Q1 2025 Primaris Real Estate Investment Trust Earnings Call

Prepared remarks, there will be a question and answer session.

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Claire Mahaney: Additional information about these assumptions, risks, and uncertainties are contained in Primaris Reads filings with securities regulators. These filings are also available on our website at www.primarisreads.com.

Speaker Change: I will now turn the call over to clear Mahaney, Vice President Investor Relations and ESG. Please go ahead. Thank you operator during this call our management of primary with Reed may make statements containing forward looking information within the meaning of applicable securities legislation forward looking information is based on a number of assumptions and are subject.

Operator: These filings are also available on our website at www.primarisreit.com. I'll now turn the call over to Alex Avery, Primaris Chief Executive Officer. Good morning.

These filings are also available on our website at www.primarisreit.com. I'll now turn the call over to Alex Avery, Primaris Chief Executive Officer.

Alexander Avery: I'll now turn the call over to Alex Avery, Primaris' Chief Executive Officer. Good morning. Thanks for joining Primaris REIT's first quarter 2025 conference call.

Alex Avery: Good morning. Thanks for joining Primaris REIT's first quarter 2025 conference call. Joining me today are Pat Sullivan, President and Chief Operating Officer, Briggs Dupleur, CFO, Wesley Buist, SVP Finance, Morty Bobrowsky, SVP General Counsel, Graham Procter, SVP Asset Management, and Claire Mahaney, VP, IR, and ESG. It is very satisfying to deliver continued strong results in the face of a lot of uncertainty, including strong same property NOI growth and substantial FFO per unit growth. We continue to exercise disciplined capital allocation, recycling capital from strategic dispositions and retained free cash flow into both strategic acquisitions and unit repurchases. The benefits to unitholders of this capital discipline, combined with the portfolio impacts of strategic capital recycling, can be most easily observed through a few key metrics.

Alex Avery: Thanks for joining Primaris REIT's first quarter 2025 conference call. Joining me today are Pat Sullivan, President and Chief Operating Officer, Briggs Dupleur, CFO, Wesley Buist, SVP Finance, Morty Bobrowsky, SVP General Counsel, Graham Procter, SVP Asset Management, and Claire Mahaney, VP, IR, and ESG. It is very satisfying to deliver continued strong results in the face of a lot of uncertainty, including strong same property NOI growth and substantial FFO per unit growth. We continue to exercise disciplined capital allocation, recycling capital from strategic dispositions and retained free cash flow into both strategic acquisitions and unit repurchases. The benefits to unitholders of this capital discipline, combined with the portfolio impacts of strategic capital recycling, can be most easily observed through a few key metrics.

Speaker Change: Through a number of risks and uncertainties many of which are beyond primary <unk> control that could cause actual results to differ materially from those that are disclosed in or implied by such forward looking information.

Alexander Avery: Joining me today are Pat Sullivan, President and Chief Operating Officer, Rags Davloor, CFO, Leslie Bust, SVP Finance.

Alexander Avery: Morty Wibrowski, SVP, General Counsel, Graham Proctor, SVP, Asset Management, and Claire Mahaney, VP, IR and ESG. It is very satisfying to deliver continued strong results in the face of a lot of uncertainty, including strong same property NOI growth and substantial FFO per unit growth. We continue to exercise disciplined capital allocation, recycling capital from strategic dispositions and retained free cash flow into both strategic acquisitions and unit repurchases. The benefits to unit holders of this capital discipline, combined with the portfolio impacts of strategic capital recycling, can be most easily observed through a few key metrics. First, tenant sales per square foot in our portfolio has increased nearly 60% from $482 per square foot at the time of our spin out to an all time high of $768 per square foot today.

Speaker Change: Additional information about these assumptions risks and uncertainties are contained in primary <unk> filings with securities regulators. These filings are also available on our website at www dot primarily dot com.

Speaker Change: I will now turn the call over to Alex Avery primary Who's Chief Executive Officer.

Alex Avery: Good morning, Thanks for joining primarily Reits first quarter 2025 conference call.

Speaker Change: Joining me today are Pat Sullivan, President and Chief operating Officer, Brexit Fluor, CFO Leslie abuse SVP finance.

Broski: Broski SVP General counsel.

Broski: Graham Proctor, SVP asset management, and Claire Mahaney, VP IR and ESG.

Alex Avery: First, tenant sales per square foot in our portfolio has increased nearly 60% from CAD 482 per sq ft at the time of our spin out to an all-time high of CAD 768 per sq ft today. Secondly, aggregate CRU sales across our portfolio over the same time frame has grown from CAD 800 million to CAD 3 billion. Thirdly, our average aggregate CRU sales per mall has more than doubled from CAD 58 million per mall to CAD 124 million per mall since 31 December 2021 through today. Fourth, our 90-day average daily trading volume in dollar terms has increased 100% from a year ago, from CAD 3 million to CAD 6 million per day.

First, tenant sales per square foot in our portfolio has increased nearly 60% from CAD 482 per sq ft at the time of our spin out to an all-time high of CAD 768 per sq ft today. Secondly, aggregate CRU sales across our portfolio over the same time frame has grown from CAD 800 million to CAD 3 billion. Thirdly, our average aggregate CRU sales per mall has more than doubled from CAD 58 million per mall to CAD 124 million per mall since 31 December 2021 through today. Fourth, our 90-day average daily trading volume in dollar terms has increased 100% from a year ago, from CAD 3 million to CAD 6 million per day.

Broski: It is very satisfying to deliver continued strong results in the face of a lot of uncertainties, including strong same property NOI growth and substantial <unk> per unit growth.

Broski: We continue to exercise disciplined capital allocation recycling capital from strategic dispositions and retained free cash flow into both strategic acquisitions and unit repurchases.

Alexander Avery: Secondly, aggregate CRU sales across our portfolio over the same timeframe has grown from $800 million to $3 billion. Thirdly, our average aggregate CRU sales per mall has more than doubled from $58 million per mall to $124 million per mall since December 31, 2021 through today. And fourth, our 90-day average daily trading volume in dollar terms has increased 100% from a year ago, from $3 million to $6 million per day. These four metrics speak directly to our strategic objective of becoming the first call for retailers in Canada and delivering tangible progress on our strategy for Unicorn.

Broski: The benefits to unit holders of this capital discipline combined with the portfolio impacts of strategic capital recycling can be most easily observed through a few key metrics.

Broski: Tenant sales per square foot in our portfolio has increased nearly 60% from $482 per square foot at the time of our spin out to an all time high of $768 per square foot today.

Alex Avery: These four metrics speak directly to our strategic objective of becoming the first call for retailers in Canada and delivering tangible progress on our strategy for unitholders. We expect to continue to be able to make this kind of strategic progress, taking all of these metrics significantly higher over the next few years. Through continued additions to our portfolio and deployment of Primaris strong management platform capabilities, we are now strategically important landlords to all of the most important retailers in Canada, and materially more important to each of these retailers than we were three years ago.

These four metrics speak directly to our strategic objective of becoming the first call for retailers in Canada and delivering tangible progress on our strategy for unitholders. We expect to continue to be able to make this kind of strategic progress, taking all of these metrics significantly higher over the next few years. Through continued additions to our portfolio and deployment of Primaris strong management platform capabilities, we are now strategically important landlords to all of the most important retailers in Canada, and materially more important to each of these retailers than we were three years ago.

Broski: Secondly, aggregate CRT <unk> sales across our portfolio over the same timeframe has grown from $800 million to $3 billion.

Broski: Thirdly, our average aggregate CRT use sales per mall has more than doubled from $68 million per mall.

Alexander Avery: We expect to continue to be able to make this kind of strategic progress, taking all of these metrics significantly higher over the next few years through continued additions to our portfolio and deployment of Primaris' strong management platform capability. We are now strategically important landlords to all of the most important retailers in Canada and materially more important to each of these retailers than we were three years ago. The strong recovery of Canadian mall fundamentals witnessed since 2021 is still in its early stages with very attractive supply and demand fundamentals and malls continuing to trade at very deep discounts to replacement.

Broski: Two $124 million per mall since December 31, 2021 through today.

Broski: And fourth our 90 day average daily trading volume in dollar terms has increased 100% from a year ago from $3 million 6 million per day.

Broski: These four metrics speak directly to our strategic objective of becoming the first call for retailers in Canada, and delivering tangible progress on our strategy for unit holders.

Alex Avery: The fact that Primaris has been able to deliver these remarkable strategic portfolio transformation improvements while simultaneously delivering sector-leading growth in per unit FFO, maintaining the lowest debt to EBITDA and FFO payout ratio amongst our peers, is only possible because of the deep cyclical downturn for enclosed malls that began a decade ago and culminated in the dramatic bottoming during the pandemic of 2020 and 2021. The strong recovery of Canadian mall fundamentals witnessed since 2021 is still in its early stages, with very attractive supply and demand fundamentals, and malls continuing to trade at very deep discounts to replacement costs. With limited investment capital competition for the ownership of large enclosed malls in Canada continuing today, we believe we may be able to continue to acquire market-leading Canadian malls and deliver significant further improvement in the quality of our business over the next few years.

The fact that Primaris has been able to deliver these remarkable strategic portfolio transformation improvements while simultaneously delivering sector-leading growth in per unit FFO, maintaining the lowest debt to EBITDA and FFO payout ratio amongst our peers, is only possible because of the deep cyclical downturn for enclosed malls that began a decade ago and culminated in the dramatic bottoming during the pandemic of 2020 and 2021. The strong recovery of Canadian mall fundamentals witnessed since 2021 is still in its early stages, with very attractive supply and demand fundamentals, and malls continuing to trade at very deep discounts to replacement costs. With limited investment capital competition for the ownership of large enclosed malls in Canada continuing today, we believe we may be able to continue to acquire market-leading Canadian malls and deliver significant further improvement in the quality of our business over the next few years.

Broski: We expect to continue to be able to make this kind of strategic progress taking all of these metrics significantly higher over the next few years through continued additions to our portfolio and deployment of primary <unk> strong management platform capabilities.

Broski: We are now strategically important landlords to all of the most important retailers in Canada and materially more important to each of these retailers than we were three years ago.

Broski: The fact that primarily has been able to deliver these remarkable strategic portfolio transformation improvements, while simultaneously delivering sector, leading growth in per unit <unk>, maintaining the lowest debt to EBITDA and <unk> payout ratio amongst our peers is only possible because of the deep cyclical downturn for enclosed malls that began.

Alexander Avery: With limited investment capital competition for the ownership of large enclosed malls in Canada continuing today, we believe we may be able to continue to acquire market leading Canadian malls and deliver significant further improvement in the quality of our business over the next few years. The changes we have already achieved in our portfolio composition are designed to deliver higher same property NOI growth, driving NAV per unit growth and FFO per unit growth, and ultimately delivering consistent annual distribution per unit growth.

Broski: A decade ago and culminated in the dramatic bottoming during the pandemic 2020 in 2021.

Alex Avery: The changes we have already achieved in our portfolio composition are designed to deliver higher same property NOI growth, driving NAV per unit growth, FFO per unit growth, and ultimately delivering consistent annual distribution per unit growth. On 31 January 2024, we completed the CAD 585 million acquisition of Oshawa Centre in Oshawa, Ontario, and a 50% interest in Southgate Centre in Edmonton, Alberta. Southgate is a top 10 Canadian mall in sales per square foot, and Oshawa Centre offers remarkable opportunity for growth in operating income and value surfacing. We also sold CAD 170 million of non-core shopping centres that did not meet our target mall criteria. A portion of the disposition proceeds were allocated to our NCIB program, where we purchased more stock in the first quarter of 2025 than we did in all of 2024. Discussions are ongoing on several additional acquisitions and dispositions.

The changes we have already achieved in our portfolio composition are designed to deliver higher same property NOI growth, driving NAV per unit growth, FFO per unit growth, and ultimately delivering consistent annual distribution per unit growth. On 31 January 2024, we completed the CAD 585 million acquisition of Oshawa Centre in Oshawa, Ontario, and a 50% interest in Southgate Centre in Edmonton, Alberta. Southgate is a top 10 Canadian mall in sales per square foot, and Oshawa Centre offers remarkable opportunity for growth in operating income and value surfacing. We also sold CAD 170 million of non-core shopping centres that did not meet our target mall criteria. A portion of the disposition proceeds were allocated to our NCIB program, where we purchased more stock in the first quarter of 2025 than we did in all of 2024. Discussions are ongoing on several additional acquisitions and dispositions.

Broski: The strong recovery of Canadian small fundamentals witnessed since 2021 is still in its early stages with very attractive supply and demand fundamentals and malls continuing to trade at very deep discounts to replacement costs.

Alexander Avery: On January 31st, we completed the $585 million acquisition of Oshawa Centre in Oshawa, Ontario, and a 50% interest in Southgate Centre in Edmonton, Alberta. Southgate is a top 10 Canadian mall in sales per square foot and Oshawa Centre offers remarkable opportunity for growth in operating income and value surfaces.

Broski: With limited investment capital competition for the ownership of large enclosed malls in Canada. Continuing today, we believe we may be able to continue to acquire market, leading Canadian malls and deliver significant further improvement in the quality of our business over the next few years.

Broski: The changes we have already achieved and our portfolio composition are designed to deliver higher same property NOI growth driving <unk> per unit growth in <unk> per unit growth and ultimately delivering consistent annual distribution per unit growth.

Alexander Avery: We also sold $170 million of non-core shopping centers that did not meet our target mall criteria. A portion of the disposition proceeds were allocated to our NCIB program, where we purchased more stock in the first quarter of 2025 than we did in all of 2024. Discussions are ongoing on several additional acquisitions and dispositions.

Broski: On January 31, we completed the $585 million acquisition of offshore center in Ottawa, Ontario, and a 50% interest in Southgate Center in Edmonton, Alberta.

Alexander Avery: We have capacity for significantly more than $2 billion of acquisitions and require no financing conditions on our deals. Primaris' profile as a well-capitalized and credible counterparty is a real differentiator in what is currently a challenging transaction market for large assets.

Alex Avery: We have capacity for significantly more than CAD 2 billion of acquisitions and require no financing conditions on our deals. Primaris profile as a well-capitalized and credible counterparty is a real differentiator in what is currently a challenging transaction market for large assets. I'll now turn the call over to Pat to discuss operating and leasing results, followed by Rags, who will discuss our financial results.

We have capacity for significantly more than CAD 2 billion of acquisitions and require no financing conditions on our deals. Primaris profile as a well-capitalized and credible counterparty is a real differentiator in what is currently a challenging transaction market for large assets. I'll now turn the call over to Pat to discuss operating and leasing results, followed by Rags, who will discuss our financial results.

Broski: <unk> is a top 10 Canadian mall in sales per square foot and offshore center offers remarkable opportunity for growth in operating income and value surfacing.

Broski: We also sold $170 million of non core shopping centers that did not meet our target mall criteria.

Patrick Sullivan: I'll now turn the call over to Pat to discuss operating and leasing results, followed by Rags who will discuss our financial Thank you, Alex. Our Shopping Centre portfolio continues to perform very well in 2025, with NOI growth coming from strong rental revenue growth, rising occupancy and rising operating cost recovery. Since June of last year, Primaris has transacted on approximately $1.2 billion of real estate, driving our portfolio quality significantly higher with same-source sales productivity, now totaling $768 per square foot. We are very quickly moving toward our ambition of becoming the first call for retailers looking to grow and expand their footprint in Canada.

Broski: A portion of the disposition proceeds were allocated to our NCI program, where we purchased more stock in the first quarter of 2025 than we did in all of 2024.

Raghunath Davloor: Thank you, Alex.

Pat Sullivan: Thank you, Alex.

Pat Sullivan: Our shopping center portfolio continues to perform very well in 2025, with NOI growth coming from strong rental revenue growth, rising occupancy, and rising operating cost recoveries. Since June of last year, Primaris has transacted on approximately CAD 1.2 billion of real estate, driving our portfolio quality significantly higher. With same store sales productivity now totaling CAD 768 per square foot, we are very quickly moving toward our ambition of becoming the first call for retailers looking to grow and expand their footprint in Canada. Our same property cash NOI was up 9.4% for the quarter compared to Q1 2024, which included same property shopping center cash NOI growth of 10.2% over 2024. The primary drivers were higher rents resulting from higher occupancy, step-up rents, and conversion of leases from variable to standard net leases, as well as higher percentage rent and prior year tax refunds.

Our shopping center portfolio continues to perform very well in 2025, with NOI growth coming from strong rental revenue growth, rising occupancy, and rising operating cost recoveries. Since June of last year, Primaris has transacted on approximately CAD 1.2 billion of real estate, driving our portfolio quality significantly higher. With same store sales productivity now totaling CAD 768 per square foot, we are very quickly moving toward our ambition of becoming the first call for retailers looking to grow and expand their footprint in Canada. Our same property cash NOI was up 9.4% for the quarter compared to Q1 2024, which included same property shopping center cash NOI growth of 10.2% over 2024. The primary drivers were higher rents resulting from higher occupancy, step-up rents, and conversion of leases from variable to standard net leases, as well as higher percentage rent and prior year tax refunds.

Broski: Discussions are ongoing on several additional acquisitions and dispositions.

Broski: We have capacity for significantly more than $2 billion of acquisitions and required no financing conditions on our deals.

Broski: <unk> profile as a well capitalized incredible counterparty is a real differentiator in what is currently a challenging transaction market for large assets.

Broski: I'll now turn the call over to Pat to discuss operating and leasing results followed by Greg who will discuss our financial results.

Patrick Sullivan: Our same property cash NOI was up 9.4% for the quarter compared to Q1 2024, which included same property shopping center cash NOI growth of 10.2% over 2024. The primary drivers were higher rents resulting from higher occupancy, step-up rents and conversion of leases from variable to standard net leases, as well as higher percentage rent and prior year tax refunds. Recovery ratios for the quarter were 78.1%, 3.3% higher as compared to Q1 last year, and consistent with the guidance we provided at the Investor Day in September of last year. For context, every 1% increase in CAM and tax we recover equates to approximately $2 million annually.

Pat: Thank you Alex our shopping center portfolio continues to perform very well in 2025 with NOI growth coming from strong rental revenue growth rising occupancy and rising operating cost recoveries.

Pat: Since June of last year, primarily <unk> transacted on approximately $1 2 billion of real estate driving our portfolio quality significantly higher with same store sales productivity now totaling $760 per square foot.

