Well, good morning. Thank you everyone for coming. Thrilled with this turnout. Almost 50 people, net of some Air Canada casualties, and a very manageable crowd. I just walked up, and you guys sort of settled down, so I appreciate that. A few intros to start with, Pat Sullivan, our President and Chief Operating Officer, is seated up front. Rags Davloor, our CFO, is just coming up here. Lesley Buist is over there in the back. She's Senior Vice President, Finance. Graham Proctor, right here, Senior Vice President, Asset Management. Lee Murray is right there. She's the Head of National Leasing. Sherri Kelsey is over there in the corner. She's the General Manager of Halifax Shopping Centre, where we are today, and Claire Mahaney is somewhere right over there. She's VP, IR, and ESG, and she and Sherri put a ton of work, and a number of other people put a ton of work in today, so very much appreciated. So you guys have heard me talk a lot about Primaris. The first couple of years of Primaris, we referred to it as the awareness campaign. So we spent a ton of time talking about what, you know, designing a REIT from a blank slate is about, our differentiated financial model, the importance of scale in our business, the consolidation opportunity, lots and lots of things. And today is really about. It's really about the mall business. So these are some of the slides that go with this. This slide will be familiar to a lot of you. We do talk about size and scale, proper capitalization, as I mentioned, all these different pieces. At the bottom left, the focus on retailer affordability is a big piece of our business, and running malls is a complex operation. It's one that takes a lot of resources, it takes a lot of experience, and that's what we're here to talk about, our strong platform and our amazing team, and how they deliver the results that we've been delivering over the first few years as a public company, and I'm very pleased to say that it's working. On this slide, you'll see that Primaris has delivered a 49% total return since the spin-out. That is significantly ahead of the other retail REITs at about 9%. And as I said, we spent the first couple of years really on this awareness campaign and building the track record, getting in front of investors and telling them why, you know, why they should own Primaris. And so I'm very pleased that I have very little to say today. It's mostly going to be the rest of the team talking about our business and how it is that we do what we do. And then, as it relates to this slide, you might think we've delivered 49% total return, well ahead of our peers. We're actually really optimistic that we can continue to deliver outperformance consistently. And you might say, "Why are we so confident?" I would say there's really sort of three areas. The first one is operating and financial performance. We have a big opportunity in our occupancy, a couple of 100 basis points, three or four hundred basis points of occupancy recovery. We still have a lot of these pandemic-era leases to straighten out, and that will help us lift our recovery ratios, and as we get closer to that stabilized occupancy, we're gonna see strengthening leasing spreads, and all of that is gonna contribute to strong FFO and NAV per unit growth. The second reason that we're pretty optimistic about our stock price is valuation. Over the past couple of years, we've seen a very significant narrowing in the credit spreads relative to our peers and on an absolute basis. You know, on the equity side, we've seen our valuation improve, and yet we continue to represent what I think is the best value. But on a straight-up valuation basis, we still have high credit spreads on the debt side and discounted valuation on the equity side. So we still see a lot of relative valuation improvement. And the third is really the liquidity and pricing of mall properties in Canada and the U.S. As I said to many of you, there was a time when malls were viewed as the top of the pecking order of property types. And that's because they're large, regionally dominant properties, high barriers to entry, really good supply and demand dynamics, and excellent long-term performance prospects. This was disrupted by Target and Sears and e-commerce and a pandemic. It has been a, There was a 10-year very tough time for malls, but you know, as liquidity returns, as Primaris buys more of the malls in the Canadian market, we're gonna see a more balance in that market. We're gonna see, you know, the relative pricing of malls compared to other property types improve, and one thing that I sometimes touch on, and I'm not sure if everyone appreciates it, but I truly believe that the REIT is the ideal ownership and capital structure for malls. It is permanent capital, and these are very long-term assets, and throughout the day, you're gonna hear a lot about how running malls is a very long-term exercise in terms of how to plan, manage, capitalize, and really produce these results, so I really do believe that this is the ideal ownership structure. But before we get to all of that talk about our platform and the strength of our team, we have some special guests here that are gonna tell you a little bit about this amazing city. I can tell you it's a fantastic story, but I don't have to because we have Wendy Luther, who is the President and CEO of Halifax Partnership here. Ian Munro, the chief economist from Halifax Partnership, is also going to speak. But first, we are honored and very appreciative to have Mayor Mike Savage from Halifax here, and he is going to tell us a little bit about Halifax. So with that, I will turn it over to Mike, if he could welcome him to the stage. Good morning, everybody. Bonjour à tous. Kwe', Pjila'si. I want to welcome you to Halifax. This is the traditional land of the Mi'kmaq people. Those are the First Nations of this land. They've been here for 13,000 years, and we honor their presence, and we have peace and friendship treaties that go back to the 1720s that really weren't honored very much, but we honor them now, and we intend to keep them. Is that the only slide we have, that yearbook picture of the three of us? He's a good-looking boy in grade twelve. It is great to look, it's tremendous. You know, we always welcome visitors, and I want to acknowledge the folks from Halifax Shopping Centre. This is a beautiful shopping center. They've done a great job with it. It's certainly a destination point for people who live in this community. So, thank you for the great work you've done with the Halifax Shopping Centre. I'm the mayor, but I'm not going to be the mayor the next time you're in Halifax, if you're from away. Now, I'm not running this year. I've been mayor for 12 years. Before that, I was a member of Parliament for three terms, and I was in business before that, so just to give you a sense of how old I am. About a year ago, I was walking through someplace, and somebody came over to me and said what a great person I was, and I'm the only mayor they knew in their lifetime. And I said, "Holy shit, it's time to get out." You know, when I got elected mayor in 2012, our population was around 400,000. Today, it's around 500,000, and Dr. Munro and Dr. Luther will give you the exact statistics, but there's no question we've gone through an unbelievable period of growth. We're also, we became a destination for immigration, and that was intentional and purposeful because in 2014, a report came in from Ray Ivany, who was asked by the provincial government to do an analysis of the Canadian economy. The title of that report was Now or Never: An Urgent Call to Action. Now, that wakes you up when you think about your future and what it means. It said that we weren't doing a very good job of attracting immigrants. We were losing the demographic battle. We were getting older. We were losing people, and I'm here to tell you today that Halifax is younger, smarter, and clearly better looking than we were in 2012. A lot of work by a lot of people has made that happen, but we were intentional. We wanted to encourage immigration. We worked with the provincial government, and I would argue that Atlantic Canada was behind the times on immigration, so the big cities, the Toronto, the Montreal, the Calgary, Vancouver, but also a province like Manitoba, was intentionally bringing immigrants into Manitoba. We didn't do that. We thought we were folksy and charming, and we were, but we didn't do enough to bring immigrants to Halifax, so we started working on that, and by 2016, we were seeing the results pay for themselves. In 2012, we had a net outmigration of people from Halifax, and our whole population grew between by zero and 1,000, and last year, we grew by around 20,000 people. We expected the immigration. What we didn't really plan for that well, population-wise, was COVID. We didn't expect that so many people would... I talked to somebody this morning who basically works here but is employed with you guys in Toronto and doing probably a great job, and largely living in Halifax. So it's an important thing for us to welcome people from around the world, and now also to have turned down, turned around that whole idea of going down the road to Toronto. Now, in fact, people are coming here in bigger numbers. So Wendy and Ian will take you through the numbers. I just want to tell you, as mayor, a few things about Halifax. We have the most bars and pubs per capita of any city in Canada. I've never seen it in paper, but I've never seen it disputed either, so get out and have a bit of fun. We were chosen by Matador Magazine a few years ago as one of the top 20 cities in the world to party in before you die. So I hope you'll all get a chance to test that amongst all the important work that you'll be doing, while you're here. But Halifax is now a cooler place than it's ever been before, I think. You find a mayor that doesn't boast about her or his city. You can usually believe about 65% of what a mayor tells you. I'm probably closer to 75%, but you don't know which 25% I'm lying about. But I will say that our economic platform, which we did as a city in conjunction with the Halifax Partnership, who you'll hear from later. Our economic plan is called People, Planet, and Prosperity. We believe in people being part of the solution. We want people to be successful. I want people who do well to earn the benefits of that success, but I also want more people to be part of it. We believe very strongly in climate change and its impacts. We're a coastal city. We see the effects of storm surge. We see what happens, sea level rise. Last year, we had the worst fires in our history at the beginning of June. July, we had the worst floods in our history. We have winds that used to whip up from Florida, but die out at the Carolinas because the water was colder. The water's not colder anymore, and those storms are hitting us all the time, we have to do more work, and we have to be ready for climate change, and we have a very good climate action plan, and I'm really excited that our economic plan is called People, Planet, Prosperity. Take care of people, take care of the planet, and the prosperity will follow. As I leave the office, which I will do in probably six weeks. You're gonna hear numbers about Halifax, and we have challenges. We have homelessness. We have people who suffer from social exclusion. We have a lot of challenges in the city. But as I often say, and Wendy has taken to saying as well, is, "I'd rather deal with the challenges of growth than the challenges of stagnancy," and we're doing that. And the greatest validation for me personally, as I leave, is that my kids, who are 27 and 24, who always talked about going to Toronto or Vancouver, they graduated and now live in Halifax, and they don't see themselves leaving. And that makes me feel like something's going on here that's worth paying attention to. So I'm gonna let you hear from these folks. I'm glad you're here. Don't do anything crazy, but if you do go out and have a bit of fun, if you get in any trouble, you get arrested, just tell them the mayor sent you. It won't do you any good, but you'll get a smile out of somebody, and it'll brighten your day. Thank you all for being here in Halifax. Good morning, everyone. Welcome to Halifax. I'm. As I get myself oriented with the technology, we're about to find out. Hi, I'm Wendy Luther. I'm President and CEO of Halifax Partnership, Halifax's public-private economic development organization, and absolutely honored to be asked by Primaris REIT to join you this morning. And thank you for your curiosity and your investment in Halifax. Now, Halifax Partnership, we work with many partners and our funders to drive economic growth throughout our municipality. We do this by, as the mayor said, guiding Halifax's economic growth through People, Planet, Prosperity, which is our current economic strategy to 2027. That has an ambitious goal to grow our city's population to 650,000 and GDP to CAD 32 billion by 2037. It hopefully is not lost on this crowd that Halifax is one of the fastest-growing cities in Canada, has been now for the past, five years or so. And we also boast the fastest-growing downtown. So in all of our work, we are selling Halifax's value proposition of talent, location, cost, and innovation. We are working to attract business and talent, and investment to our city, as well as helping businesses located here reach their full potential and tracking our economic progress. So we're very transparent about how we are doing, and Ian will share with you shortly some of that information. Now, as a part of helping businesses succeed, I was delighted to be here at Halifax Shopping Centre in March to welcome Simons' first Atlantic location and celebrate with Monsieur Bernard, their CEO, and the two Simons brothers, who are carrying on that business's legacy. Halifax is Atlantic Canada's economic and cultural hub. It's a regional center for business, shopping, tourism, post-secondary education, healthcare, and arts and culture. From here, it is easy to travel to global markets through the Halifax Stanfield International Airport. Many of you would have flown through our award-winning airport and moved goods in and out of North America through the Port of Halifax and CN Rail. We also are in similar time zones all the way up and down the Eastern Seaboard into the Caribbean and Brazil. On top of the connectivity, residents and visitors can enjoy Halifax's excellent, excellent East Coast lifestyle in nearly over 200 urban, suburban, and rural communities. By geography, we're huge, the largest municipality in the country by geography, only slightly smaller than the province of Prince Edward Island. Halifax is home to people from over a 150 countries. Many come here to start their careers by attending one of our eight post-secondary institutions in our city. But they stay, drawn by the quality of life, and I'm sure the excellent shopping options here at Halifax Shopping Centre. Now, last year, Halifax welcomed over 300,000 cruise ship passengers and three point five million air travelers who shop, dine, and enjoy all the city has to offer. We are also one of the great event-hosting cities in the world. In 2023, we hosted over 100 national and international business, sporting, and cultural events. Big events like Canada's World Junior Hockey Championships, the Junos, North American Indigenous Games, and my favorite, SailGP, and many large-scale business and academic conventions. And across all visitors to Halifax, 8.4% come for the primary purpose of shopping, 8x larger than the number that come for meetings and conventions. And look forward to working with you and our partner, agency, Discover Halifax, that works in tourism marketing, to share that great word of what's happening here at Halifax Shopping Centre. So this is close to 500,000 person visits who come every year just for shopping. And generally, about 20% of the 1.3 billion in visitors are spending on retail. So now I will hand this over to Ian Munro, our Chief Economist, to share some more numbers with you. Thank you. Good morning, everyone. Have some coffee because I'm going to be using charts. As you heard the mayor say, we've really had a dramatic population upturn over about the past decade. The majority of this population increase has come through international immigration, although we did have quite a bump in people coming from other provinces as well during the COVID period. Last year, we grew by almost 19,000 people, or 4.1%. That was a record. The population now is just under 500,000, but if you do an hour's drive around the city, that's going to get you in the ballpark of, you know, almost three-quarters of a million people. On the right-hand chart there, you can see the projected growth going out a few years, and I just put in a few comparators there, the provincial rate, the Canadian rate, and many of you, I think, are from Toronto. So just to give an example of another major Canadian city, I've got a line in there for them as well, and you can see that over that kind of four-year stretch, Halifax and Toronto have a pretty similar projected growth rate of about 1.6% as a CAGR across those four years. That remains to be seen what the impact is going to be of the federal tightening on temporary foreign workers and international students. Last year, we had about 16,000 net international immigration, about 10,000 immigrants, and about 6000 non-permanent residents, which would include the students and temporary foreign workers. We'll see how that shakes out when the next set of data comes out. Most of the people coming here are young, which is what we want, in the 15- 44 age bracket. In the 2022-23, our universities, we have seven schools here, had 32000 people in them. About 7000-8000 of whom are international students, and as well, we have several college campuses of the Nova Scotia Community College here, with another 4,000 students enrolled there. Our median age in 2023 was 39 years. That's the lowest it's been since 2009. So like all the country, we do have a growing number of seniors, but we also have had such an influx of young people. Our median age is actually going down. And access to smart young people is what, excuse me, entices companies and investment to come here. You can see the example there about Cognizant, who've just been growing by leaps and bounds here in Halifax. I'll turn to the labor market for a second. In 2022- 2023, we had a really red-hot labor market here. Very low unemployment, near record levels, peaks in job vacancies. Things have cooled a bit in 2024, and again, that's sort of a nationwide trend. After peaking at over 12,000 in mid-2022, our job vacancy number dropped down to about 7,000 in the first quarter of this year, and now is up around 8,000 in the second quarter. Similarly, from a mid-2022 peak of 5.4%, the job vacancy rate dropped down to 3.1% in the first quarter. It bumped back a little bit to 3.5 in the second quarter. The average offered hourly wage in Halifax has climbed from CAD 22.05 at the beginning of 2022 to CAD 25.55 in the second quarter of this year, down a little bit from the peak in the first quarter. Our employ... Unemployment rate in August was 6.1%, which is still over the long term, historically, very, very low for this part of the country, especially. You can see here some Conference Board of Canada forecasts for the unemployment rate, just you can see what the future's looking like. And you see we're kind of floating around in the mid-fives, and comparatively doing well to the other places you see there with a, you know, half a point, full point gap between us and Toronto over those years. We don't get retail sector data at a city level, but at a provincial level, for the retail sector in Nova Scotia, there were just under 1,600 job vacancies in the second quarter of this year for a job vacancy rate of 2.6%, and the average offered hourly wage there was CAD 19.05. If you have been around the city a bit, you'll see lots of cranes in the sky, more than 40 in action across the city. I'm not a construction guy or an engineer, but people tell me that's pretty much unheard of for a city of this size to have that many cranes up and building things. I think I can safely say that most of that building is multi-res. So strong population growth is great for business, businesses that need workers, but as you heard already, it places a strain on housing. And again, that's not a Halifax unique phenomenon. We're seeing that across much of the country. Here you can kind of see the work of those cranes in the form of a graph. This is scaled for population, but you can see that our projected housing starts are well ahead of the provincial and national figures and ahead of Toronto as well. So there's a gap to make up, but this is moving in that direction. And finally, I'll just look at income and sales figures for a moment. Again, these come from the Conference Board of Canada. They're projecting average household income growth will be pretty much in line with the inflation rate over the next four years, so not a big change in purchasing power by that metric. Retail sales are projected to grow by more than 3% each year. And with that, I'll end and invite you all to ask any questions. You may have more questions for the mayor or Wendy as well, but thank you for your time and attention. Yes, sir. I'm sorry, it's a little hard to see you because of the lights. Who are the largest employers in Halifax, and are they growing? Like any capital city, you have a large public sector. Since we are a regional center, we have a very large academic presence here, hospitals. On the private sector side, of course, we have the Irving Shipbuilding, with a massive project going on there over the next several decades. Other large companies that people would, you know, sort of think of as Toronto companies, RBC, IBM, they have really large presences growing here. New companies like Cognizant coming in already with a 1000 people. Those are some of the larger ones here. Any big new ones that I'm forgetting right now you want to mention there? Sorry, of course, Emera, the local power company, who's headquartered here and has a large presence in Florida and other parts of the U.S.. Yeah. Can you just give me a scale of some of the tech sector, like, Cognizant? By the time the mayor and I were at an event at Cognizant. They were here. They'd been here for about a year, and they were celebrating their 1000th employee, and by the time we got to their office, which is just a stone's throw from here, we can essentially see it from here, they were already at a 1,179, moving to 2,000. IBM is over a 1000 people in Bedford. They're consistently performing as the top IBM innovation center in the world. And RBC's Client Innovation Center, also in Bedford, they're at a 1000 people now, but have just announced over the summer that they're moving to 2,000 tech workers at that location. Manulife as well has a large tech team here, and they also are your neighbors here at Halifax Shopping