Real Estate Investing Tips As Lower Prices Bring Opportunity: Investor

Real Estate Investing Tips As Lower Prices Bring Opportunity: Investor

  • Travis Hanson bought his 1st two qualities whilst in law school.
  • He now owns numerous genuine estate organizations and continues to invest in assets.
  • He is now sitting down on funds and ready for up coming year’s correction. 

In 2009, Travis Hanson was attending regulation school at Texas Tech University with the target of returning to Salt Lake Metropolis to be a town prosecutor. 

It was soon following the 2008 fiscal disaster when the housing marketplace crashed. Hanson was seeking for methods to make further money while he was in college. At the time, he arrived throughout households as cheap as $50,000 in Lubbock, Texas. 

“I keep in mind going home and telling my wife right after I was getting out some of these charges. I imply it was just preposterous,” Hanson said. 

The couple experienced funds saved up and Hanson’s spouse had a comprehensive-time work at the college he attended. So they commenced by investing in two homes, both of those within a thirty day period of every single other, in Lubbock.

Hanson recalled spending $34,000 for one and about $40,000 for the second, with a 3{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} down payment. They were ready to protected two mortgages with a 4{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} curiosity charge. At about 800 square toes, the homes were little but were being a good get started. Every single was a two-bedroom, a person-lavatory house. Primarily based on other homes in the similar place, Hanson estimates they are now worthy of about $100,000. 

By the time he graduated a yr later, the few owned 9 properties, six of which had been co-owned by a pal of his. All of them were being rented. After the bills were paid, which integrated the principal, curiosity, and taxes, each individual home income flowed concerning $250 to $400.

The expertise brought about a state of mind change for Hanson and he decided he was going to remain in Texas, get a position as an attorney, and use his salary to go on purchasing households. 

“My mind was just blown and I just imagined, there is no way I am heading to go back,” Hanson explained of his previous ideas to return to Utah. 

Currently, Hanson has around 109 houses, according to county information seen by Insider. Put together, they make up about 150 rental models. He also owns a lot of serious estate organizations such as a house administration enterprise, a brokerage business, and an instructional system called The Actual Estate Retreat Community, which hosts in-individual networking events and one-on-a person coaching.

“At the top of it all, I owned 650 doors and that involved condominium complexes,” Hanson explained. “I sold all my apartment complexes off about the past several many years. Right now, I am just shy of 150 doors and that is on goal.”

Recently, he has been focused fewer on volume and a lot more on buying new quality homes that need fewer routine maintenance and bring in tenants with increased incomes. This can make handling his rentals easier. 

Ideal now, as home loan premiums proceed to enhance, dwelling profits are cooling. As of September, the median current-property median income price tag had dropped 7{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} from its peak in June to $384,800, according to the Countrywide Association of Realtors. Ian Shepherdson, the main economist at Pantheon Macroeconomics, estimates that rates could plunge by 15{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} to 20{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} in excess of the next yr. 

In addition, higher inflation will necessarily mean people are fewer capable to manage buying home, Hanson reported. This will further more reduce desire and the levels of competition but develop very good opportunities for individuals inclined and in a position to buy. 

Also, during the monetary crisis, inflation wasn’t an issue that the US consumer was dealing with, Hanson mentioned. 

“The point that individuals have to make much more money just to survive off of since of the inflation issue, I consider I see this as a large when in a lifetime opportunity, bigger than 2008,” Hanson stated. 

“We’re insulated fairly a little bit from sector crashes,” Hanson stated. “The countrywide median of homes appropriate now is about $400,000. We are nowhere in the vicinity of that. So for my investments, almost everything that I purchase is under $250,000. So if you will find a industry crash, the possibility that I get is really minor, all those houses just are not impacted by the rest of the place.”

In fact, he is sitting on income, waiting around for a steep market place correction in housing selling prices so that he could prime off his portfolio. 

Strategies to get benefit of the coming downturn 

In excess of time, authentic estate generally recovers — and that is what Hanson is willing to bet his income on. Concerning 1980 to 2020, median home costs in the US have greater by 416{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}.

To choose benefit of any options, the very best situation to be in is obtaining hard cash. To get there, you can expect to have to have to discover about delayed gratification, which signifies resisting the temptation of paying money on matters you do not seriously have to have, he famous. For the following calendar year, you can begin preserving as a great deal money as you can so that you can invest. Furthermore, you can use this time to obtain methods of rising your money.

If you are not sitting on money, it truly is not a deal-breaker, he mentioned. Hanson instructed Insider he has purchased quite a few houses without the need of employing his individual revenue. One particular way of doing it is acquiring a line of credit rating (LOC) from a lender, which is a financial loan that is withdrawn as wanted. It truly is not tricky to get approved for 1, but you may need to have to have a decent credit history score, he noted. 

“I know 18-year-olds receiving $200,000 traces of credit. You just have to check with. I suggest, most folks just don’t check with. They just believe,” Hanson reported. “I compete with 18-yr-olds out there buying attributes and I know they have lines of credit score with these banking institutions. They may have a cosigner, [or] have some people guiding them assisting, but I know that it can be probable.”

