Q2 2026 PRO Real Estate Investment Trust Earnings Call

August 13, 2026

Speaker #1: Good morning, and welcome to PRO REIT's second quarter results conference call for fiscal 2026. At this time, all lines have been placed on mute to prevent background noise.

Operator: Good morning, and welcome to PROREIT's Q2 results conference call for fiscal 2026. At this time, all lines have been placed on mute to prevent background noise. Management will make a short presentation, which will be followed by a question and answer period open exclusively to financial analysts. To ask a question, simply press the star key, then the number 1 on your telephone keypad. If you would like to withdraw your question, please press the star key followed by the number 2. For your convenience, the results release, along with the Q2 financial statements and management's discussion and analyses are available at PROREIT.com, in the investors and on SEDAR+. Before we start, I have been asked by PROREIT to read the following message regarding forward-looking statements and non-IFRS measures.

Operator: Good morning, and welcome to PROREIT's Q2 results conference call for fiscal 2026. At this time, all lines have been placed on mute to prevent background noise. Management will make a short presentation, which will be followed by a question-and-answer period open exclusively to financial analysts. To ask a question, simply press the star key, then the number one on your telephone keypad. If you would like to withdraw your question, please press the star key followed by the number two. For your convenience, the results release, along with the Q2 financial statements and management's discussion and analyses are available at PROREIT.com, in the investors and on SEDAR+. Before we start, I have been asked by PROREIT to read the following message regarding forward-looking statements and non-IFRS measures.

Speaker #1: Management will make a short presentation, which will be followed by a question-and-answer period open exclusively to financial analysts. To ask a question, simply press the star key, then the number 1 on your telephone keypad.

Speaker #1: If you would like to withdraw your question, please press the star key followed by the number 2. For your convenience, the results release along with the second quarter financial statements and management's discussion and analyses are available at proreit.com/investors and on CedarPlus.

Speaker #1: Before we start, I have been asked by PRO REIT to read the following message regarding forward-looking statements and non-IFRS measures. PRO REIT's remarks today contain forward-looking statements about its current and future plans, expectations, intentions, results, levels of activity, performance, goals or achievements, or other future events or developments.

Operator: PROREIT's remarks today contain forward-looking statements about its current and future plans, expectations, intentions, results, levels of activity, performance, goals or achievements or other future events or developments. Forward-looking statements are based on information currently available to management and on estimates and assumptions made based on factors that management believes are appropriate and reasonable in the circumstances. However, there can be no assurance that such estimates and assumptions will prove to be correct. Many factors could cause actual results, levels of activity, performance, achievements, future events or development to differ materially from those expressed or implied by the forward-looking statements. As a result, PROREIT cannot guarantee that any forward-looking statement will materialize, and you are cautioned not to place undue reliance on these forward-looking statements.

Speaker #1: Forward-looking statements are based on information currently available to management and on estimates and assumptions made based on factors that management believes are appropriate and reasonable in the circumstances.

Speaker #1: However, there can be no assurance that such estimates and assumptions will prove to be correct. Many factors could cause actual results, levels of activity, performance, achievements, future events, or development to differ materially from those expressed or implied by the forward-looking states.

Speaker #1: As a result, PRO REIT cannot guarantee that any forward-looking statement will materialize, and you are cautioned not to place undue reliance on these forward-looking statements.

Operator: For additional information on the assumptions and risks, please consult the cautionary statement regarding forward-looking statements contained in PROREIT's MD&A dated 12 August 2026, available at www.SEDAR+.ca. Forward-looking statements represent management's expectations as at 12 August 2026, and except as may be required by law, PROREIT has no intention and undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. The discussion today will include non-IFRS financial measures. These non-IFRS measures should be considered in addition to, and not as a substitute for or in isolation from the IFRS results. For a description of these non-IFRS financial measures, please see the Q2 earnings release for fiscal 2026 and non-IFRS measures section in the MD&A for the Q2 of fiscal 2026 for additional information.

Speaker #1: assumptions and risks, please consult the cautionary statement regarding forward-looking statements contained in PRO REIT's MD&A dated August 12, 2026, available at www.cedarplus.ca. Forward-looking statements represent management's expectations as at August 12, 2026, and accept as may be required by For additional information on the and undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Speaker #1: The discussion today will include non-IFRS financial measures. These non-IFRS measures should be considered in addition to and not as a substitute for or in isolation from the REIT's IFRS results.

Speaker #1: For a description of these non-IFRS financial measures, please see the second quarter earnings release for fiscal 2026 and non-IFRS measures section in the MD&A for the second quarter of fiscal 2026 for additional information.

Speaker #1: I will now turn the call over to Mr. Gordon Lawler, President and Chief Executive Officer of PRO REIT.

Operator: I will now turn the call over to Mr. Gordon Lawlor, President and Chief Executive Officer of PROREIT.

Speaker #2: Thank you, Vanessa. Good morning, everyone. And welcome. Joining me today is Alison Schaefer, our CFO and Corporate Secretary. Also joining me for our Q&A session is Zachary Aaron, Vice President of Investments and Asset Management.

Gordon Lawlor: Thank you, Vanessa. Good morning, everyone, and welcome. Joining me today is Alison Schafer, our CFO and corporate secretary. Also joining us for our Q&A session is Zachary Aaron, Vice President of Investments and Asset Management. We are pleased with our Q2 performance and the positive momentum across the business. Let me start with our investment activity. The Q2 was particularly active for PROREIT. In June, we completed the acquisition of 17 industrial properties in Quebec City and Winnipeg for a combined purchase price of CAD 136.8 million. These acquisitions meaningfully expand our industrial platform in two markets with strong underlying fundamentals. In Quebec City, we established immediate scale with 13 industrial properties representing approximately 609,000 square feet of GLA, acquired for CAD 112.8 million. In Winnipeg, we further strengthened our position in one of Canada's tightest industrial markets, where we are now the second-largest industrial landlord.

Speaker #2: We're pleased with our second quarter performance and the positive momentum across the business. Let me start with our investment activity. The second quarter was particularly active for PRO REIT.

Speaker #2: In June, we completed the acquisition of 17 industrial properties in Quebec City and Winnipeg, for a combined purchase price of $136.8 million. These acquisitions meaningfully expand our industrial platform in two markets with strong underlying fundamentals.

Speaker #2: In Quebec City, we established immediate scale with 13 industrial properties representing approximately 609,000 square feet of GLA. Acquired for $112.8 million. In Winnipeg, we further strengthened our position in one of Canada's tightest industrial markets where we are now the second largest industrial landlord.

