Q1 2026 RioCan Real Estate Investment Trust Earnings Call

May 5, 2026

Speaker #1: 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.

Speaker #1: Ms. Suess, you may begin.

Speaker #2: 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 statement.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: RioCan's management uses trust underlying poor performance and 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 there to as applicable, together with RioCan's most recent annual information form that are all available on our www.cedarplus.com.

Speaker #2: I will now turn the call over to RioCan's President and CEO, Jonathan Gitlin.

Speaker #3: Thank you, Jennifer. Good morning, everyone, and thanks so much for joining us today. Our first quarter results reinforce the message we've consistently delivered since our 2025 investor day.

Speaker #3: RioCan has 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: First off, I'd like to highlight operations. 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.

Speaker #3: An importantly, these results are not one-offs. As we discussed last quarter, we continue to benefit from a favorable retail leasing supercycle driven by a combination of expiring legacy leases and constrained new supply.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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%.

Speaker #3: 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%.

Speaker #3: 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 rank growth and extremely high occupancy.

Speaker #3: 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.

Speaker #3: The progress this quarter was meaningful. As of May 4th, 2026, we anticipate repatriating approximately $1.04 billion through closed firm and conditional transactions. This represents approximately 80% of our $1.3 billion RioCan Living disposition target.

Jonathan Gitlin: Billions 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 strategy we presented at our Investor Day was strategic capital recycling, particularly through RioCan Living. The progress this quarter was meaningful. As of 04 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.

Speaker #3: We continue to see strong interest in the remaining four 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.

Speaker #3: 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.

The second major pillar of the strategy we presented at our investor day was strategic Capital recycling, particularly through Rio can 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.

Speaker #3: 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.

this represents Approximately 80% of our 1.3 billion Ryo Kan, living disposition Target,

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

Speaker #3: At the same time, we remained opportunistic in the public markets, repurchasing and canceling $2.6 million units at an average price of $19.51 under our NCIB program.

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.

Speaker #3: 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.

The proceeds are being redeployed ACC 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.

Speaker #3: 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.

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.

Speaker #3: RioCan's adjusted spot debt to EBITDA is 8.94 times. 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.

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

Jonathan Gitlin: There has 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 BBB 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.

Speaker #3: The strength and flexibility of our balance sheet were further recognized this quarter as Morningstar DBRS affirmed our BBB credit rating and revised the trend to positive.

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.

Speaker #3: Looking ahead, we reaffirm our 2026 financial outlook, including core FFO per unit of $1.60 to $1.62. Additionally, we reaffirm our guidance of commercial same property NOI growth of 3.5% to 4%.

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.

Speaker #3: 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.

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

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

Speaker #3: 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.

the strength and flexibility of our balance sheet were further recognized as quarter as Morning Star, dbrs, a triple B credit rating and revised the trend to positive

Speaker #3: RioCan has a focused strategy in its perfectly positioned to compound organic growth. The trust has strong leasing fundamentals and a data platform that continues to provide multi-year growth visibility.

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 and 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 focused strategy and is perfectly positioned to compound organic growth. The trust has strong leasing fundamentals and a data platform that continues to provide multiyear 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 $1.60 to a $162.

Speaker #3: We're also equipped with the balance sheet flexibility to act decisively, and this turbulent world, owning hard assets with reliable cash flow and prime markets is advantageous.

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

Speaker #3: 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 will be happy to take your questions.

These targets are firmly supported by embedded, leasing spreads already achieved strong, visibility on 2026, lease maturities continued, discipline and capital deployment and reduce Capital intensity is we complete the wind down of mixed use Construction.

Speaker #1: 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.

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.

Speaker #1: 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.

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 access decisively.

Speaker #1: 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.

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

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

Franca Smith: Thank you, Jonathan, and 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.

Thank you, Jonathan. And good morning everyone.

Speaker #1: 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.

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.

Speaker #1: Core FFO in the first quarter was 39 cents per unit in line with Q1 of last year. There were four primary drivers of our core FFO results.

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

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

Speaker #1: Commercial same property NOI 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.

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.

Speaker #1: These factors were offset, primarily by higher interest expense and lower interest income, which had a combined impact of just over 2 cents per unit.

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 4 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.

