Q1 2026 RioCan Real Estate Investment Trust Earnings Call

May 5, 2026

Operator: Good day, ladies and gentlemen, welcome to the RioCan Real Estate Investment Trust Q1 2026 Conference Call and Webcast. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Ms. Jennifer Suess, Senior Vice President, General Counsel, ESG, and Corporate Secretary. Ms. Suess, you may begin.

Jennifer Suess: Thank you. Good morning, everyone. I am Jennifer Suess, Senior Vice President, General Counsel, ESG, and Corporate Secretary of RioCan. Before we begin, I am required to read the following cautionary statement. In talking about our financial and operating performance and in responding to your questions, we may make forward-looking statements, including statements concerning RioCan's objectives, its strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance, or expectations that are not historical facts. These statements are based on our current estimates and assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from the conclusions in these forward-looking statements.

Jennifer Suess: In discussing our financial and operating performance and in responding to your questions, we will also be referencing certain financial measures that are not generally accepted accounting principle measures, GAAP, under IFRS. These measures do not have any standardized definition prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other reporting issuers. Non-GAAP measures should not be considered as alternatives to net earnings or comparable metrics determined in accordance with IFRS as indicators of RioCan's performance, liquidity, cash flows, and profitability. RioCan's management uses these measures to aid in assessing the trust's underlying core performance and provides these additional measures so that investors may do the same.

Thank you, and good morning, everyone. I am Jennifer Suess, Senior Vice President, General Counsel, ESG and Corporate Secretary of RioCan. Before we begin, I am required to read the following cautionary statements. In talking about our financial and operating performance, and in responding to your questions, we may make forward-looking statements, including statements concerning RioCan's objectives, its strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance, or expectations that are not historical facts. These statements are based on our current estimates and assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from the conclusions in these forward-looking statements.

In discussing our financial and operating performance and in responding to your questions, we will also be referencing certain Financial measures that are not generally. Accepted accounting principle measures Gap under IFRS. These measures do not have any standardized definition prescribed by IFRS and are therefore unlikely to be comparable to similar. Measures presented by other reporting issuers. Non-gaap measures should not be considered as alternatives to net earnings or comparable metrics determined in accordance with IFRS as indicators of Rio. Cans performance liquidity, cash flows and profitability.

Jennifer Suess: Additional information on the material risks that could impact our actual results and the estimates and assumptions we applied in making these forward-looking statements, together with details on our use of Non-GAAP financial measures, can be found in the financial statements filed yesterday and management's discussion and analysis related thereto, as applicable, together with RioCan's most recent annual information form that are all available on our website and at www.sedarplus.ca. I will now turn the call over to RioCan's President and CEO, Jonathan Gitlin.

Jonathan Gitlin: Thank you, Jennifer. Good morning, everyone, and thanks so much for joining us today. Our Q1 results reinforce the message we've consistently delivered since our 2025 Investor Day. RioCan is executing a strategy anchored in our retail core. We're delivering durable organic growth, enhanced financial flexibility, and meaningful long-term value for unitholders. Our strategy is supported by our proven and future-focused platform. It's grounded in a culture of excellence, ongoing innovation and technology advancement, and prudent ESG practices. The quarter demonstrated momentum across all our key priorities, including leasing performance, same property NOI growth, capital recycling, and disciplined balance sheet management. It did so in a manner that is consistent with the plan and targets we laid out at our Investor Day. First off, I'd like to highlight operations.

RioCan management uses these measures to aid in assessing the trust's underlying core performance and provides these additional measures, so that investors may do the same. Additional information on the material risks that could impact our actual results, and the estimates and assumptions we applied in making these forward-looking statements, together with details on our use of non-GAAP financial measures, can be found in the financial statements filed yesterday, and Management's Discussion and Analysis related thereto, as applicable, together with RioCan’s most recent Annual Information Form. These are all available on our website and at www.riocan.com. I will now turn the call over to RioCan’s President and CEO, Jonathan Gitlin.

Thank you, Jennifer good morning everyone. And thanks so much for joining us today.

Our first quarter results reinforced the message. We've consistently delivered since our 2025 Investor Day.

Rio can is executing a strategy, anchored in our retail core.

We're delivering durable, organic growth. Enhanced Financial flexibility and meaningful long-term value for unit holders.

Our strategy is supported by our proven and future focused platform.

It's grounded in a culture of excellence, ongoing innovation and technology advancement, and prudent ESG practices.

The quarter demonstrated momentum across all our key priorities, including leasing performance, same property NOI growth, capital recycling, and disciplined balance sheet management.

And it did so in a manner that is consistent with the plan and targets, we laid out at our investor day.

Jonathan Gitlin: Record blended leasing spreads of 25.8% in the quarter was driven by new leasing spreads of 58.5%. This demonstrates once again the potent mark-to-market opportunity within our retail portfolio. Importantly, these results are not one-offs. As we discussed last quarter, we continue to benefit from a favorable retail leasing super cycle driven by a combination of expiring legacy leases and constrained new supply. They also reflect the structural advantages we highlighted at our Investor Day. These include high quality, necessity-based retail in densely populated, supply-constrained markets and strong, long-standing tenant relationships fostered over the last 30 years. We don't have an external sponsor that influences our decisions. That means we remain focused exclusively on maximizing the productivity of every square foot of our portfolio to drive unitholder value.

First off, I'd like to highlight operations.

A 58.5%.

This demonstrates, once again, the potent mark-to-market opportunity within our retail portfolio.

And importantly, these results are not 1 off.

As we discussed last quarter, we continue to benefit from a favorable retail leasing super cycle, driven by a combination of expiring legacy leases and constrained new supply.

They also reflect the structural advantages, we highlighted at our investor day.

These include high-quality necessity based retail and densely populated Supply, constrained markets and strong long-standing tenant relationships. Fostered over the last 30 years.

Jonathan Gitlin: The combination of our leasing strategy and full operating independence continues to translate into durable, repeatable growth. Our sustained organic growth reflects disciplined execution of our retail focus strategy. Over the last 12 months, that focus has delivered blended leasing spreads of 23.1%, which are now beginning to translate into same property NOI growth. Our competitive advantages were on full display again this quarter with commercial same property NOI growth of 4.7%, marking the third consecutive quarter at or above 4.5%. While we expect commercial same property NOI growth to move modestly quarter to quarter, this level of performance reinforces our confidence in the full year outlook of 3.5% to 4%. In Q1, we achieved a 92.4% retention ratio and a 98.6% committed retail occupancy.

We don't have an external sponsor that influences our decisions. That means we remain focused exclusively on maximizing the productivity of every square foot of our portfolio to drive unit holder value.

The combination of our leasing strategy and full operating Independence continues to translate into durable repeatable growth.

Our sustained organic growth reflects disciplined execution of our retail focused strategy.

Over the last 12 months that Focus has delivered Blended, leasing spreads of 23.1% which are now beginning to translate into same property. Noi growth.

Our competitive advantages were on full display again. This quarter with commercial same property, noi growth of 4.7% marking, the third consecutive quarter at or above 4 and a half percent.

While we expect commercial same property on a wide growth to move modestly quarter to quarter this level of performance reinforces our confidence in the full year outlook of 3 and a half to 4%.

