Good day, and welcome to the Allied Properties REIT second 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, President and Chief Executive Officer. Please go ahead, sir. Thank you, and good morning, everyone. Welcome to our conference call. Tom, Cecilia, and Hugh are here with me to discuss Allied's results for the second quarter ended June 30, 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 AIF 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 reports. In my view, Canadians across the country have done a great job with the vaccination program. Our national success is restoring the confidence necessary for people to return safely to a vibrant form of urban life. We see and feel the restoration of confidence in our business. Operating and leasing momentum continued to accelerate in the second quarter. FFO and AFFO per unit rose to record levels of CAD 0.602 and CAD 0.533 respectively, consistent with our expectations. Average in-place net rent per occupied square foot rose again in the second quarter, coming in at CAD 24.30 compared to CAD 24.13 in the first quarter and CAD 23.29 in the comparable quarter last year. Despite the pandemic, our space has become more productive economically over the past six quarters. Cecilia will summarize our financial results and speak about the ongoing augmentation of our financial and ESG reporting. Tom will follow with an overview of leasing and operations. Hugh will provide a development update, and I'll finish with our current thinking on the future. Now over to Cecilia. Good morning. I'll speak on three things. One. our evolving disclosure. Two. our progress on environmental, social, and governance practices. Three. our technology-based initiatives. First, our evolving disclosure. Many of you know that we regularly solicit feedback so that we can provide the best information possible to our stakeholders. In our Q1 report this year, with the support of Nanthini Mahalingam, our VP Finance and Accounting, and her team, we refined our disclosure to make the most important information the most prominent in our quarterly report. In our Q2 report, you may have noticed that we added to the disclosure in our leasing section on pages 40, 41, and 61. We've also been asked by investors to expand on leasing costs related to leasing activity in the period, which we understand the value of and will begin disclosing in our Q3 report. We're doing this with the goal of evolving into a leader of public disclosure. Our goal reaches beyond the quarterly report and includes disclosure in our management information circular. This is where Anne Miatello, our SVP Legal Counsel and Corporate Secretary, made a valuable contribution in her first few months with us earlier this year and will continue to do so in 2022 and onwards. Second, as our disclosure evolves, so do our ESG practices and related reporting. Jo Flatt, our VP Corporate Strategy and Sustainability, along with her team, has been leading the way for us in that regard. To provide some history, in 2018, we committed to submit ourselves to external scrutiny by responding to the GRESB assessment, a benchmarking tool to assess the ESG performance of real estate companies. We did just that, scoring 64 on our 2019 metrics. While this was considered "a strong first-year showing" and a critical first step in establishing our baseline, it's certainly not where we want to be. We intend to release this year's ESG report describing our 2020 metrics in October, two months earlier than last year in order to include the results of our 2021 GRESB submission, which we consider an important part of reporting on our progress. We're also in the midst of developing goals and targets for our most material ESG topics. This year's report will outline specific water, energy, emissions, and waste reduction targets for our business. We'll also begin reporting under the Global Reporting Initiative, or GRI, and Sustainable Accounting Standards Board, SASB, frameworks, which we consider an important step in our ESG evolution. Looking forward to reporting next year, we plan to align our disclosure timing with our peers in June 2022. We're also preparing to expand our disclosure to include recommendations from the Task Force on Climate-related Financial Disclosures, or TCFD. Our board, management, and the entire Allied team is actively engaged and fully committed to making progress on our ESG practices. Our evolving ESG journey also includes an external assessment of our status as an employer. For the second year in a row, we engaged Kincentric at the advice of David Doull, our VP talent. This has served us well as we've learned about the areas where we have the opportunity to improve as an employer. The employee survey was completed in April of this year. As a result of it, we scored in the top quartile for employee engagement, landing us in the category of top Canadian employer for the second year in a row. Third, our technology-based initiatives. Under Travis Vokey, our VP technology, and his team, we didn't miss a beat in the last 18 months on our technology-based initiatives. They all not only stayed on track, but with the strong inter-regional and interdepartmental coordination and accountability, especially between the technology, property accounting, and property management teams. We also saw a strengthening of the team across the country. Our teams at all levels and in all regions have been tested and have successfully come through stronger by working together through unusual circumstances. I'll now pass the call over to Tom. Thank you, Cecilia. We are continuing our proactive approach to leasing by staying in constant touch with the active commercial brokers in each of our markets. Results have been positive, with tour activity up in Q2 getting closer to pre-pandemic action, and deal numbers are up as well. We completed 99 transactions in the quarter, totaling 533,000 sq ft. Of the 99 transactions, 34 were with new tenants to the portfolio. Equally encouraging, there were 16 expansions completed. When comparing average rents on maturing leases to average rents negotiated, we achieved a 23.8% increase in rents on space renewed or replaced in the portfolio. It's worth mentioning, and as fully expected, the amount of space available for sublease in our portfolio declined considerably over the quarter. We expect this trend will continue. I will now provide an update on leasing activity in