Q3 2025 Dream Office REIT Earnings Call

Speaker #3: Good morning , ladies and gentlemen . Welcome to the Dream Office REIT . Q3 2025 conference call for Friday , November 7th , 2025 .

Speaker #3: During this call , management of Dream Office REIT may make statements containing forward looking information within the meaning of applicable securities legislation . Forward looking information is based on a number of assumptions and is subject to a number of risks and uncertainties .

Speaker #3: Many of which are beyond Dream Office REIT's control . That could cause actual results to differ materially from those that are disclosed in , or implied by such forward looking information .

Speaker #3: Additional information about these assumptions and risks and uncertainties is contained in Dream Office REIT's filings with the securities regulators, including its latest annual Information Form and.

Speaker #3: These filings are also available on Dream Office REIT's . Site at Dream Office . Later in the presentation , we will have a question and answer session to queue up for a question , press star one on your telephone keypad .

Speaker #3: Your host for today will be Mr. Michael Cooper chair and CEO of Dream Office REIT . Mr. Cooper , please go ahead .

Speaker #4: Thank you very much . Operator . And good morning to everybody , and thank you for joining our call this morning . We're here once again with the Jay Jiang .

Speaker #4: The CFO and Gordon Wadley, our Chief Operating Officer. We think the third quarter was a pretty significant quarter for Dream Office.

Speaker #4: We have been able to secure high quality tenants and are filling up a lot of vacant spaces as we turn over some of our weaker tenants .

Speaker #4: We've seen a much stronger leasing market, and we hope that over the next couple of quarters, some of the tenants that are committed and not in place will take possession and will continue to lease more space.

Speaker #4: I think the most interesting number is excluding 74 Victoria , which the federal government vacated at the end of last year . The rest of our downtown Toronto portfolio is now over 90% committed .

Speaker #4: And we can identify many vacant spaces that are quite leasable . And we expect to make progress throughout the balance of this year and into 2026 .

Speaker #4: So we're feeling pretty good about the shape we're in with some of the large deals that we've done , getting long term leases with stable tenants .

Speaker #4: We have given up some occupancy to make space for them, and to go over that in more detail. But generally, we're seeing the demand for space to be increasing.

Speaker #4: We see a lot more people back to work, and the market seems to be getting a little bit stronger. We expect to see that continue throughout the next few quarters.

Speaker #4: So with that , I'll turn it over to the team to make their prepared comments .

Speaker #5: Well that's great , thanks very much , Michael . Good morning . I hope everyone's keeping well as always . It's really nice to get a chance to connect with you all today and share some of the work that our team has been doing year to date .

Speaker #5: I also look forward to taking the opportunity to share some of our priorities to close out 2025 , as well as key milestones regarding our asset strategies , operating performance and leasing .

Speaker #5: We remain very committed and and I would say laser focused on leasing up and improving the quality of our assets despite operating a challenging environment for the sector for the last two years , we've continued to see very steady and measured growth across the portfolio as a management team , we've been very consistent in the messaging where we'd say there would be incremental net absorption quarter over quarter , and we've been very hyper sensitive in identifying and managing risks well in advance to mitigate any material drop in income or committed occupancy .

Speaker #5: This approach has yielded another consecutive quarter where we've seen committed occupancy growth directly in line with the guidance we shared throughout the year .

Speaker #5: For Dream Office, leasing continues to actually be quite resilient. We've done over 630,000 ft² of gross leasing year to date, and that's made up of 110 deals across the portfolio.

Speaker #5: More specifically, in Toronto, we've completed 520,000 ft² across 92 deals. Of that, 252,000 ft² were new leases, and 270,000 ft² were renewals.

Speaker #5: We are in advanced negotiations on another 60,000ft² of deals , which would bring our annual total just from Toronto to 580,000ft² . For context , for everybody , the three year average annual leasing volume in Toronto was about 530,000ft² .

Speaker #5: This puts us on track to exceed this level in 2025 , with even fewer assets for the 252,000ft² of new leasing and ERS are outperforming the business plan .

