Q2 2025 Minto Apartment Real Estate Investment Trust Earnings Call

Regina: Good morning. My name is Regina, and I will be your conference coordinator today. At this time, I would like to welcome everyone to the Minto Apartment REIT 2025 second quarter financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press star, then one again. Before we begin, I want to remind listeners that certain statements about future events made on this conference call are forward-looking in nature. Any such information is subject to risks, uncertainties, and assumptions that could cause actual results to differ materially.

Speaker #2: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, then the number one on your telephone keypad.

Speaker #2: If you would like to withdraw your question, press star, then one again. Before we begin, I want to remind listeners that certain statements about future events made on this conference call are forward-looking in nature.

Speaker #2: Any such information is subject to risks, uncertainties, and assumptions. That could cause actual results to differ materially. Please refer to the cautionary statements on forward-looking information in the REIT's news release and mDNA.

Regina: Please refer to the cautionary statements on forward-looking information in the REIT's news release and MD&A dated August 13, 2025, for more information. During the call, management will also reference certain non-IFRS financial measures. Although the REIT believes these measures provide useful supplemental information about its financial performance, they are not recognized measures and do not have standardized meanings under IFRS. Please see the REIT's MD&A for additional information regarding non-IFRS financial measures, including reconciliations to the nearest IFRS measures. Thank you. Mr. Li, you may begin your conference.

Speaker #2: Dated August 13th, 2025, for more information. During the call, management will also reference certain non-IFRS financial measures. Although the REIT believes these measures provide useful supplemental information about its financial performance, they're not recognized measures, and do not have standardized meanings under IFRS.

Speaker #2: Please see the REIT's mDNA for additional information regarding non-IFRS financial measures, including reconciliations to the nearest IFRS measures. Thank you. Mr. Li, you may begin your conference.

Speaker #4: Thank you, operator, and good morning. With me today are Eddie Fu, Chief Financial Officer, and Michelle Calloway, Senior Vice President of Property Operations. We had solid operating performance in the second quarter.

Jonathan Li: Thank you, operator, and good morning. With me today are Eddie Fu, Chief Financial Officer, and Michelle Callaway, Senior Vice President of Property Operations. We had solid operating performance in the second quarter. Starting on slide three, on the same property basis, we generated stable year-over-year revenue growth of 3.3% from our unfurnished suite portfolio, driven by a 5.2% increase in average market rent, partially offset by lower occupancy. Decreased furnished suite and commercial revenue resulted in total same property revenue growth of 2.3%. Same property NOI increased 1.6% compared to Q2 of last year, as the growth in revenue exceeded the increase in operating expenses.

Speaker #4: Starting on slide three, on the same property basis, we generated stable year-over-year revenue growth of 3.3% from our unfurnished suite portfolio, driven by a 5.2% increase in average market rent, partially offset by lower occupancy.

Speaker #4: Decreased furnished suite and commercial revenue resulted in total same property revenue growth of 2.3%. Same property NOI increased 1.6% compared to Q2 of last year, as the growth in revenue exceeded the increase in operating expenses.

Speaker #4: Normalized FFO and AFFO per unit decreased by 2.5% and 3.2%, respectively. This decline stemmed from the loss of NOI from the Castle View disposition, coupled with decreased capitalized interest due to a lower average outstanding balance on the revolving credit facility, and lower interest income following the repayments of two outstanding convertible development loans.

Jonathan Li: Normalized FFO and AFFO per unit decreased by 2.5% and 3.2% respectively, stemming from the loss of NOI from the Castle View disposition, coupled with decreased capitalized interest from a lower average outstanding balance on the revolving credit facility and a lower interest income following the repayments of two outstanding convertible development loans. These decreases were partially offset by accretive unit buybacks and same property NOI growth. During the quarter, we were able to execute on a number of important leasing objectives. As I highlighted on our last call, we executed a 25-year lease for the entire 10,000 square foot vacant commercial space at Minto Yorkville in Toronto, with the lease commencing in January 2026. We also executed a lease agreement for the vacant commercial space at Kaleidoscope in Calgary, with lease payments scheduled to commence in November of this year.

Speaker #4: These decreases were partially offset by accretive unit buybacks, and same property NOI growth. During the quarter, we were able to execute on a number of important leasing objectives.

Speaker #4: As I highlighted on our last call, we executed a 25-year lease for the entire 10,000-square-foot vacant commercial space at Minto Yorkville in Toronto.

Speaker #4: With the lease commencing in January 2026, we also executed a lease agreement for the vacant commercial space at Kaleidoscope and Calgary, with lease payments scheduled to commence in November of this year.

Speaker #4: And in June, a new tenant took occupancy at the Carl Island Ottawa with rent payments beginning in September of this year. In total, gross annual rent from these new commercial leases is expected to exceed $1 million dollars, representing over a penny and a half per unit on an annualized basis.

Jonathan Li: In June, a new tenant took occupancy at the Carlisle in Ottawa, with rent payments beginning in September of this year. In total, gross annual rent from these new commercial leases is expected to exceed $1 million, representing over a penny and a half per unit on an annualized basis. We have remained very active with our NCIB program, and in Q2 2025, we purchased $20.5 million of units at a weighted average price of $13.17 per unit. To date, we have purchased approximately 3.2 million units and deployed over $43 million towards the NCIB program.

Speaker #4: We have remained very active with our NCIB program, and in Q2 2025, we've purchased 20.5 million dollars of units, at a weighted average price of $13.17 per unit.

Speaker #4: To date, we have purchased approximately 3.2 million units, and deployed over 43 million dollars towards the NCIB program. Finally, we extended the CDL maturity and purchase option for 88 Beachwood in Ottawa, and in return, the coupon was amended from a fixed rate to a floating rate structure, and the coupon was increased by approximately 200 basis points from 6% to 8% based on current interest rates.

Jonathan Li: Finally, we extended the CDL maturity and purchase option for 88 Beechwood in Ottawa, and in return, the coupon was amended from a fixed rate to a floating rate structure, and the coupon was increased by approximately 200 basis points from 6% to 8% based on current interest rates. I will now turn it over to Eddie to review our second quarter financial and operating performance in greater detail. Eddie.

Speaker #4: I'll now turn it over to Eddie to review our second quarter financial and operating performance in greater detail. Eddie?

Speaker #5: Thank you, John. Slide four provides some key details about our operating performance. Same property revenue was $38.5 million, reflecting a 2.3% increase compared to Q2 of last year.