Speaker #1: And lower NOI from the sale of residential rental assets had an impact of approximately 1 cent per unit. 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.

Mechanically. It starts with ffo and adjusts for items that don't reflect or underlying run rate operations, such as residential inventory, gains HBC, related income, and restructuring charges.

Core ffo in the first quarter was 39 cents per unit in line with q1 of last year.

Speaker #1: Turning to other items in the quarter, we recorded approximately 2 million of one-time restructuring costs related to the reduction and consolidation of development and construction functions.

There were 4 primary drivers of our core ffo results.

Commercial same property NOI increased 4.7% year-over-year, contributing over 2 cents per unit.

Speaker #1: 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.

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 2 cents per unit.

Speaker #1: 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.

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.

Speaker #1: Together, these two items account for the majority of the difference between FFO and core FFO. Moving on to our balance sheet. Our adjusted spot debt to adjusted EBITDA ratio was 8.94 times that quarter-end.

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.

Speaker #1: 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.

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.

Speaker #1: 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.

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.

Speaker #1: 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 BBB credit rating and revised the trend from stable to positive.

Together these 2 items account for the majority of the difference between ffo and core ffo.

Franca Smith: 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%. 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. As Jonathan also mentioned during the Q1, DBRS reaffirmed our triple B credit rating and revised the trend from stable to positive.

Moving on to our balance sheet.

Our adjusted spot.

Speaker #1: 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 ventures with a 4.308% coupon rate and a seven-year term.

The increase versus prior 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.

Speaker #1: We also repaid 100 million of unsecured ventures 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.

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

Speaker #1: 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 align with the three-year outlook we shared at investor day.

Franca Smith: We view 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 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. 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.

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 delivering

Speaker #1: 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.

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.

Speaker #1: With that, I will turn the call back to the operator to begin the question-and-answer session.

Speaker #2: 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.

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.

Speaker #3: 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.

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.

Franca Smith: 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.

And we are delivering on our strategy and commitments.

Speaker #3: As a reminder to please ask a question. Please press star followed by the number one on your telephone keypad. Once again, that is star followed by the number one.

Speaker #3: 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.

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 1: 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.

Speaker #4: It's Lorne Kalmar from Dean Apologies. I didn't know whose line was open. Just one more little technical difficulty, but let's put that behind us and get down to the good stuff.

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.

Speaker #4: So on same property NOI, you guys had continuation, I think, of some solid prints in 3Q and 4Q into 1Q. And I think you called out a part of that was the spaces that had gone dark in 2024, cash rents resuming.

Speaker #4: How do you expect same property NOI to trend over the balance of the year? It's kind of 2Q should be another one that's a little bit outsized and it moderates a bit over the back half.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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 that we'll be between three and a half to 4%.

Speaker #3: Things are all pointing to very favorable outcomes. And if the year continues to go the way it is going, we will provide updated guidance in the coming quarters.

Speaker #3: But right now, we are firmly confident behind the three and a half to 4% number that we gave out in our guidance.

Speaker #4: Okay. That's good to hear. And then maybe just flipping to the RioCan living side of things. It seems like you guys made some really, really good progress there.

Speaker #4: 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.

Speaker #4: And then just maybe an idea of the buyer profile.

Speaker #3: Sure, Lorne. So it's all in line with our IFRS values and it's in the low 4 to mid-4 range. Across the board, now that's a balanced summer, lower summer are a bit higher.

Speaker #3: 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 net sorry, family office buyers.

Speaker #3: It's some institutional buyers and it is some private equity buyers. So it really is a range.

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

Speaker #3: 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.

Speaker #3: 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.

Speaker #4: Okay. And then I guess just to be clear, you still expect those remaining four to kind of hopefully transact on them by the end of the year?

Speaker #3: So as I had indicated previously, it's our intention to get them done as quickly as possible just because of stabilization taking a little bit longer.

Speaker #3: 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.

Speaker #3: And we'll provide updates as the year progresses. But given the strength of the assets, and given our desire to sell, we are confident that they will all be sold in short drift.

Speaker #4: Okay. Thank you so much. I'll turn it back.

Speaker #3: Thanks, Lorne.

Speaker #5: Our next question comes from the line of Matt Cormack. Your line is open.

Speaker #6: Hey, guys. You had a strong quarter on same property NOI growth. And that's notwithstanding, it looks like recoveries were maybe 99% as opposed to 100% historically.

