Choice Properties Real Estate Investment Trust

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, again, press star one. Thank you. I'd now like to hand the call over to Simone Cole, General Counsel and Secretary. Please go ahead.

Thank you. Good morning and welcome to Choice Properties Q3 2025 conference call. I am joined this morning by Rail Diamond, President and Chief Executive Officer, Niall Collins, Chief Operating Officer, and Aaron Johnston, Chief Financial Officer. Rail will start the call today by providing a brief recap on our third quarter performance and provide an update on our transaction activity. Niall will discuss our operational results and our development pipeline, and Aaron will conclude the call with a review of our financial results before we open the line for Q&A. Before we begin today's call, I would like to remind you that by discussing our financial and operating performance and in responding to your questions, we may make forward-looking statements, including statements regarding choice properties, objectives, strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, intentions, outlook, and similar statements concerning anticipated future events, results, circumstances, performance, and exceptions that are not historical facts. These statements are based on current estimates and assumptions and are subject to the risks and uncertainties that could cause actual results to differ materially from the conclusions in these forward-looking statements. Additional information on the material risks that can impact our financial results and estimates and assumptions that were made in applying and making these statements can be found in the recently filed Q3 2025 Financial Statements and Management Discussion Analysis, which are available on our website and on CDER+. Finally, new to this quarter, our call will feature presentation slides. If you've joined by webcast, you will see these slides presented on screen. If you have dialed into the call by phone, these slides will be available on our website following the call. And with that, I turn the call over to Rael.

Thank you, Simone, and good morning, everyone. Welcome to our Q3 conference call. We delivered another strong quarter, driven by strong tenant demand in our national grocery anchored retail portfolio, and new leasing activity across our well-located industrial assets. We maintained near full occupancy of 98%, up 20 basis points from last quarter. We achieved healthy overall rent spreads of 10.8% during the quarter, which included a significant amount of lawful renewals that we'll speak more about shortly. our Loblaw leases continue to be a stable source of cash flow growth and were equally encouraged with a robust leasing activity from our third-party tenants in the quarter. Excluding the Loblaw renewals, our average rent spread was approximately 23%. This leasing activity underscores the strength of our overall portfolio and our team's ability to manage through uncertainty. We delivered FFO per unit growth of 7.8% this quarter, supported in part by lease surrender revenue from our ongoing Love Law right-sizing initiative. These initiatives remain a part of our active asset management strategy as we support Love Law in evaluating spatial climates nationwide while creating opportunities to introduce other high-quality, strong covenant tenants that enhance the overall quality of our sites. Excluding lease surrender revenues and other non-recurring items in both comparative periods, FFO per unit growth was a very strong 3.5%. Erin will provide more detail on our financial results and an update on our 2025 outlook later in the call. Our strong performances quarter comes amidst a backdrop of ongoing macroeconomic uncertainty driven by trade-related risks in Canada and abroad. Despite this, our portfolio continues to demonstrate its resilience, and our commitment to prudent financial management has enabled our teams to execute on our growth initiatives. Turning to our portfolio, we continue to see a tight retail market nationwide, fueling strong demand for our grocery-anchored neighborhood