Q3 2025 Granite Real Estate Investment Trust Earnings Call
Good morning. My name is Lily and I will be your conference operator for today.
At this time I would like to welcome everyone. To Granite treats to read quarter 2025 results conference call.
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After the speaker's remarks, there will be a question and answer session.
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Speaking to you on this call this morning.
Is Kevan Gorrie, President and Chief Executive Officer, and Teresa Neto, Chief Financial Officer?
I will now turn the call over to Theresa Netto to go over some certain advisories
Good morning everyone. Before we begin today's call, I would like to remind you that statements and information made in today's discussion, May constitute forward-looking statements and forward-looking information and that actual results could differ materially from any conclusion, forecast, or projection. These statements and information are based on certain material facts or assumptions, reflect Management's, current expectations, and our subject, to known, and unknown risks, and uncertainties, that could cause actual results to differ materially from forward-looking statements or information.
Including the risk factor section of its annual information form for 2024 granite's, management discussion and Analysis, for the year ended. December 31st, 2024 filed on February 26th, 2025, and for the quarter ended September, 30 2025 filed on, November 5th, 2025.
granted posted 23 2025 results ahead of Q2 and in line with Management's, annual forecasts and guidance, that reflects continued strength in our operating fundamentals supported by strong and AI growth representing 6 cents per unit of the 9 Cent per unit growth in ffo quarter over sequential quarter,
Ffo per unit in Q3 was a $1.48. Representing the 9th cents or 6 and a half percent increase from Q2 255 and a 13 cent or 9.6% increase relative to the same quarter in the prior year. The growth in noi, this quarter is primarily derived from strong, same property noi growth and Hands by leasing spreads of 88% and the lease up of previously vacant units in Canada and the United States
Noi growth was further enhanced by the Florida Acquisitions completed last quarter.
Afo per unit in Q3 25 was a 126 which is 3 cents higher relative to Q2 and 4 cents, higher relative to the same quarter last year with the increased versus Q2 mostly tied to ffo growth and lower leasing costs due to timing of leasing turnover. Partially offset by higher Capital expenditures incurred.
Afo related Capital, expenditures incurred in the quarter total 10 and a half million, which is an increase of 2 and a half million over Q2 and 5.3 million higher than the same quarter last year.
4 2025, we continue to expect afo related Capital expenditures to come in at approximately 40 million for the year and that is unchanged from our estimates. Previously provided
Same property. I know why for Q3 remained robust increasing 5.2% on a constant currency basis and up 8.4% in foreign currency effects are included.
Same property on, why growth was driven primarily by CPI and contractual rent increases across all regions. Positive, leasing spreads on lease, renewals primarily in the US and Canada. And the lease of a previously, vacant units in the US and Canada and expiration of a free rent period at a property in the United States.
Given the continued strong leasing activity in the third quarter of 25, we are increasing our guidance for the year and narrowing, the range for constant currency, same property on the Y based on a 4 quarter average to come in at approximately 5.4% to 6.2% from the range previously provided of 5 to 6 and a half percent.
DNA for the quarter was 14.1 million which is 0.9 million higher than the same quarter last year and 4.1 million higher than Q2 the main variance relative to Q2 is the 4.2 million unfavorable fair value adjustment to non-cash. Compensation liabilities, which do not impact granite's, efo and afo metrics.
For the fourth quarter, we expect G&A expenses, that impact ffo and afo to be approximately 10 and a half million.
Interest expense with slightly higher in Q3 2025 relative to Q2 by half a million while interesting, income remains flat, as compared to Q2 the slight increase in an interest expense was, primarily driven by the drawers on the credit facility to fund last quarter's. Florida acquisitions.
Grant is weighted average cost of debt is currently 2.7% and the weighted average debt term to maturity is 3.6 years with granite's. Next debt, maturity, in September of 26, we continue to expect interest expense to remain, stable over the next, approximate 4 Quarters at roughly 24, and 1.5 million per quarter. Barring any new transactions,
Q3 2025 current income tax was 3 million, which is 0.3 million higher as compared to the prior year and remained flat compared to Q2.
For the fourth quarter, we are expecting current income taxes to come in at approximately $25 million as well.
