Welcome to the First Capital REIT's Q1 Results Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press star one on your telephone keypad. I would now like to turn the conference over to Alison. Please proceed with your presentation. Thank you. Good afternoon, everyone. In discussing our financial and operating performance, and in responding to your questions during today's call, we may make forward-looking statements. These statements are based on our current estimates and assumptions, many of which are beyond our control, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements. A summary of these underlying assumptions, risks, and uncertainties is contained in our various securities filings, including our Q1 MD&A, our MD&A for the year ended December 31st, 2020, and our current AIF, which are available on SEDAR and on our website. These forward-looking statements are made as of today's date, and except as required by securities law, we undertake no obligation to publicly update or revise any such statements. During today's call, we will also be referencing certain financial measures that are non-IFRS measures. These do not have standardized meanings prescribed by IFRS and should not be construed as alternatives to net income or cash flow from operating activities determined in accordance with IFRS. Management provides these measures as a complement to IFRS measures to aid in assessing the REIT's performance. These non-IFRS measures are further defined and discussed in our MD&A, which should be read in conjunction with this conference call. I will now turn the call over to Adam. Thanks very much, Alison. Good afternoon, everyone, and thank you for joining us today for our first quarter conference call. In addition to Alison, with me today are several members of the FCR team, including Jordie Robins and Neil Downey, both of whom you will hear from shortly. Feels like Neil's been here a while, it is his first conference call, or at least the first one answering questions instead of asking them. Welcome, Neil. It's been great to have you on board. Now turning to the quarter. It's safe to say that the environment from an operating perspective over the past year has been far from normal, and has been subject to restrictions that have been more frequent and long-lasting than we initially expected back in the spring of 2020. That being said, our Q1 results continue to demonstrate the stability and resiliency of our portfolio during a quarter in which we had the most severe and longest-lasting restrictions imposed on our tenants and their customers since the pandemic began. Yet, same-property NOI and FFO per unit were marginally positive on a year-over-year basis for the first time since the pandemic started. These results were supported by continued leasing momentum, which Neil will touch on. Despite the lockdowns, our rent collections have been fairly stable over the last three quarters, tracking in the mid 90% range. Focusing on this quarter specifically, we have collected 95% of Q1 gross rent to date, notwithstanding a less favorable operating environment for many of our tenants to start the year. Similarly, our collection rate on amounts that we have previously agreed to defer has also tracked in the mid 90% range. Our acquisition efforts continue to be opportunistic and strategic. Our Q1 acquisitions were small properties which expand existing positions we had already established in these neighborhoods. Despite their size, the addition of these parcels will enhance and improve these future redevelopments. FCR's conviction in our super urban strategy, which is focused on established, high-growth neighborhoods situated in Canada's largest cities, is based on the multi-century evolution of cities as the principal place of preference for the majority of people to live, work, socialize, educate, and so on. Our portfolio is exceptionally well-positioned in this regard, offering significant benefits and opportunities ahead for both FCR and the neighborhoods in which we operate. We continue to make progress on our ESG mandate, further embedding environmental, social, and governance principles into our business and culture. Last quarter, we reviewed various milestones we had met and recognitions received. I won't repeat those, but we'll add another. Our very own Michele Walkau, SVP of Brand & Culture, was recently presented with the Best Executive Award from the Report on Business. Each year, 10 awards are made to non-CEO executives in five different functional job categories. Congratulations, Michele, on this well-deserved honor. From a people and social perspective, we remain focused on fostering a culture that ensures equal opportunity and well-being for all employees, and our team has been one of our key strengths during these unusual times. Last quarter, we discussed our Equity, Diversity, and Inclusion Council. At FCR, Equity, Inclusion, and Diversity are at the core of our values. Our ED&I Council is the engine that will drive these matters forward at FCR. Part of their mandate is to create meaningful actions that foster awareness and advocacy. Our employee-led council has identified the key pillars of focus, which includes building our foundation for lifelong progress, education, awareness, and community outreach in the key neighborhoods we operate. This council is staffed with a diverse group of employees across departments and geographic locations. One trait that each of its 24 members have in common is their intense passion for ED&I. They've been very busy, I am so proud and thrilled with their progress because it will clearly lead to meaningful improvement at FCR. More on that to come. In conclusion, although the last year has been dominated by the pandemic and related lockdowns and restrictions, our focus is now clearly set beyond the pandemic. We expect a strong reopening for many impacted FCR tenants. We also believe we will enter that reopening phase from a solid position. These are some of the reasons why. Great locations maintaining strong occupancy. Rising rental rates for both renewal and new space leasing owing to the desirability of these great locations. Growing same-property NOI. A strong and improving tenant base as turnover has provided opportunities which were previously prevented by lease contracts. Our density pipeline is exceptionally deep, with material progress and NAV creation expected from it over the short, medium, and long term. This, together with other factors such as the incremental retained cash flow