Q3 2025 Crombie REIT Earnings Call

If at any time during the cold you'll require immediate assistance. Please press Star then zero before you operator difficulties being recorded on Thursday November six 2035.

I would now like to turn the conference over to Magna Nayar manager of Investor Relations up Crumby. Please go ahead.

Operator: Your next question comes from the line of Sam Damiani from TD Cowen. Please go ahead.

Thank you. Thank you everyone and welcome to <unk> third quarter 2025 conference call and webcast. Thank you for joining us.

Sam Damiani: Thanks, Sam. Good morning, everyone. Just on the leasing spreads, we're quite strong this quarter. I'm just wondering, was there anything unusual that drove the sort of meaningful step up in your leasing spreads?

Speaker #4: Good morning , everyone , and welcome to Crombie third Quarter 2025 conference Call . At this time , all participants are in a listen only mode .

Speaker #4: Following the presentation , we will conduct a question and answer session . If at any time during the call you require immediate assistance , please press star .

Call is being recorded and live audio and it's available on our website at Www Dot Com Dot C H.

Ari Bhattan: Morning, Sam. This was a fairly typical quarter for us, albeit a little bit smaller on the square footage side, but it is something that we've seen continually over the last four quarters. This is our fourth quarter at double digits. For us, we're seeing that demand continue to come in. We experienced that with the recent ICSC conference that we had earlier in October. We had over 100 meetings with both existing tenancies, as well as new tenancies, both to Canada and also to our portfolio. There's just a lot of demand for open-air grocery-anchored shopping centers primarily right now. They're really drawn to the fact that we're obviously.

Speaker #4: Then zero for the operator . This call is being recorded on Thursday , November 6th , 2025 . I would now like to turn the conference over to Meghna Nair , Manager of Investor Relations at Crombie .

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

Joining me on the call today are Mark Holly President and Chief Executive Officer, Carlos Hamlin, Chief Financial Officer, and Ari The Con executive Vice President leasing and operations today.

Speaker #4: Please go ahead .

Speaker #5: Thank you . Good day everyone , and welcome to Crombie third Quarter 2025 conference Call and Webcast . Thank you for joining us .

Today's discussion includes forward looking statements we want to caution you that such statements are based on management's assumptions and beliefs.

Speaker #5: This call is being recorded in live audio and is available on our website at . Slides accompany today's call are available on the investor section of our website under Presentations and Events .

These forward looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements.

Speaker #5: Joining me on the call today are Mark Hawley , president and chief Executive Officer , Kara Cameron Chief Financial Officer and Ari Barton , executive vice president .

You see our public filings, including our management's discussion and analysis and annual information form for a discussion of these risks factors are.

Ari Bhattan: Got the best anchor on site, but also what our development team has been able to pull off with respect to delivering these pad opportunities and intensification opportunities, doing our best to value engineer these projects. Victor and his team have done a really nice job of being able to tuck in some opportunities because, I mean, you can tell by our occupancy, we're near full. We're just continually looking to optimize the portfolio. What we're also seeing in our portfolio, some of these 100-plus meetings, is a bit of a diversification as well in grocery anchors. We added to our occupancy this quarter a brand new state-of-the-art 20,000sq ft provincial health clinic in Nova Scotia. We also added some other service users that traditionally we're not seeing in our portfolio.

Speaker #5: Leasing and operations . Today's discussion includes forward looking statements . We want to caution you that such statements are based on management's assumptions and beliefs .

Our discussion will also include expected yield on cost for capital expenditures. Please refer to the development section of our management's discussion and analysis for additional information on assumptions and risks.

Speaker #5: These forward looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements . Please see our public filings , including our management's Discussion and Analysis and annual Information Form for discussion of these risk factors .

I'll now turn the call over to Mark to discuss crombie strategy and outlook.

Thank you Magnus and good morning, everyone.

<unk> third quarter results showcase the strength of our strategy and the quality of our close to close necessity based portfolio.

In a dynamic environment, our grocery anchored retail platform delivered a standout quarter.

Speaker #5: Our discussion will also include expected yields on costs for capital expenditures . Please refer to the development section of our Management's Discussion and Analysis for additional information on assumptions and risks .

<unk> per unit grew 11, 1% year over year.

This quarter benefited from several high impact contributions the outcome is rooted in the fundamentals of our business strategy executing on strong leasing and tenant demand and disciplined capital allocation active portfolio management and a focused operating platform.

Speaker #5: I will now turn the call over to Marc to discuss Crombie strategy and outlook .

Ari Bhattan: Again, that's not exactly on the renewals, but I think it speaks to the health and the vibrancy that we're seeing in our portfolio currently.

Speaker #6: Thank you , Meghna , and good morning , everyone . Crombie third quarter results showcased the strength of our strategy and the quality of our coast to coast necessity based portfolio in a dynamic environment .

Sam Damiani: Oh, that's great, Kara. Thank you, Ari. Just as you look out to 2026, how are you feeling about sort of that 2% to 3% same property or same asset NOI growth? It just seems like Crombie has potential to tip above that 3% range. I'm just wondering how you feel about that.

<unk> demonstrates a combination of stability and growth that differentiates crombie as in a central retail REIT.

Speaker #6: Our grocery anchored retail platform delivered a standout quarter . AFFO per unit , grew 11.1% year over year , while this quarter benefited from several high impact contributions .

Our strategy is built around three key pillars, one and operate optimize and partner, which will guide our capital allocation decisions and approach to operations I'll frame my comments today around these pillars.

Speaker #6: The outcome is rooted in the fundamentals of our business strategy , executing on strong leasing and tenant demand , disciplined capital allocation , active portfolio management and a focused operating platform .

Ari Bhattan: Good morning, Sam. It's Mark. We're feeling pretty good. If you look at our year-to-date number, we're at 3.5. We printed a 4.6, which I think is outstanding for the team, and it's showcasing the strategy and the work that the team is doing to deliver against it. We've also got a nice little tailwind in retail and sort of that demand and supply imbalance, and we're capturing the wins on that. We're disposing of non-core assets that were legacy and structurally deficient. All the pillars of our strategy are working. I would say if you close out 2025, I would look at where we are year-to-date in 2023 as a good indicator of how we see the year ending out. In terms of 2026, we have an internal target for ourselves, which is in that 2% to 3% range.

First let's discuss owned and operate our grocery anchored retail portfolio remains the foundation of our success our ability to consistently attract both established and emerging tenants speaks to the strength and adaptability of our portfolio and the operational excellence of our leasing team.

Speaker #6: Results demonstrate the combination of stability and growth that differentiates Crombie as an essential retail REIT . Our strategy is built around three key pillars .

This ongoing demand from a diverse and expanding tenant base that has contributed to our fourth consecutive quarter of record occupancy.

Speaker #6: Own and operate , optimize and partner , which will guide our capital allocation decisions and approach to operations . I'll frame my comments today around these pillars .

Leasing activities results were strong in the third quarter with the renewal spreads increasing by 13, 5% over expiring leases on a weighted renewal term average basis.

Speaker #6: First , let's discuss , own and operate our grocery anchored retail portfolio remains the foundation of our success . Our ability to consistently attract both established and emerging tenants speaks to the strength and adaptability of our portfolio and the operational excellence of our leasing team .

Combined with embedded rent step ups, new leasing activities and another quarter of record occupancy same asset property cash NOI grew by four 6% in the quarter with a year to date now at three 5%. This is above the upper end of our annual average target range used by management.

Ari Bhattan: We see ourselves being on the high side of that for next year.

Speaker #6: It's this ongoing demand from a diverse and expanding tenant base that has contributed to our fourth consecutive quarter of record occupancy , leasing activities .

Sam Damiani: That's great. Helpful. Just on the milestone, that it does reach completion next year and hopefully stabilization quickly thereafter, does Crombie have the appetite to start a new residential development in the near term after that?

As we've noted in the past portfolio management remains an integral part of the own and operate pillar, we take a disciplined approach to capital allocation continuously evaluating opportunities to acquire properties that enhance our portfolio over the first nine months of the year. We've been very active in this area, adding four new grocery properties to the portfolio.

Speaker #6: Results were strong in the third quarter , with the spreads increasing by 13.5% over expiring leases on a weighted renewal term . Average basis .

Speaker #6: Combined with embedded rent step ups , new leasing activities and another quarter of record occupancy . Same asset property , cash NOI grew by 4.6% in the quarter with a year to date now at 3.5% .

Ari Bhattan: We definitely take a long-term view in mind, and we definitely look at it through a lens of partnerships. We have two active ones on the go. As Marlestone gets stabilized, we have two others in that market, which are Barrington and Brunswick, and we have a partnership there with Montez. We are actively working against it. If the window is right and the underwriting is sound as we look at the longer term, we will look at greenlighting projects. We look at it as a whole investment of allocation of capital, near-term versus long-term. Today, we've been more focused on non-major investments, and that is really driving same asset and really driving FFO growth. We also look at major.

Divesting of two non core locations, we will continue to pursue opportunities that align our strategy and offer compelling long term returns for our unit holders.

Speaker #6: This is above the upper end of our annual average target range used by management . As we've noted in the past , portfolio management remains an integral part of the own and operate pillar .

Our most recent addition to the portfolio was subsequent to the quarter, where we closed an acquisition of a three six acre property at <unk> and the Queensway and Toronto Western from our strategic partner Empire.

Speaker #6: We take a disciplined approach to capital allocation , continuously evaluating opportunities to acquire properties that enhance our portfolio . Over the first nine months of the year , we've been very active in this area , adding four new grocery properties to the portfolio and divesting of two non-core locations .

Total consideration was $20 5 million, excluding closing and transaction costs.

This is a newly constructed logos anchored retail property, which includes two freestanding banks totaling approximately 51000 square feet of gross leasable area.

Speaker #6: We will continue to pursue opportunities that align our strategy and offer compelling long term returns for our unitholders , our most recent addition to the portfolio was subsequent to the quarter , where we closed an acquisition of a 3.6 acre property at Islington in the Queensway in Toronto's west end .

Ari Bhattan: Today, major is all about entitlements so that we have the flexibility, as you called out, Sam, when the window opens, we can take advantage of it.

The loan goes as expected to open in the fourth quarter with the two banks slated to open in early 2026 as they currently finish off their leasehold improvements.

Sam Damiani: Okay. I appreciate that. Last question for me. Just on the Queensway acquisition, well, I guess development, really. I mean, that site, I think it's been somewhat dormant for quite a few years, and all of a sudden, obviously, it got activated within the last year. I guess what prompted the sort of greenlight for that project after whatever it might have been a decade that it was kind of just sitting there?

Turning to our second strategic pillar optimize we continue to unlock embedded value within our portfolio with a primary focus on non major development projects and advancing entitlements within our major development later.

Speaker #6: From our strategic partner empire , total consideration was $28.5 million , excluding closing and transaction costs . This is a newly constructed longo's anchored retail property which includes two freestanding banks totaling approximately 51,000ft² of gross leasable area .

