Dream Impact Trust

Good morning, ladies and gentlemen. Welcome to the Dream Impact Trust third quarter conference call for Tuesday, November 5, 2024. Please be advised that all participants are currently in listen-only mode and the conference is being recorded. After today's presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. During this call, management of Dream Impact Trust may make statements containing forward-looking information within the meaning of applicable securities legislation. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties. many of which are beyond the trust's control that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. Additional information about these assumptions and risks and uncertainties is contained in the trust's filings with securities regulators, including its final long-form prospectus, These filings are also available on Dream Impact Trust's website at www.dreamimpacttrust.ca. Your host for today will be Mr. Michael Cooper, Portfolio Manager. Mr. Cooper, please proceed.

Thank you, operator. Good morning, everybody, and welcome to Dream Impact's Q3 conference call. Today I'm here with Megan Peloso. Megan's going to speak in a couple minutes about the quarter. I thought I might, after she's done, speak a little bit about what I'm seeing in the real estate industry generally and how it's really affecting dream impact and what's happened with sort of the macro conditions. We've had a pretty good quarter in terms of making progress, so I thought I'd go through a fair amount of detail and share with you our position on the various assets. Megan, do you want to start, please?

Sure. Thank you, Michael, and good morning, everyone. We entered the quarter with cash on hand of $23.8 million. In the quarter, we closed on the sale of 10 lower Spadina and $349 car law for net purchase of $30.1. Using sales proceeds, the outstanding balance of $7 million on the trust credit facility was immediately repaid in full. Over the quarter, we completed a significant amount of financing activity, attaining extensions for approximately $130 million of current debt. As it stands, we have $25 million remaining in maturities for 2024 that are currently being worked through, which we expect to be completed in short order. Looking ahead to 2025, there is $320 million of debt maturing, of which $195 million is in active discussion today with our lenders for extensions. For the balance of the loans maturing, we expect to renew the debt by the end of 2025. Further updates will be provided over the next few quarters as we work through this. During the quarter, the trust recognized a net loss of $7.6 million compared to $12.4 million in the same period last year. The improvement in earnings was largely driven by the respective fair value adjustments in each period, partially offset by transaction costs on asset dispositions, interest expense on newly completed multifamily assets, and our deferred income tax recovery position. The most significant fair value adjustment in the third quarter related to a $5.2 million loss within equity-accounted investments on an office property in Ottawa. The loss was driven by discount and cap rate expansion and was supported by a third-party appraisal. As it relates to our recurring income segment, in the third quarter, the trust recognized $1.7 million of same-property NOI from our multifamily rental assets compared to $1.4 million in the prior period. The increase in NOI was driven by a reversal of that debt expense, lower OpEx, and rent growth. In addition, the trust recognized another $300,000 from multifamily assets in the lease that fades in the quarter. Now, NOI for our commercial assets was $2.2 million in the third quarter compared to $2.7 million in the prior period. The change in NOI was a result of asset sales and lease terminations on a specific property, partially offset by the occupancy of the acre tenant at our Claremont property last quarter. For the development segment, in the third quarter, the trust recognized a nominal net loss compared to net income of $3.1 million in Q3-23. Prior year results included a fair value gain on Maple House prior to its transfer to the recurring income segment. Over the third quarter, the residual condo occupancies for Brightwater Phase 1 were completed. In addition, we transferred 98,000 square feet of retail at Brightwater to our recurring income segment, which is roughly 60% leased. Today, between Brightwater 1 and 2 and Ivy Condos, we've achieved over 250 condo occupancies that share, and we've paid over $100 million of construction debt with condo closing proceeds. In September, leasing launched for Birch House at Canary Landing, which comprises 238 rental units. Construction continues for Cherry House at Canary Landing, which adds a further 850 multifamily units to the West Allman Canary Landing community, and we expect it to start leasing in the back half of 2025. And with that, I'll turn the call back over to Michael.