Speaker #5: At about $18 a square foot versus $15 . This outperformance is driven by longer Waltz , which allow higher T.I. and LC costs to be amortized over the extended terms .

Speaker #5: The average new lease term is eight and a half years versus five years . What we had in the budget reducing effective costs to $11 a square foot per year versus $16 a square foot per year , while net rents remain in line with our guidance and top of the market for the respective classes in the mid 30s .

Speaker #5: For the 267,000ft² of renewals , Ners are in line with guidance . Even with a few large deals executed at Lower ers to accommodate certain blend and extends and protect occupancy .

Speaker #5: Most notably Ifds at 30 Adelaide to accommodate a large new tenant at 30 Adelaide to backfill the space . We got back on the balance of the renewals .

Speaker #5: We've seen improved performance with the weighted average kind of low to mid 20s . When you exclude those big blend and extends to quickly touch on other markets year to date , we've completed 110,000ft of leasing across 21 deals in Western Canada , including 23,000ft² of new leasing across ten deals and 87,000ft² of renewals across 11 deals .

Speaker #5: We are well in line with our three year average annual leasing volume in other markets or Western Canada . Deal velocity and absorption and committed occupancy is honestly what I get , asked the most about by investors , analysts and researchers .

Speaker #5: I want to give you all some very important context . Our best year of total leasing was 2023 , where we did approximately 604,000ft² gross and subsequently the best year of leasing volume .

Speaker #5: The number of deals that we did was 2024 , where we did 104 deals . We're quite pleased year to date that we've eclipsed total square footage , leased already with 630,000ft² and total deal volume with over 110 transactions , we still have another quarter to go .

Speaker #5: We have consistently said our goal is to get incrementally better each quarter , and we have from an occupancy committed occupancy perspective , quarter over quarter since 2023 , a big catalyst for our absorption has been our model suite program since 2024 .

Speaker #5: We've built out 26 model modified suites across 120,000ft² of vacancy in the portfolio . By being proactive and investing the capital and improving space to attract , move and ready tenants , we've leased 20 of the 26 spaces for 85,000ft² .

Speaker #5: We're also conditional on another three for an additional 15,000 ft, which would be 101,000 of 121,000, or approximately 90% of the units this summer.

Speaker #5: Many of you might remember , but we had a slide at our AGM that illustrated the growth in occupancy on our base street collection assets in Q2 2024 .

Speaker #5: We were at 72% occupancy . We showed that to close out Q1 2025 , we were up almost 400 basis points to 76% .

Speaker #5: And now with our model suite deals completed on Bay Street and the two conditional deals we have in the pipeline , we're up another 500 basis points to 81% just on the Bay Street collection .

Speaker #5: As such , we're pretty pleased to see some steady growth in committed occupancy since Q1 2024 , and that specific note , over the course of the year , we've consistently worked and guided our committed occupancy to be in the high 80s .

Speaker #5: The mid to high 80s, to close out 2025, we're well on pace to achieve this and feel confident to reach about 86.5%, supported by deals signed this year on vacant space with future commitments.

Speaker #5: A great example is our largest asset at Adelaide Place . Currently it has 78.5% in-place occupancy . I'm pleased to share that we've done significant leasing in that asset the last 12 months , to the tune of 220,000ft² , bringing our committed , not our in place , but our committed occupancy to 95.7% .

Speaker #5: These deals , while not immediately contributing to NOI , will see our NOI go from 15.5 million to just over 18 million in the next year .

Speaker #5: At APY alone . This de-risks and anchors the portfolio by being a large , fully leased asset with strong , steady cash flow , great covenants , long term going asset by asset .

Speaker #5: When you drill down a little further , if you net out our largest single exposure being the remaining vacancy that we had at 74 Victoria are committed occupancy for the portfolio , as Michael said , is about 90% .

Speaker #5: As a quick reminder , we had Pspc inform us just over 18 months ago that they were leaving the building in full , giving us 200,000ft² of vacancy .