Speaker #2: We added four properties representing approximately 1509,000 square feet of GLA for 24 million dollars. Together, the two portfolios were funded through a combination of proceeds from our recent equity financing.

Gordon Lawlor: We added 4 properties representing approximately 159,000 square feet of GLA for CAD 24 million. Together, the 2 portfolios were funded through a combination of proceeds from our recent equity financing, which I will discuss in a few minutes, and CAD 89.4 million of new mortgage financing. During the quarter, we also completed the previously announced acquisition of a newly built, fully leased industrial property in Moncton, New Brunswick, for CAD 12.3 million. Built in 2024, the single-tenant property comprises approximately 60,000 square feet of GLA. Our investment activity continued following quarter end. We acquired 4 additional industrial properties in Winnipeg, totaling approximately 165,000 square feet of GLA for CAD 21.7 million. At the same time, we continued to optimize the portfolio with the sale of a retail property in Bathurst, New Brunswick, for gross proceeds of CAD 1.4 million.

Gordon Lawlor: We added four properties representing approximately 159,000 square feet of GLA for CAD 24 million. Together, the two portfolios were funded through a combination of proceeds from our recent equity financing, which I will discuss in a few minutes, and CAD 89.4 million of new mortgage financing. During the quarter, we also completed the previously announced acquisition of a newly built, fully leased industrial property in Moncton, New Brunswick, for CAD 12.3 million. Built in 2024, the single-tenant property comprises approximately 60,000 square feet of GLA. Our investment activity continued following quarter end. We acquired four additional industrial properties in Winnipeg, totaling approximately 165,000 square feet of GLA for CAD 21.7 million. At the same time, we continued to optimize the portfolio with the sale of a retail property in Bathurst, New Brunswick, for gross proceeds of CAD 1.4 million.

Speaker #2: Which I will discuss in a few minutes. And 89.4 million dollars of new mortgage financing. During the quarter, we also completed the previously announced acquisition of a newly built fully leased industrial property in Moncton, New Brunswick, for 12.3 million dollars.

Speaker #2: Built in 2024, a single-tenant property comprises approximately 60,000 square feet of GLA. Our investment activity continued following quarter-end. We acquired four additional industrial properties in Winnipeg, totaling approximately 165,000 square feet of GLA.

Speaker #2: For 21.7 million dollars. At the same time, we continued to optimize the portfolio with the sale of a retail property in Bathurst, New Brunswick, for gross proceeds of 1.4 million dollars.

Speaker #2: Altogether, year to date, we've acquired 22 high-quality industrial properties for 170.8 million, bringing our portfolio to 126 income-producing properties representing approximately 7.4 million square feet of GLA.

Gordon Lawlor: Altogether year to date, we have acquired 22 high-quality industrial properties for CAD 170.8 million, bringing our portfolio to 126 income-producing properties, representing approximately 7.4 million square feet of GLA. We also completed CAD 107.3 million of equity financing during the quarter, including an CAD 83.3 million bought deal offering and a CAD 24 million private placement. The private placement included participation from our strategic partners, Collingwood Investments and Parkit Enterprise. The financing strengthened our liquidity and financial flexibility and supported the execution of our growth plan. Let me now turn to our operating performance in Q2. Revenue, NOI, and FFO all increased year-over-year, while same-property NOI continued to grow despite the impact of 2 previously disclosed vacancies. These results reflect the contractual rent growth, strong renewal activity, and the continued mark-to-market opportunity embedded in our portfolio. Our core geographic markets continue to present strong fundamentals.

Speaker #2: We also completed 107.3 million of equity financing during the quarter. Including an 83.3 million bought deal offering and a 24 million dollar private placement.

Speaker #2: The private placement included participation from our strategic partners Collingwood Investments and Parkhead Enterprise. The financing strengthened our liquidity and financial flexibility and supported the execution of our growth plan.

Speaker #2: Let me now turn to our operating performance in the second quarter. Revenue NOI and FFO all increased year over year, while same property NOI continued to grow despite the impact of two previously disclosed vacancies.

Speaker #2: These results reflect the contractual rent growth, strong renewal activity, and the continued mark-to-market opportunity embedded in our portfolio. Our core geographic markets continue to present strong fundamentals.

Speaker #2: Nova Scotia, one of our key markets, is well-positioned to benefit from the anticipated boom of federal defense spending investment over the coming years. In Halifax, Amazon's REIT recently announced operation hub is under construction in our Birdside Industrial Park, where we are one of the largest landlords.

Gordon Lawlor: Nova Scotia, one of our key markets, is well-positioned to benefit from the anticipated boom of federal defense spending investment over the coming years. In Halifax, Amazon's recently announced operation hub is under construction in our Burnside Industrial Park, where we are one of the largest landlords. Together with increased defense and infrastructure investment, we believe these developments provide additional long-term demand drivers for this key industrial market.

Speaker #2: Together with increased defense and infrastructure investment, we believe these developments provide additional long-term demand drivers for this key industrial market. Turning to leasing activity, momentum remains strong during the quarter.

Gordon Lawlor: Turning to leasing activity, momentum remained strong during the quarter. As of today, we have renewed approximately 83% of our 2026 lease maturities at positive average spreads of 36.8%. Within our industrial portfolio, 80.4% of the 2026 maturities have been renewed at an average positive spread of 40.6%. Several completed lease renewals will begin contributing incremental cash flow during the H2. More than 400,000 square feet will begin generating higher rental rates in September, with the full quarter impact reflected in Q4. Notably, 5 lease renewals commencing in 2026, including rental increases ranging from approximately 40% to 45%. Overall portfolio occupancy was 95% at quarter end, compared to 97.8% a year earlier. As noted on previous calls, the change was primarily driven by the impact of 2 vacancies. The first one is our 176,000 square foot industrial property in Saint-Hyacinthe, Quebec, which became vacant in 2025. As previously announced, we signed a 15-year lease for approximately 74,000 square feet, representing 42% of the property that will be cash flowing 1 July 2026. The new base rent of that space represents an increase of more than 122% compared to the previous tenant's rent for the same GLA.

Speaker #2: As of today, we have renewed approximately 83% of our 2026 lease maturities at positive average spreads of 36.8%. Within our industrial portfolio, 80.4% of the 2026 maturities have been renewed at an average positive spread of 40.6%.

Speaker #2: Several completed release renewals will begin contributing incremental cash flow during the second half of the year. More than 400,000 square feet will begin generating higher rental rates in September, with the full quarter impact reflected in Q4.

