Good morning, ladies and gentlemen. Welcome to the Dream Industrial REIT year-end conference call for Wednesday, February 17, 2021. During this call, management of Dream Industrial REIT may make statements containing forward-looking information within the meaning of applicable securities legislation. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dream Industrial REIT's control, that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. Additional information about these assumptions and risk and uncertainty is contained in Dream Industrial REIT's filings with securities regulators, including its latest annual information form and MD&A. These filings are also available on Dream Industrial REIT's website at www.dreamindustrialreit.ca. Later in the presentation, we will have a question and answer session. Your host for today will be Mr. Brian Pauls, CEO of Dream Industrial REIT. Mr. Pauls, please go ahead. Good morning, everyone. Thank you for joining us today for Dream Industrial REIT's 2020 fourth quarter conference call. Speaking with me today is Lenis Quan, our Chief Financial Officer, and Alexander Sannikov, our Chief Operating Officer. 2020 was one of the most unpredictable and challenging years in recent history. However, our team has done an excellent job navigating through these challenges, and our business has been firing on all cylinders. We have continued to achieve significant strategic milestones in Q4 and carried that momentum into 2021. We reported a 3% increase in FFO per unit in Q4, driven by CP NOI growth and a lower cost of debt. Our pace of CP NOI growth improved significantly in Q4 as our leasing momentum was realized. We expect the pace to accelerate in 2021. We continue to deploy our excess liquidity into high-quality assets. After completing over CAD 620 million of acquisitions in 2020, we look to continue that trajectory in 2021 and have already completed CAD 138 million of acquisitions, with an additional CAD 215 million under contract or in exclusive negotiations. We raised nearly CAD 450 million of unsecured debt in Q4 at an average fixed interest rate of only 65 basis points after swapping to EUR, resulting in 100 basis points reduction in the cost of debt for the entire REIT. In terms of our operations, we believe the pandemic has permanently increased demand for industrial real estate. Our high-quality urban portfolio continues to attract national and global e-commerce occupiers. Leasing momentum continues to be strong, and we signed nearly 2 million square feet of leases across our portfolio since the end of the third quarter. These leases address a significant portion of our vacancies and will boost CP NOI growth in 2021. We continue to demonstrate strength in our acquisition platform by closing on over CAD 620 million of assets despite the market disruption in 2020. In just over a year, our European asset base totals nearly CAD 475 million, representing 15% of our total portfolio. We have CAD 355 million of acquisitions in our near-term pipeline, of which CAD 138 million have closed already, with the remainder expected to close in the next 30-60 days. All of these assets fit nicely within our focused investment strategy of acquiring high-quality, mid to large bay distribution and urban logistics facilities in strong industrial markets. In addition to improving our portfolio quality, these acquisitions allow us to create significant value through active asset management, enhancing our total return on investment. For example, at our 116,000 sq ft property in Mississauga, acquired in August of 2020, we had underwritten a 90,000 sq ft vacancy effective December 2020 as we expected a tenant to vacate the property. Within a month of the tenant leaving, we have signed a seven-year lease with a national logistics tenant at a 100% rental spread compared to the prior rental rate and 3.5% annual contractual rent growth over the lease term, exceeding our underwriting expectations. Our recently acquired 527,000 sq ft Class A distribution facility in Montreal allows us to add over 220,000 sq ft of additional density with a yield on construction cost exceeding 6.5%. Development will allow us to continue improving portfolio quality. With a strong balance sheet, access to low-cost debt, and improved organic growth profile, we are now executing on our development program. We have the capability and resources for development and anticipate commencing on 1 million square feet of development projects in 2021 across Canada, the U.S., and Europe. In Las Vegas, we expect to commence construction on a 36-ft clear Class A 460,000-ft distribution facility in mid-2021. We are forecasting a development yield of 6%, which is 100 to 150 basis points higher than comparable stabilized product in the market. We intend to expand an existing 110,000 sq ft property in the GTA by 40,000 sq ft with an estimated yield on construction cost of 8%. In Germany, we are planning a 200,000+ sq ft expansion at our property in Dresden, which will nearly double the current footprint. We are also evaluating redevelopments in our existing portfolio, primarily in the GTA and Montreal. The strong growth in land values and market rents over the past 12 months supports the business case for redeveloping these assets. In Whitby, we are in the design and planning stage of a potential redevelopment of a 211,000 sq ft building that we acquired last year with the goal of redeveloping the asset for approximately twice the current density. We expect to be in a position to commence the project once the current lease expires in early 2023. In Mississauga, we are advancing planning of a potential redevelopment of a 200,000 sq ft complex that currently sits on a 10-acre land parcel. We're evaluating the prospects of building a 40-ft clear, modern logistics facility, which is expected to meet the strong demand for last mile logistics assets in the sub-market and command premium rents and valuation. Lastly, given the urban nature of our portfolio, we have a number of sites, primarily in the GTA, where we believe there's opportunity to convert