Minto Apartment Real Estate Investment Trust (MIUN) Earnings Call Transcript & Summary

Good morning. My name is Anas, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Minto Apartment REIT Fourth Quarter 2021 Results Conference Call. [Operator Instructions] Before we begin, I want to remind listeners that certain statements about future events made on this conference call are forward-looking in nature. Any such information is subject to risks, uncertainties and assumptions that could cause actual results to differ materially. Please refer to the cautionary statements on forward-looking information in the REIT's news release and MD&A dated March 8, 2022 for more information. During the call, management will also reference certain non-IFRS financial measures. Although the REIT believe these measures provide useful supplemental information about its financial performance, they are not recognized measures and do not have any standardized meanings under IFRS. Please see the REIT's MD&A for additional information regarding non-IFRS financial measures, including reconciliations to the new IFRS measures. Thank you. Mr. Waters, you may begin your conference.

Thank you, Anas, and good morning, everyone. I'm Michael Waters, CEO of Minto Apartment REIT; and I'm joined on the call this morning by Julie Morin, our CFO. I'll begin the call by discussing highlights from the fourth quarter and other corporate developments. Julie will review our financial and operating results in detail, and I'll conclude with our business outlook. After that, we'll be pleased to answer any questions you may have. Our financial performance improved in the fourth quarter as Canadian urban rental market conditions continue to strengthen. We generated solid growth in occupancy and rental rates even as we reduce the use of discounts and promotions. We entered into 444 new leases in the quarter, an increase of 9% compared to Q4 last year. We realized an average rental gain on turnover of 7.2%, significantly higher than the 4.4% gain-to-lease we generated in the third quarter of 2021 and the 2.1% gain-to-lease we generated in Q4 last year. Average monthly rent was $1,641, a year-over-year increase of 1.1%. But when you exclude the acquisition of Le-Hill Park, which closed on December 7, 2021, average monthly rent would have been $1,664, a year-over-year increase of 2.5%. We didn't provide same-property information this quarter as Le-Hill Park was only included in the results for 25 days, and this wasn't considered material. Total portfolio and same-property portfolio results were substantially the same. However, starting in Q1 2022, we'll be reporting both the total portfolio in the same-property portfolio. Our average occupancy in the quarter was 95.0%, the highest level we've achieved since Q2 of 2020, which was the early stages of the pandemic. In comparison, average occupancy was 92.9% in Q3 2021 and 92.3% in Q4 2020. So I'm pleased to note that this was the third consecutive sequential quarter in which move-ins exceeded move-outs and occupancy improved. Supported by these positive developments, in the fourth quarter, we generated year-over-year growth of 5.2% in net operating income and 6.7% in AFFO per unit. During the quarter, our Board of Trustees also approved a 4.4% increase in monthly cash distributions. The increase took effect beginning with our November distribution payable in December. This was the third consecutive annual increase in distribution since the REIT's inception, 2 of which came during the pandemic. We're determined to steadily increase unitholder distributions as AFFO rises while also maintaining strong liquidity and a conservative balance sheet. The fourth quarter was also a busy period from a growth standpoint. We committed to provide a convertible development loan of up to $19.7 million for the development of a new 6-story mixed-use multi-residential and commercial property at 810 Kingsway in Vancouver. We completed the previously announced acquisition of Le-Hill Park in Montreal for approximately $80.1 million. It's a high-quality 261-suite rental property located in close proximity to our other Montreal locations. We commenced construction on new buildings at the Richgrove and Leslie York Mills properties in Toronto. These will increase our suite count by a combined 417 suites. And we completed an $87 million bought deal offering of trust units. Proceeds were used to assist in the funding of the acquisition of Le-Hill Park and our convertible development loans and also to provide financial capacity to support future acquisitions. Finally, we continue to make progress in our repositioning program. We completed the renovation of 113 suites during Q4 to improve asset quality, reduce future repair costs and drive strong growth in rental revenue. For the full year, we repositioned 367 suites. I'm pleased that we ended 2021 on a strong note. The last 2 years have been characterized by volatile markets resulting from pandemic-induced changes in work and lifestyle conditions. What we're seeing now is a steady return to more normalized market conditions. We're well positioned to generate continued improvement in financial performance and to capitalize on new growth opportunities as market conditions continue to recover. I'll now invite Julie Morin to discuss our fourth quarter financial and operating performance in greater detail. Julie?

