Q4 2025 CT Real Estate Investment Trust Earnings Call

February 18, 2026

Speaker #1: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-answer session. If you would like to ask a question during that time, simply press star 11 on your telephone keypad.

Speaker #1: To withdraw your question, please press star 11. The speakers on the call today are Kevin Salsberg, President and Chief Executive Officer of CT REIT; Jodi Shpigel, Senior Vice President, Real Estate; and Lesley Gibson, Chief Financial Officer.

Operator: The speakers on the call today are Kevin Salsberg, President and Chief Executive Officer of CT REIT; Jodi Shpigel, Senior Vice President, Real Estate; and Lesley Gibson, Chief Financial Officer. Today's discussions may include forward-looking statements. Such statements are based on management's assumptions and beliefs. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements.

Speaker #1: Today's discussions may include forward-looking statements, such statements are based on management's assumptions and beliefs. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements.

Speaker #1: Please see CT REIT's public filings for a discussion of these risk factors which are included in their Q4, 2025 management's discussion and analysis and 2025 annual information form.

Operator: Please see CT REIT's public filings for a discussion of these risk factors, which are included in their Q4 2025 Management's Discussion and Analysis and 2025 Annual Information Form, which can be found on CT REIT's website and on SEDAR Plus. I will now turn the call over to Kevin Salsberg, President and Chief Executive Officer of CT REIT. Kevin?

Speaker #1: Which can be found on CT REIT's website and on Cedar Plus. I will now turn the call over to Kevin Salsberg, President and Chief Executive Officer of CT REIT.

Speaker #1: Kevin?

Kevin Salsberg: Thank you, Gigi, and good morning, everyone. We were very pleased to report that 2025 shaped up to be a great year for CT REIT. In the face of continued geopolitical uncertainty and macroeconomic disruption, CT REIT once again delivered on its value proposition to unitholders. CT REIT's goal is to provide its investors with strong returns, growing distributions, and stability. We manage our business with these hallmarks in mind, focusing on growth opportunities that leverage our strategic relationship with Canadian Tire, optimizing our existing asset base, and maintaining a balance sheet that provides us with a resilient foundation. In 2025, we successfully deployed approximately CAD 235 million and added nearly 900,000sq ft of new retail to our portfolio, with approximately 400,000sq ft of that being added in the fourth quarter alone.

Speaker #2: Thank you, Gigi. And good morning, everyone. We were very pleased to report that 2025 shaped up to be a great year for CT REIT.

Speaker #2: In the face of continued geopolitical uncertainty and macroeconomic disruption, CT REIT once again delivered on its value proposition to unit holders. CT REIT's goal is to provide its investors with strong returns, growing distributions, and stability.

Speaker #2: We manage our business with these hallmarks in mind, focusing on growth opportunities that leverage our strategic relationship with Canadian Tire, optimizing our existing asset base, and maintaining a balance sheet that provides us with a resilient foundation.

Speaker #2: In 2025, we successfully deployed approximately 235 million dollars and added nearly 900,000 square feet of new retail to our portfolio, with approximately 400,000 square feet of that being added in the fourth quarter alone.

Speaker #2: Although we were very pleased with the quantum and quality of the new space that we brought on this past year, as I discussed on our conference call last quarter, we were even happier with how we delivered these results.

Kevin Salsberg: Although we were very pleased with the quantum and quality of the new space that we brought on this past year, as I discussed on our conference call last quarter, we were even happier with how we delivered these results. Across 13 discrete investments, our team found new opportunities to acquire assets from third parties, to redevelop and improve existing CT REIT properties, and to build new locations, both for Canadian Tire and for other third-party tenants. As we look to the future, we will lean into these growth levers and the core competencies that we have built in order to continue to create value for our unitholders and to improve our portfolio. This portfolio growth, coupled with our foundation of contractual rent escalations and our successful lease renewals, contributed to our strong financial performance in 2025.

Speaker #2: Across 13 discrete investments, our team found new opportunities to acquire assets from third parties to redevelop and improve existing CT REIT properties, and to build new locations both for Canadian Tire and for other third-party tenants.

Speaker #2: As we look to the future, we will lean into these growth levers and the core competencies that we have built in order to continue to create value for our unit holders and to improve our portfolio.

Speaker #2: This portfolio growth, coupled with our foundation of contractual rent escalations and our successful lease renewals, contributed to our strong financial performance in 2025. As we have seen across our peer group, demand for retail space continues to outpace supply, and the fundamentals for retail real estate are currently very strong.

Kevin Salsberg: As we have seen across our peer group, demand for retail space continues to outpace supply, and the fundamentals for retail real estate are currently very strong. Jodi will provide a little more color on this momentarily, but we continue to leverage this dynamic to drive organic growth and seek out new opportunities. Our successes over the course of the last year led to solid growth in our bottom line. In Q4, net operating income grew by 4.9%, and adjusted funds from operations per unit grew by 2.9%. For the full year, growth in net operating income came in at 4.6%, and adjusted funds from operations per unit grew by 2.8%.

Speaker #2: Jodi will provide a little more color on this momentarily, but we continue to leverage this dynamic to drive organic growth and seek out new opportunities.

Speaker #2: Our successes over the course of the last year led to solid growth in our bottom line. In the fourth quarter, net operating income grew by 4.9%, and adjusted funds from operations per unit grew by 2.9%.

Speaker #2: For the full year, growth in net operating income came in at 4.6% and adjusted funds from operations per unit grew by 2.8%. And we achieved this growth while maintaining our payout ratio in the low 70% range and further reducing our indebtedness ratio by approximately 130 basis points relative to the end of 2024.