Centre. They're pushing close to a 1000 as well. And Eastlink, which is one of our local telcos. Eastlink has operations across Canada, but they're headquartered here, so that gives you a bit of a flavor. Our economy is quite diverse. Ian can get into that more between tech, professional services, the manufacturing, a large industrial park across the way in Dartmouth, Mayor's hometown. That would have many businesses that are, you know, over 500 mark, side by side. Those are all short commute from here, about 10 minutes drive. The population growth, we're talking about, you know, permanent population growth numbers. We also have schools here. Yeah. Must have a positive effect. Yeah, it's a very important part of our makeup. So the population numbers that Ian shared also include temporary residents, which would, the largest portion would be study permit holders that are postsecondaries. So we've made a very concerted effort here in Atlantic Canada and Nova Scotia, specifically on attracting and retaining our international students. So the goal is to have that temporary population convert to a permanent population. But as Ian shared, and this is a national issue, federal government changes to international student flows affects us here in Atlantic Canada and certainly affects those of you in Toronto and in Western Canada. So our message on that was largely positioned as a housing shortage issue. But for us in the East, we're advocating we still need these people for our workforce as much as we ever have in the past. Just with regards to infrastructure in this area in particular, I think we heard on the tour that there's supposed to be housing densification in this node. Can you give us a sense as to... I mean, obviously, the city is maybe not the most practical if you're a million people, but, how are you dealing with infrastructure needs in the growing city? Do you want to take that? So this location is going to be the site of multi-residential, you know, on steroids. Mic Mac Mall in Dartmouth is the same thing. We have an old military base called Shannon Park, same thing. We have another mall in Dartmouth, which is being densified to, like, 22 or 2,500 people. So here's the thing. This is why I took the microphone. It's funny, when people move into a city like Halifax and they turn the tap on, they want water to come out of that tap. And it's a challenge for all municipalities because when people move to a place like Halifax, they start paying sales tax and income tax. They don't necessarily start paying more property tax. And if they do, it may not be enough to pay for the infrastructure, water, green space, transit, and all those things. We have good cooperation with the provincial government on transportation. There's something called the Joint Regional Transportation Agency that we're working on. We have a long-term plan for water, both in terms of improving water quality where it exists, but extending it, because Halifax is big. So those are issues. Infrastructure is a big issue, but it's an issue that we can manage. I mean, there is something like 400,000, basically, either already as of right development from our regional planning process, or virtually as of right. People have to come in and get a permit. So we're going to continue to grow, but we are going to need the infrastructure to do it. I think all orders of government are going to have to play a role. So yes, sir. You talked about the provincial election cycle. When are the next elections? What do the polls suggest? ... I believe on the books is a statute that says that the next provincial election is to be held on July the something next year. There has been much speculation in the press that an election may be called before then. I don't have any inside information, so it'll be sometime between now and next July. Like a snap election sometimes could be driven by the incumbent having difficulties or the incumbent having extra strength. Which is it, in your view? I can tell you what I've read in the press recently, is that the Premier's approval rating is, I think, reasonably high compared to other premiers, but having gone down slightly. I'll now leave it to a politician to address that question. I don't think it's a secret to say that across the country, there's a lot of governments that want to go to the polls before the federal government goes to the polls, that they want to be the recipient of antagonism toward the federal government, and that's the case here. We just had a sitting of the legislature, which lasted, I don't know, 12 hours? No, eight days or something very short. The Premier's approval ratings are low, mid, in terms of Canada. The last numbers that came out, it was 42%. They've gone down, but I don't think the opposition is organized, so I think that there's a chance that there might be an election relatively quickly. But my guess would be, it would be in the spring. We do have a fixed election date, as Ian said, in July, but fixed election dates have a way of dissolving with the winter snow. Yes, sir. Can you just elaborate on, like, the port? Like, what it is now, what it's going to be, when it's going to be kinda fully completed, and how big, and what it's capable of doing for the eastern seaboard? You're probably more knowledgeable about that than I am, Mr. Mayor, but- Interesting question. So Halifax is a port. We have two terminals, both owned by the same company, now PSA, out of Singapore, one of the largest in the world. They have some aggressive plans. There is capacity at Halifax Port. There's discussion of other ports in Nova Scotia, similar to what you saw on the West Coast with not only Vancouver, but with Prince Rupert and others. But the port here in Halifax has done well in the last couple of years. Interestingly, we're going to be going to a goodbye for the captain tomorrow or the next day or something like that, for Captain Gray, who came in. But they, they've got plans to increase automation and everything else to handle. As you know, I mean, a port is only as successful as how quickly you can get goods from here to big markets. You know, a port in Halifax doesn't survive on Atlantic Canadian goods. It relies partly on that, but mainly on how do you get stuff to Chicago. Working closely with CN Rail, I think the Port of Halifax future is pretty good. With that, I see that we're 10 seconds over time. Thank you all for your time. I hope you enjoy the rest of your stay here. Morning, everyone. I think I've spent two and a half years avoiding this moment. Did pretty well. I guess it was always inevitable we'd get there one day. When... Let's see if I can get this thing working. You know, when we put this slide together, I realized I was getting old. I'm not going back to the 1950s. I mean, that's basically when department stores started getting built. They didn't get built without anchors. That was the only way you could build a department store. It's the only way you could. Sorry, it was the only way you could build a mall. It's the only way you could get financing. You had to have an anchor. And as development progressed over the next few decades, it became anchors were essential. Anchors actually even took ownership interest or had rights to buy ownership interest. And you needed key retailers like, say, a Dylex or a Woolworth, which Dylex at one time probably had 20 banners, and Woolworth probably had about 10 or 15, and you needed those banners to build a mall. And so, you know, you get into the eighties and nineties, and when I started in nineteen ninety-six, it was, it was an industry full of people who had been around for 20 and 30 years. So a lot of really experienced people who were absolutely convinced that you had to have a department store, and they couldn't imagine a mall without one. And it was an interesting mentality, especially when you fast-forward today, where the mentality is you don't need one at all. You don't need a major department store to run a shopping center anymore. But in the nineties, what got a lot of these guys into trouble was they had a high debt, and they had land banked, and so you ended up with failures. You had Eaton's, you had Trizec and Bramalea. Bramalea built a lot of shopping centers. They all got in trouble, and they went bankrupt. Yes, Cadillac Fairview went bankrupt as well in the mid-nineties. And what saved Cambridge and Cadillac at the time was the pension funds started getting into the business of owning shopping centers. And they... At first, they were taking pieces of shopping centers, 50% interest. It was good cash infusion for the various shopping center owners, but it gave the pension funds an appetite for the asset class. And I think what they really liked about it at the time was the development had stopped, much like today. There was no new supply really coming on board. The huge ramp up in building shopping centers was an end. You had population growth, you had huge parcels of land, and the anchor disruption, which had been happening, you know, you had Sears, Simpson, Sears, Simpsons, sorry, Simpsons had failed. You moved through the 90s, you got Eaton's failed in 99. You had Robinsons Department Store in Ontario, which failed. You had Woodward's out west that failed. So you had a bunch of these guys, but the stores were easily absorbed. They were either bought by other department stores or they were just remerchandised with more CRU, so the mall could expand and drove rent. The attraction was the rising valuations and the rising rents. The department stores that did exist were really leaking sales into the shopping center at the time. So Sears and the Bay, which used to do, say, CAD 50-60 million, was a really good store for them. They were down to, like, CAD 30-40 million, and all that sales transferred into the shopping center itself. There was a real boon in the sales. The rents were going up, and the pension funds were attracted to it, so they ended up buying. OMERS bought Oxford, Teachers bought Cadillac, and then, the Caisse bought Cambridge, which they also had Ivanhoé at the time, and it wasn't until after 2000 they merged them. But they bought these, and Cadillac and Cambridge both had about 60 malls each. I actually have a book from, you know, 1999 for the Cambridge portfolio, 'cause I actually worked there for six months. And it's a big book. There's a lot of malls. They own malls across Canada, but they had 60 of them. And so the pension funds, of course, didn't want 60 malls. They wanted to narrow it down, so they started selling. And who were the buyers? Other pension funds, and that's when Primaris was formed in 2003. It was formed with the belief that there was gonna be this huge desire to sell assets by the pension funds, and we were gonna be the ones buying it, and over the next decade, Primaris grew to 33 shopping centers until such time as a lot of the other pension funds that still had an appetite to buy malls, they wanted malls Primaris had, so there was an event that Primaris was taken over and then split up, and it was two years later that for the first time in 65 years, there was major disruption in the shopping center business. You had Target fail, which was 100+ stores. Unlike the other anchors in the '90s, these weren't easily absorbed. This was a lot of stores all at once. Four years later, you have Sears fail, another eighty stores, so another huge amount of stores hitting the market. They were getting absorbed, but it took time, it took a lot of money, and it really created a sour taste for the asset class, especially when Target left, because it was like, this is an American retailer that came up to Canada and failed. It hadn't been the first American that came up to Canada and failed, but it was a big one, and it kind of tarnished Canada for some people and some of the Americans. It made them a little nervous about coming to Canada. And then the granddaddy of them all was the pandemic. I mean, we were essentially closed. And all this time, e-commerce was lurking in the background as a story that was gonna kill shopping centers. And through 2015-2020, you know, the end of the pandemic, it's, "The mall's dying. What are we gonna do? We're gonna build life... We should go entertainment. We should go experiential. We should do lifestyle. We should do food halls." All of it was just desperation to figure out, how do we fix this thing? Well, it wasn't actually that it was broken. It just had major department store failures over a six-year period, followed by a pandemic. The mall itself works. The food halls, in my mind, haven't worked at all in any of the shopping centers. The experiential wasn't really... It's nothing really tangible. Adding entertainment works in some places, but not others. What really drives a shopping center, first and foremost, is the merchandise mix. And so as we come forward to 2024, we found a balance in the omni-channel with e-commerce. So omni-channel, bricks and mortars married with their online business. Nobody makes money on online sales. The delivery is killing the retailers. They don't make money. They need the bricks and mortars as a distribution hub. And we found that in Halifax Shopping Centre. We have a Michael Kors store that does okay, but they said when it came up for renewal, there's no way they were gonna part with the store because they said it, they need it for their distribution hub in the Maritimes. That's the only way they can make sense of their e-commerce business out in this region. And now you have the dynamic that almost existed in the 1990s, too. You have no growth in supply. You have higher population. The anchor problems are largely resolved. And so we find ourselves in a much better place and much in a place that we were in the late 1990s when malls started booming again. And we have a lot of leasing activity on the go, and we'll get through that later. But our occupancy is going up, all the fundamentals are positive, and really, the major disruptions are behind us. So, you know, malls existed starting in the 1950s. It had a period of real despair. They've bounced back. And I started my career in Vancouver as an office broker in 1992, and rates were CAD 2 a sq ft. The market had crashed back then for office, and you see a similar dynamic today, and real estate, as we all know, it moves in cycles, and shopping centers, I think, have been through their cycle at this point, so with any organization, it starts with a great team, and the one thing I've learned over the last 28 years and focused on enclosed shopping centers is the only way to run a company for this specialized asset class is to have a great team and very specialized people. It really takes a leasing person about 10 years to fully understand how to merchandise and work a mall, and on the operations side, it's quite complicated as well, and we'll get into that. Our business is to drive traffic to the mall. We don't sell the product. The retailer sells the product. It's important that we put in the right retailer. We deliver the traffic. And how do we deliver the traffic? Well, twofold. One is we invite millions of people to our shopping center. They want to have safety, security, cleanliness. They want an environment where they feel safe, and they want tenants. They want the new and the best tenants. So on the one hand, you know, Graham runs our operations group. We have marketing people at the shopping centers. We have specialty leasing people at the shopping centers. We have operations people. We have a lot of people on-site. We have people in the regional office. We have lease administration people that manage the costs, accountants and so forth. Graham's job is to make sure that we deliver the customer experience, what, how they want it. Lee is our head of leasing. I've worked with Lee since 2005. We started at Oxford. Lee's primary role is bringing in new and exciting tenants to keep the mall current. People want to come to malls for the stores. They want the newest and best stores. If all you have is a stale, stagnant tenant mix, it's a problem. You have to continually remerchandise these shopping centers to keep them fresh for the consumer, so the lease structure of the shopping center, I mean, every asset class has its lease, and shopping center lease is rather unique, and it really provides us with flexibility and adaptability for running the business. The lease itself builds in a percentage rent clause, which is unique for other asset classes. Basically, if the tenant does well, we get part of the upside, and that's the one dynamic in the whole lease process that is unique to the shopping center. We get insight into mall sales, and you know, we are driven to try to get those sales higher, and I'll get into that later as well, how we do that. As I said, the lease is. The lease has some unique features, and it really is designed to create flexibility and adaptability for us when running the shopping center. And first and foremost, you know, because we drive a lot of people through the mall, we have to keep it safe, secure, clean, and so forth, which costs money, and we have to manage our capital very effectively. And so we really are able to. We have 15-year capital plans, and we work on how we allocate that capital over the period of time. The last thing we want to do is create an unprofitable shopping center for retailers. We want to keep a smooth out the additional rents, so there's not like big peaks and valleys year after year. And we try, when we can, to pay off any capital pools we can as quick as possible. The lease administration, I think, is common in most shopping centers and other asset classes. We charge a fee for administering the lease, and the two unique aspects to this lease, unlike others, are the excluded tenant clause and the relocation clause. So the excluded tenant clause was really designed a long time ago to bring the anchors into the shopping centers. It basically says that you can charge the anchor whatever you want for common area expenses, and the shortfall gets passed on to the rest of the tenants. And that applies to tenants generally over 15,000 sq ft. And what that does is it allows us to remain competitive with other retail developments, such as power centers. We can offer the same competitive terms for rent on a gross basis as power centers do, and that helps us bring the tenants into the shopping center. The relocation clause is very essential. In fact, I've really only exercised it three times in the last 28 years, because usually you come to an agreement. But we build it into every lease where it says we can move you if we need to. There's all kinds of parameters around that, but what it is, is when we go to remerchandise a shopping center, we want to bring in a new tenant that needs a large area. You don't always have it available, so at times you'll have to go to a tenant to see if you can move them. And if somebody doesn't have a relocation clause, they can just tell you no. So we have the relocation clause, so we can force the issue. And like I said, we've only exercised it. I've only exercised it three times in almost 30 years. But it's there, and tenants know it, so they generally work with you, and it allows you to keep the merchandise mix current. I mean, the last thing you want to do is have a tenant that you really want in your shopping center going somewhere else. You want them in your center to drive the traffic because that's the key to our business. So coming out of the pandemic, this has been very first and foremost for us. It's been fill up the mall first, and we'll get into the upgrading of the merchandise mix later. So we really have been focused on driving occupancy without a terrible regard for merchandise mix. I mean, we have been trying to get in the right tenants into our malls, but we haven't gotten to the point in a lot of shopping centers where we were pre-2014, where we were actually going to tenants proactively and saying: "Would you please leave? Because we have tenants that will take your space at higher rents, and they're more attractive." And, you know, because we see their sales, we can tell tenants may or may not survive long term, so we would proactively pursue replacing them to bring in new concepts. We really focus on the merchandise mix. And, you know, as part of this whole process in the last few years, taking our variable rents, our gross and variable rent down, structures down, has been a key to helping getting the shopping centers back to where we were pre-pandemic. We've made good progress. We started coming out of the pandemic around 15%-16% of our portfolio was on those leases. We're down to just around 9% at the end of Q2, and I know we've made progress on that. We'll come out with a better number coming into Q3. As I mentioned, merchandise mix is very important to us. Customers drive the sales of the shopping center. They want new and exciting stores, and we don't want them to go into competition. There's a whole bunch of reasons for why we re-merchandise. It's complicated to explain how we get to the point where we decide how we want the allocation of tenants to fit. You know, we've changed over the last 15 years from what I would say a lot of riskier profile to a much more well low risk and much more stable profile. Because we see the sales, we can see where the trend's going. Because we have a national platform, we can understand which tenants are doing well across the country and which trends are catching on and, and really working, and we also just rely on experience. Having done this, say, our team, we have team members that have done this for a long time, and they understand what works and what doesn't, so you know, the question is: how many tenants are right for a specific category, and we'll get into that later, too. That's kind of where the GROC, whole GROC scenario fits in, is you can see when a category is starting to get strained, the entire category, say, rent-to-sales ratios might be elevated. There's been times when we have added, say, extra jewelry stores, and you can see they're just splitting sales. So then we'll bring the category back into balance. But you see, over the last 15 years, what's really changed in the portfolio is the apparel's gone down considerably. So the drivers of this change in the last 15 years, one, is anchor failures. Target and Sears disappearing, created opportunities to remerchandise, and we did so with large-format tenants such as Sport Chek, Mark's, Old Navy, H&M, TJX, and so forth. So we brought in a lot of fashion boxes. The result of that was we downweighted our small shop fashion because you only have so much market share for fashion to begin with. Higher mall costs, which they definitely had gotten higher from 2009- 2024. They drove out a lot of the smaller local tenants from the shopping centers. You know, it's nice to have a, a complement of those tenants because every chain starts with a first store. But, I would suggest to you that the amount of locals that are in malls and trying to get in malls is, is greatly diminished, just because