centers. We also see particular strength among necessity-based and discount retail tenants. Our national portfolio is well-positioned to continue capturing this momentum and benefit from these favorable market dynamics. Our team remains active in new leasing initiatives at our existing assets, while our industry-leading balance sheet and strategic partnership with Love Law enables us to continue delivering new retail space through intensifications and greenfield development. With a strategic focus on expanding our high-quality retail portfolio and a proven track record of execution, we're well equipped to deliver sustained growth and maximize value. In the quarter, we delivered seven new retail intensification projects at attractive yields, further intensifying our neighborhood centers, something now we'll expand on shortly. In addition to intensifying our existing size, we also continue to leverage our balance sheet and relationship with Love Law to pursue new greenfield opportunities. During the quarter, we completed a $9 million acquisition of a 50% interest in a greenfield site in Ottawa. This 13-acre site will feature a new shopping center totaling approximately 120,000 square feet, anchored by no frills and a shopper's drug mart, which we will develop and manage on behalf of our partner. Our industrial portfolio remains in excellent shape, and our team delivered another strong quarter of leasing activity as occupants increased 30 basis points, to 98.3%. Leasing spreads were robust at nearly 38%, driven by third-party tenant renewals. While the overall industrial market continues to normalize, our portfolio remains well positioned to drive further growth given the meaningful gap between in-place and market rents. We also maintain a significant industrial development pipeline, including approximately 220 acres of developable land remaining at Choice Caledon Business Park. In the quarter, we announced our intention to begin the next phase of our Caledon project on a speculative basis. This decision was supported by our conviction in the GTA industrial market, the location of our site, the competitive advantage provided by low land cost basis, and the increased RFP activity we're experiencing on the site. Lastly, in our mixed use and residential portfolio, we saw a quarter of solid momentum. Our office portfolio is primarily leased to affiliate entities and occupancy in the quarter was largely stable. On the residential side, we continue to experience some pressure from new supply at certain assets. However, looking ahead, we continue to have a strong conviction in the quality of our residential product and optimistic about the long-term residential fundamentals in major urban markets in Canada. Turning to our transaction activity in the quarter, we remain focused on maintaining our portfolio quality through capital recycling, completing approximately $118 million in total real estate transactions during and subsequent to the quarter. This included the $9 million retail land acquisition in Ottawa that I mentioned previously and $109 million of non-core asset dispositions. On the disposition front, We sold our 50% interest in a non-grocery-anchored shopping center in Edmonton for approximately $9 million. In subsequent to quarter end, we completed three additional dispositions, including a retail portfolio of four assets in Ontario for $67 million, a 50% interest in a retail asset in Camrose, Alberta for $23 million, and a Canadian tile land lease in CRU at a retail site in Port Saskatchewan, Alberta for approximately $10 million. All transactions were completed. at or above our IFRS values. We expect to remain roughly balanced for the rest of the year, positioning us as net acquirers this year in line with our transaction activity today. Our industry-leading balance sheet supports, continues to support us being net acquirers in the future, complementing our existing cash flow growth and development growth pillars. and we will continue to maximize value for unit holders. With that, I'll turn the call over to Niall to discuss operational results in more detail now.