Eddie Fu: Thank you, John. Slide four provides some key details about our operating performance. Same property revenue was $38.5 million, reflecting a 2.3% increase compared to Q2 of last year. This growth was primarily driven by a 3.3% rise in unfurnished suite revenue, supported by a 5.2% increase in average monthly rent for the same property occupied unfurnished suite portfolio, which reached $2,048. However, this was partially offset by lower average occupancy, reduced revenue from furnished suites, and decreased commercial revenue due to the temporary retail vacancy at Minto Yorkville. Same property NOI was $24.4 million in Q2 2025, an increase of 1.6% compared to Q2 2024. The increase reflects the same property revenue growth, partially offset by a 3.5% increase in operating expenses, which reflected higher repairs and maintenance expenses and elevated marketing costs incurred to support leasing activity.

Speaker #5: This growth was primarily driven by a 3.3% rise in unfurnished suite revenue, supported by a 5.2% increase in average monthly rent for the same property occupied unfurnished suite portfolio, which reached 2,048 dollars.

Speaker #5: However, this was partially offset by lower average occupancy, reduced revenue from furnished suites, and decreased commercial revenue due to the temporary retail vacancy at Minto Yorkville.

Speaker #5: Same-property NOI was $24.4 million in Q2 2025, reflecting an increase of 1.6% compared to Q2 2024. This increase is attributed to same-property revenue growth, partially offset by a 3.5% rise in operating expenses, which included higher repairs and maintenance expenses as well as elevated marketing costs incurred to support leasing activity.

Speaker #5: Normalized FFO and AFFO per unit decreased by 2.5%, and 3.2% respectively, compared to Q2 of last year. Normalized AFFO payout ratio was 60.9%, it increased of 370 basis points from Q2 last year.

Eddie Fu: Normalized FFO and AFFO per unit decreased by 2.5% and 3.2% respectively compared to Q2 of last year. Normalized AFFO payout ratio was 60.9%, an increase of 370 basis points from Q2 last year. I will move now to slide five. This chart highlights the REIT's consistent quarter-over-quarter growth in average monthly rent. Our realized gain on lease of 4.7% in Q2 was down slightly from Q1, as market rents have flattened and turnover remains lower for suites with tenants whose sitting rents are substantially below current market rents, reducing their inclination to move out. Moving to slide six, we signed 469 new leases in the second quarter, generating realized gain on lease of 4.7%, down from 5.4% in the previous quarter. We generated increases of 8.3% in Ottawa, 4.7% in Toronto, and 4.2% in Montreal, but Calgary and Vancouver continued to experience competitive pressure from new supply.

Speaker #5: I'll move now to slide five, this chart highlights the REIT's consistent quarter-over-quarter growth and average monthly rent. Our realized gain on lease of 4.7% in Q2 was down slightly from Q1, as market rents have flattened, and turnover remains lower for suites with tenants whose sitting rents are substantially below current market rents, reducing the inclination to move out.

Speaker #5: Moving to slide six, we signed 469 new leases in the second quarter, generating a realized gain on lease of 4.7%, down from 5.4% in the previous quarter.

Speaker #5: We generated increases of 8.3% in Ottawa, 4.7% in Toronto, and 4.2% in Montreal, but Calgary and Vancouver continued to experience competitive pressure from new supply.

Speaker #5: As indicated in the lower table, the embedded gain-to-lease potential at the end of the second quarter remained solid at 10.4%, or $14.5 million.

Eddie Fu: As indicated in the lower table, the embedded gain to lease potential at the end of the second quarter remains solid at 10.4% or $14.5 million. Moving to slide seven, the same property annualized turnover was 24% in the second quarter, up from 20% last year. Overall, same property closing occupancy remained consistent with the first quarter at 96%, as we leveraged a combination of tactical promotion, marketing campaigns, and a targeted renewal program across the portfolio. Calgary experienced higher annualized turnover compared to Q2 2024, as the continued delivery of new supply created alternative living options. As a result, closing occupancy declined from Q1 2025 by 40 basis points to 95.2%. Ottawa also experienced higher annualized turnover compared to Q2 2024, reflecting competitive pressures from newly completed rental apartments. As a result, closing occupancy declined by 60 basis points from Q1 2025 to 95.8%.

Speaker #5: Moving to slide seven, the same property annualized turnover was 24% in the second quarter, up from 20% last year. Overall, same property closing occupancy remained consistent with the first quarter at 96%, as we leveraged a combination of tactical promotion, marketing campaigns, and a targeted renewal program across the portfolio.

Speaker #5: Calgary experienced higher annualized turnover compared to Q2 2024, as it continued delivery of new supply created alternative living options. As a result, closing occupancy declined from Q1 2025, by 40 basis points, to 95.2%.

Speaker #5: Ottawa also experienced higher annualized turnover compared to Q2 2024, reflecting competitive pressures, from newly completed rental apartments. As a result, closing occupancy declined by 60 basis points from Q1 2025, to 95.8%.

Speaker #5: Toronto also experienced an increase in annualized turnover compared to Q2 2024, driven by the continued delivery of new supply in the market. However, the REIT's leasing team successfully leveraged targeted promotions and marketing campaigns to support leasing activity, resulting in closing occupancy of 95.6%, an increase of 60 basis points from Q1 2025.

Eddie Fu: Toronto also experienced an increase in annualized turnover compared to Q2 2024, driven by the continued delivery of new supply in the market. However, Minto Apartment REIT's leasing team successfully leveraged targeted promotions and marketing campaigns to support leasing activity, resulting in closing occupancy of 95.6%, an increase of 60 basis points from Q1 2025. In Montreal, turnover was consistent at 19% and demand remained strong, resulting in stable closing occupancy of 97.1%. On slide eight, we provide an update on our commercial and furnished suite portfolios. Revenue from commercial leases decreased by 12.1% from Q2 last year, driven by the temporary vacancy at Minto Yorkville. As mentioned, we have leased vacant commercial space in the portfolio, representing estimated combined gross annual rent of approximately $1 million. This will bring our remaining vacant commercial space to less than 2,500 square feet, representing approximately 2% of the commercial portfolio.

Speaker #5: In Montreal, turnover was consistent at 19% and demand remained strong. Resulting in stable closing occupancy of 97.1%. On slide eight, we provide an update on our commercial and furnished suite portfolios.

Speaker #5: Revenue from commercial leases decreased by 12.1% from Q2 last year, driven by the temporary vacancy at Minto Yorkville. As mentioned, we have leased vacant commercial space in the portfolio, representing estimated combined gross annual rent of approximately $1 million.

Speaker #5: This will bring our remaining vacant commercial space to less than 2,500 square feet, representing approximately 2% of the commercial portfolio. With respect to the furnished suite portfolio, revenue decreased by 19.1% from Q2 last year due to a lower average number of occupied suites, coupled with a decrease in average monthly rent.

