Q1 2025 Crombie REIT Earnings Call

Good morning, everyone and welcome to Colombia eats first quarter conference call. At this time, all participants are in a listen only mode.

Unknown Executive: Good morning, everyone, and welcome to Crombie REIT's first quarter conference call. At this time, all participants are in a listen-only mode.

Unknown Executive: Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator.

The presentation, we will conduct a question and answer session.

At any time during this call you get acquired immediate assistance. Please press star zero for operator.

This call is being recorded on Thursday may eight 2025.

Unknown Executive: This call is being recorded on Thursday, May 8, 2025.

Kara Cameron: I would now like to turn the conference over to Kara Cameron, Chief Financial Officer of Crombie. Please go ahead. Thank you.

Tara Cameron: I would now like to turn the conference over to Tara Cameron Chief.

Tara Cameron: Chief Financial Officer.

Crumby: Crumby. Please go ahead.

Crumby: Thank you good day, everyone and welcome to probably read first quarter 'twenty to 'twenty five conference call and webcast. Thank you for joining US. This call is being recorded and live audio and is available on our website at www Dot crombie.

Kara Cameron: Good day, everyone, and welcome to Crombie REIT's first quarter 2025 conference call and webcast. Thank you for joining us. This call is being recorded in live audio and is available on our website at www.crombie.ca.

Crumby: <unk> Dot C E.

Kara Cameron: Slides to accompany today's call are available on the investors section of our website under presentations and events.

Speaker Change: Slides to accompany today's call are available on the investors section of our website under presentations and events joining me on the call today are Mark Holli, <unk>, President and Chief Executive Officer, and our EBITA Executive Vice President leasing and operations.

Kara Cameron: Joining me on the call today are Mark Holly, President and Chief Executive Officer, and Arie Bitton, Executive Vice President, Leasing and Operations. Today's discussion includes forward-looking statements, and as always, we want to caution you that such statements are based on management's assumptions and beliefs. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements.

Speaker Change: These discussions include forward looking statements and as always we want to caution you that such statements are based on management's assumptions and beliefs. These forward looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements.

Kara Cameron: Please see our public filings, including our management discussion and analysis, and annual information form for a discussion of these risk factors. Our discussion will also include expected yield on cost for capital expenditures. Please refer to the development section of our management discussion and analysis for additional information on assumptions and risks.

Speaker Change: Please see our public filings, including our management's discussion and analysis and annual information form for a discussion of these risk factors.

Speaker Change: Our discussion will also include expected yield on cost for capital expenditures. Please refer to the development section of our management's discussion and analysis for additional information on assumptions and risks and will now turn the call over to mark to discuss probably strategy and outlook.

Mark Holly: I will now turn the call over to Mark to discuss Crombie's strategy and outlook. Thank you, Kara, and thanks to everyone for joining us today for our first quarter call. Crombie's first quarter results demonstrate the effectiveness of our strategy as the essential reach. In a quarter marked by continued economic uncertainty, our portfolio has performed exceptionally well, delivering consistent results that validate our focused approach. At the heart of the performance is our grocery-anchored retail portfolio. With 82% of our annual minimum rent coming from necessity-based retail tenants and a weighted average lease term of over eight years, we've established a foundation for stability.

Speaker Change: Thank you Kara and thanks to everyone for joining us today for our first quarter call.

Speaker Change: Well I'll be the first quarter results demonstrate the effectiveness of our strategy as the central REIT.

Speaker Change: In a quarter marked by continued economic uncertainty our portfolio has performed exceptionally well delivering consistent results that validate our focused approach.

Speaker Change: At the heart of the performance is our grocery anchored retail portfolio.

Speaker Change: With 82% of our annual minimum rent coming from necessity based retail tenants and a weighted average lease term of over eight years, we've established a foundation for stability.

Speaker Change: Our properties situated at the heart of vibrant communities coast to coast attract steady traffic and repeat visit.

Mark Holly: Our properties, situated at the heart of vibrant communities coast-to-coast, attract steady traffic and repeat visits. This consistent engagement makes them highly sought after by top retailers, driving sustained tenant demand and reinforcing the long-term strength of our portfolio across economic cycles.

Speaker Change: This consistent engagement makes them highly sought after by top retailers driving sustained tenant demand and reinforcing the long term strength of our.

Speaker Change: Across economic cycles.

Speaker Change: As we progress through 2025, we remain committed to the disciplined advancements of our strategy owning and operating vital hubs, where Canadians live workshop and connect while delivering consistent results for our unit holders.

Mark Holly: As we progress through 2025, we remain committed to the discipline advancement of our strategy, owning and operating vital hubs where Canadians live, work, shop and connect, while delivering consistent results for our unit holders. Our quarterly performance is best viewed through the lens of our three value creation pillars within our strategy, Own and Operate, Optimize and Partners. These pillars drive our day-to-day execution, identifying our highest return opportunities, and strengthen key relationships that support sustained growth. Our first value driver own and operate continues to be the cornerstone of our success. In the first quarter, our necessity-based retail portfolio demonstrated its resilience with committed occupancy reaching 97.1%, a historic high for Crombie.

Speaker Change: Our quarterly performance is best viewed through the lens of our three value creation pillars within our strategy to own and operate optimize and partners.

Speaker Change: These pillars drive our day to day execution, identifying our highest return opportunities and strengthen key relationships that support sustained growth.

Speaker Change: Our first value driver own and operate continues to be the cornerstone of our success in.

Speaker Change: In the first quarter are necessity based retail portfolio demonstrated its resilience with committed occupancy, reaching 97, 1% a historic high for crombie.

Mark Holly: We delivered same asset property cash NOI of 3.2% and renewed 167,000 square feet. Achieving rental rate growth of 10% over expiring rates. These results translate directly to our financial performance with AFFO per unit growth of 3.8% over Q1 2024. Our team achieved these results while maintaining a solid and flexible financial position. Our AFFO payout ratio stands at 84% with a debt to EBITDA ratio of 7.95 times. Portfolio management is central to our ownership strategy.

Speaker Change: We delivered same asset property cash NOI of three 2%.

Speaker Change: And renewed a 167000 square feet.

Speaker Change: Achieving rental rate growth of 10% over expiring rates.

Speaker Change: These results translate directly to our financial performance with <unk> per unit growth of three 8% over Q1 2024.

Speaker Change: Our team achieved these results, while maintaining a solid and flexible financial position, our <unk> payout ratio stands at 84% with a debt to EBITDA ratio of 795 times.

Speaker Change: Portfolio management is central to our ownership strategy, we take a disciplined approach to capital allocation.

Mark Holly: We take a disciplined approach to capital allocation, focusing on assets where we can create the most value and divesting from those that are non-core or facing long-term challenges.

Speaker Change: Good thing on assets, where we can create the most value and divesting from those that are noncore or facing long term challenges.

Mark Holly: Building on our successful capital recycling program in 2024, we completed the sale of Loch Lomond Place in the first quarter, 188,000 square foot non-core retail property in St. John, New Brunswick, generating $3.3 million in proceeds.

Speaker Change: Building on our successful capital recycling program in 2024, we completed the sale of lock loans in place in the first quarter.

Speaker Change: Hundred and 88000 square foot noncore retail property and Saint John New Brunswick, generating $3 $3 million in proceeds.

Speaker Change: Today, I'll address our second and third value drivers together optimizing partner.

Mark Holly: Today, I'll address our second and third value drivers together, optimize and partner. as our recent activities highlight the fundamental connection between how we invest and how we grow through collaboration. Optimize focuses on unlocking embedded value across our portfolio through targeted investments, entitlement activities, and strategic development. A key example is our ongoing modernization program with Empire, part of our focused non-major development strategy. These targeted investments, each under $50 million, are designed to enhance property performance and the customer experience while delivering solid returns on capital. In the first quarter, we invested $2.2 million through this program. Our approach to major developments remains deliberate and disciplined.

Speaker Change: As our recent activities highlight the fundamental connection between how we invest and how we grow through collaboration.

Speaker Change: Optimized focuses on unlocking embedded value across our portfolio through targeted investments entitlement activities and strategic development.

