Q1 2026 SmartCentres Real Estate Investment Trust Earnings Call

May 7, 2026

Speaker #2: Rock. I'm like.

Speaker #4: Surrenders in the wild, and find what we need. A little restless on the search and get a little worn down in between. Bulls chasing the matador.

Speaker #4: A man left. But everybody needs someone too. Like a lighthouse from the sea.

Speaker #3: Mama, let me be your.

Speaker #5: The conference is now being recorded.

Operator: The conference is now being recorded.

Speaker #6: Good day, ladies and gentlemen. Welcome to the SmartCentres REIT Q1 2026 conference call. I would like to introduce Mr. Peter Slan. Please go ahead.

Operator: Good day, ladies and gentlemen. Welcome to the SmartCentres REIT Q1 2026 Conference Call. I would like to introduce Mr. Peter Slan. Please go ahead.

Speaker #7: Thank you. Good afternoon, and welcome to SmartCentres' first quarter 2026 results call. I'm Peter Slan, Chief Financial Officer, and I am joined on today's call by Mitch Goldhar, Executive Chair and CEO, and by Rudy Gobin, our Chief Portfolio and Asset Management Officer.

Peter Slan: Thank you. Good afternoon, and welcome to SmartCentres Q1 2026 Results Call. I'm Peter Slan, Chief Financial Officer, and I am joined on today's call by Mitch Goldhar, Executive Chair and CEO, and by Rudy Gobin, our Chief Portfolio and Asset Management Officer. We will begin today's call with some comments from Mitch. Rudy will then provide some operational highlights, and I will review our financial results. We will then be pleased to take your questions. Just before I turn the call over to Mitch, I would like to refer you specifically to the cautionary language about forward-looking information which can be found at the front of our MD&A. This also applies to comments that any of the speakers make on today's call. Mitch, over to you.

Speaker #7: We will begin today's call with some comments from Mitch. Rudy will then provide some operational highlights, and I will review our financial results. We will then be pleased to take your questions.

Speaker #7: Just before I turn the call over to Mitch, I would like to refer you specifically to the cautionary, which can be found at the front of our MD&A.

Speaker #7: This also applies to comments that any of the speakers make on today's call. Mitch, over to you.

Speaker #8: Thank you, Peter. Good afternoon, and welcome, everyone. As in prior quarters, we will keep our comments brief to allow more time for your questions.

Mitch Goldhar: Thank you, Peter. Good afternoon, welcome everyone. As in prior quarters, we will keep our comments brief to allow more time for your questions. The strong retail fundamentals highlighted in 2025 have continued into early 2026, with 80% of our 2026 lease maturities extending by the quarter end at retail lifts of 11.5% ex anchors. This strong retention rate and rental lift is further supported by a 3.4% same property NOI increase ex anchors. Demand for space, including new build, built space, remains strong as we continue to improve our tenant mix and covenants. As we mentioned in February, we terminated 6 Toys Us locations in early July before their CCAA filing. This gave us the flexibility and control we needed to manage the releasing of these locations.

Speaker #8: The strong retail fundamentals highlighted in 2025 have continued into early 2026, with 80% of our 2026 lease maturities extending by the quarter end, at retail lifts of 11.5% for anchors.

Speaker #8: This strong retention rate and rental lift is further supported by a 3.4% same property NOI increase, anchors. Demand for space, including new build space, remains strong as we continue to improve our tenant mix and covenants.

Speaker #8: As we mentioned in February, we terminated six Toys "R" Us locations in early July, before their CCAA filing. This gave us the flexibility and control we needed to manage the releasing of these locations.

Speaker #8: Shortly after the quarter end, we reached commitments with various grocers for three of the ex-Toys locations, for which we are currently finalizing the documentation.

Mitch Goldhar: Shortly after the quarter end, we reached commitments with various grocers for 3 of the ex-Toys Us locations, for which we are currently finalizing the documentation. We have also reached a firm commitment with TJX for a Winners in a 4th location. With these deals, if measured today, our occupancy would be 98%. Further, these deals offer higher quality, stronger covenant and new 15-year terms and 10-year term respectively, replacing the 3-year term we had. All that with higher traffic all year long and not just in Q4. Most importantly, the new net rents are 20% to 25% higher than the previous Toys Us rents, adding NOI stability and valuation to our portfolio. As I have said previously, we will stay on strategy, taking the appropriate time in building a strong, stable portfolio for the long term.

Speaker #8: We have also reached a firm commitment with TJX for a Winners in a fourth location. With these deals, if measured today, our occupancy would be 98%.

Speaker #8: Further, these deals offer higher quality and stronger covenant, and new 15-year terms and 10-year term respectively, replacing the 3-year term we had. And all that with higher traffic.

Speaker #8: All year long, and not just in the fourth quarter. Most importantly, the new net rents are 20 to 25 percent higher than the previous Toys rents.

Speaker #8: Adding NOI, stability, and valuation to our portfolio. As I have said previously, we will stay on strategy, taking the appropriate time in building a strong, stable portfolio for the long term.

Speaker #8: As we noted in our Q1 press release, we are embarking on a retail expansion program. The three projects announced are board-approved and just the beginning.

Mitch Goldhar: As we noted in our Q1 press release, we are embarking on a retail expansion program. The three projects announced are board approved and just the beginning, two of which will start construction later this year. We expect these new build developments to deliver accretive FFO growth. With the program, which has been going on for a while now, will continue for many years. Stay tuned for further announcements in the coming months. At the corporate level, which Peter will speak to in a few minutes, you will see that we have continued to carefully manage our balance sheet, debt, and related metrics. Our financial flexibility remains strong with over CAD 1 billion of liquidity and an unencumbered asset pool of CAD 10.2 billion. We have also taken steps to insulate ourselves from potential interest rate shocks with 88% of our debt being at fixed rates.

Speaker #8: Two of which will start construction later this year. We expect these new build developments to deliver accretive FFO growth, with the program, which has been going on for a while now, continuing for many years.

Speaker #8: Stay tuned for further announcements in the coming months. At the corporate level, which Peter will speak to in a few minutes, you will see that we have continued to carefully manage our balance sheet, debt, and related metrics.

Speaker #8: Our financial flexibility remains strong, with over $1 billion of liquidity and an unencumbered asset pool of $10.2 billion. We have also taken steps to insulate ourselves from potential interest rate shocks, with 88% of our debt being at fixed rates.

Speaker #8: With that, let me turn it over to Rudy for some more operational highlights. Rudy?

Mitch Goldhar: With that, let me turn it over to Rudy for some more operational highlights. Rudy?

Speaker #9: Thanks, Mitch. And good afternoon, everyone. The resiliency of the SmartCentres Walmart portfolio was once again a standout for Q1. Same property NOI continued its strong momentum with 3.4% growth in the quarter for anchors, and if we looked at the longer term, 4.8% for anchors, with 3.0% all in.