As in Prior years, Granite May realize a credit to current income taxes of approximately 1.8 million in Q4, due to the reversal of Prior year tax Provisions. However, we cannot confirm the certainty of such Credit in the December 31st and our guidance does not Factor any tax provision reversals.
Regarding the 25 Outlook, granted is increasing. Its 2025 guidance and narrowing the ranges relative to estimates previously provided
For an Outlook reflects the Florida Acquisitions, but does not include any assumption for a potential Property Disposition.
In addition, the current Outlook reflects year-to-date financing and ncib activity completed in the first half of 2025 and embeds, the year-to-date positive impact to ffo, of the weaker Canadian dollar relative to the euro and US dollar.
So, for ffo per unit, we are raising guidance from last quarter to the range of 583, to 590 representing an approximate 7 to 9%, increase over 24.
For afo per unit. We are raising guidance to the range of 503 to 510 representing, an increase of 4 to 5% over 2024.
Granite's balance sheet remains, strong investment properties totaled. 9.1 billion at the end of the quarter, which excludes 370.7 million of 6 assets, health for sale consistent with granite's, messaging last quarter on his disposition program.
The increase in investment properties from last quarter with primarily due to 156.5 million of Foreign Exchange translation, gains, on granite's. Foreign based investment, properties, driven by 2.3%. Increase in the spot US exchange rate and a 1.9 increase in the spot euro exchange rate relative to Q2 partially offset by net. Fair value. Losses of 34.6 million.
The trust's overall weighted average cap rate is 5.6% on in-place NOI, which increased 5 basis points from the end of Q2 and has risen 32 basis points since the same quarter last year. The net leverage ratio at the end of the quarter was 35%, a decrease of 100 basis points from last quarter. Net debt to EBITDA was 7 times, a slight decrease from the 7.1 times in Q2 and consistent relative to the same quarter last year.
Granite's key leverage ratios remained slightly elevated due to the classification of the 6 assets held for sale as they are excluded from investment properties. Resulting in a decrease in the denominator for the net leverage ratio.
In addition Granite has increased unsecured debt due to drawing on the credit facility to fund the Florida Acquisitions. Resulting, in an outstanding balance of 78 million at the end of the quarter,
Granted expects these ratios to normalize when the asset sales are completed.
The trust's liquidity is approximately 1 billion representing cash on hand of approximately, 109 million, and the undrawn operating line of approximately 918 million.
As of today, Granite has $79.5 million drawn on the credit facility and $3 million of letters of credit outstanding.
Granite does expect to reduce the balance uh on the credit facility throughout 26, with with free cash flow from operations or with proceeds, from disposition of certain properties, barring any other major transactions.
I'll now turn over the call to Kevin. Thank you.
Thanks. Theresa, as usual, I'll be 3 for my comments and hopefully provide some helpful context to our results.
As Theresa mentioned, our Q3 results were in line with expectations, driven by strong leasing momentum and NOI growth.
And as you can see from our updated year end guidance, we expect our financial performance to continue to strengthen over the remainder of the year.
Firstly, strong, leasing momentum continued as a team, executed on over 400,000 square feet of new leases in the quarter and extended 6, leases related to expiries in the fourth quarter of 2025, and in 2026 representing just over 2.3 million square feet.
in this quarter, as you can see the increase on renewals in the third quarter was extremely strong at 88% on 1.85 million square feet of Q3 expiries in the GTA and the US
We have now renewed 81% roughly of our 2025 expiries.
At a weighted average increase of roughly 47%.
and that excludes the increase on the new lease in Atlanta, where the team achieved an increase in rental rate of 58% over expiring rent, at the end of the first quarter,
Staying on leasing a few comments on relevant Market data.
8 of our 16 markets in North America, reported flat, or at the client and Market vacancy from the second quarter.
And all of our portfolio markets, reported positive net absorption in the quarter led by Dallas Fort Worth in Indianapolis, Savannah and Houston.
Our weakest Market was once again the greater Toronto area, I was asking rents fell, roughly 5.5% year-over-year.
so while leasing conditions, steadily improve across our portfolio and are leasing performance continues to be strong,
That absorption overall remains below the 10-year average in conditions or competitive.