At the end of the quarter, we had completed 50 property Modernizations with Empire and advanced for land use intensification properties that will add 87000 square feet of total GLA upon completion. These.

Ari Bhattan: Yeah. It used to be an active warehouse at one point in time for Empire. Over time, it got subdivided into two parcels, front end and back end. There's a lot of dialogue on highest and best use. At the end of the day, grocery anchored in that pocket is the highest and best use. There was underwriting done, and market conditions were right. As you've probably read, most grocers are in expansion mode, and they're capturing a little pocket of the market that they can drive value for. We're really happy to greenlight it with them.

Speaker #6: The Longo's is expected to open in the fourth quarter , with the two banks slated to open in early 2026 , as they currently finish off their leasehold improvements .

These non major investments have a yield on cost of 6% to 7%.

Speaker #6: Turning to our second strategic pillar optimize . We continue to unlock embedded value within our portfolio with a primary focus on non-major development projects and advancing entitlements within our major development ladder .

With respect to our major development program. We currently have only one project the milestone in Halifax under construction, which continues to track on schedule and on budget with occupancy targeted for spring 2026.

Speaker #6: At the end of the quarter , we had completed 50 property modernizations with Empire in advance for land use intensification properties that will add 87,000ft² of total GLA upon completion .

We began pre lease marketing during the third quarter and the early response has been very positive and in line with our expectations.

Across the rest of our major development pipeline, we continue to advance entitlements in a very deliberate manner. This focus ensures that we maintain flexibility and timing and scale, while preserving optionality at market conditions evolve.

Speaker #6: These non-major investments have a yield on costs of 6 to 7% , with respect to our major development program . We currently have only one project the Marlstone in Halifax , under construction , which continues to track on schedule and on budget with occupancy targeted for spring 2026 .

Sam Damiani: Okay. That's helpful. Thank you very much, I'll turn it back.

Operator: Your next question comes from the line of Giuliano Cornhill with National Bank Financial. Please go ahead.

Giuliano Cornhill: Hey, guys. Good morning. Just wondering on the retail occupancy and touching kind of an all-time high. I'm just wondering where the gains were located. It was mostly in your enclosed mall portfolio. Really, how sustainable do you think this is?

This patient disciplined approach enables us to build a pipeline of entitled sites that can create sustainable value for unit holders over a multi year time horizon.

Speaker #6: We began Pre-lease marketing during the third quarter and the early response has been very positive and in line with our expectations across the rest of our major development pipeline .

And our last value creation pillar partnership.

Our programmatic partnerships in Vancouver, and Halifax continued to deliver contributions in the third quarter. These.

Ari Bhattan: Good morning. Occupancy levels are very healthy where we are right now. We've always said that 97% is probably top end of the range, and we've passed that now. Very happy with our results. We're still seeing additional interest in not just enclosed. Our enclosed mall in St. John's is performing exceptionally well, but really, the inbounds are coming primarily in our open-air portfolio. Again, we're near full there, so we're looking to see how we can accommodate them, shuffling some tenants around, trying to accommodate expansion plans, as well as, like I said earlier, add some intensification through the addition of pads as well. I would say it's quite well-rounded in the retail sector.

Speaker #6: We continue to advance entitlements in a very deliberate manner . This focus ensures that we maintain flexibility in timing and scale while preserving optionality at market conditions .

These two partnerships generate almost half of the total $4 $4 million in fee revenue, we recognized during Q3 as.

As we noted last quarter, we expect contributions from these partnerships to be consistent each quarter as these multi year entitlement projects advance, providing a steady baseline income stream and strategic flexibility in our development pipeline.

Speaker #6: Evolve . This patient , disciplined approach enables us to build a pipeline of entitled sites that can create sustainable value for unitholders over a multi time horizon .

Speaker #6: And our last value creation pillar partnerships . Our programmatic partnerships in Vancouver and Halifax continue to deliver contributions in the third quarter . These two partnerships generate almost half of the total $4.4 million in fee revenue .

We also further strengthened our foundational partnership with Empire investing $18 4 million in the quarter in store expansions and modernizations, bringing our year to date total investment to nearly $30 million.

Speaker #6: We recognized during Q3 . As we noted last quarter , we expect contributions from these partnerships to be consistent each quarter as these multiyear entitlement projects advance , providing a steady baseline income stream and strategic flexibility in our development pipeline .

These collaborative investments enhance our properties, while supporting Empire store modernization program, resulting in increased rental revenue for crombie and improve store quality for Empire. It's a relationship that continues to drive value for both organizations and reinforces the strength of our portfolio.

Mark Helman: What's kind of the opportunity there on the on-pad intensification?

Ari Bhattan: We've got over two dozen properties in our portfolio that are identified for intensification. Those are in various stages of development. Some are more near-term, some are longer-term. Some require municipal approvals and entitlements, some require lease controls to be worked out with tenants, and we work on those as we go through our renewal process. They're all at various stages, but there are quite a number of opportunities in front of us, and a lot of tenant demand for those opportunities.

Overall crombie is delivering a combination of stability and consistent growth are grocery anchored platform provides reliable recurring cash flow are optimized initiatives in particular non major projects drive organic growth and our partner approach enables us to give unit holders access to the value accretion of larger long term opportunities while maintaining.

Speaker #6: We also further strengthen our foundational partnership with Empire investing . $18.4 million in the quarter in store expansions and modernizations , bringing our year to date total investment to nearly $30 million .

Speaker #6: These collaborative investments enhance our properties while supporting Empire Store Modernization program , resulting in increased rental revenue for Crombie and improved store quality for Empire .

<unk> efficiency and balance sheet flexibility.

Speaker #6: It's a relationship that continues to drive value for both organizations and reinforces the strength of our portfolio . Overall , Crombie is delivering a combination of stability and consistent growth .

With that I'll turn the call over to Carol to review our financial results in more detail.

Thank you Mac, our third quarter financial results reinforce the strength of our platform and our disciplined approach to capital allocation funds.

Mark Helman: There's a pretty large uptick in the new modernization projects. I'm just wondering where are these mostly located, within your portfolios in the west or east?

Speaker #6: Our grocery anchored platform provides reliable , recurring cash flow . Our optimized initiatives in particular a non-major projects drive organic growth , and our partner approach enables us to give unitholders access to the value accretion of larger , long term opportunities while maintaining efficiency and balance sheet flexibility .

Funds from operations for the quarter totaled $61 9 million or <unk> 33 per unit up six 5% year over year.

Ari Bhattan: They're coast to coast, which we always are very proud of and tout, being a coast to coast REIT because they're basically right at the heart of the communities where the people are. There's no one concentration market or province. It is really coast to coast.

<unk> was 55 million or <unk> 30 per unit up 11, 1% year over year.

Speaker #6: With that , I'll turn the call over to Cara to review our financial results in more detail .

This growth reflects our strong same asset NOI performance.

Speaker #7: Thank you . Mark . Our third quarter financial results reinforce the strength of our platform and our disciplined approach to capital allocation . Funds from operations for the quarter totaled $61.9 million , or $0.33 per unit , up 6.5% year over year .

Attribute <unk> from acquisitions and development completions and higher fee income from our partnership partly offset by increased interest expense.

Mark Helman: Would you say it's fair that this is kind of in response to more competitive pressures with more grocers looking to kind of expand their footprint, just kind of revitalizing your properties?

Let's break down the <unk> performance, starting with our revenue drivers.

Property revenue in the quarter was $120 1 million up four 9% from the prior year driven by three primary factors.

Ari Bhattan: We've had our program in place, at least our investment portion of modernization, for many, many years. This is not a new program that we've had. We've had it in place and running for six, seven years now.

Speaker #7: AFO was $55 million , or $0.30 per unit , up 11.1% year over year . This growth reflects our strong same asset , NOI performance contributions from acquisitions and development , completions and higher fee income from our partnerships .

Asset NOI growth, which included several favorable leases and amendments in the quarter contributions from acquisitions as well as completed development projects.

Mark Helman: Okay. Thanks.

Operator: Your next question comes from the line of Mario Saric from Scotiabank. Please go ahead.

Speaker #7: Partly offset by increased interest expense . Let's break down that AFO performance , starting with our revenue drivers . Property revenue in the quarter was $120.1 million , up 4.9% from the prior year , driven by three primary factors same asset , NY growth , which included several favorable leases and amendments in the quarter .

Management and development fee revenue grew significantly compared to the third quarter of 2024, delivering $4 4 million up from $1 1 million last year.

Mario Saric: Hi. Good morning. Maybe an out-of-the-box question for Ari, your comment on the ICSE meetings being pretty significant, 100 meetings plus. I'm just curious, what would that have been like last year?

We also recognized $2 1 million in deferred revenue that was flagged last quarter.

Our team continues to execute a disciplined capital allocation strategy concentrating our investments and assets that best support Crombie from Stephanie based portfolio and long term growth objectives.

Ari Bhattan: I would say it was around 75 last year. I've been here now seven years, my fifth ICSE, given COVID, and this is by far the most attended meeting, the highest meeting attendance we've had in my tenure here.

Speaker #7: Contributions from acquisitions , as well as completed development projects , management and development fee revenue grew significantly compared to the third quarter of 2020 .

As part of this approach we have actively identified non core properties, particularly those in regional markets with persistently lower occupancy and divested them to enable redeployment of capital into higher return opportunities.

Speaker #7: For delivering $4.4 million , up from $1.1 million last year . We also recognized 2.1 million in deferred revenue . That was flagged last quarter .

Mario Saric: Would it be your sense that that was the case for the industry overall? I think, Mark, you've mentioned coast to coast a couple of times, which I think is maybe underappreciated with the portfolio. Is the coast to coast nature of the portfolio now seeing strategic benefit in terms of tenant discussions?

This ongoing focus enhances our operating metrics drives consistent cash flow growth for unit holders and insurers crombie remains well positioned for sustainable value creation.

Speaker #7: Our team continues to execute a disciplined capital allocation strategy , concentrating our investments in assets that best support Crombie necessity based portfolio and long term growth objectives .

We continue to have a strong pipeline of opportunities that align with our core necessity based strategy and we're executing against it.

Speaker #7: As part of this approach, we have actively identified non-core properties, particularly those in regional markets, with persistently lower occupancy and divested them to enable redeployment of capital into higher return opportunities.

Ari Bhattan: It is. The tenants that we're talking to, by and large, are nationals, and their opportunities in Vectron Markets and other urban areas seem to be pretty tapped out. In some cases, for us, really, we're able to add to their store network plan. We have quite a few tenants throughout that are looking to add significant store counts to their portfolio, and they're just not able to do that predominantly in the major markets. We're able to accommodate them throughout. It also helps them as well with their store growth, and we're able to do it in some municipalities that have shorter timelines in order to complete them. I think that is another big benefit for them into why they're looking at our portfolio.

Subsequent to quarter end, we acquired the Queensland property in Toronto, as Mark mentioned for approximately $28 $5 million.

