Good morning. My name is Joanne, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Summit Industrial Income REIT second 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 Q&A 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, again, press star one. Mr. Paul Dykeman, you may begin your conference. Thank you, operator. Good morning, everyone. As a reminder, during this call, we may make statements that contain forward-looking information, which is based on a number of assumptions that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those disclosed or implied. We direct you to our earnings release, MD&A, other security filings for additional information about these assumptions, risks, and uncertainties. Joining me as usual on this call this morning is Ross Drake, our Chief Financial Officer, and Dayna Gibbs, our Chief Operating Officer. Since inception, the REIT's growth and track record of strong performance have been driven by a focused and proven set of strategies, a disciplined approach to growing our portfolio through new acquisitions and accretive development projects, prudent capital management, and achieving organic growth through our strategic leasing and management of our assets. Through the lens of decades of experience in industrial real estate, the current market themes of industrial remain strong. As seen on slide four, there's multiple demand drivers such as increasing tenant inventories, lack of sufficient new supply, continued e-commerce demand, population growth are a few ongoing themes in our asset class. Development is not keeping up with demand, and as such, continued rental rate growth is being seen, proven by stability to valuations, and offsetting any potential cap rate expansion in these inflationary times that we are seeing. The ability to continue to achieve meaningful rental rate growth and attractive lease terms fuels an attractive development environment even despite these rising interest rates. We've completed a lot so far this year, as you can see on slide five. We have deployed over CAD 275 million in income producing and development property acquisitions in our core markets while continuing to strengthen our balance sheet, enhance the REIT's overall liquidity. We have raised close to CAD 645 million in new debt and equity capital in the first six months of the year. With over 1.6 million sq ft of lease renewals and new leasing deals completed, the REIT has demonstrated over 46% rental rate increases so far this year with an achievement of over 100% on some deals in both Ontario and Quebec. Importantly, a key indicator of our continued strength in the Canadian industrial sector as well as the track record of this management team, our portfolio occupancy remains near full. Since the REIT's inception almost 10 years ago now, we've maintained occupancy between 98% and 100% and are confident that this stability will continue going forward. Turning to slide six, our track record in growth and solid performance continued in the second quarter with strong metrics across all our key performance benchmarks. For the three months ending June 30, the REIT demonstrated a 14% increase in revenue. Same property NOI increasing 7.7%, including 13% in Ontario. FFO per unit was up almost 24%. Another very strong quarter and FFO payout ratio remained a conservative 75%, and that's a decrease compared to Q2 last year, despite the increase in cash distributions that we've made both last year and this year. Turning to slide seven, you can see we have consistently delivered portfolio growth through many different market conditions and environments since the REIT's inception. With our growth currently focused on development projects in the existing portfolio, we have the ability to successfully continue to drive overall performance value through internal sources. Of the CAD 45 million fair market gains that we recognized in the quarter, a significant majority of CAD 34 million was contributed by our properties in our development program that are nearing completion, with the balance being delivered by top-line revenue growth. I will now turn things over to Ross to discuss our financial results in more detail. Thanks, Paul. Slide nine highlights the solid performance that the REIT delivered through the first six months of the year. Revenue is up over 13%, with same property NOI increasing 4.8%, year-to-date. FFO rose 27%, with FFO per unit up a very accretive 16% despite an increase in the overall units outstanding, while decreasing our FFO payout ratio from this time last year. Slide ten illustrates our track record of consistently delivering in growth in FFO per unit quarter-over-quarter. Looking ahead, we see this track record of performance continuing as our sector fundamentals remain exceptionally strong in all our target markets. Turning to slide 11, we've been very active so far this year, opportunistically raising attractively priced capital and continuing to enhance our liquidity profile. We increased the size of our unsecured credit facilities by a total of CAD 200 million, entered into two new 10-year fixed rate secured mortgages for a total of CAD 169 million, a significant portion of which is interest only, and raised equity through our successful bought deal and ATM equity offerings for a total of CAD 279 million. With our current record levels of available liquidity, the REIT is extremely well capitalized to manage operations and to take advantage of select market growth opportunities. With the completion of our strategic debt refinancing that we completed in 2022, the REIT currently has an extremely strong balance sheet, a critical tool in today's market environment. As shown on slide 16, the REIT's overall leverage was a very conservative 26.7% at the end of Q2, with a weighted average interest rate of 2.74% and a term to maturity of 5.1 years. Additionally, our coverage ratios continue to strengthen. On slide 13, we can see that our unencumbered properties now represent 64% of our total assets, which equates to CAD 3.3 billion. Our proportion of unsecured debt rose to 66% of total debt at quarter end, up from 54% this time last year. Given the current interest rate environment that we are operating in, you can see that we have very little debt maturing for the remainder of this year and into 2022, 2023 and 2024. Slide 14 illustrates the REIT's CAD 1.4 billion of potential available liquidity at the end of Q2, including cash on hand, availability under our credit facilities, and potential financing capacity on our unencumbered asset pool. The liquidity level is a key competitive strength that we have worked hard to achieve over the past many quarters. I'll now turn things over to Dayna. Thanks, Ross. As Paul mentioned earlier, we're pleased that the strong underlying market fundamentals continue to support our property performance in all of our key target markets. From a national perspective, the Canadian industrial market remains strong and robust. As you can see on slide 16, availability remained at its record lows of only 1.6%, despite over 6 million sq ft of new supply having been delivered in Q2. Notwithstanding the limited space available, leasing activity remained healthy, with over 7 million sq ft of positive net absorption in the quarter. In response to strong demand, construction levels grew in Canada to a new record of 43.9 million sq ft, but still only represents 2.3% of total inventory, with 64% of new supply already having been pre-leased. As shown on slide 17, with the ongoing strength in demand, rental rates continued to accelerate across Canada in Q2. The national average net asking rental rate rose another CAD 1.02 to a new record high of CAD 12.25 a ft. This is almost a doubling of industrial rents compared to only five years ago when the national average was below CAD 7. Turning to the REIT's portfolio more specifically, slide 18 shows our focus on densely populated, high-growth markets and the