from the distribution cut, will also contribute to strengthening our balance sheet. Our demographic profile is also the best it has ever been, with over 300,000 people on average now living within 5 km of FCR properties, making us the clear and distant leader amongst our peers. To close, FCR represents the best opportunity to invest in a super urban strategy and for the time being, at a material discount to our net asset value. With this platform, our development team is working tirelessly to advance our current projects and planning our new neighborhoods. More to come on that. With that, I will now pass things over to you, Neil. Neil? Thank you, Adam. For those joining today, we do have a webcast conference call slide deck, and that slide deck has also been posted to our website. I'll jump right into the numbers on slide seven. First quarter of 2021 FFO was CAD 55 million or CAD 0.25 a unit, representing an increase of 2% over last year's CAD 53.9 million or CAD 0.24 a unit. Working from the top down, total net operating income of CAD 101 million decreased by CAD 2 million or 2% year-over-year from CAD 103 million last year. Key driver of the decline is CAD 2.2 million of lower NOI due to property dispositions over the past 12 months. Net of lower interest expense that was primarily attributable to these dispositions, plus some interest rate rolldown, FFO dilution from trailing 12-month asset sales was less than CAD 0.01 per unit on an annualized basis. As Adam indicated, organic growth was slightly positive, which we believe is quite a favorable showing under the circumstances, I'll provide a bit more color on that in a moment. Moving to interest and other income, where the contribution decreased by CAD 800,000 year-over-year. Decline was principally related to lower interest income on loans receivable, the balance of which was CAD 84 million at the end of the first quarter versus CAD 132 million one year ago. Partially offsetting the decline in interest income was higher fee income. Year-over-year G&A and trust expenses increased by CAD 1.1 million in the first quarter of 2021. Of note, the quarter does include approximately CAD 1 million of employee restructuring expenses. Finally, our other gains, losses, and expenses line is CAD 3.6 million favorable this year relative to last. The prior period included unrealized mark-to-market losses on marketable securities, a tag end of the 2019 REIT conversion expenses, and some residential selling costs. These non-operating amounts are provided for you on slide eight. While not detailed in the conference call deck specifically, I will provide several points of context regarding our Q1 2021 results relative to the fourth quarter of last year. As I just indicated, the recent quarter did include about CAD 1 million of restructuring costs. Equally, the fourth quarter of last year in G&A expenses, there was a like amount reversal of a variable compensation accrual. Collectively, these two factors created a quarterly swing in G&A of about CAD 2 million or CAD 0.01 per unit. Secondly, Q1 2021 variable revenues were CAD 2.2 million lower than the fourth quarter. Now, the nature of our business is such that seasonality is not usually much of a factor. In Q1 2021, however, the variable revenue decline is mostly due to the extended lockdowns in some of our bigger markets. Finally, again, relative to the fourth quarter, there were some other operating expense items that were higher in the first quarter, mostly due to timing. Moving to slide nine. The REIT's FFO payout ratio was 43% this year versus 88% last year. The key driver, of course, was the January 2021 distribution reduction. This lower distribution rate provides FCR with CAD 95 million of annualized incremental retained cash, which we believe can propel FFO and NAV per unit growth from what it might otherwise be. The bottom part of this slide provides our ACFO derivation. In the first quarter of 2021, ACFO increased by approximately CAD 4 million or 10%, aided principally by lower capital expenditures. Our ACFO payout ratio is derived from trailing 12 months cash distributed versus trailing 12 months ACFO. As such, the ratio remains steady as at Q1 2021 versus Q1 2020. As our rolling four-quarter data is incorporated into the calculation, we anticipate the ACFO payout ratio will also trend lower. Moving ahead to touch on some of our operating highlights. Q1 2021 same-property NOI growth was CAD 0.4 million or +0.4%. In the face of very restrictive lockdowns, we generated modest same-property NOI growth, and notably, this was against what we would describe as a pre-pandemic quarter. For those of you who do wish to isolate things like lease termination fees, they were CAD 697,000 in the recent quarter versus CAD 304,000 a year ago. The increase of about CAD 400,000 did benefit same-property NOI growth by coincidentally 0.4%. On the flip side, however, factors depressing Q1 2021 organic growth included a year-over-year increase of CAD 2.6 million in our same-property bad debt expense. On a standalone basis, this hurt organic growth by a sizable 2.7 percentage points. As you might imagine, under the circumstances of widespread lockdowns in the recent quarter, there was a decline year-over-year in variable revenues that also adversely impacted Q1 2021 same-property NOI growth. Overall, I believe these statistics truly reaffirm the resiliency of our business. Moving ahead, Q1 leasing momentum remained solid. During the quarter, we had 547,000 sq ft of expiries. We renewed 450,000 sq ft of leases, generating an 8.4% rental uplift. Of note, within the Q1 2021 statistics, there were two large fixed flat rate lease renewals covering 186,000 sq ft of area in total, or about 40% of the renewed GLA. As indicated on slide 11, I believe it is, our average net rent per square foot rounded out the first quarter at CAD 21.99. That's an increase of CAD 0.10 per sq ft from year-end 2020, and that's principally a function of rent escalations. On a year-over-year basis, net rent increased CAD 0.48 per square foot or 2.2% from CAD 21.51. That growth is generated quite equally between rent escalations, renewal lifts, and an impact from some dispositions where we did sell properties with lower average net rents. Briefly on slide 13, our Q1 year-end occupancy was 95.8%. That's down 40 basis points from year-end 2020 and down 60 basis points year-over-year. The first quarter of 2021, specifically 20 basis points of that impact, was due to 97,000 sq ft of closures exceeding 