Allied Properties Real Estate Investment Trust ($APUN)

Hello, ladies and gentlemen, and thank you for standing by. Welcome to Allied Properties REIT First Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to our President and CEO, Cecilia Williams. Please go ahead.

Thanks, Dustin, and good morning, everyone. Welcome to our Q1 conference call. Please note that certain statements we make during the course of this conference call that are not statements of historical facts may constitute forward-looking information and forward-looking statements about future events or future performance. These statements are based on management's current expectations and are subject to risks, uncertainties and other factors that may cause actual events or results to differ materially from historical results and/or from our forecast, including those described under the heading Risks and Uncertainties in our 2025 annual report. Material assumptions underpinning any forward-looking statements we make include those described under the heading Forward-Looking Statements in our 2025 annual report. In addition, certain non-IFRS financial measures may be discussed on this call. References to non-IFRS financial measures are only provided to assist you in understanding our results and performance trends and may not be appropriate for any other purpose. For further discussion on these matters, please refer to our 2025 annual report under the heading non-GAAP Measures. Turning to the quarter. Q1 marks the first full quarter of executing our action plan and the results reflect progress. Operating performance was in line with our expectations. Leasing momentum is encouraging as we see improving demand across our core urban markets and a growing pipeline. Our $500 million disposition program is on track, and we completed our equity issuance during this quarter, an important milestone in restoring financial flexibility. This morning, I'll focus on 3 areas: one, leasing and operating fundamentals; two, execution of our deleveraging strategy; and three, development and capital allocation. Nan will then review our financial results, and J.P. will cover leasing in more detail. Starting with leasing and operating fundamentals. We ended the quarter at 87.1% leased and 85.0% occupied, modestly ahead of expectations. Leasing activity in the quarter was solid. We leased over 500,000 square feet with strong contribution from both new users and expansions. We also achieved 63% retention on expiries. More importantly, forward indicators are improving. Our total leasing pipeline increased 20% and our new leasing pipeline increased 36% this is consistent with what we see across our markets as interest in high-quality urban workspace continues to improve and new supply remains limited. Activity is increasingly focused on smaller format space, which aligns well with our portfolio offering. As expected, we continue to expect timing impacts from nonrenewals, and we expect some softness in Q2. However, based on current activity levels, we remain confident in our year-end occupancy target of 84% to 86%. Turning to the balance sheet. Our priority remains deleveraging and improving credit metrics. We ended the quarter at 12.3x net debt to EBITDA, an improvement from 12.9x in the prior quarter. During the quarter, we made progress across all components of the plan. We completed our equity issuance and advanced our disposition program, selling low-yield noncore assets to improve our portfolio composition and earnings potential. In Q1, we closed $46 million of dispositions and continue to advance the remaining $450 million pipeline, which is actively marketed and progressing. And I'm pleased to report that after quarter end, we went firm on additional assets expected to generate $201 million of proceeds in Q2. This gives us confidence in our ability to reach our $500 million disposition target by year-end. As we noted last quarter, the timing of asset sales is not entirely within our control, but expanding the pipeline improves execution certainty and flexibility. Our objective remains unchanged, get to mid-11x net debt to EBITDA by year-end, and we're on track to deliver that. Turning to development. We're now at the final stage of our development cycle with KING Toronto as the last major project. As expected, this project continues to create near-term volatility. In Q1, we recorded additional expected credit loss and impairment on residential inventory. These reflect higher cost to complete, construction delays and increased uncertainty around condominium closings. We're actively addressing these risks and have taken over on-site construction management and are working toward extending the construction loan. While not preferred, these actions are necessary to protect value and maintain project momentum, consistent with the approach we outlined last quarter. Importantly, the underlying fundamentals of the project remain intact. The project is 92% pre-sold. Commercial leasing is progressing and anchored by Whole Foods, and completion is targeted for the second half of 2027. Turning to our outlook. Our 3-year outlook has been updated for one item in 2026. Capital expenditures are expected to be higher in the year by $40 million to $50 million due to the higher construction cost to complete KING Toronto. All other key metrics over the 3-year period remain within previously communicated ranges. As we said last quarter, our outlook assumes gradual occupancy improvement, which we're seeing. It also assumes continued deleveraging, which we're executing on. To conclude, we're at a turning point. With the capital-intensive phase of the business largely behind us, our focus is now on execution. We're leasing space, recycling capital and strengthening the balance sheet. While risks remain, particularly within development, we're addressing what we can control. Our portfolio is well positioned and the path forward is clear. Q1 demonstrates we're on track and the work we continue to do reflects our focus. With that, I'll turn the call over to Nan.

