Q2 2026 Slate Grocery REIT Earnings Call
Operator: Good morning, ladies and gentlemen, welcome to the Slate Grocery REIT's Q2 2026 Financial Results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Friday, August 7, 2026. I would now like to turn the conference over to [Sena Guchhral]. Thank you. Please go ahead.
Operator: Good morning, ladies and gentlemen, welcome to the Slate Grocery REIT's Q2 2026 financial results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Friday, August 7, 2026. I would now like to turn the conference over to Sena Guchhral. Thank you. Please go ahead.
Speaker #1: Good morning, ladies and gentlemen, and welcome to the Slate Grocery REIT's second quarter 2026 financial results conference call. At this time, all lines are in listen-only mode.
Speaker #1: Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator.
Speaker #1: This call is being recorded on Friday, August 7, 2026, and I would now like to turn the conference over to Senna Gusral. Thank you.
Speaker #1: Please go ahead.
Speaker #2: Thank you, operator, and good morning, everyone. Welcome to the Q2 2026 conference call for Slate Grocery REIT. I am joined this morning by Blaire Welch, Chief Executive Officer; Joe Plakidis, Chief Financial Officer; and Alan Gordon, Senior Vice President.
Sena Guchhral: Thank you, operator, good morning, everyone. Welcome to the Q2 2026 conference call for Slate Grocery REIT. I am joined this morning by Blair Welch, Chief Executive Officer, Joe Pleckaitis, Chief Financial Officer, and Allen Gordon, Senior Vice President. Before getting started, I would like to remind participants that our discussion today may contain forward-looking statements. Therefore, we ask you to review the disclaimers regarding forward-looking statements as well as non-IFRS measures, both of which can be found in Management Discussion and Analysis. You can visit Slate Grocery REIT's website to access all of the REIT's financial disclosure, including our Q2 2026 investor update, which is available now. I will now hand over the call to Blair Welch for opening remarks.
[Company Representative] (Slate Grocery REIT): Thank you, operator, good morning, everyone. Welcome to the Q2 2026 Conference Call for Slate Grocery REIT. I am joined this morning by Blair Welch, Chief Executive Officer, Joe Pleckaitis, Chief Financial Officer, and Allen Gordon, Senior Vice President. Before getting started, I would like to remind participants that our discussion today may contain forward-looking statements. Therefore, we ask you to review the disclaimers regarding forward-looking statements as well as non-IFRS measures, both of which can be found in Management Discussion and Analysis. You can visit Slate Grocery REIT's website to access all of the REIT's financial disclosure, including our Q2 2026 investor update, which is available now. I will now hand over the call to Blair Welch for opening remarks.
Speaker #2: Before getting started, I would like to remind participants that our discussion today may contain forward-looking statements and therefore we ask you to review the disclaimers regarding forward-looking statements as well as non-IFRS measures both of which can be found in management discussion and analysis.
Speaker #2: You can visit slategroceryreit's website to access all of the REIT's financial disclosure including our Q2 2026 investor update, which is available now. I will now hand over the call to Blaire Welch for opening remarks.
Speaker #3: Thank you, Senna, and hello everyone. We are pleased to report Slate Grocery REIT's second quarter financial and operating results. The REIT completed over 569,000 square feet of total leasing throughout the quarter.
Blair Welch: Thank you, Sena, hello, everyone. We are pleased to report Slate Grocery REIT's Q2 financial and operating results. The REIT completed over 569,000 square feet of total leasing throughout the quarter, achieving strong rent growth on new and renewed leases. Renewal spreads were completed at 16.7% above expiring rents. New deals were completed at 41% above comparable average in-place rent. Adjusting for completed redevelopments, same property net operating income increased by CAD 3.8 million or 2.3% on a trailing 12-month basis. Portfolio occupancy was 93.6%, and our portfolio's average in-place rent of $13.10 per square foot remains well below the market average. The REIT has a weighted average interest rate of 5%, with over 90% of its debt having fixed interest rate.
[Company Representative] (Slate Grocery REIT): Thank you, [Sena], hello, everyone. We are pleased to report Slate Grocery REIT's Q2 financial and operating results. The REIT completed over 569,000sq ft of total leasing throughout the quarter, achieving strong rent growth on new and renewed leases. Renewal spreads were completed at 16.7% above expiring rents. New deals were completed at 41% above comparable average in-place rent. Adjusting for completed redevelopments, same property net operating income increased by CAD 3.8 million or 2.3% on a trailing 12-month basis. Portfolio occupancy was 93.6%, and our portfolio's average in-place rent of $13.10 per square foot remains well below the market average. The REIT has a weighted average interest rate of 5%, with over 90% of its debt having fixed interest rate.