Kevin Salsberg: And we achieved this growth while maintaining our payout ratio in the low 70% range and further reducing our indebtedness ratio by approximately 130 basis points relative to the end of 2024. We were also pleased that construction began at the Canada Square property related to Canadian Tire's new long-term head office lease in Q4. This project will substantially refurbish the existing 640,000 sq ft office complex, with completion anticipated towards the end of 2028. With the improvements that we will be making to the property and the new Eglinton LRT line now operational, the future for this asset looks bright. I want to take a moment to recognize the CT REIT team for their hard work and dedication over the past year.

Speaker #2: We were also pleased that construction began at the Canvas Square property related to Canadian Tire's new long-term head office lease in Q4. This project will substantially refurbish the existing 640,000 square foot office complex with completion anticipated towards the end of 2028.

Speaker #2: With the improvements that we will be making to the property, and the new Eglinton LRT line now operational, the future for this asset looks bright.

Speaker #2: I want to take a moment to recognize the CT REIT team for their hard work and dedication over the past year. In addition to our financial and operational achievements, we made a difference in our communities in 2025 through our fundraising efforts, the way we managed our assets, and through our various sustainability-related initiatives.

Kevin Salsberg: In addition to our financial and operational achievements, we made a difference in our communities in 2025 through our fundraising efforts, the way we managed our assets, and through our various sustainability-related initiatives. I am very proud of the efforts of our entire team, and I'm optimistic about what 2026 will bring for CT REIT as we continue to advance our business. And with that, I will pass it over to Jodi for her comments on our investment, development, and leasing activity. Jodi?

Speaker #2: I am very proud of the efforts of our entire team, and am optimistic about what 2026 will bring for CT REIT as we continue to advance our business.

Speaker #2: And with that, I will pass it over to Jodi for her comments on our investment development and leasing activity. Jodi?

Speaker #3: Thanks, Kevin. And good morning, everyone. As highlighted in our press release yesterday, we were pleased to have completed several previously announced projects in the fourth quarter.

Jodi Shpigel: Thanks, Kevin, and good morning, everyone. As highlighted in our press release yesterday, we were pleased to have completed several previously announced projects in the fourth quarter. These included six intensification projects, five of which represented expansions of existing Canadian Tire stores that are located in Victoria, British Columbia, Winnipeg, Manitoba, Fergus, and Brampton, Ontario, and Donnacona, Quebec. The last intensification project related to the development of a third-party pad at an existing Canadian Tire anchored property in Fort Frances, Ontario. In Q4, we also completed the development of a new 172,000 sq ft Canadian Tire store in Kelowna, British Columbia, and the redevelopment of a former vacant Canadian Tire store in Lloydminster, Alberta. This building was successfully backfilled with a national grocer, furniture store, and a footwear retailer.

Speaker #3: These included six intensive intensification projects: five of which represented expansions of existing Canadian Tire stores that are located in Victoria, British Columbia, Winnipeg, Manitoba, Fergus, and Brampton, Ontario, and Donocona, Quebec.

Speaker #3: The last intensification project related to the development of a third-party pad at an in Fort Francis, Ontario. In Q4, we also completed the development of a new 172,000 square foot Canadian Tire store in Kelowna, British Columbia, and the redevelopment of a former of a vacant former Canadian Tire store in Lloydminster, Alberta.

Speaker #3: This building was successfully backfilled with a national grocer furniture store and a footwear retailer. Finally, as previously announced, we also acquired the freehold interest underlying an existing Canadian Tire ground lease as well as a multi-tenant commercial retail building in Fort Saskatchewan, Alberta.

Jodi Shpigel: Finally, as previously announced, we also acquired the freehold interest underlying an existing Canadian Tire ground lease, as well as a multi-tenant commercial retail building in Fort Saskatchewan, Alberta. As Kevin noted, this is a very productive quarter for growth. In total, projects completed in Q4 represented CAD 160 million of investment and added more than 400,000sq ft of incremental GLA to the portfolio. They are also strong examples of how we collaborate with our principal tenant, Canadian Tire, to unlock additional value for our unitholders. Looking ahead, our development pipeline remains healthy. We currently have 11 projects at various stages of progress, with 4 expected to be completed in 2026 and the remainder in 2027 and beyond.

Speaker #3: As Kevin noted, this is a very productive quarter for growth. In total, projects completed in the fourth quarter represented 160 million dollars of investment and added more than 400,000 square feet of incremental GLA to the portfolio.

Speaker #3: They are also strong examples of how we collaborate with our principal tenant, Canadian Tire, to unlock additional value for our unit holders. Looking ahead, our development pipeline remains healthy.

Speaker #3: We currently have 11 projects at various stages of progress, with four expected to be completed in 2026 and the remainder in 2027 and beyond.

Speaker #3: These developments, including the Canada Square office retrofit project in Toronto, represent a committed investment of approximately 329 million dollars, of which 102 million has been spent to date.

Jodi Shpigel: These developments, including the Canada Square office retrofit project in Toronto, represent a committed investment of approximately CAD 329 million, of which CAD 102 million has been spent to date. We expect to invest roughly CAD 78 million over the next 12 months to advance these projects. Once completed, they will add just over 600,000 sq ft of new GLA to the portfolio, approximately 95% of which is already pre-leased. Turning to leasing, during Q4, CT REIT completed a little over 1 million sq ft of lease extensions, primarily comprised of 14 Canadian Tire store lease renewals. For the full year, we completed 30 Canadian Tire store lease extensions and overall renewed retail leases representing over 2 million sq ft of GLA....

Speaker #3: We expect to invest roughly 78 million dollars over the next 12 months to advance these projects. Once completed, they will add just over 600,000 square feet of new GLA to the portfolio approximately 95% of which is already pre-leased.

Speaker #3: Turning to leasing, during the fourth quarter, CT REIT completed a little over a million square feet of lease extensions, primarily comprised of 14 Canadian Tire store lease renewals.