Rudy Gobin: Thanks, Mitch. Good afternoon, everyone. The resiliency of the SmartCentres Walmart portfolio was once again a standout for Q1. Same property NOI continued its strong momentum with 3.4% growth ex anchors in the quarter. If we looked at the longer term of the trailing 12 months, we are at 4.8% ex anchors with 3.0% all in. Occupancy in the quarter experienced a temporary drop to 97.6%, largely because of one tenant, Toys Us, which Mitch mentioned earlier, with an early January termination that we did deliberately to get control of the space. Now, with the committed deals from grocers and TJX we have in hand since the quarter end, if measured today, we would be back at 98%.

Speaker #9: Occupancy in the quarter experienced a temporary drop to 97.6%, largely because of one tenant. Toys are us. Which Mitch mentioned earlier, with an early January that was, termination that we did deliberately to get control of the space.

Speaker #9: Now, with the committed deals from grocers and TJX, we have in hand, since the quarter end—if measured today—we would be back at 98%.

Speaker #9: And with four of the six Toys units attracting rental increases of 25% above what Toys was paying, as Mitch mentioned. And so, the longer-term NOI and FFO look even better on a go-forward perspective, all combined with a stronger covenant portfolio.

Rudy Gobin: With 4 of the 6 Toys Us units attracting rental increases of 25% above what Toys Us was paying, as Mitch mentioned. The longer-term NOI and FFO looks even better on a go-forward perspective, all combined with a stronger covenant portfolio. This resiliency is also reflected in the 80% of the 2026 lease maturities already completed, and with a rental lift of 11.5% ex anchors or 5.8% all in. Cash collections continue to remain strong at near 99% in the quarter, and demand continues from our core tenants Grocers, TJX Banners, Canadian Tire Brands, Dollarama, Pharmacy, Banks, Pet Stores, and Fitness. Along with these, we are also integrating a bit of entertainment, racket, and sports, rounding out a more fulsome retail offering where our minor vacancy exists.

Speaker #9: This resiliency is also reflected in the 80% of the 2026 lease maturities already completed, with a rental lift of 11.5% for anchors, or 5.8% all in.

Speaker #9: Cash collections continue to remain strong at near 99% in the quarter, and demand continues from our core tenants: grocers, TJX banners, and Canadian Tire brands.

Speaker #9: Dollarama, pharmacy, banks, pet stores, and fitness. Along with these, we are also integrating a bit of entertainment, racket, and sports, rounding out a more fulsome retail offering where our minor vacancy exists.

Speaker #9: Our premium outlets continue to excel in driving traffic, with improving tenant sales and the resulting percentage rents. Toronto Premium Outlets is doing very well and is ranked in the top three in sales in this country, and providing an expansion opportunity of nearly 100,000 square feet.

Rudy Gobin: Our premium outlets continue to excel in driving traffic, with improving tenant sales and the resulting percentage rents. Toronto Premium Outlets is doing very well and is ranked in the top three in sales in this country and providing an expansion opportunity of near 100,000 sq ft. With 50% of the leasing completed, this expansion will be accompanied by a new parking deck, and construction is scheduled to commence later this year for a grand opening in late fall next year. Overall, the business remains strong, rents are growing, and the covenant quality of the portfolio is improving. We expect this momentum of rental growth and occupancy to continue throughout 2026. Thank you. I'll now turn it over to Peter. Peter.

Speaker #9: With 50% of the leasing completed, this expansion will be accompanied by a new parking deck, and construction is scheduled to commence later this year for a grand opening in late fall next year.

Speaker #9: Overall, the business remains strong. Rents are growing, and the covenant quality of the portfolio is improving. We expect this momentum of rental growth and occupancy to continue throughout 2026.

Speaker #9: Thank you, and I'll now turn it over to Peter. Peter?

Speaker #10: Thanks, Rudy. As you have seen in our release, the change in FFO this quarter was primarily due to higher interest and G&A expenses, partially offset by the higher net operating income.

Peter Slan: Thanks, Rudy. As you have seen in our release, the change in FFO this quarter was primarily due to higher interest and G&A expenses, partially offset by the higher net operating income. Our G&A expense this quarter included approximately CAD 2.7 million of non-recurring costs associated with the renegotiation of the various agreements with Penguin. Excluding some non-recurring costs from the comparable period in the prior year, the net G&A run rate increased by about CAD 1 million. This is an improvement over our estimate when we announced the renewed agreements with Penguin, although we continue to believe that an incremental CAD 1.5 million is appropriate for subsequent quarters. As we noted at the time, these new arrangements have resulted in a meaningful simplification of our arrangements with Penguin. The earn-outs are settled, with the related development lands now being solely for the benefit of the REIT.

Speaker #10: Our G&A expense this quarter included approximately $2.7 million of non-recurring costs associated with the renegotiation of the various agreements with Penguin. Excluding some non-recurring costs from the comparable period in the prior year, the net G&A run rate increased by about $1 million.

Speaker #10: This is an improvement over our estimate when we announced the renewed agreements with Penguin, although we continue to believe that an incremental $1.5 million is appropriate for subsequent quarters.

Speaker #10: As we noted at the time, these new arrangements have resulted in a meaningful simplification of our arrangements with Penguin. The earnouts are settled, with the related development lands now being solely for the benefit of the REIT.

Speaker #10: The mezzanine loans, where the total committed amount was as high as $330 million—half of which was drawn at various times—have all been eliminated.

Peter Slan: The mezzanine loans, where the total committed amount was as high as CAD 330 million, half of which was drawn at various times, have all been eliminated. The voting top-up right has expired and was not renewed. The variable portion of the Penguin Services Agreement has been eliminated in exchange for a single fixed fee, and the non-competition agreement was renewed. We again maintained our distributions during the quarter at an annualized rate of CAD 1.85 per unit. The payout ratio to AFFO remains stable at 89.9% for the rolling 12 months ended 31 March 2026. The adjusted debt to adjusted EBITDA increased modestly to 9.8x.

Speaker #10: The voting top-up rate has expired and was not renewed. The variable portion of the Penguin services agreement has been eliminated in exchange for a single fixed fee.

Speaker #10: And the non-competition agreement was renewed. We again maintained our distributions during the quarter at an annualized rate of $1.85 per unit. The payout ratio to AFFO remained stable at 89.9% for the rolling 12 months ended March 31, 2026.

Speaker #10: The adjusted debt to adjusted EBITDA increased modestly to 9.8 times. However, the proceeds from the partial settlement of the total return swap just after the quarter end were used to retire debt.

Peter Slan: However, the proceeds from the partial settlement of the total return swap just after the quarter end were used to retire debt, resulting in a pro forma ratio of 9.7x, unchanged from the previous quarter. The weighted average term to maturity of our debt, including debt on equity accounts and investments, is 3.1 years. As in previous quarters, we've updated our MD&A disclosure, focusing on those development projects that are currently under construction. As you can see on page 17, there were 8 projects under construction at the end of Q1, unchanged from last quarter. With that, we would be pleased to take your questions. Operator, can we have the first question on the line, please?

