Q1 2026 Sienna Senior Living Inc Earnings Call

May 6, 2026

Operator: Ladies and gentlemen, welcome to Sienna Senior Living Incorporated's Q1 2026 Conference Call. Today's call is hosted by Nitin Jain, President and Chief Executive Officer, and David Hung, Chief Financial Officer and Executive Vice President, Investment of Sienna Senior Living Incorporated. Please be aware that certain statements or information discussed today are forward-looking, and actual results could differ materially.

Operator: The company does not undertake to update any forward-looking statement or information. Please refer to forward-looking information and risk factors sections in the company's public filings, including its most recent MD&A and AIF for more information. You may also find more fulsome discussion of the company's results in its MD&A and financial statements for the period, which are posted in the SEDAR+ and can be found in the company's website, siennaliving.ca. Today's call is being recorded. A replay will be available. Instructions for accessing the call are posted on the company's website, and the details are provided in the company's news release. The company has posted slides which accompany the host's remarks on the company's website under Events and Presentations. With that, I will now turn the call over to Mr. Jain. Please go ahead, Mr. Jain.

Operator: Today's call is being recorded. A replay will be available. Instructions for accessing the call are posted on the company's website, and the details are provided in the company's news release. The company has posted slides which accompany the host's remarks on the company's website under Events and Presentations. With that, I will now turn the call over to Mr. Jain. Please go ahead, Mr. Jain.

Nitin Jain: Thank you, Tina. Good morning, everyone, and thank you for joining us today. Sienna's growth momentum continued in Q1 2026. We started the year with strong organic growth for the 13th consecutive quarter and continued to expand through acquisitions, including our most recent announcements of the purchase of a recently opened long-term care home in the Greater Toronto Area and a retirement residence in the Ottawa region. We're also progressing well with our long-term care redevelopments and have been successful in sourcing land for future developments in the GTA. Each of these achievements is supporting Sienna at a compelling time in senior living. The sector remains exceptionally strong, driven by the fast-growing demand from an aging population, constrained near-term supply, and minimal exposure to the current geopolitical volatility. During the Q1, both operating platforms delivered strong results.

Nitin Jain: We're also progressing well with our long-term care redevelopments and have been successful in sourcing land for future developments in the GTA. Each of these achievements is supporting Sienna at a compelling time in senior living. The sector remains exceptionally strong, driven by the fast-growing demand from an aging population, constrained near-term supply, and minimal exposure to the current geopolitical volatility. During the Q1, both operating platforms delivered strong results.

Nitin Jain: Same-property NOI increased by 15.8% in the retirement segment and 1.7% in long-term care. Excluding one-time items in both years, our long-term care segment delivered 6.7% same-property NOI growth. Key drivers of the double-digit increase in the retirement segment were the year-over-year occupancy increase, continued rental rate growth, and additional care revenue. Average same-property occupancy was up 180 basis points year over year and it reached 94.7% in Q1. This was supported by 280 basis point margin growth. Quarter over quarter, occupancy remains flat compared to Q4 of 2025, largely as a result of typical seasonal trends and a harsher than usual winter conditions in many of our key markets. Our robust sales platform and focused marketing campaigns were supporting our year-over-year growth.

Nitin Jain: Average same-property occupancy was up 180 basis points year over year and it reached 94.7% in Q1. This was supported by 280 basis point margin growth. Quarter over quarter, occupancy remains flat compared to Q4 of 2025, largely as a result of typical seasonal trends and a harsher than usual winter conditions in many of our key markets. Our robust sales platform and focused marketing campaigns were supporting our year-over-year growth.

Nitin Jain: The significant increase in tours at a recent national open house in February generated nearly 500 new leads and reflects the broad reach of our marketing and sales campaign. We also maintain a robust focus on hospital outreach and excellent relationships with the healthcare partners in the local communities where we operate. All of these initiatives are expected to drive strong lead generation and future movements. An additional key driver behind the strong performance of our retirement operations is higher care revenue. This is a result of a new Esprit de Vie wellness program with more efficient processes, improved staffing models, and consistent care offerings. The program was launched in 2025 and has led to an approximate 25% increase in care revenue.

Nitin Jain: All of these initiatives are expected to drive strong lead generation and future movements. An additional key driver behind the strong performance of our retirement operations is higher care revenue. This is a result of a new Esprit de Vie wellness program with more efficient processes, improved staffing models, and consistent care offerings. The program was launched in 2025 and has led to an approximate 25% increase in care revenue.

Nitin Jain: With respect to Sienna's long-term care operations, fully occupied homes with growing waitlists, higher revenue from private accommodations, and government funding increases all added to the strength of these results. Sienna's government-funded long-term care operations add significant value to our business and provide stability, given that they're largely insulated from market volatility or economic uncertainty. We continue to be active on acquisition front with CAD 188 million of transactions closed or under contract to date in 2026. We increased ownership interest in 2 of Sienna's majority-owned properties in the Greater Toronto Area, and in Kelowna, and finalized the purchase of The Bartlett, a 129-suite retirement residence in the Greater Toronto Area.

Nitin Jain: We continue to be active on acquisition front with CAD 188 million of transactions closed or under contract to date in 2026. We increased ownership interest in 2 of Sienna's majority-owned properties in the Greater Toronto Area, and in Kelowna, and finalized the purchase of The Bartlett, a 129-suite retirement residence in the Greater Toronto Area.

Nitin Jain: We entered into two purchase agreements at the end of last week, including Rockland Manor, a 160-suite retirement residence in the Ottawa region, and Ballycliffe, a newly developed 224-bed long-term care community in the Greater Toronto Area. Rockland Manor will be acquired for approximately CAD 41 million, with an initial investment yield of 6%. The gross purchase price for Ballycliffe, which includes the rights to a 25-year construction funding subsidy, is approximately CAD 68.3 million, and the investment yield is approximately 6.75%. Both properties will be acquired below their replacement cost and financed with cash on hand. They are great examples of the broad range of opportunities available to us to expand our portfolio.

Nitin Jain: Rockland Manor will be acquired for approximately CAD 41 million, with an initial investment yield of 6%. The gross purchase price for Ballycliffe, which includes the rights to a 25-year construction funding subsidy, is approximately CAD 68.3 million, and the investment yield is approximately 6.75%. Both properties will be acquired below their replacement cost and financed with cash on hand. They are great examples of the broad range of opportunities available to us to expand our portfolio.

Nitin Jain: Sienna's acquisition pipeline remains strong, we are confident to maintain a significant pace of acquisitions through the balance of this year. Moving to redevelopments. We're also advancing our redevelopment pipeline, in particular in the Greater Toronto Area. We expect to start construction at Sienna's first project in the City of Toronto later this year, where we are redeveloping a 448-bed long-term care community at our existing Glengrove site. This is one of several projects in our 1,600 bed pipeline. More than 80% of the pipeline is located in the GTA, where new funding has significantly improved the development fundamentals. We've been actively sourcing land for projects in the GTA that do not have sufficient land at their existing sites.

Nitin Jain: This is one of several projects in our 1,600 bed pipeline. More than 80% of the pipeline is located in the GTA, where new funding has significantly improved the development fundamentals. We've been actively sourcing land for projects in the GTA that do not have sufficient land at their existing sites.

Nitin Jain: With the recent purchase of a site in Brampton, we are getting closer to a goal of having all lands for every LTC home project. Each completed redevelopment will modernize and strengthen our long-term care platform and support the continued growth of our business. Beyond our acquisitions and redevelopments, we remain focused on creating value within our existing portfolio through asset optimization, strategic renovations, and general enhancements to our retirement and long-term care platforms. In our retirement segment, our initiatives are focused on better aligning residences with market demands, exploring alternative property uses, or expanding services by adapting them to support seniors as their care needs change. We increasingly apply our expertise in clinical care at our retirement platform. Our updated wellness program increases residents' access to in-house wellness and care, helps improve their quality of life, and allows them to stay in our retirement homes longer.

Nitin Jain: In our retirement segment, our initiatives are focused on better aligning residences with market demands, exploring alternative property uses, or expanding services by adapting them to support seniors as their care needs change. We increasingly apply our expertise in clinical care at our retirement platform. Our updated wellness program increases residents' access to in-house wellness and care, helps improve their quality of life, and allows them to stay in our retirement homes longer.

We increasingly apply our expertise in clinical Care at a retirement platform. Our updated wellness program increases residents access to in-house, wellness, and care.

Helps improve their quality of life and allows them to stay in a retirement home longer.

Nitin Jain: In long-term care segment, we continue to make improvements to the Circle platform through ongoing input from residents, families, and team members. Our Circle approach places residents at the center of everything we do. With initiatives such as the Circle Spa and Circle Cafe, these initiatives are designed to elevate the resident experience. We see the impact reflected in resident satisfaction surveys and our consistently strong accreditation results. Moving to our team members. As we continue to expand, the timely integration of each new community in our operating platform remains a top priority. Delivering an exceptional resident experience from day one begins with our team members. With approximately 15,500 employees, we recognize the importance of investing in programs that foster a strong culture of ownership and engagement.

