Thank you for standing by. This is the conference operator. Welcome to the Nexus Industrial REIT fourth quarter 2022 results conference call. As a reminder, all participants are in listen only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Kelly Hanczyk, Chief Executive Officer. Please go ahead. Thank you. I would like to welcome everyone to the 2022 year end and fourth quarter results conference call for Nexus Industrial REIT. Joining me today is Robert Chiasson, Chief Financial Officer of the REIT. Before we begin, I'd like to caution with regard to forward looking statements and non-GAAP measures. Certain statements made during this conference call may constitute forward looking statements which reflect the REIT's current expectations and projections about future results. During this call, we will be discussing non-GAAP measures. Please refer to our MD&A and the REIT's other securities filings, which can be found at sedar.com for cautions regarding forward-looking information and for information about non-GAAP measures. In the last two years, we've been focused on the high grading of our industrial portfolio. In 2022, we continued with this strategy, closing on 16 high-quality industrial properties. We have five more A-class new build properties, two of which are unit deals coming online throughout the year, which will add about another million sq ft to our portfolio. We have a solid pipeline of additional acquisition opportunities, including unit deals that we're currently reviewing. Our development pipeline is strong, and we are preparing to break ground on two sites this spring. In Southwestern Ontario in London, we are getting ready to break ground on a 100,000 sq ft addition to our building at 1285 Hubrey Road. There's significant demand for the addition as we are working through three possible tenants where we're seeking to maximize our return for the site. It also looks good for two existing tenants expansions in the Southwestern Ontario portfolio to add another approximately 65,000 sq ft each of expansion space to their existing premises. We're currently finalizing build costs for each of these to see if we can move those forward. As mentioned previously, the REIT has 22 acres of excess land at the Titan Industrial Site in Regina, Saskatchewan, that was acquired in February 2022. We will be constructing a new building here of approximately 312,000 sq ft. We now have a signed lease in place for a minimum 200,000 sq ft with a strong covenant tenant. We also have offers out to two additional prospective tenants for the balance of the space. We intend on breaking ground here in April, which will lead to, I think a spring 2024 delivery or early late winter 2024, early spring. This still leaves us with about 6.5 acres of developable land left at this site. The development side will continue to be a focus for us over the next several years, as our developments will provide outsized returns to the REIT. We continue to have an active pipeline of off-market opportunities. We'll continue to recycle capital into both developing the aforementioned sites at higher returns within our existing portfolio. Newer Class A industrial opportunities with solid annual increases in assets where we see the ability to increase rent significantly on renewals. In Richmond, BC, we had a bit of a setback as Skate Canada, which was supposed to occupy half of the newly renovated 60,000 sq ft, executed a termination provision allowing them to back out of the lease just weeks before taking possession of the space. We pivoted quickly, and we are working with the other tenant to repurpose the space into a private racket club called the Greater Vancouver Sports Club, which is now online, with a focus on pickleball, which is North America's fastest growing sport. It will include 36 indoor and outdoor courts. We're well underway with the conversion. It's moving very, very quickly, and the site looks fantastic. They're currently taking memberships, and we hope to have them live and operational by mid-summer. We continue the process of reallocating and highgrading our portfolio by selling some of its office, retail, and non-core industrial buildings and reinvesting the proceeds to acquire high quality industrial buildings, creating an institutional quality portfolio. I mentioned last quarter that the REIT was under contract to sell a four property portfolio of smaller industrial properties in Saskatchewan. That deal is now dead. We do have one smaller one still under contract. We are currently under a firm agreement to sell our grocery anchored retail property in Victoriaville, Quebec. Post-sale of this Victoriaville property, over 90% of the REIT's NOI will now be derived from the industrial properties. This