Speaker #5: Since then , we've secured 70,000ft² direct with Pspc . We completed another deal for 44,000ft² , and we have a very active prospect in advanced negotiations for another 25,000ft² .

Speaker #5: That would take us to over 130,000ft² of the vacancy that we had received , just over a year ago . We had about 187,000ft² of Expiries this year , of which 91,000ft² are renewals .

Speaker #5: And it got us to a renewal ratio over the year of about 48.7% year to date . What I would like everybody to know is on top of that , we did another 40,000ft² of new leasing on that exact same expiring space in advance of them vacating this year , which gets us to 74% coverage on units that are expiring .

Speaker #5: Ultimately, the management team feels quite good going into 2026 and carrying on the momentum, as the Toronto portfolio has about 340,000 ft² expiring next year.

Speaker #5: Of these , about 40% are addressed net of known vacates . We only have about another 110,000ft² of unaddressed expiries . When you look at the deal velocity and absorption we've had over the years , it's quite manageable .

Speaker #5: Of this 110,000ft² we currently have proposals with about 76,000ft² . So we feel like we're in good shape on addressing year over year rollover and more importantly , backfilling space as it comes up .

Speaker #5: And we've got a track record of doing that over the course of the past 18 months . In closing , our Q3 results reflect the strength and resilience of Dream Office strategy and execution .

Speaker #5: Despite ongoing sector challenges . We've tried to be transparent and share with everyone our guidance and really work towards the guidance and do what we say we're going to do .

Speaker #5: Our team's proactive approach to leasing risk management and asset quality has delivered consistent growth and occupancy and net net absorption . Our Toronto and other markets are outperforming historical averages to date .

Speaker #5: Over the last five years , our model suite program and targeted investments continue to attract high quality tenants . While our disciplined management of renewals and backfilling Expiries position us to achieve our committed occupancy targets for year end and beyond .

Speaker #5: As we look ahead to 2026 , we remain very confident in our ability to sustain this momentum , drive portfolio stability and create long term value for our stakeholders .

Speaker #5: Thank you to our team for all their efforts and continued commitment . And thanks to you all online for your continued support and interest .

Speaker #5: I'll now turn it over to my good friend and CFO , Jay Jiang .

Speaker #6: Thank you Gord . Good morning everyone . Today I'll walk you through our third quarter financial results and share our outlook for the rest of the year .

Speaker #6: Please note , we'll provide formal guidance for 2026 during our fourth quarter conference call in February . This quarter , our diluted funds from operations were $0.60 per unit , matching both our internal expectations and with year to date FFO at $1.90 per unit , were on track to be within the range of guidance we provided on our August conference call .

Speaker #6: Compared to last year's third quarter FFO per unit declined $0.17 per unit . The decline was largely driven by the sale . 438 University .

Speaker #6: The sale of our vendor take back mortgage in Calgary and 5.9 million units of Dream Industrial REIT . The cumulative impact of these asset sales reduced our FFO by approximately $0.19 .

Speaker #6: These dispositions brought in 180 million of cash proceeds , which we used to repay mortgages and credit facility , which improved our debt to gross book value by 280 basis points at an estimated cost of debt of 5% .

Speaker #6: We save approximately $0.11 for the quarter by reducing debt , so the net FFO dilution is approximately $0.08 in exchange for 180 million of debt reduction .

Speaker #6: Improved liquidity , and a safer balance sheet . Note that on a cash basis , the impact is further reduced by additional $0.03 because the cash distribution forgone on a dream industrial REIT units sold is $0.05 versus $0.08 of FFO year over year .

Speaker #6: The weighted average interest on our total debt balance increased by approximately 23 basis points . FFO declined $0.06 due to refinancing mortgages at a higher interest rate environment and drawing on our revolver to fund some of our larger long term lease completed this year to .

Speaker #6: Improve committed occupancy year over year , comparative net operating income from our income portfolio was flat for the quarter , despite losing $2 million of NOI at 74 , Victoria from the federal government expiry , we were able to offset this decline with increased NOI at Adelaide Place .