Gordon Lawlor: More than 400,000 square feet will begin generating higher rental rates in September, with the full quarter impact reflected in Q4. Notably, five lease renewals commencing in 2026, including rental increases ranging from approximately 40% to 45%. Overall portfolio occupancy was 95% at quarter end, compared to 97.8% a year earlier. As noted on previous calls, the change was primarily driven by the impact of two vacancies. The first one is our 176,000 square foot industrial property in Saint-Hyacinthe, Quebec, which became vacant in 2025. As previously announced, we signed a 15-year lease for approximately 74,000 square feet, representing 42% of the property that will be cash flowing 1 July 2026. The new base rent of that space represents an increase of more than 122% compared to the previous tenant's rent for the same GLA.

Speaker #2: Notably, five lease renewals commencing in 2026, including rental increases, ranging from approximately 40 to 45 percent. Overall portfolio occupancy was 95 percent at quarter-end, compared to 97.8 a year earlier.

Speaker #2: As noted on previous calls, the change was primarily driven by the impact of two vacancies. The first one is our 176,000-square-foot industrial property in San Diego Centre, Quebec.

Gordon Lawlor: The first one is our 176,000 square foot industrial property in Saint-Hyacinthe, Quebec, which became vacant in 2025. As previously announced, we signed a 15-year lease for approximately 74,000 square feet, representing 42% of the property that will be cash flowing 1 July 2026. The new base rent of that space represents an increase of more than 122% compared to the previous tenant's rent for the same GLA.

Speaker #2: Which became vacant in 2025. As previously announced, we signed a 15-year lease for approximately 74,000 square feet, representing a 42 percent of the property that will be cash flowing July 1, 2026.

Speaker #2: The new base rent of that space represents an increase of more than 122% compared to the previous tenant's rent for the same GLA.

Speaker #2: With rent commencement on July 1, the new lease will contribute incremental cash flow beginning in the third quarter. The second vacancy relates to approximately 81,000 square feet in Woodstock, Ontario, which became vacant April of this year.

Gordon Lawlor: With rent commencement on 1 July, the new lease will contribute incremental cash flow beginning in Q3. The second vacancy relates to approximately 81,000 square feet in Woodstock, Ontario, which became vacant April of this year. These are high-quality properties, and we continue to actively market the available space. Excluding these two property vacancies, portfolio occupancy would have been approximately 97.4% at quarter end. Alison Schafer, over to you.

Speaker #2: These are high-quality properties, and we continue to actively market the available space. Excluding these two property vacancies, portfolio occupancy would have been approximately 97.4 percent at quarter-end.

Speaker #2: Allison, over to you.

Speaker #1: Thank you, Gordy, and good morning, everyone. We are pleased with our second quarter performance. Property revenue totaled $27 million, up $7.7 million, or 7.7 percent, year over year.

Alison Schafer: Thank you, Gordy, and good morning, everyone. We are pleased with our Q2 performance. Property revenue totaled CAD 27 million, up 7.7% year over year. The increase was mainly driven by contractual increases in rent and higher rental rates on lease renewals and new leases, and contributions from four additional properties compared to the prior year. NOI was CAD 16.5 million, an increase of 6.5% year over year, driven largely by these same factors. Same-property NOI, representing 97 of our 122 properties at 30 June, was CAD 14.3 million, up 3.3% year over year. Industrial same-property NOI increased 2.9%. The increase reflects contractual rent escalations, stronger renewal rates, and higher rents on new leases. This was achieved despite a decline in overall average occupancy related to the two vacancies Gordy mentioned earlier.

Speaker #1: The increase was mainly driven by contractual increases in rent and higher rental rates on lease renewals and new leases, and contributions from four additional properties compared to the prior year.

Speaker #1: NOI was $16.5 million, an increase of 6.5 percent year over year, driven largely by the same factors. Same property NOI, representing 97 of our 122 properties at June 30, was $14.3 million, up 3.3 percent year over year.

Alison Schafer: NOI was CAD 16.5 million, an increase of 6.5% year over year, driven largely by these same factors. Same-property NOI, representing 97 of our 122 properties at 30 June, was CAD 14.3 million, up 3.3% year over year. Industrial same-property NOI increased 2.9%. The increase reflects contractual rent escalations, stronger renewal rates, and higher rents on new leases. This was achieved despite a decline in overall average occupancy related to the two vacancies Gordy mentioned earlier.

Speaker #1: Industrial same property NOI increased 2.9 percent. The increase reflects contractual rent escalations, stronger renewal rates, and higher rent higher rents on new leases. This was achieved despite a decline despite a decline in overall average occupancy, related to the two vacancies Gordy mentioned earlier.

Speaker #1: FFO totaled 8.5 million, for the quarter. An increase of 6.1 percent year over year, primarily reflecting higher contractual rents and stronger renewal and new lease rates, partially offset by increased interest and financing costs.

Alison Schafer: FFO totaled CAD 8.5 million for the quarter, an increase of 6.1% year over year, primarily reflecting higher contractual rents and stronger renewal and new lease rates, partially offset by increased interest and financing costs. On a per unit basis, basic FFO was approximately CAD 0.12 compared with CAD 0.13 a year ago, reflecting the higher weighted average unit count following the equity financing and the timing of capital deployment. The basic AFFO payout ratio was 98.9% in Q2, compared with 89.8% in the same quarter last year. The increase primarily reflects the timing differences between the June equity financing and the deployment of those proceeds into acquisitions, as well as higher interest and financing costs. As we deploy the proceeds from the equity financing and benefit from the contribution of our recent acquisitions and completed lease renewals, we expect these factors to support our financial performance going forward.

Speaker #1: On a per-unit basis, basic FFO was approximately 12 cents, compared with 13 cents a year ago. Reflecting the higher weighted average unit count following the equity financing and the timing of capital deployment.

Speaker #1: The basic AFFO payout ratio was 98.9 percent in Q2, compared with 89.8 percent in the same quarter last year. The increased primarily reflects the timing differences between the June equity financing and the deployment of those proceeds into acquisitions, as well as higher interest and financing costs.

Alison Schafer: The basic AFFO payout ratio was 98.9% in Q2, compared with 89.8% in the same quarter last year. The increase primarily reflects the timing differences between the June equity financing and the deployment of those proceeds into acquisitions, as well as higher interest and financing costs. As we deploy the proceeds from the equity financing and benefit from the contribution of our recent acquisitions and completed lease renewals, we expect these factors to support our financial performance going forward.