Hanson a short while ago utilised an LOC to buy a property for about $72,000, according to an HUD-1 document viewed by Insider. He then created some updates that introduced the property’s value up to $130,000, based mostly on sector comparables for the exact area. Hanson ideas on refinancing the assets for 85{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} of its just after repair service price and use that dollars to pay out back the line of credit rating. This is a exercise he does generally. 

Do not be deterred by better house loan prices, as they can normally be refinanced, he stated. The cost to refinance a house loan is typically 1{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} of the personal loan, which is what deters numerous persons from refinancing their level for a reduce 1, he stated. But Hanson believes there might be a grace time period the moment factors settle down. Many financial institutions could begin to waive that rate afterwards down the line so that they can stay competitive. 

Men and women just will need to discuss to their banking companies for the reason that these huge establishments are having difficulties as well, he noted. As housing sales drop, they are not closing almost as numerous financial loans, he additional. Hanson instructed Insider he has experienced conversations with his financial loan officers and is assured he will be in a position to refinance in the long run without having shelling out the cost. 

“I think what you happen to be going to see is banks rolling out packages exactly where they’re going to give men and women a grace period of time of up to 24 months, possibly more time, exactly where they can go back again and refinance people home loans at no cost,” Hanson claimed. 

Next, look for qualities that are perfectly under the nationwide median dwelling value. This will cushion you from substantially of the volatility when there are marketplace downturn. 

The Zillow Property Values Index, which measures regular changes in residence degree Zestimates, notes that the regular residence selling price in the US is at about $357,810. You also want to remain underneath the industry median for the spot you happen to be acquiring in, he extra. This is why the majority of Hanson’s houses are under $250,000.

Last but not least, be restricted with your numbers. This means for every house you glimpse at, you can want to determine what your principal, curiosity, taxes, and insurance policy will price tag every single thirty day period. This will vary relying on the style of bank loan or house loan you get. Then, establish the lease you can accumulate dependent on other comparable properties in the space. 

Here Are The Best Home Improvement Products On Amazon & They’re Selling Out Fast

Here Are The Best Home Improvement Products On Amazon & They’re Selling Out Fast

Keeping up with home maintenance can feel overwhelming. How do you know where to focus your energy, and how can you go about it without spending tons of money? While home upgrades might have you conjuring up visions of expensive contractors and lengthy renovations, there’s a lot you can do to enhance your home just by clicking “add to cart.” Want proof? Just check out these home improvement products beloved by Amazon shoppers — they all come at reasonable prices.

So whether you’re looking for matching cookware and utensils, trying to add some high quality decor to your space, or hoping to tidy your home with storage solutions that stay conveniently out of sight, there’s something here for you. But don’t wait too long, because these hot home upgrade items are selling out fast.

1

This Smart Doorbell With 50 Different Chime Sounds

Ditch your old doorbell and swap it out for this high-tech wireless doorbell. It features four volume settings and 50 different chimes, so you can even program different alerts for different doors in your house. The set includes one button and two receivers with an impressive 1,00-foot range. Bonus: You don’t even need Wi-Fi to use it, and the included battery lasts up to 3 years.

2

A Pack Of Stick-On Lights That Add Accent Lighting Anywhere You Need It

Whether you need a bit of extra lighting under your cabinets, inside your closet, or along a staircase, these LED lights have you covered. They come with a remote control that allows you to set a timer and adjust the brightness, but they can also be turned on and off by just tapping the bulb. Mount them with either the included adhesive tape or screws.

3

The Matching Stainless Steel Kitchen Tool Set That Will Streamline Your Space

If your kitchen is full of mismatched tools, consider upgrading to this sleek stainless steel kitchen utensil set. It comes with 10 tools, including tongs, a whisk, a spatula, a potato masher, and more, all with an attractive brushed finish. They even come stored in a canister that’s available in a six different colors, so you can easily match your kitchen decor.

4

This Rack That Will Clean Up Your Messy Cabinets

If your kitchen shelves and cupboards are an overflowing mess, you can start cleaning them up with the help of this cutting board rack. Made from durable stainless steel, it has three slots for storing cutting boards upright, so you’ll be able to easily spot the one you need and grab it in a flash. It’s lightweight, too, weighing just 15 ounces.

5

A Set Of Silicone-Coated Tongs That Are Easy To Handle

Give yourself the tools you need to upgrade your cooking with this set of three kitchen tongs. They come in small, medium, and large sizes, so you’ll have the right tool for any project. Better yet, they’re coated with silicone so they’re easy to grip and won’t feel too hot to the touch as you cook. Use them for grilling, transferring foods, and tossing salads.

6

These Throw Pillow Inserts That Won’t Lose Their Shape

If your living room decor needs some sprucing up, try these pillow inserts. Because they’re filled to 90{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} capacity with a polyester fill, they won’t lose their shape or go flat. The outer shell is made from a soft microfiber fabric, and they’re even machine-washable for extra convenience. Add some throw pillow covers, and you’re good to go.