Thank you, Megan. The environment is pretty complicated and uncertain. So, you know, since July 1st, I think we've had 100 base point cuts in Canada, 50 base points in the States. That's great news. And you can see that it makes a big difference for the impact trust. I think we're going to save $4.5 million a year. Let's see. So, you know, that's a real positive. I mean, what's been a bit surprising is in the U.S., the bond rate's gone up 80 basis points since the Fed dropped rates 50 basis points. So that was a big surprise. I don't think anybody's expecting that. And it does sort of bring into doubt where the terminal rate's going to be and what we're going to expect. You know, with regards to home purchases, I think that we haven't started to see a lot of difference now that the rates start to come down. We will. It looks like the U.S. is going to drop rates a bit more this year. So, with Canada. So, one of these days is going to matter. But in the meantime, in most markets, certainly in the Toronto area, housing starts have been very slow. And that's been a bit discouraging. So, what we've seen the last couple of years is almost every condo project that was planning to come to market has been delayed. and market apartments launches that have been shelved. And that's just because the numbers don't work with higher interest rates, you know, pretty high construction costs, high development charges, and, you know, you can't get a decent return. Fortunately for us, we've been working with on affordable housing for years with the federal government and the city. And, you know, we've had great success. So, with the Bretton Flats, we started early this year. And we also were in position to lock up 10-year debt with the federal government. I think it was $233 million out of 252 that we needed to start construction of La Breton Flats. It's underway. We're pleased with that. Also, in Ottawa, we're expected to start Block 204 in the next. We've actually started moving dirt and stuff, but we should get the loan done in the next. We should do our first draw of the loan, you know, in the first quarter of the new year. And the interest rates on these loans are probably around 3.2%, maybe a little less. And we're able to make good returns. So we're happy to get those two buildings started. Our apartments in Toronto, I mean, they're going okay. And I think they continue to hold their value, if not increase in value. So we're pleased with that. On the big projects... With 49 Ontario, we're doing pretty well working on getting the financing for that large project. We work in the city, and we expect by year-end to wrap up the pieces we need to be able to solidify the pro forma, and I expect that we're going to start that project next year. Keysight's a huge project. We're meeting with the Waterfront Toronto, the city, federal government, like, many times a week. We also think that by the end of the year, we'll have that one You know, we should have a deal on that with the various parties so we can start next year, early 2026. And these projects provide, you know, pretty good returns. So, especially if we're successful in completing the things we're doing and that returns are really only available because we have affordable housing and we're using the government's funding where they use their cost of capital. So, we effectively borrow from the federal government to build affordable housing, like 20% affordable, 80% market. And we borrow at interest rates that approximate the government cost of money. So it doesn't cost the government money, but they don't make any money. But it helps us have canyoned financing through construction and operations. So that really reduces risk, and the returns are reasonable. So I think we're able to move a lot of projects forward, which is a great help because it reduces our land loans. The situation that we're in, and so is everybody else, is when you delay a project, you still have to pay the operating costs and interest on it, and it tends to add up. I don't know if this is true, but the Globe and Mail reported there's 20 receiverships a month in the Toronto area. I think that includes individual projects as well as developers, and that's because there's a lot of developers that don't have the wherewithal to carry their projects as long as it's required. And I think the Impact Trust is doing really well, carrying their projects. I think we've got lots of room to carry them as long as we need them. It's great to get other projects started. And also, we sold a couple of assets. We sold 10 lower Spadina as well as 349 Car Law. Dream acquired an asset over two times book that's a development asset that's a passive investment that generates some cash, a 349 Car Law. The purchaser required a vendor take-back. So what we did was Dream Unlimited provided them the loan and that freed up capital. So Dream Unlimited has been very involved in handling capital requirements for the Impact Trust. And we're seeing a lot of things improve. The assets we have are among the best in our entire business. And we got a decent amount of cash on hand right now. I think 2025 looks really good. And, you know, the key thing is the market conditions keep changing. I think throughout all of history, when the markets are off, it's for a period of time comes back stronger. We don't know how long that's going to be, but we have the right assets and we're committed to holding the best of the best assets. And we're looking at selling passive assets or maybe some assets that we don't need. What I would say is, you know, throughout the industry, apartments are trading pretty well. I mean, the cap rates are up a bit. although I think they've come in over the last 60 days. Industrial properties are doing pretty good. Retail has been doing surprisingly well. I don't know about regional malls. Office is a very weak market. It's very hard to transact. And with all the projects being delayed and most of the developers that build apartments or build condos already having a lot of land, it's very difficult to sell land. So I think that to try to create a force to market by selling off these buildings or land is really difficult. So we're pleased that we sold 10 lower-spot items, 3.49 car lot at good prices. Sussex Center is one that, you know, the loan comes up in a couple of years. We're going to have to deal with that one. Generally, the income properties are doing okay, but it's great to see that our multifamily is doing well, our new developers are doing well. Megan mentioned our first property in West Donlands is getting well leased. Block 11 that we finished at the end of last year, it's an 80% lease, and it's almost done. The building in Ottawa Common, it's over 50% lease. That one's a bit difficult because the group that we were using to manage the co-living went broke just about when we launched, so we've had to come up with a new strategy. But that's coming along well. And all of these buildings are going to be worth a lot of money. They're going to contribute a lot of revenue. And they add value to all of us. So, you know, what we're looking at is kind of managing each year as dealing with all this uncertainty, make sure we have enough capital, get projects moving. And I expect that one of these days, with so much demand for housing, we're going to have more of an equilibrium between what people can pay and what it costs to build. And the market will be better than ever. So, that's the summary. We'd be happy to answer any questions, and please feel free to ask questions now.