of that barriers to entry. Grocery stores, which had been a tenant that was more or less kicked out of shopping centers in the 1990s, and even in the early 2000s, they were seen as tenants that took up large plots of parking. They didn't drive customers into the shopping center. They weren't really desirable by a lot of landlords. We're now welcoming them back. They do actually drive traffic. They are complimentary, and they're a great covenant to be on top of it. What started in the 1990s and is continuing today is the department stores continuing to leak what's left of a department store, one left. It continues to leak sales into the shopping center, and the biggest beneficiary of that has been the health and beauty departments. Shoppers Beauty Boutique had took off in the last 10 years, and Sephora has really capitalized on the department store departure in the cosmetic side. Sephora has become an absolute category leader. They're in almost every one of our shopping centers. They do generally around CAD 2,000 a foot. So a tremendous story. Electronics expanded significantly in the last 20 years. I remember doing a cell phone store in a mall in nineteen ninety-eight. First cell phone store. They didn't. I mean, it's hard to think of a mall without a cell phone store, but it. There was a time when there were none, and now there are dozens in every mall. They pay really good rent, and it's Telus, Bell, and Rogers. Covenants are great. And then there's been a migration of box stores to the shopping centers as well. You've had a lot of guys a lot of tenants recognize that the mall is where the majority, in a lot of the towns, is where the majority of sales are done. It's where the majority of people shop, and so they've relocated from power centers and other strip malls to the shopping center, and the opportunity has been with Target and Sears failure for the most part. And so we added a lot of box stores over the last 15 years, and the result is, you know, where our merchandise mix today and our top ten tenants compared to where it was 15 years ago. 15 years ago, it was primarily fashion guys. It was a lot of fashion chains, small shop apparel guys. Today, it's Canadian Tire, TJX, Walmart, Loblaws, and Bell. It's an absolute rock solid risk profile for tenants. So a good example of this was Orchard Park. So I mean, this is 2009- 2024. Eaton's left this building in 1999. It was remerchandised with some CRU and some boxes. Walmart left this building in 2005. It was remerchandised with Sport Chek and a whole bunch of CRU. And then in 2019, we got two Sears stores back, 130,000 sq ft. One was a home store, one was an inline store. We put in Mark's, Leon's, Structube, Planet Fitness, and Canadian Blood Services, so all box guys. This mall has essentially gone from, you know, it's had four... It at one time had four anchors in the shopping center. It has one today. But what it does have now is it has a really, really solid, diversified merchandise mix. Because this is the best and biggest mall in the Interior BC, its trade area is probably 300 and 50,000 people. Draws from Penticton, Kamloops, basically every center that's on the Interior BC, that would have to go through mountains to get to either Calgary or Vancouver. So it has a tremendous draw, and as the mall manager here one time told me, she goes: "I think you've made this into the man mall." She said that when we put in Best Buy. But this is what I believe to be reflective of a shopping center today. It's a cross between a power center and a traditional shopping center, and it has a much more diversified tenant mix with a much lower risk profile. Anchors didn't use to pay much CAM. So historically, they were given really good deals. They didn't contribute much to the CAM. The burden falls onto the CRU. And so when we've been doing a lot of these box stores, they typically have been paying more CAM. But I can tell you some developers have been still charging them low rent, low, low CAM rates, and we see it when we take over shopping centers. And the reason is because if you get a higher base rent, your pro forma looks better. But because the CRU tenants pay you so much rent, and it's 50/50 in terms of this, you know, they occupy 41% of the space, but they pay you about 70% of your rent. So in the long run, you're best to try to keep their costs under control and keep them down, 'cause then you can drive their base rent higher. In the short term, you might think, "Okay, I did great on the box deal. I got a high rent out of them, but if you're not getting enough CAM contribution, you're putting the burden on the small shop tenants, and long term, you're going to pay for that much more substantially than by just charging them a market competitive box rate that they would have paid in a power center, and trying instead of trying to give them a special deal on the mall just because the lease enables and allows you to, so we really focus on driving those additional rents up for the majors. It's become one of the mandates for the leasing team as the leases roll, that we would try to get a higher contribution from them. Percentage rent, so as I mentioned before, it's unique to the shopping center business. We do everything we can to drive tenant sales higher. Graham's team, you know, one thing we're not going to talk about today that I do need to mention is our marketing people at the sites. Over the years, marketing has become kind of a... It was a little bit lost its way. I know we've got it back focused on what they need to. Their focus is to pick tenants that are close to their percentage rent breakpoint and promote them, get them over their breakpoint, so they pay us percentage rent. Anyone over their breakpoint, promote them, get their sales up higher so they pay us more. And I guess the last thing before I jump off marketing, 'cause I won't talk about it again, is we... You know, any tenant that has a termination rate, we use our marketing department to drive their sales higher so that they pass their threshold. And we've had three or four examples in the last year where we've actually succeeded in doing that, getting them over their sales threshold. And if we didn't know what their sales were, we wouldn't know to do this, and we wouldn't know what hurdle we needed to jump through. So for percentage rent, the majority of it comes from a handful of tenants. And usually, they're category leaders, except for the past couple of years, when it's become a much bigger part of our income base, simply because inflation has driven costs up. Sorry, driven sales up, or been a primary driver of sales increases, and we've been a beneficiary of that. So our leases have always been structured so that they were percentage rent was a hedge against inflation, but for decades, we never had any. Now that we have some, we're seeing the benefits of having that built into our leases. And so percentage rent right now is about 3% of our NOI. Traditionally, it's been about 1.5%-1.7%. It will go back to 1.5%-1.7%, simply because as these leases expire, where we have percentage rent being paid, we will crystallize the overage into their new minimum rent, and it'll settle back to the 1.5%-1.7%, but we'll have recognized it as a higher base rent going forward. So that's something we're working on now. You know, on this list, like, Sizzling Wok's been on this list for years. They're a food court tenant, Asian food. I think they fell out of our top 10 now, simply because we rolled all their leases at higher rents and crystallized the percentage rent into their new deal, so as we've talked about on many of our investor calls and analyst calls, we've seen tremendous interest in leasing space. We've got a lot of Canadian and international retailers looking at expanding in our portfolio, either with new stores or expanding their footprint. I know, I think, Lee said to me the other day, SoftMoc has a list of about seven stores they want to expand in our portfolio. La Vie en Rose continues to expand in our portfolio. Shoe Co. is expanding. Skechers is expanding. We're working on some Browns deals. Lululemon, Victoria's Secret wants to do 50 stores in Canada. They're around 11 now. We've got a new one in Halifax Shopping Centre. It was here, but it's getting reset. Victoria's Secret stumbled in Canada simply because they had too big a footprint in all their stores. They were like 12,000-15,000 sq ft. They're gonna do 5,000-8,000 sq ft going forward. Much better profile for them. Anyways, lots of demand in Canada for space and, you know, we're filling space as quickly as we can, but, you know, a lot of these guys have capital constraints. They only have so much capital on any given year to open stores. With an expanded portfolio and a bigger presence in Canada, we're starting to realize the benefit of getting in front of retailers more and more and getting to the front of the line in terms of their allocation of capital. Devonshire Mall, we've talked about it for a number of years now. We bought this mall as part of the HOOPP acquisition at the end of 2021. Really, this project, in my mind, breaks down into three phases. When we bought it, we had a Sears store that was about 200,000 sq ft. It was two stories with a basement. It would have cost a lot of money to try to fix it and re-merchandise it and fill it. There's about 40,000 sq ft in the mall, in just adjoining the Sears box that was chronically vacant. So phase I was really tear down the Sears box, free up, the 18 acres of land that it sits on for remerchandising. So that's in progress right now p hase II was lease out the 40,000 sq ft of chronic vacant space inside. So we've got deals done now with Sport Chek and Mark's. Both are tenants in the mall. Both were not in their correct format. Mark's was undersized, and Sport Chek had a very odd layout where they were, they would have left at the end of their lease. So we've repositioned those guys in the malls. We've done long-term leases with them, filled up all that vacant space at the end of the shopping center. We'll put a new entrance on the end as well. And then, phase III is really start to build out the 18 acres, and that's either leasing to retailers for freestanding pads or selling land or doing a land lease with restaurants or hotels. And we're in active discussions with some hotel guys, and we've got a few retailers we're looking at building out parcels with as well. And as part of that as well, we have to reset the space Sears is in. Sorry, that Sport Chek is in. It's a two-level building with a basement. It was actually built as a department store in the 1970s. It's a very old building. It's a bit dysfunctional, and we'll work on redoing that. We can build a much better building and do something much more appealing with it. All in all, this is a 5-7 year project, and the end result will be driving the NOI up about 50% from where we acquired it. 50% might be a little conservative, to be honest with you. Stone Road Mall, this was just an example of a reset of a Sears box. Coming out of Target, when we tried to reuse the existing boxes, we learned that it was quite often not money well spent. The boxes were older. They... It would have been just as easy to tear them down and rebuild them from scratch, and that's what we did with the Sears in Stone Road. We tore it down to the... We left the concrete pad in place, but we tore the rest of the building down, rebuilt it. It would have cost the same amount. We priced it. It would have cost the same amount of money to try to retrofit it, and we leased it to three new tenants to the shopping center, Mark's, Toys "R" Us, and HomeSense. So it was a good project with a good return. You know, as an example, what we can do with an anchor when they leave. Talking about anchors when they leave, I've been listening about this one leaving for 25 years. I don't actually know when or if it's ever going to happen. If it does, it will be a good day in my mind. It's nice to get it over with after 25 years of explaining what we would do with the Bay if we ever got it back. The lessons learned from Target and Sears would be that in the most part, we would rip them down and just build something a lot more functional to the shopping center. The benefit of HBC going is they have a lot of historical restrictions on the mall. Parking ratios, no build zones, development restrictions, and so forth, which would be materially advantageous for us to get back. It would allow us to do a lot more things on the mall sites that we cannot do today without their permission, and their permission is not free. Especially leasing integral to shopping centers. You know, the mall needs to look and feel full all the time, and the primary role, especially leasing, is to fill up that space. It represents about 5% of our income. We have dedicated people at most of our shopping centers for specialty leasing, which, you know, I often argue internally about. Is there enough there to keep somebody occupied full-time at a shopping center? And the reality is the cost is about 10% of the revenue they generate. So in my mind, it's well worth it to have one person. We've tried before to have two people, one person run two malls, and the revenue falls down significantly. So it's been a great benefit. It's a key part of our business. And, you know, in the past, we really drove specialty leasing revenue, not just from inline, but I mean, we... It used to be a lot of cash, which was not the best thing. You used to have payphones, you had coin vending machines and such forth, and I'm not sure the money was ever properly accounted for. In fact, I know that it wasn't. Nowadays, you know, there's a lot more focus on branding and promotion in turn, in addition to inline. We're going to be looking to grow the revenue base through branding and promotion. A good example is, you know, the Santas in our malls were an integral part of the shopping center. They always have been. Now we actually make money off it. I think last year we made CAD 500,000 off having Santa in our shopping centers at Christmas time, whereas historically, we didn't make anything. It was just a service we provided. And so it is a key part of our business, and they help the mall look full. So we really have been focused on growing our occupancy. I have no concerns about us getting to 96%, as we've been talking about. And really, to get there, we need to grow our anchors by another 1% and our CRU by 2%. So 97% beyond. I think we're committed 96% anchors, 92% CRU, and we need to get to 97% and 94%, which is about 170,000 sq ft. And I'm confident we'll get there. The bulk of that is CRU, which is higher rent paying. The challenge in the CRU and what takes time is the average space is 2,000 sq ft. So when you want to lease 100,000 sq ft of CRU, that's a lot of space to lease. It takes more time. The anchors are big and chunky. It's fairly simple to see a path there in a short timeframe, but CRU will take a while, but we have great leasing momentum, and we will get there. The benefit is, with 100,000+ sq ft of CRU to be leased, the rent is materially higher than the anchor rent, and it will also feed right into the recovery ratios. Anchors generally are excluded from paying CAM in our model, so getting an anchor to pay gross rent really isn't the driver. Getting a CRU tenant to pay gross rent, all of it goes to the NOI line, CAM tax, and the rent. As I mentioned, I see us getting there and beyond. Anybody have any questions? You talk a lot about percentage rent, but, like, back in the day, we all focused on, like, GROC ratios as a key metric. Is that something that's changed a lot because of, you know, online shopping, or do you still look at that? And if, what's the metric, the other metric that you would look at, aside from percentage rent? Yeah, I mean, the thing that we've most focused on is the sales, the individual sales of the tenant. So GROC has... We'll get into GROC later today, but GROC has a lot of nuances to it. You know, a tenant that has very high sales can afford a much higher GROC, and simply because if you think about all the fixed costs a tenant would have, rent being one of them, as their sales go higher, those other fixed costs fall as a percentage of their overall ratio. Whereas, so it essentially gives you room to move the GROC up. So that's why you'll see in a mall run by, say, the super regionals, the malls that do, you know, 1,000+ a foot, where the sales are really high, generally the average GROC is 20% in the shopping center. Whereas in the malls that do, say, 500-700 or 800, you're looking more in the 15% range makes sense. So it's but the underlying sales is absolutely the best number for us to look at to understand the tenant's business. Probably just following on that line of thought, Pat, you know, you spoke about leasing strategies and how you essentially have flexibility to see what the sales looks like. Let's say you do see a huge or a mid-sized tenant struggling in a particular space. Does the lease also give you the flexibility to kind of pivot midterm in terms of, okay, how do I want to actually position the space or do something else with it? You mean to terminate the tenant? Yes, I guess so. We can't just kick tenants out, no. We can move them. But, you know, if you want to move a tenant that's struggling that you want to leave, there's a problem with that. You're going to invest capital in somebody that's probably not going to stay very much longer. Generally, we go to those tenants and start talking to them about, do they want to close? Right, and maybe just looking at, you know, when you get into a leasing discussion, let's say with any big box or any of the large format retailers, how would you entice them to actually follow the enclosed mall format versus, let's say, any other big box options out there? Like, what entices them to do the enclosed mall versus something else? I think generally, you know, the experience we've had in the last 10 years has just been their belief that the traffic is better in the shopping center. The Target and Sears boxes were pretty well positioned on the site, and once they came over to the mall, they generally performed much, much better than they anticipated. And I'll give you a good example. At Sunridge, we had a Winners that moved across the street, and they called me up and said, "You know, we just had a WTF meeting." And they were going through their list of stores that they just never saw the sales coming. They were doing 15. Now, it's like CAD 13-14 million across the street, right beside a grocery store, and they moved in the mall, and they're doing CAD 22 million. And they just said, you know, the traffic in the mall was just materially higher. And I've heard that from, you know, we've moved some Mark's into the shopping centers, same story. Like, it's just that's where the bulk majority of the retail shopping is done. What is your level of confidence in this chart that's showing the improvement to 96% occupancy, especially as we go through economic cycles? We're still seeing a lot of demand from retailers. I just do not see us stepping backwards in any way whatsoever from the charge forward to that number. There's a lot of activity. A lot of retailers have posted sales higher than they've ever been. They're very bullish, very optimistic. The only thing that's been holding them back from expanding further is capital and construction prices, and construction prices have actually leveled off and come down. So, now we've got really good momentum, and I don't see it abating. Hey, Pat, sorry. Yeah. Another real estate question. As you pointed out earlier in your presentation, retail is a—they're living, breathing entities that are constantly evolving, that change and adapt every, you know, every five years. What has been, you know, the biggest change that you've actually seen in your, again, in the last 10 years, that either you have actually witnessed, whether it's actually, you know, you know, back in the day, you actually have more TIs for the retail guys? Like, what, what's actually changed that actually, that you've seen, that you kind of thought like, "Wow, didn't see that coming? You're right. I mean, retail, it does. It's like every five years, it's a cycle, and something different occurs. So in the nineties, we didn't give TA. There was nothing. Retailers didn't get any. And in the nineties, it was a much more fragmented ownership of shopping centers. You know, even after OMERS, the Caisse and Ivanhoé bought the big malls, the big companies, there were still a lot of small companies. Like, the company I worked for in Vancouver had eight malls, nine properties. There was Iberville in Quebec. There was all kinds of these little companies that had six, seven, eight malls, and they disappeared, and it became the pension funds owned them. And then what happened is the pension funds started throwing lots of money at tenants and lots of money at the shopping centers, and it changed the dynamic, and there was a lot of TA being given out for a long time. 2005- 2015 was a chase to buy tenants. And that is. If we go to where we are today, I know a lot of the big companies have put the brakes on buying tenants because they realized you're not actually creating value by buying the tenants. And so the TAs are starting to drop again, especially for the bigger tenants. And but, you know, if I'd love to see us get back to the nineties again, where we didn't get any. Our leasing team, I've told them stories like this, and they just say they don't want to hear it. They don't, they don't believe it existed. Can you please quantify the percentage of your tenants that utilize their retail footprint with you for returns? And then also for pickup and delivery, and as it relates to percent rents, is that return counted against your sales, or is it below the line? And I guess the same question for pickup and delivery. Thanks. That's an evolving discussion. Right now, the retailers really run two separate businesses, their online business and their shopping center business, and they're supposed to keep them separate. So in the lease, they don't report sales, online sales, and they don't report the returns. How true that is, I don't know, especially on the return side. We do have audit rights, and we can look into it, and we do do audits throughout the year. But in terms of how much they utilize their store for delivery, I don't know. We don't know. Okay, that's just case by case asking retailers, and even at that, the people we talk to at the real estate level, they generally don't know. It's been a fight for a number of years now, is trying to... We keep trying to get the deliveries, the online business included in the sales, so it's the true value. But what will happen eventually is that it's the Michael Kors example here. Like, they are paying a really high rent that on the surface, you wouldn't think their sales would support it. The mall's full, they have nowhere else to go, and so they'll pay the rent to stay. And as our mall, our malls get