: Joining me are Karen Sullivan, President and Chief Operating Officer, Jeffrey Brown, Chief Financial Officer, and Jonathan Boulakia, Chief Investment Officer and Chief Legal Officer. Before we begin, I direct you to the cautionary statements on slide 2, because during this call we will make statements containing forward-looking information and non-GAAP and other financial measures. Our MD&A and other securities filings contain information about the assumptions, risks, and uncertainties inherent in such forward-looking statements, and details of such non-GAAP and other financial measures. More specifically, I direct you to the disclosures in our 2024 MD&A under the heading Risks and Uncertainties and Forward-Looking Information for discussion of risks and uncertainties.
Speaker Change: Joining me are Karen Sullivan, President and Chief operating Officer, Jeffrey Brown, Chief Financial Officer, and Jonathan <unk>, Chief Investment Officer, and Chief Legal Officer.
Speaker Change: Before we begin I direct you to the cautionary statements on slide two because during this call we will make statements containing forward looking information.
Speaker Change: non-GAAP and other financial measures.
Speaker Change: Our MD&A and other securities filings contain information about the assumptions risks and uncertainties inherent in such forward looking statements and details of such non-GAAP and other financial measures more specifically I direct you to the disclosures in our 2024 MD&A under the heading risks and uncertainties.
Speaker Change: And forward looking information for a discussion of risks and uncertainties.
Unknown Executive: These documents can be found on our website or on CDER Plus website.
Speaker Change: These documents can be found on our website or on SEDAR plus website.
Speaker Change: Yeah.
Vlad Volodarski: Turning to slide three, I am proud of our teams who delivered outstanding results in virtually every area of our business in 2024. from the strong improvements in employee engagement and resident satisfaction to occupancy and cash flow growth to the record volumes of acquisition and financing activity, our people made 2024 an exceptional year. We at Chartwell know that our success starts with great service, and I'm grateful to our residences management teams and frontline employees for their unwavering dedication to those they serve, our residents and their families. I am grateful to our people for the great progress we collectively made in the transition to a more agile and scalable operating platform.
Speaker Change: Turning to slide three I am proud of our teams we delivered outstanding results in virtually every area of our business in 2024.
Speaker Change: From the strong improvements in employee engagement and resident satisfaction to occupancy and cash flow growth to the record volumes of acquisition in financing activity or people may 2020 for an exceptional year.
Speaker Change: We had cherwell now that our success starts with great service and I'm grateful to our residents as management teams and frontline employees for their unwavering dedication.
Speaker Change: Yes.
Speaker Change: And their families.
Speaker Change: Grateful to our people for the great progress, we collectively made in the transition to a more agile and scalable operating platform there hasn't been a lot of change in how we operate our business in the last two years, our people demonstrated a tremendous agility.
Vlad Volodarski: There has been a lot of change in how we operate our business in the last two years. Our people demonstrated a tremendous agility in adjusting and adopting new processes, technologies, and even more importantly, the new mindset. We continue working together to further enable our residences management teams to develop local strategies, make faster decisions, and take bold action. Our corporate support teams develop and implement tools, including technology solutions, deliver high-quality training and targeted assistance to further enable our residences teams to outperform.
Speaker Change: Adjusting and adopting new processes technologies, and even more importantly, the new mindset.
Speaker Change: We continue working together to further enable our residents as management teams to develop local strategies make faster decisions and take bold actions are.
Speaker Change: Our corporate support teams develop and implement tools, including technology solutions deliver high quality training and targeted assistance to further enable our residents as genes to outperform.
Vlad Volodarski: The exceptional work of our people and the strong results that we achieved in 2024 give me confidence in our continued successes this year and beyond.
Speaker Change: The exceptional work of our people are the strong results that we achieved in 2024 gives me confidence in our continued success this year and beyond.
Vlad Volodarski: Before I will share with you our focus and strategies for 2025, Karen will provide an operating update, Jeff will dive deeper into our Q4 and 2024 year-end results, and Jonathan will update you on our transactional activities. We'll start with Karen.
Speaker Change: Before I will share with you our focus and strategies for 2025, Karen will provide an operating update Jeff will dive deeper into our Q4 and 2024 year end results and Jonathan will update you on car transactional activities, we'll start with Gareth carrying over to you.
Karen Sullivan: Karen, over to you. Thanks, Vlad. Moving on to slide 4. Our leasing activity continued to be strong in Q4 with a positive net permanent move-in to permanent move-out. 689 including particularly strong results in December setting us up well to mitigate the historic winter dip in October. We held our first open house event in January, increasing the number of high quality initial contacts. And the teams are now in the process of purposeful activities to nurture these prospects by bringing them back for follow-up tours and events at our... In Q4, we continue to focus our marketing strategies on quality channels, including Google, Facebook, email, radio, print, and local TV, which resulted in a nearly 10% increase in personalized tours for marketing initiatives in Q4 2024 compared to Q4 2020.
Speaker Change: Moving on to slide four our leasing activity continued to be strong in Q4 with a positive net permanent move into permanent plus.
Speaker Change: Plus 689 units.
Speaker Change: <unk>, particularly strong results in December setting us up well to mitigate the historic winter dip in occupancy we held our first open house event in January increasing the number of high quality initial contacts and the teams are now in the process of purposeful activities to nurture these prospects by bringing them back for follow up tours.
Speaker Change: And events at our homes.
Speaker Change: In Q4, we continued to focus our marketing strategies on quality channels, including Google Facebook email radio print and local television, which resulted in a nearly 10% increase in personalized tours for marketing initiatives in Q4 of 2024 compared to Q4 2023 and.
Karen Sullivan: In addition, traffic from non-paid organic sources accounted for 57% of the traffic. our website and conversions that is forms filled out to obtain additional information on living in a Chartwell home grew 62% from Q4 2023.
Speaker Change: In addition traffic from non paid organic organic sources accounted for 57% of the traffic to our website and conversions that is formed scaled out to obtain additional information on living Chartwell home grew 62% from Q4 2023.
Karen Sullivan: In 2024, we established national partnerships with several organizations to promote referrals to our Including Affinity Relationships with the Independent Financial Brokers of Canada, Scotia Wealth Management and MD Financial, as well as the Alberta Retired Teachers Association. We're continuing with our property specific pricing strategies to grow market rate in homes with higher occupancy, eliminating recurring discounts for some communities, targeting specific suites for discounts to accelerate lease up or continuing with broader based discounts depending on occupancy levels. Turning to slide five, we reduced our staffing agency costs by 60% in 2024 compared to 2023 through focused recruitment and retention activities and continue to be consistently below pre-pandemic .
Speaker Change: In 2024, we established national partnerships with several organizations to primark referrals to our residences, including affinity relationships with the independent financial brokers of Canada.
Speaker Change: Shall wealth manager management, and MB financial as well as the Alberta retired teachers Association.
Speaker Change: We're continuing with our property specific pricing strategies to grow market rate in homes with higher occupancy eliminating recurring guest counts for some communities targeting specific suites for discounts to accelerate lease up or continuing with broader based discounts depending on occupancy levels and competitors' rates.
Speaker Change: Turning to slide five.
Speaker Change: <unk> staffing agency costs by 60% in 2024 compared to 2023 through focused recruitment and retention activities and continue to be consistently below pre pandemic levels. We have specific strategies in place for harder to fill positions such as RPM as well as for areas of the country will recruitment.
Karen Sullivan: . We have specific strategies in place for harder-to-fill positions, such as RPMs, as well as for areas of the country where recruitment remains difficult. We completed operational reorganizations in Ontario and Western Canada to create a more agile and responsive structure to empower and support our general managers and management teams to drive results. A similar reorganization in Quebec is now underway. We also provided in-person training to our management teams across the country in discipline-specific sessions this past fall in order to roll out new programs and enhance their knowledge and leadership skills. We also held a very successful leadership.