Pat Sullivan: Recovery ratios for the quarter were 78.1%, 3.3% higher as compared to Q1 last year, and consistent with the guidance we provided at the Investor Day in September of last year. For context, every 1% increase in CAM and tax we recover equates to approximately CAD 2 million annually. This number directly impacts the bottom line. Despite recent volatility in the markets and negative headlines, the underlying fundamentals for our shopping centers continue to be supported both by low retail supply, strong tenant sales, population growth, and continued tenant demand for quality space, as well as our national full service platform and team portfolio. In place occupancy was 93.2%, up 1.2%, and committed occupancy was 94.2%, which is relatively flat compared to Q1 last year. This is due to the addition of acquisitions that have elevated vacancy rates.

Recovery ratios for the quarter were 78.1%, 3.3% higher as compared to Q1 last year, and consistent with the guidance we provided at the Investor Day in September of last year. For context, every 1% increase in CAM and tax we recover equates to approximately CAD 2 million annually. This number directly impacts the bottom line. Despite recent volatility in the markets and negative headlines, the underlying fundamentals for our shopping centers continue to be supported both by low retail supply, strong tenant sales, population growth, and continued tenant demand for quality space, as well as our national full service platform and team portfolio. In place occupancy was 93.2%, up 1.2%, and committed occupancy was 94.2%, which is relatively flat compared to Q1 last year. This is due to the addition of acquisitions that have elevated vacancy rates.

Pat: We are very quickly moving toward our ambition of becoming the first call for retailers looking to grow and expand their footprint in Canada.

Pat: Our same property cash NOI was up nine 4% for the quarter compared to Q1 2024, which included same property shopping center cash NOI growth of 10, 2% over 2024.

Patrick Sullivan: This number directly impacts the bottom line. Despite recent volatility in the markets and negative headlines, the underlying fundamentals for our shopping centers continue to be supported both by low retail supply, strong tenant sales, population growth, and continued tenant demand for quality space, as well as our national full-service platform and Portfolio in place occupancy was 93.2% up 1.2% and committed occupancy was 94.2%, which is relatively flat compared to Q1 last year.

Pat: The primary primary drivers were higher rents, resulting from higher occupancy step up rents and conversion of leases from variable to standard net leases as well as higher percentage rent and prior year tax refunds.

Pat: Coverage ratios for the quarter were 78, 1% three 3% higher as compared to Q1 last year and consistent with the guidance. We provided at the Investor day in September of last year for.

Pat: For context every 1%, increasing cam and tax we recover equates to approximately $2 million annually.

Patrick Sullivan: This is due to the addition of acquisitions that have elevated vacancy rates.

Pat: This number directly impacts the bottom line.

Pat Sullivan: Our same property shopping center in-place occupancy grew 2.2% to 93.6% in Q1 versus Q1 last year, driven by significant reduction in vacancy at Halifax Shopping Centre, Lansdowne High Street, Medicine Hat, Sudbury, and Sunridge. Given the nature of the shopping center business, there is an element of seasonality in occupancy when looking at fourth quarter versus first quarter. Fourth quarter occupancy is typically higher as a result of seasonal tenants, and this can be seen in the approximate 1% decline in short-term leases occupancy from Q4 to Q1. The majority of this space transitions to vacant in-place for Q1, which is the period when remerchandising with new tenants is occurring. We are targeting 96% in-place occupancy, and we expect to achieve this target over the next 24 months, given our strong pipeline of leasing activity, excluding the impact of potential HBC store closures.

Our same property shopping center in-place occupancy grew 2.2% to 93.6% in Q1 versus Q1 last year, driven by significant reduction in vacancy at Halifax Shopping Centre, Lansdowne High Street, Medicine Hat, Sudbury, and Sunridge. Given the nature of the shopping center business, there is an element of seasonality in occupancy when looking at fourth quarter versus first quarter. Fourth quarter occupancy is typically higher as a result of seasonal tenants, and this can be seen in the approximate 1% decline in short-term leases occupancy from Q4 to Q1. The majority of this space transitions to vacant in-place for Q1, which is the period when remerchandising with new tenants is occurring. We are targeting 96% in-place occupancy, and we expect to achieve this target over the next 24 months, given our strong pipeline of leasing activity, excluding the impact of potential HBC store closures.

Patrick Sullivan: Our St. Property Shopping Centre in-place occupancy grew 2.2% to 93.6% in Q1 versus Q1 last year, driven by significant reduction of vacancy at Halifax Shopping Centre, Lansdowne, High Street, Medicine Hat, Sudbury and Sunridge.

Pat: Despite recent volatility in the markets and negative headlines the underlying fundamentals for our shopping centers continues to be supported both by low retail supply strong tenant sales population growth and continued tenant demand for quality space as well as our national full service platform and team.

Patrick Sullivan: Given the nature of the shopping center business, there's an element of seasonality and occupancy when looking at fourth quarter versus first quarter. Fourth quarter occupancy is typically higher as a result of seasonal tenants and this can be seen in the approximate 1% decline in short-term leases occupancy from Q4 to Q1. The majority of this space transitions to vacant in-place for Q1, which is the period when re-merchandising with new tenants occur.

Pat: Portfolio in place occupancy with 93, 2% up one 2% and committed occupancy was 94, 2%, which is relatively flat compared to Q1 last year.

Pat: This is due to the addition of acquisitions that have elevated vacancy rates.

Pat: Our same property shopping center in place occupancy grew two 2% to 93, 6% in Q1 versus Q1 last year driven by significant reduction in vacancy at Halifax Shopping Center Lansdowne High Street Medicine hat, Sudbury and Sandridge given.

Patrick Sullivan: We are targeting 96% in-place occupancy, and we expect to achieve this target over the next 24 months, given our strong pipeline of leasing activity, excluding the impact of potential HBC store closures. We do not anticipate the impact of our ability to execute new lease transactions or increase rents on renewal as a result of the HBC store closure, based on our experience with both Target and Sears closures. Leasing activity remained strong during the quarter, with 70 leases renewed at spreads of 7.8%. In addition, we completed 24 new deals, encompassing 62,000 square feet during the quarter. During the first quarter, approximately 100,000 square feet of large format tenants opened.

Pat: Given the nature of the shopping center business. There is an element of seasonality in occupancy when looking at fourth quarter versus first quarter.

Pat Sullivan: We do not anticipate the impact of our ability to execute new lease transactions or increase rents on renewal as a result of the HBC store closure. Based on our experience with both Target and Sears closures, leasing activity remained strong during the quarter with 70 leases renewed at spreads of 7.8%. In addition, we completed 24 new deals encompassing 62,000sq ft during the quarter. During the first quarter, approximately 100,000sq ft of large format tenants opened. Over the next 12 months, we have approximately 185,000sq ft of large format and exterior tenants opening, and have approximately 140,000sq ft of large format and exterior tenants that are in the final stages of negotiation. As we highlighted in our disclosures, Comarch filed for credit protection in January. Primaris had 36 stores operating under the banners of Bootlegger, Clio, and Ricky's within the Primaris portfolio.

We do not anticipate the impact of our ability to execute new lease transactions or increase rents on renewal as a result of the HBC store closure. Based on our experience with both Target and Sears closures, leasing activity remained strong during the quarter with 70 leases renewed at spreads of 7.8%. In addition, we completed 24 new deals encompassing 62,000sq ft during the quarter. During the first quarter, approximately 100,000sq ft of large format tenants opened. Over the next 12 months, we have approximately 185,000sq ft of large format and exterior tenants opening, and have approximately 140,000sq ft of large format and exterior tenants that are in the final stages of negotiation. As we highlighted in our disclosures, Comarch filed for credit protection in January. Primaris had 36 stores operating under the banners of Bootlegger, Clio, and Ricky's within the Primaris portfolio.

Pat: Fourth quarter occupancy is typically higher as a result of seasonal tenants and this can be seen in the approximate 1% decline in short term leases occupancy from Q4 to Q1. The majority of this space transitions to vacant in place for Q1, which is the period when re merchandising with new tenants occur.

Pat: We are targeting 96% in place occupancy and we expect to achieve this target over the next 24 months given our strong pipeline of leasing activity, excluding the impact of potential HBC store closures.

Patrick Sullivan: Over the next 12 months, we have approximately 185,000 square feet of large format and exterior tenants opening, and have approximately 140,000 square feet of large format and exterior tenants that are in the final stages of negotiation.

Pat: We do not anticipate the impact of our ability to execute new lease transactions or increase rents on renewal as a result of the HBC core store closure based on our experience with both target and Sears closures.

Patrick Sullivan: As we highlighted in our disclosures, Komark filed for credit protection in January. Primaris had 36 stores operating under the banners of Budweiser, Clio, and Rickey's within the Primaris portfolio. The majority of Comark leases were gross rent only leases, and we intensely maintain Comark's weighted average lease term at one year to enable flexibility in releasing the Comark space.

Pat: Leasing activity remained strong during the quarter was 70 leases renewed at spreads of seven 8%. In addition, we completed 24, new deals encompassing 62000 square feet during the quarter.

Pat Sullivan: The majority of Comarch leases were gross rent only leases, and we intentionally maintain Comarch's weighted average lease term at one year to enable flexibility in releasing the Comarch space. Initially, Comarch had intended to close all stores, however, various purchasers have stepped forward for certain locations. We anticipate that we will retain 25 stores, all of which remain on variable lease rent structures with short term. Our intention is to replace these stores over time. Some of these stores that have closed are at various stages of being replaced, with one new lease being completed at a base rent of CAD 35 per sq ft compared to the average base rent of CAD 2 per sq ft that Comarch paid. As we highlighted during our Investor Day on 24 September 2024, Primaris implements risk mitigation strategies for higher risk tenants.

The majority of Comarch leases were gross rent only leases, and we intentionally maintain Comarch's weighted average lease term at one year to enable flexibility in releasing the Comarch space. Initially, Comarch had intended to close all stores, however, various purchasers have stepped forward for certain locations. We anticipate that we will retain 25 stores, all of which remain on variable lease rent structures with short term. Our intention is to replace these stores over time. Some of these stores that have closed are at various stages of being replaced, with one new lease being completed at a base rent of CAD 35 per sq ft compared to the average base rent of CAD 2 per sq ft that Comarch paid. As we highlighted during our Investor Day on 24 September 2024, Primaris implements risk mitigation strategies for higher risk tenants.

Pat: During the first quarter, approximately 100000 square feet of large format tenants opened over the next 12 months, we have approximately 185000 square feet of large format and exterior tenants opening and have approximately 140000 square feet of large format and exterior tenants that are in the final stages of negotiation.

Patrick Sullivan: Initially, Comarket intended to close all stores. However, various purchasers have stepped forward for certain locations. We anticipate that we will retain 25 stores, all of which remain on variable lease rent structures with short term. Our intention is to replace these stores over time. Some of these stores that have closed are at various stages of being replaced with one new lease being completed at a base rent of $35 per square foot compared to the average base rent of negative $2 per square foot that Comark pays.

Pat: As we highlighted in our disclosures <unk> filed for credit protection in January primarily at 36 stores operating under the banner of Bootlegger Clio and ricky's within the <unk> portfolio the.

Pat: The majority of Komarek leases, where gross rent only leases and we intentionally maintained <unk> weighted average lease term at one year to enable flexibility and releasing the komarek space.

Patrick Sullivan: As we highlighted during our Investor Day on September 24th, Primaris implements risk mitigation strategies for high-risk tenants. Our tenant watch list is very short. As tenants report their sales to us on a monthly basis, we have good insight into their individual store performance, allowing us to make informed decisions on tenant renewals, expansions, and non-renewals or terminations. Same property, same store sales productivity has grown to $768 per square foot as at Q1 versus $677 per square foot for the portfolio as at Q1 2024. Our sales productivity numbers continue to grow as a result of strong tenant performance and our acquisition strategy of acquiring leading shopping centres in growing markets.

Pat: Initially co market intended to close all stores. However, various purchasers of step forward for certain locations, we anticipate that we will.

Pat Sullivan: Our tenant watch list is very short as tenants report their sales to us on a monthly basis. We have good insight into their individual store performance, allowing us to make informed decisions on tenant renewals, expansions, and non renewals or terminations. Same Property, Same Store sales productivity has grown to CAD 768 per sq ft as at Q1 versus CAD 677 per sq ft for the portfolio as at Q1 2024. Our sales productivity numbers continue to grow as a result of strong tenant performance and our acquisition strategy of acquiring leading shopping centers in growing markets. Having said that, our primary focus remains on driving occupancy and NOI higher, not on undertaking actions simply to drive the reported mall productivity figure higher.

Our tenant watch list is very short as tenants report their sales to us on a monthly basis. We have good insight into their individual store performance, allowing us to make informed decisions on tenant renewals, expansions, and non renewals or terminations. Same Property, Same Store sales productivity has grown to CAD 768 per sq ft as at Q1 versus CAD 677 per sq ft for the portfolio as at Q1 2024. Our sales productivity numbers continue to grow as a result of strong tenant performance and our acquisition strategy of acquiring leading shopping centers in growing markets. Having said that, our primary focus remains on driving occupancy and NOI higher, not on undertaking actions simply to drive the reported mall productivity figure higher.

Pat: We'll retain 25 stores all of which remain on variable rent lease rent structures with short term.

Pat: Our intention is to replace these stores over time. Some of these stores that are closed are at various stages of being replaced with one new lease being completed at a base rent of $35 per square foot compared to the average base rent of negative $2 per square foot that co Mark David.

Pat: As we highlighted during our Investor day on September 24th primarily implements risk mitigation strategies for higher risk tenants. Our tenant watch list is very short as tenants report report their sales to us on a monthly basis, we have good insight into their individual store performance, allowing us to make informed decisions on tenant renewals expansions.

Patrick Sullivan: Having said that, our primary focus remains on driving occupancy and NOI higher, not on undertaking actions simply to drive the reported mall productivity figure higher.

Patrick Sullivan: Over the long run, we anticipate sales growth at our properties will occur due to the strong fundamentals in the enclosed shopping centre industry, due to a 30-year low in per capita enclosed mall square footage in Canada, coupled with population growth.

Pat Sullivan: Over the long run, we anticipate sales growth at our properties will occur due to the strong fundamentals in the enclosed shopping center industry, due to a 30-year low in per capita enclosed mall square footage in Canada, coupled with population growth. Last but not least was the 7 March 2024 announcement that Canada's final conventional department store, the Hudson's Bay Company, had commenced proceedings under CCAA. Primaris REIT has been preparing for the departure of HBC for over 15 years as its department store peers downsized and ceased operations, including Zellers, Target, and Sears. This departure will enable future value creation for our stakeholders, paving the way for optimal use of space that better reflects the evolving needs and desires of the growing communities. HBC is Primaris' 14th largest tenant by annualized minimum rental, or CAD 4.5 million in net rent.

Over the long run, we anticipate sales growth at our properties will occur due to the strong fundamentals in the enclosed shopping center industry, due to a 30-year low in per capita enclosed mall square footage in Canada, coupled with population growth. Last but not least was the 7 March 2024 announcement that Canada's final conventional department store, the Hudson's Bay Company, had commenced proceedings under CCAA. Primaris REIT has been preparing for the departure of HBC for over 15 years as its department store peers downsized and ceased operations, including Zellers, Target, and Sears. This departure will enable future value creation for our stakeholders, paving the way for optimal use of space that better reflects the evolving needs and desires of the growing communities. HBC is Primaris' 14th largest tenant by annualized minimum rental, or CAD 4.5 million in net rent.

Pat: And non renewals or termination.

Pat: Same property same store sales productivity has grown to $768 per square foot as at Q1 versus $677 per square foot for the portfolio as of Q1 2024.

Patrick Sullivan: And last but not least was the March 7th announcement that Canada's final conventional department store, the Hudson Bay Company, had commenced proceedings under CCAA. Primaris Reid has been preparing for the departure of HBC over 15 years, as its department store peers downsized and ceased operations, including Zeller's, Target, and Sears.

Pat: Our sales productivity numbers continue to grow as a result of strong tenant performance and our acquisition strategy of acquiring leading shopping centers in growing markets.

Pat: Having said that our primary focus remains on driving occupancy and NOI higher not undertaking actions simply to drive the reported mall productivity figure higher over the long run we anticipate sales growth at our properties will occur due to the strong fundamentals in the enclosed shopping center industry due to a 30 year low in per capita and closed.

Patrick Sullivan: This departure will enable future value creation for our stakeholders, paving the way for optimal use of space that better reflects the evolving needs and desires of the growing community. HBC is Primaris' 14th largest tenant by annualized minimum rent or $4.5 million in net rent. There are nine locations in our portfolio totaling approximately 1 million square feet, excluding a shadow anchor at Devonshire Mall in Windsor, Ontario, that is owned in an unrelated HBC joint venture. The average base rent paid by the nine HBC locations is $4.33 per square foot.

Pat: Small square footage in Canada, coupled with population growth.

Pat: And last but not least with the March 7th announcement that candidates final conventional department store, the Hudson's Bay Company had commenced proceedings under <unk>.

Pat Sullivan: There are nine locations in our portfolio totaling approximately 1 million sq ft, excluding a shadow anchor at Devonshire Mall in Windsor, Ontario that is owned in an unrelated HBC joint venture. The average base rent paid by the nine HBC locations is CAD 4.33 per sq ft. As has been publicly reported, all HBC locations in Primaris' portfolio have commenced liquidation and are not expected to continue operations beyond 30 June 2025 as a result of declining operating performance, significant deferred capital maintenance, and a very limited customer foot traffic drop. We are very confident that the departure of HBC's tenancy will be beneficial to the REIT over the medium term, and we see significant upside in the longer term. We have updated our long-standing retenanting, redevelopment, and repurposing plans in relation to each of the locations with significant analysis and evaluation of alternatives.

There are nine locations in our portfolio totaling approximately 1 million sq ft, excluding a shadow anchor at Devonshire Mall in Windsor, Ontario that is owned in an unrelated HBC joint venture. The average base rent paid by the nine HBC locations is CAD 4.33 per sq ft. As has been publicly reported, all HBC locations in Primaris' portfolio have commenced liquidation and are not expected to continue operations beyond 30 June 2025 as a result of declining operating performance, significant deferred capital maintenance, and a very limited customer foot traffic drop. We are very confident that the departure of HBC's tenancy will be beneficial to the REIT over the medium term, and we see significant upside in the longer term. We have updated our long-standing retenanting, redevelopment, and repurposing plans in relation to each of the locations with significant analysis and evaluation of alternatives.