45,000 sq ft of openings. Now, placing the occupancy decline into context, recall that a year ago, our occupancy was close to an all-time high. If you look back over a decade at FCR's historical data, it does show that the portfolio is most frequently between 95% and 96% occupancy. Moreover, owing in a large part to portfolio quality improvement over time, in the recent years leading up to 2020, occupancy was 96%+. Turning to slide 14. During the first quarter, we invested CAD 44 million into development, redevelopment, and portfolio CapEx. Investment activity included development CapEx of CAD 29 million, where the bigger spends were our Leaside Village, Dundas and Aukland, and Wilderton projects. Adding to this was portfolio sustaining and revenue enhancing of CapEx of CAD 11 million, as well as approximately CAD 4 million invested into residential inventory. During the first quarter, we did complete two small property acquisitions for an CAD 8 million investment at our share. Turning to our balance sheet, in this regard, I would refer you to slides 15 through 17 of the deck. At the end of the first quarter, total property assets at our share, including residential inventory, our hotel and properties held for sale, were CAD 9.7 billion in total. This amount was unchanged from year-end 2020 and on a year-over-year basis. Of note within our MD&A disclosures, there are some enhancements with respect to our investment properties, their character, their valuations, and their income generation potential. We hope that you find these disclosure changes useful in understanding our business and the inherent value in our company. For 2021, property values have been, in aggregate, quite steady. Our March 31st overall weighted average stabilized cap rate was 5.0%, and that number is consistent with year-end 2020. Within FCR's balance sheet, you will note that some property classification amounts have changed. Most notably, held-for-sale properties are CAD 254 million at our share at the end of the first quarter, and that's an increase of CAD 92 million from year-end 2020. While we do not disclose our held-for-sale properties on an asset-by-asset basis, I will note for you that there's 11 properties in this category. They are a mix of density value, income-producing, and development properties. This is something you should be able to easily infer based upon the relatively modest NOI contribution from these assets in the first quarter of 2021. Our net debt rounded out Q1 at CAD 4.7 billion, again, unchanged from year-end 2020. So two is our net debt to total assets ratio of 47.3%, unchanged. While there was essentially no movement in the amount of debt over the last three months, there were some changes in our debt composition. We did carry over CAD 100 million of cash coming into Q1. On March 1st, upon the maturity, we repaid CAD 175 million Series N unsecured debenture. We also funded CAD 14 million of mortgage maturities and amortization in the first quarter. These debt repayments, along with small acquisitions, maintenance CapEx, development CapEx, are such that our cash balance rounded out the first quarter at CAD 19 million, representing a drawdown of CAD 82 million from the end of the fourth quarter. During the quarter, we also drew approximately CAD 108 million on our credit facilities, including CAD 104 million on our revolvers and CAD 5 million on our construction facilities. At March 31st, we had CAD 720 million of availability under our credit facilities, and including our cash balances, this put total liquidity at CAD 739 million. Today, our corporate liquidity is slightly higher at CAD 745 million. And on Slide 17 specifically, you can see a graphical depiction of our term debt maturities. Those maturities are very modest this year. They include only CAD 56 million of mortgage maturities over the balance of the year, and that's about 1% of our total debt. With significant FFO retention, expected asset sale proceeds as the year progresses, from these notes, it is very clear that First Capital is operating from a position of significant financial strength. I'll now turn the call to FCR’s Chief Operating Officer, Jordie Robins, who will provide some further comments that are principally related to our development activities. Thanks, Neil. Good afternoon. In Q1, notwithstanding extensive lockdowns, we made meaningful progress both with our major construction projects and with our entitlement program. Given the nature of the work, all our major projects were exempted from the government-mandated shutdowns. What's more, our extraordinary construction team successfully managed both manpower and materials. As a result, we've not seen any material impact to our construction schedules or to our budgets. In Montreal, the construction of the first phase of our Wilderton development located in Côte-des-Neiges continues to progress. The majority of the 110,000 sq ft of retail space has been pre-leased, and we are nearing completion and expect to deliver possession to Metro and Pharmaprix in the second quarter. With the progress we've made to date on the project, we're now in the process of selecting a residential development partner for the final phase, consisting of a 200,000 sq ft, 111-unit residential rental building that we plan to begin construction on next year. Moving to Toronto, in Q1, we received our occupancy permit for the first commercial floors of Station Place, our newly named mixed-use retail and rental residential project located at Dundas and Aukland, abutting the Kipling Transit Hub. Leasing of the residential component will commence later this year. Farm Boy took possession of their 26,000 sq ft space in April and is currently fixturing with a planned opening date in the second half of this year. Construction on the 70,000 sq ft expansion to our Leaside Village Center in Toronto was also deemed essential, given our new tenants operate in the healthcare sector. New development is 85% leased, and the tenants in the primary building, including Shoppers Drug Mart, PetSmart, and a collection of specialty medical office tenants, took possession of their respective premises in Q1 with a plan to open later this year. We know the addition of these new uses will broaden and enhance consumer appeal to this geothermal open-air center anchored by a t. Incorporating these new lands, it also provides our expanded retail center frontage and access from three public streets, which will improve access and traffic flow through the entire center. Our 