Eddie Fu: With respect to the furnished suite portfolio, revenue decreased by 19.1% from Q2 last year due to a lower average number of occupied suites, coupled with a decrease in average monthly rent. Since Q2 2024, we have converted 31 furnished suites to the unfurnished portfolio, including 20 at Minto 185. We expect to continue winding down the furnished suite business over time by converting furnished suites to unfurnished suites. However, the pace of conversions in each building will be subject to local market leasing conditions in order to optimize yield and cash flow. Turning to the operating expense breakdown on slide nine, same property operating expenses increased 3.5% due to the higher property operating costs that were primarily the result of increased repairs and maintenance expenses and marketing costs.

Speaker #5: Since Q2 2024, we have converted 31 furnished suites to the unfurnished portfolio, including 20 at Minto 185. We expect to continue winding down the furnished suite business over time, by converting furnished suites to unfurnished suites.

Speaker #5: However, the pace of conversions in each building will be subject to local market leasing conditions in order to optimize yield and cash flow. Turning to the operating expense breakdown on slide nine, same property operating expenses increased 3.5% due to the higher property operating costs that were primarily the result of increased repairs and maintenance expenses and marketing costs.

Speaker #5: Same property property taxes decreased due to lower assessed values and rates in Calgary, partially offset by increased rates in Montreal, Toronto, and Ottawa. Same property utility costs decreased compared to Q2 2024, primarily due to lower electricity expense, resulting from a reduction in consumption, partially offset by rate increases in Ontario and Montreal, while the cancellation of the carbon tax contributed to the decrease in gas costs.

Eddie Fu: Same property property taxes decreased due to lower asset values and rates in Calgary, partially offset by increased rates in Montreal, Toronto, and Ottawa. Same property utility costs decreased compared to Q2 2024, primarily due to lower electricity expense resulting from a reduction in consumption, partially offset by rate increases in Ontario and Montreal, while the cancellation of the carbon tax contributed to the decrease in gas costs. Moving to suite repositioning on slide 10, we repositioned 18 suites in the second quarter, generating an ROI of 8.1%. We experienced elevated costs this quarter due to the renovation of two penthouse suites at Minto Yorkville, which required higher capital investment due to the larger relative size and premium finishes. Over the past four quarters, we repositioned 58 suites and generated an average ROI of 8.7%. We expect to reposition a total of 50 to 70 suites this year.

Speaker #5: Moving to suite repositioning on slide ten, we repositioned 18 suites in the second quarter generating an ROI of 8.1%. We experienced elevated costs this this quarter due to the renovation of two penthouse suites at Minto Yorkville, which required higher capital investment due to the larger relative size and premium finishes.

Speaker #5: Over the past four quarters, we repositioned 58 suites and generated an average ROI of 8.7%. We expect to reposition a total of 50 to 70 suites this year.

Speaker #5: Slide 11 highlights our key depth statistics on a proportionate share basis. Our maturity schedule remains well-balanced. As of June 30th, 2025, the weighted average term to maturity on our term debt was approximately 5.3 years, with a weighted average effective interest rate of 3.6%.

Eddie Fu: Slide 11 highlights our key debt statistics on a proportionate share basis. Our maturity schedule remains well-balanced. As of June 30, 2025, the weighted average term to maturity on our term debt was approximately 5.3 years, with a weighted average effective interest rate of 3.6%. As of the end of Q2, 98% of our total debt was fixed rate. Total liquidity at quarter end is approximately $137 million. I will now turn it back over to Jonathan Li.

Speaker #5: As of the end of Q2, 98% of our total debt was fixed rate. Total liquidity at quarter end was approximately $137 million. I'll now turn it back over to John.

Speaker #4: Thanks, Eddie. On slide 12, we provide the current status of our development pipeline. As we indicated last quarter, we allowed the purchase option on the Highlands in Vancouver to lapse, and in April, we received repayments of $19.4 million for its related CDL.

Jonathan Li: Thanks, Eddie. On slide 12, we provide the current status of our development pipeline. As we indicated last quarter, we allowed the purchase option on the Highland in Vancouver to lapse. In April, we received repayments of $19.4 million for its related convertible development loan. The intensification at Ridgepro and Leadlindy York Mills continued to progress, with stabilization of the projects expected in Q4 2026 and Q4 2027, respectively. First occupancy at both developments is anticipated to occur later this year. As I highlighted earlier, in Q2, we agreed to amend the convertible development loan associated with 88 Beechwood convertible development loan to extend the maturity date and the purchase option to December 31, 2026.

Speaker #4: The intensifications at Rich Grove and Lesley York Mills continue to progress, with stabilization of the projects expected in Q4 2026 and Q4 2027, respectively.

Speaker #4: First occupancy at both developments is anticipated to occur later this year. As I highlighted earlier, in Q2 we agreed to amend the CDL associated with 88 Beachwood to extend the maturity dates and the purchase option to December 31, 2026.

Speaker #4: Effective January 1, 2026, the coupon will be amended from a fixed rate to a floating rate structure, and the coupon will increase from 6% to approximately 8%, calculated as a 500 basis point fixed spread over the base variable rate of our revolving credit facility.

Jonathan Li: Effective January 1, 2026, the coupon will be amended from a fixed rate to a floating rate structure, and the coupon will increase from 6% to approximately 8%, calculated as a 500 basis point fixed spread over the base variable rate of our revolving credit facility, resulting in additional FFO on a per unit basis. I will conclude with our business outlook on slide 13. Despite the near-term uncertainty facing our industry, such as elevated supply in certain markets, immigration policy changes, and affordability pressures, the long-term fundamentals supporting Canadian rental housing demand remain intact, driven by an acute housing shortage and the relative affordability of rental housing. However, due to the high quality and urban locations of some of our assets, we do compete with new supply that is currently offering a variety of incentives and promotions.

Speaker #4: Resulting in additional FFO on a per unit basis. I'll conclude with our business outlook on slide 13. Despite some near-term uncertainty facing our industry, such as elevated supply in certain markets, immigration policy changes, and affordability pressures, the long-term fundamentals supporting Canadian rental housing demand remain intact, driven by an acute housing shortage and a relative affordability of rental housing.

Speaker #4: However, due to the high quality and urban locations of some of our assets, we do compete with new supply that is currently offering a variety of incentives and promotions.

Speaker #4: Our team has been actively managing the portfolio on a building-by-building basis to increase occupancy and optimize rents, and we are pleased with the progress so far, in our fiscal Q3.