Thanks, Cecilia. Good morning, everyone. I'll briefly cover our first quarter financial results, our ongoing efforts to strengthen the balance sheet. Q1 performance came in line with expectations. FFO was $0.289 per unit. Rental revenue of $144 million and operating income of $70 million was consistent with our budget. Same asset NOI for the quarter also met expectations. Our leverage ratios were slightly better than expected debt-to-EBITDA coming in at 12.3x. This was mainly due to funding time lines for KING Toronto and M4. Turning to valuations. Our Q1 results included $134 million fair value adjustment, $48 million impairment of residential inventory and a $44 million increase in expected credit loss provision. During the first quarter, we completed dispositions totalling $46 million. These proceeds were used in conjunction with our equity raise to repay the balance owing on our 1.7% Series H debentures, which came due in February. Subsequent to the quarter end, we entered into a firm contract to sell 8 properties in Toronto for $123 million and 1 property in Montr al for $78 million. We expect these proceeds to close in the second quarter. We continue to focus on reducing our leverage metrics to maintain our investment-grade credit rating. Disposing of noncore low-yielding assets is a key component of our strategy to strengthen the balance sheet. This will reinforce our financial stability and flexibility. In closing, the start to 2026 is largely tracked as expected. I'll now turn the call over to J.P. Thank you.