But I would highlight at this time that modern functional well-located portfolios are as expected. Clearly outperforming the general markets,
I will provide a detailed update on our European portfolio markets in the fourth quarter as we receive the data.
And in viewing our leasing performance in noi growth over a longer term.
Over the past 3 years, we have generated cach noi growth per unit of 44%
A keer of 12.9% over a period, which most of you would characterize as challenging for our sector.
I provided an update on our last call regarding the publication of our 2024 corporate ESG report.
But I did want to mention at this time, the granite was recognized for the second consecutive year, with the top ranking in our industrial, peer Group, by gresb for overall score and public ESG disclosure.
I'll comment briefly on the changes to our ifs values.
As Theresa mentioned, we made minor negative adjustments to capitalization and discount rates broadly across our U.S. and European portfolios, which was partially offset by positive gains from recent renewals in our GTA portfolio.
And our overall IFRS value was obviously positively impacted as Theresa mentioned by the favorable movement in the USD, and Euro, against CAD in a quarter.
Moving on to Capital, allocation, I'll begin with an update.
On the plan dispositions.
Of the 370 million of assets held for sale, we have agreed to terms and roughly 190 million of those assets in the US.
And the transactions are progressing. Well, and we expect to provide a more wholesome update on the dispositions with our Q4 results at the very latest.
in terms of capital deployment so far in 2025,
We have a acquired roughly 145 million in Granite units, through our ncib, as well as funding roughly 10 million year to date on our development projects and 50 million related to our recent acquisition in the Miami Market.
So, to find over $200 million in these areas and finish the quarter.
With only 70. I think it's 79 million drawn on a line of credit and roughly 128 million in cash. You can see the power of our low payout ratio and free cash flow,
We have also agreed to terms and approximately 240 million of new acquisitions. In our Target markets in the US and Europe, and expect to close on those transactions in late Q4 or early q1 2026.
Staying on the capital, allocation, our 15 cent distribution increase represents the 15th consecutive annual increase since our Inception in 2011 and marks the first above 10 cents.
As we believe the incremental increase is merited at this time and sustainable, supported by the strength of our cash flow growth over the past number of years and the conservative nature of our capital structure and correspondingly low Afo Pale ratio.
We are able to fund the increased distribution while continuing to reinvest strongly in our business, without compromising the strength of our balance sheet and capital ratios.
So looking out to the remainder of the Year, our leasing pipeline remains quite strong at well over 500,000 square feet. Currently under lease negotiation
And although, we'll provide specific guidance and conject in conjunction with our Q core results. We are confident that the achievements made by the team in 2025.
At position does well to execute on our financial operational and strategic objectives for 2026 and Beyond.
Operator. I'll now open it up for questions.
Thank you at this time. I would like to remind everyone in order to ask a question. Please press star. Then the number 1 on your telephone keypad will pause for a while for to compile the Q&A roster.
1 moment.
Your first question comes from the line of Brad Sturgis of Raymond James.
Your line is now open.
Hey, good morning.
I want to clarify their Kevin, uh, the
The, uh, transactions that you were talking about us Europe. I think that was referring to the dispositions uh or as it's held for. So would all that everything that's helped to sell. Now, could that close by early 26? Or how are you thinking about the the timeline to those transactions right now?
All right, if you're referring to the dispositions Brad, I think that. Yes. All of the 370 million would be expected to close as we sit here today by the end of 2027.
And how is in terms of redeploying that cache obviously.
Um, you know, I think you've talked about, uh, opportunities. You'll even looking at on the acquisition side, how does that pipeline look today?
and um, you know, how do you think about sort of capital allocation priorities once that the cash comes back Beyond, I guess repaying, the the lines
Well I as I mentioned, we have 240 million in Acquisitions that we're currently working on.
I would estimate probably another 100 million that we are currently looking at not pursuing in Earnest, but looking at. So that's what the pipeline of Acquisitions looks like. And as I mentioned before, particularly in the US, we have to balance the Acquisitions with the dispositions or the pace of those. So that the pace of our Acquisitions will rely somewhat on the pace of dispositions.
Okay.