Jonathan Gitlin: This underscores the resilience of our cash flows and our ability to strike the appropriate balance between pure leading rent growth and extremely high occupancy. What we're seeing today is the compounding effect of years of disciplined portfolio positioning where leasing strength, occupancy, and mark-to-market gains reinforce one another. A second major pillar of the strategy we presented at our Investor Day was strategic capital recycling, particularly through RioCan Living. The progress this quarter was meaningful. As of 4 May 2026, we anticipate repatriating approximately CAD 1.04 billion through closed firm and conditional transactions. This represents approximately 80% of our CAD 1.3 billion RioCan Living disposition target. We continue to see strong interest in the remaining 4 RioCan Living assets. We're monetizing residential rental buildings and residential inventory. In doing so, we're simplifying our business and increasing clarity in our earnings profile.

In the first quarter, we achieved a 92.4%, retention ratio and a 98.6% committed retail occupancy.

This underscores the resilience of our cash flows and our ability to strike the appropriate balance, between peer-leading, rent growth and extremely high occupancy.

What we're seeing today is the compounding effect of years of discipline portfolio, positioning where leasing strength occupancy and mark-to-market gains, reinforced 1. Another

A second major pillar of the strategy we presented at our investor day was strategic Capital recycling particularly through riocan living.

The progress. This quarter was meaningful.

As of May 4th 2026, we anticipate repatriating approximately 1.04 billion dollars through closed firm and conditional transactions.

This represents Approximately 80% of our 1.3 billion riocan living disposition Target.

We continue to see strong interest in the remaining 4. Rio can living assets.

Jonathan Gitlin: The proceeds are being redeployed accretively into portfolio investments, unit repurchases, and balance sheet flexibility, exactly as we outlined at Investor Day. Our capital allocation decisions continue to be guided by a disciplined hierarchy, always having a view on the most accretive outcome. During the quarter, we reinvested CAD 22 million into high return portfolio investments, including retail infill, and asset enhancements. This allows us to unlock embedded density within our existing footprint. At the same time, we remained opportunistic in the public markets, repurchasing and canceling 2.6 million units at an average price of CAD 19.51 under our NCIB program. This reflects our view that the current unit price does not fully reflect the value and earnings power of our business.

We're monetizing residential rental buildings and residential inventory in doing. So we're simplifying our business and increasing Clarity in our earnings profile.

The proceeds are being redeployed to creatively into portfolio, Investments unit, repurchases and balance sheet flexibility exactly. As we outlined at investor day,

our Capital allocation decisions continue to be guided by a disciplined hierarchy, always having a view on the most accretive outcome.

During the quarter, we reinvested 22 million into high return portfolio Investments, including retail, infill and asset enhancements.

This allows us to unlock embedded density within our existing footprint.

At the same time, we remained opportunistic in the public markets, repurchasing and canceling 2.6 million units and an average price of $19.51 under our ncib program.

Jonathan Gitlin: There's been a steady stream of private and now public market transactions involving high quality retail assets and portfolios that are similar to ours. These market reference points offer strong evidence of current valuations for assets like ours, reinforcing that we are trading at below NAV. Our balance sheet remains well-positioned as assessed by a suite of key credit metrics. RioCan's adjusted spot debt to EBITDA is 8.94x. As we advance our capital recycling strategy through 2026, we fully anticipate net debt to EBITDA to settle into the midpoint of our stated guidance range. The strength and flexibility of our balance sheet were further recognized this quarter as Morningstar DBRS affirmed our triple B credit rating and revised the trend to positive. Looking ahead, we reaffirm our 2026 financial outlook, including Core FFO per unit of CAD 1.60 to CAD 1.62.

This reflects our view that the current unit price does not fully reflect the value and earnings power of our business.

There's been a steady stream of private and now public market transactions involving high-quality retail assets and portfolios that are similar to ours.

These Market reference points offer strong evidence of current valuations for assets. Like ours reinforcing that we are trading at below nav.

Our balance sheet remains well positioned as assessed by a suite of Key Credit metrics.

Rioux, Cannes, adjusted spot debts to IBA is 8.94 times.

Answer Capital recycling strategy, through 2026, we fully anticipate net debt to Eva to settle into the midpoint of our stated guidance range.

The strength and flexibility of our balance sheet were further recognized this quarter as Morning Star, dbrs affirmed, our Triple B credit rating and revised the trend to positive.

Jonathan Gitlin: Additionally, we reaffirm our guidance of commercial same property NOI growth of 3.5% to 4%. These targets are firmly supported by embedded leasing spreads already achieved, strong visibility on 2026 lease maturities, continued discipline in capital deployment, and reduced capital intensity as we complete the wind down of mixed-use construction. In closing, Q1 was a strong start to the year and a clear reflection of our consistent execution of the commitments we outlined at Investor Day. RioCan has a focus strategy and is perfectly positioned to compound organic growth. The trust has strong leasing fundamentals and a data platform that continues to provide multi-year growth visibility. We're also equipped with the balance sheet flexibility to act decisively. In this turbulent world, owning hard assets with reliable cash flow in prime markets is advantageous.

Looking ahead, we reaffirm our 2026 Financial Outlook, including core ffo per unit of a dollar 60 to a dollar 62.

Additionally, we reaffirm our guidance of commercial, same property and AI growth of 3.5 to 4%.

These targets are firmly supported by embedded leasing spreads, already achieved strong visibility on 2026 lease maturities, continued discipline in capital deployment, and reduced capital intensity as we complete the wind down of mixed-use construction.

In closing q1 was a strong, start to the year and a clear reflection of our consistent execution of the commitments we outlined at investor day.

Riocan has a focus strategy in his perfectly positioned to compound organic growth.

The Trust has strong leasing fundamentals and a data platform that continues to provide multi-year growth visibility.

we're also equipped with the balance sheet, flexibility to act decisively

Jonathan Gitlin: To put it another way, it is a great time to invest in RioCan. With that, I'll turn the call over to Franca Smith, RioCan's Interim Chief Financial Officer, and afterwards, we'll be happy to take your questions.

in this turbulent World owning hard assets with reliable, cash flow, and Prime markets is advantageous.

to put it another way, it is a great time to invest in Rio can

Franca Smith: Thank you, Jonathan. Good morning, everyone. Our Q1 results were in line with our expectations and reflect continued progress on the priorities we set out at our Investor Day, driving organic growth from our retail core, and maintaining a disciplined approach to capital allocation. Our balance sheet remains strong, supported by healthy credit metrics. Our financial flexibility continues to improve as we execute our capital recycling strategy. I'll walk through the quarter starting with Core FFO. As discussed at Investor Day last fall, we intentionally moved to Core FFO as a key performance metric because it better reflects the recurring earnings power of our core retail business. Core FFO also gives a more consistent basis to track and assess operating performance and cash flow generation over time.

With that, I'll turn the call over to Franca Smith, RioCan's Interim Chief Financial Officer, and afterwards we'll be happy to take your questions.

Thank you, Jonathan. And good morning everyone.

Our first quarter results were in line with our expectations and reflect continued progress. On the priorities, we set out at our investor day,

Driving organic growth from our retail corps and maintaining a disciplined approach to capital allocation.

Our balance sheet remains strong supported by healthy credit, metrics.

Our financial flexibility continues to improve as we execute our Capital recycling strategy.

I'll walk through the quarter, starting with Cor ffo.

As discussed at investor day last fall.

We intentionally moved to core ffo, as a key performance metric, because it better reflects the recurring earnings power of our core retail business.