Speaker #10: Resulting in a pro forma ratio of 9.7 times, unchanged from the previous quarter. The weighted average term to maturity of our debt, including debt on equity account and investments, is 3.1 years.

Speaker #10: As in previous quarters, we've updated our MD&A disclosure, focusing on those development projects that are currently under construction. As you can see on page 17, there were eight projects under construction at the end of Q1, unchanged from last quarter.

Speaker #10: And with that, we would be pleased to take your questions. So, operator, can we have the first question on the line, please?

Speaker #11: For those who would like to queue up to ask a question at this time, please press star one on your phone's keypad. We have one person that has queued up.

Operator: For those who would like to queue up to ask a question at this time, please press star one on your phone's keypad. We have one person that queued up. We will grab their names, and we'll introduce them shortly. The first question is from Sam Damiani from TD Securities. Please go ahead, Sam.

Speaker #11: We will grab their names and we'll introduce them shortly. Okay. The first question is from Sam Damiani from TD Securities. Please go ahead, Sam.

Speaker #12: Thanks, and good afternoon, everyone. Yeah, first question, I guess, just on the Toronto Premium Outlet expansion that was alluded to. Could you provide a little more detail, I guess, on the cost and the return on that?

Sam Damiani: Thanks, good afternoon, everyone. First question, I guess, just on the Toronto Premium Outlet expansion that was alluded to. Could you provide a little more detail, I guess, on the cost and the return on that?

Speaker #10: Returns over 8%, right? Hey, Sam. At the moment, the expansion 100% number is about $110 million. And the projected return on that is in excess of 8%, day one.

Mitch Goldhar: Returns over 8%, right? Hey, Sam. At the moment, the expansion 100% numbers is about CAD 110 million. The projected return on that is in excess of 8% day 1.

Speaker #12: All right. Did you say day one?

Sam Damiani: Sorry, did you say day one?

Speaker #10: Yeah, like the initial day-one rent. Projection as a return on that $110 million is, I think, it's something like 8.35% or 8.4%.

Mitch Goldhar: Yeah, like the initial day one rent projection, as a return, of that CAD 110 million is, I think it's something like 8.35% or 8.4%.

Speaker #12: All right. Great. And I assume you're—

Sam Damiani: All right, great.

Speaker #10: Yeah, it's already 50% leased. And that's partly self, it's partly deliberate. But.

Mitch Goldhar: Yeah, it's already, it's already 50% leased. That's partly, you know, It's partly deliberate.

Sam Damiani: That's for sure. You're confident and sure that it'll be substantially, if not 100% leased on opening?

Speaker #12: Oh, for sure. And you're confident, I'm sure, that it'll be substantially, if not 100%, leased on opening?

Speaker #10: Yeah, yeah, it's very much the case. It's really very in demand.

Mitch Goldhar: Yeah. Yeah. It's very much the case. It's really very in demand.

Speaker #12: That's great. Congrats on getting that going. And then these three new Greenfield projects, I guess two of which are starting later this year, is there—are there sort of size and scope metrics that you're disclosing publicly, including the locations specifically?

Sam Damiani: That's great. Congrats on getting that going. The 3 new greenfield projects, I guess 2 of which are starting later this year. Are there sort of size and scope metrics that you're disclosing publicly, including the locations specifically?

Speaker #10: Yeah, I mean, like the rest of the portfolio, it's going to vary. The size, but it's pretty typical SmartCentres-type stuff in terms of size.

Mitch Goldhar: Yeah, I mean, like the rest of the portfolio, I mean, you know, it's gonna vary the size, but, you know, it's pretty typical SmartCentres type stuff in terms of size. You know, they'll be anchored, all of them. Yeah, I mean, probably, I don't know whether we announced the sizes in there, but, you know, very much typical. Some of them will be two anchors, so they're not small.

Speaker #10: They'll be anchored, all of them. And yeah, I mean, probably—I think—I don't know whether we announced the sizes in there, but very much typical.

Speaker #10: Some of them will be two anchors, so they're not small.

Speaker #12: So these would be somewhat meaningful supply additions to the, I assume, the trade areas of these locations. What gives you the, I guess, the confidence and the conviction to move ahead in these two or three locations?

Sam Damiani: These would be somewhat meaningful supply additions to the, I assume, the trade areas of these locations. What gives you the, I guess, the confidence and the conviction to move ahead in these, two or three, locations?

Speaker #10: Well, I mean, first of all, the retailers—I mean, these are properties we're buying because we have pre-leased to anchor tenants. So you could say they're being driven by consumer demand.

Mitch Goldhar: Well, I mean, first of all, the retailers. I mean, these are properties we're buying because we have pre-leased two anchor tenants. You know, you could say they're being driven by consumer demand. Keeping in mind that many retailers, major national retailers have not expanded in sync with the population growth. Things really stopped growing in sync with population probably 15 years ago. In addition to, you know, the pause of physical retail growth around e-commerce, you know, 15 years ago, you also had, you know, a lot of inflation on the value of residential land. You didn't see. You saw a lot of retail being converted to residential density all over.

Speaker #10: Keeping in mind that many, many retailers—major national retailers—have not expanded in sync with the population growth. Things really stopped growing in sync with the population probably 15 years ago.

Speaker #10: So, in addition to the pause of physical retail growth around e-commerce, fifteen years ago, you also had a lot of inflation on the value of residential land.

Speaker #10: So you didn't see—you saw a lot of retail being converted to residential density all over. And then you had some very strong growth in this country for the last 15 years.

Mitch Goldhar: You had, you know, you had some very healthy annual population growth in this country for the last 15 years. When you put it all together, there are, there's quite a few large national retailers who are playing catch up. I should have mentioned COVID, which came along. We come to now and there's a lot of national retailers who are interested in catch up. A lot of residential growth across the country and small, medium size, large size markets. Yeah, I mean, these are some of the factors, some of the variables behind the reasons and the confidence for what we're doing.

Speaker #10: So when you put it all together, there are quite a few large national retailers who are playing catch-up. I should have mentioned COVID, which then came along.

Speaker #10: So then we come to now. And so there's a lot of national retailers who are interested in catch-up. A lot of residential growth across the country and small, medium, and large-sized markets.

Speaker #10: So yeah, I mean, these are some of the—these are some of the factors, some of the variables behind the reasons and the confidence for what we're doing.

Sam Damiani: I don't mean to hog the puck here, but Mitch, obviously you're gonna be building these out in phases, much like the existing SmartCentres portfolio, sort of as the buildings are leased. You know, building them out in phases. Like, if the center is gonna be 350,000 sq ft, it's not gonna be all built in 12 months.

Speaker #12: And I don't mean to hog the puck here, but Mitch, obviously, you're going to be building these out in phases, much like the existing SmartCentres portfolio—sort of as the buildings are leased.

