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.

Thank you, Jonathan, and good morning, everyone. Our first quarter results were in line with our expectations and reflect continued progress on the priorities we set out at our investor day, driving organic growth from our retail core and maintaining a disciplined approach to capital allocations. Our balance sheet remains strong, supported by healthy credit metrics. Our financial flexibility continues to improve as we execute our capital recycling strategy. I'll walk through the quarter, starting with core FFO. As discussed at Investor Day last fall, we intentionally moved to core FFO as a key performance metric because it better reflects the recurring earnings power of our core retail business. Core FFO also gives a more consistent basis to track and assess operating performance and cash flow generation over time. Mechanically, it starts with FFO and adjusts for items that don't reflect our underlying run rate operations, such as residential inventory gains, HPC-related income, and restructuring charges. Core FFO in the first quarter was $0.39 per unit in line with Q1 of last year. there were four primary drivers of our core FFO results. Commercial same property NOI increased 4.7% year over year, contributing over two cents per unit. Our unit buybacks had a positive impact of approximately one cent per unit. These factors were offset primarily by higher interest expense and lower interest income, which had a combined impact of just over two cents per unit. and lower NOI from the sale of residential rental assets had an impact of approximately one cent per unit. We anticipate Core FFO to ramp up over the balance of the year, and as Jonathan mentioned, we expect to deliver on our 2026 guidance. Turning to other items in the quarter, we recorded approximately $2 million of one-time restructuring costs related to the reduction and consolidation of development and construction functions. Adjusted G&A expense as a percentage of rental revenue, which excludes these restructuring costs, is expected to remain below 4% on a full year basis. We also recorded approximately $6 million of condo-related income in the quarter. Remaining residential inventory under construction is approximately $100 million at our proportionate share, or roughly 1% of NAV. While this balance will be addressed responsibly over time, we do not expect condominium-related items to make material contribution to FFO for the remainder of the year. Together, these two items account for the majority of the difference between FFO and core FFO. Moving on to our balance sheet. our adjusted spot debt to adjusted EBITDA ratio was 8.94 times that quarter end. The increase versus year end was primarily driven by acquisition timing related to Georgian Mall and Oakville Place, where the associated EBITDA contribution builds over time, while the associated debt was recognized immediately during the quarter. We expect these acquisitions to contribute positively to both core FFO and our leverage profile over time. Looking across our suite of metrics, our unsecured debt to total debt improved to 66%, and this mix will continue to improve as we execute on our financing plan. We had approximately $9.4 billion of unencumbered assets and approximately $1.3 billion of available liquidity at quarter end, providing ample financial flexibility and capacity. As Jonathan also mentioned, during the first quarter, DBRS reaffirmed our BBB credit rating and revised the trend from stable to positive. We view this as an important endorsement of our balance sheet trajectory and the continued progress we are making on deleveraging. On financing activity during the quarter, we raised $200 million of senior unsecured debentures with a 4.308% coupon rate and a seven-year term. We also repaid $100 million of unsecured debentures upon maturity. For the balance of the year, we expect that our capital recycling activities and capacity on our credit facility will be used to repay the vast majority of our remaining debt maturities. Additional debt issuances will be completed on an opportunistic basis. To wrap up, our first quarter results represent a strong start to the year and align with the three-year outlook we shared at Investor Day. Operating fundamentals across our portfolio remain exceptional, and we are delivering on our strategy and commitments. Both private and public market transactions continue to validate the inherent value of our business, and we remain focused on executing our plan to drive unit holder values. With that, I will turn the call back to the operator to begin the question and answer session.

Ladies and gentlemen, we are currently experiencing technical difficulties. Please stand by as we resolve this issue before proceeding with our question and answer session.

Once again, for any technical difficulties, a full recording will be made available and sent out to you all. We are now ready for the Q&A portion of today. As a reminder to please ask a question, please press star followed by the number one on your telephone keypad. Once again, that is star followed by the number one. You enter the question Q. We will pause for just a moment to compile the Q&A roster. Okay. Our first question is in queue. If you can please state your name and company, that would be greatly appreciated.