Pat: <unk> has been preparing for the departure of HBC over 15 years as its department store peers, downsized and ceased operations, including Zellers target and Sears.

Patrick Sullivan: As has been publicly reported, all HBC locations in Primaris' portfolio have commenced liquidation and are not expected to continue operations beyond June 30, 2025. As a result of declining operating performance, significant deferred capital maintenance, and a very limited customer foot traffic drop, we are very confident that the departure of HBC's tenancy will be beneficial to the REITs over the medium term and we see significant upside in the longer term. We have updated our longstanding re-tenanting, redevelopment, and repurposing plans in relation to each of the locations with significant analysis and evaluation of alternatives. As a result, we are ready to act at first opportunity.

Pat: This departure will enable future value creation for our stakeholders paving the way for optimal use of space to better reflects the evolving needs and desires of the growing communities.

Pat: HBC is primarily <unk>, 14th largest tenant by annualized minimum rent are $4 5 million in net rent.

Pat: There are nine locations in our portfolio totaling up totaling approximately 1 million square feet, excluding a shadow anchor at Devon Shire Mall in Windsor, Ontario that is owned and an unrelated HBC joint venture.

Pat: The average base rent paid by the nine HBC locations is $4 33 per square foot.

Pat: As has been publicly reported all HBC locations, primarily portfolio have commenced liquidation and are not expected to continue operations beyond June 32025 as.

Pat Sullivan: As a result, we are ready to act at first opportunity. Based on our analysis to date, and as a general statement, we estimate it will cost approximately CAD 25 to 30 million to demise an HBC box and approximately CAD 8 to 9 million to demolish, including all site works. Where a single tenant takes an HBC box, the cost to Primaris could be as little as 12 months of free rent. While it is too early to have good visibility into the outcomes for each of our locations, we are currently estimating a total HBC-related spend of CAD 125 to 150 million over the next few years. Furthermore, we expect yields on this invested capital between 7% and 12% or more, or a lower 3% to 9% when including only the incremental NOI beyond the foregone HBC rent.

As a result, we are ready to act at first opportunity. Based on our analysis to date, and as a general statement, we estimate it will cost approximately CAD 25 to 30 million to demise an HBC box and approximately CAD 8 to 9 million to demolish, including all site works. Where a single tenant takes an HBC box, the cost to Primaris could be as little as 12 months of free rent. While it is too early to have good visibility into the outcomes for each of our locations, we are currently estimating a total HBC-related spend of CAD 125 to 150 million over the next few years. Furthermore, we expect yields on this invested capital between 7% and 12% or more, or a lower 3% to 9% when including only the incremental NOI beyond the foregone HBC rent.

Patrick Sullivan: Based on our analysis to date, and as a general statement, we estimate it will cost approximately $25 to $30 million to demise an HPC buyer. and approximately $8 to $9 million to demolish, including all site. Where a single tenant takes an HPC box, the cost of Primaris could be as little as 12 months of free rent.

Pat: As a result of declining operating performance significant deferred capital maintenance and a very limited customer foot traffic drop we are very confident that the departure of hbc's tenancy will be beneficial to the REIT over the medium term and we see significant upside in the longer term we.

Patrick Sullivan: While it is too early to have good visibility into the outcomes for each of our locations, we are currently estimating a total HBC related spend of $125 to $150 million over the next few years. Furthermore, we expect yields on this invested capital between 7% and 12% or more. or a lower 3% to 9% when including only the incremental NOI beyond the foregone HBC rent.

Pat: We have updated our long standing re tenant in redevelopment and Repurposing plans in relation to each of the locations with significant analysis and evaluation of alternatives.

As a result, we are ready to act at first opportunity.

Pat: Based on our analysis to date and as a general statement, we estimate it will cost approximately $25 million to $30 million to demise and HBC box and.

Pat: And approximately $8 million to $9 million to demolish including all site works.

Patrick Sullivan: These estimates don't factor in the qualitative benefits to our shopping center. The halo effect on sales and rents from tenants adjacent to former HBC locations that are reinvigorated with new retailers, nor the impact on cap rates and valuations for a property that replaces questionable tenancies with new, stronger retailers. There is strong tenant demand for our HVC boxes, and we are in discussions with grocers, sporting goods, and other high-quality, large-format retailers. There are opportunities where tenants are considering the entire box, others will be subdivided, and a handful will likely be demolished.

Pat Sullivan: These estimates do not factor in the qualitative benefits to our shopping center, the halo effect on sales and rents from tenants adjacent to former HBC locations that are reinvigorated with new retailers, nor the impact on cap rates and valuations for a property that replaces questionable tenancies with new, stronger retailers. There is strong tenant demand for our HVC boxes, and we are in discussions with grocers, sporting goods, and other high quality large format retailers. There are opportunities where tenants are considering the entire box, others will be subdivided, and a handful will likely be demolished assuming all leases are disclaimed.

These estimates do not factor in the qualitative benefits to our shopping center, the halo effect on sales and rents from tenants adjacent to former HBC locations that are reinvigorated with new retailers, nor the impact on cap rates and valuations for a property that replaces questionable tenancies with new, stronger retailers. There is strong tenant demand for our HVC boxes, and we are in discussions with grocers, sporting goods, and other high quality large format retailers. There are opportunities where tenants are considering the entire box, others will be subdivided, and a handful will likely be demolished assuming all leases are disclaimed.

Pat: We are a single tenant takes in HBC box the cost of <unk> could be as little as 12 months of free rent.

Pat: While it is too early to have good visibility into the outcomes for each of our locations. We are currently estimating a total HBC related spend of $125 million to $150 million over the next few years.

Pat: Furthermore, we expect yields on this.

Speaker Change: <unk> capital between 7% and 12% or more.

Speaker Change: For our lower 3% to 9% when including only the incremental NOI beyond the foregone HBC Ren.

Speaker Change: These estimates don't factor in the qualitative benefits to our shopping center.

Patrick Sullivan: Assuming all leases are disclaimed, we anticipate that over time the sites will be fully optimized with the removal of site restrictions, enabling redevelopment, improved traffic flow, better site lines, financially stronger and more relevant tenants, contributing to an enhanced merchandise mix, and the opportunity to sever and sell excess land for its highest and best use.

Pat Sullivan: We anticipate that over time the sites will be fully optimized with the removal of site restrictions, enabling redevelopment, improved traffic flow, better sight lines, financially stronger, and more relevant tenants contributing to an enhanced merchandise mix, and the opportunity to sever and sell excess land for its highest and best use. We continue to closely monitor HBC's CCAA process, and at this point we cannot give location-specific information, but anticipate on our second quarter call at the end of July we will be in a position to further disclose details. To conclude, it is a very exciting time to be in the mall business. Primaris business continues to perform very well, and we are very well positioned to capture continued growth within our malls, and with that I'll turn the call over to Rags to discuss our financial results.

We anticipate that over time the sites will be fully optimized with the removal of site restrictions, enabling redevelopment, improved traffic flow, better sight lines, financially stronger, and more relevant tenants contributing to an enhanced merchandise mix, and the opportunity to sever and sell excess land for its highest and best use. We continue to closely monitor HBC's CCAA process, and at this point we cannot give location-specific information, but anticipate on our second quarter call at the end of July we will be in a position to further disclose details. To conclude, it is a very exciting time to be in the mall business. Primaris business continues to perform very well, and we are very well positioned to capture continued growth within our malls, and with that I'll turn the call over to Rags to discuss our financial results.

Speaker Change: Halo effect on sales and rents from tenants adjacent to former HP, both HBC locations that have reinvigorated with new retailers, nor the impact on cap rates and valuations for a property that replaces questionable tenancies with new stronger retailers.

Speaker Change: There is strong tenant demand for our HBC boxes, and we are in discussions with groceries sporting goods and other high quality large format retailers.

Patrick Sullivan: We continue to closely monitor HBC's CCAA process, and at this point, we cannot give location-specific information, but anticipate on our second quarter call at the end of July, we will be in a position to further disclose details.

Speaker Change: There are opportunities where tenants are considering the entire box others will be subdivided and a handful will likely be demolished.

Patrick Sullivan: To conclude, it is a very exciting time to be in the mall business. Primaris Business continues to perform very well, and we are very well positioned to capture continued growth within our malls.

Speaker Change: Assuming all leases are disclaimed, we anticipate that over time the sites will be fully optimized with the removal of site restrictions, enabling redevelopment improved traffic flow better sightlines financially stronger and more relevant tenants contributing to an enhanced merchandise mix and the opportunity to sever and sell excess land for its highest and best use.

Raghunath Davloor: And with that, I'll turn the call over to Ragh to discuss our financial results. Thank you, Pat, and good morning, everyone. Our operating and financial results for the quarter continue to remain very strong. We're seeing very strong NOI growth from our portfolio, specifically the acquisition properties, and our many operating metrics are continuing to improve. Our business is reaching critical mass, as can be seen in our G&A as a percentage of rental revenue, which has begun to stabilize. For the quarter, FFO per diluted unit was 43.9 cents, as compared to 38.8 cents for the same quarter last year.

Raghunath Davloor: Thank you, Pat, and good morning, everyone. Our operating and financial results for the quarter continue to remain very strong. We are seeing very strong NOI growth from our portfolio, specifically the acquisition properties, and our many operating metrics are continuing to improve. Our business is reaching critical mass, as can be seen in our G&A as a percentage of rental revenue, which has begun to stabilize. For the quarter, FFO per diluted unit was $0.439 as compared to $0.388 for the same quarter last year. Despite higher interest costs and increased unit count as a result of high-quality, accretive acquisitions completed over the last 12 months, and strong same property growth, FFO per unit was up 13.3%. Our average net debt to adjusted EBITDA was 5.7x and within our range of 4x-6x.

Rags Davloor: Thank you, Pat, and good morning, everyone. Our operating and financial results for the quarter continue to remain very strong. We are seeing very strong NOI growth from our portfolio, specifically the acquisition properties, and our many operating metrics are continuing to improve. Our business is reaching critical mass, as can be seen in our G&A as a percentage of rental revenue, which has begun to stabilize. For the quarter, FFO per diluted unit was $0.439 as compared to $0.388 for the same quarter last year. Despite higher interest costs and increased unit count as a result of high-quality, accretive acquisitions completed over the last 12 months, and strong same property growth, FFO per unit was up 13.3%. Our average net debt to adjusted EBITDA was 5.7x and within our range of 4x-6x.

Speaker Change: We continue to closely monitor <unk> process and at this point, we cannot give location specific information when aunt.

Speaker Change: <unk> on our second quarter call at the end of July we will be in a position to further disclose details to conclude it is a very exciting time to be in the mall business, primarily business continues to perform very well and we are very well positioned to capture continued growth within our malls and with that I'll turn the call over to <unk> to discuss our financial results.

Speaker Change: <unk>.

Speaker Change: Thank you Pat and good morning, everyone.

Speaker Change: Our operating and financial results for the quarter continue to remain very strong.

Raghunath Davloor: Despite higher interest costs and increased unit count, as a result of high-quality, aggretive acquisitions completed over the last 12 months and strong same-property growth, FFO per unit was up 13.3%. Our average net debt to adjusted EBITDA was 5.7 times and within our range of 4 to 6 times. As a reminder, this range, as far as part of our executive compensation structure, was the top end of the range of 6 times.

Speaker Change: We're seeing very strong NOI growth from our portfolio specifically the acquisition properties and there are many operating metrics continuing to improve.

Speaker Change: Business is reaching critical mass as can be seen in our G&A as a percentage of rental revenue, which has begun to stabilize.

Raghunath Davloor: As a reminder, this range forms part of our executive compensation structure for the top end of the range of six times. At the end of March, Primaris entered into and borrowed on a CAD 100 million unsecured bilateral non-revolving term facility maturing 4 June 2028, with a one-year extension at Primaris' option. The proceeds of the drawdown were used to repay debt on the unsecured syndicated revolving term facility and for general press purposes. Concurrently, Primaris entered into an interest rate swap for CAD 50 million at an effective all-in rate of 3.96%. Prior to quarter end, we repaid CAD 133.1 million of the maturing Series B debentures. CAD 100 million of this repayment was pre-funded by a maturing term deposit, which was placed in August 2024, with a portion of the proceeds coming from the issuance of the CAD 500 million Series E and Series F senior unsecured debentures.

As a reminder, this range forms part of our executive compensation structure for the top end of the range of six times. At the end of March, Primaris entered into and borrowed on a CAD 100 million unsecured bilateral non-revolving term facility maturing 4 June 2028, with a one-year extension at Primaris' option. The proceeds of the drawdown were used to repay debt on the unsecured syndicated revolving term facility and for general press purposes. Concurrently, Primaris entered into an interest rate swap for CAD 50 million at an effective all-in rate of 3.96%. Prior to quarter end, we repaid CAD 133.1 million of the maturing Series B debentures. CAD 100 million of this repayment was pre-funded by a maturing term deposit, which was placed in August 2024, with a portion of the proceeds coming from the issuance of the CAD 500 million Series E and Series F senior unsecured debentures.

Speaker Change: For the quarter <unk> per diluted unit was $43 nine.

Speaker Change: As compared to $78 eight.

Speaker Change: At the same quarter last year.

Raghunath Davloor: At the end of March, Primaris entered into and borrowed on a $100 million unsecured bilateral non-revolving term facility, maturing June 4, 2028, with a one-year extension at Primaris' office. The proceeds of the drawdown was used to repay debt on the unsecured syndicated revolving term facility and for general trust purposes. Concurrently, Primaris entered into an interest rate swap for $50 million at an effective all-in rate of 3.96%.

Speaker Change: Despite higher interest cost and increased an account as a result of high quality accretive acquisitions completed over the last 12 months.

Speaker Change: Our same property growth <unk> per unit was up 13, 3%.

Speaker Change: Higher average net debt to adjusted EBITDA was five seven times I mean within a range of 46 times.

Speaker Change: As a reminder, this range for as part of our executive compensation structure, where the top end of the range of six times.

Speaker Change: At the end of March primarily entered into and borrowed $100 million unsecured bilateral non revolving term facility maturing June four 2028.

Raghunath Davloor: Prior to Quarter End, we repaid $133.1 million of the maturing Series B debentures. $100 million of this repayment was pre-funded by a maturing term deposit, which was placed in August 2024 with a portion of the proceeds coming from the issuance of the $500 million Series E and Series F senior unsecured debentures.

One year extension at primarily since option.

Speaker Change: The proceeds of the drawdown was used to repay debt on the unsecured syndicated revolving term facility and for general corporate purposes.

Speaker Change: Concurrently primarily entered into an interest rate swap for $50 million and an effective all in rate of 396%.

Raghunath Davloor: Primaris weighted average interest rate and term to maturity on total debt is 5.2% and 4.2 years, respectively. With unencumbered assets of CAD 4,650,000,000 in liquidity and no debt maturing until 2027, we have eliminated refinancing risk in the medium term and have access to significant liquidity. During the quarter, we closed on the sale of Sherwood Park Mall and the Professional Center in Edmonton, Alberta for CAD 107 million, and St. Albert Centre, also in Edmonton, Alberta, for CAD 60 million, both in line with our IFRS fair value. These dispositions, in addition to our CAD 352 million in assets held for sale pool, align to our strategy to focus on owning a growing, high-quality portfolio of leading enclosed shopping centers in Canada. Primaris has been in the market repurchasing units since 9 March 2022 under the NCIB.

Primaris weighted average interest rate and term to maturity on total debt is 5.2% and 4.2 years, respectively. With unencumbered assets of CAD 4,650,000,000 in liquidity and no debt maturing until 2027, we have eliminated refinancing risk in the medium term and have access to significant liquidity. During the quarter, we closed on the sale of Sherwood Park Mall and the Professional Center in Edmonton, Alberta for CAD 107 million, and St. Albert Centre, also in Edmonton, Alberta, for CAD 60 million, both in line with our IFRS fair value. These dispositions, in addition to our CAD 352 million in assets held for sale pool, align to our strategy to focus on owning a growing, high-quality portfolio of leading enclosed shopping centers in Canada. Primaris has been in the market repurchasing units since 9 March 2022 under the NCIB.

Raghunath Davloor: Primaris weighted average interest rate in terms of maturity on total debt is 5.2% and 4.2 years respectively. with unencumbered assets of $4 billion, $650 million in liquidity, and no debt maturing until 2027, we have eliminated refinancing risk in the medium term and have access to significant liquidity.

Speaker Change: Prior to quarter end, we repaid $173 1 million of the maturing series B debentures.

Speaker Change: $100 million of this repayment was pre funded a maturing term deposit which has placed in August 2024, and a portion of the proceeds coming from the issuance of the $500 million series E and soon as half.

Raghunath Davloor: During the quarter, we closed on the sale of Sherwood Park Mall and the Professional Center in Edmonton, Alberta, for $107 million, and St. Albert Center, also in Edmonton, Alberta, for $60 million, both in line with our IFRS fair value. These dispositions, in addition to our $352 million in assets held for sale pool, align to our strategy to focus on owning a growing, high-quality portfolio of leading enclosed shopping centers in Canada.

Speaker Change: Obviously <unk> debentures.

Speaker Change: Primarily weighted average interest rate and term to maturity on total debt is five 2% and $4 two years respectively.

Speaker Change: With unencumbered assets of $4.650 billion in liquidity and no debt maturing until 2007, we have eliminated refinancing risk in the medium term and have access to significant liquidity.

Raghunath Davloor: Primaris has been in the market repurchasing units since March 9, 2022 under the NCIB. As at quarter end, we have purchased for cancellation 11.5 million units at an average value per unit of $14.09 or an approximate 34.2% discount to NAB of $21.40. repurchases under the program in 2025 have already exceeded all repurchases completed in 2024. This program is very accretive to you as well.

Speaker Change: During the quarter, we closed on the sale of Sherwood Park Mall, and the professional center in Edmonton, Alberta for $107 million and St Albert Center.

Raghunath Davloor: As at quarter end, we have purchased for cancellation 11.5 million units at an average value per unit of CAD 14.09, or an approximate 34.2% discount to NAV of CAD 2,140. Repurchases under the program in 2025 have already exceeded all repurchases completed in 2024. This program is very accretive to unitholders. Given our strong results to date, and the confidence in the strength of our business, we are reaffirming our 2025 guidance, other than guidance for occupancy, which will drop approximately 7% assuming HBC disclaims all nine leases. We removed six months of rental income for HBC for the back half of the year and do not anticipate any significant CapEx spend with respect to the HBC boxes in 2025.