Speaker #6: Could you give a sense of if that's just the timing issue in this particular quarter? And then also presented rent looked a little bit low relative to what we expected in the past.

Speaker #6: But if there's anything color-wise there, that would be helpful.

Speaker #3: Yeah. So 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.

Speaker #3: And that usually picks up as the year progresses. And on the recoveries, 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.

Speaker #3: But that usually stabilizes and ramps up by the end of the year.

Speaker #6: Yeah. And that's the only thing I'd add, this is John Ballantyne. Percentage rent, we will 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.

Speaker #6: So 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.

Speaker #4: Okay. No, that makes sense. On the in-place occupancy front, committed remains essentially at an all-time high fold. But there was a little bit of a dip in the in-place.

Speaker #4: Did you have some tenant turnover? And if we look at your new leasing spreads in the 50-plus percent range, is that the kind of rents you're getting on any sort of turnover you're seeing in tenants?

Speaker #3: 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.

Speaker #3: And so I think you'll see it back to the normal range closer to 75 beeps, which is our historic average. And the second part of the question, I can hand it over to.

Speaker #6: Yeah. And look, Matt, the in-place occupancy did drop. We did buy a half interest in Oakville and George & Ball, which obviously had those two HBC boxes, which have been fully leased, but are not paying rent yet.

Speaker #6: 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.

Speaker #3: Yeah. And you had 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.

Speaker #3: Strengthen them all. And we feel confident that while this is an outsized quarter for new leasing spreads, it is, it sets a tone. And I think it is underscores the strength of the markets out there.

Speaker #5: 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. The market sequentially still improving, or are we at a period of stability here now after getting some really good rent growth?

Speaker #5: It just seems like you've got continued momentum and interest that if you're seeing that in the marketplace now.

Speaker #3: It's certainly been a great quarter. And we think it is quite durable. That said, all of our projections that we provided to investors today were predicated on a 15% leasing spread combined.

Speaker #3: 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.

Speaker #3: The consistency of these spreads, they're going to ebb and flow. I mean, they're very sensitive to specific deals. And you'll see a bit of fluctuation between quarters.

Speaker #3: But 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 there will be continued strength in that regard and operationally for RioCan.

Speaker #3: But as I said, you're not going to see that exact same level every single quarter going forward. But we are we're happy with where we currently stand.

Speaker #3: And we think it's reasonably sustainable. But there is going to be ebbing and flowing.

Speaker #4: That makes sense. Last one for me, just obviously, we've had a big M&A trade at a pretty low cap rate for some of the more core assets.

Speaker #4: 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 fairly sizable transaction in the grocery industry?

Speaker #3: I don't even know which transaction you're referring to, Matt. 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.

Speaker #3: 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.

Speaker #3: 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 disparate because there haven't been a lot of them.

Speaker #3: But we've been seeing 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.

Speaker #4: Thanks, Matt.

Speaker #3: Thanks, Matt. And thanks for your patience.

Speaker #5: As a reminder to thank you, as a reminder to ask a question, please press star, followed by the number one on your telephone keypad.

Speaker #5: Our next question comes from the line of Sam Damiani with TD. Your line is opened.

Speaker #7: Thank you. Good morning, everyone. Maybe just on the leasing side here, obviously, a highlight for everyone seeing these spreads. Occupancy remains essentially full. You really can't accommodate new demand except for any turnover that you have, which also remains low.

Speaker #7: So 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?

Speaker #3: So I'll first off, thanks for your patience, Sam. And I understand that you might have missed the extremely eloquent opening remarks by Jennifer, myself, and Franca.

Yeah.

Speaker #3: And we'll get those to you but look, the backdrop oh, good. They were brilliant, right? The backdrop is very strong. And I think we're doing extraordinarily well with the necessity-based tenants.

Speaker #3: But 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 $30.

Speaker #3: Our average rents across the portfolio were just over $23. That leaves a sizable room to really extract what we feel our market rents out of our portfolio.

Speaker #3: And the team has done 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.

Speaker #3: But with respect to the tenants out there that are utilizing the space, it really is a list of the same incumbent tenants that you've ve seen that make up a part of our portfolio for quite some time.