attractive metrics in these regions. Our target markets are typically key urban centers with strong labor pools and population growth that have good access to major highway and transportation links. In our eastern Canadian target markets within Ontario and Quebec, which make up close to 80% of our portfolio value, we continue to see supply and demand imbalances contributing to our ability to achieve meaningful rental rate increases, rising annual escalators, and providing the REIT with other leverage in our leasing activities. Slide 19 shows the REIT's overall portfolio occupancy at the end of Q2. As you can see, occupancy remains strong at close to 100%. As Paul mentioned earlier, the REIT has consistently operated above 98% occupancy since its inception, where lower occupancy levels, for the most part, have typically been a result of minimal short-term downtime due to tenant turnover. Turning to our individual key target markets, slide 20 illustrates the positive impact of strong market fundamentals in the GTA. The GTA's track record of strength continued through Q2. Availability in Canada's leading industrial markets saw net rents rise to a new high of CAD 15.09 a ft, marking 21 consecutive quarters of rental rate growth. Availability held steady at the record low of 0.8%. All of this within the backdrop of record levels of construction activity in the quarter, with over 14 million sq ft under development. Turning to slide 21, Montreal, Canada's second-largest industrial market, has also been extremely strong. With its availability rate hovering around 1%, the greater Montreal area's average net rental rate continued to rise to all-time highs of CAD 13.40 per sq ft in Q2. Land prices have continued to increase in this region, marking a record year-over-year increase of 20% to CAD 1.7 million an acre. Slide 22 outlines some of the details of our Alberta portfolio. In Calgary, vacancy and availability rates are near historic lows, and Q2 rental rate statistics printed the largest quarterly increase recorded to date at 6.7%. Momentum and demand continues in this market, with approximately 2 million sq ft of net positive absorption in Calgary for the quarter, marking the sixth consecutive quarter of at least 1.5 million sq ft, despite the 1.1 million sq ft of new supply that was delivered. The Edmonton market continues to accelerate as well, as availability rates and vacancy rates continue to fall in light of close to 800,000 sq ft of new supply added in the quarter. Of the existing vacancy in our Alberta portfolio, we currently have commitments on 50% of the space. Looking ahead, the REIT's focus will continue to be driven by our proven growth strategy. Slide 24 outlines our three verticals of growth. Expanding the size and scale of our portfolio through selective accretive acquisitions, proactive development and expansion, and capitalizing on strong market fundamentals to maximize organic growth within our existing portfolio, all while focusing on ESG and environmental accountability. Turning to slide 25, while our acquisition program is currently quieter than normal, given broader market considerations, we've stayed on track with a strong acquisition program for the year. We completed the purchase of four income-producing properties for a total of CAD 137 million, generating a solid going-in cap rate of 4.5%. The REIT also acquired the remaining 50% interest in a development property in Guelph, Ontario, that's nearing completion, as well as two additional income-producing industrial properties in the GTA subsequent to quarter end, totaling 175,000 sq ft for CAD 59 million. We have also closed on three development sites, expanding our presence in the very strong Guelph-Kitchener market, providing the REIT with the potential to add another 1.3 million sq ft of green buildings to our portfolio in the future. Turning to our development pipeline on slide 26, we currently have over 2.3 million sq ft under development in various stages of planning or construction, including the three new sites we acquired this year. Currently, 41% of our development program is on balance sheet, with the remainder through joint venture partnerships. As well, we continue to pursue three walled expansion projects on existing REIT-owned land. Approximately 330,000 sq ft is expected to become income producing by the end of Q3 this year. Importantly, our development projects continue to align with our ESG initiatives and green financing framework, and we have completed our inaugural green bond allocation report and are pleased to have reported not only green building initiatives, but also energy efficiency improvements, storm water reclamation, waste diversion, and biodiversity and conservation allocations. The third pillar of our growth strategy is to continue our track record of strong organic growth through our existing portfolio. Meaningful embedded growth exists within the REIT's existing portfolio of real estate. Slide 27 illustrates on a province-by-province basis the spread between average market and in-place rental rates for our portfolio as a whole. Significant upside exists as the REIT's expiring leases come due, as well as for our development projects that have yet to be leased in Eastern Canada. As you can see on slide 28, over the next five years, we have nearly 10 million sq ft of leases coming due with meaningful mark-to-market upside potential, with over half of our lease maturities in the high-growth Ontario market. In addition, we continue to have ongoing discussions to identify further potential expansion opportunities within our existing tenant base. Slide 29 details some of the specific results that we are achieving through our proactive leasing programs. So far in 2022, we have completed over 1.6 million sq ft of lease renewals and new lease deals, generating a very significant 46.5% increase in rental rates. Drilling down further to Eastern Canada, rental rate growth was even higher, with a 76% increase in Ontario and 74% in Quebec. With record low availability and high demand, we're confident rental rates will continue to grow in all of our key target markets for the foreseeable future. I'll now turn things back over to Paul for some closing remarks. Thanks, Dayna. In summary, we continue to have a lot of confidence in the strength of our team and the real estate in our key target markets, as they are the backbone of our operation. While our acquisition program is a bit quieter than typical, we will continue to leverage our development program and deliver attractive yield on cost returns with brand-new, environmentally efficient real estate to our portfolio. As Dayna mentioned, organic growth will continue to renew our leases at market rents, which are considerably higher than our in-place rents. In this volatile market like this, our balance sheet strengths and the management team experience are paramount. Our strong in-place liquidity allows us to strategically allocate capital and execute on selective growth opportunities as they present themselves. I thank everyone for their time this morning, and we'd now 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, then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Mark Rothschild with Canaccord. Your line is open. Thanks, and good morning, everyone. Maybe just following up on. Good morning, Mark. Hey. Some of the last comments from Dayna. It sounds like you're still pretty bullish on the outlook for rental rates to continue to grow. At what point does the amount of space under development have a more material impact on that and slow down rent growth or maybe even negatively impact that? Do rising development costs play into that as well? Hi. Good morning. Thanks for the question. That I think is the million-dollar question, and frankly, you know, we chat about it with our board, we chat about it at the management level, we chat about it with our investors. You know, right now, what we're seeing