Q1 2026 BTB Real Estate Investment Trust Earnings Call

May 13, 2026

Operator: Good morning. My name is Julie, and I will be your conference call facilitator today. At this time, I would like to welcome everyone to the BTB Real Estate Investment Trust 2026 Q1 conference call, for which management will discuss the quarter ended 31 March 2026. All lines have been placed on mute to prevent any background noise. Should you wish to follow the presentation in greater detail, management has made a presentation available on BTB's website at www.btbreit.com/investor/presentations/quarterly-meeting-presentation. After the speaker's remarks, there will be a question and answer period reserved exclusively for analysts. If you'd like to ask a question during this time, please press star followed by 1 on your telephone keypad. Before turning the meeting over to management, please be advised that some of the statements that may be made during this call may be forward-looking in nature.

Speaker #2: For which management will discuss the quarter-ended March 31st, 2026. All lines have been placed on mute to prevent any background noise. Should you wish to follow the presentation in greater detail, management has made a presentation available on BTB's website at www.btbbreath.com.

Speaker #2: Forward slash investor forward slash presentations forward slash quarterly meeting presentation. After the speakers' remarks, there will be a question-and-answer period. Reserve exclusively for analysts.

Speaker #2: If you'd like to ask a question during this time, please press star followed by the number one. On your telephone keypad. Before turning the meeting over to management, please be advised that some of the statements that may be made during this call may be forward-looking in nature.

Speaker #2: Such statements involve numerous factors and assumptions and are subject to inherent risks and uncertainties. Both general and specific, which gives rise to the possibility that predictions forecasts projections and other forward-looking statements will not be achieved.

Operator: Such statements involve numerous factors and assumptions and are subject to inherent risks and uncertainties, both general and specific, which gives rise to the possibility that predictions, forecasts, projections, and other forward-looking statements will not be achieved. Several important factors could cause BTB Real Estate Investment Trust actual results to differ materially from the expectations expressed or implied by such forward-looking statements. These risks, uncertainties, and other factors that could influence actual results are described in BTB Real Estate Investment Trust management discussion and analysis, and in its annual information form, which were filed on SEDAR+ and on BTB's website at www.btbreit.com/investors/reports. I would now like to remind everyone that this conference call is being recorded. Thank you.

Speaker #2: Several important factors could cause BTB Real Estate Investment Trusts' actual results to differ materially from the expectations expressed or implied by such forward-looking statements.

Speaker #2: These risks uncertainties and other factors that could influence actual results are described in BTB Real Estate Investment Trust management discussion and analysis and in its annual information form, which were filed on Cedar Plus and on BTB's website at www.btbbreath.com forward slash investors forward slash reports I would now like to remind everyone that this conference call is being recorded.

Speaker #2: Thank you. I would now like to end the conference over to Mr. Michel Léonard. President and Chief Executive Officer accompanied today by Mr. Marc-André Lefebvre, Vice President and Chief Financial Officer Mr. Charles Derebédard, Vice President of Finance and Ms. Stéphanie Léonard, Principal Director of Leasing.

Operator: I would now like to turn the conference over to Mr. Michel Léonard, President and Chief Executive Officer, accompanied today by Mr. Marc-André Lefebvre, Vice President and Chief Financial Officer, Mr. Charles Dorais Bédard, Vice President of Finance, and Miss Stéphanie Léonard, Senior Director of Leasing. Mr. Léonard, you may begin your conference.

Speaker #2: Mr. Léonard, you may begin your conference. Thank you, Julie. Good morning, everybody. We're pleased to present our Q1 results for the year 2026. Our portfolio stands at $6 million square feet with 74 properties with a total asset value of $1.3 billion.

Michel Léonard: Thank you, Julie. Good morning, everybody. We're pleased to present our Q1 results for the year 2026. Our portfolio stands at 6 million sq ft with 74 properties with a total asset value of CAD 1.3 billion. We're continuing on our investment activity, selling certain properties, mostly office properties, in order to redeploy the capital into industrial properties. During the Q1, we did acquire 3 industrial properties located in Leduc, a suburb of Edmonton in Alberta. Basically 143,000 sq ft. These 3 properties we forecast that they will generate CAD 2.5 million of NOI on an annualized basis. We do continue our densification activities are on different properties.

Michel Léonard: Thank you, Julie. Good morning, everybody. We're pleased to present our Q1 results for the year 2026. Our portfolio stands at 6 million sq ft with 74 properties with a total asset value of CAD 1.3 billion. We're continuing on our investment activity, selling certain properties, mostly office properties, in order to redeploy the capital into industrial properties. During the Q1, we did acquire three industrial properties located in Leduc, a suburb of Edmonton in Alberta. Basically 143,000 sq ft. These three properties we forecast that they will generate CAD 2.5 million of NOI on an annualized basis. We do continue our densification activities are on different properties.