will continue to grow throughout the year as we close on all the aforementioned acquisitions. It looks pretty positive that we'll be by the year-end approaching the 94%-95%. I'll now hand it over to Rob Chiasson to give greater detail of the REIT's financials. Thanks, Kelly. Year-over-year, same property NOI was up $400,000 or 2.2% for the quarter, benefiting from strong renewals in Southwestern Ontario. Approximately $ 150,000 of the year-over-year increase is attributable to items that will not recur in 2023. We expect that strength in the Southwestern Ontario market, where we have approximately 400,000 sq ft expiring in 2023, will continue. Partially offsetting will be the expiry of two leases in Western Canada, where renewal rates are expected to be lower than expiring rents. Acquisitions completed on November 1st contributed approximately $ 450,000 of NOI in the fourth quarter. Will contribute approximately $200,000 of additional NOI in Q1 2023 when they are owned for the full quarter. As Kelly mentioned, the repositioning of approximately 60,000 sq ft at our Richmond, BC property was anticipated to be complete in the fourth quarter, and this has been delayed to the third quarter of this year. Upon completion, this is expected to have an approximately $ 600,000 positive quarterly NOI impact. Interest expense was up approximately $ 600,000 in the fourth quarter as compared to the third quarter, with higher levels of debt from financing $80 million of acquisitions completed in the second and third quarters. More of the REIT debt was also in the form of floating rate interest. Proceeds from the offering completed in December were used to pay down debt, and the March 7th, $117 million acquisition of the Ford Distribution Center in Casselman, Ontario, was financed with variable rate debt drawn on the REIT's unsecured credit facilities. $80 million of proceeds from the December offering and the establishment of $375 million unsecured credit facilities provides the REIT with the flexibility required to fund the announced acquisitions and certain of the REIT's development plans. We are monitoring the markets and will consider swapping variable rates under the credit facility for fixed as and when swaps are priced in acceptable ranges. In 2023, we have approximately $50 million in mortgages with a weighted average interest rate of 4.26% maturing. Five-year Government of Canada bond yield was approximately 2.8% this morning. If maturing mortgages were refinanced with five-year mortgages, there wouldn't be a significant spread on refinancing based on today's bond yields. I'll now turn the call back to Kelly. Perfect. Thanks, Rob. On this lovely day in the capital markets, we'll open up the line to questions. We will now begin the question and answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please press star then two. We'll pause a moment as the callers join the queue. The first question comes from Kyle Stanley from Desjardins. Please go ahead. Thanks. Morning, guys. Morning. I was just looking for a bit more information on the Victoriaville disposition. You know, I'm just curious on, you know, cap rates, where the value received compares to your IFRS values and maybe just the timing of the deal? Rob? The Victoriaville disposition is roughly in line with carrying value as at Q4. However, the carrying value was adjusted to reflect the selling price. I believe the deal is expected to close in April towards the end of April, Kelly. Cap rate, I'm not certain offhand. Just one second. Okay. Yeah, I feel Kyle, it's a decent offer, considering the market, I think, we're happy with it. Okay. Fair enough. Just going back, you know, you there's been more focus on the development opportunity within the REIT this year. I think you walked through in your prepared remarks and in the disclosures, you know, starting development in Regina, the 100,000 sq ft in London. You've got the project in Hamilton. I'm just wondering, you know, what else could you start? I think you did mention some stuff in southwestern Ontario. What does your development capital budget look like for 2023? Yeah. Let me start. The London one, we are breaking ground in April. We'll start to move earth in April. It's in for permitting. We had an offer on it already, but one of our existing tenants looks like they want it, and the offer is much higher return for us. We're slowly working with them on a, I guess, a broader deal, I would say, that enhances our return on that site. I think that could be a real home run. It'd be probably, you know, at least I'd say at least a 10% cash on cash yield on that site. The two in that I mentioned, the expansions, 65,000 sq ft each. One of them apparently has got board approval. We're