CT Real Estate Investment Trust

Good morning. My name is Lauren Cannon, and I will be your conference operator today. At this time, I would like to welcome everyone to CTREIT's Q2 2025 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star 1 1 on your telephone keypad. To withdraw your question, please press star 1 1. The speakers on today's call are Kevin Salzberg, President and Chief Executive Officer of VT REIT, Jody Spiegel, Senior Vice President, Real Estate, and Leslie Gibson, Chief Financial Officer. Today's discussion may include forward-looking statements. Such statements are based on management's assumptions and beliefs. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. Please see CTREIT's public filings for a discussion of these risk factors, which are included in their Q2 2025 management's discussion and analysis, which can be found on CTREIT's website and on CDER+. I will now turn the call over to Kevin Salzberg, President and Chief Executive Officer of CTREIT. Kevin?

Thank you, Lauren. Good morning, everyone, and thank you for joining us today on CTREIT's quarterly investor conference call. We had a busy second quarter here at CT REIT, and I am pleased to highlight some of our notable accomplishments since we last spoke. First, we were thrilled to recently share news of the progress that we have been making at our Canada Square property. Located at the southwest corner of Yonge Street and Eglinton Avenue West in Midtown Toronto, and home to Canadian Tire Corporation's head office for nearly five decades, this trophy asset that we co-own with Oxford Properties Group has always been a unique property within our portfolios. Acquired in 2014, we have long considered there to be tremendous upside in this asset based on its strategic location at what will soon be the intersection of two transit lines and also related to the site's future mixed-use redevelopment potential. For the co-owners, stabilizing the commercial component of the complex has been our priority, and we have been working with CTC for some time on their evolving workplace strategy to determine their needs and to find solutions that met all of our collective objectives. The result of these efforts is a new 20-year lease with CTC to take approximately 550,000 square feet of significantly refurbished space that will anchor the complex and occupy substantial portions of the two buildings located at 2180 and 2200 Yonge Street. The co-owners have committed to improving the buildings at a cost of over $200 million or greater than $100 million at our 50% share, including upgrading the electrical and mechanical systems, washrooms, elevators, and even replacing the curtain wall. There will also be enhanced transit connections in the form of a new subway entrance from the lobby of 2200 Yonge Street, as well as 15,000 square feet of new retail space along Yonge. The project will also seek to minimize embodied carbon while introducing significant energy efficiency upgrades in support of LEED certification. Needless to say, we will be investing in this asset to deliver what will soon become a AAA complex at what has always been a AAA location. Construction and occupancy will begin this fall and will be phased over the next three years with full occupancy expected in late 2028. Second, with respect to our funding and financing activities, in Q2, we refinanced our Series B unsecured debentures that matured in June with a new issuance of $200 million in Series J unsecured debentures with a five-year term at a rate of 4.29%. The spread we realized on this new financing of 135 basis points over the reference rate was CT REIT's tightest ever, and at the time, the tightest REIT five-year spread in the last four or so years, obviously a result that we were very pleased with. Additionally, the REIT reset the interest rate effective June 1, 2025, on its Series 3, 16, 17, 18, and 19 Class C LP units with CTC to 4.38%, for a five-year term ending on May 31, 2030. In the quarter, we also renewed our base shelf perspectives as well as our ATM program. Next, we were happy to release our fourth annual ESG report, which highlights our strategy, priorities, and accomplishments in 2024. As we continue to evolve our thinking, practices, and disclosure, our ESG report is a great reference to understand where we are at on our ESG journey. Highlights from the past year include improving our data-related systems, and the ability to measure our footprint, philanthropically supporting the communities in which we operate, and being recognized for both our diversity and the way we manage our assets. I encourage you to give it a read to learn more. Beyond these achievements, I am also pleased with our financial performance, and CT REIT delivered strong results in Q2. Occupancy was steady again this quarter, up slightly to 99.5%. Growth in same-store NOI was 1.6% for the quarter, which when coupled with our intensification activity over the past year, led to growth in same property NLI of 2.2%. Net operating income overall grew at 3.4% on the back of the same property NLI growth, coupled with growth driven by recently completed acquisitions and developments. And this growth in net operating income drove AFFO per unit growth of 1.6% in Q2. As a reminder, in Q2 of 2024, we received a lease surrender payment, And excluding this item, NOI growth would have been 4.4%, and AFFO per unit growth would have been 3.2% for the quarter, both very strong showing. With respect to our balance sheet, with our indebtedness ratio dropping below 40% at the end of Q2, we are in the enviable position to be able to leverage our financial flexibility when we find new investment opportunities that fit our strategy and meet our financial targets. Although we are quite comfortable with this current level, it is below our typically targeted range in the low to mid 40%, and we therefore have significant dry powder to deploy for the right deals. While the market has slowed in terms of transaction volumes, the new investments that we announced this quarter and that Jody will describe in more detail are great examples of our ability to source strategic third-party acquisitions and to also leverage our relationship with Canadian Tire to both find new avenues for growth and continue to improve our asset base. With a substantially fully occupied portfolio, a solid balance sheet, and the financial flexibility to continue to invest in our growth, CTREIT continues to provide investors with a stable and reliable investment option that is built to withstand the ups and downs of the volatile markets that we have seen for some time now. I will now turn it over to Jody and Leslie to provide some additional details on the quarter, our results, and our leasing, investment, and development activities. Jody?