Speaker #1: As we deploy the proceeds from the equity financing and benefit from the contribution of our recent acquisitions, and completed lease renewals, we expect these factors to support our financial performance going forward.

Speaker #1: Net cash flows provided from operating activities were 10.6 million in the quarter, up 54.3 percent, mainly impacted by the timing of cash receipts and the settlement of payables.

Alison Schafer: Net cash flows provided from operating activities were CAD 10.6 million in the quarter, up 54.3%, mainly impacted by the timing of cash receipts and the settlement of payables. The weighted average capitalization rate for our portfolio remained stable year over year at approximately 6.7% at 30 June 2026. Turning to the balance sheet, we remain focused on maintaining financial flexibility while reducing leverage over time. Total debt to total assets was 47.4% at 30 June, down from 50.6% a year earlier. Adjusted debt to gross book value was also 47.4%, compared with 50.7% a year earlier. Adjusted debt to annualized adjusted EBITDA was 10.0 times at 30 June, compared with the 9.8 times a year earlier, reflecting the timing of the deployment of proceeds from the equity financing. We remain focused on maintaining financial flexibility and reducing leverage over time.

Speaker #1: The weighted average capitalization rate for our portfolio remains stable year over year at approximately 6.7 percent at June 30, 2026. Turning to the balance sheet, we remain focused on maintaining financial flexibility while reducing leverage over time.

Speaker #1: Total debt to total assets was 47.4% at June 30, down from 50.6% a year earlier. Adjusted debt to gross book value was also 47.4%, compared with 50.7% a year earlier.

Alison Schafer: Total debt to total assets was 47.4% at 30 June, down from 50.6% a year earlier. Adjusted debt to gross book value was also 47.4%, compared with 50.7% a year earlier. Adjusted debt to annualized adjusted EBITDA was 10.0 times at 30 June, compared with the 9.8 times a year earlier, reflecting the timing of the deployment of proceeds from the equity financing. We remain focused on maintaining financial flexibility and reducing leverage over time.

Speaker #1: Adjusted debt-to-annualized adjusted EBITDA was 10.0 times at June 30, compared with the 9.8 times a year earlier, reflecting the timing of the deployment of proceeds from the equity financing.

Speaker #1: We remain focused on maintaining financial flexibility and reducing leverage over time. At quarter-end, our total debt, including current and non-current portions, totaled 609.2 million, compared to 562.4 million at the same date last year.

Alison Schafer: At quarter end, our total debt, including current and non-current portions, totaled CAD 609.2 million, compared to CAD 562.4 million at the same date last year. At 30 June, we had CAD 71.7 million of remaining mortgage maturities in 2026. As of today, all of those maturities have either been refinanced or are subject to renewal commitments. Subsequent to quarter end, approximately CAD 32.9 million of maturing debt was refinanced with CAD 40.4 million of new mortgages, while approximately CAD 38.8 million was committed for one-year renewal. Looking beyond 2026, we have CAD 55 million of mortgage maturities in 2027 and CAD 66.8 million in 2028. The weighted average interest rate on those maturities are 4.8% and 3.5% respectively. Finally, our distributions of 3.75 cents per unit was maintained for the Q2 2026. That wraps up our financial review. Gordie, back to you for closing remarks.

Speaker #1: At June 30, we had 71.7 million of remaining mortgage maturities in 2026. As of today, all of those maturities have either been refinanced or are subject to renewal commitments.

Speaker #1: Subsequent to quarter-end, approximately 32.9 million of maturing debt was refinanced with 40.4 million of new mortgages, while approximately 38.8 million was committed for one-year renewal.

Speaker #1: Looking beyond 2026, we have 55 million of mortgages mortgage maturities in 2027, and 66.8 million in 2028. The weighted average interest rate on those maturities are 4.8 percent and 3.5 percent, respectively.

Speaker #1: Finally, our distributions of 3.75 cents per unit was maintained for the second quarter of 2026. That wraps up our financial review. Gordy, back to you for closing remarks.

Speaker #2: Thank you, Allison. We're pleased with the progress we made during the quarter. And enter the second half of 2026 with a larger industrial portfolio, meaningful leasing momentum, and increased financial flexibility.

Gordon Lawlor: Thank you, Alison Schafer. We are pleased with the progress we made during the quarter and enter the H2 2026 with a larger industrial portfolio, meaningful leasing momentum, and increased financial flexibility. Our recent acquisitions have strengthened our presence in key Canadian markets, where our leasing results continue to demonstrate the embedded growth potential within our existing portfolio. Looking ahead, our priorities remain clear: driving growth, integrating our lease and acquisition, maintaining a disciplined approach to capital allocation, and continuing to strengthen our balance sheet. We believe we are well positioned to build on this momentum and to continue to create long-term value for our unitholders. Thank you for joining us today. Vanessa, we are now ready to take questions.

Speaker #2: Our recent acquisitions have strengthened our presence in key Canadian markets, where our leasing results continue to demonstrate the embedded growth potential within our existing portfolio.

Speaker #2: Looking ahead, our priorities remain clear: driving growth, integrating our recent acquisitions, maintaining a disciplined approach to capital allocation, and continuing to strengthen our balance sheet.

Speaker #2: We are we believe we are a well-positioned to build on this momentum and continue to create long-term value for our unicolders. Thank you for joining us today.

Speaker #2: Vanessa, we're now ready to take questions.

Speaker #3: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the 1 on your touchtone phone.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. We have our first question from Sami Damiani with TD Cowen.

Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. We have our first question from Sami Damiani with TD Cowen.

Speaker #3: You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the 2.

Speaker #3: If you're using a speakerphone, please lift the handset before pressing any keys. We have our first question from Sam Damani with TD Collin.

Speaker #4: Well, thank you, and good morning, everyone.

Sami Damiani: Thank you, and good morning, everyone.

Speaker #2: Good morning, too.

Speaker #4: So, yeah, good morning. Just first question for me, just, you know, the headlines on the sort of defense spending have seemed to continue building in recent months.

Gordon Lawlor: Good morning.

Gordon Lawlor: Yeah, good morning. Just first question from me. Just the headlines on the sort of defense spending have seemed to continue building in recent months. I am just wondering if there is anything you are seeing in any of your leasing markets that materialize as a result of that government spending?

Sami Damiani: Yeah, good morning. Just first question from me. Just the headlines on the sort of defense spending have seemed to continue building in recent months. I am just wondering if there is anything you are seeing in any of your leasing markets that materialize as a result of that government spending?