Montreal, Toronto, Calgary, and Vancouver, and conclude with an update on our urban data center portfolio. In Montreal, our leasing team was especially busy, completing 50% of all the transactions in the portfolio during the quarter. There were many small deals with new companies at our RCA and El-Pro buildings in Saint-Henri. This is an encouraging sign for the future, as we will be well-positioned to handle expansion, as many of these small companies will inevitably grow. Most notable transaction in the quarter was a renewal of Beyond Technologies for 30,000 sq ft at Cité Multimédia. We are now in the process of finalizing extension and expansion of a film industry tenant, going from 100,000 sq ft to 120,000 sq ft. In addition, we have approximately 300,000 sq ft in active negotiations in Montreal. We were delighted to announce recently the acquisition of Place Gare Viger. This project has exactly the type of differentiated space we seek and will give us yet another opportunity to better serve our tenant base in this city. In Toronto, we completed renewals with Synaptive for 35,000 sq ft, Verizon for 23,000 sq ft, and Service Canada for 11,000 sq ft. We also completed a deal for a full floor of 12,000 sq ft near the top of the tower at The Well, bringing the pre-leasing of the office tower to 86%. There's approximately 450,000 sq ft of active negotiations in our portfolio in Toronto. In Calgary, in the context of the overall market, we are doing well as we gained leased area for the second quarter in a row. We currently stand at 86% leased. Tour activity is particularly strong for small-size users, and subsequent to the quarter, we reached agreement on deals totaling 11,000 sq ft at TELUS Sky. There are approximately 200,000 sq ft of space in active negotiations in the Calgary portfolio. In Vancouver, we continued to de-lease two buildings as we reposition them for the long term. We have about 50,000 sq ft under discussion in this market. Finally, with respect to our urban data centers, as mentioned on the last call, we completed 22,500 sq ft of new leasing at 250 Front early in Q2, and just subsequent to the quarter, came to terms with an existing tenant at 151 Front to lease the last remaining unit in the building of 7,000 sq ft. This brings 151 to 100% leased and our urban data portfolio to 95% leased. I should note that we're completing upgrades at 151 that include adding 3 MW of commercial power, together with related, fully redundant backup systems. This upgrade allows us to accommodate recent and future demand and to ultimately generate more revenue per sq ft at the property. I will now turn the call over to Hugh. Thanks, Tom. I would characterize this quarter as a return to normalcy for the majority of our development activity. As a result, we have been able to make progress on all of our major construction projects. I will begin by giving an overview of our major projects, and then we'll follow that with an update on planning activity for our development pipeline. Construction activity. Beginning in Montreal, the team continues to make progress on 400 Atlantic, 1001 Boulevard Robert-Bourassa, formerly known as 700 DLG, and has begun work on the upgrade of the RCA Building. In Central Canada, we have been able to make solid progress on all of our major construction projects. Beginning with The Well, we have topped off the office tower, closed on two more air right sales, and begun the final work on the office floors that will be occupied by our workspace users at the end of Q3 and into Q4. King Toronto continues to be on track to reach grade by the end of the year, and the team has begun focusing on planning work to build in flexibility for the future retail tenants. In Western Canada, we have turned our attention towards leasing up our Lougheed Building. Our progress of work at Revillon Boardwalk has resulted in the first deal. The team continues to make progress on this project and look to see where we can make further advances on the leasing front. Our partners Westbank have completed the majority of the base building work at 400 West Georgia, which has enabled the first tenants to start fixturing. Planning activity. In Toronto, we were able to make the two re-zoning submissions for the expansion of the Castle and the Bathurst Street assembly. We have also been able to come to terms with the city for the expansion plans of 20 York. Formal approval by the LPAT should occur in Q4 of this year. The team has ramped up our planning activity for the northwest corner of King and Spadina, with an anticipated submission for rezoning at the end of this year or beginning of 2022. In Montreal, the team continues to push for the approval of the first expansion of Le Moulin-à-Lait, which is expected to be received in Q4 of this year. With the new acquisition of Gare Viger, the team will now start to plan the East Block expansion. We hope to have a well-conceived plan by the end of the year. This has been a solid quarter for our development activity. We have worked with our partners and suppliers to ensure that construction activity continues unabated, and that we have sufficiently quantified the costs associated with any delays to our projects. The team is excited to make progress on our future intensification projects across the country. I will now turn the call back to Michael. Thank you, Hugh. As I mentioned in my letter to unitholders, we continue to make 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 94 million thus far in 2021. We expect to continue allocating capital in this way over the remainder of the year. As Tom and Hugh mentioned, we recently announced a large acquisition in Montreal, the urban office component of Place Gare Viger. It will significantly enhance our ability to provide distinctive urban workspace to knowledge-based organizations. The acquisition will also help us begin to expand the range of knowledge-based organizations we serve to include the burgeoning biotech and life sciences sector. As Cecilia and Hugh have discussed, we continue to allocate large amounts of capital to development activity with our completion and return estimates remaining fully intact. We estimate that our current developments will increase our annual EBITDA by approximately CAD 79 million and have a weighted average lease term of 13 years. One final comment. You'll note that the cover and first two pages of our quarterly report illustrate how we plan to transform the ground