Thanks, Kevin, and good morning, everyone. As highlighted in our press release yesterday, we are pleased to announce two new investments this quarter. The first new investment relates to our acquisition of a well-located 200,000-square-foot open-air shopping center anchored by Canadian Tire and other strong tenants in the north part of Calgary, Alberta, which closed subsequent to quarter end. Additionally, we have finalized arrangements to expand a Canadian Tire store in the eastern part of Saskatoon, Saskatchewan. This development project is anticipated to be completed by the end of 2026. These new investments will require a total of $66 million to complete and, in aggregate, are expected to earn a going-in yield of 7.55%. Together, they will add approximately 252,000 square feet of incremental GLA to our high-quality portfolio. In the second quarter, we completed two previously disclosed projects, including the expansion of a Canadian tire store in Peterborough, Ontario, as well as the development of a new Canadian tire store in Kingston, Ontario. These investments totaled $45 million and added 142,000 square feet of incremental GLA to the portfolio. Our development pipeline overall remains strong with 20 projects at various stages, eight of which are expected to be completed by the end of this year, and the remainder expected to be completed in 2026 and beyond. Included in these development projects is the newly announced retrofit at Canada Square that Kevin touched on and that we announced in June. This initiative will modernize the commercial complex, delivering a total of 680,000 square feet of renovated space, of which over 90% is pre-leased and over 80% of which will be occupied by Canadian Tire. The redevelopment is our first step in transforming the 9.2-acre site into a vibrant, mixed-use community hub complete with public open spaces and transit-connected infrastructure. The office retrofit for 2180 Yonge Street will begin later in 2025 with work on 2200 Yonge Street beginning at the start of 2026, and the project overall will be substantially completed in 2028. The majority of the required investment will be spent relatively evenly between 2026, 2027, and 2028. The office retrofit will include upgrades to the curtain walls, new quick dispatch elevator systems, improved lobbies and entrances, refreshed washroom facilities, new HVAC systems and roof replacements in both buildings, as well as new ended trip facilities in 2180 Young that will serve both buildings. The goal of the co-owners is to deliver a world-class office complex that will meet the needs and exceed the expectations of both Canadian Tire and our other tenants within the property. These developments, including the Canada Square retrofit project, represent a total committed investment of approximately $433 million upon finalization, $119 million of which has already been spent, and $153 million of which we anticipate will be spent in the next 12 months. Once built, these projects represent a total GLA of approximately $1 million 137,000 square feet, approximately 95% of which has been pre-leased. With respect to our leasing activities, during the second quarter, CT REIT completed 10 Canadian tire and two marked lease extensions, which total approximately 554,000 square feet of GLA, and as at the end of Q2, the weighted average lease term for a portfolio was 7.5 years, which remains one of the longest in the sector. At the end of the quarter, CG REIT's occupancy rate ticked marginally higher to 99.5%. I will now turn it over to Leslie to discuss our financial results.