Um just last question, just on the leasing front uh I think last call uh
on the uh, I guess within the Indianapolis Market, you had the the larger
Um facility. You're still looking at least you were looking at rfps or reviewing them for the for the entire building. There in Indianapolis is, is there any update on that front?
I don't want to update on particular markets. I, I may sound a little paranoid but I don't want to do anything that will compromise our efforts on the leading front acquisition front or disposition front. So, just to say I mean it over half a million square feet under lease negotiation that obviously involves some of our large spaces.
Uh and uh and those deals are progressing. Well,
Okay, appreciate it. I'll turn it back. Thank you.
Your next question comes from the line of Kyle Stanley of desert done. Capital markets, your line is now open.
Thanks uh, morning everyone.
So you've made great progress on the 26th maturities already as well. Um, with most of the expiries happening in the US, is there any kind of early non-renewal concerns that you might have? Um, and you know, generally what kind of leasing spreads, would you expect overall? And, and then, maybe more for the, the US portfolio specifically.
Um, I think other than the, uh, Samsung, uh, space in the US next year. Nothing that really stands out to us, but I think, you know, we've had some very high levels of renewals. We were over 90% in 24 over 80% and 25. I would expect us to be sort of in that traditional range of 70 to 75% renewals for next year, partly because of the Samsung, um, non-renewal in terms of spreads, um, I think it would be
Like, I wouldn't expect anyone to expect a repeat of 2025. IE, you know, 47%, I think it would be closer to our range in 2024 which is in, was which more in that 20% range?
For 2026, but I'll have more details on the next call.
Okay. No that's, uh, that's very helpful. I mean, leasing activity seems to have, you know, remained, quite strong or improve. Even since our last update what's changed in the last, you know, maybe 4 to 6 months that has allowed for this, uh, Improvement in demand, more broadly in in the market and then specifically um you know, within your portfolio to convert, you know, leasing tours uh to an rfps, you know, to to sign leases at this point.
Hi, I don't, I don't know if there's anything specific. I I think the 2 TR that sort of come to mind to me, that, I, I, I think I've mentioned is, is 1, I think tennis have put off their leasing decisions for a long time.
And I think we are seeing that. So I will tell you, I think the activity across our specific portfolio is quite strong relative to the overall market and maybe some of our competitors.
Um, but I think that that's a testament to the quality of the platform and the quality of the, of the real estate that we own. It's starting to show.
Okay, no appreciate that. Uh, just 1 more question with the fundamentals across the US firming up. Are you seeing any new developments start to to percolate you know, particularly I guess on spec. Um and has your outlook towards development changed at all in the last several months.
No, I think we're continuing to see a gradual decline like in the US. It's never going to go to zero. In terms of new Supply, there has been a gradual decline, I think, uh, 2026. If you look at some of the expectations from CBRE and others, they're expecting the lowest I think development Pipeline and well over 10 years so it's never going to go to zero and I think we've seen pre-leasing in this sort of 30 to 35% range.
Which is pretty consistent with pre-CO levels. So we're not seeing an uptick in development, if that's what you're asking. Or new supply, if there is, it's usually build-to-suit. In terms of speculative, I think it continues to slow down. We expect that trend to continue in 2026.
Okay, thank you very much. I will turn it back.
Your next question comes from Hyman Sue Gupta of Scotia Bank. Your line is now open.
Thank you and good morning everyone.
Uh, so first on Capital allocation uh distribution increase was a bit higher than the last couple of years. Uh, just wondering what led to that decision. And, uh, is that a reflection of, you know, stronger expected. Ffo growth next year.
Uh, it's a great question. I think, look, we've been at 10 cents since inception in 2011, and I think our first distribution was $2.
So 10 cents represented the first year would have been 5%. And so on a percentage basis, the increase was declining every year.
And if we had stayed with 10 cents this year, it would have been sub 3% increase. I think it would have been 2.91.
And so I think we saw long and hard about what the right distribution increase was for granite.
I don't think we would have been in this place, so we didn't have such strong FFO and AFFO per unit growth over the past five years.
Where we sit today. I mean, obviously, we want to prioritize reinvestment in our business.