As at quarter end, we have purchased for cancellation 11.5 million units at an average value per unit of CAD 14.09, or an approximate 34.2% discount to NAV of CAD 2,140. Repurchases under the program in 2025 have already exceeded all repurchases completed in 2024. This program is very accretive to unitholders. Given our strong results to date, and the confidence in the strength of our business, we are reaffirming our 2025 guidance, other than guidance for occupancy, which will drop approximately 7% assuming HBC disclaims all nine leases. We removed six months of rental income for HBC for the back half of the year and do not anticipate any significant CapEx spend with respect to the HBC boxes in 2025.

Speaker Change: So in Edmonton, Alberta for $60 million, both in line with higher <unk> fair value. These dispositions. In addition to our $352 million and assets held for sale pool align to our strategy to focus on owning a growing high quality portfolio of leading and closed.

Speaker Change: Shopping centers in Canada.

Speaker Change: Primarily has been in the market repurchasing units since March nine 2022 under the NCIC.

Raghunath Davloor: Given our strong results to date, and the confidence and the strength of our business, we are reaffirming our 2025 guidance, other than guidance for occupancy, which will drop approximately 7%, assuming HPC disclaims all nine. We removed six months of rental income for HBC for the back half of the year and do not anticipate any significant CapEx spend with respect to the HBC boxes in 2025 due to the timing of the CCAA process. We anticipate Same Properties Cash NOI growth to remain in the range of 3 to 4%, and FFO per unit diluted to remain in the range of $1.70 to $1.75 per unit.

Speaker Change: As at quarter end, we have purchased for cancellation 11 5 million units.

Speaker Change: The average value per unit of $14 nine.

Speaker Change: On an approximate 34, 2% discount to NAV of 21 40.

Speaker Change: Repurchases under the program in 2025 have already exceeded all repurchases completed in 2024.

Raghunath Davloor: Due to the timing of the CCAA process, we anticipate same properties cash NOI growth to remain in the range of 3% to 4% and FFO per unit diluted to remain in the range of $1.70 to 1.75 per unit. Our guidance includes the impact of HBC as previously stated, the acquisitions of Oshawa Centre from Southgate Centre, and approximately CAD 300 million of dispositions throughout the year. No additional acquisitions are incorporated into the guidance. Further details of our 2025 guidance can be found in section 4 of the MD&A titled Current Business Environment and Outlook. Overall, we are very pleased with our results for the first quarter and are optimistic of the outlook in 2025 and beyond. Maintaining a conservative financial model and generating free cash flow after distributions and operating capital is a core focus, which we will not deviate from.

Due to the timing of the CCAA process, we anticipate same properties cash NOI growth to remain in the range of 3% to 4% and FFO per unit diluted to remain in the range of $1.70 to 1.75 per unit. Our guidance includes the impact of HBC as previously stated, the acquisitions of Oshawa Centre from Southgate Centre, and approximately CAD 300 million of dispositions throughout the year. No additional acquisitions are incorporated into the guidance. Further details of our 2025 guidance can be found in section 4 of the MD&A titled Current Business Environment and Outlook. Overall, we are very pleased with our results for the first quarter and are optimistic of the outlook in 2025 and beyond. Maintaining a conservative financial model and generating free cash flow after distributions and operating capital is a core focus, which we will not deviate from.

Speaker Change: This program is very accretive to unitholders.

Speaker Change: Given our strong results to date and our confidence in the strength of our business. We are reaffirming our 2025 guidance.

Speaker Change: Other than guidance for occupancy.

Speaker Change: Drop approximately 7% assuming HBC disclaims all nine leases.

Raghunath Davloor: Our guidance includes the impact of HBC, as previously stated, the acquisitions of Oshawa Center and Southgate Center, and approximately $300 million of dispositions throughout the year. No additional acquisitions are incorporated into the guide.

Speaker Change: We removed six months of rental income for HBC for the back half of the year and do not anticipate any significant capex spend with respect to the HBC boxes in 2025 due to the timing of the <unk>.

Raghunath Davloor: Further details of our 2025 guidance can be found in Section 4 of the MD&A, titled Current Business Environment and Outlook.

Speaker Change: <unk> process.

Speaker Change: We anticipate same property cash NOI growth to remain in the range of 3% to 4% and <unk> per unit diluted to remain in the range of $1 70 to $1 75 per unit.

Raghunath Davloor: Overall, we are very pleased with our results for the first quarter and are optimistic of the outlook in 2025 and beyond. Maintaining a conservative financial model and generating free cash flow after distributions and operating capital is a core focus, which we will not deviate from.

Speaker Change: Our guidance includes the impact of HPLC as previously stated the acquisitions of offshore center from Soundscape Center and approximately $300 million of dispositions.

Speaker Change: Here.

Alexander Avery: And with that, I'll turn the call back to Alex. Thank you, Rags.

Raghunath Davloor: With that I will turn the call back to Alex.

With that I will turn the call back to Alex.

Speaker Change: No additional acquisitions are incorporated into the guidance for the details of our 2025 guidance can be found in section four of the MD&A titled current business environment and outlook.

Alex Avery: Thank you, Raj. 2025 is off to a very exciting start. There are four key takeaways from this quarter. First, at the beginning of the call I reviewed our progress on the dramatic changes achieved against our strategic portfolio objectives. Second, Pat has highlighted the sustained leasing strength we are seeing in our portfolio. Third, Rags detailed the strength and impact of our differentiated financial model on our business. Lastly, Rags also reiterated our substantially unchanged operating and financial guidance, reflecting the net impacts of headwinds and tailwinds we are seeing across our business. Our portfolio is performing very well, with significant further runway as rising occupancy and recovery ratios drive NOI and FFO growth. The properties we have added to our portfolio over the past few years are enhancing our internal growth profile and increasing our relevance with retailers.

Alex Avery: Thank you, Raj. 2025 is off to a very exciting start. There are four key takeaways from this quarter. First, at the beginning of the call I reviewed our progress on the dramatic changes achieved against our strategic portfolio objectives. Second, Pat has highlighted the sustained leasing strength we are seeing in our portfolio. Third, Rags detailed the strength and impact of our differentiated financial model on our business. Lastly, Rags also reiterated our substantially unchanged operating and financial guidance, reflecting the net impacts of headwinds and tailwinds we are seeing across our business. Our portfolio is performing very well, with significant further runway as rising occupancy and recovery ratios drive NOI and FFO growth. The properties we have added to our portfolio over the past few years are enhancing our internal growth profile and increasing our relevance with retailers.

Alexander Avery: 2025 is off to a very exciting start. There are four key takeaways from this. First, at the beginning of the call, I reviewed our progress on the dramatic changes achieved against our strategic portfolio objectives. Second, Pat has highlighted the sustained leasing strength we are seeing in our portfolio. Third, Rags detailed the strength and impact of our differentiated financial model on our business. And lastly, RAGS also reiterated our substantially unchanged operating and financial guidance, reflecting the net impacts of headwinds and tailwinds we are seeing across our business. Our portfolio is performing very well with significant further runway as rising occupancy and recovery ratios drive NOI and FFO growth.

Speaker Change: Overall, we were very pleased with our results in the first quarter.

Speaker Change: Our optimistic of the outlook in 2025 and beyond maintaining conservative financial model generating free cash flow after distributions in operating capital.

Focus, which we will not deviate from and with that I'll turn the call back to allowance. Thank you Rose 125 is off to a very exciting start there.

Speaker Change: There are four key takeaways from this quarter.

Speaker Change: At the beginning of the call I reviewed our progress on the dramatic changes achieved against our strategic portfolio objectives.

Alexander Avery: The properties we have added to our portfolio over the past few years are enhancing our internal growth profile and increasing our relevance with retailers. We expect to see more capital recycling materialized in 2025, providing more capital for further acquisition. Underpinning our 2025 financial guidance is our expectation for more of what we saw in 2024. Strong internal growth, highly impactful capital recycling, a significant improvement in the trading volume of our units, and a growth across all of our committees.

Speaker Change: Seconds.

Highlighting the sustained leasing strength, we're seeing in our portfolio.

Speaker Change: Third.

Speaker Change: Greg detailed the strength and impact of our differentiated financial model on our business.

Alex Avery: We expect to see more capital recycling materialize in 2025, providing more capital for further acquisitions. Underpinning our 2025 financial guidance is our expectation for more of what we saw in 2024: strong internal growth, highly impactful capital recycling, a significant improvement in the trading volume of our units, and growth across all of our key metrics. In conclusion, we were very pleased with how our business is performing and are excited about the future of Primaris. We'd now be pleased to answer any questions from the call participants. Operator, please open the line for questions.

We expect to see more capital recycling materialize in 2025, providing more capital for further acquisitions. Underpinning our 2025 financial guidance is our expectation for more of what we saw in 2024: strong internal growth, highly impactful capital recycling, a significant improvement in the trading volume of our units, and growth across all of our key metrics. In conclusion, we were very pleased with how our business is performing and are excited about the future of Primaris. We'd now be pleased to answer any questions from the call participants. Operator, please open the line for questions.

Speaker Change: And lastly, Brian has also reiterated our substantially unchanged operating and financial guidance, reflecting the net impact of headwinds <unk> wins, we are seeing across our business.

Speaker Change: Our portfolio is performing very well with significant further runway as rising occupancy and recovery ratios drive NOI and <unk> growth.

Alexander Avery: In conclusion, we were very pleased with how our business is performing and are excited about the future of Primaris.

Speaker Change: The properties, we have added to our portfolio over the past few years that are enhancing our internal growth profile and increasing our relevance with retailers.

Operator: We'd now be pleased to answer any questions from the call participants.

Operator: Operator, please open the line for questions. Thank you.

Speaker Change: We expect to see more capital recycling materialize in 2021, providing more capital for further acquisitions.

Operator: Thank you. If you would like to ask a question during this time, simply press Star followed by the number one on your telephone keypad. If you would like to withdraw your question, press Star followed by the number two. You may ask one question and a follow up, at which point you may return to the queue. We'll pause here for just a moment to compile the Q&A roster. Your first question will go to the line of Sumayya Syed with CIBC. Your line is open. Thanks. Good morning. Thanks for all the color around the HBC departure. Just kind of on that tone, what implications do you see their departure having on the M&A side of things? How could it change how pension funds are thinking about their remaining mall assets?

Operator: Thank you. If you would like to ask a question during this time, simply press Star followed by the number one on your telephone keypad. If you would like to withdraw your question, press Star followed by the number two. You may ask one question and a follow up, at which point you may return to the queue. We'll pause here for just a moment to compile the Q&A roster. Your first question will go to the line of Sumayya Syed with CIBC. Your line is open.

Operator: If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star followed by the number two. If you may ask one question and a follow-up, at which point you may return to the queue.

Speaker Change: Underpinning our 2020 financial guidance is our expectation for more of what we saw in 2024.

Speaker Change: Strong internal growth.

Speaker Change: Impactful capital recycling the significant improvement in the trading volume of our units and our growth across all of our key metrics.

Operator: We'll pause here for just a moment to compile the QA roster.

Speaker Change: In conclusion, we were very pleased with our business is performing and we're excited about the future of premises.

Sumayya Syed: Your first question will go to the line of Sumayya Syed with CIBC. Your line is open. Thanks. Good morning. Thanks for all the color around the HBC departure. Just kind of on that tone. What implications do you see their departure having on the M&A side of things? And how could it change how pension funds are thinking about the remaining small assets? Right.

Sumayya Syed: Thanks. Good morning. Thanks for all the color around the HBC departure. Just kind of on that tone, what implications do you see their departure having on the M&A side of things? How could it change how pension funds are thinking about their remaining mall assets?

Speaker Change: Thank you.

Speaker Change: I'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad.

Speaker Change: If you would like to withdraw your question Press Star followed by the number too.

Speaker Change: You May ask you ask one question and a follow up.

Speaker Change: Which point you may return to the queue, we'll pause here for just a moment to compile the Q&A roster.

Alex Avery: Good morning, Sumayya. Yeah, it's an interesting question. I mean, I think just to point to the most recent three transactions, Les Galeries de la Capitale, Southgate Centre, and Oshawa Centre, all three were acquired in the last six, seven months. All three had HBCs, and they were definitely a significant area of focus as we underwrote those properties, and we heavily, heavily, heavily discounted any rent that was coming from HBC. We didn't know when it was going to happen, but it was very clear that HBC was not a long-term tenancy. I guess from our perspective, not a whole lot has changed in terms of the HBC. We anticipated that there would be a need to, you know, deal with HBC boxes.

Alex Avery: Good morning, Sumayya. Yeah, it's an interesting question. I mean, I think just to point to the most recent three transactions, Les Galeries de la Capitale, Southgate Centre, and Oshawa Centre, all three were acquired in the last six, seven months. All three had HBCs, and they were definitely a significant area of focus as we underwrote those properties, and we heavily, heavily, heavily discounted any rent that was coming from HBC. We didn't know when it was going to happen, but it was very clear that HBC was not a long-term tenancy. I guess from our perspective, not a whole lot has changed in terms of the HBC. We anticipated that there would be a need to, you know, deal with HBC boxes.

Speaker Change: Your first question will go to line of.

Speaker Change: Sorry, Ed with CIBC Your line is open.

Speaker Change: Yes.

Speaker Change: Thanks, Good morning, Thanks for all the color around the HTC departure, just kind of on that tone.

Speaker Change: Vacations to you see their departure having andi.

Speaker Change: M&A side of things and how could it change how pension funds are thinking about the remaining mall assets.

Speaker Change: Good morning Smile.

Speaker Change: Yes, it's an interesting.

Speaker Change: Question, I mean, I think just.

Speaker Change: To the.

Speaker Change: The most recent three transactions gallery to a capital associate in offshore.

Speaker Change: All three were acquired in the last six ish six seven months.

Speaker Change: All three had <unk> and <unk>.

Alex Avery: You know, most of the top malls in the country have HBCs, which is a reality of our acquisition growth strategy from a vendor perspective. I think, you know, it's also something that's been on their mind. It's definitely something that, you know, we have to model out and think about. You know, I think putting HBC.

You know, most of the top malls in the country have HBCs, which is a reality of our acquisition growth strategy from a vendor perspective. I think, you know, it's also something that's been on their mind. It's definitely something that, you know, we have to model out and think about. You know, I think putting HBC in context is important.

Speaker Change: We're definitely a significant area of focus as we underwrote those properties.

Speaker Change: We heavily heavily heavily discounted.

Speaker Change: Any rent that was coming from HBC, we didn't know when it was going to happen, but it was very clear that HBC was it's not a long term tenancy.

Speaker Change: So I guess from our perspective, not a whole lot has changed in terms of the HBC, we anticipated that there would be a need to deal with HBC boxes.

Raghunath Davloor: In context is important.

Alex Avery: If you think back to a decade ago, malls were experiencing, you know, peak 97% occupancy, peak retailer demand, and valued at cyclically high valuations, record low cap rates. Against this backdrop, Target declared bankruptcy in a surprise move that was, you know, less than two years after they entered Canada in a, you know, sort of kick the door down style. It was a pretty bold entrance into Canada. There were lots of other retailers, you know, bursting into Canada at the time. You know, HBC is not Targeting, it's not Sears. HBC has been slowly dying for years. The occupancy in our portfolio has been rising for the past few years pretty steadily, but it remains in the low 90s, you know, not the 97% it was a decade ago.

If you think back to a decade ago, malls were experiencing, you know, peak 97% occupancy, peak retailer demand, and valued at cyclically high valuations, record low cap rates. Against this backdrop, Target declared bankruptcy in a surprise move that was, you know, less than two years after they entered Canada in a, you know, sort of kick the door down style. It was a pretty bold entrance into Canada. There were lots of other retailers, you know, bursting into Canada at the time. You know, HBC is not Targeting, it's not Sears. HBC has been slowly dying for years. The occupancy in our portfolio has been rising for the past few years pretty steadily, but it remains in the low 90s, you know, not the 97% it was a decade ago.

Speaker Change: Most of the top malls in the country.

Speaker Change: Hbc's.

Speaker Change: <unk>, which is the reality of our acquisition growth strategy.

Speaker Change: From a vendor perspective I think.

Speaker Change: Its also something thats been on their mind.

Speaker Change: Malls were experiencing peak, 97% occupancy peak retailer demand and valued at cyclically high valuations record low cap rates and against this backdrop target declared bankruptcy and a surprise move that was less than two years. After they entered Canada in a.

Alex Avery: HBC is a smaller tenant exposure, and we have the recent experience of dealing with both Target and Sears boxes. We have the benefit of years of advanced planning, and in terms of the public markets dynamics, you know, malls were sort of top of the pecking order a decade ago. Pricing was, you know, robust, pretty peak pricing, record low cap rates. The mall REITs were trading at record high multiples. Today, you know, investors remain skeptical of malls. Primaris trades at an implied double-digit cap rate. You know, today we have a pristine balance sheet. Our modeling shows the debt to EBITDA remaining below 6x, even factoring in the departure of HBC. It's definitely something that plays into our acquisitions, dispositions, transactions in the market. None of this is remotely surprising.

HBC is a smaller tenant exposure, and we have the recent experience of dealing with both Target and Sears boxes. We have the benefit of years of advanced planning, and in terms of the public markets dynamics, you know, malls were sort of top of the pecking order a decade ago. Pricing was, you know, robust, pretty peak pricing, record low cap rates. The mall REITs were trading at record high multiples. Today, you know, investors remain skeptical of malls. Primaris trades at an implied double-digit cap rate. You know, today we have a pristine balance sheet. Our modeling shows the debt to EBITDA remaining below 6x, even factoring in the departure of HBC. It's definitely something that plays into our acquisitions, dispositions, transactions in the market. None of this is remotely surprising.

Speaker Change: So to kick the door down style. It was a pretty bold entrants into Canada, there were lots of other retailers.

Speaker Change: Bursting into Canada at the time.

Speaker Change: HBC is not target it's not tiers.

Speaker Change: HBC has been slowly dying for years the occupancy in our portfolio has been rising for the past few years.

Speaker Change: Pretty steadily but it remains in the low nineties knock the 97% it was a decade ago.

Speaker Change: HBC is a smaller tenant exposure and we have the recent experience of dealing with both target and Cvs boxes.

Speaker Change: We have the benefit of years of advanced planning and in terms of the public market dynamics.