Franca Smith: Mechanically, it starts with FFO and adjusts for items that don't reflect our underlying run rate operations, such as residential inventory gains, HBC related income, and restructuring charges. Core FFO in Q1 was CAD 0.39 per unit in line with Q1 of last year. There were four primary drivers of our Core FFO results. Commercial same property NOI increased 4.7% year-over-year, contributing over CAD 0.02 per unit. Our unit buybacks had a positive impact of approximately CAD 0.01 per unit. These factors were offset primarily by higher interest expense and lower interest income, which had a combined impact of just over CAD 0.02 per unit. Lower NOI from the sale of residential rental assets had an impact of approximately CAD 0.01 per unit. We anticipate Core FFO to ramp up over the balance of the year.

Core ffo also gives a more consistent basis to track and assess operating performance and cash flow generation over time.

Mechanically, it starts with FFO and adjusts for items that don't reflect our underlying run-rate operations, such as residential inventory, gains (HBC), related income, and restructuring charges.

Core FFO in the first quarter was $0.39 per unit, in line with Q1 of last year.

There were 4 primary drivers of our core ffo results.

Commercial same property in oi increased 4.7% year-over-year contributing over 2 cents per unit.

Our unit BuyBacks had a positive impact of approximately 1, cent per unit.

These factors were offset primarily by higher interest expense and lower interest income, which had a combined impact of just over $0.02 per unit.

And lower NOI from the sale of residential rental assets had an impact of approximately $0.01 per unit.

Franca Smith: As Jonathan mentioned, we expect to deliver on our 2026 guidance. Turning to other items in the quarter, we recorded approximately CAD 2 million of one-time restructuring costs related to the reduction and consolidation of development and construction functions. Adjusted G&A expense as a percentage of rental revenue, which excludes these restructuring costs, is expected to remain below 4% on a full year basis. We also recorded approximately CAD 6 million of condo-related income in the quarter. Remaining residential inventory under construction is approximately CAD 100 million at our proportionate share or roughly 1% of NAV. While this balance will be addressed responsibly over time, we do not expect condominium-related items to make a material contribution to FFO for the remainder of the year. Together, these two items account for the majority of the difference between FFO and Core FFO. Moving on to our balance sheet.

We anticipate core ffo to ramp up over the balance of the year. And as Jonathan mentioned, we expect to deliver on our 2026 guidance.

Turning to other items in the quarter. We recorded approximately 2 million of 1 time, restructuring costs related to the reduction and consolidation of Development and Construction functions.

Adjusted GNA expense as a percentage of rental Revenue. Which excludes these restructuring costs is expected to remain below 4% on a full year basis.

We also recorded approximately 6 million of condo related income in the quarter.

Remaining residential inventory. Under construction is approximately 100 million at our proportionate share or roughly 1% of nav.

While this balance will be addressed responsibly over time, we do not expect condominium related items to make material contribution to ffo for the remainder of the year.

The majority of the difference between ffo and core ffo.

Franca Smith: Our adjusted spot debt to adjusted EBITDA ratio was 8.94x at quarter end. The increase versus year-end was primarily driven by acquisition timing related to Georgian Mall and Oakville Place, where the associated EBITDA contribution builds over time while the associated debt was recognized immediately during the quarter. We expect these acquisitions to contribute positively to both Core FFO and our leverage profile over time. Looking across our suite of metrics, our unsecured debt to total debt improved to 66%, and this mix will continue to improve as we execute on our financing plan. We had approximately CAD 9.4 billion of unencumbered assets and approximately CAD 1.3 billion of available liquidity at quarter end, providing ample financial flexibility and capacity.

Moving on, to our balance sheet.

Our adjusted spot debt to adjusted ebitda ratio was 8.94 times at quarter end.

The increase versus year-end was primarily driven by

The increase versus last year-end was primarily driven by acquisition timing related to Georgian Mall and Oakville Place, where the associated EBITDA contribution builds over time, while the associated debt was recognized immediately during the quarter.

We expect these Acquisitions to contribute positively to both core ffo and our leverage profile over time.

Looking at our suite of metrics, our unsecured debt to total debt, improved to 66%, and this mix will continue to improve as we execute on our financing plan.

Franca Smith: As Jonathan also mentioned during Q1, DBRS reaffirmed our triple B credit rating and revised the trend from stable to positive. We view this as an important endorsement of our balance sheet trajectory and the continued progress we are making on deleveraging. Financing activity during the quarter, we raised CAD 200 million of senior unsecured debentures with a 4.308% coupon rate and a 7-year term. We also repaid CAD 100 million of unsecured debentures upon maturity. For the balance of the year, we expect that our capital recycling activities and capacity on our credit facility will be used to repay the vast majority of our remaining debt maturities. Additional debt issuances will be completed on an opportunistic basis.

We had approximately $9.4 billion of unencumbered assets and approximately $1.3 billion of available liquidity at quarter end, providing ample financial flexibility and capacity.

As Jonathan also mentioned during the first quarter, DBRS reaffirmed our Triple B credit rating and revised the trend from stable to positive.

We've used this as an important endorsement of our balance sheet trajectory and the continued progress, we are making on deleveraging.

On financing activity. During the quarter, we raised 200 million of senior unsecured debentures with a 4.308% coupon rate and a 7-year term.

We also repaid, 100 million of unsecured debentures upon maturity.

For the balance of the year, we expect that our Capital recycling activities and capacity on our credit facility will be used to repay the vast majority of our remaining debt maturities.

Franca Smith: To wrap up, our Q1 results represent a strong start to the year and align with the 3-year outlook we shared at Investor Day. Operating fundamentals across our portfolio remain exceptional, and we are delivering on our strategy and commitments. Both private and public market transactions continue to validate the inherent value of our business, and we remain focused on executing our plan to drive unitholder value. With that, I will turn the call back to the operator to begin the question-and-answer session.

Additional debt issuances will be completed on an opportunistic basis.

To wrap up our first quarter results, represent a strong start to the year and aligned with the 3-year Outlook we shared at investor day.

Operating fundamentals across our portfolio remain exceptional, and we are delivering on our strategy and commitments.

Both private and public market transactions. Continue to validate the inherent value of our business and we remain focused on executing our plan to drive unit holder value.

With that, I will turn the call back to the operator to begin the question and answer session.

Operator: Ladies and gentlemen, we are currently experiencing technical difficulties. Please stand by as we resolve this issue before proceeding with our question-and-answer session.

Ladies and gentlemen, we are currently experiencing technical difficulties. Please stand by as we resolve this issue before proceeding with our question and answer session.

Operator: Ladies and gentlemen, we apologize once again for any technical difficulties. A full recording will be made available and sent out to you all. We are now ready for the Q&A portion of today. As a reminder to please ask a question, please press star followed by 1 on your telephone keypad. Once again, that is star followed by 1 to enter the question queue. We will pause for just a moment to compile the Q&A roster. Okay. Our first question is in queue. If you can please state your name and company, that would be greatly appreciated. Your line is open.

Ladies and gentlemen, we apologize once again for any technical difficulties. Uh, a full recording will be made available, uh, and sent out to you all. Uh, we are now ready for the Q&A portion of today. Uh, as a reminder to please ask a question. Please press star. Followed by the number 1 on your telephone keypad. Once again, that is star followed by the number 1 to enter the question queue.

