Q2 2025 CT Real Estate Investment Trust Earnings Call
After the Speakers' remarks, there will be a question and answer session. If you would like to ask a question during that time simply press star one one on your telephone keypad to.
To withdraw your question. Please press star one one.
The speakers on today's call are Kevin Salzburg, President and Chief Executive Officer of CTV, Jodi Spiegel, Senior Vice President real estate, and Leslie Gibson Chief Financial Officer.
Speaker #2: Good morning. My name is Lauren Cannon, and I will be your conference operator today. At this time, I would like to welcome everyone to CT REIT's Q2 2025 earnings results conference call.
Today's discussion May include forward looking statements such statements are based on management's assumptions and beliefs. These forward looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements.
<unk> public filings for a discussion of these risk factors, which are included in their Q2 2025 management's discussion and analysis, which can be found on <unk> website and on Cedar plus.
I'll now turn the call over to Kevin Salzburg, President and Chief Executive Officer of CTV Kevin.
Thank you Lauren.
Good morning, everyone and thank you for joining us today on <unk> quarterly Investor Conference call.
We had a busy second quarter here at <unk> and I'm pleased to highlight some of our notable accomplishments since we last spoke.
First we were thrilled to recently share news of the progress that we have been making at our Canada square property.
Located at the southwest corner of Young Street in Eglinton Avenue West in Midtown Toronto and home to Canadian Tire Corporation's head office for nearly five decades. This trophy asset we co own with Oxford properties group has always been a unique property within our portfolio.
Acquired in 2014, we have long considered there to be tremendous upside in this asset based on its strategic location at what will soon be the intersection of two transit lines and also related to the sites future mixed use redevelopment potential.
For the co owners stabilizing the commercial component of the complex has been our priority and we have been working with CPC for some time on their evolving workplace strategy to determine their needs and to find solutions that met all of our collective objectives.
As a result of these efforts is a new 20 year lease with CPC to take approximately 550000 square feet of significantly refurbished space that will anchor the complex and occupy substantial portions of the two buildings located at $21 80, and 2200 Young Street.
The co owners have committed to improving the buildings at a cost of over $200 million.
Our greater than $100 million at our 50% share, including upgrading the electrical and mechanical systems, Washrooms elevators, and even replacing the curtain wall. There will also be enhanced transit connections in the form of a new subway entrance from the lobby of 'twenty 200, Young Street as well as 15000 square feet of new retail space along young.
The project will also seek to minimize embody carbon while introducing significant energy efficiency upgrades and supportive LEED certification.
Speaker #3: committed to improving the buildings at a cost of over $200 million dollars, or greater than $100 million dollars at our 50 percent share, including upgrading the electrical and mechanical systems, washrooms, elevators, and even replacing the curtain wall.
Needless to say, we will be investing in this asset to deliver what will soon become a AAA complex at what has always been a AAA location.
Construction and occupancy will begin this fall and will be phased over the next three years with full occupancy expected in late 2028.
Speaker #3: There will also be Thanks,
Second with respect to our funding and financing activities in Q2, we refinance our series B unsecured debentures debenture.
Debentures that matured in June with a new issuance of $200 million.
Series J unsecured debentures with a five year term at a rate of four 9%.
The spread we realize on this new financing of 135 basis points over the reference rate with Cte reached tightest ever and at the time, the tightest reached five year spread in the last four or so years. Obviously, a result that we were very pleased with.
Additionally, the REIT reset the interest rate effective June one 2025 on our series 316, 17, 18, and 19 class C. L. P units with CPC to 438% for a five year term ending on May 31 2013.
In the quarter, we also renewed our base shelf prospectus as well as our ATM program.
Next we were happy to release, our fourth annual ESG report, which highlights our strategy priorities and accomplishments in 2024.
As we continue to evolve our thinking practices and disclosure our ESG report is a great reference to understand where we're at on our ESG journey.
Highlights from the past year include improving our data related systems and the ability to measure our footprint philanthropically supporting the communities in which we operate and being recognized for both our diversity and the way we manage our assets.
I encourage you to give it a read to learn more.
Beyond these achievements I am also pleased with our financial performance and Cte REIT delivered strong results in Q2.
Occupancy was steady again this quarter up slightly to 99, 5%.
Growth in same store NOI was one 6% for the quarter, which when coupled with our intensification activity over the past year led to growth in same property NOI of two 2%.
Net operating income overall grew at three 4% on the back of the same property NOI growth coupled with growth driven by our recently completed acquisitions and developments.
And this growth in net operating income drove <unk> per unit growth of one 6% in Q2.
As a reminder, in Q2 of 2024, we received a lease surrender payment and excluding.
This item NOI growth would have been four 4% and <unk> per unit growth would have been three 2% for the quarter, both very strong showing.
With respect to our balance sheet with our indebtedness ratio dropping below 40% at the end of Q2, we are in the enviable position to be able to leverage our financial flexibility when we find new investment opportunities that fit our strategy and meet our financial targets.
Although we are quite comfortable with this current level. It is below our typically targeted range in the low to mid 40% and we therefore have significant dry powder to deploy for the right deals.
While the market has slowed in terms of transaction volumes, the new investments that we announced this quarter and that Jodi will describe in more detail are great. Examples of our ability to source strategic third party acquisitions and to also leverage our relationship with Canadian tire to both find new avenues for growth and continue to improve our asset base.
With a substantially fully occupied portfolio, a solid balance sheet and the financial flexibility to continue to invest in our growth CTV continues to provide investors with a stable and reliable investment option that is built to withstand the ups and downs of the volatile markets that we have seen for some time now.
I will now turn it over to Jodi and Leslie to provide some additional details on the quarter, our results and our leasing investment and development activities Jody.
Thanks, Kevin and good morning, everyone as highlighted in our press release yesterday, we are pleased to announce two new investments this quarter.
First new investment relates to our acquisition of a well located 200000 square foot open Air shopping center anchored by Canadian tire and other strong tenants in the north part of Calgary, Alberta, which closed subsequent to quarter end. Additionally, we have finalized arrangements to expand the Canadian tire store in the eastern part of SaaS Katrina Scott.
Speaker #3: it over to Jodi and Lesley to provide some additional details on the quarter, our results, and our leasing investment and development activities. Jodi?
One.
This development project is anticipated to be completed by the end of 2026.
Speaker #4: Kevin, and good morning, everyone. As highlighted in our press release yesterday, we are pleased to announce two new investments this quarter. The first new investment relates to our acquisition of a well-located $200,000 square foot open-air shopping center anchored by Canadian Tire and other strong tenants in north part of Calgary, Alberta, which closed subsequent to quarter-end.
These new investments will require a total of $66 million to complete and in aggregate are expected to earn a going in yield of 755% together. They will add approximately 252000 square feet of incremental GLA to our high quality portfolio.
Speaker #4: Additionally, we have finalized arrangements to expand a Canadian Tire store in the eastern part of Saskatoon, Saskatchewan. This development project is anticipated to be completed by the end of 2026.