Speaker Change: We're sort of top of the pecking order a decade ago.

Alex Avery: I think to the extent that you were buying or selling a mall in the last two or three years and you didn't spend a lot of time thinking about HBC, you probably weren't being very diligent.

I think to the extent that you were buying or selling a mall in the last two or three years and you didn't spend a lot of time thinking about HBC, you probably weren't being very diligent.

Speaker Change: <unk> was.

Robust pretty peak pricing record low cap rates the mall Reits are trading at record high multiples today invest.

Speaker Change: Investors remain skeptical of malls, primarily trades on an implied double digit cap rate.

Operator: Right. I guess in the same vein, it's a bit early, but what are you hearing from other tenants or expect to hear on the co-tenancy side? Maybe just you brought up Target. Remind us how those clauses played out following Target's departure, and would you expect a similar outcome this time around?

Sumayya Syed: Right. I guess in the same vein, it's a bit early, but what are you hearing from other tenants or expect to hear on the co-tenancy side? Maybe just you brought up Target. Remind us how those clauses played out following Target's departure, and would you expect a similar outcome this time around?

Alexander Avery: And then I guess in the same vein, it's a bit early, but what are you hearing from other tenants or expect to hear on the co-tenancy side? I mean, we just you brought up Targeting Zero Minus, how those clauses played out following Target's departure, and would you expect a similar outcome this time around? Maya, yeah, it's a bit early to talk about that. The clauses are all unique to the particular tenant in the mall. They often have certain triggers that have to be met. There might be a sales reduction. It might not solely be HBC leaving.

Speaker Change: Today, we have a pristine balance sheet, our modeling shows the debt to EBITDA remaining below six times, even factoring in the departure of HBC.

Speaker Change: So it's definitely something that plays into our acquisitions dispositions transactions in the market, but none of this is remotely surprising I think to the extent that you are buying or selling a ball you know in the last two or three years and you didn't spend a lot of time thinking about HBC.

Alex Avery: Maya?

Pat Sullivan: Maya? Yeah, it's a bit early to talk about that. The clauses are all unique to the particular tenant in the mall. They often have certain triggers that have to be met. There might be a sales reduction. It might not solely be HBC leaving. The way it played out when we dealt with Target and Sears is when you have a portfolio as large as ours, there are things that the tenants want in other properties because we have multiple locations with all these tenants. There tends to be some negotiation that goes on that ends up settling the co-tenancy clauses, and they actually never get triggered. We're optimistic that we'll come through it relatively unscathed.

Pat Sullivan: Yeah, it's a bit early to talk about that. The clauses are all unique to the particular tenant in the mall. They often have certain triggers that have to be met. There might be a sales reduction. It might not solely be HBC leaving. The way it played out when we dealt with Target and Sears is when you have a portfolio as large as ours, there are things that the tenants want in other properties because we have multiple locations with all these tenants. There tends to be some negotiation that goes on that ends up settling the co-tenancy clauses, and they actually never get triggered. We're optimistic that we'll come through it relatively unscathed.

Speaker Change: You're probably we're being very diligent.

Mario Saric: And then the way it played out when we dealt with Target and Sears is when you have a portfolio as large as ours, there's things that the tenants want in other properties, because we have multiple locations with all these tenants. So there tends to be some negotiation that goes on that ends up settling the co-tenancy clauses and they actually never get triggered. So we're optimistic that we'll come through it relatively unscathed. Thank you.

Speaker Change: Alright, and then I guess in the same vein.

Speaker Change: Early but what are you hearing from other tenants or expect to hear on the co tenancy side.

Speaker Change: Just tagging.

Speaker Change: Can you remind us how those closets laid out targets departure and would you expect a similar outcome this time around.

Speaker Change: Okay.

Speaker Change: Yes, it's a bit early to talk about the causes are all unique to the particular tenant in the mall.

Operator: Thank you. Your next question comes from the line of Mario Saric with Scotiabank. Your line is open.

Operator: Thank you. Your next question comes from the line of Mario Saric with Scotiabank. Your line is open.

Mario Saric: Your next question comes from the line of Mario Saric with Scotiabank. Your line is open. Yeah, good morning. Just maybe sticking to each.

Speaker Change: They often have to certain triggers that have to be met there might be a sales reduction it might not solely be HBC, leaving.

Pat Sullivan: Yeah, good morning. Just maybe sticking to each CAD 150 million of projected capex or capital required to deal with it. Does that, the CAD 25 to 30 million per box, does that assume the space is just being taken by one tenant or does it assume kind of a subdivision of the space amongst several tenants? Hi, Mario. Good morning. That would assume subdivision of the space, in some cases demolition, perhaps even back to just the slab and the studs of the space itself. Most of these buildings are very aged. They have mechanical and electrical systems that you can't even find parts for anymore. There will be substantial demolition and just a rebuild. Really, if there's one tenant taking the whole space, the cost would probably be substantially less. We don't anticipate many of these spaces will be taken by one tenant only. Okay.

Mario Saric: Yeah, good morning. Just maybe sticking to each CAD 150 million of projected capex or capital required to deal with it. Does that, the CAD 25 to 30 million per box, does that assume the space is just being taken by one tenant or does it assume kind of a subdivision of the space amongst several tenants?

Speaker Change: And then the way it played out when we dealt with targeted series is when you have a portfolio as large as ours, there's things that the tenants want and other properties because we have multi tenant we have multiple locations with all these tenants. So there tends to be some negotiation that goes on that ends up settling the co tenancy clauses and they actually never get triggered so we're optimistic.

Mario Saric: Can the $125-$150 million of projected capex or capital required to deal with it, the $25-$30 million per box, does that assume the space is being taken by one tenant or does it assume kind of a subdivision of the space? Hi Mario, good morning. That would assume subdivision of the space, in some cases demolition, perhaps even back to the just the slab and the studs of the space itself. Most of these buildings are very aged. They have mechanical and electrical systems that you can't even find parts for anymore. So there will be substantial demolition and just a rebuild.

Speaker Change: That will come through relatively unscathed.

Alex Avery: Hi, Mario. Good morning. That would assume subdivision of the space, in some cases demolition, perhaps even back to just the slab and the studs of the space itself. Most of these buildings are very aged. They have mechanical and electrical systems that you can't even find parts for anymore. There will be substantial demolition and just a rebuild. Really, if there's one tenant taking the whole space, the cost would probably be substantially less. We don't anticipate many of these spaces will be taken by one tenant only.

Speaker Change: Thank you.

Mario: Your next question comes from the line of Mario <unk> with Scotiabank.

Speaker Change: Your line is open.

Speaker Change: Thank you.

Mario: Morning.

Mario: Maybe sticking to each.

Mario: The 125.

Mario: The $150 million of projected capex or capital required to deal with it.

Mario Saric: And really, if there's one tenant taking the whole space, the cost would probably be substantially less, but we don't anticipate many of these spaces will be taken by one tenant only.

Mario: Does that the $25 million to $30 million per box, but I would assume the spaces, just taking <unk> by one tenant.

Mario: <unk> kind of a subdivision in the space.

Mario Saric: Okay. Does the 125 to 150 million include any expected from the sale of ultimate residential land?

Mario: Several primary and good morning.

Mario Saric: Okay, and does the $125 million to $150 million include any expected... from the sale of ultimate residential land. No, we haven't factored that in yet. Right now, it's kind of a high-level speculative number. We have pretty good feel for who the tenants are that will replace the bay, but we haven't progressed discussions with them. And I suspect once the stores are formally disclaimed, we'll have other options that present themselves to us. So we'll see what happens, but we haven't factored in any of the residential opportunity that might come from the removal of their restrictions on the site.

Pat Sullivan: Does the 125 to 150 million include any expected from the sale of ultimate residential land? No, we haven't factored that in yet. Right now it's kind of a high-level speculative number. We have a pretty good feel for who the tenants are that will replace the Bay, but we haven't progressed discussions with them. I suspect once the stores are formally disclaimed, we'll have other options that present themselves to us. We'll see what happens. We haven't factored in any of the residential opportunity that might come from the removal of their restrictions on the site.

Mario: That would assume subdivision of the space in some cases demolition.

Speaker Change: Perhaps even back to that just the slab and the status of that.

Alex Avery: No, we haven't factored that in yet. Right now it's kind of a high-level speculative number. We have a pretty good feel for who the tenants are that will replace the Bay, but we haven't progressed discussions with them. I suspect once the stores are formally disclaimed, we'll have other options that present themselves to us. We'll see what happens. We haven't factored in any of the residential opportunity that might come from the removal of their restrictions on the site.

Mario: The space itself. Most of these buildings are very age they have.

Mario: Mechanical and electrical systems that you can't even find parts for anymore.

Mario: So there will be substantial demolition and just.

Mario: Our rebuilt.

Mario: And really if there is one tenant taking the whole space the cost would probably be substantially less but we don't anticipate many of these spaces will be taken by one tenant only.

Mario: Alright, Okay, and the one $5 million to $150 million.

Mario: Included in your expense.

Operator: Thank you.

Operator: Thank you. Your next question comes from the line of Lauren Calmar with Desjardins. Lauren, your line is open.

Operator: Thank you. Your next question comes from the line of Lauren Calmar with Desjardins. Lauren, your line is open.

Mario: Yes.

Lorne Kalmar: Your next question comes from the line of Lorne Kalmar with Desjardins. Lorne, your line is open. Thanks. I guess I'll stay on theme here with the HBC side of things. Can you just remind us, how will the cost that HBC was paying be reallocated to the other tenants? And will there be any significant impact to recovery ratios?

Mario: From the sale of ultimate residential land.

Mario: No we haven't factored that in yet, but right now it's kind of a high level of speculative number we have a pretty good feel for who the tenants are that will replace the bay, but we haven't progressed discussions with them and I suspect once the stores are far movie, formerly disclaim will have other options that present themselves to us So we'll see what.

Alex Avery: Thanks. I guess I'll stay on theme here.

Lorne Kalmar: Thanks. I guess I'll stay on theme here with the HBC side of things, can you just remind us how will the cost that HBC is paying be reallocated to the other tenants, and will there be any significant impact to recovery ratios?

Pat Sullivan: With the HBC side of things, can you just remind us how will the cost that HBC is paying be reallocated to the other tenants, and will there be any significant impact to recovery ratios?

Mario: It happens, but we haven't factored in any of the residential opportunity that might come from the removal of their restrictions on the site.

Raghunath Davloor: Hi Lauren.

Alex Avery: Hi Lauren. Good morning. The taxes are going to be a non-recoverable expense to the landlord. The common area contribution that was coming from HBC will be reallocated to the CRU. I guess the fortunate part is this happened early enough in the year that we can manage our expenses and try to absorb the cost within our current CAM estimate for the year, so the tenants don't get hit with an extra burden. Yeah, we can reallocate the CAM. I don't expect it to have any impact on our recovery ratios.

Patrick Sullivan: Hi Lorne, morning. So we, the taxes are going to be a non recoverable expense to the landlord. The common area contribution that that was coming from HCC will be reallocated to the CRU. I guess the fortunate part is this happened early enough the year that we can manage our expenses and try to absorb the cost within our current CAM estimate for the year so the tenants don't get hit with an extra burden. But yeah, we can reallocate the CAM. I don't I don't expect it to have any impact on our recovery rate.

Pat Sullivan: Good morning. The taxes are going to be a non-recoverable expense to the landlord. The common area contribution that was coming from HBC will be reallocated to the CRU. I guess the fortunate part is this happened early enough in the year that we can manage our expenses and try to absorb the cost within our current CAM estimate for the year, so the tenants don't get hit with an extra burden. Yeah, we can reallocate the CAM. I don't expect it to have any impact on our recovery ratios. Okay, that's very helpful.

Mario: Thank you.

Speaker Change: Your next question comes from the line of Lorne Kalmar with Desjardins.

Speaker Change: Lauren Your line is open.

Speaker Change: Thanks.

Speaker Change: I guess I'll stay on fee there with the HBC side of things can you just remind us how will be.

Speaker Change: The cost in HBC was paying be reallocated to the other tenants and will there be any significant impact to recovery ratios.

Lorne Kalmar: Okay, that's very helpful. Just last quick one, you guys kept seeing property NOI guidance, obviously. Had a pretty solid print this quarter. Does that sort of imply you guys are expecting to do 1% to 2%? quarter over the balance of the year?

Speaker Change: Hi, good morning.

Speaker Change: So we the taxes are going to be a non recoverable expense to the landlord.

Lorne Kalmar: Okay, that's very helpful.

Lorne Kalmar: And then just last quick one. You guys kept the same property and all I got guidance obviously had a pretty solid print this quarter. Does that sort of imply you guys are expecting to do one to 2% quarter over the balance of the year? Yeah. Thank you.

Alex Avery: Just last quick one, you guys kept seeing property NOI guidance, obviously.

Speaker Change: The common area.

Pat Sullivan: Had a pretty solid print this quarter.

Speaker Change: Contribution that that was coming from Hec will be reallocated to the CRE you.

Alex Avery: Does that sort of imply you guys are expecting to do 1% to 2%?

Pat Sullivan: Quarter over the balance of the year? Yes.

Speaker Change: The fortunate part of this happened early enough of the year that we can manage our expenses and try to absorb.

Alex Avery: Yes.

Speaker Change: The cost within our current.

Speaker Change: <unk> estimate for the year, so the tenants don't get hit with an extra burden.

Operator: Thank you. Your next question comes from the line of Matt Kornack with National Bank Financial. Your line is open.

Operator: Thank you. Your next question comes from the line of Matt Kornack with National Bank Financial. Your line is open.

Speaker Change: But.

Matt Karnak: Your next question comes from the line of Matt Karnak with National Banking Financial. Your line is open. Good morning, guys. Just just quickly on the property tax recovery that you had this quarter from a prior year or prior years. Was that originally anticipated in the guidance? Or would that be some of the potential offset to the bay? And then also from a from a bad debt standpoint, how are you accounting for the bay in this quarter? I think there was a larger bad debt charge. Yeah, so the property tax rebate So we did anticipate some amount.

Speaker Change: Yes, we can reallocate the camp I don't I don't expect it to have any impact on our recovery ratios.

Pat Sullivan: Good morning, guys. Just quickly, on the property tax recovery that you had this quarter from a prior year or prior years, was that originally anticipated in the guidance, or would that be some of the potential offset to the Bay? Also, from a bad debt standpoint, how are you accounting for the Bay in this quarter? I think there was a larger bad debt charge.

Matt Kornack: Good morning, guys. Just quickly, on the property tax recovery that you had this quarter from a prior year or prior years, was that originally anticipated in the guidance, or would that be some of the potential offset to the Bay? Also, from a bad debt standpoint, how are you accounting for the Bay in this quarter? I think there was a larger bad debt charge.

Okay. That's very helpful. And then just last quick one.

Speaker Change: You guys kept the same property NOI guidance, obviously had a pretty solid this quarter.

Speaker Change: It's sort of imply you guys are expecting to be 1% to 2% quarter over the balance of the year.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Thank you.

Raghunath Davloor: Yeah. The property tax rebate, we did anticipate some amount. We tend to heavily discount it when we put it into our forecast because these things can really move around. Until it's sort of certain and we have the minutes of settlement from the city, we don't typically put a huge amount of weight on it. We try to be careful. There was some amount included in the forecast or the guidance, and once the number got pinned down, then obviously it showed up. What was the other question that was about? Oh, bad debt? Yeah. HBC, all receivables that were included in the NPL up until 31 March 2024, was provided for, was written off. We don't anticipate any.

Rags Davloor: Yeah. The property tax rebate, we did anticipate some amount. We tend to heavily discount it when we put it into our forecast because these things can really move around. Until it's sort of certain and we have the minutes of settlement from the city, we don't typically put a huge amount of weight on it. We try to be careful. There was some amount included in the forecast or the guidance, and once the number got pinned down, then obviously it showed up. What was the other question that was about? Oh, bad debt? Yeah. HBC, all receivables that were included in the NPL up until 31 March 2024, was provided for, was written off. We don't anticipate any.

Speaker Change: Your next question comes from the line of Matt Carnac with National Bank Financial Your line is open.

Raghunath Davloor: We tend to heavily discount it when we put it into our into our forecast, because these things can really move around and until it. sort of certain and we have the minutes of settlement from the city, you know, we don't typically put a huge amount of weight on it, so we try to be careful. So there was some amount included in the forecast, other guidance, and, you know, once the numbers got pinned down, then obviously it showed up. What was the other question that was about? Oh, back deck. Yeah, so HBC, all receivables that were included in the NPNL up until March 31st was provided for, was written So we are anticipating that.

Speaker Change: Yeah.

Matt Carnac: Hey, good morning, guys.

Matt Carnac: Just quickly on the property tax recovery that you had this quarter from prior year or prior years.

Matt Carnac: Was that originally anticipated in the guidance or would that be some of the potential offset to the bay and then also from a from a bad debt standpoint, how are you.

Matt Carnac: Accounting for the day in this quarter I think there was a.

Matt Carnac: Larger bad debt charge.

Matt Carnac: Yes, so the.

Matt Carnac: Property tax rebate.

Matt Carnac: So we did anticipate some amount of intend to heavily discounted or put it into our into our forecast, but as these things can really move around and until it.

Matt Carnac: So the certain and we have the minutes the settlement from the city.

Matt Carnac: So typically put a huge amount of weight on it so we try to be.

Matt Carnac: Careful so there was some amount included in the <unk>.

Matt Karnak: and then just, uh, sorry.

Pat Sullivan: Just quickly on consumer sentiment and what you're seeing from a leasing standpoint for the rest of your tenant base outside of HBC, obviously we're in a tough economic time here, but has it started to materialize at all in terms of what tenants are saying or thinking?

Matt Carnac: Forecast.

Matt Carnac: The guidance and some numbers out.

Matt Karnak: Anyway, just quickly on consumer sentiment and what you're seeing from a leasing standpoint for the rest of your tenant base outside of HPC. Obviously, we're in a tough economic time here, but... started to materialize at all in terms of what tenants are saying or thinking. It doesn't sound like it, but interested in any color there.

Matt Carnac: Pin down then obviously it showed up.

Matt Kornack: Just quickly on consumer sentiment and what you're seeing from a leasing standpoint for the rest of your tenant base outside of HBC, obviously we're in a tough economic time here, but has it started to materialize at all in terms of what tenants are saying or thinking? It doesn't sound like it, but interested. Any color there?