7

A Comprehensive Knife Sharpening Kit That Makes Maintenance Easy

One of the best ways to improve your home is to maintain the tools you already have, and this knife sharpening stone set can help. It comes with multiple stones for both sharpening and polishing, all of which can be set on the nonslip bamboo base. There’s even an angle guiding gripper to make sure you achieve the perfect sharpening motion.

8

This Classic Glass Pitcher With A Tight Seal

An easy way to level up your home decor is to pour your liquids directly into elevated servingware like this glass pitcher. It has a generous 68-ounce capacity and features a twisting, BPA-free lid that seals in your beverages for freshness. The wide mouth of the pitcher makes it easy to fill, too.

9

The Rotating Organizer That Will Clean Up Your Spice Cabinet

Tame your messy spice rack with this two-tier lazy Susan organizer. Because it rotates, you’ll be able to access your full collection without losing spice bottles in the back of the shelf. It’s made from durable stainless steel and weighs just 1 pound. It even works to store toiletries in the bathroom.

10

A Broom Holder That Holds Up To 35 Pounds

Stop storing your cleaning tools in a heap in the corner and organize them with this wall-mounted broom holder. It comes with five spring-loaded storage slots for long items, and has hooks for hanging smaller tools like brushes and dustbins. It even comes with one free floating wall organizer slot that can be installed with adhesive.

11

The Under-Bed Bins That Can Handle The Overflow From Your Closet

A stuffed closet and overflowing drawers can prevent your home from looking its best, so upgrade with these zippered under-bed storage bags. You get two in a pack and they’re perfect for storing linens or out-of-season clothes you don’t wear as often. They have windows on top so you can view the contents inside, and the handles make for easy maneuvering.

12

This Handy Holder That Stores Paper Towels With Style

Function meets style with this chrome paper towel holder. With a simple, sleek design, this metal rack is the perfect way to always have paper towels on hand while blending nicely into your decor. And Amazon buyers agree — it has a 4.6-star overall rating after 4,000 reviews.

13

A Multi-Size Pack Of Matching Cutting Boards

Coordinating kitchen tools is an excellent way to elevate the feel of your home with little effort, and these cutting boards can get you there. They feature white cutting surfaces with colorful nonslip handles available in five different hues, and the set comes with small, medium, and large sizes. They even have juice grooves around the perimeter to keep messes in place.

14

A Chic & Convenient Way To Store Extra Plastic Bags

Set yourself up with this plastic bag saver to organize and re-use your grocery bags — the sleek construction will blend in with any steel appliances in your kitchen. Simply insert the bags through the mouth at the top and pull them out through the center like a tissue box. All the hardware you need to mount it comes included.

15

The Handy Shoe Organizer That Stays Out Of Sight

If traditional shoe racks leave something to be desired, try cleaning up your closet or entryway with this over-the-door shoe organizer. It hooks over a door with three sturdy chrome hooks and stores up to 12 pairs of shoes, all while keeping them out of sight on the back of a door. The pockets are made from breathable mesh for increased ventilation.

16

This Multi-Level Hanger That Uses Clips To Save Space

If you’ve got more clothes than you can easily store, these tiered hangers can really help improve the look of your closet. It features five descending rows of hangers with clips, so you can store skirts and pants vertically, thereby saving space. The hook swivels 360 degrees for extra convenience and the clips are coated with rubber to protect your garments.

17

A Grippy Pad That Keeps Your Rugs In Place

If your rugs are constantly sliding around, try this area rug gripper pad to keep them straight and centered. Made from nonslip PVC foam that won’t damage your floors, the mat grips both your rug and the floor for less slipping. It comes in three sizes, and can be cut down to your exact size specifications.

18

These Wooden Utensils That Look High-End But Are Budget-Friendly

Elevate the look of the items you use every day by scoring this set of wooden utensils. Made from olive wood, the set comes with five pieces, including a spoon, a flat spatula, and a slotted spatula. As one reviewer raved, “The pieces are beautifully crafted, smooth and uniform in size […] The olive wood grain is gorgeous and they even smell nice. Cannot believe the quality for the price.”

19

The Luxurious Rainfall Showerhead That Will Turn Your Bathroom Into A Spa

Small tweaks can make a big difference, like adding this rainfall showerhead to your bathroom. It produces the feeling of high pressure by infusing the water with air bubbles, but won’t waste unnecessary water, so it’s eco-friendly. The head comes on a swivel that makes it easy to adjust the angle, while the chrome finish gives it an elegant appearance.

20

A Handy Silicone Mat For Drying Dishes & Holding Hot Items

Fill your home with items that pull double duty, like this dish drying mat. Made from silicone, this mat can be used alone under dishes, since the ridges elevate your items, or underneath a larger drying rack, as the raised outer edge catches excess water. Because it’s heat-resistant up to 450 degrees Fahrenheit, you can even use it as a trivet for hot dishes, too.