Speaker Change: I mean as a challenge.
Speaker Change: We completed operational reorganizations in Ontario, and Western Canada to create a more agile and responsive structure to empower and support our general manager and management teams to drive results.
Speaker Change: Reorganization in Quebec is now underway in Q1.
Speaker Change: We also provided in person training to our management teams across the country and discipline specific sessions. This past fall in order to roll out new programs and enhance our knowledge and leadership skills.
Speaker Change: Held a very successful leadership conference with all of our general managers from across the country in January to celebrate our 2024 results and set the stage for further success in 2025.
Karen Sullivan: all of our general managers from across the country in January to celebrate our 2024 results and set the stage for further success. The operations team has also been focused on continuing to integrate the properties that we recently purchased in Quebec and B.C., including most recently another retirement residence on Vancouver Island, and preparing for the upcoming acquisition of a large 660-suite home on the island.
Speaker Change: The operations team has also been focused on continuing to integrate the properties that we recently purchased and cut back in D C, including most recently another retirement residence on Vancouver Island, and preparing for the upcoming acquisition of a large 660 sweet home on the island and Montreal.
Karen Sullivan: Finally, I wanted to share another example of our ongoing efforts to develop individual property-specific strategies to better meet the needs in our local community. Chartwell Constantia started 2024 with an occupancy of 67,000. This home is located in North York in a predominantly Jewish community. By increasing our focus on programming, including authentic high holiday celebrations, menu selections and community outreach, networking and business development, the team has increased occupancy to 83%, including 12 move-ins in the last three months. The residence has now been rebranded Chartwell Thornhill, and there are several initiatives underway to continue this momentum in August.
Finally, I wanted to share. Another example of our ongoing efforts to develop individual property specific strategies to better meet the needs in our local communities.
Speaker Change: Chartwell Constantia started 2024 with an occupancy of 67%. This home is located in North York and are predominantly Jewish community by increasing our focus on programming, including authentic high holiday celebrations menu selections and community outreach networking and business development team has increased occupancy.
Speaker Change: C to 83%, including 12 move into the last three months of 2020 for the residents has now been rebranded Chartwell Thornhill and there are several initiatives underway to continue this momentum and occupancy from.
Jeffrey Brown: I will now turn it over to Jeff to take you through our. Great. Thank you, Karen.
Speaker Change: I will now turn it over to Jeff to take you through our financial results great. Thank you Karen.
Jeffrey Brown: As shown on slide 6, in 2024, net income was $22.4 million compared to net income of $128.3 million in 2020. 2023 included 178.7 million gain on sale from the completed stronger offering results and lower DNA. Positively Contributed to Net Income, who are partially offset by deferred tax expense and higher funding. FFO and continuing operations increased 61.7% and total FFO increased 48.3% in 2024 compared to 2023 from strong operating results in our core property portfolio. 2024 FFO growth also benefited from higher adjusted NOI from continuing operations of 76.2%. Lowered G&A Expenses of 11. One-time retroactive government funding related to LCC discontinued operations of $1.4 million.
Speaker Change: As shown on slide six in 2024 net income was $22 4 million compared to net income of $123 million. In 2023 2023 included the $178 7 million gain on sale from the completed LTC transactions stronger operating results and lower G&A.
Speaker Change: Positively contributed to net income.
Speaker Change: Hershey offset by deferred tax expense and higher finance costs.
Speaker Change: <unk> from continuing operations increased 61, 7% and total episodes of increased 48, 3% in 2024 compared to <unk> 23 from strong operating results in our core property portfolio.
Speaker Change: What are your 24 <unk> growth also benefited from higher adjusted NOI from continuing operations of $76 2 million.
Speaker Change: Lower G&A expenses of $11 million onetime retroactive government funding related to LTC discontinued operations of $1 4 million higher adjusted interest income of $1 4 million and lower depreciation of PP&E and amortization of intangible assets used for administrative purposes, a zero point.
Jeffrey Brown: Higher Adjusted Interest Income of 1.4 and Lower Depreciation of PP&E and Amortization of Intangible Assets Used for Administration. 0.4. partially offset by higher adjusted finance costs of $14.2 million and lower management fees of $0.9 billion. In 2024, our same property occupancy reached 590 basis points to 88 and our same property adjusted NOI increased $38.8 million or $18.9 million.
Partially offset by higher adjusted finance cost of $14 2 million and lower management fees 0.9 billion.
Speaker Change: In 2020 for our same property occupancy was 590 basis points to 88% in the same.
Speaker Change: Same property adjusted NOI increased 38, 8 million or 18, 9%.
Jeffrey Brown: For Q4 2024, that income was $3.5 million compared to a net loss of $13.2 million in Q4 2024. primarily due to higher resident revenue, lower negative changes in fair value of financial instruments. Impairment Losses in Q4 2023, Higher Net Income from Joint Ventures, Lower G&A Expenses, and Higher Current Income. partially offset by higher direct property operating expense, deferred tax expense in Q4 2024 as compared to a deferred tax benefit in Q4 2023, higher depreciation of PP&E and higher. Q4 2024 FFO and continuing operations was up 46.9%. and FFO from total operations increased 47.5% compared to Q4 2023.
Speaker Change: So Q4 2024 net income was $3 5 million compared to a net loss of $13 2 million in Q4 of 2023, primarily due to higher resident revenue.
Speaker Change: Lower negative changes in fair value of financial instruments impairment losses in Q4, 2023 higher net income from joint ventures, lower G&A expenses and higher current income tax benefit.
Speaker Change: Partially offset by higher property operating expense deferred tax expense in Q4 of 2024 as compared to a deferred tax benefit in Q4, 2023 hydro depreciation of PP&E and higher funding costs.
Speaker Change: Q4, 2024, <unk> from continuing operations was up 46, 9% and ethical from total operations increased 47, 5% compared to Q4 2023.
Jeffrey Brown: His operating results in our core property portfolio continue to show strong. In Q4 2024, our same property occupancy increased 510 basis points to 90.1%. and their same property adjusted NOI increased $8 million for $14.4 billion.
Speaker Change: Operating results in our core property portfolio continued to show strong growth.
Speaker Change: In Q4 2020 for our same property occupancy increased 510 basis points to 91%.
Speaker Change: Same property adjusted NOI increased $8 million or 14, 4%.
Jeffrey Brown: Slide 7 summarizes our same property operating results for each class. All of our platforms posted occupancy gains in Q4 2024 compared to Q4 2023, which positively impacted our results.
Speaker Change: Slide seven summarizes our same property operating results for each platform.
Speaker Change: All of our platforms posted occupancy gains in Q4, 2024, compared to Q4, 2023, which positively impacted our results.
Jeffrey Brown: Our Western Canada platform same property adjusted NOI increased 1.7 million or 9.3 Ontario platform same property adjusted at no I increased 4.3 million or 13.7 and our Quebec platform same property adjusted NOI increased 2 million or $31.5 Turning to slide 8, at February 27, 2025, liquidity amounted to approximately $283 million, which included $44 million of cash and cash equipment. and $239 million of foreign capacity. In 2025, our debt maturities include $343.8 million more. with a weighted average interest rate of 5.29. $150 million to 4.211% unsecured ventures and a $75 million As of February 27, 2025, we estimate the 10-year CMHC insured mortgage rate to be approximately 3.84%.
Speaker Change: Our Western Canada platform same property adjusted NOI increased $1 7 million or nine 3%, Ontario platform same property adjusted NOI increased $4 3 million or 13, 7%.
Speaker Change: And our Quebec platform same property NOI increased 2 million or 31, 5%.