This newly constructed grocery anchored assets and a strong urban market represents the type of disciplined capital deployment that supports our growth while maintaining balance sheet strength.

Speaker #7: This ongoing focus enhances our operating metrics , drives consistent cash flow growth for unitholders , and ensures Crombie remains well positioned for sustainable value creation .

On the expense side property operating costs were $40 $6 million up modestly from the third quarter last year, well controls and in line with expectations.

Speaker #7: We continue to have a strong pipeline of opportunities that align with our core necessity based strategy , and we're executing against it . Subsequent to quarter end , we acquired the Queensway property in Toronto .

Net property income margin remained healthy at 66, 2%.

Speaker #7: As Mark mentioned for approximately $28.5 million , this newly constructed grocery anchored asset in a strong urban market represents the type of disciplined capital deployment that supports our growth .

General and administrative expenses were $6 5 million or five 2% of total revenue, including revenue from management and development services.

Mario Saric: With occupancy relatively full, there isn't much space for them outside of, I guess, we talked about some potential pad additions. How do the market rents and, let's say, some of the secondary markets look relative to required development yields in order to satisfy that demand?

Speaker #7: While maintaining balance sheet strength . On the expense side , property operating costs were $40.6 million . Up modestly from the third quarter last year , but well controlled .

Staying for unit based compensation G&A was four 2% of revenue.

Looking at interest expense finance costs were $24 4 million for the third quarter up $1 7 million from $22 $7 million last year.

Speaker #7: And in line with expectations . Net property income margin remained healthy at 66.2% . General and administrative expenses were $6.5 million , or 5.2% of total revenue , including revenue from management and development services .

Ari Bhattan: Our experience over the last 18 to 24 months is we're pushing renewal rates. We're pushing new store rents that are similar in the geographies where we're operating. I wouldn't say that it's that drastic of a spread between. Obviously, mixed use are quite a bit different, but there's not much. You can see that show up in our numbers when you take a look at the renewal rates that we're pushing out from a geographic basis.

This increase was primarily due to the full quarter impact of the $300 million of unsecured notes, we issued late 2024.

Our debt metrics remain solid.

Speaker #7: Adjusting for unit based compensation , G&A was 4.2% of revenue . Looking at interest expense , finance costs were $24.4 million for the third quarter , up $1.7 million from $22.7 million last year .

Debt to gross fair value is 41, 9% and debt to EBITDA is approximately seven seven times.

Our debt positioning is well suited to <unk> business model. Our income stream is exceptionally stable anchored by long term leases with necessity based retailers, which gives us great cash flow visibility.

Mario Saric: Okay. When we look out into 2026 or maybe even 2027, in 2026, you have about 5% that are at least maturing. In 2027, closer to 7%. They're not big numbers relative to peers, but just curious whether, over the next couple of years, are there any known vacancies that you're aware of, any unusual opportunities to really boost rent on low in-place expiring rent? Just anything out of the ordinary that you'd like to highlight?

Speaker #7: This increase is primarily due to the full quarter impact of the $300 million of unsecured notes we issued late 2020 for our debt .

With over 97% of our total debt at fixed rate, we're largely insulated from interest rate volatility.

Speaker #7: Metrics remain solid debt to gross fair value is 41.9% , and death to EBITDA is approximately 7.7 times our debt . Positioning is well suited to Crombie's business model .

This stability enables us to be very comfortable with our current leverage while maintaining financial flexibility.

We ended the third quarter with approximately $676 million in liquidity between Undrawn credit facilities and cash our fair value of unencumbered asset pool is over $3 8 billion.

Speaker #7: Our income stream is exceptionally stable , anchored by long term leases with necessity based retailers , which gives us great cash flow , visibility with over 97% of our total debt at fixed rate , we're largely insulated from interest rate volatility .

Ari Bhattan: No, Mario. I'd say that next year is a fairly typical renewal year for us. In some ways, it's looking fairly optimistically in the sense that we don't have a lot of office next year. We don't have a lot of fixed-rate renewals next year. I would say that's why all indicators are that the current glide path we're on is one that we expect to maintain in the short term. Looking into 2027, it is a little bit larger than 2026, but again, we will start chipping away at some of those renewals into 2027. To the extent that we have any concerns, we're not airing any of those now. We're working with tenants. I would say that we're continually updating the watch list. There's nothing that strikes out right now in terms of the 2026 or 2027 expiry that we're currently significantly concerned about.

We've deliberately positioned our debt profile for flexibility.

Secured debt represents 61% of our total debt with a weighted average term of four three years for our fixed rate debt.

Speaker #7: This stability enables us to be very comfortable with our current leverage , while maintaining financial flexibility . We ended the third quarter with approximately $676 million in liquidity between undrawn credit facilities and cash .

We have no significant maturities until 2026 and those are well staggered.

Our payout ratios for the third quarter were 67, 3% of SSL and 75, 8% of <unk>.

Speaker #7: Our fair value of unencumbered asset pool is over $3.8 billion . We've deliberately positioned our debt profile for flexibility , unsecured debt represents 61% of our total debt , with a weighted average term of 4.3 years for our fixed rate debt .

After many years of holding the distribution flat, while we reinvested in growth we increased our annual distribution by one per unit last quarter.

Even post increase our payout ratio remains very conservative.

Same asset cash NOI grew four 6% in the third quarter and three 5% year to date, reflecting strong leasing fundamentals and occupancy gains across the portfolio.

Speaker #7: We have no significant maturities until 2026 , and those are well staggered . Our payout ratios for the third quarter were 67.3% of FFO , and 75.8% of AFO .

Mario Saric: Okay. Just last one for me, just on Broadway and commercial, any updated thoughts on timing on full entitlement enactment, and what may happen at that property going forward?

Looking ahead, we continue to see our 2% to 3% long term annual average target range as the appropriate framework for our same asset NOI business planning.

Speaker #7: After many years of holding the distribution flat , while we reinvested in growth , we increased our annual distribution by $0.01 per unit last quarter .

To summarize the third quarter was yet another quarter of steady dependable performance with Ravi, we're hitting our strategic targets producing consistent financial results and managing our balance sheet to support both stability and measured growth.

Ari Bhattan: Hey, Mario. It's Mark. We're looking Q1, Q2 for full enactment. We're working with municipalities, refining it, and getting it through. Q1, Q2 is our best estimate at this point in time. On the go-forward, it's looking at the window in terms of how the underwriting looks and the role that we'll want to play as we look at the underwriting. The Vancouver market is soft. As we look at the underwriting, we have to make sure that it works for us and our partner. More to come on that in 2026, but again, the first step is to get enacted.

Speaker #7: Even post increase , our payout ratio remained very conservative . Same asset cash NOI grew 4.6% in the third quarter and 3.5% year to date , reflecting strong leasing fundamentals and occupancy gains across the portfolio .

With that I'll turn it back to Mark for some closing remarks.

Speaker #7: Looking ahead , we continue to see our 2 to 3% long term annual average target range as the appropriate framework for our same asset .

Thank you Kara before we open up to questions I want to emphasize that it is the disciplined execution of our strategy and the crombie team that is driving performance. We're focused on owning a central real estate at the heart of communities, managing our assets and capital with discipline and investing and <unk>.

Speaker #7: NOI business planning . To summarize , the third quarter was yet another quarter of steady , dependable performance for Crombie . We're hitting our strategic targets , producing consistent financial results and managing our balance sheet to support both stability and measured growth .

Partnering strategically for growth, we are delivering consistent performance, while building a stronger more flexible platform for the long term. We thank you for your time and with that we're happy to take your questions.

Mario Saric: Okay. That's it for me. Thank you.

Operator: Your next question comes from the line of Sal Woolley from CIBC Capital Markets. Please go ahead.

Speaker #7: With that , I'll turn it back to Mark for some closing remarks .

Sal Woolley: Hey, good morning. I had to step off the call for a brief second, so I apologize if some of this stuff's been answered. Just let me know if it has. First of all, we got a new CEO at Empire yesterday. Just wondering if that would presage any board changes or anything at Crombie. Maybe you can speak a little bit about your relationship with Pierre and any changes that may portend for Empire's strategy.

Speaker #6: Thank you . Cara . Before we open up to questions , I want to emphasize that it is the disciplined execution of our strategy and the Crombie team that is driving performance .

Thank you ladies and gentlemen, we will now begin the question and answer session. As a reminder, in order to ask a question. Please press star followed by the number one on your telephone keypad and if you would like to withdraw your question simply if revpar. When again, we will pause for a moment to compile the Q&A roster.

Speaker #6: We're focused on owning a central real estate at the heart of communities , managing our assets and capital with discipline and investing and partnering strategically for growth .

Speaker #6: We're delivering consistent performance while building a stronger , more flexible platform for the long term . We thank you for your time . And with that , we're happy to take your questions .

Our first question comes from the line of Florida, Kalmar with Desjardins. Please go ahead.

Thanks, Good morning, everyone.

Ari Bhattan: Morning, Sal. Yeah, I'm really happy that you asked the question. I personally want to congratulate the rest of the Crombie team, management team, and the board. I'd also congratulate Pierre St. Laurent on his recent appointment. I think it's excellent for Empire. Pierre is a 35-year vet of Empire and has been overseeing most divisions of that organization over his 35 years. I think it's a great person to come in after Michael Medline, who I also want to congratulate and acknowledge, who's been there for nine years, ran through three strategies, and is leaving the company in a great spot from where it started when he joined in 2017. I'm confident Pierre is going to take it and even go higher. We're really thrilled. We have great relationships with Empire. They are our strategic partner, and we see that continuing going forward.

Just on the <unk> property you guys bought.

Speaker #4: Thank you . Ladies and gentlemen , we will now begin the question and answer session . As a reminder , in order to ask a question , please press star followed by the number one on your telephone keypad .

In October just wondering what percentage leased as this and can you give us a rough idea of the stabilized cap rate on the deal.

Speaker #4: And if you would like to withdraw your question, simply press star one. Again, we will pause for a moment to compile the Q&A roster.

Good morning Lauren.

Yeah, we're pretty proud that we're able to acquire that it is 100% leased so it is the long growth in the two freestanding bank pads.

Speaker #4: Thank you . Our first question comes from the line of Lauren Kalmar with Desjardins . Please go ahead .

<unk>, who is going to go into operations later this quarter and the two banks, they're going to be early January February to be operating.

Speaker #8: Thanks . Good morning everyone . Just on the Etobicoke property . You guys bought in October . Just was wondering what percentage leased is this ?

In terms of how it was structured and we felt that as the developer on behalf of Empire and that investment was about $23 $24 million and then after we completed the investment, which we were earning a fee on we then acquired the real estate the underlying real estate, which gave us the total cost of $28 million. So that number would show up in our non major development pipe.

Speaker #8: And can you give us a rough idea of a stabilized cap rate on the deal ?

Speaker #9: Good morning . Lauren . Yeah , we're pretty proud that we're able to acquire that . It is 100% leased . So it is the Longo's and the two freestanding bank pads .