Speaker #3: For the full year, we completed 30 Canadian Tire store lease extensions and overall renewed retail leases representing over 2 million square feet of GLA.

Speaker #3: For the full year, these renewals were completed at a weighted average first-year rental uplift of approximately 10.4%. As of year-end, we maintained a long weighted average lease term for the portfolio at 7.2 years and are occupancy rate remained robust at 99.5%, up 10 basis points from a year ago.

Jodi Shpigel: For the full year, these renewals were completed at a weighted average first-year rental uplift of approximately 10.4%. As of year-end, we maintained a long weighted average lease term for the portfolio at 7.2 years, and our occupancy rate remained robust at 99.5%, up 10 basis points from a year ago. I will now turn it over to Lesley to discuss our financial results. Lesley?

Speaker #3: I will now turn it over to Lesley to discuss our financial results. Lesley?

Speaker #4: Thanks, Jodi. And good morning, everyone. As Kevin mentioned, we are very pleased with the REIT's financial performance in the fourth quarter and full year 2025.

Lesley Gibson: Thanks, Jodi, and good morning, everyone. As Kevin mentioned, we are very pleased with the REIT's financial performance in the fourth quarter and full year 2025. Once again, our results demonstrated the steady growth and resilience of our portfolio. Same property NOI, which includes the impact of intensifications, grew 2% in the quarter compared to Q4 2024. For the full year, same property NOI increased 2.2%. These increases reflect the contractual rent escalations of approximately 1.5% per year in many of our Canadian Tire leases, as well as the contributions from intensification projects completed in 2024 and 2025 of CAD 1.2 million and CAD 3.3 million for the quarter and year, respectively. Overall, net operating income for the quarter grew 4.9% year-over-year, representing an increase of about CAD 5.7 million.

Speaker #4: Once again, our results demonstrated the steady growth and resilience of our portfolio. Same property NOI, which includes the impact of intensifications, grew 2% in the quarter compared to Q4 2024.

Speaker #4: For the full year, same property NOI increased 2.2%. These increases reflect the contractual rent escalations of approximately 1.5% per year in many of our Canadian Tire leases.

Speaker #4: As well as the contributions from intensification projects completed in 2024 and '25, of 1.2 million and 3.3 million for the quarter and year, respectively.

Speaker #4: Overall, net operating income for the quarter grew 4.9% year over year, representing an increase of about 5.7 million. For the full year 2025, NOI grew 4.6%, or over 21 million dollars.

Lesley Gibson: For the full year 2025, NOI grew 4.6% or over CAD 21 million. This strong performance was supported by the same property NOI growth that I just spoke out to, and the impacts of acquisition and development activity over the relevant period. In the fourth quarter, general administrative expenses as a percentage of property revenue were 2.8%, compared to 2% in the period, same period last year. The increase was mainly due to the timing of non-cash fair value adjustments on unit-based compensation in Q4 2025. Excluding these fair value adjustments, G&A as a percentage of property revenue decreased 20 basis points to 2.7%.

Speaker #4: This strong performance was supported by the same property NOI growth that I just spoke to and the impacts of acquisition and development activity over the relevant period.

Speaker #4: In the fourth quarter, general administrative expenses as a percentage of property revenue were 2.8%, compared to 2% in the period same period last year.

Speaker #4: The increase was mainly due to the timing of non-cash fair value adjustments on unit-based compensation in Q4 2025. Excluding these fair value adjustments, G&A as a percentage of property revenue decreased 20 basis points to 2.7%.

Speaker #4: On a full-year basis, G&A expense represented approximately 3.1% of revenue, or roughly 2.8% after normalizing for unit-based compensation fair value changes, slightly better than the 2.9% in 2024.

Lesley Gibson: On a full year basis, G&A expense represented approximately 3.1% of revenue, or roughly 2.8% after normalizing for unit-based compensation fair value changes, slightly better than the 2.9% in 2024. The fair value adjustment of our investment properties was CAD 110.4 million in Q4, compared to CAD 54.8 million in the prior year. This sizable gain was driven primarily by increases to underlying cash flows due to updates made to market leasing assumptions, strong leasing and renewal activity completed during the period, the impact of numerous development project completions mentioned by Jodi earlier, and the compression of terminal capitalization discount rates for certain retail properties within the portfolio.

Speaker #4: The fair value adjustment of our investment properties was 110.4 million in the fourth quarter. Compared to 54.8 million in the prior year. This sizable gain was driven primarily by increases to underlying cash flows, due to updates made to market leasing assumptions, strong leasing and renewal activity completed during the period, the impact of numerous development project completions mentioned by Jodi earlier, and the compression of terminal capitalization and discount rates for certain retail properties within the portfolio.

Speaker #4: These factors, more than offset the expansion of terminal capitalization discount rates applied to the valuation of our industrial properties, a change that was made to reflect current market conditions.

Lesley Gibson: These factors more than offset the expansion of terminal capitalization discount rates applied to the valuation of our industrial properties, a change that was made to reflect current market conditions. For the full year, fair value adjustments totaled CAD 195.4 million, up from CAD 119.1 million in 2024. In the fourth quarter, AFFO per diluted unit was CAD 0.317, up 2.9% compared to the fourth quarter last year and the full year. AFFO per unit diluted was up 2.8% year-over-year. FFO on a diluted basis was CAD 0.339 per unit, up 1.5% compared to Q4 2024, and up 2% on a full year basis. Growth in FFO and AFFO primarily reflects increases in NOI, partially offset by higher interest expense.

Speaker #4: For the full year, fair value adjustments totaled $195.4 million, up from $119.1 million in 2024. In the fourth quarter, AFFO per diluted unit was 31.7 cents, up 2.9% compared to the fourth quarter last year and the full year.