Speaker #6: 36 , Toronto and 30 Adelaide . Our year over year straight line rent reduced by approximately $0.05 . As in the prior year , there were two larger tenants that began operations in their premise prior to commencement of the lease .

Speaker #6: Those tenants are now paying contractual rents. We are up $0.03 on the completed development and rent commencement of 366 Bay, and down $0.01 on taking 606 Fourth Avenue in Calgary into development and terminating some of the in-leases.

Speaker #6: We're pleased with the progress of our two properties under development at 606 fourth and Calgary , and 67 Richmond in Toronto . Once stabilized , these two projects are expected to contribute over 4 million in annual NOI .

Speaker #6: At our share , or roughly $0.20 per unit . Other items , including the elimination of previously accrued liabilities and expenses , are no longer required , and higher property management expenses offset to zero year over year .

Speaker #6: Our debt to gross book value increased 130 basis points to 53.2% . As a result of fair value declines in the income portfolio over the past 12 months .

Speaker #6: As a weighted average cap rate of our income portfolio increased from 5.72% to 6.15% , our debt over trailing 12 month EBITDA improved to 11.4 times , versus 11.7 times on a comparative basis .

Speaker #6: Currently , there is approximately 450 basis points of spread between our in-place and committed occupancy , which represents approximately 6.7 million of annualized EBITDA , of which 1.7 million comes online at the end of 2025 .

Speaker #6: 4.2 million over the course of 2026 , and the remaining 0.8 million in 2027 . Once the leases take commencement and we continue to improve our occupancy , we expect our EBITDA to grow and improve our leverage ratios over time .

Speaker #6: On the financing front , we've already addressed all 741 million of our 2025 debt maturities , which represented 53% of our total debt stack .

Speaker #6: We've already actively begun to work on 166 million of debt maturities for next year , and are confident in our ability to secure favorable terms and higher refinancing balances than maturity .

Speaker #6: This quarter , we repaid our $8.7 million of mortgages on 606 Fourth Avenue and then sold 50% of our interest in the project to Pomelo Capital .

Speaker #6: Having pomelo as a partner in this project makes strategic sense for us , as they are one of Canada's largest construction companies and their wholly owned subsidiary , ITC construction Group , will be the construction manager .

Speaker #6: In addition , we were able to reduce development risk and repatriate 15.3 million of proceeds to reduce our own debt . Construction is already underway and we anticipate completion in the fall of 2027 , with stabilization by mid 2028 .

Speaker #6: On stabilization , we anticipate that the asset will produce approximately 3.6 million of NOI at a development yield of approximately 5.6% , including land at 100% .

Speaker #6: We closed on the Aclp loan for $64 million for a term of ten years, at a rate of 3.3%. The project yield provides an attractive spread of 230 basis points to the cost of borrowing.

Speaker #6: In addition , we have also worked with 9000ft² of tenants to relocate them into our adjacent building at 447 . This relocation improved occupancy at 447 by 340 basis points .

Speaker #6: We're overall pleased to have obtained a creative solution that helps us reduce risk , improve liquidity and enhance income and value in our remaining property and otherwise very challenging office market in Calgary at 12,800 Foster Street , Overland Park .

Speaker #6: Our existing lease with US Bank concludes in November 2025 , and we have listed the asset for sale earlier this year . We have received expressions of interest from prospective buyers and are negotiating with them on a sale .

Speaker #6: We are targeting a transaction in early 2026, and we will provide more information on pricing and timing as we make more progress. On our August conference call, we provided updated guidance of between $2.40 to $2.45 per unit in annual comparative property NOI, to be relatively flat to slightly positive for 2025.

Speaker #6: We are still on track with our guidance to close off the year . Our business planning process is scheduled for December and will provide 2026 guidance during our February call .

Speaker #6: We believe our portfolio is well positioned for growth in income and value , especially if the downtown Toronto market continues to improve . With that , thank you .

Speaker #6: And now I'll turn the call back to Michael for Q&A .