in terms of our development program and our conversations with our tenants, you know, certainly we think it will continue to rise. Again, you know, there are specifics in each of our individual markets. Certainly talking about Calgary is quite different than the GTA. Places like the GTA, the market just, you know, the stats are so tight that we expect growth to continue. I think the sense is that the trajectory of that growth or the velocity of the growth certainly will temper. You know, the question is, are you going to? You know, CAD 20 rates, you know, how quickly are you getting to certain points? That clearly has, you know, a direct impact on our underwriting, you know, of our development projects that, you know, have a longer time horizon. You know, all that to say, I don't know that we have a concrete answer in terms of, you know, what that decrease in trajectory will look like, but we do definitely anticipate growth to continue in rental rates. You know, the offsetting factor, if you think about a place like Calgary, you know, that momentum is just starting to pick up, you know, notwithstanding, you know, that's a very development-friendly environment. You know, product is much easier to come online. You know, if you think about the building that's happening out there, you know, whether it's Amazon or some other, you know, behemoth project. You know, that market still continues to plug along and show strength even with, you know, new construction at very, very high levels. We expect the growth to continue, but perhaps at a slightly slower pace, you know, not only just because of new construction but, you know, some of the broader, you know, economic challenges that we're seeing out there. Great. Thanks. Mark, just to add. Sorry, just want to add. Go ahead. We've said this for 10 years now, replacement cost is really the driver of rental rates. You know, we're still not seeing any slowing down. There might be some, what they're calling transitional, you know, inflation factors in some of the, you know, the hard costs of construction. Those might start to moderate down in terms of their percentage growth. But we haven't seen that in land yet or development charges. Those are the two big pieces that make up the replacement cost. We're, you know, I still stick by, you know, inside the Greenbelt, you know, CAD 350 a sq ft is probably what it's costing today, but we see that migrating up, you know, closer to CAD 400 a sq ft, you know, over the next year or two. I think also the time horizon, like if you think about, you know, how long it takes for, you know, new supply to come online, even with the construction levels that we're at, you know, this is certainly not something that's going to, you know, have an impact on, you know, as tight of the market as we're in right now overnight. So it would be something really that you'd likely see further down the road or expectations of what's to come down the road. Okay, great. Just one more from me maybe. Looking at the retention rates from tenants, it was, you know, it's not that high. Is that somewhat reflective of existing tenants just not being able to maybe pay their rent, or is it them needing more space? What is it? Obviously, you are full, so it's not like there isn't demand. It's a combination of things. There are several large tenants that if you recall a couple of years ago, we bought a building we called the Kubota Building 184,000 sq ft. We knew that tenant wasn't going to renew because they were building their own new building. That tenant left and that space was released with one month of downtime and at a 42% increase in rent. There's another tenant 40,000-odd sq ft in the GTA. They've been subletting their space for several years and so we knew they weren't going to renew and then we released that space with zero downtime and a 117% increase in the rent. There's a tenant in Montreal, a little over 100,000 sq ft. We couldn't accommodate their growth, and we were aware of that and well in advance, and we released that space with a 109% increase in the rents. The beauty of the larger spaces is that when the tenants you know, you're having these conversations well in advance of the maturity of their maturities before and so you're able to know well in advance and limit the downtime on those spaces. It's a combination of tenants you knew weren't going to renew and tenants we just couldn't accommodate their growth. Overall, you know, there's no major issue other than that. Okay, great. Thanks so much. Mm-hmm. Your next question comes from the line of Sam Damiani with TD Securities. Your line is open. Thanks and good morning, everyone. Excuse me. Morning, Sam. Just on the outlook for the sector in light of the potential for an economic slowdown, just given, you know, this REIT's history of Summit's history, everyone's experience. I mean, how do you think about the impact of a recession on the Canadian industrial market and specifically Summit's portfolio after years where demand has exceeded supply and the vacancy rates are so unsustainably low? I'm just curious how you're thinking about, you know, how a slowdown would be different this time, if at all, and perhaps by region. Yeah. Yeah, Sam, and I'm glad to have that question now. I remember when COVID hit two years ago, I go, "I have no clue." We've seen this cycle before, and it really starts from, you know, in a similar place we were when, you know, when the COVID disruption happened. The fundamentals, you know, are that solid. You know, with the availability rate, you know, at sub 1%, you know, pretty much everywhere, we see that it'd have to be a pretty long and prolonged recession to move that number in a big way. You know, Dayna talked about, you know, the 43 million sq ft. You know, the significant amount of that that's already pre-leased. In order, you know, you'd have to start having business failures. In our portfolio, you know, which we've built kind of building by building, you know, a lot of international, multinational tenants, you know, good quality, you know, companies, you know, they're not gonna go bankrupt. They might look at their needs and say, "Do we need to downsize?" But again, we're still behind, you know, places like the U.S. in terms of e-commerce penetration. You know, I think COVID helped push that along, you know. If anything, you know, there might be a bit of a pause. But just anecdotally, you know, in our portfolio in Toronto and Montreal, you know, we're talking to five or six tenants about expanding their buildings by, you know, 50,000 sq ft, 70,000 sq ft. They're bursting at the seams. We're looking at taking a mezzanine, office mezzanine and other buildings to try to accommodate the extra space they require because those buildings can't be done. You know, we're excited about Alberta because we finally, after three years of answering the question, you know, about all the scary things, you know, you're seeing availability rate, and I've always said 5% is kind of in balance in my mind. Once you get below 3%, it's, you know, significantly a landlord, you know, that's where you start to see rents moving up, which is the phenomena we're seeing in Calgary now. If you ever go below 1%, you know, then it's, you know, it's highly unusual and a great market to be in because, you know, we're doubling rents. We're getting 3%-4% escalators, and tenants are going, "Thank you," because they have no other place to go. It really goes to the, you know, the length and the severity of potentially a slowdown. I think the only thing we're seeing right now, our tenants are saying, "Okay, instead of that, you know, the 100,000 sq ft, you know, expansion that I'm trying to talk about, let's just put that on hold and see how things, you know, flesh out over the next three or four months before we, you know, we sign on the paper." Dayna, do you wanna? Yeah, no, I think I'd just add, you know, in those questions sometimes I think, you