existing assets into mid and high-rise residential uses, resulting in significant value creation. We are in early stages of activating this potential for a few sites within our GTA portfolio and will report additional details as we make progress on these projects. During 2020, we also made significant progress on ESG initiatives. We have summarized our progress and initiatives in our recent sustainability report that was published in December and can be accessed on our website. For 2021, we intend to advance this agenda further as we continue to collect more data, establish meaningful and realistic benchmarks, and measure our progress in order to integrate our environmental and social obligations into the ways we manage our business and create value. We are also exploring the possibility of investing in renewable power in our buildings, which will further our sustainability initiatives. We continue to make significant progress on all aspects of our business, and I will now turn over to Alex to talk about our operations. Thank you, Brian. Good morning, everyone. Starting with leasing. Industrial market fundamentals remain robust across all our markets, supported by accelerated penetration of e-commerce. Availability of rates have remained close to historic lows during the pandemic, with healthy rental rate growth across our portfolio. Leasing volume has increased significantly in all our markets, taking our overall leasing volume since the beginning of 2020 to 4.6 million square feet. Since the end of Q3, we signed 1.1 million square feet of new leases at an average rental spread of 20% over prior rents, including leasing up 600,000 sq ft of vacancy, which are expected to commence in the first half of 2021. We also signed nearly 900,000 sq ft of renewals at an average rental spread of 10%. We also achieved annual contractual rental growth of 3% in our recent renewals and new leases. Earlier this year, we leased our largest vacancy to Amazon, with rent payment commencing in Q2 2021. Pro forma the lease with Amazon, committed occupancy in the U.S. portfolio as well as our total portfolio will be approximately 97%. As we anticipated, Spectra has vacated the smaller of the two main properties we have with them in Montreal on January 1st, 2021. The asset is a 180,000 sq ft distribution and logistics property, well located in Laval. We have received strong interest in the asset and are already in negotiations with a major national distribution tenant for the entire building. In addition, we received strong unsolicited interest from multiple parties in acquiring the asset as is at a significant premium to our current book value. Spectra has expressed their intention to remain at their other major space with us in Boucherville. Turning to our organic growth outlook. With the leasing activity over the past six months, our CP NOI growth profile has improved significantly for 2021 compared to 2020. We reiterate our previous forecast of mid-single digit CP NOI growth for 2021. In terms of quarterly guidance, we expect CP NOI growth to accelerate through the year as new leases take effect. On the operations front, rent collection levels in our portfolio have returned to pre-pandemic levels and our tenant base has proven highly resilient. We collected 98% of contractual gross rents due for January and 99% of contractual gross rents due for Q4 2020. We have collected substantially all rents due for Q2 and Q3 2020 after adjusting for CECRA. Of the CAD 2.3 million of rent deferred during Q2 2020, we have collected over 90% already, and we anticipate collecting the remaining amount in the near term. Lastly, touching on our valuations. During the quarter, the value of our portfolio increased by CAD 92 million, reflecting the robust demand for industrial assets in our markets, strong leasing activity, and rental growth. The outlook for rental growth remains strong, and we look forward to engaging in value add initiatives to increase the returns and surface additional value from our portfolio. I will now turn it over to Lenis, who will provide our financial update. Thank you, Alex. The fourth quarter was eventful and a successful end of another transformative year for DIR. Our financial results for the fourth quarter were strong and in line with our expectations. Diluted funds from operations was CAD 0.19 per unit for the quarter, 3% higher than the prior year comparative quarter due to higher NOI from our comparative properties and recent acquisitions and lower borrowing costs as we executed on our European debt strategy. During 2020, we made significant progress on our financing strategy. Our strong and flexible balance sheet, along with our superior tenant and geographic diversification, enabled us to obtain a BBB mid-investment grade credit rating from DBRS in October. We shifted the REIT to operate on a primarily unsecured financing model, and with our European expansion, we're able to access low-cost euro interest rates. We raised nearly CAD 450 million of unsecured debt during the fourth quarter at an average rate of only 65 basis points after swapping to euros. The average interest rate on our in-place debt has decreased by over 100 basis points over the past year, and at the end of 2020 was 2.57%, with opportunity to reduce this further. We reduced our secured debt to 23% of total assets, with overall net debt to assets of 31% and net debt to EBITDA at 6.2x. Over the course of 2020, our unencumbered asset pool increased by over 10x to CAD 1.4 billion at the end of 2020, which represents 45% of our total investment property value. In conjunction with our unsecured credit facility, this provides a significant amount of financial flexibility as we continue to focus on improving portfolio quality. Last month, we completed a CAD 259 million equity offering and used the proceeds to continue to pay off Canadian mortgages and to fund our near-term acquisition pipeline. With these mortgage repayments, our average cost of debt has come down further since the end of Q4. Our acquisition pipeline comprises the previously announced CAD 355 