Q1 2025 Choice Properties REIT Earnings Call

Audra: Good morning, my name is Audra and I will be your conference operator today.

At this time, I would like to welcome everyone to the Choice Properties Real Estate Investment Trust first quarter 2025 earnings call.

Audra: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again.

Speaker Change: I will now hand the call over to Simone Cole, General Counsel and Secretary. Please go ahead.

Simone Cole: Thank you, good morning, and welcome to Choice Properties Q1 2025 Conference Call.

Speaker Change: I am joined this morning by Rael Diamond, President and Chief Executive Officer, Niall Collins, Chief Operating Officer, and Erin Johnston, Chief Financial Officer. Rael was thought to call today by providing a brief recap of the first quarter performance and providing an update on our Transaction Activity.

Niall Collins: Niall will discuss her operational results and development pipeline, and Erin will conclude the call with a review of our financial results before we open the line for Q&A

Niall Collins: Before we begin today's call, I would like to remind you that by discussing our financial and operating performance,

Niall Collins: And in responding to your questions, we may make forward-looking statements, including statements regarding Choice Properties, Objectives, Strategies to achieve those objectives.

Niall Collins: as well as statements with respect to management's beliefs, plans, estimates, intentions, outlook, and similar statements concerning anticipated future events results.

Niall Collins: Circumstances, performance, or exceptions that are not historical facts. These statements are based on current estimates and assumptions and are subject to risks and uncertainty that could cause actual results to differ materially from the conclusions in these forward-looking statements.

Niall Collins: Additional information on the material risks, expecting impact to our financial results and estimates, and the assumptions that were made in applying and making these statements.

can be found. [inaudible]

Niall Collins: and recently filed Q1 2025 Financial Statements and Management Discussion and Analysis, which are available on the website and on CIDAR. And with that, I turn the call over to Ralph.

Rael Diamond: Thank you, Simone, and good morning everyone. Welcome to a Q1 conference call. We're a very strong start to the year, and our Q1 operating and financial results were solid.

Rael Diamond: Achieve strong, same-asset cash in our growth of 2.9%, and effort for a growth of 1.9%.

Rael Diamond: In light of the current macroeconomic environment, I'd like to start by expressing my confidence in our portfolios, exceptional positioning of its broader economic uncertainty.

Rael Diamond: Before diving into the details of our core activities, it's important to highlight that choice remains in an enviable position.

Rael Diamond: In retail, we continue to see strong performance and retention in our well-located necessity-based properties.

Rael Diamond: Our portfolio continues to demonstrate its ability to deliver stable and growing cash flows throughout varying economic cycles and conditions, and we believe this year will be no different.

Rael Diamond: industrial portfolio is extremely high quality and generic in nature with properties located in key distribution markets across the country.

Rael Diamond: Based on the current tariffs announced, our industrial portfolio is limited exposure to sectors impacted by these tariffs and will continue to capitalize on embedded rate growth within the portfolio from strong leasing demand for our properties.

Rael Diamond: In our transit-orientated mixed-use and residential portfolio, our portfolio is benefiting from the lease-up and stabilization of our two most recent residential development completions, which are now near full occupancy. Our remaining mixed-use and residential portfolio continues to perform well.

Rael Diamond: Choice's strong balance sheet improving the approach to financial management has allowed our team to focus on executing our strategic goals, including our active capital recycling program that is focused on maintaining the quality of our portfolio. Thank you.

Rael Diamond: During the first quarter, we completed approximately 95 million in total real estate transactions including approximately 33 million of strategic acquisitions and 62 million of non-core asset dispositions.

Rael Diamond: In the quarter, we continue to buy half one of the assets from Love Law, acquiring a retail property in Bramson.

Rael Diamond: for purchase price of approximately 33 million, the property totals approximately 120,000 square feet, and is anchored by 14 years banner with a 15 year lease term and annual rent increases of 2 percent.

Rael Diamond: The asset benefits from favourable demographic trends and is exceptionally well-located nearby the Mount Pleasant Coast Station and a recently completed residential asset, Unity, and Mount Pleasant Village.

Rael Diamond: On this position, in the quarter we completed the sale of three non-core retail properties including two assets in Aurora and one in Montreal for combined proceeds of approximately 54 million. In addition, we saw the land parcel in Edmonton for approximately 8 million.