Thank you. We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. If you would like to withdraw your question, please press star then two. We will now pause momentarily as callers join the queue. And today's first question comes from Sam Damiani with TD Cowan. Please proceed.

Thank you. Thank you. Good morning, everyone. Maybe, Michael, just on your comments there on the projects that could get started in the next year or so. I wonder if you could just comment about the recent development charge reductions announced by the City of Toronto. Are you going to participate in that program with both 49 Ontario and Quayside? And is this sufficient in your mind to really make the economics work, I guess, because it seems like there's maybe certainly a lack of consensus as to whether or not it is.

Great question. The answer is much more delicate, as it's going to Executive Committee today, and next Tuesday it goes to City Council. And I certainly wouldn't want anything I say to affect anybody. What I would say on your specific question is, like, development charges might be 5% or 6% of the total cost of a project. So it's consequential. It's about the same... Sorry, that's about rental. And I guess, to be clear, on apartment units, the development charges might be around $40,000. It depends on the size of the unit, but let's say $40,000. And in a condo, it's $100,000. So I'm not talking about condos here. I'm just talking about apartments. But on the apartments, let's say it's $40,000 a unit, which is 5% of the development costs. If you weren't planning on doing affordable and you have to carry the financial losses of reducing the rent, it doesn't make sense. But if... Like, I think the idea is that... And you can see it in the materials. They said they were asking the federal government for another $7 billion of the ACPL financing. The ACPL financing is the financing that we commonly use that, among other things, provides capital for 10 years at interest rates that are about the same as the federal government pays. But you have to have 20% affordable. I believe what this development charge waiver does is for the projects that are already meeting the federal government's requirements for ATPL financing, that 5% is meaningful. So, you know, I don't think it takes a project that somebody's going to take, you know, 20% of units and make them affordable, the 5% doesn't work. But I don't think it's intended for that. I suspect it's intended to match up with what the government's initiatives are. And keep in mind, the federal government and the province have said to the city, specifically in this case, City of Toronto, that they have to increase housing starts to get more money. So to a certain extent, the governments are working better together than they ever have at promoting these programs to get housing started. So I think it is valuable for those people who are already looking to build affordable housing in their projects.

That's helpful. And just one other follow-up question, just on the starting potentially one or two fairly large projects in the next year or so, Is there a desire or a requirement for the trust to monetize some other assets? What sort of dispositions are envisioned or intended over the next little while to position the balance sheet to be able to do these two developments?