million of high-quality acquisitions in Canada, the U.S., and Europe. We have closed on CAD 138 million of these acquisitions to date in 2021, with the remainder expected to close in the next 30 to 60 days. Pro forma these transactions, our leverage is expected to be in the low 30% range with an unencumbered asset pool close to 60% of our total assets. We currently retain over CAD 250 million of acquisition capacity. Assuming average leverage for the year in the low to mid-30% range and that current foreign exchange rates prevail, we expect 2021 FFO per unit to be approximately CAD 0.80 or over 10% higher than 2020. For the first quarter of 2021, we expect our FFO per unit run rate to be in line with that of Q4 2020. Comparative property NOI growth, acquisitions, and lower cost debt are expected to be offset by slightly lower average leverage in the first quarter. We expect our FFO run rate to increase in subsequent quarters as our comparative property NOI growth accelerates and we deploy our acquisition capacity. I will turn it back to Brian to wrap up. Thank you, Lenis. We continue to take significant steps in positioning DIR as the premier industrial REIT in Canada in delivering attractive overall returns to our unit holders. We'll now open it up for questions. Very good. We can begin our question and answer session. If you have a question, please press star one on your phone. If you wish to be removed from the question queue, you may press the pound sign or the hash key. If you're using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you should have a question, please press star one on your phone. Our first question is from Brendon Abrams from Canaccord. Hi, good morning, everyone. Maybe just the first question on portfolio composition. 2020 was the entry into Europe, and you already have just slightly under 15% of the portfolio there. Just wondering, how you're thinking about your pro forma target geographical mix going forward, given the ramp-up in Europe has been so successful. Yeah, Brendon, it's a good question. We have a target allocation of 20%-25%, potentially even to 30% in Europe, depending on the opportunities that we're able to find. We're under-allocated there in terms of our eventual target. We're basically at our U.S. target. We'd like to grow more in Europe. That gives us a lot of things. The assets there perform well on their own. It gives us access to very low-cost debt. We like the geographic and tenant diversification across the three platforms of Canada, U.S., and Europe. We're on our way to continue to grow a little bit faster in Europe till we get to our target allocation there. Okay. I guess the idea would still be to have a majority weighting or about half weighting in Canada. Yes. Okay. Roughly 20% target in the U.S., 20%-30% in Europe, and the rest in Canada. Okay. Just a quick question on the utilized cap rates. I noticed a pretty big drop in Ontario quarter-over-quarter, just over 50 basis points. The drop in Europe, that might have been because of adding new assets, but maybe you could just speak to the change in Ontario. Was that a function of kind of new appraisals since the last quarter or changes in the marketplace? Yeah. Well, it's a number of those things. I think as our asset quality goes up, the cap rates will go down. The market continues to be more and more competitive, pushing cap rates down. Alex, I'll let you comment on where you're seeing cap rates and what's happening in these markets. Yeah, thanks. Specifically for Ontario, obviously cap rate is one metric in the evaluation process. We've seen significant acceleration in rental rates and rental rate growth primarily in Toronto, and that does push down the going-in cap rate without necessarily changing the overall total return outlook. The total return gets more skewed towards future growth. Now, having said when we look at the implied cap rates for the fourth quarter for Ontario relative to the third quarter, and that is just last quarter annualized NOI, that cap rate drop is not as pronounced, perhaps, as you pointed out, simply because there's NOI growth as well in these numbers. When we're looking at Q3 versus Q4, it's roughly 20 and change basis points relative drop in the implied cap rates. Okay, that's helpful. I'll turn it over. Thanks. Our next question is from Brad Sturges of Raymond James. Hi, good morning. Just to follow on that line of questioning. When you were reviewing your fair market values, how much of the intensification or redevelopment potential is being baked into those numbers right now? Yeah. Hi, Brad. Basically none. I mean, the properties get evaluated as they are currently sitting there. The intensification or the future value is not considered in our IFRS numbers. This would be value add that we would do in the future. All the development we've mentioned, some of it's like Las Vegas greenfield, but a lot of it is intensification within our current portfolio, which would be additive in terms of overall value to the portfolio. Okay. It's more really based on in-place NOI. Yes. All right. Okay, that's helpful. In terms of the acquisition activity so far to date, it's been a pretty robust start to the year for Dream Industrial. Just curious on your expectations for the rest of the year once you close, I guess, what's still in the immediate pipeline. You had a pretty successful year of over CAD 600 million acquisitions. Is that something you think you can beat this year? Where do you think the REIT, what would be the timeline for the REIT to more or less reach the stabilized financial leverage targets? Mm-hmm. Yeah, Brad, our team has hit the ground running in 2021. We've got a really active and robust pipeline, some of it we mentioned in the prepared remarks. We're looking at a lot more things every day. As I mentioned to Brendon, I think we will likely grow in Europe faster, although we're seeing opportunities in Canada, in our target markets as well as the U.S. We anticipate doing acquisitions there as well. I would expect we would have a similar or more robust acquisition. Total