Speaker #12: Building them out in phases, such that they're all—like if a center is going to be 350,000 square feet, it's not going to be all built in 12 months.

Mitch Goldhar: I'd love to just say, I'd just love to scare you and tell you that we're going to go and build the 350 all at once. I can't do that to you, Sam. We are, we've never built for all intents and purposes, over the last, whatever it is, 35 years, we've never really built from scratch a space that isn't leased. That's why we've had the earn outs. That's why we've got Vacant parcels here and there because we never built spec. Now there are times where on a CRU building we might add 2 or 3 or 4 thousand sq ft because it makes sense. Other than that, it's, we build as we lease.

Speaker #10: I'd love to just say, I just love to scare you and tell you that we're going to go build the 350 all at once, but actually, I can't do that to you, Sam.

Speaker #10: We are—we've never built—I mean, for all intents and purposes, over the last, whatever it is, 35 years, we've never really built from scratch a space that isn't leased.

Speaker #10: That's why we've always—that's where we've had the earnouts. That's why they're there. Because you never built spectacular. Now, there are times where we, on a CRU building, we might add two or three or four thousand square feet because it makes sense.

Speaker #10: But other than that, it's we build as we lease.

Speaker #12: Okay. Great. Thank you. I will turn it back. Thank you.

Sam Damiani: Okay, great. Thank you. I'll turn it back. Thank you.

Speaker #13: Thank you, Sam. The next question is from Lauren Kalmar from Desjardins. Please go ahead, Lauren.

Peter Slan: Thank you, Sam. The next question is from Lauren Calmar from Desjardins. Please go ahead, Lauren.

Operator: Thank you, Sam. The next question is from Lorne Kalmar from Desjardins. Please go ahead, Lauren.

Speaker #14: Thank you very much. Good afternoon, everybody. Maybe just switching gears a little bit—I mean, you're talking about turning on the development taps here on the retail side.

Lauren Calmar: Thank you very much. Good afternoon, everybody. Maybe just switching gears a little bit. I mean, you're talking about turning on the development taps here on the retail side. Just wanted to see if that influences in any way the outlook for dispositions. Are you perhaps a little bit more motivated now that you're gonna have to fund some of these developments? What are you seeing out there in the market? What do you think is achievable in 2026?

Lorne Kalmar: Thank you very much. Good afternoon, everybody. Maybe just switching gears a little bit. I mean, you're talking about turning on the development taps here on the retail side. Just wanted to see if that influences in any way the outlook for dispositions. Are you perhaps a little bit more motivated now that you're gonna have to fund some of these developments? What are you seeing out there in the market? What do you think is achievable in 2026?

Speaker #14: And just wanted to see if that influences in any way the outlook for dispositions. Are you perhaps a little bit more motivated now that you're going to have to fund some of these developments, and what do you see out there in the market?

Speaker #14: What do you think is achievable in 2026?

Speaker #10: Yeah. I mean, we've always been motivated to dispose of certain assets—ideally, some land. And to the extent that we can't do that because of the market, which I'll comment on in a second, we'll just gauge the rate of our development around our various metrics.

Mitch Goldhar: Yeah. I mean, we've always been motivated, to dispose of, you know, of certain assets, ideally, you know, some land. To the extent that, uh, we can't do that because the market, which I'll comment on in a second, you know, we'll just, you know, gauge the rate of our development around, you know, our various metrics. But, you know, we are confident that, you know, we will be able to, uh, achieve some dispositions finally. The market's a little better, slowly but surely. Ideally it'll be some of our PUD. But, yeah, if the markets doesn't cooperate, we will, you know, we'll act accordingly, in terms of the rate of development. Keeping in mind, this development's not high rise.

Speaker #10: But we are confident that we will be able to achieve some dispositions, finally. The market's a little better—slowly, but surely. And ideally, it'll be some of our PUD, but yeah, if the market doesn't cooperate, we will act accordingly in terms of the rate of development.

Speaker #10: Keeping in mind, this development's not high-rise. This is like if we build a Loblaw store—if we started it today, it would be paying rent in a year from now, or less.

Mitch Goldhar: This is like, you know, if we build a Loblaws store, we started it today, you know, we would be paying rent in 1 year from now or less. We're not really carrying the, you know, the debt for very long. The path to EBITDA is really very short and straight forward. Nevertheless, we will be managing. That's how we'll be managing. It'd be great if we could achieve some dispositions, you know, next 6 to 12 months.

Speaker #10: So we're not really carrying the debt for very long. So the path to even is really very short and straightforward. But nevertheless, we will be managing.

Speaker #10: That's how we'll be managing. It'd be great if we could achieve some dispositions. Next 6 to 12 months.

Speaker #14: Okay. And I guess maybe in the event that you can't, because obviously there's a lot of stuff beyond your control, unfortunately, is there a top end you'd be willing to let leverage go to?

Lauren Calmar: Okay. I guess maybe in the event that you can't, because obviously there's a lot of stuff beyond your control, unfortunately, is there like a top end you'd be willing to let leverage go to?

Lorne Kalmar: Okay. I guess maybe in the event that you can't, because obviously there's a lot of stuff beyond your control, unfortunately, is there like a top end you'd be willing to let leverage go to?

Mitch Goldhar: You know, we'd like to maintain our current, you know, debt rating. You know, I think, you know, just in some, you know, vague-ish kind of way, that would probably be one of the, you know, one of the guiding metrics that would determine whether we go or don't go on something. Generally speaking, the land that we're buying, you know, is not, you know, most of it's not really needle-moving stuff. It's more the development itself. We're certainly pretty confident that we'll be able to, you know, move the development program along. You know, as I said, the only sites we're buying is when we have, you know, pre-leased to anchors.

Speaker #10: We like our—we'd like to maintain our current debt rating. So I think, just in some vague-ish kind of way, that would probably be one of the guiding metrics.

Speaker #10: That would determine whether we go or don't go on something. Generally speaking, the land that we're buying is not—most of it's not really needle-moving stuff.

Speaker #10: It's more the development itself. So we're certainly pretty confident that we'll be able to continue to move the development program along. As I said, the only sites we're buying are when we have pre-leased to anchors.

Mitch Goldhar: You know, even if we have to, we would, I can't imagine it would ever be the case, but, you know, we can always slow down acquisitions. It's the commencement that we'll be watching closely around our debt metrics. You know, it's not very difficult to do.

Speaker #10: And so we'll—even if we have to, we would—I can't imagine whatever would be the case—but we can always slow down acquisitions. But it's the commencements that we'll be watching closely around our debt metrics.

Speaker #10: So, it's not very difficult to do.

Speaker #14: Okay, and then maybe just one—kind of taking back—yep, sorry. Go ahead, Peter.

Lauren Calmar: Okay. Maybe just one kind of.

Lorne Kalmar: Okay. Maybe just one kind of.