Speaker Change: Turning to slide eight at February 27, 2025 liquidity amounted to approximately $283 million, which included $44 million of cash and cash equivalents and $239 million of flooring capacity on our credit facility.
Speaker Change: In 2025, our debt maturities include $343 8 million of mortgages with a weighted average interest rate of 529% a $150 million of four point to one 1% unsecured debentures into $75 million term loan.
Speaker Change: As of February 27, 2025, we estimate the 10 year CME to see insured mortgage rate to be approximately $3 eight 4% in the five year unsecured debenture rate to be approximately 431%.
Jeffrey Brown: in the five-year unsecured venture rate to be approximately 4.3%.
Jeffrey Brown: Moving to slide 9. With the continuing strong prospect traffic and leasing We expect Occupy to continue to grow. We now forecast to achieve 91.1% same property occupancy by March. We have been using targeted incentives in certain markets to support this rapid. has more residences achieve higher We expect to gradually reduce the use of these incentives. We are working hard to maintain the positive occupancy growth. striving to reach 95% and our same property portfolio by the end. We expect rent and services rates to increase by approximately 4% in 2025. and Same Property Operating Markets to grow to approximately As a result of various efficiency initiatives, we expect growth in our general and administrative expenses to be below average.
Speaker Change: Moving to slide nine with.
Speaker Change: With the continuing strong prospect traffic and leasing activity.
Speaker Change: <unk> occupancy to continue to grow in 2025.
Speaker Change: Now forecast to achieve 91, 1% same property occupancy by March of this year.
Speaker Change: We have been using targeted incentives in certain markets to support this rocket occupancy growth is more residences achieve higher occupancy rates, we expect to gradually reduce the use of these incentives.
Speaker Change: We are working hard to maintain the positive occupancy growth momentum striving to reach 95% occupancy and our same property portfolio by the end of this year.
Speaker Change: Rent and services rates to increase by approximately 4% in 2025 and same property operating margins to grow to approximately 40%.
Speaker Change: As a result of various efficiency initiatives, we expect growth in our general and administrative expenses to be below inflation.
Jonathan Boulakia: I will now turn the call to Jonathan to discuss our recent acquisitions and portfolio optimization. Thanks, Joe. Turning to slide 10, in Q4 we completed the acquisition of a 50% ownership interest in a portfolio of 5 retirement residences in Quebec, 4 of which are located in Quebec City area and 1 in Chewinigan, for an aggregate purchase price at our share of $213.5 million. The vendor provided us with a two-year NOI guarantee on two properties, with $4.7 million of the purchase price to be held in escrow to support the vendor's obligation. In Q3 2028, subject to a one year extension at the vendor's option, the vendor will have an option to sell and will have an option to purchase the remaining 50% ownership interest in this portfolio at the then fair market value.
Speaker Change: I will now turn the call to Jonathan to discuss our recent acquisitions and portfolio optimization activities.
Jonathan: Thanks, Jeff.
Jonathan: Turning to slide 10 in Q4, we completed the acquisition of a 50% ownership interest in a portfolio of five retirement residences in Quebec, four of which are located in Quebec City area and one in Shawinigan for an aggregate purchase price at our share of $213 $5 million the.
Jonathan: The vendor provided us with a two year NOI guarantee on two properties with $47 million of the purchase price to be held in escrow to support the vendors obligation.
Jonathan: In Q3, 2028 subjects through a one year extension of the vendors auction. The vendor will have an option to sell and will have an option to purchase the remaining 50% ownership interest in this portfolio at their then fair market values.
Jonathan Boulakia: In January of this year, we acquired an upscale 131 suite ISL retirement residence in Victoria, B.C. for a purchase price of $75 million. This acquisition is our fourth property on Vancouver Island, adding critical mass in the region. Also in January, we entered into a definitive agreement to acquire a 632 suite retirement residence located in Montreal, Quebec for $136 million, which is expected to close shortly. All of these newer high quality assets are located in strong markets and in great locations within those markets. We acquire these premium residences at attractive pricing, significantly below replacement costs. We expect higher market rate growth out of these assets than our same store portfolio over the medium term, which will generate strong investment returns.
Jonathan: In January of this year, we acquired an upscale 131 suite I S. L retirement residence in Victoria, BC for a purchase price of $75 million.
Jonathan: This acquisition is our fourth property on Vancouver Island, adding critical mass in the region.
Jonathan: Also in January we entered into a definitive agreement to acquire a 632 suite retirement residence located in Montreal, Quebec for $136 million, which is expected to close shortly.
Jonathan: All of these newer high quality assets are located in strong markets and in great locations within those markets. We acquire these premium residences at attractive pricing significantly below replacement costs, we expect higher market rate growth out of these assets than our same store portfolio over the medium term with.
Jonathan: We'll generate strong investment returns.
Jonathan Boulakia: 2024 was a record year of investments for Chartwell. We are seizing opportunities to refresh our portfolio with high quality assets at attractive pricing in our core markets. Q1 of 2025 has also been busy and we hope to continue this momentum throughout 2025 with more exciting strategic acquisitions being evaluated and at various stages of negotiation.
Jonathan: 2024 was a record year of investments for travel we are seizing opportunities to refresh our portfolio with high quality assets at attractive pricing in our core markets Q1 of 2025 has also been busy and we hope to continue this momentum through 2025 with more exciting strategic acquisitions.
Jonathan: Being evaluated and at various stages of negotiation.
Jonathan Boulakia: We also continue the path of portfolio optimization with several residences that we no longer consider core to our portfolio being repositioned, sold or planned for sale. This process will continue through 2025 and into 2020. This position of non-core properties will lower the average age of our portfolio, position our portfolio more strategically, and free up capital to pursue strategic growth opportunities.
Jonathan: We also continue the path of portfolio optimization with several residences that we no longer consider core to our portfolio being repositioned sold or planned for sale.
Jonathan: This process will continue through 2025 and into 2026.
Jonathan: Disposition of non core properties will lower the average age of our portfolio positioning our portfolio more strategically and free up capital to pursue strategic growth opportunities.
Vlad Volodarski: I'll turn the call back to Vlad to wrap.
Speaker Change: I'll turn the call back to black to wrap up.
Vlad Volodarski: Thank you, Jonathan. Moving to slide 11. Today, maybe more than ever, there's a lot of uncertainty in the world and particularly in our country's relationship with the United States. The threat of trade disputes and their potential to create an economic downturn is real. We cannot reliably assess or predict the potential impact of this situation on our country or on Chartwell at this time. Having said that, our business is predominantly needs-driven, and historically has been less susceptible to economic downturns. For example, during the financial crisis of 2008-2009, our same property portfolio remained stable in the 90% occupancy rate.
Black: Thank you Jonathan moving to slide 11 today, maybe more than ever there is a lot of uncertainty in the world and particularly in our countries of the relationship with the United States.
Black: Out of trade disputes and their potential to create an economic downturn Israel.
Black: We cannot reliably assess or predict the potential impact of this situation on our country. Our I'm cherwell at this time.
Black: Having said that our business is predominantly needs driven and historically has been less susceptible to economic downturns. For example, during the financial crisis of 2008 2009, our same property portfolio remain stable in the 90% occupancy range.
Vlad Volodarski: Whatever the future might bring, we will continue to focus on resident experience, striving to deliver exceptional personalized services and quality care, and leveraging our strong management platform to efficiently support our residents. We believe we are at the front end of what is going to be a multi-year period of growth in retirement living in Canada. Demand for our services should continue to grow for decades, driven by the senior population growth and lack of long-term care accommodation. Forecasts show that to maintain supply-demand balance, the sector would need to build 200,000 suites in the next 10 years, which is almost three times the number of suites built in the previous 10 years.