What was the other question those above.

Matt Carnac: Bad debt.

Matt Carnac: Yes, so HBC.

Matt Carnac: All receivables that were included in the P&L.

Now until March 31.

Matt Carnac: It was provided four was written off.

Alex Avery: It doesn't sound like it, but interested.

Matt Carnac: So we had anticipated and that's helpful and then.

Pat Sullivan: Any color there? Hey Matt. No, we haven't seen any change in tenant behavior or tenant demand for opening stores. There's international retailers looking at Canada like Uniqlo. There's American tenants looking to expand to Canada like Victoria's Secret. Bath & Body Works is looking at expansions, and Canadians are very active as well. No slowdown. Sales in March, just to give everyone kind of an update, were very strong, which was, I got to admit, a little bit surprising, but they were strong. We were up 3% overall in the month, with two malls that you might not have expected being one of our leaders, which was Oshawa and Windsor, Devonshire and Oshawa. People are still out shopping, and that's got the retailers still optimistic and wanting to open stores.

Pat Sullivan: Hey Matt. No, we haven't seen any change in tenant behavior or tenant demand for opening stores. There's international retailers looking at Canada like Uniqlo. There's American tenants looking to expand to Canada like Victoria's Secret. Bath & Body Works is looking at expansions, and Canadians are very active as well. No slowdown. Sales in March, just to give everyone kind of an update, were very strong, which was, I got to admit, a little bit surprising, but they were strong. We were up 3% overall in the month, with two malls that you might not have expected being one of our leaders, which was Oshawa and Windsor, Devonshire and Oshawa. People are still out shopping, and that's got the retailers still optimistic and wanting to open stores.

Matt Carnac: Yeah.

Patrick Sullivan: Hey Matt, no we haven't we haven't seen any change in in tenant behavior or tenant demand for opening stores. There's international retailers looking at Canada like Uniqlo, there's American tenants looking to expand to Canada like Victoria Secrets, Bath & Body Works is looking at expansions and Canadians are very active as well so no slowdown. Sales in March just to give everyone kind of an update we're very strong which was I gotta admit a little bit surprising but they were they were strong. We were up three percent overall in the month with two malls that you might not have expected being one of our leaders which was Oshawa and Windsor, Devonshire and Oshawa.

Matt Carnac: Okay and then just.

Matt Carnac: Sorry.

Matt Carnac: Anyway, just quickly on.

Matt Carnac: Consumer sentiment and what you're seeing from a leasing standpoint.

Matt Carnac: For the rest of your tenant base outside of HBC.

Matt Carnac: Obviously, we're in a tough economic time here, but.

Matt Carnac: Started to materialize at all in terms of what tenants are saying or thinking it doesn't sound like it but but interested in any color there.

Matt Carnac: Okay.

Matt Carnac: Hey, Matt No. We haven't we haven't seen any change in tenant behavior or tenant demand for.

Matt Carnac: Opening stores.

Patrick Sullivan: So people are still out shopping and that's got the retailers still optimistic and wanting to open stores.

Speaker Change: There is international retailers looking at Canada like unit growth there.

Speaker Change: As American tenants looking to expand in Canada like Victoria Secrets.

Speaker Change: <unk> is looking at expansions and Canadians are very active as well so no slowdown sale.

Operator: Thank you. Your next question comes from the line of Pammi Bir with RBC. Your line is open.

Operator: Thank you. Your next question comes from the line of Pammi Bir with RBC. Your line is open.

Pammi Bir: Thank you.

Pammi Bir: Your next question comes from the line of Pammi Bir with RBC. Your line is open. Thanks. Good morning.

Speaker Change: Sales in March just to give everyone kind of an update we're very strong which was I got to admit a little bit surprising, but there were strong.

Pat Sullivan: Thanks. Good morning. Just maybe coming back to the disposition commentary in your remarks, can you maybe just talk about what sort of appetite you're seeing in the market, how that's changed at all given the current state of the bigger picture on the macro front, and maybe a slower economy?

Pammi Bir: Thanks. Good morning. Just maybe coming back to the disposition commentary in your remarks, can you maybe just talk about what sort of appetite you're seeing in the market, how that's changed at all given the current state of the bigger picture on the macro front, and maybe a slower economy?

Pammi Bir: Just maybe coming back to the disposition commentary in your remarks, can you maybe just talk about, you know, what sort of appetite you're seeing in the market? How that's changed at all, given the current state of the bigger picture on the macro front and maybe a slower economy? We haven't really seen any change in the tone of the market. I have sort of talked to lenders. We really don't play a lot in the secure debt space, but there's a lot of capital out there and I think the banks have a lot of capital. Their underwriting may have gotten a little stricter, but we're not hearing any issues as far as purchasers securing Finance, which at the end of the day is the main driver as you're dealing with privates who do rely on leverage.

Speaker Change: We were up 3% overall in the mid <unk>.

Speaker Change: <unk>.

With two malls that you might not have expected being one of our leaders which was offshore and.

Speaker Change: And Windsor, Devon Shire in Oshawa So.

Speaker Change: People are still out shopping and that's got the retailers still.

Speaker Change: Optimistic in wanting to open stores.

Raghunath Davloor: We haven't really seen any change in the tone of the market. I have sort of talked to lenders. We really don't play a lot in the secured debt space, but there's a lot of capital out there, and I think the banks have a lot of capital. You know, their underwriting may have gotten a little stricter, but we're not hearing any issues as far as purchasers securing financing, which at the end of the day is the main driver as you're dealing with privates who do rely on leverage. At this point, we're not seeing any issues on pricing or deal velocity. If this uncertainty continues and the banks adjust their access to capital, obviously it'll have an impact. Today we're not seeing it.

Rags Davloor: We haven't really seen any change in the tone of the market. I have sort of talked to lenders. We really don't play a lot in the secured debt space, but there's a lot of capital out there, and I think the banks have a lot of capital. You know, their underwriting may have gotten a little stricter, but we're not hearing any issues as far as purchasers securing financing, which at the end of the day is the main driver as you're dealing with privates who do rely on leverage. At this point, we're not seeing any issues on pricing or deal velocity. If this uncertainty continues and the banks adjust their access to capital, obviously it'll have an impact. Today we're not seeing it.

Speaker Change: Thank you.

Tami Barron: Your next question comes from the line of Tami Barron with RBC.

Speaker Change: Your line is open.

Speaker Change: Thanks, Good morning, just maybe coming back to the disposition commentary and your remarks can you maybe just talk about.

Speaker Change: What sort of appetite youre seeing in the market how that's changed at all given the current state of sort of.

Speaker Change: The bigger picture on the macro front and maybe a slower economy.

Pammi Bir: So at this point, we're not seeing any issues on pricing or deal velocity. If this uncertainty continues and the bank... just their access to capital, then obviously it'll have an impact, but today we're not seeing it. Got it.

Speaker Change: We haven't really seen any change in the tone of the market.

Speaker Change: I have sort of talked to.

Speaker Change: Lenders, because we really don't play a lot in the secured debt space.

Speaker Change: There's a lot of capital out there and I think the banks have a lot of capital there underwriting may have gotten a little stricter, but we're not hearing any issues as far as purchase or securing.

Pat Sullivan: Got it. Just coming back to the HBC commentary, based on your comments, it sounds like none of your leases are perhaps part of any of the possible acquisition discussions. Maybe if you just confirm that. Secondly, do you expect any of this space, based on the tenants that you are talking to, to potentially be released and income producing maybe by next year or late next year? Yeah, I think I'm highly skeptical someone's going to buy any of our leases. I mean, we have use clauses that are pretty clear on operating a department store, and we have operating covenants that require them to operate. If somebody does want to take the leases, they're going to have to start paying us rent from day one with no landlord help. We won't be upgrading any of the store.

Pammi Bir: Got it. Just coming back to the HBC commentary, based on your comments, it sounds like none of your leases are perhaps part of any of the possible acquisition discussions. Maybe if you just confirm that. Secondly, do you expect any of this space, based on the tenants that you are talking to, to potentially be released and income producing maybe by next year or late next year?

Pammi Bir: Just coming back to the HBC commentary, any... Based on your comments, it sounds like that none of the none of your leases are perhaps part of any of the possible acquisition discussion. So maybe if you just confirm that, and then secondly, you know, you do you expect any of this space based on the tenants that you are talking to, to potentially be released in income producing, maybe by next year or late next Yeah, I think, I'm highly skeptical someone's going to buy any of our leases. I mean, we have use clauses that are pretty clear on operating a department store, and we have operating covenants that require them to operate.

Speaker Change: Finance and we're just in the day is the main driver because you're dealing with privacy, who do a lot of leverage so at this point, we're not seeing any issues on pricing or deal velocity.

Speaker Change: This uncertainty continues in the banks adjust.

Speaker Change: They are at test the capital and obviously it will have an impact but today, we're not seeing it.

Pat Sullivan: Yeah, I think I'm highly skeptical someone's going to buy any of our leases. I mean, we have use clauses that are pretty clear on operating a department store, and we have operating covenants that require them to operate. If somebody does want to take the leases, they're going to have to start paying us rent from day one with no landlord help. We won't be upgrading any of the store.

Got it.

Speaker Change: Just.

Speaker Change: Coming back to the HBC commentary any.

Based on your comments it sounds like that none of the none of your leases are perhaps part of any of the possible acquisition discussions. So maybe if you could just confirm that and then secondly.

Patrick Sullivan: So, if somebody does want to take the leases, they're going to have to start paying us rent from day 1 with no landlord help. We won't be upgrading any of the store. That will be all on them to deal with. So, I'm very skeptical anyone will buy it, but if they do, they can start paying us rent right away. Other than that, there is a potential we could see income from stores towards the latter part of next year if there happens to be deals concluded where there is one single tenant taking the box. Otherwise, we're looking 24 to 36 months out if we're subdividing.

Pat Sullivan: That will be all on them to deal with. I'm very skeptical anyone will buy it. If they do, they can start paying us rent right away. Other than that, there is a potential we could see income from stores towards the latter part of next year if there happens to be deals concluded where there is one single tenant taking the box. Otherwise, we're looking 24 to 36 months out if we're subdividing.

That will be all on them to deal with. I'm very skeptical anyone will buy it. If they do, they can start paying us rent right away. Other than that, there is a potential we could see income from stores towards the latter part of next year if there happens to be deals concluded where there is one single tenant taking the box. Otherwise, we're looking 24 to 36 months out if we're subdividing.

Speaker Change: Do you expect any of this space based on the tenants that you are talking to.

Speaker Change: To potentially be released into income producing maybe by next year late next year.

Speaker Change: Hum.

Speaker Change: Yes, I think.

Speaker Change: Really skeptical someone's going to buy any of our leases and we have used clauses that are pretty.

Speaker Change: Clear on operating in Department store, and we are operating covenants that require them to operate.

Speaker Change: So if somebody who doesn't want to take the leases, they're going to have to start paying us rent from day, one with no landlord health, we wont be upgrading any of the store.

Operator: Thank you. Your next question comes from the line of Mark Rothschild with Canaccord. Your line is open.

Operator: Thank you. Your next question comes from the line of Mark Rothschild with Canaccord. Your line is open.

Pammi Bir: Thank you.

Mark Rothschild: Your next question comes from the line of Mark Rothschild with Canaccord. Your line is open. Thanks and good morning. Alex, you spent a couple of minutes in your comment talking about the opportunity to buy models. Canada. It doesn't appear to be a ton of competition for the types of malls that you want to buy. But it does require generally issuing some equity, whether it's to vendors or in some other form, with the units trading where they are. And you have been buying back some stock.

Speaker Change: It will be all around them to deal with so.

Speaker Change: I am very sceptical anyone would buy it but if they do they can keep start paying us rent right away.

Pat Sullivan: Thanks and good morning. Alex, you spent a couple minutes in your comments talking about the opportunity to buy malls in Canada. There doesn't appear to be a ton of competition for the types of malls that you want to buy. It does require generally issuing some equity, whether it's the vendors or in some other form with the units trading where they are. You have been buying back some stock. Does the attitude of issuing equity to vendors change at all, or is the opportunity and the prices so attractive that it's worth it and accretive even at this cost of capital? Thanks, Mark.

Mark Rothschild: Thanks and good morning. Alex, you spent a couple minutes in your comments talking about the opportunity to buy malls in Canada. There doesn't appear to be a ton of competition for the types of malls that you want to buy. It does require generally issuing some equity, whether it's the vendors or in some other form with the units trading where they are. You have been buying back some stock. Does the attitude of issuing equity to vendors change at all, or is the opportunity and the prices so attractive that it's worth it and accretive even at this cost of capital?

Speaker Change: Other than that there is a potential we could see income from.

From stores towards the latter part of next year, if there happens to be deals concluded wherever there is one single tenant taking the box.

Speaker Change: Otherwise, we're looking 24 months to 36 months out at for subdividing.

Alexander Avery: Does the attitude of issuing equity to vendors change at all, or is the opportunity and the price is so attractive that it's worth it and accretive even at the same time? Cost of Capital. Thanks, Mark. You know, I would say that the opportunity to buy malls from pension plans remains as big as it has been since we were spun out. The engagement that we're getting from pension plans, who are the primary vendors, is larger now, I think today. And I think a big part of that is just our demonstrated ability to transact. and, you know, the evolving nature of our business.

Speaker Change: Thank you.

Mark Rothschild: Your next question comes from the line of Mark Rothschild with Canaccord. Your line is open.

Speaker Change: Thanks, and good morning al.

Alex Avery: Thanks, Mark. You know, I would say that the opportunity to buy malls from pension plans remains as big as it has been since we were spun out. The engagement that we're getting from pension plans, who are the primary vendors, is larger now, I think, today. I think a big part of that is just our demonstrated ability to transact, and, you know, the evolving nature of our business. I talked a lot about our, you know, CRU per mall, the total CRU.

Mark Rothschild: A couple of minutes and your comments talking about the opportunity to buy them all.

Alex Avery: You know, I would say that the opportunity to buy malls from pension plans remains as big as it has been since we were spun out. The engagement that we're getting from pension plans, who are the primary vendors, is larger now, I think, today. I think a big part of that is just our demonstrated ability to transact, and, you know, the evolving nature of our business. I talked a lot about our, you know, CRU per mall, the total CRU.

Speaker Change: In Canada.

Speaker Change: It doesn't appear to be a kind of competition.

Mark Rothschild: Types of malls that you.

Speaker Change: Bye.

Speaker Change: But it does require a generally issuing some equity whether it's the vendors or some other form.

Speaker Change: With the units trading where they are and you have been buying back some stock.

Speaker Change: Does the attitude of issuing equity to vendors changed at all or is the opportunity on the prices so attractive that it's worth it and accretive even at this.

Alexander Avery: I talked a lot about our, you know, CRU per mall, the total CRU, our role in the market. All of those things, I think, are making us a more attractive buyer for those properties. And I think the vendors are getting much more comfortable with the proposition of taking equity in Primaris. And a lot of these, you know, pension plans are You know, longer thinkers, they see the value of these shopping centers. They know that the fundamentals are recovering.

Speaker Change: Cost of capital.

Mark Rothschild: Thanks Mark.

Mark Rothschild: I would say that the opportunity to buy malls from pension plans remains as big as it has been since we were spun out.

Pat Sullivan: Our role in the market.

Our role in the market.

Alex Avery: All of those things I think are making us a more attractive buyer for those properties. I think the vendors are getting much more comfortable with the proposition of taking equity in Primaris. A lot of these pension plans are longer thinkers. They see the value of these shopping centers. They know that the fundamentals are recovering. Where our units trade is definitely a factor that influences the decision making of the vendors. I would also say that they're also looking at it and saying we know that there's lots of value in our malls, their malls, in Primaris malls, and the proposition of getting significant liquidity through our deal structure and also being able to participate in the continued recovery of the mall sector seems to be gaining traction with the vendors.

All of those things I think are making us a more attractive buyer for those properties. I think the vendors are getting much more comfortable with the proposition of taking equity in Primaris. A lot of these pension plans are longer thinkers. They see the value of these shopping centers. They know that the fundamentals are recovering. Where our units trade is definitely a factor that influences the decision making of the vendors. I would also say that they're also looking at it and saying we know that there's lots of value in our malls, their malls, in Primaris malls, and the proposition of getting significant liquidity through our deal structure and also being able to participate in the continued recovery of the mall sector seems to be gaining traction with the vendors.

Mark Rothschild: The engagement that we're getting from pension plans.

Speaker Change: Who are the primary vendors.

Mark Rothschild: It is.

Mark Rothschild: As is larger now I think today and I think a big part of that is just our demonstrated ability to transact.

Mark Rothschild: And you know the evolving nature of our business side, they talked a lot of it are.

Alexander Avery: And so I, you know. Where our units trade is definitely a factor that influences the decision-making of the vendors, but I would also say that they're also looking at it and saying, we know that there's lots of value in our malls, their malls, in Primaris' malls, and the proposition of getting significant liquidity through our deal structure and also being able to participate in the continued recovery of the mall sector seems to be gaining traction with the vendors. So you answered the question explaining why it would make a lot of sense to be attractive for the vendors.

Mark Rothschild: CRE you per mall, but total CRE you our role in the market.

Mark Rothschild: All of those things I think are making us a.

Mark Rothschild: A more attractive buyer for four of those properties and I think the vendors are getting much more comfortable.

Mark Rothschild: With the proposition of taking equity in primarily.

Mark Rothschild: And a lot of these pension plans are.

Mark Rothschild: Longer thinkers they see the value of these shopping centers. They know that the fundamentals are recovering and so.

Mark Rothschild: Where our unit train is definitely a factor that.

Pat Sullivan: You answered the question explaining why it would make a lot of sense to be attractive for the vendors. My question is more for Primaris issuing equity.

Mark Rothschild: You answered the question explaining why it would make a lot of sense to be attractive for the vendors. My question is more for Primaris issuing equity.

Mark Rothschild: <unk> the decision making of the vendors, but I would also say that.

Alexander Avery: My question is more for Primaris, issue in fact. Well, so just to go back to how we underwrite the deals, we look at the mall, value them on the same basis that our existing portfolio is valued. We actually rank all of the malls and we slot the proposed acquisitions into the hierarchy of our mall portfolio. And then we establish what we believe pricing is based on a NAV for NAV basis. And then we structure the deal such that on the deal, these transactions are appropriately priced. And so, from our perspective, we're issuing equity at NAV.