Thanks, Nan. I'll start by providing a summary of our leasing performance in Q1. followed by commentary on our leasing pipeline and the associated risks and conclude with observations on the market and operating fundamentals. Starting with leasing performance. In Q1, we captured strong market share. We completed 10% of the total leasing activity while representing 5% of the total rental stock. This 2:1 ratio underscores the quality of our portfolio and strength of our operating platform. Equally encouraging, our new leasing pipeline increased 36%, demonstrating continued improvement in operating fundamentals. Our occupied and leased area in the quarter ended modestly ahead of expectations and flat relative to year-end 2025 at 85% and 87.1%, respectively. We anticipate a decline in occupancy in Q2 because of known nonrenewals. However, we expect to end the first half of the year higher than our outlook of 82%. To achieve our occupancy target of 84% to 86% by the end of the year, we need to lease between 1.05 million and 1.35 million square feet in our rental portfolio through new leasing and renewal activity that impacts occupancy in 2026. This is consistent with the volume leased in 2025. Year-to-date, we've leased 414,000 square feet against our target, and there have been no material unanticipated nonrenewals or terminations that would alter our goal. In Q1, we completed 529,000 square feet of total leasing activity. 518,000 square feet of leasing activity occurred in the rental portfolio and 11,000 square feet occurred in the development portfolio. Within the rental portfolio, 324,000 square feet represented new leasing and 195,000 square feet represented renewals. New leasing activity in the rental portfolio measured in square feet was in line with our quarterly average in 2025 and new leasing activity measured in number of transactions was up 7%. Our conversion rate for new leasing was 45%. Of the 324,000 square feet of new leasing activity, 133,000 square feet represented expansions of existing users, in line with our quarterly average in 2025. New leasing activity in Q1 across our 3 workspace formats was proportional to total GLA. 47% of total leasing activity occurred within our Heritage portfolio, 44% occurred in our Modern portfolio and 9% occurred in our Flex portfolio. Our Heritage portfolio is 88.4% leased, our modern portfolio is 87.2% leased, and our Flex portfolio is 75.3% leased. New leasing spreads were up 1% in our Modern portfolio and up 5% in our Heritage portfolio when excluding Calgary. Average total leasing costs in Q1 were $7.62 per square foot per annum, within the range achieved in 2025 of $4.38 to $8.57. Average leasing costs for new leases were $10.78 per square foot per annum and $2.39 for renewals. The composition of our leasing profile remains anchored by professional services and TAMI users, which collectively represented more than 3/4 of the transaction volume in Q1. We continue to observe more demand from the professional services sector, representative of the ever diversified nature of our tenant profile. Our retention and replacement rate was 63%, higher than our forecast for Q1. The average rental rate increased 1.2% when comparing the ending to starting base rent and 7.7% when comparing average to average, in line with our forecast. In 2025, we successfully renewed Google at the Breithaupt Block in Kitchener, which addressed our largest 2026 maturity, representing 97,000 square feet at our 50% share. Our largest known nonrenewal in 2026 is Sun Life at our de Gasp portfolio in Montr al, representing 56,000 square feet expiring at the end of August. We are in advanced discussions with the TAMI user to backfill up to 40,000 square feet of the Sun Life space with lease commencement in Q4 2026. We are forecasting a replacement and retention rate of 69% in 2026. In 2027, our largest known nonrenewal is SQI, a Crown Corporation of the province of Quebec at 747 Square Victoria. As part of a broader public sector consolidation, SQI will return 18,000 square feet in June 2026 and approximately 100,000 square feet in December 2027. We are actively touring users with 2028 requirements through the SQI space. There are no material nonrenewals known at this time for 2028. Lastly, sublease availability dropped by 20 basis points relative to Q4 and is 2.4% of GLA. The weighted average lease term of space available for sublease is 4.6 years, which reduces the risk of imminent direct vacancy and loss of economic productivity. Moving to our leasing pipeline. We currently have 1.57 million square feet of leasing activity underway, comprising 985,000 square feet of new opportunities and 583,000 square feet of renewals. Of the new activity, 411,000 square feet is at the prospect stage and 574,000 square feet has progressed to the offer stage. Our total leasing pipeline increased 20% since the beginning of the year, and our new leasing pipeline increased 36%. For context, we averaged a pipeline of 1.3 million square feet each quarter in 2025 and 950,000 in 2024. There was some commentary among brokers at the beginning of the year that the momentum experienced in the second half of 2025 had not carried over into 2026. Our pipeline suggests a different narrative, though we are monitoring this dynamic closely. We are also monitoring the conflict in the Middle East for its impact on energy prices, inflation and interest rates and whether it will adversely impact office space demand. So far, we have not observed an impact, though the risk increases the longer the conflict continues. Turning to market commentary. The increase in our leasing pipeline reflects improving fundamentals driven by: one, increased demand resulting from higher physical utilization as organizations continue to revert to an office-centric model; two, limited availability in AAA assets in the CBD of Montr al, Toronto and Vancouver, which is at or near pre-pandemic levels, driving an increase in demand for Class A assets in and around the CBD; three, reduced sublease availability, which declined for the 11th consecutive quarter to 2.4% of the national rental stock and sits closer to pre-pandemic levels of 1.5% to 2%; and four, a decline in total construction, which has fallen to a 22-year low. As a result, no new urban supply is expected in the near term. For these reasons, we continue to see positive leasing momentum in our core concentrations of Downtown West Toronto and Downtown South Montr al. This trend began in the second half of 2025 as AAA assets were leased and demand extended to Class A buildings in and around the CBD. Leasing activity in Kitchener remains slow as demand is currently concentrated in the suburban market. Calgary's recovery remains tempered by consolidation in the energy sector, though the market is benefiting from structural supply side corrections resulting from conversions, particularly in the belt line where our portfolio is concentrated. And in Vancouver, Gastown and Yaletown continued to lag the financial district, though both showed signs of improvement in Q1. At the beginning of March, we introduced several initiatives to make it easier for small to midsized organizations to lease space in our portfolio. These tactics aim to reduce friction in the leasing process and align with how tenants screen tour in shortlist properties. By removing these obstacles related to fit and readiness early in the process and investing in areas where tenants receive the most risk, specifically speed to transact, price certainty and space delivery, we're able to further differentiate our product. To date, these initiatives have been well received and demonstrate Allied's willingness to be more adaptive in growing occupancy. I will now turn the call back to Cecilia.

Thanks, J.P. To conclude, Q1 reflects how we're progressing through a transition phase. We've made deliberate moves to strengthen the balance sheet and better position the portfolio. Although we expect some softening from nonrenewals in Q2, we're encouraged by signs of improvement in leasing activity beyond. Our focus remains on execution and on the areas within our control. We know the path forward, and we know it will take time and consistent delivery to achieve our objectives. With that, we'll open the line for questions.

[Operator Instructions] And we will take our first question from Lorne Kalmar from Desjardins.

Thank you for all the color in terms of the operating fundamentals. That was very helpful. I just wanted to touch on the KING Toronto for a second. Firstly -- and sorry if I missed this, but can you confirm whether or not you're recognizing interest income based on the full amount of the loan or the amount net of the impairment?