Speaker #4: I'm just wondering if there's anything you're seeing in your in any of your leasing markets that materialize as a result of that government spending.

Speaker #2: Yeah, I'll let Zach jump in on that. He's on daily calls in Halifax and whatnot, so he can probably describe that to you a bit better.

Gordon Lawlor: Yeah, I will let Zach jump in on that. He is on daily calls in Halifax and whatnot, so he can describe that to you a bit better.

Speaker #5: Yeah, sure. Zach here. Hi, Sam. Yeah, we're there is definitely a lot of buzz related to the defense spending and what that might mean, especially for a market like Halifax and Atlantic Canada in general.

Zachary Aaron: Yeah, sure. Zach here. Hi, Sam. There is definitely a lot of buzz related to the defense spending and what that might mean, especially for a market like Halifax and Atlantic Canada in general. In our portfolio specifically, we have not seen anything just exactly direct yet on that front, but we are starting to see some rumblings about that. I think just in the last quarter or two, between some of the leasing in Bayers Lake and some other chunkier spaces in and around Halifax and Burnside, that we believe some of that has been tied to defense spending and related contracts to those kind of projects. So we are starting to see that heat up here significantly. I think you are seeing it in the office side as well. I know Lockheed Martin Canada had a recent kind of larger announcement with more jobs to come here in Halifax.

Speaker #5: In our portfolio specifically, we haven't seen anything just exactly direct yet on that front, but we are starting to see some rumblings about that.

Speaker #5: And I think just in the last, you know, quarter or two, between some of the leasing and Bayers Lake and some other chunkier spaces, in and around Halifax and Burnside, that we believe some of that has been tied to defense spending and, you know, related contracts.

Speaker #5: To the to those kind of projects. So we are starting to see that heat up here significantly. I think you're seeing it in the office side as well.

Speaker #5: I know Lockheed had a recent kind of larger announcement with, you know, more jobs to come here in Halifax. So it's definitely real and palpable here.

Zachary Aaron: So it's definitely real and palpable here, and I think we'll start to see more effects of that as some of these contracts get awarded out and more progress is made on that front.

Speaker #5: And I think we'll start to see more effects of that as, you know, some of these contracts get awarded out, and more progress is made on that front.

Speaker #4: Oh, thanks, Zach. That's that's interesting and helpful. I guess over to the acquisitions, which, you know, just recently closed. Any anything surprising that you've seen since since closing?

Sami Damiani: Thanks, Zach. That's interesting and helpful. I guess over to the acquisitions, which just recently closed. Anything surprising that you've seen since closing?

Speaker #2: Oh, it's Gordy. So no, no, I mean, as expected, to date, the Winnipeg Aid assets, you know, former Artis assets that were very close to our portfolio, you know, no major leasing to be done in the next couple of years there.

Gordon Lawlor: It's Gordie. So, no. As expected to date, the Winnipeg eight assets, former Artis assets that were very close to our portfolio. No major leasing to be done in the next couple of years there. Kind of picked up the keys in a day, and just part of the portfolio, so nothing there. Quebec City, no negative surprises. At this point in time, we're processing setting up our property management office in Quebec City. Zach's heavily involved with the leasing there and the rent roll that we assumed in those transactions. Zach can jump in because he's talked to the leasing there specifically, but I think there's a little bit of a buzz in Quebec City as well, just compared to even six months ago. So I'll let maybe Zach can highlight it.

Speaker #2: Kind of picked up the keys and in a day. And it's just part of the portfolio, so nothing there. Quebec City, no negative surprises.

Speaker #2: At this point in time, you know, we're setting up our process of setting up our our property management office in Quebec City. Zach's heavily involved with the with the leasing there.

Speaker #2: And, you know, the rental that we assumed in those transactions—that can jump in, because he's talked to the leasing there specifically.

Speaker #2: But I think there is a little bit of a buzz in Quebec City as well. Just to compare to even six months ago. So I'll let maybe Zach can highlight a little bit.

Speaker #5: Yeah, not not too much to add. I mean, Winnipeg, I would say, status quo to what we expected and what we kind of already know about Winnipeg.

Zachary Aaron: Yeah. Not too much to add. Winnipeg, I would say status quo to what we expected and what we kind of already know about Winnipeg. Quebec City, obviously a bit more of a learning experience there. We're working closely with the CBRE team locally in Quebec City, who knows that market super well. And just little tidbits of just in terms of working with some tenants on renewals already this year and for next year, some activity on some vacancy and things like that. It seems to be performing the way we kind of underwrote and are expecting. So I think Quebec City will be kind of a great complement to our existing platform, and I think we'll do well there.

Speaker #5: Quebec City, obviously, a bit more of a of a learning experience there. We're working closely with the CBRE team locally in Quebec City, who knows that market super well.

Speaker #5: And, I mean, just already, you know, just little tidbits of, you know, just in terms of working with some tenants on renewals already. This year, and for next year, some activity on some vacancy and things like that.

Speaker #5: Like, it seems to be performing the way we're kind of we kind of underwrote and are expecting. So I think Quebec City will be kind of a great complement to our our existing platform.

Speaker #5: And I think we'll do well there.

Speaker #4: Okay, great. Thank you. And last one for me—just, you know, you've got the two sort of chunkier vacant spaces in the portfolio. Do you see any other known or expected move-outs in the near term of any consequence in terms of size as well?

Sami Damiani: Okay, great. Thank you. Last one from me. You've got the two sort of chunkier vacant spaces in the portfolio. Do you see any other known or expected move-outs in the near term of any consequence in terms of size as well?

Speaker #2: It's Gordy. So nothing in 2026. We haven't we haven't we've told you about anything material for 2026. I mean, we're starting to knock on the doors in 2027.

Gordon Lawlor: It's Gordie. Nothing in 2026. We've told you about anything material for 2026. We're starting to knock on the doors in 2027. Nothing formal there yet for positives or negatives, really. Just rolling through the business.

Speaker #2: Nothing nothing formal there yet for positives or negatives, really. So just rolling through the business.

Speaker #4: Great. Thank you. I'll turn it back.

Sami Damiani: Great. Thank you. I'll turn it back.

Speaker #2: Thanks.

Gordon Lawlor: Thanks.

Speaker #3: We have our next question from Brad Sturgis with Raymond James.

Operator: We have our next question from Brad Sturges with Raymond James.

Speaker #6: Hey, good morning.

Brad Sturges: Hey, good morning.

Speaker #2: Good morning.

Gordon Lawlor: Morning.