21

These Sleek Mixing Bowls With Lids For Storing Leftovers

Pare down unnecessary items and keep your kitchen tidier with these stainless steel mixing bowls. Not only does the uniform and attractive set include five graduated sizes, but it also comes with lids, so you can easily meal prep or store leftovers. They’re refrigerator-, freezer-, and dishwasher-safe.

22

The Cushiony Bath Mat That Can Go In Or Out Of The Shower

If your bathroom needs an upgrade, try this textured bath mat. Made from loofah-like material, it gently exfoliates feet and dries quickly. It’ll stay in place, too, thanks to the anti-slip coating on the bottom. It’s made without phthalates and can even be recycled.

23

A Streamlined, Unobtrusive Box That Hides Your Cables

A tangled mess of cords can prevent a room from looking its best, so organize and cover them up with this cable management box. It’s large enough to fit an 11-inch surge protector and features three cutouts through which cables can pass neatly. It’s scored an impressive 4.5-star overall rating after more than 10,000 reviewers have weighed in.

24

An Attractive Toothbrush Holder That Neatens Up Your Bathroom

Turn your messy bathroom counter into a stylish storage surface with this toothbrush organizer. It has a stainless steel finish and features four cubbies big enough for even electric toothbrushes, and one larger compartment for toothpaste. The bottom drainage tray detaches for easy cleaning.

25

A Minimalist Desk Lamp With 3 Color Temperatures

Add some illumination to your workspace with this desk lamp that has three adjustable light modes ranging from cool to warm white. It’s also brightness-adjustable, with a matte panel that diffuses light so that it’s gentle on eyes. The minimalist lamp takes up next-to-no space on your desk, so you won’t have to give up any valuable real estate.

26

These Smart Plugs That Let You Control Appliances With Your Voice

These smart plugs are an easy way to streamline the appliances in your home (think: TV, coffee maker, fans, and even Instant Pots). Use the accompanying app to set schedules or turn appliances on and off from your phone, or sync the plugs to your Alexa or Google Assistant for voice control.

27

This Organizer That Tidies Up Your Messiest Junk Drawer

If your desk or kitchen junk drawer is an absolute mess, this drawer organizer is virtually guaranteed to get a handle on things. The nine-compartment drawer has six adjustable and removable dividers, so you can customize storage for your needs. At just 2 inches high, the low-profile organizer fits into drawers of most sizes.

28

These Produce Containers That Preserve Freshness

If your fruits and veggies go bad in the fridge seemingly overnight, these produce saver containers are for you. These unique containers feature draining trays that elevate your produce and keep it away from any water or moisture. They’re BPA-free, stackable, and dishwasher-safe.

29

An Outlet Extender That Expands Your Plug-In Space

Trade in your bulky power strip for this outlet extender that sits flush against the wall. Boasting an ultra-high 4.7-star overall rating after 57,000 reviews, it has six AC outlets and two USB ports. There’s even a built-in night light, so you can plug in easily in the dark.

30

These Durable Glasses With Bamboo Lids & Reusable Straws

Perfect for sipping at home or on the go, these drinking glasses feature tight-sealing bamboo lids that help prevent drips and spills. The can-shaped glasses are made from durable, BPA-free glass that’s resistant to both hot and cold temperatures — so you can use them for anything from hot coffee to iced tea. The set of four dishwasher-safe glasses comes with reusable glass straws plus two scrubbing brushes.

31

A Handy Organizer For Your Food Storage Bags

If you have that one cupboard or drawer that’s a mishmash of food storage boxes, this food storage bag organizer is for you. It has compartments for gallon, quart, sandwich, and snack bags, and the space-efficient design means you’ll never have an almost-empty cardboard box with just one or two bags living in your drawer. The organizer is made from natural and renewable bamboo.

32

This Countertop Organizer For Cosmetics

Put an end to the frustration of not being able to find that one lipstick by storing your cosmetics in this makeup organizer. The countertop organizer features multiple compartments for palletes, brushes, jars, and more, and the acrylic construction is easy to wipe clean. Use this on your desk for office supplies too.

33

These Stackable Shelves That Offer Vertical Storage

Make use of vertical storage on your kitchen counter — or inside your cupboards — with these stackable shelves. With a simple, all-white design, the two shelves are sturdy enough for dishes, glasses, and canned goods. You can also use them side by side — whatever fits your storage needs best.

34

A Hair Tool Holder That Hangs On The Cabinet Door

You know the back side of your bathroom cabinet door? It can actually be used for storage — case in point: this hair tool holder. The holder has compartments to hold your hair dryer, curler, and flat iron, and the basket at the bottom wrangles all the cords. It’s made from heat-safe steel, so you can store your tools while they’re still cooling down.

35

These Stove Gap Covers That Keep Messes At Bay

Crumbs and spills can sneak through that gap between your stove and the counter, where they’re virtually guaranteed to not be cleaned up anytime soon. These stove gap covers fill that space, so all you have to do is wipe down the silicone material. Available in three colors, the covers are heat-resistant and can be trimmed to size.