Thank you, Michael. Turning to Slide 4, I'll start by reviewing the Q4 operating results. We reported revenue, excluding per suites of $30.3 million in Q4 2021, an increase of 4.7% compared to $29 million in Q4 last year. The increase was mainly due to higher occupancy and average rents. Total revenue, including furnished suites was $32.4 million, an increase of 4.8% compared to Q4 last year, reflecting higher rents and occupancy for both furnished and unfurnished suites. NOI, excluding furnished suites in the fourth quarter was $18.8 million or 62.1% of revenue, an increase of 4.6% compared to $18 million or 62.2% of revenue in Q4 last year. Total NOI including furnished suites was $19.9 million or 61.5% of revenue, an increase of 5.2% from $18.9 million or 61.3% of revenue in Q4 last year. Higher NOI in Q4 2021 was mainly reflected higher revenue due to improved occupancy and rental rates, partially offset by higher property taxes and utilities expense. FFO in Q4 2021 increased 10.2% year-over-year to $13.2 million compared to $12 million last year, mainly due to the positive NOI variance. AFFO increased 11.4% to $11.7 million or $0.189 per unit from $10.5 million or $0.177 per unit last year. Higher AFFO primarily reflected the higher FFO, partially offset by an increase in the maintenance capital expenditure reserve. The REIT declared cash distribution in the fourth quarter of $0.1171 per unit, resulting in an AFFO payout ratio of 63.1%. Cash distributions of $0.1138 per unit were declared in Q4 last year, resulting in an AFFO payout ratio of 64.2%. As Michael noted, we increased our monthly distribution beginning with the November 2021 payment. At the end of 2021, our portfolio consisted of 7,538 suites with an average monthly rent of $1,641 per occupied unfurnished suite. Average monthly rent increased by $18 or 1.1% compared to $1,623 at the end of 2020. The average occupancy rate in Q4 2021 increased to 95% compared to 92.3% in Q4 last year. Turning to Slide 5. This chart highlights our steady quarter-over-quarter growth and occupancy as urban rental market conditions improved over the course of 2021. In the fourth quarter, we had 514 move-ins versus 420 move-outs or 94 net move-ins. It was the third straight quarter with positive net move-ins. Accordingly, occupancy increased from approximately 91.1% in the first quarter to 95% in the fourth quarter. While Q4 occupancy is still lower than pre-pandemic levels, it represents a strong improvement in a relatively short period of time. On Slide 6, we have provided a revenue analysis as of the end of 2021. The upper chart breaks down our gain-to-lease performance in the fourth quarter, while the lower chart shows our estimate of the gain-to-lease potential embedded in the portfolio. Beginning with the upper chart, as Michael noted, we signed 444 new leases in the quarter following suite turnover. This was a 9% improvement compared to Q4 last year. We generated solid gain-to-lease in all of our markets. The average rent on new leases increased by 7.2% from $1,652 to $1,770. This resulted in an annualized incremental revenue gain of approximately $472,000. Turning to the gain-to-lease potential on the lower chart. We believe we can generate approximately $7.9 million of annualized incremental revenue growth by bringing rents in 6,991 occupied suites to market level. We expect to realize a significant portion of this potential over the next 3 to 5 years. By comparison, we estimated gain-to-lease potential of $7.3 million at the end of the third quarter. Turning to Slide 7. The upper chart tracks our gain-to-lease and average monthly rent growth on a quarterly basis. Gain-to-lease remains highly positive with room to improve to pre-pandemic levels, and we have generated steady growth in average monthly rents. You will note on the upper right section of the chart that there was a slight decline in average monthly rent in Q4 2021 relative to Q3. This reflected the acquisition of Le-Hill Park, which has sitting rents that are below the portfolio average. On a same-property basis that excludes Le-Hill Park, average monthly rents continuing to rise in the fourth quarter. On the lower chart, we break out our rents by geography as of the end of 2021. Moving to Slide 8, I want to provide an update on our furnished suite portfolio. Our furnished suites were severely impacted by the drop in business travel associated with the pandemic, but the recovery over the course of 2021 was impressive as market conditions improved. As the chart shows, we generated substantial growth in rental rates and occupancy beginning in the second quarter. Average monthly rents in the fourth quarter was $4,078, while average occupancy exceeded 80% for the second straight quarter. We are continuing to trim the furnished suite inventory by converting furnished suites to unfurnished and leasing them out on that basis. We had a total of 203 furnished suites at the end of 2021, a decline of more than 20% from 2 years earlier. On Slide 9, you'll find a summary of our repositioning activities. We renovated and leased a total of 113 suites in the fourth quarter or 85 of the REIT's proportionate ownership share. The average cost per renovation was approximately $47,400 per suite. The average annual rental increase following the repositioning was $4,475 per suite, which generated a simple return on investment of 9.4%. In total, we have 2,350 remaining suites to reposition under the current program. We are also exploring repositioning opportunities at 2 other wholly-owned properties in the portfolio. Combined, they have more than 400 suites with repositioning potential. We expect to reposition approximately 250 to 300 suites in 2022, subject