Mark Rothschild: They are also looking at it and saying like we know that there is lots of value in our malls.

Alex Avery: Well, just to go back to how we underwrite the deals, we look at them, value them on the same basis that our existing portfolio is valued. We actually rank all of the malls, and we slot the proposed acquisitions into the hierarchy of our mall portfolio. We establish what we believe pricing is based on a NAV for NAV basis. We structure the deal such that, on the basis that we're issuing equity at NAV, these transactions are appropriately priced. You know, from our perspective, we're issuing equity at NAV, and the fact that we can do that while simultaneously buying back stock at a 30% to 40% discount to NAV, as evidence supports, we buy back stock every day in the market.

Alex Avery: Well, just to go back to how we underwrite the deals, we look at them, value them on the same basis that our existing portfolio is valued. We actually rank all of the malls, and we slot the proposed acquisitions into the hierarchy of our mall portfolio. We establish what we believe pricing is based on a NAV for NAV basis. We structure the deal such that, on the basis that we're issuing equity at NAV, these transactions are appropriately priced. You know, from our perspective, we're issuing equity at NAV, and the fact that we can do that while simultaneously buying back stock at a 30% to 40% discount to NAV, as evidence supports, we buy back stock every day in the market.

Mark Rothschild: Their malls and primarily <unk> malls and.

Mark Rothschild: The proposition of getting significant liquidity through our deal structure and also being able to participate in the continued recovery of the mall sector seems to be.

Mark Rothschild: Gaining traction with the with the vendors.

Mark Rothschild: So you answered the question explaining why it would make a lot of sense to be attractive for the vendors it Mike.

Mark Rothschild: My question is more for primary issuance of equity.

Mark Rothschild: Well so.

Mark Rothschild: Just to go back to how we underwrite the deals we look at the mall value them on the same basis that our.

Alexander Avery: And the fact that we can do that while simultaneously buying back stock at a 30-40% discount to NAV, as evidence supports, we buy back stock every day in the market. And I think the portfolio, the results that we've been delivering in terms of the evolving nature of our business. You know, it's really working for Primaris. So I don't I'm not really... too fussed about the question about whether we should be issuing equity. We're issuing equity at NAB and we're improving the nature of our business. So we're, we're pretty comfortable continuing on the path that we're on.

Mark Rothschild: Existing portfolio was valued.

We actually rank all of the malls and we swapped the proposed acquisitions into the <unk> of our bond portfolio and then we established what we believe pricing is based on our NAV.

Alex Avery: You know, I think the portfolio, the results that we've been delivering in terms of the evolving nature of our business, you know, it's really working for Primaris. I don't, I'm not really.

You know, I think the portfolio, the results that we've been delivering in terms of the evolving nature of our business, you know, it's really working for Primaris. I don't, I'm not really too fussed about, you know, the question about, you know, whether we should be issuing equity. We're issuing equity at NAV, and we're improving the nature of our business. We're pretty comfortable continuing on the path that we're on, and we really like the direction that the business is moving in, and also the direction that the stock is moving in. Notwithstanding the last couple of months, which are tariffs and HBC and Comarch. Last year, we were the top performing REIT on the TSX Capped REIT Index, and since the spin out, we've been the top performing REIT on the TSX Capped REIT Index.

Mark Rothschild: Now for now basis, and then we structured the deal such that on the basis that we're issuing equity at these these transactions are appropriately.

Mark Rothschild: Appropriately priced and so.

Raghunath Davloor: Too.

Alex Avery: Fussed about, you know, the question about, you know, whether we should be issuing equity. We're issuing equity at NAV, and we're improving the nature of our business. We're pretty comfortable continuing on the path that we're on, and we really like the direction that the business is moving in, and also the direction that the stock is moving in. Notwithstanding the last couple of months, which are tariffs and HBC and Comarch. Last year, we were the top performing REIT on the TSX Capped REIT Index, and since the spin out, we've been the top performing REIT on the TSX Capped REIT Index.

Mark Rothschild: From our perspective, we're issuing equity at NAV.

Mark Rothschild: And the fact that we can do that while simultaneously buying back stock at $3 40.

Mark Rothschild: Percent discount to NAV.

Mark Rothschild: As ever.

Mark Rothschild: Evidence supports we buyback stock everyday in the market and.

Alexander Avery: And we really like the direction that the business is moving in.

Mark Rothschild: Thank you.

Mark Rothschild: The portfolio mix.

Alexander Avery: And also, the direction that the stock is moving in notwithstanding the last, you know, couple of months, which are, you know, tariffs and HVC and Comark. Last year, we were the top performing read on the TSX Capped Read Index. And since the spinout, we've been the top performing read on the TSX Capped Read Index.

Mark Rothschild: The results that we've been delivering in terms of the evolving nature of our business.

Mark Rothschild: It's really working for primarily so I don't.

Mark Rothschild: I'm not really.

Mark Rothschild: Too fussed about.

Mark Rothschild: You know that.

The question about whether we should be issuing equity we're issuing equity at NAV and we're improving the nature of our business.

Sam Damiani: Thank you. Your next question comes from the line of Sam Damiani with TD Securities. Your line is open. Thanks. Good morning, everyone. I apologize. I logged in a bit late. So hopefully these questions weren't asked.

Operator: Thank you. Your next question comes from the line of Sam Damiani with TD Securities. Your line is open.

Operator: Thank you. Your next question comes from the line of Sam Damiani with TD Securities. Your line is open.

Mark Rothschild: So we're pretty comfortable continuing on the path that we're on.

Mark Rothschild: We really like the direction that.

Alex Avery: Thanks. Good morning, everyone. I apologize, I logged in a bit late, so hopefully these questions weren't asked just on the comment earlier. I think in response to Lauren's question. In terms of the same property NOI for the balance remaining three quarters of the year looking to average 2% or less versus, you know, 6% adjusted in Q1. What would be the reason for the remainder many quarters of this year to come in with such a lower same property NOI growth?

Sam Damiani: Thanks. Good morning, everyone. I apologize, I logged in a bit late, so hopefully these questions weren't asked just on the comment earlier. I think in response to Lauren's question. In terms of the same property NOI for the balance remaining three quarters of the year looking to average 2% or less versus, you know, 6% adjusted in Q1. What would be the reason for the remainder many quarters of this year to come in with such a lower same property NOI growth?

Mark Rothschild: The business is moving in and also.

Mark Rothschild: The direction that the stock is moving and notwithstanding the last couple of months, which are.

Sam Damiani: Just on the comment earlier, I think in response to Lorne's question in terms of the same property and why, for the balance, the remaining three quarters of the year, looking to average 2% or less versus, you know, 6% adjusted in Q1, what would be the reason for the remainder, remaining quarters of this year to come out, come in with a So it's a lower same property on wide growth. Yeah, you know, it's We're still looking at the overall 3-4%. It's really substantive. I mean, obviously, that's going to have a big impact. Yeah, otherwise, excluding the HBC, you know, the numbers are tracking very strong, actually slightly ahead of expectations.

Mark Rothschild: Tariffs in HBC and co Mark.

Mark Rothschild: Last year, we were the top performing REIT on the PSX capped REIT index.

Mark Rothschild: And since the spin we've been the top performing read on the PSX capped REIT index.

Mark Rothschild: Thank you.

Speaker Change: Your next question comes from the line of Sam Damiani with TD Securities. Your line is open.

Raghunath Davloor: Yeah, you know, we're still looking at the overall 3% to 4%. It's really cuts and Bay. I mean, obviously that's going to have a bit of an impact.

Rags Davloor: Yeah, you know, we're still looking at the overall 3% to 4%. It's really cuts and Bay. I mean, obviously that's going to have a bit of an impact.

Speaker Change: Oh, Thanks, good morning, everyone and I apologize I logged in a bit late so hopefully these questions.

Speaker Change: On the the comment earlier I think in response to Lauren's question in terms of the same property NOI for the balance of the remaining three quarters of the year looking to average 2% or less.

Alex Avery: Yeah.

Alex Avery: Yeah.

Raghunath Davloor: Otherwise, excluding HBC, you know, there's a number tracking very strong, actually slightly ahead of expectations. We're, it's really impactive HBC for the second half of the year.

Rags Davloor: Otherwise, excluding HBC, you know, there's a number tracking very strong, actually slightly ahead of expectations. We're, it's really impactive HBC for the second half of the year.

Sam Damiani: So we're, it's a very impactive HBC for the second half of the year. and the- The leases have not yet been disclaimed, and so the expectation is once we have leases disclaimed, we're hoping all of them are disclaimed, we will get 30 days more rent. So in Q2, we would expect at least two of the three months rent from HBC.

Speaker Change: Versus 6% adjusted in Q1, what would be the reason for the remainder.

Speaker Change: Orders of this year to come out come in with Us.

Alex Avery: And.

Alex Avery: And the leases have not yet been disclaimed. The expectation is once we have leases disclaimed, we're hoping all of them are disclaimed, we will get 30 days more rent. In Q2, we would expect at least two of the three months' rent from HBC. Really, the impact is expected to be more concentrated in Q3 and Q4. We don't have visibility into when those leases might be disclaimed and what we're going to do with them once we have control of those leases.

Operator: The.

Speaker Change: The lower same property NOI growth.

Alex Avery: The leases have not yet been disclaimed. The expectation is once we have leases disclaimed, we're hoping all of them are disclaimed, we will get 30 days more rent. In Q2, we would expect at least two of the three months' rent from HBC. Really, the impact is expected to be more concentrated in Q3 and Q4. We don't have visibility into when those leases might be disclaimed and what we're going to do with them once we have control of those leases.

Speaker Change: Yes.

Speaker Change: We're still looking at the overall, 3% to 4% currently.

Speaker Change: Some day.

Speaker Change: Obviously, that's a bit of an impact.

Speaker Change: Yes, otherwise excluding HBC.

Speaker Change: The numbers are tracking very strong actually slightly ahead of expectations.

Sam Damiani: So really the impact is expected to be more concentrated in Q3 and Q4, but we don't have visibility into when those leases might be disclaimed and what we're going to do with them once we have control of those leases. And the other thing, Sam, is... I can't believe it. The growth in NOI and same property growth, while they're correlated, they're not exactly correlated because acquisitions do not show up in same property growth. So the fact that we're driving very strong growth on the recent acquisitions does not flow through same property growth because we didn't have them for two comparable periods.

Speaker Change: Sure.

Speaker Change: In.

Speaker Change: In fact, I think <unk> seen for the second half of the year.

Speaker Change: And the.

Speaker Change: Not yet.

Speaker Change: The leases have not yet been disclaimer.

Raghunath Davloor: The other thing, Sam, is.

Speaker Change: And so the.

Rags Davloor: The other thing, Sam, is the growth in NOI and same property growth, while they're correlated, they're not exactly correlated because acquisitions do not show up in same property growth numbers. The fact that we're driving very strong growth on the recent acquisitions does not flow through same property growth because we didn't have them for two comparable periods. You know, given the big shift in the portfolio and the growth, you're just missing that impact, and the actual growth is stronger.

Speaker Change: The expectation is.

Speaker Change: Once we have leases disclaimer.

Pat Sullivan: The.

Raghunath Davloor: Growth in NOI and same property growth, while they're correlated, they're not exactly correlated because acquisitions do not show up in same property growth numbers. The fact that we're driving very strong growth on the recent acquisitions does not flow through same property growth because we didn't have them for two comparable periods. You know, given the big shift in the portfolio and the growth, you're just missing that impact, and the actual growth is stronger.

Speaker Change: All of them are disclaimer.

Speaker Change: We will get 30 days more rent.

Speaker Change: So in Q2, we would expect at least 222 of the three months rent from HBC. So really the impact is expected to be more concentrated in Q3 and Q4, but we don't have.

Speaker Change: Visibility into when those leases might be disclaimed.

Sam Damiani: So, you know, given the big shift in the portfolio and the growth, you know, you're just missing that impact. And so the actual growth is stronger, if you follow my. I do. That's helpful.

Speaker Change: And what we're going to do with them once we have people on those leases.

Sam Damiani: And the other thing Sam.

Speaker Change: Okay.

Alex Avery: If you follow my drift.

Alex Avery: If you follow my drift.

The growth in NOI and same property growth, while they're correlated they're not exactly correlated because acquisitions.

Raghunath Davloor: I do.

Sam Damiani: I do. That's helpful. Maybe sort of also on guidance, you also didn't change your three-year outlook, which essentially is 2027. Can you give us, I guess, give us a sense as to how you're thinking about getting, you know, getting to those points over, you know, by the end of 2027? Is it kind of a bit of a pause in 2026 and then a re-acceleration in 2027? I know you haven't given 2026 guidance yet, but just with HBC, you know, something must have changed as you look at the path to 2027.

Alex Avery: That's helpful. Maybe sort of also on guidance, you also didn't change your three-year outlook, which essentially is 2027. Can you give us, I guess, give us a sense as to how you're thinking about getting, you know, getting to those points over, you know, by the end of 2027? Is it kind of a bit of a pause in 2026 and then a re-acceleration in 2027? I know you haven't given 2026 guidance yet, but just with HBC, you know, something must have changed as you look at the path to 2027.

Sam Damiani: And maybe sort of also on guidance, you also didn't change your three-year outlook, which essentially is 2027. Can you give us, I guess, give us a sense as to how you're thinking about getting, you know, getting to those points over, you know, by the end of 2027? Is it kind of a bit of a pause in 26 and then a re-acceleration in 27? I know you haven't given 2026 guidance yet, but just with HBC, you know, something must have changed as you look at the path to 2027. I mean, there's a lot of talk about HBC, but quite frankly, it's not that big a deal for us.

Speaker Change: Same property numbers. So the fact that we are driving very strong growth on the on the recent acquisitions.

Speaker Change: Flow through our same property growth because we didn't have them, but two comparable periods. So.

Speaker Change: Given the big shift in the portfolio and the growth.

Speaker Change: You just missing that that impact that.

Speaker Change: Actual growth is stronger.

Speaker Change: If you follow my drift.

Speaker Change: I do.

Raghunath Davloor: I mean, there's a lot of talk about HBC, but quite frankly, it's not.

Rags Davloor: I mean, there's a lot of talk about HBC, but quite frankly, it's not that big a deal for us.

Speaker Change: Helpful.

Speaker Change: And maybe sort of also on guidance you do also didn't change your three year outlook, which essentially is 2027.

Pat Sullivan: That big a deal for us.

Raghunath Davloor: I mean it doesn't have that much weight that it's going to throw all our numbers into tilt. I mean the headline occupancy, obviously there's an impact because it's a large amount of space, but they weren't paying a lot of rent. We are still comfortable. We can drive operating income. It's just as simple as that portfolio is performing, and there's a lot of opportunity to generate growth, especially on the new acquisitions.

I mean it doesn't have that much weight that it's going to throw all our numbers into tilt. I mean the headline occupancy, obviously there's an impact because it's a large amount of space, but they weren't paying a lot of rent. We are still comfortable. We can drive operating income. It's just as simple as that portfolio is performing, and there's a lot of opportunity to generate growth, especially on the new acquisitions.

Patrick Sullivan: I mean, it doesn't have that much weight that it's going to throw a lot of numbers into tilt. I mean, the headline occupancy, obviously there's an impact because it's a large amount of space, but they weren't paying a lot of rent. and so we just feel comfortable we can drive, you know, drive operating income. It's as simple as that.

Speaker Change: Can you give us I guess give us a sense as to how you're thinking about getting you know getting to those points over by the end of 2027 is it kind.

Speaker Change: Kind of a bit of a pause in 'twenty six and then a reacceleration in 27, I know you haven't given 2026 guidance, yet, but just with HBC.

Patrick Sullivan: Portfolio is performing and there's a lot of opportunity to generate growth, especially on a new acquisition. Thank you.

Speaker Change: Something must have changed as you look at the path to 2027.

Speaker Change: I mean, there's a lot of talk about HCC, but quite frankly years.

Operator: Thank you. Your next question comes from the line of Brad Sturges with Raymond James. Your line is open.

Operator: Thank you. Your next question comes from the line of Brad Sturges with Raymond James. Your line is open.

Brad Sturges: Your next question comes from the line of Brad Sturges with Raymond James. Your line is open. Hey, good morning. Just to circle back on the assets held for sale and the thinking around dispositions this year, would that include any properties with HPC locations that are in the assets held for sale bucket right now? Yeah, there's a couple. Okay.

Speaker Change: Not that big a deal for us.

Speaker Change: It doesn't have that much later, so that's all in numbers and to tell I mean, the headline occupancy we say this a impact but to hit the large amount of space, but they won't pay a lot of rent.

Alex Avery: Hey, good morning. Just to circle back on the assets held for sale and just the thinking around dispositions this year. Would that include any properties with HBC locations that are in the assets held for sale budget right now?

Brad Sturges: Hey, good morning. Just to circle back on the assets held for sale and just the thinking around dispositions this year. Would that include any properties with HBC locations that are in the assets held for sale budget right now?

Speaker Change: So it was felt comfortable we can drive.

Speaker Change: Drive operating income.

Raghunath Davloor: Yeah, there's a couple.

Rags Davloor: Yeah, there's a couple.

Speaker Change: Just as simple as that.

Speaker Change: Portfolio is performing and there's a lot of opportunity.

Pat Sullivan: Okay.

Brad Sturges: Okay.

Patrick Sullivan: And my other question would be just thinking about once the restrictions around land usage get removed, assuming like all the leases are disclaimed. Can you kind of walk through or how should we think about what the incremental density would free up at the nine properties that would have HPC locations?

Alex Avery: My other question would be just thinking about once the restrictions around land usage get removed, assuming like all the leases are disclaimed, can you kind of walk through or how should we think about what the incremental density would free up at the nine properties that would have HPC locations?

Brad Sturges: My other question would be just thinking about once the restrictions around land usage get removed, assuming like all the leases are disclaimed, can you kind of walk through or how should we think about what the incremental density would free up at the nine properties that would have HPC locations?

Speaker Change: Growth, especially on the new acquisitions.

Speaker Change: Thank you.

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

Brad Sturges: Hey, good morning.

Brad Sturges: Just to circle back on the assets held for sale and just the thinking around dispositions. This year would that include any properties with HBC locations that are in the asset held for sale bucket right now.

Pat Sullivan: Hi, Brad. It's going to take time to sort out what the opportunity is. We've done some preliminary looking at it in the past, but we haven't spent a lot of time on it simply because HBC had long term leases, and we had no visibility into when we might get the land back. That'll be something that we look further into in the coming months, and we'll talk about it probably in the next couple of quarters.