Peter Slan: Lauren, sorry.

Lauren Calmar: Yep, sorry. Go ahead, Peter.

Lorne Kalmar: Yep, sorry. Go ahead, Peter.

Peter Slan: Lauren, it's Peter. I was just gonna add, you know, we do have some levers to pull. As you saw this quarter, you know, we unwound a portion of the TRS to use those proceeds to de-lever a little bit. There's still another CAD 50 or 55 million to go there. There are some tools in the toolkit that we have to manage the debt levels.

Speaker #15: Lauren, it's Peter. I was just going to add, we do have some levers to pull, as you saw. This quarter, we unwound a portion of the TRS and used those proceeds to delever a little bit.

Peter Slan: Lorne, it's Peter. I was just gonna add, you know, we do have some levers to pull. As you saw this quarter, you know, we unwound a portion of the TRS to use those proceeds to de-lever a little bit. There's still another CAD 50 or 55 million to go there. There are some tools in the toolkit that we have to manage the debt levels.

Speaker #15: And there's still another $50 or $55 million to go there. So there are some tools in the toolkit that we have to manage the debt levels.

Speaker #14: Okay, and then maybe while I have you, Peter, just one kind of ticky-tacky one on the G&A. And I might have missed it—I think you talked a little bit about it.

Lauren Calmar: Okay. Then maybe, while I have you, Peter, just one kind of ticky-tacky one on the G&A, and I might have missed it. I think you talked a little bit about it. With the CAD 1.5 million incremental expected, did you say there was CAD 1 million of that picked up in Q1, i.e., you know, we shouldn't expect a double counting in Q2 of the CAD 1.5 million once the resolution's approved?

Lorne Kalmar: Okay. Then maybe, while I have you, Peter, just one kind of ticky-tacky one on the G&A, and I might have missed it. I think you talked a little bit about it. With the CAD 1.5 million incremental expected, did you say there was CAD 1 million of that picked up in Q1, i.e., you know, we shouldn't expect a double counting in Q2 of the CAD 1.5 million once the resolution's approved?

Speaker #14: With the $1.5 million incremental expected, did you say there was a million of that picked up in Q1? I.e., we shouldn't expect a double counting in Q2 of the $1.5 million once the resolution's approved?

Speaker #15: That's right. That's exactly right. So, yeah.

Peter Slan: That's right. That's exactly right.

Peter Slan: Okay, perfect.

Lorne Kalmar: Okay, perfect.

Peter Slan: Yeah.

Speaker #14: Thank you so much. That’s all from me.

Lauren Calmar: Thank you so much. That's all from me.

Lorne Kalmar: Thank you so much. That's all from me.

Speaker #13: The next question is from Mario Saric from Scotiabank. Please go ahead, Mario.

Peter Slan: The next question is from Mario Saric from Scotiabank. Please go ahead, Mario.

Operator: The next question is from Mario Saric from Scotiabank. Please go ahead, Mario.

Speaker #16: Hi. Thank you. Maybe just talking with Peter on the penguin agreements—just very high-level—can you just go through the numbers again in terms of the total potential impact on FFO from the rearrangements?

Mario Saric: Hi. Thank you. Maybe just sticking with Peter on the Penguin agreements. Just very high level, can you just go through the numbers again in terms of the total potential impact on FFO from the rearrangements?

Speaker #15: Well, Mario, there's really not a huge impact on FFO. The biggest impact is on the balance sheet. The largest portion of the Penguin arrangements that we settled was the earnings.

Mitch Goldhar: Well, Mario, there's really not a huge impact on FFO. The biggest impact is on the balance sheet. The largest portion of the Penguin arrangements that we settled was the earn-outs, which is not only with Penguin, but with some third-party partners as well. That was about CAD 47 million on the balance sheet, we now control all of those lands ourselves, and there'll be a future FFO impact as those lands get developed at some point in the future. You know, the current impact is mostly the G&A that we discussed in the press release, about CAD 1.5 million a quarter.

Speaker #15: Which is not only with Penguin, but with some third-party partners as well. And that was about $47 million on the balance sheet. And so we now control all of those lands ourselves.

Speaker #15: And there'll be a future FFO impact as those lands get developed, at some point in the future. But the current impact is mostly the G&A that we discussed in the press release—about $1.5 million a quarter.

Speaker #16: Okay, I just wanted to be clear on that. Thanks for that. And then, just coming back to the Toys R Us discussion, what total capital spend is expected on the foresigned leases that you're getting at 25% rental uplift on B?

Mario Saric: Okay. I just wanted to be clear on that. Thanks for that. Then just coming back to the Toys Us discussion, what total capital spend expected on the 4 signed leases that you're getting a 25% rental uplift on B?

Speaker #10: Can you say that again?

Mitch Goldhar: Can you say that again?

Mario Saric: What on the 4 signed Toys Us replacement leases, the 3 with the grocers and the 1 Winners, what's the estimated kind of CapEx spend required to get the 25% uplift in net rents?

Speaker #16: On the foresigned Toys R Us replacement leases, the three with the grocers and the one Winners, what's the estimated kind of CapEx spend required to get the 25% uplift in net rents?

Speaker #10: Yeah. I mean, minimal. Ultimately, minimal. I don't know if we have that number at our fingertips, but yeah. There's not a huge—it's not a—they're not broad sort of rental increases.

Mitch Goldhar: Yeah, I mean, minimal. Ultimately minimal. don't know if we have that number on our fingertips, but, yeah, there's not a huge You know, they're not bought, you know, sort of rental increases.

Speaker #14: Yeah. And for the most part, Mario, the grocers and the winners are taking the boxes, and we're not spending money on subdividing boxes into smaller boxes or changing anything.

Rudy Gobin: Yeah. For the most part, Mario, the grocers and the Winners are taking the boxes and, you know, we're not spending money on subdividing boxes into smaller boxes or changing anything. It's literally a handover, maybe changing some HVAC systems and so on. Like Mitch said, it's gonna be minimal on the capital side.

Speaker #14: So, it's literally a handover—maybe changing some HVAC systems and so on. But like Mitch said, it's going to be minimal on the capital side.

Speaker #16: Okay. And then maybe for Peter, during the quarter, was the interest expense associated with those vacated Toys boxes? Was it capitalized during Q1? I'm just trying to get a sense of the FFO impact.

Mario Saric: Okay. Maybe for Peter, during the quarter, was the interest expense associated with those vacated Toys Us boxes, was it capitalized during Q1? I'm just trying to get a sense of the FFO impact from the vacancy in Q1.

Speaker #16: From the vacancy in Q1.

Speaker #15: No, it's expense, Mario.

Peter Slan: No, it's expense, Mario.

Speaker #16: Okay. Okay. And then my last question, just coming back to the asset sales, I think Mitch, last quarter, kind of said you could see your SmartCentres selling $200 to $300 million over the next 2 to 3 years.