Black: Whatever the future might bring we will continue to focus on resident experience striving to deliver exceptional personalized services and quality care and leveraging our strong management platform to efficiently support our residents as teams.
Black: We believe we are at the front end of what is going to be a multi year period of growth in retirement living in Canada.
Black: Demand for our services should continue to grow for decades, driven by the senior population growth and lack of long term care accommodation.
Black: Forecasts show that to maintain supply demand balance the sector would need to build 200000 suites in the next 10 years, which is almost three times the number of suites built in the previous 10 years.
Vlad Volodarski: with a persistently high cost of construction. The new development activity has been slow, which combined with the obsolescence of some of the existing inventory, will continue to exacerbate supply shortages. These dynamics will support occupancy growth, higher market rates, and profitability of the existing operations. It's one of the largest participants in the senior living sector, Chartwell stands to benefit from that.
Black: With the persistently high cost of construction.
Black: Development activity has been slow, which combined with the obsolescence of some of the existing inventory will continue to exacerbate supply shortage.
Black: These dynamics will support occupancy growth higher market rates and profitability of the existing operators and it's one of the largest participants in the senior living sector, Charles fast food benefit for them.
Vlad Volodarski: Turning to slide 12. To build on our recent successes and reap the benefits of the positive operating environment, we will continue our focus on operational excellence. investing in employee engagement and resident satisfaction strategies, and continue our work on building an agile and scalable operating platform to generate operating efficiency. We believe that the positive operating environment in our sector presents a unique opportunity to future-proof our portfolio, growing it with the newer, more efficient assets and strong markets, and realizing better value on dispositions of non-core properties, which generally are smaller, less efficient, and often located in secondary and tertiary markets.
Black: Turning to slide 12 to.
Black: To build on our recent successes and reap the benefits of the positive operating environment. We will continue our focus on operational excellence investing in employee engagement and resident satisfaction strategies and continue our work on building, an agile and scalable operating platform to generate operating efficiencies.
Black: We believe that the positive operating environment in our sector presents a unique opportunity to future proof our portfolio growing it with the newer and more efficient assets in strong markets and realizing better value on dispositions of non core properties, which generally are smaller less efficient and often located in secondary and tertiary market.
Black: Yes.
Vlad Volodarski: We will continue to be prudent in our capital management decisions, we will strive to diversify our capital sources, including through new joint ventures, to support access to growth capital in all phases of economic and real estate cycles. will maintain a strong liquidity position and conservative debt leverage profile. And over time, we intend to grow distributions to our unit holders on a consistent basis. We are optimistic about the future and united in our drive to continue delivering strong results for all of our key stakeholders.
Black: We will continue to be prudent capital management decisions, we'll strive to diversify our capital sources, including three new joint ventures to support access to growth capital in all phases of economic and real estate cycles.
Black: We'll maintain a strong liquidity position and conservative debt leverage profile.
Over time, we intend to grow distributions to our unit holders on a continued consistent basis.
Black: We are optimistic about the future and United and the drive to continue delivering strong results for all of our key stakeholders.
Vlad Volodarski: I will now close our prepared remarks with a short story from one of our residences that's pictured on slide 13. This is Carmen's story from one of our recently acquired properties, Chartwell Victoria Harbor in Victoria. Carmen moved to Chartwell Victoria Harbor with her husband. Like for many couples, it was a tough decision to leave their long-term home. She was increasingly worried about her stamina and physical strength, because a few weeks before moving, Carmen suffered a fall, resulting in multiple injuries, including a fractured pelvis. frustrated by how her posture has declined. Now after the fall, she was hunched over with a walker.
Black: I will now close our prepared remarks, so the short story from one of our residences are pictured on slide 13.
Speaker Change: Oh this was carbon story from one of our more recently acquired properties Starwood, Victoria Harbour in Victoria, Carmen most of childhood, Victoria Harbour with her husband.
Speaker Change: Like for many couples so it was a tough decision to leave their long term hold.
Speaker Change: She was increasingly worried about her standalone physical strength, because a few weeks before moving Harlan suffered a fall, resulting in multiple injuries, including phosphorus pelvis.
Speaker Change: Frustrated by hyper poster has declined now after the fall she was harsh silver over with a Walker.
Vlad Volodarski: She had always been an energetic, avid walker living a full and busy life.
Speaker Change: She had always been an energetic avid walker living at full and visualize it.
Vlad Volodarski: Upon arriving to the residence, Carmen was determined to regain her strength. She set a goal with our wellness manager to walk without a walker. Partnering with a specialist to develop a personalized training plan, she started slowly but stayed committed. continue to train weekly with both our kinesiologists and personal training, participating in group activities alongside personal training. She surpassed her original goal. Not only did she ditch the walker, increased her weights, and she set a stretch goal for herself to complete 20 consecutive push-ups, which she has achieved. 88 years young, proving that the fitness goals can evolve at any age, Carmen is beyond proud of her accomplishments.
Speaker Change: Upon arriving to the residents Carmen it was determined to regain her strength. She set a goal with our wellness manager to work without the Walker partnering with a specialist to develop personalised strides training plans.
Speaker Change: She started slowly but stayed committed.
Speaker Change: Continue to train the weekly with both our kinesiology and personal training participating in group activities alongside personal training.
Speaker Change: She surpassed our original goal not only traditional Walker increased her ways and she says a stretch goal for herself to complete 20 consecutive pushups when she has achieved.
Speaker Change: 88 years young proving that the fitness goals can evolve at any age harmon's beyond proud of her accomplishments. She is a strong advocate for strength training and functional sickness and true ambassador for the wellness program at the residents.
Vlad Volodarski: strong advocate for strength training and functional fitness and true ambassador for the wellness program at the Residence.
Vlad Volodarski: Thank you for your attention this morning.
Speaker Change: Thank you for your attention. This morning, we'd now be pleased to answer your question.
Unknown Executive: We would now be pleased to answer your questions. Thank you.
Speaker Change: Thank you we will now take questions from the telephone lines.
Unknown Executive: We will now take questions from the telephone line. If you have a question, please press star 1. You may cancel your question at any time by pressing star 2. Please press star 1 at this time. If you have a question, there will be a brief pause while the participants register for questions. Thank you for your patience.
Speaker Change: You have a question please press star one.
Speaker Change: You may cancel your question at any time by pressing star queue. Please press star one at this time if you have a question it will be a brief pause about the participants register for questions. Thank you for your patience.
Tom Callahan: The first question is from Tom Callahan with BMO Capital Markets. Please go ahead. Thanks, morning, guys.
A Moderator/Host: My first question is from Tom Callaghan with BMO capital markets. Please go ahead.
Tom Callaghan: Thanks, Good morning, guys.
Tom Callahan: Maybe just first one is just in terms of paired remarks there and in, you know, acquisitions and in various stages of negotiation, can you just give some some color in terms of, you know, the types of properties you're looking at today? Or do they skew towards maybe more lease up or stabilized? And then are there certain markets versus others that are that are of interest today? Sure, yeah, I'll take that. So we are looking at a number of exciting one-off acquisitions, which are attractive to us and would fit nicely in our portfolio. They're generally of newer properties, which is important to us to ensure our portfolio remains efficient and resilient to future competition and think pretty much all the opportunities we've looked at, or are looking at are generally below replacement costs.
Tom Callaghan: Maybe just first one is just in terms of paired remarks, there and you know acquisitions in various stages of negotiation can you just give some some color in terms of the types of properties. You are looking at today or do they skew towards maybe more lease up or stabilized and then are there certain markets versus others.
Tom Callaghan: There are interesting.
Tom Callaghan: Sure Yeah, I'll take that so we are looking at a number of exciting one off acquisitions, which are attractive to us and would fit nicely in our portfolio.