floor of 700 de la Gauchetière in Montréal, which will be known going forward as 1001 Boulevard Robert-Bourassa. For those interested in further detail, we've posted the vision document on the homepage of our website. The document illustrates much more fully the user and community experience we plan to create at the property. We expect to have the transformation of the ground floor completed by mid-2022, and we've just about completed the base building transformation of a sample floor, which in my opinion, is turning out extraordinarily well. We'll be using the floor to illustrate how the work environment can be transformed throughout the building over time. I hope this has been a useful and comprehensive update for you. We'd now be pleased to answer any questions you may have. Ladies and gentlemen, to ask a question, you can simply by pressing star 1 oneon your telephone keypad. Do keep in mind if you're using a speakerphone, make sure the mute function is released so that signal can reach our equipment. Once again, star one for any questions. We will hear first from Frederic Blondeau with iA Capital Markets. Thank you, and good morning. I'll be quick. Just one quick question for Tom in terms of sublease space within your portfolio, and also I guess overall in Toronto. Are these absolute levels in line with our scenario at this stage? What should we be expecting for the remainder of the year? Thank you. We saw a significant decrease in sublease space, as did the rest of the market, Fred, if that's the question. We do expect companies will take their space off the market as they return to work. They're realizing they need the space. Yeah, that's why I mentioned absolute levels. That 627,000 sq ft, is it more or less in line with your scenario? You would have expected, I guess, a lower number at this stage? No, it's more or less in line with as we thought. Perfect. Thank you. That's it from me. Now we'll take a question from Caitlin Burrows with Goldman Sachs. Oh, hi. Good morning. I was just wondering if you could give some details on the current conversations you're having with your tenants in terms of the return to office progress and plans, and then what you think or they're telling you that means or doesn't mean for their ultimate space needs. We're speaking to all of our tenants quite frequently, there's a wide range of opinions about how quickly they'll resume occupying their space. Some are asking their staff to come back right away, some in September, some in October, some will be phasing in. It relates to the comfort level of public transit and the level of vaccinations. Interestingly, I said in my speaking notes there were 16 expansions in the quarter. Many tenants are actually taking more space to allow their employees a little more elbow room. We think that trend will continue. Got it, okay. Then maybe, I know I'm not going to say the name right, so Michael, though, the larger acquisition that you referenced at the end of your prepared remarks there in Montreal, could you just give a little bit more detail on why that property was attractive to you, the long-term plans for it, and kind of timing of anything in particular that's going on there? Sure. If it's any consolation, Caitlin, I mispronounce it almost consistently myself. It's actually Place Gare Viger, I am inclined to call it Place Gare Viger, which of course reveals that I am an Anglophone and not very competent beyond that. In any event, it is, in my opinion, a spectacular mixed-use urban project that was commenced about a decade ago and is grounded in the restoration of one of the finest heritage structures in this country. That, of course, is Gare Viger itself, or an early railway station in the city of Montréal that was designed in the way the conventional British railway stations were designed at the time, with the rail cars actually coming right into the building where the hotel accommodation existed. That restoration started about a decade ago, the space became the home of several extremely successful indigenous tech firms in the city of Montréal. The owner, Jesta, expanded the vision to include residential and hotel space at what I think of as the rear of the property, new urban workspace just behind the heritage structure, with all of the structures forming, in a way, a surround with an interior courtyard, which is beautifully designed and which will be utilizable by both the users of the buildings, the different users, and the public. It's also in an area of Montréal that is transforming spectacularly as we speak, primarily because of the finalization of a mega-hospital complex called the CHUM. It employs 17,000 people and is instrumental in terms of medical education, medical research, and of course, healthcare. I think there are 1,000 beds in that particular facility, and it's one of two mega-hospitals in the city. Interestingly, the other mega-hospital or new mega-hospital is immediately north of our Saint-Henri. We expect both hospitals to drive transformation in the area surrounding Place Gare Viger, which we just bought, as well as the area surrounding El-Pro Lofts and the RCA Building, which Tom mentioned a moment ago. For us, it was a very logical acquisition of an extremely well-executed mixed-use urban development in the city of Montréal, which we know is continuing to experience accelerating demand for workspace on the part of a broadening range of knowledge-based organizations. Of course, perhaps the newest element of that range is the biotech and life sciences sector, which in Canada is very much behind where it is in the U.S. I think there's a very strong belief that the biotech and life sciences sector in Canada will strive to catch up, that both the governments and the venture capitalists are now prepared to support that evolution in Canada's major cities. We expect it to be very pronounced in the city of Montréal, as well as the city of Toronto and Vancouver going forward. The rationale for Place Gare Viger is it is ideally suited for what I think will be an emerging biotech and life sciences ecosystem in downtown Montréal. We love the asset. It is exactly the kind of facility we want to make available to those we serve. As you know, we serve knowledge-based organizations. That is our mission. Every acquisition we make is designed to enable us to better serve knowledge-based organizations in major Canadian cities. Every development we undertake and complete is designed