Good day, and welcome to the Allied Properties REIT first quarter 2021 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Michael Emory. Please go ahead, sir. Thank you very much. Good morning, everyone, welcome to our conference call. Tom, Cecilia, and Hugh are here with me to discuss Allied's results for the first quarter ended March 31, 2021. We may, in the course of this conference call, make forward-looking statements about future events or future performance. These statements, by their nature, are subject to risks and uncertainties that may cause actual events or results to differ materially, including those risks described under the heading "Risks and Uncertainties" in our most recently filed annual information form and in our most recent quarterly report. Material assumptions that underpin any forward-looking statements we make include those assumptions described under "Forward-Looking Disclaimer" in our most recent quarterly report. Despite ongoing shutdowns across Canada, our operating and leasing momentum continued to accelerate in the first quarter of this year. We collected 97.6% of our rental revenue. Of the 2.4% we deferred, we expect to collect nearly 1.5% under the Canada Emergency Rent Subsidy. Same asset NOI and FFO per unit were in line with the comparable pre-shutdown quarter last year, while AFFO per unit was up 3%. The quarter once again confirmed that our team, our properties, and our user base are resilient. Cecilia will summarize our financial results, as well as discuss our balance sheet and our short-term outlook. Tom will follow with an overview of leasing and operations. Hugh will provide a development update. I'll finish with our current thinking on the future. Now over to Cecilia. Good morning. First, our financial results. Our portfolio and our user base continued to demonstrate resilience through the first part of 2021. The growth in average net rent per occupied square foot of 5.3% resulted in our same asset NOI holding, despite the drop in our occupancy. We're also confident in the incremental economic contribution as the remaining space of our portfolio is taken up. Second, our balance sheet. Our NAV per unit at March 31 was up 1.1% from the same time last year. Our IFRS value increment in the first quarter was CAD 8 million on incremental capital investment of CAD 85 million, primarily as a result of rent growth in Toronto, partially offset by continuing softness in Calgary and Edmonton. After finalizing our green financing framework early this year, we issued our inaugural green bond with a five-year term and a 1.73% coupon for total proceeds of CAD 600 million. Having been able to take advantage of the favorable interest rate environment puts us in a great position of liquidity today. It will be late in Q3 when we start drawing on our CAD 500 million operating line. At the end of the first quarter, our net debt to EBITDA was 7.9x. Our total debt was 31.1% of IFRS value, and our interest coverage was 3.3x. We estimate our developments, which have a 13-year weighted average lease term, will increase our annual EBITDA by approximately CAD 79 million. Not only will this augment our earnings per unit significantly, along with anticipated organic growth, it will materially reduce our ratio of net debt to EBITDA and materially increase our interest coverage ratio, our two most important debt metrics. Our pool of unencumbered assets is CAD 6.9 billion, representing 79% of our investment properties. We intend to continue prepaying or repaying mortgages as they come due, with the goal of having the majority of our asset base unencumbered. We believe this will give us the strongest and most flexible balance sheet from both a defensive and offensive perspective. Third, our outlook for 2021. Based on accelerating leasing momentum in our major markets, we continue to expect low to mid single-digit% annual growth in FFO per unit, AFFO per unit, and same asset NOI. We expect our portfolio and our users to continue exhibiting resiliency through the balance of 2021. I'll now pass the call to Tom for a discussion of our leasing and operating activities. Thank you, Cecilia. Within the last 12 months, in order to improve our office market coverage, we added six leasing staff to the team, two in Montreal, two in Toronto, and two in Calgary. Beginning exactly one year ago, recognizing that it's never been more important to stay in touch with the market, our internal leasing team embarked on a program to strengthen our relationships with the entire brokerage community. Every active commercial broker in each of our markets receive calls from Allied. We believe this personal contact on the part of our team has been the biggest reason for our continued leasing success. We know that if we can get a potential tenant to physically tour available space, the chances of leasing it are greatly enhanced. Q1 2021 was no different, with calls to the brokerage community continuing. Remarkably, the team actually completed 30% more physical tours in Q1 2021 than in Q1 2020, which was a pre-shutdown quarter. In all, there were 201 tours conducted in our portfolio in the first quarter and 78 transactions completed, totaling 439,000 sq ft. We achieved a 5.4% increase in year one net rents on space renewed or replaced. That's a good number, but lower than our usual increases for two reasons. First, there were fewer deals completed in Toronto this quarter and quite a number of deals completed in Calgary. Second, we were asked by a number of renewing tenants during negotiations to scale rents over the renewal term and not increase their rents early in the term, given the pandemic. For long-term tenant relations, we often agree to delay an increase in rents to year two. Our leased area dipped slightly in the quarter to 91.9%. There are three reasons that account for this temporary decline in the quarter. First, we had small non-renewals in Montreal. Second, we settled with a co-working company called Breather for seven small leases totaling 35,000 sq ft, rather than deal with the situation in bankruptcy. Third, we made small strategic terminations in Vancouver. We are optimistic about regaining leased area in the coming quarters. The team recently tallied the amount of space currently under discussion in our portfolio, not including renewals, at just over 1 million sq ft. Montreal is leading in terms of activity because of