Jonathan Li: Our team has been actively managing the portfolio on a building-by-building basis to increase occupancy and optimize rents, and we are pleased with the progress so far in our fiscal Q3. The majority of expected supply in Toronto and Calgary is expected to be delivered throughout 2026, with fewer new starts to follow. As these new suites continue to be absorbed, we expect to see a more balanced supply and demand dynamic in both markets. In addition, we have made significant progress in leasing up the commercial portfolio, which will provide some tailwinds in 2026. At the same time, we continue the measured wind-down of our furnished suite portfolio, subject to local market leasing conditions and cash flow optimization. Lastly, we expect to continue returning capital to unit holders through unit purchases, as it remains an attractive use of capital at current trading levels.

Speaker #4: The majority of expected supply in Toronto and Calgary is expected to be delivered throughout 2026, with fewer new starts to follow. As these new suites continue to be absorbed, we expect to see a more balanced supply and demand dynamic in both markets.

Speaker #4: In addition, we have made significant progress in leasing up the commercial portfolio, which will provide some tailwinds in 2026. At the same time, we continue the measured wind-down of our furnished suite portfolio.

Speaker #4: Subject to local market leasing conditions and cash flow optimization, we expect to continue returning capital to unit holders through unit purchases, as it remains an attractive use of capital at current trading levels.

Speaker #4: We have undertaken many initiatives over the past two years to strengthen the REIT, including improving the balance sheet, effectively allocating capital, and high-grading the portfolio.

Jonathan Li: We have undertaken many initiatives over the past two years to strengthen Minto Apartment Real Estate Investment Trust, including improving the balance sheet, effectively allocating capital, and high grading the portfolio. As near-term headwinds abate over the coming quarters, we believe Minto Apartment Real Estate Investment Trust is well-positioned to generate strong returns for unit holders. That concludes our prepared remarks. Operator, please open the line for questions.

Speaker #4: As near-term headwinds abate over the coming quarters, we believe the REIT is well positioned to generate strong returns for unit holders. That concludes our prepared remarks.

Speaker #4: Operator, please open the line for questions.

Speaker #2: We will now begin the question and answer session. In order to ask a question, press star followed by the number one on your telephone keypad.

Regina: We will now begin the question and answer session. In order to ask a question, press star, followed by the number one on your telephone keypad. Our first question will come from the line of Jonathan Kelcher with TD Cowan. Please go ahead.

Speaker #2: Our first question will come from the line of Jonathan Calcher, with TD Cowen. Please go ahead.

Speaker #6: Thanks. Good morning. first first question, just on the the occupancy it it helped flat, versus Q1. Do you do you think the sort of 95, 96 percent level is is one that you can hold over, I guess, over the balance of the next 18 months, while the the new supply kind of works its way through?

Speaker 8: Thanks. Good morning. First question, just on the occupancy, it held flat versus Q1. Do you think the 95%, 96% level is one that you can hold over, I guess, over the balance of the next 18 months while the new supply kind of works its way through?

Speaker #7: Hey, good morning, Jonathan. Thanks for the question. Yeah, you know, we have been extremely, extremely active, managing the portfolio and in attempt to increase occupancy.

Jonathan Li: Good morning, Jonathan, and thanks for the question. We have been extremely, extremely active managing the portfolio in an attempt to increase occupancy. Turnover is higher, and the tenants who are turning do tend to be those who have a shorter length of stay. We have invested in many marketing and leasing strategies to try to backfill that higher turnover. As I said in those remarks, we are pleased with how it is going so far in Q3. I think, unfortunately, flat is kind of the new up in this market. At least, that is kind of how we are approaching it. We are optimistic that we can maintain current occupancy levels through Q3, and what we are seeing in July and August to date kind of supports that.

Speaker #7: You know, turnover is higher, and the tenants who are turning do tend to be those who have a shorter length of stay. We have invested in many marketing and leasing strategies to try to backfill that higher turnover, and as I said in those remarks, we are pleased with how it's going so far in Q3.

Speaker #7: And I think, unfortunately, like flat is kind of the new up in this market; at least that's kind of how we're approaching it. We are optimistic that we can maintain current occupancy levels through Q3, and what we're seeing in July and August to date kind of supports that.

Speaker #6: Okay, that's helpful. And I guess along the same lines, if a lot of the turnover is from tenants that have been there the shortest, how do you how should we think about the uplips going forward on turnover?

Speaker 8: Okay, that is helpful. I guess along the same lines, if a lot of the turnover is from tenants that have been there the shortest, how should we think about the uplifts going forward on turnover, like the 4% to 5% range?

Speaker #6: Like, the sort of five to four to five percent range?

Speaker #7: I mean, look, I think the numbers that you're seeing in our gain-to-lease charts are on a growth basis. On a net basis, i.e., including promotion and incentive, it's a little lower than that.

Jonathan Li: I mean, look, I think the numbers that you are seeing in our gain-to-lease charts, they are on a gross basis. On a net basis, i.e., including promotion and incentive, it is a little lower than that. I think in terms of driving the model and your numbers, anywhere between 0% and 5% gain-to-lease is probably reasonable. We are seeing that kind of actual gain-to-lease in all of our markets, and that is kind of what we are forecasting in our internal models as well. When you add that to the renewals, which is 80% of our portfolio or so, those are still growing at 3% and 3.5%. You can kind of take the weighted average of those two and get your growth for the rest of the year.

Speaker #7: So I think in terms of driving the model, in your numbers, you know, anywhere between zero and five percent gain-to-lease is probably reasonable. We're seeing that kind of, you know, actual gain-to-lease in all of our markets, and and that's kind of what we're we're forecasting in our internal models as well.

Speaker #7: And so when you add that to the renewals, which is, you know, 80% of our portfolio or so, those still are still growing at three and a three and a half percent, and so you can kind of take the weighted average of those two and and get your growth, for the rest of the year.

Speaker #6: Okay, so how so if you if you did, forget the exact number, 4.7 or something this quarter, what what would that have been on a net basis?

Speaker 8: If you did, I forget the exact number, 4.7% or something this quarter, what would that have been on a net basis? Do you have that number?

Speaker #6: Do you have that number?

Speaker #7: It's about flat.

Jonathan Li: It's about flat.

Speaker #6: Okay, and what would that translate into in terms of average in setup, like a month, three, or month and a half? Like, how should we think about that?

Speaker 8: Okay, what would that translate into in terms of average in setup, like a month, three, or a month and a half? How should we think about that?

Speaker #7: Yeah, it's somewhere between a month and a month and a half on average, right? It's zero somewhere, it's two months in other places, and so on average, it's a month and a month and a half.

Jonathan Li: Yeah, it's somewhere between a month and a month and a half on average, right? If it's zero somewhere, that's two months other places. So, on average, it's a month and a month and a half.

Speaker #6: Okay, thanks. I'll, , I'll turn it back.

Speaker 8: Okay, thanks. I will turn it back.

Speaker #7: Thank you.

Jonathan Li: Thank you.