just going through final costing for them. I've negotiated just a return on that deal, so we'll see if that gets through. It depends on, I think, what the final pricing is on there. The other one in Windsor, that's the other one. They contacted us the other day just to firm up pricing to get final approval for them. In Regina, that one, we will be breaking ground shortly, very shortly 'cause we have a time constraint to get the tenant in there. It doesn't look like it's an issue, but pricing's come in pretty good. I think our return there is going to be somewhere around an 8.75% cash on cash. Pretty good for Regina. It'll be a brand new build. We have one tenant already. We have we're working on a couple more to fill the space. pretty positive that that will be 100% full by the time we're finished. we've identified other potentials in London, Ontario that we have, but they're a little bit down the line. I'd say those are next year type projects for us. on the Hamilton development sites, I think two of them are longer term. One of them could possibly break ground, I'd say early next year. at the end of the day, I think we see outside returns from our existing portfolio versus what you can get in the market. Rob, I'll talk. Rob will just jump in here on the capital side. Yeah. We've got developments in various stages. The Regina project is roughly a $ 43 million development. Anticipated to be roughly a $43 million development. We're probably looking at about $75 million of development costs. The majority of that will be financed by construction financing. The equity component would be the remainder. Okay, perfect. Just one last one for me. You made mention of the, you know, the assets held for sale and maybe the debt deal on the four non-core industrial portfolio. Just curious, you know, what's included in that held for sale now? I'm assuming they're the Victoriaville asset, but maybe what else? Yeah. The Victoriaville asset, it's some office properties that we previously were selling. I believe three Montreal office suburban Montreal office properties. Yeah, the four properties. Okay. Yeah, just some color on that on the office properties, Kyle. Two of them have some term to them. One of them has lower term. Two of them, we're in the process of. The two main tenants are under renewal right now, and we're working through the renewal, and it looks good that they're both renewing. Getting term on those will help potential sale down the line. Okay. I guess are those being actively marketed right now, or are you kind of waiting for maybe stronger period in the summer? How are you thinking about that? What I'm doing is I'm going to lock down the two renewals first, and then wait. Well, we'll see how the markets are right now. It's a little volatile all over the place. We'll wait for the best time to do it, or we'll soft market with some groups that we've been dealing with, and see if we can get something done there. Okay, fair enough. I will turn it back. Thanks, guys. Thanks. The next question comes from Gaurav Mathur from iA Capital Markets. Please go ahead. Thank you. Good morning, everyone. Just when you're thinking about future development initiatives, can you just discuss how development yields may have changed across your markets when compared to a year ago? To be honest, like, you know, we're looking at developing where, you know, Regina, we had that site, we bought it with the land, and it had a development plan. We just went out marketing it to find a tenant. We have a large tenant, so we will begin to go there. It's a very strong covenant. So, it's a little bit of a no-brainer for us to go on that one. London, we were doing spec. I guess technically it's still spec, but we do have three groups that are kind of clamoring for the space. You know, overall demand is still really strong, especially in Southwestern Ontario. You know, we had a tenant that was looking to leave and thinking they could go build their own building, and now they did a short-term renewal, and they're coming back to us saying, you know, "We have nowhere to go." It's positive from the fundamental side of where we're looking to develop. Okay, great. Just lastly, you know, we noticed a fair value losses on the investment properties. Do you think there is more price discovery that's yet to happen, or are we somewhat in the later innings as far as valuation rerating are concerned? I guess that's a question of where we think cap rates in the markets are going, but I think we've reflected the changes in cap rates to this point. I don't think there's any more adjustment required on the books. Kelly, I guess maybe you can comment on where you see cap rates going in the future. Yeah, I see it all over the place. I