Uh, we will pause for just a moment to compile the Q&A roster.

Okay. Our first question is in queue. If you can, please state your name, uh, and the company, uh, that would be greatly appreciated.

Your line is open.

Lorne Kalmar: Is it Lorne?

Is it?

Operator: Yes. Your line is open.

Lorne Kalmar: Sorry. This is Lorne Kalmar from Desjardins. Apologies. I didn't know whose line was open. Just one more little technical difficulty, let's put that behind us and get down to the good stuff. On same property NOI, you guys had the continuation, I think, of some solid prints in Q3 and Q4 into Q1. I think, you called out a part of that was the spaces that had gone dark in 2024, cash rents resuming. How do you expect same property NOI to trend over the balance of the year? Kind of Q2 should be another one that's a little bit outsized, it moderates a bit over the back half.

Yes, your line is.

Um, Lauren caller from d and apologies. Um I didn't know whose line is open. Um, just 1 more little technical difficulty but uh let's put that behind us and get down to the good stuff.

Jonathan Gitlin: Hmm. Hey, Lorne. A couple of things to start. First of all, you no need to apologize on your end. This is totally our service provider's issue. Second of all, love the headline of your report. Wooderson is always a good quote. Thirdly, with respect to SPNOI, we had a great quarter. The year is going very well. It's a little too premature to predict the entire remainder of the year, and we still remain very confident in our guidance. It will be between 3.5% to 4%. Things are all pointing to very favorable outcomes. If the year continues to go the way it is going, we will provide updated guidance in the coming quarters.

So on same property in Ohio, you guys had the continuation, I think of some solid prints um in 3, q and 4 q into 1 q. And I think you called out a part of that was um, the spaces that have gone dark in 2024, cash, rents for zooming, how do you expect the same property? An ally to Trend over the balance of the years kind of 2 Q should be another 1, that's a little bit outside than it moderates a bit over the back half.

Jonathan Gitlin: Right now, we are firmly confident behind the 3.5% to 4% number that we gave out in our guidance.

Hey, Lauren, a couple of things to start. First of all, you no need to apologize on your end. This is uh, totally our uh service provider's issue. Second of all, love the um, headline of your report wooderson is always a good quote thirdly, with respect to spoi. Um, we had a great quarter, um, the the year was going very well. It's a little too premature to predict the entire remainder of the year and we still remain very confident in our guidance. So, we'll be, uh, between 3 and a half to 4%. Um, things are all pointing uh to very favorable outcomes and and uh, if the year continues to uh, go the way it is going. We will provide updated guidance um, in the coming quarters. But right now, we are firmly confident behind the 3 and a half to 4% number that we gave out in our guidance.

Lorne Kalmar: Okay. That's good to hear. Maybe just flipping to the RioCan Living side of things. It seems like you guys made some really good progress there. I was just wondering if you'd give us a I know it's a sensitive one, but a rough idea perhaps of the yield on the assets that are either sold or under agreement to be sold, and then just maybe an idea of the buyer profile.

Okay. Um,

That's, uh, that's good to hear, and then maybe just flipping to the, uh, real, okay— and living side of things. Seems like you guys made some really, really good progress there.

Jonathan Gitlin: Sure, Lorne. It's all in line with our IFRS values and, you know, it's in the again, the low 4 to mid 4 range across the board. Now, that's a balanced, some are lower or a bit higher. The buyer pool is consistent with the pool of buyers that we've had to date, which is a range. It's some private wealth and family office buyers. It's some institutional buyers. It is some private equity buyers. It really is a range.

Idea of the buyer profile.

Sure Lauren. So it's all in line with our IFRS values. And um, you know, it's in the um, again the uh, Low 4 to Mid 4 range, um, across the board. Now, that's a balanced summer. Lower summer are a bit higher. Uh, the buyer pool is consistent with the pool of buyers that we've had to date, which is um a range. It's uh, some private, uh, wealth and family net. Uh, sorry family, uh office, um uh buyers. It's some institutional buyers and it is um, uh, some um, private Equity buyer. So it's a, it really is a range.

Lorne Kalmar: I guess as you kind of look ahead, I think you got 4 or so left to go. Has there been any change in the acquisition transaction environment since the aforementioned deals were consummated?

And I guess as you kind of look ahead to you, I think you got 4 or so left to to go. Has there been any change in the acquisition transaction environment since uh the aforementioned deals with automated?

Jonathan Gitlin: No, it still remains strong. These assets are new, they're transit oriented, they don't have rent control, and there's a high degree of demand for them. For us, it's just a question of getting all of them stabilized, getting the lease up as we intend to get it, and then I think there will be a fairly robust market for them.

No, it Still Remains strong. There's these assets are are new the transit oriented they don't have rent control. Um, and, and there's a, a high degree of demand for them. Um, for us, it's just a question of getting, all of them stabilized getting the lease up as we, we intend to get it. And then I think there will be, um, a fairly robust market for them.

Lorne Kalmar: Okay. I guess, just to be clear, you still expect those remaining 4 to kind of, hopefully transact on them by the end of the year?

Okay and then I guess is it just to be clear? You you still expect those remaining 4 to kind of hopefully transact on them by the end of the year.

Jonathan Gitlin: As I've indicated previously, it's our intention to get them done as quickly as possible just because of stabilization taking a little bit longer. There might be a couple of them that trickle into 2027, but our hope is that we have them contracted for by the end of the year, and we'll provide updates as the year progresses. Given the strength of the assets, and given our desire to sell, we are confident that they will all be sold in short thrift.

Lorne Kalmar: Okay. Thank you so much. I'll turn it back.

Jonathan Gitlin: Thanks, Lorne.

Okay, thank you so much. I'll turn it back.

Thanks Lauren.

Operator: Our next question comes from the line of Matt Kornack. Your line is open.

Matt Kornack: Hey, guys.

Our next question comes from the line of Matt cormack, your line is open.

Jonathan Gitlin: Hey, Matt.

Matt Kornack: strong quarter on same property and NOI growth. That's notwithstanding, it looks like recoveries were maybe 99% as opposed to 100% historically. Can you give us a sense if that's just a timing issue in this particular quarter? Also, percentage rent looks a little bit low relative to what we've expected in the past. If there's anything color-wise there, that would be helpful.

Hey guys. Um, you had a strong quarter on the same property. I don't uh, noi growth. Um, and that's not withstanding. It looks like recoveries were maybe 99% as opposed to 100% uh historically. Uh, could you give us a sense of that? That's just the timing issue in in this particular quarter and then also presented your rent looks a little bit low relative to what we've expected in the past. But if there's any anything colour-wise there that would be helpful.

Jonathan Gitlin: Yeah. I think it's all just seasonality. I don't think there's anything to read into it. On the percentage rent, most certainly it's seasonal, and that usually picks up as the year progresses. On the recoveries, again, I think that is really just a byproduct of the fact that it was Q1, usually a little bit softer on the recoveries, but that usually stabilizes and ramps up by the end of the year.

John Ballantyne: Yeah, Matt, the only thing I'd add, this is John Ballantyne. Percentage rent, you'll probably see that drop over time, not because tenant sales productivity is decreasing, but because we are converting some, I would say, historic or legacy percentage rent in lieu of net rents. You know, based on the hotness of this leasing market, we're able to get in front of these tenants and convert them to net deals, which will obviously benefit same property NOI.