Tom Callaghan: They're generally a newer properties, which is important to us to I'm sure our portfolio remains efficient and resilient to future competition and.
Tom Callaghan: And pretty much all the opportunities we've looked at or are looking at are generally below replacement cost. So they represent a great way to access new redevelopment redeveloped assets at good pricing.
Jonathan Boulakia: So they represent a great way to access newly development, newly developed assets at good pricing. Some of them are fully leased up. Some of them are in lease up stage, but mostly we're looking for. Stabilized Assets to be acquiring.
Tom Callaghan: Some of them are fully restocked some of them are in research stage.
Speaker Change: Hum, but most people were looking for.
Tom Callaghan: Stabilized assets to be acquired.
Jonathan Boulakia: And where are we looking to grow? We're generally looking in the markets that we are in. We are focused on the West, Ontario, and in Quebec we have an important pipeline of newer assets that we are acquiring. Continuous and Steady. Okay, thanks.
Tom Callaghan: And where are we looking to grow.
Tom Callaghan: Generally looking in the markets that we are in we are focused on the west, Ontario, and Quebec, we have an important pipeline of assets that we are acquiring it.
Tom Callaghan: Kind of a continuous and steady pace.
Speaker Change: Okay. Thanks.
Jonathan Boulakia: Maybe just second one. You've obviously done some acquisitions with properties undergoing lease up. Just curious, okay, I know there are some moving pieces here, but can you just provide some color in terms of how we should think about the cadence and quantum of recognition of the income guarantees that a few of those properties came with over the course of 2025? I mean, some of the properties that came during 2025, particularly the ones on Vancouver Island, are not at a very low occupancy level, so we will be utilizing more of NOI guarantees now than the early years or months of our operation.
Speaker Change: Maybe just a second one you've obviously done some acquisitions with properties undergoing lease up.
Speaker Change: Just curious okay. I know there are some moving pieces here, but can you just provide some color in terms of how we should think about the cadence in quantum a recognition of the income guarantees, but that's a few of those properties came with over the course of 2025.
Speaker Change: I mean, the some of the properties that came due in 2020 five, particularly the one son.
Speaker Change: Vancouver Island.
Speaker Change: Not at the very low occupancy level. So we will be utilizing more of NOI guarantees and housing do you already years or months of our operation.
Jonathan Boulakia: In other cases, the properties that came from Batimo, they're almost at stabilized occupancy level, so those NOI guarantees are shorter in duration. realized over a shorter period of time based on the agreements and the status of the lease of these properties.
Speaker Change: In other cases, they are the properties that came from basketball there almost a stabilized occupancy level. So those NOI guarantees are shorter in duration than it will be realized.
Speaker Change: Over shorter period of time based on the agreements and the status of the lease up of these properties.
Unknown Executive: Okay.
Speaker Change: Okay. Thanks, guys.
Unknown Executive: Thanks, guys.
Speaker Change: Thank you. The next question is from Himanshu Gupta with Scotiabank. Please go ahead.
Unknown Executive: Thank you.
Himanshu Gupta: The next question is from Himanshu Gupta with Scotia Bank. Please go ahead. Thank you and good morning. So just looking at your, you know, 2025 outlook. So, you know, 4% rent growth, let's say 3% occupancy gains, 300 basis point margin expansion. So what kind of same property NOI growth will this translate? Himanshu, you know, we don't give these specific guys, but I think you can kind of back into the numbers just from the amounts that we quoted. It should continue to be pretty healthy given the 4% rental rate growth. Our expenses, we expect to grow between 4% and 5% on the labor side, and that's the majority of the expenses.
Himanshu Gupta: Thank you and good morning.
Speaker Change: So just looking at D R.
Himanshu Gupta: <unk> 25.
Himanshu Gupta: So you know for persons and cooled Scott that's it.
Himanshu Gupta: Occupancy gains 300 basis point margin expansion.
Himanshu Gupta: So what kind of same property NOI growth.
Himanshu Gupta: Me too.
Speaker Change: I'm sure you know we don't give these specific guys, but I think you can kind of back into the numbers just from that.
Speaker Change: That the amounts that we called it out and it should be continue to be pretty healthy given the.
Speaker Change: 4% rental rate growth our expenses, we expect to grow between four and 5% on the labor side and that's the majority of the expenses and then we do expect to get to 95% occupancy by the end of the year I mean, some of the questions will be determined by how quickly we get there whether we get there.
Himanshu Gupta: And then we do expect to get to 95% occupancy by the end of the year. I mean, some of your questions will be determined by how quickly we get there, whether we get there on December 31st or earlier will determine how big expansion of the margin and NLI growth Okay, fair enough. So maybe, I mean, the ingredients kind of get you to like low teens, or call it double digits, I'm sure, in probably a lot of words. Are you ready to say that? Yeah. Okay. Fantastic. And then, you know, same property. Thanks for laying out the math clearly out there.
Speaker Change: Remember 31st the earlier well determine how big expansion of the margin in NOI growth is going to be.
Speaker Change: Okay fair enough, so maybe oven the ingredients kind of get to.
Speaker Change: Like low teens or call it double that just seems too simple.
Speaker Change: Okay fair to say that.
Speaker Change: Yes.
Speaker Change: Okay. That's it.
Speaker Change: And then same property, thanks for laying down so bad and although.
Himanshu Gupta: On the growth portfolio, and I know I think the QVAC got added there as well, do you have a sense of like how margins will move or occupancy should move here? Good morning, Himanshu. Those properties that are in the growth portfolio are at different stages of lease up, some are stabilized. So it's quite a varied level of growth and margin expansion across that portfolio. So we couldn't give you one number that really represents the group of 31 properties that are in that portfolio. And plus, many of them do not have year-over-year comparisons, so it's kind of...
Speaker Change: On the growth portfolio and I know I think the you had called out is doing as well.
Speaker Change: Do you have a sense of like how margins would move or I'll keep on Ctrip mobile.
Matthew: Good morning, Matthew.
Matthew: Those properties that are in the growth portfolio are at different stages of lease up some are stabilized.
Matthew: Some are still in lease up so it's quite a varied level.
Matthew: Level of growth and margin expansion across that portfolio. So we could give you one number that really represents that.
Matthew: 31 properties that are in the portfolio bucket now and plus many of them do not have year over year comparisons. So it's kind of.
Himanshu Gupta: We didn't own them for the full year of last year. That's why they're in this growth portfolio. So the comparison year over year is not. Fair enough. And that's a good point.
Matthew: We didn't own them for the full year of last year, that's why they're in this growth portfolio. So the comparison year over year is not very meaningful.
Speaker Change: Oh, that's a good point.
Himanshu Gupta: And then maybe, you know, just the Quebec City portfolio, I think that's added to the growth now. I think that got done in November.
Speaker Change: And then maybe just the Quebec City portfolio I think that's I think there's a good small I think that got done in November. So what was that increase NOI margin on the Quebec city portfolio, because if I look at the growth portfolio underlying margin is that the reason why a sequence.
Himanshu Gupta: So what was the in place NOI margin on this Quebec City portfolio? Because, you know, if I look at the growth portfolio, NOI margin, is that the reason why, you know, sequentially we saw like a downkick apart from the seasonality element? Potentially. I mean, it's a detailed question.
Moving sort of like a down tick a box of little sheep that'd be telemundo.
Speaker Change: Potentially they if they were I mean, it's detailed question if we can get back to you.
Himanshu Gupta: We can get back to you on that separately. There are some assets that are in lease up in that portfolio, and so it is running at a little lower margin. So probably it's kind of mid to high 30s would be a margin for that portfolio.
Speaker Change: Separately there are some assets that are in lease up in that portfolio and so it is running at a little lower margin. So probably it's kind of mid to high thirty's would be our margins for that property for that portfolio.