Speaker Change: Key example is our ongoing modernization program with Empire part of our focus non major development strategy. These targeted investments each under $50 million are designed to enhance property performance and the customer experience, while delivering solid returns on capital in the first quarter, we invested $2 $2 million through this.

Speaker Change: Program.

Speaker Change: Our approach to major developments remains deliberate and disciplined we continue to advance entitlements to create value, while maintaining flexibility around timing scale and capital deployment and approach that is particularly important in today's market tomorrow.

Mark Holly: We continue to advance entitlements to create value, while maintaining flexibility around timing, scale, and capital deployment, an approach that is particularly important in today's market. The Marlstone, our sole active major development, is progressing well and remains on track for completion in the first half of 2026. Designed to achieve LEED Gold Standard and Rick Hansen Foundation certification, it will be a high-quality addition to the Halifax market.

Speaker Change: Tomorrow stone, our sole active major development is progressing well and remains on track for completion in the first half of 2026.

Speaker Change: Designed to achieve LEED gold standard and Rick Hanson Foundation certification it will be a high quality addition to the Halifax market.

Mark Holly: In the past month, we announced new strategic partnerships in Halifax and Vancouver, two markets we view compelling long-term opportunities. In Halifax, we've partnered with Montez to advance key projects across our Halifax development portfolio. This includes the sale of a 50% interest in the Marlstone and agreements to advance the Barrington Street and Brunswick Place properties through the entitlement process.

Speaker Change: In the past month, we announced new strategic partnerships in Halifax in Vancouver, two markets, we view compelling long term opportunities.

Speaker Change: And Halifax, we partnered with Montes to advance key projects across our Halifax development portfolio. This includes the sale of a 50% interest in the marlstone and agreements to advance the Barrington Street and Brunswick place properties through the entitlement process. These.

Mark Holly: These efforts show how optimizing partners work hand-in-hand, deploying capital thoughtfully, creating long-term value, and strengthening our platform through strategic collaboration.

Speaker Change: These efforts show, how optimizing partners work hand in hand, deploying capital thoughtfully, creating long term value and strengthening our platform through a strategic collaboration.

Mark Holly: And last night, with our first quarter results, we announced another partnership with West Group Properties, a well-established Vancouver real estate owner, operator, and developer. As part of this transaction, West Group acquired Empire's limited partnership interests in Lynn Valley and Kingsway and Tyne, while Crombie and West Group formed new entitlement partnerships for East Hastings and West Broadway properties. These programmatic partnerships deliver immediate, stabilized cash flow through management and development fees, drive accretion to AFFO, and unlock value from high potential assets, all while preserving balance sheet flexibility to reinvest in our core retail platform.

Speaker Change: And last night with our first quarter results, we announced another partnership with Westgroup properties are well established Vancouver real estate owner, operator and developer.

Speaker Change: As part of this transaction Westgroup acquired Empires limited partnership interests and Lynn Valley in Kingsway in time, while crombie and Westgroup form new entitlement partnerships for East Hastings and West Broadway properties.

Speaker Change: These programmatic partnerships deliver immediate stabilized cash flow through management and development fees drive accretion to <unk> and unlock value from high potential assets, all while preserving balance sheet flexibility to reinvest in our core retail platform.

Mark Holly: Looking ahead to the rest of the year, we remain committed to delivering consistent performance while positioning Crombie for long-term value creation.

Speaker Change: Looking ahead to the rest of the year, we remain committed to delivering consistent performance, while positioning crombie for long term value creation, our first quarter results demonstrate the effectiveness of our strategy owning a central real estate at the heart of thriving communities managing for resilience and investing with discipline and with that I'll turn the call over to Karen.

Mark Holly: Our first quarter results demonstrate the effectiveness of our strategy, owning essential real estate at the heart of thriving communities, managing for resilience, and investing with discipline.

Kara Cameron: And with that, I'll turn the call over to Kara.

Karen: Thank you Max Q.

Kara Cameron: Thank you, Mark. Our Q1 financial results reinforce the fundamental strength of our platform and validate our disciplined approach to capital allocation. The numbers tell a clear story. Our strategy is working. Operationally, we're seeing the direct impacts of our focused execution. Our leasing team delivered renewal growth at nearly double our historical average, demonstrating the continued demand for our necessity-based retail properties across all markets. Let me walk you through the specifics. During the quarter, we completed 167,000 square feet of renewals at a 10% increase over expiring rental rates. We achieved growth of 12.2% when comparing expiring rates to the weighted average spread over the entire renewal term.

Karen: Q1 financial results reinforce the fundamental strength of our platform and validate our disciplined approach to capital allocation. The numbers tell a clear story our strategy is working.

Karen: Operationally, we're seeing the direct impacts of our focused execution, our leasing team delivered renewal growth at nearly double our historical average demonstrating the continued demand for our necessity based retail properties across all markets.

Karen: Let me walk you through the specifics.

Karen: During the quarter, we completed 167000 square feet of renewals at a 10% increase over expiring rental rates, we achieved growth of 12, 2% when comparing expiring rates two the weighted average spread over the entire renewal term.

Kara Cameron: This strength was consistent across our assets in Vectom, major markets and rest of Canada, achieving spreads of 11.7%, 9.5% and 9% respectively. Our ongoing renewal activity combined with contractual rent step-ups and new leases drove our same asset property cash NOI growth of 3.2% for the quarter. G&A expenses represented 5.7% of property revenue and revenue from management and development services in the quarter, up from 4% in Q1 of 2024. This increase reflects higher salaries and benefits as we backfilled roles that were vacant during 2024 and includes employee transition costs and unit-based compensation tied to our strong unit price performance.

Karen: This strength was consistent across our assets and dotcom major markets and rest of Canada, achieving spreads of 11, 7% nine 5% and 9% respectively.

Karen: Our ongoing renewal activity combined with contractual rent step ups and new leases drove our same asset property cash NOI growth of three 2% for the quarter.

Karen: G&A expenses represented five 7% of property revenue and revenue from management and development services in the quarter up from 4% in Q1 of 2024.

Karen: This increase reflects higher salaries and benefits as we backfill the rules that were vacant during 2024 and includes employee transition cost and unit based compensation tied to our strong unit price performance.

Kara Cameron: Excluding employee transition costs and unit-based compensation, general and administrative expenses was 3.8% of property revenue and revenue from management and development services, compared to 3.3% in Quarter 1 of 2024. We expect full-year G&A expenses, excluding unit-based comp, to reflect the effect of the backfilled rules as I mentioned. FFO per unit for Q1 2025 was $0.30, unchanged from Q1 2024, while AFFO per unit was $0.27, growing 3.8% year-over-year. These results include higher interest expense of $1.8 million from our Series L and Series M senior unsecured notes issued in 2024, as well as employee transition costs and unit-based compensation expenses.

Karen: Excluding employee transition cost and unit based compensation general and administrative expenses was three 8% of property revenue and revenue from management and development services compared to three 3% in quarter one of 2024.

Karen: We expect full year G&A expenses, excluding unit based comp to reflect the effect of the backfill roles as I mentioned.

Karen: <unk> per unit for Q1 2025 was 30.

Karen: Unchanged from Q1 2024, while <unk> per unit was 27 cents growing three 8% year over year. These results include higher interest expense of $1 8 million from our series L. M series and senior unsecured notes issued in 2024 as well as in <unk>.

Karen: Transition costs and unit based compensation expenses adjusting for employee transition costs <unk> per unit was 31 cents, an increase of three 3% compared to the first quarter of 2024 <unk> per unit was unchanged at 27 cents per unit.

Kara Cameron: Adjusting for employee transition costs, FFO per unit was $0.31, an increase of 3.3% compared to the first quarter of 2024, while AFFO per unit was unchanged at $0.27 per unit. We ended the quarter with FFO and AFFO payout ratios of 73.9% and 84% respectively.

Karen: We ended the quarter with <unk> and <unk> payout ratios of 73, 9% and 84% respectively.