to do the same thing. We don't buy for buying's sake. We don't develop for development's sake. We do both, if and only if, it will make us a better, space partner for knowledge-based organizations in this country, and frankly, around the world. That's probably more than you asked for, but there it is. I was actually going to ask a quick follow-up. Just as you think about that property in Montreal, is it one where you're just going to use your expertise to lease it out to the right sorts of users, as opposed to needing some large amount of redevelopment capital from Allied? In the near term, we will be striving to do two things. One, to realize the full potential of Gare Viger itself. It's largely complete, but there's a tremendous amount of space below grade that we believe can be transformed and monetized or, if you will, made productive economically going forward. We want to bring it to its fullest potential, and we think we're well equipped to do that. We also want to complete the lease-up of the new building that is under construction and is 24% pre-leased to Novartis. We're well equipped to complete that lease-up. Our Montreal leasing team is extraordinarily deep and extraordinarily busy. Our relationships with the brokers community in Montreal are extraordinarily deep. We feel we can complete the lease-up of that building, perhaps by year-end, but certainly by completion of the building in mid-2022. Tom's eyes just rolled a little bit when I said by year-end. That might be a little ambitious, but that's what we're going to strive for. We're certainly going to strive to have the leasing completed by mid-2022, when the building itself is ready for users to take occupancy and to build out their space. Thank you. Ladies and gentlemen, if you find your question has been answered, you can remove yourself from the queue by pressing star two. We will now move to our next question in the queue. Mark Rothschild with Canaccord. Please go ahead. Thanks, and good morning, everyone. Morning, Mark. Michael, maybe just following up on something that you kind of sort of spoke on in different ways. You've long been favorable on Montreal, and you have some sizable acquisitions there right now. You spoke at a number of different reasons why you liked those acquisitions, whether it's the specific sub-market or the type of property. To what extent is this driven by a real interest in being more active in life sciences, or is this just that this is where the deal flow was now, and it's an area that you like? We've been aware of this development, Mark, for about three years. We looked at it three years ago as a potential development partner, and while we liked the asset very much then, we were very busy with Nordelec, and we were very busy completing the Gaspé properties. We felt taking on yet another significant development challenge might have overburdened the team and might have represented an excess allocation to development in the city of Montréal at that point in time. The owners have completed the development for the most part very successfully in the intervening three years. We would have bought this whether or not it facilitated accommodating biotech and life sciences uses. It is exactly the kind of asset we want to own and operate in major Canadian cities across the country. The fact that it actually may enable us to begin to serve biotech and life science users systematically and well was an added benefit, but we would have bought that in a heartbeat at its current stage of completion, even if it didn't afford that to us. Because at the moment, it's accommodating some of the finest technology users in the city of Montréal, and its ability to do that going forward, in my opinion, is extremely strong. We may or may not have mentioned this in the material that we issued publicly, but there's massive residential development occurring just to the east of Place Gare Viger. What we're seeing unfold actually is the formation of a new mixed-use urban environment in downtown Montréal that in many ways parallels what we've seen at King and Spadina or in the St. Lawrence Market area, or in Mile End in Montréal or in Gastown in Vancouver. It's an area of intense positive urban transformation, and it's exactly the kind of thing Allied wants to be part of. Okay, great. Thanks. Since the beginning of COVID, you were very strong in your belief that people would return to the office in a material way. More recently, you've been quoted publicly as being very forceful on this and pushing others to be more active in this regard. Can you comment on if these quotes that we've seen from you, do you feel that you've been accurately portrayed as being so strong with your comments? Maybe share with us the feedback you've received on those comments. Yeah. The journalist who wrote the article for The Globe did so responsibly, accurately, and with my express permission. I was accurately quoted. I think the headline was manipulated a little bit by the editors of The Globe, and made a bit more sensational than my commentary was, or at least than my commentary was intended to be. I know only too well that it's very easy for the press to distort commentary. To be clear, the article was fair and reasonable and entirely consistent in its content with what I said. I believe what I said, and I continue to stand by it, was a view shared by a very wide spectrum in the business community in Canada, and particularly in Toronto. I do think business has a responsibility to lead. I think Canadian business, the banks in particular, did an excellent job at the beginning of the pandemic, leading large numbers of employees where they needed to be led, which was to working from home. That was the right thing to do. The banks were strong, clear, articulate in what had to be done, and I think the Canadian business community was strong, clear and articulate in terms of what had to be done and did the right thing. With our essential workers remaining in the workplace as needed to protect either assets or people as the case may be. I think it's incumbent upon business to lead back to work, to lead back into the urban environment. There are many small businesses employing many men and women who are unable to open and unable to offer employment to those men and women if we don't come back. I believe it's incumbent upon all of us, including the chartered banks, who are leaders in our economy and in our communities and in our