Himanshu Gupta: Okay. Fair enough. Okay.
Speaker Change: Okay. Okay fair enough, okay. Thank you and I'll come back.
Speaker Change: Thank you. The next question is from Lorne Kalmar with Chardan capital markets. Please go ahead.
Himanshu Gupta: Thank you and good morning. Going or taking a look at the rent growth assumption for 2025, 4% I think is fairly consistent with what you guys know to put up and probably for the last decade or so. When do you expect to see market rent growth start to accelerate? We expect as more and more properties achieving, so the reason that the 4% is consistent with what we delivered in the past is that we have been offering, as Karen pointed out, some targeted incentives, probably at the broader scale than historically, over the last couple of years to drive occupancy.
Lorne Kalmar: Thank you and good morning.
Lorne Kalmar: Going or taken a look at the rent growth assumption for 2025.
Lorne Kalmar: 4% I think it was fairly consistent.
Lorne Kalmar: What you guys are able to put up.
Lorne Kalmar: Probably for like a decade or so when can you expect to see market rent growth start to accelerate.
Lorne Kalmar:
Lorne Kalmar: We expect as more and more properties achieving so the reason that the 4% is a.
Speaker Change: Consistent with what we delivered in the past is that we I'm happy to offering as Karen pointed out some targeted incentives are probably the broader scale that historically over the last couple of years to drive occupancy and lease.
Himanshu Gupta: And these incentives are still now in the system that kind of push down year-over-year comparisons, particularly given the occupancy growth that we had last year. So some of the move-ins came with discounts that continue to be in place. So the growth is not as robust as you would expect. As we get closer to that 95% portfolio-wide occupancy, that means that more and more of the properties are at fully stabilized occupancy level. My expectation is that these discounts and incentives are gonna be pulled back, and we will continue to generate higher market ratings. in our portfolio in 2026.
Speaker Change: Incentives are still now in the system that kind of pushed down year over year comparisons, particularly given the occupancy growth that we had last year. So some of the move ins came with discounts that continue to be in place and so the growth is not as robust as you would expect as we get closer to that 95% portfolio wide occupancy that means that more and more of that.
Speaker Change: These are at fully stabilized occupancy level and my expectation is that these discounts and incentives they're gonna be pulled back and we will continue to generate higher market rate increases.
Speaker Change: In our portfolio in 2026 as I mentioned, many times before the increases that we're passing to our existing residents my expectation will be that they will not be as high as what we can generate on the market right.
Himanshu Gupta: As I mentioned many times before, the increases that we're passing to our existing residents, my expectation will be that they will not be as high as what we can generate on the market. Okay, yeah.
Speaker Change: Okay Yeah.
Himanshu Gupta: And then maybe just switching to the development side, I think last quarter, you talked about how, you know, it might be sooner than people think, just because of how developers look, you know, several years out when they're doing the performance. Are there any markets that you're in that you think are maybe more susceptible to new development once the new cycle kicks off? Um, I think it's some some of it is a function of how many people will prepare to go ahead with their developments before these dynamics played out of rising construction costs and the pandemic impact because if somebody starting from the scratch with an empty piece of land, it's going to take some time, particularly in the urban markets to get through the entitlement process and approvals.
Speaker Change: And then maybe just switching to the development side I think last quarter you talked about.
Speaker Change: How will you know it might be sooner than people think just because of how developers look several years out when they're doing the pro formats.
Speaker Change: Are there any markets that you're in that you think are maybe more susceptible to new development once a new cycle kicks off.
Speaker Change: I think it's some some of it is a function of how many people were prepared to go ahead with their developments before these dynamics played out of rising construction costs or independent make impact because.
Speaker Change: If somebody starting from scratch with a an empty piece of land, it's going to take some time, particularly in the urban markets to get through entitlement process and approvals and if people were ready to go before that then potentially they could start development faster.
Himanshu Gupta: And if people were ready to go before that, then potentially they could start development faster. I think just purely because of the dynamics in the Quebec market and cost being lower there, we might see more developments starting in Quebec. We ourselves are looking at potentially doing some expansions in Quebec this year.
Speaker Change: I think just purely because of the dynamics in the Quebec market and costs being lower are there we might see more developments starting in Quebec, we ourselves are looking at potentially doing some expenses into the back this year.
Himanshu Gupta: Other than that, I can't really tell you which markets will be more susceptible to new developments. Well, fair enough. That was very helpful.
Speaker Change: Other than that I can't really tell you, which markets will be more susceptible to enter Dallas and others.
Speaker Change: Fair enough that was very helpful. Thank you very much.
Unknown Executive: Thank you very much. Thank you.
Speaker Change: Thank you. The next question is from Jonathan Culture with Cowen. Please go ahead.
Jonathan Kelcher: The next question is from Jonathan Kelcher with TD Cowen, please go ahead. Thanks. Good morning. Just circling back to the the 4% rate growth you're targeting for 2025. Is there is there much of a difference for what you're asking on on new leasing versus what you're getting on on renewals? It is very property specific. And so it's not really we can't give you a generic answer to that some of the properties will continue to use targeted incentives. So they may be discounting the market rates a bit. Other properties will be driving a lot higher market rates than they're increasing the rents for the existing residents because their occupancy is high.
Jonathan Culture: Thanks, Good morning, just circling back to the 4%.
Jonathan Culture: Rate growth you're targeting for 2025 is there is there much of a difference for.
Jonathan Culture: Or what you're asking on new leasing versus what youre getting on on renewals.
Jonathan Culture: It is very property specific and so it's not really we cant give you a generic answer to that some of the properties will continue to use targeted incentives. So they may be discounting the market rates are bad other properties will be driving a lot higher market rates.
Jonathan Culture: Then there increasing day rates for the existing residents because their occupancy as high and as I mentioned before we try not to increase right.
Jonathan Kelcher: And as I mentioned before, we did try not rents to the existing residents by more than what our costs are going by. So it really depends on the individual property circumstances. Okay, well, I guess another way of asking that is like on the ones on your properties that are full, maybe have waiting lists. How much of a gap would you do between new leasing versus renewal? Okay, I mean, in some properties, the new leasing could be high single digits, low double digits, market rat increases with the rent increases to the existing residents would be four to 5% range, maybe five and a half.
Jonathan Culture: Residents by more than what our costs are going to buy so it's really depends on the individual property circumstances.
Speaker Change: Okay, well I guess another way of asking that is like on the ones on your property et cetera, all the baby have waiting lists.
Speaker Change: How much of a gap what would you do between new leasing versus renewals.
Speaker Change: Okay, I mean in some properties they are.
Speaker Change: New leasing could be high single digits low double digits market, rather increases with the rent increases to the existing residents would be 4% to 5% range, maybe five and a half.
Jonathan Kelcher: Okay, and then just switching gears on the acquisition front, you've got in and around $300 million from Batimo that is set to come on. How should we think about the cadence of that this year? And if I'm thinking purchase, should we be thinking somewhere in the low six cap rate for those assets as a whole? Yeah, you should be thinking low six cap rates for those assets. We expect to take on a couple. in the near term, and then I'm not sure we'll see any more. Okay, so sort of two of the three. Yeah. Okay, thanks.
Speaker Change: Okay.
Speaker Change: And then just switching gears on the acquisition front.
Speaker Change: Got it.
Speaker Change: In and around 300 million from from bottom all of that.
Speaker Change: Is set to come on how should we think about the cadence of that this year and if I'm thinking.
Speaker Change: Purchase where should we be thinking somewhere in the low six cap rate for those who knows I suppose a hole.
Speaker Change: Yeah, you should be thinking low six cap rates for those assets and.
Speaker Change:
Speaker Change: We expect to take on a couple of assets.
Speaker Change: Near term.
Speaker Change: And then.