Kara Cameron: Moving to our balanced At quarter end, our available liquidity stood at $696 million with an unencumbered asset pool of $3.7 billion. Debt to gross fair value was 43.6%, while debt to trailing 12-month adjusted EBITDA remained at 7.95 times. We've carefully structured our debt maturity ladder to minimize refinancing risk and maintain flexibility through market volatility. Our weighted average term to maturity is four and a half years, with a weighted average interest rate of 4.1%. Over 98% of our debt carries fixed rates, further insulating us from interest rate fluctuations. We currently stand at 60% unsecured to 40% secured debt.

Karen: Moving to our balance sheet.

Karen: At quarter end, our available liquidity stood at $696 million with an unencumbered asset pool of $3 $7 billion.

Karen: Net to gross fair value was 43, 6% while debt to trailing 12 month adjusted EBITDA remained at 795 times.

Karen: We have carefully structured our debt maturity ladder to minimize refinancing risk and maintain flexibility through market volatility our weighted average term to maturity is four and a half years with a weighted average interest rate of four 1%.

Karen: Over 98% of our debt carries fixed rates further insulating us from interest rate fluctuations.

We currently stand at 60% unsecured this 40% secured debt.

Kara Cameron: As we progress through 2025, we are well-positioned with minimal near-term debt maturities and access to diverse capital sources, providing us the flexibility to meet financing needs and advance our strategic initiatives.

Karen: We progressed through 2025, we are well positioned with minimal near term debt maturities and access to diverse capital sources, providing us the flexibility to meet financing needs and advance our strategic initiatives.

Kara Cameron: A few items regarding our Halifax and Vancouver partnership. As part of the Montez transaction, Crombie sold a 50% interest in the Marlstone for $32.2 million. In our MD&A, you'll see that our share of the estimated total cost to completion has been revised to $71 million. This updated figure now reflects the inclusion of land value and is presented at Crombie Share. We continue to expect a yield on cost in the range of 4.5% to 5.5%. Moving to the West Group Partnership, Crombie will retain 100% ownership of all four Vancouver assets and will continue to receive the associated rental income in relation to these properties.

Karen: A few items regarding our Halifax, and Vancouver partnerships.

Karen: As part of the Montes transaction, probably sold a 50% interest in the milestone for $32 $2 million.

Karen: Our MD&A, you'll see that our share of the estimated total cost to completion has been revised to $71 million. This updated figure now reflects the inclusion of land value and it's presented at Crombie sure.

Karen: We continue to expect a yield on cost in the range of four and a half to five 5%.

Karen: Moving to the West group partnership probably will retain 100% ownership of all four Vancouver assets and we will continue to receive the associated rental income in relation to these properties.

Kara Cameron: Crombie will act as co-development manager and will receive management and development fees from the joint venture. All costs will be shared equally between Crombie and Western.

Karen: Rami will act as co development manager and will receive management and development fees from the joint venture.

Karen: All costs will be shared equally between crombie <unk> group.

Mark Holly: And with that, I'll hand it back to Mark. Thank you, Kara. So as we conclude today's call, I want to emphasize Crombie's consistency, the quality and strength of our properties and our people. The first quarter of 2025 demonstrates the resilience of our strategic framework as the essential REIT, designed to perform through changing market conditions while maintaining a focus on the long-term value creation. Our necessity-based retail portfolio continues to deliver dependable performance with high occupancy and strong renewal spreads supporting steady cash flow growth. Our approach to partnerships remains a key differentiator. Whether with Empire, where our line priorities continue to generate mutual value, or through the recently announced Halifax and Vancouver partnerships, we're creating opportunities that enhance our platform while preserving financial flexibility.

Mark: I'll hand, it back to Mark.

Mark: Thank you Kara.

Mark: So as we conclude today's call I want to emphasize crombie consistency, the quality and strength of our properties and our people.

Mark: The first quarter of 2025 demonstrates the resilience of our strategic framework as the central REIT designed to perform through changing market conditions, while maintaining a focus on the long term value creation.

Mark: Our necessity based retail portfolio continues to deliver dependable performance with high occupancy and strong renewal spreads supporting steady cash flow growth.

Mark: Our approach to partnerships remains a key differentiator, whether with Empire, where our line priorities continue to generate mutual value or through the recently announced Halifax, Vancouver partnerships, we're creating opportunities that enhance our platform while preserving financial flexibility.

Mark Holly: Looking ahead, we remain deliberate in our approach, investing in grocery-anchored retail, supported by complementary retail-related industrial and mixed-use residential properties, advancing our entitlement pipeline to unlock embedded value, while maintaining the financial strength to move decisively when opportunities arise. I'm incredibly proud of the team's delivery and commitment. Their focus on operational excellence and community impact drive our performance every day. And I'm pleased to share that those efforts have once again been recognized, with Crombie being named one of Nova Scotia's top employers, Atlantic Canada's top employers, Canada's top small and medium employers, and Canada's greenest employer. At Crombie, we're building with purpose, delivering steady performance today while creating a stronger, more flexible platform for tomorrow.

Mark: Looking ahead, we remain deliberate in our approach investing in grocery anchored retail supported by complementary retail related industrial and mixed use residential properties advancing our entitlement pipeline to unlock embedded value, while maintaining the financial strength to move decisively when opportunities arise.

Mark: I'm incredibly proud of the team's delivery and commitment their focus on operational excellence and community impacts drive our performance every day and I'm pleased to share that those efforts have once again been recognized with crombie being named one of Nova Scotia's top employers Atlantic Canada's top employers candidates top small and.

Mark: Medium employers and Canada's greenest employer.

Mark: Crumby, we're building with purpose delivering steady performance today, while creating a stronger more flexible platform for tomorrow. Our assets are essential our partners are aligned and our strategy is built to endure.

Mark Holly: Our assets are essential, our partners are aligned, and our strategy is built to endure.

Unknown Executive: With that, we will now open the line for questions. Thank you.

Mark: That we will now open the line for questions.

Mark: Okay.

Mark: Okay.

Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the number one on your Touchtone phone.

Unknown Executive: Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number 1 on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number 2. If you are using a speakerphone, please lift the handset before pressing any keys.

Mark: You wouldn't hear a prompt that your head has had been raised should.

Mark: Should you wish to decline from the polling process. Please press star followed by the number too.

Mark: If you're using a speaker phone please lift the handset before pressing any keys.

Frank Liu: Your first question comes from the line of Frank Liu from Vimo Capital Markets. Your line is now open. Good morning, guys. Morning. Just to quickly touch on the G&A that took up this quarter, I think you provide some color in your opening remarks.

Speaker Change: Your first question comes from the line of frankly, you from BMO capital markets. Your line is now open.

Speaker Change: Good morning, guys.

Good morning.

Speaker Change: I'll quickly touch on the G&A that tick up this quarter I think you could provide some color in your opening remarks could you just kind of clarify how much of this is attributed to the one time item.

Kara Cameron: Could you just kind of clarify how much of this is attributed to the, you know, one-time item as you call it, like the employee transition cost? This is just for our model inverter.

Speaker Change: As you called out like the employee transition cost.

Speaker Change: Just for modeling purpose.

Speaker Change: Sure. Thanks for your question and good morning, and so where there's two line items that were affected by those onetime costs. So there is a portion and employee transition as well as the portion in UBC and guidance is between the seven and $800000 for that investment.

Kara Cameron: Thanks for your question and good morning. So there's two line items that were affected by those one-time costs. So there is a portion in employee transition as well as a portion in UBC, and guidance is between the $700,000 and $800,000 for that adjustment.

Speaker Change: Got it thank you I'll turn it back to Sam.

Frank Liu: All right, thank you. I'll turn it back.

Speaker Change: Thanks.

Speaker Change: Your next question comes from the line of Lauren Kalmar from des Jordan. Your line is now open.

Lorne Kalmar: Your next question comes from the line of Lorne Kalmar from Bay Jardin. Your line is now open. Hey, good afternoon, everyone.

Lauren Kalmar: Hey, good afternoon, everyone.

Lorne Kalmar: I can't promise I'll be as speedy as Frank, but I'll try and keep it tight. All right, Lorne. I just wanted to focus in on the announcement of the two JV partnerships. The first question I had was related to kind of the pace of payments. Is it expected to be relatively steady, kind of quarter over quarter from both of these? And will there be any additional kind of episodic payments related to certain milestones being hit? Sure.