Thank you, Rael. Good morning, everyone. As Rael mentioned, our portfolio delivered another solid quarter of operational results, and we continue to see strong tenant demand and leasing spreads across each of our portfolio types. Overall portfolio occupancy remained strong, ending the quarter at 98 percent. This was a 20 basis point increase to the prior quarter. During the quarter, we had over 3.7 million square feet of lease expiries and renewed approximately 3.6 million square feet, resulting in a retention rate of 96%. Overall, the portfolio renewals were completed at an average rental spread of 10.8%. Excluding the Loblaw renewals, our renewal spread was a very healthy 23.1%. We also completed 291,000 square feet of new leasing, resulting in positive absorption of 135,000 square feet, largely driven by our Ontario industrial portfolio, Quebec retail portfolio. Turning to each of our asset classes. In our necessity-based retail portfolio, occupancy was unchanged at 97.8%. During the quarter, approximately 3.2 million square feet of leases expired, including 2.8 million of Loblaw maturities. We renewed approximately 3.1 million square feet including 2.7 million square feet from the Loblaw tranche, for a retention of 97%. Given the lack of new retail supply, vacating tenants or early terminations have provided opportunities to backfill space at elevated rental rates with stronger columnancy. Leased renewal spreads averaged 9% above expiring rents and 12.9% excluding the Loblaw tranche, with broad-based trends across all of our regions and categories led by value retailers. We also completed 148,000 square feet of new leasing. Average rents over the lease term are 42% higher than our average in-place rents. This largely offsets the 95,000 square feet of expiries that did not renew in the quarter. Our team has already backfilled a portion of the space at rents 49% above previous rates and remain confident in the leasing activity on the remaining space. Turning to our industrial portfolio, occupancy increased 30 basis points from our last quarter to 98.3%. This quarter, 491,000 square feet expired, primarily in our Alberta and Atlantic portfolios, and we renewed 430,000 square feet for a healthy 87.6% retention rate. We had two vacancies in the quarter, one of which has already been backed over Q4, and negotiations are underway for the other properties. Lease renewal spreads remain strong, averaging 38.3% above prior rents, driven by the Alberta and Ontario portfolios. In the Ontario portfolio, we completed one renewal for 57,000 square feet and a rent spread of 183%. Excluding the 189,000 square feet of Loblaw renewal, the average renewal spread for the portfolio was approximately 62%. We also completed 142,000 square feet of new leasing against 61,000 square feet of vacates, resulting in positive absorption of 81,000 square feet. New leasing rents averaged over the lease term are 32% higher than our average influence rents. Lastly, our mixed use and residential portfolio continues to perform well with occupancy at 95.5%, which is up 10 basis points from the last quarter, and it's increased 140 basis points the year to date, primarily from strong performance within our mixed-use assets. Turning to our developments in the quarter, our team continues to advance our development pipeline across each of our strategic asset classes with near-term focus on commercial development. This quarter, our team delivered seven retail intensification projects totaling 107,000 square feet at a blended yield of 6.3%. Project deliveries included two shoppers drug marts in Ontario and Alberta, totaling 34,000 square feet at yields in the mid-sixes and sevens. And we have another seven shoppers drug marts currently in active development. A T&T and CRU in Mississauga, totaling 44,000 square feet. Two CRU units in Alberta with an international cosmetic retailer, totaling 7,000 square feet at yields in the high A range. And finally, two ground leases at a property unit Ontario and Alberta, totaling 22,000 square feet, and an average weighty deal of approximately 11%. One of the ground leases is with Nautical, with whom we have a deep relationship, and the other ground lease is with a tenant in the automotive sector. As Ray mentioned earlier, this quarter highlights our team's ability to unlock incremental value from existing retail portfolio and land bank through intensifications in new developments. These type of retail initiatives remain a cornerstone of our broader development strategy, and we will continue to actively pursue opportunities to deliver high-quality retail projects. Looking ahead for the balance of the year, our major active development project continues to be our industrial pipeline at Joyce Caledon Business Park. The MLS building, totaling approximately 624,000 square feet, of which we own 85%, was transferred to IPP on November 1st. and rent commencement is on track for April 2026. With this delivery, our team is now focused on the next phase of our industrial development calendar. This quarter, we announced our intention to begin construction of 1 million square foot buildings on spec before the end of the year. Permits are submitted and delivery is scheduled for Q2 2027. Overall, our active development pipeline totals 12 projects of approximately 1 million square feet and an average forecasted yield of approximately 6.9%. Our development pipeline continues to be a reliable source of long-term cash flow and that growth for our portfolio. I will now pass it over to Erin to discuss her financial performance.