Speaker #2: We're continuing on our investment activity, selling certain properties, mostly office properties, in order to redeploy the capital into industrial properties. So during the first the first quarter, we did acquire three industrial properties, located in Les Ducs, a suburb of Edmonton in Alberta.

Speaker #2: Basically, 143,000 square feet. And these three properties are going to generate—we forecast that they will generate $2.5 million of NOI on an annualized basis.

Speaker #2: We do continue our densification activities. Our on different properties. We did dispose as I mentioned of a property located in Quebec City for $11.7 million.

Michel Léonard: We did dispose, as I mentioned, of a property, located in Quebec City for CAD 11.7 million. The purchaser was one of the tenants of the property. On an annualized basis, this property was to generate CAD 928,000 of NOI. Subsequent event regarding our activity, we did purchase a 50% interest that we did not own. Now we own a 100% interest in the property located at 7 and 9 Montclair Boulevard. Obviously, we purchased the 50% from our partner for CAD 7 million. This property is scheduled to generate an additional CAD 500,000 of annualized net operating income.

Speaker #2: The purchaser was one of the tenants of the property. And on an annualized basis, this property was to generate $928,000 of NOI. Subsequent event regarding our activity, we did purchase a 50% interest that we did not own.

Speaker #2: So now we own 100% interest in the property located at 7 and 9 Montclair Boulevard. Obviously, we purchased the 50% from our partner for $7 million.

Speaker #2: And this property is scheduled to generate an additional $500,000 of annualized net operating income. So the positive effect of the dispositions and acquisitions that we did conclude is $2.1 million.

Michel Léonard: The positive effect of the dispositions and acquisitions that we did conclude is CAD +2.1 million on an annualized basis, roughly CAD 1.6 million for the year. We saw our real estate portfolio regarding the suburban office segment reduced since 2021 from 51% to now 41%. We saw our industrial weight increase from 22% to 38%, and necessity base going down from 27% to 21%. Regarding our geographic diversification, a little bit of increase on the weight in Edmonton as a result of the recent acquisitions. As I mentioned, the fair value of our investment in properties is CAD 1.2 million, and the difference between CAD 1.2 and CAD 1.3 are other assets of the REIT.

Speaker #2: On an annualized basis, so roughly $1.6 million for the year. So we saw a real estate portfolio regarding the suburban office segment reduce since 2021 from $51% to now $41%.

Speaker #2: We saw in our industrial weight increase from 22% to 38%. And necessity-based going down from 27% to 21%. Regarding our geographic diversification, a little bit of increase on the weight in Edmonton as a result of the recent acquisitions.

Speaker #2: So, as I mentioned, the fair value of our investment in properties is $1.2 million. And the difference between $1.2 million and $1.3 million are other assets of the REIT.

Speaker #2: Our occupancy rate stands at almost 92%. And we did conclude renewals and new leases for 206,000 square feet in Q1. And regarding our leasing activity, our last company to brief you on the activity.

Michel Léonard: Our occupancy rate stands at almost 92%, and we did conclude renewals and new leases for 206,000 sq ft in Q1. Regarding our leasing activity, I'll ask Stéphanie to brief you on the activity.

Speaker #3: Good morning, everyone. Just as a reminder for those of you following online, we're currently on page eight of our presentation. So our total leasing activity, which is the combination of new leases and lease renewals, totals as Michelle mentioned, $206,000 square feet for the quarter, of which $40,000 square feet are attributed to new leases and $166,000 square feet to lease renewals.

Stéphanie Léonard: Good morning, everyone. Just as a reminder, for those of you following online, we're currently on page 8 of our presentation. Our total leasing activity, which is the combination of new leases and lease renewals, totals, as Michel mentioned, 206,000 sq ft for the quarter, of which 40,000 sq ft are attributed to new leases and 166,000 sq ft to lease renewals. Our most noteworthy transaction for the quarter was concluded with The Hub Sports Centre in Edmonton, Alberta, in our industrial segment, representing roughly 33,000 sq ft. During our last conference call, I noted that 3 vacancies were the principal reasons for our decrease in occupancy rate. With this transaction, we have successfully filled 1 of the targeted vacancies in our portfolio.

Speaker #3: Our most noteworthy transaction for the quarter was concluded with the Hub Sports Center in Edmonton, Alberta, in our industrial segment, representing roughly 32,000 to 33,000 square feet.

Speaker #3: During our last conference call, I noted that three vacancies were the principal reasons for our decrease in occupancy rate. With this transaction, we have successfully filled one of the targeted vacancies in our portfolio and to remind you, this was a space which we had elected to terminate the lease of the tenant that was previously occupying due to the recurring default under their lease.