Speaker #3: Achieving strong rent growth on new and renewed leases. Renewal spreads were completed at 16.7% above expiring rents, and new deals were completed at 41% above comparable average in-place rent.
Speaker #3: Adjusted adjusting for completed redevelopments, same property net operating income increased by 3.8 million or 2.3% on a trailing 12-month basis. Portfolio occupancy was 93.6%, and our portfolios average in-place rent of $13.10 per square foot remains well below the market average.
Speaker #3: The REIT has a weighted average interest rate of 5% with over 90% of its debt having fixed interest rate. This provides a stable outlook for the REIT's near-term financing costs, and the REIT's weighted average capitalization rate remains well above the REIT's weighted average interest rate for outstanding debt, allowing the REIT to maintain positive leverage.
Blair Welch: This provides a stable outlook for the REIT's near-term financing costs. The REIT's weighted average capitalization rate remains well above the REIT's weighted average interest rate for outstanding debt, allowing the REIT to maintain positive leverage. We continue to believe in the resilience of grocery-anchored real estate. Fundamentals in the grocery sector remain favorable, with elevated construction costs and tight lending conditions continuing to limit new retail development and overall retail availability. This dynamic continues to give landlords meaningful pricing power, supporting tenant retention and driving continued rent increases as leases expire. On behalf of the Slate Grocery REIT team and the board, I'd like to thank the investor community for their continued confidence and support. I will now hand it over for questions.
Blair Welch: This provides a stable outlook for the REIT's near-term financing costs. The REIT's weighted average capitalization rate remains well above the REIT's weighted average interest rate for outstanding debt, allowing the REIT to maintain positive leverage. We continue to believe in the resilience of grocery-anchored real estate. Fundamentals in the grocery sector remain favorable, with elevated construction costs and tight lending conditions continuing to limit new retail development and overall retail availability. This dynamic continues to give landlords meaningful pricing power, supporting tenant retention and driving continued rent increases as leases expire. On behalf of the Slate Grocery REIT team and the board, I'd like to thank the investor community for their continued confidence and support. I will now hand it over for questions.
Speaker #3: We continue to believe in the resilience of grocery-anchored real estate. Fundamentals in the grocery sector remain favorable, with elevated construction costs and tight lending conditions continuing to limit new retail development and overall retail availability.
Speaker #3: This dynamic continues to give landlords meaningful pricing power, supporting tenant retention and driving continued rent increases as leases expire. On behalf of Slate Grocery REIT team and the board, I'd like to thank the investor community for their continued confidence and support.
Speaker #3: I will now hand it over for questions.
Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star followed by the one on your telephone keypad. You will hear a prompt that your hand has been raised. Should you wish to cancel your request, please press star followed by the two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Thank you. Your first question comes from the line of Sam Damiani from TD Cowen. Please go ahead.
Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star followed by the one on your telephone keypad. You will hear a prompt that your hand has been raised. Should you wish to cancel your request, please press star followed by the two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Thank you. Your first question comes from the line of Sam Damiani from TD Cowen. Please go ahead.
Speaker #1: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star, followed by the one on your telephone keypad.
Speaker #1: You will hear a prompt that Johanna has been raised, and should you wish to cancel your request, please press star, followed by the 2.
Speaker #1: If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question.
Speaker #3: There you go.
Speaker #1: Thank you. And your first question comes from the line of Sam Damiani from TD Cowen. Please go ahead.
Speaker #4: Thank you. Good morning, everyone.
Sam Damiani: Thank you. Good morning, everyone.
Sam Damiani: Thank you. Good morning, everyone.
Speaker #3: Morning.
Blair Welch: Morning.
Blair Welch: Morning.
Speaker #4: Yeah, morning. So I didn't see was there an update on the strategic review at this point? I think it's a it's been a couple months now.
Sam Damiani: Hey, morning. I didn't see, was there an update on the strategic review at this point? I think it's been a couple of months now.
Sam Damiani: Hey, morning. I didn't see, was there an update on the strategic review at this point? I think it's been a couple of months now.
Speaker #3: Yeah, there's no update at this time. And when there is, we will come out quickly, but the special committee is still continuing their process.
Blair Welch: Yeah, there's no update at this time. When there is, we will come out quickly. The special committee is still continuing their process.
Blair Welch: Yeah, there's no update at this time. When there is, we will come out quickly. The special committee is still continuing their process.
Speaker #4: Okay. And just to be clear, it looked like some costs were incurred, but added back to FFO. Was there any any net costs that actually flowed through to FFO this quarter related to the review?
Sam Damiani: Okay. Just to be clear, it looked like some costs were incurred but added back to FFO. Was there any net costs that actually flowed through to FFO this quarter related to the review?