Rael Diamond: Subsequent to Porta and were able to leverage our relationships and industry leading balancing to take advantage of acquisition opportunities. In April we completed two industrial transactions, totaled link to 140 million, bringing your today's acquisitions to approximately 373 million. These acquisitions included.

Rael Diamond: A 1.1 million square foot industrial distribution asset from Lavlox, for approximately 182 million, which was currently leads back to Lavlox for 10 year term with 2% annual growth.

Rael Diamond: The asset also has significant exit land that offers 1.2 million square feet of future intensification potential and is well located in Ajax along Highway 401, providing 30-minute access to the city.

Rael Diamond: We also bought a portfolio of eight industrial auto-story sites for approximately 158 million.

Rael Diamond: The portfolio includes approximately 140 acres of land across core Canadian markets.

Rael Diamond: These sites of complimentary are existing in National Portfolio and are at least to 10 Canada, one of Canada's largest commercial trailer, rental leasing and maintenance companies, and an attractive prospect for Acre and Yield.

Rael Diamond: Our team also continue to advance our development partner on the first quarter, with approximately 44 million of development spend, primarily related to active construction at Choice Calder and Business Fall. We'll surprise with two retail intensifications in Ontario and one in Alberta, turning 97,000 square feet.

Niall Collins: Identification Pathline is another example of how we continue to take advantage of the demand for retail space to and value chart portfolio, now we will speak more about intensification in the conditions of shortly.

Niall Collins: Finally, I want to acknowledge the release of a 2024 environmental, social, and governance report.

Niall Collins: This year's report summarizes many of choices successes over the last year and showcases choices commitment to ESG and the great work being done by teams across the business. The report can be found in the sustainability section of our website and I encourage you to take a read.

Niall Collins: With that, I'll pass the poll over to Nile to discuss Operation Results in more detail. Now, thank you, Rael. Good morning, everyone. As Rael mentioned, once again, we are delivered stable operation results in the first quarter. I'm going to continue to see strong demand across our portfolio. Thank you, Rael.

Niall Collins: The overall portfolio remains at near full occupancy, ending the quarter of 97.7% [inaudible]

Niall Collins: Disreflected an increase of 10 basis points compared to the product of the water

Niall Collins: During the quarter, we had approximately 1.1 million square feet of Lisa's expire, of which we renewed 934,000 square feet, achieving an 82% tenant retention.

Niall Collins: These renewals were completed an average rent spread of 11.7%, we also completed 253,000 square feet of newly-sync.

Niall Collins: Resulting a positive absorption of 53,000 square feet, which was largely driven by our Alberta retail portfolio.

Niall Collins: Turning to each of our asset classes, and our necessity based retail portfolio of occupancy increased 20-based points to 97.8%

Niall Collins: During the quarter, 715,000 square feet expired, of which we renewed 635,000 square feet for an 89% tenant retention rate.

Niall Collins: These renewal spreads averaged 10% above expiring rents with particularly strong roads in the specialising value sector.

Niall Collins: We also completed 165,000 square feet of newly sang in the quarter, with average rents over the lease term 42% higher than our average in-place rents [inaudible]

Niall Collins: This more than all sets the 80,000 square sheet of expires that did not renew in the quarter.

Niall Collins: Today 42% of the space is committed to backfill in 2025, with rents 28% higher than prior chemist expiring rent, and our team is actively working on deals from the remaining space.

Niall Collins: Interindustrial Portfolio, Occupancy at 97.7% was 20 per cent lower than last quarter.

Niall Collins: We had 418,000 square feet of expires all within our Alberta and Atlantic portfolios and we knew 299,000 square feet for a 72% retention rate.

Niall Collins: These renewal spreads remain strong, average 17% with both expiry and are indicative of the geographic market.

Niall Collins: We also completed 78,000 square feet of new leasing in the quarter, where the average rental over the lease term is 55% higher than our average in place rents.

Niall Collins: The small occupancy decline in the quarter was expected and will be temporary as our leasing team is already in negotiations on 24,000 square feet and actively working to address the remaining space.

Niall Collins: As I communicated on the last call, we expect industrial occupancy to improve in the second half of 2025, ending the year about 98% based on strong tenant retention they could space being released.