In the second quarter, we completed two previously disclosed projects, including the expansion of the Canadian tire store in Peterborough, Ontario, as well as the development of a new Canadian tire store in Kingston, Ontario. These.
Speaker #4: These new investments will require a total of $66 million to complete, and an aggregate, are expected to earn a going-in-yield of 7.55 percent. Together, they will add approximately $252,000 square feet of incremental GLA to our high-quality portfolio.
These investments totaled $45 million and added 142000 square feet of incremental GLA to the portfolio. Our development pipeline overall remains strong with 20 projects at various stages eight of which are expected to be completed by the end of this year and the remainder expected to be completed in 2012.
Speaker #4: In the second quarter, we completed two previously disclosed projects, including the expansion of a Canadian Tire store in Peterborough, Ontario, as well as the development of a new Canadian Tire store in Kingston, Ontario.
Six and beyond.
Included in these development projects is the newly announced retrofit of Canada square that Kevin touched on and that we announced in June. This initiative will modernize the commercial complex delivering a total of 680000 square feet of renovated space of which over 90% is pre leased and over 80% of which will be <unk>.
Speaker #4: These investments totaled $45,000,000 and added $142,000 square feet of incremental GLA to portfolio. Our development pipeline overall remains strong, with 20 projects at various stages, eight of which are expected to be completed by the end of this year, and the remainder expected to be completed in 2026 and beyond.
Occupied by Canadian tire.
The redevelopment as our first step in transforming the 9.2 acre site into a vibrant mixed use community hub complete with public open spaces and transit connected infrastructure.
Speaker #4: Included in these development projects is the newly announced retrofit at Canada Square that Kevin touched on, and that we announced in June. This initiative will modernize the commercial complex, delivering a total of 680 thousand square feet of renovated space, of which over 90 percent is pre-leased and over 80 percent of which will be occupied by Canadian Tire.
The office retrofit for 'twenty 180 Young Street will begin later in 2025 with work on 2200 Young Street beginning at the start of 2026 and the project overall will be substantially completed in 2028.
The majority of the required investment will be spent relatively evenly between 2026 2027 and 2028.
Speaker #4: The redevelopment is our first step in transforming the 9.2-acre site into a vibrant, mixed-use community hub, complete with public open spaces and transit-connected infrastructure.
The office retrofit will include upgrades to the curtain walls, new quick dispatch elevator systems improved lobbies entrances refreshed, Washington facilities, New HVAC systems, and rueful replacement in both buildings as well as new and a trip facilities in 'twenty, one that will serve both buildings the goal.
Speaker #4: The 2180 Yonge Street will begin later in 2025, with work on 2200 Yonge Street beginning at the start of 2026, and the project overall will be substantially completed in 2028.
The co owners is to deliver a world class office complex that will meet the needs and exceed the expectations of both Canadian tire and our other tenants within the property.
Speaker #4: The majority of the required investment will be spent relatively evenly between 2026, 2027, and 2028. The office retrofit will include upgrades to curtain walls, new quick-dispatch elevator systems, improved lobbies and rances, refreshed washroom facilities, new HVAC systems, and roof replacements in both buildings, as well as new end-of-trip facilities in 2180 Yonge that will serve both buildings.
These developments, including the Canada square, a retrofit project represent a total committed investment of approximately $433 million upon finalization $119 million of which has already been spent and $153 million of which we anticipate will be spent in the next 12 months.
Speaker #4: The goal of the co-owners is to deliver a world-class office complex that will meet the needs and exceed the expectations of both Canadian Tire and our other tenants within the property.
Once built these projects represent a total GLA of approximately $1 million 137000 square feet, approximately 95% of which has been pre leased.
Speaker #4: These developments, including the Canada Square retrofit project, represent a total committed investment of approximately $433 million upon finalization, $119 million of which has already been spent, and $153 million of which we anticipate will be spent in the next 12 months.
With respect to our leasing activities during the second quarter CTV completed 10, Canadian tire and two marks lease extensions, which total approximately 554000 square feet of GLA and as at the end of Q2, the weighted average lease term for our portfolio was seven five years, which remains one of the longest in.
Speaker #4: Once built, these projects represent a total GLA of approximately $1,137,000 square feet, approximately 95 percent of which has been pre-leased. With respect to our leasing activities, during the second quarter, CT REIT completed 10 Canadian Tire and two marked lease extensions which total approximately $554,000 square feet of GLA, and as of the end of Q2, the weighted average lease term for our portfolio was 7.5 years, which remains one of the longest in the sector.
In this sector.
At the end of the quarter CG reach occupancy rate tick marginally higher to 90 99, 5% I will now turn it over to Leslie to discuss our financial results Leslie.
Thanks, Jody and good morning, everyone. We.
We were pleased with the results delivered by the read again this quarter.
This quarter same store NOI increased one 6% or $1 8 million, mainly driven by contractual rent escalations, averaging one 5% per year containing the Canadian tire leases.
Speaker #4: At the end of the quarter, CT REIT's occupancy rate ticked marginally higher to 99.5 percent. I will now turn it over to Lesley to discuss our financial results.
Same property NOI saw rise of two 2% or $2 $5 million compared to the previous year.
The increase was largely due to the same store NOI growth along with approximately 700000 of additional contract contribution from intensification completed in 2024 and 2025.
Speaker #4: Lesley? Thanks, Jodi, and good morning, yone. We were pleased with the results delivered by the REIT in this quarter. This quarter, same-store NOI increased 1.6 percent, or 1.8 million dollars, mainly driven by contractual rent escalations averaging one and a half percent per year contained in the Canadian Tire leases.
Overall in the second quarter NOI.
<unk> robust growth of three 4% or $4 million. This was fueled by the increase in same property NOI and further driven by properties acquired and developed in 'twenty four 'twenty five.
Speaker #4: Same-property NOI saw a rise of 2.2 percent, or two and a f million dollars, compared to the previous year. The increase was largely due to the same-store NOI growth, along with approximately $700,000 of additional contribution from intensifications completed in 2024 and 2025.
As Kevin mentioned in Q2 of last year, we recorded approximately $1 million of revenue related to a lease surrender fee. Excluding the lease surrender fees are quarter over quarter NOI growth would have been four 4% more in line with our Q1 quarter over quarter growth of four 6%.
Speaker #4: Overall, in the second quarter, NOI experienced growth, robust growth of 3.4 percent, or $4 million. This was fueled by the increase in same-property NOI and further driven by properties acquired and developed in '24 and '25.
In the second quarter, excluding fair value adjustments G&A as a percentage of property revenue was three 4%, which is higher than the same period in the prior year a two 8%.
This increase was due to the timing of a deferred income tax provision in 2024 that is expected to reverse by the end of the fiscal year.
Speaker #4: As Kevin mentioned, in Q2 of last year, we recorded approximately $1 million dollars of revenue related to a lease surrender fee. Excluding the lease surrender fee, our arter-over-quarter NOI growth would have been 4.4 percent, more in line with our Q1 quarter-over-quarter growth of 4.6 percent.