Leslie? Thanks, Jody, and good morning, everyone. We were pleased with the results delivered by the REIT again this quarter. This quarter, same-store NOI increased 1.6% or $1.8 million, mainly driven by contractual rent escalations averaging 1.5% per year contained in the Canadian tire leases. same property NOI saw a rise of 2.2% or $2.5 million compared to the previous year. The increase was largely due to the same store NOI growth, along with approximately 700,000 of additional contribution from intensifications completed in 2024 and 2025. Overall in the second quarter, NOI experienced robust growth of 3.4% or $4 million. This was fueled by the increase in same property NOI and further driven by properties acquired and developed in 2024 and 2025. As Kevin mentioned, in Q2 of last year, we recorded approximately $1 million of revenue related to a lease surrender fee. Excluding the lease surrender fee, our quarter-over-quarter and a Y growth would have been 4.4%, more in line with our Q1 quarter-over-quarter growth of 4.6%. In the second quarter, excluding fair value adjustments, G&A as a percentage of property revenue was 3.4%. which was higher than the same period in the prior year of 2.8%. This increase was due to the timing of a deferred income tax provision in 2024 that is expected to reverse by the end of the fiscal year. The fair value adjustment of $23.6 million in the quarter was primarily different by contractual rent increases, development completions, as well as tenancy renewals within the property portfolio, with investment metrics remaining consistent during the quarter. In the quarter, FFO per unit was up 1.5% to 34.2 cents, compared to 33.7 cents in the second quarter of June 2024, and AFFO per unit on a diluted basis was 32.0 cents, up 1.6 compared to Q2 of 2024. Excluding the impact of the lease surrender revenue in 2024, FFO and AFFO growth per unit for the quarter would have been 2.7% and 3.0%. Cash distributions in the quarter increased 3% compared to the period in the previous year due to the increase in distributions, which became effective with the monthly distributions paid in July 2024. With the rate of increase on the monthly distributions exceeding the increase in AFFO per unit, the AFFO payout ratio for Q2 was 72.2%, up 71.4% in the same period last year. Now turning to the balance sheet, our interest coverage ratio was 3.55 times for the current quarter, which is in line with the 3.5 times in the comparable quarter of 2024. As discussed last quarter, the interest rate for the 252 million class CLP units, which matured at the end of May, was reset to 4.38% for a five-year term. In June, we also completed the issuance of $200 million in new public unsecured debentures with a five-year term at an interest rate of 4.29%. These funds were used to repay existing indebtedness. The indebtedness to EBIT fair value ratio was 6.55 times in the quarter, a decrease compared to last year's ratio of 6.59 times, primarily due to the growth in EBIT fair value from increased NOI outpacing the increase in total indebtedness. Our indebtedness ratio was 39.8% in the quarter, which was lower than the indebtedness ratio from last year of 40.9%. primarily due to an increase in the fair value on investment properties and repayment of the credit facilities. This ratio has steadily fallen over the last several years and is below our low to mid-40% target range, providing ample financial flexibility for future growth. Lastly, with respect to liquidity, we ended Q2 with $8 million of cash on hand and $298 million that remains available through our committed credit facility. A further $228 million is also available on our uncommitted facility with Canadian Tire Corporation. And with that, I will turn back the call to the operator for any questions.

Thank you. At this time, I would like to remind everyone, in order to ask a question, please press star then 1-1 on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Our first question comes from the line of Lauren Calmer with Desjardins. Your line is now open.

Thanks. Good morning, everyone. Morning. Maybe just maybe just on the retrofit, the office retrofit, and I might have missed it, but could you guys give us a rough idea of the expected yield on this?