This is Loren Calmar from Data and Anthropologies. I didn't know whose line was open. This is one more little technical difficulty, but let's put that behind us and get down to the good stuff. So on same property and OI, you guys had the continuation, I think, of some solid prints in 3Q and 4Q and the 1Q. And I think you called out a part of that was the spaces that have gone dark in 2024, cash rents resuming. How do you expect same property and OI to trend over the balance of the years? Kind of 2Q should be another one that's a little bit outsized and it moderates a bit over the back half?

Hmm. Hey, Lauren, a couple of things to start. First of all, no need to apologize on your end. This is totally our service provider's issue. Second of all, love the headline of your report. Wooderson is always a good quote. Thirdly, with respect to SPNOI, we had a great quarter. The year is going very well. It's a little too premature to predict the entire remainder of the year, and we still remain very confident in our guidance. It will be between 3.5% to 4%. Things are all pointing to very favorable outcomes, and if the year continues to go the way it is going, we will provide updated guidance in the coming quarters. But right now, we are firmly confident behind the 3.5% to 4% number that we gave out in our guidance.

Okay, that's good to hear. And then maybe just flipping to the real can living side of things, it seems like you guys made some really, really good progress there. I was just wondering if you'd give us a, I know it's a sensitive one, but a rough idea perhaps of the yield on the assets that are either sold or under agreement to be sold, and then just maybe an idea of the buyer profile.

Sure, Lauren. So it's all in line with our IFRS values. And, you know, it's in the low four to mid four range across the board. Now that's a balanced summer, lower summer or a bit higher. The buyer pool is consistent with the pool of buyers that we've had to date, which is a range. It's some private wealth and family office buyers. It's some institutional buyers and it is some private equity buyers. So it really is a range.

And I guess as you kind of look ahead, I think you've got four or so left to go. Has there been any change in the acquisition transaction environment since the aforementioned bills were consummated? No.

No, it still remains strong. These assets are new. They're transit-oriented. They don't have rent control, and there's a high degree of demand for them. For us, it's just a question of getting all of them stabilized, getting the lease up as we intend to get it, and then I think there will be a fairly robust market for them.

Okay. And then, I guess, just to be clear, you still expect those remaining four to kind of hopefully transact on them by the end of the year?

So, as I had indicated previously, it's our intention to get them done as quickly as possible. Just because of stabilization, taking a little bit longer, there might be a couple of them that trickle into 2027. but our hope is that we have them contracted for by the end of the year, and we'll provide updates as the year progresses. But given the strength of the assets and given our desire to sell, we are confident that they will all be sold in short thrift.

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

Thanks, Warren.

Our next question comes from the line of Matt Cormack.

Your line is open. Thank you. I guess. You had a strong quarter on the same property, NOI growth, and that's notwithstanding, it looks like recoveries were maybe 99% as opposed to 100% historically. Could you give us a sense of if that's just a timing issue in this particular quarter? And then also, percentage rents looked a little bit low relative to what we expected in the past, but if there's anything color-wise there, that would be helpful.

Yeah, so I think it's all just seasonality. I don't think there's anything to read into it. On the percentage rent, most certainly it's seasonal, and that usually picks up as the year progresses. And on the recoveries, again, I think that is really just a byproduct of the fact that the first quarter is usually a little bit softer on the recoveries, but that usually stabilizes and ramps up by the end of the year.

Yeah, Matt, the only thing I'd add, this is John Valentine. Percentage rent, you'll probably see that drop over time, not because tenant sales productivity is decreasing, but because we are converting some, I would say, historic or legacy percentage rent in lieu of net rents. So, you know, based on the hotness of this leasing market, we're able to get in front of these tenants and convert them to net deals, which will obviously benefit same property and alliance.

That makes sense. On the in-place box, you can see front committed remains essentially at an all-time high fold, but there was a little bit of a dip in the in-place. Did you have some tenant turnover? And if we look at your new leasing spreads in the 50-plus percent range, is that the kind of rents you're getting on any sort of turnover you're seeing in tenants?

Yeah, I think that this is, I would say, an anomalous quarter with respect to that gap between committed and in-place occupancy. Based on the leasing that the team has done, you're already seeing that gap close quite dramatically, largely due to the HBC deals that we did in Oakville Place. And so I think you'll see it back to the normal range closer to 75 beats, which is our historic average. And the second part of the question is, I can head over to you.