Thank you, Niall, and good morning, everyone. We are very pleased to report another quarter of strong financial performance Our reported funds from operations for the second quarter was $201.4 million, or $0.278 on a per unit diluted basis, reflecting an increase of 7.8% compared to the third quarter of 2024. Included in our results this quarter, we had approximately $10 million of lease surrender revenue. Last year, we had approximately $5 million of lease surrender revenue and $3.3 million of non-recurring G&A expenses related to outsourcing. As Braille mentioned, our lease surrender revenue is mainly due to our rightsizing activities with Loblaw, where we are able to add high-quality third-party tenants to our sites, and Loblaw is able to rightsize their store to a smaller footprint. These initiatives demonstrate the benefits of our strategic partnership with Loblaw and do not occur consistently throughout the year. Excluding these items, FFO per unit growth remains strong at 3.5%. FFO growth was primarily due to strong operational results and contributions from net acquisitions and development transfers over the last 12 months, partially offset by higher net interest expense. AFFO this quarter was 19.2 cents per unit, which was impacted by the earlier timing of executing on our maintenance capital projects. On a full year basis, we expect our 2025 maintenance capital and AFFO payout ratio to be relatively consistent with the prior year. Turning to our operational results, same-asset cash NOI increased by $7 million, or 2.8%, compared to the third quarter of 2024, driven by higher base rents from rent steps and strong leasing activity. By asset class, retail same-asset cash NOI increased by $5.8 million, or 3.1%. The increase was primarily driven by leasing activity, which included the impact of our lawful lease renewals in the quarter and higher base rent on contractual rent steps. Retail growth was also favorably impacted by higher capital recovery revenue. Industrial same-asset cash NOI increased by approximately 0.8 million, or 1.6%. The increase was primarily due to higher base rent from contractual rent steps and leasing activity. Growth in the quarter was tempered by prior year property tax recoveries and other income items. Including prior year items, same-asset cash NOI growth would have been approximately 3.3%. Mixed use and residential, same asset cash NOI increased by approximately 0.4 million or 4%. Moving to our balance sheet. Our IFRS net asset value or NAV for the quarter was $14.53 per unit, an increase of 111 million or approximately 1% compared to the second quarter of 2025. NAV growth was driven by a net contribution from operations of 56 million a net fair value gain on our investment properties of $13 million, and a fair value gain on our investment in the units of allied properties. As a reminder, we are required under IFRS to mark to market the investment in allied to its trading price at each period end. Our fair value gain on investment properties in the quarter was primarily driven by cash flow growth, favorable leasing, and backfill initiatives in our retail segments. This more than offset a fair value decrease related to certain asset-specific leasing adjustments in our industrial portfolio. This quarter, we also completed several successful financings, most notably our $500 million dual-tranch unsecured-to-venture offering in August. The transaction included a $350 million series W unsecured-to-venture at a 4.628% coupon with a 10-year term. and $150 million Series X to venture at a 5.369% coupon with a 30-year term. The Dual Trust offering carried a weighted average coupon of approximately 4.85% and a 16-year average term, extending our debt maturity profile to 6.8 years. Our team capitalized on a very strong credit environment, with the issuances representing both the tightest ever 10- and 30-year spreads for choice. We saw exceptional demand for these issuance, with the combined offering being over nine times oversubscribed. This transaction continues to demonstrate our strong position in the market and our ability to source low-cost capital while also accessing the long end of the curve, providing the flexibility needed to prudently manage our balance sheet and maintain a well-structured debt ladder. Proceeds from the offering were primarily used to repay maturing debt, including the redemption at par of our $200 million Series F unsecured debenture in September and approximately $100 million of mortgages that matured in the quarter. The remaining proceeds were used for general purposes and to pay the rebalances on a revolving credit facility. Looking ahead to the remainder of the year, our team has largely addressed the few remaining maturities, with our next significant debt maturity not occurring until our unsecured debenture due in November 2026. We ended the quarter in solid financial position with strong debt metrics, ample liquidity, including approximately $1.5 billion of available liquidity, including credit on our corporate facility and available cash, and $13.7 billion of unencumbered properties. Our debt-to-event ratio was 7.1 times, which was down 0.1 times from last quarter as we captured earnings related to our acquisition activity earlier in the year. Supported by our strong year-to-date operating performance, including our team's ability to execute on a transaction strategy and deliver on our right-sizing initiatives with Loblaw, we have increased our guidance for 2025 FFL per unit to approximately $1.06 to $1.07, representing year-over-year growth of approximately 3% to 4%. With that, Rail, Niall, and I would be glad to answer your questions.