to turnover. On Slide 10, you can see our repositioning results for the full year. We renovated a total of 367 suites in 2021, which exceeded our expectations. This chart highlights the strong predictable returns on invested capital that we generate from repositioning. During 2021, our average annual unlevered return was between 8.4% and 9.4% per quarter with an overall average of 9.1%. As we've said before, repositioning represents the best risk return of any of our investment opportunities. It will continue to be a major priority for us moving forward. Now I'll move on to our intensification and development initiatives beginning on Slide 11. Through our strategic alliance with the Minto Group, we're advancing 7 different development projects with the potential to add 1,678 new suites to the portfolio or 1,176 suites at the REIT's proportionate share. That would bring our total fleet count to 9,216, up 22% from the current level. During the fourth quarter, we made an initial advance of $10.3 million on the convertible development loan for the 810 Kingsway project in Vancouver. We began demolishing and site mobilization at both the Richgrove and Leslie York Mills properties in Toronto. And we also obtained a construction financing commitment for Richgrove under CMHC's rental construction financing initiatives. Note that of our 7 total developments, 6 projects totaling 916 suites are now in the active development phase. I'll now review individual projects in more detail beginning with 810 Kingsway on Slide 12. As we announced on December 1, we agreed to provide a convertible development loan of up to $19.7 million to finance Minto Properties' 85% interest in a joint venture for the development of this project. This is our second property development deal in the Greater Vancouver area after Lonsdale Square, which I will discuss shortly. The financing bears interest of 6% per annum and matures on August 1, 2024. 810 Kingsway is expected to comprise of 108 unfinished rental suites as well as approximately 11,500 square feet of at-grade retail space. The conceptual images on this slide gives you a good sense of what it's going to look like. Site mobilization and demolition has commenced, and the project is expected to be completed and stabilized in Q3 of 2024. At that point, we'll have the option to purchase Minto Properties' 85% stake at a 5% discount to its then-appraised value. Slide 13 shows the locations of 810 Kingsway and Lonsdale Square in Vancouver and North Vancouver respectively. Expanding into the Greater Vancouver area has been one of our key priorities since the inception of the REIT. Development of these 2 attractive urban in-fill projects gives us the ability to secure quality assets in Vancouver's highly competitive rental housing market. Moving to Lonsdale Square on Slide 14. The photo on the right of the slide shows the good progress that's being made here. Excavation is complete and formwork is well underway. Concrete has been poured at the P1 basement level. Construction is expected to be completed by the second quarter of 2023, with property stabilization in the fourth quarter of that year. As a reminder, Lonsdale Square is part of our large master-planned community on a 99-year land lease with the City of North Vancouver. The building is expected to comprise 113 rental suites and approximately 8,000 square feet of retail space. The REIT provided financing to this project through a convertible development loan and has the option to purchase this project upon stabilization at a 5% discount to its then-appraised fair market value. Turning to Richgrove on Slide 15. As I noted, construction got underway in the fourth quarter. We are taking advantage of excess plan on this site to add a new rental tower with 225 suites, including 100 affordable housing suites and 200 -- sorry about that. Stabilization is expected in the first quarter of 2026. One reason this property is attractive is that it is adjacent to the site of the future Martin Grove LRT Station, which is expected to be completed by 2031. Moving to Leslie York Mills on Slide 16. Construction also commenced here in the fourth quarter with demolition and site preparation underway. Currently, this site has 3 18-storey towers. We are planning to develop 192 new ground-oriented rental terrace suites as well as a host of new amenities and a new underground parking garage. The large conceptual image on the left shows how this will significantly transform the existing site. Stabilization of this project is expected in late 2025. Turning to Slide 17. I have a brief update on the Fifth and Bank redevelopment in the heart of Ottawa's clean neighborhood. This mixed-use multi-residential and retail property is financed through a convertible development loan from REIT and is very near completion. Currently, 96 of the 163 suites have been leased and more than 50 are already occupied. Stabilization is expected in mid-2022, at which point, we will have the ability to exercise our purchase option to acquire the property at a 5% discount to its then-appraised fair market value. Finally, I'd like to review our debt financing and liquidity on Slide 18. We are committed to maintaining conservative leverage ratio and balance in our debt maturity schedule. The chart demonstrates that maturities are highly manageable through 2026. As of December 31, 2021, the weighted average term to maturity on our fixed rate debt was 4.69 years with a weighted average interest rate of 2.82%. Approximately 94.2% of our debt is fixed rate and 72% is CMHC insured. Our total liquidity was approximately $151 million at year-end and debt to gross book value was 36.5%. I'll now turn it back over to Michael. Michael?