So, Lauren, we haven't disclosed the expected yield. You know, we are subject to certain confidentiality provisions, both in the lease with Canadian Tire and through our co-ownership with Oxford. So, it's not an answer we can give you straight out. I mean, we've giving some guidance generally around the cost. You know, the rents were set at what we believe to be, you know, market, both on a net basis and a net effective basis. And we were targeting market-based returns for, you know, a like asset with an anchor tenant deal for an office in Midtown Toronto. So that's kind of the best I can give you at this point, unfortunately.

Okay, maybe I'll try one other way and then I'll stop. But what kind of spread do you generally target or what kind of spread do you need to hurdle on a development project above a prevailing cap rate maybe?

Maybe the best way I can describe it differently without really probably saying too much is, you know, we view this as an exercise in stabilizations. So, you know, I wouldn't say that there's been huge value creation through this exercise, but at the same time, we had an aging office complex that had substantial vacancy. I mean, some of that was purposeful because we always intended to redevelop it. But, you know, from our perspective, we were able to preserve the value while also earning a return mostly on an IRR basis that we felt was rewarding to the co-ownership group.

You should try being a politician. That was very good. Okay. And then maybe just lastly for me. Yeah. Maybe just lastly for me here. On the asset you guys acquired out in Calgary, could you maybe give us a little bit of color on the vendor? And if you're seeing more opportunity for third-party acquisitions, obviously you mentioned you got a decent amount of firepower on the balance sheet right now.

Yeah, I mean, I can say this because it's been publicly disclosed. Primaris was the vendor. You know, obviously they have a strategy that's focused on buying enclosed malls and improving those types of assets. So I think this was a legacy type property that didn't necessarily fit within their portfolio from a strategic perspective. Obviously, it fits exactly perfectly within our portfolio from a strategy perspective. So I think it was a you know, a great opportunity for us to work together. You know, it's an urban property in Calgary, the north part of Calgary. The Canadian Tire Store does very well. The co-tenancy is strong. The neighborhood is strong as well with great demographics. So we're very pleased to be able to work with Primaris on that particular transaction. The investment market more generally, I would say, you know, certainly from a volume perspective, it's as slow as it's been in a long time. So much uncertainty out there. I think we've seen privates be very active, but I think financing has gotten a little bit more challenging for them. So that's perhaps driving some of that slowdown. We view that as opportunistic. We're a credible buyer. We have a balance sheet that supports our ability to go and do more. You know, every deal has its own story and we're seeing cap rates vary quite greatly depending on geography and asset type. So we're just trying to pick our spots. And like Leslie and I kind of commented on in our prepared remarks, we have a balance sheet at the ready to deploy for the right things. We're not going to force it. We're not going to rush. But at the same time, we're open to transacting. Okay, perfect. Thank you so much. Thank you.

Thank you. Our next question comes from the line of Brad Sturgis with Raymond James. Your line is now open.

Hey, good morning. Maybe going back to the questioning around the office retrofit, just in terms of NOI contribution at Kano Square, would there be any disruption on NOI, I guess, during the construction phase? And then how would you think about the ramp up of rent payments in the NOI, would it sort of be phased in along the same lines of the capital spend, or how should we think about that?

There will be no disruption in the NOI. I mean, we de-leased the majority of 2200 Yonge Street over the last year or more, or slowly, so we phased that in. I think thinking about it on a phased approach in terms of the additional contributions that we'll receive Certainly, they correspond with the delivery of new space. So, you know, the first tranche of that will be in the building we call 2180 Yonge Street, where there's four existing floors that Canadian Tire is going to take up. And that's where we're starting our work in the fall. And then in 2200 Yonge Street, I think space is being delivered in three large tranches. And again, fairly evenly, probably starting, Jodi, in 20... 2026 is when the work starts, and then it'll get delivered

subsequent to that, probably in the 2027 and through to 2028.

Yeah, late 2027 into 2028, I believe, Brad, is where it'll start, and probably a third, a third, a third, call it, in terms of when that NOI will come online, leading into late 2028.