36

A Caddy That Adheres To The Inside Of A Cabinet Door

This cabinet caddy attaches to the inside of a cupboard door, where it can hold extra sponges, scrub brushes, dish soap and more. With a 7.5-pound weight capacity, it secures with simple adhesive (no nails or screws required), but removes cleanly without leaving residue behind.

37

These Amber Glass Dispensers For Olive Oil, Vinegar & Dish Soap

Dress up your kitchen counter by pouring your olive oil and vinegar into these elegant glass dispensers. The amber glass dispensers come with stainless steel pour spouts that produce a slow, smooth flow. You can also use one of these for your dish soap.

38

These Silicone Baking Mats That Let You Forego Cooking Spray

With these nonstick silicone baking mats, you can forego the use of oil, cooking sprays, and butter. Not to mention, they’ll protect your pans from baked-on gunk. Dishwasher-safe and heat-resistant to 480 degrees Fahrenheit, the set includes four mats of different sizes. The cherry on top? If you choose to bake macarons, you have a built-in guide on the surface.

39

A 2-Pack Of Stackable Egg Containers That Save Space

If your fridge is packed, you know that every inch of storage counts. To get some real estate back, use these egg containers that are so sturdy, you can stack other items on top of them. Each one holds up to 14 eggs, so you can store up to 28 eggs total. Boasting a 4.8-star overall rating, they’re a fan-favorite — one reviewer wrote, “I just wanted the organization aspect of this product but the slimline design and the fact that they’re stackable just freed up a lot of space that the “double-wide” 18 egg carton normally fills.”

40

This Stainless Steel Hair Catcher That Keeps Your Drains Clear

Prevent plumber visits by placing this hair catcher over your shower drain. Made from rust-resistant stainless steel, the hair catcher features elliptical holes that grasp hair strands while still allowing water to flow through. The silicone edges around the perimeter create a tight seal to keep any other debris from sneaking through.

41

A Plant Stand That’s Size-Adjustable

This ingenious plant stand is size-adjustable, so you can use it with a variety of pots. It extends from 8 inches in width to 12 inches in width, and the platform that holds the pot can be adjusted from 5.75 inches high to 11.75 inches high. Made from beech wood, the mid-century modern plant stand features felt pads on the bottom to protect your floors.

42

These Matte Black Cabinet Knobs That Replace Your Old Ones

Replacing your drawer or cabinet pulls is an instant and foolproof way to update any space. These cabinet knobs are made from zinc alloy in your choice of a matte black or brushed nickel finish. The simple, understated design blends in seamlessly with a variety of interiors. Use the knobs on kitchen or bathroom cupboards, or upgrade your dresser with them.

43

This Under-Shelf Drawer That Adds Extra Storage

Turn that space directly under a shelf into storage with this handy clip-on adhesive drawer. Perfect for storing loose items, it slides out easily, then angles down for easy viewing of what’s inside. Installation is easy: Just slide it over the edge of the shelf, press and hold for 30 seconds, then let cure for 24 hours.

44

An Under-Sink Storage Unit With Slide-Out Baskets

No matter which cabinet you use it in, this two-tier organizer is a great way to get a little extra storage space. The baskets slide out for easy access, and each one has two removable bins and two adjustable dividers for organizing items. Use it in the bathroom for toiletries or keep it under the kitchen sink for cleaning supplies.

45

This Doormat That *Really* Traps Dirt & Moisture

Keep your entryways free of dirt and mud with this doormat that’s a step above the rest. The durable fabric traps dust and moisture while the ridges catch excess water, so it doesn’t get tracked in. Last but not least, the beveled edges help prevent tripping, and since they’re made from natural rubber, they’ll be odor-free. Suitable for use indoors and out, the mat is stain-resistant and comes in more than two dozen colors and designs.

  • Available sizes: 6
  • Available colors and designs: 28
Making a space a home with holistic landscape design

Making a space a home with holistic landscape design

Property. For every single person you talk to, you will possible come across a distinct this means of the word.

For Katherine Wilcenski, house is a position wherever a single feels taken treatment of by the surroundings it really should be nourishing, inspiring, creative and secure.

As a holistic landscape designer, it is Wilcenski’s task to make others’ spaces truly feel additional like house — and she uses her information of integrative health tactics and ecological style to do so.

Wilcenski creates sustainable landscapes that are restorative to equally individuals and the ecosystem. From rewilding houses to installing edible landscapes, she centers every single of her types all-around her clients’ desired means of interacting with character.

“We experience the advantages — physically, emotionally and psychologically — of a healthier and ample ecosystem,” she discussed. “The intention is to enable our clientele create a space they can intuitively connect with that will in the long run enhance their well being and the ecology close to them.”

For extra than 10 years, the Cutchogue indigenous has labored as a land- scape and garden designer. Last year, she founded her very own holistic landscape style and design organization referred to as Solstice Yard Co. She will work on residential and commercial tasks throughout the North Fork, turning backyards into purely natural refuges and livening up outlets like Tulsi Square with her plant designs.