50-unit townhome joint venture development with Greenpark, adjacent to our Rutherford Marketplace, is nearing completion as well. The final units were sold in Q1, with registration scheduled to occur in June and all closings to occur before the end of the year. At Humbertown, sales at Edenbridge, our 260,000 sq ft retail condominium mixed-use joint venture project with Tridel, are also progressing well, with 79% or 166 of the units now sold. As anticipated, given the demographic profile of the neighborhood, purchasers are primarily owner occupants. LCBO has been relocated to the main site, and demolition of their former premises is now complete. Considering what we're seeing both in our portfolio and in the marketplace, we retain a positive view towards mixed-use development in our super urban neighborhoods. Most of our 23 million sq ft development pipeline is residential. Across the country, and in Toronto specifically, where over half this density is located, there remains a housing supply shortage. This shortage, coupled with low interest rates, is driving residential demand and in turn, pricing higher, as evidenced by a number of residential high-rise projects that have recently come to market. In Q1, we successfully launched the sales of our 400 King Street development joint venture with Plazacorp. Located on King Street West in Toronto, this 500,000 sq ft mixed-use retail condo was incredibly well-received, with over 350 or 60% of the units sold within the first four weeks of launch. The average price of these units is about CAD 1,400 per sq ft, higher than our pre-COVID pricing expectations. We anticipate the start of construction at 400 King in early 2022. Turning to entitlements, we've had a very busy quarter, with important progress on several of our active files. The most exciting of which relates to our 2150 Lake Shore development. On April 22nd, after years of effort by our dedicated team, the Planning and Housing Committee at the City of Toronto recommended approval of the Christie Secondary Plan and Zoning By-law, which governs our 28-acre development site. With this recommendation, we expect that Toronto City Council will approve the Christie's Secondary Plan and By-law at this week's City of Toronto Council meeting. This draft Zoning By-law, recommended for approval by the Planning and Housing Committee, contemplates permission for 7.5 million sq ft of total density on our property. This density is made up of 6.3 million sq ft of residential and a further 1.2 million sq ft of commercial density. The draft By-law further contemplates approximately 7,500 new residential units with 15 tall towers ranging in height from 28-67 stories. The project will also incorporate a Metrolinx GO station, two parks totaling three acres, over an acre of privately owned public space, community center, and two elementary schools. Once approved at Council this week, there are a few procedural steps for the Zoning By-law to become enacted and in full force, which we expect will occur by the end of this year. As we've articulated in the past, 2150 is a generational development property that will be transformative for FCR and for the City of Toronto. What's more, we carry 2150 today at cost on our balance sheet. Moving to Vancouver, North Vancouver specifically, we're redeveloping our smallest property in the neighborhood with a residential partner that we have selected. Over the course of the last 15 months, we've been working on securing the required municipal approvals for a proposed 70,000 sq ft, 75-unit multi-family residential rental development. Final approvals are now in place, and demolition of the structure is currently underway, with first phase occupancy expected in 2023. We have an additional 11 million sq ft of entitlement submissions at various stages with municipalities across the country and a further nine million sq ft of incremental density where entitlements have yet to be submitted. COVID may have slowed the approval timeline slightly, but as demonstrated by our 2150 Lake Shore application, it has not prevented our incredible development team from advancing these files. While we can't be specific given the sensitivities of discussions underway, we can say that over the course of the first quarter, we made great strides in advancing negotiations for a number of these applications and look forward to sharing our progress with you over the next several quarters. Before we open it up for Q&A, it's important to point out that our entitlement program will continue into 2021 and 2022 with another 1.9 million sq ft of submissions in the queue. As these previous and future applications are approved, we will be able to create and realize meaningful value but retain optionality by developing this incremental density ourselves, with a strategic partner, or by selling it to a third party. Okay, that concludes the prepared remarks. Paul, if you could open up the line for questions, that would be wonderful. Certainly. Thank you very much. We will now take questions from the telephone lines. If you have a question and you're using a speaker phone, please lift your handset before making your selection. If you have a question, please press star one on the device's keypad. You can cancel your question at any time by pressing star two. So please press star one at this time. If you have a question, there will be a brief pause while the participants register. We thank you for your patience. We have a first question from Tal Woolley. Please go ahead. Your line is open. Hi. Good afternoon. Hello? How you doing, Tal? Okay. Sorry. Just to start off with the Christie Cookie site. If the zoning comes through before the end of the year, and I think, Adam, we talked about this last quarter, will all the transit piece be decided over the course of this year as well? Hi, Tal. It's Jordie. The answer to your question is the transit piece will go along hand in hand. It may lag slightly, but it is and will be resolved as part of the By-law. Okay. Fair to say you've had conversations about partnership potential on that site already? Yeah, one of the things we've said from the beginning is that at an appropriate time, we felt that it was important for us to retain control over the master plan and the zoning process and retain certainly the upside of that, and given our platform capabilities and our comfort level taking that on. We also said, though, that when it starts to shift towards a point in time where physical construction would start taking place, given