Great. I appreciate that. Just in terms of the CTC leases renewed, any guidance or thoughts on range and what we should think about in terms of the leasing spreads there?

So in terms of the CTRs, as you noted, we did 10 and a quarter. We were very pleased with the results, a lot of volume. And we achieved our usual slash a little better renewal spreads versus previous CTR renewals.

So with those ones, Brad, we continued on with the annual rent escalations as we have in the past. So that's what you can expect in terms of rent progression.

Yeah. Okay. Appreciate that. And then maybe the last question, just the establishment of the ATM program, how do you think about using that going forward in terms of another sort of source of potential capital for growth?

No, Brad, we'd be happy to use that. Obviously, the unit price has improved, but I think for us, the ATM, it fits well with sort of the size of the assets we purchase. But I think until we get to perhaps a price higher than we are, we won't be in the market using it. But we do hope over the course of the next 25 months that with improved unit price that we'll be able to perhaps access the equity market in a small way under that program.

Great. Appreciate it. I'll turn it back. Thank you. Thank you.

Thank you. Our next question comes from the line of Juliano Thornhill with National Bank Financial. Your line is now open.

Hey, guys. Good morning. I just had one. Have you noticed the kind of lack of spare footage and the strong retail results that keep getting posted? Have you started noticing pickup intensification requests or more interest in your properties at all?

I'll say yes, but I'll say probably marginally. I mean, I think we've always had strong locations where from an intensification perspective, you know, we typically market those spaces to pad tenants, quick service restaurants, banks, that kind of stuff. And they're usually on main thoroughfares at, you know, intersections with good ingress, egress. So they've always been on those tenants' radar. I think you're speaking generally to the health of the retail leasing market, which we've certainly been noticing. And obviously, we've seen, you know, the results from our peers, which have been really strong as well. I think that story is still playing out in a big way. You know, increased population, muted new supply with no development coming on stream, certainly working in our favor. And, you know, from a in-place NOI growth, renewal spread growth, leasing spread growth, and even from, as you mentioned, the intensification side, things are all positive from our perspective at this point.

And out of the 370 resource stores that you have, how many would you say are good candidates for that kind of intensification?

Well, we've intensified over what, 120 sites over the last, you know, dozen years or so. So we've already, you know, been doing this for some time. You know, a lot of that is Canadian Tire expansion. Some of it is third-party, you know, pad work. You know, a lot of times we may have interest from certain third-party tenants, but if the Canadian Tire store is strong and we've been having discussions with the Canadian Tire about their desire to eventually expand the store, we may choose not to do that just to ensure that We leave enough land available for them as their store operations continue to improve. So I think the program will continue on as it has been. There's still lots of opportunity, but we've been taking advantage of it where we can since our creation.

Okay.

Thanks, Kevin.

Thank you.

Thank you. Our next question comes from the line of Sam Damiani with TD. Your line is now open.

Thank you. Good morning, everyone. I do apologize. I jumped to the call a little bit late, so I apologize if this was already sort of addressed. But just perhaps if you could just help me a little bit sort of at a high level simply understand the retrofitting at Canada Square. So the lease is for 550,000 square feet. How much space can the entire currently lease and occupy at the two buildings? And, you know, how will that evolve as we progress over the next three years?

So, that's an excellent question, Sam. We're all kind of struggling for the exact number. I think the answer is somewhere around 140,000 square feet. Is that right, Leslie? Yeah. Somewhere around there. We can get back to you with the exact number. So, certainly, they're taking on significantly more. They do have other space in Midtown Toronto. And so incrementally, I'm not sure they're taking on a great deal of more square footage. It's more of a consolidation of various spaces into one complex. And I think, sorry, your second question was?

Just how that, if it's 140,000 square feet today, you know, how will it ramp up? I just want to, in terms of modeling the ramp up in rent, between now and 2028?