The fair value adjustment of $23 6 million in the quarter was primarily different by contractual rent increases development completions as well as tenancy renewals within the property portfolio with investment metrics remained consistent during the quarter.
Speaker #4: In the second quarter, excluding fair value adjustments, G&A is a percentage of property revenue was 3.4 percent. Which was higher than the same period in the prior year of 2.8 percent.
In the quarter <unk> per unit was up one 5% to $34 <unk> compared to $33 seven in the second quarter of two in 2024 and <unk> per unit on a diluted basis was 32.0 cents up $1 six compared to Q2 of 2024.
Speaker #4: This increase was due to the timing a deferred income tax provision in 2024 that is expected to reverse by the end of the fiscal year.
Speaker #4: The fair value adjustment of 23.6 million in the quarter was primarily driven by contractual rent increases, development completions, as well as tenancy renewals within the property portfolio.
Excluding the impact of the lease surrender revenue in 2024 <unk> growth per unit for the quarter would have been two 7% and 3.0% respectively.
Speaker #4: With investment metrics remaining consistent during the quarter. In the quarter, FFO per unit was up 1.5 percent to 34.2 cents, compared to 33.7 cents in the second quarter of 2024, and AFFO per unit on a diluted basis was 32.0 cents, up 1.6 compared to Q2 of 2024.
Cash distributions in the quarter increased 3% compared to the period in the previous year due to the increase in distributions, which became effective with the monthly distributions paid in July 2024.
With the rate of increase on the monthly distributions exceeding the increase in <unk> per unit. The <unk> payout ratio for Q2 was 72, 2% up from 71, 4% in the same period last year.
Speaker #4: Excluding the impact of the lease surrender revenue in 2024, FFO and AFFO growth per unit for the quarter would have been 2.7 and 3.0 percent respectively.
Now turning to the balance sheet, our interest coverage ratio was 355 times for the current quarter, which is in line with the three five times in the comparable quarter of 2024.
Speaker #4: Cash distributions in the quarter increased 3 percent compared to the period in previous year, due to the increase in distributions, which became effective with the monthly distributions paid in July 2024.
As discussed last quarter, the interest rate for the 252 million class C. L. P units, which matured at the end of May was reset to 438% for a five year term and.
Speaker #4: With the rate of increase on the monthly distributions exceeding the increase in AFFO per unit, the AFFO payout ratio for Q2 was 72.2 percent, up from 71.4 percent in the same period last year.
In June we also completed the issuance of $200 million in new public unsecured debentures with five year term and interest rate of $4. Two 9%. These funds were used to repay existing indebtedness.
Speaker #4: Now, turning to balance sheet, our interest coverage ratio was 3.55 times for the current quarter, which is in line with the 3.5 times in the comparable quarter of 2024.
The indebtedness to EBIT fair value ratio was 655 times in the quarter, a decrease compared to last year's ratio of six five times five nine times, primarily due to the growth in EBIT fair value from increased NOI outpacing the increase in total indebtedness.
Speaker #4: As discussed last quarter, the interest rate for the $252 million Class C LP units, which matured at the end of May, was reset to 4.38 percent for a five-year term.
Speaker #4: In June, we also completed the issuance of $200 million in new public unsecured dementures, with a five-year term at an interest rate of 4.29 percent.
Our Denton this ratio was 39, 8% in the quarter, which was lower than the indebtedness ratio from last year, 49%, primarily due to an increase in the fair value of investment properties and repayment of the credit facilities.
Speaker #4: These funds were used to repay existing indebtedness. The indebtedness to EBIT fair value ratio, with 6.55 times in the quarter, a decrease compared to last year's ratio of 6.5 times, five nine times, primarily due to the growth in EBIT fair value from increased NOI outpacing the increase in total indebtedness.
This ratio has steadily fallen over the last several years and is below our low to mid 40% target range, providing ample financial flexibility for future growth.
Lastly, with respect to liquidity, we ended Q2 with 8 million of cash on hand, and $298 million that remains available through our committed credit facility.
Speaker #4: Our indebtedness ratio was 39.8 percent in the quarter, which was lower than the indebtedness ratio from last year of 40.9 percent, primarily due to an increase in the fair value on investment properties, and repayment of the credit facilities.
Further $228 million is also available on our uncommitted facility with Canadian Tire Corporation.
And with that I will turn back the call to the operator for any questions.
Speaker #4: This ratio has steadily fallen over the last several years and is below our low to mid-40 percent target range, providing ample financial flexibility for future growth.
Thank you at this time I would like to remind everyone in order to ask a question. Please press Star then one one on your telephone keypad, well pause for just a moment to compile the Q&A roster.
Speaker #4: Lastly, with respect to liquidity, we ended Q2 with $8 million of cash on hand and $298 million that remains available through our committed credit facility.
Okay.
Our first question comes from the line of Lorne Kalmar with days yard on your line is now open.
Speaker #4: A further $228 million is also available on our uncommitted facility Canadian Tire Corporation. And with that, I will turn back the call to the operator for any questions.
Thanks, Good morning, everyone.
Good morning, maybe just maybe just on the.
The retrofit the office retrofit and I might have missed it but could you guys give us a rough idea of the expected yield on this.
Speaker #4: Thank you. At this time, I would like to remind everyone, in order to ask a estion, please press star then one one on your telephone keypad.
So Laura we haven't disclosed the X.
Speaker #4: We'll pause for just a moment to compile the Q&A roster. Our first question comes from the line of Lauren Kalmer with Desjardins. Your line is now open.
Expected yield.
We are subject to certain confidentiality provisions both in the lease with Canadian tire and through our co ownership with Oxford to so it's not an answer we can give you a straight out.
Speaker #5: Thanks. Good morning, yone.
<unk>.
Given some guidance generally around the cost.
Speaker #3: Morning.
Speaker #5: Maybe just, maybe just on the, the retrofit the office retrofit, and I might have missed it, could you guys give us a rough idea of the expected yield on this?
Rents were setup, what we believe to be.
Market, both on a net basis on a net effective basis.
And we were targeting a market based return is for.
Speaker #3: so Lauren, we, we haven't disclosed the, expected yield. you know, we are subject to certain confidentiality provisions, both in the lease with Canadian Tire and through our co-ownership with Oxford.
Unlike asset with an anchor tenant deal for an office in Midtown Toronto.
That's kind of the best I can give you at this point Unfortunately.
Okay maybe.
Speaker #3: So it's not an answer we can give you straight out. I mean, we've, given some guidance generally around the cost, you know, the rents were set at what we believed to be, you know, market, both on a net basis and a net effective, basis.
I'll try one other way then I'll stop.
But what kind of what kind of spread do you generally target or what kind of spread do you need to hurdle on auto.
On a development project above prevailing cap rates maybe.
Maybe the best way I can describe it differently without really probably saying too much.