country, to return. Does that mean everybody has to return? Of course not. There are people who desperately want to return to work, and with the vaccine program having been so successful in this country, after a somewhat shaky start, to be sure, it's time to come back. It is incumbent upon business to lead, in my opinion. That's why I said what I said. I stand by it. I was probably a little more provocative and confrontational than I normally am, but I'll answer for that, and I stand by what I said. Thanks. I appreciate the extra commentary. Thanks so much. Yeah. No problem. Now we will hear from Jonathan Kelcher with TD Securities. Thanks. Good morning. First question, just going back to Place Gare Viger. On the second building, are you guys 100% responsible for the lease-up of that? We are responsible for leasing. The vendor will be paying the costs associated with the leasing. We are responsible for executing the leasing, and we are at risk if the leasing isn't executed. Okay. It's a set price basically, no matter what then? That is correct. With the vendor funding leasing costs according to a formula that we're fully in agreement on. We have the responsibility to find and negotiate with the users of the building above and beyond the 24% leased to Novartis. Okay. How do rents in that building compare to, say, downtown Montreal or some of your other sub-markets? The rents are entirely consistent in the new complex, with what we can obtain in our best quality, differentiated urban workspace in Montreal. Okay. Does that imply that there's room for the other building is under-rented in any form? I believe Place Gare Viger is a bit below market, but not materially, especially given the quality of the principal user and given the term of commitment made by that user. Without wanting to ruin Tom's day a second time, my feeling is we might be able to do a little better on lease-up of the new building, than initially achieved with the lead tenant. Frankly, that's not unusual. The lead tenant usually gets the best deal. If we look at The Well, for example, a much larger scale leasing effort that Tom and Tim Lowe and others on our leasing team oversaw. The initial transaction with Shopify was, by a way, the most favorable, economically for the user. Each subsequent transaction was better in terms of net effective rental rates payable to the owners, Allied and RioCan. I would expect the same to occur here. As I say, the pricing was based on achieving the same level of leasing as the pre-lease, not a higher level. There is a bit of an opportunity, I don't want to overstate it, I certainly can't assert this categorically at this point in time, there is a bit of an opportunity for us to do a bit better. Okay. That sounds good. Just switching gears to leasing and the new disclosure on term to maturity. I think for the quarter, it's sub 4 years. I guess that's obviously below your in-place average of 5.6. Was there anything special in this quarter that would have had it lower, tenants being more conservative or anything like that? Jonathan, there's nothing I'm aware of. It was a relatively modest quarter in terms of lease expiries. Was it 250,000 sq ft, Cecilia, or 450,000 sq ft? No, roughly about 350,000 sq ft that we re-leased on maturing space. Okay. 350,000 sq ft matured in the quarter, which is not a lot for us. We usually have more maturing in any given quarter. There was nothing that stood out, Jonathan, although you're quite right that the term to maturity of the renewed leases is somewhat shorter than the weighted average term to maturity of our portfolio overall. There was nothing that stood out as sort of a truncated renewal that I can recall. A lot of the deals that were done in RCA were short-term deals strategically. We're trying to position the building to be most attractive to other users and somewhat larger users. Many of the deals were two-year deals, three-year deals. That's probably skewed the number a little bit. Yeah, we really want to ultimately re-lease RCA in a much more emphatic way than we have to date. These tenants are effectively on a holding pattern for us and might be repositioned over to El-Pro Lofts or elsewhere. Yeah. Okay. That makes a lot of sense. There is an answer, Jonathan. I just didn't have it. There you go. Perfect. Lastly, just on, Tom, I guess, very positive on what you're seeing in terms of demand. Where do you guys think you can end the year on occupancy? That's a great question. The demand actually is amazing for us right now. It's so hard to predict. We're optimistic. We think our occupancy levels will go up, in most markets. Hard to predict. Okay. Higher that, Q2's hopefully the bottom and then starts to grow from there? We hope so. Jonathan, I'm going to give you an answer, and you know that it's going to be at the optimistic end of the range. A lot of pressure on Tom coming from this call. Yeah. There is one factor that is giving us all pause here, and that is something we adverted to when we explained our internal forecast for 2021 for the first time, when we issued our Q4 results for 2020. And that is some turnover vacancy that we know we're going to sustain at Cité Multimédia in Montréal. Were it not for that, I would be confidently telling you that our occupancy would increase meaningfully over the remainder of 2021, and Tom would probably agree with me. Of that, we are all a little hesitant. Having said that, let me say this. Tom and Tim and the team are doing a brilliant job of replacing the tenants that are not renewing at Cité Multimédia. I think there's a very good chance that we will end up with much less turnover vacancy, and perhaps no real hit to occupancy or leased area as a result of these non-renewals. We don't know that yet. T o summarize, were it not for that, our occupancy would absolutely go up across the portfolio by the end of 2021. Because of that, there's some risk that we have to recognize that our occupancy gain will be temporarily reduced or deferred as we deal with that turnover vacancy. I think we're going to do very well with that space. We've already done really well with it, and the caliber of the tenants is even more encouraging. We're not there yet. We don't have all of the space committed, and it could put some downward pressure on our occupancy, at least for a couple of quarters before we then return to what I think would be a steady trend upward. The risk we have is the upward trend might be