know, assume we're smarter than we are, you know, thinking about what's gonna happen in the, you know, the broader perspective of the Canadian economy. You know, if you compare it to something like the GFC, you know, as Paul touched on, the market is certainly, you know, has much stronger footing right now. I think even you can, you know, draw that analogy to the broader market. Unless there's, you know, really a long sustained recession, you know, and again, you know, I think the view could also be argued that you'll experience perhaps maybe not a technical recession by the definition of the term, but perhaps subsectors of the economy, you know, dipping down into recessionary areas. You know, barring something that's quite prolonged and deep, you know, going into this, you know, the consumer is you know much more or much better capitalized. If you think about the potential impact on our tenant base, you know, if you've got a shift from you know goods spending to service spending, you know, and some of that sort of stress testing we saw through COVID, right? You know, we think there's a lot more resiliency on the consumer side, you know, we are not expecting you know a long, prolonged deep recession. We have a diverse tenant base. You know, we've got some exposure to e-commerce. We think, you know, that obviously has the growth in that market has slowed down a little bit, you know, but there is still continued growth, and we're well diversified across, you know, all different types of tenants. You know, think that there's strong footing going into this, you know, with pent-up demand. Again, it's a timeline that you need to match the two pieces. If you think there is gonna be economic weakness, you know, how much and for how long, and how is that offset by all these offsetting demand factors? You know, things like pent-up demand, population growth, you know, and continued but slower growth in e-commerce. Yeah. I think that results finally in, you know, what Dayna mentioned earlier was, you know, maybe rental rates don't go up by the 10% or 15% or 20% per year. That starts to moderate a little bit. You know, even if you get any rental growth over where the market rents are today, you know, compared to where in-place rents are, we still have, you know, significant upside there, so. Oh, that's a, t hat's a great answer. Yeah, no, that's a great answer and a tough one for sure. That's right. Thank you. Just for my follow-up, allocating capital today, I guess it's an easier call to put some acquisitions on hold. It's probably a relatively easier call to shift capital more in favor of development. How do you think about returns on development relative to your current cost of capital? Are you more inclined to initiate spec development today versus six months ago? Again, I'll keep correcting you. We build inventory. We don't do spec development; we have a lot of demand in our portfolios. I'm gonna get you to say it, building inventory at some point. No, in fact, we found the least risky way to build right now is, you know, new spec or building inventory. Because if you try to pre-lease, there's so many variables in delivering buildings, whether it's, you know, the site plan approval process, which is, you know, very much outside our control. But even once you get site plan approval, you know, pre-ordering steel and precast can be eight to 12 months. You know, through COVID, and strikes and stuff like that, you know, we're, you know, easily you can have three months to six months late delivery of buildings. What we found is, you know, basically the point where we start to put steel in the ground is when we'll start to activate the leasing process. Given the tightness in the market, you know, we're fine. Every pro forma that we've put together, Sam, in terms of we're buying land, you know, we put some buffers in there in terms of growth, in terms of the hard costs, but every single time the rental growth has been exceeded in our forecast, and it's more than made up. If anything, we're seeing slightly better yield on cost than we were. You're still preserving, you know, a very healthy, you know, call it a, you know, 150 basis point yield spread, which, you know, equates to, you know, CAD 75 a buildable sq ft. You've got roughly 2.3 million sq ft, but you've got some other land that, you know, should come online later in the year that will push the development program closer to 3 million sq ft. Yeah, we're happy to keep, you know, growing that. It's staggered kind of, I won't say equally, but, you know, over the next two years to three years. It's, you know, the ones we have under construction now, they're all pre-leased. They'll come on income producing between now and the end of the year. You know, we're starting to get, you know, site plan approval and steel ordered for, you know, our construction that will start in the spring of next year. Yeah. I'd just add too. Great. Thanks. Thanks. You know, just if you think about sort of the proportion of development as a percent of our overall portfolio, while we haven't a stated target, you know, we are still in what we'd consider the build-out or the growth stage of our development platform. You know, barring any type of really financial shock, which as Paul mentioned, you know, we're not seeing, we certainly would even without the disruption in the broader markets be continuing to grow our development platform. You know, the optimism, which I'm sure you're hearing from you know, other of our peers in the market for the first time in a very long time, you know, and a positive inflation print out of the U.S. today. We're starting to see some of the inflationary pressures easing on hard costs in our development pipeline and, you know, availability of labor and trades improving as well. Those are all, you know, positive signs that we're seeing. We're in the fortunate position that, you know, these are all still making sense for us, and we're now just really trying to push the envelope as far as possible to make these as energy efficient as possible. Really having some buffer there to do that extra, you know, green spend, you know, whether it's LEED or net zero or net zero ready for the project. You know, a good position to be in and nice to start to see some of these hard costs or the inflation on the hard cost side, easing off a little bit. That's great. Thank you. I'll turn it back. Okay. Your next question comes from the line of Kyle Stanley with Desjardins Securities. Your line is open. Thanks. Morning, everyone. Hello. We've heard some anecdotes of maybe, you know, some developers potentially hitting the pause button in the GTA, just given certain uncertainty related to exit cap rates, and IRRs. I'm just wondering, is this something you've seen to date or believe could be occurring? I'm just thinking of it from, you know, we've been talking about the supply response and if you were to start to see supply potentially slow down, you know, the positive attributes that would have for market rent growth. Sure. I'll start and then Dayna can finish. Again, you have to look at the group of developers, and there's a broad spectrum of developers. If I'm a developer that's a merchant developer and I have to have an exit to, you know, create my IRR and my promotes and stuff like that, you know, you're gonna be maybe a little bit more cautious or careful in what you're doing. If you're in Orlando that has the land bank and you have tenant demand, you're just gonna keep the machine going. For us, you know, if we look at our pro forma, I think if we paused our developments, you know, maybe the return would be, you know, that much higher in a year. The way we're looking at it, building out and kind of averaging in, so you're never gonna be perfect. You know, as long as we're making a proper development spread, you know, it's significantly better than, you know, buying income-producing or getting brand new real estate. You know, we'll