Speaker #4: Thanks , Jay . Thanks , Gordon . And operator , at this time , we'd be happy to answer questions .

Speaker #3: Thank you . We will now begin the question and answer session to ask a question . Press star one on your telephone keypad .

Speaker #3: If you're using a speakerphone , please pick up your handset before pressing any keys to withdraw your question , please press star one again .

Speaker #3: We'll pause for just a moment as callers join the queue . Your first question comes from serum Davis with Cormark Securities . Your line is open .

Speaker #7: Thank you . Alberta . God , this one's probably for you . When you look at the demand , that's kind of come up in September across the street .

Speaker #7: Is that more specifically for a certain kind of floorplate or is that generally across the board where people really need space now and are willing to actually come to smaller plates ?

Speaker #5: Yeah . Good question . It's it's a combination of of both . So we're catching a lot of tenants that are in around the 3 to 5000 square foot range that are looking at our Bay Street collection , and the bulk of the tours I mentioned our model suites .

Speaker #5: So they're really kind of coveting improved suites that are move in ready . And we're starting to see for the first time a few kind of startups dip their toe in the water .

Speaker #5: But the profile is mostly still professional services firms . Deals we're doing are with money managers , law firms , people that kind of covet having a Bay Street address .

Speaker #5: But it's in about the 3 to 5000 square foot range . We're seeing the most velocity of tours .

Speaker #7: And probably 74 Victoria . And considering the leasing you guys have done to date in that space and what's remaining out there , is there something that stands out in the space that remains that makes it maybe less or more challenging to kind of lease out ?

Speaker #7: And is that something we should probably meet the current requirement out there ?

Speaker #5: Yeah . No , I'm glad you brought it up . So 74 Victoria would be , you know , by any class considered almost a typical government building , like a low b , c class type building .

Speaker #5: We've specked some capital to redo the common areas , which is attracted more tours and helped the tour help the deal velocity . We just finished the lobby renovation .

Speaker #5: We've done two floors into high quality model suites that really show what the potential is . But it's , you know , the difficulty with that building is that it is an old building .

Speaker #5: It's a large foot foot plate footprint . And and as such , it kind of caters to a bit of a submarket in Toronto that has , you know , less velocity than the class AA or the A class market .

Speaker #5: It's almost a tale of two buildings , like if you look at Adelaide , for example , are committed . Occupancy is almost 96% .

Speaker #5: And if you look at 74 , Victoria , different class of asset , well located , it caters to a different group where you're seeing less velocity of tours and interest .

Speaker #8: Yeah .

Speaker #4: I'm a little bit more positive on 74 Victoria . It's been an incredible location . The floor plates are big and it probably is good for larger tenants that are looking to have a decent space that is very cost friendly , and I think there's a fair amount of tenants like that .

Speaker #4: We got a lot of space back last year . We're making progress leasing it , and I think we'll continue to do fairly well leasing that building over the next 24 months .

Speaker #4: Lord , how long would you have budgeted to release the space at the federal government left at the end of last year ?

Speaker #5: We put out just about two years . Michael .

Speaker #4: Yeah . So I think like when you have such a big change to a building , it does take time to backfill . And I think we're doing pretty good .

Speaker #4: So I'm pretty impressed with how well that's going .

Speaker #9: Agreed .

Speaker #7: That's great . Thanks for the call , Michael . God , maybe just looking into the assets out here . I look at the list of assets here .

Speaker #7: Right here . It's 36 Toronto , 330 Bay and 250 Dundas . One thing that's common between all three is the in-place committed right now is around between 70 and 75% .

Speaker #7: Right there . When you think about these assets and the demand , you know , do we feel that in the next 12 to 24 months , you could probably see incremental flow of leases out here .

Speaker #5: Yeah. So 330. Sorry, Michael.

Speaker #4: Go ahead . Go ahead . No go ahead . You go .

Speaker #5: I was just going to go through each of the assets . You ask questions on . So 330 Bay . We've seen a real velocity in tours .