Speaker #6: Just following on Sam's last question there, just on just looking ahead to next year in terms of the '27 lease expiries. Do you have a sense or have a rough estimate of what the potential mark-to-market could be on rollover for next year?

Brad Sturges: Just following on Sam's last question there, just looking ahead to next year in terms of the 2027 lease expiries. Do you have a sense or have a rough estimate of what the potential mark-to-market could be on rollover for next year?

Speaker #2: Zach, I'll turn that over to you just about the some significant time on a five-year model we forecast. So I'm sure he can enlighten you a bit on that one.

Gordon Lawlor: Zach, I will turn that over to you. Just spent some significant time on a five-year model reforecast, so I am sure he can enlighten you a bit on that one.

Speaker #5: Yeah. Hi there. Yeah, I think we're I think we're in line to see more of the same. I think, you know, where we're still kind of achieving 35% spreads and up on a weighted average basis, I think we'll probably be just realistically maybe closer to kind of 25, 30 percent, but still still overall very healthy spreads as, you know, we still see a lot of rents coming out of, you know, Winnipeg, Ottawa, and Burnside that are still quite significantly below market.

Zachary Aaron: Yeah. Hi there. I think we are in line to see more of the same. I think, where we are still kind of achieving 35% spreads and up on a weighted average basis. I think we will probably be just realistically maybe closer to kind of 25% to 30%, but still overall very healthy spreads. As we still see a lot of rents coming out of Winnipeg, Ottawa, and Burnside that are still quite significantly below market. So still a healthy amount of runway looking into 2027.

Speaker #5: So still still a healthy amount of runway looking into 2027.

Speaker #6: Okay. And the two larger vacancies you're working on, just, I guess, just to understand a bit better, where do things stand today? And, you know, when you think about timing of releasing and rent expectations, have much changed as you've been progressing through some of your discussions?

Brad Sturges: Okay. The two larger vacancies you are working on, I guess just to understand a bit better, where do things stand today? When you think about timing of re-leasing and rent expectations, have much changed as you have been progressing through some of your discussions?

Speaker #5: Sure. I'll I'll I'll I'll jump in. So so we have the vacancy in Woodstock, Ontario, the 80,000 square feet. That's really class A space on the highway.

Zachary Aaron: Sure. I will jump in. We have the vacancy in Woodstock, Ontario, the 80,000 square feet. That is really class A space on the highway, effectively turnkey ready for a tenant to come in and operate pretty quickly there. We are coming off sub CAD 9 rent there. We are marketing the space at CAD 11.50 right now, which looking at kind of competing space in that area and other areas nearby, we think that is a very competitive rate and offers healthy upside to the space. Activity is definitely on the slower end when it comes to Southwest Ontario and closer to kind of that Windsor, London corridor, just as the automotive users are not in peak demand mode right now. But we have seen a few kicks as a can, but nothing noteworthy.

Speaker #5: Effectively turnkey ready for a tenant to come in and operate pretty quickly there. So, you know, we're coming off sub $9 rent there. We're marketing the space at 1,150 right now, which, you know, looking at kind of competing space in that area, in other areas nearby, we think that's a very competitive rate and offers healthy upside to the space.

Speaker #5: You know, activity is definitely on the slower end when it comes to southwest Ontario and, you know, closer to kind of that winter London corridor, just as, you know, the automotive users aren't in, you know, peak demand mode right now.

Speaker #5: But we've seen a few kicks as it can, but but nothing noteworthy. And then on our Picard building in St. Hyacinth, obviously, we did the 75,000 square foot deal.

Zachary Aaron: On our Picard building in Saint-Hyacinthe, obviously we did the 75,000 square foot deal we had talked about in Q1. We are seeing a decent amount of activity on the remaining 100,000 square feet. I would say most likely that 100,000 will get split up into two units somewhere along the lines of a 40 and a 60 or a 50 and a 50. We have some groups at the table now that we are talking to, getting a bit more serious, kind of in that 40,000, 50,000 range. We will see if that materializes to something real. But we are still seeing some good demand there. Okay. Just if you do split up that remaining space, what would be the CapEx spend potentially for that? It depends, is the soft answer. Obviously you would have to kind of build out a demising wall and improve some entrances.

Speaker #5: We had talked about in Q1. We're seeing a decent amount of activity on the remaining 100,000 square feet. I would say most likely that 100,000 will get split up into two units.

Speaker #5: Somewhere along the lines of a 40 and a 60 or a 50 and a 50. We're we have some we have some groups at the table now that we're talking to, getting a bit more serious kind of in that 40, 50,000 range.

Speaker #5: We'll see if that materializes into something real. But we are still seeing some good demand there.

Speaker #6: Okay. And just just if you do split up that remaining space, you know, what would be the capex spend potentially for that?

Brad Sturges: Okay. Just if you do split up that remaining space, what would be the CapEx spend potentially for that?

Zachary Aaron: It depends, is the soft answer. Obviously you would have to kind of build out a demising wall and improve some entrances.

Speaker #5: It depends is the soft answer. You know, obviously, you'd have to kind of build out a demising wall and improve some entrances. There are already some doors there and existing mechanicals that we could all feed off of.

Zachary Aaron: There are already some doors there and existing mechanicals that we could all feed off of, so that helps and saves a lot on cost. So it frankly just depends on what these users will need. If the need is basically just warehouse, it is kind of good to go as is, and then you just have to put in a demising wall. If there is a need for a bit more, then we will have to look into that at that time. But really, in terms of splitting it up today, it would just be improving some entrances that exist and then adding some demising walls and maybe a washroom or two. When you look at that, Brad, we are looking and hopeful for 10 year deals on these.

Speaker #5: So that helps and saves a lot on cost. So it it it frankly just depends on what these users will need. If the need is basically just warehouse, it's kind of good to go as is, and then you just have to put in a demising wall.

Speaker #5: If there's a need for a bit more, then we'll we'll have to look into that at that time. But really, in terms of splitting it up today, it would just be improving some entrances that exist and then adding some demising walls and maybe a washroom or two.

Speaker #2: And then when you when you look at that, Brad, I mean, we're looking and hopeful for 10-year deals on these. So when you you think about those costs relative to 10-year rates jumping from, you know, the historic $4 to $10, these would be significantly positive NERs in any respect, right?

Gordon Lawlor: When you look at that, Brad, we are looking and hopeful for 10 year deals on these.