the mass amount of construction and infrastructure that will take place. That's where we have long believed that there would be a significant benefit to bring in a strategic development partner to co-develop it with us. And so certainly, as time has gone on, we have gotten a lot closer to that, and that's something that's been brought more to the forefront of our thinking. Obviously want to retain significant interest in this. Are you looking to be leading the development of this? When you say strategic partner, do you mean you might provide a managing interest to someone else on some phases of the project? Yeah. The site is so large and so complicated that when we look at it, there are elements where we feel we would be the logical platform to lead the development. There are other elements of it where if we're successful in selecting the right partner, we think we can bring in someone who is even more well-equipped to do those phases. I would anticipate us playing various roles depending on the phase and components and the elements of the project, and it'll depend on the skill set of our partner ultimately, when they're brought in. Okay. I just wanted to ask a bit about King High Line. There's still about, I believe it's just under 30,000 sq ft you're completing, and I'm just wondering what parts of that is. What's still left to kind of complete on the site? If you can give us an update just on how the residential operations have gone there. Yeah. Jordie will comment more on it is all residential. The retail is about 160,000 sq ft. That's been fully leased for quite some time. All tenants in the commercial retail component are in occupancy and paying full rent. The balance is some of the residual components of the residential that are nearing completion and likely in the next quarter or two will transfer. Just so we're clear, was the other part of your question how the residential is going? Yeah. Yeah. Okay. That's the part I'm going to turn over to Jordie. We're just about 70% of the 506 units are leased today. Average rents are generally in line with our budget. As you and probably everyone else have seen with other purpose-built rental property owners in the city and the country, residential rental has been a segment that has been certainly most impacted by COVID, King High Line, I would say, is no exception to that. It has certainly delayed our lease-up period. I do suggest to you, certainly if the last month or month and a half is any indication that the trend is starting to move the other way. Generally speaking, I would say we remain very bullish on rental residential in particular in Toronto. In the case of King High Line, it really benefits our entire Liberty Village portfolio and frankly makes all of it better. Okay. Just lastly on the Rutherford Marketplace closing, just when I look at sort of the rough invested capital there, that's maybe a couple pennies towards the back half of the year in terms of FFO. Is that the right way to think about it? Sorry, we're talking Rutherford or Leaside? The Rutherford, the condo. The closing of the townhomes? Yeah. Tal, I think as we indicated, that's likely to be a Q3 closing, and there will be some development profits there that are effectively part of our income, interest in other income line. Those will not be material in the context of our total FFO. That's when you should be expecting them and where they will probably show up in the P&L. Okay, perfect. Thanks very much, gentlemen. Okay. Thank you, Tal. Thank you. The next question is from Pammi Bir. Please go ahead. Your line is open. Thanks, hi, everyone. Just with respect to the expected approval at Christie Cookie, how are you thinking about recording the incremental value created in terms of the process from zoning or successful zoning? Any comments on perhaps the potential magnitude and timing of that? Yeah. Our process for writing up land that's going through the development process is generally the first write-up occurs when we have certainty or a high degree of certainty around zoning. We think we're within a quarter of achieving that on Christie Cookie so you know that's something unfolds different than what we expect at this point. We think that likely in Q2, that milestone gets achieved and consequently, there would be an impact. We're not going to comment on the magnitude of it, but there is a meaningful delta between what is being carried on our balance sheet, which still represents historical cost, and what the range of market value would be for a zoned site. Sorry, can you maybe just remind us what it's carried on the balance sheet at? No, we never disclose individual asset values that we're carrying it at. We disclosed, at the time of acquisition, what it cost to purchase. We've been working very hard on it. Lots of sweat equity invested, but also some meaningful capital as well. You'll be able to get in the ballpark, Pammi, but disclosing what we're carrying individual assets at is not something that we've historically done, and are not planning to change that anytime soon. Got it. Okay. Just maybe going back to your comments on partners there. Again, thinking about it as getting through the zoning process or successfully zoning it, whether it's next quarter or maybe shortly after, is it maybe too early then to still think about monetizing any portion of that value created? Would that be under consideration this year? Look, one of the things we're really excited about with Christie is the number of levers that it represents for us. While the monetization of it is, a portion of it's appealing to us, what's more important to us is securing the right partner because this is a multi-billion-dollar development that should have a very material amount of profit in it, for an extended period of time. Mining and maximizing that profit, in combination with delivering a state-of-the-art, from an ESG perspective, neighborhood and delivering some of the social benefits we think it can, environmental benefits that we think it can. The right partner will be very important, for us to achieve Christie's maximum potential in that regard, both financial and non-financial. That's going to take priority over monetization. Obviously, they're both really important to us, but just so we're clear on where we're focused in terms of priorities. We think assembling the right development partnership group to complement our skills will be exceptionally valuable. That may not mean that it goes to someone that's going to pay the highest price