So the trust owns 12.5% of Quayside, and it requires a little bit more money. It shouldn't be too much. It's not a problem. And I think on 49 Ontario, what I was trying to say before was while we finalize the loan and with a bunch of other policy changes, we don't really have that information now because too many things are changing. We think it will all fall into place by the end of the year, and there's a reasonable chance that we already have enough equity in the land. We may bring in a partner, but I don't think – The current thinking is that we have to sell assets to get those projects going.

Excellent. Thank you very much.

And the next question is from Sairam Srinivas with Cormac Securities. Please proceed.

Thank you, Alfredo. Good morning, Michael. Good morning, Megan. Probably just teeing off Sam's question there in terms of capital commitments. Michael, can you just comment on what What kind of numbers are we looking at in terms of capital commitment for the next 12, 24 months?

What capital commitment for the next 24 months?

Yeah, so, you know, it does depend on what we bring online. I think over the next 12 months per se, I think anywhere from between 14 to 18 million. A good chunk of that is for land servicing costs. So, again, it really just depends on some of the factors that Michael talked about that still need to be ironed out. So we'll have more clarity in the next quarter.

But I think the point is, with the way the market is now, we've got cash on hand, and we have a plan for cash for everything we need for next year for sure. 2025 looks really good. 2026 looks good. We've got to deal with a convertible to venture. But for the other operations, things look great. And we're really quite comfortable with the capital sources and uses.

That's with color. And maybe just looking at this quarter, Michael, when you look at the commercial portfolio, I guess the occupancy was down and mainly that one of the biggest contributors to that was Sussex Center. Can you comment on what led to that occupancy decline there and generally the outlook for office in terms of where do we see occupancies kind of hitting the trough for this portfolio at least?

I'll jump inside and let Michael talk to general thoughts on the occupancy. But in particular for Sussex, there was a tenant who downsized that we were aware of that happened right at the beginning of the quarter. So that was really the biggest drop. Over the next two quarters, I don't think we're anticipating a significant change based on our current leasing volumes and tours that are going on. So that was really the biggest change that we expected this year from Sussex.

Thanks, Megan. That's a good question. Good point. Michael and Janice, you're looking at, you know, all these residential projects are being developed. And let's, for example, say Alto 2 right now, which is slowly being leased out. When you look at a project on stabilization and you look at the stabilized yield on these assets, How does that compare to the average cost of debt on them? I'm just trying to think of the spread that you're seeing on, you know, when you complete a development and, you know, it's fully leased and stabilized.

No, it's a great question because both the stabilized cap rate or even the yield on costs, they're all moving. But, you know, I think we were at 375 for a brand new building in Toronto. We're probably now at 4 to 4.25. You know, with normal CMHC financing under MLI select, you can probably get 10-year money at 3.6, 3.7. So, a 50 basis point spread seems pretty attractive. As I mentioned earlier, I think we're seeing, you know, apartments coming in by maybe 25 basis points over the last 60 to 90 days. So, you know, one of the key things I would suggest is there's been some transactions in the last year that have been motivated by people who really needed money. And what that means is that the pricing of assets is determined by the most motivated sellers. With apartments, what we're seeing is a bunch of new purchasers have come in, and they're driving the prices up or the yields down because they want to, they're actually keen. And I think that, you know, if they would land, what we're seeing is there's an occasional transaction at quite a good price, But otherwise, like, it might be a receiver that's selling it. So, you know, when you're in this kind of market and the weakest hands are pricing, it can change very quickly as soon as people see things differently. So we're already seeing these numbers coming down. We're seeing a lot of government policies that are making development more useful. We're seeing a lot of condos being delivered, and they're starting to clear the market. So I think, like, my view of it is that as more and more condos get delivered... And the owners who may have an operating loss that's bigger than they thought, so they rent it. They may not be as demanding on the rent. They want to get it full. But then they sell it to somebody who wants to use it. Maybe, like what we're hearing a lot of is people are buying condos now for their kids because they're just great prices. So as we start to clear this out, the overhang that we're dealing with right now, starts to go away, and then we can start to see prices being bid up. So a lot of this is we've got to get through the motivated sellers, and then we get to a more normal market, and the interest rates coming down is a great motivation for people to step up once they feel comfortable with it, once they feel more comfortable that, you know, the rates are something they can live with. So there's been a lot of changes.