the large blocks of space available. While we will not complete all of the potential deals, we are very encouraged for future results on the levels of activity today. I will now provide leasing updates on Montreal, Toronto, Calgary, and Vancouver, and conclude with an update on our urban data center portfolio. Noteworthy transactions in Montreal during the quarter were the extension and expansion of Moment Factory to 80,000 sq ft and a 21,000 sq ft renewal with an independent gym at the RCA building. Of interest is the recent increase in activity from the various companies serving the film industry. We have a number of tenants in Montreal providing post-production services to the large film studios in Hollywood. As Hollywood has reopened for business, some of our tenants are arranging for more space to handle this spike in workload. This will no doubt result in an increase in our leased area in the coming months. In Toronto, we maintained our leased area at 95.8%. We completed a new lease for 25,000 sq ft at The Well and also completed a second expansion of Rose Rocket at 37 Front East, adding 8,000 sq ft. In the Calgary market, small spaces continue to lease. The team completed a very impressive 81 tours in Q1 and leased more space and completed more deals than we did in Toronto. We also managed to increase our leased area to 85%. In Vancouver, we continued to de-lease two properties as we reposition the buildings for the long term. Subsequent to the quarter, we completed a 17,000 sq ft renewal at The Landing with good uptick in net rents. There were no leasing deals finalized at the urban data center portfolio in the quarter, but just subsequent to the quarter, we completed three deals at 250 Front for a total of 22,500 sq ft. Revenue will be phased commencing Q2 this year. These deals bring our leased area at 250 Front to 86% and our UDC portfolio to 94%. We are currently working on a transaction at 151 Front, which, if completed, will bring it to 100% leased. We remain unconcerned by the amount of space available for sublease in our portfolio and can report a decline in the amount of space currently being offered. We expect this trend will continue as tenants withdraw their space from the market in favor of reoccupying. As the year progresses, we will maintain our efforts to stay connected to the market. In recent weeks, we awarded four listings in Montreal to assist us with exposing four large blocks of space. Our cold calling will continue, and we expect results will be positive. Now, I will turn the call over to Hugh. Thanks, Tom. This quarter, we have been able to make progress on all of our major construction projects. While COVID has had an impact on manpower and supply chains, we have not seen any material impact on our projects' overall schedules. All of our major projects have been exempt from any government-mandated shutdown. I will begin by giving an overview of our major projects, then we'll follow that with an update on planning activity for our development pipeline. Beginning in Montreal, the team has been able to make solid advancements at our work at 400 Atlantic and 700 DLG. Our first phase of vacant suite upgrades is complete, and the team is focusing on leasing up the improved spaces. In Toronto and Kitchener, despite the government's restrictions on construction activity, we have been able to make solid progress on all of our large-scale development projects. At the end of the quarter, we had reached the top floor of the main office tower at The Well. We have completed the transfer of three of the six air right sales to our residential partners and will complete the remaining over the next four months. The team has turned their attention to ensuring that the site is ready for tenants to start their fit-out work. The first tenant begins their work in September. At Adelaide and Duncan, our partners have reached the fourth floor and continue to climb up the tower. RioCan is nearing completion at our JV project at College Street and should start the lease-up for this rental residential project in the late summer. On King Street, we have been able to excavate the majority of the site and have started the form work for the lowest levels of the below grade. We anticipate reaching grade by the end of 2021. In Kingston, our partners Perimeter continue to make good progress on our Breithaupt phase III project. We have reached the fourth floor and anticipate construction to be completed by Q1 2022. In Western Canada, we are nearing completion of the restoration of the Lougheed Building in Calgary and 400 West Georgia in Vancouver. Work at the Boardwalk Rexall Building in Edmonton continues unabated. Planning activity. We've been able to progress work on a number of future intensification projects in Montreal and Toronto this quarter. This includes the formal submission for the first expansion of Le Nordelec and the preparatory work for the two intensification projects in Toronto. The latter two submissions should be made in the following couple of weeks. The team has started the initial planning work for the intensification of the northwest corner of King and Spadina. Despite the challenges of COVID on our workforces and supply chains, this quarter has seen solid progress made on all fronts of our development activity. Our team remains upbeat and well-prepared to ensure that we continue to push through the challenges. I will now turn the call back to Michael. Thanks, Hugh. As I mentioned in my letter to unit holders, we continue to make small strategic infill acquisitions, principally in downtown Toronto. These afford respectable yields and augment existing concentrations with future intensification potential. We allocated CAD 100 million to acquisitions like these in 2020 and another CAD 30 million in the first quarter of 2021. We expect to continue allocating relatively small amounts of capital in this way over the remainder of 2021. As Cecilia and Hugh have discussed, we continue to allocate large amounts of capital to development activity, with our completion and return estimates remaining intact. We estimate that current developments will increase our annual EBITDA by approximately CAD 79 million and have a weighted average lease term of approximately 13 years. As we look to the future, I believe we should base our decisions and our expectations on what people actually do, not on what they say they