mean, there's portfolios out that I'm seeing in the low fours. It depends on the quality. It depends on a whole bunch of different things. I think what we did in this quarter was go through ours and make some adjustments just 'cause there has been some cap rate decompression. We weren't overly aggressive in the past of taking write-ups. At the end of the day, I think what we have pretty fairly reflected. I don't see any more adjustment coming in the short term anyway, unless, God forbid, the markets absolutely collapse. I don't see that happening. There's still strong demand in the industrial sector. It is really strong. Even where I thought, you know, the one office building that we have there that we had two tenants coming up, one of the smaller suburban, you know, looks like they both reached out to talk renewals. Still looks pretty positive for us. Great. Thank you for the color, gentlemen. I'll turn it back to the operator. The next question comes from Munish Garg from Laurentian Bank Securities. Please go ahead. Thank you and hi, everyone. Congrats on the great results. Just to start on the Q&A, just a bit more color on Richmond, BC. Could you please remind us the timeline, you know, on the completion of the entire project, and whether right now you're looking for any sort of exit strategy over there or it's a bit too early for that? That's a good question. Like I said, we were turning over. We had two different tenants. I'll try to give more color. One of them, we had started, but we'd given them a break because they were relying on Skate Canada as part of their business, and we've done a shift. The site has gone over a major overhaul, so it looks fantastic. They're up live on the private, call it pickleball club. The Racket Club is going to be badminton, pickleball and padel. Pickleball is one of the top growing sports in North America. Actually, it is the top. Without even marketing, their membership list is growing really quickly, and they haven't even launched the marketing yet. I think it hopefully is sooner than later because we're well underway. The courts are in. They just have to paint the outside courts. It's taken a little bit of a delay. Like, we were ready to turn over and had done a walk through two weeks before. Because of COVID, we had a delay obviously, and they did have a note if we didn't hit a certain date. They surprised us with a notice to not follow through on the lease. At the end of the day, I think it's overall positive for the site because I think the racket club will be a huge success. Looks fantastic. There's pretty big demand for it. We're delayed, call it, I don't know, where we would thought we would get rent December. That's probably, I'm thinking it's June, July. I could be surprised to the positive, but that's what I'm thinking is July sometime, July. At the end of the day, we have kind of shifted plans on the development as well. Because we now have the front of the building where our green, our green space was, that's courts, going to be courts. The footprint of our expansion that we have, we are still planning on about 74,000 sq ft there that we will go on, I'd say, end of the year. It just takes away some of the land which would have been bonus density. I think the plan for the site as a whole is to build the 74,000 sq ft. And then once we're done that, we will look to exit that site. I would think, at some point in about a year and a half, we would look to exit and then redeploy that capital elsewhere into pure play industrial, like we've been doing for the last two years. Okay. Thank you. Just one more for me. Just on the acquisitions, that you announced, could you please provide a range on the CapEx for those acquisitions? Sure. I'd say overall there is the. Let me just think here. Between $5 million and $ 6 million, or there's a couple of more, so call it $ 4.75 million-$ 6 million. Okay. Thank you. One more comment on Richmond, just as I say, on the exit. We would look to separate title everything and then I think that's how we can maximize value on the site and then sell the units individually. Thanks a lot. The next question comes from Brad Sturges from Raymond James. Please go ahead. Hi there. Brad. Just to continue on with Richmond there for a second. Just with Skate Canada, can you remind us of what the size of the space and the rent was? What would be the conversion cost to get the new pickleball tenant in? I think we're throwing a couple million bucks in there to get it done, but so is the developer. He's throwing in quite a bit of capital of his own. At the end of the day, it's not enormous for us. I believe we're working a new deal with the existing tenants. Where they were like, I think $ 52 and Skate was, call it $ 