Yeah, and look, Matt, the in-place occupancy did drop. We did buy a half interest in Oakville and Georgian Mall, which obviously had those two HPC boxes, which have been fully leased but are not being rent yet. That accounted for about 40 basis points. As Jonathan said, with Oakville taking possession in April, there's only about a 70 basis point gap now between committed and in-place.

Yeah, and you've asked about the new leasing spreads. I mean, look, it's just a sign of the market, the sign of our portfolio, and the sign of our team. Strengthen them all, and we feel confident that while this is an outsized quarter for new leasing spreads, it sets a tone, and I think it underscores the strength of the markets out there.

On that front, maybe just a broader commentary, I mean, it seems, we didn't think they could go higher, but you're setting all-time records. Is the market sequentially still improving or are we at a period of stability here now after getting some really good rent growth? It seems like you've got continued momentum and interest if you're seeing that in the marketplace now.

It's certainly been a great quarter, and we think it is quite durable. That said, all of our projections that we provided at Investor Day were predicated on a 15% leasing spread combined. These leasing spreads are obviously in excess of that, and we are certainly taking advantage of a very strong market. an ever-improving portfolio and a team that has very deep relationships to continue driving growth. The consistency of these spreads, they're going to ebb and flow. I mean, they're very sensitive to specific deals, and you'll see a bit of fluctuation between quarters. But right now, based on all those strengths that I spoke about and the strength of the Canadian retail landscape, We feel confident that there will be a continued strength in that regard and operationally for RioCan. But as I said, you're not going to see that exact same level every single quarter going forward. But we're happy with where we currently stand, and we think it's reasonably sustainable, but there is going to be ebbing and flowing.

That makes sense. Last one for me, just obviously we've got a big M&A trade at a pretty low cap rate for some of the more core assets. Does that give you comfort around your IFRS value, maybe some optimism on the portfolio being more than what you thought it was worth, or just any read-throughs from fairly sizable transactions?

I don't even know which transaction you're referring to, Matt. Of course, for us, we've always been comfortable with our IFRS valuations. That's why we certify them and put them out there. That being said, I think that transaction stands as a great validation for the strength of retail in Canada. and the desirability of it for both institutional owners and other REITs. So I think, again, it just draws us closer to what the private market has been seeing for quite some time. We've been seeing trades. I mean, they are quite disparate because there haven't been a lot of them, but we've been seeing trades. that are also indicative of a very strong market for retail assets. So this didn't surprise us, but I think it just serves as broader validation behind the strength and desirability of great major market retail assets like those owned by RioCamp. Thanks, guys. Thanks, Matt, and thanks for your patience.

I have a reminder to add. Thank you. As a reminder, to ask a question, please press star followed by the number one on your telephone keypad. Our next question comes from the line of Sam Damiani with TD. Your line is opened.

Thank you. Good morning, everyone. Maybe just on the leasing side here, obviously a highlight for everyone seeing these spreads. You know, occupancy, you know, remains essentially full. You really can't accommodate, you know, new demand except for any turnover that you have, which also remains low. So, you know, how is the leasing discussions changing? How is the mix of tenant categories that you're dealing with as you deal with this increasingly scarce amount of available space in your portfolios?

First of all, thanks for your patience, Sam, and I understand that you might have missed the extremely eloquent opening remarks by Jennifer, myself, and Franca, and we'll get those to you. Oh, good. They were brilliant, right? The backdrop is very strong, and I think we're doing extraordinarily well with the necessity-based tenants, but keeping in mind that we do have this mark-to-market opportunity that we have been conveying for a very long time. Our average new rents in the quarter were now well over $30. Our average rents across the portfolio were just over $23. That leaves a sizable room to really extract what we feel are market rents out of our portfolio. And the team has done an extremely good job in taking tenants through this and making them understand what the true landscape is. And we are using data more so than we ever have to figure out exactly where market rates lie. But with respect to the tenants out there that are utilizing the space, it really is the list of the same incumbent tenants that you've seen that make up a part of our portfolio for quite some time. I'll turn it over to Oliver Harris and just give you a little more color on who they are, but I don't think you'll hear any surprises.