In long-term care segment we continue to make improvements to the circle platform through ongoing input from residents, families and team members.

Our circular approach places residents at the center of everything we do.

Nitin Jain: We see the impact reflected in resident satisfaction surveys and our consistently strong accreditation results. Moving to our team members. As we continue to expand, the timely integration of each new community in our operating platform remains a top priority. Delivering an exceptional resident experience from day one begins with our team members. With approximately 15,500 employees, we recognize the importance of investing in programs that foster a strong culture of ownership and engagement.

With initiatives, such as the Circle, Spa and Circle Cafe. Each initiative is designed to elevate the resident experience and we see the impact reflected in Resident satisfaction surveys in our consistently strong accreditation results.

Moving to team members, as we continue to expand, the timely integration of each new community in our operating platform remains a top priority. Delivering an exceptional, resonant experience from day one begins with our team members.

Nitin Jain: Our initiatives range from town halls that foster learning and connections, leadership development to recognition and share ownership programs through which shares have been awarded to over 12,000 team members. We are also investing in our team member health and well-being and have introduced a new employee and family assistance program with greater access to mental health, wellness, and work-life support. Each of these initiatives play a role in the continued reduction in turnover, which reached a record low of less than 20% in 2025. Our initiatives also resulted in the fifth consecutive year of increased team member engagement and helped reduce Sienna Agencies costs, which are below 1% of total labor cost. We are extremely proud of these achievements, which put us in a strong position to attract and retain the best in Canadian senior living.

With the approximately 15 and a half thousand employees. We recognize the importance of investing in programs. That Foster a strong culture of ownership and engagement.

Our initiatives range from town halls that Foster learning and connections leadership development to recognition and share ownership programs through which shares have been awarded to over 12,000 team members.

We are also investing in our team member health and well-being and have introduced a new employee in family assistance program, with greater access to mental health, wellness and work life support.

Nitin Jain: Each of these initiatives play a role in the continued reduction in turnover, which reached a record low of less than 20% in 2025. Our initiatives also resulted in the fifth consecutive year of increased team member engagement and helped reduce Sienna Agencies costs, which are below 1% of total labor cost. We are extremely proud of these achievements, which put us in a strong position to attract and retain the best in Canadian senior living.

Each of these initiatives play a role in the continued reduction in turnover.

Which reached a record low of less than 20% in 2025.

And help reduce Sienna agency costs, which are below 1% of total labor cost.

Nitin Jain: With that, I'll turn it over to David for an update on our financial results.

We're extremely proud of these achievements, which put us in a strong position to attract and retain the best in Canadian Senior Living.

With that, I'll turn it over to David for an update on our financial results.

David Hung: Thank you, Nitin. Good morning, everyone. I will start on slide 11 for financial results. In Q1 2026, revenue on a proportionate basis increased by 17.3% year-over-year to CAD 286.3 million. This increase was largely due to acquisitions, occupancy, and rental rate growth, as well as increased care revenue in the retirement segment. Adding to the increase were the contributions from our long-term care platform, including higher flow through funding for direct care, increased private accommodation revenues, CAD 1.1 million in retroactive funding from the BC government, and additional revenues from acquisitions and developments completed in 2025.

Thank you, nineteen, and good morning everyone. I will start on slide 11 for financial results.

In q1 2026 revenue on a proportionate basis, increased by 17.3% year-over-year to 286.3 million.

David Hung: Adding to the increase were the contributions from our long-term care platform, including higher flow through funding for direct care, increased private accommodation revenues, CAD 1.1 million in retroactive funding from the BC government, and additional revenues from acquisitions and developments completed in 2025.

This increase was largely due to acquisitions, occupancy and rental rate growth, as well as increased care revenue in the retirement segment.

David Hung: Same property NOI increased by 7.9% to CAD 47.4 million in Q1 2026, including by 15.8% in our retirement segment and by 1.7% in the long-term care segment. In the retirement segment, same-property NOI increased by CAD 3 million in Q1 2026 compared to last year, largely as a result of improved occupancy, rate growth, and higher care revenues. Combined with our strict focus on operating expenses, the year-over-year operating margin improved by 280 basis points. In the long-term care segment, same-property NOI increased by CAD 1.3 million. Continued improvements in private occupancy and government funding increases were the key drivers behind the year-over-year growth. Our Q1 results include one-time items relating to prior years, including retroactive funding from the Government of British Columbia in 2026 and WSIB refunds in 2025.

Adding to the increase were the contributions from our long-term care platform, including higher flow-through funding for direct care, increased private accommodation revenues, $1.1 million in retroactive funding from the BC government, and additional revenues from Edition Acquisitions and developments completed in 2025. Same property NOI increased by 7.9% to $47.4 million in Q1 2026, including an increase of 15.8% in our retirement segment and 1.7% in the long-term care segment.

In the retirement segment, same property, noi increased by million dollars in q1 2026 compared to last year largely, as a result of improved occupancy rate growth and higher care revenues.

David Hung: In the long-term care segment, same-property NOI increased by CAD 1.3 million. Continued improvements in private occupancy and government funding increases were the key drivers behind the year-over-year growth. Our Q1 results include one-time items relating to prior years, including retroactive funding from the Government of British Columbia in 2026 and WSIB refunds in 2025.

Combined with our strict focus on operating expenses the year-over-year operating margin improved by 280 basis points.

In the long-term care segment. Same property. Noi increased by 1.3 million

Continued improvements in private occupancy and government funding increases were the key drivers behind the year-over-year growth.

David Hung: Excluding these one-time items in both years, same-property NOI would have increased by 10% overall, including by 13.8% in the retirement segment and by 6.7% in long-term care. During Q1 2026, operating funds from operations increased by 42.5% to CAD 37.1 million compared to last year, primarily due to higher NOI and lower cash taxes. Adjusted funds from operations increased by 45.1% to CAD 35.1 million compared to last year. The increase was mainly due to higher OFFO and construction funding income for redevelopments completed last year, offset in part by an increase in maintenance capital expenditures. On a per-share basis, OFFO and AFFO increased by 21.5% and by 23.5%, respectively, in Q1 2026.

Our q1 results, include 1-time, items related to Prior years, including a retroactive funding from the government of British Columbia in 2026 and wsib. Refunds in 2025, excluding these 1-time items in both years, same property. Noi would have increased by 10% overall, including by 13.8% in the retirement segment and by 6.7% in long-term care

During q1 2026 operating funds from operations, increased by 42.5% to 37.1 million compared to last year primarily due to higher noi. And lower cash taxes.

David Hung: The increase was mainly due to higher OFFO and construction funding income for redevelopments completed last year, offset in part by an increase in maintenance capital expenditures. On a per-share basis, OFFO and AFFO increased by 21.5% and by 23.5%, respectively, in Q1 2026.

Adjusted funds from operations increased by 45.1% to 35.1 million compared to last year.

The increase was mainly due to higher of Pho and construction funding income for redevelopments completed last year offset in part by an increase in maintenance Capital expenditures.

David Hung: Sienna's Q1 2026 AFFO payout ratio was lowered to 68.5% compared to 86% in Q1 2025. This improvement highlights Sienna's strong operating results, the contributions from our completed redevelopments and accretive acquisitions, as well as the progressive deployment of capital to fund growth initiatives. We ended Q1 2026 with a strong financial position, including approximately CAD 557 million in liquidity and nearly CAD 1.5 billion of unencumbered assets. At approximately 37%, our net debt to adjusted gross book value is conservative, and our weighted average cost of debt remained low at 3.9%. Year over year, we also further improved Sienna's debt service coverage ratio to 2.6 times from 2.4 times in Q1 2025-2026. Sienna had approximately CAD 160 million of debt coming due in the next 12 months.

On a per share basis, ofo and afo increased by 21.5% and by 23.5% respectively in q1 2026.

In Q1 2026, the payout ratio was lowered to 68.5% compared to 86% in Q1 2025.

This Improvement highlights CN a strong operating results. The contributions from our completed redevelopments and accretive Acquisitions as well as the progressive deployment of capital to fund growth initiatives.

David Hung: At approximately 37%, our net debt to adjusted gross book value is conservative, and our weighted average cost of debt remained low at 3.9%. Year over year, we also further improved Sienna's debt service coverage ratio to 2.6 times from 2.4 times in Q1 2025-2026. Sienna had approximately CAD 160 million of debt coming due in the next 12 months.

We ended q1 2026 with a strong financial position, including approximately 5157 million in liquidity, and nearly 1.5 billion dollars of unencumbered assets.

At approximately 37% our. Net debt to adjusted gross Book value is conservative and our weighted average cost of debt remained low at 3.9%.

Year-over-year. We also further improved Sienna's debt service coverage ratio to 2.6 times from 2.4 times in Q1 2025.

David Hung: Given our access to a broad range of capital, we are confident in our ability to refinance our expiring debt at attractive terms. With respect to our equity, demand for Sienna shares remains strong. As a result, we were able to fully deploy Sienna's CAD 150 million at-the-market distribution program during Q1, which provides the necessary liquidity to fund our continued growth through acquisitions and developments. With that, I will turn the call back to Nitin for his closing remarks.