Um, yeah. So I—I think it's all just seasonality. Um, I don't think there's anything to read into it. Um, on the percentage run, most certainly it's seasonal and that usually picks up as the year progresses. And on the recoveries, um, again, I think that is really just a byproduct of the fact that it was first quarter—usually a little bit softer on the recoveries. But that usually, uh, stabilizes and ramps up by the end of the year.

Yeah, Matt the only thing I'd add this is John Valentin percentage rent. You will probably see that drop over time, not because tenants sales productivity is decreasing, but because we are converting some, I would say, historic or Legacy percentage rent in lie of um, net rents. Um, so, you know, based on the hotness of this leasing Market, we're able to get in front of these tenants and convert them to net deals, which will obviously benefit, uh, same property in the line.

Matt Kornack: Okay. No, that makes sense. On the in-place occupancy front, committed remains essentially at an all-time high flow, but there was a little bit of a dip in the in-place. Did you have some tenant turnover? If we look at your new leasing spreads in like the 50-plus percent range, is that the kind of rents you're getting on any sort of turnover you're seeing in tenants?

Okay, no, that makes sense. Um, on the Inplay box, you can see front committed remains essentially at an all-time high, high fold. But there was a little bit of a dip in the Inplay. Um, did you have some tenant turnover? And if we look at your, uh, new leasing spreads in like the 50% range, is that the kind of rents you're getting on any sort of turnover you're seeing in tenants?

Jonathan Gitlin: Yeah, I think that the this is I would say an anomalous quarter with respect to that gap between committed and in-place occupancy. Based on the leasing that the team has done, you're already seeing that gap close quite dramatically, largely due to the HBC deals that we did in Oakville Place. I think you'll see it back to the normal range, closer to 75 bips, which is our historic average. The second part of the question, I can hand over to-

John Ballantyne: Yeah. Look, Matt, the in-place occupancy did drop. We did buy a half interest in Oakville and Georgian Mall, which obviously had those two HBC boxes, which have been fully leased, but are not paying rent yet. That accounted for about 40 basis points. As Jonathan said, with Oakville taking possession in April, there's only about a 70 basis point gap now between committed and in-place.

In uh April. Uh, there's only about a 70 basis, point gap now between

Jonathan Gitlin: Yeah, you'd asked about the new leasing spreads. I mean, look, it's just a sign of the market, the sign of our portfolio, and the sign of our team, strength in them all. We feel confident that, you know, while this is an outsized quarter for new leasing spreads, it sets a tone, and I think it underscores the strength of the markets out there.

Yeah, and you would ask about the new leasing spreads, I mean, look, it's just a sign of the market, the sign of our portfolio and the sign of our team, uh, strengthened them all. And uh, we feel confident that, you know, while this is an outsized quarter for new leasing spreads, it is it sets the tone and I think it it uh, is is underscores the strength of the markets out there.

Matt Kornack: On that front, maybe just a broader commentary. I mean, it seems we didn't think they could go higher, but you're setting all-time records. Like, is the market sequentially still improving or are we at a period of stability here now after getting some really good rent growth? It's just it seems like you've got continued momentum and interested if.

Jonathan Gitlin: Yeah

Matt Kornack: if you're seeing that in the marketplace now.

On on, on that front. Maybe just a broader commentary. Um I mean it seems I we didn't think they could go higher but your setting all-time records like is the market sequentially still improving? Or are we at a period of stability here? Now, after getting some really good rent growth, I it's just it seems like you you've got continued momentum and

Jonathan Gitlin: It's certainly been a great quarter, and we think it is quite durable. That said, all of our projections that we provided at Investor Day were predicated on a 15% leasing spread combined. These leasing spreads are obviously in excess of that, and we are certainly taking advantage of a very strong market, an ever-improving portfolio, and a team that has very deep relationships to continue driving growth. The consistency of these spreads, they're gonna ebb and flow. I mean, they're very sensitive to specific deals, and you'll see a bit of fluctuation between quarters. Right now, based on all those strengths that I spoke about and the strength of the Canadian retail landscape, we feel confident that it's not, you know, there will be a continued strength in that regard and operationally for RioCan.

interested, if, if you're seeing that in the marketplace now,

It's, it's certainly been a great quarter and we think it is quite durable, that said, all of our projections that we provided at investor day were predicated on a 15%, leasing spread combined, um, these leasing spreads are, obviously, in excess of that. And, um, we are certainly taking advantage of a very strong market and ever improving portfolio and a team that has very deep relationships to continue driving growth. Uh, the consistency of these spreads, they're going to have and flow. I mean, they're very, um, they're very sensitive to specific deals and you'll see a bit of fluctuation between quarters, but right now based on

Jonathan Gitlin: But as I said, you're not gonna see that exact same level every single quarter going forward. We're happy with where we currently stand, and we think it's reasonably sustainable, but there is gonna be ebbing and flowing.

All those strengths that I spoke about and the strength of the Canadian, um, Retail Landscape. We feel confident that it's not, you know, there there, there will be a continued strength in, in that regard and operationally for riocan. Um, but as I said, you know, you're not going to see that exact same level every single quarter going forward, but, um, we we are, um, we're happy with where we currently stand. And, um, we think it's, it's reasonably sustainable, but there is going to be having and flowing

Matt Kornack: That makes sense. Last one for me, just obviously the big M&A trade at a pretty low cap rate for some of the more core assets. Does that give you comfort around your IFRS value, maybe some optimism on the portfolio being more than what you thought it was worth, or just any read-throughs from a fairly sizable transaction in the grocery industry?

That's makes sense. Last 1 for me, just um, obviously we had a big m&a trade at a pretty low cap rate for some of the more core assets. Um, does that give you comfort around your IRS value, maybe some optimism on on the portfolio being more than what you thought it was worth or just any read through from, uh, from

Jonathan Gitlin: I don't even know which transaction you're referring to, Matt. Of course, for us, we've always been comfortable with our IFRS valuations. That's why we certify them and put them out there. That being said, I think that transaction stands as a great validation for the strength of retail in Canada and the desirability of it for both institutional owners and other REITs. I think again, it just draws us closer to what the private market has been seeing for quite some time. We've been seeing trades. I mean, they are quite disparate because there haven't been a lot of them, but we've been seeing trades that are also indicative of a very strong market for retail assets.

Sizeable transaction. In the, in the grocery store, I don't even know which transaction you're referring to Matt. Um, I just, of course for us, we've always been comfortable with our IFRS valuations, that's why we certify them and put them out there. Uh, that being said, I think that transaction stands as a great validation for the strength of retail in Canada and the desirability of it for both institutional owners and other REITs. Um, so I think again, it just draws us closer to what the private Market has been seeing for. Quite some time, we've been seeing trades, I mean, they are quite desperate because they're having a lot of them but we've been seeing

Jonathan Gitlin: This didn't surprise us, but I think it just serves as broader validation behind the strength and desirability of great major market retail assets like those owned by RioCan.

Trades that are also indicative of a very strong market for retail assets, so this didn't surprise us, but I think it just serves as broader validation behind the strength and desirability of great major market retail assets like those owned by RioCan.

Matt Kornack: Thanks, guys.

Thanks sense.

Jonathan Gitlin: Thanks, Matt, and thanks for your patience.

Operator: As a reminder to thank you. As a reminder to ask the question, please press star followed by the number one on your telephone keypad. Our next question comes from the line of Sam Damiani with TD. Your line is open.