back to full occupancy, for the most part, especially in the really good malls, we will be able to push tenants to pay higher rents, especially if we know they're using it for distribution purposes. They won't want to give it up. So in terms of how they report in percentage rent, that's, I think that's gonna be a fight we're gonna have for another five to 10 years with them. Just on the, I think on one of the slides, you had your, the percentage rents are now down to 9% of total? The variable. Yeah, the variable, yeah. So what is that gonna settle to in terms of, you know, long term? And what is... I don't know if you've quantified it, but what does that NOI lift look like once you get to that sort of long-term level? The goal is to get it. A historical number is like 5.5%, and we've been knocking it away generally about 1% a quarter for the last, I don't know, two years. We're always gonna have some, and a lot of that's tied to just always trying to remerchandise. You're hanging on to tenants in space to keep it occupied and paying rent until such time as you can put a new tenant in. It really feeds into the whole recovery ratio discussion and what's the upside in the recovery ratios, and right now we're at around 80% on. Our historical number for CAM is 99%, and our historical number for tax is 93%. My guess is, you know, if we get back to our historical numbers, that's around CAD 35 million. Okay, thank you, Pat. That's occupancy plus variable. We're gonna take a quick ten-minute break. Yay! We'll see you at 10:23. And we're back. Sorry. Okay, so one of the things we've talked about a lot lately has been our recovery ratios and how that's going to drive NOI. And as I mentioned just before the break, we see significant upside in our NOI tied to bringing our recovery ratios back to our historic norm. So on the CAM side, we have an administration fee that we charge on CAM. So the potential CAM number that we can generate from CRU tenants, small shop tenants, is 115%. And when we go back, you know, pre-2014, we had a number of malls that were in the 105%-110% range. When I say our portfolio average was 99%, there were a number of malls that were driving that, that were much higher. I would expect malls like this shopping center, for instance, to be in the 110% range when we get back to a normalized period of time. Part of what brings that recovery ratio down is the gross rent and percentage rent abatements. Some of it's occupancy related. Well, primarily those two things and those two things alone. On the tax side, we don't have an administration charge. There is the odd lease that we've in malls that we've bought, where we do have an admin fee on taxes. It's not that common, so there have been malls where we charged over... Where we received over 100%, but generally, our historic number is in the 93%-94% range. As I mentioned, going into the break, when we think about getting back to our historic norm, which is, you know, our occupancy level at 96%, the variable rent tenants down to, say, 5% or so, we will be close to our historic norms in terms of recovery ratio, which will be a significant driver of NOI growth, so as we're often reminded, you know, running malls is expensive. We do spend quite a bit of money on shopping centers, and that's because we're an asset class that invites millions of people into our property every year, and their expectation is cleanliness, security, and so forth. So we take great pride in our shopping centers, and we maintain them very well. We've done a good job over the years, over the past 20 years, especially in the primary historic portfolio, of maintaining our shopping centers without incurring significant expense in terms of maintaining them. You know, a great example was Orchard Park, where we recently redid the entire floor of the mall. Cost CAD 6 million. We planned it over a three- to four-year period. We bought the tile one year, and then we installed it over the next two and a half years. And that way, we were able to manage the impact to the CAM pool. We expensed it over, like I said, a three-year period, so that we didn't burden the tenants with any high CAM rates. If we just dumped it all into the pool at one moment in time, probably would have driven the CAM up to the CRU by about $2 a sq ft. And the way we did it, we were able to burn off some existing amortization as we're adding to the pool. So our CAM really went up about 1.5-2%... very manageable and expected by the tenants. Devonshire Mall, I mean, when we bought the mall, they had just finished a CAD 80 million renovation to the shopping center. It looks fantastic. Historically, we've bought a lot of our malls from pension funds who have invested heavily in the shopping centers. And we've spent the next number of years trying to get the CAM pools down in these shopping centers. As I mentioned earlier, one of the drivers in acquiring a lot of these centers is getting the majors to pay more CAM as their leases come due, so we can get the numbers down. Another example is Lethbridge. We redid the food court in, no, it wasn't 2022. Redid the food court back in 2017. We spend a lot of money in our food courts, so just to put it in perspective, food courts in a lot of our shopping centers generate as much as 10% of the NOI, and they drive a lot of traffic to the shopping center. They're a big source of percentage rent for us. They pay high rent, but because they're so heavily trafficked, there's a lot of wear and tear. We take a lot of care in maintaining the food court simply because it has been such a good source of revenue for us over the years, and it is a heavily trafficked area of the shopping center. The majority of our expenses are recoverable, 95%, approximately. HVAC, roof, and parking are our primary expenditures of the shopping center, and there's an ongoing program for that. 15-year capital plans are put in place. We very much pay attention to the peaks and valleys, the potential peaks and valleys in the shopping center. We want to keep a smooth profile for the expenditure plan, simply so that we don't have major expenses flowing to the tenant in any one given year. Primaris as a platform started in 2003. There's a lot of people that have been there since that time, and we take great pride in our the people that we have, and we have a very, very simple program in terms of how we operate. We keep our costs down. A lot of focus on that. We focus on trying to grow rents with the built-in escalations, and I think you're seeing that more and more, especially it became much more adopted in the U.S., so a lot of the tenants have become acceptable to it in Canada, which is great. We have not really expanded any shopping centers in quite some time. In fact, we've shrunk the footprint. I think a lot of malls, the issue right now is they're too large. I wouldn't say that about our portfolio per se, but Devonshire was a good example of we took down the Sears box simply because we didn't need it, and it gives us density on the site to do other, for other purposes. It is very, very important, and we've talked about it many times, to have a national platform and malls across Canada. It allows you to have dialogue with retailers, a meaningful dialogue when they want to roll out a program, like I mentioned earlier, with SoftMoc, where they want to expand stores. It's great for them to come to us and say, "We need seven deals." They have a capital program. They want to deploy it. They know they can get things done with us quickly. They know that it'll be executed smoothly, and we'll be able to turn over the space to them as we promised. Some of the other things I've talked about, the recovery rates and so forth, but cost control has been a huge driver for us for more than a decade, and I think it's been one of the reasons we've been so successful at operating in closed malls. I think a lot of the other platforms and shopping center developers have not put an emphasis on cost. In fact, I talked to my counterparts many times at some of the larger shopping center companies and basically tried to deliver a message about, "Please get your costs under control because you're going to bankrupt tenants at this pace." Like, there are some malls that their CAM costs have gotten completely out of control simply because the renovations that they do are so extensive, and they dump the money in the CAM pool, and their performance are all based on rents rising, but rents take time to rise. But when you increase their CAM costs, it's a little hard to get rents to go up when you've already increased their CAM costs by 20%. So the acquisitions for us have been a tremendous success over the past few years. The group acquisitions we've done very well with, and there's a number of reasons why we've been successful at the malls we've bought so far. The malls we acquired tended to have a much higher gross or variable rent structure in place as a percentage of their total tenants. We've taken the last two and a half years to bring that in line with where our numbers are, and that's helped drive the NOI. We've increased our occupancy at these centers. A good example is Highstreet, where we've leased 76,000 sq ft. The problem with that asset when we purchased it is there was a lot of vacancy. Sales were okay, but they weren't great. We spent the first six months trying to get the CAM costs under control, and we dropped them from CAD 24 to CAD 16 a sq ft, which brought them in line with nearby outlet centers and strip malls and so forth, where tenants had the alternative of going. So we were able to then get the rates that we were looking for, and from a gross rent perspective, you know, we fit with a lot of tenants. So we did a lot of leasing. We added, like, La Vie en Rose, Shoe Co., Lululemon, and those, and by adding those tenants, we were able to drive sales at the shopping center. So now I'm looking at tenants, say, like American Eagle, whose sales have gone up 20% since all these other tenants have opened. And so what we're looking at on their renewals, we'll be able to drive rents higher simply because their sales have jumped up, and that's all tied to the leasing that we've done at the property. At Conestoga, we came out of the gate publicly saying that there was about 58,000 sq ft of space that was either short-term leasing, like temporary tenants or vacant. We've, you know, our leasing team's done a great job. We've got that down to 36,000, with a visibility to bring it under 20 in the next 12-18 months, which will significantly drive the NOI. We're much ahead of schedule on that property. And it's simply been the leasing focus that has gotten us there. So overall, we've had really good success with the properties we purchased. This property, Halifax, is a tremendous shopping center. The previous owners did a fantastic job, not only merchandising it, but renovating it. And, I think, just the fact that it's a, it's such a high-performing center, we'll see good rental growth over the next five to 10 years. And, you know, the addition of Simons and such where there's a lot of unique tenants in the shopping center that are making this a regional draw, that'll bring customers from throughout the Maritimes. Any questions? Lauren? You covered the ratio slide. I think it's eighty-seven or so for CAM by the... Oh, wrong way. Um- Nope. By the end of 2026. I was just wondering, how long do you figure it takes? How long do you figure it'll take to get back to those historical, you know, high nineties numbers? And is that CAD 35 million NOI opportunity you talked about, sort of linear in terms of how it ramps up with the recovery ratio increasing? Good question. There's a lag for sure, and it really is tied to occupancy and the conversion of the tenants from the gross variable leases back to normal. But as we've seen over the last couple of years, there's been a lag in it kicking in. It's really dependent on when the tenant opens. So for instance, right now we have what 1.5% of committed tenants that'll open anytime between the next, you know, three months to 18 months from now. So even though we're gonna get back to 96%, it's when that when do we actually have those stores open and paying rent? And they have to be open for a full year before we receive the full benefit of the recoveries as well. You know, I'm hoping it's 24-36 months. It may be stretching it a little longer, but there's definitely a lag for when it actually fully kicks in. So on the acquisition-driven opportunity slide, can you talk about the occupancy gain in the Halifax, 10%, versus the others, you know, a little bit less, and then, you know, with the sales growth, it looks great. Can you also talk for a like-for-like, rent growth in these assets? Halifax, the occupancy growth was really built in. It was the re-leasing of the Sears box that was completed when we bought it. I'd love to take credit for it, but it was just really already done. There's not a lot of vacant space in the shopping center. There's a little bit. There is about 20,000 sq ft of tenants that are on gross or variable rents that shouldn't be much longer. They, they just had contractual terms. We're working on plans to re-merchandise those or get the tenants converted. From there, it's really just rental growth that's gonna drive this property higher. That was a related question between sales and occupancy. What's not on this chart is rent growth, and so what's been the like-for-like rent growth ex- for these properties? The rental growth has been, you know, I'd like to say in the new portfolio, it's been. It's pretty much standard across the portfolio, high single digits. Really, in the new portfolio, they had low occupancy, so we've really been focused on driving that up without worrying too much about merchandise mix. The rental growth is gonna lag simply because there was high occupancy. You know, Highstreet was the same thing. Like, we have to fill it first before the sales jump up. Halifax, we expect strong rental growth simply because of the sales. Conestoga, we haven't had a lot of rollover yet, to be honest with you. So our focus has really just been on leasing space. In terms of the annual rent escalators- Yep. Can you give us a sense as to how many, what percentage of the portfolio would have them in place, and kind of what you're pushing for in terms of putting them in place when you're talking to tenants? We're pretty much pushing on, on every deal we have for the last three years. As for a percentage, I don't know the answer to that. Two to three. I mean, we push for three, we often get two. No. You, I think, did a really good job explaining why expense management is really important. It makes a ton of sense. Why is it that some other, you know, third-party managers or other organizations wouldn't have the same approach to expense management? I think it's twofold. One is the way they're compensated. They're compensated based on gross revenue, so they get a percentage of gross revenue, so managing the cost out of the business is in the first and foremost. It's more short-term thinking than long-term thinking. I mean, it's easy to increase the CAM costs and for tenants when they have long-term leases. You won't really feel the pain of it until you have to renew their lease when they expire. Second is, like I said, it's on the pro forma. So when they do redevelopments, they might undercharge the anchors on the recovery side, which will in the long term hurts your your ability to recover more for charge... Not charge. It'll hurt your ability to keep the cost down on the overall tenant base, but it'll help your pro forma in the short term. So in essence, it's really just a lot of short-term thinking rather than thinking longer term, what's for the best, how you best grow the asset revenue. Deborah? I think, you know, you being an American, this is going to be a big problem in the U.S.. I mean, the malls down there have six anchors in a lot of them, and they haven't gone through the pain at all. In Canada, we have HBC left, and my guess is HBC, if it ever win and if it ever happens, will not be a complete rip off of the Band-Aid. It'll be some stores close over time. They'll give some back, which is how it was in the '90s. In the U.S., I think it's a much different story, which unfortunately tarnishes Canada. There's a lot of pain coming in the U.S., and I don't know how they fill them all in the U.S. You also talked about COVID rents. What percentage of the portfolio would that represent? It's the most of it is the gross variable rent structures, so we're down to 9%. Q3 reporting will be a much better number as well. The last question, you had stated that, you know, the example around American Eagle of, you know, kind of sales up 20%. What are you seeing as the critical drivers? Is it specific of retailers or changes in other structures and adjacencies? How do you think that plays into this holiday season? Thanks. Sorry, you said so sales- You mentioned American Eagle sales were up 20% as you had added additional tenants. Right. How do you see that playing out this holiday season and beyond? Right. So that was Highstreet. Sales are flattening out. They've had a great run for three years. Like, I really have never in my 30 years seen them rise like they have coming out of COVID. I mean, it was expected, but I've never seen them just keep going like they have unabated. Like, there's some tenants who literally doubled their sales coming in. Sephora is a great example. Their sales have doubled in some malls since from their pre-COVID numbers. So huge run up. I think they're going to flatten out. Even if they pull back, guys are doing so well. I mean, our GROCs are extremely low for whatever GROC is worth. But I think that's what's generally created the optimism for retailers wanting to expand. They're very pleased with where they're at in terms of their sales performance. Okay, just moving to the KPIs. So sales. Sales, all store sales are really a number that I don't use a whole lot to talk about because it includes stores that are open but haven't been open a full year, and it includes stores that have closed. And, you know, they're no longer operating in the center, but their sales are still in the sales report. What it does give you is an indicator of your overall market share, because it's a totality of the sales that are driven through the mall for a period of time. Tenants move into same store sales when they've had 24 months of being open in a shopping center and reporting sales. So it gives... It's a stable number, but it does. There's a lot of ins and outs and, you know, I often talk about when you're looking at sales, you're really talking about a moment in time, and it's hard to talk sales from quarter to quarter, and it gets a little frustrating at times when people start picking apart one quarter to the next quarter, simply because there's so many tenants moving in and out of the same store number. And a good example is Peter Pond. So the sales productivity went down last quarter or the quarter before. And the reason it went down was because Ardene was in, they moved to a larger store in chronically vacant space. They paid us net rent. We're happy to do the deal, but Ardene performs at CAD 200 a foot. The productivity of the mall was 800, so they dragged the sales performance down. We did the right things. We don't manage the sales. I mean, like, I wish I could say otherwise, but we don't manage the sales. Doing the Ardene deal was great for us because it drove NOI, it filled up spaces chronically vacant. On the flip side, come October, Sephora, which opened, you know, almost 24 months ago, they go on the same store productivity. They're doing CAD 2,000 a foot, so the sales will swing the other way. It depends who's moving in and out of the category, which will drive the number. And that's why, you know, quarter to quarter, it's tough to have a discussion. It's more, you know, annual versus annual is a much better way to approach this. I think that, you know, the Peter Pond Mall, it's very symbolic of what goes on in all of our shopping centers. The bigger the mall, one or two tenants isn't going to have that big of a swing, but in smaller malls, it definitely has an influence and an impact. GROC, which is my least favorite subject, and I think a bunch of you know that. It's really, you know, it's a way that we can measure how a tenant performs, but it really comes down to the tenant specific. I mean, we look at. We can talk about it by category, but really, when I start to look into it for a tenant, it's really tenant specific. It really depends on a lot of factors. I spoke earlier about the tenant, the tenant sales volume, which influences how much GROC, what the GROC can be. It also depends on the tenant margin, and what they can afford to pay, based on their own profitability. So you know, when we look through our own portfolio and we dissect it, we say, "Okay, which tenants cause us a little concern because their GROCs are elevated?" Not necessarily because we think they're going bankrupt, just because they're elevated. You know, we could identify, say, 10%, and that's not driven by a magic number of anybody over 15% or 20%. Like, cell phone guys operate at a GROC of 40%, because of the way they report sales and because of the way they sell their... They sell a service or a subscription to a phone, but they don't necessarily include the phone in the sales. So it just depends on how they report. But overall, you know, these are some guidelines that we've established internally. These, you know, what tenants can pay. Food courts can generally pay close to 20%. Electronics can pay higher. You know, apparel, they say 18%, but then, as I said, you get into the subset of who the tenant is specifically and what they sell. Some tenants have much higher margins, especially in the apparel side. Maybe they manufacture and import all their clothing from China, and they have really high margins because of it. Some, you know, manufacture and import it from other places where they don't have quite as big of a spread. It really comes down to the tenant. And what it really comes down to is our leasing team understanding the tenant's business because they talk to them and meet with them on a regular basis, and we talk to them about their business and what they can and can't afford. So I'll give you an example: There was a tenant that we were renewing in a mall. It's a hair salon. Their sales were great, their GROC was 8%, and he said, "I'm losing money." And he simply said it because their sales volume is not high enough. What's happened with inflation, it's especially on the labor side, is it's thrown out of whack our understanding of GROC, because we need to reestablish our understanding of a lot of the businesses. Labor used to cost around 15% of tenant sales. It's now around 20%. So it's moved up quite a bit, and it's become a burden for a lot of tenants in terms of how much they pay for labor. Construction costs haven't helped either. That's moved up quite a bit, even though