Speaker #2: Our next question comes from the line of Siram Srinivas with Coremark Securities. Please go ahead.

Regina: Our next question comes from the line of Asiram Srinivas with Cormac Securities. Please go ahead.

Speaker #8: Morning, gents. I just realized my questions have been answered. I'll turn it back. Thanks.

Speaker 9: Morning, gents. I just realized my questions have been answered. I will turn it back. Thanks.

Speaker #7: Thanks, guys.

Jonathan Li: Thanks, John.

Speaker #2: Again, for any questions, press star followed by the number one on your telephone keypad. Our next question comes from the line of Matt Kornak, with National Bank Financial.

Regina: Again, for any questions, press star, followed by the number one on your telephone keypad. Our next question comes from the line of Matt Cornack with National Bank Financial. Please go ahead.

Speaker #2: Please go ahead.

Speaker #9: Hey guys, good morning. just with regards to the the incentives, question, are you providing incentives on renewals as well, or should we think about the renewal spreads as being, a cleaner number?

Speaker 8: Hey, guys, good morning. With regards to the incentives question, are you providing incentives on renewals as well, or should we think about the renewal spreads as being a cleaner number?

Speaker #7: Renewals tend to be a cleaner number, and I'm generally, though, we're we're aiming to be flat. On on renewals in many markets, you know, up a little bit, obviously when there's some embedded rent in there.

Jonathan Li: Renewals tend to be a cleaner number, and generally, though, we are aiming to be flat on renewals in many markets, you know, up a little bit, obviously, when there is some embedded rent in there. It varies, but on the renewal side, our strategy really is to just get really far ahead of those renewals with the tenants and have our teams have one-on-one discussions with them. You know, look, we are finding that the tenants are very sophisticated and open to discussion, and so are we. It is bearing a little bit of fruit, but there is a lot of backfilling, as we mentioned before. We are working hard.

Speaker #7: And so, it varies, but on the renewal side, our strategy really is to just get really far ahead of those renewals with the tenants, and have our teams have one-on-one discussions with them, and, you know, look, we're finding that the tenants are very sophisticated, and and open to discussion, and so are we.

Speaker #7: And so that's, it's bearing a little bit of fruit, but there is a lot of backfilling, as we mentioned before.

Speaker #7: So, we're working hard.

Speaker #9: Okay, fair enough. And then, like, how should we think of how far we are into this process in terms of timing? I mean, you had a a bit higher turnover, this quarter, but like, are we going to work through it, call it in the next 12 months, or is this a multiple-year issue in terms of the higher leases coming to maturity?

Speaker 8: Okay, fair enough. How should we think of how far we are into this process in terms of timing? You had a bit higher turnover this quarter, but are we going to work through it, call it, in the next 12 months, or is this a multiple-year issue in terms of the higher leases coming to maturity?

Speaker #7: I I mean, it's a good question, and something that we try to analyze a lot. I think based on some of the questions we're getting and based on some of the information that we show our board and we analyze, we do have a, you know, a decent view on what the, supply is coming up, in each of our markets, and that's relative to historical averages as well.

Jonathan Li: I mean, it's a good question and something that we try to analyze a lot. I think based on some of the questions we are getting and based on some of the information that we show our board and we analyze, we do have a decent view on what the supply is coming up in each of our markets, and that's relative to historical averages as well. I think we are going to consider putting these supply slides into our investor presentations, so people can just see the same data that we are looking at. You can kind of see that in Toronto, Calgary, Ottawa, Vancouver, in 2024 and 2025, the deliveries are significantly higher than what the 10-year averages have been, and that's what we are dealing with.

Speaker #7: So, I think we're we're going to consider kind of putting these supply slides into our, investor presentations, and so people can just see the same data that we're looking at, and you can kind of see that, you know, in like Toronto, Calgary, Ottawa, Vancouver, you know, in 2024 and 2025, the deliveries are significantly higher than what the the 10-year averages have been.

Speaker #7: And that's what we're dealing with. But you can see in some of these charts where the additional supply is forecasted to be, you know, based on current estimates. This can obviously change, and I suspect if it changes, it'll actually decrease relative to these numbers.

Jonathan Li: But you can see in some of these charts where the additional supply is forecasted to be, based on current estimates, and this can obviously change. I suspect if it changes, it will actually decrease relative to these numbers as some condos and purpose-built rentals just do not get finished. I think we are going to put some of these graphs up in our materials, and folks can just take a look and come to their own conclusions.

Speaker #7: As some as some condos and purpose-built rentals just don't get finished. But, I think we're going to we're going to put some of these some of these graphs up on our, in our materials and folks can just just take a look and come to their own conclusions.

Speaker #9: Okay, fair enough. And then maybe the last one for me: how's the transition on the furnished suites to long-term rentals going?

Speaker 8: Fair enough. Then maybe last one for me, how the transition on the furnished suites to kind-of long-term rentals is going. Also, did I read correctly? The incremental contribution from the commercial portfolio as a result of leasing is about $250,000 a quarter, or I am just interested in how we should model that going forward as well.

Speaker #9: And then also, did I read correctly, is the incremental, contribution from the commercial portfolio as a result of leasing is about 250,000 dollars a quarter, or or I'm just interested in how we should model that going forward as well.

Speaker #7: Okay. Well, I'll start with the commercial. It's easier one. So, starting in, you know, effectively 2026, so here, I mean, the lion's share of the incremental, commercial is is Minto Yorkville, like the stock lease.

Jonathan Li: I will start with the commercial. That is the easier one. Starting in, effectively, 2026, the lion's share of the incremental commercial is Minto Yorkville, the stock lease, and that is, call it, $800,000, and that is going to start January 1st, 2026. The other two, the Carlisle and Kaleidoscope, basically take that remaining $200,000 or so. Half of it will start at the Carlisle paying in September 2025, and half of it will start in March 2026.

Speaker #7: And that's call it, you know, 800 grand. And that's going to start January 1st, 2026. the other two, the Carl Island Kaleidoscope, basically take that remaining 200 grand or so, and, you know, half of it will start at the Carl Island paying in September 2025.

Speaker #7: And half of it will start in March 2026.

Speaker #9: Okay, that's helpful.

Speaker 8: That's helpful.

Speaker #7: And then furnished suites, I mean, look, I think as as is evident, by some of some of our comments, you know, the the original strategy was set out in a market that was a lot more a lot hotter than it is today.

Jonathan Li: Furnished suites, I mean, look, I think as is evident by some of our comments, the original strategy was set out in a market that was a lot hotter than it is today. I think with the vacancy that is in the Toronto market here in Yorkville and also in Ottawa at 185 Lyon, I think we are being pretty prudent and strategic in terms of, look, there is no point converting a unit from furnished to unfurnished, spending a little money on it, and then have it sit vacant. So I think we are going unit by unit, analyzing which ones we think are rentable. Right now, the rental market in Ottawa, or sorry, our building in Ottawa is absorbing some of those conversions a little better than in Toronto.