Like properties, what goes into the producing of a holistic landscape is own — it’s remarkably dependent on the house and these who use it. Wilcenski shared some essential functions at the rear of holistic layout and how she’s included them into her possess home.

Setting up A Safe and sound HAVEN

When I initially fulfilled Wilcenski in her property in East Marion, she was sitting in a picket rocking chair, barefoot, sipping espresso underneath a sugar maple tree.

A secure spot to sit, she advised me, is one of the very first areas she considers when developing someone’s household area.

(Credit: David Benthal)

“I feel which is number just one — a spot that you feel protected in and lined from the solar,” she mentioned. “Hopefully you have some variety of watch which is inspirational or engaging.”

She’ll usually get the job done about the all-natural overstory, like the trees in her backyard, to generate this cozy location. Guarded by the shady sugar maple, a bluestone patio overlooks a grassy, picturesque meadow that wraps around the perimeters of her yard. It’s furnished with mainly natural components: wood chairs and log benches, handcrafted by her boyfriend. The chairs encircle a compact, steel fireplace pit — she tries to spotlight elements like these in her layouts.

“Fire and drinking water, I think, are very critical,” she discussed. “It’s type of primal in a way to sit all around the fireplace and have a consume.”

Acquiring an outdoor room to share a meal with other individuals also assists make a comforting atmosphere and a deeper connection with the natural globe. Guiding the patio is a picket, six-seat eating area desk she located at a thrift retail outlet, topped with an antique candelabra and potted plant. In several of her styles — exactly where it tends to make perception — you will discover salvaged or antique items blended with greenery. At Lumber + Salt, an antique store found in Jamesport, she sells her plant product in distinctive, upcycled vessels.

“Besides the clear environmental benefits of making use of upcycled components, I adore the tale the parts have, their uniqueness and the cultural soul they include,” she stated. “I obtain it [to be] pretty philosophically soothing to interweave human artifacts — in a perception — with an inten- tionally considerable and ecologically regenerative place.”

SUPPORTING THE BIODIVERSITY OF A Room

Wilcenski grew up in a spouse and children of generational farmers and landscapers, surrounded by the organic splendor of the North Fork. Now getting a space of her possess, she sees the natural beauty in remaining in a position to view wildlife, like turkeys and deer, from her backyard.

“I believe it is actually a responsibility of property owners out listed here to take interest in the ecological wellness of this put,” she claimed. “If you never … you get rid of what you initially invested in.”

Holistic gardeners like Wilcenski normally increase indigenous vegetation and other species that will provide habitat to wildlife and advertise biodiversity in the space. For some, this may possibly signify rewilding their backyards — the act of planting and then stepping again to permit Mom Nature take in excess of. For other individuals, it may imply incorporating indigenous vegetation or other beneficial species into a backyard.

“I like to make confident to involve early and late year flowering crops to support lengthen the food stuff source for pollinators,” she reported. “Milkweeds are fantastic for monarch [butterflies].”

Tumble is an excellent time to start off planning for a pollinator-welcoming yard and there are a range of genera terrific for attracting pollinator bugs like bees. Wilcenski’s favorites are goldenrod, eupatorium, asters, as properly as a species referred to as verbena bonariensis. There are numerous early flowering bulbs that also support pollinators — muscari, crocus, galanthus and hyacinthoides, to name a couple.

Wilcenski also pays attention to preexisting disorders like soil health. Soil, she discussed, is the “foundation of a balanced back garden, a nutritious ecology and a nutritious world.” Having wholesome soil assures that plants will be equipped prosper and thus will reinforce the biodiversity of the region. Incorporating a water supply in a backyard design and style, like a birdbath or a pond, is one more way to assistance wildlife.

NOURISHING THE System AND Head

The overarching objective of holistic gardening is to generate a space that not only heals the environment, but the persons dwelling in it.

“You have to feel about what ways you are most probably to interact physically, tactilely, centrally with your setting,” Wilcenski described. “Would you be the type to reduce bouquets, pick some herbs to make tea or walk close to and harvest apples?”

Edible landscapes and food items gardens can offer actual physical nour- ishment, whilst other vegetation offer medicinal qualities. When the season’s proper, Wilcenski fills two flowerbeds on her residence with crops of various textures, fragrances and utilizes. Tomatoes, carrots, chives, shishito peppers, parsley, kale and even a watermelon ended up a component of this year’s food stuff bounty. She grows calendula for lotions and infused oils, lemon balm for calming the nerves and echinacea for immune procedure help. There’s also tulsi basil, a medicinal plant in any other case recognised as “holy basil.” “I like to set it in my h2o fresh new in the summertime or dry it and make tea in the winter season,” she described. “It’s uplifting.”

Exterior the picket flower beds is an edible landscape of pear trees, blueberries, raspberries and blackberries, hidden in basic sight. “You can mainly integrate distinctive types of shrubs and perennials that have edible houses into your landscape,” she claimed. “Edible landscaping can be virtually unnoticeable to another person who isn’t conscious of distinct plant species.”