Speaker #3: and we were targeting market-based returns for, you know, a like asset with an anchor tenant deal for an office in Midtown Toronto. So, that's kind the best I can give you at this point, fortunately.
We view this as an exercise in stabilization so.
I Wouldnt say that theres been huge value creation through this exercise, but at the same time, we had an aging office complex.
Speaker #5: Okay. Maybe, I'll try one other way, then I'll . but, what kind , what kind of spread do you generally target, or what ind of spread do you need to hurdle on, on a development project above a, a prevailing cap rate, maybe?
Substantial vacancy I mean, some of that was purposeful because we always intended to redevelop it.
From our perspective.
We were able to preserve the value while also earning.
Speaker #3: maybe the best way I can describe it differently without really probably saying too much, is, you know, we, viewed this as an exercise in stabilization.
Our return mostly on an IRR basis.
That we felt was.
Adding to the co ownership group.
Speaker #3: So, you know, I wouldn't say that there's been huge value creation through this exercise, but at the same time, we had an aging office complex, that had substantial, vacancy.
You describing a politician that was very good.
Okay, and then maybe just lastly for me.
Yeah, maybe just lastly from me here on the App that you guys acquired out of Calgary could you maybe give us a little bit of color on on the vendor and if youre seeing more opportunity for third party acquisitions. Obviously, you mentioned, you've got a decent amount of firepower on the balance sheet right now.
Speaker #3: I mean, some of that was purposeful because we always intended to redevelop it, but, you know, from our perspective, we were able to preserve, the value, while also earning, a return mostly on an IRR basis.
Speaker #3: that we felt was, rewarding to the, co-ownership group.
Yes.
I can say this because it's been publicly disclosed primarily with the vendor.
Speaker #5: You, you should try being a politician. That was very good. okay. And then maybe just lastly, for me, yeah. maybe just, lastly from me here, on the, asset you guys quired out in Calgary, could you maybe give us a little bit of color on, on the, the vendor and if you're seeing more opportunity for third-party acquisitions?
Obviously they have.
Our strategy Thats focused on buying in closed malls and improving those type of assets. So I think this was a legacy type property that didn't necessarily fit within their portfolio from a strategic perspective.
Obviously, if it's exactly perfectly within our portfolio from a strategy perspective, So I think it was.
Speaker #5: Obviously, you mentioned ou got a, a decent amount of firepower on the balance sheet right .
Sure.
A great opportunity for us to work together.
Speaker #3: Yeah. I mean, the, the, I, I can say this because it's been publicly disclosed. Primaris was the, the vendor. you know, obviously, they have a, a strategy that's focused on, buying and closed malls and, and, and improving those type of assets.
You know it's an.
And urban property in Calgary, the north part of Calgary, The Canadian tire store, that's very well the co tenancy is strong.
<unk> is strong as well with with great demographics. So.
Speaker #3: So I think this was a legacy-type property that didn't necessarily fit within their portfolio from a strategic perspective. obviously, if it's exactly perfectly within our portfolio from a strategy perspective, so I think it was a, you ow, a great opportunity for us to work together.
We're very pleased to be able to work with primarily on that particular transaction.
The investment market more generally I would say certainly from a volume.
<unk>.
So as it's been in a long time.
So much uncertainty out there I think we've seen private to be very active but I think financing has gotten a little bit more challenging for them. So that's perhaps driving some of that slowdown.
Speaker #3: you know, it's a, an urban property in Calgary, the north part of Calgary, the Canadian Tire store that does very well. The co-tenancy is strong.
We view that as opportunistic we're a credible buyer we have a balance sheet that supports our ability to go in and do more.
Speaker #3: the neighborhood is, is, is strong as well with, with great demographics. So, we were very pleased to be able to work with Primaris on that particular, transaction.
Deal has its own story and we are seeing.
Speaker #3: the investment market more generally, I would say, you know, certainly from a, a volume perspective, it's as slow as it's been in the long time.
Cap rates vary quite greatly depending on geography and asset type.
We're just trying to pick our spots and like Leslie and I kind of commented on in our prepared remarks.
Speaker #3: so much uncertainty out there. I think, we've seen privates be very active, but I think financing has gotten a ittle bit more challenging for them.
We have a balance sheet at the ready to deploy for the right things we're not.
Speaker #3: So that's perhaps driving some of that slowdown. we view that as opportunistic. We're a credible buyer. We have a balance sheet that supports our ability to go and, and do more.
And of course, it we're not going to rush, but at the same time, we are open to transacting.
Okay perfect. Thank you so much.
Thank you.
Speaker #3: you know, every deal has its own story, and we're eing cap rates vary quite greatly depending on geography and asset type. so 're just trying to pick our spots and, and, and like a, you know, Lesley and I kind of commented on in our prepared remarks.
Thank you.
Our next question comes from the line of Brad Sturges with Raymond James Your line is now open.
Hey, good morning.
Maybe going back to the questioning around the office retrofit.
Speaker #3: we have, a balance sheet at the ready to deploy, for the right things. We're not, gonna force it. We're not gonna rush, but, at the same time, we're open to, transacting.
Just in terms of.
NOI contribution at Kendall square would there be.
Any disruption on NOI I guess during the construction phase and then how would we think about the.
Speaker #5: Okay. Perfect. Thank you so much.
Speaker #3: Thank you.
The ramp up.
Speaker #4: Thank ou. Our next question comes from the line of Brad Sturges with Raymond James. Your line is now open.
Rent payments in NOI would sort of be phased in.
Along the same lines of the capital spend or how should we think about them.
Speaker #6: Hey, good ning. maybe going back to the, the questioning around the office retrofit, just in terms of NOI contribution at Canada Square, would there be any disruption on NOI?
There'll be no disruption in the NOI.
The majority of 2200 Young street over the last call it year or more slowly so we phase that in.
I think thinking about it on a phased approach in terms of the <unk>.
Speaker #6: I guess during the construction phase and then, how would we think about the, you know, the ramp-up of, of, rent payments in the NOI?
Additional contributions that will receive.
Certainly they correspond with the delivery of new space. So the first tranche of that will be in the building. We call 21, 80 Young Street, where theres four existing floor is that Canadian tire is going to take up and Thats where were starting our work in the fall and then in 2200 Street I think space is being delivered in three <unk>.
Speaker #6: Would it sort of be phased in, in a, along the same lines of, of the capital spend, or how should we think about that?
Speaker #3: there'll be no disruption in the NOI. I mean, we, we de-leased the majority of 2,200 Yonge Street over the last, call it, year or more or slowly.
Speaker #3: So, we've phased that in. I think thinking about it on a phased approach in terms of the, additional contributions that we'll ive, certainly they correspond with the delivery of, new space.
<unk> tranches and again fairly evenly probably starting jodi in 'twenty 2026 is when that work starts and then we will get delivered subsequent to that probably in the 2027% and 2% to 'twenty late 'twenty seven.