acquisitions for 2021 compared to 2020 will likely be higher, depending on kind of what opportunities we can find. Alex, you can comment a little bit on where we're seeing opportunities, particularly in Germany and the Netherlands, where we're likely to grow faster. Yeah. We continue seeing, as Brad, you suggested, a strong pipeline of off-market, on-market opportunities leveraging our local network. We're seeing more opportunities in Germany, Netherlands, and as the travel restrictions get lifted, we will start looking closer at other potential target markets in Europe that offer compelling fundamentals and ability to grow further on the continent. Okay. In terms of asset sales, any update in terms of your planning there and the potential to see some asset sales in Western Canada this year? We're looking at kind of targeted asset sales, targeted recycling. We're looking at this every day, of which assets kind of would be good to recycle out of. How can we continue to improve quality? Alex, maybe you can give an update on what we're seeing, specifically in Western Canada that Brad's asking about. Yep. We've seen interest in some of our assets that we've identified as we've communicated at the end of 2020. We've identified a list of non-strategic assets. That's for the assets that we would sell at the right time for the right price. We have been engaging with potential users and some investors on these assets over the past six months. We've received some interest in some of our non-strategic assets, and we're currently in discussions with some users, some investors on select opportunities in Western Canada, in various markets. Obviously, we want to make sure that we hit the right price and the right terms. We're happy to hold these assets, or at the right price, we will look at parting with them. I say, you can't comment on what that program may look like right now for this year? It's a bit hard to predict that because the liquidity in Western Canada is not as robust as it is in Toronto. The transaction volume has not been as robust as you know. It's hard to predict that. We are in discussions with potential buyers, but it's a bit difficult to forecast. Okay. Maybe my last question, just to discuss the Laval property with Spectra vacating. Just what's your expected downtime at the property at this stage, and any general comment on what you believe the mark-to-market rent growth opportunity would be? We're in discussions with one prospective user who would like the space, more or less immediately. There will be some fixturing period required, so it will be at least a few months if that deal advances. If not, we expect that we'll be in occupancy kind of in the summer. As far as the mark-to-market goes, we expect that there's going to be better growth profile from the asset going forward. The immediate mark-to-market is likely going to be roughly flat, maybe slight increase, compared to the previous rent. There's going to be a better growth profile from the asset over the lease term. We're already seeing from the unsolicited interest that we've received, on as-is basis, that the asset is going to be significantly more valuable as a result of this event compared to 2020. Whether it's leased or vacant, we're seeing pretty strong valuation for the property. Overall story, overall total return is going to be quite positive for the company. Okay. I'll turn it back. Thank you. Next question from Pammi Bir of RBC Capital Markets. Thanks, and good morning. Just maybe on the Amazon lease in Louisville, can you maybe provide just some background on maybe the terms, like the duration, any rent steps in that lease, and how did the rent set up compare to market rates? Yeah. Hi, Pammi. We can provide basically that the rent is going to commence in Q2. We're not allowed to disclose the specifics of it yet. It's right on market. It's slightly better than what we were forecasting. The tenant's certainly investing a lot in the space. That's about all we are able to disclose at this point. We're certainly really delighted to have it entirely leased, that Louisville building entirely leased to Amazon. They're a great tenant. Will add a lot of value. The rental rate is right in line with market, and we'll disclose that when we're able. Got it. I guess, is there any capital being put in by the REIT at all, or? For the most part, the tenant. Alex, you can comment on any landlord work, but it’s quite minimal. Yeah. The market standard contribution from the landlord, but the tenant is going to be putting in significant amounts of capital to get the property suitable for their last mile operations. The capital the tenant intends to invest is multiples of what we contribute. Got it. Thank you. Just with respect to the same property NOI guidance, the mid-single digit level for 2021. Do you see that sort of being fairly consistent or even across your three regions for just sort of continued leadership out of Canada relative to the U.S. and Europe? Just curious if you could break that down. You bet. Go ahead, Alex. Thanks, Pammi. Yep. With respect to the regional breakdown, when we are guiding mid-single digits for the year, that excludes Europe. Now, Europe will be in our same property numbers later in the year. When we're guiding, we're guiding without it because it's a full year guidance. With respect to how that breaks down, we expect that Canada is going to be sort of in the midpoint of that guidance, and U.S. is going to be higher on the back of the Louisville lease-up. U.S. is going to be in that high single digits, and Canada is going to be sort of right in the middle of the mid-single digits number for the year. Okay. Thanks for that, Alex. Just one last one. I'm just curious with respect to the ATM, curious on your rationale to maybe put that program in place, and when do you see the potential size of that program, what it might look like? You bet, Pammi. I think it's an additional tool as we go. If you look at the kind of the three tools of DRIP, ATM, and then bought deals, those kind of go in order of size, and we expect to be able to