Sienna had approximately 160 million dollars of debt coming to in the next 12 months.

Given our access to a broad range of capital. We are confident in our ability to refinance our expiring debt at attractive. Terms, with respect to our Equity demand for Sienna shares remain strong as a result. We were able to fully deploy Sienna's 150 million at the market distribution program during q1, which provides the necessary liquidity to fund our continued growth through Acquisitions and developments.

Nitin Jain: Thank you, David. We believe that our ability to operate and invest across the full continuum of care continues to differentiate Sienna and gives us a wide range of growth opportunities from private pay independent living to government-funded long-term care and from acquisitions to redevelopments. Our strategy supports our growth initiatives at a time demand for senior living continues to grow while supply remains constrained. Against this backdrop, we grew our assets by approximately 30% last year, and the momentum continues in 2026 with nearly CAD 200 million of acquisitions closed or under contract and a CAD 250 million redevelopment project starting later this year. Yesterday, we announced a renewal of the ATM program, which gives us the opportunity to issue another CAD 150 million of equity to grow and scale our platform.

With that, I will turn the call back to nitten for his closing remarks.

Nitin Jain: Our strategy supports our growth initiatives at a time demand for senior living continues to grow while supply remains constrained. Against this backdrop, we grew our assets by approximately 30% last year, and the momentum continues in 2026 with nearly CAD 200 million of acquisitions closed or under contract and a CAD 250 million redevelopment project starting later this year. Yesterday, we announced a renewal of the ATM program, which gives us the opportunity to issue another CAD 150 million of equity to grow and scale our platform.

Thank you, David. We believe that our ability to operate and invest across the full. Continuum of Care continues to differentiate Sienna and gives us a wide range of growth opportunities from private pay Independent, Living to government funded long-term care, and from Acquisitions to redevelopments.

Our strategy supports our growth initiatives, at a time, demand for Senior Living continues to grow while Supply remains constrained.

Against this backdrop, we grew our assets by approximately 30% last year.

And the momentum continues in 2026 with nearly 200 million dollars of Acquisitions closer than the contract.

Project starting later this year.

Nitin Jain: With the strong support of our investors, we remain extremely selective when considering opportunities to expand. We will continue to stay disciplined in our approach to raising and allocating capital and will maintain a strong balance sheet. In the near term, our confidence is reflected in Sienna's growth targets for 2026. Excluding one-time items, we expect same-property NOI growth in excess of 10% and occupancy to exceed 95% in retirement segment. In long-term care, we anticipate low to mid-single digit growth, not factoring in one-time items. Canadian senior living is performing exceptionally well, and we believe Sienna is ideally positioned to benefit in both the near and long term. With the support of our 15,500 team members who are at the heart of our success, we are confident in our ability to capture the tremendous opportunities ahead.

Yesterday, we announced a renewal of the ATM program, which gives us the opportunity to issue another 150 million of equity to grow and scale our platform.

With the strong support of our investors. We remain extremely selective when considering opportunity to expand

We will continue to stay disciplined in our approach to raising and allocating capital and will maintain a strong balance sheet.

Nitin Jain: Excluding one-time items, we expect same-property NOI growth in excess of 10% and occupancy to exceed 95% in retirement segment. In long-term care, we anticipate low to mid-single digit growth, not factoring in one-time items. Canadian senior living is performing exceptionally well, and we believe Sienna is ideally positioned to benefit in both the near and long term. With the support of our 15,500 team members who are at the heart of our success, we are confident in our ability to capture the tremendous opportunities ahead.

In the near term, our confidence is reflected in Sienna's growth targets for 2026.

Excluding 1 time items. We expect. Same property. Noi growth in excess of 10%,

In occupancy to exceed 95% in retirement segment.

And a long-term care. We anticipate low to mid single digit growth. Not factoring in 1 time items.

Canadian Senior Living is performing exceptionally well and we believe Sienna is ideally positioned to benefit in both the near and long term.

Nitin Jain: On behalf of our entire team and our board of directors, I want to thank all our shareholders and all of you on this call for your continued support. Tina, we can open now for questions.

With the support of our 15 and a half thousand team members, who are at the heart of our success. We are confident in our ability to capture the tremendous opportunities ahead.

On behalf of our entire team. And our board of directors. I want to thank all our shareholders, and all of you in this call for your continued support.

Tina. We can open now for questions.

Operator: As a reminder, to ask a question, simply press star one on your telephone keypad. Our first question is from the line of Lorne Kalmar with Desjardins. Please go ahead.

as a reminder to ask a question, simply press star 1 on your telephone keypad,

our first question is from the line of Lauren calmer with

dardens. Please go ahead.

David Hung: Thanks. Good morning. Maybe just touching on the announcement around defunding the third and fourth beds. I was wondering how many of those, about 300 that you have, do you think that you can actually have redeveloped by 2030?

Lorne Kalmar: Thanks. Good morning. Maybe just touching on the announcement around defunding the third and fourth beds. I was wondering how many of those, about 300 that you have, do you think that you can actually have redeveloped by 2030?

Thanks, good morning.

Um, maybe just touching on the announcement around, defunding the third and fourth beds. I was wondering how many of those about 300 that you have, do you think that you can actually have redeveloped by 230?

Nitin Jain: Hi, Lorne. Good morning. That is actually a great question. There is a chance that, you know, we can probably redevelop half of them or would be in the process of redeveloping others. The big thing that, you know, from our view, what government is focused on is a path for redevelopment of these beds, knowing that if the funding is removed, it will be very hard to continue to run those beds. It is in no one's interest to close any capacity in long-term care. You know, our belief is as we continue to build and redevelop, you know, the advocacy from our association and us from us would be to continue to keep this funding at least to a sustainable level to keep these homes and beds open.

Nitin Jain: It is in no one's interest to close any capacity in long-term care. You know, our belief is as we continue to build and redevelop, you know, the advocacy from our association and us from us would be to continue to keep this funding at least to a sustainable level to keep these homes and beds open.

I want good morning. Uh that is actually a great question that there is a chance that you know we can probably redevelop half of them or would be in the process of redeveloping others. Uh, the big thing that, uh, you know, from our view what government is focused on is a path for redevelopment of these beds. Knowing that if the funding is removed, it will be very hard to continue to run those beds and it is and no 1's interested to close. Uh any capacity in long-term care.

so, you know, our belief is as we continue to build, uh, and redevelop, uh, you know, the the advocacy from our association and us from, we from us, would be to continue to keep this funding, at least, to a sustainable level, to keep this, uh, homes and beds open

Lorne Kalmar: Okay. Maybe just sort of sticking on the LTC redevelopment scene here. You announced the purchase of the land in Brampton. Could you maybe give us a little bit of color on exactly what the plans for that site are? You also mentioned you're getting close to acquiring all the land that you need for your LTC redevelopments. How many more sites would you need to acquire?

Nitin Jain: We're down to 2 last sites, which we have to acquire, and at that stage, we would have land for every single LTC home redevelopment that we have to do. The Brampton site we just acquired. We have a home, you know, a few kilometers from there, that we will move there eventually. The project, you know, if everything works well, you're probably in construction 18 to 24 months from now, and then 24 month of construction. Your date of 2030 is pretty aligned with what we will do. We also have other projects. You know, one of our commitment is that obviously we want to expedite long-term care redevelopment, but we would not take significant development risk. In our mind, it's 10% of our asset base.

Okay. Um and then maybe just sort of sticking on the LTC Redevelopment theme Here, you announced the purchase of land and branded could you maybe give us a little bit of color on exactly what the plans for that site are. And and you also mentioned you're getting close to acquiring all the land that you need for your C. Redevelopments, how many more sites would you need to acquire?

Nitin Jain: Your date of 2030 is pretty aligned with what we will do. We also have other projects. You know, one of our commitment is that obviously we want to expedite long-term care redevelopment, but we would not take significant development risk. In our mind, it's 10% of our asset base.

Uh, we're down to 2 last sites, uh, which we have to acquire. And after at that stage, we would have, um, uh, land for every single sea home Redevelopment that we have to do. Uh, the Brandon site, we just acquired, we have a home, you know, a few kilometers from there. Uh, that we will move there eventually that project, you know, if everything works. Well, you probably in construction 18 to 24 months from now and then 24 months of construction. So your

Nitin Jain: You know, it is now close to CAD 2.5 billion in assets, you know, CAD 200 to 300 million probably in development at any given stage in total. We will just manage those things. We do think there is a path for us to redevelop all of our C homes now, considering there is a robust CFS funding for GTA.

The date of 2030 is pretty aligned with what we will do, but we also have other projects and um, you know, 1 of the, our commitment is that obviously we want to expedite long-term care Redevelopment but we would not take significant development risk. In our mind, it's 10% of our asset base.

So, you know it's uh it's now closed. It's going to have a billion dollars in assets. So you know, 2 to 3 hundred million dollars probably in development at any given stage in total. So we'll just manage those things. But we we do think there's a there's a path for us to redevelop all of our sea homes. Now, uh, considering there is a robust uh, CFS funding for GTA.