and that's just something we'll factor into the decision-making. Got it. Okay. Just maybe one last one for me. Coming back to just the overall disposition program, and looking beyond, I think there's CAD 275 million held for sale. Is it fair to think that perhaps the bulk of what might be sold, beyond that amount and thinking about this year or even next year, is fair to think that those would have similar attributes, meaning minimal NOI? Do you see some additional, more traditional income-producing properties on deck for the rest of this year? It's a very good question, Pammi. Our disposition program has evolved in a very deliberate way. We didn't necessarily take the easiest path forward. We really focused on selling what we viewed to be the tougher assets we would have to sell. Some of those went a lot better than we expected, and some of them were a bit tougher and, all in all, we felt the business was much better off proceeding the way we did. They were the most painful because they also carried the highest yields in place, which resulted in the most dilution from an FFO perspective. We said, "Okay, we've kind of cleared the vast majority of those types of assets." The composition started to change. If you look at the transactions that we closed at the end of last year, they were different. The composition between density and IPP started to gravitate a bit, not materially. The cap rate and the quality of the assets, the IPP portions, they're great assets, but they are in the bottom bucket of our portfolio. They would not have been in that same bottom bucket two or three years ago. You see cap rates coming in. We've said, Neil's comments when he touched on this in his opening remarks, would indicate that there's a much more balanced mix between density and IPP and held for sale. That's definitely something that we see continuing as we progress through the current assets held for sale and others that we would contemplate adding in the future. Okay. Thank you very much. I will turn it back. Okay. Thank you very much, Pammi. Thank you. The next question is from Dean Wilkinson. Please go ahead, sir. Your line is open. Thank you, and good afternoon, everyone. Good afternoon, Dean. First, I'd like to congratulate Michelle on her award. I think with Neil, that puts three Humberview High School grads on this phone call. Funny you mention that. Michelle has also reminded me of the Humberview alumni connection. Yeah. There's got to be something with our English teachers there. My question is for Neil Downey. Neil, you come into this role with a very unique and tenured skill set and have a lens, I would argue, unlike no other CFO in the space. As you sort of looked over this and have started, do you see opportunities, and it's not to suggest that disclosure was lacking in any way, shape, or form, but do you see opportunities to help bridge that disclosure gap on things like entitlements and excess density to narrow that CAD 5 gap between where the units are trading and where your IFRS book value is? Sort of how are you thinking about, for lack of a better term, bringing Mohammed to the mountain? Dean, I don't recall that you were on the high school basketball team, but that sounds like a bit of a layup. You do see some changes, I hope, within the MD&A, specifically in the section entitled Valuation of Investment Properties. The objective here really was to try and add some clarity in terms of the components of value within FCR's portfolio. Hopefully what you can see from that on page 13 of the MD&A in particular is that we generate the overwhelming majority of our income off of CAD 8.4 billion of generally stabilized same-property assets. Beyond that, we do have CAD 1.1 billion of other assets, including major redevelopment, ground-up development, properties under construction, our held for sale bucket, as we've already discussed. Those assets, characteristically, you can see, are earning a fairly low NOI yield. For the most part, their value is not in the NOI that's in place. Right. In many cases, the value, for instance, is in the as of right density within these buckets. The fact that some of these assets are still in transition, et cetera. I would say that we are hopeful that this will help readers of our disclosures maybe bridge some of the gap that's been there in terms of understanding the components of value. Yeah, I guess it's a problem that's endemic within the space, right? The way we've always looked at NAVs, it's like a one-year DCF, and that's not what the real world looks like. Big job ahead of you, but I'm sure we'll all get there. That's all I had. I'll hand it back over. Thanks. Okay. Thank you very much, Dean. Thank you. The next question is from Mark Rothschild. Please go ahead. Your line is open. Thanks. Good afternoon, everyone. In regard to the re-leasing spreads, which I think were 8% in the quarter, I just have a few questions on that. One, is that a good number to take? Obviously, it jumps down a little bit as a trend that you think you can operate around now. In that context, do you think market rents have stabilized? Is there good information now to know where rents are? Have they moved at all? Maybe if you could also just expand on it. I'm not sure if you disclosed the retention rate of leases that expired in the quarter. It might be in the disclosure I missed it. What was the retention rate for the quarter? Okay. I'll start with your last point, Mark. You're right. We haven't typically disclosed it because we don't actually place a whole lot of relevance on it. Higher is not better in our mind in terms of retention. We have really benefited from the turnover of specific space over time, and there's no shortage of instances where we get control of space and a tenant may want to renew, and we're the ones that see a different opportunity for the space. This quarter, Neil did, in his prepared remarks, give you the elements of the retention rate. It was about 72%, I believe. We like it to be not much less than 70%, not as high as 80%. That's generally where we've run. We have not seen much of a change to that, with the exception of Q2 of 2020, where there were a couple of instances that we may have been more compelled to take space back. Given the uncertainty in the world at the time, we chose to renew. It was one of our highest retention quarters ever, actually. Market rents, you touched on a couple of things that would indicate perhaps they've moved around. We have not seen that. Market rents and, in fact, most of