Stéphanie Léonard: To remind you, this was a space which we had elected to terminate the lease of the tenant that was previously occupying due to the recurring default under their lease. In terms of our lease renewals, our total activity for the quarter amounted to 165,000 square feet, representing a 93.5% lease renewal rate for the quarter. Out of our noteworthy transactions, we renewed important leases with Hooke & Touchette in our industrial segment, located in Saskatoon, for about 101,000 square feet. With Desjardins in our suburban office segment, located in Quebec City for roughly 22,000 square feet. I'd just like to note that Desjardins renewed their entire space with us and did not downsize their Quebec City footprint with us.

Speaker #3: In terms of our lease renewals, our total activity for the quarter amounted to $165,000 square feet. Representing a 93.5% lease renewal rate for the quarter.

Speaker #3: Out of our noteworthy transactions, we renewed important leases with Groupe Touchette in our industrial segment located in Saskatoon for about $101,000 square feet with Desjardins in our suburban office segment located in Quebec City for 20 roughly $22,000 square feet.

Speaker #3: And I'd just like to note that Desjardins renewed their entire space with us and did not downsize their Quebec City footprint with us. And finally, with the LCBO for roughly 7,000 square feet in our suburban office segment located in Ottawa.

Stéphanie Léonard: Finally, with the LCBO for roughly 7,000 sq ft in our suburban office segment located in Ottawa. In terms of our rental spreads, for the quarter, we achieved a 7.2% average increase in our lease renewal rate across all segments. Most specifically, a 7.6% increase in our industrial segment, 5.3% in our suburban office segment, and 10.9% in our retail-based segment. Our committed occupancy rate at the end of the quarter stood at 91.8%, which was a 70 basis point decrease since Q1 2025, the comparable quarter. I would like to note that it is a 50 basis point increase since the end of Q4 last year.

Speaker #3: In terms of our rental spread, so for the quarter, we achieved a 7.2% average increase in our lease renewal rate across all segments. And most specifically, a 7.6% increase in our industrial segment, 5.3% in our suburban office segment, and 10.9% in our retail-based segment.

Speaker #3: Our committed occupancy rate at the end of the quarter stood at 91.8%, which was a 70 basis point decrease since Q1 2025. So the comparable quarter.

Speaker #3: But I would like to note that it is a 50 basis point increase since the end of the fourth quarter last year. This was a rather quick quarter, short and sweet.

Stéphanie Léonard: This was a rather quick quarter, short and sweet. On this note, I'll turn it over to Marc-André for our financial review.

Speaker #3: But on this note, I'll turn it over to Marc-André for our financial review.

Speaker #2: Thank you, Stephanie. Good morning, everyone. So for the first quarter, rental revenues stood at $32 million. That's a decrease of 7.1% compared to the same quarter last year.

Marc-André Lefebvre: Thank you, Stéphanie. Good morning, everyone. For the Q1, rental revenues stood at CAD 32 million. That's a decrease of 7.1% compared to the same quarter last year. The decrease is partially caused by a partial lease cancellation payment from a tenant, which positively affected the NOI by CAD 1 million in the Q1 of last year in 2025. Excluding that payment, the decrease would have been 4.3% compared to the same quarter last year. In terms of NOI and cash NOI, they both decreased by 10.3% and 10.2% respectively, again, compared to the same quarter last year.

Speaker #2: The decrease is partially caused by a partial lease cancellation payment from a tenant which positively affected the NOI by $1 million in the first quarter of last year, in 2025.

Speaker #2: Excluding that payment, the decrease would have been 4.3% compared to the same quarter last year. In terms of NOI and cash NOI, they both decreased by 10.3% and 10.2% respectively.

Speaker #2: Again, compared to the same quarter last year. The decrease was mainly driven by a $1.3 million impact from planned tenant departures that have not yet been replaced.

Marc-André Lefebvre: The decrease was mainly driven by a CAD 1.3 million impact from planned tenant departures that have not yet been replaced, free rent granted to new tenants, and the rent reduction provided to Lion Electric. Dispositions completed throughout 2025 also had a net -CAD 200,000 impact. This was partially offset by acquisitions completed at the end of the quarter, which will contribute more meaningfully to future quarters. Excluding the said lease cancellation payment previously described, the decrease would have been 5.5% for both NOI and cash NOI compared to the same quarter last year. Looking now at organic growth, cash same-property NOI decreased by 9.2% for the quarter compared to the same period last year.

Speaker #2: Free rent granted to new tenants. And the rent reduction provided to Lion Electric. Dispositions completed throughout 2025 also had a net negative impact of $200,000.

Speaker #2: This was partially offset by acquisitions completed at the end of the quarter, which will contribute more meaningfully to future quarters. Excluding the said lease cancellation payment previously described, the decrease would have been 5.5% for both NOI and cash NOI compared to the same quarter last year.

Speaker #2: Looking now at organic growth, cash same property NOI decreased by 9.2% for the quarter. Compared to the same period last year, the quarterly decreases driven by both industrial and office segments.