Sal Woolley: Okay, I just wanted to talk about two of the larger non-retail, or sorry, non-grocery anchored retail assets in the portfolio. Just at Scotia Square, I'm wondering if you can talk a bit about the performance in the market, how you're looking at the outlook for the next couple of years with that asset.

And the M DNA, which gave us a yield on cost between six and 7%.

Speaker #9: The Longo's is going to go into operations later this quarter . And the two banks are going to be early January , February to be operating in terms of how it was structured .

If youre thinking okay.

Great perspective.

If you take a look at in the MD&A under Tom and sort of how we're trending on back at home in our asset class where in that range on a cap rate. So at the end of the day, we got a great development yield and a great cap rate.

Speaker #9: We built that as a developer on behalf of Empire , and that investment was about 23 , $24 million . And then after we completed the investment , which we were earning a fee on , we then acquired the real estate , the underlying real estate , which gave us the total cost of 28 million .

Ari Bhattan: Sure. The Halifax office market has been one of the standouts nationally, and Scotia Square is continuing to beat the market. Downtown occupancy for us is very healthy and above what we're observing from other peninsula-based offices there. The connectivity that Scotia Square offers, the Pedway access, the largest barcade in downtown Halifax, and all the other amenities it has with the food court and everything else are really contributing to this being the magnet downtown. Obviously, we're adding the Marlestone to it, but we're also adding some significant tenancies that are in our economic in some part and committed occupancy in others that are also going to be driving a lot of additional foot traffic to the shopping center. We continue to be the first call, I believe, for many tenants that are looking for office space in Halifax.

Okay, perfect and I guess that kind of lead to my next question or should we just be looking at the non major developments and see if there are any other projects like this in the pipeline that you guys could acquire in this presumably not too distant future.

Speaker #9: So that number would show up in our non-major development pipeline in the mDNA , which gave us a yield on cost between 6 and 7% .

Speaker #9: If you're thinking about it from a cap rate perspective . If you take a look at in the mDNA under rectum and sort of how we're trending on rectum and our asset class , we're in that range on a cap rate .

In the near term, yes. So we have one other project it is a greenfield in Quebec.

And we have a joint operation partner, there that we are developing it with <unk>.

Speaker #9: So at the end of the day , we got a great development yield and a great cap rate .

It will be another food store grocery anchored assets.

Just outside of Montreal.

Speaker #8: Okay . Perfect . And I guess that kind of leads to my next question . Are should we just be looking at the non-major developments to see if there are any other projects like this in the pipeline that you guys could acquire in the presumably not too distant future ?

Alright, and just to be clear you guys are developing this on behalf of Empire.

Got it okay.

Okay perfect. Thank you.

And then.

The balance sheet seems to be in good shape things are firing on all cylinders.

But you're still trading at a pretty wide discount to NAV, especially when you look at your your sponsored peers I'm. Just wondering have you guys thought about unit buybacks at all.

Speaker #9: In the near term , yes . So we have one other project . It's a greenfield in Quebec , and we have a joint operation partner there that we're developing it with .

Hi, Lauren it's Kara Ah.

Speaker #9: And it will be another food store , grocery anchored asset in just outside of Montreal .

Ari Bhattan: We're seeing that gradual recovery in office throughout, and we're pretty pleased right now with where Scotia Square sits. Obviously, we'd like to see occupancy take up a little bit more, but the team's done a fantastic job. The one thing I'll add there, Sal, is office occupancy is up almost 340 basis points year over year. Part of that is because we sold the Moncton office. We did that earlier this year, which had chronic vacancy and something that we didn't see the value for us to invest in, but somebody else to take on. Because of that transition, it's taken that distraction away, and the team is even more focused in on what we have at HDL, Scotia Square. As Ari called out, our committed occupancy is ticking up. It is the first call. It is center ice for the town.

Yeah, that's always on our radar in terms of assessing whether or something like an NCIC would be in our purview right now it doesn't make sense to us we do have a drip in place in a discount on the drip that produces solid cash flow in the form of equity for us. So we like that for right now, but it's always on our radar.

Speaker #8: Sorry . And just to be clear , you guys are developing this on behalf of Empire .

Speaker #9: You got it .

Speaker #8: Okay , perfect . Thank you . And then , you know , the balance sheet seems to be in good shape . Things are firing on all cylinders , but the .

Speaker #8: You know , you're still trading at a pretty wide discount to Nav , especially when you look at your your sponsored peers . I'm just wondering , have you guys thought about unit buybacks at all ?

Okay. Thank you very much I will turn it back.

Thanks.

Once again, if you would like to ask a question that is suppressed star one on your telephone keypad. Thank you. Our next question comes from the line of Brad Sturges with Raymond James. Please go ahead.

Speaker #10: Hi , Lauren , it's Cara . Yeah , that's always on our radar in terms of assessing whether something like an NCIB would be in our purview right now .

Hey, good morning.

Speaker #10: It doesn't make sense to us . We do have a drip in place and a discount on the drip that produces some solid cash flow in form of equity for us .

<unk>.

Maybe just on the on the development side.

Looking at our moral stone.

You know you're slated for completion mid next year, just would you be able to stay accretive doing pre leasing today and maybe.

Speaker #10: So we like that for right now . But it's always on our radar .

Ari Bhattan: It has the highest concentration of parking. It's got the Pedway system. It's got the food court. We're pretty happy with its performance. It is, in our view, from all the metrics we've seen, it outperforms all the other offices in that market.

Speaker #8: Okay . Thank you very much . I will turn it back .

Maybe just walk through where that would be.

Speaker #11: Thanks .

Speaker #4: Once again , if you would like to ask a question , that is to press Star one on your telephone keypad . Thank you .

Good morning, Brad Sorry, we started our pre leasing towards the end of October. So we have a kiosk set up that are supposed to square property adjacent to the milestone as well as the models research situated there as well so.

Speaker #4: Our next question comes from the line of Brad Sturgis with Raymond James . Please go ahead .

Sal Woolley: Okay, just wondering if you can give a brief update to you on Avalon Mall as well.

Speaker #12: Hey . Good morning . Maybe just on the on the development side . Just looking at the moral stone . I think , you know , you're slated for completion mid next year .

Ari Bhattan: Avalon Mall has been just firing on all cylinders. We're experiencing really strong traffic, double-digit traffic growth year over year. The team there has just done a tremendous job of engaging with the community to drive traffic, which is helping tenant sales. We're seeing very healthy GLA levels. Occupancy is in the mid to high 90s. It'll be near full over Christmas with temp leasing as well. The tenant demand is still there, albeit less than open air for sure. Avalon Mall, I would say, is performing very well. Like I said, tenant sales, traffic, all current metrics are pointing in the right direction for us. The other benefit is it is the only enclosed mall in Newfoundland. If you want to come to this market, you're coming to us, and the team has done an excellent job on capturing that and engaging with all the retailers.

Pre leasing I started website is up we are starting to.

Speaker #12: Just . Would you be at a stage where you're doing pre-leasing today and maybe just walk through where that would be ?

Through the initial intake of application and we're very hopeful and very enthusiastic about the response so far from the early days of our PBC program.

Speaker #13: Morning , Brad . It's Ari . We started our pre-leasing towards the end of October , so we have a kiosk set up at our Scotia Square property adjacent to the milestone , as well as the model suite that's situated there as well .

And I guess from a stabilized yield perspective, it doesn't look like.

Your estimates or your range has changed I guess.

Given where Halifax rents are trending I guess on the Newbuild side.

Speaker #13: So Pre-leasing has started . Website is up . We are starting to do the initial intake of applications and we're very hopeful and very enthusiastic about the response .

Has there been material movement, and where you expect pro forma rents to be.

No Brad so our underwriting versus what we're seeing in the market.

Speaker #13: So far . From the early days of our Pre-leasing program .

We're pretty much in line and so our yield on costs as we called out there's still a before and after 500 per cent range, we're still on budget.

Speaker #12: And I guess from a stabilized yield perspective , it doesn't look like your estimates or your range has changed . I guess given where Halifax rents are trending , I guess on the new build side , like is there been material movement in where you expect pro forma rents to be ?

With a little bit of contingency Russell might be slightly under budget. When this closes out so we're pretty happy and has already called out we started the pre leasing in tech has met our expectations, which is a positive sign Halifax as a market relative to other markets across the country at least in our view has kind of held in there much better in terms of the rental market.

Ari Bhattan: As we have turnover, we already have a roster of those that want to come in. While we might be near full, we already have backup plans to, if something goes down, we have a replacement at a higher rate.

Speaker #9: No . Brad . So our underwriting versus what we're seeing in the market , we're we're pretty much in line . And so our yield on cost , as we've called out , is still at the four and a half to 5.5% range .

Sal Woolley: You have no major anchor transitions there that you need to work on?

Yeah.

Okay.

Ari Bhattan: No.

Just last question in terms of the I know, it's a small exposure for you guys is on the residential side.

Sal Woolley: Okay. This question's come up before over the course of Crombie's history, but there at least have been some mall trades over the last couple of years. Is Avalon, you still see that as a core holding for the company going forward?

Speaker #9: We're still on budget with a little bit of contingency left . So it might be slightly under budget when this closes out . So we're pretty happy .

Vacancy ticked up just a touch just can you walk through what Youre seeing I guess within the few assets you do on our own on the on the multifamily side and sort of your expectations for NOI going forward.

Speaker #9: And there's already called out . We started the pre-leasing . The intake has met our expectations , which is a positive sign . You know Halifax has a market relative to other markets across the country , at least in our view , is kind of held in there much better in terms of the rental market .

Sure Brad.

We are.

Focusing on prioritizing occupancy right now so we did have a slight dip in this quarter.

Ari Bhattan: Our core is grocery anchored. Avalon Mall has been a nice asset for us. We made a significant investment in it in 2018-ish. Those are now performing. It's performing exceptionally well because of some of that investment. It's got great cash flow for us. It is not core to what we are, which is grocery anchored. We like the assets. As Ari talked about it, occupancy is high. We're getting the right turnover when we need the right turnover growth rate. We'll continue to manage the asset and focus on the metrics that drive that business.

That is primarily related to one property that has.

Speaker #12: Okay , just last question . In terms of the I know it's a small exposure for you guys . It's on the residential side , you know , occupancy vacancies ticked up just a touch .

Multiple expiry, so within the quarter I'm very happy with where we had our turnover ratio for that property in the quarter. So we started early.

Speaker #12: Just can you walk through what you're seeing I guess within the few assets you do own on the on the multifamily side . And sort of your expectations for going forward ?

With respect to our notices to tenants to gauge interest than we were able to really I would say manage the expiry cliff quite well notwithstanding the fact that we did see some.

Speaker #13: Sure . Brad . We are focusing on prioritizing occupancy right now . So we did have a slight dip in this quarter that is primarily related to one property that had multiple expiries within the quarter .

Some vacancy occur and.

There's not a.