Yeah, so on the cost side, you know, we'll be spending the money fairly evenly between 2026, 2027, and 2028. Work begins on the first part of the project in the building we call 2180 Yonge Street in the fall of this year, so quite shortly, and then 2200 will start in early 2026. You know, we expect rent to start on the new space in 2180 in mid to late 2026. And then 2020-200, Yonge Street, the space will be delivered essentially in three tranches fairly evenly, I believe, starting either at the very end of 2027 or very beginning of 2028. And then the next space halfway through 2028 and the last space at the end of 2028.

I did hear you say that there will be no NOI disruption, so the rent you're getting currently from the complex in its entirety is not going to go down between now and sometime in the next year. That's correct. You're already at the trough of NOI. For the most part, yeah. Yeah, exactly, for the most part. That's helpful. Thank you. And just curious if this was addressed. I heard a little bit on third-party leasing. Was there a volume of third-party leasing in the quarter and spreads that you were able to share?

Good morning, Sam. It's Jody. Our spreads each quarter are not great compared to maybe some of our peers. So this quarter represents our typical quarter. So I would describe it as mid-volume in terms of third-party. And our spreads A little lower than usual, high single digits, because one was a fixed option, and so the balance were more market, and so the combination of the two gets us to about high single digits on the renewal.

Got it. Okay, last question for me, just on the acquisition from the other public readers. Thank you. Is there a plan to modify or expand the Canadian tire store there?

Not at the current time. As I mentioned earlier, it is a strong performing store for Canadian Tire, but we bought it on the basis of the urban location, the strength of the community and demographics, and the financial parameters of the deal. We think there's upside in the NOI generally from the centre, but no specific plans at this time to expand the Canadian Tire store.

Excellent. Thank you very much, and I'll turn it back. Thank you.

Thank you. Our next question comes from the line of Tal Woolley with CIBC Capital Markets. Your line is now open.

Hey, good morning, everybody. Morning. Just wondering, on the acquisitions completed this quarter, too, just following up on Sam's question, 7.6 seems – a little high for a shopping center in Calgary? Or is it the combination of both assets that's sort of twisting that number a little bit? Maybe you can give me some color on that.

Certainly, it's the combination. The blended yield, obviously, is what we disclose. I was fairly happy with the financial parameters of the transaction for the Calgary asset. You know, the Calgary asset has a feeder as part of it. We did our diligence on that and we're very satisfied with, you know, the usability of the box, the performance of the actual cinema, where it stands in the community. And I think some people, you know, were a little nervous by that. We actually thought it was an opportunity and obviously that played into the overall cap rate as well.

And when you say like having a potentially vacant theater is an opportunity, is it because you feel comfortable with like, hey, we can put a sport check or we can put something else in there that probably matches into the space nicely?

I wouldn't say we have any specific plans for it. We've kind of looked into the feasibility of retrofitting it if need be, but it also has a very long-term lease and from what we understand is a very successful component of the cinema chain. To be honest, I'm really not that worried about it. It's just more obviously through the course of our diligence ensuring we understand the risk.

Got it. And then when you're looking at prospective deals now, can you give a sense of like how much of, you know, new acquisitions you're looking at would be third party, no Canadian Tire content versus Canadian Tire driven deals?

Well, Tal, as you may recall, I mean, typically our non-Canadian Tire related activity I would describe as opportunistic. We don't typically say, you know, every year we want to do X million dollars worth of non-Canadian Tire stuff. It's more, you know, if it aligns with the composition of our portfolio being primarily net lease, you know, strong tenant, good real estate on the financial terms that we like, we'll certainly consider it. The problem over the last few years is there hasn't been a lot of that that's been available at prices that we found to be attractive. That may or may not be changing at this point in time with all the uncertainty and volatility that we're seeing out there and the slowing of the transaction markets more generally. So we're at the ready. We're interested. We're always looking to add complementary strong assets to the portfolio. and we'll keep our eye on the transaction markets and the availability of new supply or opportunity for us to take hold of. We'll complement that with continuing to buy as many Canadian Tire stores as makes sense for us, as long as we understand how the stores perform, their core to Canadian Tire's network, and obviously can be acquired on terms that we view as favorable. So that's kind of a non-answer, but the reality of it is, third-party acquisitions, there's always things we're working on and then there's opportunities that come about. We've turned our mind to that as a strong source of potential growth for us, so we'll be working hard on it.