That's great, Colin. Michael, thank you for that. I'll throw it back.

And the next question comes from Eve Appel with CIBC. Please proceed.

Hi. Good morning. Wondering you have not purchased any units in the last reported period under your NCIB and wondering, you know, if the financial metrics are less attractive than previous using the funds for redeploying capital into building it? And also, I guess part of that question is, what is your performer IRR expectation for your new builds, and what cap rate are you assuming? Thank you.

Yeah, well, it's a great question because I want you to think about something. So let's say you have a piece of land and you don't start it. you have negative cash flow. So if you said, oh, maybe I will put $5 million into the equity to start this project, I'll buy stock back, where do you get the money to cover the interest? So what you're really looking at is having negative carry on a piece of land or no carry plus a decent return. So a lot of the times you start the projects in order to get a decent return, and we're often looking at 15% or 17% returns, And you also reduce the requirement to cover the interest costs on fallow land. I think that in the type of environment we're in now where there's so much uncertainty on capital and values, buying back stock is a little bit inappropriate as a fiduciary. Thanks, Michael.

The next question is from Sid Levin, a shareholder. Please proceed.

My questions have all been answered. Thanks very much.

Well, Sid, it's nice to hear your voice.

And the next question is from David Crystal with Ventum Capital Markets. Please proceed. Thanks.

Good morning, guys. Megan, just a small one for me here. How much of the multifamily NOI during the quarter was due to the one-time reversal of bad debt?

In the period, I think it was about $100K. It wasn't huge.

Okay, so the kind of year-over-year growth was, I guess, knock $100K off, still pretty strong showing from the same property portfolio?

Yeah, we're seeing some good rent growth. We're a little later on certain op-ex for select buildings, and then we have the bad debt reversal. So we're happy overall with how the portfolio is continuing to generate and why it grew.

I mean, I would mention that we have the three buildings, the one. Sorry, go ahead. Sorry, you go ahead. I was going to move on to the next question. What I was going to say was we have three buildings that are in lease-up. and they're going to represent a big increase in income from apartments, but it doesn't count yet. So that'll be a big jump.

Well, and that's a perfect segue. So on the 0.3 million, that's from both Alto 2 and Canary Landing, but can you comment on the expected stabilized contribution from both when occupancy hits stabilization?

Oh, I think we're still... I mean, it'll still take some time before we get there.

Did I just speak about it? Are they an income property sale?

Yep.

Sorry about that. We're expecting that Alto 2 will be more or less fully leased probably in the next four or five months. And hopefully we'll see the next one would be Block 8. Sorry, we call it Maple House. And I think we'll see Block 8. 206 take a little bit longer as we work through the co-living, but it's becoming pretty good. So the numbers will be great for 2026.

And what do you expect the NOI from those three will be kind of run rate for 2026?

Probably it's a six to seven million. That's probably a little low.

But that was my point in terms of how significant that is compared to what we have. Yeah, yeah, fair.

And then switching gears, the parcel of land at ZB, have you seen much interest? Have you got any idea of pricing? And maybe walk me through your thought process behind selling versus holding for future development in light of your kind of commentary on the market for land and kind of the lack of transparency in the market for land right now.

That's a great question. So I think what we're seeing is when we bought the site, we took out an infrastructure loan to pay for literally putting in streets, sewers, lights, electricals, everything, roads to be able. So, you know, right now when we start block two, 204, which will probably draw the loan down in the first quarter. I mentioned that earlier. When we do that, we'll probably pay off $12 million of the infrastructure loan in Ontario. And after that, it'll be really quite small. We have five more sites in Ontario, but we have a very small infrastructure loan. That's no problem. In the Quebec side, I think the issue is that we still have quite a bit of land to get through, and we're building as fast as we can. So what we're really looking for is, does somebody else have another... purpose for it that can help us absorb it quicker. And ironically, there seems to be much more interest in land and opportunities in Gatineau than we had expected. That's why we brought it on the market. So it's really, it'll just help us get through the land quicker. It will contribute to getting out of the infrastructure loan. And the nice thing about having the infrastructure loan down to zero or close to zero is you don't really have any carrying costs and you can develop each parcel whenever you feel like it. So That was the motivation was really in Ontario, we have a low infrastructure loan. We only have five sites left after this. And we can sort of work our way through it without any pressure in Gatineau. We don't really want to continually capitalize interest on the infrastructure loan for the land that might be too far out. So if somebody else has a good idea, we thought that'll help us develop the community faster at basically zero opportunity cost because we've got lots of land anyways.