Speaker #3: So, you know, the first tranche of that will be in the building we call 2180 Yonge Street, where there are four existing floors that Canadian Tire is going to take up, and that's where we're starting our work in the fall.
Into 2028, I believe Brad is where it will start in probably a third a third a third call it.
In terms of.
When the NOI will come online leading into the late 2028.
Speaker #3: And then in 2,200 Yonge Street, I ink, space is being delivered in three large tranches, and again, fairly evenly, probably starting Jodi in 20?
Great I appreciate that.
In terms of the.
The CTC leases renewed any guidance or thoughts on range and what we should think about in terms of.
Speaker #4: 2026 is when the work starts, and then we'll get delivered subsequent to that, probably in the 2027 and through to 2028.
The leasing spreads there.
So in terms of the Ctr side as you noted we did <unk> 10 in the quarter.
Speaker #3: Yeah. Late, late '27, 2020, into 2028, I believe Brad is where it'll start and probably a third, a third, a third, call it. in s of, when that NOI will come online, leading into the late 2028.
We were very pleased with the results of a lot of volume.
And we achieved our usual slash a little better renewal spreads versus previous ctr renewals.
Was wondering Brett we continued on with annual rent Escalations as we have in the past.
Speaker #6: Great. I appreciate that. just in terms of the, the CTC leases renewed, any guidance or thoughts on range and what we should think about in terms of, the leasing spreads there?
So that's what you can expect in terms of progression.
Okay I appreciate that.
And then.
Speaker #4: so in terms of, the CTRs, as you noted, we did, 10 in the arter. we were very pleased with the results. A lot of volume.
Maybe last question.
The establishment of the ATM program, how do you think about using that going forward.
In terms of another sort of source of potential capital for growth.
Speaker #4: and we achieved our usual slash a little better renewal spreads, versus previous CTR renewals.
No, Brian we we'd be happy to use that.
Speaker #6: So with those ones, Brad, we, continued on with the annual rent escalations as we have in the
Obviously, where the unit prices improved but I think for us. The ATM you know it fits well with sort of the size of the assets we purchase.
Speaker #4: Okay.
Speaker #6: so that's what you can expect past. in terms of rent progression.
But I think until we get to perhaps a price are higher than we are where we might be in the market using it but we do hope over the course of the next 25 months that we can prove that unit price that we'll be able to perhaps some access the equity market in a small small way under that program.
Speaker #5: Yep. Okay. Appreciate that.
Speaker #6: and then, maybe last question, just, you ow, the establishment of the ATM program, how do you think about using that going forward? in terms of another sort of source of, of potential capital for, for growth?
Great I appreciate it I'll turn it back thank you.
Speaker #4: no, Brad, we, we'd be happy to, to use that, you ow, obviously, we're, you ow, the, the unit price improved, but I think for us, the ATM, you know, it fits well with sort of the size of the assets we purchase.
Thank you.
Thank you. Our next question comes from the line of Julianna Thornhill with National Bank Financial Your line is now open.
Speaker #4: but, I ink until we get to perhaps a, a price higher than we are, we're, well, we won't be in the market using it, but we do hope over the course of the next 25 months that, with improved, unit price, that we'll be able to, perhaps, access the equity market in a small, way under that program.
Hey, guys. Good morning, I understood one morning.
Or is the kind of lack of square footage and the strong retail results.
Keep getting posted.
Started noticing pickup intensification requests or more.
Interest in your properties at all.
Speaker #6: Great. Appreciate it. I'll turn it . Thank ou.
Also I'll say, yes, but also probably marginally I mean, I think we've always had strong locations where.
Speaker #3: Thank you.
Speaker #4: Thank you. Our next question comes from the line of Juliano Thornhill with National Bank Financial. Your line is now open.
I'm, an intensification perspective.
Speaker #7: Hey, guys. Good morning. I just had one.
Typically market those spaces to pad tenants quick service restaurants banks that kind of stuff.
Speaker #6: Morning.
Speaker #7: And have you noticed the kind of lack of square footage and the strong retail results that, you know, keep getting posted? do you start, started notice it pick up in intensification, request, or more?
And they're usually on main thoroughfares.
Their sections with good ingress egress, so they've always been on those tenants radar.
Speaker #7: You know, interest in your properties at all?
I think you're speaking generally to the health of the retail leasing market, which we've certainly been noticing.
Speaker #3: I'll say, I'll say yes, but I'll probably marginally. I mean, I ink we've always had strong, locations where, from an intensification perspective, you know, we, we typically market those spaces to pad tenants, quick-service restaurants, banks, that kind of stuff.
Obviously, we've seen the results from our peers, which have been really strong as well.
Think that story is still playing out in a big way increased population either new supply with no development coming on stream certainly working in our favor and.
Speaker #3: and there, you know, usually on main thoroughfares at, you ow, intersections with good ingress, gress. So, so they've always been on those tenants' radar.
<unk>.
In place NOI growth.
Renewals spread growth leasing spread growth and even from as you mentioned the intensification side.
Speaker #3: I think you're, ou're speaking generally to the health of the retail, leasing market, which, we've certainly been noticing. and obviously, we've seen, you know, results from our peers, which have been really strong as well.
Things are all positive from our perspective at this point.
And out of the 370 or so stores that you have how many would you say are good candidates for for that kind of a densification.
Speaker #3: I think that story is still playing out in a big way, you know, increased population, muted new supply with no development coming on stream, certainly working in our favor.
Well, we've intensified over with 120 sites over the last dozen years or so so we've already.
Speaker #3: And, you know, from a in-place, NOI growth, you ow, renewal spread growth, leasing spread growth, and, and even from, as you mentioned, the intensification side, you know, things are all positive from our, our perspective at this point.
<unk> been doing this for some time.
A lot of that is can the entire expansion some of it is third party.
Good work.
A lot of times, we may have interest from <unk>.
Speaker #7: And, and from out of the, you know, 300 and 70 or so stores that you have, how many would you say are good candidates for, for that kind of intensification?
Certain third party tenants, but if the Canadian tire store is strong and we've been having discussions with the entire but their desire to eventually expand the store we may choose not to do that just to ensure that we leave enough land available for them.
Speaker #3: well, we've intensified over, what, 120 sites over the last, you ow, dozen years or so. So we've already, you know, been, been doing this for some time.
As there.
Store operations.
Continue to improve.
Speaker #3: you know, a lot of that is Canadian Tire expansion. Some of it is third-party, you ow, pad, pad work. you know, a lot of times, we may have interest from, certain, third-party tenants, but if the Canadian Tire store is strong and we've been having discussions with the Canadian Tire about their desire to eventually expand the store, we may choose not to do that just to ensure that we leave ough land, available for them, as, as their, ou know, store operations, you know, continue to rove.
So.
I think the program will continue on as it has been.
Theres still lots of opportunity, but we've been taking advantage of it where we can since our creation.
Okay. Thanks, Kevin.
Duke.
Thank you.
Our next question comes from the line of Sam Damiani with TD. Your line is now open.