Lorne Kalmar: Okay. That's that's great to hear. Maybe just one last kind of ticky-tacky one for David. Just on the G&A, I think if you exclude the SOAR and the share-based comp, it was about 21% year over year. Could you maybe just give us a little bit of color on if this was a timing issue or if this is sort of a good run rate going forward?

David Hung: Sure. I can happy to answer that. It's a couple of things. First of all, it would, the growth would include additional headcount as a result of the acquisitions that we made in 2025. Normal wage inflations on a year over year basis. We did have, you know, some incremental professional fees in the quarter, call it about half a million dollars, you know, that would not continue through 2026.

Okay. That's uh, that's great to hear and then maybe just 1 last kind of ticky, tacky 1 for David. Um, just on the GNA, I think of the exclude, the sore and the share-based composite about 21% year-over-year. Could you maybe just give us a little bit of color on if there was a timing issue or if this is sort of a good run rate going forward.

Uh, sure I can uh, happy to answer that.

A couple of things. Um, first of all, it would, um,

The growth would include, um, uh, additional headcount. Um, as a result of the Acquisitions that we made, um, in 2025, um, normal wage inflation. Uh, uh,

On a year-over-year basis. And we did have, uh, you know, some incremental professional fees, uh, in the quarter, call it about half a million dollars. Um, you know, that would not continue through, uh, 2026.

Lorne Kalmar: Okay. Effectively, we should kind of reset our G&A expectations based on the Q1 results.

David Hung: Yeah. I think if you normalize for, you know, some of the one-time costs within G&A, you could normalize for, reset for 2026.

Okay, so effectively, we should kind of reset our GNA expectations based on the 1 CS.

David Hung: Yeah. I think if you normalize for, you know, some of the one-time costs within G&A, you could normalize for, reset for 2026.

Um, yeah. I I

If you, if you normalize for, you know, uh,

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

Time, costs within G&A, you could normalize for, um, reset for 2026.

David Hung: Thank you.

Nitin Jain: Thank you.

Very much. I'll turn it back.

Thank you.

Operator: Your next question comes from the line of Jonathan Kelcher with TD Cowen. Please go ahead.

Your next question comes from the line of Jonathan kelter with TD Cohen.

Jonathan Kelcher: Thanks. Good morning. Just turning to the retirement operations and on your optimization portfolio, how do you see occupancy growth playing out for that portfolio this year?

Please go ahead.

Thanks, uh, good morning. Um, just turning to the retirement operations and on, on your optimization portfolio. Um, how do you see occupancy growth playing out for that portfolio this year?

David Hung: Yeah, sure. We, you know, we continue to make good progress on our optimization portfolio. We do continue to see that it will grow. Our occupancy in that portfolio was around 85%. As we continue to, you know, right-size some of the properties within there, we would expect that the occupancy for a couple of those properties will grow towards stabilization. As that happens, we will move those properties into our same property portfolio.

Um, yeah sure. We um, you know, we continue to make good programs on our optimization um portfolio. Um and we do continue to see that. Uh, it will, it will grow um, our occupancy in that portfolio is around, um, 85%. Um, and as we continue to, you know, uh, right side some of the properties within their, um, we would expect that the occupancy for a couple of those properties will will grow towards stabilization. Um, and as it as that happens, we will move those um properties into our same property portfolio.

Jonathan Kelcher: Okay. The target would be to move one or two of them into same property by next year?

David Hung: That's correct. Yeah.

Jonathan Kelcher: That's fair. Okay. Then on the rate growth you're getting in the retirement portfolio, are you getting much pushback on that? Secondly, can you maybe break down what you're seeing on new leases on turnover leases versus what you're seeing on renewal leases?

Okay, so the target would be to move one or two of them into the same property by next year, that's correct. Yeah.

Okay. And then, on the um, on the the rate growth you're getting in the the retirement portfolio are you are you getting much? Push back on that and and secondly, could you maybe break down what you're seeing on on new leases on on, um, turnover releases versus what you're seeing on, uh, renewal leases.

Nitin Jain: Good morning, Jonathan. For rental rates, you know, we are around, call it 4% increases. We do quite a bit of education with inflationary increases and what has happened to food cost and utility and everything to explain why our rents are going up. Our goal is to be very disciplined without creating a lot of shocks in the system. We're not after higher rent increases in 1 year and upsetting every resident that lives with us. We would rather have a steady stage for multiple years. We take the same approach on new leases. It is market dependent. I mean, there are some markets where, you know, we are seeing higher than 4% increases at a new lease given what has happened in the market.

Nitin Jain: We're not after higher rent increases in 1 year and upsetting every resident that lives with us. We would rather have a steady stage for multiple years. We take the same approach on new leases. It is market dependent. I mean, there are some markets where, you know, we are seeing higher than 4% increases at a new lease given what has happened in the market.

Nitin Jain: In some cases it is closer to the 4%. In, you know, cases where we have optimization portfolio, you might see flat changes because, you know, the goal is to build occupancy there rather than increase rate first.

Good morning, Jonathan. So for rental rate, you know, we are around, call it 4%, uh, increases. We do quite a bit of Education, uh, with inflationary increases and what has happened to food cost, and utility and everything to explain why rents are going up. Um, our goal is to be very disciplined without creating a lot of shocks in the system. So, we're not after higher rent, increases in 1 year, and upsetting every resident that lives with us, and we would rather have a steady stage for multiple multiple years. When we take the same approach, a new leases, it is Market dependent. I mean, there are some markets where, you know, we are seeing um higher than 4% increases at a new lease given what has happened in the market. And in some cases it is closer to the 4%

And in uh you know cases where we have optimization portfolio, you might see flat changes because, you know, the goal is to build occupancy there rather than increase rate first.

Jonathan Kelcher: Okay. Fair enough. Just lastly on the Ballycliffe, the 6.75% investment yield, how does that break down between NOI and construction financing or funding?

David Hung: Sure. That's a good question, Jonathan. The 6.75% is on the NOI itself. As you know, there's two streams of income on Ballycliffe, one being the NOI and one being on the 25 C, CFS. The 6.75% is on the NOI. Then on the CFS, you know, we would have, the way we would have looked at it is based on the present value of that cash flow using a risk-adjusted discount rate.

Okay. Um, fair enough. And then just just lastly on on the on the ballet, Cliff, um the 6.75% investment yield, how, how does that break down between noi? And uh, and construction financing responding. Sure. Uh, that's a good question. Uh, Jonathan, the 6 and uh, 6.75% is on the noi itself. Uh, and as you know, uh, there's 2 streams of income on Valley Cliff 1 being the noi and 1 being on the 25th uh, CFS so the 6 and 3/4% is on the noi. Um,

And then on the CFS, you know, we would have the way we would have looked at it is based on a, uh, the present value, uh, of that cash flow using a, a risk adjusted discount rate.

Jonathan Kelcher: Okay. That CAD 6.75, is that on the CAD 68 million?

David Hung: No, it would be on the piece relating to the NOI.

Okay. So that's 6.75 is that on the 68 million?

No, it would be on, it would be on the, uh, the the piece relating to the uh, noi.

Jonathan Kelcher: Okay. what would that piece be?

David Hung: Well, we haven't.

Okay. And what would that piece be?

Jonathan Kelcher: I'm just trying to get how much to add into NOI versus how much to add into AFFO call itself.

Well, we have, let's try. I'm just trying to get how much to add in to knee.

Versus how much?

David Hung: Yeah, I think that, maybe the right way to look at that, I mean, you remember that we bought Cawthra Gardens 1 year ago, and we also.

Jonathan Kelcher: Yeah

David Hung: bought that at 6.75%. If you were trying to, you know, kinda work through the numbers, you might take Cawthra Gardens as an example. Then use that as a good jump-off for calculating your NOI.

Jonathan Kelcher: Okay, thanks. I'll turn it back.

Yeah, I think that um, maybe the the right way to look at that. I mean you um you remember that we bought copper Gardens a year ago, um, and we also bought that at uh, 6 and 3/4%. So if you were trying to, you know, kind of work through the numbers, you might take copper Gardens as an example. Um, and then, uh, and then use that as a, as a, as a good jump off to, for calculating your noi.

Okay, thanks. I'll, uh, I'll turn it back.

Operator: Okay. Your next question comes from the line of Brad Sturges with Raymond James. Please go ahead.

Your next question comes from the line of Brad Sturgis.

With Raymond James, please go ahead.

Brad Sturges: Hey, good morning. Just on your acquisition commentary, you're expecting a significant pace. Do you have a target in mind for what you could achieve this year? Maybe just give a bit more context of what you're seeing in the pipeline beyond what's been announced or closed so far this year.

Uh, hey, good morning. Um,

Just on the year. Uh,

Nitin Jain: Good morning, Brad Sturges. You know, I would say I would just tweak it and say I think we see good pace, not significant pace. The reason why that is important is, there is a lot of opportunities in the market. There's also a lot of competition. We get our fair share of deals, and our goal is not to overpay. Obviously, I'm stating the obvious here. There is a bit of frothiness in some of the deals. For us, if it doesn't make financial sense, we would rather not grow. We don't have a specific target in mind. You know, what we did last year, which was close to CAD 600 million in acquisitions and CAD 200 million in development, then our run rate is towards that.