Thanks, Julie. Sorry, I've been only living through COVID for 2 years and still doing the mute thing. I'll wrap up with our business outlook on Slide 19 before we take your questions. The pandemic continued to impact us during 2021. But as you saw from our presentation this morning, our financial and operating performance improved steadily over the course of the year as urban rental market conditions recovered. Throughout the pandemic, we've adapted and executed on our strategic plan to grow the business and build value for unitholders. We'll continue to do so in 2022 and beyond. It's important to remember that the long-term fundamentals supporting Canadian urban rental housing have not changed despite the short-term disruptions caused by COVID-19. Our market is supported by population growth, including high levels of immigration, the rising affordability gap between owning and renting a home and constraints on new housing supply amongst other factors. We're optimistic that the market recovery will accelerate in the coming quarters, driving continued growth in occupancy and rental rates. By the middle of 2022, we anticipate that market dynamics will have returned to pre-pandemic levels. However, COVID-19 has proven to be unpredictable, and it's possible that future variants such as Omicron could disrupt the recovery in the short-term. With our strong liquidity position and conservative balance sheet, we believe we're well positioned to manage any potential market volatility. To conclude, I want to reiterate that we have the right team, the right assets and the right strategy for long-term success. They've served us well to date, and we're confident they'll continue to do so in the months ahead. We remain focused on 4 key areas to grow the REIT. Firstly, capitalizing on organic growth through gain-to-lease. Second, creating value from suite repositioning. Third, exploring attractive acquisitions and developments. And fourth, capitalizing on our relationship with the Minto Group. As Julie pointed out, we currently have 6 active development projects, and we're partnering with Minto Group on all of them. The Minto Group is the development and construction manager on 4 of the projects and is developing or co-developing all of the projects financed with convertible development loans. This underlines the value of that relationship. By continuing to focus on these 4 business priorities, we're confident that we will deliver significant value to unitholders as market conditions continue to improve. That concludes our presentation this morning. Julie and I would now be pleased to answer any questions you may have. Anas, please open the line for questions.