Sam Damiani: Okay. Just to be clear, it looked like some costs were incurred but added back to FFO. Was there any net costs that actually flowed through to FFO this quarter related to the review?
Speaker #3: No, that that would have all been flushed out. So nothing nothing that went through FFO.
Joe Pleckaitis: No. That would've all been flushed out. Nothing that went through FFO.
Joe Pleckaitis: No. That would've all been flushed out. Nothing that went through FFO.
Speaker #4: Okay. Okay. Thanks. Thanks there. And just on the vacancy, I guess a couple of tenants vacated in in some some sort of smaller market properties.
Sam Damiani: Okay. Thanks. Just on the vacancy, I guess a couple of tenants vacated in some sort of smaller market properties. You can talk about who the prior tenants were and the prospects to backfill those two vacancies at this point?
Sam Damiani: Okay. Thanks. Just on the vacancy, I guess a couple of tenants vacated in some sort of smaller market properties. You can talk about who the prior tenants were and the prospects to backfill those two vacancies at this point?
Speaker #4: You can talk about who the the prior tenants were and the prospects to backfill those two two vacancies at this point.
Speaker #3: Yeah, this is Alan, Gordon. We had roughly 260,000 square foot of vacates this quarter. Most of those vacates we were aware of and have begin already leasing up.
Allen Gordon: Yeah, this is Allen Gordon. We had roughly 260,000 square foot of vacates this quarter. Most of those vacates we were aware of and have begun already leasing up. We have already leased four of the 10 of the largest vacates that we have. We already have prospects for several of those and letters of intent ongoing for some larger notable vacates as well.
Allen Gordon: Yeah, this is Allen Gordon. We had roughly 260,000 square foot of vacates this quarter. Most of those vacates we were aware of and have begun already leasing up. We have already leased four of the 10 of the largest vacates that we have. We already have prospects for several of those and letters of intent ongoing for some larger notable vacates as well.
Speaker #3: We have already leased four of the 10 of the largest vacates. That we have. And we already have prospects for several of those in letters of intent ongoing for some larger notable vacates as well.
Speaker #4: Okay. And just on dispositions, any any sort of continued focus on that? I didn't see any any new ones announced this quarter.
Sam Damiani: Okay. Just on dispositions, any sort of continued focus on that? I didn't see any new ones announced this quarter.
Sam Damiani: Okay. Just on dispositions, any sort of continued focus on that? I didn't see any new ones announced this quarter.
Speaker #3: Yeah, there's there's one property that's help for sale right now at the end of Q2, which is Heritage Heights. We're you know, looking to close that in the next couple weeks.
Joe Pleckaitis: There's one property that's held for sale right now at the end of Q2, which is Heritage Heights. We're looking to close that in the next couple of weeks, looking to report that in Q3. Just going through normal due diligence and looking to close that shortly.
Joe Pleckaitis: There's one property that's held for sale right now at the end of Q2, which is Heritage Heights. We're looking to close that in the next couple of weeks, looking to report that in Q3. Just going through normal due diligence and looking to close that shortly.
Speaker #3: So, looking to report that in Q3, but just going through normal due diligence and looking to close that shortly.
Speaker #4: Okay. That's it for me. Thank you. And I'll turn it back.
Sam Damiani: Okay. That's it for me. Thank you, and I'll turn it back.
Sam Damiani: Okay. That's it for me. Thank you, and I'll turn it back.
Speaker #3: Thanks, Sam.
Joe Pleckaitis: Thanks, Sam.
Joe Pleckaitis: Thanks, Sam.
Speaker #1: Thank you once again. Should you have a question, please press star, followed by the one on your telephone keypad. Once again, that is star and one to answer your question.
Operator: Thank you once again. Should you have a question, please press star followed by the one on your telephone keypad. Once again, that is star and one to ask a question. No further questions at this time. I will now hand the call back to Sana Butcha for any closing remarks.
Operator: Thank you once again. Should you have a question, please press star followed by the one on your telephone keypad. Once again, that is star and one to ask a question. No further questions at this time. I will now hand the call back to Sana Butcha for any closing remarks.
Speaker #1: No further questions at this time? I want to hand the call back to Senna Gushar for any closing remarks.
Speaker #2: Thank you, everyone, for joining the Q2 2026 conference call for Slate Grocery REIT. Have a great day.
[Company Representative] (Slate Grocery REIT): Thank you everyone for joining the Q2 2026 conference call for Slate Grocery REIT. Have a great day.
Sena Guchhral: Thank you everyone for joining the Q2 2026 conference call for Slate Grocery REIT. Have a great day.
Operator: This concludes today's call. Thank you for participating. You may all disconnect.
Operator: This concludes today's call. Thank you for participating. You may all disconnect.