Speaker #4: AFFO per unit diluted was up 2.8% year over year. FFO on a diluted basis was 33.9 cents per unit, up 1.5% compared to Q4 2024 and up 2% on a full-year basis.

Speaker #4: Growth in FFO and AFFO primarily reflects increases in NOI, partially offset by higher interest expense. Cash distributions paid in the quarter increased 2.5% compared to Q4 2024 to 23.7 cents per unit, reflecting the higher monthly distribution rate that became effective in July '25.

Lesley Gibson: Cash distributions paid in the quarter increased 2.5% compared to Q4 2024 to CAD 0.237 per unit, reflecting the higher monthly distribution rate that became effective in July 2025. This continued growth is further evidence of our strong track record of increasing distributions every year since our IPO in 2013, reflecting the cumulative growth of 45.9% that unit holders have enjoyed since that time. With AFFO per unit growing faster than distributions, our payout ratio improved slightly. The AFFO payout ratio for Q4 was 74.8%, compared to 75% a year ago. On a full year basis, the AFFO payout ratio remained stable at 73.5%.

Speaker #4: This continued growth is further evidence of our strong track record of increasing distributions every year since our IPO in 2013, reflecting the cumulative growth of 45.9% that unit holders have enjoyed since that time.

Speaker #4: With AFFO per unit growing faster than distributions, our payout ratio improved slightly. The AFFO payout ratio for Q4 was 74.8% compared to 75% a year ago.

Speaker #4: On a full-year basis, the AFFO payout ratio remained stable at 73.5%. Turning to the balance sheet, our interest coverage ratio for the fourth quarter was 3.34 times, compared to 3.52 times in Q4 2024.

Lesley Gibson: Turning to the balance sheet, our interest coverage ratio for the fourth quarter was 3.34 times, compared to 3.52 times in Q4 2024. This decrease reflects the higher interest costs arising from the reset of interest rates on several series of our Class C LP units, effective 1 June 2025, an increased utilization of our credit facilities to fund acquisitions and developments, and the issuance of CAD 200 million of Series J unsecured debentures in June 2025. Even with these financing activities, our total indebtedness to EBITDA fair value improved to 6.77 times in 2025 from 6.81 times a year ago, as earnings growth outpaced the increase in debt. Our indebtedness ratio at the year-end also improved relative to the end of 2024, at 39.8%, down from 41.1%.

Speaker #4: This decrease reflects the higher interest costs, arising from the reset of interest rates on several series of our class CLP units effective June 1, 2025, and increased utilization of our credit facilities to fund acquisitions and developments, and the issuance of 200 million of Series J unsecured debentures in June '25.

Speaker #4: Even with these financing activities, our total indebtedness to EBIT fair value improved to 6.77 times in 2025 from 6.81 times a year ago, as earning growth outpaced the increase in debt.

Speaker #4: Our indebtedness ratio at the year-end also improved relative to the end of 2024 at 39.8%, down from 41.1%. This improvement reflects the continued increase in the fair value of our investment properties and the growth in total assets from acquisitions and developments partially offset by drives on our credit facilities.

Lesley Gibson: This improvement reflects the continued increase in the fair value of our investment properties and the growth in total assets from acquisitions and developments, partially offset by draws on our credit facilities. The strength in our balance sheet and these industry-leading debt metrics provide us with ample financial flexibility to fund our future growth initiatives. With respect to liquidity, we ended Q4 with approximately CAD 4 million of cash on hand. Our committed CAD 300 million bank credit facility was essentially undrawn at year-end, and we also maintained our CAD 300 million uncommitted credit facility with CTC, with roughly CAD 104 million available on this line at year-end. Altogether, we continue to have adequate liquidity and balance sheet capacity to fund ongoing investments and to pursue new, new opportunities. And with that, I'll turn the call back to the operator for any questions.

Speaker #4: The strength in our balance sheet and these industry-leading debt metrics provide us with ample financial flexibility to fund our future growth initiatives. With respect to liquidity, we ended Q4 with approximately 4 million of cash on hand.

Speaker #4: Our committed $300 million bank credit facility was essentially undrawn at year-end, and we also maintained our $300 million uncommitted credit facility with CTC, with roughly $104 million available on this line at year-end.

Speaker #4: Altogether, we continue to have adequate liquidity and balance sheet capacity to fund ongoing investments and to pursue a new opportunities. And with that, I'll turn the call back to the operator for any questions.

Operator: ... Thank you. At this time, I would like to remind everyone that in order to ask a question, please press star, then one, one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Our first question comes from the line of Brad Sturges from Raymond James.

Speaker #3: Thank you. At this time, I would like to remind everyone that in order to ask a question, please press star, then 11 on your telephone keypad.

Speaker #3: We'll pause for just a moment to compile the Q&A roster. Our first question comes from the line of Brad Sturges from Raymond James.

Speaker #4: Hey, good morning.

Brad Sturges: Hey, good morning.

Kevin Salsberg: Morning.

Brad Sturges: Congrats, congrats on a good quarter and obviously a lot of, you know, success on a number of fronts on the growth side. Just curious on the, I guess, as you think about the expansion, intensification opportunity, you know, you completed a number of projects in the quarter, like, how do you think about new opportunities to be added to the pipeline this year? Kind of, what do you see in terms of new opportunities right now?

Speaker #5: Morning.

Speaker #4: I'm Brad. Congrats on a good quarter, and obviously a lot of success on a number of fronts on the growth side. Just curious on the, I guess, as you think about the expansion intensification opportunity, you completed a number of projects in the quarter.

Speaker #4: How do you think about new opportunities to be added to the pipeline this year? Kind of what do you see in terms of new opportunities right now?