Sal Woolley: I guess, longer term, I mean, it's a bit of a harder question to answer. For some of the mixed-use stuff, if we went back five years, this was one of the things that, or sorry, five-plus years, that mixed-use development was. This excess density was a big part of the story. Obviously, the environment has changed. Do you get the sense that over the next decade, that that is going to be a bigger piece of the puzzle going forward? Do you want to keep it sort of as you've structured it now, with one, maybe two on the go, a couple of entitlement partnerships? That sort of seems to be maybe the way forward as opposed to a more aggressive plan sometime in the future.

Thank you.

Expiry profile for the balance of the year. So we're hoping to see that climb back up.

Speaker #13: Very happy with where we had our turnover ratio for that property in the quarter . So we started early with respect to notices to tenants , to gauge interest , and we were able to to really I would say manage the the expiry cliff quite well , notwithstanding the fact that we did see some some vacancy occur and , you know , there's not a big expiry profile for the balance of the year .

We closed out 2025.

And all of that should translate into.

Hawaii expectations that we have the properties as a whole.

But again the focus is on delivering occupancy at this point in time, given the state of the market. We believe we've got some of the best assets situated in.

And their respective by geography, but we are seeing that softness.

So imagine soup.

Speaker #13: So we're hoping to see that climb back up we close out 2025 . And all of that should translate into the NOI expectations that we have for the properties .

I guess that sort of what you saw in Q3 that would be more just typical seasonal turnover you would expect going forward.

Speaker #13: as

<unk>.

Yeah.

Speaker #13: As a whole . But again , the focus is on delivering occupancy at this point in time , given the state of the market , we believe we've got some of the best assets situated in their respective geographies .

Sounds good I'll turn it back thank you.

Your next question comes from the line of Sam Damiani from TD Kelvin. Please go ahead.

Ari Bhattan: Yeah. If you step back and go back, I don't know, six, seven years, we had the pipeline was in around 33. Since then, we developed three, we have one under construction, we sold the rest, and we use the proceeds to help fund those investments into our grocery anchored. As we look at the platform today and going forward, we have the long term in mind. That is absolutely how we look at the business long term. Right now, we need to get these projects entitled, Sal. Once we get them entitled, we have that flexibility on what role we want to participate in. Again, it's back to sources and uses of capital, and making sure that we're driving the best returns for our unit holders. In some cases, that will be to partner and develop.

Thanks, and good morning, everyone.

And just on the the leasing spreads were quite strong this quarter I'm. Just wondering was there anything unusual that drove those sort of meaningful step up in your leasing spreads.

Speaker #13: But we are seeing that softness throughout and we're managing through it .

Speaker #12: I guess that turnover you saw in Q3 , that would be more just like typical seasonal turnover . You would expect going

Okay.

Morning, Sam I. This was a fairly typical quarter for us, albeit a little bit smaller on the square footage of size, but it is something that we've seen continually over the last four quarters. So this is our fourth quarter at double digits.

Speaker #12: forward in Q3 relative to , yeah , okay . Sounds good . I'll turn it back . Thank you .

Speaker #4: Your next question comes from the line of Sam Damiani from TD Cavan . Please go ahead .

No for us, where we're seeing that demand continue to come in we experienced that with the.

Speaker #14: Thanks and good morning everyone . And just on the leasing spreads we're quite strong this quarter . I'm just wondering was there anything unusual that drove the sort of meaningful step up in your leasing spreads ?

The recent ICSC conference that we had earlier in October we had over 100 meetings with both existing tenancies as well as new tenancies.

Ari Bhattan: In other cases, that might be to change the percentage ownership that we have. In other cases, it might be to monetize it. We do keep that flexibility open. Today, I think what we stood up is exceptional because we are the ones that are driving the entitlement value, and we're getting paid for that. When we get them entitled, then we can create the optionality to look at what we can do with them. The way that we focus on the business today is not a mandatory the shovel will go in the ground.

Speaker #13: Morning , Sam . This was a fairly typical quarter for us , albeit a little bit smaller on the square footage side , but it is something that we've seen continually over the last four quarters .

To Canada, but also to our portfolio so.

A lot of demand for open air grocery anchored shopping centers, primarily right now and they really are drawn to the fact of this.

Speaker #13: So this is our fourth quarter at double digits . You know , for us , we're we're seeing that demand continue to come in .

Access, where obviously <unk> got the best anchor on site, but also what our development team has been able to pull off with respect to delivering these ad opportunities and intensification opportunities are doing our best to value engineer. These projects then Victor and his team have done a really nice job of being able to.

Speaker #13: We experienced that with the recent ICC conference that we had earlier in October . We had over 100 meetings with both existing tenancies as well as new tenancies , both to Canada .

Sal Woolley: Got it. Okay, thanks very much, everybody.

Operator: Your next question comes from the line of Sammy Beer with RBC Capital Markets. Please go ahead.

Sammy Beer: Thanks. Good morning. Just really one question for me. The same property NOI numbers obviously look quite strong, both for the quarter and year to date. Was there much contribution from modernization investments in those figures? If so, I'm not sure if you could try to quantify that.

Speaker #13: But also to our So there's just a lot of demand for open air grocery anchored shopping centers , primarily right now . And they're really drawn to the fact of , you know , the fact that we're obviously got the best anchor on site , but also what our development team has been able to pull off with respect to delivering these had opportunities and intensification opportunities .

Again, some opportunities because.

I can tell by our arguments you were near full so we're just continually looking to optimize the portfolio.

What we're also seeing in our portfolio some of these 100 plus.

But meetings is a bit of a diversification as well in grocery anchored so we added to.

Operator: Yeah. The modernizations are contributing to our same asset NOI, especially where we're getting that, excuse me, 6% to 7% increase in opening up the lease and laying that off on top of current rental amounts. We had a bit of an uptick in the quarter of plus 30, 50 year to date. We are capitalizing on some of that income growth, and it is delivering some solid performance in our same asset NOI, as well as other new leases too.

So our occupancy this quarter a brand new state of the art 20000 square foot provincial health clinic in Nova Scotia. We also added some other service users that are traditionally.

Speaker #13: Doing our best to value engineer these projects . And , you know , Victor and his team have done a really nice job of being able to portfolio . opportunities because , I mean , I tell by our occupancy , we're near full .

Speaker #13: Doing our best to value engineer these projects . And , you know , Victor and his team have done a really nice job of being able to portfolio .

Not seeing in our portfolio. So again, that's not exactly on the renewals, but I think it speaks to the health and the vibrancy that we're seeing in our portfolio currently.

Oh, that's great color. Thank you. Thank you Ari and I just I just as you look out to 2026, how are you feeling about sort of the 2% to 3%.

Speaker #13: as well . In grocery anchors . So we added to our occupancy this quarter a brand new state of the art 20,000 square foot provincial health clinic in Nova Scotia .

Same property NOI.

NOI growth.

Sammy Beer: Sorry, Kara, just to clarify, not sure what you meant. Plus 30 and plus 50, was that sort of the year-to-date completions? I'm curious as to, of that 4.6 or the 3.5%, roughly how much of that? Is it half of that? Is it 1/3 of that? Is it 20% of those figures that came from the modernization investments?

It's just seems like Colombia has potential to tip above that 3% range I am just wondering how you how you feel about that.

Speaker #13: We also added some other service users that traditionally , you know , we're not seeing in our portfolio . So again , that's not exactly on the renewals , but I think it speaks to the health and the vibrancy that we're seeing in our portfolio currently .

Good morning, Sam It's Marc we're feeling pretty good. So if you look at our year to date number we're at three and a half we printed a $4 six which I think is outstanding for the team.

Showcasing the strategy and the work that the team is doing to deliver against it. We're also got a nice little tailwind in retail and sort of that demand and supply imbalance in recapturing.

Speaker #14: Oh that's great . Caller . Thank you . Thank you . Ari . And I just I just as you look out to 2026 how are you feeling about sort of that 2 to 3% same property or same asset .

Operator: That was project count, not percent contribution to same asset NOI. Yeah, we don't break it out that way.

The wins on that we're disposing of noncore assets that were legacy and structurally deficient deficient. So all of the all the all the pillars of our strategy are working I would say on a if you close out 2025, I would look at where we are year to date in 2023 is a good indicator of how we see the year ends.

Speaker #14: NOI growth . It's just seems like Crombie has potential to to tip above that 3% range . I'm just wondering how you how you feel about that .

Sammy Beer: Okay.

Operator: Your next question comes from the line of Mike Marquidis at BMO. Please go ahead.

Speaker #9: Good morning Sam , it's Mark . We're feeling pretty good . So if you look at our year to date number , we're at three and a half .

Mario Saric: Thanks, operator. Just following up on Sammy Beer's question, how many modernizations, how much runway is there over the next 12 to 24 months? Is this pace going to continue, or do you expect it will accelerate or slow from here?

Speaker #9: We printed a 4.6 which I think is outstanding for the team . And it's showcasing the strategy and the work that the team is doing to deliver against it .

Ending up in terms of 2026, we have an internal target for ourselves, which is in that 2% to 3% range, we see ourselves being on the high side of that for next year.

Speaker #9: We're also got a nice little tailwind in retail in sort of that demand and supply imbalance , and we're capturing the wins on that .

Ari Bhattan: We've invested approximately CAD 30 million, give or take, up and down, over the last three or four years. We're likely going to be in that same range again this year. All indications, and Empire's publicly talked about this, are that they are in a modernization rental program where they did say that they wanted to touch 25% to 30% of their locations over a three-year window, and they're still in that window. There is runway. We've been working on it with them on assets that we own, and it's been about CAD 30 million. We see that holding for the balance of this year, and we see it holding into next year as well.

Speaker #9: We're disposing of non-core assets that were , you know , legacy and structurally deficient deficient . So all the all the all the pillars of our strategy are working , I would say on a if you close out 2025 , I would look at where we are year to date in 2023 is a good indicator of how we see the year ending out in terms of 2026 .

Okay, that's great helpful.

And just on the on the milestone that you know it does reach completion next year hopefully stabilization quickly thereafter.

Crombie of your appetite to to start a new a new residential development.

In the near term basketball.

We definitely take a long term view in mind, and we definitely look at it through a lens of partnerships. We have two active ones on the go so as marlstone gets stabilized. So we have two others in that market, which was Barrington in Brunswick can we have a partnership there with monetizing so we're actively working against it and if the window.

Speaker #9: We have an internal target for ourselves , which is in that 2 to 3% range . We see ourselves being on the high side of that for next year .

Speaker #14: Okay , that's very helpful . And just on on the milestone that , you know , does reach completion next year and hopefully stabilization quickly thereafter .

Mario Saric: Okay. Great. Just on the deferred fee revenue you guys flagged last quarter, if we strip that out just for the next little while, given what's on the go, is that the decent run rate for the next several quarters here to think about?

Is right.

And the underwriting is sound as we look at the longer term.

Speaker #14: Does Crombie have the appetite to to start a new a new residential development in the near term after that ?