Niall Collins: Lastly, our mixed use in residential portfolio continues to perform well with occupancy at 94.9%, which is up 80 basis points from the last quarter.

Rael Diamond: Finally, turning to developments. As Rael mentioned, our team continues to deliver on our development pipeline. During the quarter, we completed three intensifications, totaling 97,600 square feet.

Rael Diamond: These included intensifications included a 72,600 square foot ground leads to the nautical landscape group, Inverbal Ontario, at a yield of 9.9% directly adjacent to a choice on property.

Rael Diamond: This was our second ground lease intensification with Nautical Lands and we continue to believe that this great partnership.

Rael Diamond: for Choice Generating, Stable and Growing Tashel Stream while augmenting the performance of adjacent retail site.

Rael Diamond: The shoppers Drug Martin, Mrs. Saga, totaling 17,000 square feet at a year of 6.3 percent, which was one of eight shoppers Drug Martin intensifications in our active development pipeline.

Rael Diamond: We also have an additional five shopper's drug marks and planning and finally a zero-use trip at a 50% cold site in Devonaton totaling 8,000 square feet of chair delivering a 5.7%.

yield.

Rael Diamond: Overall, our active development pipeline totaled 17 projects of approximately 1.1 million square feet at an average forecasted yield of approximately 7%.

Rael Diamond: Looking ahead for the remainder of the year, our major active development is progressing well at Choice College and Business Park. Construction is on schedule on our NLS building with possession September of this year.

Rael Diamond: I will now pass it over to Erin to discuss her supernatural performance.

Erin: Thank you, now, and good morning everyone. We are very pleased with our financial performance in the first quarter, as our business continues to deliver stable and consistent growth.

Erin: A reported funds from operations for the first quarter was 190.9 million or 26.4 cents on a per unit deluded basis, reflecting an increase of 1.9% compared to the first quarter of 2024.

Erin: In the quarter, we had a modest amount of non-recurring items totaling 2.9 million, limited to a property tax incentives of 1.4 million, recognized at 500 lakeshore, and 1.5 million of fee income, recognized in relation to the termination of the Golden Mile purchase agreement.

Erin: Comparatively, in the prior year, we had 4.5 million of non-recurring items which included a $2 million dollar conjo gain and 2.5 million of lease termination income.

Erin: Normalizing for these non-recurring items, FSO per unit grows was approximately 3.2%. This increase was primarily due to higher same asset cash and a Y and contributions from developments, partially asset by higher interest expense and lower interest income.

Erin: Turning to our Properties, Stay Massive Cash and a Y increased by $7.2 million or $2.9% compared to the first quarter of 2024, driven by strong leasing and renewal activity.

Erin: By asset class, retail same asset cash and a Y increased by 2.8 million or 1.5 percent. The increase was primarily driven by higher base rent from renewals, new leasing and contractual rent steps.

Erin: Industrial St-Masic, cash and a Y increased by approximately 2.8 million or 6.1%. This increase was also primarily due to higher base rent for renewals, new leasing and rent steps.

Erin: And mixed use and residential same asset cash and a Y increased by approximately 1.5 million or 15.3%. This increase was primary due to the property tax incentive recognized at 500 lakeshore and hired base rents from leasing activity and rent steps.

Erin: Excluding the previously noted property tax incentive, total same asset cash at a Y-gross would have been 2.3%

Erin: Turning to our balance sheet, our IFS nav for the quarter was $14.14.17 per unit, an increase of 76 million or 0.7% over the last quarter. Our nav growth was driven by a net contribution of 46 million from operations, and a net fair value gain of $4.00 million on our investment properties.

Erin: Offset by a decline of 9 million on our investment in allied properties. As a reminder, we are required in our IFRS to mark to market this investment to its trading price each period end.

Erin: Our fair value gain on investment properties in the quarter was primarily driven by favorable leasing activity and contractual rent steps across the retail portfolio.

Erin: Turning to our financing activities, we continue to take a prudent approach to capital management and benefit from the stability provided by our industry-leading balance sheet. Once again, we ended the quarter in a solid financial position where strong debt metrics and ample liquidity.

Erin: Our debt to EBITDA ratio was seven times and we continue to maintain a fully undrawn 1.5 billion corporate facility. This is further supported by approximately 13.1 billion of unencumbered properties.