keep, you know, plugging on. Then you have, you know, pension funds, again, they're not gonna be impacted in a big way. The only place that we haven't seen evidence of it yet. Do land prices start to moderate? You know, right now, good luck trying to find land, but if you can, you know, we haven't seen a lot of land trade in the last, you know, three or four months. That would be the only place where you'd start to see, you know, maybe saying, "Okay, I'm not gonna pay CAD 3 million an acre. Maybe I'll try to pay CAD 2.5 million or whatever." again, there's no evidence that land prices have moderated, but that's where you'd probably see it first. Yeah, I just, I mean, I don't have too much to add. I'd just say, you know, it's a broad question, but if you think about perhaps some other asset classes, things like condo development, you know, certainly there would be pausing in that type of activity. You know, they don't have that same type of profile where, you know, we have the ability really to, as Paul mentioned earlier, wait to lease the space, you know, to sort of the absolute last moment to capture all of that upside in market rental rates. So, you know, again, assuming that we've got inflation and hard costs slowing down a little bit and we're still able to move rental rates, you know, between now and the end of completion of a project. You know, again, the big assumption that people are not overpaying for land, you know, you certainly are, have no concern in that regard. Okay, great. Maybe just for my last question, moving over to the leasing environment in Alberta, I mean, you've discussed it kind of at length so far. I'm just wondering, you know, what are your expectations with regard to leasing spreads on maybe the balance of space expiring in 2022? You know, I think according to the disclosure, the in-place rate looks relatively low compared to market. Just some general thoughts on, you know, your leasing activity i n Alberta. Sure. I'll start and then Ross can give you all the facts and figures. The strategy definitely has shifted in Alberta from the last, well, two years where it's just like, let's keep our buildings occupied, let's do month-to-month tenants, let's be creative. You know, let's try to hold market rents to, okay, let's take our selective shots. You know, you have to look at each individual asset and tenant and decide what you wanna do. We decided to do that this year. We have a 94,000 sq ft space, you know, coming off a CAD 5 rent. The tenant didn't wanna go to market, which was, you know, closer to CAD 8. You know, they're gonna overhold to the end of the year at a higher rent, and then we'll put a new tenant in next year. I think Ross, that number is about 40. It's about a 45%-50% bump in the rent there. That's just a one-off, so it's hard to kind of, you know, pick and choose. You know, overall, we're gonna start to see, you know, our rents move up in the market. We'll do it on a selective basis. Every property, every tenant situation is not the same. Ross, do you have any more flavor on the one I'm thinking about, the 94,000? Well, first yeah, when we're quoting Alberta, there's been an increase in rents in Calgary, and then it's a little flatter in Edmonton and that. We're continuing to see improved rents and as well the improved steps in the rent and that. You know, so far there's been a little bit of a you know a. You know, like in Calgary, year-to-date, we've seen an 8% increase in our rents that's being offset by a slight decline in Edmonton. Edmonton, we're still focusing on getting the occupancy up a bit in that. We're seeing healthy steps in the rents going forward on that as well. Yeah. Yeah. I'd say that. Sorry. Go ahead, Paul. I was gonna say that, you know, or even as recently as a quarter ago, you know, or call it six months ago, we would have seen a larger gap in what we were able to achieve in those annual escalators, and it's really closing in closer to what we're able to push in the GTA. You know, again, it's some sort of test market, you know, seeing what the market can withstand, and we're really quite happy with what we're able to achieve. That's encouraging. Notwithstanding, you know, as we mentioned earlier, all the new construction that's happening there. All that in light of a lot of new supply coming into the market, it's still moving in a positive direction. Okay, great. That's it from me. I'll turn it back. Thanks. Great. Thank you. Your next question comes from the line of Brad Sturges with Raymond James. Your line is open. Hi there. Just to go back to the development pipeline there for a second. I think you said pro forma you're expecting the pipeline to be 3 million sq ft. Does that include some of the expansion or intensification discussions you're having, or is that excluding those potential opportunities? You can stop right there because there is a piece of land that I know we're likely to acquire, which hasn't been announced yet. It just needs to go through some severance that will allow us to build out another 500,000 sq ft of new. That's primarily where the difference between the 2.35 and the 3 million sq ft. Although, Brad, we're actively and proactively going through our portfolio, starting with where we have the bigger expansion. Ross had mentioned earlier the Kubota building. We put the new tenant in there. We're doing a 60,000 sq ft expansion. Yield on cost on a three-wall expansion is higher. You know, that one's gonna be north of 7%. We have another one that's, you know, under contract or signed up in Barrie for a 70,000 sq ft expansion. You know, we're talking to at least three other tenants, a couple in Montreal, and one other in Ontario that could add up to another, you know, 200,000 sq ft-300,000 sq ft, but that's not in my CAD 3 million number. We usually only count the expansions once they're signed up and ready to go. The only two we're counting right now are the 60,000 sq ft and the 70,000 sq ft expansion. Yeah. Okay. That makes sense. I guess you're about to complete about 300,000 sq ft, as you noted. Just based on where you are from planning and a permitting perspective, like, how much could you commence construction on in the short term and potentially deliver by the end of next year? Yeah. Just to give. Okay, go ahead. Sorry. Go ahead. Go ahead. Would say just to give sort of a quantum of that 2.3, you know, call it 850,000 we're expecting for 2023. Then again, you know, as we get further out, some of the timing is a little less certain. You know, call it another 360,000 sq ft for 2024, and then the balance after that. Okay. Yeah. In terms of actual projects, just to give you know, 'cause I know we just got the permits to clear, you know, clear the dirt down in South Service Road in Burlington. We had ordered the steel 10 months ago, so it's getting delivered, you know, this month. The construction will actually start this fall. What's the total number for that one, Ross? Do you remember? I think it's like 260,000 sq ft. The last project in Guelph is around 200,000 sq ft. That's well underway in terms of construction, so that will get delivered in 2022. We've got some pre-leasing on about half of the building there now. Between now and, you know, the spring, that will get complete and fully leased up. Those are the two major ones. You know, the rest of it, you know, probably won't get delivered in 2023. A lot of it will be underway and we'll have some updates as we go. Okay. That, that's helpful. I'll turn it back. Okay. Thanks. Your next question comes from the line of Matt Kornack with National Bank Financial. Your line is open. Hey, guys. Just maybe first off. Hey, Matt. A comment. If you could provide a bit more detail, going forward in your disclosure as to the timing of deliveries plus the outlay of CapEx on the development side. That would be quite helpful from a modeling standpoint. With regards to questions, just on your ability to deploy, you have