Speaker Change: I'm not sure we'll see anymore in 2025.
Speaker Change: Okay, so sort of two of the three.
Speaker Change: Yeah.
Speaker Change: Okay. Thanks, I'll turn it back.
Unknown Executive: I'll turn it back.
Speaker Change: Thank you. The next question is from Christian Greener with Costar News. Please go ahead.
Unknown Executive: Thank you.
Christian Gravenor: The next question is from Christian Gravenor with Coast Star News. Please go ahead. Uh, yeah, thanks for taking the call. I see that you guys have 32 acres of undeveloped land across Canada. You've got quite a bit in Gatineau. I see you have valuable land in Calgary and Surrey.
Christian Greener: Oh, yes, thanks for taking the call I see that you guys have 32 acres of undeveloped land across Canada, you've got quite a bit and got no I see you have valuable land in Calgary and sorry, I know you sort of addressed this cryo, but could you give me sort of a timeline to possible builds there are some more.
Christian Gravenor: I know you sort of addressed this prior, but could you give me sort of a timeline to possible builds there, one or some more advanced than others, and is it possible you might just sell off some of these properties or what the plans are? The answer is, again, it depends on individual locations. As I mentioned, there is a possibility that we're going to do a couple of expansions or start a couple of expansions in Quebec on the lands that we already own. And the other one's really a function of economics of development. So at this point in time, it's really hard to predict the timeline of when these projects can commence.
Speaker Change: That's in others and is it possible you might just sell off some of these properties or what the plans are.
Christian Greener:
Christian Greener: The answer is again it depends on individual locations as I mentioned, there is a possibility that we're going to do a couple of expansions or start a couple of expansions and pulled back on the land that we already own.
Christian Greener: Hum.
Christian Greener: And the other ones are really a function of our economics of development. So at this point of time, it's really hard to predict the timeline of when.
Christian Greener: When these projects I cant commands I can tell you that we're actively our development team is working very hard to.
Christian Gravenor: I can tell you that we're actively, our development team is working very hard. Get through the entitlement process on some of the lands and being ready to begin construction when the economics are better. And in some cases, yes, we might consider selling the exit density. either have too much to build retirement community on it, or if we don't think that we will be developing that particular piece of land. 5 to 10 years. Fantastic, thank you. Thank you.
Christian Greener: Get through the entitlement process on some of the lens and are being ready to begin construction when the economics are better and in some cases, yes, we might consider selling the asset density if we either have too much to build retirement community on it or if we don't think that we.
Christian Greener: We'll be developing that particular piece of land in the next.
Christian Greener: Five to 10 years.
Speaker Change: Fantastic. Thank you.
Christian Greener: Yeah.
Speaker Change: Thank you. The next question is from Giuliano Thornhill with National Bank Financial. Please go ahead.
Unknown Executive: Hey guys, good morning. I just had a question on your full year NOI margins. So we came in at 37% or so and around a year ago, you got it for 38% on that. I'm just wondering, is that delta mostly from your incentive use or lower with the agency costs coming in lower, like the burn off being slower than you thought?
Giuliano Thornhill: Hey, guys good morning.
Giuliano Thornhill: Just had a question on your full year NOI margins. They came in at 37% or so in around a year ago, you guided for 38% on that.
Giuliano Thornhill: I'm just wondering is that delta mostly from your incentive you saw our lowest month the agency costs coming in lower like the burnt being slower than you thought.
Unknown Executive: Good morning. The incentive program does have some impact on the margin. And there's some seasonality so that with utilities and certain other expenses that has caused Q4 to come in a bit lighter than Q3. But we still did have really significant growth of two and a half percentage. over last year and is live shared expecting to get up to approximately for 2025. Continued Growth in Occupancy and Rate-Driving Network. Okay, so a bit of both.
Speaker Change: Sure good morning.
Speaker Change: The incentive program does have some impact on the margin.
Speaker Change: And there is some seasonality so it is with utilities and certain other expenses. It does cause Q4 to come in a bit lighter than Q3.
Speaker Change: But we still did very well.
Speaker Change: Significant growth.
Speaker Change: Two five percentage points over last year, and there's less churn.
Speaker Change: Are you starting to get up to approximately 40%.
Speaker Change: For 2025, as we see continued growth in occupancy and rate and driving that margin expansion.
Speaker Change: Okay. So it's been both.
Unknown Executive: Is there, I guess, to the development side, relative to a year or two years ago, how have hard costs kind of trended? And then will the kind of the delivery of all the product in the GTA within apartments, is that going to affect the hard cost situation at all? Yeah, hard costs seem to be leveling out generally. But again, there's a lot of uncertainty that Vlad talked about earlier this morning with tariffs. and other measures that might be taken. And so we don't know yet what impact that will have, if any, on hard costs and materials.
Speaker Change: I guess to the development side relative to a year or two years ago, how hard cost kind of tried to.
Speaker Change: And then what are the kind of the.
Speaker Change: The delivery of all the.
Speaker Change: <unk> product in the GTA within apartments is that going to affect the.
Speaker Change: Hard cost situation at all.
Yeah hard cost seem to be leveling oops generally, but again, there's a lot of uncertainty with what I talked about earlier this morning with tariffs.
Speaker Change: And other measures that might be taken and so.
Speaker Change: We don't know yet what impact that will have if any on.
Speaker Change: On hard cost and materials.
Unknown Executive: So there's there's a little bit of uncertainty on on where they're heading The last year or so, we've seen some. And then I guess on the second part of the question, is there a lot of overlap between the contractors and seniors housing and like the in the apartment or condo builders? Yeah, for sure. On the trade side. Yeah. So the drywall. Plumbers, they, you know, they work on both.
Speaker Change: So there's there's a little bit of uncertainty on where they're headed but last year or so we've seen some leveling off of the particles.
Speaker Change: Alright, and then I guess the second part of the question is is there a lot of overlap between the contractors in seniors housing and like the and the apartment condo builders Yeah. That's for sure on the trade side, yeah, So dry winters.
Speaker Change: Or is there a big work on all kinds of proteins.
Unknown Executive: And then just lastly, on the dispositions, I know you guys kind of quoted at the beginning, is this going to be a significant source of proceeds over the balance of the year, or is it just going to be more similar to last year as well? Yeah, I'm not sure. going to be significant. We continue to evaluate the portfolio and we're continuing to sell and reposition assets at the right time. It's a process. probably a multi-year process.
Speaker Change: And then just lastly on the dispositions I know you guys kind of quoted at the beginning is this going to be a significant source of proceeds over the balance of the year or is it just going to be more similar to last.
Speaker Change: Last year as well.
Speaker Change: Yeah, I'm not sure.
Speaker Change: Going to be significant we continue to evaluate the portfolio and we're continuing to sell and reposition assets at the right time.
Speaker Change:
Speaker Change: But it's you know, it's it's a process and it's probably a multi year process and Oh I don't think we should expect you know significant proceeds coming in you know in the near term.
Unknown Executive: Okay, thanks. Thank you once again please press star 1 at this time if you have a question.
Speaker Change: Okay. Thanks.
Speaker Change: Yeah.
A Moderator/Host: Thank you once again, please press star one at this time if you have a question. The next question is from Tommy <unk> with RBC capital markets. Please go ahead.
Pammi Bir: The next question is from Pammi Bir with RBC Capital Markets, please go ahead. Thanks. Good morning.
Tommy <unk>: Thanks, Good morning.
Pammi Bir: You've made some great progress on the G&A cost efficiency side, but, and I know you mentioned inflationary type grills, but, you know, do you think there's further efficiencies that you might be able to achieve going forward? Or have you kind of hit a steady state level? Good morning, Pammi. I think we have hit a steady state level and things. this is the right run rate for the business and the efficiencies are more gonna come in being able to add in more properties to the portfolio without growing G&A. that it's in work.