Speaker Change: I can't promise I'll be speediest, Frank, but I'll try and keep it.

Lauren Kalmar: Alright Lauren.

Speaker Change: I just wanted to focus in on the the announcement of the two JV partnerships.

Speaker Change: The first question I had was related to the kind of the pace of payments is it expected to be relatively.

Speaker Change: Steady kind.

Speaker Change: Quarter over quarter from both of these and will there be any additional kind of episodic payments related to certain milestones being hit.

Speaker Change: Sure. So good morning, Loren and firstly I do want to reiterate just how proud we are of these partnerships. So they are multi year entitlement partnerships and will generate additional development management fees, particularly by adding Hastings on West Broadway and so they will be equal over.

Kara Cameron: So good morning, Lorne. Firstly, I do want to reiterate just how proud we are of these partnerships. So they are multi-year entitlement partnerships and will generate additional development management fees, particularly by adding Hastings and West Broadway. And so they will be equal over the portion of this entitlement project. They will be accretive to AFFO starting in 2025. And so we're expecting our fees to be a bit higher than what we saw in 2024, which was $5.3.

Speaker Change: A portion of this entitlement project.

Speaker Change: Will be accretive to <unk>, starting in 2025, and so we're expecting our fees to be a bit higher than what we saw in 2024, which was $5 three.

Kara Cameron: Thank you. That being said, they are not incremental to our overall plan, so it's worth thinking about balancing that uplift that we're talking about with a more normalized G&A run rate per the previous question as well. We had a number of positions vacant that have now been filled, and we will have very few roles continue to be filled in Q2 and Q3, and so what we're really saying is we would expect removing the total of UBC that was in Q1 and looking at it as G&A as a percent of total revenue, and that's really where we would see a reasonable approximation for the remainder of the year, and so that was about 4.3% in Q1.

Speaker Change: That being said they are not incremental to our overall plan. So it's worth thinking about balancing that uplift that we're talking about with a more normalized G&A run rate per the previous question as well. So we had a number of physicians vacancies that have now been filled and we will have.

Speaker Change: A very few rules continue to be filled in Q2, and Q3 and so what we're really saying is we would expect removing the total of UBC.

Speaker Change: No. It was in Q1, so and looking at it as G&A as a percent of total revenue and Thats really where we would see a reasonable approximation for the remainder of the year and so and that was about four 3% in Q1.

Lorne Kalmar: Okay, so with the GNA uplift, it won't have a material impact, you know, the increased development fees won't have a material impact on on the per unit earnings, but we will be higher on the development fee income than we were last year, or you guys will be than you were last year. Correct. You got it. Okay. Okay, that's very helpful.

Speaker Change: Okay. So if the G&A.

Speaker Change: <unk> uplift it won't have a material impact the increased development is one of the material impact on <unk>.

Speaker Change: On the per unit earnings, but we will be higher on the development fee income than we were last year you guys will be than you were last year.

Speaker Change: Correct you got it okay.

Speaker Change: Okay. That's very helpful. And then this this was maybe a misunderstanding on my part, but I'm I understand the JV, that's paying both crombie and the respective development partner and then if so could you maybe help me understand how the JV is funded.

Kara Cameron: And then this, this was maybe a misunderstanding on my part, but am I to understand that it's the JV that's paying both Crombie and the respective development partner? And then if so, could you maybe help me understand how the JV is funded? Sure. So yes, the joint venture, we are co-managing the project. So there will be development management fees that come out of the joint venture for both Crombie and West Group. And there will be line of credit within the joint venture. Okay. That's helpful.

Speaker Change: Sure. So yes, the joint venture we are co managing the project to the Rovs development management fees that come out of the joint venture for both Crombie and Lash group.

Speaker Change: And there will be line of credits within the joint ventures.

Speaker Change: Okay.

Mark Holly: And then just last one quickly, just wondering if there's any update on on Broadway and commercial, the zoning process there. Hey, Lorne. It's Mark. Still advancing through the entitlement process, working closely with our partner. We're hoping to have further clarity and updates in the probably quarter or two to come. But the two teams are working closely together to get that through the entitlement process.

Speaker Change: That's helpful. And then just last one quickly just wondering if theres any update on Broadway and commercial are the zoning process there.

Mark: Hey, Lauren it's mark.

Lauren Kalmar: Still advancing through the entitlement process working closely with our partner, we're hoping to have further clarity and updates.

Mark: Probably quarter or two to come.

Mark: But the two teams are working closely together to get that through the entitlement.

Speaker Change: As your development partner in any way motivated to sell this.

Mark Holly: Is your development partner in any way motivated to sell this or to at least monetize their interest? We're both motivated to get it entitled. That's definitely step one and we are actively working together to get that. Okay, okay, fair enough.

Mark: So at least monetize their interest.

Speaker Change: We are both motivated to get it entitled.

Speaker Change: Definitely step one and we are actively working together to get that first accomplish okay. Okay fair enough. Thank you very much. Thanks.

Lorne Kalmar: Thank you very much.

Speaker Change: Thanks.

Speaker Change: Alright.

Speaker Change: Your next question comes from the line of Brad Sturges from Raymond James Your line is now open.

Brad Sturges: Your next question comes from the line of Brad Sturges from Raymond James. Your line is now open. Hey there. My question is related to, you know, thinking about growth capital and levels of investment going forward. Like, has that changed much at all in terms of maybe the total dollar amount you're looking to allocate to growth capital? And then, you know, with the weightings between your various growth buckets, whether it's non-major or major development acquisitions, entitlement, would those have shifted at all, you know, in light of some of the recent new partnerships you have in place?

Brad Sturges: Hey, there.

Speaker Change:

Speaker Change: Thank you Ed.

Speaker Change: My question is related to thinking about growth capital and levels of investment going forward.

Speaker Change: Has that changed much at all in terms of maybe the total dollar amount youre looking to allocate to growth capital and then you know.

Speaker Change: With the weightings between your various.

Speaker Change: Growth buckets.

Speaker Change: Whether it's a non major major developments acquisitions entitlement.

Speaker Change: <unk> shifted at all.

Speaker Change: You know in light of some of the recent new partnerships you have in place.

Mark Holly: So when you kind of step back and think about total capital allocation, the way that we've been talking about it for a number of years now is we will spend up to $250 million, or the last couple of years we've been total capital in the $180 million-ish range. You're thinking about them in the right buckets, non-major and major and acquisitions. So non-majors are typically running at about 50% of the capital that we allocate, and that adds and goes a little bit, because we had the Marlstone and we also did buy Davie Street, and so that acquisition would have crept up, it would come at the expense of the percentage of non-majors going down.

Speaker Change: So when you kind of step back and think about total allocate capital allocation the way that we've been talking about it for a number of years now is we will spend up to $250 million.

Speaker Change: Our last couple of years, we've been total capital and a $1 80 ish range.

Speaker Change: Youre thinking about them in the right buckets, non major and major and acquisitions. So non majors are typically running at about 50% of the capital that we allocate and that ebbs and flows a little bit because we had the marlstone in and we also did by daily streets, and so that acquisition would have crept up that would come at the expense of the percentage of <unk>.

Speaker Change: One major is going down, but if you just think about it generally speaking non majors, usually running around the 40% to 50% majors run in the 30%.

Mark Holly: But if you just think about it, generally speaking, non-majors usually run in around the 40 to 50%, majors run in the 30%, and the rest goes to acquisitions. That's sort of how we look at the allocation of capital, and where we like that is the flexibility it has in those three categories, because as you know, non-majors are $50 million or less, they're usually done in 12 months or less, and they have a really good yield on cost, and majors do have a bit longer of a runway on them, but they're excellent assets for the long term where we're optimizing the real estate that we have.

Speaker Change: The rest goes to acquisitions.

Speaker Change: That's sort of how we look at the allocation of capital.

Speaker Change: We're we like that is the flexibility it has in those three categories. Because as you know non majors are $50 million or less they are usually done in 12 months or less and they have a really good yield on cost and majors do have a bit longer of a runway on them, but they are excellent assets for the long term, where we're optimizing the real estate that we have.

Mark Holly: So that's a longer answer for you, but it gives you the backdrop strategically how we think about capital allocations, how we allocate it, how we decide between major and non-majors and acquisitions.