Speaker #5: Thanks, Brad. Yeah, no, super happy about the completions in Q4. I think that was a big quarter for us. Obviously, looking to reload the pipeline just in terms of new opportunities, and continue to work with Canadian Tire.

Kevin Salsberg: Thanks, Brad. Yeah, so super happy about the completions in Q4. I think that's, that was a big quarter for us. Obviously, looking to reload the pipeline just in terms of new opportunities and continue to work with Canadian Tire. I think the cost environment is still somewhat challenging on the new development side. You know, as you know, we have several growth levers that we can pull, whether it be, you know, store intensification, new store development, acquiring assets from other third-party landlords, or even vend-ins, which we haven't done in some time. So we're obviously looking to the opportunities and availability of each of those types of transactions.

Speaker #5: I think the cost environment is still somewhat challenging on the new development side. As you know, we have several growth levers that we can pull, whether it be store intensifications, new store development, acquiring assets from other third-party landlords, or even vendants, which we haven't done in some time.

Speaker #5: So we're obviously looking to the opportunities and availability of each of those types of transactions. And I'm pretty optimistic that we'll be able to find some that fit our strategy and our financial parameters and 2026, we'll shape up similarly to the way we were able to deliver in 2025.

Kevin Salsberg: And, you know, I'm pretty optimistic that we'll be able to find some that fit our strategy and our financial parameters, and 2026, you know, will shape up similarly to the way we were able to deliver in 2025.

Brad Sturges: Okay. So you think pipeline across all those buckets could be pretty similar year-over-year?

Speaker #4: Okay. So you think pipeline across all those buckets could be pretty similar year over year?

Speaker #5: Yeah, I mean, it's always opportunity-based, so it's hard to say exactly. But certainly, we're out there. We're looking at some things that are on market, some things that are off market.

Kevin Salsberg: Yeah, I mean, it's always opportunity based, so it's hard to say exactly, but certainly we're out there. We're looking at some things that are on market, some things that are off market. We're having discussions with Canadian Tire. So, I guess the best I would say is I'm optimistic, but time will tell.

Speaker #5: We're having discussions with Canadian Tire. So I guess the best I would say is I'm optimistic, but time will tell.

Speaker #4: Okay. And just what got completed or delivered in the quarter? Can you just comment, generally speaking, on going in yield on cost?

Brad Sturges: Okay. And just what got completed or delivered in the quarter, can you just comment, generally speaking, on going in yield on cost?

Kevin Salsberg: Probably a mixed bag. I mean, obviously we had some different project types. One, you know, ground up development for a third party, some of the store intensifications, an acquisition. So, you know, on a blended basis, I would probably say mid to high sixes. But that's without really spending a lot of time thinking about the math in my head. So, that, I think that's probably a good rough guide.

Speaker #5: Probably a mixed bag. I mean, obviously, we had some different project types. One ground-up development for a third party, some of the store intensifications, an acquisition.

Speaker #5: So, on a blended basis, I would probably say mid to high sixes. But that's without really spending a lot of time thinking about the math in my head.

Speaker #5: So I think that's probably a good rough guide.

Speaker #4: Okay. Appreciate that. Thank you.

Brad Sturges: Okay, appreciate that. Thank you.

Operator: One moment for our next question. Our next question comes from the line of Juliano Thornhill from National Bank.

Operator: One moment for our next question. Our next question comes from the line of Giuliano Thornhill from National Bank.

Speaker #3: One moment for our next question. Our next question comes from the line of Juliano Thornhill from National Bank.

Juliano Thornhill: Hey, guys. Good morning.

Giuliano Thornhill: Hey, guys. Good morning.

Speaker #4: Hey, guys. Good morning.

Kevin Salsberg: Good morning.

Juliano Thornhill: Just had one question on the kind of Vendin opportunity. How large is that? And do you think kind of CTC is, you know, mostly fleshed out on the industrial distribution side?

Speaker #5: Morning.

Speaker #4: Just had one question on the kind of vending opportunity. How large is that? And do you think kind of CT is mostly fleshed out on the industrial distribution side?

Giuliano Thornhill: Just had one question on the kind of Vendin opportunity. How large is that? And do you think kind of CTC is, you know, mostly fleshed out on the industrial distribution side?

Kevin Salsberg: On the supply chain side, yes, I think they're pretty set. You know, they had a major swell in COVID when their inventory positions increased, and we helped them with that as we built a new DC for them in Calgary. I would say, you know, looking back at the last couple of quarters, I think they've normalized that to a certain extent. So I don't see any huge opportunities with CTC necessarily on the supply chain side. Although we do always look at synergies with respect to our existing holdings and if there's anything, you know, in terms of adjacent sites or opportunities in the nodes that we operate in to consolidate space. So, that continues to be a strategy for us.

Speaker #5: On the supply chain side, yes, I think they're pretty set. They had a major swell in COVID when their inventory positions increased, and we helped them with that as we built a new DC for them in Calgary.

Speaker #5: I would say, looking back at the last couple of quarters, I think they've normalized that to a certain extent. So I don't see any huge opportunities with CTC necessarily on the supply chain side, although we do always look at synergies with respect to our existing holdings.

Speaker #5: And if there's anything in terms of adjacent sites or opportunities in the nodes that we operate in to consolidate space. So that continues to be a strategy for us.

Kevin Salsberg: In terms of your first question, in terms of the Vendin opportunities, there's roughly 10 to 15 Canadian Tire stores that we believe meet our investment criteria. You know, the last couple of years, our unit price hasn't been exactly where we want to be, in terms of issuing equity in exchange for assets, which is part of the formula, we've used in the past, when acquiring assets from Canadian Tire. I think today we feel a little better about that, and, and certainly with the development pipeline, you know, a little bit smaller than it was this time last year, that is something we will be looking at.