Marc-André Lefebvre: The quarterly decrease is driven by both industrial and office segments. First, the industrial segment was impacted by a planned departure at the end of Q3 2025 of a tenant occupying over 24,000 sq ft in Edmonton, and that tenant has not been yet replaced. The impact of the new lease negotiated with a group of investors who purchased Lion Electric. Second, the decrease in the office segment is due to the previously mentioned lease cancellation payment and the planned departures of tenants in Ottawa at the end of Q3 2025, not yet fully replaced. Excluding the lease cancellation payment, cash SPNOI would have decreased by 4.4% compared to the same quarter last year.

Speaker #2: First, the industrial segment was impacted by a planned departure at the end of Q3 2025 of a tenant occupying over 24,000 square feet in Edmonton.

Speaker #2: And that tenant has not been yet replaced. And the impact of the new lease negotiated with a group of investors who purchased Lion Electric.

Speaker #2: Second, the decrease in the office segment is due to the previously mentioned lease cancellation payment. And the planned departures of tenants in Ottawa at the end of the third quarter of 2025 not yet fully replaced.

Speaker #2: Excluding the lease cancellation payment, cash SPNOI would have decreased by 4.4% compared to the same quarter last year. FFO adjusted per unit was 9.9 cents for the quarter, a decrease of 1.2 cents compared to the same quarter last year.

Marc-André Lefebvre: FFO adjusted per unit was CAD 0.099 for the quarter, a decrease of CAD 0.012 compared to the same quarter last year. This reduction was mainly driven by the previously explained decrease in NOI. Now looking at AFFO. AFFO adjusted per unit was CAD 0.086 for the quarter, a decrease of CAD 0.017 compared to the same quarter last year. The decrease is explained by the previously outlined decrease in cash in cash NOI of CAD 2.1 million and is partially offset by a decrease in administration expenses of CAD 300,000. Excluding the lease cancellation payment, previously described, FFO and AFFO adjusted per unit would have decreased by CAD 0.001 or 1% and CAD 0.006 or 6.5% respectively, again, compared to the same quarter last year.

Speaker #2: This reduction was mainly driven by the previously explained decrease in NOI. Now looking at AFFO, AFFO adjusted per unit was 8.6 cents for the quarter, a decrease of 1.7 cents.

Speaker #2: Compared to the same quarter last year, the decrease is explained by the previously outlined decrease in cash NOI of $2.1 million, and it's partially offset by a decrease in administration expenses of $300,000.

Speaker #2: Excluding the lease cancellation payment previously described, FFO and AFFO adjusted per unit would have decreased by 0.1 cent, or 1%, and 0.6 cent, or 6.5%, respectively.

Speaker #2: Again, compared to the same quarter last year. We maintain our distribution to unit holders at 7.5 cents per unit for the quarter. Which represents a 7.5 cents per unit for the quarter, which represents an annualized distribution of 30 cents per unit the FFO, the AFFO adjusted payout ratio was 87.2% for the quarter.

Marc-André Lefebvre: We maintain our distribution to unit holders at CAD 0.075 per unit for the quarter, which represents No. CAD 0.075 per unit for the quarter, which represents an annualized distribution of CAD 0.30 per unit. The FFO, the AFFO adjusted payout ratio was 87.2% for the quarter, an increase of 14.5% from the same quarter last year. That was driven by the decrease in AFFO. The value of our investment properties and the weighted average cap rate for the entire portfolio remains stable at CAD 1.2 billion and 6.7% respectively. That's compared to year-end 2025. As previously mentioned by Michelle, overall, the two acquisitions and the disposition that we completed will have a net contribution of CAD 2.1 million to NOI on a annualized basis.

Speaker #2: And the increase of 14.5% from the same quarter last year. That was driven by the decrease in AFFO. The value of our investment properties and the weighted average cap rate for the entire portfolio remains stable at $1.2 billion.

Speaker #2: And 6.7% respectively. That's compared to year-end 2025. As previously mentioned by Michelle, overall, the two acquisitions and the disposition that we completed will have a net contribution of 2.1 million to NOI on a annualized basis.

Speaker #2: We concluded the quarter with a total debt ratio of 58%. The weighted average term and average interest rate on our mortgage portfolio were 2.2 years and 4.41% respectively.

Marc-André Lefebvre: We concluded the quarter with a total debt ratio of 58%. The weighted average term and average interest rates on our mortgage portfolio were 2.2 years and 4.41% respectively. Finally, at the end of the quarter, we have CAD 1.4 million in cash and CAD 22.3 million was available under our credit facilities for a total liquidity of CAD 23.7 million. This completes our presentation, and we will now open a call to questions.

Speaker #2: Finally, at the end of the quarter, we held 1.4 million in cash and 22.3 million was available under our credit facilities. For total liquidity of 23.7 million.

Speaker #2: So this completes our presentation. And we will now open a call to questions.

Speaker #3: Thank you. This is the conference operator. At this time, I would like to remind everyone that the analysts may now ask their question by pressing star followed by the number one on your telephone keypad.