the leasing metrics, if not all of them, is the one element of the business we have not seen evidence of the pandemic. We have not seen a softening of rents at all. On renewal rates, that's been pretty much the same thing. The current quarter was decent. It was weighed down by a couple of large fixed flat rate renewals, that would have taken it well through 10%. And you know our long-term average has been around 9%. That's probably a good place to assume in terms of looking forward. Okay, great. In regards to occupancy going forward, obviously it's held up pretty well, but there has been some slip. One of your competitors just the other day on their earnings call expressed confidence that it will recover, but it will be in 2022. Would you agree with that sentiment, or do you think you can see an improvement in occupancy sooner? Hi, Mark, it's Neil. Like many of our peers, we're probably not going to give you a whole lot of forward-looking guidance with respect to things like same-property NOI growth, et cetera. To give you a bit of context, firstly, in my prepared remarks, I did talk about the historical band of occupancy and how the portfolio has performed over the longer term and in more recent years. In the short term, so let's say through till mid-year, we do not expect any significant occupancy change relative to the Q1 number that you'll see in our disclosures. A point of note is that earlier this year, Walmart did announce six store closures, I believe it was, across Canada, and several individuals on this call did pick up the fact that two of those stores are within the FCR portfolio. As we look out to Q3 specifically, we do have an 87,000 sq ft Walmart store in Calgary where the lease expires on September 15th. That will be vacant space in our third quarter statistic. That would represent 40-45 basis points of future vacancy. That's something we know. It's something you should keep in mind. As you're aware, these stores typically have a very low rent, and this location is no different. Think mid-single digit rents per square foot in terms of dollars per square foot. While we carry this vacancy, you'll see it in the stats, and there will be some lost FFO as we progress through into year end 2021. Our experience with similar situations like this gives us very little doubt that upon this non-renewal is in fact a positive NPV outcome for us. We'll just have to rework the space, reinvest in the property, and ultimately we will generate significantly higher future NOI. Okay, great. Thank you. Okay. Thanks very much, Mark. Thank you. The next question is from Sam Damiani. Please go ahead. Your line is open. Thanks, good afternoon, everyone. I was wondering if we could just hear about the types of tenants that are expanding in your markets and in your portfolio in recent months, and what you're expecting as the year plays out based on what you're hearing from the retailer tenants that you have. Yeah, thanks for the question, Sam. We've got Carm with us who's closest to it of anyone in the room, and so he'll give you the details. The short answer is it's been the same types of tenants that we've had in the portfolio from the beginning. We see much less change than we thought was potentially the case a year ago. It spans both tenants that are deemed essential, non-essential. I think what you're going to hear from Carm is the broad view is that there's a very strong reopening recovery, economic recovery, whatever you want to call it, pending. What we're seeing are some preliminary signs of retail tenants specifically really being aggressive in their actions to try and position themselves to take advantage of that recovery. In terms of the specific types of categories and things like that, we'll let Carm speak to it. Carm? Hi, Sam. The story is really the tenants that were active pre-COVID remained active during COVID. You're seeing some categories like food, drug, pet, the discount retailers, QSR, home furnishing, medical uses, and office supplies really providing some strong demand. I think very recently, we've seen some sit down restaurants trying to regain some traction in the marketplace. I view those tenants as really they're trying to gauge when the recovery is going to spark, and they want to get into the gate now and look for some key locations as well as apparel. It's not usually a big category for us, but some apparel tenants are starting to reengage with us in trying to look for space. Okay. Thanks, Carm. Thanks, Adam. That's helpful. What about fitness and gyms? How are they holding up, and what's your expectation over the medium term? Look, they've had a tough go, no question about that. We're feeling like we have a lot of confidence in that category now versus a year ago. That source of confidence comes from the multiple reopenings that have occurred so far in Canada. In general, they've opened up exceptionally strong and recaptured a very high percentage of their sales volume. Probably more important than that is monitoring that industry in other countries that are much more advanced and are effectively fully reopened. And what we've seen is there's clear evidence that there's pent up demand. It continues to be a growing sector. While people maneuvered through this so far through the pandemic, whether it be Peloton or et cetera, they do go back to the fitness clubs in big numbers, and it will be an important element of our merchandising mix going forward. We have actually done a small handful of new deals with fitness operators in our properties. I wouldn't call it a category that we've done the most number of deals with. Surprisingly, at least to us, we have done some. They're with entities that are reasonably well-capitalized, established operators, strong operators, and we think we'll continue to do more. They're at a stage now where they've gone through obviously a very tough time and now cannot operate in several of the markets we're in. That's obviously problematic, but we haven't seen a spike in defaults or things like that, like we did last spring. We feel like the fitness tenants we have now are generally holding in and will hold in till the other side. Generally the ones we've got, we're happy with, and we're going to try and support them to the other side. Hopefully that gives you a little bit of color on what we're seeing from a fitness perspective. Thank you. That's helpful. My last question is just on the distribution. It's been, I guess, four months now since the temporary distribution cut was put in