might do. Most of the behavior I observed in 2020, and thus far in 2021, suggests that Canadians remain committed to the city as the principal venue for living, working, and playing. Demand for urban accommodation has not declined, but rather accelerated, putting upward pressure on prices. Demand for urban office space has not collapsed, but rather remains strong, putting continued upward pressure on rental rates in Montreal, Toronto, and Vancouver. Despite the fact that urban retail users have borne the economic brunt of the pandemic, many are committing to the few strong urban locations that come available, effectively looking right through the pandemic to a strong rebound. People are betting on and committing to the city more than ever. Far from reversing urban intensification, the pandemic seems more likely to have the long-term effect of accelerating it. It follows that we continue to have deep confidence in our strategy of operating distinctive urban workspace and UDCs in Canada's major cities. We continue to expect our operating and development environment to be generally favorable in 2021. Finally, we continue to have confidence in our internal forecast for 2021. I do hope this has been a useful and comprehensive update for you. We'd now be pleased to answer any questions that you may have. Operator? Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. We will now take our first question from Jonathan Kelcher, TD Securities. Your line is open. Thank you. Good morning. Good morning. First question. Congrats on the leasing at 250 Front. What kind of tenant was that? There were three tenants, Jonathan. Actually, two tenants in three leases. They've been with us for a while, and now they're looking for more space. Okay, expansions. You say the lease, the rents commence in Q2, and then how do they build beyond that? The smallest of the three spaces starts actually June 1st of 2021, and the other two spaces will begin contributing in Q1 of 2022 and be phased over 12 months. Okay. Then what are your prospects for the remainder of the space? We continue to work on it. I think we may see some expansions in the future. We're also looking to complete the leasing at 151 Front. The leasing cycle for these projects is a long one, but we're constantly working at it. Okay. That is helpful. Thanks. Then just switching, on the development side, you guys signed leases at Boardwalk and 400 Atlantic this quarter. Do you now have any-- I guess they both say they're going to be transferred in Q1 of next year. Do you have estimates on the total cost and the expected yields for those two projects? We haven't done any deals. It's Hugh here. We haven't done any deals at 400 and Boardwalk Rexall. The leases that were described in the table are existing leases because the building was partially leased and partially de-leased. Those are what we're referring to in those tables. Yeah, it's to be determined. We haven't disclosed the costs yet. We're still tendering that out. Okay. You still think you'll be done those by Q1 next year? Yes. Okay, thanks. I'll turn it back. Thank you. Our next question is from Caitlin Burrows from Goldman Sachs. Your line is open. Oh, hi, good morning. Good morning. Michael, you mentioned planning for the long term around what companies are actually doing versus what they say they're going to do, which I think makes sense. I was wondering if you could talk about how the office utilization or repopulation is going so far. Based on the conversations that you're having, what is your latest thoughts on more significant repopulation timing? I'm going to have Tom elaborate on it, but generally, our tenants across the country are beginning to establish firm time frames for reoccupying their space, which is encouraging. There has been virtually no need expressed on the part of our tenants to transform or modify their existing spaces across our portfolio. There's one exception to that, a user that needs to, in a way, de-densify the utilization of their space. When I say de-densify, I mean they have to remove partitions, which actually create multiple pinch points within their space. That's the exception that proves the rule in our case, that nobody feels the need at this juncture to modify their space for the purposes of returning to the office. Tom has been conducting those discussions with our tenants on an ongoing basis and can probably elaborate usefully. Yeah, I canvassed 15 large size users in the portfolio in various parts of the country. They're media companies, tech companies, financial services, professional services. A wide range. They're planning on reoccupying their space in September, October timeframe predominantly. They're going to be phasing in their population, usually starting around 25%, would expect to reach full levels, and again, that depends on vaccine rollout and public health. They expect to reoccupy to 100% by the end of the year or early next. Got it. Okay. Just on the topic of subleased space, that's something that it looks like it peaked in the recent past at 6% at the year-end, and now it's down to 5.3% with noticeable declines in Toronto and Montreal. I was wondering if you could go through any details of this decline, whether it was due to some of that space being actually subleased, whether that was directly with you or the original tenant taking it back, and then your expectations of the sublease space going forward. Very little of our space has been actually subleased. It's been tenants taking the space back off the market, recognizing that they're going to need it. There were a lot of small tenants that decided, we're working from home, let's throw our space in the sublease market and see what happens. They're not getting any takers, and they realize they need it, so it's slowly coming off. We think that trend's going to continue for the balance of the year. Got it. Okay. Maybe a last one. I think it was touched on in the prepared remarks just on the leasing spread number that you reported in the first quarter, still up but lower than in the past. When we look at the mark to market kind of potential that you guys show in the supplement, it could increase later in the year. Just wondering if you could give some color on that, and to the extent you're confident in that increasing or that there could be some other risk. I think it'll increase later in the year. As confidence builds about