Speaker #3: I'll turn it over to Oliver Harrison to just give you a little more color on who they are. But I don't think you'll hear any surprises.

Speaker #8: Correct. Yeah. If you look at our quarter, the volume is really being driven by grocery pharmacy essential personal services. No change from what we've seen over the past few quarters.

Speaker #8: And back to your first question, excuse me, on how the negotiations have changed, I would say the only thing 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 the negotiations are more holistic than just the economic outcome of the deal.

Speaker #8: We are using the current market environment to remove no-builds, new leases do not have any fixed rent options. Annual growth is a concept that two years ago was challenging to get tenants to agree to.

Speaker #8: 98% of our deals now have some form of annual growth embedded in the negotiation. So 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.

Speaker #4: Okay. Great. That's helpful. And maybe just on the other side of it, 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?

Speaker #3: I think just there's certain tenants that we know might leave a space, but they're sporadic. There's no theme to it. And the good news is demand for whatever space we know might be coming back to us.

Speaker #4: Okay. Great. And just one last small one. It was pretty tough winter. Just out of curiosity, was there snow removal costs meaningfully above normal in Q1?

Speaker #8: Hey, Sam. Yeah. They were. There's probably four or five larger centers in the GTA area that we actually had to haul snow, which is expensive.

Speaker #8: Which means you basically have to build the tenants. The tenants do pay for all this. We had to send out some interim billings just to catch up on that.

Speaker #8: And all good. Yeah. And snow removal is not a is not included in the limited number of tenants that have caps on cans. So it's fully recoverable.

Speaker #4: Well, that's good. Okay. Great. I'll turn it back. Thanks very much.

Speaker #3: Thanks, Sam.

Speaker #5: Bye.

Speaker #8: Bye.

Speaker #5: Our next caller, come from the line of Brad Sturgis, your line is opened.

Speaker #4: Hey. Good morning. Just from a capital allocation perspective, just thinking about the NCIB, obviously, the leverage ticked up over the quarter to quarter. And at the same time, I guess your stock price improved.

Speaker #4: 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?

Speaker #3: Thanks, Brad. And again, thanks for your patience on the call today. The capital allocation decisions are really rooted in achieving our 9% unleased IRR hurdle.

Speaker #3: 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 paths and strips, which in this environment certainly allows us to hurdle that 9% IRR number.

Speaker #3: But yeah, if we are in the fortunate circumstance where the unit price continues to increase, then NCIB becomes less of a promising prospect for capital allocation.

Speaker #3: But we feel that there will be other opportunities that arise out of 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.

Speaker #3: And so that will always be our principal focus. And as we've asserted before, as RioCan living assets close as the year goes on, it will continue to strengthen that balance sheet.

Speaker #3: And we'll get closer to the mid part of that range for net net EBITDA.

Speaker #4: And just on the intensification opportunity, I know you've highlighted a few times in terms of the potential across the portfolio. I guess, is there 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?

Speaker #3: Yeah. I think we've already put out guidance that we're going to spend about $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.

Speaker #3: And I think that's going to be fairly consistent. We're going to 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.

Speaker #3: But we'll continue to update that guidance.

Speaker #4: Sounds good. Thank you.

Speaker #5: Our next question comes from the line of Dean Wilkinson, your line is opened. Thanks.

Speaker #3: Hey, Dean. Thanks, Ryan.

Speaker #4: Good morning, everyone.

Speaker #5: Always, you know me, I hang. Jonathan, look back over our illustrious careers. Every time we've seen things get better, occupancy tightens up, and rents are going up, new supply tends to come into the picture.

Speaker #5: When you look at the landscape now, is it still a case that just new construction costs, given land, all of those things associated with it, you just can't pencil that out?

Operator 2: 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 the number 1 on your telephone keypad. Once again, that is star followed by the number 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.

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 the number 1 on your telephone keypad. Once again, that is star followed by the number 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.

Speaker #5: So the runway for existing assets is probably a little longer than maybe it has historically been?

Speaker #3: I'm highly confident that there'll be no material supply in the Canadian landscape anytime soon, Dean. And that's not just because of the economic context.

Speaker #3: It's not just because you need certain rents to justify new build. You also need to find land. Unencumbered land of many acres that have rooftops and appropriate demographics surrounding it, that's very difficult to find.