Speaker Change: So that's a longer answer for you, but it gives you the backdrop strategically how we think about capital allocations, how we allocate it how we decide between major non majors and acquisitions.

Mark Holly: And I guess acquisitions are going to be opportunity driven, but I guess how would that Pipeline look today, whether it's third party or from We are actively in the market trying to continue to add more grocery anchor to our portfolio and we have a lot of discussions with third parties. As we've talked in the past, we've had a great relationship and continue to have an amazing relationship with Empire. We have purchased assets from them over time. They do have assets in their balance sheet. We do have dialogues with them. It's a matter of when they're prepared to look at selling.

Speaker Change: And I guess acquisitions are going to be opportunity, driven, but I guess how would that.

Speaker Change: <unk> look today, whether it's third party or from EMCORE.

Speaker Change: Huh.

Speaker Change: We are actively in the market trying to continue to add more grocery anchor to our portfolio and we have a lot of discussions with third parties as we've talked in the past we've had a great relationship and continue to have an amazing relationship with Empire, we have purchased assets from them over time they do.

Speaker Change: Have assets with and without them and their balance sheet. We do have dialogues with them. It's a matter of when they are prepared to look at selling we are absolutely prepared to look at acquiring.

Mark Holly: We are absolutely prepared to look at acquiring. At this point, we're looking at Buff and third party is sort of the focus right now.

Speaker Change: But at this point, we're looking at <unk>.

Speaker Change: Third party is sort of the focus right now.

Speaker Change: Okay last question just for clarification.

Brad Sturges: Okay, last question, just for clarification on the office segment, I think there was like a one time adjustment.

Speaker Change: On the office segment I think there was like a one time adjustment I'm just curious what that was.

Arie Bitton: I'm just curious of what that was. Related to.

Speaker Change: Related to.

Brian: Hey, Brian sorry, so that was related to a recovery adjustment just a onetime.

Arie Bitton: Hey Brad, it's Arie. So that was related to a recovery adjustment, just a one-time piece on that. Beyond that, we don't expect any more of those impacts moving forward after this was adjusted.

Brian: Piece on that beyond that we don't expect any more of those impacts moving forward. After this one.

Brian: Adjusted in Q1.

Arie Bitton: How much was the adjustment? Approximately three. The Board of Trustees Meeting, Page 22 of 22 Page 22 of 22 Great, thank you.

Speaker Change: How much was the adjustment.

Speaker Change: Approximately 364.

Speaker Change: Okay.

Speaker Change: Alright, thank you.

Speaker Change: Okay.

Speaker Change: Your next question comes from the line of Mario <unk> from Scotiabank. Your line is now open.

Mario Saric: Your next question comes from the line of Mario Saric from Scotiabank. Your line is now open. Hi, good afternoon. Maybe coming back to the West Group, JV, just so it's clear in terms of like debits and credits, if you will, or cash coming in cash coming out from an FFO standpoint, it sounds like the incremental Fee income coming from the partnership will generally be offset by higher G&A. So it's kind of a net wash this year. And then the expectation going forward is for it to be a net positive. Is that the right way to think about it?

Mario: Hi, good afternoon.

Speaker Change: Maybe coming back to the West group JV, just thoughts are clear in terms of like debits and credits if you will or cash can be cash coming out from an ethical standpoint, it sounds like the incremental.

Speaker Change: The income coming from the partnership will generally be offset by higher G&A. So it's kind of a net wash this year and then the expectation.

Forward is it for it to be a net positive.

Speaker Change: The right way to think about it.

Speaker Change: Yes that definitely is.

Kara Cameron: Yeah, that definitely is. Kara was talking about, you know, we were capitalizing some labor in there that will now become expense as we now have the partnership. So that will be a bit of an offset in 2025. But it definitely will be a net positive, you know, if you think about the multi years that this will take to get these through. These are long term, medium term projects that we've identified are in MD&A. So you are thinking about it correctly, Mario.

Speaker Change: As Karen was talking about we were capitalizing some labor in there that will now become expense as we now have the partnership so that will be a bit of an offset in 2025, but it definitely will be a net positive as you think about the <unk>.

Speaker Change: Multi years of this will take to get these through these are long term medium term projects that we've identified are in MD&A. So you are thinking about it correctly Mario anything else to anchor on that.

Kara Cameron: Anything else to add, Kara?

Speaker Change: No go ahead please.

Speaker Change: Got it got it.

Mario Saric: Okay, and then also, I guess, kind of sticking to the cash in and out, in terms of potentially selling partial stakes in the existing buildings, is that something that is being contemplated this year, next year? Or is this simply more of an entitlement partnership? It's more of an entitlement partnership, Mario, so no anticipated partial sales in the near term.

Speaker Change: Okay. Okay, and then also I guess.

Speaker Change: Kind of sticking to the caching to note in terms of potentially selling partial stakes in the existing buildings or is that something that is being contemplated. This year next year or is this simply more of an entitlement.

Speaker Change: Partnership.

Speaker Change: No it's more of an entitlement partnership Mario So no anticipated parcel sales in the near term.

Speaker Change: Okay.

Mario Saric: Okay, maybe shifting gears just to Bronte, I noted the FFO this quarter came down quite a bit from Q4 was almost zero, now included about an 8% drop in revenue. Like I know expense accruals can be volatile quarter over quarter, i.e. Q4 versus Q1, but maybe can you talk about what you're seeing on the top line revenue side there, any one-time item during the quarter in the numbers and kind of what you expect, i.e. the stabilization of the asset going forward? I think you break down the components on the revenue side. We're actually holding rents at a steady rate per square foot.

Speaker Change: Maybe shifting gears just to.

Speaker Change: Brian T. I noted the <unk> this quarter it came down quite a bit from.

Speaker Change: Q4 was almost zero.

Speaker Change: And then could you put an 8% drop in revenue like I know expense accruals can be volatile quarter to quarter I E Q4 versus Q1, but maybe can you talk about what youre seeing on the top line revenue side. There are any one time item during the quarter and the numbers and kind of what you expect or E. The stabilization of the asset going forward.

Speaker Change: Sure sure.

Speaker Change: <unk> sorry.

Speaker Change: I think.

Speaker Change: You breakdown the components on the revenue side.

Speaker Change: We're actually holding rents.

Speaker Change: Steady rate per square foot, while we did see in the quarter was just given a high amount of turnover due to the leasing that we've done in prior years and some of those leases rolling over we did see some early quarter turnover I'm happy to report that we were able to.

Arie Bitton: What we did see in the quarter was just given a high amount of turnover due to the leasing that we've done in prior years and some of those leases rolling over. We did see some early quarter turnover. I'm happy to report that we were able to backfill virtually all of it. We're ending the quarter. We don't get specific guidance on property specific, but we did on this one finish at a higher committed occupancy than we started the quarter. So that's on the revenue side. On the expense side, we were also hit with some seasonal maintenance items that we don't anticipate to see moving into spring and summer.

Speaker Change: Backfill.

Speaker Change: Actually all of it we're ending the quarter, we don't give specific guidance on.

Speaker Change: Property specific but we did on this one finished at a higher occupancy than we started the quarter. So.

Speaker Change: Thats on the revenue side on the expense side, we were also.

Speaker Change: Hit with some seasonal maintenance items.

Speaker Change: We don't anticipate to see moving into spring and summer. So overall our outlook on Friday remains positive we're seeing some great tenant interest coming in through this.

Arie Bitton: Overall, our outlook on Bronte remains positive. We're seeing some great tenant interest coming in through this early spring season. On that I would say it's Cori Wanda.

Speaker Change: Early spring season so.

Speaker Change: Beyond that I would say with Carty one issue.

Arie Bitton: The only thing I'll add to that, Mario, is that we did put a mortgage on our commercial there, so we had about $100,000 in extra interest expense.

Speaker Change: Yeah, the only thing I'll add to that Mario is that we did put a mortgage on our commercial there. So we had about 100000 in extra interest expense.

Speaker Change: Got it.

Mario Saric: Okay, maybe shifting to the core retail portfolio, the occupancy is 96.6%.

Speaker Change: Okay.