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. And our first question today comes from a line of Mark Rothschild from Canaccord. Your line is open.

Thanks, Ben. Good morning, everyone. It sounds like you're comfortable progressing with industrial development now, and I'm just curious your thoughts on undertaking new developments on larger mixed-use projects. at a time when general residential development, especially in the condo market, is stopped or slowing. Projects take quite some time. Are you looking at advancing any of these projects now, or still do the numbers maybe just not work right now?

Hey, Marcus. I hope you're well. Look, I think the way we think about it is we're a long-term owner of real estate, and if you start one of these projects now, you're only going to deliver it in three or four years. And you're releasing it up in a very different environment than we are today. So given we take that long view, our balance sheet's strong. And there are quite a few available incentives at the moment our team is working on trying to capture. So we actually think we're going to be in a position to launch one of these in 2026 because we believe it's the right long-term investment. I don't know if you want to add anything else.

Yeah, just to add to that, Mark, there's been a progressive decline in costs that come down approximately 15% over the last couple of years. So it's really improving the dynamics of how we're evaluating some of these performers. There's a lot of appetite in the markets for new projects. So we think schedules will improve as well. So overall, we're seeing a change in dynamics that I think could be created very quickly.

But I guess, Rael, we should wait a little bit to hear your announcement on which project it is and what the plan is.

Yeah, so we hope to have something in the early plan of 2026.

Okay, great. I'll wait on that. Thanks so much.

Your next question comes from a line of Himanshu Gupta from Scotiabank. Your line is open.

Thank you and good morning. So your retail occupancy continues to be strong. Should we expect occupancies to be stable from here, or do you expect any uptick, you know, in the near term? And at the same time, you know, any pockets of, like, software losing demand within the retail sector?

It's Niall. Just to respond to that, on our retail going into Q4, we're expecting a little bit of growth in occupancy improving. And in our industrial portfolio, we see occupancy improving as well.

Okay, that's fantastic. And on the retail, thanks for the answer there. I mean, in the context of this population growth has slowed down and GDP growth also slowed down. So it sounds like no pocket of weakness you guys are seeing.

I'd say, look, there's a lot of catch up from the immigration that has happened over the last number of years and retail and residential and industrial are still trying to catch up with that, particularly in retail.

Okay, okay, that's fair enough. Thank you for that. And maybe my next question is on that Caledon industrial property. I mean, sounds like you're making progress on that, you know, that one million square feet of development on spec. Do you have a sense of, you know, what kind of tenant demand will be there for that kind of product?

We're very encouraged by the responses we've been getting to RFPs. It's a mix of logistics, electronics, There's a lot of growth there. We're seeing build to suit as well as interest in our spec as well. So there's a good variety there for us.

And what kind of yields will you be underwriting on that project?

Similar yields that we've been achieving to date on our IPP portfolio. And our NLS project is transferring in the next quarter. We expect to see yields similar to that.

Okay. Thank you. Maybe just last question, I mean, on your allied holdings. And I know it's a small part of the NAV. Any thoughts, you know, if there's a distribution cut, what could be the impact on your FFO?

Look, Kamesh, I think just go back to what we've always said. We've always said that, you know, our view that the underlying real estate is you know, is great long-term real estate. We also recognize that office fundamentals are starting to improve. And then we don't need the capital right now. Look, we don't know exactly what the distribution cut is going to be until they officially announce it. But, you know, it's not going to have a material, you know, impact on our business. Our business is strong. And, you know, we'll provide an update when we know the magnitude of the cut.

Fair enough. Thank you, guys, and I'll be back.

Your next question comes from a line of Sam Demiani from TD Cowan. Your line is open.

Thank you. Good morning, everyone. I'm certainly interested to see the retail shopping center development kickoff in the PN. I'm just wondering if, Niall, perhaps you could share a little bit of sort of thoughts about how you underwrote the opportunity to and uh you know expected rents versus cost kind of yields like is this an opportunity that has opened up you know just in recent in the recent year let's say with the the rise in market rents is this an opportunity that could really uh expand across more so in a bigger way across the country what i'd say look we have a number of opportunities for locations across canada that we're working on for grocery stores and cru

we are seeing rents improve to underwriting. But they're where they need to be for underwriting, so they're in the 50s. But we'll give you more input when we talk to you in Q4.

Okay, that's helpful. And maybe, Rael, I mean, since you guys have been acquiring these industrial outside storage assets over the last few years, the asset class has become more popular. Are you still seeing opportunities in that space to acquire going forward?

Sam, we haven't seen any, you know, real interesting new opportunities since we acquired the TIP portfolio. I can tell you that numerous people have reached out to us to acquire portions of that portfolio at significantly higher values than we paid, which I think leads to a comment on, you know, the significant investor interest in the asset class.

That's helpful. And just lastly, you know, Mark asked about, I guess, residential construction. So I look forward to, I guess, seeing some details when that's announced. Do you have any initial thoughts on the federal budget announced a couple of days ago and how that sort of impacts the way you look at building new residential in Canada?