reopening, there's momentum that takes place in the marketplace, and tenants are a little bit more flexible. We did give some tenants a little bit of a break by scaling up their rent in renewal periods. I think as confidence builds, we'll be able to see bigger increases right off the bat throughout the year. The other thing I'd add, Caitlin, is as the space renewed in Toronto goes up in terms of the total, so too will the average rent increases. The ability to achieve very significant rent increases in Toronto, over our in-place rents has not eroded one bit as a result of the pandemic. As Tom mentioned, the lower number in Q1 was really a function of the fact that very little of the space renewed in Q1 was in Toronto. It does vary for us from market to market in terms of the level of increase we can expect. Toronto is easily the highest. Those numbers can approach 50% over prior in place. We haven't seen any pullback in the Toronto market at all. Frankly, Calgary is seeing more leasing activity than we expected. The rents aren't heroic, to put it mildly. We can get deals done, and they do tend to represent some erosion in relation to prior in-place levels of rent, as we expected. Got it. Okay, thanks. Thank you. Our next question is from Michael Markidis from Desjardins. Please go ahead. Hi. Thank you, good morning to everybody. Just focusing back on the 5% average lease spread this quarter. Just noticing within the mix, totally understand your explanation with regard to geography, but there was a flat rent at CAD 40 or maybe multiple leases, an average of CAD 40, which disproportionately threw off that mix as well, and I suspect that might be due to a scale-up over the course of the renewal term as you expected, but I was just wondering if you could give us a little bit more color on that particular space, just given the high rent per square foot. I would say you've hit the nail on the head, Mike, in terms of just giving the tenants the benefit of the doubt early in the term. Okay. Would that have been specific to Toronto or just trying to get some color on where that space was? Pretty well everywhere. In Calgary, somebody's coming off a 10-year lease, chances are the rent's going to be lower. In Toronto, we gave some tenants a break in early years. I would say same in Montreal. Okay, great. Thank you. Just in terms of your leasing efforts, you guys have had Tom D. Tudor pointed comments with respect to the increased activity on the leasing side in terms of extra resources, but also extra efforts to be visible and reaching out to the brokerage community. In terms of what tenants are looking for, is there anything that you're seeing in terms of the way that you need to evolve your service offering, HVAC upgrades, stuff like that, in response to the pandemic that are becoming topical, or is it business as usual on that front? You were breaking up there, Mike, for part of it, but was your question, do we need to modify our offering at all in the future? I was just curious. Michael made the comment that nobody's looking to change the way their existing footprints. I'm just wondering on the new leasing side, if there's anything that tenants are looking for now that is different than what you may have seen in the past, and specifically just thinking about things like in the context of the pandemic, HVAC upgrades or touchless water faucets, all that kind of stuff that seem to be becoming more topical with new builds. Not really. I don't think people are as concerned about their physical office environment as they are about getting to the office. We haven't had many issues with respect to people's concerns with the office environment itself. Okay, great. Thanks. Last one from me before I turn it back. Just on the CAD 79 million of EBITDA that you expect on completion of the existing pipeline, do you have any thoughts based on your leasing expectations and the mix of space in that development pipeline, how long it will take you in terms of once you complete the developments to actually achieve the CAD 79 million? To Ram. The larger projects are 100% leased or very close to 100% leased. I'm thinking of Adelaide and Duncan is 100% leased to Thomson Reuters. Hop Three is 100% leased to Google. The Well, 85% leased on the office component. I would say that the bulk of that is baked, and you can go off the timing that we disclose in the MD&A in terms of when it'll actually hit our EBITDA. Okay, great. Thanks very much, and I'll turn it back. We take our next question, Jenny Ma from BMO Capital Markets. Your line is open. Thanks. Good morning, everyone. Congratulations on the strong leasing quarter. I'm wondering if you could share what the average term in terms of time frames are like, and is there a range that you can provide, and has that really changed from leasing activity you've seen in the pre-pandemic times? Not much change in terms of the lease terms. I would say there's been a few occasions where we've elected to have shorter terms, where we've had to compromise in Calgary. For a shorter term, waiting for the market to improve, where we can get a bigger rent going forward. Generally, no change in the lease terms requested by tenants. Are you able to share what the average lease term for the leasing in Q1 was, roughly? I don't know it offhand. Consistent with our in-place. Yeah. Because it didn't change our in-place. It didn't alter the in-place in any material way. By implication, it's five point six years or something like that. Okay, great. That's helpful. I wanted to dig a little bit deeper in terms of that Toronto-Calgary differential in the leasing activity. First of all, with Calgary, can you give us some more color on what kind of tenants are looking for new space right now? Does it have to do with a bit more confidence in higher oil prices, or are they sort of non-oil and gas users? Do you see Calgary leasing being an impact for the rest of the year, or is it really contained to sort of a Q1 event, either because of market conditions or just the timing of the leases? I think it's efforts. I think Calgary wasn't as locked down the same way that we were in Ontario, and I think the marketplace was more amenable to physical tours. The team turned on the tap full blast in terms of connecting with the brokers. The kind of tenants we're seeing are tech tenants, professional services tenants, not oil and gas tenants in