Lorne, it's the full amount.

Okay. And then maybe-- I Sorry. Sorry, I missed that.

The loan is not credit impaired, so it's on the full amount.

Okay. Is there any point at which you would recognize it on the net amount?

Yes, if it becomes credit impaired.

The way it's being recognized now, Lorne, is the way we have to recognize it under IFRS.

Okay. Fair enough. And then just sticking with the KING Toronto theme here. You guys, I think, pushed out the receipt of condo proceeds from, I think, the beginning of '27 back in February to the end of the year. I know you touched on a few complications at the project, but it seems to have changed a lot in the last couple of months. Like what really changed since we spoke in February or since you released results in February?

In terms of -- I mean, the costs went up. There were curtain wall cost increases from transportation and storage, trade delays due to labor inefficiencies and required extended site presence and then schedule extensions leading to site overhead and all of those things resulted in a longer time line and higher costs.

Okay. And then one last quick one. Do you have the number of the average percent of deposits on the condos?

It's about 20%.

Our next question comes from the line of Jonathan Kelcher from TD Cowen.

One more on the KING Toronto. I believe you guys said that you completely took over the project. When was that? Just trying to get a sense of the added costs or post that or pre that or what's happening there?

Yes. We started taking over in the fall, Jonathan, and now we've completely taken over on-site construction management.

Okay. So with that and I guess, having the fall and winter to sort of look at it, do you think you're hopefully very comfortable with this being the final increase in costs?

We can't guarantee, Jonathan. We rely heavily on the cost consultants in addition to EllisDon, but we are very comfortable with where we've landed as of this point.

Okay. And same -- I guess, same question on the timing.

Yes.

Okay. And then on the dispositions, on the $200 million that you announced last night, I guess, 2 things there. One, maybe a little color on why the Competition Bureau is involved in the Montr al one? And then secondly, just on the cap rate or annualized NOI that's associated with these properties.

Yes. On the Competition Act, if it's a book value of $93 million or higher and has to go through that. So that property triggered that criteria?

And Jonathan, on the 2 properties announced last night, the cash yield is 4.4%...

Our next question comes from the line of Mario Saric from Scotiabank.

Just sticking to the disposition, can you remind us of what the overall expected disposition cap rate would be on the $500 million you're targeting this year?

In our forecast, Mario, the average cash yield is 3.1%.

Okay. And then what percentage of the $500 million goal would have been originated by unsolicited expressions of interest?

I'm sorry, what percentage of the original goal was from unsolicited interest?

Yes.

I mean we're -- everything is being marketed.

Okay. I'm trying to get a sense of the office transaction market is opening up. There's been several deals announced in Toronto recently on the office side. I'm just trying to get a sense of based on what you're seeing in the market today, do you feel you can sell more than $500 million of IFRS if you were to more actively pursue opportunities today?

We feel very confident in our ability to hit the $500 million target that we've set.

Okay. And then just maybe last question, more of a strategic question. Allied has acquired some more traditional office assets in the past with the intention of transforming the interior into more of a Class A environment for lack of a better way to describe it. From a capital allocation standpoint going forward over the next 2, 3 years that your outlook encompasses is the plan to continue to convert some of these more traditional office assets into internal Class experiences? Or is it more likely that you could see some of these become disposition candidates down the road?

Yes. We'll finish whatever we started and are currently working on. And then otherwise, we would consider anything as a disposition possibility.

Okay. Maybe one more for me, just for J.P. You mentioned some change in leasing tactics removing obstacles for leasing in the quarter. Can you just maybe touch on an example or 2 in terms of what exactly that means and what's driven?

Mario, the average size of a vacant unit in our portfolio is 5,000 square feet. So naturally, that would target small to midsized organizations who necessarily don't have the internal capabilities to take on large construction projects to prepare their space for occupancy. And as such, we're investing in our vacant space to make it occupancy ready. We're also providing end-to-end construction oversight support, leveraging our vertically integrated platform to support those small to midsized organizations. And we're also prepared when appropriate to also a short-form lease template on which we can transact with those small to midsized organizations provided the type of transaction fits certain criteria.

Our next question comes from the line of Pammi Bir from RBC.

Just maybe coming back to the leasing. You mentioned we're going to see a drop in Q2 occupancy. But I believe, J.P., you mentioned as well that it may be higher than the 82% occupancy that you previously guided to. Can you just maybe comment or maybe clarify that piece there and what's driving that?