deferred, but it certainly isn't going to turn into a downward trend. The upward trend in occupancy and lease area might be delayed as a result of those non-renewals, which we've known about for a long time and adverted to when we put our internal forecast together for 2021. Jonathan, I was being quite cautious in answering the question, but I will also say that I'm quite eager for our Q3 conference call, because I think we'll be able to suggest some really positive news. We're getting close on some sizable tenants. We're not there yet, but we're getting close. Okay. That's it for me. Thanks. Our next question will come from Howard Leung with Veritas Investment Research. Thanks. Good morning. Good morning. I also wanted to follow up on the same asset NOI for the rest of the year. I think the forecast was still kept at low to mid-single digits. This quarter was pretty strong. Is that because a big portion of the growth this quarter was from the wind up of the provisions from last year? No. The provisions remain in place. We have not reversed them and brought them into income at all. I think the CAD 2 million provision in aggregate remains in place, and we expect it to remain in place for a while. We don't anticipate bringing it into income until there's more clarity with respect to the reopening. Same asset NOI was strong, certainly because in the second quarter of 2020, we participated in the CECRA program and agreed to abate 25% of the rent payable by some of our retail users as part of that program. I think we'll see the same, if you will, favorable comparable quarter in Q3 for that reason. We've also seen material rent growth really over the comparable quarter. I think the combined impact of the two things has given rise to pretty healthy same asset NOI growth. As I say, we expect that to potentially taper in Q3 and Q4 if we sustain the kind of turnover vacancy we initially thought we'd sustain in Montreal at Cité Multimédia. If we're able to avoid that and have very quick re-leasing and very quick re-occupancy, which is possible, then I think there'd be a little less pressure on our same asset NOI in Q3 and Q4. The number we forecast for 2021 is actually predicated on having a reasonable amount of turnover vacancy with respect to expiries in Montreal in Q3 and Q4 of 2021. Right. That makes sense. That's been baked in. That's why it's built into the forecast. I guess on that note, on the leasing, not to pick on Tom as well, the expanded disclosure on the tours and the lease terms is pretty helpful. It looks like the tours, maybe it's a seasonal thing, it's gone up, and also the conversion rate, if I just take transaction on tours, has gone up. Is that what you're expecting? Are you expecting to even grow your conversion rates for the rest of the year? We're always pressing to about 1,000. I think we'll see a continued increase in tour activity as our teams in every market are encouraging their broker relationships to bring their tenants to Allied. These contacts are absolutely happening every day in every market. We saw, I think, about a 25% increase in tour activity from Q2 over Q1, and that trend will probably continue. I think we'll get better and better at converting those tours into real deals. Right. Would you say that, I guess compared to pre-COVID, the tours, have they reached what you saw back then, or are we still a ways off? I think we're getting close to it now because of the extra efforts by the team. Okay. That's great. Thanks so much for answering the questions. That's it for me. Thank you. Now, moving on to Pammi Bir with RBC Capital Markets. Thanks, Doug. Good morning. Good morning. Just in terms of the renewal leasing, you mentioned the 16 lease expansions. I'm just curious, do you have an estimate of how many tenants may have reduced their space? Are there any conversations around more flexible lease terms? We're not seeing any tenants reducing their space. Nor have we had conversations to date in that regard. That doesn't mean we won't. We don't know what people are thinking fully yet. We've had no discussions with any tenant along those lines thus far. Got it. Another sort of encouraging sign, I guess, so far this year. In terms of the leasing spreads, it was nice to see, I guess, a strong rebound in Q2. I guess some of that was just less space in Calgary. As you look ahead, are you seeing any pressure on the ability to sort of continue to hit those spreads on a go-forward basis, at least through 2021? I would say we're going to continue to enjoy really good spreads because the demand is strong. The number of tours as we talk is up. The activity with all of our teams is up. It's going to turn out to show that the rents are going to go up as well. It's just supply and demand. Just coming back to the comments around the occupancy outlook. Yeah, I appreciate there is still a lot of moving parts, but to what extent does perhaps new supply impact your view, I guess particularly in Toronto over the next, call it 12 to our next 18 months or so? We've been monitoring the new supply for years now very carefully with active assistance on the part of the better brokerage firms. To be very candid, I don't anticipate the new supply in Toronto having any negative impact on Allied's portfolio whatsoever. Remember, too, that Allied is a significant part of the new supply. If there are 8 million sq ft coming toward completion, Allied is behind roughly 1.5 million sq ft with 100% lease up at 19 Duncan and 86% lease up at The Well, of course, at our share and at RioCan's share. What Tom didn't mention, but which we all know is very much in the works, is a final transaction at The Well that could, for all practical purposes, get the office space to full lease up. It's not done yet. It's never over till it's over. It is in a very advanced state of negotiation and finalization. That new space, by the way, has a weighted average lease term of around 13 years. We don't see the new space having any negative impact on Allied's portfolio. Where it might have some negative impact is on the limited amount of supply in urban Toronto that is verging on obsolescence. Again, we're very lucky in this market. The demand is so great and has historically, for the last five years at least, been so great that there's very little space that hasn't been upgraded to the new standards of building operations that tenants quite rightly expect today. This isn't Calgary, and I say this not