And then just lastly, I guess one of the things that you guys have a really good track record on is just doing the consistently churning through your development pipeline and turning those projects over and completing them successfully. Does Like the development group there, is there like some spare capacity there? Like could you theoretically be looking to try and find different ways to build revenue, like through third-party merchant development or something like that?

Yeah, so development is a joint effort, obviously, between ourselves and the group at Canadian Tire, specifically, you know, with respect to store expansions or new store development. We do have development capabilities within the REIT ourselves and have a really strong, talented team that leads the charge on that front. And, you know, do we have a ton of spare capacity? No, but could we certainly be looking for new projects? Yeah, we always are. You know, unlike or not unlike most out there, I think the experience is we're finding things hard to make financial sense of. You know, the math of development today is a little challenge. Costs are still elevated. And although retail fundamentals are really strong and tenants are willing to pay more rent, There's only so much they can afford to pay and economic feasibility of developments is certainly a challenge. So we're always on the lookout. We do have, you know, projects like our Winkler Mall redevelopment or the Lloyd Minster redevelopment or really a square redevelopment. That's things that like our investment and development teams are actively pursuing and our construction teams are managing. So we have a lot on our plate right now. Obviously, Kansas Square is another addition to that, although Oxford Properties is leading the charge from a development and construction perspective. So like third-party acquisition, I think we're very open to doing more of it. It's just finding the right opportunities.

Okay. Thanks very much, guys.

Thank you. As a reminder, to ask a question, please press star 11 on your telephone keypad. Our next question comes from the line of Gaurav Mather with Green Street. Your line is now open.

Thank you, and good morning, everyone. Just one question on my end. I'm going to stick to the development pipeline. When you're comparing the pipeline from last quarter to this quarter, we noticed that there were about five projects that were being pushed from, whose data completion has been pushed from Q4 26 to the second quarter of 2027. Just wondering what's happening with that set of projects and why you're pushing the data completion out.

Good morning, it's Jody. You know, in development, it's fairly typical to have movement of dates because there's so many variables that play into it from design, approvals, costing, tendering. And so this, you know, really just reflects, I'd say, typical movement within for development projects.

And, Gaurav, just to remind you, when we do our developments with Canadian Tire, there's not really any drag on that capital. We only fund it at the point in time the project is complete. So although it's, you know, desirable to do these things as quickly as possible, you know, there's no real financial impact to us of delay other than, you know, the contribution doesn't come on quite as fast.

Okay. Thank you. I'll turn it back to the operator. Thank you so much.

Our next question neighbor with RBC Capital Markets. Your line is now open.

Thanks. Good morning. Really just one question for me. In terms of Canada Square and I guess some of the other projects in the pipeline, can you just maybe provide some thoughts on the funding? Is it primarily going to be maybe a mix of construction financing or would you perhaps consider cycling out of some non-core assets? Thanks very much.

Hi, it's Leslie. You know, as typical for the 24 months of development pipeline that we have, you know, we'd be principally looking at, you know, using our line of credit, using unsecured debt. As it comes to the Canada Square project, you know, we will have the opportunity as now that the lease has been going and we have sort of a firmer timeline to be able to work with the Oxford to look at, you know, other opportunities if there are there. But I think for us in Oxford, we, you know, we have perhaps the luxury of, using both of our strong balance sheets as well as potentially using construction financing, but that hasn't been run to ground yet.

Great. Thanks very much, Leslie. I'll turn it back.

Thank you. Thank you. As there are no further questions at this time, I'll turn the call over to Kevin Salzberg, President and CEO, for closing remarks.

Thank you, Lauren.

We want to thank you for joining us today, and we'll look forward to speaking to you again in November after we release our Q3 results. Have a good day.

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