Speaker #5: We've actually done quite a bit of leasing in the building that has forward commitments . So we're quite optimistic about it . 350 Bay , I think was the other building you mentioned .

Speaker #5: And 250 Dundas . 250 Dundas is a site I'll let Jay talk about , but it's it's a site that's a redevelopment site for us .

Speaker #5: So we've just been holding on to in-place tenants for cash flow purposes . And then on 350 Bay , we had a low in-place occupancy .

Speaker #5: There . But on that building , you know , I don't want to give too much forward looking information . We're getting pretty close on a on a deal that would take the occupancy to almost 100% .

Speaker #5: And we're .

Speaker #7: Hoping that is amazing . Thank you for . that .

Speaker #5: Will be done by the end of the year .

Speaker #7: Awesome . Thanks , guys . Thanks for the call . I turn it .

Speaker #9: You're welcome . Thank you .

Speaker #3: Once again , if you have a question , it is star one on your telephone keypad . This concludes oh my apologies . We have a question from Anish Thapar with Scotiabank .

Speaker #3: Your line is open .

Speaker #10: Hi . Thanks for taking the questions . So my first question is , is the impact of the return to work policies on the market vacancy consistent with the prior expectations of 6 to 12 months ?

Speaker #4: I generally think we're pretty impressed with how many people are coming back to work and how various governments and banks have been encouraging people back to work.

Speaker #4: But , Gord , do you want to go in a bit more detail ?

Speaker #5: Yeah , I think really the only group that is trailing back to work is is the government . I think the banks , you know , the banks that we have in our buildings , they've been communicating with us .

Speaker #5: They're in at least four days a week . The provincial government , they're in five days a week . You municipality is starting to come back , but it's just the federal government that that hasn't quite landed on a return to work program .

Speaker #5: We're seeing a lot of our private sector tenants . I'd say the vast majority are now in five days a week in some capacity .

Speaker #5: So my personal observation is I feel like everybody's return to work is normalized . Save and accept the federal government .

Speaker #10: All right . Thanks for the color . So what's the breadth of the tenant demand right now in Toronto today ? By category ?

Speaker #10: Is it like majority by banks or is it diversified by other industries as well ?

Speaker #5: Good question . So our portfolio it's all the majority are kind of like low rise buildings , smaller floor plates . So we see quite a mix of tenants through .

Speaker #5: We're seeing a lot of professional services firms come through . We're starting to see more consulting firms tour our buildings . And I think if you read the budget and some of the infrastructure that's coming out with the feds , a lot of these consulting firms are tying their interests to different provincial and federal government contracts .

Speaker #5: So we're starting to see some consulting firms come through . You know , the provincial government's very active in space accommodations . They're they're out looking at vacancies as well as other buildings .

Speaker #5: And then , you know , I'd say predominantly . And the other thing we're seeing too , is I mentioned it before on the first caller is we're starting to see some some more start up interest , which we haven't seen over , over the last little while .

Speaker #5: A lot of tech startups have been touring some of our smaller units . And what's appealing to them is we've got some growth potential in the portfolio as well .

Speaker #5: So when we speak to them , we say , look , you may be 2000 today , but let's stay in touch . Let's communicate and let's see if we can grow .

Speaker #5: You organically . And then we just kind of show them examples of how we've done it . And it's helped us strike a few deals , which is great .

Speaker #10: Nice . Good to know . My next question will be on the DNR's . So what kind of trends are you seeing on the DNR's on smaller ?

Speaker #10: That is like less than 10,000ft² and the larger deals .

Speaker #5: Yeah . So for net effective rents , I mentioned on new deals , we're doing better than we had budgeted . We're seeing kind of high teens , low 20s , you know , we were seeing a real aversion to term to to term lengths the last few years .

Speaker #5: But this is kind of changed . We've been able I think you can see in our stats , our waltz have gone up as well too .

Speaker #5: So that's helped net effective rents get stronger . We have more time to amortize the costs . So on new deals , we're in and around high teens , low 20s , our renewals were brought down a little bit .