Thanks man. Thanks for your patience as a reminder to

Sam Damiani: Thank you. Good morning, everyone. Maybe just on the leasing side here, obviously, a highlight for everyone seeing these spreads. You know, occupancy, you know, remains essentially full. You really can't accommodate, you know, new demand except for any turnover that you have, which also remains low. You know, how is the leasing discussions changing? How, maybe the mix of tenant categories that you're dealing with as you deal with this increasingly scarce amount of available space in your portfolio?

Thank you. Thank you. As a reminder, to ask a question, please press star followed by the number 1 on your telephone keypad. Our next question comes from the line of Sam Demian with TI. Your line is open.

Thank you. Good morning everyone. Um, maybe just on the, on the leasing side here, obviously, uh, a highlight for, for everyone seeing these spreads, you know, occupancy, you know, remains essentially full, um, you really can't accommodate, you know, new demand, except for an internal that you have, which also remains low. So, you know, how is how is the leasing discussions changing? How

The mix of tenant categories that you're that you're dealing with as you deal with this uh increasingly scarce amount available space in your in your portfolio.

Jonathan Gitlin: First of all, thanks for your patience, Sam, and I understand that you might have missed the extremely eloquent opening remarks by Jennifer, myself, and Franca, and we'll get those to you.

Sam Damiani: Oh, no. I caught it all.

Jonathan Gitlin: Look, the backdrop.

Sam Damiani: It was wonderful.

Jonathan Gitlin: Oh, good. They were brilliant, right? The backdrop is very strong and, I think, you know, we're doing extraordinarily well with the necessity-based tenants. Keeping in mind that we do have this mark-to-market opportunity that we have been conveying for a very long time. Our average new rents in the quarter were now well over CAD 30. Our average rents across the portfolio were just over CAD 23. That leaves a sizable room to really extract what we feel are market rents out of our portfolio. The team has done an extremely good job in taking tenants through this and making them understand what the true landscape is. We are using data more so than we ever have to figure out exactly where market rates lie.

Jonathan Gitlin: With respect to the tenants out there that are utilizing the space, it really is the list of the same incumbent tenants that you've seen, that make up a part of our portfolio for quite some time. I'll turn it over to Oliver Harrison just to give you a little more color on who they are, but I don't think you'll hear any surprises.

Oliver Harrison: Correct. Yeah. If you look at our quarter, the volume is really being driven by grocery, pharmacy, essential personal services. You know, no change from what we've seen over the past few quarters. Back to your first question, excuse me, on how the negotiations have changed. I would say the only thing, you know, that is being done differently, and this isn't like a Q1 event, but this has been happening, let's say, over the last year to 18 months, is that, you know, the negotiations are more holistic than just the economic outcome of the deal. You know, we are using the current market environment to remove no-builds. New leases do not have any fixed rent options.

Well over $30, our average rents across the portfolio. We're just over 23, that leaves a sizable room to to Really extract what we feel. Our Market rents out of our portfolio and the team has done an an extremely good job in, taking tenants through this and making them understand what the true landscape is. And we are using data more so than we ever have to figure out exactly where Market rates lie. Um, but with respect to the tenants out there that are that are, um, that utilizing the space. Um, it really is uh, the list of the same incumbent tenants that you've seen. Uh, that make up a part of our portfolio for quite some time. I'll turn it over to Oliver Harrison and just give you a little more color on who they are, but I I don't think you'll you'll hear any surprises.

Correct. Yeah, it's if you look at our quarter, the uh, volume is, is really being driven by grocery Pharmacy, essential personal services, um, you know, no change from what we've seen over the past few quarters, uh, and back to your first question, excuse me on how the negotiations have changed. I would say, the only thing

You know that is is being done differently. And and this isn't like a q1 event, but this has been happening. Let's say over the last

year to 18 months is that, you know the negotiations are

More holistic than just, the economic outcome of the deal. You know, we are using uh, the current market environment to remove no bills new. Leases do not have.

Oliver Harrison: Annual growth is a concept that 2 years ago was challenging to get tenants to agree to. 98% of our deals now have some form of annual growth embedded in the negotiation. We are leveraging all aspects of this market to produce not only the best economic outcome of these deals, but from a long-term kind of value creation and flexibility. We're, I think we're doing extremely well.

Um, any, uh, fixed rent options—uh, you know, annual growth is, uh, you know, is a concept that, you know, two years ago was challenging to get tenants to agree to—98% of our deals now have some form of annual growth embedded in, um, you know, in the negotiation. So we are leveraging all aspects of this market to produce, you know, not only the best economic outcome for these deals, but from a long-term kind of value creation and flexibility, um, you know, we're, uh, I think we're doing extremely well.

Sam Damiani: Okay, great. That's helpful. Maybe just on the other side of it, you know, are there any known larger or multi-space retailer tenants that you expect to be moving out or not renewing in the coming year or two?

Uh, okay, great. That's uh, that's helpful and maybe

Just on the other side of, you know, are there any known larger or multispace retailer, tenants, uh, that you expect to be moving out or not? Renewing in, in the coming year?

Jonathan Gitlin: I think just, there's certain tenants that we know might leave a space, but they're sporadic. There's no theme to it. The good news is there's demand for whatever space we know might be coming back to us.

Too. I think just uh, there, there's certain tenants that um we know might leave a space but there's sporadic, there's no theme to it and uh the good news is is demand for whatever space. We know might be coming back to us.

Sam Damiani: Okay, great. Just one last small one. You know, it was a pretty, tough winter. Just out of curiosity, was there snow removal costs, you know, meaningfully above normal in Q1?

Okay, great and just 1 last small 1, you know, it was pretty uh, tough winter. Just out of curiosity, was was there snow removal costs? You know, meaningfully above normal in q1.

John Ballantyne: Hey, Sam. Yeah, they were. You know, there's probably 4 or 5 larger centers in the GTA area that we actually had to haul snow, which is expensive, which means you basically have to bill the tenants. As the tenants do pay for all this, we had to send out some interim billings just to catch up on that and all good.

Hey Sam. Yeah, they were, um, you know, there's probably 4 or 5 larger centers in the GTA area that we actually had to haul snow, which is expensive, which means you basically have to build the tenants as the the tenants do pay. For all of this. We had to send out some, uh, interim Billings just to catch up on that. And

Oliver Harrison: Yeah, snow removal is not included in the limited number of tenants that have caps on CAM, so it's fully recoverable.

All good.

Sam Damiani: Well, that's good. Okay, great. I'll turn it back. Thanks very much.

Yeah, and still, removal is not, uh, is not included in the limited number of tenants that have caps on CAM, so it's fully recoverable.

oh, that's

Jonathan Gitlin: Thanks, Sam.

good. Okay, great. I'll uh, I'll turn it back. Thanks very much.

Operator: Our next caller comes from the line of Brad Sturges. Your line is opened.

Thanks Sam.

Brad Sturges: Good morning. Just from a capital allocation perspective, just thinking about the NCIB, obviously, you know, leverage ticked up over the quarter over quarter and at the same time, I guess your stock price improved. Like, how do you think about capital allocation towards unit buybacks in the short term as still an opportunity, or should we see a little bit of a change in thinking, at least in the short run on the NCIB?