Acquisition. Um commentary, you're expecting a significant Pace. Um, do you have a a Target in mind for what you could achieve this year and maybe just um, give a bit more context of what you're seeing in the pipeline Beyond what's been announced or closed so far, uh, this year

Nitin Jain: Obviously, I'm stating the obvious here. There is a bit of frothiness in some of the deals. For us, if it doesn't make financial sense, we would rather not grow. We don't have a specific target in mind. You know, what we did last year, which was close to CAD 600 million in acquisitions and CAD 200 million in development, then our run rate is towards that.

Nitin Jain: I mean, our development is already CAD 250 million for this year, and it's May, and we have, you know, call it one third of the year in, and, you know, we added around CAD 200 million of acquisition. That could be achievable. It's not a stated target or an outlook, but that's, you know, that could be reasonable what we might achieve this year.

Brad Sturges: Okay, I appreciate that. Just on my other question would be just on leverage. It's ticked down a little bit below, I guess, what you would suggest as your target. I guess, would it be fair to say, given some of the expected acquisition activity going forward and maybe a bit more ramp-up on development, would that normalize back into your target range by over the course of the year? How should we think about leverage going forward?

Here. Uh, but there is uh, a bit of fraudin in in some of the deals. And for us, if it doesn't make Financial sense, we would rather not grow. So we don't have a specific Target in mind. But you know what we did last year which was a close to 600 million in Acquisitions and 200 million dollars in uh, development and our run rate is towards that. I mean, our development is already 250 million for this year and it's May and we, you know, call it 1 third of the year end and, you know, we are at around 200 million dollars of acquisition, so that could be achievable. It's not a stated Target or an Outlook, but that's, you know, that could be reasonable. Uh, what? We might achieve this year.

David Hung: Yeah, Brad, it would. We would expect our leverage targets to normalize a little bit. Q1 leverage is on the lower side because we issued CAD 150 million through our ATM. That said, we're going to use, you know, the bulk of that proceeds for our recent acquisitions for Rockland Manor and Ballycliffe. You know, by the end of the year, you know, all else being equal, we would expect that our leverage ratios would tick back up.

I appreciate that. And and just on my other question would be just on, uh, leverage. It's, it's ticked down a little bit below. I guess what you would suggest is your target. I guess would be fair to say given, uh, some of the expected acquisition activity, going forward and and maybe a bit more ramped up on development with that normalized back into your target range by over the course of your, how should we think about leverage going forward?

Uh, yeah, Brad it. It would, uh, we we would expect our leverage, uh, targets to normalize a little bit. Um, q1. Uh, Leverage is, uh, on the lower side because we issued, the 150 million dollars through our ATM. That said we're going to use, uh, you know, the bulk of that proceeds for our recent acquisitions for Rahman Manner and Valley Cliff. So, you know, by the end of the year, um, you know, all else being equal, we would expect that our leverage ratios uh, would tick uh, back.

Brad Sturges: Perfect. Thank you.

Perfect, thank you.

Operator: Our next question is from the line of Himanshu Gupta with Scotiabank. Please go ahead.

Your next question is from the line of Pam Manu.

With Scotia Bank.

Himanshu Gupta [Director, Equity Research Analyst: Thank you, good morning. First on LTC long-term care, I mean, you increased your outlook to low to mid-single digit now. What led to that change?

Himanshu Gupta: Thank you, good morning. First on LTC long-term care, I mean, you increased your outlook to low to mid-single digit now. What led to that change?

Please go ahead.

Thank you and good morning.

uh, so first on LTC long-term care, um, I mean you increase your outlook to low to mid single-digit now, uh, so what led to, uh, that change

David Hung: Sure. Himanshu, there's really two reasons. The first one is because our long-term care NOI, we did grow by 6.7% in Q1, if we exclude one-time items. The second is because the Government of Alberta announced a 7.25% funding increase. They had originally announced 1.25% and then changed it to 7.25% as a result of the cost pressures that operators were facing throughout the last several years. We would expect that, you know, a good portion of that incremental 6% would flow to the bottom line. For that reason, we changed our outlook to single to mid-digit growth this year.

David Hung: They had originally announced 1.25% and then changed it to 7.25% as a result of the cost pressures that operators were facing throughout the last several years. We would expect that, you know, a good portion of that incremental 6% would flow to the bottom line. For that reason, we changed our outlook to single to mid-digit growth this year.

Himanshu Gupta [Director, Equity Research Analyst: Thank you. That Alberta funding increase, that will be retroactively from April 2023, I believe. Have you received any retroactive amount from Alberta yet, or that's gonna show up in Q2 and onwards?

Himanshu Gupta: Thank you. That Alberta funding increase, that will be retroactively from April 2023, I believe. Have you received any retroactive amount from Alberta yet, or that's gonna show up in Q2 and onwards?

Sure. Uh, him answer, this really 2 Reasons the first 1 uh, is because our long-term care and why we did um, grow by 6.7% in q1, um, if we exclude uh, 1 time items. Uh, the second is because uh the government of Alberta announced the 7 and a quarter percent uh funding increase. They had originally announced 1 in a quarter percent and then changed it to 7 and a quarter percent as a result of the cost pressures that, um, operators were facing throughout the, uh, the last several years. Uh, so we would expect that, you know, uh, a a good portion of that incremental, 6% would flow to the bottom line. And for that reason, uh, we changed our Outlook to single to Mid, uh, digit growth this year.

David Hung: Yeah, we have not received any of the funding yet. They just announced that in April. Some of the increase is going to flow through to wages. Again, you know, the Government of Alberta recognized the cost pressures that operators are facing. We may need to increase wages somewhat. Not all of it would flow to the bottom line, but a good portion of it should.

Himanshu Gupta [Director, Equity Research Analyst: Yeah.

Himanshu Gupta: Yeah.

David Hung: To answer your question, we have not received any of it yet.

Thank you. Uh, that Alberta funding increase. Uh, that will be retroactively from April last year. I believe. Uh, have you received any retroactive amount from Alberta yet or that's going to show up in Q2 and onwards? Uh, yeah, we we have not received uh, any of the funding yet they uh, just announced that in uh, in April. Um, some of the increase is going to flow through to wages. Um, again, you know, the government of Alberta recognized, the cost pressures that it's, uh, that operators are facing, um, and we may need to, uh, increase, uh wages, um, somewhat, so, not all of it would flow to the bottom line, but a, uh, you know, a good portion of it should

Himanshu Gupta [Director, Equity Research Analyst: Got it. That 6.7, whatever you achieved in Q1, was without the Alberta impact. You could literally re-add this runway for the rest of the year.

Himanshu Gupta: Got it. That 6.7, whatever you achieved in Q1, was without the Alberta impact. You could literally re-add this runway for the rest of the year.

But to answer your question, we have not received any of it yet.

David Hung: That's right. The 6.7% did not include the funding for Alberta, the funding increase, I should say.

Got it. So that 666.7 whatever you achieved in q1 was without the Alberta impact, and um, so you could literally be at the strong rate for the rest of the year.

Himanshu Gupta [Director, Equity Research Analyst: Thank you. Thank you. Moving on to retirement homes. Obviously, you know, seasonal dip in Q1 so far on the occupancy side. Are you feeling, I mean, as you get into April and May months, are you seeing some glass ceiling here at 95 on overall portfolio basis? Or based on the lead generation, you think, you know, 95, 96 could be achievable here?

Himanshu Gupta: Thank you. Thank you. Moving on to retirement homes. Obviously, you know, seasonal dip in Q1 so far on the occupancy side. Are you feeling, I mean, as you get into April and May months, are you seeing some glass ceiling here at 95 on overall portfolio basis? Or based on the lead generation, you think, you know, 95, 96 could be achievable here?

Thank you. Thank you. Uh, moving on to retirement homes, uh, obviously, you know, seasonal dip in q1 so far on the occupancy side. Uh, are you feeling? I mean, as you get into April and May months, are you seeing some glass ceiling here at 95 on overall portfolio basis, or

Based on the lead generation. You think, you know, 95 96 could be achievable here

Nitin Jain: Where we feel confident is that we will get back to 95%. You know, can we get to 96%? I think that remains to be seen. We saw similar things last year, where our occupancy dipped till April/May and then it climbed up. We actually didn't see seasonality early in the year, like in January, if you would ask us this question, we'd not see that. February, we started to see a decline. You know, our expectation is we will be 95% plus. I think could it get to 96%? I think it's, I can argue either way on that one at this moment, Himanshu.

Himanshu Gupta [Director, Equity Research Analyst: Yeah, no, that's fair enough. Maybe just on retirement homes. Margin expansion looks like, you know, tracking ahead of what your full year guidance is in Q1. Was it ahead of your internal expectations as well in Q1, the margin expansion?

Himanshu Gupta: Yeah, no, that's fair enough. Maybe just on retirement homes. Margin expansion looks like, you know, tracking ahead of what your full year guidance is in Q1. Was it ahead of your internal expectations as well in Q1, the margin expansion?