Erin: As we mentioned on our last conference call, we had two major financing activities during the quarter. We issued our 300 million Series Vs Senior Unsecured Adventure at an all-in-rate of 4.293%.

Erin: With proceeds used to partially repay our $350 million series-day senior unsecured debenture.

Erin: We also funded 136 million mortgage that share on the law of the ground lease at Choice Caled and Business Park. This loan is coterminous with law of less 25 year ground lease with an all in interest rate of 4.88%.

Erin: Overall, we are pleased with another strong quarter. The first quarter was a solid start to the year. And looking ahead we continue to have a conviction in our ability to deliver on our operational and financial goals and we are well positioned to achieve our 2025 outlook.

Erin: We plan to continue to advance our development pipeline with the majority of our spend focus on the advancement of our industrial development at Choice Caledon Business Park and our retail intensification program.

Erin: Lastly, we remain committed to maintaining the strengths of our industry-leading balance sheet and expect debt to evade us to remain below 7.5 times. With our financing activity in the quarter, we have addressed a significant portion of our 20-25 maturities. With that, Rael, Niall and I would be glad to answer your questions.

Speaker Change: Thank you. At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad.

We'll take our first question from Mark Rothschild at Canacord.

Thanks, thanks. Good morning, everyone. [inaudible]

Real, you made a comment that you don't expect tariff [inaudible]

Speaker Change: Either way, to really impact your industrial portfolio too much, if at all. But there has been a notable increase in vacancy and industrial markets in general. To what extent do you believe that the same property on a wide growth that you've had of late can be sustained over the next year or two based on where your emplacements are and where market is now?

Niall Collins: Yeah, look, I think just coming back to the terrace and then I will speak to, you know, the sustaining of, you know, our growth. But look, we've spoken before there. We've completed a real detailed review.

Niall Collins: of Industrial Portfolio, and we've looked at every single tenant and where we believe they have exposure.

Niall Collins: We do not believe there is any material risk in our portfolio. If we take a very negative view, we maybe think there's a couple of million dollars of potential exposure but it's not material for us.

Niall Collins: And then when you look at 2025, you have to remember that 80% of our renewals are already committed and locked in, and we're pretty good visibility on, you know, next year as well, just given we're ready in discussion with those tenants. Maybe I'll just leave no comments on the growth.

Speaker Change: Yeah, we're just as supportive of you're saying, for the balance of the year the vast majority of our leasing is done so we feel quite confident for 2025 and again we've a very generic portfolio and great location so we don't see a lot of impact the time that the tenant base we have we don't see any major impact none of them are in that category that's sensitive to some of the tariffs that are being floated at today.

Speaker Change: And as Darlene Erin mentioned on last quarter, we do see in Dathlow and Ahar Grot, Euroyear improving in a second half of this year, along with occupancy.

Speaker Change: Great. Great. Thank you. Maybe just on the acquisition of the outdoor storage sites and to what extent do you view this as something a little bit different from what you normally acquire from your industrial portfolio? How does this strategically fit in? Is this different at all and what's the opportunity there? Yeah.

Speaker Change: Look, I think if you even go back to what Nile said on the call, he spoke about the partnership with Nautical, and we've always liked...

Speaker Change: You know, stable, growing cash flow, you know, land use assets. And so this puts in, and then if you think about it on the industrial side, if you go back, I think it was around three years ago, we bought a portfolio from Canada Cardage.

Speaker Change: So very similar portfolio was like 56 acres we bought then.

Speaker Change: You know, so this is another 140 acres, so we have truly, you know, 196 acres.

Speaker Change: of this industrial art of storage. And as I said, it's stable.

Speaker Change: Strong cash load growth, very low-capex or no-capex from our side. The tenant sometimes has improvements on the side.

Speaker Change: Of The Surready. And then if you add, you know, again, think of what we've done in Love Law recently, two land leases, as well as we have one of the Amazon land leases, and you add all of that, so we have almost...

Speaker Change: You know, Paul are 365 acres of industrial property on land leases which we think fits wonderfully in the reach.

Okay, great. Thank you so much.

Speaker Change: We will go to our next question from Sam Damani at TD Securities.

Sam Damani: Thanks, and good morning everyone, and congratulations on the acquisitions for sure. I guess wonder, Rael, if you could just address, I guess capital allocation going forward in light of the trade war with the US, how it's changed, if at all.