Speaker #5: In terms of your first question, in terms of the vending opportunities, there's roughly 10 to 15 Canadian Tire stores that we believe meet our investment criteria.

Speaker #5: The last couple of years, our unit price hasn't been exactly where we want it to be in terms of issuing equity in exchange for assets, which is part of the formula we've used in the past when acquiring assets from Canadian Tire.

Speaker #5: I think today we feel a little better about that. And certainly, with the development pipeline, a little bit smaller than it was this time last year, that is something we will be looking at.

Speaker #4: And just with leverage, kind of declining at all-time lows, really. Is there maybe the possibility to pursue larger distribution increases or possibly buying back stock at these levels?

Juliano Thornhill: Just with leverage kind of declining, you know, at all-time lows, really, is there maybe the possibility to pursue larger distribution increases or possibly buying back stock at these levels? I'm just wondering kind of how you would utilize, like, the low leverage level for unitholders.

Giuliano Thornhill: Just with leverage kind of declining, you know, at all-time lows, really, is there maybe the possibility to pursue larger distribution increases or possibly buying back stock at these levels? I'm just wondering kind of how you would utilize, like, the low leverage level for unitholders.

Speaker #4: I'm just wondering kind of how you would utilize the low leverage level for unit holders.

Speaker #5: Yeah, I mean, we've said before, while being below 40% is not necessarily a target for us, we certainly feel comfortable where we are. We also believe it provides some dry powder, as you're sort of intimating.

Kevin Salsberg: Yeah, I mean, we've said before, you know, while being below 40% is not necessarily a target for us, we certainly feel comfortable where we are. We also believe it, you know, provides some dry powder, as you're sort of intimating. We would prefer to use that dry powder to acquire or develop sites, at the unit price levels that we're currently experiencing. I'm not sure we'd be users of our NCIB. That was something we were a little bit more active on when we were trading kind of in the low to mid CAD 13-dollar range. Today we're in the high 16s. So, I think primarily we would like to use it for growth initiatives at the portfolio level.

Speaker #5: We'd prefer to use that dry powder to acquire or develop sites. At the unit price levels that we're currently experiencing, I'm not sure we'd be users of our NCIB, that was something we were a little bit more active on when we were trading kind of in the low to mid $13 range.

Speaker #5: Today, we're in the high $16. So I think primarily we would like to use it for growth initiatives at the portfolio level.

Juliano Thornhill: Okay. Thank you.

Giuliano Thornhill: Okay. Thank you.

Speaker #4: Okay. Thank you.

Speaker #5: Thank you.

Kevin Salsberg: Thank you.

Speaker #3: Thank you. One moment for our next question. Our next question comes from the line of Tao Wuli from CIBC Capital Markets.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Tao Wylie from CIBC Capital Markets.

Speaker #4: Hi. Good morning. Apologies if I missed some earlier commentary. I had to jump on late. Just with Canada Square, now that the Eglinton LRT is done, can you just talk a little bit about I know this was one of the hitches sort of in getting things moving on that site.

Tao Wylie: Hi, good morning. Apologies if I missed some earlier commentary. I had to jump on late. Just with Canada Square, now that the Eglinton LRT is done, can you just talk a little bit about... I know this was one of the hitches sort of in getting things moving on that site. Can you talk a little bit more about just progress there?

Tal Wooley: Hi, good morning. Apologies if I missed some earlier commentary. I had to jump on late. Just with Canada Square, now that the Eglinton LRT is done, can you just talk a little bit about... I know this was one of the hitches sort of in getting things moving on that site. Can you talk a little bit more about just progress there?

Speaker #4: Can you talk a little bit more about just progress there?

Speaker #5: Sure. So very happy that the Crosstown LRT is finally open. In terms of hitches, there's kind of two components of that. One was the actual usability of the new line.

Kevin Salsberg: Sure. So very happy that the Eglinton Crosstown LRT is finally open. In terms of hitches, there's kind of two components of that. One was the actual usability of, of the new line. The other is the 2 acres at the, I guess, northwest corner of our site, are being controlled by Crosslinx, the, the consortium that built the LRT. And the first phase of development cannot begin on those lands until such time as they relinquish control. We don't have a specific timeline as to when that will happen. I would imagine it would be sooner than later, but, we have no notice yet at this point.

Speaker #5: The other is the two acres at the, I guess, northwest corner of our site. Our being controlled by CrossLinx, the consortium that built the LRT.

Speaker #5: And the first phase of development cannot begin on those lands. Until such time as they relinquish control. We don't have a specific timeline as to when that will happen.

Speaker #5: I would imagine it would be sooner than later, but we have no notice yet at this point. Having said that, although the benefits of the LRT still accrue to the existing commercial complex and its users, the connectivity that it brings and access to the employee base here, we're really focused on the commercial refurbishment, the retrofit of the office space, that will be undertaking with Oxford between now and the end of 2028.

Kevin Salsberg: Having said that, although the benefits of the LRT still accrue to the existing commercial complex and its users, the connectivity that it brings, and access, to the employee base here, we're really focused on the commercial refurbishment, the retrofit of the office space, that we'll be undertaking with Oxford between now and the end of 2028. So I think while we will continue to advance the master plan and the zoning efforts, we're not really turning our minds quite yet to incremental density on the site in terms of the desire to proceed with that part of the project.

Speaker #5: So I think while we will continue to advance the master plan and the zoning efforts, we're not really turning our minds quite yet to incremental density on the site, in terms of a desire to proceed with that part of the project.

Speaker #4: And does that sort of does the ongoing question about when you will sort of maybe start that piece, is that sort of factoring into why the pipeline is sort of where it's at right now, that you wanted when you're thinking about this a few years ago, you wanted to have capital available to pursue that.