Zachary Aaron: When you think about those costs relative to 10-year rates jumping from the historic CAD 4 to CAD 10, these would be significantly positive NERs in any respect, right? What type of contractual rent growth do you think you can get on a 10-year deal right now? Are you targeting like 3% plus? Yeah, 3%. That is what we achieved on our existing 1,000 square foot deal. It is 3% annual rent escalations. See no reason we would not be able to achieve the same on any future deals at the property. Okay, I appreciate it. I will turn it back.

Gordon Lawlor: When you think about those costs relative to 10-year rates jumping from the historic CAD 4 to CAD 10, these would be significantly positive NERs in any respect, right?

Speaker #6: So, what type of contractual rent growth do you think you can get on a 10-year deal right now? You're targeting, like, 3 percent plus?

Brad Sturges: What type of contractual rent growth do you think you can get on a 10-year deal right now? Are you targeting like 3% plus?

Speaker #5: Yeah, 3 percent. That's the you know, that's what we achieved on our on our existing housing surface deal. You know, it's 3 percent annual rent escalations.

Zachary Aaron: Yeah, 3%. That is what we achieved on our existing 1,000 square foot deal. It is 3% annual rent escalations. See no reason we would not be able to achieve the same on any future deals at the property.

Speaker #5: And see no reason we wouldn't be able to achieve the same on any future deals at the property.

Speaker #6: Okay. I appreciate it. I'll turn it back.

Brad Sturges: Okay, I appreciate it. I will turn it back.

Operator: We have our next question from Kyle Stanley with Desjardins.

Speaker #3: We have our next question from Kyle Stanley with Desjardins.

Speaker #7: Thanks. Good morning, everyone. Maybe just going back to Halifax and kind of talking about the strength there, what is your availability in Halifax today?

Kyle Stanley: Thanks. Morning, everyone.

Gordon Lawlor: Good morning.

Gordon Lawlor: Maybe just going back to Halifax and kind of talking about the strength there. What is your availability in Halifax today, and what is the lease maturity profile in that market? I am just trying to think about what the near term upside for PROREIT could be as you start to benefit from maybe some of those structural tailwinds we talked about kind of going forward.

Kyle Stanley: Maybe just going back to Halifax and kind of talking about the strength there. What is your availability in Halifax today, and what is the lease maturity profile in that market? I am just trying to think about what the near term upside for PROREIT could be as you start to benefit from maybe some of those structural tailwinds we talked about kind of going forward.

Speaker #7: And, you know, what is what's the least maturity profile in that market? I'm just trying to think about what the near-term upside for PRO could be.

Speaker #7: As you start to benefit from maybe some of those structural tailwinds we've talked about, kind of going forward.

Speaker #5: Sure. So, Zach here again. So, I mean, we have one chunkier vacancy in Burnside at the 50,000 square foot unit. So, again, 25,000 of that hits our books.

Zachary Aaron: Sure. Zac here again. We have one chunkier vacancy in Burnside. It is a 50,000 square foot unit. Again, 25,000 of that hits our books. I think that is a specific unit that will see some significant tailwinds from all the recent kind of defense spending demand. We have some good activity on that space right now where that was coming off of a single digit rent and will be comfortably into the double digit rents. Just a question of time there, and that will kind of add a nice bump once we get something there. In terms of the greater portfolio, I think we are trending around 95%, 94% occupancy, plus or minus. Some of that included is some second floor office, which is always a bit of a laggard. But on our typical 5,000 to 10,000 in industrial, we still see really good demand.

Speaker #5: I think that's a specific unit that we'll, you know, see some significant tailwinds from, with all the recent kind of defense spending demand. We have some good activity in that space right now, where that was coming off of a single-digit rent and we'll be comfortably into the double-digit rents.

Speaker #5: So just a question of time there, and that'll kind of add a nice bump once we get something there. In terms of the greater portfolio, I think we're trending around 94 to 95 percent occupancy, plus or minus.

Speaker #5: Some of that included is some second-floor office, which is always a bit of a laggard. But on the, you know, our typical, you know, 5 to 10,000 industrial, we still see really good demand.

Speaker #5: We see tenants renewing at, you know, rents in kind of that 14, 15 dollar range with, you know, minimal TIs, 3 percent steps. We're still seeing good demand that when tenants do churn, we're we're backfilling them with either existing tenants in the portfolio who want to expand or new tenants coming into the portfolio.

Zachary Aaron: We see tenants renewing at rents in kind of that CAD 14, CAD 15 range with minimal TIs, 3% steps. We are still seeing good demand that when tenants do churn, we are backfilling them with either existing tenants in the portfolio who want to expand or new tenants coming into the portfolio, again at really solid market rents. I do not know or have an exact WALT per se of the portfolio today, but I would suspect it is in that three to four year range, just given the nature of a small B portfolio, kind of typically doing three to five year lease deals.

Speaker #5: Again, at, you know, really solid market rents. I don't know or have the an exact, you know, Walt per se of the portfolio today, but I would suspect it's in that 3 to 4-year range, just given the nature of of a small big portfolio kind of typically doing 3 to 5-year lease deals.

Speaker #7: Okay. No, that's I think very very helpful. Maybe just kind of sticking with Halifax and, you know, you mentioned in your prepared remarks, obviously, Amazon coming to Burnside.

Kyle Stanley: Okay. No, that is I think very helpful. Maybe just kind of sticking with Halifax, and you mentioned in your prepared remarks, obviously Amazon coming to Burnside, vote of confidence for the park and the market generally. I am just wondering, do you have a sense of what the existing 3PL presence is in Halifax? Is there maybe a bit of a risk that some of the demand from those types of players steps back if Amazon is kind of running its own delivery? I am just trying to think about how to understand that.

Speaker #7: Voter confidence for the park and and the market generally. I'm just wondering, do you have a sense of, you know, what the the existing 3PL presence is in Halifax?

Speaker #7: Is there maybe a bit of a risk that that some of the demand from those types of players steps back if if Amazon is is kind of running its own delivery?

Speaker #7: Or I just try to think about how to understand that.

Speaker #2: Well, just as Halifax guy, the I see the Amazon trucks in in my driveway all through the weekend. So Amazon in Atlanta, Canada still delivers, you know, on the last mile piece from from them.

Zachary Aaron: Well, just as a Halifax guy, I see the Amazon trucks in my driveway all through the weekend. So Amazon in Atlantic Canada still delivers on the last mile piece from them. Clearly this is 1 million square feet, so there is going to be more inventories moving to that piece. On the Halifax side, I am only reading on LinkedIn. We do not have intimate knowledge, but two brand new 3PL users are coming in on the Halifax side in the 400,000 square feet in Bayers Lake. You have typical got all the regular folks, Midland there, Armour Transportation Systems, all the big players that I see their trucks driving between Halifax and Montreal.