Operator: Thank you. This is the conference operator. At this time, I would like to remind everyone that the analyst may now ask their question by pressing star followed by the number 1 on your telephone keypad. Again, if you'd like to ask a question, please press star 1. One moment please while we compile the Q&A roster. Your first question comes from Matt Kornack from National Bank Capital Markets. Please go ahead.

Speaker #3: Again, if you'd like to ask a question, please press star one. One moment, please, while we compile the Q&A roster. Your first question comes from Matt Karnak from National Bank Capital Markets.

Speaker #3: Please go ahead.

Speaker #4: Hi, guys. Good morning. Just quickly on the retention rate, it was significantly better and pretty high this quarter. Is that a reflection of a change in the nature of the demand?

Matt Kornack: Hi, guys. Good morning. Just quickly on the retention rate, it was significantly better and pretty high this quarter. Is that a reflection of a change in the nature of the demand? Is it just the nature of the tenancies that were maturing, or is it a nature of your approach to kind of renewals at this point?

Speaker #4: Is it just the nature of the tendencies that were maturing? Or is it a nature of your approach to kind of renewals at this point?

Speaker #5: I think it's Matt, it's a combination of all factors that you mentioned. I think sometimes the renewal rate isn't always indicative of not necessarily what's going on in our portfolio.

Stéphanie Léonard: I think it's Matt, it's a combination of all factors that you mentioned. I think sometimes the renewal rate isn't always indicative of not necessarily what's going on in our portfolio. Sometimes we do terminate leases to then upswing tenancies within the portfolio. We have to keep that in mind. Of course, as well, within this quarter, we have Hooke & Touchette for 101,000 square feet. That counted for a big portion. We always do, I think, we always try to retain our clients when we can. In previous quarters, what we have done is we have terminated leases to make sure we could get better NOI within our properties as well.

Speaker #5: Sometimes we do terminate leases to then upswing tenancies within the portfolio. So we have to keep that in mind. Of course, as well, within this quarter, we have hoped to shed for 1,000, 101,000 square feet that counted for a big portion.

Speaker #5: But we always do, I think, we always try to retain our clients when we can. But in previous quarters, what we have done is that we have terminated leases to make sure we could get better NOI in our properties as well.

Speaker #4: Okay. Makes sense. And then on the free rent front, can you give me a sense of the kind of how big that is and how it rolls off over the course of 2026?

Matt Kornack: Okay. Makes sense. Then on the free rent front, can you give me a sense as to kind of how big that is and how it rolls off over the course of 2026? Are you giving free rent on new leases at this point? I'm just trying to figure out how our NOI will swing accordingly as those arrangements fall off or come on.

Speaker #4: And are you giving free rent on new leases at this point? I'm just trying to figure out how our NOI will swing accordingly as those arrangements fall off or come on.

Speaker #2: Hey, Matt. So, I'll give you the number for Q1, and I'll let Stephanie comment for the rest of the year. But for Q1, free rent was $800,000.

Marc-André Lefebvre: Hey, Matt. I'll give you the number for Q1, and I'll let Stephanie comment for the rest of the year. For Q1, free rent was CAD 800,000. That was granted to tenants.

Speaker #2: So that was granted to tenants.

Speaker #4: Okay.

Matt Kornack: Okay.

Speaker #5: I think, to answer the other part of your question, it really does depend on the type of tenancy. We are seeing some free rent in terms of pre-occupancy periods, which we usually recuperate over the term.

Stéphanie Léonard: I think to answer the other part of your question, I think it really does depend on the type of tenancy. We are seeing some free rent in terms of pre-occupancy periods, which we usually recuperate on the term. That's what we usually try to do. If we're gonna give free rent, we're trying to extend the term a further 3 months to be able to recoup that on the back end. I mean, it really does depend. I can't say that there will be no free rent that will be given because it's just a market incentive. However, we aren't, as of today, we aren't seeing any free rent incentives in terms of what we were doing maybe 2 to 3 years ago that we're giving 18 months of free rent.

Speaker #5: That's what we usually try to do. So if we're going to give free rent, we're trying to extend the term a further three months to be able to recoup that on the back end.

Speaker #5: So it really does depend. I can't say that there will be no free rent that will be given because it's just a market it's a market incentive.

Speaker #5: However, we aren't as of today, we aren't seeing any free rent incentives in terms of what we were doing maybe two to three years ago that were giving 18 months of free rent.

Speaker #5: That ship has sailed so far. So I would stick it basically with just regular preoccupancy and recouping that at the end of the term.

Stéphanie Léonard: That ship has sailed so far. I would stick it basically with just regular pre-occupancy and recouping that at the end of the term.

Speaker #4: Okay. So if I think about just how that cadence occurs, does that 800,000 get smaller over the next few quarters? Or should we expect that it kind of remains stable per quarter?