Mario Saric: Okay. Then maybe my last question, just coming back to the asset sales. I think Mitch last quarter kind of said you could see or saw, you know, SmartCentres selling CAD 2 to 3 million on the next 2 to 3 years, the timing of which is obviously very unpredictable. Is that still kind of the range that you're thinking about over the next 2, 3 years in terms of what you would like to do?

Speaker #16: The timing of which is obviously very unpredictable. Is that still kind of the range that you're thinking about over the next two to three years in terms of what you would like to do?

Mitch Goldhar: What number did you use?

Speaker #10: What number did you use?

Mitch Goldhar: What number did you use?

Mario Saric: CAD 200 to 300 million over the next 2 to 3 years.

Speaker #16: 200 to 300 million over the next 2 to 3 years.

Mitch Goldhar: Yeah, over the next two, three years. Yeah. I mean, if the market cooperates, you know. I mean, with PUD alone, I mean, we have sort of in excess of a billion and a half, maybe billion seven worth of land. You know, so if the market comes back even, you know, comes back a bit, we certainly think that we could achieve that and potentially more. That's sort of been our target number and still is.

Speaker #10: Yeah. Yeah. Yeah. Yeah. Over the next 2 to 3 years. Yeah. I mean, if the market cooperates, I mean, with PIT alone, I mean, we have sort of in excess of a billion and a half, maybe billion seven worth of land.

Speaker #10: So if the market comes back even, comes back a bit, we certainly think that we could achieve that and potentially more. But that would be—that's sort of been our target number, and still.

Speaker #16: Okay. Thank you.

Mario Saric: Okay. Thank you.

Speaker #13: Thank you. As a reminder, if you’d like to queue up to ask a question, please press star one on your phone’s keypad. The next question is from Juliano Thornhill from National Bank.

Operator: Thank you. As a reminder, if you'd like to queue up to ask a question, please press star one on your phone's keypad. The next question is from Giuliano Thornhill from National Bank. Please go ahead, Giuliano.

Speaker #13: Please go ahead, Juliano.

Speaker #17: Hey guys, good afternoon, everyone. Just wanted to stick with that line of questioning. Does that kind of imply your goal is mostly to dispose of the more residential-exposed lands, just because the retail market obviously is doing quite well?

Giuliano Thornhill: Hey, guys. Good afternoon, everyone. Just wanted to stick with that line of questioning. Does that kind of imply your goal is mostly to dispose of the kind of more residential exposed lands and just because the retail market obviously is doing quite well? I'm just wondering if that's the main opportunity set that you think is available versus some of the retail lands that you have.

Speaker #17: So, I’m just wondering if that’s the main opportunity set that you think is available, versus some of the retail lands that you have.

Speaker #10: Yeah. I mean, it's not so much like disposing of the residentials that we have. We have 50, 60 million square feet—for all intents and purposes, approved square feet—of residential across the portfolio.

Mitch Goldhar: Yeah, I mean, it's not so much, like, you know, disposing of the residential. It's just that we have 50, 60 million sq ft, for all intents and purposes, approved sq ft of residential across the portfolio. You know, it's a, it's a, you know, obviously, you know, it'd be ideal to sell some of that density since it's gonna take a long time for us to build out 50, 60 million sq ft. I mean, I'll still be here, but I don't know about Rudy and Peter. You know, we don't want to sacrifice any of the retail because it's just so, you know, straightforward, low capital, you know, you know, very, quick path to profit, accretive. You know, you build and open in the same market.

Speaker #10: So, obviously, we could sell—it'd be ideal to sell some of that density, since it's going to take a long time for us to build out 50, 60 million square feet.

Speaker #10: I mean, I'll still be here, but I don't know about Rudy and Peter. So, and we don't want to sacrifice any of the retail because it's so straightforward.

Speaker #10: Low capital, very quick path to profit, creative—you build and open in the same market. All those reasons. So yeah, we don't want to, we don't want to sell off the retail.

Mitch Goldhar: All those good reasons. Yeah, we don't wanna sell off the retail. We think the residential, which we have an abundance of, would be ideal.

Speaker #10: We think the residential, which we have an abundance of, would be ideal.

Speaker #17: And so, the earnouts that were settled this quarter, can you give us some more sense of what that related to in terms of asset-wise?

Giuliano Thornhill: The earn-outs that were settled this quarter, Can you give us, like, some more sense of what that related to in terms of asset-wise?

Speaker #15: Yeah. Juliano, the lands that this related to were lands within property that were mostly developed already. So these were the—this would be the remaining lands in those properties that were subject to final earnouts.

Rudy Gobin: Yeah. Giuliano, the lands that this related to were lands within properties that were mostly developed already. This would be the remaining lands in those properties that were subject to final earn-outs. We've just picked up the rest of the land so that the REIT can control and lease up that space itself in conjunction with the rest of the property. None of it was standalone land. It's all land integrated within a shopping center.

Speaker #15: So, we've just picked up the rest of the lands so that the REIT can control and lease up that space itself in conjunction with the rest of the property.

Speaker #15: So none of it was standalone land. It's all land integrated within a shopping center.

Speaker #17: Right. Okay. And just one other question on the Penguin agreement. Can you kind of help us understand how shifting to more of a fixed fee structure may change your approach to catalog allocation, or even just your alignment with unitholders?

Giuliano Thornhill: Right. Okay. Just one other question on the Penguin agreement. Can you kind of help us understand how shifting to a fixed fee structure may change your approach to capital allocation or even just your alignment with unitholders?

Speaker #15: Well, I think what we said was that it gives us a little bit more predictability and visibility into cash flow going forward. These are fees for development services.

Peter Slan: Well, I think what we said was that, you know, it gives us a little bit more predictability and visibility into cash flow going forward. You know, these are fees for development services, and so they get capitalized to our development projects. Of course, the beneficial owner is also the large shareholder of the REIT, so there's very strong alignment in this case.

Speaker #15: And so they get capitalized to our development projects. And of course, the beneficial owner is also the largest shareholder of the REIT, so there's very strong alignment with this.

Speaker #17: Great. Okay. Thanks, guys.

Mitch Goldhar: Great. Okay. Thanks, Gary.

Peter Slan: As you know, the, you know, the whole approach was reviewed and negotiated by an independent committee of the board.

Speaker #15: And as you know, the whole approach was reviewed and negotiated by an independent committee of the Board.

Peter Slan: As you know, the, you know, the whole approach was reviewed and negotiated by an independent committee of the board.

Speaker #17: Yep.

Mitch Goldhar: Yep.

Speaker #13: We have a follow-up question from Sam Damiani from TD Securities. Please go ahead, Sam.

Operator: We have a follow-up question from Sam Damiani from TD Securities. Please go ahead, Sam.

Speaker #18: Yes, thank you. Just wondering, as you look over the balance of the year, are there any other tenants on the watch list that might give rise to some hiccups in occupancy, as small as it might be, or bad debt expense?