We've been digesting it as it's been coming out over the last couple of days. You can see that there's a lot of it. emphasis towards infrastructure, which we feel is very important for some of our very large master plan projects. We're not quite sure how the impact on DCs is going to be trickling down to the provinces and the municipalities. So I think we're waiting for more information to come out. And Build Canada Homes, we're waiting to see how that's going to work as well. So I think there's more information to come out as the budget gets discussed over the next couple of weeks.

That's great. I'll turn it back. Thank you.

Your next question comes from a line of Tal Woolley from CIBC Capital Markets. Your line is open.

Hi, good morning. I was just wondering on the retail business where Loblaw is, where you're sort of terminating some of these leases or looking to downsize, are they switching banners while they're doing it?

I tell it's not necessarily them switching banners. I mean they could. It's more they'll look at a store and say we have a store that's 150 to 160,000 square feet. Could we make the same amount or you know, do the same sales on a smaller footprint of, say, 120,000 square feet, 125,000 square feet. So it's more of that. And then what happens is Choice will go out to the market and see if we can find a third-party tenant. And only when we do, we'll tell Loblaw we're okay for them to reduce the space. But if we don't have a good third-party tenant, we would never let them reduce the store footprint.

And the third-party tenant... Oh, sorry, go ahead. Pardon me, Raelle. Go ahead.

No, just... I will tell you that the interesting thing, and maybe Niall can also comment, is that our leasing team is saying that, you know, on the size that, you know, we're backfilling on the downsizing, there's really a lack of available, you know, space on the market. So we've had really strong tenant interest in that space, which has been, you know, a positive to offer that space to tenants.

Yeah, and maybe out of that ICSC, we had a lot of interest in our land bank and our opportunities and Trying to find large space is difficult for our tenants that are looking to grow in a number of sectors. So right-sizing is definitely a solution, and also some of our new developments for Greenfield as well are providing opportunities for them too.

And is there a theme on any of these? Like, is it a certain region or a certain size store that sort of predominates this group?

No, I wouldn't call it on a theme. I think it's, you know, we've done ones in Toronto, in Montreal, and in, you know, Alberta. Like, I don't think it's a regional theme. That's, you know, opportunity as well, refreshing, you know, the interior of their store. We work with them, too. Okay.

Perfect. That's it for me. Thank you.

Again, if you'd like to ask a question, press star 1 in your telephone keypad. Your next question comes from the line of Gilliano Thornhill from National Bank Financial. Your line is open.

Hey, guys. Good morning, everyone. Just wondering on the 8.6% renewals with law of laws, I'm just wondering what would be required to see this kind of reach the maximum and looking out like further out to 2027, kind of where is that trending?

Yeah. Hi, it's Ray. Look, I think you have to understand this, you know, 40, you know, call it 45-ish leases rolling a year. And the nature of our leases are that they can be no less than the expiry of the, you know, expiry rent and no more than 10% growth. So we actually think, you know, 8.5%, you know, is a really healthy lift given the nature of all the leases. And look, we don't have yet visibility on 27, and we're happy to share it when we have it. But I think it would be very difficult to get to the maximum 10 because it would imply that every single lease is, you know, at least 10% below market when it's rolling. And remember, these leases were set in 2013 at market rounds.

And, Gideon, just one thing to add is the geographic spread on these locations as well. It's across Canada in various markets.

All right. And then just going back to kind of Kyle's line of questioning, just how many more kind of opportunities do you think are for these, you know, larger developments? And where has kind of been the lack of grocery, you know, under construction in the country over the last little bit?

Look, I think one of our big competitive advantages is that we're working with Love Law to say, you know, where are you trying to expand and how can we help you find land? For example, just on the grocery side, you know, we had announced, I think, one or two quarters ago that we were building, call it, six new grocery stores. And, you know, I think in pretty much most cases, we're building additional CLU as well. You know, like I don't want to lean too much into where the locations are. I can tell you where the six are, but I don't want to lean too much into where the locations of the future opportunities we're looking at with Lavalois. But now I can maybe just comment on where the far remaining are. Look, currently they're typically out west and in Ontario.