issue equity through those three tools. As you know, the DRIP is back turned on. The ATM will be used in the future as needed. However, we've got quite a bit of capacity right now on our balance sheet to do acquisitions, which we will use first. I'll let Lenis comment more just in terms of how we will manage that and how we will potentially use that in the future. Go ahead, Lenis. Sure. Like Brian said, we view the ATM as a good tool to have, just in addition to the other tools such as the larger bought deal equity offerings. It could turn out to be a cost-effective means to finance smaller tuck-in acquisitions, smaller redevelopment projects, and we would utilize it in a manner that results in most value to unitholders. As Brian also mentioned, we don't currently anticipate using it in the near term as we have ample acquisition capacity. Thanks, Lenis. I will turn it back. Our next question, Himanshu Gupta of Scotiabank. Thank you. Good morning. Just on the FFO guidance for 2021, I think you mentioned 10% higher than 2020 or CAD 0.30. Just wondering what leverage or range of leverage are you assuming in that guidance? Also what level of acquisitions or dispositions are baked in in your guidance? You bet, Himanshu. We are basically low to mid-30s as we start 2021. That's anticipated to grow over the year. It doesn't take effect till mostly later in the year. We're basically average leverage in the low to mid-30s for 2021, producing that FFO that you've mentioned. Lenis, you can elaborate on that and how we are forecasting leverage and guidance for FFO. Sure. Yeah. No, as you mentioned, leverage, we're assuming low to mid-30s. Low to mid-30%. I think pro forma the previously announced acquisitions, that kind of gets us in that low 30% range. Guidance is assuming average leverage in that low to mid-30% range, and also that our current FX rates, the U.S. and euro rates, remain the same throughout the year, and those are sort of the big levers there in the guidance. Got it. Maybe on the acquisition side, if you do, let's say, another CAD 500 million of acquisition over and above what you have announced so far, that could lead to an upside to the guidance. Is that a fair statement? More acquisitions versus what has been already announced could probably lead to some kind of upside there. Yep. Himanshu, that's a very fair statement. It would push leverage up into, call it, the upper 30s, and would be upside of the FFO. Sure. Thank you. Just on the mid-single-digit organic growth in 2020, I know you provided some color, specifically for Western Canada, you have, I think, almost 800,000 sq ft of leases coming up for renewal in 2021. Do you expect any softness in rents there, how's the market performing? I know your occupancy was actually up year-over-year in Western Canada, sequentially as well. Any update on the market there? Yeah, you bet, Himanshu. The Western Canada market's proven, if you look at our occupancy and look at the transactions we've been able to do, it's been quite a stable market there, and it's performed okay. Alex, you can elaborate on how you're feeling about leasing for 2021. We have been making good progress on leasing in Western Canada. We are working on just over 100,000 sq ft of new leases right now across various markets. What that translates into for the year is that we expect slightly higher occupancy over the course of 2021. We're still seeing that there's going to be, as outlined in our MD&A, that there's a bit of an over rent where we're going to see some leases roll to market down. That will offset that a little bit. For the year, we expect that the same property NOI and the West is going to be moderately up, kind of that low single digits number, flat to slightly up for the year on same property basis. Got it. On the same subject, like collections in January, I know Q4 has been very strong. For January, I think around 2.3% is yet to be collected. Is there any particular region where you still need to collect? Are the collections in Western Canada very similar to other regions in January as well? Yeah. We're seeing consistent levels across the regions, and what we're seeing in our collection numbers, and that's also evident from our reporting over the last few quarters, is that our collection rates for a particular quarter rises as time passes. If you recall, when we published our Q2 2020 collection numbers, they were in that 98% range, so just over 2% remaining uncollected. Now we are virtual at 100% for the second quarter, and we've seen that for the third quarter and for the fourth quarter. We expect that tenants are going to catch up on this outstanding balance and that our collection rates are going to be in that north of 99% range for January and for the remainder of the first quarter of 2021. Got it. Then maybe just switching gears to acquisitions. I know you provided some commentary on the European acquisitions. Just one observation. Most of them, the acquisitions you have done so far, at least announced so far, have been in the range of CAD 20 million-CAD 40 million acquisition price per property. Is this where the opportunity lies in those countries compared to, say, portfolio acquisitions? Then what cap rates are you buying these Dutch and German properties recently? I mean. I think that's where the recent acquisitions have come down. The larger portfolios or the bigger portfolios, they're very competitive. We have looked at those. I think it's somewhat coincidence that's where our recent acquisitions have fallen down. We're not necessarily targeting a certain purchase price size. We're more looking at asset quality and location. We do find a niche in that price range often. I would say we will look at larger deals, certainly. Smaller tuck-in deals in markets that we've already got scale would fit as well. Alex, you can talk about our pipeline and why it's somewhat coincidental that we're seeing all these acquisitions in the similar price range. Yeah. When we look at our European deals, and this is consistent with what we've been communicating over the course of 2020, is that we're