particular. As you know, Calgary is trying to make a big push on attracting tech, and I think they're beginning to see some traction. Certainly, we are. But I think that the surge in activity in Calgary is attributable to the efforts we've made on personal connections with the brokers. Okay, great. When I look at the rent roll for 2021, I guess it's Calgary, Edmonton, and Vancouver all rolled up. Is there much more left in Calgary that might provide some downside? It looks like the average spread is pretty much flat. Is it because Calgary's rolled off because of its Q1 leasing, or is there more in there, or it's offset by rents in Vancouver? I don't think we're going to see any more pressure on Calgary. I think it'll maintain the same momentum. Great. Just switching gears to acquisitions. Michael, last quarter, you had talked about some potential for larger opportunities in the market, particularly in Vancouver, that you guys would be interested in. Could you give us an update on what you're seeing in the market and if you expect more product to be coming online as you had indicated a couple of months ago? Yes. Just to clarify, what I foresaw and what I anticipated and what I adverted to in the Q4 conference call was the recommencement of trading of larger, high-quality urban office assets, and that has occurred. It has occurred at price levels identical to or even better than pre-pandemic, as I expected. It's even started in Montreal, which doesn't surprise me, but actually, I'm most happy to see because Montreal was, in many respects, the latest to really trade at an aggressive level pre-pandemic. To see it reestablish itself at that level so quickly, call it so quickly following some kind of renormalization of trading, is really encouraging to me. Whether that recommencement of trading will bring large opportunities to Allied or not, I don't know. I have no wish and no sense of urgency with respect to large acquisitions on Allied's part in 2021. What I am thrilled about is the fact that we're seeing small infill acquisitions that enable us to augment existing concentrations of real significance in our Toronto market. They don't represent large allocations of capital, but they are generating respectable returns. The amount we were able to allocate in 2020 was not immaterial, but not large at CAD 100 million. Likewise, the amount we allocated in the first quarter was not large, but the longer-term implications of the acquisitions are significant. Those are the acquisitions I want to focus on in 2021. The fascinating thing about them, and this has become more apparent to us as we've worked our way through this unusual environment, is these are assets that would not have been available to us pre-pandemic. Not because they're owned by weak owners. They're not owned by weak owners, but they're owned by owners who aren't large, established real estate organizations. What those owners did pre-pandemic was entirely intelligent and correct. They ran with their gains, and they have enormous gains accumulated in those smaller properties. The pandemic impressed upon them that there is indeed risk associated with owning commercial real estate in major urban centers in Canada, and suggested to them that the wise investment conduct might be to realize that large gain and pass the assets on to larger organizations that are able to cope with the risk that is inherent in real estate ownership and operation. All the acquisitions we've made in the first quarter of this year are properties that simply would not have been available to us pre-pandemic. That's where we see the opportunity arising for us out of the pandemic, not some sort of large acquisition in Vancouver. I'm not saying one won't present itself, but frankly, I'm less interested in that than I am in taking advantage of the opportunities that wouldn't have come our way had the pandemic not occurred. Trading has recommenced. The trading has occurred at cap rates entirely consonant with the cap rates that prevailed pre-pandemic. Interestingly, and this isn't something we anticipated initially, small acquisitions that would never have come our way in a pre-pandemic environment are coming our way, and that's where we're focusing our energies and attention. In terms of capital allocation, the bulk of it is going to be toward development over the next two years. If we can allocate relatively smaller amounts to these really potentially significant small acquisitions, that's where we want to go. Great. That's a fantastic color. That actually leads to my next question on the acquisitions you completed in Q1, the one in Toronto and Calgary. I just want to be clear with the 432 Wellington asset. Is that income producing? Because I believe the tenant is not operating at this point. What kind of lease is in place for that property? That is a very interesting situation. It's a building on Wellington across from The Well, one building west of our 420 Wellington, which is a building we've owned since the REIT went public in 2003. It was run as the Le Sélect Bistro. It is a very popular restaurant in the neighborhood at large and has a long history in Toronto. The operator happened to own the real estate as well, decided to retire. Most of the value in the business was reposed in the real estate, and offered it to us. We agreed to buy both the real estate and the restaurant business. Let me assure you, Allied is not getting into the restaurant business. We thought having the restaurant assets might make it more attractive to a new operator that we would attract to the property. Interestingly, it worked out exactly that way. A major operator in this country is going to be operating the property as Le Sélect, with rent commencing on July 1st, at levels of net rent that are extremely encouraging and represent a very good return to us. The deal is structured so that we can regain access to the property after five years, although it's a 10-year deal, should we want to redevelop it at that point in time. My guess is we will see that operation run for the full 10-year term of the lease, and we will redevelop that complex of property on Wellington 10 years out. Occasionally things do progress more rapidly than we expected. If they do, we'll have the ability to get that back five years from July 1st of 2021. It's a perfect example of the kind of opportunity that wouldn't have come our way and wouldn't have