Sam Damiani: Yes, thank you. Just wondering, as you look out for the balance of the year, are there any other tenants on the watch list that might give rise to some hiccups in occupancy, small as it might be, or bad debt expense? Thank you.

Speaker #18: Thank you.

Mitch Goldhar: No, no. Maybe some smaller, but no, nothing like the Toys Us situation. That was a big one. That hasn't happened for a while, though, frankly, I mean, geez, I wish I could do the math right now in my head. We collected, you know, that's probably 200 and close to 250,000 square feet, maybe 220,000 square feet of space, probably averaging, I don't know, CAD 15 a foot, let's say. You know, you can probably do that in your head faster than me. I think it's probably close to CAD 6 million gross that we collected for many years that, you know, frankly, you know, was longer than I think a lot of people would have predicted for Toys Us.

Speaker #10: No. No. Maybe some smaller, but no, nothing like the Toys 'R' Us situation. That was a big one. That hasn't happened for a while, though, frankly.

Speaker #10: I mean, Chief, I wish I could do the math right now in my head, but we collected, that's probably 200, close to 250,000 square feet—maybe 220,000 square feet of space.

Speaker #10: Probably averaging, I don't know, $15 a foot, let's say. You can probably do that in your head faster than me. But I think it's probably close to $6 million gross dollars that we collected for many years, that frankly, was longer than I think a lot of people would have predicted for Toys R Us.

Speaker #10: So we probably got two or three years more out of Toys R Us rents. Now, of course, it happened all at once and it affected our quarter, really, but we're coming out of this.

Mitch Goldhar: You know, we probably got 2 or 3 years more out of Toys Us rents, you know. Now, of course, it happened all at once and it affected our quarter really, but we're coming out of this. I mean, it's a setback, but it's turned and it is already turned into an advance. I mean, there's just no comparison. I mean, we've traded toys for food. We've traded weak covenant for the strongest, and we've traded, you know, 3-year term for 15-year term in the case of the food stores, to say nothing of just the quality that it brings and traffic, quality of traffic it brings to the center. Yeah, okay, fine. You know, it cost us a quarter. You know, it's a blip.

Speaker #10: I mean, it's a setback, but it's turned, and it is already turned into an advance. I mean, there's just no comparison. I mean, we've traded toys for food.

Speaker #10: And we've traded weak covenant for the strongest. And we've traded a three-year term for a 15-year term in the case of the food stores. To say nothing of just the quality that it brings in traffic, the quality of traffic it brings to the center.

Speaker #10: So yeah, okay, fine. It cost us a quarter, but it's a blip. And when you combine it with the growth program that's going on, and has been going on for a long time, it's really a blip.

Mitch Goldhar: When you combine it with the growth program that's going on and has been going on for a long time, it's really a blip. I mean, we're talking about today 3 new centers, but there are, you know, many more than 3 going on. It really is a blip. We're really sort of excited about the future in terms of our growth and our earnings in FFO.

Speaker #10: I mean, we were talking about three new centers today, but there are many more than three going on. So it really is a blip.

Speaker #10: We're really sort of excited about the future in terms of our growth and our earnings.

Speaker #17: In FFO?

Speaker #18: Thank you. And just on those developments, just to clarify, those are 100% owned by the REIT, or does the REIT have partners in these?

Sam Damiani: Thank you. Just, on those developments, just to clarify, those are 100% owned by the REIT, or, does the REIT have partners in these?

Speaker #10: No. These are 100% owned by the REIT. At the moment, of course, I have a non-compete, so that's in the past. Of course, what I developed did end up being partners with the REIT going back, but no, these are 100% REIT.

Mitch Goldhar: No, these are, these are 100% owned by the REIT, you know, at the moment. Of course, I have a non-compete, so, that's, you know. In the past, of course, when I developed, I did end up being partners with the REIT, going back. Nope, these are 100% REIT.

Speaker #18: Thank you. Thank you, and I'll turn it back.

Sam Damiani: Thank you. Thank you, and I'll turn it back.

Operator: The next question is from Pammi Bir from RBC Capital Markets. Please go ahead, Pammi.

Speaker #13: The next question is from Pammy Burr from RBC Capital Markets. Please go ahead, Pammy.

Speaker #19: Thanks. Hi, everyone. Just want to clarify—would it be fair to say then that Q1 likely marked the low point for occupancy? And should we expect to see perhaps the same property NOI ramp up in the back half of the year, or are we not quite there yet?

Pammi Bir: Thanks. Hi, everyone. Just wanted to clarify. Is it fair to say then that Q1 likely marked the low point for occupancy? Should we expect to see perhaps the same property NOI ramp up in H2 or are we not quite there yet?

Speaker #10: No, it's a low point for this year, the way we see it. And in terms of rent ramp-up NOI, yeah, the back half of the year should get back to what you've been seeing.

Mitch Goldhar: No, it's a low point for this year the way we see it. In terms of, you know, in terms of, you know, rent ramp up, you know, NOI, yeah, the back half of the year should get back to, you know, back to what we've been seeing for the last little while.

Speaker #10: For the last little while.

Speaker #19: Okay, and then just maybe on the toy space—I may have missed it—but when do these tenancies start? And when do these grocers and the winter space, when will they take possession?

Pammi Bir: Okay. Then just maybe on the, on the toy space. I may have missed it, when do these tenancies start to, like, when do they, these grocers and the Winners space, when will they take possession?

Speaker #10: Probably near the—I mean, maybe the earliest, Q3, Q4. It depends on which one we're talking about. So, latter half to the end of the year.

Mitch Goldhar: Probably near the I mean, maybe the earliest Q3, Q4. You know, it depends on which one we're talking about. Latter half to the end of the year.

Speaker #19: Okay. And then, the economic rent—like the economic occupancy—would commence late this year or into 2027?

Pammi Bir: Okay. The economic rent, like the economic occupancy, would commence late this year or into 2027?

Mitch Goldhar: We're hoping, we're sort of hopeful that it will actually, economic rent will commence this year.

Speaker #10: We're sort of hopeful that, actually, economic rent will commence this year.

Speaker #19: Great, okay. And then maybe just on Art Walk—I can't recall if we've spoken about this one for a while—but can you remind us of the total cost of that project and the timing of completion?

Pammi Bir: Great. Okay. Maybe just on Artwalk. Can't recall if we've spoken about this one for a while, but can you remind us the total cost of that project and the timing of completion?

Mitch Goldhar: Let's go in reverse order there. I think we're looking at, I think we're expecting to top off in November this year. Just stand by in terms of when we anticipate completion and closings. Probably a year from now-ish, I would say, starting. We're out of the ground. We're the garage, which is 3 levels, is done. I think in the next couple weeks, we're going to typical floors where we will start finishing a floor, like, once a week. All the arduous, you know, work is pretty much done, and now it's gonna be kind of full steam. I think we'll be doing windows sometime in July. You know, late June, July, windows will start coming out.