Speaker Change: And then maybe shifting to the core retail portfolio occupancy.

Mario Saric: If we strip out any potential future dispositions that could bump it up, like we saw last quarter, based on your leasing pipeline and the current macro environment, do you foresee potentially the occupancy moving even higher from where it is? Mario, we hit an all-time high this quarter and committed occupancy at 97.1. The team's pretty proud of achieving that milestone. We hit the milestone last quarter, we hit another milestone this quarter. We had always talked about a range between 95 and 97 and now we're at the top end of the 97, so at this point we're pretty comfortable where we're sitting.

Speaker Change: It was 96, 6%.

Speaker Change: If we strip out any potential future dispositions that could bump it up like we saw last quarter and based on your leasing pipeline and the current macro environment.

Speaker Change: Do you foresee potentially.

Speaker Change: The team will be even higher from where it is today.

Speaker Change: Well Mario we hit an all time high this quarter and committed occupancy at 97 one.

Speaker Change: The team is pretty proud of.

Speaker Change: Achieving that milestone it was we hit the milestone last quarter, we had another milestone this quarter.

Speaker Change: We had always talked about a range between 95%, 97% and now are at the top end of the 97. So at this point, we're pretty comfortable where we're setting our east team works as you know each day working with our tenants and.

Mark Holly: Arie's team works, as you know, each day working with their tenants. Rated Occupancy and Economic Occupancy and making sure we got the right merch mix.

Speaker Change: Occupancy and economic occupancy, making sure we have the right merch mixed.

Speaker Change: Can it go higher maybe a little bit will go down a little bit maybe but we're in a really good range I think the way to think about it.

Mark Holly: Can it go higher? Maybe a little bit. Will it go down a little bit? Maybe. But we're in a really good range is, I think, the way to think.

Mark Holly: Okay, so the overall environment such that you do think that the economic occupancy can come up to where the committed occupancy This doesn't flow within the portfolio, but I'd say that... Potentially could be some small BIP improvement within our economic, but... We're not talking about a lot.

Speaker Change: Okay. So the overall environment such that you do think that the economic occupancy.

Speaker Change: Come up towards the committed occupancy is today.

Speaker Change: There's ebbs and flows within the portfolio, but I would say that.

Speaker Change: There potentially could be some small.

Speaker Change: Improvement within our economic but.

Speaker Change: No we're not talking about a lot here.

Mario Saric: Okay. And it's a really small part of your portfolio, but the office occupancy at 86%. How do you kind of see that?

Speaker Change: Okay, and it's a really small part of your portfolio, but the office occupancy at 86% how do you kind.

Speaker Change: You see that.

Mario Saric: involving through 25 and 26. Mayor, it is a small component of our portfolio. It's only about 5% of our GLA. It's broken down really between two segments. So our downtown Halifax office portfolio has performed exceptionally well relative to the rest of the market. And we're very happy to have some exciting tenants that will be joining us at some point later on in 2025 on the office side. So that interest remains strong. The challenges that we've been having in Moncton office portfolio, the leasing team is actively working on backfilling some of the departed tenants. It is a more challenging asset for us to lease up, but we're continuing to work through that.

Speaker Change: Evolving through 'twenty five 'twenty six.

Speaker Change: Merit has a smartphone.

Speaker Change: Portfolio.

Speaker Change: 5% of our GLA.

Speaker Change: Or it is broken down really between two segments, so our downtown Halifax office portfolio.

Speaker Change: It has performed exceptionally well relative to the rest of the market.

Speaker Change: And we're very happy to.

Speaker Change: To have some exciting.

Speaker Change: Tenants that will be joining us at some point later on in 2025 on the office side, so that interest remains strong.

Speaker Change: The challenges we have been having in Moncton office portfolio.

Speaker Change: Those are the leasing team is actively working on back filling some of the the part of tenants.

Speaker Change: It is of more challenging asset for us to lease up but we're continuing to work through that.

Mario Saric: But that said, it's only about 140,000 square feet. So it's a much smaller component of the office portfolio exposure that we have.

Speaker Change: But that said, it's only about 140000 square feet. So it's a much smaller component of the office portfolio exposure that we have but.

Speaker Change: We're seeing some traction.

Mario Saric: Okay, thank you. Thanks, Mario.

Speaker Change: Okay. Thank you.

Speaker Change: You're welcome.

Speaker Change: Thanks Maria.

Sumayya Syed: Your next question comes from the line of Sumayya Syed from CIBC. Your line is now open. Good afternoon.

Speaker Change: Your next question comes from the line of <unk> from CIBC. Your line is now open.

Speaker Change: Thanks, Good afternoon.

Sumayya Syed: Just following up on the West Group partnership and of the interest that were bought from Empire, can you just talk through the strategic advantage with somebody like a West Group being the partner as opposed to working through the entitlement process with Empire and are there other Empire co-owned sides that could see the same kind of outcome?

Speaker Change: Just following up on the last scrip, a partnership and off the interest that were bought from Empire.

Speaker Change: Talk to this strategic advantage with somebody like a west grouping the partner as opposed to working through the entitlement process.

Speaker Change: With Empire and are there other empire colon coincides that could see the same kind of outcome.

Mark Holly: Hi Sumayya, it's Mark. So we have historically been talking about the two parts of the country that we really see a good opportunity to optimize with entitlements, and it's in the Halifax market and the Vancouver market. They're very different in terms of planning and approvals.

Simona: Hi, Simona asked Mark.

Simona: So we have historically you've been talking about the two parts of the country that we really see good opportunity to optimize with entitlements and it's in the Halifax, Mark in the Vancouver market.

Simona: They're very different in terms of planning and approvals.

Mark Holly: Page 4 of 5 built over 7,000 homes, over 100 communities, partnering with somebody like that, co-partnering with them through this is a great positive. And so we see a lot of tremendous value in that, whereas in Atlanta, Canada, partnering with somebody like Montez, which is more institutional capital focused, that has a background in real estate, we're really leading all aspects of that day-to-day. We kind of look at it in the two sides of the country, and we took on different partners for different reasons.

Speaker Change: Thanks, Hoover is very complex market and partnering with somebody like West group.

Simona: Yes.

Speaker Change: Well over 60 years old and a family based Western Canada focused.

Speaker Change: Built over 7000 homes over 100 communities by partnering with somebody like that co partnering with them through this as a great positive and so we see a lot of tremendous value in that whereas in Atlantic Canada.

Speaker Change: Partnering with somebody like Montes, which is more institutional capital focused that has a background in real estate, where we're really leading all aspects of that day to day.

Speaker Change: We kind of look at it and the two sides of the country and we took on different partners for different reasons.

Mark Holly: At this point, we're really happy with the partnership programs that we have in place and not looking to expand beyond what we have at this point. Okay. And then in terms of post-entitlement objectives in the long term, it sounds like Crombie wants to maintain residential ownership. Would that be outright full ownership or keep the partners on? Do you have a sense of how that pans out down the line? Yeah, at this point, it's about getting them entitled. And then ultimately, once you have that entitlement to, between the partnerships, collectively make the decision on, you know, where's the market at?

Speaker Change: At this point, we're really happy with the partnership programs that we have in place and not looking to expand beyond what we have at this point in time.

Speaker Change: Okay, and then in terms of pulse entitlement objectives in the long term it sounds like hobby.

Speaker Change: Wants to maintain residential ownership or that'd be outright ownership or keep their partners on do you have a sense of how that pans out on the line.

Speaker Change: Yes at this point, it's about getting them entitled and then ultimately once you have that entitlements to between the partnerships collectively make the decision on.

Speaker Change: Whereas the market at <unk>.

Mark Holly: Are we prepared to move forward and put the shovel in the ground at this point? They're all on 50-50 partnerships. So, you know, we'll work at that part. There's flexibility on both partners' behalf. But once we get through entitlements, then we'll hit that next phase of decision of go-no-go and about.

Speaker Change: We are prepared to move forward to put the shovel in the ground at this point.

Speaker Change: They are all on a 50 50 partnership so.

Speaker Change: The workout that part there's flexibility on both partner's behalf.

Speaker Change: But once we get through entitlements and we will hit that next phase of decision of go no go in.