Correct, yeah. If you look at our quarter, the volume is really being driven by grocery, pharmacy, essential personal services. You know, no change from what we've seen over the past few quarters. And back to your first question, excuse me, on how the negotiations have changed, I would say the only thing, you know, that is surprising is being done differently, and this isn't like a Q1 event, but this has been happening, let's say, over the last year to 18 months, is that the negotiations are more holistic than just the economic outcome of the deal. We are using the current market environment to remove no bills. New leases do not have any fixed rent options. You know, annual growth is a concept that two years ago was challenging to get tenants to agree to. Ninety-eight percent of our deals now have some form of annual growth embedded in the negotiation. We are leveraging all aspects of this market to produce, you know, not only the best economic outcome of these deals, but from a long-term kind of value creation and flexibility. You know, I think we're doing extremely well.

Okay, great. That's helpful. Just on the other side, are there any known larger or multi-space retailer tenants that you expect to be moving out or not renewing in the coming years?

I think just there's certain tenants that we know might leave a space, but they're sporadic. There's no theme to it. And the good news is there's demand for whatever space we know might be coming back to us. Okay.

Okay, great. And just one last small one. It was a pretty tough winter. Just out of curiosity, was there snow removal costs meaningfully above normal in Q1?

Hey, Sam. Yeah, they were. There was probably four or five larger centers in the GTA area that we actually had to haul snow, which is expensive, which means you basically have to fill the tenants. The tenants do pay for all this We had to send out some interim billings to catch up on that, and all good.

Yeah, and snow removal is not included in the limited number of tenants that have caps on CAM, so it's fully recoverable.

Oh, that's good. Okay, great. I'll turn it back. Thanks very much.

Thanks, Sam.

Our next caller comes from Brad Sturgis. Your line is opened.

Hey, good morning. Just from a capital allocation perspective, just thinking about the NCIB, obviously, you know, leverage kicked up over the quarter of a quarter, and at the same time, I guess, your stock price improved. Like, how do you think about capital allocation for unit buybacks in the short term as still an opportunity, or should we see a little bit of a change in thinking, at least in the short run, on the NCIBs?

Thanks, Brad, and again, thanks for your patience on the call today. The capital allocation decisions are really rooted in achieving our 9% on Libra IRR hurdle. When the stock price goes up or the unit price goes up, it obviously makes it challenging to achieve that. The good news for us is that there are other opportunities to invest in, such as putting money into our own shopping centers, building up paths and strips, which in this environment certainly allows us to hurdle that 9% IRR number. But, yeah, if we are in the fortunate circumstance where the unit price continues to increase, then NCIB becomes less of a promising prospect for capital allocation, but we feel that there will be, you know, other opportunities that arise out of there. And then the other thing I'll just remind you of is that the balance sheet and the strength of it is a core principle for REOCAN, and so that will always be our principal focus. And as we've asserted before, as REOCAN living assets close as the year goes on, it will continue to strengthen that balance sheet and we'll get closer to the mid part of that range for NETS at EBITDA.

And just on the intensification opportunity, I know you've highlighted a few times in terms of the potential across the portfolio. Is there, in the short term, can we expect a couple more projects getting added into the active pipeline, or how should we think about that over the remainder of the year?

Yeah, I think we've already put out guidance that we're going to spend about $100 million in 2026 on a combination of CapEx endeavors, one of which is, of course, putting money into pad build-outs and strip build-outs, And I think that's going to be fairly consistent. We're going to seek out as many opportunities as are logical on a year-by-year basis. But I think that's a logical run rate for years going forward. But we'll continue to update that guidance.

Okay. Thank you.

Our next question comes from the line of Dean Wilkinson. Your line is open.

Hey, Dean.

Thanks for having me.

Always, you know me, I can't. Jonathan, look back over our illustrious careers. Every time we've seen things get better, the occupancy tightens up and the rents are going up, new supply tends to come into the picture. When you look at the landscape now, is it still a case that just new construction costs, given land, all of those things associated with it, you just can't pencil that out. So the runway for existing assets is probably a little longer than maybe it has historically been

I'm highly confident that there will be no material supply in the Canadian landscape anytime soon, Dean. And that's not just because of the economic context. It's not just because you need certain rents to justify new build. You also need to find land, you know, unencumbered land of many acres that have rooftops and the appropriate demographics surrounding it. That's very difficult to find. And then the attributes of that land have to be such that they're easily accessible to they've got great visibility, and that you've got tenants that necessarily want to be in that specific area. These things take time to find, and they're very far and few between out there. I would also say that you also have to get that land zoned, which is another very high barrier. And for us, this is a long time away. If Rio can't find viable land and the viable opportunities to build de novo, so greenfield-do sites, then I suspect many others in the field will also have such difficulty, which is, I mean, obviously a two-sided coin. On one hand, it really protects the landscape. There will be no material supply going forward. But on the other hand, of course, it does limit our opportunities to build anew. The good news for us, as I alluded to before, is we have this excellent opportunity set, which is our own portfolio, and there's a lot of density to be had in that portfolio, which, as you can see from the activity results, in our portfolio this year, we are fully intent on extracting and building out.