Pat Sullivan: Hi, Brad. It's going to take time to sort out what the opportunity is. We've done some preliminary looking at it in the past, but we haven't spent a lot of time on it simply because HBC had long term leases, and we had no visibility into when we might get the land back. That'll be something that we look further into in the coming months, and we'll talk about it probably in the next couple of quarters.

Patrick Sullivan: Hi, Brad. It's going to take time to sort out what what the opportunity is. We've done some preliminary looking at it in the past, but we haven't spent a lot of time on it simply because HBC had long term leases, and we had no visibility into when we might get the land back. So that'll that'll be something that we look further into in the coming months. And we'll talk about it probably in the next couple quarters. I mean, partly, it would depend on who the prospects are. Are we going to tear it down, not tear it down?

Brad Sturges: Yeah, there's a couple.

Brad Sturges: Okay.

Brad Sturges: And.

Brad Sturges: My other question would be.

Brad Sturges: Just thinking about once the <unk>.

Brad Sturges: Restrictions around land usage get removed.

Brad Sturges: Assuming like all the <unk>.

Brad Sturges: This is our disclaimer can you kind of walk through how should we think about what the incremental density would free up.

Raghunath Davloor: I mean, partly it will depend on who the prospects are. We're going to tear it down, not tear it down. There are a lot of moving parts. Until we have absolute clarity as to what's happening with HBC, it's very difficult to comment on that. Obviously, we believe there are opportunities here.

Rags Davloor: I mean, partly it will depend on who the prospects are. We're going to tear it down, not tear it down. There are a lot of moving parts. Until we have absolute clarity as to what's happening with HBC, it's very difficult to comment on that. Obviously, we believe there are opportunities here.

Patrick Sullivan: So there's a lot of moving parts. So until we have absolute clarity as to what's happening with HPC, it's very difficult to comment on that. But obviously, we believe there's opportunities here. Thank you.

Brad Sturges: At the nine properties that would have HBC locations.

Brad Sturges: Hi, Brad.

Brad Sturges: It's going to take time to sort of what what the opportunity is.

Brad Sturges: We've done some preliminary looking at it in the past, but we haven't spent a lot of time on it simply because HBC had long term leases and we had no visibility to when we might get that land back.

Operator: Thank you again. If you would like to ask a question, press star, then the number one on your telephone keypad. Your next question comes from the line of Gaurav Mathur with Green Street. Your line is open.

Operator: Thank you again. If you would like to ask a question, press star, then the number one on your telephone keypad. Your next question comes from the line of Gaurav Mathur with Green Street. Your line is open.

Operator: Again, if you would like to ask a question, press star then the number one on your telephone keypad.

Brad Sturges: So that'll be something what we look further into in the coming months and we'll talk about it probably in the next couple of quarters.

Gaurav Mathur: Your next question comes from the line of Gaurav Mathur with Green Street. Your line is open. Thank you and good morning. Just staying on that theme for a minute, you mentioned that some of these HVC boxes do have redevelopment potential.

Speaker Change: I think partly it will depend on who the prospects are good.

Pat Sullivan: Thank you and good morning. Just staying on that theme for a minute, you mentioned that some of these HBC boxes do have redevelopment potential. Is there in the near term any possibility that you'd be able to dispose these boxes to developers who are looking to build either mixed use assets or residential? Absolutely not. We want to control our real estate. The boxes themselves are attached to the shopping center, and we will control the redevelopment of those. As for whatever excess lands might be available, we'll give updates on that in the coming quarters.

Gaurav Mathur: Thank you and good morning. Just staying on that theme for a minute, you mentioned that some of these HBC boxes do have redevelopment potential. Is there in the near term any possibility that you'd be able to dispose these boxes to developers who are looking to build either mixed use assets or residential?

Brad Sturges: With that I'll not tear it down.

Brad Sturges: So there's a lot of moving parts, so until we have absolute clarity as to what's happening with HBC.

Alexander Avery: Are you, is there in the near term any possibility that you'd be able to dispose these boxes to developers who are looking to build either mixed use assets or residential? Absolutely not. We want to control our real estate. The boxes themselves are attached to the shopping center and we will control the redevelopment of those.

Brad Sturges: Difficult to that too.

Brad Sturges: Okay.

Brad Sturges: We believe there is opportunities here.

Brad Sturges: Yeah.

Pat Sullivan: Absolutely not. We want to control our real estate. The boxes themselves are attached to the shopping center, and we will control the redevelopment of those. As for whatever excess lands might be available, we'll give updates on that in the coming quarters.

Brad Sturges: Thank you.

Brad Sturges: Again, if you would like to ask a question Press Star then the number one on your telephone keypad.

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

Alexander Avery: As for whatever excess lands might be available, we'll give updates on that in the coming quarters. Okay, thanks.

Speaker Change: Thank you and good morning.

Speaker Change: Just staying on that theme for a minute you mentioned that some of these HBC boxes do have redevelopment potential.

Raghunath Davloor: Okay, thanks.

Gaurav Mathur: Okay, thanks. My last question would be around the cotenancy discussion that we had earlier on the call. Would you be able to quantify the number of cotenancy leases on the portfolio?

Pat Sullivan: My last question would be around the cotenancy discussion that we had earlier on the call. Would you be able to quantify the number of cotenancy leases on the portfolio? Yeah, I mean the absolute number is around 27, which is materially lower than it was during Target and Sears. We had a lot more exposure back then, and we've taken the opportunity in the last 10 years to rewrite a lot of the clauses so that the Bay was specifically excluded. We did a great job in the Primaris portfolio. We acquired properties that hadn't taken the same route, and there were greater concentrations in the acquired properties. We're confident we can navigate our way through them as we did with Target and Sears.

Patrick Sullivan: And my last question would be around the co-tenancy discussion that we had earlier on the call. Would you be able to quantify the number of co-tenancy leasals on the portfolio? Yeah, I mean, the absolute number is around 27. is materially lower than it was during Target and Sears. We had a lot more exposure back then that we've taken the opportunity in the last 10 years to rewrite a lot of the clauses so that the bay was specifically excluded. We did a great job in the Primaris portfolio. We acquired properties that hadn't taken the same route and there were a greater concentration in the acquired properties, but we're confident we can navigate our way through them as we did with Target and Sears.

Speaker Change: Our U S.

Speaker Change: Is there in the near term any possibility that you'd be able to dispose of these bulk close to adapt lockers, we're looking to build either mixed use assets on residential.

Pat Sullivan: Yeah, I mean the absolute number is around 27, which is materially lower than it was during Target and Sears. We had a lot more exposure back then, and we've taken the opportunity in the last 10 years to rewrite a lot of the clauses so that the Bay was specifically excluded. We did a great job in the Primaris portfolio. We acquired properties that hadn't taken the same route, and there were greater concentrations in the acquired properties. We're confident we can navigate our way through them as we did with Target and Sears.

Speaker Change: Absolutely not we want to control our real estate the boxes themselves or are.

Speaker Change: Attached to the shopping center and we will control the redevelopment of those thats for whatever excess lands might be available.

Speaker Change: Give updates on that in the coming quarters.

Speaker Change: Okay. Thanks, and my last question would be around the co tenancy discussion that you had earlier on the call would you be able to quantify the number of co tenancy, leaving the portfolio.

Speaker Change: Yes.

Speaker Change: The absolute number is around 20.

Speaker Change: 27.

Mario Saric: Thank you.

Operator: Thank you. Your next question comes from the line of Mario Saric with Scotiabank. Your line is open.

Operator: Thank you. Your next question comes from the line of Mario Saric with Scotiabank. Your line is open.

Speaker Change: Which.

Mario Saric: Your next question comes from the line of Mario Saric with Scotiabank. Your line is open. Hi, thanks for taking the incremental question maybe for Alex. And specifically thinking about capital allocation, the 125 to 150 million coming back to the potential capital acquired. Clearly, you're not going to issue equity to fund that. So when you when you think about The sources of use is 125 to 150 million. What does that entail in terms of adjustments, capital, capital allocation, if any, in terms of where you're reallocating that spend from like whether it's essentially higher than expected dispositions, lower CIB activity, which Q1 doesn't seem to be the case.

Speaker Change: Is materially lower than it was during target and Sears.

Speaker Change: We had a lot more exposure back then we've taken the last.

Alex Avery: Hi.

Mario Saric: Hi. Thanks for taking the incremental question. Maybe for Alex, and specifically thinking about capital allocation, the CAD 125 to 150 million coming back to the potential capital acquired, clearly you're not going to issue equity to fund that. When you think about the sources and uses, the CAD 125 to 150 million, what does that entail in terms of adjustments, capital allocation, if any, in terms of where you're reallocating that spend from, like whether it's potentially higher than expected dispositions, lower the activity, which Q1 doesn't seem to be the case. Just curious in terms of how you think about that.

Pat Sullivan: Thanks for taking the incremental question. Maybe for Alex, and specifically thinking about capital allocation, the CAD 125 to 150 million coming back to the potential capital acquired, clearly you're not going to issue equity to fund that. When you think about the sources and uses, the CAD 125 to 150 million, what does that entail in terms of adjustments, capital allocation, if any, in terms of where you're reallocating that spend from, like whether it's potentially higher than expected dispositions, lower the activity, which Q1 doesn't seem to be the case. Just curious in terms of how you think about that.

Speaker Change: The opportunity in the last 10 years to rewrite a lot of the clauses so that the bay with specifically excluded.

Speaker Change: Did a great job in the primary portfolio, we acquired properties that hadn't.

Speaker Change: Done the taken the same road and there are a greater concentration in the acquired properties, but we're confident we can navigate our way through them as we did with target and Sears.

Speaker Change: Thank you.

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

Speaker Change: Alright, thanks for taking the incremental question maybe for Alex.

Alexander Avery: So just curious in terms of how you think about that. Yeah.

Speaker Change: And specifically thinking about capital allocation, the $125 million to $150 million on coming back to the potential capital required.

Alex Avery: Yeah, thanks, Barry.

Alex Avery: Yeah, thanks, Barry.

Alexander Avery: Go ahead, Alec. I was just going to say, I don't really think it's going to have much of an impact on our capital allocation. We routinely spend $40-$50 million a year on these types of projects. We're reaching the conclusion of Northland Village, which has been a big spend for the last couple of years. We are well advanced in the Devonshire redevelopment, and as those projects wind down, really the only question is what projects will replace those in terms of a steady state capital investment in the portfolio. I think what's pretty evident is that HBC redevelopments will be those projects.

Pat Sullivan: Go ahead, Alex.

Pat Sullivan: Go ahead, Alex.

Alex Avery: I was just going to say I don't really think it's going to have much of an impact on our capital allocation. We routinely spend CAD 40 to 50 million a year on these types of projects. We're reaching the conclusion of Northland Village, which has been a big spend for the last couple of years. We are well advanced in the Devonshire redevelopment. As those projects wind down, really the only question is, you know, what projects will replace those in terms of a steady state capital investment in the portfolio. I think what's pretty evident is that HBC redevelopments will be those projects. You know, as it relates to the availability and sources of capital, as you saw in Q1, we have really accelerated our dispositions as part of our, you know, not HBC driven, but certainly, you know, portfolio, portfolio construction ambitions.

Alex Avery: I was just going to say I don't really think it's going to have much of an impact on our capital allocation. We routinely spend CAD 40 to 50 million a year on these types of projects. We're reaching the conclusion of Northland Village, which has been a big spend for the last couple of years. We are well advanced in the Devonshire redevelopment. As those projects wind down, really the only question is, you know, what projects will replace those in terms of a steady state capital investment in the portfolio. I think what's pretty evident is that HBC redevelopments will be those projects. You know, as it relates to the availability and sources of capital, as you saw in Q1, we have really accelerated our dispositions as part of our, you know, not HBC driven, but certainly, you know, portfolio, portfolio construction ambitions.

Speaker Change: Clearly youre not going to issue equity to fund that so when you when you think about.

Speaker Change: The sources and uses the $125 million to $150 million.

Speaker Change: What does that entail in terms of adjustments topic capital allocation.

Speaker Change: Any.

Speaker Change: In terms of where you're reallocating that spend from like whether it's actually higher than expected dispositions lower.

Speaker Change: CIB activity, which Q1 doesn't seem to be the case. So I'm just curious in terms of how you think about that.

Speaker Change: Yeah. Thanks.

Alex Avery: Okay go ahead Alex.

Speaker Change: I was just going to say I don't.

Speaker Change: I don't really think it's going to have much of an impact on our capital allocation.

Speaker Change: We routinely spend $40 million to $50 million a year on.

Alexander Avery: As it relates to the availability and sources of capital, as you saw in Q1, we have really accelerated our dispositions as part of our portfolio construction ambitions. We've accelerated the capital recycling. A big part of that, as you noted, has been allocated to buying back units. We expect that to continue at an elevated pace this year. Our stock simply traded at an enormous discount to NAD. the remainder of those disposition proceeds will be a mix of helping to fund capital investments in our existing portfolio and also support the acquisition ambitions that we're pursuing at current.

Speaker Change: These types of projects, we're reaching the conclusion of Northland village, which has been a big spend for the last couple of years.

Speaker Change: We are well advanced in the Devon Shire redevelopment and as those projects wind down.

Speaker Change: Really the only question is.

Alex Avery: We've accelerated the capital recycling. A big part of that, as you noted, has been allocated to buying back units. We expect that to continue at an elevated pace. This year, our stock simply trades at an enormous discount to NAV.

We've accelerated the capital recycling. A big part of that, as you noted, has been allocated to buying back units. We expect that to continue at an elevated pace. This year, our stock simply trades at an enormous discount to NAV.

Speaker Change: What projects will replace those in terms of the steady state capital investments in the portfolio.

Speaker Change: And I think what's pretty evident is that H B C.

Speaker Change: Developments will be those projects.

Speaker Change: As it relates to the availability and and.

Speaker Change: Sources of capital.

Raghunath Davloor: The.

The remainder of those disposition proceeds will be a mix of helping to fund, you know, capital investments in our existing portfolio, and also support the acquisition ambitions that we're pursuing at current. I don't, I don't really see it having much of an impact.

Alex Avery: Remainder of those disposition proceeds will be a mix of helping to fund, you know, capital investments in our existing portfolio, and also support the acquisition ambitions that we're pursuing at current. I don't, I don't really see.

Speaker Change: As you saw in Q1.

Speaker Change: We have really accelerated our dispositions as part of or not.

Speaker Change: Not HBC driven but certainly.

Speaker Change: Portfolio.

Speaker Change: Portfolio construction ambitions, we've accelerated the capital recycling a big part of that as you noted has been allocated to buying back units and we expect that to continue.

Alexander Avery: So I don't really see it having much of an impact. I mean, at the margin, if you wanted to look for the impact rather than having some of that capital we would have put back into our portfolio in other places. You might see the odd bank pad or grocery store development in the parking lot deferred for a couple of years, but I'm not even convinced of that. To Rags' point, this really, in the context of a nearing $5 billion balance sheet, $125 million, $150 million over a couple of years really isn't out of the ordinary.

Raghunath Davloor: It having much of an impact.

Alex Avery: I mean, at the margin, if you wanted to look for the impact, rather than having, you know, some of that capital we would have otherwise put back into our portfolio, in other places, you know, you might see the odd bank pad or grocery store development in the parking lot deferred for a couple of years, but I'm not even convinced of that. You know, to Rags's point, this really, in the context of a, you know, nearing CAD 5 billion balance sheet, CAD 125 million, CAD 150 million over a couple of years really isn't out of the ordinary.

I mean, at the margin, if you wanted to look for the impact, rather than having, you know, some of that capital we would have otherwise put back into our portfolio, in other places, you know, you might see the odd bank pad or grocery store development in the parking lot deferred for a couple of years, but I'm not even convinced of that. You know, to Rags's point, this really, in the context of a, you know, nearing CAD 5 billion balance sheet, CAD 125 million, CAD 150 million over a couple of years really isn't out of the ordinary.

Speaker Change: And a lot of an elevated pace this year.

Speaker Change: Simply trade to the enormous discount to NAV.

Speaker Change: And.

Speaker Change: The remainder of those disposition proceeds will be a mix.

Speaker Change: Helping to fund.

Speaker Change: Capital investments in our existing portfolio and also support the acquisition ambitions that we're pursuing that current so I don't I don't really see it having much of an impact I mean at the margin. If you wanted to look for the impact rather than.

Operator: Okay, that's helpful. Thank you. There are no further questions at this time.

Pat Sullivan: Okay, that's helpful. Thank you.

Mario Saric: Okay, that's helpful. Thank you. Thanks.

Speaker Change: Having some of that capital, we would have otherwise put back into our portfolio in other places.

Alex Avery: Thanks.

Operator: Thank you. There are no further questions at this time. Claire, I turn the call back over to you. Thank you. Operator, with no further questions today, we'll close the call. On behalf of the Primaris team, we thank you all for participating, and look forward to speaking with you again soon. Thank you. Thank you. You may now disconnect.

Operator: Thank you. There are no further questions at this time. Claire, I turn the call back over to you.

Speaker Change: You might see the odd bank pad or grocery store development in the parking lot.

Claire Mahaney: Claire, I turn the call back over to you.

Claire Mahaney: Thank you. Operator, with no further questions today, we'll close the call. On behalf of the Primaris team, we thank you all for participating, and look forward to speaking with you again soon. Thank you.

Claire Mahaney: Thank you, operator. With no further questions today, we'll close the call. On behalf of the Primaris team, we thank you all for participating and look forward to speaking with you again soon. Thank you.

Speaker Change: Deferred for a couple of years, but im.

Speaker Change: Im not even convinced of that.

Speaker Change: <unk> at this point that's really.

Operator: Thank you. You may now disconnect.

Speaker Change: In the context of a.

Speaker Change: Nearing $5 billion balance sheet.

Operator: You may now disconnect.

Speaker Change: Mm 125 million $150 million over a couple of years really isn't out of the ordinary.

Speaker Change: Okay. That's helpful. Thank you.

Speaker Change: Thanks.

Thank you.

Speaker Change: There are no further questions at this time Claire I turn the call back over to you.

Claire Mahaney: Thank you operator with no further questions today, we'll close the call on behalf of a primary team. We thank you all for participating and look forward to speaking with you again soon thank you.

Speaker Change: Thank you you may now disconnect.