it's more stable. So the ability to generate a higher volume of sales is key to a retailer in terms of determining whether they can open a store or not. And that's the one dynamic that's really come out of the pandemic. So in terms of a watch list, we've talked about this a number of times. There's. The pandemic cleaned out a lot of tenants that were weak. Since the pandemic's ended, we haven't really experienced much bankruptcy. There are tenants that we're looking at, saying, "Their business as a whole isn't really relevant anymore. It doesn't resonate with the consumer. The sales haven't kept up with the category." You know, those are the tenants we're looking at weeding out and getting out of our portfolio. And, you know, as we talked about this slide, we talked about examples that we give from the past. It was hard to quantify a lot of it, but I can... You know, some examples of tenants we've dealt with in the past, Athlete's World, back in, you know, 2006-7- 8, they were dying. You could see it. They had a lot of competition in the category. We started replacing them before they filed for CCAA. By the time they filed, I think we might have had one or two when we originally had about 10. You know, Payless Shoes, another one. Le Château is another one. Like, we knew these guys were going to fail, and we got ahead of them and started replacing them before they, before they filed CCAA. 2011 was actually the biggest bankruptcy year that I'd ever experienced. That was three years after the global financial crisis. We had 97,000 sq ft of space that had filed for CCAA that year. A lot of tenants, a lot of turnover that year, and we got ahead of a bunch of it, too. But that was just three years after the global financial crisis. Canada never really went through it, but what it did is strained a lot of balance sheets to the point where they couldn't remerchandise, they couldn't get relevant, they weren't selling enough product, and they couldn't recapitalize their store and renovate. Just before we take any questions, I just want to. So François Roberge, he owns La Vie en Rose, which is a big tenant of ours. We have more than 30 locations with François. He originally started his career at Les Ailes de la Mode in Quebec, which was a department store in Quebec. He's been around a long time. In this video, he'll explain how he started his business, but we have a great relationship with François. He was nice enough to do a video for us to explain his business to you. There's a lot of retailers in Canada that we deal with that nobody knows who they are. They're private companies. They operate, you know, banners that people don't really know that they're connected. So François runs La Vie en Rose and Bikini Village. So he's got two banners. He's international. He's got a lot of stores. He's got no debt, and we have a number of retailers that are similar to François in that you don't really know who they are, but they are rock-solid covenants for us, and he's a fashion retailer paying us. He's actually paying us a lot of percentage rent, too. He performs very well. So... I'm François Roberge, the owner of La Vie en Rose and Bikini Village. I've been working since 1981 in the retail. It's a fantastic company. It's a family-owned business. La Vie en Rose, you know, it was a company based in Toronto, small, 23 stores, CAD 12 million, losing ton of money, and I have a chance to buy the assets in 1996. The office was at Toronto, and we moved to Montreal. We start to work very aggressively to turn around the business, and the first year we make a profit, and since that, we never lost a dollar with the business. We have over 400 stores, 300 in Canada, 100 in international, and two new stores in the U.S.. We are going to do close to CAD 600 million this year. Something I am very proud, we have no debt. You know, it's. My philosophy is very simple: You grow or you die. And that's why I always push the machine to open store. It's very important. I'm a brick-and-mortar guy, and I will continue to push on that direction. Let's focus on the U.S., and we have already two stores, and I'm very proud. We're planning to do 20 stores in the next 3 years. So that, that's the goal. This is the future for La Vie en Rose now. The key of the success of La Vie en Rose is the team. You know, we have a fantastic team. We know what we do, we work together, we win together, and we lose together, and that's something very important for me. With Primaris, we have today 28 stores, 22 La Vie en Rose, with a productivity of CAD 1.8 million, and we have 6, only 6 BV, Bikini Village, with a productivity around CAD 800,000. What I like with Primaris, it's, you know, I always said that time is money, and with Primaris, we can make a deal rapidly, a good deal. It's very important for me that it needs to be win-win. So when you have a good relation with the landlord, you can grow rapidly and efficiently. He took the HOOPP portfolio. We did the deal on Highstreet, on the golf course. I love... He's a great guy. He's a man of his word. Yep, just negotiated on a napkin, and it was good to go. Like, it's the relationships in the shopping center business, especially in Canada, are huge for getting deals done. You tend to do deals with your friends. We spend a lot of time schmoozing the retailers and spending time with them and going to their offices, and me and our team are regularly traveling to people's offices to get to know them better. And it's been great. It's been great for us to expand our footprint with François and a lot of others in Canada. But it's a direct result of spending a lot of time with them in person. So, questions? It's me again. So, I asked a question in the last question-and-answer session, and it was about what do you do if you have a tenant where their sales are softening, there's still term, he asked if you could kick them out. You said, "You can't kick them out." And, one of the objectives here today is to get the knowledge that you have in your head out so that everyone else can understand how this business works. So you kind of finished with, "We'll then approach them and say, 'Do you want to leave?'" But the next part of that, I think you think everyone else knows, but what happens at that point? And, you know, that sort of ties to GROC ratios and performance. But, what do you do if you get to the point where you see a tenant that's not doing well, and you wouldn't be able to do that if you didn't have the sales reporting function? I mean, the game has always been to get the tenant to leave and not have to give them money. And, you know, the, the real game is trying to get them to leave and have them pay you money. And, usually when a tenant's sliding down and they're losing money, they're very amenable to, to leaving. And when the mall's been full back, you know, back in the 2000- 2015 period, a lot of tenants would pay us to leave. And, you know, the key is not to be greedy about it, like they can... They might have five years left in their lease. You really want to replace them, cover your costs. If you can make a little money, that's great. But if you can get a new tenant in there, that's going to pay you more rent, that's the key. And, like I know in Halifax, there's a tenant that's approached us about leaving, and they're going to pay us to leave. And when your mall's full, you have demand for the space, which is great, and you really feel like you're in a good position to replace the tenant. You'll get paid for the tenant on the way out. You can get more rent from the tenant on the way in. When the mall is not as full, it's a little tougher to drive that bargain. You don't really want to give up the occupancy. You have other vacant space to fill, so you're not so eager to replace the tenant simply when you could have put that other new tenant into vacant space and got rent from the vacant space, plus keep getting rent from the tenant that's failing, but the nuance really is, you know, Lee and I have been doing this for a long time. It's steering the tenant towards, "We'll let you out, but you're going to be paying," and generally, it's always been there. The pie chart where you showed the tenant mix, now it's kind of evolved over time. How do you see it evolving over the next five years? I think the small shop fashion side is stable. I don't really see it shrinking any further. I think it's a... I think fashion is still a critical part of the shopping center, and without it, it doesn't quite have the same resonance with the consumer. I think people always need clothes. I mean, we talked about doing an annual report where we got naked on the cover and just said, "Clothes aren't optional.T hat was Alex's idea. We all vetoed it. But no, fashion's key for the mall, and it has come down quite a bit from the past. I think, like I said earlier, the dynamic has been in terms of who the tenants are. We just don't have as many locals and regionals as we used to, and we need those tenants, but we don't need a lot of them like we used to. Like, if you're running Square One in Toronto, you listen to everybody. You have to. It's a massive mall. You have no choice. If the mall is right-sized, it's nice to have a good complement of locals, but, you know, you don't have, you don't need them to fill your whole shopping center. I think that's the dynamic that changes. Those. The malls that are right-sized are not full of tenants you're taking a gamble on, and hoping they do well. You know, like I said, we still have a complement, but what has bulked up in the shopping centers has been the health and beauty side and the personal care services. I think where the tenant mix is generally is pretty much where I see it staying for the next little while. I just don't see it evolving much further. Yep, Sam? The GROC ratio historically reported sort of mid to high single digits on the leasing spreads. But we look at the GROC ratio, it kind of indicates, you know, market rents or the rents that tenants could pay are maybe 25% higher than what you're getting today. And you talk about getting to 96%, and then your leasing strategy evolves to, you know, pushing rent a little harder. Is that the order of magnitude that you are thinking is possible, or you're effectively guiding to today when you get to that 96% level? And also, what about your competitors? Not a lot of great information on stats in the mall industry specifically. Is that a dynamic that you see many of your competitors across the country also looking at? I think in terms of rental spreads, I think we can continue with mid- to high-single-digit growth. I think by building in annual escalations of 2% and 3%, I think that's gonna, you know, negate some of the ability to jump it up significantly on expiry, because they've already been jumping up. 2% a year over 10 years is actually a big rental jump. And it all comes back to how you manage your costs. If you keep those under control and the gross rent at the expiry is reasonable, then that's then it'll be fine. GROC, in general, is lower than it has been typically, and even if we exclude a few tenants like Apple, Sephora, Aritzia, Lulu, it's still below historical average, and I think that is a sign that we can grow rents further. I know that a lot of the other shopping center companies, like we're all basically reporting the same thing. Everyone's talking about the mid to high single digit growth for the most part. But I think that continues, especially where sales have been. A quick question on leasing strategy, and you gave two examples where leasing strategies, one, led to lower sales productivity per square foot and one to much higher. And the old rule of thumb was sales productivity square foot was a function of whether you're an A mall, a B mall, and that has cap rate implications. So as you think about your leasing strategy going forward, how do you balance maybe the right decision to take a lower productivity tenant versus... but that may have ramifications on what the perception is on the quality of the mall? And is that just an old-fashioned way of looking at malls? A little. I think what everyone started to realize is that the value of the mall is based on the income that you're generating, and you can sit and pretend a space is worth X amount of dollars, and it's vacant, and how long it's vacant for, and, you know, you can fill a space and get low productivity and charge a reasonable rent that the guy can afford. It might hurt your productivity, but at least you're generating in, you're generating income. The sales should, over time, balance themselves out. You're always going to get... There's always space kind of... Malls are big place. You're always going to get space at the ends that are less desirable or certain areas less desirable, and you're going to fill them with whatever tenant you can that's going to perform at whatever number it is that generates income. And on the flip side, you're going to have really good, productive space that you're going to fill with tenants that drive that have sales that you trust are going to grow, grow, grow over time. And so the overall number should balance itself out, but we in no way manage the sales at all. I mean, we, we could easily jump our productivity by converting some of our SL tenants that we actually have one on two-year leases back to just specialty leasing deals and take them out of our sales reporting number, and it would automatically jump our sales number. But I'd rather have the security of knowing they're there for two years until we, we get our occupancy higher. Thank you, Bob. We'll take another 10 minute break. See you at 11:12 A.M. A couple things I missed when I was introducing everyone. I just wanted to highlight that we've got two of our trustees in the room today. Tim Penner, who's the Chair of the Board, and Deborah Weinswig over there, and I would encourage all of you to engage with them, ask them any questions. We just actually recently ran a board engagement, a series of meetings with a bunch of investors. We think it's important that there's connectivity. They are responsible for governing the REIT and ensuring that unitholder voices are represented in the governance and management of the REIT. So that's important. I also wanted to just thank Pat for anchoring the day. I think you're doing a fantastic day or a fantastic job today. You made the joke that you've been avoiding this for two and a half years, and I don't think everyone really appreciates how true that is. I think it may have physically hurt Pat to be in the spotlight for as long as he was. And he all the time I think he thinks that everyone else knows what he knows, and so I'm glad that you know everyone had the opportunity today to hear him and ask questions about our business. So it wouldn't be an investor day if we didn't talk about capital allocation, and I could drone on about this for the rest of the day, but I won't. Simply say that, as I think everyone in the audience knows, the REIT structure is really an exercise in managing your cost of capital and the return on capital. We spend a lot of time talking about capital allocation, thinking about it. We're always looking for every advantage. I think Pat did a great job demonstrating the very real moat that we have around our business because of the platform that we have, the management capabilities. And from a, you know, capital allocation perspective, we try to create another moat around our business or a competitive advantage. And so, you know, these are all things that I think everyone in the room you know is familiar with, your sources of capital, your uses of capital, and in you know an ideal world, you take your absolute best cost of capital and pair it with your absolute best return on capital, and that's the whole exercise. You basically ignore all of the other sources of capital and other uses of capital because that is the optimal combination. So I think you know I think we've probably talked a lot about that. I know I drone on about normal course issuer bids and other such things that are under that heading, but it is very important to us. We do spend a lot of time on it, but that really isn't the focus of today. This is an interesting slide, and it's one that has been in our investor deck for some time. You know, we're very focused on organizationally. I guess from a strategy perspective, we don't talk about it that much, but I'm sure you've heard us talk about becoming the first call, and that's really what this slide ultimately represents. We have the largest mall portfolio in the country by mall count, and what we've been working on is growing the size of that portfolio, but more importantly, targeting the right additions to the portfolio, and there will be subtractions from the portfolio. This is sales productivity on a per sq ft basis compared to aggregate sales volume. So we, you know, want to have the dominant retail node in the market as the shopping centers that we own. We call them market-leading shopping centers, and that's exactly what they are. And so the red bubbles are the ones that we owned under our previous ownerships, ownership structure prior to the spin-out. Concurrent with the spin-out, we bought six properties from HOOPP. You can see them, they're in gold. Quinte Mall is kind of hidden there, but that would be the sixth gold ball. And then, last year, in 2023, we bought Conestoga Mall, and we bought Halifax. And as you can see, we're drifting up into the right. There are another, I think it's 20 of those silver balls. Those are the target acquisitions. There are malls that are larger, more productive in Canada, but they're not on our target list because they don't fit all of the criteria that we look for in a mall. But those are the malls that we would like to acquire. Very fortunately, there's not a lot of competition for those malls, and so we are in a unique position to provide liquidity to the owners of those properties. And I can say that, you know, we're in active discussions on five or six of those malls today, various stages. Some of it's very preliminary, some of it's more advanced. But it is very much our strategy to drift up into the right. And as you can see, we've already made some considerable progress on that, and we think that we're moving fairly quickly towards becoming the first call for retailers. So, as you know, we also transact in a unique manner. Because of this supply and demand imbalance in terms of the ownership of malls, we're able to transact using vendor takeback equity. And what that does for the vendors is it provides them liquidity in a relatively liquid market. We think we're transacting at fair values, and they get partial liquidity immediately, and then they get to participate in the recovery of the shopping centers. They also, I think, based on some of the stuff that you would have heard over the past couple of hours, I think they have a lot of confidence that we're well-positioned to continue to manage these assets and deliver performance out of them. So it's, you know, a pretty interesting combination of things, but that's, you know, really the type of structure that we transact with. And, you know, we're working on additional transactions that would follow that pattern. So, and I think that is about it for me, which is glorious, that I am not taking up a lot of time today. So... Sorry? Alex, if you look at the Canadian pension vendor space right now, as institutions broadly rebalance their portfolios on the private side as well, do you see the same drivers of the necessity to dispose and downsize that were there two years ago, still continue in the next 24, 36 months and beyond? Yeah. No, it's, I think we do see that continued appetite for portfolio rebalancing. And you know, when you think about it, it's there are some shorter-term dynamics that are going on. Two years ago, three years ago, most of the pension funds were still trying to get up to their target allocations. A number of them, you know, late 2023, early 2024, decided that they'd actually exceeded their target allocation, and so were looking to not only downweight their mall exposure, but also downweight their real estate exposure in aggregate. A lot of them are looking to downweight their Canadian exposure. I think that below target dynamic or above target dynamic might be reversing, as interest rates come back down. So I think there might be different motivations, but certainly the portfolio construction considerations, I think, really drive the bus for the pension funds. And when you think about it, I mean, the pension funds have very large portfolios, and it takes time to shift a large portfolio, particularly in a market like Canada, where you don't have the same trading liquidity as you might have in the U.S., for instance. And if you look back 10, 15 years ago, pension funds, for the most part, didn't do a lot of investing in apartments. There were a lot of regulatory issues. There was a lack of new supply. You didn't see a lot of new, higher quality product, and that meant that there was a lot of lower quality product with a lot of tenant issues. There also wasn't cell towers or data centers. Those weren't really investable property types. And so by default, they ended up concentrating in malls and office. And office is a challenge right now. So I think there's still going to be quite a bit of appetite over the next probably three or four or five years, maybe even longer than that. Will we continue to be able to transact in the manner that we have been? That I'm less confident about, because I think that we will see a recovery in the reputation of the mall and more appetite from others to buy them. Sorry, that was a long answer. I think in your press release that you put out this morning, you said the goal is to acquire CAD 1 billion worth of assets over the next three years and sell CAD 500 million. Can you give us a sense as to the cadence of that and what that would look like? I mean, it's not that many properties at the end of the day, but maybe just in terms of what type of assets you're acquiring, what regions you're looking at, et cetera. What type of assets? Very consistent with what we're here touring today. Market-leading shopping centers, generally higher sales productivity, really market dominant is what we're after. Sorry, what was the first part of the question? What was the cadence? Oh, the cadence. That's right. Yeah. So we had a meeting in early September at another event, and one of the investors walked in and said, "You've been doing a lot of beating and raising. Why is that?" And I looked at him and said, "Because people like it." And I feel like that's... You know, when we set the targets, I feel like we're probably going to be able to hit those targets. Alex, when those high-performing portfolios you were talking about, they don't fit your criteria, can you just give us examples of some of the KPIs that you find unacceptable? Yeah, I would say, you know, in Toronto, for instance, so Yorkdale is a giant asset. It would be probably worth about as much as