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.

Speaker #3: 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 specific area.

Speaker #3: 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.

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

Speaker #3: And 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.

Your line is open.

Lorne Kalmar: Am I on?

Is it?

Operator 2: Yes. Yes, your line is open.

Operator: Yes. 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, but let's put that behind us and get down to the good stuff. On Same Property NOI, you guys had a 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? Is kind of Q2 should be another one that's a little bit outsized, and it moderates a bit over the back half?

Speaker #3: On one 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 anew.

Yes, you're welcome.

Speaker #3: 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 from the activity in our portfolio this year, we are fully intent on extracting and building out.

I'm Lauren from California. Apologies, I didn't know whose line was open. Just one more little technical difficulty, but let's put that behind us and get down to the good stuff.

So on same property in Ohio you guys and the continuation I think of some solid prints um in 3Q and 4 q into 1 Q.

And I think you called out a part of that was um, the spaces that have gone.

Speaker #4: That's the benefit of the cost basis. And I suppose this is why investors are willing to pay a premium to book value to acquire assets, not a discount.

Dark in 2024, cash rents for zooming. How do you expect the same property and why the 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: Hey, Lorne. A couple of things to start. First of all, 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% and 4%. Things are all pointing to very favorable outcomes and if the year continues to go the way it is going, we will provide updated guidance in the coming quarters.

Speaker #4: That's it. Thanks a lot, Jonathan.

Speaker #3: Thanks, Dean.

Speaker #5: Our next question comes from the line of Pami Burr with RBC Capital Markets, your line is opened.

Speaker #4: 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?

Speaker #4: Have they been listed, or just not yet as you work to stabilize them?

Speaker #3: There's I would say there's no consistent theme, Pami. They're in different stages. Some of them we are actively putting in the market in very short order.

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

Speaker #3: And others, we're actually working on some off-market discussions. And others are just not ready to do either. So they really do range. But as I said previously to one of your colleagues, we are confident that those assets will be sold.

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. What is always a good quote thirdly, with respect to spni? Um, we had a great quarter, um, the 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. 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. Then maybe just flipping to the RioCan Living side of things. It seems like you guys made some really, 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, just maybe an idea of the buyer profile.

Speaker #3: 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.

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. It seems like you guys made some really, really good progress there.

Speaker #3: They're not beyond that.

I was just wondering, if you could give us a a, I know, it's a sensitive 1, but a rough idea, perhaps of the yield on the assets that are, um, either sold or, or, or under agreement, to be sold. And then, just maybe an idea of the buyer profile.

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 balance. Some are lower, some are 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, sorry, family office buyers. It's some institutional buyers, and it is some private equity buyers. It really is a range.

Speaker #4: Okay, got it. And then I did want to come back to, I guess, maybe clarify some of the comments on the remaining condo inventory that's under construction.

Speaker #4: In your that 1.3 billion target in the capital recalculation, I think there's still about 120 million related to condo closings, if I read that table correctly.

Speaker #4: In order to hit that target. But then I think your commentary Frank's commentary suggested that there's no further condo income this year that you I guess you anticipate.

Speaker #4: So just trying to reconcile those two comments. And should we essentially infer that there's no further proceeds coming back this year in order to hit that 1.3 billion, or just it wasn't clear?

Sure Lawrence. So it's all in line with our IFRS values and um, you know, it's in the um, the uh, Low 4 to 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 four or so left to go. Has there been any change in the acquisition transaction environment since the aforementioned deals were consummated?

Speaker #3: So I'll start and then hand it to Franca. But there's about 100 million dollars of inventory remaining about 14 million of those are under contract.

And I guess as you kind of look ahead to 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 were consummated.

Jonathan Gitlin: No, it still remains strong. These assets are new. They're transit oriented. They don't have rent control. 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.

Speaker #3: We expect most of those to close. And then the remainder, we didn't have we didn't prognosticate closings for the remainder of 2026. But in terms of how it features in that 1.3, I'm going to hand it over to Franca.

Speaker #6: Yeah, Pami, there's also some if you look at the reconciliation in our materials, there's also some receivables that we're going to be collecting. From one of the projects that are entering into final closing.

No, it Still Remains strong. There's these assets are are new, they're 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 four to kind of, hopefully transact on them by the end of the year?