(Credit: David Benthal)

BRINGING THE Outdoor IN

Even though the colder months aren’t typically involved with gardening, there are techniques to link with a home’s all-natural environment extended after the gardens have been set to mattress.

“I like to carry plant product inside, like distinct forms of at any time- green cuttings, pinecones, berries, and maybe make an arrangement,” Wilcenski stated. “You can even boil drinking water on the stovetop with fir and pine needles — that will release the oils inside and then it will fill your place with this Christmasy scent.”

She also freezes herbs from the backyard garden or dries them to use for tea and natural smokes for the drop and wintertime.

“I think aromatherapy is genuinely terrific, particularly in the cooler months when every thing kind of goes dormant outdoors,” she said. “Just obtaining that sensory link is truly valuable.”

Regardless of time of year, like some plant materials inside the dwelling — like snake crops or potted herbs — is visually and physiologically worthwhile. “It can also support to increase the air high quality in your residence,” she spelled out. “To have that responsibility to take treatment of it and have a tendency to it is genuinely nourishing to your self.

The White Company reveals its top Christmas decor shortcuts

The White Company reveals its top Christmas decor shortcuts

The White Company has revealed its top Christmas decor shortcuts to easily transform your home with just a few finishing touches.

In a new video shared to its social media accounts, the brand revealed four ideas to instantly add a touch of festive style to a range of spaces.

This content is imported from Instagram. You may be able to find the same content in another format, or you may be able to find more information, at their web site.

Oversized baubles are a big trend this Christmas and they don’t have to stay confined to the tree. Hang over mantlepieces or in the centre of large windows to create an easy festive statement in any room.

The White Company

Ultimate Etched Mercury Room Decoration – 25cm

The White Company
thewhitecompany.com

£55.00

£24.00 (56{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} off)

Looking to create a centrepiece for the dining table this Christmas? Don’t overlook the humble candle. Arranged together on a decorative plate, serving dish or even cake stand, a selection of candles can create a sophisticated display and cast a gorgeous, flickering light in the process.

The White Company

Cassis Medium Botanical Candle

The White Company
thewhitecompany.com

£31.00

Of course, no tablescape is complete without proper napkins and, folded inventively, they can be part of the decoration themselves. Stylish as well as functional.

The White Company’s video gives a few examples, such as a simple pocket fold which allows cutlery to sit neatly inside. Accessorise with a small touch such as a miniature bauble, pine cone or spring of rosemary or other herb.

The White Company

Fir-Green Napkins – Set of 4

The White Company
thewhitecompany.com

US$2,022.00

One of the most obvious ways is with a classic Christmas garland. A long garland can be used year after year in a multitude of locations making it a versatile piece.

Wrap around the door frame to create a warming welcome, lace up the staircase to add festive cheer to the hallway or even, as The White Company demonstrates in its video, trail down the dinner table as a centrepiece.

Inspired to start decorating your home? Take a look at some of our favourite festive garlands below:

12ft Unlit Pine Cone Garland

12ft Unlit Pine Cone Garland

M&S
marksandspencer.com

£35.00

Pinecones and green foliage join forces in this traditional classic garland. It’s 12 foot in length making it perfect to run up the length of your bannister.

Ultimate Garland – 180cm

Ultimate Garland – 180cm

thewhitecompany.com

£85.00

£31.00 (64{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} off)

The White Company has long been coveted for its gorgeous Christmas range; and this garland showcases exactly why. It will add a feel of opulence and luxury to any space.

Holly Garland With Robins felt Christmas Decoration

Holly Garland With Robins felt Christmas Decoration

Selfridges
selfridges.com

£35.00

This gorgeous green holly garland is adorned with little red berries and robins and is made from 100{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} wool. It’s also part of Selfridge’s Project Earth, an edit of products that are better for people and the planet – so you can feel good about buying it and having it on display for years to come.

Jolly General Store Candy Cane Bauble Garland

Jolly General Store Candy Cane Bauble Garland

Jolly General Store
John Lewis

£30.00

We love how old school this bauble garland feels. In bright traditional candy cane colours it’ll add a festive feel to any mantlepiece or staircase.

Light Up Bauble Garland

Light Up Bauble Garland

M&S
marksandspencer.com

£25.00

This vibrant bauble garland has a mix of sizes and glittery finishes in shades of magenta, teal and electric blue. It’s pre-lit to ensure plenty of sparkle and the timer lets you set them to come on automatically for a six-hour period.

Moon & Star Gold Wooden Bead Christmas Garland Large, £29.50

Moon & Star Gold Wooden Bead Christmas Garland Large, £29.50

Oliver Bonas
oliverbonas.com

Oliver Bonas’ unconventional Christmas garland is beautiful and would add a celestial touch to your living space with its cute hanging stars and moons. It can be used all year round and would look great hanging in the bedroom for a dreamy, starry theme every night. Make it extra special by pairing with another, pre-lit garland.