Speaker #7: I think with the vacancy that that's in the Toronto market here in Yorkville, and also in Ottawa, at 185 Lion, you know, I think we're being pretty prudent and strategic in terms of, look, there's no point converting a unit from furnished to unfurnished, spending a little money, on it, and then have it sit vacant.

Speaker #7: So I think we are, you know, going unit by unit, analyzing which ones we think are rentable. Right now, the rental market in Ottawa—sorry, our building in Ottawa—is absorbing some of those conversions a little better than in Toronto.

Speaker #7: And so I think what you're going to see from us is a bit of a slowdown in the wind-down, just to try to optimize cash flow and yields as we run through the piece.

Jonathan Li: What you are going to see from us is a bit of a slowdown in the wind-down just to try to optimize cash flow and yields as we run through the piece. We are analyzing it every single day to see like, okay, should we just rip the Band-Aid off or should we continue this? We are trying to be nimble, we are trying to be adaptive, and that is kind of how we are managing it.

Speaker #7: But we are analyzing every single day to see, like, okay, should we just rip the band-aid off, or should we continue this?

Speaker #7: And so we're we're trying to be nimble. We're trying to be, you know, adaptive and and that's kind of how we're managing it.

Speaker #9: Makes sense. and then, sorry, I know they said that was my last question, but maybe one quick one on relative performance of geographies. Seems like Montreal's pretty good.

Speaker 8: Makes sense. Sorry, I know that was my last question, but maybe one quick one on relative performance of geographies. It seems like Montreal is pretty good. Ottawa, it is new supply of purpose-built rental, whereas Toronto is condo. Is there any thought as to which you would rather have as a competitor, condo or purpose-built rental at this point in terms of how the market reacts to the new supply?

Speaker #9: Ottawa, it's its new supply of purpose-built rental, whereas Toronto's condos... is there any thought as to which you'd rather have as a competitor: condo or a purpose-built rental at this point, in terms of how the market reacts to the new supply?

Speaker #9: You know.

Jonathan Li: I think our kind of short and mid-term forecasts for each of the markets aren't that different. We kind of feel like our occupancy in Ottawa is, again, kind of flat, I think would be a reasonable expectation. Toronto, same thing, flat, reasonable expectation. Montreal, like flat to up a tick a little bit over, through the course of Q3. Then Calgary, we're fighting hard to keep it level. The deliveries in Calgary in 2024 were like three times higher than the 10-year average. We're working through that right now. There's obviously a bit more volatility there. So I'd say, it's not, it's kind of splitting hairs. We're working hard everywhere, and that's kind of how we're seeing it.

Speaker #7: I think our short- and mid-term forecast for each of the markets isn’t that different. We kind of feel like our occupancy in Ottawa is, you know, again, kind of flat. I think that would be a reasonable expectation.

Speaker #7: You know, Toronto, same thing, flat, reasonable expectation. Montreal, like flat to up a tick, a little bit over, you know, through the course of Q3.

Speaker #7: And then Calgary, you know, we're fighting hard to to, to to keep it level, you know, the the deliveries in the in Calgary in 2024 were like three times, higher than the 10-year average.

Speaker #7: And so we're working through that right now. And so there's there's obviously a bit more volatility there. so I'd say, you know, it's not it's it's it's kind of splitting hairs, every it's it's it's a, you know, we're working hard everywhere, and, that's kind of how we're seeing it.

Speaker #9: Okay, perfect. Thanks for those details.

Speaker 8: Okay, perfect. Thanks for those details.

Speaker #7: No No problem.

Jonathan Li: No problem.

Speaker #2: Our next question will come from the line of Kyle Stanley, with Desjardins. Please go ahead.

Regina: Our next question will come from the line of Kyle Stanley with Desjardins. Please go ahead.

Speaker #10: Thanks. morning, everyone. just as we look forward over the next 12 to 18 months, where do you see the same property OPEX inflation trending, you know, like what kind of avenues do you have to maybe enhance the margin?

Jonathan Li: Thanks. Morning, everyone. Just as we look forward over the next 12 to 18 months, where do you see same property OpEx inflation trending? What kind of avenues do you have to maybe enhance the margin? Obviously, there has been a bit of elevated year-to-date spending, so potentially that starts to roll off. I would just love your thoughts on the OpEx. Yes, I think the way we are thinking about the rest of the year for OpEx is probably pretty consistent with what this quarter was. Our operating expenses unfortunately are elevated a little bit from an R&M perspective. I mean, look, we are investing more in our marketing and leasing teams and strategies, and so that is, I think, going to stay.

Speaker #10: Obviously, there's been a bit of elevated year-to-date spending, so potentially that starts to roll off. I'd just love your thoughts on the OPEX.

Speaker #7: Yeah, I think the way we're thinking about the rest of the year for OPEX is probably pretty consistent with what this quarter, was. You know, our our operating expenses, unfortunately, are elevated a little bit.

Speaker #7: from an R&M perspective, I mean, look, we're we're investing more in our marketing and leasing teams and strategies, and so so that's, I think, going to stay.

Speaker #7: We do have some headcount vacancies that we had in 2024 that we've filled in 2025, and so that's kind of going to be there to stay for the rest of the year.

Jonathan Li: We do have some headcount vacancies that we had in 2024 that we filled in 2025, and so that is kind of going to be there to stay for the rest of the year. Where we have had some pickup, actually, is some of our utilities, and then also on the property taxes, sorry, not property taxes, insurance going forward appears to be a tail, will be a bit of a tailwind as well. But those operating expenses in that 3.5% to 5% zone is kind of how we are thinking about the future.

Speaker #7: where we have had some pickup, actually, is, you know, some of our utilities. and then also, you know, on the property taxes, sorry, not property taxes, insurance insurance going forward, appears to be a will be a bit of a tailwind as well.

Speaker #7: But that those operating expenses and that, you know, three and a half to five percent zone is kind of how we're thinking about the future.

Speaker #10: Okay, thank you for that. And just one more more kind of on the the rental market as a whole. As we look at the supply curve, like you're seeing a shift in dynamic of what is coming to be delivered, you know, going away from condo, turning more towards purpose-built rental.

Eddie Fu: Okay, thank you for that. And just one more, kind of more kind of on the rental market as a whole. As we look at the supply curve, you are seeing a shift in dynamic of what is coming to be delivered, going away from condo, turning more towards purpose-built rental. Over the longer term, what kind of impact do you think that potentially has on the rental market with more actual purpose-built rental stock being delivered versus historic?