[Operator Instructions] Your first question comes from Jonathan Kelcher with TD Securities.

First question, just on the occupancy. It came back nicely in the quarter, Q1 is seasonally weaker. How should we expect that to trend over the course of 2022?

So we did see a slightly slower January and then things sort of returning to kind of a normal seasonal pattern after really 2 years of kind of disrupted seasonality. So we're expecting that the strong leasing season in Q2 and Q3 we'll see a real move in occupancy from where we're at now to sort of kind of what we would consider to be our kind of pre-pandemic normal in the high-90s sort of 96%, 97% kind of range. So that's kind of how we're looking at it. Certainly, the patterns that are developing thus far kind of supporting that.

And as it ticks up, do you expect that to have any impact on the mark-to-market? The 7% seems conservative to me.

I would expect that as we get into Q2 and Q3 that we'll see that continue to strengthen. My hope is that we'll see a return to kind of where we were pre-COVID, which was low single -- low double digits. It's -- but I think that would be something that we would expect in Q2 or Q3.

And then just lastly, on the repositioning, you're targeting 250 to 300, and that's down from 367 this year. Is that just a function of your expectation of turnover in those suites?

Yes, it is. I mean the gating item for us on the repositioning program is turnover of renovated -- sorry, unrenovated suites. And so it's not always predictable with a great precision. What I can say is the Q1 repositioning is tracking ahead of where we were Q1 of 2021. So that's encouraging. But that is the -- the limiting factor is turnover of unrenovated suites.

[Operator Instructions] Your next question comes from Jimmy Shan with RBC.

Just a couple of quick ones for me. Do you keep stats on rent-to-income ratio for your tenant base? And what would that look like today?

So we -- when we're qualifying a prospect for a lease, we would do income confirmation validation, but there isn't an ongoing sort of income verification requirement. So we really have our best picture at the time that the tenant signs the new lease. And our internal threshold is 30%. We want to see income sufficient such that rents don't exceed 30%. And typically, what I would say is that our tenant prospects that are signing leases are below that level and comfortably so. So that's really the best stat that I can offer, Jimmy.

And then maybe to Jonathan's point, in terms of the market rent trends you're seeing in the different markets that you operate in, we've seen condo rents not back quite nicely over the last few months. And so, again, just sort of any indication of what you're seeing in terms of how the market rents are trending in the market that you operate?

So condo rents, certainly in Toronto, were a leading indicator. Certainly, they fell first and they fell most at the onset of the pandemic, if you remember back in early mid-2020. Certainly, they have snapped back. And what we've seen, and we sort of highlighted this really beginning in Q2, but continuing through the second half of the year and certainly in Q4, was that we've been reducing the use of discounts and promos that we've been offering. And that I think is generally consistent with what we're seeing broadly in the market. Where the strongest markets for us really had been in the fourth quarter where Ottawa and Toronto. Toronto was heavily impacted. And so it was nice to see the recovery there. I think we're broadly seeing good strength in most of the markets, partly driven by kind of a return to workplace. We saw strong temporary student arrivals from an immigration perspective, we're anticipating strong arrivals from an immigration perspective for permanent residents. Certainly, the statistics that we saw in the latter part of 2021 were very encouraging. So from our perspective, the other thing that we'd point out, Jimmy, is the widening gap between housing affordability and the rental option, which continues to be we think by far the most affordable housing options for Canadians. And that gap widened even further in 2021 with just runaway property prices in almost every market.

And sorry, just one quick follow-up then on the discounts. What is roughly the amount of incentives that's currently baked into the current revenue numbers?

Well, when you say baked into the current revenue numbers, are you saying what incentives are we offering now?

Yes, like if I look at the Q4 revenue run rate, what's rough percentage of that would be incentives?

I would say that we'd be in the range of about -- if you thought about it in terms of number of months' rent, it would be in the range of sort of 0.3, if you will, months' rent on average. That's what we were sort of looking at on a weighted basis in sort of the latter part of 2021. That's what we were sort of using, and that's an average across the portfolio, Jimmy. In many properties where we had very limited availability, there was no discounting and no incentives being offered. In other places, we were using incentives and promotions strategically. So I don't know if that helps, add some color to that.

Your next question comes from Matt Kornack with National Bank.

On the furnished suite front, occupancy was down a little bit sequentially, but obviously, we had Omicron. Can you give us a sense as to how you think that trends through kind of the first half of the year? And does it exhibit similar type of strength through the back half of the year?

Well, firstly, this segment, one is very small as a proportion of our total business, just 203 suites out of more than 7,000. I know it garners a lot of attention, probably out of scale with what it represents. It is and always has been a more volatile segment from an occupancy perspective. And what we saw certainly in beginning in Q2, but really strongly in Q3 and Q4, we saw stronger demand. Our occupancy for the last 2 quarters has been over 80% and rents were up higher. But that segment is sort of always changing depending on business mix. It is seasonal. I will say that, particularly in Toronto, historically in the past, our 61 Yorkville property has had a heavy entertainment segment, and that tends to be quite seasonal. What we've seen recently is it's become increasingly transient. In Ottawa, our 185 Lion property, which is right downtown, very close to Parliament, traditionally had a very strong government segment. Transient and corporate were kind of rounding out the business mix there. What we did see in Q1 is there was some impact due to the restrictions in January arising from Omicron. That tended to alleviate as we've seen the quarter progress. So it's really hard to say with precision kind of where Q1 or Q2 will play out. As I say, we continue to trim inventories there. Our target which we articulated last year early in 2021 was to sort of bring our overall inventory in the furnished suite segment into the sort of low-to-mid 180 suites range. That helps us actually provide a little bit more yield management there in that segment as well.