Speaker #6: So that's going to be added to the proceeds. Right now, as we sell them, we close on interim. When we get to final closing, we collect the cash.

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. 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.

Speaker #6: So you'll see that coming through the reconciliation as well.

Speaker #3: So the 1.3 in total is still the right number?

Speaker #6: Yep.

Speaker #4: Okay, so it's still the right number. So the total condo, I guess, proceeds, Frank, to your comments on the receivables, the 370 is the cash number that should come through.

Speaker #4: The 370 million is the average number that should have been collected between 2025 and the end of this year.

So as I indicated previously, It's Our intention to get them known as quickly as possible just because of stabilization taking a little bit longer, there might be a a couple of them that trickle into 2027. Um 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 but given the strength of the asset, um, and given our desire to sell, we are confident that they were 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.

Speaker #6: Yes.

Thanks Lauren.

Operator 2: Our next question comes from the line of Matt Kornack. Your line is open.

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

Speaker #4: Right, okay. And then just in terms of the restructuring charges, I mean, is this do you feel at this point there's no further I guess any additional anticipated changes coming or charges?

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 a sense if that's just a timing issue in this particular quarter? Then also percentage rent looks a little bit low relative to what we've expected in the past, but if there's anything color-wise there, that would be helpful.

Speaker #4: Or are there perhaps some further efficiencies across the business that you're looking to we may see?

Speaker #3: No, I don't think there's anything material.

Speaker #4: Okay. And then just lastly, I just wanted to come back to the comment around annual rent steps. Obviously, we saw this within we've seen this with industrial now for many years.

Uh, noi growth. Um, and that's notwithstanding, it looks like recoveries were maybe 99% as opposed to 100% uh, historically. Uh, could you give a sense of that? That's just the timing issue in in this particular quarter. And then also percentage rent, looks a little bit low relative to what we 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 by-product 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.

Speaker #4: And certainly in retail, we've been talking about it and seeing it as well. But 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?

Speaker #3: Yeah, the objective is always 3%. We are attempting to do the greater of 3% in CPI, but that's, of course, the objective. Sometimes we get a little more.

John Ballantyne: 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. 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. Rent, most certainly it's seasonal and we, 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.

Speaker #3: Sometimes you'll get a little less. Oliver, did I?

Speaker #7: Yes, between 2 and 4%.

Speaker #3: Yeah.

Speaker #4: Okay, all right. Thanks very much. I'll turn it back.

Speaker #3: Thanks, Pami. Thanks for your patience.

Speaker #5: And I am showing no further questions at this time. I will now turn the conference back to President and CEO Jonathan Gitlin.

Yeah, and that the only thing I had this is John Valentin percentage rent. You'll 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 St. Rocky and why

Matt Kornack: Okay. No, that makes sense. On the in-place occupancy front, committed remains essentially at an all-time high full, 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%+ range, is that the kind of rents you're getting on any sort of turnover you're seeing in tenants?

Speaker #3: Well, thank you very much. And again, for all those of you who have are still on the call, I really do appreciate your patience with the technical difficulties that we all experienced.

Speaker #3: I'll leave you with this. Our first quarter clearly demonstrates execution of the strategy that we presented at our investor day. We're delivering exactly what we said we would.

Speaker #3: 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.

Okay, no, that that makes sense. Um, on the Inplay box, you can see front committed remains essentially at an all-time high fold, but there was a little bit of a dip in the in place. Um, did you have some tenant turnover? And if we look at your, uh, new leasing spreads and like the 50 plus percent range is that the kind of rents you're getting on, 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, and 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 bps, which is our historic average. The second part of the question, I can hand over to John.

John Ballantyne: Yeah, and 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 being 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.

Uh, yeah, I think that the, um, this is, I would say an anomalous quarter with respect to that that gap between committed and in place occupancy. Um, based on the leasing that the team is done. You're already seeing that Gap closed quite dramatically. Um, and to largely due to the HBC deals that we did in Oakville place. And so, I think, uh, you'll, you'll see it back to the normal range, closer to 75 beeps, which is our historic average. Um, and the second part of the question, I can hand it over to

Yeah, and and look at the, uh, in place. Occupancy did drop. We did buy, uh, a half interest in Oakville, and George and Mall, which actually had those 2 HBC boxes, which have been fully leased but, uh, are not being rent yet that account for about 40 basis points, as Jonathan said with, um, Oakville taking possession.