Speaker #5: This this past quarter just because we did some blend and extends . And on these blend and extends , we've put some costs in to attract and retain some of our largest tenants .

Speaker #5: We were successful in doing it , but it did cost us some free rent and some ties to do so . The other thing that's contributing to any year , and I'm not complaining about it because it's it's a necessary function in the market is leasing commissions for brokers have more than doubled over the last two years .

Speaker #5: So, the whole market is susceptible to that, and that contributes to our compression as well.

Speaker #10: All right . Makes sense . Thanks for the color . Just the last one . So do you see any incremental pickup in the Toronto office .

Speaker #10: Buyer sentiment . And how should we think about your disposition plans for 2026 .

Speaker #4: That's a great question . I think that there's definitely a better mood around office . There was a recent transaction that closed at 70 York , and that was interesting because that was somebody buying an office building as an office building , because most of the trades over the last few years have been buying office buildings to use as institutional quality .

Speaker #4: So we think it's marginally getting better , but it's not very deep . So I think that will take some more time . But there's definitely more people who are , you know , getting educated on it , studying the market .

Speaker #4: So we'll see what happens .

Speaker #10: All right . And any disposition plans for 2026 . Can you give any color on that ?

Speaker #4: Well , I think that in the other category , you know , I think that Jay mentioned our Kansas City asset . And , you know , if we can we might lighten up there a little bit .

Speaker #4: And Toronto , we really like what we have . We may sell a building , but I don't think we're intending to sell much in Toronto over the over the foreseeable future .

Speaker #10: Right . Makes sense . That's it for me . Thank you so much .

Speaker #9: Thank you. Thank you.

Speaker #3: This concludes the question and answer session . I would like to turn the conference back over to Mr. Cooper for closing remarks .

Speaker #4: Thank you very much . Operator . I just want to close with that little retrospective for those who may not recall , at our year end for 2015 , in February 2016 , we announced that we were concerned about suburban assets and some other assets , and we were going to sell a lot of assets .

Speaker #4: And buy back stock . So between 2016 and 2019 , we sold 38 of 40 buildings in Alberta . We sold 142 buildings in total .

Speaker #4: We reduced the size of the REIT from 7.2 billion by 60% . We bought back about 60% of the stock , and by the time it got to 2019 , we were in great shape .

Speaker #4: There was like less than 3% vacancy in Toronto . Rents were very high , buildings were full competition for space . And then we woke up at the beginning of this decade with Covid and people not being able to go to the buildings , and that was a total shock .

Speaker #4: Work from home with something that was really a fringe item before that , and it's basically been one thing after another with inflation going up , interest rates going up , uncertainty around policies with the US and elsewhere and , you know , we're going into 2026 , which is actually the seventh year of this decade .

Speaker #4: So , you know , there's no doubt it's been a tough sector to be in office . But we're pleased with the budget .

Speaker #4: We're pleased . This that we're just a bunch of new jobs created in Canada . The unemployment rate went down . It's a relatively mixed environment , but we think that there's becoming more confidence .

Speaker #4: So the question was , is it just banks that are expanding ? Well , they definitely are expanding as they bring tenants back .

Speaker #4: But we're seeing with the budget and incentives in it , we expect that there's going to be , you know , more and more businesses taking chances and growing and we think things look more positive than they have for a while .

Speaker #4: But that doesn't mean that we're not fully aware of just how difficult it's been to be in the office sector for the last 6 or 7 years.

Speaker #4: So , you know , I think we're quite optimistic for what's going forward . I think we're through a lot of the difficult times .

Speaker #4: We've made huge adjustments . But , you know , continues the way it's been for the next couple quarters will be good . But you know , there's there's no quick fixes .

Speaker #4: But we're pleased with the progress we're making . So I guess that's my summary . It's a little bit it's just like what we've been doing the last decade .

Speaker #4: Now we're hoping that we are through most of the difficult times and that things are getting better. I'd like to thank the listeners, and please know that George and I are available anytime to answer any more of your questions.