excess liquidity at this point, even taking into account your acquisition post-quarter. Should we assume that liquidity is maintained and just deployed into development, or should we expect some incremental acquisition activity through the balance of the year? Matt, I don't know the answer. We're monitoring the market. There's quite a few, you know, transactions in each market. You know, we haven't talked about this yet, but, you know, there still seems to be, you know, quite a depth in the bidding. You know, it's a property by property, you know, activity. We just see development as a logical, you know, you can't fail at that because it's bringing on higher quality, higher yielding, you know, more ESG friendly property. We'll continue to put that as priority number one in terms of external growth, you know, finding more land or opportunities. But, you know, as you know, we do lots of off market type of deals. We're talking to people that we might be able to, you know, pick up a property here or there. We do have the one forward purchase in Montreal, that net zero property at CAD 39 million. There's a few things in the market just to give you a sense, you know, of some stuff that's out there. There's one that the rent is at CAD 17 and expected, you know, price per sq ft of that sale is gonna be over CAD 400 a sq ft. That's in the GTA. We're not gonna bid on something like that. Where we can build, you know, we can build below that. We're seeing activity both in Calgary, Edmonton, you know, lots in Ontario. Montreal's been a bit quiet. I can't come up with a number for you. You know, it really just depends on, you know, if we see something, you know, maybe a little bit of distressed or an opportunity. Yeah. I think I'd just add to the source of capital for any potential acquisition unit. Not only what's happening in the investment market, which we're obviously being extremely selective, but you know, have been very successful in off-market deals. But just, you know, looking at what's happening with our unit price, which, you know, we obviously think is undervalued at the moment. You know, anything we would do with that liquidity right now would be, you know, have a debt component certainly. While we're comfortable with where our leverage is now, you know, think of it in terms of some type of temporary increase in leverage if we were to do something meaningful. Again, there could be sort of smaller one-off deals, but to focus on a larger transaction that would be more meaningful to the REIT, you know, we have to take into account obviously the cost of our equity capital right now, which to us is clearly below NAV. Fair enough. Ross Drake anything to add? The only thing I'd add to that, Matt, is we have CAD 117 million of cash that we've allocated to that subsequent event acquisition that's in the notes. We have a forward purchase on a property in Montreal that's being developed. It was part of the acquisition that we did in the first quarter in that. Some of that cash will get used up, but then we'll just add to our unencumbered assets and have no change in our liquidity. Our leverage, because we're just trading assets for cash for assets in that. Okay. No, fair enough. I'd forgotten about the Montreal forward purchase. We'll incorporate that. Mm-hmm. With regards to the ability to buy sort of similar type yields to what you've been able to get, but with a, I guess higher or closer to market, rents. How should we think about the availability of opportunities like that going forward versus kind of lower cap rate but, below market rents? Secondarily, just quickly, the Montreal rent growth has been kind of jaw-dropping. And it doesn't seem like there's too much in the way of new development there. Is there just no land? What's going on? Why is nobody building in Montreal? Another interesting question and a phenomenon. The Montreal marketplace has less developers. They tend to be a bit more conservative. You do a lot more build-to-suit there. I think as a percentage of inventory, it has the lowest amount of construction going on. Whatever is under construction, I think the pre-leasing number is, you know, up in the 70% or 80%. I think it's just happened so quick, Matt, that, you know, so there is land. You know, we're only trying to build one building there, not having much fun with the government there in terms of getting our site plan approval. You know, learning that market. Literally we seem to have skipped the, you know, the rents going from, you know, CAD 9 to CAD 10 to CAD 11 to CAD 12. We went from nine, and now we're doing deals at 14, right? I think that's just happened in such a quick period of time that you know we saw that rents were going to start to move up. Even ourselves didn't anticipate that it would move up at the rate it has. You know, that's definitely. When we're looking at, I've got a sheet in front of me, you know, probably close to CAD 1 billion of opportunities that are out in the market right now. I mentioned the one in Toronto, over 400. There's a bunch of other ones there that you know we're kind of putting numbers on. They're sub-3 cap. You know, whether it's CAD 320 sq ft-CAD 330 a sq ft, there's like 4 or 5 of them there. Again, you know, if we can get everything at the right price per sq ft, we'll do it. Again, when you get up into 330- 350, you know, we're more comfortable to build at that price and not take all the risk on a 25-year-old asset. You got to move the rent from here to here. There's been a few deals in Montreal, but again, not quite the quality that we would like. Definitely a little bit higher cap rates, you know, in Montreal. Still sub-4% in Montreal in terms of cap rates. You know, I won't say surprisingly, but people are becoming more bullish because the fundamentals are improving in Alberta. There's a few properties that, you know, aren't announced yet. You know, Calgary, Edmonton portfolio that included some land. In Edmonton, that's over CAD 300 million that's, you know, under contract. A few properties in Calgary, you know, that would be low 4 cap rate stuff. There's lots of stuff going on. I think the word from the brokers are, you know, post Labor Day, you know, they expect to see, you know, some more listings come out. That's kind of the landscape. Awesome. Appreciate the color. Sounds like, Summit units are the best buy out there. I think so. I think. Your next question comes from the line of Himanshu Gupta with Scotiabank. Your line is open. Thank you, and good morning. Just building on the, you know, discussion on the acquisition market here. Paul, you mentioned almost CAD 1 billion of product in the market. Just wondering how competitive is the market for sub three or sub four product now? Are you seeing, you know, a lot of or some players out of the market which were there like six months back? Yes. I mean, again, there's not a lot of data points yet. A lot of it's anecdotal, you know, in the market right now. We do know there's multiple bidders. It really comes down to a, you know, asset by asset, you know, selection. If you've got this brand new, you know, 10-year lease, that's gonna, you know, have CAD 17 rents that's gonna be appealing to a certain group of investors, and that's probably gonna be more of your pension fund type investor. They probably gonna look at that, you know, pretty similar to the way they did a little while back. You know, if you have some opportunities where you're gonna be using a bit more leverage, you know, those leverage buyers, you know, are gonna have to reset some of their underwriting criteria. If you remember, you know, a lot of this bidding process that happened in GTA, you'd have eight or 10 bidders, which is more than enough to have a very good process. I think, you know, you might lose a few bidders and, you know, so if it's six or eight, but you still have, you know, the ones that are gonna pay that, you know, price that they really want that particular, you