30, kind of blending them that the overall space was gonna be right around $ 39-$ 40 afoot. How much space is the pickleball gonna be? They're going to be big. They're gonna need that entire 60,000 sq ft plus additional that they're gonna be doing in the first phase. Okay. Just like the step back, it sounds like your real strategic potential with the asset hasn't changed, that you'd still proceed with the expansion and then, and then look to exit. Yeah. What would change your thinking around that, given you have a pretty healthy development pipeline of high quality opportunities on the industrial side, would there be something that you would have in mind where you would maybe rethink whether or not that's the right, the right area to deploy capital? Yeah. I think I can sum it up neatly. It's in Richmond, BC. I think we can build for about $ 3-$ 350 a foot, and I think we can exit somewhere around between $ 1,200 and $ 2,000 a foot on the new 74,000 sq ft. I think the return there is pretty big. I mean, that is pretty valuable land and pretty in-demand area. There's just no land in Richmond, BC or in Vancouver, Greater Vancouver. I think the returns will be well worth it when it's all said and done. Okay. Rob, just to go back to your comments on the development budget. I think you referenced a couple of numbers there. The $ 75 million, was that for the budget for 2023 or was that related to just Regina? That's Regina and some of the Hamilton as well as I think that includes London. Do you have a budget for 2023 in terms of what you plan to spend? I mean, we haven't committed aside from the Regina development. We haven't committed yet. We're still refining the budget. We could be looking at developments of up to about $ 250 million for 2023. Okay. That's total cost. Yeah. Total cost, yeah. With a large portion being funded by construction loans. Correct. Yeah. Take up financing, you know, with the lift we get on development, take up financing, on one project might actually finance the equity piece on the next project. Yeah, when you put, you know, a 10% or 11% cash on cash return, say on London, and then really the valuation on it is probably about a 4%, 5% and a quarter cap, you effectively pay for it just in your returns. Last question, just to go back to the acquisition pipeline. Besides what's under contract, it sounds like you're working on some other kind of unit deal opportunities at the moment. I'm just wondering if you could expand on some of those opportunities and where they might be? Obviously, we're always still working on things with our London partner. That is one that we will be exploring. Another one in BC that we have a potential unit type deal. Two right now, and we're always talking with guys. It's just like I've always said, it's a longer process to get guys on board and comfortable with the story and what we do. Yeah, I mean, there's no shortage of opportunities. You know, where we're focused right now is closing on what we have, getting the development going. Like I've always said, you know, it's been a transition to get us to this institutional quality. I think if you look at all the stuff that we're bringing in and that we brought in, it is institutional quality and it's class A. We'll execute on that. We'll execute on our London renewals where the majority of it is and show the same sort of lift in that portfolio and execute on our development, which, should bring outsized returns. I think once we continue to execute on all those, capital markets will look to see what we're doing and start to really appreciate what we've done to the company and the story. That's gonna be our focus for the next year. Sounds good. Thanks a lot. I'll turn it back. Okay. The next question comes from Michael Markidis from BMO Capital Markets. Please go ahead. Hi, everybody. A lot of, lot of sort of small details thrown out. I think you said you had a couple of not non-renovals, but roll downs in Alberta, and I know we're expecting pretty good growth in Southwestern Ontario, in 2023 and beyond. Just, you know, with I think you're at 70% of your portfolio is now same property. Just looking to 2023, what should we be thinking about as a reasonable assumption on same property growth? We're probably looking at about, I'd say $750,000, give or take, on the year. $750,000 upside on total NOI? Like the bright end of the basis? Yeah. Okay. Net of the downside, in Alberta. Yeah. Western Canada. Yeah, we have two in London alone. call it, you know, 109,000 sq ft, 110,000 sq ft, 150,000 sq ft. call it a 150,000 sq ft where we're probably up, I'd say $5 a foot on renewals. Okay. That's got it. That's 15. Okay. $ 750,000 on the total portfolio. I guess I could if I pro rata that somewhat, I