Matt Kornack: Okay. If I think about just how that cadence occurs, does that CAD 800,000 get smaller over the next few quarters, or should we expect that it kind of remains stable per quarter?

Speaker #5: I would expect that it remains stable just to keep it at those levels since we're we don't I can't necessarily forecast that it would go down or go up.

Stéphanie Léonard: I would expect that it remains stable just to keep it at those levels since I can't necessarily forecast that it would go down or go up. I would keep it stable right now.

Speaker #5: I would keep it stable right now.

Speaker #4: Okay. And then it was a lovely January and February in Central and Eastern Canada. Was there any impact on margins or recoveries just given the amount of snow that we had?

Matt Kornack: Okay. It was a lovely January and February in Central and Eastern Canada. Was there any impact on margins or recoveries just given the amount of snow that we had in that period that would maybe have hit this quarter from an NOI standpoint? I know most of your leases are recoverable now, but there is maybe some gross leases left as well.

Speaker #4: In that period, that would maybe have hit this quarter from an NOI standpoint. I know some of your—most of your leases are recoverable now.

Speaker #4: But there's maybe some gross leases left as well.

Speaker #6: No. It's I call it business as usual. We still heated the properties and so on. And the demand was still there. I understand what you mean.

Michel Léonard: No. It's I call it, business as usual. You know, we still heated the properties and so on, and the demand was still there. I understand what you mean, and, yes, we do recuperate almost all of those expenses.

Speaker #6: And yes, we do recuperate almost all of those expenses.

Speaker #4: Okay. And then G&A looked quite low. Again, I don't know if that's I should have used this as a proxy for a new run rate?

Matt Kornack: Okay. G&A looked quite low. Again, I don't know if that's, should we use this as a proxy for a new run rate, or was there anything one time in the quarter in terms of timing on expenses there?

Speaker #4: Or was there anything one-time in the quarter in terms of timing on expenses there?

Speaker #2: So yeah, there is a difference of 300K with last year. However, I would use a run rate of maybe per quarter, a saving of 100K for the year.

Charles Dorais Bédard: Yeah, there is a difference of CAD 300,000 with last year. However, I would use a run rate of maybe per quarter, a saving of CAD 100,000 for the year. All in all, total CAD 400,000 of savings versus last year in terms of G&A.

Speaker #2: So all in all, total 400K of savings versus last year in terms of G&A.

Speaker #4: Perfect. And then last one for me. Just on the occupancy trend going forward in some of those spaces that you're looking to lease, can you give us a sense how you see this year unfolding in terms of interest on vacant space and any potential non-renewals in the portfolio that you'd foresee?

Matt Kornack: Perfect. Then last one for me. Just on the occupancy trend going forward, in some of those spaces that you're looking to lease, can you give us a sense, how you see this year unfolding in terms of interest on vacant space and any potential non-renewals in the portfolio that you'd foresee?

Speaker #5: I think right now, the market is at a really good spot in terms of the positioning of our properties. We're seeing interest within our vacancies.

Stéphanie Léonard: I think right now the market is at a really good spot in terms of the positioning of our properties. We're seeing interest within our vacancies. I'm gonna say the biggest issue right now, I think, is just lead time in terms of negotiation. I know I've said this in the past, some negotiations are extremely tedious. Like, we have a vacancy under negotiation. I think it's been I mean, almost a year now that we've been negotiating. It really depends. Again, the bigger the clients we negotiate with, the more complex it is and the more lead time it takes. I know during the last quarter, during Q2 we did mention we had a vacancy coming up in Ottawa at our Walkley property.

Speaker #5: I'm going to say the biggest issue right now, I think, is just lead time in terms of negotiation. I know I've said this in the past.

Speaker #5: But someone negotiations are extremely tedious. We have a vacancy under negotiation. I think it's been a couple I mean, almost a year now that we've been negotiating.

Speaker #5: So it really depends, again, the bigger the clients we negotiate with, the more complex it is and the more lead time it takes. I know during the last quarter, yeah, during Q4, we did mention we had a vacancy coming up in Ottawa at our Walkley property.

Speaker #5: I think everyone has heard the news that the federal government is mobilizing not necessarily quickly, but they're mobilizing. They need more space. They've let go a lot of their spaces.

Stéphanie Léonard: I think everyone has heard the news that the federal government is mobilizing, not necessarily quickly, but they're mobilizing. They need more space. They've let go a lot of their spaces, and now with their back to work mandate, they don't have enough seats for all of their employees. What we're trying to do for that specific property is capitalize on the federal government demand, and we are trying to put forward a proposals to them so we could stimulate interest before they start looking at the market more.

Speaker #5: And now, with their work from back-to-work mandate, they don't have enough seats for all of their employees. So what we're trying to do for that specific property is capitalize on the federal government's demand.