Sam Damani: Yeah, look, I think we are in a unique position, Sam, that our balance sheet is really strong, our assets are performing very well and if we can find good opportunities, we'll continue to take advantage of those opportunities and as we said at the start of the year, we believe in 2025 will be net acquirers of assets but there's nothing, you know, nothing else significant and there we are currently underwriting.

Speaker Change: Okay, and with the rather substantial impact position already in Q2, is there, you said you'd be in that acquirer, but you planned offset that at least some degree with some dispositions near term to keep the leverage around seven times, are you happy to let it drip up a bit?

Speaker Change: No, some dispositions be in the process of working on, which we'll hopefully have no more colour next quarter. It's probably around $100 million of dispositions.

Speaker Change: Okay, that's helpful. And I guess last one for me, you talked about going through the industrial portfolio in detail. What have you just described how you categorized the most risky elements of the tenant base, just in terms of industry or how you looked at that sort of small exposure?

You know how it's what industries are those? [inaudible]

Speaker Change: So it would be, I'm just trying to find something, but it should be automotive, we're very small exposure.

Speaker Change: You know, some consumer goods, but we went, our team went tenant by tenant and you know, looked at

You know, the top of tenant.

Speaker Change: and how they were using the space and looked at exposure to the US. Again, it's very hard to say exactly how everyone's business will get affected and that's why I say we took a pretty conservative view.

Okay, great, thank you and I'll turn it back [inaudible]

Thank you.

Speaker Change: Our next question comes from Lorne Kalmar at Desjardins Capital Markets

Lauren Kalmar: Thanks, good morning. Maybe switching over to the retail side of things. Obviously, law blogs is continuing to look to grow. A lot of the major retailers are. But are you seeing any apprehension on the part of any smaller or regional tenants to execute on their growth plans and items? No, I don't think so.

What's been developing that south of the border? [inaudible]

Niall Collins: by Lorne Its Nile. I would say, look, there's some cautious optimism with retailers, but as I said, all of our retail leasing of the vast majority for the year is completed, so we're not seeing any challenges. They have the capital and they're continued to expand. And I think again, we got to remember that there is limited supply of good retail in the country. So again, that's in our favor too.

Okay, let's do more on that again.

No, it's not going to add if you...

Niall Collins: If you look at yesterday's news article on interest in HPC boxes, I think that's, you know, an indication that, that, you know, tenants are actively looking for, for new space.

Speaker Change: Yeah, that was a nice surprise to see the high level demand, just like everything going on. How do you see retail occupancy trending over the balance there? You think it kind of sticks around the high 97 range, or do they even push it higher?

Speaker Change: Lorne, it's going to be flat for these first two quarters, but at the back end of the year it is going to pop as I mentioned. Would you expect expected to go into the 98s, but it is going to be a Q3, Q4 film based on our leasing and comments.

Speaker Change: Okay, that's very helpful, and then just last one, and Rael, I think you kind of alluded to it earlier, but I just want to confirm, I think last quarter you talked about there being two industrial assets from law block, for about 350 million bucks you were looking at, I'm assuming the Ajax one was one of them, are you guys no longer looking at the second one? [inaudible]

Speaker Change: No sorry, the two natural assets we're looking at were the ones we just acquired were the one from Lovewell and the one from the third point.

Got it. Okay, thank you very much.

We'll move next to Pommy Burr at RBC Capital Markets.

Pommy Burr: Thanks, good morning. Just wanted to come back to the IOS acquisitions. Can you just provide a bit more color on the locations? I didn't catch the tenant that you mentioned and maybe a capillary range if that would be helpful. Thanks.

Sure, so, so...

Speaker Change: The eight locations across Canada, the tenant is, you know, 10 Canada which is transportation equipment network.

Speaker Change: The locations are anywhere from Toronto, Delta BC, Calgary Edmonton, Montreal, there's Winnipeg in there as well, but I'd say the majority of the locations on the eighth are all in...

Speaker Change: in major markets. And then, you know, 10 Canada is the largest, you know, network of, you know, the largest, I think, trailer, leasing network in Canada. I think there are 26,000, you know, vehicles.