been accessible had the pandemic not occurred. It is also a transaction that validates in the fullest possible terms, the kind of retail net rents that we can achieve at King and Spadina. They're every bit as high as they were pre-pandemic, if not somewhat higher. Okay, great. That's really interesting, and I, for one, am pleased to hear that Le Sélect will be coming back in some form. My last question is about the deferred rent and the CERS component, that 1.5% out of that 2.4%. I'm just wondering, given the different structure of CERS versus CECRA, that 1.5%, is that an estimation on your part of the tenants you believe who are eligible, who have indicated to you that they're eligible, or is there some sort of an agreement in place that Allied has in writing with the tenants, in terms of accessing the CERS rent assistance? It's the latter. Okay. We have worked with the tenants. We have helped them process their applications through the program. We know the applications have been accepted, and we have a commitment from the tenants to provide those funds to us on account of their rent on receipt. Okay, it's just going to be a flow-through to Allied as the payment is received by the tenants. Exactly. Perfect. Thank you very much. Thank you. We take our next question from Mario Saric from Scotiabank. Your line is open. Hi, good morning. Good morning. For the first question, I wanted to just come back to the lease renewal spread of the five point four, just maybe to help us kind of better quantify the impact of scaling back the rent increases as you termed it. Do you have a sense of what that five point four would look like either on a year two basis or on a weighted average rent over the term of the new lease? Mario, we don't. We should, actually, and we will provide that, but we did not make that calculation and in light of your question, and in retrospect, we should have. We can make that calculation. We will, and I think it is an important bit of additional disclosure. We will provide that. Okay. Maybe shifting over to the guidance, which was intact. I believe the call at the start of the year was kind of a relatively flat occupancy. Over the course of the year, it did tick down 60 to 70 basis points. Based on your commentary, it does sound like you expect it to tick back up again. Is it a fair comment to say that the expectation is for the economic occupancy to be pretty consistent with Q4 2020 at the end of the year? We do expect occupancy to increase over the remainder of 2021, principally in Montreal. That's not guaranteed. Given the level of activity, given the depth of our team in Montreal, and given the relationships with the brokerage community, which Tom adverted to in his prepared remarks, we do expect to increase occupancy in our overall portfolio over the remainder of 2021, and we do expect the bulk of that increase to come from Montreal. Understood. Okay. Just on that point, in Montreal, there was 90,000 sq ft roughly of increased vacancy quarter-over-quarter. How much of that would you say was orchestrated by Allied versus kind of a broader general decline in lease renewals? I think, and I am going by memory, and Tom can correct me. I think a big chunk of that would be part of building transformation. We will see some non-renewals in Q3 of 2021 in Montreal, which we adverted to when we discussed our internal forecast for 2021. Well, we do know those are coming. We are making a lot of progress on them now. I believe the bulk of, if you will, the increase in vacancy in Montreal in the first quarter was largely transformative work at Elpro and the RCA building and 400 Atlantic. I think the bulk of it, Mario, was, if you will, transformational rather than non-renewal or erosion. Got it. Okay. Just sticking to the guidance, one last question, and it pertains to 250 Front. I think Tom mentioned the smaller of the three leases will commence rent in June of this year. Is that now reflected in your intact guidance, or do you continue to exclude it from your original guidance? It's a good question. You're right that we did not, in our internal forecast, contemplate any rent increase as a result of lease up at 250 Front. I suppose it would be modestly incremental to our guidance, but we don't expect it to have impact in 2021 or to have material impact in 2021, but it will certainly have material positive impact in 2022 and beyond. I think that's probably right. I would say that's right. In context, I said the smallest of the three leases, Mario, and the smallest lease is about 10% or 11% of the total. Okay. It's a small portion of the 22,500 sq ft. You got it. I guess what I'm just trying to understand is the guidance is intact. Just curious about how you feel about the urban office portfolio today relative to three months ago, I guess, in relation to that guidance. It sounds like it's pretty consistent. Yeah. We're entirely comfortable with the internal forecast as it relates to our urban workspace portfolio. There has been nothing that has occurred to reduce our confidence or to cause us to be more cautious. Indeed, the success at 250 Front is incremental to our internal forecast. As Tom points out, it's not going to be materially incremental in 2021. If we are successful in increasing occupancy in Montreal in the face of the non-renewals that I adverted to in Q3, that too would be incremental, but it would be late in the year. Even if we're fortunate enough to get there, it would not likely have much impact on 2021. It would clearly have impact on our run rate for 2022. Right. Okay. I wanted to shift gears to 250 Front. The leasing was nice to see. On the 20,000 sq ft that was leased, how much capital on your end would be required to prepare that space for the lease, if any at all? There was some capital, but less than normal. The first tranche was basically no capital required, and the other two, modest amounts, let's say. Okay. I think, Michael, in the past, you've talked about a longer-term plan to commit capital to 250 in terms of increasing the capacity, productivity, the capability there. Are you at a point now where you can quantify how much capital you're thinking about, how it's going to be spent, and how it may impact the productivity at 250 Front going forward and the types of returns you think you can get? No. It would be irresponsible, I think, to even try. Our focus, of course, is to complete the