could get to a more of a same property number. Do you guys know what that might be actually on a same property percantage basis? Not okay. For Victoria, I don't remember if the detail was in the disclosures. If it was, I apologize, what's the agreed sale price for that asset? We haven't disclosed that yet. Are we under confidentiality, Kelly? We are. Okay. Victoriaville and then the three office properties in Montreal, that's the $70 million is held for sale. Correct. Okay. Got it. Just with respect to, Richmond, does the vendor support continue until? Yes. It does. Okay, perfect. That's good to know. You know what? I think that's all. Oh, sorry, last one. I just the development numbers are a bit confusing. I heard $75 million, and then I heard $ 250 million. I'm trying to get a sense of what just the spend is projected to be sort of this year for what you think is gonna get started in terms of capital outlay. Yeah. As mentioned, there's a number of development projects that we're looking at, not all of which are at advanced stages. However, there's roughly, you know, as I mentioned, about $ 250 million of potential development projects that could get started this year. Of that, you know, I'd say it well, it depends on the start time on how much of that gets spent this year. I'd say, like, We have Regina, which is probably 312,000 sq ft. It's probably about $ 136 a foot, so it's gonna be around $42 million. Yeah. Because that is breaking ground. We've got Hubrey, which is going to break ground. I think that's somewhere around $14 million or $ 15 million. Those are the two immediate ones that are going to start. I'd say if we did Windsor and the St. Thomas, which quite frankly, St. Thomas can go on a little mini boom considering the lithium plant that was just announced for there by Volkswagen. You know, that's combined 130,000 sq ft, probably $ 150 bucks a foot, $ 175 bucks a foot on those. That if anything, those would probably be late fall type breaking. I think of what we actually break ground on and have to spend, the two immediate ones are Regina and London and Hubrey. Okay. Got it. That would be, like, $57 million for those two, and then I guess the $75 million is any incremental on stuff. Okay. Then the $ 250 million, I mean, is that more of an aspirational figure, or you actually think you'll start on $ 250 million of projects this year? There's pretty big delta between what you guys have described. Yeah, I don't think we'll start on that much this year. I think, what is feasible really for this year is probably the Richmond later in the year. We've got Hubrey and Regina for sure, possibly the two, the Windsor and St. Thomas, and I would say one of the RFA developments late in the year or early next year. That could be pushed out. Got it. Okay. That's, that's it for me. Thanks. I'll turn it back. Okay. The next question comes from Jimmy Shan from RBC Capital Markets. Please go ahead. Thanks. I just wanted to clarify on Robin, your $ 700,000 NOI comment. If I take Q4 NOI and just simply annualize it's about $ 100 million. What you're saying is add $ 750,000 to that $ 100 million? Yeah. That would be year-over-year increase. Yeah. Yeah. That would just w hat is that $ 750,000? Is that rental lift on the leasing maturities and some of the roll downs? Does that include actual rent escalation as well? How do we think of that? Yeah. That's the rent on renewals, the rent lift on 2023 renewals that have some lost NOI on some two renewals in Western Canada. We may end up ahead of that. It depends on how some of the releasing goes. Kelly's working on some deals, you know, blend and extends that, you know, we could see our same store NOI significantly up above that. That's the most likely in the bag increase. Right. Okay. When I look at the lease maturities, like in Ontario, as you mentioned, the 400,000 sq ft, most of which is in London at $ 6 rent, I presume market is somewhere in the $ 10 range. That alone would be, you know, $ 1.6 million, if my math is correct. Right. I guess the roll down, those Western Canadian assets more than offset, like offset a lot of that. I think the roll down, Kelly, correct me if I'm wrong, but about $ 750,000. Of renewal. Yeah. I mean, we've got that on two tenants alone. Okay. All right. Then e have two renewals locked down. Honestly, it's over double the rent of their existing. I think that's about 150,000 sq ft. That's our complete. Okay. Maybe turning to the funding for the acquisitions. I think you mentioned Casselman, you've drawn on the credit facilities. Are you planning on putting new mortgages on that facility? How are you planning on funding the remaining $200 million under contract? Yeah. The expectation right now is that we'd add those