Speaker #5: And we are trying to put forward a proposal towards to them so we could stimulate interest before they start looking at the market more in depth.

Speaker #4: Perfect. That makes sense. And I appreciate the update all.

Matt Kornack: Perfect. That makes sense, and I appreciate the update.

Speaker #5: Pleasure.

Stéphanie Léonard: Pleasure.

Speaker #7: This is the conference operator again. If analysts would like to ask a question, please press star. And the number one. Your next question comes from Paul Woolley from CIBC.

Operator: Your next question comes from Sumayya Syed from CIBC. Please go ahead.

Speaker #7: Please go ahead.

Speaker #8: Hey, good morning, everybody. The asset classes continue to evolve. And it's great to see you're continuing to increase your penetration in the portfolio of industrial properties.

Sumayya Syed: Hey, good morning, everybody. You know, the asset classes, you know, continue to evolve, and it's great to see, you know, you're continuing to increase your penetration in the portfolio of industrial properties with the acquisitions in Alberta. I just want to know, when you sort of like sit back and look at the business, you know, we're seeing other asset classes like retail get a little bit more respect than they've gotten in the past. Have you thought at all about shifting from that 60% target for industrial or, Yeah, I'm just wondering if the last couple years have made you sort of rethink what your long-term allocation should be to each asset class.

Speaker #8: With the acquisitions in Alberta, I'm just wondering though, when you sort of sit back and look at the business, we're seeing other asset classes like retail get a little maybe get a little bit more respect because they've gotten in the past.

Speaker #8: Have you thought at all about shifting from that 60% target for industrial? Or yeah, I'm just wondering if the last couple of years have made you sort of rethink what your long-term allocation should be to each asset class.

Speaker #6: That's a very, very good question. I think that overall, what we've always stated is the fact that we we're still opportunistic in looking at the market.

Michel Léonard: That's a very good question. I think that overall, what we've always stated is the fact that we, you know, we're still opportunistic in looking at our, at the market. If we were able to acquire a retail property, accretively, we would still acquire that retail property as long as it is accretive. We've seen a lot of interest in groups soliciting us to sell our retail. We know that there's a lot of interest, and we know that overall it is a category that is really where we have a lot of interested parties within that category.

Speaker #6: And if we were able to acquire a retail property accretively, we would still acquire that retail property, as long as it is accretive. We've seen a lot of interest in groups soliciting us to sell our retail.

Speaker #6: So we know that there's a lot of interest. And we know that overall, it is a category that is really where we have a lot of interested parties within that category.

Speaker #6: So but I think that the key word is opportunistic. And we're holding very decent properties as far as retail and very desirable properties. And just think about the development that we did last year where we delivered a property to Winters Home Sense.

Michel Léonard: I think that the key word is opportunistic, and we, you know, we're holding very decent properties as far as retail and very desirable properties. Just think about the, you know, the development that we did last year, where we delivered a property to Winners HomeSense, and we're continuing our activity in that center in order to, you know, cancel certain leases at expiration or not renew certain leases from, let's call it, mom-and-pop operators in order to replace these tenancy by national tenants within this center. That's part of our strategy in order to obviously enhance value and also increase rents. As a result, you know, we're looking very, you know, positively in the retail segment.

Speaker #6: And we're continuing our activity in that center in order to cancel certain leases at expiration or not renew certain leases from, let's call it, mom-and-pop operators in order to replace these tendency by national tenants within this center.

Speaker #6: So that's part of our strategy in order to obviously enhance value and also increase rents. And so as a result, we're looking very positively in the retail segment.

Speaker #6: But that's not to deter from our goal of holding 60% of our portfolio in the industrial segment. So that means, intrinsically, the fact that we're reducing office to favor industrial and then remaining very opportunistic on the retail front.

Michel Léonard: That's not to deter from our goal of holding 60% of our portfolio in the industrial segment. That means intrinsically is the fact that we're reducing office to favor industrial and then remaining very opportunistic on the retail front.

Speaker #8: And in terms of what's on the market for industrial right now, do you think that growth is still sort of going to be on small portfolios going forward?

Sumayya Syed: In terms of what's on the market for industrial right now, do you think, you know, that growth is still sort of gonna be on, you know, small portfolios, going forward or, you know, individual properties? Or are you seeing any sort of industrial portfolios out there being marketed that, you know, that would be within your financial capabilities?

Speaker #8: Or individual properties? Or are you seeing any sort of industrial portfolios out there being marketed that would be within your financial capabilities?

Speaker #6: When you say financial capability, you talk about the accretion. I presume. And.

Michel Léonard: When you say financial capability, you talk about the accretion, I presume.

Speaker #8: I'm just more size, I guess, is maybe what I'm thinking about.

Sumayya Syed: I just more size, I guess, is maybe what I'm thinking about.