Okay, fair. And have you advanced discussions on that parcel, or where's that process at?

So, I mean, we've listed it, and we've got lots of inbounds. It's very varied, but it wouldn't be at a point where we'd be taking offers or anything like that. There are discussions going on, and we'll see. But, again, you're right. Thank you. we'll have to see who's out there and who's looking to build a retirement home or a hotel or this or that. So we'll see, but we just wanted to make it available so we could start the conversations.

Okay. That's a, that's great color. Appreciate it. I'll turn it back. Thanks. Thank you.

The next question is from Nick Cameron with re holdings. Please proceed.

Hi Michael. Thanks for taking our call this morning. A couple of questions. Can you give us an update on the plans for Brightwater and that newly approved zoning? Are you looking at putting some CMHC-backed apartment buildings there?

So at Brightwater, we have three other partners, and we had an initial plan, and it's very hard to vary from that. That plan was all built to sell. Just for the other listeners, we got approval for about an extra 900 units, so we have I think a little bit more than 3,000 units to build on Brightwater at a time where it's very difficult to sell and start construction on any. I don't know if anybody else sees humor in that. So it's a great site. It's on the water, but until the market recovers, it's very difficult to make progress. We are looking at trying to sell some townhouses, and there's Block K, which we sold a bunch. We hope in the spring to get over the hurdle for pre-sales to get a construction loan. But it's an example of an incredible site that is slow to get moving. And we're going to have to deal with the market conditions throughout. So I don't have a lot of answers for you. When it's finished, it's going to be great, but there's an example of having to pay more holding costs on land and producing less, and it kind of grinds away at your cash. So, you know, we own 25% of it, and I think we're in a pretty good position to wait it out. But it's just so hard to force the issue when the market, you know, people aren't able to pay the price that we need to be able to develop. So that's why everybody's delaying projects, and it's a great site, and it's very unique, and we expect it to recover before a lot of others, but we've got to wait for the map to work.

Okay, thank you for that. Second question, any update on moving forward with Oak House at Canary Landing?

Sorry, could you repeat that?

Is there any movement on Oak House? Can you hear me?

I'm sorry. There's so many different names for every property. I think that's Block 20. We are working on it. Block 20, when we dealt with Infrastructure Ontario for the West Onlands transaction, There were three sites. Two of them have been great, and they're progressing. As we said, Maple House is getting fully leased. Block 347, which I don't know, it's another tree. Development's going well. I think Block 7, which is a very small one, will be ready next year. So those are good. But Block 20 is beside the railway, and it's been very difficult for us to come up with a plan that meets the requirements to keep residents away from the rail yard. It's got to be at least six storeys. which pencils out. So we're working on it. That's one that there's more enthusiasm right now. That's one, obviously, that would have affordable housing because that's what the deal is. We would expect to be able to get CBC funding for that. So the real impediment to get that one going is a design that works with the restrictions due to the proximity to the railway tracks.

Okay, thank you. Can I just have one more question? Of course. By the way, we're a bunch of retail unit holders in a group on Discord of MPAC, so we appreciate you taking the time to answer our questions today. This is great. Quayside, sorry, Victory Silos, we saw something on the Toronto waterfront that they're looking at putting something on the west side of the Parliament Slip. I believe that's right near Victory Silos. Just curious if you're, it looks like you're trying to put something in that will attract one million visitors a year. Do you have any feedback on that or any info you could share?

Sure. Are you asking about the 1.3 million square feet of victory silos?