Thank you and good morning, everyone I do apologize I jumped on the call a little bit late so I apologize. If this was already sort of.
Speaker #3: so, well, I, I think the program will continue on as it has been. there's still lots of opportunity, but we've been taking advantage of it where we can, you know, since our, our creation.
Addressed but just.
Perhaps if you could just help me a little bit.
At a high level simply understand the the retrofitting, Canada square so the leases for 550000 square feet.
Speaker #7: Okay. Thanks, Kevin.
Speaker #8: Yes.
Speaker #6: Thank ou.
<unk> does can be entire currently leased and occupied.
Speaker #4: Thank ou. Our next question comes from the line of Sam Damiani with TD. Your line is now open.
Buildings.
And how will that evolve as we as we progress over the next three years.
Speaker #5: Thank you. Good morning, yone. I do apologize. I jumped to the call a little bit late, so I apologize if this was already sort of, addressed.
So that's an excellent question, Sam and we're all kind of struggling for the exact number I think the answer is somewhere around 140000 square feet is that right.
Speaker #5: But just, perhaps if you could just help me a little bit sort of at a high level, simply understand the, the, the retrofitting at Canada Square.
Somewhere around there we can go back to what the exact number so certainly it's.
Speaker #5: so the leases for 550 thousand square feet, how much space does Canadian Tire currently lease and occupy at the two buildings? And, you know, how will that evolve as we, as we progress over the next three years?
Sure.
Theyre, taking on significantly more they.
They do have other space in Midtown Toronto and <unk>.
Incrementally I'm not sure they are taking on a great deal of more square footage, it's more of a consolidation of various spaces into one complex.
Speaker #3: So, that's an excellent question, Sam. And we're all kind of struggling for the exact number. I think the answer is somewhere around 140,000 square feet.
And I think.
Sorry, Your second question was.
Just how that if it's a 140000 square feet today.
Speaker #3: Does that sound right, Lesley? Somewhere around .
Speaker #4: Yeah.
Speaker #3: there. We can get back to you with the exact number. So, certainly, it's, they're taking on a significantly more. they do have other space in, in Midtown Toronto, and, so incrementally, I'm sure they're taking on a great deal, of more square footage.
How will it ramp up I'm, just wondering in terms of modeling the ramp up in rent.
Rent over between now and 2028.
Yes, so on the cost side.
Spending the money fairly evenly between 2026, 27% and 28.
Speaker #3: It's more of a consolidation of various spaces into one complex.
Work begins on the first part of the project and the building we called 21 to 80 Young Street.
Speaker #5: Yep.
Speaker #3: and, and I think, sorry, your second question was?
All of this year. So so quite shortly and then 'twenty 200 will start in early 2026.
Speaker #5: Just how that, if it's 140 thousand square feet today, you know, how well it ramps up. I just want , in terms of modeling the, the, ramp-up and.
We expect rent to start on the new space in 2100 <unk>.
Speaker #3: Yeah.
Speaker #5: And, and
Speaker #5: rent, over, and between now and 2028.
In mid to late 2026, and then 2000 2200 Young Street the space will be delivered essentially in three.
Speaker #3: Yeah. So, so between, on, on the cost side, you know, we'll be, spending money fairly evenly between 2026, '27, and '28. work begins on the 1st of, part of the, project in the building we call 2180 Yonge Street, in the fall of this year.
Tranches fairly evenly I believe starting either at the very end of 2027 or very beginning of 2028 and then the next space halfway through 28 in the last base at the end of 2015.
Speaker #3: So, so quite shortly. And then 2,200 will start in early 2026. you know, we expect, rent, to, to start on the new space in 2180, in mid to late 2026.
Okay.
I didn't hear you say that there will be no NOI disruption so the rent you're getting currently.
From a complex in its entirety is not going to go down between you know between now and.
Speaker #3: and then, 2,200 Yonge Street, the space will be delivered essentially in three, tranches, fairly evenly, I believe, starting either at the very end of 2027 or its very beginning of 2028, and then kind of the next space halfway through '28 and the last space at the end of 2028.
Sometimes I mean, that's that's correct youre already at the P&L, a little bit of why okay.
Okay.
Yeah exactly for the most part.
That's helpful. Thank you and.
Just curious.
If this was addressed I heard a little bit on third party leasing.
Speaker #5: Okay. And, and I, I did hear you say that the, will be no NOI disruption. So the, the, the rent ou're getting currently, from the complex in its entirety, is not gonna go down between, you know, between now and, you know, sometime in the xt two years.
The volume of third party leases in the quarter and spreads that you were you able to share.
Good morning, Sam It's Jody.
Our spreads each quarter are not great compared to maybe some of our peers. So this quarter represents our typical quarter. So I wouldn't describe it as mid volume in terms of third party and our spreads a little lower than usual high single digits, because one was the fixed option and so the balance.
Speaker #3: That's correct.
Speaker #5: You're,
Speaker #5: ou're already at the trough in terms of NOI. Okay. Okay.
Speaker #3: Very much right. Yeah.
Speaker #5: Yeah. For the, exactly. For the most part. that's helpful. Thank ou. And, just curious, if this was addressed, I heard a little bit on, on third-party leasing.
Speaker #5: Was there, there a volume of, of third-party leasing in the quarter and spreads that you were, you able to are?
There are more market and so the combination of the two gets us to about high single digits on the renewal.
Got it Okay last question from me just on the acquisition from <unk>.
Speaker #4: Good morning, Sam. It's Jodi. You know, our spreads each quarter are, you know, not great compared, you know, maybe to some of our peers.
The other other public REIT with close in Q and Q2 was there is there a plan to modify or expand the kidney entire school with her.
Speaker #4: This quarter represents our typical quarter. I would describe it as mid-volume in terms of third-party. Our spreads are a little lower than usual, in the high single digits, because one was a fixed option.
None at the current time as I mentioned earlier it is a strong performing.
Our store for Canadian tire.
Speaker #4: And so, the balance were, more market, and so the combination of the two gets us to about high single digits on the renewal.
But we bought it on the basis of the urban location and the strength of the community and demographics.
Speaker #5: Got it. Okay. Last question for me, just on the acquisition from, from your, the other, other public REIT this closing queue. In Q2. Was there, is there, is there a plan to, modify or expand the Canadian Tire store there?
And the financial parameters of the deal we think there is upside.
And the NOI generally from.
From the center, but no specific plans at this time to expand the Canadian tire stone.
Excellent. Thank you very much and I'll turn it back.
Speaker #3: not at the current time. as I mentioned, earlier, it is a strong, performing, a store for Canadian Tire. but we bought it on the basis of the, you know, urban, location, the strength of the community and demographics, and, and the financial parameters of the deal.
Thank you.
Thank you.
Our next question comes from the line of Tal <unk> with CIBC capital markets. Your line is now open.
Morning, everybody.
Good morning.
Just wondering on the acquisitions completed this quarter to just following up on Sam's question.
Speaker #3: We think there's upside, in the NOI generally from, from the, center, but, no specific plans at this time to expand the Canadian Tire store.