seeing that there is that niche in terms of the competition in the market from, call it, EUR 10 million-EUR 40 million. It becomes a bit less competitive than for much larger assets and larger portfolios. We are able to get better prices, get deals faster, get some deals off-market. Having said that, as Brian suggested, we are looking at larger deals because they offer other advantages. Maybe there is less of a pricing arbitrage, but they offer scale, they offer perhaps maybe better growth. We're not disregarding those opportunities, and we're definitely looking at a few now. As far as the pricing, a little bit about pricing arbitrage there, we do see that in the smaller to mid-size assets. Sure. Just final question from me on that Montreal distribution facility acquisition. Almost 500,000 sq ft, an expansion of, I think, over 200,000 sq ft. Is the expansion going to be on a speculative basis, or the existing tenant is asking for more space there? How much are you looking to spend? There are two expansion phases on that project. That 200,000 sq ft volume breaks roughly into two halves. We're proceeding with phase 1, and shortly thereafter, we intend to proceed with phase 2. Generally, our plan is to proceed on a speculative basis. However, there is interest from existing tenants in that expansion phase, and so we're engaging with them, but we're not holding the project to get a tenant lined up. As far as construction costs, currently we're in that low CAD 100 per sq ft range for that expansion. Awesome. Okay. Thank you, guys. I'll come back. Our next question is from Matt Kornack of National Bank. Hi, guys. A bit of a different tack on an earlier question with regards to fair value. I mean, if you look at the per square foot values that you have on your books, do you think you could acquire in Toronto at CAD 160 a sq ft per Quebec and CAD 115 these days? I'm just trying to get a sense. I would've thought markets are CAD 100 a sq ft higher than that at this point. Just some thoughts there. Matt, it's a good observation. All of our valuations, our IFRS are backward-looking. They often can't keep up with the actual market. We certainly wouldn't transact for our IFRS values, and they're likely to continue to try to catch up to market. By its very nature or definition, it's backward-looking. We would agree with you. It's way undervalued in terms of price per square foot. We anticipate continuing to unlock that value as we go. Lenis, you can comment a little bit more on our valuation process or how it's done. Yeah. I mean, I won't add too much color because I think folks are quite aware just in terms of we got to get a certain part of the portfolio externally appraised. They tend to be looking backwards at previously the prior transacted, as well as backwards-looking metrics. That really kind of dictates the assumptions that need to go into our internal valuation models as well. Yeah, I mean, not too much color to add in terms of just kind of constraints with that process. I mean, we do have ongoing conversations with appraisers to try to bring up to date just we see more recently some transactions in market rents as well as on the ground negotiations of active deals as well. For the large part we need to fall in line with what the rules dictate. Fair enough. That was a bit of a loaded question there. Just to add to that, Matt, what we've seen with external appraisers and our valuation process such that not only we obtain appraisals for a part of the portfolio, we also obtain cap rates and discount rates from external appraisers. What we've seen is that it's been a little bit more difficult for them to keep up with the market during the pandemic, as well as they do, as Lenis pointed out, they do need to see a deal close to reflect that in their market assessment. With that lag and obviously the complexities of the pandemic, we're seeing that impacting their inputs. Sure. No, it makes sense. It's been a pretty crazy ride to this point. On that note, just with regards to your leasing, you disclosed a few leases in the GTA with pretty substantial mark-to-markets, and then on top of it, you're getting 3.5% annual rent escalators. Is that unique to the GTA, or where would those rent escalators be in other segments of the portfolio? We're certainly trying to implement contractual rent escalators across the portfolio. They would be higher in the GTA compared to other markets. In the GTA, we're trying to get close to 4%. The average is around 3.5%. In Quebec, we're pushing 2%-3%, in some cases 3.5%. In Alberta, we're pushing that 1%, 1.5%, 2%. In the U.S., it's about 2.5% on average. In Europe, it's indexation. Matt, we're trying to be leaders in this area. This wasn't necessarily a phenomena for GTA and Quebec a few years ago. About three years ago, we started implementing it across our portfolio. Obviously, Blackstone came in and bought Pure Industrial. They started implementing it, became much more of a market condition. It's been in the U.S. for many years as kind of a normal lease provision, and we're starting to implement that now and starting to see the fruit of our labor in CP NOI and contractual rent growth. It's certainly something we're putting across the whole portfolio. Europe as well, where we can. We expect to have more and more leases with that contractual rent growth in it. Okay, that makes sense. Last one for me on the development side. Las Vegas development, 6% yield on cost. If you could provide some context as to where a new asset at market rents would trade in terms of the development spread you're getting, and then it sounds like you're getting sort of high single-digit yield on costs for some of the expansion options. That's clearly a good use of your capital, and I think you've defined the opportunity, but what would be sort of the upside you'd expect there? Yeah. A stabilized building that we're going to build in Las Vegas would be 4.5% to maybe upper fours in terms of a cap rate. We're going to build to a six, so it's 100 to 150 basis point spread in terms of the lift we would get by building it and