Correct. And it looks like the Waterfront Toronto is also looking to put something there as well that's going to apparently attract 1 million visitors a year right beside the property that we own there. Oh, I hear you saying.

Okay. So for those who are not as informed as our caller, the Parliament slipped is going to be quite an amusement. They're going to have swimming in it and little boats and stuff like that. It should be pretty nice. And it is in front of some of the Quayside buildings, and there's some others that are further east. To the south, which is sort of right on the water, there's a block that has been reserved for some type of tourist attraction, education, that kind of thing. And that's still being worked on. I don't have any details because there are no details about it. But the idea, as you mentioned, is to try to bring visitors down to the site in the Parliament slip. So that's a work in progress. The site is Victory Silos, which is a site we bought incredibly expensively in retrospect. And that one we're holding. But I think the difference on that site compared to other sites we've been talking about is once we won Quayside, We decided that we're better off to work on Quayside, and we'll get to Victory Silos as we make more progress on Quayside. So Victory Silos, we're holding it, we're paying interest on it, but... Effectively, just the phasing of the two sites, Quayside, which is 13 acres, and Victory Silo, which is 5, is 18 acres in total. We're going to do them in order, and Victory Silo just has to wait its turn. So it's interesting to me that Victory Silo, which we bought cheap, which is worth a lot of money, it's right on the water. We are holding it, but we're holding it because it's just not its turn yet, which is what we would do no matter what the conditions were. So just as an illustration of different reasons to hold land.

All right. Thank you very much, Michael, for your time. Thank you.

Once again, if you do have a question, please press star, then 1. Our next question comes from Andrew Carr, a private investor. Please proceed. Good morning.

I'm wondering if you can provide any color on the retail portion. of Zippy and with the added members to the community there if we're going to see any new tenants join the retail side of that complex.

Oh, that's a great question. Do you live in Ottawa? Do you see Zippy very often?

I do not, but I do know the area quite well, and it really is transforming.

So the reason why it's a great question is we've literally put hundreds of million dollars into that area. It's all net zero. We've created a utility with Ottawa Hydro. And we keep finishing buildings. People move in. But when we deal with retailers, the math for them doesn't work because there's not enough residents. It doesn't help that the Booth Street Bridge had been basically closed for a year and a half. And it is quite the construction site. So Block 204, which I referred to earlier, It's the last building that surrounds our Head Street Square, which is a major center on the Ontario side. So when we do that, it completes that area, number one. Number two, it brings a lot of people. And number three, there won't be any construction there. So we're getting closer. But just recently, we have made some progress with some retail tenants. And, you know, we did this with the distillery district. You know, you've got to find any way to get them in, and then as you build it out, you've got more people there, and you really start to make money way later. But we are having a difficult time finding retailers who are prepared to move with the construction going on, but we're getting through that. So hopefully, when I say hopefully, I mean every year at this time, hopefully we're going to get retail tenants next year, but this time there's more evidence to support it.

That's an honest answer. Yes, great. Thank you. And one more question. In regards to Birch House, part of those units are for rental and the other portion were built to sell condos. Can you give any insight onto the condo portion of that and if they are pre-sold or where those condos are heading?

Okay, so I get his background. That's a project we did with AHD, a First Nations healthcare group. And it was their land. And we sliced and diced it so that we could get enough capital to them to cover what they needed. And we did it in two parts. One is an apartment. And we had a ground lease. And that provides them with operating income. On the condo side, we bought the land that helped them with the construction. The owner of the condo is Kilmer and Dream Unlimited through an investment fund. Impact Trust is a partner in the apartment building only.

Okay, great. That explains it. Thank you very much. Thank you.

And this does conclude our question and answer session. I would now like to turn the conference back over to Mr. Cooper for any closing remarks.

Oh, nothing special in the closing remarks, but I do want to thank everybody for spending your time with us, asking your questions. I'd like to tell you that we're working really hard through difficult times, and we're very optimistic about the future of the projects, and it's getting better as time goes by, and hopefully that'll continue. Thanks, everybody, and Megan and I are always around.