Michel Léonard: Yeah. Okay. Well, on a pure size basis, you know, there's a property on the market in Montreal right now, it's 1.6 million square feet. I think it may be a little bit too big for us. Overall, you know, we, you know, whether it's 300,000 square feet, we would jump on it as long as it's accretive. The acquisition of properties that would be 40,000, 50,000, 100,000 square feet, it's not something that is out of the realm for us. It is definitely part of our process. You know, when, you know, a few years ago, we were smaller, we were buying smaller properties. Now we're larger, we're buying larger properties.

Speaker #6: Yeah. Okay. Well, on a pure size basis, there's a property on the market in Montreal right now. It's 1.6 million square feet. I think it may be a little bit too big for us.

Speaker #6: But whether it's 300,000 square feet, we would jump on it as long as it's accretive. So it's in the acquisition of properties that would be 40, 50, 100,000 square feet.

Speaker #6: It's not something that is out of the realm for us, and it is definitely part of our process. And when we were—a few years ago, we were smaller.

Speaker #6: We were buying smaller properties. Now we're larger. So we're buying larger properties. And obviously, when you're looking at larger properties, the tendency becomes more and more important within the evaluation of the acquisition.

Michel Léonard: Obviously, when you're looking at larger properties, the tenancy becomes more and more important within the evaluation of the acquisition.

Speaker #8: Okay. And I guess my third question sort of relates to the last one is just you in the press release noted that you're interested in starting an at-the-market equity program.

Sumayya Syed: Okay. I guess my third question sort of relates to the last one. It's just, you know, you in the press release noted that, you know, you're interested in starting an at-the-market equity program. Do you have any immediate needs for using that? Or is this more of a, you know, precautionary, not precautionary is not the right word, but, you know, like you're trying to be prepared for potentially something in the near future that would require equity funding.

Speaker #8: Do you have any immediate needs for using that? Or is this more of a precautionary not precautionary is not the right word. But you're trying to be prepared for potentially something in the near future that would require equity funding?

Speaker #4: Yeah. It's more the latter though. We'll use the ATM on the opportunistic basis. When we feel the yeah, that the issue price is at the right level.

Marc-André Lefebvre: Yeah. It's more the latter. We'll use the ATM on an opportunistic basis when we feel, yeah, that the issue price is at the right level.

Speaker #6: But to confirm, we're putting it in place. But we don't need it in order to generate capital for BTB. It is a tool that would be part of our tool chest in order or toolbox in order to if we have a small acquisition that would be that would require us to raise capital rapidly.

Michel Léonard: To confirm, we're putting it in place, but we don't need it in order to generate capital for BTB. It is a tool that would be part of our tool chest in order or toolbox in order to, you know, if we have a small acquisition that would require us to raise capital, you know, rapidly, we would use it. This is not to replace bought deals that we've been constantly using over the last few years. It is just part of the tools that we can use, and it's not to raise capital because we would be in a position where we need capital in order to sustain our daily needs.

Speaker #6: We would use it, but this is not to replace bought deals that we've been constantly using over the last few years. So, it is just part of the tools that we can use, and it's not to raise capital because we would be in a position where we need capital in order to sustain our daily needs.

Speaker #8: Okay. That's great. Thank you very much, everyone.

Sumayya Syed: Okay. That's great. Thank you very much, everyone.

Speaker #4: Thanks.

Marc-André Lefebvre: Thanks.

Operator: At this time, there are no further questions. Please go ahead, Mr. Léonard.

Speaker #1: At this time, there are no further questions. Please go ahead, Mr. Léonard.

Speaker #6: Well, thank you very much for joining us today. The first quarter, as you saw, was a little bit boring, except for an acquisition at this position.

Michel Léonard: Well, thank you very much for joining us today. The first quarter, as you saw, a little bit boring, except for an acquisition, a disposition, and after the quarter, the acquisition of a 50% interest that will positively generate additional NOI for BTB. Last year, we did dispose, did not acquire. We have properties on the market right now that we're trying to dispose in order to generate the capital to redeploy in industrial. As I mentioned, perhaps opportunistically into the retail segment. Overall, we like to transact, we like to reposition the portfolio in order to get to our goal of being at 60%, so far as 60% weight into the industrial segment.

Speaker #6: And after the quarter, the acquisition of a 50% interest that will positively generate additional NOI for BTB. So last year, we did dispose did not acquire.

Speaker #6: So we have properties on the market right now that we're trying to dispose in order to generate the capital to redeploy an industrial. And as I mentioned, perhaps opportunistically, into the retail segment.

Speaker #6: But overall, we like to transact. We like to reposition the portfolio in order to get to our goal of being a 60% so far, a 60% weight into the industrial segment.

Speaker #6: So with this, thank you very much for your presence today. I look forward to seeing you or listening to you again for our Q2 results.

Michel Léonard: With this, thank you very much for your presence today, and looking forward to seeing you or listening to you again for our Q2 results. Thank you.

Speaker #6: Thank you.

Operator: Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Thank you.