Speaker Change: Okay, and just in terms of the lease mechanics, what's the duration of these leases and what sort of steps do you see in them?

Speaker Change: And then the lease terms, you know, they roll over various times but the years that the tenant has control is around 15 years for each site and the lease is step with CPI.

on a venue basis.

Speaker Change: Got it. Okay. And then just, you know, coming back maybe one of the earlier questions, you know, there are more of these perhaps with others that you're looking to acquire in the near term, or is this kind of like a one-off opportunity that emerged?

Speaker Change: Now, look, I think we will keep relevering our relationships with, you know, tenants in the industry and we would like to acquire more of these. We think, as I said earlier, you know, it's great as a class to fit with your industrial portfolio.

Speaker Change: Okay, last one for me, just coming back to the Industrial Portfolio, you know, obviously it sounds like things have been trending pretty well and quite stable, but...

Speaker Change: Are you seeing any changes in terms of how tenants, or how long it takes to maybe get at least assigned? Any indication that tenants might be slowing their expansion plans or anything of that nature, just any shift in behavior? Thank you.

Niall Collins: I wouldn't say there's a strong shift in the area probably, it's Niall. The leasing, again, we're a lot of releasing for the remainder of the year is completed. We didn't see any challenges.

Niall Collins: They don't seem to be as affected and are just not slowing down these things. [inaudible]

Speaker Change: And would that pick up an RFP's B from domestic companies? I'm curious if there's any change between domestic and foreign tenants, perhaps looking at expansion plans in Canada at all.

Speaker Change: You know, some of them are from, you know, large global 3PL networks. So we don't know who their ultimate client is, Pammi, but, you know, strong covenant from our point of view.

Thanks very much, Rael I'll turn it back.

Speaker Change: We'll take our next question from Mike Marquitas at BMO Capital Markets.

Thank you Operator.

Mike Merkides: Well, you kind of stole my thunder a little bit because you touched on it with the HPC lease news, but I was just curious if you could give us a little bit of additional color.

Speaker Change: Are you concerned at all? I mean, obviously the demands are there. Would you characterize that as being pent up demand or are you concerned that maybe this robs from demand a couple of years out that might have been there otherwise?

Speaker Change: It will be interesting to see who the ultimate tenants are. We have heard that there's one

Speaker Change: We do see it as an opportunity in some locations to actually try and pull tenants out of some of these malls because in some of these locations we think the malls are now challenged.

Speaker Change: Right, and I guess that's the other part of it, right? There's I guess 65 plus 95 or 95 plus 65 so there would be properties that you have that might be benefiting from a decline in that where I'm joining.

Speaker Change: Properties, OK. Got it. And then just maybe a last meal for me. You know, your stocks obviously done very well, macro related well for me. Obviously you guys are doing everything you can to justify it, but it's been aided by a macro tail end.

Speaker Change: And as you look forward, you've always been conservative in nature, your stocks in the low sixes, mean flight cap rate basis, and you're buying the mid sixes. So just with respect to your leverage targets, are you thinking about, you know, a seven to right number or you think about maybe testing the seed, you should bring that down over time, just curiousness to your thoughts.

Speaker Change: Hi, my kids Erin. I'd say that we're comfortable where we are with leverage. We've always said that our targets seven and a half, but when we look at the next couple of years, just based on the where our developments are and our capital recycling program, it'll probably stay in the low sevens.

Speaker Change: Okay, so no real change there. Great. That's all I have. Thank you so much.

Thanks Mark.

Our next question comes from Himanshu Gupta at Scotiabank

Himanshu Gupta: Thank you and good morning. Just to follow up on the Industrial Acquisition, I think where you mentioned Mid-Six Caprate, how would you say for Ajax Industrial Distribution Center? Is it like very similar Mid-Six?

as well.

Himanshu Gupta: Yeah, when I commented on the meant sex was the blend of the two was the meant sex, so they both very similar.

Himanshu Gupta: Okay, very soon, okay. And then on the Ajax Industrial Property, you mentioned about I think over 1 million square feet of future intensification potential as well.

Speaker Change: Is that something you look to pursue in the near term or is it more like a medium to long term initiative there?

Speaker Change: Yeah, look, I think when you just, I don't know if you're trying to manage it to look at the Google Earth image of the property bit, but I think what you will see when you do look at it, you'll see, you know, we are quite essentially 126 acres.