assets to the unencumbered asset pool and draw on the credit facility to close. Yeah. How would the rate compare if you were to instead of putting a new mortgage on? Like, is there a reason you wouldn't be putting a mortgage on that today? Today we might look at putting a mortgage on, given where GOC is. You know, putting a 6% mortgage on wasn't something that we were looking at. On Monday and again this morning, swaps traded down and GOC traded down. Vanilla five-year mortgage financing as of today, probably looking at about 4.5%, based on today's bond yields. We would initially put it on the facility, and that doesn't mean that it's permanent financing. We'd look then to swap the facility where it made sense. You know, we could acquire some of the future acquisitions and put vanilla mortgages on them. That's a possibility. What we're trying to do is build up our unencumbered asset pool and get ourselves to the point where we could be rated and issue public debt. You know, taking it down on the facility, if we put a swap on top of it brings our interest rate down to in and around 5%, depending on the length of the swap. We're not locked into the higher short-term interest rates. Right. Okay. Okay. Understand. lastly, just on the London asset, the 325,000 sq ft, the $50 odd million that you paid for, does that include the addition as well? Yeah. It includes the. It does. Okay. Yeah. That would be roughly $ 155 a foot. Is that kind of where prices are today in London or? No. No? No. Okay. Rent now is cranking pretty quickly. Here's a crazy example for you. I just was looking at something in development charges to build new industrial. There's $ 25 a foot. It makes pricing pretty tough for new builds for guys. We don't have to pay development charges on our expansions, obviously. I would say those deals were signed and done, you know, when market was $ 9 and change, I think it's ove $ 10 now. It's $1 0, $ 11, $2, and it's moving pretty quickly still. At the end of the day, I think finding anything under $200 a foot is good. You know, we are looking at others that have pretty low in-place rents, and I'm talking low. On renewals that you can really get some same-store growth. Yeah, I mean, the market is very, very, very tight. There's still pretty big demand going on because the development charges are really prohibitive to new builds there. I think at the end of the day, we're purchasing those at around a six cap. I think with the amount of land, especially on Wilton Grove, the one that we have in Wilton Grove, it has a ton of developable land. That tenant that is there is growing and growing substantially and has been. While it's getting a 150,000 sq ft addition and, you know, it's 300,000 sq ft, I think, or, that they may need to expand again, which is again, just bonus for us, especially at that cap rate. Yeah. Okay. Thanks, guys. Okay. The next question comes from Himanshu Gupta from Scotiabank. Please go ahead. Thank you. Good afternoon. Just to follow up on the same property NOI growth for this year. It looks like it will be less than 1%, you know, based on some of the math discussed here. Just wondering what kind of rent escalators do you have on your in-place portfolio right now? It varies. I mean, we've got a piece out west that's CPI. On the new stuff that we're acquiring, we're typically looking at higher rental rate growth, you know, 3.5%-4%. You know, the real story I think is expiries more so than built-in steps in rent. Himanshu, I think at the end of the day, we can walk you through it, Himanshu. You know, Southwestern Ontario has significant rent growth for most of our Western candidates that have CPI. The newer properties that we're buying in London and whatnot have embedded, you know, 3%- 4.25% increases. I think it's probably better offline just to walk you through it all. Fair enough. We spoke about the industrial lease expires in, you know, London specifically. You talk about the write down in Western Canada. What about the, I think 186,000 sq ft coming due within the retail portfolio. Are you expecting markdowns there as well or, you're expecting like, flat generals? Any, any color there on the retail portfolio? Sorry, on which portfolio? The $ 186,000? Within the retail portfolio, the lease expires, which is coming due in this year. What are your thoughts there? Sorry, maybe the connection's not clear, but which market? No, I'm just talking about the re-retail portfolio. Retail. Okay. Yeah, retail. Okay. Yeah, I think retail will be relatively flat. We've seen one or two, you know, we've seen one or two positive moves on leasing, but overall, relatively flat. Yeah, it surprisingly held up. It's held up pretty well, I think, at the end of the day. Overall, I think, and the results here, it was positive. I think we could safely model like it's probably like 1%, overall on the retail. Got it. Okay. Then, you know, just turning on the balance sheet, and sorry for some background noise here. Turning on to the balance sheet there. Unsecured facilities, I think $375 million. My question is, what leverage do you need to maintain, to capture the lease? I think there's a BA plus 170 basis points, interest rate on that. How much leverage do you need to maintain there? Sorry. Leverage in order to maintain the spread like at 170 or? That's right. Yeah. That's right. Yeah. Yeah, go ahead. 