At, uh, where we feel confident is that we will get back to 95. Uh, you know, can we get to 96? I think that remains to be seen. Uh, we saw similar things last year where our occupancy dipped till April May and then uh, then climbed up we actually didn't see seasonality early in the year. Like in January, if you would asked us this question, we did not see that, but February, we started to see a decline. Uh, so you know, our expectation is we will be 95% plus uh, I think could it get to 96%? I think it's uh, I can either I can argue either way on on that 1 at this moment here.

Fair enough, uh, and maybe just on, uh, Red Diamond homes, margin expansion. Looks like, you know, tracking ahead over to your full year. Guidance is uh, in q1. Uh,

Was it ahead of your internal expectations as well in q1? The margin expansion?

Nitin Jain: That's, I don't know if that's a fair question. I would just say, you know, when we saw a dip in occupancy and one of the things we stay quite focused in is not to give into incentives, because that will have significant tail to it. You know, we saw margin challenges. You know, when we buy properties from people who have done incentives, we'll stay quite focused and only go for incentives in very specific market. Our care has been a big change into our margin because when we started, our care hours went up significantly, 2 years back, we actually lost money every time we provided a care hour. That has been a big change.

Nitin Jain: You know, we saw margin challenges. You know, when we buy properties from people who have done incentives, we'll stay quite focused and only go for incentives in very specific market. Our care has been a big change into our margin because when we started, our care hours went up significantly, 2 years back, we actually lost money every time we provided a care hour. That has been a big change.

Nitin Jain: Just when you are at 95% plus, you're optimizing the portfolio. The operating team, you know, has a good rhythm of making sure the homes are running well. It really is a combination of those things. I would say we are not overly shocked where our margin is, and we expect to continue on that trend.

Himanshu Gupta [Director, Equity Research Analyst: Got it. Thank you. Last question is on acquisition cap rates. You know, Bartlett at, like, I think 575, Ballycliffe at, like, 675. They're both kind of in the same market, both kind of newly developed as well. Is 100 basis points the spread between the retirement homes and LTC? I know, you know, there's a funding element to Ballycliffe or LTC there, I mean, a few nuances to it. But bigger picture, is 100 basis points the right spread between RH and LTC here?

Himanshu Gupta: Got it. Thank you. Last question is on acquisition cap rates. You know, Bartlett at, like, I think 575, Ballycliffe at, like, 675. They're both kind of in the same market, both kind of newly developed as well. Is 100 basis points the spread between the retirement homes and LTC? I know, you know, there's a funding element to Ballycliffe or LTC there, I mean, a few nuances to it. But bigger picture, is 100 basis points the right spread between RH and LTC here?

That's, uh, I don't know if that's a fair question, but I would just say, uh, you know, when we saw a dip in occupancy and 1 of the things, uh, we staying quite focused in is not to give into incentives, uh, because that will have significant tail to it. And, you know, we we saw margin uh, challenges. Uh, you know, when we buy properties from people who have who have done incentives, so we'll stay quite focused on all the go for incentives in very specific Market. Uh our care is has been a big change into a margin because when we started our care hours went up significantly. But 2 years back, we actually lost money every time we provided a care. Our so that has been a big change and then just when you are at 95% plus your optimizing, the portfolio, the operating team, uh, you know, has a good rhythm of making sure the homes are running well. So it's, it's really is a combination of those things. But I would say, we are not overly shocked, where where our margin is and we expect to do continue on that trend.

Nitin Jain: Absolutely. You know, we are, you know, we have been talking about it for a period of time. There are hardly any LTC deals. The last two public ones were ours. They both were at 6.75. The Alberta one that we bought last year was really in the same range. Both these properties, the Ballycliffe that we bought and Cawthra Gardens that we bought last year, they had 2 or 3 other bids attached to it, so it wasn't that we were looking to pay 20% above market, and they were all very, very close. The reality is, it is nearly impossible to find anything below 6.75, and from a LTC perspective. You're right.

Perfect. Thank you. Uh, last question is on acquisition cap rates. Uh, you know, Bartlett at like I think 575 uh ballet. Cliff at like 675 you both kind of in the same Market, both kind of newly developed as well uh is 100 basis points. Spread between the diamond home and LTC. And I know, you know, there's a funding element to buccleigh for LTC there. I mean few nuances to it, uh, but but bigger picture is, is 100 basis. Pointy right spread between RH and LDC here.

Nitin Jain: Both these properties, the Ballycliffe that we bought and Cawthra Gardens that we bought last year, they had 2 or 3 other bids attached to it, so it wasn't that we were looking to pay 20% above market, and they were all very, very close. The reality is, it is nearly impossible to find anything below 6.75, and from a LTC perspective. You're right.

Nitin Jain: I mean, retirement is in a 5.5% to 6% range, depending on the market.

Absolutely. Yeah. You know we are, you know, we have been talking about it for a period of time. There is there are hardly any LTC deals. The last 2, public ones were ours. They both were a 6.75 uh, the Alberta 1 when we bought last year. Um, was really in the same range. And these both these properties the um the battery Cliff that we bought and quartz or Gardens that we bought uh, last year. Uh, they had 2 or 3 other bids attached to it. So it wasn't that we were looking to pay 20% above market and it was they were all very, very close. Uh, so the reality is it is it is nearly impossible to find anything below 6.75 uh, in from my LTC perspective, and you're right, I'm in retirement, there's in a 5 and a half to 6% range depending on the market.

Himanshu Gupta [Director, Equity Research Analyst: Thank you so much for the color, and I'll turn it back. Thank you, guys.

Himanshu Gupta: Thank you so much for the color, and I'll turn it back. Thank you, guys.

Nitin Jain: Thank you. Tina, do we have a next question?

Thank you so much for the color and I'll turn it back. Thank you guys. Thank you.

Tina: Do we have a next question?

Operator: We have a Pammi on the line.

Have a pan me on.

Nitin Jain: Tina, do we have our next question?

Tina. Do we have our next question?

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

Your next question is from the line of Payment Bear with RBC Capital Markets.

Nitin Jain: Thank you.

Pammi Bir: Hi. Thanks. Good morning. Maybe just sticking with the acquisition side, Nitin. I think you mentioned, you know, it is getting more competitive. You know, have you considered maybe, perhaps trying to secure, like, a steady pipeline or cadence of acquisitions through, by maybe partnering up with some developers to build that sort of a multi-year pipeline of opportunities? Is there still enough out there that you can continue to compete effectively on one-off or portfolio deals?

We just, um, sticking with the acquisition side. Uh, the I think you mentioned, you know, it's getting more competitive, you know, have you considered maybe, uh, perhaps trying to secure, uh, like a steady pipeline or Cadence of Acquisitions through, uh, by maybe partnering up with, um, some Developers?

Nitin Jain: Hi, Pammi. Good morning. Great, question. I mean, we have considered some partnerships and in fact we did one with Reitmans a few years back on a retirement home that we now own together, and eventually we will buy that. That would be under consideration, but I wouldn't call it a big strategy. We might, you know, if we find the right partners, we might get one every year or in 18 months. It's not a place where we're looking to invest a lot of money. A lot of these forward contracts in our mind have significant risk. 5, 6 years from now, the market could look different. We're also at a place where we have many markets where we don't really have any properties. You know, Quebec being one.

Nitin Jain: We might, you know, if we find the right partners, we might get one every year or in 18 months. It's not a place where we're looking to invest a lot of money. A lot of these forward contracts in our mind have significant risk. 5, 6 years from now, the market could look different. We're also at a place where we have many markets where we don't really have any properties. You know, Quebec being one.

Nitin Jain: Alberta, we have only a one retirement home that we manage. We feel there is enough opportunities for us to grow. At some stage, you know, it probably will become important for us to look at those partnerships, and we might consider it. The last one just for us, you know, in many cases, the joint ventures are looking for your development dollars and our, at this stage, our development focus is in LTC, not, you know, it's economically quite robust, and it's a need that we have to resolve for our C homes.

Nitin Jain: The last one just for us, you know, in many cases, the joint ventures are looking for your development dollars and our, at this stage, our development focus is in LTC, not, you know, it's economically quite robust, and it's a need that we have to resolve for our C homes.

many markets where we don't really have any properties where so, you know, Quebec being 1, Alberta, we only have 1 retirement home that we manage, so we feel there is enough opportunities for us to grow, uh, and at some stage, you know, it probably will become important for us to look at those Partnerships and we might consider it

And the last 1 just for us um you know, in many cases, the joint ventures are looking for your development dollars and our at this stage, our development focuses in LPC not, you know, it's um it's economically quite robust and it's a need that we have to resolve for for our sea homes.

Pammi Bir: Okay. Yeah, no, makes sense. Just, you know, you mentioned in some markets you don't have exposure, maybe in others, of course, you maybe have more heavier exposure. I'm just curious, you know, we've seen the Competition Bureau scrutinize. It seems like they're scrutinizing deals more. I'm just curious if you've seen that come up in any of the transactions that you've been involved with, or not really the case, at this point.