Pammi, we do anticipate some erosion in occupancy in the second half of the year as we had contemplated in our forecast -- in the first half of the year, specifically the second quarter, as we had contemplated in our forecast and communicated. Specifically, we modeled an 82% ending occupancy in Q2. We expect to end higher than that, and that's primarily a function of leasing activity and some anticipated nonrenewals that are now renewing.

Okay. All right. Got it. And then you mentioned some of the demand from professional services and TAMI tenants. I'm just curious, are you seeing any changes in terms of space needs from software tenants or AI-related implications on demand at this stage?

We are -- we actually saw an increase in leasing volume from the TAMI sector in Q2 -- or in Q1, I should say, compared to Q4. And we are hearing and observing in our pipeline and in the broader market that there's more and more demand from the tech sector across the markets we operate.

Okay. And then just -- I do have a couple more just on KING Toronto. What are you now assuming in terms of default rates? And has that been informed by perhaps buyers just more buyers perhaps trying to get out of deals?

Yes, Pammi, we're carrying a 35% default rate right now, and we have been talking to the marketing team, and we've also been tracking the current purchases and having communications with them as well. So that's how we keep arrived at that 35% default rate.

Okay. And what was it previously assumed or estimated at?

10%.

So that incremental 25% is just from this quarter?

Yes.

Okay. And then in terms of the pricing on -- I know there's only a small amount left in terms of the remaining units, but what -- what are they currently being marketed at versus, I think the initial price is $2,000 a foot roughly or...

Yes. So what's remaining, there's about 8 penthouses remaining. So the penthouses on a per square foot basis are higher. So what's remaining of the 35 units on average is $1,500 to $1,800 per square foot. That's what we're carrying.

Okay. And then just lastly, on the disposition side, obviously, some encouraging signs. But in terms of the Toronto House and Calgary House, where are you now in terms of the sale process on those assets?

We are advanced in our marketing efforts of -- with the Toronto asset. CBRE has listed that asset for us, and we have a number of groups in the data room underwriting the asset. We are preparing to bring the Calgary asset to market in June, and that will be listed with CBRE and Scotiabank.

Okay. Fair to say then that the Calgary House is unlikely just again, given the maybe later stages of the timing of it being marketed, that's not likely to maybe transact this year?

We're still contemplating closing this year.

Our next question comes from the line of Patrick Sealy from Green Street.

Given the Q1 results, how confident are you in meeting your 2026 outlook on occupancy, NOI and FFO?

Well, like we said, we came in as expected for Q1, so we continue to expect to hit our targets for the year.

Our next question comes from the line of Matt Kornack from National Bank Financial.

Just trying to understand a bit of a divergence in terms of where NOI is headed relative to kind of the KPIs on occupancy and rents. I mean it seems like this quarter, you actually gained some occupancy. You had some positive transfers out of PUD and into IPP. But NOI kind of missed us by a fairly sizable margin. And it looks like it's maybe recoveries or margins. And I'm just -- I'm trying to understand why? And then how that progresses, if it is maybe some one-time timing delays between recoveries or it sounds like you've decapitalized some operating costs as well. And I'm just trying to figure out how that margin picture evolves.

Yes, Matt. So in terms of occupancy, you're right, year-over-year, it's 85.9%. But tenants this quarter in the rental portfolio are fixturing. So from fixturing, yes, it's in your FFO because straight-line rent is in your FFO. But from an NOI standpoint, there's all the additional rent, which they don't pay during fixturing. So that's why you have the occupancy, but you don't have the revenue. That's one component of it. The second component is the capitalization of operating costs. In the rental portfolio, there were upgrade activities that were completed at the end of Q4. So those assets from a timing perspective, some of them may be leased, but not productive yet.

Okay. So it does sound like we'll recapture some of that in subsequent quarters, and it's a function of timing. And then presumably, some of that relates to Toronto House, which is a gross lease as opposed to net leases elsewhere. And I know it's slated for sale. I don't think you provided the occupancy this quarter. But is it fair to say that, that may even be a drag on NOI in this quarter, just given seasonality and where you are in leasing?

Correct. The operating cost is not recoverable and the property is more stabilized today in terms of expenses than it was in the comparative year. So absolutely correct that -- and we also had an assessment of the realty taxes there so that to go up.