Our next caller comes from a lot of Brad Sturgis. Your line is opened

Hey, good morning. Um

Just from a a capital allocation perspective just thinking about the ncib obviously you know, leverage picked up over the uh, Court recorder. And at the same time I guess your stock price improved, like how do you think about Capital allocation towards uni Buybacks in the short term as as still an opportunity or uh should we see a little bit of a change in thinking um at least in the short, run on the NAB?

Jonathan Gitlin: Thanks, Brad Sturges, and again, thanks for your patience on the call today. The capital allocation decisions are really rooted in achieving our 9% unlevered IRR hurdle. When the stock price goes up or the unit price goes up, it obviously makes it challenging to achieve that. The good news for us is that there are other opportunities to invest in, such as putting money into our own shopping centers, building up pads and strips, which in this environment certainly allows us to hurdle that 9% IRR number. Yeah, if we are in the fortunate circumstance where the unit price continues to increase, NCIB becomes less of a promising prospect for capital allocation, but we feel that there will be, you know, other opportunities that arise out of there, out there.

Jonathan Gitlin: Then the other thing I'll just remind you of is that the balance sheet and the strength of it is a core principle for RioCan, so that will always be our principal focus. You know, as we've asserted before, as RioCan Living assets close as the year goes on, it will continue to strengthen that balance sheet, and we'll get closer to the mid part of that range for net debt to EBITDA.

Circumstance where the unit price continues to increase? Then ncib becomes less of a promising Prospect for Capital allocation but we feel that there will be you know other opportunities that arise out of there out there. And then the other thing I'll just remind you of is that the balance sheet and the strength of it is a core principle for riocan and so that will always be our our principal focus and you know as we've uh asserted before as Ryo Kan living assets close as the year goes on, it will continue to strengthen that balance sheet and we'll get closer to the the mid part of that range for net debt.

Brad Sturges: Just on the intensification opportunity, I know you've highlighted a few times in terms of the potential across the portfolio. I guess, in the short term, could we expect a couple more projects getting added into the active pipeline, or how should we think about that over the remainder of the year?

Jonathan Gitlin: Yeah, I think we've already put out guidance that we're gonna spend about CAD 100 million in 2026 on a combination of CapEx endeavors, one of which is of course, putting money into pad build-outs and strip build-outs. I think that's gonna be fairly consistent. We're gonna seek out as many opportunities as are logical on a year-by-year basis, but I think that's a logical run rate for years going forward, but we'll continue to update that guidance.

And just on the intensification opportunity, I know you you pilot a few times in terms of the potential across the portfolio. I guess, is there in the short term can we expect a couple more projects getting added into the the active pipeline, or how should we think about that over the the remainder of the year?

Yeah, I think we've we've already put out guidance. That we're going to spend about a hundred million dollars in 2026 on a combination of capex Endeavors 1 of which is, of course, putting uh, money into you uh pad build outs and strip build outs. And I think that's going to be fairly consistent. We're going to seek out as many opportunities as our logical on a year-by-year basis but I think that's a logical run rate for years. Going forward, but we'll continue to update that guidance.

Brad Sturges: Sounds good. Thank you.

Sounds good. Thank you.

Operator: Our next question comes from the line of Dean Wilkinson. Your line is open.

Jonathan Gitlin: Hey, Dean.

Dean Wilkinson: Thanks.

Dean Wilkinson: Thanks for hanging in.

Jonathan Gitlin: Thanks for hanging in.

All right, next question comes from the line of Dean Wilkinson. Your line is open.

Dean Wilkinson: Morning, everyone. Always. You know me, I hang. Jonathan, you know, look back over our illustrious careers. Every time we've seen, you know, things get better, right? The occupancy tightens up and the rents are going up, new supply tends to come into the picture. When you look at the landscape now, is it still a case that just, you know, new construction costs, given land, all of those things associated with it, you just can't pencil that out, so the runway for existing assets is probably a little longer than maybe it has historically been?

Hey Dean. Thanks everyone.

Always, you know me. I hang, um,

Jonathan I get, you know, look back.

Our illustrious.

Jonathan Gitlin: I'm highly confident that there'll be no material supply in the Canadian landscape anytime soon, Dean. That's not just because of the economic context. It's not just because you need certain rents to justify new build. You also need to find land, you know, unencumbered land of like, you know, many acres that have rooftops and the appropriate demographics surrounding it. That's very difficult to find. The attributes of that land have to be such that they're easily accessible, they've got great visibility, and that you've got tenants that necessarily want to be in that specific area. These things take time to find, and they're very far and few between out there. I would also say that you also have to get that land zoned, which is another very high barrier.

Careers, every time we've seen you know, things get better, right? Occupancy. Tightens up and rents are going up. New Supply tends to come into the picture. When you look at the landscape now is, is it still a case that just, you know, new construction costs given land all of those things associated with it. You just can't pencil that out. So the runway for existing assets is probably a little longer than maybe it has historically been

I'm highly confident that there will be no material supply in the Canadian landscape anytime soon, Dean. And that's not just because of the economic, uh, contacts. It's not just because you need certain rents to, uh, to justify new builds. You also need to find land. Um, you know, unencumbered land of, like, you know, many acres that have rooftops in the appropriate demographics surrounding it—that's very difficult to find. And then the attributes of that land have to be such that they're easily accessible, they've got great visibility, and that you've got tenants that necessarily want to be in that, uh, that specific area. These things take time to find, and they're very far and few between out there. I would

Jonathan Gitlin: For us, this is a long time away. If RioCan can't find viable land and the viable opportunities to build de novo, so greenfield new sites, then I suspect many others in the field will also have such difficulty, which is, I mean, obviously a two-sided coin. On one hand, it really protects the landscape. There will be no material supply going forward. On the other hand, of course, it does limit our opportunities to build anew. The good news for us, as I alluded to before, is we have this excellent opportunity set, which is our own portfolio, and there's a lot of density to be had in that portfolio, which as you can see from our, you know, from the activity in our portfolio this year, we are fully intent on extracting and building out.

Also say that you also have to get that land zoned which is another very high barrier um and uh for us like that this is this is a long time away. If Rio can can't find viable land and the viable opportunities to build denovo, So Greenfield new sites. Then I suspect many others in the field will also have such difficulty which is, I mean, obviously a 2 sided coin on 1 hand, it really protects the landscape. There will be no material supply going forward, but on the other hand of course, it does limit our opportunities to build a new, the good news for us as I alluded to before is we have this excellent opportunity set which is our own portfolio. And there's a lot of density to be had in that portfolio. Which as you can see from our um, you know, from the activity in our portfolio, this year, we are fully intent on extracting and building out.

Dean Wilkinson: That's the benefit of the cost basis. I suppose this is why investors are willing to pay a premium to book value to acquire assets, not a discount. That's it. Thanks a lot, John.

That's the benefit of that the cost basis and I suppose this is why uh investors are willing to pay a premium to book value to acquire assets, not a discount. Um,

Jonathan Gitlin: Thanks, Dean.

That's it. Thanks a lot, John.

Thanks be.

Operator: Our next question comes from the line of Pammi Bir with RBC Capital Markets. Your line is open.

Pammi Bir: Thanks. Good morning. Just maybe coming back to the four RioCan Living rental residential properties that are left to sell. Where are they now in terms of that sale process? Like, have they been listed or just not yet as you work to stabilize them?

Our next question comes from the line of potty Burr with RBC, Capital markets, your line is open.