So...

potential density.

Speaker Change: Correct, okay, thank you. I'll say the last thing, just on the team of, you know, just on the team of our industrial outdoor storage.

Speaker Change: If you just think about, you know, a lot of people classify, you know, industrial art or stories, where the building represents 20% of the land coverage. And I think, you know, Ajax almost puts in that category given the low-salt coverage on the property as a whole.

Speaker Change: Okay, fair enough, thank you. And then in terms of the acquisition pipeline from Lobloh, I mean, obviously, you had the Brenton side and the Ajx one. So are you done in the near term? How's the pipeline looking there?

Speaker Change: , , , , , , , , , , , , , ,

Speaker Change: Hi, Himanshu. There's not a lot left, which Ajax would be the most significant one this year. We also did work in earlier in the year. And when we look ahead to what Lobla has left plus what we've been looking at, there's a couple small retail acquisitions, but not a lot in the pipeline this year if anything.

Speaker Change: Okay, and Erin on these, just on the financing of these acquisitions in a post-corder 300 dollar acquisition, will that be mostly on debt or you could use some class fee units as well?

We've put those all in our mind.

Speaker Change: All on the list, okay, okay, and I guess 100 million disposition planned as well, that could partly finance.

Those acquisitions. Yeah.

There will probably be more...

Thanks for watching!

Speaker Change: Pammi Bir, I'm just going to say there'll be probably more dispositions if you think about the whole year when Rael was quoting 100 million, we'll probably see that in Q2 and then there'll be a bit more in the third, fourth quarter. But we'll still be in that acquirer for the year.

Speaker Change: Okay, last question from me, when is the cost of death and death in today? You know, secured or insecure and has anything changed in response to, you know, the uncertainty which we have seen, please continue.

Speaker Change: Yeah, so we think about the cost of 10-year debt is probably around 5.2. Spreads have definitely widened, as you would have seen since we went to market in January . And if we think about if you take, say, a 10-year mortgage versus a 10-year unsecured, I think we're seeing

Speaker Change: Secured market hasn't widened as much, and I think there's probably a 40 to 50 basis point spread between choices on secured rate and secured rate.

Speaker Change: Okay, awesome. Thank you. Thank you. And I'll turn it back.

Speaker Change: And as a reminder, if you would like to ask a question, please press star one on your telephone on K-PAD. We'll go next to Garov Mathur at Green Street Advisors.

Speaker Change: Thank you, and good morning everyone. Just stay on acquisitions for a minute. We would notice seeing more industrial portfolios hit the market. Just wondering if that's something that would interest you opportunistically. I'm in the near term going forward.

Speaker Change: Yeah, look, I think Graff, thanks for your question. We had a right, everything we see on the market, and if we think it represents good value.

Speaker Change: and a good long-term asset. I'm sending something we will be interested in, but as I said earlier, there's nothing right now that we actively pursuing on the acquisition side.

Speaker Change: Thank you for that, Rael. And just my last question on one of such gears here to the condominium market. Now last quarter on Golden Mile you did indicate that condominium construction is not feasible. Could you provide some more colour on what you've seen currently in the condominium market and if that would affect any of your other projects in the zoning pipeline?

Um...

Speaker Change: One of the reasons we pause on golden model is more on an infrastructure cost base, not necessarily the market, and we're working with the city to try and resolve on that. In terms of the overall general condo market, we don't have a lot of exposure to that.

Speaker Change: Our portfolio is rental and as it plays out over the next 12-18 months, it's very hard to predict what that level of absorption would be.

Speaker Change: The active development science that we trying to advance, there's no exposure to Kondo, we

Speaker Change: Thank you very much. I'll turn it back to the operator.

Speaker Change: Thank you, and that concludes the question and answer session. I'll turn the call back over to Rael Diamond for closing remarks.

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Speaker Change: Thank you, Audra. As I mentioned at the outset of the call that we are really in an enviable position. This quarter marks another example of our ability to consistently generate strong and stable growth. Our team remains focused on executing on our plan in 2025. Thank you for your interest, for investment in choice and for joining us this morning. Our AGM will follow this morning at 11 and we look forward to you joining us there.

Speaker Change: And this concludes today's conference call. Thank you for your participation. You may now disconnect.

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