Okay. Yeah, no it makes sense. And then um, just you know, you mentioned in some markets. You don't have exposure, maybe in others, of course, you maybe have more heavier exposure. I, I'm just curious, you know, we've seen the competition Bureau, uh, scrutinize it seems like they're scrutinizing deals more. So, I'm just curious, if you've seen that come up in any of the transactions that you've been involved with um, or not, not really the case, um, at this point

Nitin Jain: I would maybe just give a broader question, you know, broader answer to it. There's really, you know, other than probably 1 city we can think of, we don't really have any market concentration in any market where we think this would become an issue. I mean, we announced a deal property in Ottawa. We have 6% or less properties in Ottawa, and the threshold is close to 30%+, so, you know, we could be 5 times our size in Ottawa. Quebec, we have 0 properties. Alberta, we have 1, which we actually manage and not even own. BC, we only have 4 retirement homes.

Nitin Jain: We have 6% or less properties in Ottawa, and the threshold is close to 30%+, so, you know, we could be 5 times our size in Ottawa. Quebec, we have 0 properties. Alberta, we have 1, which we actually manage and not even own. BC, we only have 4 retirement homes.

I would maybe just give a broader, uh, my question. Uh, you know, broader answer to it. Um, there's really, uh, you know, other than probably 1 City, we can think of, uh, we don't really have any Market concentration in, in any Market, uh, where we think this would become an issue. I mean, we announced a deal property in Ottawa. We, we have 6% or less, uh, properties in Ottawa. And the threshold is close to 30% plus so you know it could be 5 times her size in Ottawa.

Nitin Jain: We do believe that, you know, we have a lot of tailwinds on our side as it relates to competition and, you know, we could really grow our portfolio without running into significant challenges. They might decide to, Competition Bureau obviously, might decide to look into a deal and, you know, if that happens, we will obviously work through it at that stage. You know, broadly speaking, we've feel given our market concentration and our number of properties, this is not gonna be a material impact on us for a medium to long term.

Nitin Jain: They might decide to, Competition Bureau obviously, might decide to look into a deal and, you know, if that happens, we will obviously work through it at that stage. You know, broadly speaking, we've feel given our market concentration and our number of properties, this is not gonna be a material impact on us for a medium to long term.

Uh Quebec, we have zero properties Alberta. We have 1, which we actually manage and not even on BC, we only have 4 retirement homes. So we do believe that, uh, you know, we have a lot of, um, Tailwind on our side as it relates to competition. And, you know, uh, we could really grow our portfolio without running into significant challenges. Now, they might decide competition Bureau, obviously, uh, might decide to look into a deal. And, you know, if that happens, we will obviously work through it at that stage, but you know. Broadly speaking. We've filled given our Market concentration and our number of properties. This is not going to be a material impact on us for a medium to long term.

Pammi Bir: Okay. Then just maybe a couple of other ones just on the tax recovery in Q1. Just, can you maybe just remind us how we should think about, you know, the right run rate for 2026 with the accelerated depreciation?

David Hung: Sure. I think the way that we would think about it is, obviously in 2024 we didn't have too many acquisitions. In 2025 we did have more. I think as you're thinking about 2026, if you exclude the CAD 3.9 million tax benefit, the tax rate should be somewhere between 2024 and 2025 as a percentage of income before taxes. The cash tax rate would be as a percentage of income before taxes would somewhere be in the range between 2024 and 2025.

Okay, uh and then just maybe a couple of other ones just on the the tax recovery and q1 just can you maybe just remind us how we should think about uh, you know, the right run rate for uh for 2026 with with the accelerated depreciation.

Sure. Um, I think the way, uh, I think, the way that we would think about it is, um, obviously, in 2024 we didn't have too many Acquisitions. Um, in 2025, we did have more. Um, and so I think as you're thinking about the 2026, if you exclude, the 3.9 million, um, uh, tax benefit, the tax rate should be somewhere between 2024 and 2025 as um,

As a percentage of income before taxes.

So the cash tax rate would be, you know, um, as a percentage of income before taxes, would somewhere be in the range between, uh, 20% and 24% and 20% and 25%.

Pammi Bir: Okay. All right. Then just lastly, just in BC, are you anticipating any sort of changes from a cost standpoint in terms of the labor wage, I guess leveling that you're kind of reviewing at this point or anything you can share on that front would be helpful.

Nitin Jain: Yeah, we continue to work both through our association and directly with government. You know, at this stage we do not feel there'll be a material impact on labor. You know, signs from the government is for all the funded properties, government will fund those things and for retirement the reality would be that would have to flow into rent increases. At this stage, we don't really think there would be a material change, but you know, they continue to provide more information on it.

Okay. All right, and then just lastly, um, just in DC, are you anticipating any sort of changes from a cost standpoint in terms of the, uh, the labor wage? I guess, leveling that you're kind of reviewing at this point, or anything you can share on that front would be helpful. Uh, you know, we continue to work both through our association and directly with government. Um, you know, at this stage, we do not feel there will be a material impact in labor. Uh, you know, signs from the government is for all the funded properties, uh, government will fund those things. And for retirement, the reality would be that would have to flow into rent increases. So at this stage, we don't really think there would be a material change, but, you know, they continue to provide more information on it.

Pammi Bir: Okay. Oh, maybe lastly, just on your comments, Nitin, about Quebec and the no exposure, is that a market where maybe there are some transactions that you're looking at or are you sticking to maybe where you already have an existing presence?

Okay.

Nitin Jain: We, that is a market that is of interest to us. When the right opportunity comes along, we would, you know, we would look at those. Obviously, we look at opportunities everywhere and now including Quebec.

Oh, and lastly um just on your comments, Nathan about Quebec and the no exposure is that um a market where maybe there are some transactions that you're looking at, or are you sticking to maybe where you already have an existing presence?

That is a market that is of interest to us. When the right opportunity comes along, we would, um, you know, we would look at those. Obviously, we look at opportunities everywhere now, including Quebec.

Pammi Bir: Okay. I will turn it back. Thanks very much.

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

Operator: Your next question comes from the line of Tal Woolley with CIBC Capital Markets. Please go ahead.

Your next question comes from the line of tal woolly with CIBC Capital markets. Please go ahead.

Tal Woolley: Hi, good morning. just wanted to talk a bit about funding to start. fair to say you're not expecting any base rate increase for LTC in Ontario this year?

Hi, good morning. Um, just wanted to talk a bit about funding to start. So fair to say, you're not expecting any uh base rate increase for LTC in Ontario this year.

David Hung: I wouldn't say that, Tal. I mean, we haven't, the ministry hasn't announced the funding increase for 2026, 2027 yet. We would expect that the funding increase would be in line with inflation.

27, yet we would expect that the, uh, the funding increase would be in line with inflation.

Tal Woolley: Okay. For these Class C beds, you know, it sort of reminds me a little bit of like what happened with the Class C licenses. You know, they were all supposed to come off at a cliff in 2025 and then have subsequently been extended. Has yourselves or the industry thought about given the demand that, you know, we can sort of see building for some of these services and appreciating the fact that these beds are maybe not suitable under every circumstance, have you as an industry started to think about ways to repurpose these assets? Like maybe it's for our hospital step downs or transitional care, rather than maybe full-time residential. Like is there any thought given around how to best utilize these assets in the interim?

Tal Woolley: Has yourselves or the industry thought about given the demand that, you know, we can sort of see building for some of these services and appreciating the fact that these beds are maybe not suitable under every circumstance, have you as an industry started to think about ways to repurpose these assets? Like maybe it's for our hospital step downs or transitional care, rather than maybe full-time residential. Like is there any thought given around how to best utilize these assets in the interim?

Okay. And then for um these Class C beds uh you know it's sort of reminds me a little bit of like what what happened with the class C licenses you know they were all supposed to come off at a cliff in 2025 and then have subsequently been extended.

Nitin Jain: Great point and you know, completely agreed with you. I think there is quite a bit work going on and different people are doing different things. I'll just use two of our examples. The, our old property in North Bay that got sold and it is now being used for residential purpose and the one we had in Brantford, the city bought it and they're also using it for residential purpose, you know, including, you know, some of the places we didn't have a, you know, they couldn't find accommodation for people. I don't believe that you will see many of these buildings being demolished because there is a demand. Now, in some cases, the buildings are so foregone that you have no other choice, but we have the same interest.

Um has the industry have yourselves or the industry thought about giving the demand that you know, we could sort of see building for some of these services and appreciating the fact that these beds are maybe not suitable under every circumstance have, have you as an industry started to think about ways to repurpose these assets. Like maybe it's for our Hospital step Downs or Transitional Care, uh, rather than maybe full-time residential, like so many thoughts given around. How do you best utilize these Assets in the interim?

point and, you know, and

He agreed with you.

Nitin Jain: I don't believe that you will see many of these buildings being demolished because there is a demand. Now, in some cases, the buildings are so foregone that you have no other choice, but we have the same interest.

Different people that are doing different things. I'll just use 2 of our examples, um, the our old property, not pay that got sold and it is now being used for a residential purpose. And the 1 we had in Brantford, the city bought it and they're also using it for residential purposes. Uh, you know, including uh, you know, some of the places we didn't have a you know, where they they couldn't find accommodation for people. So I do I don't believe that you will see many of these buildings being demolished.