That's the benefit of the cost basis. And I suppose this is why investors are willing to pay a premium to book value to acquire assets, not a discount. That's it.

Thanks a lot, John.

Thanks, Steve.

Our next question comes from the line of Patti Burr with RBC Capital Markets. Your line is open.

Thanks. Good morning. Just maybe coming back to the four Rio Can Living rental residential properties that are left to sell, where are they now in terms of that sale process? Like, have they been listed or just not yet as you work to stabilize them?

I would say there's no consistent theme, Pami. They're in different stages. Some of them we are actively... putting in the market in very short order, and others were actually working on some off-market discussions, and others were just not ready to do either. So they really do range. But as I said previously to one of your colleagues, we are confident that those assets will be sold. I mean, I will not say with certainty that all four of them will be sold and finalized by the end of 2026. I have indicated that there might be a couple that – literally just flow into next year simply because the assets aren't ready to be sold. They're not stabilized. But I don't think it'll be a big delay beyond that.

Okay, got it. And then I did want to come back to, I guess, maybe clarify some of the comments on the remaining condo inventory that's under construction. In that $1.3 billion target in the capital recaturation, I think there's still about $120 million related to condo closings, if I read that table correctly, in order to hit that target. But then I think your commentary, Frank's commentary, suggested that there's no further condo inventory income this year that I guess you anticipate. So just trying to reconcile those two comments, and should we essentially infer that there's no further proceeds coming back this year in order to hit that $1.3 billion, or just make it clear?

So I'll start and then hand it to Franca, but there's about $100 million of inventory remaining. About $14 million of those are under contract. We expect most of those to close. And then the remainder, we didn't have, we didn't prognosticate closings for the remainder of 2026. But, you know, in terms of how it features in that 1.3, I'm going to hand it over to Franca.

Yeah, Tommy, there's also some, if you look at the reconciliation in our materials, there's also some receivables that we're going to be collecting from one of the projects that are entering into final closing. So that's going to be added to the proceeds. Right now, as we sell them, you know, we close on interim. When we get to final closing, we collect the cash. So you'll see that coming through the reconciliation as well.

So the 1.3 in total is still the right number?

Yeah. Okay, so it's still the right number. So the total condo, I guess, proceeds second to your comments on the receivables. the 370 is the cash number that should come through, like the $370 million is the average number that should have been collected between 2025 and the end of this year?

Yes.

Right. Okay. And then just in terms of the restructuring charges, I mean, do you feel at this point like there's no further, I guess, any additional anticipated changes coming or charges, or are there perhaps some further efficiencies across the business that, you know, you're looking to, you know, we may see?

No, I don't think there's anything material.

Okay. Okay. And then just lastly, I just wanted to come back to the comment around annual rent steps. Obviously, we've seen this with industry now for many years, and certainly in retail we've been talking about it and seeing it as well. But what range of annual steps are you putting into some of the renewal leasing or the new leases?

Yeah, the objective is always 3%. We are attempting to be greater of 3% in CPI, but that's, of course, the objective. Sometimes we get a little more. Sometimes we'll get a little less. Oliver, did I?

Yeah, I think 2% and 4%.

Okay. All right. Thanks very much. I'll turn it back.

Thanks, Bong. Thanks for your patience.

And I am showing no further questions at this time. I will now turn the conference back to President and CEO, Jonathan.

Thank you very much. And again, for all those of you who are still on the call, I really do appreciate your patience with the technical difficulties that we all experienced. I'll leave you with this. Our first quarter clearly demonstrates execution of the strategy that we presented at our investor day. We're delivering exactly what we said we would. We have absolute confidence in our people, our portfolio, and our strategy to drive long-term value. Thanks, everyone, and thank you again for your patience.