lease-up of 250 Front, which happily we have finally made decent progress on in April of this year. We're not at a point where we would begin to plan for taking additional amounts of space from the landlord in that complex, the CBC. We're really not in a position to, in a way, anticipate or forecast or predict growth at 250 Front over and beyond what we have, even though, as we've discussed, we have tremendous power allocated there, along with power at 151 Front. The potential to increase the economic productivity of those two facilities is material. I don't think it's fair to suggest we've made any progress in that regard thus far, Mario. It isn't something that's likely to have any impact on 2021. I'd be surprised if it has a material impact on 2022, to be honest. It is a capability that exists. It is a capability that I think we will ultimately deploy or exploit, and there is a cost of capital associated with that exploitation. It's not imminent, I don't think, given the experience we've had in the last 12 months. Got it. Okay. My last question, just more of a housekeeping item. The parking revenue in Q4 was down CAD 1.5 million year-over-year. Do you have a sense of what that number was down in Q1 of this year? Same number, Mario. CAD 1.5 million. Perfect. Okay. Thanks, everyone. Thank you. We take now our next question from Pammi Bir, RBC Capital Markets. Your line is open. Hi, everyone. Thanks. Good morning. Morning. Maybe just coming back to the rents and leasing spreads. Have you had to perhaps step up at all in terms of whether it's inducements or incentives? Any comments on how you see perhaps net effect of rents trending over the balance of the year? There really hasn't been any change in the kind of inducements we've been providing the tenants on these renewals. We'll be consistent with the MERS going forward. Have there been any instances where there are perhaps any free rent periods that might be out of the ordinary or longer at all? That's a good question, we're almost allergic to free rent periods. No. No change there. Got it. Just maybe switching gears and just thinking about the developments. We've been hearing a lot about rising costs again, or maybe this is just a continuation for quite some time, but it seems the pressures seem to be heating up. If you look at the development portfolio, the yields, as you mentioned, and we can see they're holding in pretty steady. Can you talk about maybe what you're seeing from a cost perspective and whether you see any potential pressure on those yields going forward? Sure. I'll take this. I don't see any pressure on any of our yields for any of our projects, mostly just due to where we are in tendering. I think that we're reevaluating for future projects, taking into account cost escalations. For all of our existing ones, just given where we are and what we've tendered and what we've locked in, I don't see any impact on our yields. Got it. Thanks very much. I will turn it back. Thank you. We take now our next question, Matt Kornack from National Bank Financial. Please go ahead. Hi, guys. Morning. Morning. Most of my specific questions have been answered, but maybe a more general one. Looking at the third-party brokerage reports, it's a little counterintuitive, I guess, to our intuition in terms of where the vacancy has been highest, and it seems to be in King West and East due to the sublet move. Just generally wondering how you think this all plays out in the downtown core and what the knock-on effects of that may be. I know I've been going into the office since July, and it seems the only reason to be at King and York is to be in the office. Your thoughts generally on those dynamics and how it may impact your business going forward. I think I can summarize that, Matt, pretty usefully. I think if we look at downtown East and downtown West, where Allied has its portfolio concentrations, I think it has a slight advantage in the context of the ongoing pandemic and in the early stages of the reopening. Primarily because they're mixed-use neighborhoods with established residential populations there to, in a way, provide demand to the storefront retail users. The buildings are lower rise, so it's a little easier for people to repopulate if they can get to the buildings in a manner that they feel is safe. I think that advantage is temporary only. I think once the vaccination rollout achieves its level of, if you will, distribution that is necessary for public health purposes, I think the core will repopulate, and be every bit as vital as it was pre-pandemic. The retailers beneath the tower complexes who have suffered so intensely during the pandemic because the towers are empty will again achieve the kind of sales volumes that they were accustomed to. I don't see any systemic erosion in the conventional central business district at the end of this pandemic. I think our properties may have a slight advantage in the early stages of the pandemic, but I think once we're back to normal, and I am convinced we are returning to normal now, although we're certainly not there, I think the towers will repopulate and operate just as they have historically. I think the buildings east and west of the core will repopulate and operate just as they have previously. I don't think there's any systemic weakness in the office towers in the core of Toronto or frankly, in Montreal or Vancouver either. On Montreal and Vancouver, it seems, at least at this point, and everybody's feeling similar circumstances, although Quebec seems to have done a little bit better in the third wave. It seems like Montreal's been more active. Is that something cultural? Is there new businesses that are being formed there or going to Montreal at the moment? I'm just interested in some of the divergence in leasing trends amongst the Canadian markets. Well, in our case, it's been considerably more active, primarily because we have more space to lease. In Toronto, I think our occupancy is around 97%, 98%. It's quite high, and there's not a lot of occupancy gain that we can achieve in Toronto. In Montreal, I think it's around 92% or so. There's a great deal of occupancy gain that we can achieve there. Part of the activity differential is simply the fact that we have more space to lease in that market. The other part of it, I believe, is related to what Tom alluded to in his prepared remarks, and that is the