Primaris, which would make it problematic to put it in that 50% of our asset base. But it's also an asset. You know, we talked a lot about being long-term owners and having a long-term strategy. Yorkdale is the kind of asset that I think you really need to have, like, a 100-year investment horizon to really understand. And as much as we have a long-term view, we're also a public company, we need to deliver near-term results. So the yield on a mall like Yorkdale would probably be too low for us to realistically afford. And that's because there is immense value there, but it might not show up for 15 or 20 or 25 years. So that's a good example of something that we probably wouldn't want to own. And there are other very high productivity malls that happen to have a lot of competition. And if you have, you know, two really good malls, side by side, and one happens to be backed by a CAD 200 billion pension fund and one is a public company with CAD 4 billion of assets, that's not the kind of dogfight that we want to get into. So there are some assets that would fall into that bucket as well, where, you know, we're just not gonna outspend a pension fund to dominate the market. Deborah? I don't sleep well at night, but what keeps you awake now in 2024, heading into 2025, versus 2021, heading into 2022? Kids is probably the most frequent answer. Yeah, I don't know. I mean, I think when we first spun out, we thought that there would be a two-year window in which we could transact in the manner that we have been. I now still think that there's probably a two-year window. Certainly, there is a flow of capital coming back into real estate, and it has been the last 60,90 days, and it has been tremendous to see the amount of capital interest. So I think that window might close, and I'd like to, I'd like to see us make as much progress as we can on the bubble chart, before that window closes, and we end up seeing a lot more competition. Yeah, that would be it. I mean, as Pat, I think, very clearly articulated, the business is in really good shape. You know, we have a slide in our investor presentation that shows the inventory per capita of mall space declining and accelerating, so our property type is in fantastic shape, and the reputation hasn't caught up with the reality, but you know, it's a double-edged sword. With that recognition will come more demand and more competition for the properties. Tim? So a lot of people, investors, worry about the cyclicality of a mall, of regional malls and retail sales, and we're looking at a economies that are slowing, maybe not a recession, maybe a soft landing. How do you look at this environment and retailers and the mall business today relative to other cycles? Yeah, so Pat talked about the change in the merchandise mix. When I am in the room and Pat is not there, and I have to answer questions about that kind of thing, I generally point to the fact that the retailer mix that we have is very comparable to the other retail REITs, and that is a function more of the Canadian consumer than it is anything else. You know, when we're going through these merchandise mix exercises, it's really tenant demand that drives which retailers are the hot retailers that we want to bring into the shopping center that will bring more of the consumer, and our business is very, very defensive from that perspective. I'll often cite that in Primaris 1.0, the last time Primaris was public, up until 2013, the GFC, Global Financial Crisis, was a big event, and in that period of time, the maximum NOI decline that we saw on the same property basis was 0.6%. You know, there is a reputation around the mall that it's highly discretionary. It's, you know, very economically sensitive, and the evidence just doesn't support that. Then you take on top of that, you know, where our GROC ratios are relative to where they have historically been. They're below average. The inventory of the mall sector is declining. All of the fundamentals suggest that we should be pretty recession-resistant, too, you know, relative to the rest of our peers. I know the GFC was kind of an idiosyncratic event. Do you have any insight into how maybe the malls would have done in Alberta when, you know, the oil market took a hit? Pat would probably be the right one to answer that. It was 2015, and it actually... It took a hit. Not substantial, but you could see, like, the sales went down and the NOI in the year it happens, it doesn't hit it, but sales definitely softened and tenant demand dried up. Did you see, 'cause I think Target left around then, but outside of that, did you see a lot of retailers leaving the malls, or was it really just a softer sales? It was softer sales. Yeah. Was there an impact, big impact, on leasing velocity? Yes. Yeah. Andrew? Just a question, going back to cap allocation, dispositions. Could you maybe give some color on that? Is there a thought... You obviously have a portfolio of other properties. Is there a thought also on the enclosed mall side, if there's something to do there? ... Yeah, so we have, I think we've guided publicly that, you know, we've probably CAD 400 million or CAD 500 million of assets in total, that we've notionally earmarked as things that we would sell over time. We have already executed on Garden City Square. In June, we sold for CAD 32 million. We have a number of other transactions that we've been working on. All of the non-enclosed shopping center stuff would be on that list. And then there are a few of the enclosed shopping centers, and they're generally the lower productivity ones. If they, you know, are in a market where there's competition, that's another, you know, sort of flag for things that might be for sale. And then we have some, like, Northland Village, so we de-malled that one. It's no longer an enclosed mall, which makes it something that we would sell. But we have another mall in Calgary that, you know, isn't the market-dominant shopping center and something that is probably more of a redevelopment site, and we're not, you know, a residential developer, so there will be some malls that go as well. Mark? Yeah. So we saw some land value outside here, and you just mentioned maybe you're not a residential developer. To what extent of that maybe 500 that you'd like to sell would be pre-development land or other development? And would Dufferin the Dufferin development opportunity be included in that? And maybe just to expand on your thoughts on that asset. Yeah, we think about Dufferin differently. Dufferin Grove, the development site, that's not included in those numbers. Dufferin Grove is, for those who don't know, four acres out of a 21-acre site at Dufferin Mall. It's zoned, entitled and severed, ready for 1,200-ish residential units. We had it appraised as we spun out at CAD 180 million. It went up in value. It has subsequently come down in value. We last had it appraised at CAD 151 million. The reality is it's a large development site. It's a super prime development site. It's an expensive development site, and liquidity in the land market in Toronto has been low for the last two years, as there hasn't been a lot of new development kickoffs. So we haven't been putting it front burner in terms of something that we want to monetize. We do think it will be something that will go out the door. And then Dufferin Mall as a whole is a fantastic location. The shopping center is good. It performs, I think, CAD 700+ a sq ft. But in the fullness of time, I think all 21 acres will be redeveloped, and that's not us, that's someone else. I think it really deserves someone who can master plan the whole 21 acres. And you know, we've got 16 years until we have full site control, so there's time. But I think in the fullness of time, that probably won't be a Primaris property at some point. And now it's time for Dave Black. I'm really excited that Dave's here. He does a lot of our valuation work, and I hope everyone feels very comfortable asking him any and all questions, 'cause I find it very interesting talking to him, and I think you will too. I have the very unfortunate slot of being after Alex and before lunch. At least there's not alcohol at lunch. It's not holding me back from the bar, at least. For those of you I haven't met yet, my name is Dave Black, and I'm the head of Value and Risk Advisory for JLL Canada. We are a platform that values about CAD 90 billion worth of commercial real estate from coast to coast on an annual basis. We're doing that work primarily for pension funds and REITs such as Primaris, but also Life Cos and some private groups as well. Those valuations would be used for financing, obviously, but also financial reporting, internal decision-making, asset management, and whatnot. So prior to my role as the kinda head and trying to grow the group and you know around the results and strategy, there was that youthful headshot of me, happy-go-lucky. I was a mall appraiser and have been a mall appraiser for 15 or so years. I have probably valued 90+% of all the malls in this country, so I have a pretty intimate knowledge of where we are as it relates to malls right now, and I think part of the reason why I'm here. So, very happy to be here, and I think the thought is one to give a bit of an overview on what we're seeing from an investment market, and I'll give you a bit of a flyby in terms of what the first six months of 2024 looked like from an investment volume perspective. And then dig in a little bit into our process. And I've met a few of you already, and you had the questions on, you know, how do you come up with your values and what that process is. My answer changes whether we're on a boat with a beer in hand or whether we're standing here. But I am available over the next day and happy to answer any questions, obviously. So first, there's a lot to take away. This comes from our research group and is kind of showing what we are observing. You know, appraisers, we don't make a market. We observe what we're seeing and apply it to the values that we produce. Through the first six months of 2024, we have about CAD 20 billion of investment activity in commercial real estate across the country, and we don't have our Q3. It's a few weeks before we get the Q3 numbers. You compare that, so CAD 20 billion, if you annualize it, 40. The last few years have been sitting around 60, and we've had quite an active investment market coming out of COVID. We had a very soft Q1, CAD 8 or 9 billion worth of transaction activity, and that picked up to kind of 11 or 12 in Q2. Why did we pick up? We did see some softer, you know, lower bond yields. We've seen interest rates and the direction they're going. That could be a reason why we're seeing more sell. There was also the capital gains tax, and that accelerated some deals, and there was some fortuitous timing. It sped up some processes and people trying to sneak into that deadline as well. But we saw an, let's say, elevated activity in Q2, and the hope or the belief is that as we move into Q3 and Q4, as appraisers say, "Well, wait till next or later this year. We'll get evidence later this year." So we do hope that in Q3 and Q4 we are going to see that evidence. There's a lot on this slide about residential valuation, and, you know, we could talk for a long time about that. There's a lot of nuance to achieving market rent and building and construction and pro forma. So that's obviously a market theme and an in-demand sector. But really, I think the biggest takeaways are, you know, there is that bifurcation. Everybody's looking at each asset class differently and very much on a property-by-property basis as well. What does that wall look like? What is that income security? So when you hear, "Hey, how are your values moving?" yes, we can have some sweeping generalizations, but it's very much on a property-by-property basis right now. This slide has a lot of red numbers on it. What we do is we compare the various sectors in terms of that investment volume and compare it to the five-year trailing average. And as I alluded to, we had some record years in over the last three years in terms of investment activity. So when we look over the first half of 2024, yes, we are down across available activity virtually across all sectors. The only anomaly outlier is hotels, and you see a massive green number there, buoyed primarily because Morguard sold CAD 400 million worth of hotels, which closed in Q1. So, for the most part, we're seeing everything kind of come back down, and the belief is that the more in-demand sectors will come back. You see office there, for example, leading the charge in terms of the lowest volume, and we don't know if that number is going to change anytime soon. This slide shows a bit of the nuances of what's selling, where is it selling. Montreal is actually the most investment or most popular investment market right now, close to CAD 4 billion through the first six months of the year, followed closely by the GTA. But we do see that bounce back in Vancouver, markets like Ottawa, and that, I think we call it the Western Golden Horseshoe now as well. A lot of investment activity in that market, of investors looking at, or wanting to be close to the GTA or having that close proximity, but not necessarily having the same pricing levels that we see in the GTA. And then on the right, it is by, on a sector-by-sector basis. So you see some dips into Q1 and some nice rebounds across most asset classes, and I think that will continue to present itself, and we'll see that upswing in the more stable asset classes. And then what I talk about a lot is the makeup of the market. We are... I live on market evidence, and so you say, "Okay, Dave, CAD 20 billion of property has sold this year. You must have lots of comps, and you might be able... If you're valuing Halifax Shopping Centre, you know, how are you rationalizing these values?" What's interesting is that it's, I think, I'm trying to look at the color. It's the somewhat blue on the left represents the private buyer. A private buyer represents 80% of all investment activity right now on the buy side. And so when you look at groups that are, a bit more opportunistic, maybe a bit more nimble, can act quickly, don't have as much, you know, sustainability promises. They might not have a board to report to. They can act quick and fast, and they seem to be capitalizing in this investment market right now. So that private buyer is really driving a lot of the activity that we're seeing. Because of that, what we're seeing is also that deal size between $5-$25 million is representing the largest deal share right now in the market. Again, appraising Halifax Shopping Centre, not a lot of comparable evidence to a plaza worth $6 million down the street. We get to see these investment activity totals and talk about some of the property that is selling, but we're still I don't want to say picking and choosing, but we're still trying to find the kind of true anchor benchmark comparables to apply in our valuations on a day-to-day basis. I think that's, you know, one of the main reasons why I'm here. You know, what's the process that we go through as a valuation professional in establishing a market value? So this is a very simplistic way to understand what we do. A lot of what Pat talked about this morning, that's the information that we would get from a client like Primaris or the pension funds. We get all of the information about each mall. What are the leases? What does the rent roll look like? What are those contractual rent steps? Tenant productivity, and we've talked about GROC. That I know, Pat, you said you don't like GROCs. We like GROCs. We like to understand that affordability, what that health ratio is. It gives us a bit of an idea on how each retailer is performing. Taken with a grain of salt, obviously, but it's another way for us to build our cash flow projection. We get budgets, we get an idea of where revenue is, what expenses are. We are looking at capital plans and what's being spent on roofs and parking and HVAC, what's being charged back to the tenants, what that non-recoverable cost is, and we take all of this financial data and build a cash flow projection over the next 10 years. You know, real estate, it takes a long time to sell. These are, especially malls, they're contractual leases. They're 5- and 10-year leases. So when people talk about cap rates, and we'll have a drink in hand and say, "What was the cap rate on this, and what was the cap rate on that?" It's a very spot in time. It can be a very misleading indicator on what, you know, the true value is of a center. We are very much based on the IRR TCR. What's the internal rate of return or the discount rate, and what is that exit yield? What's that terminal capitalization rate? That's what we rely on from a valuation perspective. Malls, in particular, are complex. There's a lot of moving pieces. This isn't single-tenant industrial with one lease. There are a lot of moving pieces that you need to understand, that you need to roll the market, and that traditional valuation methodology is to project how the mall evolves over the next decade, and we apply a lot of assumptions in terms of where rental growth is, what sales growth is, what vacancy should be, to come up with that kind of decade-long forecast. And then we use whatever we can derive, and I'll go into it a little bit further later, what's out there in terms of market evidence, and how do we establish what that IRR and that TCR is, to give confidence that the values that we are giving are reflective of today's value. So when we talk about cash flow projection, this slide really just talks about the positivity we do feel in malls right now. And I'm not here to say, "Oh, wait, malls are great," that's not why. But after spending so many years talking about the retail apocalypse, and every board presentation was about what's happening in retail. Retail is dying. Are you going to get occupancy back up? Are sales going to climb? It is nice to have these stories, and we do so many valuations on a quarterly basis or year-on-year basis, where the value from operational lift is there. And we do a lot of work for pension funds, you can imagine we also do a lot of valuations in the office space. We find all of a sudden that the first questions were about malls in 2021, and now they don't want to talk about malls anymore, and it's what's going on in office. And these slides that talk about sales productivity going up, you know, retailers and landlords all expected a positive 2024, which we are seeing in all of our valuations, rental climb, sales climb, and virtually across all mall categories. The suburban mall came out of the pandemic years quite strong, whereas the more urban centers have struggled. But we have started to see that bounce back in the Eaton Centre in Toronto, the Pacific Centre in Vancouver, that have, you know, driven by tourism, driven by downtown office workers, they're starting to show signs of life. And I know, Pat, you the other question I was almost wanting to jump in. Pac Centre is a great example of if you look at ICSC and sales productivity, the sales productivity is declining, crumbling in Pac Centre, but it's because they took an Apple store that was reported in the CRE sales and turned it into a major tenancy. That's great from a value perspective and great income, and if you've been to Vancouver, you've seen that glass cube. It's unbelievable. But if you just look at that sales productivity and say, "Well, what's going on at Pacific Centre?" It can be very misleading, as you know, an indicator in isolation. This slide I like from our research group because, you know, retail we all shop. We are obviously looking at demographics and dynamics, and where do we see population growth? This is the right crowd for this slide as well, because you can see Halifax Shopping Centre on the top right there, which means there is a lot of productivity growth and a lot of population growth in the market. And that gives us comfort when we're looking at traffic and how many people are coming to the mall and are sales increasing. This is that scatter plot to show that, particularly in the Primaris portfolio, there are some malls that are benefiting from strong population growth around the malls, and then inherently strong sales, within those centers. This is how I argue with clients in terms of where values are, and I say argue because we do argue. There's a lot more details on what transaction, and I mentioned that we're trying to find the right transactions in the market. We have benefited. There's 12 malls there in the last 36 months that have sold. What we would do is we would understand everything there is to know about these malls, why they transacted, you know, what that consideration was, what the nuances are, and we would, on each of these centers, have an IRR TCR based on that transaction. So if Halifax Shopping Centre sells at CAD 370 million, as Alex alluded to, there's other kind of considerations that we need to incorporate. There's also the annex across the street, and there's an office tower. You need to kind of strip that out to understand what that true mall value is, build out our cash flow, and we get a really good idea of what the rate of return for Halifax mall is based on our projection. There's malls in here, Erin Mills Town Centre, Pickering Town Centre, for example, that have massive intensification of it. Most of you are from Toronto. You see that there are condos planned, so we have to look at what that purchase price was. Was there allocation to the density to then get to a mall price in isolation? VTBs, there's some of these deals where the vendor was motivated to get a deal done, so they might offer some below-market debt. We need to consider that as well. But you take these kind of 12 or so malls, and there's another five or so that likely should close over the next few months, that just give us further evidence on what malls are commanding from a market value perspective. It's you know, they're all varying qualities, and Alex again talked about Yorkdale. Yorkdale, to us, is the number one mall in the country. It is from a productivity perspective. It's in Toronto, it has intensification, it's extremely valuable, and then you can work your way to the bottom. Everyone asks, what's the worst mall on our list? I will not say. But all of these malls then fit in between. Laval, Vaughan Mills, great indication of top 10 or 15 malls, and what sort of IRRs and exit yields can be applied to those types of centers. You look at Conestoga and Halifax, which are great, high-producing malls, you know, not in MTV markets, Montreal, Toronto, Vancouver. That gives us a good benchmark when we're valuing alike malls there. You just work down the list that we kind of build that ranking on where we see metrics, and we're always trying to confirm it with what that available evidence is. Again, I can't stress it enough that a cap rate is a made-up number. An income is different on what Pat thinks the income is out of this mall and