to knock Calgary, but Calgary has a lot of office space verging on obsolescence, and it is going to have to be dealt with as that market recovers. Toronto has very little, and none of it's in our portfolio. Got it. Just maybe going back to Tom's comments earlier about, I guess, potentially some positive news in Q3. Was that with respect to Montreal or Cité Multimédia, or was that comment more with respect to the potential work at The Well in terms of leasing? It was with respect to Montreal and Cité Multimédia. Okay. Any thoughts on when maybe this lease at The Well could come to fruition? It'll happen when it happens. I can tell you this, the next time we record, it either will have died or been completed. Okay. All right. Just maybe one last one for me. Just in terms of for Cecilia, the capitalized interest did increase rather substantially in the quarter. Just as completions do ramp up in particularly The Well, just curious if you could comment on the outlook for the capitalized interest. Yeah. It does go up as we continue investing in our development pipeline, so you can expect it to continue increasing this year and begin to taper next year as we have fixturing and occupancy commencing at The Well. In particular, that would be the biggest driver. Got it. Thanks very much. I will turn it back. Thank you. Now we will hear from Matt Kornack with National Bank Financial. Hi, again. Morning. I'll start actually with a follow-up question to Pammi's questioning there, and really appreciate the timing on when leases actually are cash paying for The Well. Will the capitalized interest fall off at the beginning or as those spaces are leased? Also with regards to straight line rent, should we assume that the sort of FFO increases earlier on in the process, and that would be the cash rent commencement for those leases that you've identified at The Well? The capitalized interest, as we begin getting our occupancy permits and the fixturing begins, it'll be a bit of a phased approach. It's not going to happen all at once. It'll probably happen over a 6 to 12-month period. You can probably use the new disclosure we have on page 61 in terms of rent commencement as a rough guide. Sorry, Matt, what was your second question? Yeah, just whether, so those dates that you've provided, is that sort of the beginning of fixturing or is that when cash rents would be paid? No, that's rent. Yeah, that's rent commencement. That's cash rent. Fixturing would be anywhere between 6 to 12 months prior to that. Okay. We'd expect the FFO to trend sort of six months before those figures. Fair enough. Exactly. Yeah. Okay. Nfo, that's perfect. On Novartis, is that all sort of corporate space, or is there a lab component to that office space? Also, do you think Novartis is the beginning of a trend? I think most of the biotech companies in Montreal are located on the West Island and in suburban areas. Do you foresee a move from the West Island to downtown by more of these guys? The answer to the first question is it's all office space. There is no lab component. To the second question, the answer is yes. I don't want to suggest there's going to be a tidal wave of movement from the suburbs into the inner city. I think there definitely is a trend to the inner city, and I think the gravitational pull is coming from the two mega-hospitals. Yes. Certainly, one of the reasons behind the decision Novartis made is proximity to what they believe will be a biotech and life science ecosystem. That definitely underpinned their decision. They're actually selling their building once this move is completed in the suburbs. I do believe there will be a trend along those lines, but I certainly wouldn't want to suggest it's going to be a tidal wave. It's just, I think some of these organizations are going to want to be in closer proximity to kind of a diverse biotech and life sciences ecosystem. I think that's what will be pulling them if they do elect to move. Fair enough. I was out on King West a week or two ago, pre the opening of indoor dining, and it's hard to get a reservation on a patio. I am interested in your thoughts with regards to retail in terms of tenant health, as well as maybe parking revenue throughout the balance of the year. We can't predict waves of COVID, but if things continue on this trajectory, how should we think about those two items? Well, our retail users in King and Spadina and in the St. Lawrence Market area, in particular, are fortunate because they're in mixed-use parts of the city. Even if the office repopulation is slow in those areas, and by the way, it is beginning to accelerate, there's plenty of custom for them from the people who live in those areas. Our retailers throughout this pandemic have been able to, if you will, get to maximum demand for whatever they're allowed to provide under the rules right away because of the residential populations. The same isn't true of the retail users at the base of the towers or in the underground PATH system, because people who live in Downtown East and Downtown West are not migrating to those areas to give trade to those businesses. In downtown East itself and downtown West itself, the minute the retailers can open, they've got all the demand they can serve and satisfy. Now that the environment is one of almost full opening, it's going to be very interesting. Our expectation is, and our observations are, they're as busy or busier than ever. We expect all of our key independent owner-operated retail and service businesses to survive, and indeed to prosper going forward. Makes sense. One quick follow-up. On the King project, you mentioned something with regards to the retail users there. Is there any anticipation of changing what was going to be offered there? Maybe skewing more towards office, or are you sticking with the same plan in terms of the base of that building? Sticking with exactly the same plan. There'll be a number of retail uses and restaurants, of course, and some limited amount of office. Okay, fair enough. Thanks, guys. Thank you. Now we'll move to a question from Arnaud Prokofiev with Promethea. Hello. Hi. Thank you for taking my call and my question. I apologize if any of this has been addressed already, because I joined a bit later. First, on the severance expense in the G&A this quarter, can you comment on that? Pardon me. Comment on the severance? Yes. We evaluated people in our property accounting and operations teams earlier