Tao Wylie: Does that sort of-- does the ongoing, like, question about when you will, you know, sort of maybe start that piece, is that sort of factoring into why the pipeline is sort of where it's at right now that you wanted... You know, when you're thinking about this a few years ago, you wanted to have, capital available to pursue that, and so took on less, or is it a function of just there are fewer projects to do at Canadian Tire?

Tal Wooley: Does that sort of-- does the ongoing, like, question about when you will, you know, sort of maybe start that piece, is that sort of factoring into why the pipeline is sort of where it's at right now that you wanted... You know, when you're thinking about this a few years ago, you wanted to have, capital available to pursue that, and so took on less, or is it a function of just there are fewer projects to do at Canadian Tire?

Speaker #4: And so took on less, or is it a function of just there were fewer projects to do at Canadian Tire?

Speaker #5: I think it's mostly the latter where there's fewer projects. Certainly, having that dry powder to allocate as we feel is appropriate is a nice-to-have.

Kevin Salsberg: I think it's mostly the latter, where there's fewer projects. Certainly, having that dry powder to allocate as we feel is appropriate is a nice-to-have. So if, you know, in a couple of years, the market has improved, the density is realized, and it's something we want to pursue, having the balance sheet capacity to do that is obviously great. But in the current circumstances, I think it's more the cost environment that's impeding our ability to continue to add to the store intensification and new store development pipeline.

Speaker #5: So if in a couple of years, the market has improved, the density is realized, and it's something we want to pursue, having the balance sheet capacity to do that is obviously great.

Speaker #5: But in the current circumstances, I think it's more the cost environment that's impeding our ability to continue to add to the store intensification and new store development pipeline.

Speaker #4: Okay. And then just lastly, I guess this would be for Lesley. You have, I believe, a $200 million venture maturing in June. Would we expect you to move earlier on that?

Tao Wylie: Okay. And then, just lastly, I guess this would be for Lesley. You have the, I believe, a CAD 200 million debenture, maturing in June. And I'm assuming you'd be looking to refinance the, whatever you have left in your credit facilities, too, in addition to the CAD 200 million.

Tal Wooley: Okay. And then, just lastly, I guess this would be for Lesley. You have the, I believe, a CAD 200 million debenture, maturing in June. And I'm assuming you'd be looking to refinance the, whatever you have left in your credit facilities, too, in addition to the CAD 200 million.

Speaker #4: And I'm assuming you'd be looking to refinance the whatever you have left on your credit facilities too. In addition to the $200 million.

Lesley Gibson: Kyle, definitely we're watching markets, and I think the public debt market, which has sort of been our continued preferred avenue for sort of financing, you know, is very constructive right now, and it has been, and it's quite active. So, definitely looking to refinance the existing maturities, CAD 200 million, and likely some upsize to that. We'll just see where we are drawn on the line and where our use for the rest of the year is in terms of, you know, how much new offering could be. But, yeah, definitely in the next sort of 3 months, we'll be watching the markets to find an opportune time.

Speaker #3: Tao, definitely we're watching markets. And I think the public debt market, which is sort of in our continued preferred avenue for sort of financing, is very constructive right now.

Speaker #3: And it has been and it's quite active. So definitely looking to refinance the existing maturities, that $200 million. And likely some upsize to that.

Speaker #3: We'll just see where we are drawn on the line and where our use for the rest of the year is in terms of how much new offering could be.

Speaker #3: But yeah, definitely in the next sort of three months, we'll be watching the markets to find an opportune time.

Speaker #4: Okay. That's great. Thanks very much, everybody.

Tao Wylie: Okay, that's great. Thanks very much, everybody.

Tal Wooley: Okay, that's great. Thanks very much, everybody.

Speaker #5: Thank you.

Kevin Salsberg: Thank you.

Speaker #3: Thank you. One moment for our next question. Our next question comes from the line of Sam Domiani from TD Cowen.

Operator: Thank you. One moment for our next question. Our next question comes in the line of Sam Domiani from TD Cowen.

Operator: Thank you. One moment for our next question. Our next question comes in the line of Sam Damiani from TD Cowen.

Speaker #4: Thank you. And good morning, everyone. I just jumped on a little late. So I think the question was asked about the former Canadian Tire store in Kelowna that has been backfilled.

Sam Damiani: Thank you, and good morning, everyone. I just jumped on a little late, so, but I think the question was asked about the former Canadian Tire store in Kelowna that has been backfilled. Has it been, like, 100% backfilled? And I wonder if you could comment on the rents versus the pre-existing rents on that space.

Speaker #4: Has it been, like, 100% backfilled? And I wonder if you could comment on the rents versus the pre-existing rents on that space.

Lesley Gibson: Good morning, Sam, it's Jodi. Just to clarify, it was a former Canadian Tire store in Lloydminster, Alberta, that we backfilled. We completed a new store in Kelowna as well in this quarter, but the backfill was in Lloydminster, and so that's the tenants that were the grocer, the footwear retailer, and furniture store.

Speaker #3: Good morning, Sam. It's Jodi. Just to clarify, it was a former Canadian Tire store in Lloydminster, Alberta, that we backfilled. We completed a new store in Kelowna as well in this quarter, but the backfill was in Lloydminster.

Speaker #3: And so that's the tenants that were the grocer, the footwear retailer, and furniture store.

Speaker #4: Okay. Okay. But there is an empty former Canadian Tire store in Kelowna too. Is that not right?

Sam Damiani: Okay. Okay, but there is an empty former Canadian Tire store in Kelowna, too. Is that not right?

Speaker #3: That is correct. Canadian Tire is still occupies it and has lease terms. So we're determining what comes next for that asset.

Lesley Gibson: That is correct. Canadian Tire still occupies it and has lease terms, so we're determining what comes next for that asset.