50% or less, I think, debt to total assets. Okay. You know, looking at the acquisitions announcement and the development spend, do you see yourself below that 50% leverage? We do, yeah. We do that. Okay. The effective interest rate on that unsecured facility would be something around mid 6%. Is it fair to say that, you know, looking at where the BA is right now? Yeah, I mean, you know, I don't know that you can look at it that way because we will be looking to swap it out and reduce our interest rates. That's the short-term rate. You know, we can swap it at any time to lock in at, you know, a five-year swap this morning was trading at around 4.95%. A three-year swap, just 5.25%, let's say. Yeah, 6.5% as long as we're floating. We always have the opportunity and we're looking closely at opportunities to fix the rate by way of swaps. Awesome. Thank you guys, and I'll join back. Thank you. The next question comes from Matt Kornack from National Bank Financial. Please go ahead. Hey, guys. Your occupancy has been pretty stable in all of your asset classes, but just wondering, and it sounds like, from your commentary, there's no known large non-renewals, but how should we think about occupancy trends in each of the buckets through 2023? Industrial will pretty much stay full at the end of the day. The retail, I think it's been pretty constant since we've had it, so I don't think there's any surprises there. Office, we have our three office buildings are good. Our building on Stanley is good. We do have one in Fort St. John that we have for sale that hopefully gets moved. That's always been a little bit of a problem asset for us. I think overall in the office it'll probably stay fairly stable as well. One of our largest tenants in the old Montreal office portfolio is expected to vacate as well. There could be a little bit of pressure in that portfolio. Okay. Just with regards to industrial, and then just a broader commentary on the strength of the market. Like, let's say you did have a non-renewal of a tenant, how long is it at this point to find a replacement? Obviously there's a rent spread probably to your benefit on that. Yeah, I don't, you know, other than the one we mentioned in Alberta, we don't really have any that I believe will be non-renewals. We're, we're well working on everything. We did have actually in London one non-renewal, end of May, but literally I think it's leased for June 1, so it's pretty easy to lease on the industrial side, especially in those markets. Yeah, other than the Alberta one, I don't see anything not renewing. Fair enough. Just on the spreads, obviously Ontario and Quebec, very strong. Yes. You leased a vacant space in one of your Alberta properties. Like, that was -30%, but was there something anomalous to that, or is it? Yeah. That was a space that's been vacant, a 25,000 sq ft space that's been vacant at the Royal Vista property for quite some time. As noted in the MD&A, where a space has been vacant for a period and there's no rents to compare it to, we take the average rents for the building. The average rent for the building was, I think, around $ 16 a foot compared to an $ 11 or $ 12 lease. That's what led to the negative leasing spread. I think in Western Canada for the most part, we're pretty close to market rents. that particular property, we had the tenant go vacant on us, on 25,000 sq ft where the rate was fairly high. Okay. No, that makes sense. On Richmond, the $ 600,000, can you just remind me? I missed it in your commentary. That's a quarterly figure? Yeah. That's additional to anything that's being collected through the guarantee. Also is there still a Class B unit issuance associated with that at the time that it's complete? Yeah, there shouldn't be. I think we've settled. At the end of the day, there would be no more Class B's on that one. Okay, perfect. Thanks. This concludes the question and answer session. I would like to turn the conference back over to Kelly Hanczyk for any closing remarks. I just want to thank everybody, and we'll see you next quarter. This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.