Nitin Jain: We have a couple of buildings where, you know, in locations such as downtown where it'd be hard to replace, so we'll continue to find ways to see if they can be repurposed for something else.

Because there is a demand now, and in some cases the buildings are so far gone that you have no other choice. But, uh, we have the same interests. We have a couple of buildings where, uh, you know, in locations such as downtown, where it'll be hard to replace. So, we'll continue to find ways to see if they can be repurposed for something else.

Tal Woolley: Okay. Earlier on the call you made a comment I think, you know, saying that you really were losing money per care hour I think 2, you know, 2, 3 years ago. Was that like across the entire system and are we just sort of now beginning to see the contribution of profitability from the care side of the business?

Nitin Jain: I would just say that that was the case for us at Sienna. Like, we are, you know, we had multiple programs under care, you know, some, and that was my commentary was in aggregate. In smaller homes when you provide care, because you need to maintain a certain level of staffing, which is gonna be very important for us as it relates to quality. We, you know, at overall level, either we were breaking even or losing a bit of money. The big part of it was rather than cutting services, making sure we are, first of all, selling the right care opportunities, putting them in the right package, and making sure we have the right staff to deliver that.

Nitin Jain: We, you know, at overall level, either we were breaking even or losing a bit of money. The big part of it was rather than cutting services, making sure we are, first of all, selling the right care opportunities, putting them in the right package, and making sure we have the right staff to deliver that.

Nitin Jain: It took us some time, and we also didn't want to have major shocks in the system by having significant increases. We were quite tempered in our approach of how to change some of those rates and change some of those packages. This took us 2 years to do that. I do not know if it was a Sienna thing or it was across the industry.

Okay. Um, and then earlier on the call, you made, uh, a comment I think, uh, you know, saying that you, you really were losing money per care hour. I think to, you know, 2, 3 years ago was that like across the entire system and are we just sort of now, beginning to see the contribution of profitability from the care side of the business? I, I would just say that, that was the case for us at Sienna like we are, you know, we had multiple programs under care and, uh, you know, some and that with my commentary was an Aggregate and in smaller homes. When you provide care, because you need to maintain a certain level of, uh, Staffing which is going to be very important for us as it relates to Quality. Uh, we, you know, at an overall level either we were breaking even or losing a bit of money and um, the big part of it was, was rather than cutting services. Making sure we are. First of all, selling the right care opportunities, putting them in the right package and making sure we have the right staff uh to deliver that.

Tal Woolley: This was just on the retirement side of the business too?

Uh, so it took us some time, and we also didn't want to have major shocks in the system by, uh, having significant increases. So we, we were quite tempered in our approach of how to change some of those rates and change some of those packages. Just took us a couple of years to do that. Uh, I do not know if it was, uh, a Sienna thing or it was across the industry.

Tal Woolley: This was just on the retirement side of the business too?

Nitin Jain: That's absolutely. In long-term care, this is not applicable.

Tal Woolley: Right. Okay. Just lastly, you saw, you know, you've announced a couple deals that are yet to close. Have you got any more specific visibility on exactly when you might think the remaining assets under contract might close?

And this was just on the retirement side of the business too. That's absolutely. In long-term care. This is not applicable.

Right. Okay um and then just lastly uh you still, you know, you've announced a couple of deals that we have to close with you. Have you got any, um, more specific visibility on? Exactly when you might think the remaining assets under contract might close

David Hung: Are you referring to Ballycliffe and Rockland Manor?

Tal Woolley: Yes.

Are you are you referring to a ballet cliff and Rocklin Manor?

David Hung: Yeah.

Tal Woolley: We're just wondering for modeling.

Yes.

David Hung: Yeah.

Tal Woolley: when we should start including these.

David Hung: Ballycliffe we're expecting to close in H2 of the year and, probably late, like, later than earlier part of H2 of the year. Rockland Manor would be within 60 days.

Yeah, so we're just wondering for modeling, like, we should start including these, uh, Bali clip. We're expecting to close in the second half of the year and, um, probably late like later than earlier part of the second half of the year, uh, Rahman manner would be within 60 days.

Tal Woolley: Perfect. Okay. Thanks, gentlemen.

David Hung: Thank you.

Perfect. Okay. Thanks gentlemen.

Thank you.

Operator: Our next question comes from the line of Chris Murray with ATB Capital Markets. Please go ahead.

Nice question comes from the line of Sierra.

This with ATB Capital markets, please go ahead.

Chris Murray: Thank you, operator. Good morning, guys. A quick one from me. Just looking at Ballycliffe, it's actually quite surprising to see a 2025 vintage community come out on the transaction market. Could you perhaps just comment on, you know, the kind of the transaction here and, you know, the counterparty they're selling the asset?

Thank you, everybody. Good morning, guys.

Uh, a quick 1 from me, I'm just looking at bar Cliff. Uh, it's actually quite surprising to see a 2025 vintage, uh, Community come out on the transaction Market. Could you perhaps just comment on, you know, the kind of the transaction here and, you know, the counterparty that selling that

Nitin Jain: Yeah. This is a property we bought from Chartwell, so I think, I can't really comment why they've sold it. Obviously it is a perfect fit for us. We are in the GTA. We have a lot of scale here, and it fits exactly what we're trying to build at Sienna.

Uh, yeah.

This is a property, we bought from chart file. So I think

Why they sold it. Uh, but obviously it is a perfect fit for us. We are in the GTA. We have a lot of scale here, and it fits exactly what we're trying to build at Sienna.

Chris Murray: All right. Sounds good. Thanks, guys.

Nitin Jain: Thank you.

Right, sounds good. Thanks guys.

Thank you.

Operator: Our next question comes from the line of Giuliano Thornhill from National Bank Capital Markets. Please go ahead.

and our next question comes from the line of

Yeah. Galano Thornhill from National Bank Capital markets. Please go ahead.

Giuliano Thornhill: Hey, guys. Good morning. Just, I'll keep it brief. I'm just, I'm wondering, like, obviously the larger operators are moving forward with redevelopment, like yourselves. Are the economics beginning to work for the smaller operators yet? Do you think maybe that more funding needs to be announced to kinda incentivize that, if that's not the case?

Hey guys. Good morning. I just I'll keep it brief. I'm just uh, I'm wondering like obviously the larger operators are moving forward through the Redevelopment, uh, like yourselves are the economics beginning to work for the smaller operators yet. And do you think maybe that more funding needs to be announced to kind of incentivize that if that's not the case?

Nitin Jain: I would say the funding is appropriate in most cases, Giuliano, in most of the markets, so I don't think that would be an issue. If you're a private owner operator, you in fact can borrow close to 85%, 90% on this. I think these projects are viable, and that's why we are seeing a lot of LTC being built, which is great because we need to build close to 60,000 beds as a sector. It is great to see that. There's never been more beds being built at this time. We also look at that as a potential opportunity 3, 4 years down the road because, you know, we are actively looking to grow our LTC, including in Ontario.

Nitin Jain: I think these projects are viable, and that's why we are seeing a lot of LTC being built, which is great because we need to build close to 60,000 beds as a sector. It is great to see that. There's never been more beds being built at this time. We also look at that as a potential opportunity 3, 4 years down the road because, you know, we are actively looking to grow our LTC, including in Ontario.

I would say the funding is appropriate in most cases Giuliano and, and in most of the markets, so I don't think that would be an issue and, um, if you're a private owner, operator, you in fact can borrow close to 85 90% on this. So I think these projects are viable and that's why we are seeing a lot of LTC being built, which is great because we need to build close to 60,000 beds as a sector. Uh, so it is great to see that and so there is a, there has never been more bets being built.

Nitin Jain: If, you know, hopefully there'll be opportunities on the other side of it, which we are confident that there would be.

At this time. And uh, we also look at that as a potential opportunity 3, 4 years down the road because, uh, you know, we we are actively looking to grow, uh, our LTC, uh, including it Ontario. So if you know, hopefully, there'll be opportunities on the other side of it, which we are confident that they would be.

Giuliano Thornhill: Okay. Great. I just wanted to clarify on the earlier comment about the Alberta funding increase from 1.25 to 7.25. Does that entirely relate to other accommodation funding, or will that just be kinda revenue and then flow down into NOI?

David Hung: No. That would be completely accommodation funding.

Giuliano Thornhill: Okay. Thank you.

Okay, great. And I just wanted to clarify on the earlier comment about the Alberta funding increase. From 1.25 to 7.25. Does that entirely relate to other accommodation funding? Or will that just be kind of Revenue and then flow down into noi uh know that that would be uh completely accommodation funding.

Okay, thank you.

Operator: Once again, to ask a question, press star one on your telephone keypad.

once again to ask a question, press star 1 on your telephone keypad,

Nitin Jain: I think, Tina, we are done. There are no more questions.

I think, Tina, we have done the normal questions.

Operator: With no further questions in queue, thank you for joining today's call. You may now disconnect.

With no further questions in queue. Thank you for joining today's call. You may now disconnect