Jonathan Gitlin: I would say there's no consistent theme, Pammi. They're in different stages. Some of them we are actively putting in the market in very short order, and others we're actually working on some off-market discussions, and others are just not ready to do either. They really do range. As I said previously to one of your colleagues, we are confident that those assets will be sold. I mean, I will not say with certainty that all four of them will be sold and finalized by the end of 2026. I have indicated that there might be a couple that literally just flow into next year simply because the assets aren't ready to be sold. They're not stabilized. I don't think it'll be a big delay beyond that.

Thanks. Uh, good morning. Um, just maybe coming back to the, uh, the four, uh, RioCan leading, uh, rental residential properties that are left to sell. Where are they now in terms of that sale process? Like, have they been listed, or just not yet as you work to stabilize?

End of 2026. Uh, I have indicated that there might be a couple that that um literally just flow into next year, simply because the assets aren't ready to be sold or not stabilized.

But I don't think it'll be a big delay beyond that.

Pammi Bir: Okay. Got it. Then I did wanna come back to, I guess maybe clarify some of the comments on the remaining condo inventory that's under construction.

Pammi Bir: That CAD 1.3 billion target, in the capital repatriation, I think there's still about CAD 120 million related to condo closings, if I read that table correctly.

Pammi Bir: in order to hit that target. I think your commentary, Franca's commentary suggested that there's no further condo income this year that you're, I guess you anticipate. Just trying to reconcile those two.

Pammi Bir: Those two comments, should we essentially infer that there's no further proceeds coming back this year in order to hit that CAD 1.3 billion, or just it wasn't clear?

Okay. Got it. Um and then I did want to come back to um I guess maybe clarify some of the comments on the remaining condo inventory that's under construction um in your that 1.3 billion dollar Target in the capital we cater, and I think there's still about 120 million related to to condo closing. If I read that the table correctly in order to hit that Target, but then I think your commentary, uh, Frank has commentary suggested that there's no further condo income, uh, this year that you you, I guess, you anticipate. So, just trying to reconcile those 2, those 2 comments, and should we essentially infer that there's no further proceeds coming back this year, in order to hit that 1.2 billion or just, it wasn't clear.

Jonathan Gitlin: I'll start and then hand it to Franca, there's about CAD 100 million of inventory remaining. About CAD 14 million of those are under contract. We expect most of those to close. The remainder, we didn't have, we didn't prognosticate closings for the remainder of 2026. You know, in terms of how it features in that CAD 1.3, I'm gonna hand it over to Franca.

Franca Smith: Yeah. Pammi, there's also some, if you look at the reconciliation in our materials, there's also some receivables that we're gonna be collecting from one of the projects that are entering into final closing. That's gonna be added to the proceeds. Right now, as we, as we sell them, you know, we close on interim. When we get to final closing, we collect the cash. You'll see that coming through the reconciliation as well.

So, um, I'll start and then hand it over to franka, but the there's about a hundred million dollars of inventory. Remaining about 14 million of those are under contract. Uh, we expect most of those to close and then the remainder we didn't have, um, we didn't prognosticate closings for the remainder of 2026, um, but, you know, in terms of how it features in that 1.3, I'm going to hand it over to Franco. Yeah, pardon me. There's also some, if you look at the reconciliation

Ation in our materials, there's also some receivables that we're going to be collecting uh from uh from 1 of the projects that are entering into final closing. So that's going to be added to the proceeds, uh, right now, uh, as we as we sell them, uh, you know, we we close on interim, when we get to final closing, we collect the cash.

Jonathan Gitlin: The 1.3 in total is still the right number.

Franca Smith: Yep.

Pammi Bir: Okay. It's still the right number. The total condo, I guess, proceeds, Franca, to your comments on the receivables, the CAD 370 is the cash number that should come through. Like the CAD 370 million is the average number that should have been collected between 2025 and the end of this year.

So you'll see that coming through the reconciliation as well. So the 1.3 in total is still the right. Number yep.

Franca Smith: Yes.

Okay, so it's still the right number. So, the total condo, I guess, uh, proceeds back into your comments on the receivables. The $3,770 is the cash number that, uh, should come through. The $3,799 is the average number of that, you should have been collected between 2025 and the end of this year.

Yes.

Pammi Bir: Right. Okay. Then just in terms of the restructuring charges, I mean, do you feel at this point like there's no further, I guess, any additional anticipated changes coming or charges, or are there perhaps some further efficiencies across the business that, you know, you're looking to, you know, we may see?

Right. Okay.

Um and then just in terms of the uh the restructuring charges, I mean, is this the do you feel at this point? Like there's no further I guess.

Jonathan Gitlin: No, I don't think there's anything material.

Any additional anticipated changes coming or charges? Um, or are there perhaps some further efficiencies across the business that, um, you know, you're looking to, uh, you know, we may see.

Jonathan Gitlin: No, I don't think there's anything material.

Uh no. I don't think there's anything material.

Pammi Bir: Okay. Lastly, I wanted to come back to the comment around annual rent steps. You know, obviously we've seen this with industry now for many years, and certainly in retail we've been talking about it and seeing it as well. What range of spreads are you putting in, or sorry, annual steps are you putting in into some of the renewal leasing or the new leases?

Jonathan Gitlin: Yeah. The objective is always 3%. We are attempting to be greater of 3% in CPI, but that's of course the objective. Sometimes we'll get a little more, sometimes we'll get a little less.

Okay, and then just lastly um I just do, I wanted to come back to the comment about annual, rent steps. You know, obviously, we saw this within we've seen this with industry now for many years. And, and certainly, in retail, we've been talking about it and seeing it as well. But what, what range of, um, spreads are you putting in or sorry annual steps? Are you putting in into, uh, some of the, the renewal leasing or the new leases?

Oliver Harrison: Yeah. It's between 2% and 4%.

Yeah, the objective is always 3%. Uh, we are attempting to do the greater of 3% in CPI, but that's, of course, the objective. Sometimes you get a little more sometimes, you'll get a little less, um, Oliver that. I yeah, it's been 2 and 4%

Jonathan Gitlin: Yeah.

Pammi Bir: Okay. All right. Thanks very much. I'll turn it back.

Jonathan Gitlin: Thanks, Pammi Bir. Thanks for your patience.

Okay. All right. Thanks very much. I'll turn it back.

Thanks, Bonnie. Thanks for your patience.

Operator: I am showing no further questions at this time. I will now turn the conference back to President and CEO, Jonathan Gitlin.

And I am showing no further questions at this time. I will now turn the

Conference back to.

Authenticate ones.

Jonathan Gitlin: Well, thank you very much. Again, for all those of you who are still on the call, I really do appreciate your patience with the technical difficulties that we all experienced. I'll leave you with this. Our Q1 clearly demonstrates execution of the strategy that we presented at our investor day. We're delivering exactly what we said we would. We have absolute confidence in our people, our portfolio, and our strategy to drive long-term value. Thanks, everyone, and thank you again for your patience.

Oh, thank you very much. And again, for all those of you who have, uh, are still on the call, I really do appreciate your patience with the technical difficulties that we all experience. I'll leave you with this our first quarter. Clearly demonstrates execution of the strategy that we present it at our investor day. We're delivering exactly what we said. We would we have absolute confidence in our people. Our portfolio, and our straight.

Strategy to drive long-term value. Thanks to everyone and thank you again for your patience.