But when you have a payout ratio, an afo afo pair ratio in the mid-60s and you have, you know, 100 million plus in free cash flow, the 10 cents, the 15 Cents, Only represents 3 million in incremental Distribution on an annual basis and we feel we can do that and continue to reinvest in the business and not compromise a liquidity and not compromise, our free cash flow. So that's why we made the decision. What was really important is if we moved to 15, we have to be able to sustain it. And I think all of us on the management team and the board are very confident. We can sustain that that that level of increase. Again, there's no guarantee we we have to review it every year, but the sustainability of the distribution increase was an important consideration for us. When we made this decision to move to 15 cents
Got it, uh, very helpful, uh, and then on the capitol recycling. Uh, so you're selling in markets, like, you know, in Annapolis, Columbus, Columbus and you're looking to buy in core markets. Uh, how site is the Caps, uh, cap. It's right now versus historically speaking, which, you know, encourages you to make that move from, uh, you know, selling these
Assets and buying on the other side.
Well, it depends on the markets but we, I think what we've signaled is look, as we're continuing this rotation into the Tier 1 markets, that we believe are going to be the strongest markets over the next decade. Um, as spread of 75 basis points to 100 basis points is probably something the market should expect. It may not be that case all the time, but that's sort of the what we're seeing right now in terms of our dispositions versus our our Acquisitions. Now, keep in mind,
That's a year 1 yield.
Term.
If that makes sense.
No that's helpful. And then as you, you know, kickstarted this position program, uh did you consider adding Magna to the mix as well in any of the magma assets to that list?
Yeah, I mean it depends on the market. I certainly think um,
We look at all of our non-core assets.
Uh as part of this disposition program. So if the short answer to your question is, yes we do. And I would think in 2026 and 2027 as we look at further dispositions, certainly magnets as could form part of that disposition program.
Got it. Uh thank you Kevin and I'll jump back. Thank you.
Your next question comes from the line of tal, bully of c. I b c.
Your line is now open.
Hey, good morning. Uh, I was just following up on him maannews question. Um, you know, now that we're sort of 6 Plus months out from when the tariffs drama sort of began
You got a little bit of time to assess how things are shaken out.
How are you feeling overall just about Automotive exposure in the portfolio? Period.
I think one thing that I've mentioned about this towel is that one aspect that really gets missed here, and I don't know, really, sorry, it's interesting to me reading some of the analysts' reports on Magna and other automotive parts providers, is that you don't see tariffs mentioned in their analyst reports. You see tariffs mentioned more with respect to Granite. Let's not forget that the automotive parts industry is covered under customer and that is an important piece—it's an important trade agreement, for sure. And something that we monitor.
Uh, and then listening to Magnus calls and Magnus disclosures, um, they've been very clear, there hasn't been a lot of noise around the Tariff side. So,
Uh, I certainly don't think that it merits any immediate action on our part. Those assets continue to perform well and, uh, hopefully the trade agreement, you know, that's in place, uh, continues in its current form or as close to it as as possible, and if that's the case, then these assets will in our opinion, continue to perform well
And actually, you're just sort of leading me into where I wanted to go. Next was just, you know, with the cusma negotiation uh, renegotiation coming up.
Given what you sort of saw this year, do you have any insights for us on how to think about leasing velocity uh going into 2026 like how you would expect a you know your clients to respond?
Are you talking about overall in the portfolio in 2026?
Yes.
Well, I think we talked about Canada uh and if there are any changes to the magnet portfolio specifically in our in our view, it's not related to uh to tariffs at all.
Um, for the US portfolio. It it's hard for us to see how it's actually current our us portfolio at all. I'm not, I can't say with any sort of certainty that it has helped the US portfolio. But certainly we have seen an uptick in manufacturing demand uh and not in all markets, if you look at
looking at a stat, the other day if you look at um construction spending on a manufacturing facilities in the US, the last 12 months 80% of it has occurred the Midwest through the South and Southeast
So, there's an awful lot of investment, uh, particularly in the manufacturing side going into those markets, and that has benefited our portfolio for sure. So, I have no concerns with the U.S. market with respect to Europe. Um, it has not affected our leasing that we can see, anyways, at all. So, I don't anticipate any impact on our 2026 leasing as a result of, uh, the trade sort of, um, narrative that's going on right now or tariffs, if that helps, okay.
and just lastly, um,
you know, if you look sort of over the last maybe decade or so there's been, you know, a big change in rent levels and some of your markets as have you noticed, there are many long-term kind of implications around like
Uh, for industrial development, occupiers prefer to, you know, build their own stuff. Given the cost, you know, the rents have risen or, um, any sort of changes, you know, in terms of whether, uh, you know, potential tenants decide to own on their own versus decide to lease.