Speaker Change: And the value.

Speaker Change: Great.

Mark Holly: And then just switching to the retail side of things, obviously doing very well there and just Given the ongoing shortage of retail supply and retailers still have growth mandates, do you expect that to be a positive to your non-major development pipeline? And do you see that growing on the back of that unabated demand? Certainly a lot more demand than there is supply and we're getting a lot of the incomings for tenants that want to be located on our grocery and food shopping centers. The pad opportunities certainly are there. The challenges now are just trying to make the numbers work with respect to construction costs, but on our existing GLA, like I said, demand is certainly outstripping supply.

Speaker Change: And then just switching to the retail side of things, obviously doing very well there and just given.

Speaker Change: Given the ongoing shortage of retail supply and retailers, we still have growth mandates do you expect that to be a positive T. R. Non major develop on the pipeline and do you see that growing on the back of that.

Speaker Change: Unabated demand.

Speaker Change: There's certainly a lot more demand than there is supply and we're getting a lot of the incoming.

Speaker Change: Tenants want to be located on our grocery anchored shopping centers.

Speaker Change: Pat opportunity certainly are there.

Speaker Change: Some of the.

Speaker Change: Some of the challenges now are just trying to make the numbers work with respect to construction costs, but.

Speaker Change: On our existing GLA.

Speaker Change: Demand is certainly outstripping supply and.

Sumayya Syed: And I think the fortunate part about having a tenant watch list is that we're constantly looking at tenants that might have some existing challenges so that we can replace them should they decide to leave. So I'd say that the incomings are a lot more than the outgoings, and we're seeing a lot of very, very strong demand. Thank you.

Speaker Change: I think the fortunate part of us having a tenant watch list is that we're constantly looking at tenants that might have some existing chan.

Speaker Change: Challenges so we can have.

Speaker Change: Placed on.

Speaker Change: <unk>.

Speaker Change: Should they decide to leave so.

Speaker Change: I would say that the incoming as our allowable horizontal.

Speaker Change: The outgoing and.

Speaker Change: We're seeing a lot of very very strong demand.

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

Sumayya Syed: I'll turn it back.

Speaker Change: Your next question comes from the line of some the Biyani from DD Cowen. Your line is now open.

Sam Damiani: Your next question comes from the line of Sam Damiani from TD Cowen. Your line is now open. Mr. Sam Damiani from TD Cowen, your line is now open. There, if I turn off the mute. Sorry about that. Good afternoon, everyone. Yeah, so yeah, I think, you know, the leasing discussions have been, you know, brought up a number of times.

Speaker Change: Mr. Sam Damiani from TD Cowen Your line is now open.

Speaker Change: But if I turn off the mute sorry about that good afternoon, everyone.

Speaker Change: Yeah. So yeah, I think the leasing discussions have been brought up a number of times, but I guess it would be hard to answer the question of what was what's been the biggest change in the impact.

Sam Damiani: But I guess if you had to answer the question of, you know, what was what's been the biggest change in the impact, or the impact on leasing discussions from the tariff dispute in the last month or two, you know, what would it be will be the sort of single biggest impact that you've had? I wouldn't say that there's been much change in the body language of our tenants quarter over quarter. Certainly, as I said earlier, the demand is there. Have we seen any trepidation from tenants or any slowdowns? The leasing team is not really hearing that.

Speaker Change: Or the impact on leasing discussions from the tariff dispute in the last month or two.

Speaker Change: What would it be will be that sort of single biggest impact to us.

Speaker Change: Sorry.

Speaker Change: Didn't say that there's been much change in the body language of our tenants quarter over quarter.

Speaker Change: Certainly.

Speaker Change: I said earlier the demand is there.

Speaker Change: <unk> seen any trepidation from tenants or any slowdown.

Speaker Change: The leasing team is not really hearing that I think that.

Arie Bitton: I think that's likely due to the fact that our portfolio is mostly essential and not discretionary. But like I said, previous answer. Tariffs do not seem to be playing a factor into the essential retailer decision making.

Speaker Change: Like that's likely due to the fact that our portfolio is mostly essential and not discretionary.

Speaker Change: But.

Speaker Change: Like I said previous answer.

Speaker Change: Tariffs do not seem to be playing a factor into the essential retailer decision, making at this point.

Arie Bitton: Okay, what reason Ari would you would you say that's the case? I think that the property types are generating the traffic that these tenants need to come onto the shopping center with. Not a lot of feedback that we're hearing right now that their supply chains are affected. That might be coming later on, but like I said, I think the nature of these tenant types is not one that's going to be severely impacted by these tariffs. And if they are, I think the fact that they're essential and non-discretionary means that they'll be able to pass that on to the consumer.

Speaker Change: Okay. What reason would you say that's the case.

Speaker Change: Okay.

Speaker Change: It's tough to say I think that.

Speaker Change: <unk>.

Speaker Change: Property taxes are generating the traffic that.

Speaker Change: Tenants.

Speaker Change: I need to come out to the shopping center with there is really.

Speaker Change: Not a lot of.

Speaker Change: The feedback that we're hearing right now that their supply chains are affected that might be coming later on but like I said I think the nature of these tenant types is not one that's going to be severely impacted by these by these tariffs and if they are I think the fact that their essential and non discretionary means that they'll be able to pass that onto the <unk>.

Speaker Change: Sure.

Speaker Change: That's helpful. Thank you and then last one for me is just on capital recycling is and again. This has been touched on a bit already but it just seems like crombie sort of opportunity set is as.

Sam Damiani: Thank you.

Mark Holly: And the last one for me is just on capital recycling, and again, this has been touched on a bit already, but it just seems like Crombie's sort of opportunity set is crystallizing, coming into better focus. And perhaps over time, there might be some bigger investment opportunities than we've seen in the last couple of years. And as a result, what would be some opportunities within the portfolio for non-core dispositions in a more meaningful way to help fund that potential acceleration of growth in the future?

Speaker Change: Crystallizing coming into better focus and perhaps over time, there might be some some bigger bigger investment opportunities that we've seen in the last couple of years.

Speaker Change: And as a result, what would be.

Speaker Change: There will be some opportunities within the portfolio for non core dispositions and a more meaningful way to help fund that potential acceleration of growth in the future.

Speaker Change: Sam It's Marc good afternoon.

Mark Holly: Sam, it's Mark. Good afternoon. When we step back and look at the portfolio, it's 304 properties, coast to coast, focused on grocery anchored. We have disposed of a few assets over the last couple of quarters. We're actively, as we answered one of the other analysts' questions around growth, we are actively looking to add more grocery anchored. And where we're able to find grocery anchored, that sort of meets the criteria that we have in our underwriting, while it protects the balance sheet secreted to AFFO, we're going to take advantage of them. So, At this point, we continue to uncover opportunities and try to add them to the portfolio.

Speaker Change: Look when we step back and look at the portfolio of 304 properties coast to coast focus on grocery anchored.

Speaker Change: We have disposed of a few assets over the last couple of quarters. We're actively as we answered to front of the other analysts questions around growth. We are actively looking to add more grocery anchored.

Speaker Change: And we're able to find grocery anchored that sort of meet the criteria that we have in our underwriting while it protects the balance sheet is accretive to <unk>.

Speaker Change: Are going to take advantage of them so.

Speaker Change: At this point, we continue to uncover opportunities and try to add them to the portfolio at the balance sheet as you've been calling out is in tremendous health and Karen and her team has done a phenomenal job getting debt to EBITDA with liquidity at somewhat near all time highs and unencumbered asset pool. So.

Mark Holly: The balance sheet, as you've been calling out, is in tremendous health, and Kara and her team have done a phenomenal job getting it debt to EBITDA with liquidity at somewhat near all-time highs and unencumbered asset pools. If the opportunity presents themselves, we're ready to action against it. That helps answer and give you a bit more clarity. That is helpful. Thank you.

Speaker Change: If the opportunity presents themselves, we're ready to action against it so.

Speaker Change: I hope that helps answer and give you a bit more clarity.

Speaker Change: That is helpful. Thank you and I'll turn it back.

Mark Holly: And I'll turn it back over to you.