And as we go through and look at our Python, we think we're going to see more coming in from Quebec as well. So it's a national, we're seeing a national opportunity in Ontario, out west, Edmonton, Calgary, and some opportunities in Quebec that we're evaluating at the moment.

Right. And then just lastly, there's a, you know, conservatory group was kind of put up for sale recently. I'm wondering if any of the assets there kind of catch your interest within the portfolio.

Look, I think we've just signed the NDA to get access to the data room, and hopefully there'll be something that fits our criteria, but nothing to share yet. Right. Thank you.

Your next question comes from the line of Pammy Burr from RBC Capital Markets. Your line is open.

Thanks. Good morning. Just on the lease termination income from Loblaw, just how many properties did that relate to? And then secondly, just to clarify, has all of that, I guess, terminated space been released?

So, Pammy, sorry, it's Erin. It related to three properties. And we actually put in five different CRU tenants across those properties. So it'd be like a Dollarama, Good Life, LCBO, and it's all been released. When we do these, they are released before we go ahead and do them.

Okay. All right. And then should we, you know, as we think about, you know, just looking ahead for 2026 and maybe even beyond, is this, you know, is this process, you know, likely to continue maybe at the similar sort of volume annually, or is this, Bit of a unique period in terms of their their right sizing.

Yeah, so I say we've had this for the last couple of years. I think there'll be a few in 2026 and maybe 27. I wouldn't expect large volumes to continue to all depend on tenant demand market and Lobla looking at their stores and where they're renovating. But we do have some in 26.

OK, and then just just lastly on the the 100 million of dispositions, I guess after the quarter. What was sort of the range or the cap rate range on those asset sales? And maybe just if you could comment on the likelihood of further capital recycling next year.

Yeah, I think the average cap rate or the range was all close to a seven. So seven cap. And as we said on the call, look, our balance sheet's in great shape. And this year we were unbalanced from a capital recycling point of view, i.e. purchasing more than we sold. and we've done a significant number of transactions. And I think we're in a position to continue to do that in future years as well.

And maybe as an extension to that, would that include perhaps monetizing some of the residential density as it gets zoned, or is that not really on the table at this stage?

I think in this environment, it's tough at the moment. It's something we may consider in the future, but not really something we're considering at the moment. Thanks very much.

I'll turn it back. Your next question comes from a line of Gaurav Mathur from Green Street. Your line is open.

Thank you, and good morning, everyone. Just one question on the disposition activity so far. Is it fair to say that there's a lack of liquidity now in the market when compared to probably nine to 12 months ago as you were looking through your capital-free second plans?

No, look, I think from our standpoint, we wouldn't agree with that statement. We actually think for the product that we've been selling, there's been lots of liquidity. So usually even the portfolio that was roughly, you know, $100 million, the average asset size was each $25 million. And the pool of buyers, you know, it's deep, it's institutions, it's advisors, sometimes even it's a private individual. So we actually, for the product we've been selling, we haven't seen a lack of liquidity.

And by extension, would that also be applicable to the industrial market?

Again, if you look at this, again, there hasn't been a lot of trading on the industrial market. There's been, you know, I think they're in, You know, I think this past quarter there were two significant trades. And again, they were, you know, large assets with, from our point, seemed to have good liquidity on it too. Okay. And I will share with you as well on, I'll also share with you when we sold the small bay portfolio earlier in the year, you know, there was strong investor interest and, you know, appetite for more of that as well. willing to sell more assets.

Thank you, Ray. I'll turn it back to the operator.

Your next question comes from a line of Sam Damiani from TD Cowan. Your line is open.

Thank you. Just a quick follow-up on the Loblaw space that was given back and generated the lease surrender fees. That is all in respect of store downsizing. There were no stores completely closed. Is that correct?

That's correct, Sam.

Thank you very much.

And I will now turn the call back over to Rail Diamond, CEO, for some final closing remarks.

Thank you, Rob. As I mentioned at the start of our call, our portfolio balance sheet are in excellent shape, and our team remains focused on achieving our growth objectives. Thank you all for your interesting choice. And for joining us this morning, we look forward to providing you another update on the business in a year.

This concludes today's conference call. You may now disconnect.