Okay. I appreciate that. Just back to the asset sales side of things, J.P., I think you said 4.4% on the Montr al asset? Or was that the combination of the Toronto and the Montr al asset?

It was the combination, Matt. And when you add the amount closed in Q1, the total yield is 4.2%.

Okay. And then 150 West Georgia, is there any update in terms of the timing or how that ultimately is expected to work in terms of the partial cash payments and how your participation in residual projects will be?

There is no update to provide at this time, Matt. As soon as we have one, we will.

Okay. Fair. And then last one for me, just on the tenant side. You have lease term with Ubisoft, but obviously, it's been a business that I think has been under a little bit of pressure. Have you guys been in contact with them? Or are you fairly comfortable that they're in a reasonable position to continue to occupy and pay on their space in Montr al?

We have been in contact, Matt, and we are confident. Vantage Studios operates in Montr al, which is Ubisoft's most well-capitalized creative house, having received a EUR 1.2 billion investment from Tencent for a 25% stake in that creative house. They also introduced a 5-day week return office policy associated with their restructuring earlier this year. And so at this time, we're confident in their incoming tenancy.

Our next question comes from the line of Tal Woolley from CIBC Capital Markets.

Is Westbank still involved in the marketing of these assets? I know you guys have taken over control of the construction, but I'm just wondering what sort of influence they have on the rest of the process?

How they are leading the sales process with our very close involvement.

Okay. And then their financial difficulties have stretched out over a period here. What is the contingency plan if they run out of liquidity?

Well, that's essentially what we already have modeled relating to KING Toronto.

Okay. So...

That's already captured in our balance sheet and our outlook.

Okay. And so if they hit the wall, then your framework really shouldn't change that much then?

Correct.

Okay. And then you talked a little bit about default rates before. I'm just wondering how confident you feel the contracts are with respect to rescission and default?

Based on what we know today, Tal, we feel confident. Everything that we've reported is based on the best information that we have to date.

Okay. And then I guess just on the leasing side, can you talk a little bit about any new initiatives or strategies you might be using that were not employed previously to try and drive demand here? And I apologize if I missed some of this earlier. I was waiting forever to get on earlier.

No problem, Tal. There are 2 constituencies that we are targeting with the recently introduced initiatives that were communicated to the broader market in the middle of March. The first constituency is the brokerage community, where we're really trying to engage or increase engagement with the brokerage community in large part in how we structure commissions by adding commission bonuses on near-term transactions and the timing of those payments. The second constituency is the tenant community, specifically small to midsized organizations in light of the fact that the average vacancy in our portfolio is 5,000 square feet. So really trying to reduce friction in the leasing process to make it easier for organizations of that scale to lease space in our portfolio and ultimately differentiate our product relative to our peers. And we're doing that by offering short-form lease templates where appropriate for the risk is appropriately measured. Second, we are prepared to offer free rent in lieu of allowances. That's mostly on renewals, but nevertheless, an incremental tactic. We're building out space to improve the readiness and shorten the lead time associated with occupancy and where a tenant wishes to lease space that's not built out, we are prepared to leverage our integrated platform and offer end-to-end construction oversight support as the tenant prepares their space for occupancy. And I'll add, Tal, that so far, both communities have responded exceptionally well to these initiatives, and they acknowledge that this reflects the increased adaptive nature in which Allied is prepared to grow its occupancy.

Our next question comes from the line of Brad Sturges from Raymond James.

Just going back to the disposition program yet again. Just on Toronto House and Calgary House, I know Toronto House is under lease up. I think you're carrying some vacancy at Calgary House. Like how do you think that dynamic of lease-up is going to impact sales pricing and time lines? I guess the question is, would you have an expectation of a smaller pool of buyers relative to being at a more stabilized level, maybe a little bit later on?

We haven't seen any impact to the prospective buyer pool because of the state of occupancy in the Toronto asset, nor do we expect the same for the Calgary asset.

Okay. And at this point, the $500 million target that you have not made any changes in assumptions around proceeds that you think you can generate from those 2 assets?

No.

We have reached the end of the Q&A session. I will now turn the call back over to our President and CEO, Cecilia Williams, for closing remarks.

Thanks, Dustin, and thank you, everyone, for your interest. We look forward to keeping you updated on our progress.

The meeting has now concluded. Thank you all for joining, and you may now disconnect.