Speaker #4: I see. Okay. Thank you for the clarification. And I appreciate the new disclosure on rent increases, on renewal rent increases. That's very helpful. Showed both an uptick in the fourth quarter versus sort of first nine months both on the Canadian Tire and third-party tenants.

Sam Damiani: I see. Okay, great. Thank you for the clarification. And, appreciate the, the new disclosure on, on rent increases, on renewal rent increases. That's very helpful. Showed both an uptick in Q4 versus, sort of the first nine months on, both on the Canadian Tire and, and third-party tenants. You know, was, was there anything unusual in the Q4 stats there, or would you say that's indicative of, of kind of just a market trend?

Speaker #4: Was there anything unusual in the Q4 stats there? Or would you say that's indicative of kind of just a market trend?

Kevin Salsberg: I don't think there's anything unusual. I think certainly we're seeing, you know, an improved leasing and, and renewal market as, as we kind of commented on, earlier. You know, we've substantially dealt now with our 2026 maturities, so, you know, in the the next couple of months, we'll be turning our eyes to, you know, the first, few that, you know, come up in 2027. But yeah, I think, you know, there's, there's certainly an opportunity to, replicate these kind of results, across the portfolio. I mean, every, every batch of renewals that we deal with is slightly different in terms of, where they're located, the size of the market, where the rents are relative to market rent.

Speaker #5: I don't think there's anything unusual. I think certainly we're seeing an improved leasing and renewal market as we kind of commented on earlier. We've substantially dealt now with our 2026 maturities.

Speaker #5: So in the next couple of months, we'll be turning our eyes to the first few that come up in 2027. But yeah, I think there's certainly an opportunity to replicate these kind of results.

Speaker #5: Across the portfolio, I mean, every batch of renewals that we deal with is slightly different in terms of where they're located, the size of the market, where the rents are relative to market rent.

Kevin Salsberg: So, there certainly could be some fluctuation up and down, amongst the output. But we do think there is upside for us as we continue to get at these renewals. And you know, that'll start kicking in, you know, more and more as time goes on, as we get further into our, you know, our lease expiries. I think you know, in 2027, I think there's about 6 to 7%, 6% of CTR leases come up for renewal. 2028, almost 9%. So that number will continue to grow in prominence and we'll continue to hopefully follow the trends that we're seeing more broadly in the retail leasing market.

Speaker #5: So there certainly could be some fluctuation up and down amongst the output. But we do think there's upside for us as we continue to get at these renewals.

Speaker #5: And that'll start kicking in more and more as time goes on, as we get further into our lease expiries. I think in 2027, I think there's about six, seven percent no, six percent of CTR leases come up for renewal.

Speaker #5: 2028, almost 9%. So that number will continue to grow in prominence. And we'll continue to hopefully follow the trends that we're seeing more broadly in the retail leasing market.

Speaker #4: I appreciate that. Kevin. And the sort of 10 and a half, 11 percent on the Canadian Tire store lease renewals, just to clarify, those are five-year fixed renewals?

Sam Damiani: Appreciate that, Kevin. And the sort of 10.5, 11 percent on the Canadian Tire store lease renewals, just to clarify, those are 5-year fixed renewals, right? Is that correct?

Speaker #4: Is that correct?

Kevin Salsberg: That, that's correct. Yeah, that's correct, Sam.

Speaker #5: That's correct. Yeah, that's correct, Sam.

Speaker #4: Yeah, and so the average sort of annual increase is a snick above 2%. So, if I'm not mistaken, that is higher than previous years, which I seem to recall was more in the one and a half percent annual—sort of average annual—increase.

Sam Damiani: Yeah. And so the average sort of annual increase is, you know, a tick above 2%. So if I'm not mistaken, that is higher than previous years, which I seem to recall was more in the 1.5% annual sort of average annual increase. Is that right?

Speaker #4: Is that right?

Kevin Salsberg: That's correct, Sam.

Speaker #5: That's correct, Sam.

Speaker #4: Okay. And is that any reason anything different with the 2025 renewals that would sort of justify that? Or is it purely just a reflection of overall markets, the mixed geographically isn't meaningfully different year to year?

Sam Damiani: Okay. And is that any reason, anything different with the 2025 renewals that would sort of justify that? Or is it purely just a, you know, reflection of overall markets? You know, the mix geographically isn't meaningfully different year to year.

Speaker #5: I think it's a combination of the improved retail leasing market as well as the mix of those leases that we were dealing with.

Kevin Salsberg: I think it's a combination of the improved retail leasing market as well as the mix of those leases that we were dealing with.

Sam Damiani: Okay, perfect. I think my, the rest of my questions have been answered, so thank you very much, and I'll turn it back.

Speaker #4: Okay. Perfect. I think the rest of my questions have been answered. So thank you very much. And I'll turn it back.

Speaker #5: Thank you, Sam.

Kevin Salsberg: Thank you, Sam.

Speaker #3: Thank you. At this time, I would like to remind everyone in order to ask a question, please press star, then 11 on your telephone keypad.

Operator: Thank you. At this time, I would like to remind everyone, in order to ask a question, please press star then one one on your telephone keypad. As there are no further questions at this time, I will now turn the call over to Kevin Salsberg, President and CEO, for closing remarks.

Speaker #3: As there are no further questions at this time, I will now turn the call over to Kevin Salsberg, President and CEO for closing remarks.

Speaker #5: Thank you, Gigi. And thank you all for joining us today. We look forward to speaking with you again in May after we release our Q1 results.

Kevin Salsberg: Thank you, Gigi, and thank you all for joining us today. We look forward to speaking with you again in May after we release our Q1 results. Thank you.

Speaker #5: Thank you.

Operator: This concludes today's call. You may now disconnect.

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