Speaker Change: Your next question comes from the line of Gaurav mature from Green Street. Your line is now open.

Gaurav Mathur: Your next question comes from the line of Gaurav Mathur from Green Street. Your line is now open.

Gaurav mature: Thank you and good afternoon, everyone.

Gaurav Mathur: Thank you and good afternoon, everyone. We noticed the disposition this quarter and just looking ahead, how should we think through the disposition pipeline? And is there a quantum of assets that you're looking to dispose for 2020? There's no quantum of assets that we're looking to dispose in 2025, you know, as I just mentioned with Sam, the balance sheet is in terrific health. So we're not actively working on a disposition program. What we are actively working on is how do you continue to own and operate high-performing assets that stick to the core of what we're focused in on, which is necessity-based grocery anchored.

Speaker Change: We noticed.

For disposition this quarter just looking ahead, how should we think through the disposition pipeline and is that a quantum of assets that youre looking to dispose for a quite gratifying.

Speaker Change: There is no quantum of assets that we're looking to dispose in 2025.

Speaker Change: As I just mentioned with Sam the balance sheet is in terrific health.

Speaker Change: So we're not actively working on a disposition program. While we are actively working on is how do you continue to own and operate high performing assets.

Speaker Change: Stick to the core of what we're focused on which is a necessity based grocery anchored so the last three assets that we have disposed off don't fit the profile of what we ultimately want to invest our money in or our time and effort and so as we continue to look at the portfolio. There are probably a couple of other ones in there that if the right opportunity presented itself, we would might action.

Mark Holly: So the last three assets that we have disposed of don't fit the profile of what we ultimately want to invest our money in or our time and effort. And so as we continue to look at the portfolio, there are probably a couple of other ones in there that, you know, if the right opportunity presented itself, we might action. But the portfolio by and large, as we've talked about, is necessity-based. We're always looking to grow from it. So there is no set specific disposition actually. Thank you.

Speaker Change: But the portfolio by and large as we've talked about is necessity based we're always looking to grow from it. So there is no set specific disposition action plan.

Speaker Change: Okay. Thank you and then just switching gears to the partnerships that you have announced.

Mark Holly: And then just switching gears to the partnerships that you've announced. The one with Montez, you know, how did the thought process come around for the sale of 50% in the milestone along with other two sort of medium term projects in Halifax. Catalyst for Life. When you take a step back and think strategically, you know, as we've been talking about it, you know, being an essential read, it's owning grocery anchored necessity based. And then looking at the opportunities to optimize them through major and non-major developments. We took advantage of optimizing and green lit the milestone about 18 months ago and started construction.

Speaker Change: 101 has.

Speaker Change: Hardwood cost process come around for the sale of 50% and the milestone along with the.

Speaker Change: Other two sort of medium term projects in Halifax, or what was the catalyst for that.

Speaker Change: So when you take a step back and think strategically.

Speaker Change: We've been talking about it being an essential read it.

Speaker Change: Owning grocery anchored necessity based.

Speaker Change: And then looking at the opportunities to optimize them through major non major developments, we took advantage of optimizing and green lit tomorrow stone about 18 months ago and started construction we were doing that self developed.

Mark Holly: We were doing that self-developed, but when you reflect back on partnerships, we've always talked about partnerships and we talk about them in the way of major developments. So the game plan around the milestone was to highlight the proof of concept that Crombie can be a development manager. It can push these projects through the system in that market. And once we established that, we went to market to find a 50% partner to take some proceeds off the table, clip management fees throughout the duration of the development, and then ultimately get to a stable asset with a partnership.

Speaker Change: But when you reflect back on partnerships, we've always talked about partnerships and we talk about them in the way of major development. So the game plan around.

Speaker Change: The milestone was to highlight the proof of concept that crombie can be a development manager. It can push these projects through the system in that market and once we establish that we went to market to find a 50% partner to take some proceeds off the table put management fees throughout the duration of the developer.

Speaker Change: <unk> and then ultimately get to a stable asset with a partnership.

Mark Holly: At the same time, we looked at it more holistically around finding a programmatic partner that can also participate in other opportunities that are in and around the same area with Barrington and Brunswick. So it is a long-term view, it's a long-term approach, and so that was sort of the catalyst of sort of how we were thinking through back to our strategy of what do you own, how do you operate it, how can you optimize it, and how do you leverage partnerships to make sure your balance sheet is flexible to be opportunistic for what you are truly investing in, which is grocery-anchored core retail.

Speaker Change: At the same time, we looked at it more holistically around finding a programmatic partner that can also participate in other opportunities that are in around the same area with Barrington in Brunswick. So it is a long term view a long term approach and so that was sort of the catalyst of sort of how we were thinking through back to our strategy of what you own how do you operate it how can you optimize it.

Speaker Change: How do you leverage partnerships to make sure your balance sheet is flexible to be opportunistic for that what you are truly investing in which is grocery anchored core retail.

Speaker Change: Okay and then just last question on <unk>, what would that work.

Kara Cameron: Okay, and then just last question on the milestone, what would the cap rate be, or a range of cap rate be for BATROM?

Speaker Change: There are a range of cap rate before for that transaction.

Speaker Change: And we actually don't disclose cap rates on individual assets.

Kara Cameron: We actually don't disclose cap rates on individual assets, but we are at four and a half to five and a half on a yield on cost. Thank you.

Speaker Change: But we are at.

Speaker Change: Four five to five and a half and a yield on cost for that is disclosed.

Speaker Change: Okay. Thank.

Alexander: Thank you Alexander.

Unknown Executive: I'll turn it back over to you. As a reminder, if you have any questions, please press star 1.

Speaker Change: As a reminder, if you have any questions. Please press star one.

Pami Beer: Your next question comes from the line of Pami Beer from RBC Capital Markets. Your line is now open. Thanks. Hi, everyone. Just maybe one question for me. Coming back to the development fees, you mentioned, I think, over $5 million for this year. What is the cadence of that sort of revenue growth potentially look like over the next couple of years with the new JVs? And, you know, I suspect there's obviously some lumpiness there as well as you kind of hit the milestones. But just curious if there's any sort of recurring baseline aspect to them.

Speaker Change: Your next question comes from the line of Amit <unk> from RBC capital markets. Your line is now open.

Speaker Change: Thanks, Hi, everyone.

Speaker Change: Just maybe one question for me coming back to the development fees, you mentioned I think over five over $5 million for for this year. What is the cadence of that sort of revenue growth potentially look like over the next couple of years with the new JV.

Speaker Change: Theres, obviously, some lumpiness there as well as you've kind of hit the milestones, but just curious if theres any sort of recurring baseline aspect to them.

Speaker Change: Yes, so we're not disclosing all the.

Kara Cameron: We're not disclosing all the financial details of the deal, but what I can give you is that it is a fairly straight-lined approach to development management fees, so not a whole lot of lumpiness associated with that. Okay, so would it be unrealistic to think that the growth profile would be, you know, in that five, like five percentage range? Or is it is it better than that?

Speaker Change: The financial details of the deal, but what I can give you is that it is a fairly straight line approach to development management fees, so not a whole lot of lumpiness associated with that.

Speaker Change: Okay. So.

Speaker Change: Would it be unrealistic to think that the.

Speaker Change: Growth profile would be.

Speaker Change: And that five 5% ish range or is it better than that.

Speaker Change: We're really not giving guidance right now on the development management fee growth.

Unknown Executive: We're really not giving guidance right now on the development management fee growth. Okay, I'll turn it back. There are no further questions at this time.

Speaker Change: Okay, I'll turn it back.

Speaker Change: Thank you.

Speaker Change: There are no further questions at this time I will now turn the call over to Kirk Amarin. Please continue.

Kara Cameron: I will now turn the call over to Kara Cameron. Please continue. Thank you everyone for joining and we look forward to hosting you again on our Q2 call.

Speaker Change: Thank you everyone for joining and we look forward to hosting again on our Q2 call.

Speaker Change: Ladies and gentlemen this.

Unknown Executive: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation.

Concludes today's conference call. Thank you for your participation you may now disconnect.

Unknown Executive: You may now disconnect.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: No.

Sure.

Speaker Change: Yes.

Speaker Change: Okay.