We'll look at green lighting projects, but we look at it as a full investment of allocation of capital.

Speaker #9: We definitely take a long term view in mind . And we definitely look at it through a lens of partnerships . We have two active ones on the go , so as milestone gets stabilized , we have two others in that market , which is Barrington and Brunswick , and we have a partnership there with Montez .

Ari Bhattan: Yeah.

Near term versus long term. So today, we are more focused on non major investments and that is really driving same asset and really driving <unk> growth, but we also look at major today major is all about entitlements. So that we have the flexibility as you called out Sam when the window opens and we can take advantage of it.

Mario Saric: Okay. Got it. Last one for me. I kind of missed the answer to Florin Kalmar's question on Queensway. Can you just remind us for, I guess, my benefit, remind me how that worked? Was that a development? I understand you guys managed it. Did you fund the development on your balance sheet, or how did that work exactly?

Speaker #9: And so we're actively working against it . And if the window is right and the underwriting is sound as we look at the longer term , we will look at green projects , but we look at it as a whole investment of allocation of capital .

Okay. That's appreciate that last question for me just on the Queens, We acquisition, while it gets development really I mean, that's I think it's been somewhat dormant for quite a few years and all of a sudden obviously got activated within the last year or so I guess, what prompted the a sort of a green light for that project after wherever it might've been a deck.

Operator: Yes, we did. We funded a portion of the pre-development costs and then bought the land from Empire. It's a total of CAD 28 million.

Speaker #9: So near term versus long term . So today we've been more focused on nonmajor investments . And that is really driving same asset and really driving FFO growth .

Mario Saric: Okay, that's great. Thanks so much.

But it was kind of just sitting there.

Speaker #9: But we also look at major . And today major is all about entitlements so that we have the flexibility . As you called out , Sam , when the window opens , we can take advantage of it .

Yes, it used to be an act of warehouse at one point in time for Empire, and then overtime they've got subdivided into two parcels our front end and back end and there's a lot of dialogue and highest and best use and at the end of the day.

Operator: At this time, we have no further questions. I would like to conclude the Q&A session and today's conference call. We would like to thank you for your participation. You may now disconnect your lines at this time. Have a pleasant day, everyone.

Speaker #14: Okay . That appreciate that last question for me , just on the Queensway acquisition . Well , I guess development really I mean , that's I think it's been somewhat dormant for quite a few years .

Grocery anchored in that pocket is going to is the highest and best use. So there was underwriting done in market conditions were right and proper.

Speaker #14: And all of a sudden obviously got activated within the last year or so . I guess what prompted the sort of greenlight of that for that project , after whatever it might have been a decade , that it was kind of just sitting there .

You read most grocers are in expansion mode and so they are capturing a little pocket of the market that they can drive value for us. So we're really happy to green light it with them.

Speaker #9: Yeah , it used to be an active warehouse . At one point in time for Empire and and then over time it got subdivided into two parcels , front end and back end .

Okay. That's helpful. Thank you very much and I'll turn it back.

Speaker #9: And there's a lot of dialogue in highest and best use . And at the end of the day , grocery anchored in that pocket is going to is the highest and best use .

Your next.

Question comes from the line of Giuliano Thornhill with National Bank Financial. Please go ahead.

Hey, guys. Good morning, I'm, just wondering on the retail occupancy touching kind of an all time high I'm just wondering.

Speaker #9: So there was underwriting done and market conditions were right . And as you probably read , most grocers are in in expansion mode .

Kind of where the you know the gains were located was mostly in your enclosed mall portfolio and really like how sustainable do you think this is.

Speaker #9: And so they're capturing a little pocket of the market that they , they can drive value for . So we're really happy to greenlight it with them okay .

Okay.

Good morning.

<unk>.

Occupancy levels are very healthy, where we are right now.

Speaker #14: That's helpful . Thank you very much . And I'll turn it back .

<unk> always said that.

Speaker #4: Your next question comes from the line of Juliano Thornhill with National Bank financial . Please go ahead .

97 is probably the top end of the range and we passed that now so very happy with.

Speaker #15: Hey guys . Good morning . Just wondering on the retail occupancy and a touching kind of an all time high . I'm just wondering kind of where the , the gains were located was mostly in your enclosed mall portfolio and really like how sustainable do you think this is ?

We're still seeing.

Additional interest and not just in closed our enclosed mall.

Johns is performing exceptionally well, but really the inbounds are coming primarily in our open air portfolio.

Speaker #13: Morning . The occupancy levels are very healthy where we are right now . You know , we've always said that 97 is probably top end of the range and we passed that now .

Again were near full there. So we're looking to see how we can accommodate them shuffling some tenants around China.

Kind of accommodate expansion plans.

As well as like I said earlier at some identification through the addition of pad as well, so I would say quite well rounded in the retail sector.

Speaker #13: So very happy with our results . We're still seeing additional interest in not just in closed enclosed mall in Saint John's is performing exceptionally well , but really the the inbounds are coming .

And what's kind of the opportunity there on the on Densification.

We've got over two dozen properties in our portfolio that are identified.

Speaker #13: Primarily in our open air portfolio . Again , we're we're near full there . So we're looking to see how we can accommodate them .

Sure intensification.

Speaker #13: Shuffling some tenants around trying to accommodate expansion plans as well as like I said earlier , add some intensification through the addition of pads as well .

They're all in various stages of development. Some are more near term some are longer term.

Some require a municipal approvals and entitlements some require lease controls to to be worked out with tenants and we work on those.

Speaker #13: So I would say it's quite well rounded in the retail sector .

We go through a renewal process, but they're all at various stages, but there are quite a number of opportunities in front of us and a lot of tenant demand for those opportunities.

Speaker #15: And what's kind of the opportunity there on the on pad intensification ?

Speaker #13: We've got over two dozen properties in our portfolio that are identified for intensification . Those are all in various stages of development . Some are more near term , some are longer term , some require municipal approvals and entitlements .

And then just a there's a pretty large uptick in the new motor and modernization projects I'm. Just wondering where are these mostly located within your portfolio is in the west or east.

The other coast to coast.

Speaker #13: Some require lease controls to to be worked out with tenants . And we work on those as we go through our renewal process .

Which as you know we always are very proud of.

Being a coast to coast right.

Speaker #13: But so they're all various stages . But there are quite a number of opportunities in front of us . And a lot of tenant demand for those opportunities .

Because they're basically right at the heart of the communities where the people are so.

Theres no one concentration market or a province that is really coast to coast.

Speaker #15: And then just there's a pretty large uptake in the new modernized modernization projects . I'm just wondering , where are these mostly located within your portfolios in the West or East .

And would you say, it's fair that this is kind of in response to like more competitive pressures with more grocery is looking to expand their footprint just kind of revitalizing your properties.

Speaker #15: ?

Speaker #9: They're coast to coast , which is , you know , we always are very proud of and tout being a coast to coast REIT .

We've had a program in place our at least our investment portion of Modernizations for many many years.

So.

Speaker #9: Because they're basically right at the heart of the communities where the people are . So there's no one concentration market or province . It is really coast to coast .

This is nothing this is not a new program that we've had we've had it in place and running for six seven years now.

Okay. Thanks.

Your next question comes from the line of Matt Hewitt Sirek from Scotiabank. Please go ahead.

Speaker #9: .

Speaker #15: And would you say it's fair that this is kind of in response to like more competitive pressures with more grocers looking to kind of expand their footprint just kind of revitalizing your properties ?

Hi, good morning, maybe.

Maybe an out of box question for all of your comments on the ICSC.

Speaker #9: We've had our program in place, at least our investment portion of modernization, for many, many years. So this is nothing.

ICSC.

Meetings being pretty significant 100 gigs plus just curious what would that been like last year.

Speaker #9: This is not a new program that we've had . We've had it in place and running for 6 or 7 years now .

Oh sure.

I'd say it was around 75 last year.

Speaker #15: Okay . Thanks .

I've been here now seven years, my fifth ICSC, given COVID-19 and this is by far the most attended.

Speaker #4: Your next question comes from the line of Mario Saric from Scotiabank . Please go ahead .

Speaker #16: Hi . Good morning . Maybe a maybe an out of question for you or your comment on the iCSC meetings being pretty 100 meetings plus .

Meeting the highest many tenants we've had in my tenure here.

Okay.

And it would it be your sense that that was the case for the industry overall or I think Mark you mentioned a coast to coast a couple of times, it's which.

Speaker #16: Just curious what would that been like last year .

Which I think is maybe underappreciated with the portfolio.

Speaker #13: I would say it was around 75 last year . So I've been here now seven years . My fifth iCSC given Covid and this is by far the most attended meeting , the highest meeting attendance we've had in my tenure here .

As the coast to coast nature of the portfolio now.

Seeing strategic benefit in terms of the discussions.

It is so the tenants that we're talking to.

By and large our nationals and.

There are opportunities and that comm market and other urban areas seems to be pretty tapped out and so in some cases, so for us really were able to add to their store network plan. So we have quite a few tenants throughout that are looking to add significant store counts to their portfolio and they're just not.

Speaker #16: And would it be your sense that that was the case for the industry overall , or . I think , Mark , you mentioned coast to Coast a couple of times .

Speaker #16: You know , is which which I think is maybe underappreciated with the portfolio is the coast to coast nature of the portfolio . Now seeing strategic benefit in terms of tenant discussions .

You have to do that predominantly in the major markets and were able to accommodate.

Speaker #13: It is so the tenants that we're talking to , by and large , are nationals and they're opportunities in markets and other urban areas , seems to be pretty tapped out .

It is down throughout it also helps them.

Well with their you know store growth and we're able to do it in some municipalities that have a shorter timelines in order to complete them. So I think that that is another big benefit for them into why theyre looking at our portfolio.

Speaker #13: So in some cases , so for us really we're able to add to their store network plans . So we have quite a few tenants throughout that are looking to add significant store counts to their portfolio , and they're just not able to do that predominantly in the major markets .

And with occupancy like relatively full there isn't much space for them outside.

So I guess.

Talked about some central cod.

Speaker #13: And we're able to accommodate them throughout . It also helps them as well with their , you know , store growth . And and we're able to do it in some municipalities that have shorter timelines in order to complete them .

Additions.

Hum.

Out of the market wants and let's say some of the secondary markets look relative to required development yields in order to satisfy that demand.

Our experience over the last 18 24 months is we're pushing renewal rates were pushing you still around that are similar in the geographies, where we're operating them. So I wouldn't say that it's that drastic of a spread between obviously mixed use are quite a bit there.

Speaker #13: So I think that that is another big benefit for them . Into why they're looking at our portfolio .

Speaker #16: And with occupancy relatively full , there isn't much space for them outside of , I guess , talked about some some potential pad .

Speaker #16: Additions . How do the how do the market rents in , let's say , some of the secondary markets look relative to required development yields in order to satisfy that demand ?

But ah theres not much and you can see that show up in our numbers. When you take a look at the renewal rates that we're pushing out or just you know from a geographic basis.