716.
A little high for a shopping center in Calgary is or the combination of both assets sort of pushing that number a little bit maybe you can give me some color on that.
Speaker #5: Excellent. Thank you very much, and 'll turn it back.
Certainly it's a combination.
Speaker #3: Thank you.
Speaker #4: Thank you. Our next question comes from the line of Tal Woolley with CIBC Capital Markets. Your line is now open.
Blended yield obviously is what we disclosed.
No.
I always fairly happy with the financial parameters of.
Speaker #6: Hey, good morning, everybody.
Speaker #3: Morning.
The transaction for the Calgary asset.
Speaker #6: just wondering, on the acquisitions completed this quarter too, just following up on Sam's question. Seven-six seems a little high for a shopping center in Calgary.
The Calgary asset has a feeder.
Part of it we did our diligence on.
On that and we're very satisfied with.
Speaker #6: Is, or is it the combination of both assets that sort of twisting that number a little bit? Maybe you can give me some color on that.
The usability of the box the performance of the actual.
The actual cinema.
Speaker #3: certainly, it's the bination. the blended yield obviously is what we disclosed. you know, I always fairly, happy with the financial parameters of the, the transaction for the Calgary asset.
It stands in the community and.
And I think some people.
We're a little nervous that we actually thought it was an opportunity and obviously that played into the overall cap rate as well.
And when you say like having a potentially vacant theater as an opportunity is it because you feel comfortable with like Hey, we can put a sport check or we can put something else in there that probably matches and other space directly.
Speaker #3: you know, the Calgary asset has, a feeder, as part of it. we did our diligence on, on, on that, and we're very satisfied with, you know, the usability of the box, the performance of the actual, the actual cinema, where it stands in the community, and, and, I think some people, you know, were a little nervous, by that.
I wouldn't say, we have any specific plans for it we've kind of looked into the feasibility of retrofitting. It if need be but it also has a very long term lease and from what we understand is a very successful component of the cinema chain. So.
Speaker #3: we actually thought it an opportunity, and, and obviously, that played into the, the overall cap rate as well.
To be honest I'm really not that worried about it is just more obviously through the course of our diligence insuring.
Speaker #6: And when you say, like, having a potentially vacant theater as an opportunity, is it because you feel comfortable with, like, "Hey, we can put a sports check," or, "We can put something else in there," that probably matches into the space nicely?
We understand the risks.
Got it.
And then when you looking at.
Prospective deals now can you give a sense of like how much of.
Speaker #3: I, I wouldn't say we have any specific plans for it. We've, we've kind of looked into the, you know, feasibility of retrofitting it, if need be, but it also has a very long-term lease, and from what we understand, is a very successful component of the, the cinema chain.
New acquisitions, we're looking at would be.
Third party no Canadian tire content versus.
Canadian tire driven deal.
We will tell as you might recall I mean, typically our non Canadian tire related activity I would describe as opportunistic we.
Speaker #3: So, to be honest, I'm really not that worried about it. It's just more, obviously, through the course of our diligence, ensuring, we understand the risk.
We don't typically see every year, we want to do X million dollars worth of non Canadian tire stuff that's more.
Speaker #6: Got it. And then, when you're looking at prospective deals now, can you give a sense of how much of, you know, new acquisitions you're looking at would be third-party, no Canadian Tire content, versus Canadian Tire-driven deals?
It aligns with the composition of our portfolio being primarily net lease.
Strong tenant good real estate and financial terms that we like.
We will certainly consider it.
The problem over the last few years is there hasnt been a lot of that that's been available at prices that we found to be.
Speaker #3: well, Tal is you, you might recall. I mean, typically, our non-Canadian Tire-related activity, I would describe as opportunistic. we don't typically say, you know, every year we wanna do X million dollars worth of non-Canadian Tire stuff.
Attractive.
That may or may not be changing at this point in time with all the uncertainty and volatility that we're seeing out there in the.
The slowing of the transaction markets more generally.
Speaker #3: Moreover, you know, if it aligns with the composition of our portfolio being primarily net lease, you know, strong tenants, good real estate on financial terms that we like.
So we're at the ready.
We're interested we're always looking to add complementary strong assets to the portfolio.
Speaker #3: we'll tainly consider it. you know, the problem over the last few years is there hasn't been a lot of that that's been available at prices that, we found to be you know, attractive.
And we'll keep our eye on the transaction markets and the availability of new supply or our opportunity for us to take hold as well.
Complement that with continuing to buy as many Canadian tire stores.
Speaker #3: that may or may not be changing at this point in time with all the uncertainty and volatility that we're eing out there in the, the slowing of the, the, the transaction markets more generally.
As makes sense for us as long as we understand.
How the stores performed their court Canadian tires network, and obviously can be acquired on terms that we view as favorable so.
Speaker #3: so we're at the ready. we're ested. We're always, looking to add, complementary strong assets to the portfolio. And we'll keep our eye on the transaction markets and the ailability of, you know, new supply or, or opportunity, for us to take hold of.
That's kind of a non answer but.
The reality of it is.
Third party acquisitions, Theres always things, we're working on and then there's opportunities that come about we will.
We've turned our mind to that as a.
Speaker #3: we'll complement that with continued to buy as many Canadian Tire stores, as, as makes sense for us, as long as, you ow, we understand, how the stores perform, their core Canadian Tire's network, and, and obviously can be acquired on terms that, that we view as favorable.
A strong source of potential growth for us. So it will be we will be working hard on it.
Yeah.
And then just lastly, I guess one of the things you.
We have a really good track record on this is doing.
Consistently kind of churning through your development pipeline and turning those projects over and completing them successfully.
Speaker #3: So, that's kind a non-answer, but the, you know, the, the reality of it is, third-party acquisitions, there's always things we're working on, and then there's opportunities that come about, and we'll, we've turned our mind to that as a, a strong source of potential growth for us.
The development group there is there.
Some spare capacity there like could you.
Periodically be looking to try and find different ways to build revenue like through third party merchant development or something like that.
Speaker #3: So we'll be working hard on it.
Yeah. So development is a joint effort, obviously between ourselves and the group a Canadian tire specifically with respect to store expansions or new store development, we do have development capabilities within the REIT ourselves and have a really strong talented team that leads the charge on that front.
Speaker #6: and then just lastly, I guess, like, one of the things that, you know, you guys have a really good track record on is just doing the, you know, sort of consistently kind of churning through your development pipeline and turning those projects over and completing them successfully.
Speaker #6: Does, like, the development group there, is there, like, some spare capacity there? Like, could you theoretically be looking to try and find different ways to build revenue, like, through third-party merchant development or something like that?
And do.
Do we have a ton of spare capacity no, but could we certainly be looking for new projects.
Yeah, we always are.
Unlike.
Not unlike most.
Speaker #3: yeah. So development is a, is a joint effort, obviously, between ourselves and, and the group at Canadian Tire, specifically, you know, with, with respect to store expansions or new store development.