what our model says, and the cap rate is going to be different. The IRR TCR is just a great way to anchor our valuations, and as I say, give confidence that we are treating all the malls across the country in a very similar fashion. When we don't have sales or when we're in times where we don't have as much available activity, there are other things that we can do. We do run investor surveys. We'll go out to a 100 or so senior executives at pension funds and REITs and, you know, active investors in the country and ask the hypothetical: If you're buying a mall in a major urban center, what does that IRR look like? We do ask them about cap rates because people talk cap rates, but this at least gives us an idea of trending and what the sentiment is, and it's not exact. Okay, if it moves 37 basis points, we're going to move all of our valuations, no. But it does get to show across, and we do it in malls, we do it across all retail assets. We actually do it across all Core Four assets to try and understand really what that investor perception is of the valuation parameters at any given time. We try to do it quarterly. People stop, if any of you run surveys, they just stop answering eventually. So we do it once a year to give us at least an annual snapshot on where we're seeing values. So the last we have is 2023. We're compiling all the 2024 numbers right now, and if any of you are interested in the results, I'm happy to share that when they are ready. The other kind of cool thing we get to do, I work for a Fortune 200 company. We do all sorts of different real estate services, and brokerage is one of them. We have what we call the Global Intent Bid Intensity Index. So if JLL is selling a $200 million industrial portfolio in the U.S., that broker has to input into our system what-- how many bids did they get? You know, how many buyers are at the table? What was the low bid? What was the high bid? What's your ask? And then it gets, kind of compiled and anonymized and aggregated and gives us some really good insights into... You know, as an appraiser, I'm always blamed for looking in the rearview mirror. The intensity index is a bit more current in terms of where, you know, are there buyers on a global level for certain asset types? Where is that pricing disconnect? And you can see that in that kind of line graph on the top left, that when you anchor it as the base being 2019, there seems to be, on a global level, more buyers in the market right now, for everything that JLL has marketed worldwide. But what I really like is that bottom right, and that's showing the variance between bid and ask and bids on any kind of given sale process. And you'll note that three of the four, residential, industrial, retail, it's starting to narrow. People are, you know, getting a good idea on where value lies. That big blue one is why, you know, people are asking about office, that there's still a massive disconnect between sellers and buyers and where underlying value is, of office, really around the world. It is a challenged sector. People are returning to the office, but there is still that uncertainty, and it is stealing the headlines and dominating a lot of my conversations in terms of value projection moving forward. Then the other kind of last way we can do this is we can kind of geek out on the nerd or on the number side of things, where we can say, "Okay, what's our risk-free rate?" Let's look at a Bank of Canada 10-year. That right now sits at anywhere between 2.9% and 3.1%, and you can compare that to historical return expectations for regional malls, and this comes from the Altus InSite Survey. You can get an idea of what real estate risk is. So if we're sitting at 3%, and malls are on average, regional centers are at 7% IRR, okay, there's that 400 basis point spread between that risk-free and then that real estate asset. And it's nice to go back 10, 15 years and understand where that relationship is. And when we get in environments where, you know, it was not that long ago that the 10 year was getting close to 4%, it was putting pressure on our valuations and should we be moving up those yields and making sure that that relationship still exists. But now that we've come down to a bit more of a historical level, we can feel confident that what we're applying is, is very much in line with what we've seen over the last 10 or 15 years. So you melt that all together, and you use that available evidence in some of these other exercises. You get some sort of idea on what assets like the one we're sitting in today are worth. I've saved 10 minutes for questions, which I'm happy to answer. Thanks for that. You know, when you look at 10 year forecasts for rental yields as well as cash flows, do you factor in also the tenant mix evolution over the period of time, or is it more of a one-time evaluation as such? So when we build—I mean, we're not kicking out tenants or anything like it. We're not. It's a building, an asset management projection. We are looking at what that tenant mix is, but being very realistic in terms of what those uses are today and what kind of income they can achieve. We're very cautious as a group, and this is my philosophy on vacant space. You know, what we found is a lot of purchasers don't necessarily attribute a lot of value to vacant space. And so you can get an appraisal that's really out of whack if you turn them all into something that it's not as of today. So we are looking at the current state of the mall. If there's expansions or if those plans or if there's contractual agreements, we do incorporate those. We do sit down with every mall manager or every leasing platform to understand what the assumptions might be and get a flavor there. But it's very much looking at what is there now and what is the potential upside or risks over the next decade. So less speculative movement and saying, "We would like to replace this with this," and more just trying to say, "Okay, if this tenant stays, you know, what kind of rent or income can we achieve on a unit-by-unit basis? Yeah. How is CapEx factored into the IRR? Is it based on the CapEx plan of the mall? Is it your own kind of view as the CapEx that needs to be spent? Is there any kind of like historical, you know, for a mall CapEx to NOI in our DCFs or X? Both the recoverable and non-recoverable CapEx is below the NOI line, but our IRR is present worthing the 10 years of cash flow. So when you look at that DCF value being a combination of 10 years of cash flow value and then the assumed disposition of the property in year eleven and that exit yield, whatever capital that you are applying in that projection has an effect on value. Our kind of belief on things, non-recoverable capital, if someone puts a building condition report in front of us and says, "You need to spend this money," of course, we're gonna incorporate that in our valuations. When it comes to recoverable income, we do poke holes, and we try and understand, are these projects really going to be spent? It really messes with cash flow yields if you don't, in fact, spend that money, and we know that budgets and mall managers would love recoverable money to spend and pump through some of these malls, but you have to be very careful, and it's very owner-specific. So as a valuation professional, we're trying to be very neutral in terms of what the market value is. So we're taking you know, the concrete for sure CapEx program, really as the baseline and discussing that more discretionary spending and whether in fact it does occur. Like, given that names like Eaton's, Simpsons, and even Target are no longer around, how do you think about underwriting the anchor tenants who have a 10 year+ leases? Because we all know that if you had Eaton's as an anchor tenant, they were never gonna go away until they did. So how do you incorporate that into the 10-year+ sort of cash flow, knowing that you're running 10-year DCFs? We've had the rule that one tenant shouldn't affect our valuation too much. When Target was coming to Canada, our client base was saying: I'm getting a Target in my mall. My cap rate should be better. There was that excitement, and we saw what kinda happened there. We've dealt with the 10 million sq ft that came back from Sears for the most part. We dealt with the 10 million in Target. When we're looking at anchors, you're right. We've got one left, maybe two. When we're looking at the Bay, for example, they have lease term forever. We still run that out. We might look at it a little bit differently. We used to never apply vacancy, or any assumptions that the anchor is gonna be there forever. We do look at it a bit differently now. But what we also find, and Pat alluded to as well, there's not a lot of income coming out of those anchor tenants anyways. So when you look at the proportion of rent coming out of these boxes to everything else, it's a lot smaller. So it doesn't have as much of a material effect on our valuations versus when it was malls anchored by Sears, Target, and the Bay, where there was that massive disruption. So yes, we keep an eye on, on anchors. We didn't talk... We haven't mentioned Nordstrom. Nordstrom was another great example. Their stores did wonderful, you know, very high sales productivity, but there was a lot of rent, a lot of cost to get the goods into Canada. That had some effect, and to replace those boxes, spend that money, continue them as retail uses, does have an effect on where our value sits in those assets. But it is very much mall by mall and anchor by anchor in terms of how we look at it, and I agree with Pat that I don't see every Bay store closing next week. You do get an idea on what ones might be starting to shutter, and we're seeing it already, certain malls kind of getting lopped off the chain, and I think that should continue. And we are aware and speaking to owners in terms of, "Are you on that list? Have they reached out, and what do you think about the store moving forward? ... Just on the retail, the bid intensity, that chart you showed there with retail, industrial, and apartments, I think, all showing improvements. Do you have a breakdown on the retail bid intensity between enclosed, unenclosed, grocery-anchored, et cetera? They don't break it out, but, I mean, what can I say is that, of course, every group has food-anchored strips on their radar right now. Not every group has malls on their radar. So it is a great question to say that we do look at. Yes, we talk about retail, but what is open-air retail? What is anchored open-air retail, in particular? Very resilient. We all learned that it, over, the COVID years, performed extremely well, and so it's on the buy side. There's not a lot for sale in this country that's food-anchored, and we have private and institutional capital chasing it right now. So that intensity would be high if the right property comes. But you're exactly right. Every... We group it into core four, but within each of those asset categories, there are the nuances in terms of how within that asset class, properties do perform. Great. Just a follow-up. Are you seeing any evidence of cap rates or discount rates coming down now that we're on the other side of the interest rate cycle? Interest rates and cap rates don't move lockstep with one another. You need to have a certain amount of movement in my mind, and it lags. So the properties that are closing now were negotiated still in a higher interest rate environment. So yes, the hope is that more buyers and more institutional money reenters the market, and that lower interest rates help understand the levered returns and create accretive, you know, value propositions, but it takes time. So every 25 basis point, it's great to see, but we really need to see how it translates to the transaction market before we can say that we're feeling good. I'm not compressing cap rates in many valuations right now. So in different property types, you see macro trends on the horizon. Let's say, e-commerce changed industrial, had an impact on retail, work from home impact office values. As you look at retail in the mall today, do you see a macro issue, positive, negative, something you're watching as you're thinking through valuations? There were some dark years in retail, and Lee will talk about that on the leasing side, Pat, the strategy on keeping doors... I mean, we were not allowed to shop and go into places to spend money. So I feel great that, you know, as humans, we like to go to the mall. You know, not everybody wants to shop in sweatpants from home. It's nice to maybe buy your toilet paper or you've got a couple of regular purchases, but the mall has reestablished itself, in my view, in our day-to-day of going there and spending money, and you might have bought something online, and you're going to go pick it up, but while you're there, you're going to probably buy something else. So that physical closure and, you know, tenants, there was some talk about percentage rent in lieu. There was six, seven years where I don't think I saw one tenant in the country revert out of a rent in lieu situation. It's just everybody was turning from 40 net to 12% of sales. Now, almost every valuation we do, "Oh, here's the guys that we've come back onto net terms." You know, that gives us the warm fuzzies from a valuation perspective. So I think a lot of the obstacles in the asset class have been overcome. E-commerce, we keep getting that question. Oh, it's gonna eat into mall sales, but its percentage of total sales is staying the same. So what keeps me up at night is some of the other asset sectors more than retail right now, to be honest. Just... Oh, I think I'm keeping people from lunch. Yeah, no, I see this big- I'll try to keep this one short. Just, you know, the strength of retail fundamentals, we've talked a lot today, and you've mentioned it as well, but have you seen coming back to that bid index, have you seen foreign interest in the Canadian mall space, or do you sense it possibly getting a bit more competitive from a buyer standpoint? We have seen. I wouldn't say necessarily in the mall space. We do see international buyers in the market. I don't have as much of an understanding. We do know there's certain taxes and some obstacles to that affects the kind of viability of foreign investment coming into Canada and making sense on a global level. But some of the more notable transactions, Royal Bank Plaza in Toronto, which Oxford and CPPIB sold a few years ago, sold it to Mr. Zara, a private international capital. 401 West Georgia, 402 Dunsmuir, that sold in Vancouver. Again, Oxford, CPPIB, sold to Deka, out of Germany. So the international buyer is absolutely around, but they have to figure out what is the right scale to make that investment worthwhile, and also how Canada aligns with other markets around the world in terms of what sort of rate of return they would get for that money. So it's complicated when you get the international funds involved, but we do expect them to be part of a lot of the notable disposition processes going forward. Okay, great. Thank you, Dave. We'll now take a 20-minute lunch break. Thank you. Sorry. Hello? Yeah, here we go. So I'm going to do the math part and, talk a little bit about the financial structure, where we see, opportunities on our stock price and total returns. So the first thing, obviously, is a differentiated financial model. Well, this has been a labor of love, last 2.5 years. You know, we've done a lot, as far as working our balance sheet and what we've tried to achieve. Everything is anchored on the debt to EBITDA, not exceeding six times and a 50% payout ratio. So we think that puts us in an incredible spot as to how we run our business and how we want to manage our financial risk profile. Really, the objective here is to disconnect the right side of the balance sheet from the left side of the balance sheet. That allows us to manage the capital structure one way and allow the real estate to operate separately, so that when we're making decisions about the real estate, I don't have to have Pat come to me and say, "How does this impact our financing on this asset? Can I do this? Can I not do that?" And that is critical to maximizing the performance of the real estate. To get to this model, we've relied very heavily on an unsecured debt program. So today, 82% of our debt is unsecured, 18% is secured. Most of the secured debt really comes from our joint venture assets, where our partners would like to see debt on the assets, so we accommodate that with putting secured debt on the property. But for the most part, we're very committed to an unsecured program. What that does is, first of all, the cash flow is incredibly pure, so there's no amortization of principal. So all we're paying is just the interest. So that makes our cash flow, optimizes our cash flow, makes it, like I said, extremely pure. We can also manage the debt ladder very efficiently, where we can sort of put the maturities in place where we want it, and try to smooth out our expiries. When we went public, I think we were at 1.4x average loan to maturity. Today, we're over 4x. We're at 4.6x average term to maturity. We've seen the unsecured markets really come back to us nicely. We went through a period where we had to pay our dues, so to speak, and the discounts or the spread was wider than what was necessarily optimal in the market. But you know, that's what happens when you're a new issuer. You know, recall, we came out two and a half years ago, and we had no comparative financial information. It was a tough slog, coming out and trying to get people to buy in to an unsecured program where we had very minimal financial disclosure. And so it was very much a show me story. We think we've proved that. I think people are comfortable with our capital allocation capital management on the debt side, extremely conservative. Today, 100% of our debt is fixed. We have no floating rate debt. With the last bond issue, we really accomplished two things: we've eliminated maturities for 2024, 2025, 2026, so we have no debt maturing, and we were able to tap the seven-year debt markets, which is. We're very happy about it. Six months ago, if we tried to do something over five years, there was no takers. So the investors have definitely shown confidence in our capabilities, our capital management, our balance sheet management, and now we're able to do a seven-year bond, which is really nice. You can see how we've smoothed out the debt ladder, and it's starting to take shape. We've left 2031 open, so we can still tap the six-year market, and we're now getting reverse inquiries for people who would look to do as long as 10 years. So we think that's a very positive signal. And you know, as the yield curve flattens, there is more of a an appetite for longer-dated maturities. So we think we're gonna, you know, we're gonna tap into that. Debt to EBITDA is sort of the be all and end all. It's how we measure our debt structure. It is sort of we use a 4-6x range as far as guidance. It's really in the fives is where we would be, and we'd operate within you know low fives to high fives. Today, we're at 5.7. We've been asked on several occasions, would we go over six? And you know, quarter by quarter, it's an artificial date. The answer is, if we had a clear line of sight on dispositions or on a pro forma basis, we can see that we're still below six. You know, we would, we would evaluate that. The intention is not to go over six, but if it was a very temporary thing, and like I said, we had a clear line of sight where you collapse the quarters, you know, we'd look at it, but it's not something that we're, we're keen on doing. We actually have a significant part of our compensation linked to Debt to EBITDA, so our short-term bonus plan, I think 10%, is based on not breaching that six times. On our long-term incentive plan, it's actually 25% of our compensation on the long-term incentive plan is linked to debt to EBITDA. If we breach 6.25, we would go to zero. So if it, there's a sliding scale between 6 and 6.25, and over 6.25, we would go to zero. So that's baked in, and we were very comfortable when we came out. You know, when we looked at REITs and what the optimal capital strategy is, you know, we had the benefit of seeing the history of REITs, and we do feel that the lower leverage is the right way to go. And we think ultimately it'll translate to multiple expansion as we continue on with this program, and obviously, access to capital is critical. We also have a $600 million dollar operating facility that stands to the side. Part of it is we want to always make sure that we have sufficient liquidity as debt rolls to ensure that we can pay off that debt. Obviously, we have got no debt now rolling for the next two years, but more importantly, on the acquisition side, as we sit down with potential vendors, and the acquisitions we look to do are fairly chunky. We wanna make sure that there's no financing conditions, and that does make a difference when we sit down with vendors, and they're looking at our ability to execute, having no financing conditions and knowing that we got the cash in the bank makes a difference. So at the end of the day, we want to strive to a fortress balance sheet. People ask me, what happens if the markets crap out or something disruptive happens? You know, I always say I want to be the last man standing. So if the banks or the markets start to pull back, we want to make sure we're always the go-to name, and we're the last man. So if we can't access capital, then God help us, everybody else is in the toilet. So we've talked about this briefly. So same-property NOI is obviously the key driver, and we have multiple parts to that. There's the occupancy gains that we can tap into. There's the recoveries, and Pat talked about CAD 30-35 million of low-hanging fruit that'll roll in over time as we get our occupancy, sorry, our recovery ratios from 80%- 100%, so that's gonna be a key driver. Contractual rent steps, obviously, that's a driver. And the merchandising mix all sort of plays into that and what type of increases we can get on the rents. Acquisitions is a key part of our portfolio mix, and that would be net of dispositions, and I'll come back to that. But acquisitions we see as a driver of FFO growth. Developments and expansions, it's really pad additions, sort of at the margin. We're not talking about large-scale redevelopments. You know, repositioning the assets is a constant thing, and a lot of that is driven by the retained cash flow. So having the retained cash flow is a great embedded growth structure that's baked in. You know, roughly speaking, we're looking at CAD 60 million a year. You know, there's a few things we could do with that. It can go into the redevelopments, it can go into paying down debt and NCIB purchases. So we're always trying to figure out what to do on that front. The other thing that I didn't talk to before, but part of what's driving this, is we have no interest rate headwinds anymore. So with our debt ladder now structured the