Right.

Speaker #13: Our experience over the last 18 to 24 months is we're pushing renewal rates . We're pushing new store rents that are similar in the geographies where we're operating .

Okay, and then when we look out into 'twenty, six or maybe even a 27 2006, you have like or something.

27 closer to seven so they are not big numbers.

Speaker #13: So I wouldn't say that it's that drastic of of a spread between obviously mixed use or quite a bit different , but there's not much .

Relative to peers, but just curious whether.

Over the next couple of years are there any known vacancies are true heroes.

Unusual opportunities to really boost rent on moly in place expiring rent just anything out of the ordinary that you'd like to highlight.

Speaker #13: And you can see that show up in our numbers when you take a look at the renewal rates that we're pushing out . You know , from a geographic basis .

No Mario I'd say that next year is a fairly typical renewal year for us.

Speaker #16: Okay . And then when we look out into 26 or maybe even 27 and 26 , you have 5% of your leasing maturing 27 closer to seven .

In some ways its looking fairly optimistically in the sense that we don't have a lot of office next year, we don't have a lot of fixed rate renewals next year. So.

Speaker #16: So they're not big numbers relative to peers , but just curious whether over the next couple of years , are there any known vacancies that you're aware of ?

So I would say that's why all indicators are that the current glide path. We're on is one that we expect to maintain in the short term.

Speaker #16: Any unusual opportunities to really boost rent on low in place expiring rent ? Just anything out of the ordinary that you'd like to highlight ?

Looking into 2027.

It is a little bit larger in 2026, but again, we will start chipping away at you know some.

Speaker #13: No , Mario , I say that next year is a fairly typical renewal year for us . In some ways , it's looking , you know , fairly optimistically in the sense that we don't have a lot of office next year , we don't have a lot of fixed rate renewals next year .

Some of those renewals into 2027 <unk>.

To the extent that we have any concerns.

Are any of those now we're working with tenants I would say that.

You know we're continually updating the watch list like Theres nothing that strikes that are right now in terms of the 2026 or 'twenty 'twenty seven expired that we're currently.

Speaker #13: So I would say that's why all indicators are that the current glide path we're on is one that we expect to maintain in the short term .

Significantly concerned about.

Speaker #13: Looking into 2027 , it is a little bit larger than 2026 . But again , we will start chipping away at , you know , some of those renewals into 2027 .

Okay and then just last one for me just on Broadway and commercial any updated thoughts on timing on full <unk>.

Titled document and what May happen at that property going forward.

Speaker #13: To the extent that we have any concerns , we're not airing any of those now . We're working with tenants . I would say that , you know , we're we're continually updating the watch list like there's nothing that strikes out right now in terms of the 2026 or 2027 expires .

Okay.

Hey, Miriam it's mark were.

We're looking Q1 Q2 for full enactment.

And.

Working with municipalities refining it and getting it through so Q1 Q2 is our best estimate at this point in time and on the go forward. It's looking at the window in terms of how the underwriting looks and the role that will want to play as we look at the underwriting, but the Vancouver market is soft.

Speaker #13: That we're currently, you know, significantly concerned about.

Speaker #16: Okay. And then just last one for me, just on Broadway and commercial. Any updated thoughts on timing on full entitlement enactment and what may happen at that property going forward?

And so as we look at the underwriting we have to make sure that it works for us and our partner so more to come on that in 2026.

Speaker #9: Hey Mario , it's Mark . We're we're looking Q1 Q2 for full enactment . And , you know , we're working with municipalities .

Again, the first step is to get enacted.

Okay. That's it for me thank you.

Speaker #9: You know , refining it and getting it through . So Q1 Q2 is is our , our best estimate at this point in time .

Your next question comes from the line of Sal <unk> from CIBC capital markets. Please go ahead.

Speaker #9: And on the go forward . It's looking at the window in terms of how the underwriting looks and the role that we'll want to play as we look at the underwriting .

Hey, good morning, I had to step off the call for a brief second so I apologize if some of the stuff's been answered just let me know if it has.

Speaker #9: But the Vancouver market is soft and and so as we look at the underwriting , we have to make sure that it works for us and our partner .

First of all we got a new CEO at Empire yesterday, I'm, just wondering if that.

Speaker #9: So more to come on that in 2026 . But again , the first step is to get it enacted .

Would presage any board changes or anything I Crombie, maybe you can speak a little bit about your relationship with share and.

Speaker #16: Okay. That's it for me. Thank you.

Any changes are made per ton for empire are starting to see.

Speaker #4: Your next question comes from the line of Tal Woolley from CIBC Capital Markets . Please go ahead .

Good morning House, Yeah, and so I'm really happy that you asked the question and I personally want to congratulate and the rest of the Crombie team management team. The board and it's also congratulate appear similar world on his recent appointment I think it's excellent for Empire appears a 35 year of that.

Speaker #8: Hey , good morning . I had to step off .

Speaker #17: The call for a brief second . So I apologize if some of this stuff's been answered and just let me know if it has .

Speaker #17: First of all , we got a new CEO at Empire yesterday . Just wondering if that would presage any board changes or anything at Crombie .

Empire has been overseeing most divisions of that organization over his 35 years and so I think it's a great person to come in after Michael Medline, who I also want to congratulate and acknowledge who's been there for nine years ran through three strategies and is leaving the company in a great spot from where it started in.

Speaker #17: Maybe you can speak a little bit about your relationship with Pierre and any changes that may portend for Empire strategy .

Speaker #9: Good morning Tal . Yeah , and so I'm really happy that you asked the question , and I personally want to congratulate and the rest of the Crombie team management team .

When he joined in 2017.

Speaker #9: The board has also congratulated Pierre Saint Laurent on his recent appointment . I think it's excellent for Empire . Pierre is a 35 year vet of Empire , has been overseeing most divisions of that organization over his 35 years , and so I think it's a great person to come in after Michael Medline , who I also want to congratulate and acknowledge who's been there for nine years , ran through three strategies and is leaving the company in a great spot from where it started .

Confident Pierre is going to take it and even go higher so we're really thrilled we have great relationships with Empire. They are a strategic partner and we see that continuing going forward.

Okay.

And I just wanted to talk about two of the larger non retail or sorry, non grocery anchored retail assets in our portfolio.

Just a social square I'm wondering if you can talk a bit about the performance in the market how youre looking you know.

Speaker #9: And when he joined in 2017 . And I'm confident Pierre is going to take it and even go higher . So we're really thrilled .

At the outlook for the next couple of years, but I thought.

Yeah.

Sure.

Speaker #9: We have great relationships with Empire . They are our strategic partner and we see that continuing going forward .

<unk> office market has been one of the standouts nationally and Gaucher square is continuing to beat the market downtown occupancy for us.

Speaker #8: Okay .

Speaker #17: And I just wanted to talk about two of the larger non-retail or sorry non grocery anchored retail assets in the portfolio just at Scotia Square .

<unk> is a very healthy and above what we're observing from other peninsula faced our offices there. So the connectivity that Scotia square offer as the pedway access the largest market in downtown of Halifax, and all the other than that it has with the food court and everything else.

Speaker #17: I'm wondering if you can talk a bit about , you know , the performance in the market , how you're looking . You know , the outlook for the next couple of years with that asset .

Speaker #13: Sure . The Halifax office market has been one of the standouts nationally , and Scotia Square is continuing to beat the market . Downtown occupancy for us is very healthy and above what we're observing from other Peninsula based offices there .

Contributing to this being the magnet downtown obviously, we're adding a milestone to it but we're also adding some significant tenancies that are in our economic and some part in committed occupancy and others that are also going to be driving a lot of.

Speaker #13: So the the connectivity that Scotia Square offers , the Pedway access , the largest parkade in downtown Halifax and all the other amenities .

Additional foot traffic to the shopping center.

We continue to be the first call I believe for many tenants that are looking for office space in Halifax, So where we're seeing that gradual recovery in office throughout and we're pretty pleased right now with where our gross square sits obviously, we'd like to see occupancy tick up a little bit more.

Speaker #13: It has with the food court and everything else are really contributing to to this being , you know , the magnet downtown . Obviously , we're adding the milestone to it , but we're also adding some significant tenancies that are in our economic in some part .

The team has done a fantastic job. The one thing I'll add there tell us office occupancy is up almost 340 basis points year over year.

Speaker #13: And committed occupancy and others that are also going to be driving a lot of additional foot traffic to the shopping center . And , you know , we continue to be the first call , I believe , for many tenants that are looking for office space in Halifax .

Part of that is because we sold the Moncton office, we did that earlier this year, which had chronic vacancy and something that we didn't see the value for us to invest in but somebody else to take on and because of that transition. It's taken that distraction away and the team is even more focused in on what we have at HDL Scotia square and has already called out with or is that committed occupancy.

Speaker #13: So we're we're seeing that gradual recovery in office throughout . And we're pretty pleased right now with where Scotia Square sits . Obviously , we'd like to see occupancy tick up a little bit more , but the team has done a fantastic job .

<unk> is picking up and it is the first call it as sunrise for the town as it has.

Speaker #9: The one thing I'll add there , Tal , is office occupancy is up almost 340 basis points year over year , and part of that is because we we sold the Moncton office .

The highest concentration of parking its got the pedway system. It's got the food court. So we're.

Really happy with its performance and it is in our view from all the metrics we've seen it outperforms all the other offices in that market.

Speaker #9: We did that earlier this year, which had chronic vacancy and something that we didn't see. The value for us to invest in.

Speaker #9: But somebody else to take on. And because of that transition, it's taken that distraction away. And the team is even more focused in on what we have at HDL.

Okay.

And then just wondering if you can give a brief update you on Avalon mall as well.

Speaker #9: Scotia Square . And as Ari called out , we've that committed occupancy is ticking up and it is the first call . It is center ice for the town .

Yeah.

I have one mall has been.

Just a fire on all cylinders, we were experiencing really strong traffic double digit traffic growth year over year.

Speaker #9: It has the highest concentration of parking . It's got the pedway system . It's got the the food court . So pretty happy with its performance .

The team there has just done a tremendous job of engaging with the community to drive traffic, which is helping tenant sales are.

Speaker #9: And it is , in our view , from all the metrics we've seen , it outperforms all the other offices in that market .

We're seeing very healthy crack levels occupancy is in the mid to high 90, it'll be near full over Christmas with hemp leasing as well.

Speaker #17: Okay . And then just wondering if you can give a brief update to on Avalon Mall as well .

So the.

Speaker #13: Avalon mall has been just fire on all cylinders . We were experiencing really strong traffic , double digit traffic growth year over year .

The tenant demand is still there, albeit less 10 are open air for sure.

But Avalon mall I would say is performing very well like I said tenant sales and traffic.

Speaker #13: The team there has just done a tremendous job of engaging with the community to drive traffic , which is helping tenant sales . We're seeing very healthy groc levels .

All current metrics are pointing in the right direction for us.