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

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'd 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 seems like you've got continued momentum. I'm interested if you're seeing that in the marketplace now.

On on that front, maybe just a broader commentary. Um I mean it seems I didn't think they could go higher but you're you're setting All Time Records. The 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. 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, you know, 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 all

Jonathan Gitlin: As I said, you're not going to see that exact same level every single quarter going forward. We are, we're happy with where we currently stand, and we think it's reasonably sustainable, but there is going to 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 real can. 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 influence

Matt Kornack: That makes sense. Last one for me, just, obviously we've had a 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?

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.

Maybe it's an optimism on the portfolio, being more than what you thought it was worth, or just any read-through from, uh, fairly sizable transaction in.

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

The negotiating, 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 desired ability of it for both institutional owners and other reads. 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 haven't met a lot of them, but we've been seeing 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 the strength and and desirability of great Major Market retail assets like those owned by Rio camp.

Matt Kornack: Thanks, Ed.

Thanks so much.

Jonathan Gitlin: Thanks, man. Thanks for your patience.

Operator 2: Thank you. As a reminder, to ask a question, please press star followed by 1 on your telephone keypad. Our next question comes from the line of Sam Damiani with TD. Your line is open.

Operator: Thank you. As a reminder, to ask a question, please press star followed by 1 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?

Hey, 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 Demianiuk.

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 any turnover that you have, which also remains low. So, you know, how is how is the leasing discussions changing? How we need the mix of 10 categories, that you're that, you're dealing with as you deal with this 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. It was wonderful.

Jonathan Gitlin: 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're using data more so than we ever have to figure out exactly where market rates lie.

So I'll first first off, thanks for your patience Sam. And and uh, I understand that you might have missed the extremely eloquent, um, opening remarks by Jennifer myself and franka and we'll get those to you, but look the backdrop. Oh good, they were brilliant, right? Um, the, uh, the backdrop is, is very strong. And, um, I think, uh, you know, we're, we're doing, um, extraordinarily well with, uh, the the necessity based tenants, but 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 $30, our average rents across

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. 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.

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.

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 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. Uh, but with respect to the tenants out there that are that are, um, uh, 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 Harris. 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 of the

Jonathan Gitlin: 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. You know, annual growth is, you know, is a concept that, you know, 2 years ago was challenging to get tenants to agree to. 98% of our deals now have some form of annual growth embedded in, you know, in the negotiation.

Oliver Harrison: 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. You know, annual growth is, you know, is a concept that, you know, 2 years ago was challenging to get tenants to agree to. 98% of our deals now have some form of annual growth embedded in, you know, in the negotiation.

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 that 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.

Um, any uh, fixed rent options.

Jonathan Gitlin: We are leveraging all aspects of this market to produce, you know, not only the best economic outcome of these deals, but from a long-term kind of value creation and flexibility. You know, we're, I think we're doing extremely well.

Oliver Harrison: We are leveraging all aspects of this market to produce, you know, not only the best economic outcome of these deals, but from a long-term kind of value creation and flexibility. You know, we're, I think we're doing extremely well.

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?

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 or 2

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.

I think just, uh, there... There are certain tenants that, um, we know might leave a space, but it's sporadic—there's no theme to it. And, uh, the good news is there's 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 pretty tough winter. Just out of curiosity, was there snow removal costs, you know, meaningfully above normal in Q1?

Okay, great, and just one last small one. You know, it was a pretty, uh, tough winter. Just out of curiosity, were snow removal costs, you know, meaningfully above normal in Q1?

John Ballantyne: Hey, Sam. Yeah, they were. You know, there's probably four or five 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.

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

You know, there's probably four or five 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, uh, interim billings just to catch up on that. And, uh, all good.

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.

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

Oh, that's good.

Jonathan Gitlin: Thanks, Sam.

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

Thanks Sam.

Operator 2: Our next caller comes from the line of Brad Sturges. Your line is open.

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

Caller comes from the lab.

Brad Sturges: Hey, good morning. Just from a capital allocation perspective, just thinking about the NCIB, obviously, you know, leverage ticked up over the quarter over quarter. 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? Should we see a little bit of a change in thinking, at least in the short run on the NCIB?