way it is, we've put that behind us. So we do not have to worry about a rising interest rate environment. If anything, with interest rates coming down, as we issue debt to finance acquisitions, that's really where we'd be looking to issue new debt and tap the capital markets. But we ate about CAD 0.14 of accretion, dealing with the interest rate headwinds from the IPO spinout to where we sit today. And having that behind us is really nice to not have to worry about where interest rates are going. Just looking at sort of how we look at our returns. So this assumes no multiple expansion. So assumes that our multiple stays exactly where it is today, and the market does not reward us for our platform and what we're doing and our execution capabilities. So when you look at sort of returns and where, what can drive returns, all things being equal, you know, you get the distribution yield of 4-6%, 3-4% same-property NOI growth, and again, driven by occupancy, rental uplifts, the gross to net conversions. Acquisitions on a net basis, we'd anticipate 2-4%. And then the retained cash flow, we look at adding 1-2%. It depends how the money's deployed. The NCIB right now is massively accretive, but we would also look at allocating that capital to other activities. So we're looking at 13% total return for a unitholder, assuming absolutely no change in our multiple. So we think that's a very compelling proposition. Financial targets. So everybody wants, likes to see this. So occupancy, we're given, like, a three-year target here. We haven't altered the 2024 guidance. We'll freshen that when we do our Q3 reporting, but for now, we do not want to touch those numbers. Occupancy growth, we'd like to drive that to 96%. We see same property growth of 3%- 4%. And I would tell you that when you look at 2024, it's understated. And the reason why it's understated is we've seen significant growth in some of the acquisitions, which does not show in that number. And if you took Halifax and Conestoga and compared it to prior years, we're getting growth that's higher than that. It shows up in our revised NOI guidance and in the FFO per share growth, but it doesn't show up today in our same property growth. We're not really reflecting what we've been able to do with some of these acquisitions when we lean in and apply our expertise. This translates to four to six times, four to six percent, FFO growth. You know, because we're, we have the low leverage, we're not as torqued to translating NOI growth to FFO growth, but we think that's a good thing, because of the retained cash flow and the conservative financial structure. Annual distribution growth will converge to FFO growth. Today, it's lagging just a little bit because we're slightly over 50%. As we set the annual distribution targets, we're really looking at Q3, Q4, which is what we did when we did the distribution bump last year in Q4. And so if we keep it slightly below the FFO growth, we'll get it back below 50%, and then you should look at it stay in lockstep with FFO growth. So this is a tough one, acquisitions and dispositions, sort of what we're pegging. So we think conservatively, based on what we're looking at in the pipeline, there's well in excess of CAD 1 billion of acquisitions. It's very fluid. There's a lot of factors, obviously, moving around in this, but the acquisitions are fairly lumpy, so you're dealing typically with acquisitions over CAD 300 million. So you'll be looking at three to four acquisitions to hit that target. Dispositions, we're looking at over CAD 500 million, and I would say this is more of an 18- 24 month time frame, is what we think. What we're seeing in the market today is a fair bit of liquidity coming back in for assets under a 100 m illion. We're getting a ton of reverse inquiries now, people looking to deploy capital. Financing is starting to become more readily available for those assets, and so we do believe that we can be quite successful in executing on that side. This does not include Dufferin Land. I think that question was posed to Alex before, so we have not included the Dufferin Land. There's some other small land sales included in there, but when you talk about selling land, you're dealing with almost zero cost of capital that you can redeploy, and it's highly accretive and conducive to building out the portfolio. So those are the key financial metrics that we can guide you to. Finally, to conclude, I guess, our thesis and sort of how we look at investing in Primaris, is we think there's an asymmetrical risk profile. The downside risk is very low compared to the upside. The upside far outweighs the downside. We have a very conservative capital structure, no interest rate headwinds, so that's totally behind us, so we don't have to worry about that. We have retained cash flow. We have a sector that's recovering very nicely, same-property growth, occupancy gains, conversion of leases, and these malls just continue to get stronger. You know, the cities have grown around these lands. The barriers to entry are extremely high. You know, you're basically creating moats around these properties. There's no construction activity. You're seeing you know retail square feet per capita decreasing. So we think that there's huge upside. And the big thing, which I think sometimes people don't appreciate, this is an asset class where scale and the platform matters. And our scale and our platform really lends itself to achieving superior growth as we add higher quality assets, our relationship with our tenants, what we can do with the portfolio, really just keeps getting stronger and stronger and stronger. And we also have not hit critical mass yet as far as leveraging our G&A platform. So you will see G&A stay relatively stable, maybe increase slightly. We've done a lot of retooling in the last three years, especially on the financial planning and analysis, as we've had to rebuild our finance group coming out of H&R. But, you know, it really does. You really can leverage the platform and the capabilities of the platform. So for the most part, you know that when we're growing same-property growth, most of it is going right to the bottom line and adding to the FFO growth. So the G&A burden should not be increasing at the same pace, so that provides positive leverage from that front. So that's it. Oh, yes, we do have an interesting slide here, where we talked about, you know, what happens if cap rates go to 9%? That would equate to a CAD 15 stock price, which is basically our implied cap rate today, where we trade. Our NAV today is based on a 7.2% cap rate, and that equates to a CAD 22 NAV. And if NAVs... If cap rates go to 6%, I'm not saying that'll happen overnight, but as we high grade the portfolio and capital starts coming back into the sector, that would translate to a 30-dollar NAV. So we think that there's room there to see multiple expansion, and the upside, as I said, far outweighs the downside, where we have very low risk. With that, I'll turn it over to questions. Dan? In that $1 billion+ of acquisitions, how much equity is assumed to be issued to vendors? Our structure, we started off sort of like 60% cash, 40% equity, and then I think we're in 55-45. Where we're trying to get it to is roughly 50-50. I think as we start to generate more cash from asset sales, that split might get altered because the vendors will see, you know, how much cash we have, and we'll leverage that cash. But right now we're targeting around 50-50. Yep. In your 3-4% same-property NOI growth target, a couple questions there. How do you see that within those three years? Is that sort of the consistent range or, you know, 2025, maybe moderates or maybe better? Can it be a little bit lumpy? And then second piece is: Do you have a higher degree of confidence in the same-property NOI or the CAD 1 billion of acquisitions? We have confidence in both. You know, when you're dealing with transactions, it's obviously you don't control it. You need a counterparty. So assuming that these pension funds, who are targets, are still looking to sell, and we are today the only game in town, we feel highly confident that we can execute on that, especially as you get into the second half of each year. You know, they're trying to execute some sales at that point. So we have seen the level of activity and the nature of the discussions change quite a bit between the first half of this year and what we're seeing now. Getting them over the finish line is a long process, and so that's always the execution risk. But I think, you know, we're fairly comfortable with that. We're very comfortable with the CAD 500 million sales. If you want a sort of an order of magnitude, you know, the CAD 500 million, if you're trying to model it, I would use an 8 cap as sort of the exit cap rate. The portfolio right now is valued at 7.2, but, you know, these, these properties, you know, 8% is probably the right number. And, you know, you might say, "Well, if you're selling at 8 cap and you're buying, call it at 7, how do you make that math work?" The math works because you are issuing equity at NAV, and then you can also deploy some leverage. So a CAD 200 million asset sale translates into a CAD 400 million acquisition. And so there's some interesting math when you sort of work through, you know, can you make those deals work, and can you still drive accretion? The answer is absolutely yes. And typically, we're looking for assets that have a high growth profile. So even though in the short term, we might say 8% sale, you know, those assets typically have a different type of growth profile compared to the assets that we're looking to acquire. So we're pretty confident in that 3%-4% guidance on both same property NOI growth and the 4-6 on the FFO growth. You know, a lot depends on... You know, these acquisitions are lumpy, the sales are lumpy, and, you know, there's always a lag, the work Pat's doing, but we have visibility into what's going on on that front, so we're feeling pretty good about it. Is it fair to say that in the same property, NOI growth buildup, that you're not assuming much in the way of rent growth? It's mostly just occupancy gains, plus the conversion of lease- No, we assume, you know, mid to high teens. You know, it's done lease by lease, so it's not really done on a portfolio basis, but typically, we look to sort of mid to high single digit. Well, that drives about 1%, right? 1%-2%, depending on the timing. So it's, like I said, a quarter to a half of it. If you were at fully stabilized occupancy, we call it 96%, you would be looking more at 2% same property growth through rental uplifts, and then the balance is really coming through other activity. You know that, with scale, you'll get to a point, so right now, scale, you're going to have, not growing G&A burden, but flat G&A burden. What level of scale or acquisitions can you get to a G&A burden decline? And then second question, a note to your BBB high- Right. Rating. What is that your goal, or do you have a different goal in terms of credit rating? You'd have to ask DBRS. They're sitting right there. So we did get the bump from BBB to BBB high, which obviously we were very pleased about. I don't think there's any real estate companies, other than, you know, the pension funds, which is a different animal that are A-rated in this country. So I'm not sure whether the rating agencies are comfortable moving real estate companies into an A low. Obviously, we'd love to be there, but we're comfortable with the BBB high. What we do find. You know, the rating is important, and being investment grade is important to our bondholders who are buying. At the end of the day, they do their own risk assessment, and they come up with their own spreads. That's what we find. You could have two BBB entities that are issuing at totally different spreads, and it's really a function of the bondholders. They make their own assessment so whether going in an A low is going to move the dial, I'm not sure, quite frankly. I think we'd be there before we move to A low. They'll make their own assessment, and as long as we keep our debt-to-EBITDA in check, I think they'll be comfortable. You know, managing the risk appropriately is a key part of it. What was the other question? Just on the G&A burden, you said that the- So, G&A burden. I have this debate. It should start falling as we buy these large assets. That's the theory, and we're working through the math because as we add assets and we can take some of our G&A overhead and allocate it to the operating costs of the assets, in theory, on a net... So the G&A gross will grow. The net, that's non-recoverable, you know, will it go down, or will it just stay flat? That's hard to judge. We're not modeling this on the basis that the G&A is going to go down. Like, you know, we're, there is inflation on those costs, and so that's something that's hard to avoid. And we still are not quite there yet on optimizing sort of the finance group and some of the things we want to add to the finance group. But we're sort of at the tail end. We're pretty close. But I wouldn't be modeling G&A going down, you know. If it does, it wouldn't surprise me, but it really depends on the structure of what we can allocate to the properties. But have you looked at a sensitivity in terms of, so I get CAD 500 million?...net investment and the guidance, and that's going to be G&A burden flat. Yeah. But if you did CAD 4 billion of net investments, is the math that at what point do you start triggering into scale efficiencies on the G&A side? I think it's. Let me come at this differently. If we were optimized and we were adding properties, we would have to add to our G&A. So- So I think where we have scale efficiencies is we can still continue to grow without having to add G&A. So we still have some scale capabilities and embedded in our structure. But to say going down, that's a tough call because we're dealing with, you know, running a public company, and you don't charge that back to tenants. That's outside of that, and that's sort of stabilized. I guess, you mean as a percentage of revenue? Oh, as a percentage of revenue? of revenue? Yeah, it'll keep going down. Absolutely. We're already seeing it going down as a% of revenue,% of total assets, and we do track that. Yeah. Sorry, I didn't appreciate that was the question, but yeah. Percentage of G&A of gross revenues is gonna continue to come down. Because I think right now, people who've benchmarked it, and there's a lot of noise in these G&A numbers, like what you allocate to the properties and what you don't allocate, and what you capitalize if you're development-heavy versus what you don't capitalize, and we capitalize very little. They do have us sort of at the higher end of the range, and that'll naturally come down. Any more questions? All right, I don't know what's next. Miller time, we'll go on the tour. Oh, back to you. Thank you, Rags, and thanks, everyone, for attending today. It's been a big chunk of time. We appreciate your time, and I feel pretty good about the show that the team has put on, and I hope everyone else does as well. This is one of my favorite slides from our investor deck, and it basically just looks at Primaris through every conceivable lens. And on pretty much every one of them, I think we're at the end of the spectrum where we have the most potential to improve, whether it's FFO multiple or discount to NAV or, you know, all sorts of other things. And I encourage you to take a look at it. It's a good one. So this is really the end of the formal presentation for today. We do have a period here for Q&A, and then after that, we'll commence with the property tour. The property tour will go for about an hour, maybe a little bit less, and then there's an hour before the bus goes back to the hotel, and you can do some shopping and enjoy the mall, so I guess with that, we'll move to any final Q&A that anyone has. Anything ESG. Is there any ESG goals for 2025? Yes, we do have ESG goals. Claire is probably best equipped to answer what those... Oh, Rags could do it as well. Either way. Yeah, so we've. So the GRESB has been a big part of it. So we did do GRESB last year. We've got the prelim results in right now. I can't tell you the number or I'll have to be shot, but it has gone up. What we're doing right now is we are calibrating all our KPIs. So we've been spending a lot of time working through what we think is the right objectives going forward to measure our success, because we've only got two and a half years of history, so getting that right is very important. And then the next step is to then embed it into our comp structure. So what we're doing for this year is to finalize those KPIs, what the right targets should be, going forward, and then pushing that down into the organization, so that, you know, compensation drives behavior, and that's the-- that's what we're trying to do. So the senior executive team, we already have it, but it's a little bit soft. Like, it's fairly sort of based on a lot of qualitative factors versus quantitative and measurables. And as the old saying goes, "If it's important, you got to be able to measure it." And so right now, we're going through that process of nailing down the baseline, setting targets, and then rolling that out to the entire organization. We are not looking to necessarily be on the front as a market leader. We've actually benefited very much from being able to see what other people have done and sort of leveraging off of what's going on in the market, so we want to be middle of the pack. We're not going to set the standards, so to speak. We don't think that's necessary, and for us, it's a little bit more difficult because we're not development-focused. Entities that are highly development-focused, they can create nice ESG targets, and always looks great, but we are not doing that. We're not focused on that, and what we have is we have a lot of initiatives that happen at the local property level. They're very passionate. They love doing this stuff, and what we're now trying to do is roll it up to corporate standards and then push it down, but still allow the properties to do their thing because they're in the local markets, and they're trying to do things for the local markets. So just trying to formalize that process a bit more. So that's where we're going. We've had discussions with the banks on, you know, sustainability-linked loans and those sorts of ideas. So we are gonna think about how do we embed that again into some of our debt instruments. And quite frankly, like, the savings is minuscule. You're not doing it for that purposes. What you're trying to do is drive corporate behavior. And so when you put that in, you set targets, and then you force people to adhere to the target. So it's more behavioral than anything else, but it's something that we're keenly focused on. Any other questions? Sam? So just, I know Matt asked it earlier, but what, from a geographical standpoint, you got 20 properties that are kind of in your sights. You said 5 or 6 are in various stages. I think you've got at least two properties in Calgary that are probably gonna be sold in the next little while. Obviously, you've got some smaller market stuff you're gonna sell, too. But as we look forward 3 years or whatever, you know, what is the major market, secondary market mix, for Primaris gonna look like? Yeah. Thanks, Sam. So, from a geographic perspective, we're not really focused on targeting specific provincial weightings or things like that. We're really focused on the malls themselves, whether they're market dominant, and then to the extent that they are in markets that, you know, meet our criteria. We have a written formal sort of threshold of 100,000 population, but if you look at the transactions we've completed so far, they're more, you know, 500,000. I would say the real sweet spot in terms of Canada is that 500,000- 1 million population. And that's where people who are moving out of high-cost jurisdictions like Toronto and Vancouver are moving to. So like Halifax, you're seeing really strong population growth. There's a well-established, high-performing mall like this one. That's the kind of profile that we're after. You know, we have right now a lot of weighting in Alberta and a lot of weighting in Ontario. We would certainly welcome some more exposure to the Vancouver market. We're underweight Quebec relative to the population. So I think that there's some opportunity in that province. But generally speaking, the malls are the malls, and we're focused on. You know, there's 20 malls that we're very focused on, and they are spread across the country, from coast to coast. You mentioned the discount to replacement cost. I don't know how much a mall costs to build, but could you give us a sense as to what the math looks like on what it costs to build versus the rents that you would need to justify building today? Yeah. So the discount to replacement cost is massive. Our enterprise value is about CAD 240 a sq ft. I don't know what it is at now, but it would be maybe closer to CAD 300 a sq ft. Replacement costs, hard and soft costs, would be CAD 800 a sq ft, and then the land cost, because, you know, you're talking site coverage, generally, you know, 25%-30%, something like that, on average. So you'd be looking at another CAD 200 a sq ft. So at CAD 240, we're trading at a 76% discount to replacement cost. And if you were to then... You know, there is a mall that was recently completed in Montreal. Unusual, and that is a highly unique situation, but I would say for someone to compete with our properties, the rents would need to be about three times what they are right now for it to make sense. To the extent that you did have that market environment, you would then have to assemble, you know, 40, 50, 60 acres of land. And that's impossible in a market like this, where, you know, we're embedded within the downtown of the city. If you were to do it, it would have to be out at the perimeter, and then you have to wait 40 or 50 years for the city to grow around it to create the same kind of dynamic that we have. That's one of the really great moats about our business. It's almost impossible to add new supply. I think we're good. That's great. I think there's still lots of questions for all the other presenters, which is even better. Okay, so just to conclude, I wanted to thank everyone for attending. Also thank Stephanie Schnare, who is right there. She's does marketing at Halifax Shopping Centre and has been very instrumental in today's events. And Kevin Marchand, the manager of operations here, also has put a lot of work into this, including fitting out this space. And the whole team, the whole Halifax Shopping Centre team and the whole Primaris team, I hope you guys appreciate you know the effort that goes into a day like today and also get a lot out of you know the content that we provided. And with that, we will shut it down. So that's the end of the webcast, and we'll move on to the property tour portion of the presentation.