The other benefit is it is the only in closed mall in Newfoundland. So if you want to come to this market who are coming to us and the team has done an excellent job on capturing that and engaging with all the retailers and so as we have turnover, we already have a roster or for those that want to come in while we might be near full we already have backup plans to if something goes.

Speaker #13: Occupancy is in the mid to high 90s. It'll be near full over Christmas with temp leasing as well. So, the tenant demand is still there, albeit less than open air, for sure.

Speaker #13: But Avalon Mall , I would say is performing very well . Like I said , tenant sales traffic , all current metrics are pointing the right direction for us .

Down and we have a replacement at a higher rate.

And you have no major anchor transitions or that you need to work on.

No.

Okay.

Speaker #9: The other benefit is is the only enclosed mall in Newfoundland . So if you want to come to this market , you're coming to us .

And then.

This question has come up and you know like before over the course of Columbia's history, but.

Speaker #9: And the team has done an excellent job on capturing that . And engaging with all the retailers . And so as as we have turnover , we already have a roster of those that want to come in .

Or at least have been some mall trades over the last couple of years like is Avalon you know you still see that as a core holding for the company going forward.

Speaker #9: While we might be near full , we already have backup plans to if something goes down , we have a replacement at a higher rate .

Our core is grocery anchored.

I want them all has been a nice asset for us and we've made a significant investment in it in 2018 ish. Those are now performed it's performing exceptionally well because some of that investment it's got great cash flow for us.

Speaker #17: And you have no major anchor transitions there that you need to work on .

Speaker #13: No .

Speaker #17: Okay . And then you know , this question has come up . You know , like before , over the course of Crombie history .

Speaker #17: But , you know , there at least has been some mall trades over the last couple years , like is Avalon , you know , you still see that as a core holding for the company going forward .

But it is not core to what we are which is grocery anchored them, but we like the asset has already talked about it occupancies hot where getting the right turnover when we need the right hurdle for growth rate.

Speaker #9: Our core is grocery anchored . Avalon mall has been a nice asset for us . We made a significant investment in it in 2018 .

So we'll continue to manage the asset and I'm focusing on the metrics that drive that business.

And then.

Speaker #9: Ish . Those are now performing . It's performing exceptionally well because of some of that investment . It's got great cash flow for us , but it is not core to what we are , which is grocery anchored .

I guess like longer term I mean, it's a bit of a harder question to answer but.

Like.

Your.

For some of the mixed use stuff like we went back five years like this one you know one of the things that you know or sorry, five plus years, a mixed use development was.

Speaker #9: But we like the asset . As Ari talked about it , occupancy is high . We're getting the right turnover when we need the right turnover .

This excess density was you know a big part of the story, obviously the environment has changed.

Speaker #9: Growth rate. So we'll continue to manage the asset and focus on the metrics that drive that business.

Do you get the sense that like over the next decade, but that is going to be a bigger piece of the puzzle going forward or do you want to keep it sort of is you've structured it now.

Speaker #17: And then I guess like longer term , I mean it's a bit of a harder question to answer . But like your for some of the mixed use stuff , like we went back five years like this was , you know , one of the things that , you know or sorry , five plus years that , you know , mixed use development was the excess density was , you know , a big part of the story .

With.

One maybe two on the go a couple of entitlement partnerships that sort of seems to be maybe the way forward as opposed to a more aggressive plan sometime in the future.

Yeah, if you step back and.

Speaker #17: Obviously , the environment has changed . Do you get the sense that , like , over the next decade , that that is going to be a bigger piece of the puzzle going forward ?

Go back six seven years, we had the pipeline was at around 33 and.

Since then we developed a three we have one under construction and we sold the rest and we use the proceeds to help fund that.

Speaker #17: Or do you want to keep it sort of as you've structured it now with , you know , one , maybe two on the go , a couple of entitlement partnerships that sort of seems to be maybe the way forward as opposed to a more aggressive plan sometime in the future .

Investments into our grocery anchored.

As we look at the platform today and going forward, we have the long term in mind so.

That is absolutely how we look at the business long term.

And right now we need to get these projects entitled to now and then once we get them entitled we have that flexibility over what role we want to participate and again, it's back to sources and uses of capital and making sure that were driving the best returns for our unit holders in some cases that will be to partner and develop in other cases that might be changed the percentage ownership that we have in other cases, it might be to monetize it.

Speaker #9: Yeah . If you step back and go back , you know , six , seven years , we had the pipeline was in around 33 .

Speaker #9: And since then we developed three . We have one under construction . We sold the rest and we used the proceeds to help fund those investments .

Speaker #9: Plus into our grocery-anchored properties. As we look at the platform today and going forward, we have the long term in mind.

But we do keep that flexibility open and today I think what we stood up is exceptional because we are the ones that are driving the entitlement value and we're getting paid for that and when we get them entitled and then we can create the optionality to look at what we can do with them. So.

Speaker #9: So that is absolutely how we look at the business long term . And right now we need to get these projects entitled . And then once we get them entitled , we have that flexibility on what role we want to participate in .

The way that we focus on the business today is not a mandatory the shovel will go in the ground.

Speaker #9: Again , it's back to sources and uses of capital and making sure that we're driving the best returns for our unitholders and in some cases , that will be to partner and develop in other cases , that might be change .

Got it okay. Thanks, very much everybody.

Okay.

Your next question comes from the line of family Beer with RBC capital markets. Please go ahead.

Speaker #9: The percentage ownership that we have and other cases it might be to monetize it , but we do keep that flexibility open . And today I think what we stood up is exceptional because we are the ones that are driving the entitlement value , and we're getting paid for that .

Thanks. Good morning, just really one question for me. The you know the same property NOI numbers, obviously look quite strong and both for the quarter and year to date was there much contribution from modernization investments in in those figures and if so I'm not sure if you could try to quantify that.

Speaker #9: And when we get them entitled , then we can create the optionality to look at what we can do with them . So the way that we focus on the business today is not a mandatory the shovel will go in the ground .

Speaker #17: Got it. Okay. Thanks very much, everybody.

Yeah. There was the modernizations are contributing to our same asset NOI, especially where where I'm getting that.

Speaker #4: Your next question comes from the line of Tami Beer with RBC Capital Markets. Please go ahead.

Excuse me, 6% to 7%.

Speaker #18: Thanks . Good morning . Just really one question for me . The you know , the same property NOI numbers obviously look quite strong and both for the quarter and year to date , was there much contribution from modernization investments in in those figures .

The increase in opening up the lease end and laying that are on top of current our current rental amounts. So we had a bit of an uptick in the in the quarter plus 30 50 year to date until we're capitalizing on some of that income growth and it is delivering solid performance in our.

Speaker #18: And if so, I'm not sure if you could try to quantify that.

Speaker #10: Yeah . There was a modernizations are contributing to our same asset . Noi , especially when we're getting that excuse me , 6 to 7% increase in opening up the lease .

Same asset NOI as well as other new leases too.

Okay.

Sorry, just to clarify I'm not sure what you meant plus 30, plus 50 was that sort of the the year to date completions or I'm curious as to of that 4.6 or the three 5%.

Speaker #10: And laying that off on top of current current rental amounts . So we had a bit of an uptick in the in the quarter of plus 30 , 50 year to date .

How much of that is it.

Half of that is it a third of that is it 20% of those figures that came from the modernization investments.

Speaker #10: And so we're capitalizing on some of that income growth . And it is delivering some solid performance in our same asset . NY as well as other new leases to .

This project count not per cent.

Yeah same asset NOI, yeah, we don't break it out that way.

Speaker #18: Sorry , Carrie . Just to clarify , not sure what you meant . Plus 30 and plus 50 . Was that sort of the the year to date completions or .

Okay.

Yeah.

Your next question comes from the line of Mike Mark Kt's with BMO. Please go ahead.

Speaker #18: I'm curious as to of that 4.6 or the 3.5% roughly how much of that is it ? Half of that ? Is it a third of that ?

Thanks, Operator, I'm just following up on Tommy's question, how many modernizations like how much runway is there.

Speaker #18: Is it 20% of those figures that came from the modernization investments . ?

Over the next 12 to 24 months is this pace is going to continue or do you expect it will accelerate or slow from here.

Speaker #10: That was project count , not percent contribution to same asset ? NOI yeah , we don't break it out that way .

We've invested approximately $30 million give or take up and down over the last three or four years.

Speaker #18: Okay .

We're likely going to be in that same range again this year.

Speaker #4: Your next question comes from the line of Mike Marquis with BMO . Please go ahead .

So.

All indications in empires publicly talked about this that they are in the modernization rider Reno program, where they just say that they wanted to touch 25% to 30% of their their locations over a three year window and they're still in that window. So there is runway we've been working on it with them.

Speaker #16: Thanks . Operator .

Speaker #19: Just following up on Tommy's question , how many modernizations , like how much runway is there over the next 12 to 24 months ?

Speaker #19: Is this pace going to continue, or do you expect it will accelerate or slow from here?

Speaker #9: We've invested approximately $30 million, give or take, up and down over the last three to four years. We're likely going to be in that same range again this year.

On assets that we own and they spend about $30 million. So we see that holding for the balance of this year, we see it holding into next year as well.

Okay.

Great just on the.

Deferred revenue you guys flagged last quarter, if we strip that out just for the next little while given what's on the go is that because that's a decent run rate for the next several quarters.

Speaker #9: And so all indications and empires publicly talked about this , that they are in a modernization program where they did say that they wanted to touch 25 to 30% of their their locations over a three year window .

Yeah.

Okay got it and last one for me I kind of missed the warnings the answer to Lauren's question on Queens way can you just remind us or I guess my benefit remind me how that worked and we started to develop I understand you guys managed it did you fund the development on your balance.

Speaker #9: And they're still in that window . So there is runway we've been working on it with them . And on assets that we own .

Speaker #9: And it's been about 30 million . So we see that holding for the balance of this year . We see it holding into next year as well .

Speaker #19: Okay , great . Just on the the deferred fee revenue , you guys flagged last quarter . If we strip that out just for the next little while , given what's on the go , is that is that the decent run rate for the next quarters here to think about ?

Cheat or how does that work exactly.

Yes, we did and so we funded a portion of the pre development costs and then bought the land from Empire. That's it.

Speaker #9: Yeah .

Speaker #19: Okay . Got it . And last one for me , I kind of missed the ones . The answer to Lauren's question on Queensway .

Total of $28 million.

Okay.

So that's great. Thanks, so much.

Speaker #19: Can you just remind us for I guess my benefit , remind me how that worked . Was that a develop ? I understand you guys managed it .

And at this time, we have no further questions I would like to conclude the Q&A session and today's conference call you would like to thank you for your participation. You may now disconnect. Your lines at this time have a pleasant day everyone.

Speaker #19: Did you fund the development on your balance sheet or how did that work exactly ?

Speaker #10: Yes , we did . So we funded a portion of the pre-development costs and then bought the land from Empire . There's a total of $28 million .

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