place. With the four months now under your belt, how do you feel about the prospect for de-leveraging and ultimately restating the prior distribution? We feel similarly to the way we did when we announced it. We don't have anything new to say. We think it's a helpful tool. We still think it's a temporary tool. There's other things that are going to be required for us to get where we want to go to beyond that. We think it was a step in the right direction given the environment and our shorter and medium-term goals. But yeah, it's one element that we've looked to to help us, and we have the same views on that topic as we did when we made the announcement. Thank you. I'll just say the enhanced fair value disclosure is greatly appreciated. I'll turn it back. It was my pleasure. Neil had nothing to do with it. I say that jokingly. Obviously, that was a Neil initiative. Okay. Thank you, Sam. Thank you. The next question is from Jenny Ma. Please go ahead. Thanks. Good afternoon. Hi, Jenny. Hi. Hi. Just going back to the development pipeline, I'm wondering if your thinking on apartments versus condos have shifted over the last while, given that there's so many moving parts. It seems like at least for 400 King Street West, you're getting some pretty strong pricing. When you try to balance out some of the short-term challenges and potential risks with regulation around multi-family ownership, and higher construction costs overall and the certainty of selling off condo projects, has that changed your thinking around how to balance your residential development? Well, it actually extends beyond that because our changing has evolved a bit. Another element in addition to the ones you mentioned was the fact that as a public company, condo investments are not treated in the most ideal fashion by the capital markets. What I mean by that is you go through the development of a condominium, and you take on debt while you're going through that, and the market fully factors in that debt into the business. When you realize the profits, they can be meaningful, but the market also discounts those as more one-time items and non-recurring. You live with the full headwind of the debt through the development, but then you kind of fall short of a full credit for the profit. It's not the most natural fit in our view. Jordie went through a few condos that we have under development right now. I think what you'll see going forward for First Capital is that we will do less condo development. We will focus on neighborhoods that are highly strategic for us, where the economics are quite compelling and often where there's another benefit beyond the sole profitability of the single condo. We're spread a little wider now than I think we would be in the future on condo development. Look, every project we've underwritten, the condo pro forma looks better than the rental pro forma. We know over time you have to make your condo profits on completion. That's not the case with residential rental if you hold it. We've seen wonderful value appreciation. You know m ost people don't know we actually built our own first residential property. It was over 10 years ago now in Vancouver. It's not entirely new to us. The rents that we're renting that project for now I think are double what they were even 10 years ago. There's been a lot of value appreciation over that time period. But it didn't all occur on the day it was completed. We definitely have a bias towards rental. It is more challenging in some places given the condo profitability. In some cases where that's the type of profile that sits in our density pipeline, that's a good example of some things that would make logical sense for us to monetize and recycle that capital into things that can generate a more recurring permanent income stream. Thank you. That's great color. With regards to the variable revenue component, I'm just wondering if you could talk a little bit more detail about what makes that up. In terms of balance, how much of it is the hotel versus temporary rentals and parking? Just how should we think about that piece? Which is not big, but there's a materiality to it, so anything would be helpful there. Yeah, Jenny, it's Neil. You have, I think in essence, identified the components. It would be the hotels, it would be parking revenue, and believe it or not, there is a small amount of percentage rents in the business that have tended to be consistent from year to year. You did identify the three primary sources. Obviously, it's very difficult for a hotel to be profitable when things are pretty much in full lockdown and occupancy is close to zero. That would certainly be a big part as to why the Q1 was impacted in that regard. If I'm hearing you correctly, there was basically no contribution from the hotel, and perhaps we should look at some pre-pandemic quarter to look at the magnitude of that and factoring for the change in ownership. I guess in Q1 then, it's primarily the parking and the percentage rents? Q1 versus Q4, yes. Okay, how would you differentiate the percentage rents in that bucket versus the actual line item for percentage rents? Sorry, I don't quite catch the nature of the question, but if you want, we can look at it offline. Sure. We can do that. I'll follow up with you. My last question is with regards to the held for sale. How should we think about the timing of these deals? Are these mostly one-off properties, or is there a small portfolio in there that might take a little bit more time to close? There's a bit of a mixed bag in terms of what's in there. I think one of the rules with held for sales, you have to expect to transact within a year. We definitely expect to transact within a year. We usually don't make any formal disclosure until a minimum of when transactions are firm, in some cases when they close. We haven't reached that point on a material amount of it, or you will expect to see that. Yeah, inside of a year, Jenny, and generally those assets that are in there have identified buyers and are subject to conditional agreements at this point. Okay, great. Thank you very much. I will turn it back. Okay. Thanks, Jenny. Thank you. There are no further questions registered at this time. I will turn the call back to Adam Paul. Okay. Thank you, Paul. Thank you everyone for joining us today, for taking the time to listen and participate in our Q1 conference call and for your interest in First Capital. Have a great afternoon. Thank you. Thank you. The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.