There I think the experiences we're finding things heard to make.
Financial sense of the <unk>.
Mass of development today is a little challenged costs are still elevated.
Speaker #3: we do have development capabilities within the REIT, ourselves, and have a really ong talented team that, that leads the charge on that front. and, you know, do we have a ton of spare capacity?
Though retail fundamentals are really strong and tenants are willing to pay more rent.
There's only so much they can afford to pay and economic feasibility of developments is certainly challenged so.
Speaker #3: No, but could we certainly be looking for new projects? yeah, we always are. you know, unlike, or not unlike, most, out there, I think the iences we're finding things hard to make financial sense of.
We're always on the look out we do have.
Projects like our Winkler mall redevelopment towards Alloyed Minister.
Redevelopment or really a square redevelopment that's things like our investment in development teams are actively pursuing and our construction teams are managing.
Speaker #3: You know, the math of development today is a little challenged. Costs are still elevated, and although retail fundamentals are really strong and tenants are willing to pay more rent, there’s only so much they can afford to pay. The economic feasibility of developments is certainly challenged.
So we have a lot on our plate right now obviously, you Kansas, whereas another addition to that although Oxford properties is leading the charge for oil development and construction perspective.
So like third party acquisition I think we're very open to doing more of it is just finding the right opportunities okay.
Speaker #3: So, we're always on the lookout. We do have, you know, projects like our Winkler Mall redevelopment or the Lloyd Minster, redevelopment are really a square redevelopment.
Okay. Thanks, very much guys.
Thank you.
As a reminder to ask a question. Please press star one one on your telephone keypad.
Speaker #3: That's things that, like, our estment and, development teams are actively, pursuing and our construction teams are managing. so we have a lot on our plate right .
Our next question comes from the line of Gaurav matter with Green Street. Your line is now open.
Speaker #3: Obviously, Canada Square is another addition to that, although Oxford Properties is leading the charge from a development and construction perspective. So, like third-party acquisition, I think we're very open to doing more of it.
Thank you and good morning, everyone. Just one question on my end.
Sticking with that last one pipeline.
When you're comparing with the time.
Nine from last quarter to this quarter, we noticed that there are about five projects.
Speaker #3: It's just finding, finding the right, the right opportunities.
Speaker #6: Okay. Thanks very much, guys.
Pushed from.
Speaker #3: Thank you.
Speaker #4: As a reminder, to ask a question, please press star one one on your telephone keypad. Our next question comes from the line of Garav Mathur with Green Street.
Whose data completion has been pushed from Q4 2006.
To the second quarter of train seven.
I'm, just wondering what's happening with wood.
Speaker #4: Your line is now open.
That kind of project and a y O.
Why youre pushing the data completion out.
Speaker #5: Thank you and good morning, yone. just one question on, on my end. I'm gonna stick to the development pipeline. When you're comparing the, the pipeline, from last quarter to this quarter, we noticed that there are about five projects that were being pushed from whose date of completion has been pushed from Q4 '26.
Hi, good morning, it's Jody.
In development, it's fairly typical to have move into updates because there's so many variables that play into it from design approvals costing tendering and so this.
It really just reflects I would say typical movement within for development projects.
Speaker #5: To, the second quarter of 2027, I just wondering what's happening with the, with that set of projects and, why, why you're ushing the date of completion out.
And Gaurav just to remind you when we do our developments with Canadian tire Theres, not really any drag on that capital. We only funded at the point in time. The project is complete so although it's desirable to do these things as quickly as possible.
Speaker #4: good morning. It's Jodi. you know, in development, it's fairly typical to have movement of dates because there are so many variables that play into it, from design, approvals, costing, tendering.
There's no real.
Financial impact to us of delay other than the contribution doesn't come on quite as fast.
Speaker #4: And so this, you know, really just reflects, I'd , typical movement within, for development projects.
Yeah.
Okay. Thank you I'll turn it back to the operator.
Thanks, so much.
Speaker #3: A-and Garav, just to remind you, when we do our developments with Canadian Tire, there's not really any drag on that capital. We only fund it, at the point in time the ect is complete.
Our next question.
Remember with RBC capital markets. Your line is now open.
Thanks. Good morning, just one question from me in terms of Canada Square and I guess some of the other projects in the pipeline can you just maybe provide some thoughts on the funding.
Speaker #3: So, although it's, you ow, desirable to do these things as quickly as possible, you ow, there's no real, financial impact to us of, of delay other than, you know, the contribution, doesn't come on quite as fast.
Is it primarily going to be maybe a mix of construction financing or would you perhaps consider cycling out of some non core assets. Thanks very much.
Speaker #5: Okay. Thank you. I'll turn it back to the operator.
Speaker #3: Thank you much.
Tony It's Leslie.
Speaker #4: Our next question comes from the neighbor with RBC Capital Markets. Your line is open.
Typical for the 24 months of development pipeline that we have you know we'd be principally looking at using our line of credit using unsecured debt.
Speaker #7: Thanks. Good morning. really just one question for me. i-in terms of Canada Square and, I guess, some of other projects in the pipeline, w can you just maybe provide some thoughts on the funding?
As it comes to the candidate square project.
We will have the opportunity is now that the leases and going and we have sort of a firm timeline to be able to work with the Oxford to look at other opportunities. If they are there, but I think for us in Oxford, we have perhaps the luxury is easing set of our both of our strong balance sheets as well as potentially you think construction financing, but that hasn't been run to ground yet.
Speaker #7: is it primarily gonna be maybe a mix of construction financing or, would you perhaps consider siphoning out of, some non-core assets? Thanks very much.
Speaker #4: for me, it's Lesley. you know, as typical for the, the 24 months of development pipeline that have, you know, we, we principally looking at, you know, using our unsecured debt, as it comes to the Canada Square project.
Great. Thanks, very much Leslie I will turn it back.
Thank you. Thank you.
As there are no further questions at this time I will turn the call over to Kevin Salzburg, President and CEO for closing remarks.
Speaker #4: you know, we will have the opportunity, as now that the lease has been going and, we have sort of a, firmer timeline, to be able to work with the Oxford just to look at, you know, other opportunities if there are there.
Thank you Lauren.
Speaker #4: But I think for, for us in Oxford, we, you know, we have perhaps the, the luxury of using sort of our both of our strong balance sheets as well as potentially using construction financing, but that hasn't been run to ground yet.
We want to thank you for joining us today.
We will look forward to speaking to you again in November after we release, our Q3 results have a good day.
This concludes today's call you may now disconnect.
Speaker #7: Great. Thanks very much, Lesley. I'll turn it back.
Speaker #4: Thank you.
Speaker #7: Thank you.
Speaker #4: As there are no further questions at this time, I will turn the call over to Kevin Salisburg, President and CEO, for closing remarks.
Speaker #5: Thank you, Lauren. We want to thank you for joining today, and we look forward to speaking to you again in November after we release our Q3 results.
Speaker #5: Have a good day.