Gordon Lawlor: Well, just as a Halifax guy, I see the Amazon trucks in my driveway all through the weekend. So Amazon in Atlantic Canada still delivers on the last mile piece from them. Clearly this is 1 million square feet, so there is going to be more inventories moving to that piece. On the Halifax side, I am only reading on LinkedIn. We do not have intimate knowledge, but two brand new 3PL users are coming in on the Halifax side in the 400,000 square feet in Bayers Lake. You have typical got all the regular folks, Midland there, Armour Transportation Systems, all the big players that I see their trucks driving between Halifax and Montreal.

Speaker #2: So clearly, this is a million square feet. So there's going to be more assets more assets, more more inventories moving to that piece. I mean, we in the Halifax side, you know, I'm only reading on LinkedIn, we don't have intimate knowledge, but two brand-new 3PL users are coming in on the Halifax side in the 400,000 square feet.

Speaker #2: And in Bears Lake, you know, you've typically got all the regular folks—Midland there, Armour Transport, all the big players. You know, I see the trucks driving between Halifax and Montreal weekly.

Gordon Lawlor: Weekly. I do not think it is going to be a negative to put that facility there. To the extent that they do not do all of their own 3PL, then there is probably more opportunities and perhaps some of this new stuff is tied to that. We just do not know. We knew of the land sale. We knew who was going to build the building. But the announcement kind of just broke this week on the size, which, unless I am corrected, is probably the largest building, probably industrial building in Atlantic Canada. I will ask ChatGPT about that later, but I think it is pretty close to being a pretty good size building.

Speaker #2: So I I don't think I don't think it's going to be a negative to to to to put that facility there, to the extent that they don't do all of their own 3PL, then there's probably more opportunities.

Speaker #2: And perhaps some of this new stuff is tied to that. We just we just don't know. We knew of the of the land sale we knew who was going to build the building.

Speaker #2: And then but the you know, the announcement kind of just broke this week on the on the sides, which unless I'm correct, it is probably the largest building in probably industrial building in Atlanta, Canada.

Speaker #2: So I'll ask ChatGPT about that later, but I think it's pretty close to being a pretty good-sized building.

Speaker #7: Okay. No, thank you for that. And then just the last one, more just thinking about the organic growth profile. Obviously, the temporary vacancy is maybe held that down a little bit this quarter, but, you know, you've dealt with a little bit of the space in Quebec and it sounds like there's some good upside in in Woodstock.

Kyle Stanley: Okay. No, thank you for that. Then just the last one, more just thinking about the organic growth profile. Obviously, the temporary vacancy has maybe held that down a little bit this quarter, but you have dealt with a little bit of the space in Quebec, and it sounds like there is some good upside in Woodstock. Do you see the REIT getting back to the high single digit, same property growth profile that we saw in Q1 or in Q4 of last year towards the end of the year? Is that really going to be kind of a 2027 story?

Speaker #7: You know, do you see the reed getting back to the, you know, high single-digit, same property growth profile that we saw in the first quarter or in the fourth quarter of last year towards the end of the year?

Speaker #7: Is that really going to be kind of a a 2027 story?

Speaker #2: Well, I think we'll see, you'll see incremental from the 3 percent in Q3 for sure, with this 74,000 coming on. And then Q4, I think, you know, you'll see the mid to high digits again.

Gordon Lawlor: Well, I think you will see incremental from the 3% in Q3 for sure with this 74,000 coming on. Then Q4, I think you will see the mid to high digits again. We had 3% same store rent growth in Q2 with 250,000 square feet vacant compared to the last year. So that really talks of the magnitude, and those empty spaces were CAD 4 rents that now are going to be CAD 10 or CAD 9 rents that is hopefully going to be CAD 11. So there is cranking to happen there. We just need to fill those spaces. Then we honestly forget about the natural flow through of these 2,000 to 5,000 square foot spaces that Zach approves these deals every second day with these bumps. Then so they roll in and roll through, and then it is only when you are looking back, you remember, oh, I did that deal 8 months ago.

Speaker #2: I mean, we had 3 percent rent grow same-store rent growth in in in Q2 with 250,000 square feet vacant compared to the the last year.

Speaker #2: So that really talks of the magnitude and those empty spaces were $4 rents that now are going to be 10 or $9 rents that's hopefully going to be 11.

Speaker #2: So there's cranking to happen there. We'll just need to fill those spaces, and, you know, then we honestly forget about the natural flow-through of these 2,000 to 5,000 square foot spaces that, you know, Zach approves these deals.

Gordon Lawlor: Then we honestly forget about the natural flow through of these 2,000 to 5,000 square foot spaces that Zach approves these deals every second day with these bumps. Then so they roll in and roll through, and then it is only when you are looking back, you remember, oh, I did that deal 8 months ago.

Speaker #2: Every second day with these bumps, and then so they roll in and roll through, and then you know, it's only when you're looking back you remember, "Oh, I did that deal eight months ago."

Gordon Lawlor: I forgot our rent's jumping by CAD 4 a square foot. We are definitely seeing that. We are looking for a much better Q3 and Q4, just with the 400,000 feet that I mentioned there with contracted rent jumps that Q4 will be very interesting quarter for us, hopefully.

Speaker #2: I forgot where I rents jumping by $4 a square foot." So so we're definitely seeing that. So we're looking for, you know, a much better Q3.

Speaker #2: And Q4, you know, just with the 400,000 feet that I mentioned there, with contractor rent jumps that, you know, Q4 will be very interesting quarter for us hopefully.

Speaker #7: Okay. Perfect. Thank you for that. I'll turn it back.

Kyle Stanley: Okay, perfect. Thank you for that. I will turn it back.

Speaker #1: As a reminder, if you wish to ask a question, please press star, then 1. Our next question is from Edward Zhang with RBC. Edward, perhaps you're muted.

Operator: As a reminder, if you wish to ask a question, please press star then 1. Our next question is from Edward Zhang with RBC. Edward, perhaps you are muted. I am not receiving a response from Edward. I will drop the line. We have no further questions. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Speaker #1: I'm not receiving a response from Edward. I will drop the line. We have no further questions. Ladies and gentlemen, this concludes today's conference call.

Speaker #1: Thank you for your participation. You may now disconnect.

Gordon Lawlor: Thanks very much.