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 core recorder. And

At the same time, I guess your stock price improved, like, how do you think about cap allocations for unit of 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 mkb?

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 out 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, then NCIB becomes less of a promising prospect for capital allocation. We feel that there will be, you know, other opportunities that arise out there.

Uh, thanks, Brad. And again, thanks for your patience on the call today. The, um, the, the capital allocation decisions are are really rooted in, uh, achieving our the 9%, um, on liver IR hurdle, uh, when the stock price goes up or the unit price goes up it obviously, um, it, it 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. Um, but yeah, if we are in the fortunate circumstance, where the unit price,

Jonathan Gitlin: 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 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.

Continues to increase that 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 closed 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, is there, 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. 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.

Okay, thank you.

Operator 2: Our next question comes from the line of Dean Wilkinson. Your line is open.

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

Jonathan Gitlin: Hey, Dean.

Dean Wilkinson: Thanks.

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

Dean Wilkinson: Thanks for hanging on.

Jonathan Gitlin: Thanks for hanging on.

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 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?

Hey Dean. Thanks everyone.

Always, you know me. I hang, um,

Dean Wilkinson: You just can't pencil that out. The runway for existing assets is probably a little longer than maybe it has historically been.

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. 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 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.

Jonathan, I, 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 cancel that out? So the runway for existing assets is probably a little longer than maybe it has historically been.

Jonathan Gitlin: For us, like, this is, 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.

Uh, contacts. It's not just because you need certain rents to, uh, to justify new build. You also need to find land. Um, you know, unencumbered land of, like, you know, many acres that have rooftops and 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 say that you also have to get that land zoned, which is another very high barrier. Um, and, uh, for us, like, this is—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.

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

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 4 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?

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

Jonathan Gitlin: I would say there's no consistent theme, Pami. They're in different stages. Some of them we are actively putting in the market in very short order, and others we are 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 4 of them will be sold and finalized by the end of 2026. I've 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, the 4, uh, Rio can leading, uh, rental Residential Properties that are left to sell. Where are they now in terms of that sale process like, are they have they been listed or just not yet as you work to to stabilize

Um, there's I would say there's no consistent theme pommy, they're in different stages, uh, some of, uh, some of them were, we are actively putting in the market in, in very short order, and others were actually working on some off-market discussions and others are just not ready, uh, to do either. So, they really do range. Um, but as I said previously to a 1 of your colleagues, we are confident that those assets will be sold. I mean, I, I will not say for with certainty that all 4 of them will be sold and finalized by the end of 2026. Uh, I have indicated that there might be a couple that that um literally just flow into next year's 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. 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, in order to hit that target. I think your commentary, Franca's commentary suggested that there's no further condo income this year that I guess you anticipate. Just trying to reconcile those two comments and 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 a capital Recreation. 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 is commentary suggests 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 1.3 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 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 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 Bronco. Yeah, pardon me. There's also some, if you look at the reconciliation in our materials, there's also some uh receivables that we're going to be collecting uh, from uh, from 1 of the projects that are in 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 CAD 1.3 in total is still the right number.

Franca Smith: Yeah.

So you'll see that coming through the reconciliation as well. So the 1.3 in total is still the right number. Yeah,

Pammi Bir: 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 aggregate number that should have been collected between 2025 and the end of this year.

Franca Smith: Yes.

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 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 is anything material.

Pammi Bir: Okay. I wanted to come back to the comment around annual rent steps. You know, obviously we saw this with, we've seen this with industry now for many years and certainly Enrique will be 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. That's of course the objective. Sometimes we get a little more, sometimes we'll get a little less. Oliver.

Okay, and then just lastly, um, I just didn't 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 the 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 renewal leasing or the new leases?

Oliver Harrison: Yeah. It's been 2 and 4.

Yeah, the objective is always 3%. Uh, we are attempting to do the greater of 3% and 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 to 12%.

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

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

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

Operator 2: I am showing no further questions at this time. I will now turn the conference back to President and CEO, Jonathan Gitlin.

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 president and CEO, Jonathan gitlin.

Jonathan Gitlin: Well, thank you very much. Again, for all those of you who have, 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 first quarter 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 experienced. I'll leave you with this. Our first quarter, 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.