Speaker #10: Over the longer term, what kind of impact do you think that potentially has on the rental market with with more actual purpose-built rental stock being delivered versus historic?

Speaker #7: I mean, not a lot. Like, look, we're competing with the shadow condo market, and we're competing with the purpose-built rental market. The math works for purpose-built rental today for developers.

Jonathan Li: I mean, not a lot. Look, we are competing with the shadow condo market, and we are competing with the purpose-built rental market. The math works for purpose-built rental today for developers, and it does not for condos. I think, professionally, we compete with everything. Professionally managed purpose-built rental, individual investors who own condos, so I am not going to say every single unit of supply is the same, but the way we are thinking about the future, we are not really differentiating between condo deliveries and purpose-built rental deliveries. Once you apply, like, a rental assumption on those condos, it is kind of, we are competing with all of it.

Speaker #7: And it doesn't for condos. you know, I think, look, professionally, we we we we compete with everything. Professionally managed purpose-built rental, individual investors who want to who own condos.

Speaker #7: And so you know, I'm not going to say every single unit of supply is the same, but the way we're thinking about the future, we're not really differentiating between condo deliveries and purpose-built rental deliveries.

Speaker #7: Once you apply like, you know, a rental assumption on those condos, it's kind of we're we're competing with all of it.

Speaker #10: Okay. No, fair enough. Thanks for that. I will turn it back.

Eddie Fu: Okay, fair enough. Thanks for that. I will turn it back.

Speaker #7: Thanks.

Jonathan Li: Thanks.

Speaker #2: Our next question comes from the line of Mario Sarge, with Scotiabank. Please go ahead.

Regina: Our next question comes from the line of Mario Sart with Scotiabank. Please go ahead.

Speaker #11: Hi, good morning. my my first question to John, just I want to clarify your commentary on the the new lease spreads and the renewal spreads.

Speaker 8: Hi, good morning. My first question, Jonathan, I want to clarify your commentary on the new lease spreads and the renewal spreads. On the new lease side, it was fairly clear, but on the renewals, you are targeting gross 3% to 3.5%. You mentioned that you are aiming for flat on renewals as well. Are you suggesting that on a net effective basis, renewals are expected to be flat as well?

Speaker #11: so on the new lease side, it was it was fairly clear, but on the renewals, you kind of you're targeting gross three to three and a half percent.

Speaker #11: but you mentioned that you're aiming for flat on renewals as well. So are are you are you suggesting that on a net effective basis, renewals are expected to be flat as well?

Speaker #7: No, I mean, the the flat had more to do actually with kind of the the new lease-up buildings. Like, like our as an example, in in Vancouver, but I think overall, we do expect our renewals to be on a on a net basis.

Jonathan Li: No, the flat had more to do actually with kind of the new lease-up buildings, like as an example in Vancouver. But I think overall, we do expect our renewals to be on a net basis that 3% to 3.5%.

Speaker #7: That three to three and a half percent.

Speaker #11: Got it. Okay. That's helpful. And then, more of a broader question, just on the dynamic between occupancy and asking rent growth. You mentioned 95 to 96.

Speaker 8: Okay, that is helpful. More of a broader question just on the dynamic between occupancy and asking rent growth. You mentioned 95% to 96%. You are pretty comfortable with where you are in Q3 thus far. Is there a specific occupancy level that is required for you to kind of really taper off the incentives and start kind of pushing that asking rents up? Or are we in a situation where, you know, going into a seasonally slow second half of the year, you have to wait until kind of the spring of next year to really start to ramp that up?

Speaker #11: You're pretty comfortable with, where you are in Q3 thus far. is there is there a specific occupancy level that is required for you to, kind of really taper off the incentives and start kind of pushing net asking rents up?

Speaker #11: Or are we in a situation where you know going into a seasonally slow second half of the year, you have to wait until kind of the spring of next year to really start to ramp that up?

Speaker #7: I mean, I think it's more to do with what you first said. I mean, we've always operated our portfolio based on optimal vacancy, which is probably in that 3% range.

Jonathan Li: I mean, I think it is more to do with what you first said. We have always operated our portfolio based on optimal vacancies, probably in that 3% range. That is where we can really optimize our yields and push rents. I think that has not changed. We are really fighting hard to get back to that kind of 3% vacancy number. Hopefully when we do, and I do not know if it is going to be this year, I do not know if it is going to be next year, based on supply, but that is the goal. I think that is when we can start seeing a bit more pricing power for us.

Speaker #7: That's where we can really optimize our yields and push rents. and I think that hasn't changed. So we're really fighting hard to get back to that kind of 3% vacancy number, and you know hopefully when we do, and I don't know if it's going to be this year, I don't know if it's going to be next year, to basically based on supply, but but that's the goal, and I think that's when we can start seeing a bit more pricing power for us.

Speaker #11: Got it. And how have you, just last question, on the incentives, how have you seen the dynamic change between the effectiveness of offering incentives versus cutting face rates?

Speaker 8: Got it. How have you, just last question, on the incentives, how have you seen the dynamic change between the effectiveness of offering incentives versus cutting face rates?

Speaker #7: Well, I mean, we're the strategy is different whether or not it's a rent control building or not a rent control building. I mean, that's pretty self-evident, right?

Jonathan Li: The strategy is different whether or not it is a rent-controlled building or not a rent-controlled building. That is pretty self-evident, right? Even we are trying to maintain the face rate for all of our rent-controlled buildings so we can eliminate promotion and get right back to rack rate. With the non-rent-controlled buildings, obviously, it is dynamic and we can move rents up and down with more ease. I think the limiting factor now is, at the end of the day, we are offering more than two months to rent. It becomes kind of a mum's game. If we do find that we have to move the rent more than two months, then we will consider changing the face rate. That has not really happened at all, really, to date. I think that is how we think about it, Mario.

Speaker #7: Because you can, we're trying to maintain the face rate for all of our rent control buildings so we can eliminate promotion and get right back to rack rate.

Speaker #7: with the non-rent control buildings, obviously, it's dynamic, and we can move rents up and down. with more ease. but I think the limiting factor now is, you know, at the end of the day, we we offering more than two months to rent is just it becomes kind of a mug's game.

Speaker #7: So, if we find that we have to move the rent more than two months, then we'll consider changing the face rate.

Speaker #7: But that hasn't really happened at all, really, to date, so but I think that's how we think about it, Mario.

Speaker #11: Great. Okay, that's helpful. Thank you.

Speaker 8: Great. Okay, that's helpful. Thank you.

Speaker #7: Thanks.

Jonathan Li: Thanks.

Speaker #2: Our next question comes from the line of Brad Sturges, with Raymond James. Please go ahead.