know, portfolio or those assets, you know, there's gonna be lots of competition. I said, we're seeing the same thing in Quebec and, you know, if anything, it's a little bit of an increasing interest in Alberta just because you can get a premium, you know, yield compared to Toronto and Montreal. Again, it all depends on where, you know, people think the long-term bonds are moving, right? They were going up and never gonna stop going up, and lo and behold, they've come down, right? It's just people trying to, again, maybe use that word pause again, you know, until they can figure out exactly what that long-term finance is gonna look like. You know, that might cause somebody to pause a little bit before they, you know, roll up their sleeves. The background of everything we've talked about, you know, there's pension funds knowing if they're getting out of retail or office, they wanna move into industrial. There's, you know, those dynamics. There's, you know, international money that's looking in Canada. You know, they like the dynamics in Canada, you know, even more than potentially some of the U.S. markets. Got it. That's fair enough. You know, looking at the IFRS cap rate, it was adjusted higher slightly, this quarter. Is there a reason, like Montreal was adjusted 40 basis points versus GTA 20? I mean, is that a function of adjusting NOI much higher for Montreal versus GTA? Any color there? It was pretty well evenly across the board around 20 basis points-25 basis points. As you can see, our valuation has remained relatively flat. There was a small uptick in it because the income we're showing growth in income. The other thing I'd comment is in that note to the financial statement, that is the cap rate you're using for the market cap method. We're relying mainly on the discounted cash flow method on our valuation because that captures the growth and the rents that you're seeing. That, you know. Overall, you know, yes, there's been a slight increase in cap rates, but it's been more than made up for the continuing growth and income in that. It's very, very positive in that. That's good. Yeah. Okay. I think. Yeah. Sorry. Go ahead, Paul Dykeman. Yeah. No, I was gonna say the number I continue to focus on and, you know, because cap rates are a little bit elusive, you know, depending on where, you know, the market rent is on that building, compared to the in-place. If you look at the price per sq ft. At the end of the day, you know, I'd focus less on the cap rate and more on that price per sq ft. I think in, you know, Toronto or GTA, you know, it was for CAD 250 sq ft or CAD 260 a sq ft, Ross? 260. Yeah. 260. Yeah. Which we're, you know, we're very, very comfortable that, you know, that there's a pretty significant cushion between that and replacement cost, and particularly where replacement cost is going. Okay. Thank you. Yeah. I'd just add in general, you know, the feel of our underwriting. Certainly obviously we've got, you know, third parties who do work, and we had about 5% appraised this quarter, so lighter than last quarter where we had a chunkier piece because of some of our mortgage financings. In general, we've been, you know, on the more conservative side in terms of, you know, when cap rates were contracting, so a little bit more conservative on the way up, I guess we could say. There's really sort of some buffer in there I guess from our perspective, from an overall perspective. Okay. Thank you. Maybe just a final question, you know, follow-up on the recession question asked earlier as well. So obviously, you know, Paul, you mentioned portfolio occupancy has been in the range of 98%-100% since inception. Like, what happened to the occupancy level in the past recession? Or maybe, you know, what category of tenants do you think will be more vulnerable in case of a downturn scenario? I'll answer the first part. Second part's a little harder to answer. In the first one, the recession, what we saw, you'd see an overall change in occupancy of the entire industrial market, you know, going, let's just say it was at 95, you know, going down to, like, a 92. There, you know, there was, like, a 3% shift in. But you had to then look at what type of properties and where, and that's how we designed Summit number two. What we looked at, where do you have the biggest dips? It's in secondary markets, and it's in smaller type tenants where there's more options for them to, you know, to move out. We call it midnight moves, you know, 10,000 sq ft, that sort of thing. We purposely designed this portfolio to eliminate the two biggest, you know, concerns there. One, we're only in Toronto, Montreal, and the major markets. You know, our average size tenant is, you know, 75,000 sq ft and higher in bigger buildings, a lot of them single tenant, which, you know, would've gone from 99% down to, you know, 98% or 97.5%. There's much less, you know, volatility. As Ross mentioned, we have, you know, lots of lead time on when a tenant is gonna leave to replace them. In our particular portfolio, you know, I do not see occupancy changing that much 'cause you always have options. It's just a matter you know, we use the word, you know, how greedy you want to be in terms of your rental rate. You know, there's clearly, you know, enough tenants to keep our portfolio, you know, near full occupancy. It's just, you know, do you want to strategically have some vacancies so that you can try to push rents a little bit more. I think Dayna mentioned earlier, we have, you know, a really broad cross-section of different types of tenants and different types of industry. You know, manufacturing a lot of, you know, third-party logistics groups. Most of our buildings are bought and thought of as to be very generic. You know, you could have a, you know, we have a Magna doing some, you know, auto parts assembly. You know, if they leave tomorrow, that same building could be converted into a distribution center. You know, so we don't feel like we have any major, you know, exposure. I think our largest tenant is, you know, around 5%, and then it very quickly goes down to, you know, less than 1% of our income in terms of concentration. Yeah. I think also it would come back to the comment we had earlier about pent-up demand. If you think of the data points going through COVID, you know, while not a recession, but certainly a shock to our tenant base. You know, any situation where we had space come back to us was frankly an opportunity because, you know, there was ample demand to fill that space, which as Paul mentioned, is easily convertible, you know, from one tenant's use to another. If you think about things like e-commerce demand, which again is a balanced piece of our portfolio, you know, there still has been expansion requests coming in. You've got a buffer there, where even if things were to slow down, that pent-up demand is more than offsetting it, you know, for the time being. Thank you. Excellent color, I'll join back. Thank you, guys. Thank you. Your next question comes from the line of Sam Damiani with TD Securities. Your line is open. Thanks. Good morning. Just on the- Good morning. Upcoming development deliveries. Can you just remind us of the expected yields on the upcoming 300 sq ft that are almost complete? Yeah. Let me just go to that schedule. I try not to be overly specific here. You know, a couple of these, you know, I'll use a range of a low of probably, you know, low in the 5s to as high as almost 7%. They're, you know, you know, we've overachieved. That's where some of the you've seen these. Now that they're leased, now we, you know, we kind of have the, you know, the pro forma on all the costs. You know, that's why we were able to do that fair market value bump of CAD 33 million was, you know, on these particular properties. Again, one that's closer to 5.5% cap, we made an error in judgment there. That's when we thought pre-leasing was a good thing. You know, we were probably