leasing it ourselves. It's similar, if not wider spreads on buildings that we expand. When we're 6.5% to 8% in terms of return on construction costs, that could be even 300 to 400 basis points compared to the market. Keep in mind that we've already got the land, so we're talking about yields on construction costs to expand the building. The value add and the lift on value by doing development's pretty significant. Okay, perfect. Thanks, guys, and congrats on a strong quarter. Thanks, Matt. Next question from Michael Markidis at Desjardins Securities. Hi, everybody. I just want to hone in on the development side as well. I know it's something that you guys have been putting more emphasis on in your disclosures, certainly in the presentation. I think the number you quoted was 1 million square feet that you look to start this year, in terms of the total greenfield and expansions that you're doing. Do you have a rough sense of what the total capital required would be for that 1 million square feet? Yeah. Thanks, Mike. For the year, we expect it will depend on the timing of construction commencement, obviously. We're roughly budgeting about CAD 40 million-CAD 50 million for the year, depending on the timing, and some of these projects are going to spill over into 2022. Okay. If we into 2022. If we just thought about the total budget for all of that million square feet, would you say 30 to 50 times two, or what will be the sort of total cost? It is going to be roughly in that magnitude, yes. I don't have the exact number in front of me, but we can- Okay get back to you. It's going to be in that magnitude. Okay, no problem. I guess presumably you own all the land, so any of the incremental costs there you'd be able to get capitalization until the asset's stabilized? [audio distortion]. Mike, that was really hard to hear you. Could you repeat that question? Sorry, I was just saying with any incremental capital, just given the nature of your program right now, and you own the land in Las Vegas, you own the land on your expansion. Would the incremental spend at this juncture be all capitalized from an interest perspective and then hit the income statement when you stabilize the assets or deliver them? Yes. We own the land on all of those. That'd be how it's treated. Lenis, you can elaborate on the accounting treatment of the development, but it's all capital going into those assets. Yeah, that's right, Brian. We haven't commenced construction, so there hasn't been a significant amount of spend to date. To the extent that we incur the interest on funding that and while it's in that development stage, I believe we are able to capitalize that against the costs there. Okay. Thank you. The last one for me, just with respect to the way you see your development program going, I know it sort of got kicked off with the acquisition of the one in Las Vegas. In terms of where you see yourself focusing in the next two to three years, should we be thinking that most of the effort and capital will be going into the redevelopment opportunities that you see within the existing assets? Do you expect to continue being active on the acquisition of land in your target markets in the U.S.? Mike, I would say both. We have greenfield, as you know, in Las Vegas. We're doing a lot of development and expansion and adding density in Canada. We're doing that in Europe as well. We've got boots on the ground and ability to execute within our own company in all three of our target areas of Canada, the U.S., and Europe. I would expect us to continue to add value and look for opportunities to enhance yields by development in all three of those areas. Where we have greenfield opportunities, we'll do it. Sometimes that is quite a bit of time. Like it would be a couple of years before you can execute. If we can buy properties like we're doing in Dresden that we mentioned, into Montreal, where we buy the property, we've got some interim yield and expand it, we'll certainly do that. I would say we would look to add to all those fronts as we continue to grow the company and add more development to our portfolio. Alex, you may want to elaborate on that. Yeah, we're seeing opportunities to expand assets. We are looking to select land opportunities, as Brian suggested, and I think Mike also wanted to point out, and Brian also alluded to that in his prepared remarks, is that we're looking at redevelopment opportunities in the portfolio. Our property, for example, in Whitby, is a 200,000 sq ft building. The base case for that asset and that acquisition was that we would redevelop the entire property and double the density. We're seeing more of those opportunities also in the market, but also in our portfolio as land prices as well as rent levels continue rising, and that makes some of these cases more economical. We're also working on one in Mississauga right now that will be along the same lines. Okay. That's great. Thank you for the update. Our next question from Sam Damiani of TD Securities. Thanks. Good morning, everyone. Just wanted to start off on occupancy. You did give some pretty good guidance for same-property NOI growth and also the occupancy, I guess, in the U.S. portfolio. For the overall portfolio, maybe Canada, Europe specifically, what sort of occupancy changes do you expect in the next couple of quarters? Hi, Sam. In terms of rent-paying occupancy, we expect that it will continue trending upwards throughout Q1 and Q2 and Q3, sir, for that matter. We expect it's going to level off a little bit in the fourth quarter relative to Q3. We're expecting a moderate uptake in the first quarter and then getting slightly closer to our pro forma occupancy in the second quarter and then rising slightly from there. Positive- occupancy. Sorry, I'm just going to say, you think that you see positive absorption throughout the portfolio at least through the first three quarters? That's right. Yep. Okay. I guess, most of my questions have been asked, but just on rent collections, with the lockdowns in Ontario and Quebec, is there any impact there on tenants' behavior