Tommy <unk>: Great promise on the G&A cost efficiency side, but and I know you mentioned inflationary type growth but.
Speaker Change: Do you think theres better efficiencies that you might be able to achieve going forward or have you kind of hit a steady state level.
Tommy <unk>: Pardon me.
Tommy <unk>: We have hit a steady state level in thing.
Tommy <unk>: This is the right run rate for the business and the efficiencies are more going to come in being able to add in more properties to the portfolio without growing.
Tommy <unk>: G&A.
Tommy <unk>: At a similar pace.
Pammi Bir: Okay, um, maybe just switching to leverage, you know, we've got see that's come down nicely, I guess over the past year, for sure. From where you sit today, that where you'd like to operate, or are you willing to push it a little bit higher from current level? Our plan is to continue to de-lever the business. We believe we are targeted to get to seven and a half times and we think that comes from continuing to grow EBITDA. support that lower level.
Tommy <unk>: Okay.
Tommy <unk>: Maybe just.
Tommy <unk>: Switching to leverage you know, we got see that's come down nicely I guess over the past.
Tommy <unk>: No for sure.
Tommy <unk>: From where you sit today is that where you'd like to operate or are you willing to push it but he had allergies.
Tommy <unk>: From current levels.
Tommy <unk>: Our plan is to continue to Delever the business.
Tommy <unk>: We believe we.
Tommy <unk>: We are targeting to get to seven five times and we think that comes from continuing to grow EBITDA.
Tommy <unk>: To support that lower leverage level.
Pammi Bir: Okay, last one for me, Vlad, I think you mentioned UJV that's something that either was in the works or discussions that maybe you're looking to pursue. Can you maybe just expand on that? Is there anything in any sort of more advanced stages at this point? There's nothing in the more advanced stages at this point. The intent is to continue looking for diverse sources of capital so that we can have access to growth capital in all cycles, whether real estate or economy. And we are in discussions with a number of different people on a number of different opportunities, but they're not advanced enough to be more specific than Okay, so these are more passive as opposed to, you know, partnering up with existing owners, operators.
Tommy <unk>: Okay.
Tommy <unk>: Last one for me, but I think you mentioned, new JV, that's something that Oh.
Tommy <unk>: I think it was in the works or discussions that maybe you're looking to pursue can you maybe just expand on that is there anything any sort of more advanced stages at this point.
Tommy <unk>: There's nothing in the more advanced stages at this point the intent is to continue looking for a diverse sources of capital. So that we can have access to that growth capital in all cycles.
Tommy <unk>: The real estate or R.
Tommy <unk>: Our economy and we are in discussions with a number of different people on a number of different opportunities, but they are not advanced enough to be more specific than just that.
Tommy <unk>: Okay. So these would be more possibly that as opposed to you know.
Tommy <unk>: Partnering up with existing owners operators.
Pammi Bir: Yeah, our discussions are revolving around both growth with the kind of core type of properties that are stabilized so that we can partner with other people to acquire those portfolios or properties. And also on the development side, as we just discussed, we have quite a number of opportunities. on our own lands and intensifying some of the sites where we already have retirement residences and we are looking to execute on this development program over time without putting undue stress on our own balance sheet and that's why we're looking for partners. Got it. Makes sense. I'll turn it back.
Tommy <unk>: Yes.
Tommy <unk>: Yeah Yeah.
Tommy <unk>: Yeah, our discussions are evolving around both growth with the kind of core type of properties that are stabilized. So that we can partner with other people to acquire those portfolios of properties and also on the development side as we just discussed we have quite a number of opportunities on that.
Tommy <unk>: Our old lens.
Tommy <unk>: And intensifying some of the sites, where we already have a retirement residences and we are looking to execute on this development program over time without putting undue stress on our own balance sheet and that's why we're looking for partners.
Tommy <unk>: Got it makes sense.
Unknown Executive: Thank you.
Tommy <unk>: I'll turn it back thank you.
A Moderator/Host: Thank you. The next question is from Himanshu Gupta with Scotiabank. Please go ahead.
Himanshu Gupta: The next question is from Himanshu Gupta with Scotiabank. Please go ahead. Thank you. Sorry, just a couple of follow-ups here. So on financing of the announced acquisitions, the Victoria Harbor property, was it done purely on the credit facility? Yeah, that was fine. Okay. And then on the Rosemont Montreal, do you expect CMSE debt coming in for that acquisition? That is one. that we haven't finalized that is that will be eligible for CMH. But we haven't finalized whether we will pursue that or look at others. including the debenture market which continues to get more attractive relative to seem Okay, yeah, that's a good point there.
Himanshu Gupta: Thank you so just a couple of follow ups here.
Himanshu Gupta: So on financing of the announced acquisitions.
Himanshu Gupta: The Victoria Harbour property was that was that done purely on the credit facility.
Himanshu Gupta: Yeah, Yeah that was financed with the credit facility.
Himanshu Gupta: And then on the Rosemont Montreal.
Speaker Change: But do you expect like T M S. He deck coming in for that acquisition.
Speaker Change: So that is one of them.
Speaker Change: We haven't finalized that is there will be eligible for some H C.
Speaker Change: Who havent finalized whether you'll pursue that or look at other sources, including the debenture market, which continues to get more attractive relative to see them H C.
Okay.
Speaker Change: Good point, there and then finally, the Edgewater since Q2 closing I mean, any sense of timing would be sure the human body.
Himanshu Gupta: And then finally, the Edgewater, still Q2 closing? I mean, any sense of timing, what we should assume in our model? I think you should continue to assume duty. Q2 is fair enough. And Jonathan, anything on the Barrie platform? That seems to be just pushing out quarter by quarter. Finally, any update there? Yeah, we we got occupancy at Valleycliff and now we are preparing the building for the residents to condition over from the older building. And do you plan to keep it or like dispose it as you were previously expecting? Yeah, well, you know, we, as you know, we exited, largely exited the Ontario long term care business.
Speaker Change: I think you should continue to assume in Q2.
Speaker Change: Q2 was set up and Johnson and I didn't want somebody to have something that seems to be just pushing out quite a bad quarter.
Speaker Change: Finally, any any update there.
Speaker Change: Yeah, we got occupancy about like with them that we are preparing to building for the residents to.
Speaker Change: Transitioning over from the older building to the new one.
Speaker Change: And do you plan to keep it all night dispose it as you were previously expecting.
Speaker Change: Yeah, well you know we as you know we exited a largely exited the Ontario long term care business. So yes.
Himanshu Gupta: Yes. Thank you. Corps, but we are evaluating. It's not being managed by Chartwell. It's third party managed. So we have Fair enough. Okay. Thank you.
Speaker Change: One answer we'd not be quarter, but we are evaluating our options with respect to this property, it's not being managed by Chartwell, It's third party manage so.
Speaker Change: We have some flexibility.
Speaker Change: Okay. Thank you I'll turn back and thanks for taking my questions.
Himanshu Gupta: I'll turn it back in. Thanks for taking the time. Thank you.
Speaker Change: Yeah.
Speaker Change: Thank you there are no further questions registered at this time I will turn the meeting back over to Mr. Vella dusky.
Vlad Volodarski: There are no further questions registered at this time, so I will turn the meeting back over to Mr. Velodeck. Thank you, Alana. This wraps up today's conference call. Thanks again to everybody for joining us. As always, if you have any further questions, please do not hesitate to give us a call. Goodbye. Thank you.
Speaker Change: Thank you Ilana this wraps up today's conference call. Thanks, again to everybody for joining us as always if you have any further questions. Please do not hesitate to give us a call goodbye.
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Speaker Change: Nick Please also as you say.