And then looking at the U.S., Sunbelt in particular, it's a market with similar but maybe not as strong demographic trends as Canada and the ability to supply easier than we are hearing, yet rent spreads have grown in a market like Austin to plus 30%. Do you think -- I mean, we were talking about getting back to pre-pandemic levels on the leasing front in Canada, but is there the possibility that actually things are a lot more frothy post-pandemic in Canada, given, again, very strong demographics and limited new supply of housing?

Well, yes, and I think that's a point -- a good point, Matt. I mean, the underlying fundamental dynamics in the housing market, and I'm talking about for sale and for rent that existed pre-COVID, didn't go away just because of COVID. They may have been temporarily disguised, if you will. But those underlying trends are coming back. And the first one is very strong population growth driven by immigration. And what we've seen during COVID was the Federal Government reiterating and really doubling down on a very expansive immigration policy, setting targets well in excess of 400,000 for each of the next 3 years. And that would bring us to levels we hadn't seen since 1913, if you can believe that. And what we've seen from that perspective, we know that immigrants tend to rent their first home in Canada, typically until they've established credit history and employment. They tend to cluster in major centers where our portfolio is focused. And what we do know as well is that these immigrants are good for the economy. They tend to be more highly educated. They tend to start businesses at a higher rate. And so these are fundamentally good things for the Canadian economy. But in the short-term, from a housing market perspective or maybe even the medium-term, we simply are not as an economy producing enough housing. If you go back over 20 years of data, back to 2020 -- sorry, 2000, what you'll see is Canada on an average is producing about something like 200,000 new homes of all types every year. At the same time, average household size continues to drop lower and lower. And so we need more houses per capita to house the population growth that Canada is experiencing. And those fundamentals, that supply/demand mismatch, not surprisingly, coming out in housing prices, and we think will drive a resurgence in rents. I think Canadian incomes will probably grow as well. We've seen pressure on wages and other things like that. So I mean, we're very, very bullish on this. And I think the solutions to the supply conundrum that we face are deep and systemic and they will take years to fix if they get fixed. They would require a coordination by multiple levels of government. And what we've seen to date is that their policy actions haven't been coordinated, in fact, quite the opposite.

Makes sense. And the last one for me, just on Montreal's relative performance. It was one of your stronger markets. This quarter, mark-to-market was a little bit weaker, but I think they got disproportionately hit earlier on with Omicron. Should we kind of attribute it to that or is there anything specific in the Montreal market that was a little bit weaker quarter-over-quarter?

No, Quebec certainly probably had the strongest response, if you will. And I mean, I think it was the only market in the country that had curfews. So certainly, I think it probably was maybe more impacted temporarily at least. What we've seen there as well as the amenities and most rental properties were shut down longer. We've been very active on our repositioning program. And I think what you'll see in Q1 is our newest asset, Le-Hill Park will register a bunch of repositionings as well. And so that's going to help us. We've had higher vacancy in Montreal due to that repositioning program, which has been so aggressive. We're very bullish on that market. And I think the mark-to-market for us in Montreal is probably skewed a little bit by Le-Hill Park, because when we acquired it in December, the gap between sitting rents and unrenovated market rents was something in the order of 20%. We think that the gain-to-lease for repositioning those unrenovated suites is probably 20% again. So I think as we continue to realize on the turnover of unrenovated suites in that property in particular, I think that's going to really help us there as well. So I think we look at a lot of these markets, and we're very bullish. We forget that the compound annual growth rate in Toronto of rents pre-COVID was something like 8.5%. And I think, like I said, we're looking for sort of a return because I don't see the fundamental underlying changing from where it was pre-COVID.

No, fair enough. My associate who's sitting across me has been trying to find a place to rent and it's been a little bit more challenging in Toronto these days. So I appreciate the color, guys.

Your next question comes from Brad Sturges with Raymond James.

Just expanding on the repositioning program there. The 2 assets you're talking about exploring whether or not to add to the program, maybe I missed it, but what assets are you looking at right now within the portfolio?

So the first one is a Castleview, it's an Ottawa asset. And the second one is a component of our Parkwood Hills portfolio in Ottawa. And they're just going through our normal feasibility analysis.