Regina: Our next question comes from the line of Brad Sturgis with Raymond James. Please go ahead.

Speaker #10: Hey, guys. just a couple of quick questions. Just, looking at the development, projects that are, going to start, lease up towards the end of the year, just, I'm sorry if I missed it in your opening comments, but, you know, just in terms of the FFO drag from those projects, is any any guidance at this stage you can provide on that, or how to think about what the, I guess, the impact would be through lease-up?

Jonathan Li: Hey, guys, just a couple of quick questions. Looking at the development projects that are going to start lease up towards the end of the year, I am sorry if I missed it in your opening comments, but in terms of the FFO drag from those projects, is there any guidance at this stage you can provide on that or how to think about what the, I guess, the impact would be through lease up?

Speaker #10: Good morning, Brad. It's Eddie. Thanks for the question. Yeah, we're pleased with the progress on these developments. Excited that, you know, first occupancy for phase one of our LYM development and Rich Grove are anticipated for Q4.

Eddie Fu: Good morning, Brad. It's Eddie. Thanks for the question. We are pleased with the progress on these developments, excited that first occupancy for phase one of our Leadlindy York Mills development and Ridgepro are anticipated for Q4. With that, we do expect some FFO dilution in Q4 and into 2026. We are going to continue with our lease up, but as a result, we are going to have to stop capitalizing interest on these projects. With the Leadlindy York Mills projects, it is actually two phases, and it is really the phase one that is going to be substantially completed in Q4, coinciding with our first occupancy. At that point, we are going to stop capitalizing interest on that portion of the project. We think it is a small FFO dilutive impact in 2025, obviously more significant in 2026 as we lease up those 96 townhomes.

Speaker #10: So with that, we do expect some FFO dilution in Q4 and into 2026. You know, we're going to continue with our lease-up, but as a result, we're going to have to stop capitalizing interest on these projects.

Speaker #10: With the LYM project, it's actually two-phase. Two phases. And it's really the phase one that's going to be substantially completed in Q4. Coinciding with our first occupancy and it's at that point we're going to stop capitalizing interest on that portion of the project.

Speaker #10: So we think it's a small FFO, dilutive impact in 2025, obviously more significant in 2026 as we lease up, those 96 townhomes. with Rich Grove, as you know, that's a high-rise concrete over in Tobaco.

Eddie Fu: With Ridgepro, as you know, that is a high-rise concrete over in Toronto, 100 affordable units in that development. That is going to achieve substantial completion in Q1 2026 based on our timelines right now. It is at that point we are going to stop capitalizing interest for that development. We are not necessarily going to give specific numbers, but you can see in our disclosures we give numbers on what our leverage is on these properties, what the interest rates are on the Ridgepro, so that you should be able to use that to kind of model out. In terms of our Ridgepro, I mentioned about the affordable, it is really those units that are going to lease up first in that development.

Speaker #10: 100 affordable units in that, in that development. That's going to achieve substantial completion in Q1. 2026, based on our timelines right now. and it's at that point we're going to stop capitalizing interest, for that development.

Speaker #10: so you know I'm not necessarily going to give the specific numbers, but you can see in our disclosures we give, numbers on what our leverage is on these properties, what the interest rates are on on the Rich Grove, so that you should be able to use that to kind of model out to the board.

Speaker #10: Okay. yeah, and in terms of our Rich Grove, I mentioned about the affordable, it's really those units are going to lease up first. In that development.

Speaker #10: Right, you mean for both projects, is there a target timeline to lease up and stabilize?

Jonathan Li: Right, and for both projects, is there a target timeline to lease up and stabilize?

Speaker #7: Right now, it's, you know, it's so early, we're we're marketing right now. We haven't, started the pre-leasing process just yet. but that will start shortly.

Eddie Fu: Right now, it is, you know, it is still early. We are marketing right now. We have not started the pre-leasing process just yet, but that will start shortly. We think that lease up, you know, it could be a year for each of these projects.

Speaker #7: But we think that lease-up, you know, it could be a year for for each of these projects.

Speaker #10: Yeah. Okay, sounds good. Thank you.

Jonathan Li: Yeah, okay, sounds good. Thank you.

Speaker #2: And that will conclude our question-and-answer session. I'll turn the call back now for any closing comments.

Regina: That will conclude our question and answer session. I will turn the call back now for any closing comments.

Speaker #7: Thanks very much, operator. it's Jonathan Lee here. I There are a couple of things I just wanted to make sure people understood, that and the questions weren't asked.

Jonathan Li: Thanks very much, operator. It's Jonathan Li here. There are a couple of things I just wanted to make sure people understood, and the questions weren't asked. One was on the 88 Beechwood convertible development loan extension. I just want to be clear, the extension is not necessarily a signal that we are going to buy the asset. I think we simply didn't want to give up a free option, and we were able to increase the coupon pretty materially, which is a better outcome than simply paying back debt or other alternatives. We will continue to buy back units as well. So it's not like it was one for the other. I think that's comment number one. Comment number two, I think when it comes to our asset sales, we aren't marketing anything actively now.

Speaker #7: You know, one was on the Beachwood extension. I just want to be clear, the extension is not necessarily a signal that we're going to buy the asset.

Speaker #7: I think we simply didn't want to give up a free option, and we were able to increase the coupon pretty materially, which is a better outcome than simply paying back debt.

Speaker #7: or other alternatives. And and and we will continue to buy back units as well. So it's not like it was one for the other.

Speaker #7: I think that's comment number one. And and comment number two, you know, I think when it comes to to our to our asset sales, you know, we we we don't we aren't marketing anything actively now.

Speaker #7: However, you know, we do continue to receive inbounds given the high quality of our assets and their desirability. I can share that the values that we're seeing are very attractive.

Jonathan Li: However, we do continue to receive inbounds given the high quality of our assets and their desirability. I can share that the values that we're seeing are very attractive. It supports what we've been saying for a while now, that we would be able to sell all of our assets for an average higher. This really does provide us with a lot of confidence that the true value of our portfolio, and it really confirms how large and unwarranted the current trading discount is. I think that's a key point for some people to understand. Anyway, I wanted to just get that out there, and we thank everyone for their time, and we'll talk to you next quarter.

Speaker #7: It supports what we've been saying for a while now, in that we would be able to sell all of our assets for an average hire.

Speaker #7: And this really does provide us with a lot of confidence that the true value of our portfolio and and it really confirms how how large and and unwarranted the current trading discount is.

Speaker #7: And I think that's a key point for some people to understand. So, anyway, I wanted to just get that out there. We thank everyone for their time, and we'll talk to you next quarter.

Regina: This will conclude today's meeting. Thank you all for joining. You may now disconnect.