RioCan Real Estate Investment Trust

Good day, ladies and gentlemen, and welcome to the Rio Can Real Estate Investment Trust first quarter 2026 conference call and webcast. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Ms. Jennifer Seuss, Senior Vice President, General Counsel, ESG, and Corporate Secretary. Ms. Seuss, you may begin.

Thank you, and good morning, everyone. I am Jennifer Suess, Senior Vice President, General Counsel, ESG, and Corporate Secretary of RioCAN. Before we begin, I am required to read the following cautionary statement. In talking about our financial and operating performance, and in responding to your questions, we may make forward-looking statements, including statements concerning RioCAN's objectives, its strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance, or expectations that are not historical facts. These statements are based on our current estimates and assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from the conclusions in these forward-looking statements. In discussing our financial and operating performance and in responding to your questions, We will also be referencing certain financial measures that are not generally accepted accounting principle measures, GAAP, under IFRS. These measures do not have any standardized definition prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other reporting issuers. Non-GAAP measures should not be considered as alternatives to net earnings or comparable metrics determined in accordance with IFRS as indicators of RIOCAN's performance, liquidity, cash flows, and profitability. RioCamp's management uses these measures to aid in assessing the trust's underlying poor performance and provides these additional measures so that investors may do the same. Additional information on the material risks that could impact our actual results and the estimates and assumptions we apply in making these forward-looking statements together with details on our use of non-GAAP financial measures, can be found in the financial statements filed yesterday and management's discussion and analysis related thereto, as applicable, together with REOCAM's most recent annual information form that are all available on our website and at www.cedarplus.com. I will now turn the call over to REOCAM's President and CEO, Jonathan Gitlin.

Thank you, Jennifer. Good morning, everyone, and thanks so much for joining us today. Our first quarter results reinforce the message we've consistently delivered since our 2025 Investor Day. RioCan is executing a strategy anchored in our retail core. We're delivering durable organic growth, enhanced financial flexibility, and meaningful long-term value for unit holders. Our strategy is supported by our proven, and future-focused platform. It's grounded in a culture of excellence, ongoing innovation, and technology advancement and prudent ESG practices. The quarter demonstrated momentum across all our key priorities, including leasing performance, same-property NOI growth, capital recycling, and disciplined balance sheet management. And it did so in a manner that is consistent with the plan and targets we laid out at our investor day. First off, I'd like to highlight operations. Record blended leasing spreads of 25.8% in the quarter was driven by new leasing spreads of 58.5%. This demonstrates, once again, the potent mark-to-market opportunity within our retail portfolio. And importantly, these results are not one-offs. As we discussed last quarter, we continue to benefit from a favorable retail leasing super cycle driven by a combination of expiring legacy leases and constrained new supply. They also reflect the structural advantages we highlighted at our investor day. These include high quality, necessity-based retail in densely populated, supply-constrained markets, and strong, long-standing tenant relationships fostered over the last 30 years. We don't have an external sponsor that influences our decisions. That means we remain focused exclusively on maximizing the productivity of every square foot of our portfolio to drive unit holder value. The combination of our leasing strategy and full operating independence continues to translate into durable, repeatable growth. Our sustained organic growth reflects disciplined execution of our retail focus strategy. Over the last 12 months, that focus has delivered blended leasing spreads of 23.1%, which are now beginning to translate into same-property NOI growth. Our competitive advantages were on full display again this quarter, with commercial same-property NOI growth of 4.7%, marking the third consecutive quarter at or above 4.5%. While we expect commercial same-property NOI growth to move modestly quarter to quarter, this level of performance reinforces our confidence in the full-year outlook of 3.5% to 4%. In the first quarter, we achieved a 92.4% retention ratio and a 98.6% committed retail occupancy. This underscores the resilience of our cash flows and our ability to strike the appropriate balance between peer-leading rent growth and extremely high occupancy. What we're seeing today is the compounding effect of years of disciplined portfolio positioning where leasing strength, occupancy, and mark-to-market gains reinforce one another. A second major pillar of the strategy we presented at our Investor Day was strategic capital recycling, particularly through Rio Can Living. The progress this quarter was meaningful. As of May 4, 2026, we anticipate repatriating approximately $1.04 billion through closed, firm, and conditional transactions. This represents approximately 80% of our $1.3 billion RioCan Living disposition target. We continue to see strong interest in the remaining four RioCan Living assets. We're monetizing residential rental buildings and residential inventory. In doing so, we're simplifying our business and increasing clarity in our earnings profile. The proceeds are being redeployed accretively into portfolio investments, unit repurchases, and balance sheet flexibility, exactly as we outlined at Investor Day. Our capital allocation decisions continue to be guided by a disciplined hierarchy, always having a view on the most accretive outcome. During the quarter, we reinvested $22 million into high-return portfolio investments, including retail infill and asset enhancement. This allows us to unlock embedded density within our existing footprint. At the same time, we remained opportunistic in the public markets, repurchasing and canceling 2.6 million units at an average price of $19.51 under our NCIB program. This reflects our view that the current unit price does not fully reflect the value and earnings power of our business. There has been a steady stream of private and now public market transactions involving high-quality retail assets and portfolios that are similar to ours. These market reference points offer strong evidence of current valuations for assets like ours, reinforcing that we are trading at the low NAV. Our balance sheet remains well-positioned, as assessed by a suite of key credit metrics. RioCan's adjusted spot debt to EBITDA is 8.94 times. As we advance our capital recycling strategy through 2026, we fully anticipate net debt to EBITDA to settle into the midpoint of our stated guidance range. The strength and flexibility of our balance sheet were further recognized this quarter as Morningstar DBRS affirmed our BBB credit rating and revised the trend to positive. Looking ahead, we reaffirm our 2026 financial outlook, including core FFO per unit of $1.60 to $1.62. Additionally, we reaffirm our guidance of commercial same property NOI growth of 3.5% to 4%. These targets are firmly supported by embedded leasing spreads already achieved, strong visibility on 2026 lease maturities, continued discipline in capital deployment, and reduced capital intensity as we complete the wind-down of mixed-use construction. In closing, Q1 was a strong start to the year and a clear reflection of our consistent execution of the commitments we outlined at Investor Day. RioCan has a focused strategy and is perfectly positioned to compound organic growth. The trust has strong leasing fundamentals and a data platform that continues to provide multi-year growth visibility. We're also equipped with the balance sheet flexibility to act decisively. In this turbulent world, owning hard assets with reliable cash flow in prime markets is advantageous. To put it another way, it is a great time to invest in RioCamp. With that, I'll turn the call over to Franca Smith, RioCan's Interim Chief Financial Officer, and afterwards, we'll be happy to take your questions.