Speaker #10: Let's go in reverse order there. I think we're looking at—we are, I think, we're expecting to top off in November this year. And just stand by in terms of when we anticipate completion and closings.

Speaker #10: Probably a year from now-ish, I would say, starting. We're out of the ground. The garage, which is three levels, is done. I think in the next couple of weeks, we're going to typical floors.

Speaker #10: We're going to start finishing a floor once a week. So all the arduous work is pretty much done, and now it's going to be kind of full steam.

Speaker #10: I think we'll be doing windows sometime in July—late June, July—windows will start coming on ground floor. I think I'm stalling here for somebody to just find it, but I think it's, I think it's Q3.

Mitch Goldhar: I think I'm stalling here for somebody to just quickly find it, but I think it's.

Rudy Gobin: Yeah, Q4 2027 is the first deliveries.

Speaker #13: Yeah, Q4 '27 is the first deliveries.

Speaker #10: Okay.

Mitch Goldhar: Okay.

Speaker #19: Oh, I see.

Pammi Bir: Oh, I see. Okay.

Mitch Goldhar: Yeah. Q4 delivery, start closings, in 2027.

Speaker #13: Yeah, so Q4 delivery start closings. In 2027.

Speaker #19: Okay. So, still some time away. I guess really where I was going with this is: Have you changed—first off, have you taken any write-downs at all on that project?

Pammi Bir: Okay. still some time away. I guess really where I was going with this is, you know, First off, have you taken any write-downs at all on that project? Any changes in the assumptions on costs or the assumed default rates on the units that have been pre-sold?

Speaker #19: Any changes in the assumptions on costs, or the assumed default rates on the units that have been pre-sold?

Speaker #10: I mean, the costs probably overall are the same as we originally anticipated. We've done better on some trades—certainly the ones that we, thankfully, did not let in anticipation of some better prices.

Mitch Goldhar: I mean, the costs probably, overall are the same as we originally anticipated. We've done better on some trades. Certainly the ones that we thankfully did not let in anticipation of some better prices, so we're happy we did wait on that. I think we could have done a little better on a couple trades that we let, you know, we had to let them, like, you know, in the last 12 months. I think we're pretty much on budget there. Then, you know, we have 20% deposits from, you know, from the purchasers. So, it's hard to say what's gonna happen, you know. I think if we were closing today, it's just my prediction, I mean, there'd be some defaults just because, I think.

Speaker #10: So we're happy we did wait on that. I think we could have done it a little better on a couple of trades that we had to let go in the last 12 months.

Speaker #10: So, I think we're pretty much on budget there. And then we have 20% deposits from the purchasers, and so it's hard to say what's going to happen.

Speaker #10: I think if we were closing today—it's just my prediction—I mean, there'd be some defaults just because, I think. But I think for the most part, they were sold at an average of—let me just check and see whether we closed this before I say it.

Mitch Goldhar: I think for the most part, you know, they were sold at an average of Let me just check and see whether we disclosed this before I say it. Yeah. I mean, we sold between, you know, 11 and 11.75 a foot there. We've got 20% deposits. We've done all the slicing and dicing of, you know, analyzing what happens if scenarios where if we get units back. I mean, we'd rather that not happen, but if it does, I think we'll be in pretty good shape to either, you know, resell them at current market price or then market price or rent them out.

Speaker #10: Yeah, I mean, we sold between $11 and $11.75 a foot there. So we've got 20% deposits. So we've done all the slicing and dicing of analyzing what happens if—scenarios where, if we get units back. I mean, we'd rather that not happen.

Speaker #10: But if it does, I think we'll be in pretty good shape to either resell them at current market price or then-market price, or rent them out.

Speaker #19: Okay.

Pammi Bir: Okay.

Speaker #10: And we should do, we'll be fine with that. Just FYI, in terms of those analyses, we're well within the market if we were to get those back, or any of those back.

Mitch Goldhar: We should be fine with that. Just FYI, in terms of those analysis, we're well within the market if we were to get those back or any of those back.

Speaker #19: Okay, all right. And maybe just moving on, last one—just on the new developments that you announced, the new greenfield sites. Are these Walmart-anchored or not?

Pammi Bir: Okay. All right. Maybe just moving on. Last one, just on the new developments that you announced, the new greenfield sites. Are these Walmart anchored or not? Or other anchors, whether it's other grocers or any other of your larger tenancies?

Speaker #19: Or are there other anchors, whether it’s other grocers or any other of your larger tenancies?

Speaker #10: I think it's taken 38 minutes for somebody to ask that. Well, we are not announcing—we're not announcing the actual tenants at the moment.

Mitch Goldhar: I think it's taken 38 minutes for somebody to ask that. Well, you know, we are not announcing, we're not announcing the actual tenants at the moment. You know, they very much reflect the overall profile of our current portfolio. You know, there'll be lots of familiar names in terms of, you know, the anchors that we'll be building on these properties. As I say, the three that we're mentioning right now are really, you know, just represent a larger program, a larger accretive program. I might add that, you know, for all intents and purposes, all the anchor tenants in this program have bumps and, you know, are for the most part between 15 and 20 years.

Speaker #10: But they very much reflect the overall profile of our current portfolio. So there'll be lots of familiar names in terms of the anchors that we'll be building on these properties.

Speaker #10: And as I say, the three that we're mentioning right now are really just representative to represent a larger program, a larger accretive program. And I might add that, for all intents and purposes, all the anchor tenants in this program have bumps and are, for the most part, between 15 and 20 years.

Mitch Goldhar: There'll be the odd sub-anchor at maybe 10 years.

Speaker #10: And they'll be the odd sub-anchor at maybe 10 years.

Mitch Goldhar: There'll be the odd sub-anchor at maybe 10 years.

Speaker #19: Okay, good to hear. And I guess that answers that last question, I guess. None of the anchors will have flat rents forever.

Pammi Bir: Okay. I guess that answers that last question, I guess. No, none of the anchors will have flat rents forever.

Speaker #10: That was a dig there. No, they will not have flat rents forever.

Mitch Goldhar: That was a dig there. No, they will not have flat rents forever.

Speaker #19: All right. I will turn it back. Thank you.

Pammi Bir: All right. I will, I'll turn it back. Thank you.

Speaker #13: Okay. Thank you. There are no further questions in the queue.

Operator: Okay. Thank you. There are no further questions in the queue.

Mitch Goldhar: Okay. Thank you for participating in our Q1 call. Please feel free to reach out to any of us if you have any further questions. Have a great day, and we will speak to you soon. Bye-bye.

Speaker #10: Okay. Thank you for participating in our Q1 call. Please feel free to reach out to any of us if you have any further questions.

Speaker #10: Have a great day. We'll speak to you soon. Bye-bye.

Operator: Ladies and gentlemen, this concludes the SmartCentres REIT Q1 2026 conference call. Thank you for your participation and have a nice day.