in terms of paying rent? We have not seen a significant impact so far as we look at our January collections and February collections numbers. Although February collections are still coming in, so we don't have complete data. The various programs that are out there, including CERS, are helping, and we are definitely hearing that from our tenants. There are some of our tenants who are not operational during the lockdowns, and they do contribute to that outstanding balance. However, we're working with them, and they are on various support programs that cover a significant component of their rent, and maybe they have a few, like a small percentage of their rent that is not covered and outstanding. Okay, that's helpful. Just finally on the acquisition pipeline, has it changed since the January press release? Do you expect incremental new sort of new acquisitions to close as early as later on in the second quarter or would anything new likely not close until the third quarter? I think we're basically on track as we disclosed before, Sam. We do have new opportunities coming into our pipeline, which we expect to continue to execute on well into Q3 and beyond, depending on how they develop. I would expect we would continue to execute on acquisitions throughout the year. It's hard to predict exactly when they fall. Alex, you can comment on how you see those developing in all three of our regions. We are always adding to the pipeline. In Europe, well, in Germany specifically, deals take longer to close, even if we add them to the pipeline today. In the Netherlands, it's a faster timeline from origination to closing. We continue being active in Canada. We have a few deals that we are underwriting. There's always deals there we're looking at. Thank you. I'll turn it back. Thank you. Our next question from Dean Wilkinson of CIBC. Thanks. Morning, everyone, or just morning. Questions for Brian, more of a higher level conversation, if you will. Brian, you've gone through a couple of cycles, and we're looking at all-time low interest rates, unprecedented demand for industrial product, rental rates coming up at double-digit clips. What concerns you in this, and how does this compare to prior cycles that you've kind of lived through? Yeah, Dean, thanks for your question. We have been through a number of different cycles. They've affected different ways. The pandemic has certainly changed things. When we do acquisitions, we look at three things that we look at it like a three-legged post. If you look at cap rate is one, that's the high level metric that everybody looks at. That's the headliner. We also look at where in-place rents are compared to market. Finally, we look at, maybe most importantly, replacement cost. Where are we related to replacement cost? As you look at this cycle, even though rents are growing, there's a tremendous amount of competition and euphoria around industrial. We don't think we're necessarily in that unhealthy of a spot in the cycle, because when you look at replacement cost, where things are trading compared to replacement cost, they're continuing to go up. We like our basis. We like continuing to buy in strategic locations. Replacement cost is going up because entitlement costs are going up, materials are going up. It's becoming more and more difficult to build large industrial buildings because they are inefficient land uses compared to other uses like residential or other things. There's more and more barriers to entry in this space. We like the markets we're in. We're very focused on location. We're very focused on geographic mix and tenant mix. We think we're very happy with our portfolio. We continue to look for higher quality assets that will continue to increase the quality of our overall portfolio. We've got a metric that looks at every single one of our assets. The things that we buy are above the mean or the average quality. The things that we sell are below the average quality. The average quality has a lot to do with functionality, clear height, truck maneuvering area, location of the asset. We're quite analytical when we look at our portfolio and what to recycle. That's great. I guess it's fair to say then in those prior cycles, I've seen a few of them myself, it's that speculative supply that comes into the market that tends to start to put pressure always around. That's kind of like when the punch bowl gets taken away. Can you quantify that gap between how far rents need to go before speculative supply would come into one of your key markets? I would imagine that they might need to double from here before we get merchant builders coming in. We certainly can quantify it, and we do that. Each market is different. That's going back to my point on replacement cost. In Ontario, for example, there's been very, very little new supply. Rents would need to grow certainly into double digits, CAD 11, CAD 12 per square foot to justify what we'd call economic rent or what would support new construction based on replacement costs. We've got a long ways to go in terms of rent growth, and we expect that to continue before new supply hits. We're at all-time lows in terms of vacancy, all-time highs in terms of occupancy. We do expect more rent growth before significant new supply hits the market. That is the snapshot of Toronto. Similar story in Montreal. Most of the markets we're in, we do monitor what you're talking about in terms of new supply and the things that could significantly impact the fundamentals of the market. We want to be in high barrier to entry markets with good quality product. That's easier said than done because it's very competitive. Oh, that's great. Good color. Sounds like it's just the front end of Charles Dickens' story. It was the best of times. I'll turn it back. Thanks, guys. There are no more questions. We would like to thank everyone for your time today, and we look forward to speaking again soon. In the meantime, stay warm, stay healthy, and stay safe. Thank you, ladies and gentlemen. This concludes today's conference. Thank you for your participation. You may now disconnect.