The period of time where companies like Amazon wanted to own their facilities. And then they wanted to not own all of their facilities because they probably had a better use of funds within their own business. So I don't think we've seen looking at the team here. I don't think we've seen a trend of ownership. Now the, the legislation in the US, I think. And and the pending legislation the budget in Canada.
I think certainly incentivizes Capital spending. I don't think we anticipate that there will be, uh, uh, a big impact on tenant decisions regarding ownership of their of their facilities.
Uh and I mean, we certainly seen it, there's always a percentage of tenants that will want to own mission critical facilities but we haven't seen an uptick in that Trend uh and we don't expect to see it in the next couple of years.
Perfect. Thanks very much everybody.
Your next question comes from Matt karak of National Bank.
Your line is now open.
Hey guys just just to follow up to tell's questioning their is through through this kind of capital recycling. Uh that you're anticipating to do is there a theme that you're trying to play that you currently aren't playing or or something in those markets that you see that would be different than than where you are because to your point it seems like the markets you're in are actually the ones that have been kind of net beneficiaries.
Of some of the changes in industrial.
Okay, so we should invest more in the midwest. Is that the point? Well, just is, is there something outside the Midwest, or where, like, what are you trying to get at in, in going into these new markets relative? I I think, but I'm not trying to be prestigious but I I think I think we've been clear that
It was always our intent. We like the markets that we're in and I agree with you and certainly when you look from a tenant demand perspective Indie and other markets in the midwest have performed as well as any markets in in the US Dallas would be in their Houston would be in their Savannah had a terrific year last year, despite high levels of Supply. They seem to sort of continue to absorb that.
Um, so we like the markets that rent, but as we said, it was always our intent to continue to rotate into Tier 1 markets. There are markets that we feel are going to perform very well, and we like the pricing in those markets as we sit here today.
And so it's not so much looking at an end to your Columbus and saying, we just like the market, it's that we have a relatively high level of concentration in those markets.
And if we are uh very interested in moving into Miami, for example or the UK or France, or a certain markets in in the US we have to use our existing uh assets to move into those markets and that's what we're doing. So I hope that that's, uh, coming through clearer. It is really more a concentration play than anything else. And this allows us to enter the markets that we've been
Monitoring closely and coveting for years at prices that we think make a lot of sense to us both from a in going yield perspective, and from a total return perspective.
And and in terms of the type of industrial building that you'd be getting in these markets. It's it's consistent with what you own a large Bay and high quality Tech, tenants Etc. Yeah. It doesn't value add or anything along those lines. Well, I mean it, but it has to be, it has to be modern. It, it has to be modern is something that we can make modern it. We are never going to play in the small Bay older generation process. It's just not what we do. And if you're truly a logistics company, you want to try it to the best of your ability to stay with Logistics tenants, it doesn't have to be large pay. Um, we're certainly looking at some very attractive opportunities that involve, uh, some midday tenants in there. But the point is, it has to be very functional Logistics type of assets for us.
So it doesn't have to be large pay. Um, that's not... we're rather agnostic about whether it's multiple pay or...
or or a single tenant at large Bay. It's just the functionality of the asset. That's the top priority for us and location within the market.
Okay, um, and of course this is not to say that you need to be there. Um, but, uh, have you not caught the data center bug at this point that some of your peers are chasing? Um.
I think, uh, well when you look at
In data centers, there are extremely Capital intensive and so it's a, it's an area that our team has been paying more attention to both from a converting existing assets at at some point to Data Centers, if feasible.