post-production entities in the city desperately need more space in order to meet the demand that all of a sudden has represented itself from Hollywood and elsewhere in terms of the creation of new content. One of the interesting things about the pandemic, I was reading about this, I'm certainly no expert in this area, during the pandemic, we consumed five years of content in one year. All the content providers are out of content and desperately need to create new content. I think that's part of what we're seeing in Montreal. Montreal's always been driven in our time there by the TAMI tenant complex. A big part of that in Montreal, interestingly, is animation, game development, and post-production. That's been augmented by artificial intelligence, and more recently, interestingly, by the major tech complex, the so-called FAANG companies, which has got to be one of the ugliest acronyms ever. In any event, Montreal has a lot of natural demand velocity because it's such a successful city for knowledge-based organizations. That's the other driver in my estimation. In our situation specifically, it's really because we got more space to lease there. Okay. No, fair enough, and I appreciate the color. Okay. Our next question, and the second last for the moment, is from Howard Leung from Veritas Investment Research. Your line is open. Thanks. Good morning. I realize it's past the hour already. Good morning. I wanted to touch base or ask about the sublease space. The table that you showed in the quarter shows a drop, which is, I guess, encouraging in Toronto and Montreal. Just wanted to know, I guess two things. The first is, last quarter, you talked about the composition of it. I think you mentioned 75% of it was under 10,000 sq ft. Is that still the case with this batch of space? The other one I want to ask is the delta between Q4 and Q1, if you have those figures. Do you know how much space was added and how much space was taken off to make that drop? Thanks. There wasn't much space added to the sublease market, and the space that was taken off, there was a couple of 30,000 footers only. The rest were small, five, three, five, 7,000 square footers. We think we'll see a lot more of those going forward. Right. It sounds like it's still Yeah, sorry, go ahead. No, one of the things we've learned is that in major urban markets that are more advanced in the reopening, the same thing has occurred on a larger scale. Most of the sublease space that came on the market during the pandemic is actually removed by the very tenants who put it on the market as they plan to reutilize it or repopulate it. In London, for example, the trend that Tom articulates is much further advanced, apparently, than it is here in Toronto. Based on that too, we're anticipating as we progress toward reopening, that we'll see more and more of that space, at least in our portfolio, and I expect in the general market as well, come off the market and be pulled by the tenants off, as opposed to leased by the tenants to subtenants. Right. Yeah. It sounds like the same story as last quarter, where tenants are just trying their luck and as things reopen, they should take it off. I guess we're still early in 2021, I wanted to look at the next year, given that we hope for a rebound. In 2022, looking at the lease ladder, it looks like there's kind of a bigger proportion of leases coming up for renewal, especially in Toronto. Is it fair to say, I guess, if we're going to get a rebound, that the growth might be higher than this year in terms of same as NOI and FFO per unit? I'm just looking at the table on page 38 of our quarterly report, if I look and make sure I'm reading it correctly, we've got about 750,000 sq ft rolling in Toronto in 2022. The in-place rent is CAD 2,147, the estimated market rent is CAD 2,663. That would suggest a very significant amount of growth is achievable in 2022 if our market estimates are correct. As you know, we review those every quarter with the brokerage community on a space-by-space basis. That is a reasonable inference from, if you will, that schedule and that chart, especially if you drill into Toronto and Kitchener, which are grouped. Kitchener doesn't have much overall impact on that number. It's primarily Toronto, and there is a fairly respectable gap between in-place and our current estimate of market rents. Right. I guess, speaking to the year one, year two renewals that you talked about, you don't anticipate at this time to have to do that with the Toronto tenants that are expiring next year, right? I guess this is more of a Q1 2021 strategy. Yeah, I would say it's something we do expect to do in 2021. As Tom mentioned, the tenants accept the rent increases but have asked us if we would ease them into it rather than have it occur, if you will, overnight. In the interest of longer-term tenant relations. For tenants who have been long-term occupants of our space, we're prepared to do that. It's not a function of weakness, it's actually a function of strength, and it is appreciated. It gives the tenant a tough year, if you will, during which they won't be utilizing the space, to not have to withstand the rent increase. I would hope by 2022, we will not be doing that because the tenants will indeed be using their space and have to bear the full brunt of the increase from day one. I think it's a very good move on the part of our operations and leasing teams to have done what we did in 2021, because most of the tenants who have agreed to these renewals aren't even using the space, or at least not using it in any material way. I think it was a very good thing to do, but it wasn't a function of weakness at all. It was simply an effort to recognize the circumstance with users who have been part of our portfolio for a long period of time, and with whom we have a very constructive and generally longer-term relationship. Right. Yeah. I'm sure they also appreciate the breathing room as well. That's it for me. Thanks, everybody. Thank you. It appears there are no further questions at this time, and I'd like to turn the conference back to you for any additional or closing remarks. Well, thank you all for participating in our conference call. We'll certainly keep you apprised of progress as we move forward. Be safe, be well, and we will be talking soon. Thanks so much. This concludes today's call. Thank you for your participation. You may now disconnect.