this year and determined that, in part because of process improvements and technology improvements, we didn't need the same level of coverage as previously. We also looked at people in the operations team and concluded that there may be some misalignment in relation to our core values on the part of certain people and some, if you will, levels of disengagement, and decided to address those issues all in the Toronto team. We decided to address them, if you will, at once, as the pandemic was ending. Had the pandemic not occurred, we probably would have addressed these issues much sooner, and probably in early 2020. In an effort to keep everybody whole during the pandemic, we addressed them only earlier this year. That's what that relates to. Okay. That's one off. For the second portion of the Gare Viger schedule, like for the 700 Rue Saint-Hubert, what are your plans to finance it? Sorry, you broke up a little bit there. What was the question? On the second portion of the Gare Viger schedule for the 700 Rue Saint-Hubert, how are you planning to finance it? How are we planning to finance the acquisition of the building under construction, pre-leased to Novartis? We haven't determined that yet. It will depend on a number of factors. It'll depend upon our cost of debt at the time and our debt metrics. It'll depend on our cost of equity at the time. We haven't had to make that decision and won't have to make that decision until about a year from now. We're fortunate to be in a position of, I won't call it extreme liquidity, but very considerable liquidity. We can afford to wait in terms of deciding how optimally to fund that particular acquisition. It's not small, certainly, but it's also not massive. My guess is we'll probably end up funding it on a leverage-neutral basis, with equity coming either from the equity capital markets or from the disposition of non-core assets, which is how we're funding the, let's call it the equity component of the acquisition of the properties at the end of August. Hope that's helpful. Okay, thank you. That's all my side. Thank you. It looks like we have one final question in our queue. We'll take our final question today from Jenny Ma with BMO Capital Markets. Thanks. Good morning. Appreciate the expanded disclosure. It's always welcome. Just a couple of questions on the Place Gare Viger. Could you give us any color on how to think about the going-in yield on this asset for the combined office component and the land of the small office piece? That's a question we've been asked a lot, and the way we have consistently answered it is to say that the going-in unlevered yields are entirely consistent with what is taking place in that market today. Okay, great. Turning to the biotech and the life sciences piece, it sounds like this is a bit of a new direction for you guys in very early days, but I'm wondering if there is any opportunity to be acquiring such properties, or is that direction for Allied more driven by organic growth, starting with that piece of land at [audio distortion]? The acquisition opportunities appear to be limited, primarily because the biotech and life sciences evolution in Canada is very much behind where it is in the United States and in other countries. The opportunity to buy assets is limited. It's not nonexistent, but it is limited. I think there's a greater opportunity to create assets that will serve the different segments of the biotech ecosystem. Of course, those segments would range from very small startups right through to very large enterprises. As I say, in Canada, we're very behind in every respect at the small end of the spectrum and at the very large end of the spectrum. There's a strong belief on the part of, I think, both governments and businesses that Canada needs to improve in this area. We certainly have the intellectual capability and the educational capability to improve. Probably most importantly, there is significant amounts of VC funding becoming available in Canada for the first time in a long time for exactly this kind of evolution. We're very early stage. There are very few true complexes in existence today that could simply be acquired. Great. Thank you. As far as, like a follow-on to his question, what is Allied's appetite or range of the spectrum of these kinds of assets you're willing to operate? I guess ranging from office all the way to pretty high-intensity lab space. You've got some experience operating the UDC portfolio, which is more technical. What's your appetite, and range, for what you'd like to invest in the biotech and life sciences side? We would ultimately like to develop the capability of serving the entire spectrum, from, if you will, base-building intense facilities with wet labs right through to office space of the sort that Novartis will be leasing. We want to develop the capability of serving the entire spectrum. You're quite right. Our expertise with respect to the base building intense reality in our UDC space, I think gives us a head start in understanding and ultimately managing a more intense base building type of facility like biotech and life sciences users would need. Frankly, the UDC environment is more intense, more demanding, more complex, than any biotech or life science facility can possibly be, we believe. That said, we have a lot to learn. We are not experts. We're not pretending to be. Allied has typically been careful about expanding its operating focus. We will walk first, then we'll jog, and if things go well, we'll start to run. We're not going to start to run on day one, and we're not suggesting to anyone that we have in-house all the expertise we need to serve these kind of tenants the way they need to be served. We're highly confident of our ability to develop that expertise, and we have the financial, and I think locational capabilities, to do that ultimately. The key will be developing the expertise. Great. Thank you very much. Thank you. Ladies and gentlemen, this will conclude your question-and-answer session for today. I will turn the call back over to your host for any additional or closing remarks. Thank you, and thanks to all of you for participating in our conference call. We will keep you apprised of our progress going forward and wish you all well in the interim. Have a good day. Thank you. With that, ladies and gentlemen, this does conclude your conference for today. We do thank you for your participation, and you may now disconnect.