six months later, six months to eight months later delivering that than we thought. We'd leased it, you know, even before construction began. We probably left some rental rate on there so that, you know, that cap rate could have been, you know, closer to 6%. We'll get another kick when those five-year leases, you know, roll over, and we'll get to bump the rents there. Very healthy development spread. The one on our 60,000-sq-ft expansion, you know, that's going to be north of 7%. That's just a three-wall expansion. The ones in our JV, you know, our yield on cost are typically over 6%. When you blend it with the half, you know, we're still comfortably, you know, in and around that 5% range for our combined yield on cost for both parts. Okay, thanks for that. Just to touch on the point on fair value gains this quarter was mostly on development. Would you say there's more to come there, or have you guys captured the major development milestones on the upcoming deliveries and it's already shown in this quarter's fair value gains? Yeah. Just the ones they're coming into income producing in the balance of 2022. Essentially, you know, we've had these discussions with our auditors, you know, what's the right time to do that. It's basically, you know, once we've removed the, you know, the risk element. We, you know, we know the timing, we know the, you know, the cost down to a pretty close number, and we have leasing information. Once you have all those three things, you know, that's when we make the assumption. In our pro formas, again, you know, these would be the yields on cost that we'd be looking at, and therefore we'd have that, you know, 150 basis point roughly development spread, you know, which equates to about CAD 75 a sq ft. We won't start to recognize that until it's leased. It just was 330,000- odd sq ft that the CAD 30 million came from. It's almost a hundred Okay. It's almost CAD 100 a sq ft, which is good stuff. Yeah, for sure. Okay. That's all for me. Thank you. Okay, thank you. Your next question comes from the line of Tommy Burt with RBC Capital Markets. Your line is open. Thanks. Good morning. Hopefully a couple of quick ones on my end. Just any change in terms of maybe how you're thinking about the leasing strategy over the next, call it, six to nine months maybe? Just again, given, you know, the potential for some further softness in the economy, you know, any thoughts on, you know, shifting anything from maybe doing early renewals, like changes to lease durations or even the rent bumps in the leases? Not dramatically. You know, Tom, we're still. Because we don't have a big portfolio, we talk about this, you know, every Monday, and have a strategy on a tenant-by-tenant basis. You know, if we thought a tenant needed to be talked to, you know, a year in advance, we've already been doing that. Then, you know, if there's other tenants that, you know, we wait until they miss their option to renew, and then, you know, we're in the driver's seat. Yeah. I think, you know, it's a combination. Clearly, you know, with that backdrop of inflation, you know, we've been accelerating our rental bumps, you know, both in GTA and now, you know, for the first time, you know, in Alberta. You know, in terms of any real lot of big changes, we really haven't done other than you've seen, you know, what Ross didn't mention. We've also asked tenants not to stay in our building. So if we don't like their use, we don't like, you know, the way their relationship, you know, we've actually asked a few tenants, you know, or told them we're not renewing them. So that's why our retention number, you know, is purposely, you know, been a bit lower to, you know, have that, you know, be able to capture that higher rental bump. Dayna, do you wanna add anything? Yeah. I'd just add, Tommy, that, you know, it's market specific. You know, the conversations we have in somewhere like Calgary versus the GTA obviously would be quite different. Now more than ever, you know, being in touch with our tenants on a regular basis is extremely important. You know, as everybody has asked the questions around this call and in other investor calls, you know, we're cognizant of where interest rates have gone and the broader economy, so we're looking for any signs of, you know, capitulation on the tenant side. Those conversations are really important. In the same context, we continue to try to push rates, push escalators. Again, it may be property size specific, it may be tenant business specific, but you know, part of our strategic leasing is trying to find, you know, the tenant types that, you know, are least sensitive to rental rate increases as well and also obviously who align with our ESG initiatives. It's real-time conversations, and we're constantly looking for, you know, for areas of concern. So far really things are holding up, you know, insofar as our portfolio and also trying to be in touch with, you know, the broader market. Whether it's leasing agents seeing what's happening outside of our portfolio as well for signs of potential things or cause for concern, particularly on the development side, you know, places like Guelph or areas where you think there's gonna be, you know, meaningful new products coming online. You know, what that competitive landscape might look like from a leasing perspective so that we can really fine-tune our performance for our projects that are in the works. Got it. Yep. No, that's good color. Just lastly, in terms of capital allocation, you know, you have of course flagged the disconnect between your NAV and the unit price. I'm just curious whether, you know, unit repurchases factor into or are under consideration at some point, or is it still, you know, look, you can get maybe some better returns from the developments that are coming online over the next or that are in planning over the next 12 months-24 months? Just if you have any color there. Yeah, I mean, it's an interesting question. Well, I have my. Go ahead, Paul. I was gonna say, I have my color. Dayna's gonna give you the right answer, but my color is, you know, Lou and I, we've done this a long time. I think once and maybe somewhat more we might have done some buybacks, but, you know, we've never thought it was strategically. So mathematically, you know, even if it works, it's nothing, you know, that we've ever felt was enough to, you know, change the needle unless you're gonna go into the program, you know, in a massive way. So we've never been, you know, it's more, we think it's more of a psychological, you know, indicator to the market. So that's my personal view. I'll let Dayna add her No, they're both right answers. You know, it's, you know, we see some of the other REITs out, and if you think about, you know, potential select dispositions that we could, you know, could do. We've got a very short sort of disposition watch list, again, trying to hit the market at the right time in the specific examples that we're thinking of. It, you know, again, it's really not gonna move the needle, and we like to think that it's a temporary disconnect. If there's something for a longer sustained period, you know, again, if you could do something in a meaningful way, perhaps it moves the needle, but, you know, it sounds more like a, you know, optical mathematical exercise for the size at which we would be thinking about it. Hopefully we expect our unit price to come back. Hopefully it's a temporary dip in valuation here in the capital markets. Thanks very much. I'll turn it back. Okay. There are no further questions at this time. I will now turn the call back over to Mr. Dykeman for closing remarks. Okay. Well, thanks again, everybody, for joining us today. If you have any follow-up questions, be sure to reach out to us. Had good discussion today and look forward to the next discussion in November. Thanks a lot. This concludes today's conference call. Thank you for participating. You may now disconnect.