Or looking at a new builds, but I would just they're very Capital intensive and certainly not something that I think would be in the immediate radar of granite. As we said here today,
Okay, um, last 1 for me, um, wafer moved up your tenant list, which presumably was part of the really strong leasing spread that you got this quarter. Uh, can you give us a sense obviously the Toronto Market, you said has been a little bit more challenging but why they would have needed to stay in that space and pay a much higher rent relative to what they were paying.
Yeah, I I think that that's 1 of the top 3 Assets in the country, to be honest with you. Um you know 40 foot clear excess trailer parking. Literally across the street from uh the GTA, it's on 2 bus routes missa and Brandon large labor pool. Like it is just an absolutely fantastic asset and so I don't think wafer had any intentions of moving. Uh and we certainly although we were confident in our ability to release the space. It's a large space and we are happy to keep them in that space. So I think there's a lot of
Things that were going for that, uh, building that uh, wafer recognized, uh, in terms of value. And so we were able to get, you know, uh, a very strong renewal done in a in a relatively short period of time.
Okay, thanks guys.
Your next question.
Comes from the line of balmy, beer of RBC.
Your line is now open.
Thanks and uh, good morning, um, just coming back to the 240 million of Acquisitions. In in progress, are these all stabilized assets or are you perhaps willing to take on some vacancy? Maybe creates some value in that way.
Uh, for the most part, they're stabilized assets. Um, 1 that we're looking at would be a Redevelopment play with income in the short term. I just don't want to provide too much more detail than that. Follow me. Uh, but all of them would be, uh, stabilized assets at this time.
Okay. And, and sort of the, uh, the mix between the, uh, the US and Europe. Uh, can you provide some context there, and, um, what sort of cap rates are you kind of seeing these deals come in at,
Well it's it is a us and Europe predominantly in the US. And as we've said, I think we're targeting.
Um, uh, in going yields in the in the low to mid fives.
Okay, cool. And then just
Sorry and just coming back to um, I think 1 of the earlier questions on on Samsung. Um, have you started marketing that space and any color you can provide in terms of where the uh releasing prospects are
Ya know, there was, um, we have started marketing, the space release. Um, the only thing I would say is I would remind people that the, in place rents or the expiring rents are roughly 25% Market, uh, and we don't have anything to update you on at this time.
And and is it fair? And can you remind me when does that? Is that leases do be a year or so basically, before the end of Q3 and 26,
At the end of Q3 26.
Right. And and I, I guess it would be fair to assume that there's going to be some downtime there at, you know, probably if it does get released, uh, let's say into 2027.
Yeah, I I think that's fair.
Okay, and then just lastly on the um, on the 500,000 square feet of leases. That I think you mentioned were in progress, or in discussions. What's the mix there between new leasing versus uh, renewals
It's the only Leasing.
Sorry, can you repeat that?
All new Leasing.
okay, all new
Okay, thanks very much. I'll I'll turn it back.
The last question.
now, open
Uh, thank you and good morning. Uh, so obviously most of my questions have been answered but uh just wanted to get your sense Kevin on on uh at this point in the cycle.
If you see cap rates, more likely to be moving in a meaningful way in the next, uh, year or so. Um, and if there's any markets in particular, where you see,
Potentially some bigger moves.
I don't want to discuss specific markets those would be markets that we're paying a lot of attention to. I can assure you of that. Um
It's certainly we've seen more Capital come off the sidelines. There is still more of a focus on value, add assets. And, and by the way, we probably put ourselves in a category, um, with a probably, a, a more refined focus on Modern assets. Um, so core assets are still. They're catching it, but it's not that deep, but, um, looking at the dispositions that we're going through, it does feel like momentum is picking up and if you were to ask me, uh, you know, do I think that there's is there a greater chance that cap rates are rising the following? I would say absolutely not. I our expectation is Cap rates will fall uh, in 2026. Just based on the activity that we're seeing the competition that we're seeing on our acquisition targets, uh, Etc. It certainly feels like it's going uh, in a favorable Direction.
Um, that's great. Kevin, thank you very much and I'll turn it back.
And no further question.
At this time, I will now turn the call over to Mr. Kevin, please continue.
Thank you, operator. And thank you everyone for joining us on our Q3 fall and we look forward to speaking to you in the new year on our fourth quarter results.
Have a good day.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect