Good morning, and welcome to the Summit Industrial Income REIT first quarter 2022 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. To allow time for everyone to ask a question, please limit yourself to one question and one follow-up. As a reminder, today's conference call is being recorded. I'll now turn the call over to Mr. Paul Dykeman, Chief Executive Officer. Please go ahead, Mr. Dykeman. Great. Good morning. Thank you, operator. As a reminder, during this call, we will make statements that contain forward-looking information, which is based on a number of assumptions and are subject to known and unknown risks and uncertainties that could cause the actual results to differ materially from those disclosed or implied. We would direct you to our earnings release, MD&A, other security filings and additional information about these assumptions, risks, and uncertainties. We also invite you to join us at our virtual annual general and special meeting that will be hosted later this morning. Joining me on the call as usual is Ross Drake, our Chief Financial Officer, and Dayna Gibbs, our Chief Operating Officer. Since inception, the REIT's growth and track record of consistent operating performance has been driven by a focused and proven set of strategies. A disciplined approach to growing our portfolio through new acquisitions, prudent capital management, and achieving organic growth through our strategic leasing and management of our existing assets. Kicking things off on slide four. So far this year, despite navigating market volatility, we have accomplished a lot. We started the year off by deploying over CAD 200 million of capital for income-producing and development property acquisitions in our core markets, and we'll continue to strengthen our balance sheet and enhance the REIT's overall liquidity. We have raised close to CAD 650 million in new debt and equity capital year to date. In addition, over 1 million sq ft of 2022 lease renewals and new leasing deals have been completed so far this year, generating over 50% in rental rate increases, which include deals where Summit has achieved over 100% rental growth both in Ontario and Quebec. Turning to slide 5. Our track record of growth and solid performance continued in the first quarter of the year. Revenues were up 12% in the quarter, with same-property NOI increasing 1.8%, including 5.2% in the GTA. The same-property NOI growth was muted by the reversal of certain bad debt provisions in the first quarter of last year due to our successful rent collection of all of the COVID pandemic relief that we gave. Excluding these historical one-time reversals, comparable property NOI would have been 3.5% overall and 7% in the GTA. FFO rose 15%, with FFO per unit was up 9% year-over-year. Another healthy quarter for the REIT. Our FFO payout ratio remained a very conservative 77%, and we continue to have a strong participation rate. Moving to Slide 6. We're very pleased to have announced a 3% increase in our monthly cash distributions yesterday. This increase results in a new annualized distribution of CAD 0.581 per unit on an annual basis, and that will be effective with our May distribution. With our record performance in 2021, our continued growth in the first quarter, this reflects our confidence in the continued strength of the Canadian industrial markets and our commitment to growing a stable, returns to our unitholders over the long term. I will now turn things over to Ross. Thanks, Paul. Turning to slide 8, as Paul mentioned, we have been very active so far this year, raising attractively priced debt and equity capital and continuing to enhance our liquidity profile. We increased the size of our unsecured credit facilities, entered into new ten-year fixed rate secured mortgage financing, a significant portion of which is interest-only, and raised equity through a successful bought deal and ATM equity offerings. We now have CAD 600 million available through our unsecured credit facilities, including CAD 150 million available for green financing initiatives under our green unsecured development credit facility. With our current record levels of available liquidity, we are well positioned to continue to selectively deploy capital as opportunities present themselves. Turning to slide 9. You can see that we have consistently delivered portfolio growth through many different market conditions and environments since the REIT's inception. We now own 159 properties, not including our development program, totaling over 21 million sq ft of GLA with a fair value of close to CAD 5 billion. Our portfolio continued to see fair market value gains of approximately CAD 200 million in the first quarter of 2022, primarily as a result of growth in income achieved through lease renewals and new lease deals, as well as ongoing growth in market rental rates. Slide 10 shows the REIT's total portfolio occupancy at the end of Q1, and as you can see, occupancy remains strong at 98.2%. Quebec occupancy was 100%, and there was a slight decrease in occupancy in Ontario as a result of a short-term downtime at one of our properties due to tenant turnover, which will be occupied in Q2 2022. In addition to our strategic debt refinancing that we completed in 2021, the REIT currently has record levels of available liquidity and a strong balance sheet. As shown on slide 12, the REIT's overall leverage was a very conservative 28.1% at the end of Q1, with a weighted average interest rate of 2.47%, a meaningful decrease over the same period last year. Slide 13 details the continuing strengthening of our financial position. Our unencumbered properties now represent 65% of our total assets, or CAD 3.4 billion. Our proportion of unsecured debt rose to 77% of total debt at quarter end, up from 40% this time last year. Given the current interest rate environment that we are operating in, you can see that we have very limited debt maturity exposure over the remainder of this year and into 2022 and 2024 as well. To update you on the specifics of our liquidity position, slide 14 illustrates the breakdown of the CAD 1.2 billion of a potential available liquidity at the end of Q1, including cash on hand, availability under our various credit facilities, and potential financing capacity on our unencumbered asset pool. I will now turn things over to Dayna. Thanks, Ross, and good morning, everyone. As Paul mentioned earlier, strong underlying market fundamentals continue to drive performance in our key markets. As you can see on slide 16, despite some of the broader market volatility and noise, the REIT strategy on focusing on high-growth Canadian markets has served us well. In the Eastern Canadian markets of Ontario and Quebec, which make up close to 80% of our portfolio value, we continue to see supply-demand imbalances contributing to our ability to achieve meaningful rental rate increases, increasing annual escalators, and providing the REIT with other negotiating leverage with our tenants. In addition, we believe that some of the potential risks to market cap rates may be de-risked or mitigated by the continued appreciation of income to maintain industrial property valuations. Turning to our individual key target markets, slide 17 illustrates the positive impact of strong market fundamentals in the GTA. Availability in Canada's leading industrial markets saw net rents rise to CAD 13.59 per square feet in the quarter, marking another record of 20 consecutive quarters of rental rate growth. Over the past 5 years, rental rates have almost doubled. Occupancy at quarter end was reduced from year-end due to downtime at one property resulting from a tenant turnover, and will be occupied in Q2 at 42% higher rent. This tenant will also be occupying 62,000 square feet of planned expansion space at the property. Our in-place net rents in the GTA sit at CAD 7.64 per square feet at quarter end, and we believe there's still considerable upside as we renew our maturing leases. Turning to slide 18, we continue to expand our Ontario footprint in the Kitchener-Waterloo, Cambridge-Guelph market with the recent acquisition of two new development sites in Guelph. This region has become a highly attractive industrial market, with lease rates hitting historic highs and availability at all-time low of 0.6%. This is the lowest industrial availability rate in all of Canada. Turning to slide 19, this region's seeing very attractive relative rental rate growth, with net average rents having increased every quarter since the start of 2021, with an over 50% current increase over last year. We have a track record of success in this region, having developed just under a million square feet to date in Guelph, and will continue to benefit from economies of scale as we add to our development program in this high-growth area. Looking to slide 20, Montreal, Canada's second-largest industrial market, is also demonstrating strong growth. With an availability rate of 1% and an 11% increase in asking rents, the first quarter of 2022 marks the 14th consecutive quarter of rental rate growth in this market. At the end of the first quarter, we remained at full occupancy in Quebec, and there's meaningful mark-to-market upside in rental rates in this market as leases come up for renewal, with rents over CAD 14 per square feet seen on several lease deals in recent months. Slide 21 shows the details of our Alberta portfolio. The industrial market fundamentals in Western Canada, and specifically Calgary, continued to improve in Q1. REIT occupancy improved in Calgary in the quarter but decreased in Edmonton due to a tenant turnover, a portion of which has been leased subsequent to quarter end. Calgary's year-over-year same property NOI change reflects 65,000 square feet of downtime in the quarter that was a result of tenant turnover as well. The space is now occupied, as well as the impact from bad debt reversals that occurred last year in Q1, as we've already discussed. Looking ahead, we'll continue to focus on the same successful growth strategies that have generated positive unit holder returns to date. Turning to slide 23, our growth and performance continues to be based on our three-part strategy. One, expanding the size and scale of our portfolio through selective accretive acquisitions, two proactive development and expansion, and capitalizing on strong market fundamentals to achieve organic growth within our existing portfolio. Slide 24 summarizes that despite the highly competitive market landscape, our acquisition program continues to be active, having completed close to CAD 140 million of accretive acquisitions so far this year, including our Vaughan acquisition that we announced post-quarter end. We also expect to close on the 150,000 square feet net zero carbon expansion project at our Trans-Canada Highway property in Pointe-Claire, Quebec, for approximately CAD 40 million upon completion this year. Our underwriting criteria continues to be one of discipline and patience, and the REIT's being highly selective in pursuing any new investment opportunities at this time. In addition to our acquisition program, and given the current opportunity for attractive relative returns, the REIT continues to grow its development platform. As seen on slide 25, we currently have over 2.3 million square feet under development in various stages of planning or construction. In Q1, we added three new development properties to our pipeline in Ontario, one in Burlington, one in Kitchener, and one in Guelph, which in total have the potential to add over 1.3 million square feet of GLA to the REIT's portfolio. Importantly, our development projects continue to align with our ESG initiative and green financing framework as we strive to achieve maximum efficiencies and minimize our environmental impact through our newly built buildings with the added benefit of an improved cost of capital. Slide 26 details the organic growth that we've been able to achieve through our proactive leasing programs. So far in 2022, we've completed over 1.1 million square feet of lease renewals and new lease deals. Most importantly, these leasing transactions generated a significant 52% increase in monthly rents, with rents more than doubling in Ontario and up 74% in Quebec, excluding contractual renewals. The leasing activity includes specific deals where Summit has achieved over 100% rental rate growth in Ontario and Quebec. With record low availability and high demand, we are confident rental rates will continue to grow in all of our key target markets. The third pillar of our growth strategy is to continue our track record of strong organic growth through our existing portfolio. As you can see on slide 27, over the next 5 years, we have over 10 million square feet of lease renewals coming due with meaningful mark-to-market upside potential and over half of our lease maturities in the high-growth Ontario market. In addition, we continue to explore and discuss select expansion opportunities within our existing tenant base to further maximize rental rate opportunities on existing our own land. I'll now turn things back over to Paul for some closing comments. Thanks, Dayna. In summary, we continue to be optimistic about the strength of our underlying fundamentals in our key target markets as they are the backbone of our operations. We expect to continue to be able to execute on a selective and disciplined approach to acquisitions. We continue to deliver on our development program. We'll contribute attractive yield on cost returns, and create brand-new environmentally efficient real estate to our portfolio. Our organic growth, as Dayna mentioned, will continue as we renew leases at market rents, which are considerably higher than our in-place rents today. Finally, our strong, in-place liquidity position that Ross outlined will allow us to navigate the potential market volatility and continue to execute on the growth opportunities as they present themselves. I thank you for your time this morning, and now we'd be pleased to take any questions you may have. Operator? At this time, I would like to remind everyone in order to ask a question, press star one. To allow time for everyone to ask a question, please limit yourself to one question and one follow-up. We'll pause for just a moment to compile the Q&A roster. Our first question comes from the line of Sam Damiani with TD Securities. Your line is open. Thanks, and good morning, everyone. I guess just to start off, Paul, I wonder if you could give us a sense of your perspective on what Amazon announced a couple weeks ago with their overcapacity issues. What are you hearing or seeing in the marketplace with respect to that or other fulfillment tenants in the marketplace? Just so you know, we invited the CBRE into our board meeting the other day, and they have a global platform that you know captures a lot of that information. They've also have very good contacts within the Canadian contacts within Amazon. You know, clearly, I think it took everyone by surprise. When they talked about what it actually means, you know, I think they're talking about subletting some of their space, which would be primarily in the U.S. market for some shorter term period of, like, 2-3 years. You know, they don't see that overextension you know happening in Canada. It might slow down their amount of you know continuing you know taking more space within Canada. It really isn't, you know, trickling down into anything that we're seeing in any kind of substantive way. You know, when we talk about our leasing, you know, we're still doing a lot of leasing to, you know, third party logistics companies, but also there's lots of other, you know, automotive, different types of tenants in our portfolio that, you know, have that steady demand. Then there's still that onshoring of inventory that we're starting to see, and it's happening where, you know, Walmart would say, "We need an extra, you know, 15 days of inventory." You know, those kind of tenants, which don't have options, are coming to us and, you know, starting to talk, "Can we expand your property?" and that thing. You know, we only have the one Amazon tenant, which was in Calgary. It's CAD 7 and something rent. You know, they're there for 10 years. You know, that building's very leasable. I think, Dayna, you wanted to add something. Yeah, no, I was just gonna add, I think there's a couple of ways to look at this, and we can chat for quite a lot of time about Amazon here. Don't want to take up too much time. You know, I think there's a broader market impact on industrial, you know, generally speaking, and then, you know, you need to be specific and to be clear, you know, what's the impact for Summit and our portfolio. Paul already touched on sort of our exposure specifically to Amazon. You know, if you think a little bit more broadly just to close the loop on our portfolio, our exposure to e-commerce in general. You know, so there's the one aspect where, you know, their take-up of real estate space, but also the comments about sort of softening e-commerce demand I think we shouldn't overlook. You know, in terms of our portfolio, our exposure to e-commerce, we have direct exposure. You know, tenants like Essentia that are Émile-Bélanger property, Amazon, obviously. You know, that's probably about, call it 5%, but then there's sort of follow-on exposure that you would have, you know, indirect and servicing, you know, if you think of the likes of FedEx and Purolator. There's, you know, if you think about direct exposure, it's 5%. Even if you lumped in all of the ancillary exposure, you know, you're below 15%, just sort of rough numbers. Really thinking there's very little potential risk even if this were to become something bigger down the road. Importantly, I think it's a theme that we've seen in other aspects, you know, of real estate, where Canada lags the US. You know, from the conversations that we have and the intel that we have, you know, Amazon really doesn't have an adequate distribution network set up in Canada as yet. You know, this news coming out of the U.S. is, you know, much further ahead of us. Impact on U.S. REITs, you know, Amazon, as people have been talking about for years now, is, you know, number one tenant in a number of the large U.S. industrial REITs. You know, not the case, obviously, in Canada. I think that's a key differentiating point. Really keeping an eye on, you know, consumer spending and e-commerce, I think is gonna be a focus that we should not lose sight of. Oh, thanks. That's excellent color. We appreciate that. Just for my second question, just with the rise in interest rates, what are you seeing in the investment market real time in terms of just in the last few weeks in terms of, you know, deals being maybe repriced or bidders backing away? What are you seeing, and do you expect an impact on cap rates in the short term? Yeah. Again, you know, there's going to be an impact. We're not seeing a whole lot of it yet. You know, just anecdotally, we were bidding on a CAD 200 million portfolio in Montreal, kind of B-class buildings. We bid below the guidance, and we didn't get into the second round. There was three groups at the guidance or higher. It wasn't the kind of real estate that we want to push for. You know, we'll talk more in this call, but you know, it's. You know, we're gonna be very selective on how we do it and strategically grow. We're still very comfortable that, you know, spending capital on our development program is number one. You know, if there is some dislocations here, you know, we'll be able to take advantage of that. Other than that, we really haven't heard too much, but I think everyone is kind of probably doing what Summit's doing right now, which is let's just stop for a second and think about what's gonna happen and how long this might, you know, go on for. I think there's gonna be a bit of a pause. The other thing we're hearing is, you know, lots of people are gonna bring properties to the market. You know, this year or last year, if they didn't get a good bid, you know, they would just refinance it. You know, the impression is that option is not as attractive anymore. I think you're gonna start to see a little bit higher volume of properties coming to the market. If there is some, you know, softness in the bidding. When you look at all of the real estate asset classes and you look at the markets that they're in, industrial in Canada still ticks an awful lot of boxes in terms of, you know, availability being the lowest in North America, highest, you know, rental rate growth. It's got growth and it's defensive. I think it's still gonna be an attractive asset class as people recycle out of, you know, office, multifamily and other things, given some of their issues as well. Thank you. I'll turn it back. Our next question comes from Himanshu Gupta with Scotiabank. Your line is open. Thank you and good morning. Just on 2022 leasing activity, I mean, clearly very strong renewal spreads there. Montreal in particular looks strong there. I mean, GTA we have spoken for some time. Do you think the leasing spreads were in line or above your expectations, what you have achieved in 2022 so far? I'll break it down into two cities. It continues to give us a smile on our face when we lease because it keeps increasing gradually in the GTA. Big smile on our face for Montreal because, you know, in-place rent's roughly the same as GTA, you know, at CAD 7.50. We're thinking, you know, maybe when are we gonna hit CAD 10 in Montreal, which would be, you know, nice rental bumps. As things continue to tighten, I think year-over-year the Montreal rental rates are up, you know, according to CBRE, 35%. You know, one deal was 106,000 square feet. We actually had two tenants, and we basically just ran an auction and, you know, we ended up at CAD 14 and then 3% or 3.5% steps on that kind of rent. You think, okay, maybe that's a one-off, but you know, we turned around and did it again. We had a CAD 14.50 rent. That property had a little bit specific, you know, there's rail going to it, so maybe there's a bit of a premium, you know, for that particular asset. Somehow they, you know, that market has kind of jumped over the, you know, the CAD 0.10, 0.11 and 0.12. That's not for every space, but if you're well located, you know, good quality, good ceiling height, you know, that's definitely a pleasant surprise. Finally, you know, Alberta, and we've talked about it for, you know, a number of quarters now, you know, clearly has turned the corner. Availability, you know, sub-5% in Calgary and getting closer to 5% in Edmonton. You know, we are actually testing that market. You know, we've done some at, you know, 15%- 20%. But, you know, there's a couple that are gonna happen, you know, later in the year or early 2023 that, you know, we'll start to see 30% or 40% bumps in some of our select, Calgary properties, which is good. The, you know, the last two years was primarily maintain occupancy, maintain rent, and clearly that mindset is changing. We don't think we're that far away from some of that happening in Edmonton as well once that market gets below 5% availability. All right. All right. All right. All right. More optimistic. Well, the future is still like it's still tight. Even, you know, with that Amazon announcement, you know, anecdotally we're starting to hear numbers that, you know, are CAD 15, CAD 16, CAD 17, CAD 18. You know, we know there's still room to go. You know, I can make another prediction. Somewhere in the next couple of years, CAD 20 is gonna be achieved in the GTA. There you go. Got it. I am writing down your predictions there. 400 is the new 300, and 20 is the new 15. Thank you. There you go. Thanks. The impact of higher debt financing on valuation, I mean, that's my follow-up question here. You know, based on your experience, Paul, where will we see the first impact on valuation? I mean, will that be secondary markets versus the primary markets, or will it be like lease term specific? You know, properties with three years lease should be fine, but seven years will be impacted. I mean, any thoughts there? Yeah. Again, we had all these great dialogues yesterday with CBRE in the room. Again, it's still a little early to tell. But Jonathan Robbins has been with doing this for 30 years underwriting, you know, he goes, it's, you know, the C properties, right? So those spreads and cap rates. So what's happened when, you know, the market has been as frothy as it's been over the last few years, A, B, C, exactly where they're located, you know, they kind of all blend together. You know, I think the word we used was bifurcation. You're gonna start to see a little bit of that. You know, we'll start with the C. The good news is even B quality properties, if they're in the right locations, are really seeing no different rental rates than A buildings like across the street. If you're in the GTA, you know, and we've seen it in some of our buildings, 25 years old at $ 14, you know, to a new building being built down the street is CA D 15 or something. You know, very little or no difference there. Again, because we've cobbled together this portfolio very carefully over the last seven years, you know, we have A and B buildings, but you know, we don't have any C buildings, so you know, we think we're pretty insulated from that. You'll see some of that. Then geographically, again, we're you know. I mean anything in the GTA, Montreal, Vancouver, you're not gonna see that. Everything that's been going on has been benefiting Alberta in terms of population growth and immigration and stuff like that. We're not seeing any major changes in market specific that we're in. Got it. Maybe just follow up and then give you my final question. What happens to the land pricing in the middle of all this? I mean that $3 million per acre or more, I mean the- Yeah. Still 3, 4 years away. I mean, how does that get impacted now? Again, that's gonna go to how long, you know, do we think things are gonna go on. Right now in Canada, it's going to be a record year of what's under construction. Roughly 35 million square feet when we probably averaged 25 million square feet the last 3 years. I think the number of that 35 million that's pre-leased is upwards of 60%-70%. It's not gonna fix the problem. You know, we're at, you know, nationally 1.6% availability in our markets. You know, it's 1% or less. You're gonna have to have multiple years of, you know, of negative absorption, you know, to have any dent on that, you know, that availability rate. You know, unless you start seeing the availability rate go north of 3% and probably closer to 5%, I think people are still gonna be, you know, bidding, you know, for land that's a bit, you know, that's able to go. Like it's a challenge. We're buying land and, you know, it still takes two or three years to get it, you know, the pipeline approval. Dana, you wanna I think I mentioned too, I'd just add to that as well, that if you think about the bifurcation that Paul mentioned, you know, when you're thinking about the B or poorly located B and C properties. You know, when you've got the development side, what you're putting out is, you know, larger, newer buildings. So that obviously is a consideration as well as you think about some of that softening that you would really have to have that trickle through in a very meaningful way to your A class buildings, and your new buildings to see, you know, a direct impact on that side of things. Yeah. I'll give you one more note. Awesome. Thank you. What? Sorry. I'm gonna give you one more piece of information right now. Land prices in Montreal now roughly around CAD 1.7 million an acre, and that's up 100% over the last 18 months. You know, which you'd expect in a market that's, you know, not building a whole lot of space. That same phenomena that's been happening in Toronto is starting to accelerate in Montreal. You're seeing it both in land prices and rental rates. Thank you, Paul. Okay. I have actually written it down as well, so thank you. I'll turn it back. Okay. Our next question comes from Matt Kornack with National Bank Financial. Your line is open. Hi guys. Hi Matt. In terms of the financing you did, subsequent to the end of the quarter, I'm interested in your rationale behind sort of the secured term you went with, and what the use of proceeds is ultimately for that financing. Very, very good question, and we cringe as we watch bonds moving around, as I'm sure everybody does on the line here. We try not to look, but you know, we were spoiled for a very long time with pricing in the unsecured market. That obviously would be, you know, have been our number one preference in terms of of debt financing. You know, I think we've chatted a fair bit about, in the past about our target leverage and really trying to keep that on the lower side, you know, with our focus on debt to EBITDA multiples obviously. You know, mindful of, you know, sort of the looming market ahead of us thinking that, you know, we would like to have some debt capital, sort of under our belt and really try to replicate as much as possible, you know, what we'd been achieving in the unsecured market. As Ross mentioned in our prepared remarks, you know, the majority of that is interest only. You know, as we got into the weeds, you know, in the secured mortgage market, to see what some of the pricing options were, we found really, you know, as opposed to sort of the last time we were in this market, which was several years ago, the landscape had changed quite a bit with lots of different appetites, lots of different underwriting criteria from the lender's perspective. You know, we had some flat pricing, frankly, across the entire curve, whether you're going 5-10 years, and really just depended on sort of their asks for debt and what they were looking for. You know, we found a bit of a window, a bit of what we thought was a pricing gap in terms of spreads versus, you know, where the unsecured market was. You know, we were able to act quickly and access that market. We did some rate locking in terms of the underlying bonds to improve our pricing there. Just felt that, you know, in terms of tenor, you know, being ten years, there was a very meaningful gap to what we would see in the unsecured market and felt that the pricing was attractive, you know, given where we thought things were headed and frankly, where they have headed since we've you know since we announced that. Okay. Your second part of your question, the funds, we have a couple of acquisitions that we're currently looking at and just some debt repayment in that. We've allocated those funds and once those acquisitions are done, we still have a full CAD 600 million available on our unsecured lines to act on any opportunities that we see going forward. We see a very strong, you know, healthy balance sheet. There's very little debt maturities in the balance of the year or 2023 and 2024 on that. We feel like we've put ourselves in a good position for the time being. Okay. No, that makes sense. Two quick follow-ups. One on the mortgage side. Was that a single asset that you've encumbered, or was it a group of assets? Maybe on- Well, there's Oh, sorry. Sorry. Finish your question. Sorry. No, it's completely unrelated, so I'll ask it after. Yeah. Okay. It was two properties in two different markets, two fairly large properties. One mortgage was for CAD 100 million for 10 years, 5 years interest only, and 5 years 30-year amort on it, and the other property was a CAD 69 million dollar mortgage, and it's 10 years interest only. It's acting almost like a bond, but a significantly lower spread to Government of Canada's than the bonds are offering today. Yeah. One was, since Ross didn't say, but you'll find out someday. One's Calgary and one's Montreal. Matt, what we're comfortable is it's, you know, the lenders are. You know, if you got good quality buildings with good quality tenants and leases. Mm-hmm They're prepared to, you know, lend, you know, no matter where the market is or how the perceived, you know, strength of that market is. It's not like, you know, GTA is getting a better pricing than Montreal or Calgary. We had expressions of interest from six to eight lenders on those. Very healthy interest and had a lot of different options that we could choose from in that, so. Okay. No, that's perfect. Then just quickly on the, I guess it's transitory vacancy, and you guys are pretty good at filling things quickly. Is there anything else, whether it's by design on your part because you wanna get a higher rent or otherwise in terms of expected kind of vacancy going forward in 2022? Yeah. I think it's in our MD&A somewhere, but you know, keep an eye on our retention number because we are doing what we're calling more strategic leasing which means we're kicking tenants out or letting them leave. I think it's down into the 60%. Matt, we are being a little bit, you know, more aggressive on, you know, whether we don't like the use, we don't like the covenant, their ability to pay the higher rent and that sort of thing. This one in Toronto, I think you know, we're thinking of as a case study, that was a Kubota sale leaseback we did two years ago. They're building their own building. They're consolidating building their own building. They put a CAD 9 market rent on that. As Dana mentioned, you know, the rent that we're actually gonna achieve now with the new tenant is 43% higher than that. Most importantly, because of the lack of space, they're prepared to go in and live through a 60,000 square feet expansion. Now with the increased rent and not having the downtime, you know, our yield on this is, you know, now gonna end up being closer to 5.5%. You just look at that, you look at cap rates, you know, the value creation, the NAV once all of that work is done is around CAD 30 million. You know, it's over CAD 100/ square feet. It's kind of another thing that Summit does that I don't think, you know, you see every day. You know, it's not building. It's not buying. You know, it's a value add proposition. So a combo. The only thing I'd add to that is our downtime, given the size of these tenants. You know well in advance that, or they know well in advance, you're not renewing them. We're already marketing it. The downtime has been really the time to transition from one tenant to the other. You've got a tenant in place even before the lease has expired and that. You've done your strategic thing. The only other thing I'll add is when you say you guys, you mean Kimberley Hill. Yeah. Yeah. Big fan of Kim. Yeah. Ross and I don't lease. Yeah. Okay. Thanks, guys. Appreciate that, color. Okay. Thanks. Thanks. Our next question comes from Brad Sturges with Raymond James. Your line is open. Hi there. Hi. To go back to the discussion on valuation, you know, given the obviously the rise in debt costs, and you did talk about maybe a little bit of dislocation short term. Is that do you think that's more specific to longer duration assets or, you know, could that be more of a kind of a general comment in the market at the moment? I think it's a general comment. I mean, there's so many different buyers for different assets. So like, you know, this in Montreal, these were longer term in-place leases, but rents were below market. So this wasn't your, you know, your short term weighted average lease term where you can flip those. Clearly in the GTA, that seems to have had the most attention and the most bidders was that type of thing. That's where you saw cap rates down in the, you know, 2%-2.5% and, you know, the price per square foot of, you know, CAD 350 a square feet. So I think for those kinds of opportunities, you're still gonna have, you know, a number of bidders. These long-term leases, you know, in the past, you'd call coupon clippers, you know, that attracts different type of capital, usually a non-levered buyer and, you know, it's not gonna be an issue. So there might be some levered buyers might have some negative carry in the early years on a couple of, you know, on some of these GTA acquisitions. I think it's gonna go down to the, you know, the quality of the asset. So somewhere along the way there might be some, you know, change in pricing of some of those assets. Like I said, we're not seeing it yet in our portfolio or what we're seeing, sorry. I guess the balancing effect is the inflation you're seeing on rents and on the replacement costs can help offset, you know, the higher cost of capital. Yeah, I think so. I mean, like, I think the fundamentals are what's gonna drive the situation, you know, mid and longer term. You know, what's gonna happen in the next however long, you know, goes on, 3 months, 6 months, 12 months. You know, we've seen that before, but I think the underlying fundamentals, you know, are very, very strong and they're not gonna change. You know, we haven't talked a lot about it yet, but, you know, you'll see our in-place contractual rental bumps have moved from like 1.6 up to 2. That means most of our new releases now are getting 3.5% bumps on top of, you know, already a very good rental bump percentages of over 50% on average. I think we're, you know, we're combating some of that inflation in not just the initial bump in the rent, but we're getting higher escalations. All those contractual rents, they're very meaningful and, you know, let alone our mark-to-market. You know, for sure, you know, any concern about cap rates is gonna be more than offset by that. Then the second valuation and metric is our development pipeline. You know, we're achieving very good spreads, development spreads there, so that there's gonna be some value created through that pipeline as well. Just the couple of acquisitions you're looking at now, that's the CAD 95 million in the GTA that was previously disclosed? Yeah. We've got that, and we're always looking at stuff. It's like, no, it's a very active pipeline. As I mentioned earlier, you know, we expect that pipeline to even grow, whether we pursue deals or lock them up, you know, that's gonna depend on where we think the strategic, you know, value is. Okay. We've got that and some other stuff that we're looking at. Like I said, given we've already had a quick jump start to the year, you know, we believe we're already kind of on track to hit our normal growth rate. We know we've got 1, 2, 3 more properties that are gonna come out of our development pipeline into income producing. Leases are in place. We're just finishing the construction. June, July, you know, third quarter, fourth quarter, we'll bring in, you know, 3 or 4 more buildings into the income producing from a development pipeline as well. Yeah. Also not to lose sight of, you know, where our unit price is trading right now, which we think frankly is a real disconnect to, you know, our underlying valuation. If you think about, you know, what we're talking about this quarter versus last quarter and what's changed in our markets, you know, we have seen improvements. We think certainly there's a dislocation in the capital markets, so we're very happy that, you know, we're able to raise, you know, the debt and equity capital at the pricing that we had, you know, to have the opportunity and the flexibility to continue to have these conversations about selective growth. Okay. Great. I'll turn it back. Thanks. Thanks, Brad. Our next question comes from Sumayya Syed with CIBC. Your line is open. Thanks. Good morning. Hi, Sumayya. Just really on the outlook for rent growth. I think you note in the press release that visibility is pretty good for 2022. Don't know if it's too early, but what are your thoughts on how that looks for 2023? Better. Like, we literally. That's why we've changed our strategy on development leasing. Until we have the site plan approval, we're actually under construction. You know, we're just delaying development. We've seen that in some of the projects where we leased, you know, 6 months before we started construction. You know, we're kicking ourselves a little bit. We're not gonna do that again. We believe, you know, you're seeing. You know, and I think when we've talked to other people, what they're doing in underwriting, you know, at least, you know, 10% growth in rents, you know, for the next 3 years is kind of what most people are using in their underlying models, which is still substantially less than, you know, what we've seen historically in the last couple of years. Yeah, we still see there's lots of runway for rental growth. It's just a tenant by tenant, deal by deal. You know, some of our tenants that don't have options to renew, you know, they don't. They're really stuck because they don't have the option to move somewhere else. They're either gonna, you know, go out of business or, you know, retrench to some other, you know, some other area. Most of the time, you know, the rent cost for a lot of our tenants is very small part of their G&A, so transportation, labor, all of the other things. Rent, they seem. We're not hitting that, you know, ceiling where, you know, we're running into affordability yet. Okay. That's fair. Just my second question. Dayna, you kind of went over the Kitchener-Waterloo market and the strong fundamentals there. Based on what you see today, perhaps in other markets in the greater GTA, which market would you say is up and coming and poised to become the next, Kitchener-Waterloo? That's a big crystal ball question. I mean, there's been a lot of interest and talk about, you know, the Hamilton area, you know, a lot of investors looking to that. You know, we're quite comfortable in terms of the markets that we're in this Kitchener-Waterloo market. You know, there's a lot for us to still do there. We're focusing on our core markets, and I think we've been rewarded for sort of keeping in our central areas, you know, with these opportunities for high rental rate growth and development. Okay, great. I will turn it back. Thank you. Thanks. Our next question comes from Mike Markidis with Desjardins. Your line is open. Thank you. Good morning. I promise I only have one. On the land deals that you did this quarter, different geographies, but still Western Ontario, there's a pretty wide range in terms of the price per acre. I was wondering if you could just give us a bit of color there. Is that solely due to the difference in geography, or is there a significant difference in terms of where the entitlements or where they are in the zoning process? Thank you. Yeah, no, it's primarily location. You know, in the Burlington one, you know, we're close to putting one site into construction later this year, the South Service Road. We just finished North Service Road, which will be completed this year. We're kind of looking at, you know, what's gonna happen in the 2023, 2024. That's why we bought the piece of land there. You know, just kind of the migration, you know. When we originally bought the North Service Road property, that was probably about CAD 1 million an acre. South Service Road was just under CAD 2 million an acre, and now this new one is, you know, CAD 2.3 million, I think, is my recollection. That's still, you know, inside the Greenbelt. It's very important to kind of differentiate. Once you go outside the green belt, that's where the prices start to, you know, go down. Let's go to the furthest one is in Kitchener. Yeah. Kitchener. Kitchener. You know. Kitchener. Yeah, Kitchener. You know, those originally, when we were looking down there, CAD 500 thousand-CAD 700 thousand an acre, that's probably migrated up to, you know, CAD 1 million an acre. But, you know, what Dayna has talked about and shown in the slides, the rental rate growth has been, you know, historically the highest year-over-year. You know, even at those land prices, our yield on costs, you know, are gonna be extremely better than, you know, inside the green belt where, you know, it's a little trickier. Then the last one we bought is, you know, kind of on the outskirts of Guelph, right across from Maple Leaf Foods. That is kind of the first stop between Milton. Go through the green belt and, you know, 15 minutes later, you're at our site. It's only 3 minutes off the 401. There was 24 bidders on that, and we ended up winning again, because we were able to close in 30 days. Our partner, Cooper, this is the whole area where they've been doing things for 30 to, you know, 40 years. Those connections with the municipalities to get the entitlements to get all the little things that you need done, you know, go a lot smoother. We're very excited there because we do think we're gonna be able to build larger scale on that McLean Road property. With 40 acres, we can do one or two buildings, but almost 800,000 square feet. Again, you know, what we're seeing in even our existing Guelph rental rates that originally were CAD 7 three years ago, we did CAD 9.50 last year. Now the most recent deal is CAD 11, CAD 11.50, the new one. You know, it just keeps going up and up. We're very confident that, you know, this McLean Road is, you know, even a better site than our existing location's a little bit better than the existing group of properties that we've built in Guelph. That's kind of the lay of the land there. We're still hearing about the CAD 3.5 million and CAD 4 million. If you look at the stats for Vancouver, you know, they're up into CAD 6, CAD 6.5 million now. The belief is there's still more room for growth in land prices inside, particularly inside the green belt. It's growing everywhere because you just can't find it. Thank you. Thank you. Okay. Our next question comes from Pammi Bir with RBC Capital Markets. Your line is open. Thanks. Good morning. Dayna, you mentioned that you're mindful of the trends in e-commerce, I guess, earlier in the call. I just wanted to clarify your comments there. Like, are you seeing demand in this segment actually start to taper off at all among others beyond, of course, Amazon? And then secondly, you know, as we hear more talk of, you know, a possible slowdown, you know, on the horizon at some point, I guess we don't know when from an economic standpoint, but any signs of perhaps slower leasing, from some of the, some of the users that might have been more active over the last 12-24 months? No, I mean, it's a really big question, and I think everybody's looking to it. There's, again, disparity between the US market and the Canadian market. Certainly in the US, we've been seeing things drop off in terms of e-commerce penetration. You know, the question in my mind is, you know, is that temporary in terms of sort of the reopening, you know, post-pandemic, and will we go back to, you know, a rate of growth in terms of penetration but maybe a slower pace? I mean, that I think is my view. In Canada, again, being a laggard, you know, I'd say less of an impact because we've been a little bit behind the curve in terms of e-commerce penetration. I think I read a forecast the other day that there was some, I think the CAGR for the next four years was something like growth of, what, 6%-10% versus, you know, what we've been seeing, like in and around 15%, looking backwards. You know, I think there'll be some softening or perhaps maybe the better term is slowing down, but not to the point where it's gonna be a cliff to have such a big impact. You know, we put a lot of emphasis on Amazon. If you think about sort of the Canadian landscape, you've also got, you know, the Walmarts and Home Depots of the world. You know, I think across the three, Amazon, Walmart, and Home Depot, they make up something like, you know, 40%-50% of total online revenue in Canada. You have to go back and then, you know, not to be too much of an economist here, but say, you know, consumer spending, how much of that is gonna be impacted by, you know, interest rate hikes and, you know, central bank movements to try to tame inflation. Yeah, I don't know if I have a good answer for your question here. I think we're gonna see some slowdown, but not, you know, a cliff that we're gonna be falling off of. In terms of how does that trickle down into, you know, the businesses and the tenants in our space, you know, I think there is still so much backlog as we've talked about across so many different aspects of our business, you know, whether it's rental rates, space requirements, new development. There's still so much of a backlog that even if these things temper the market, we have so much catch up still to do in Canada that, you know, I think it will take really some time on a sustained basis for that to really you know hit bottom lines. We've got, I mean, we're looking at tenants who are just expanding, bursting at the seams. You know, where they're at the point where they're trying to convert some of their office space, you know, and using it for things like returns or sort of pick and pack, because they just are trying to get absolutely every square foot that they can. I think that even this conversation we're talking about is something much further down the road, in terms of seeing any impact. Yeah. Just to add a couple comments there. Sorry, just wanted to add a couple. You can't understate the amount of population growth. As the immigration numbers start to come back and likely expand, you know, the markets that we're in, you know, are experiencing significant population growth. You're seeing that even in Kitchener, Cambridge, Waterloo. You know, simple things like some of our new recent tenants, you know, they make sauces and, you know, food distributors and stuff like that. That's just a growing, you know, market because you have that many more people. Some of the other consumer spending that Dayna's talking about, you know, might be, you know, it's more discretionary. There's a lot of distribution that's just purely based on population growth that is only improving in these markets. Thanks for that. Just maybe one follow-up on the whole discussion around cap rates and pricing. You know, have you seen any change in terms of maybe the buyers at the table, the composition of capital that's in the market? You know, from the Canadian industrial standpoint, has that changed at all yet or is it really just too early at this point? It really is too early. I think it's more just the discussions that, you know, somebody like ourselves or CBRE or other brokers are having with, you know, buyers and sellers right now. I think everyone's just kind of having these discussions. What do you think? Your brain would tell you know, if you're the leveraged buyer, their cost of capital has gone up obviously. That should impact, you know, how they're gonna view things a little bit. You know, we've been having 24 bidders on a piece of land. We're having multiple bidders in Montreal for Class B stuff. There always seems to be, you know, a willing buyer in some places. The issue will be, you know, how much supply comes on. If there's more supply, you know, then you might start to see people, you know, picking and choosing where they're gonna, you know, go after that capital. But we're seeing more and more foreign capital coming into Canada looking to allocate because they like the dynamics. I think, Dayna, the stats we saw yesterday was, like, Canada has one of the best GDP growth prospects, one of the highest, you know, population growth. Yeah, across the G7. Yep. Yeah. Across. You know, Canada as a country, you know, ticks a lot of boxes. I think when you start looking at industrial, you know, it's ticking more boxes because of that, you know, supply-demand, you know, imbalance. Again, we just do not see where the supply is coming from. For us, it's only if whatever happens, if it goes on for a long time, and there's, you know, there is a true slowdown, you know, that you'll gradually start to see it, but I don't think you're gonna see any changes quickly. Yeah. I'd just add to that, you know, the usual suspects are still there at the table. You know, perhaps the leverage buyers are, you know, less aggressive on pricing, which, you know, they were very aggressive, you know, understandably so, where interest rates were. To echo Paul's comments, you know, getting more and more interest from international money because on a relative basis, you know, Canada still has those market fundamentals. We don't have the same exposure to Amazon. If you're looking at, you know, what are two still very attractive asset classes, you know, multifamily residential, industrial, Canada on a global scale, you know, is very, very attractive on a relative basis. Thanks very much. I'll turn it back. Okay. Thank you. We have reached the end of the question and answer session. I'll turn the call back over to Mr. Dykeman for closing remarks. Great. Well, thanks again for everyone. A good quarter, obviously lots of market turmoil. I think back to the pandemic, which I think is still ongoing, but with all the opening up, the good news is, you know, looking back in hindsight, we've now been through it. We had three bankruptcies. Anyone that was on our watch list is now off our watch list. We collected, you know, 100% of any deferral agreements we've had. That was a big unknown for us. This market that we're currently in, we've been through this one before, so we know what we're doing. You know, we'll pick our spots. Our balance sheet's in great shape and look forward to talking next quarter. Thanks a lot. This concludes today's conference call. You may now disconnect.