Glittery Garland

Glittery Garland

If you prefer a garland a little more understated, this glittery option is the one for you. The honeycombed paper decorations have a glittery edge and look just like baubles. It’s great for hanging anywhere around the home and is also available in a dark beige colour.

Fir Tree Garland, £135

Fir Tree Garland, £135

The White Company
thewhitecompany.com

A luxurious garland packed with a greenery, including fir branches, pinecones with frosted moss tips and white berries to create a full-looking display. It’s super long length means it’s ideal for styling over mantelpieces, doorframes or around staircases.

Glitter Leaf Pinecone Christmas Decoration 120cm

Glitter Leaf Pinecone Christmas Decoration 120cm

Selfridges
selfridges.com

£34.00

The pinecone design of this Christmas garlands gives it a rustic feel, while the glitter makes it feel special and celebratory. A chic design for anyone who wants their Christmas decorations to look stylish.

Candy Cane Felt Christmas Garland

Candy Cane Felt Christmas Garland

Lights4fun
lights4fun.co.uk

£18.99

It doesn’t get much sweeter than this candy cane Christmas garland! Use it to spruce up any space and it will delight kids and adults alike.

Lakeland Winter Berry Garland

Lakeland Winter Berry Garland

Lakeland
lakeland.co.uk

£49.99

Whether it’s draped over your mantelpiece, wrapped around a banister or mirror, or hung on a wall, this gorgeous winter berry garland will make your home look like you’ve been out gathering greenery in a winter wonderland this Christmas.

5ft Berry and Leaves Garland

5ft Berry and Leaves Garland

Dunelm
dunelm.com

£18.00

For those of us with smaller spaces, this pared back berry and leaf garland is the perfect option. It adds just the right amount of festivity to your room and also comes with a matching heart-shaped wreath if you want to go all out.

5ft White and Green Snowy Garland

5ft White and Green Snowy Garland

Dunelm
dunelm.com

£22.00

White and green is a classic colour combination for Christmas; and this garland showcases exactly why. The addition of pinecones give it a warm and rustic feel.

SmartCentres Real Estate Investment Trust Releases Third Quarter Results for 2022

SmartCentres Real Estate Investment Trust Releases Third Quarter Results for 2022

SmartCentres Real Estate Investment Trust

SmartCentres Real Estate Investment Trust

Operational

  • Shopping centre leasing activity continues to improve with occupancy levels, inclusive of committed deals, increasing to 98.1{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} in Q3 2022, representing a 50 basis point increase from Q2 2022

  • Same Properties NOI inclusive of ECL(1) increased by $3.9 million or 3.1{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} in Q3 2022 as compared to the same period in 2021. Same Properties NOI excluding ECL(1) increased by $3.0 million or 2.3{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} in Q3 2022 as compared to the same period in 2021

  • Net rental income and other increased by $3.6 million or 2.9{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} for the three months ended September 30, 2022 as compared to the same period in 2021

Mixed-use Development

  • In excess of three million square feet of construction activity is currently underway, principally on high rise residential projects in Toronto, Montreal, and Ottawa

  • Construction progressing on time and on budget on 241,000 square feet of industrial space for the 16-acre Phase 1 development in Pickering, of which 53{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} has already been pre-leased to a leading Canadian furniture retailer

  • Construction of Transit City 4 & 5 condominium towers is in the final stages of completion with closings scheduled to commence in Q1 2023. All 1,026 units have been pre-sold

  • Construction of the Millway, a 454-unit purpose-built rental apartment building, is also in the final stages of completion, with initial tenants expected to begin occupancy in Q1 2023

Financial

  • FFO with adjustments and excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition(1) was $93.8 million for the three months ended September 30, 2022, which remained virtually unchanged as compared to $93.9 million for the same period in 2021

  • Net income and comprehensive income was $3.5 million for the three months ended September 30, 2022, as compared to $178.1 million for the same period in 2021, representing a decrease of $174.6 million, which was primarily attributed to a $177.7 million decrease in fair value adjustments on revaluation of investment properties

TORONTO, Nov. 11, 2022 (GLOBE NEWSWIRE) — SmartCentres Real Estate Investment Trust (“SmartCentres”, the “Trust” or the “REIT”) (TSX: SRU.UN) is pleased to report its financial and operating results for the quarter ended September 30, 2022.

“Customer traffic to our Walmart-anchored shopping centre portfolio continues to gain post-pandemic momentum which, in turn, is generating steadily increasing levels of leasing activity that began earlier in 2022,” said Mitchell Goldhar, Executive Chairman and CEO of SmartCentres.

“We anticipate that this trend will continue into 2023 and will have a positive impact on both our occupancy and earnings levels. We are pleased with the noticeable increase in leasing activity in the third quarter and the associated improvement in cash collections.

Our development business is progressing well, with over 735,000 square feet (approximate) of municipal approvals received for residential and mixed-uses in this quarter alone. This brings 6,000,000 square feet of potential on-site growth so far this year. Current projects under construction include over 400,000 square feet of self-storage space across three properties, more than 1,000 condominium units and a further 174 townhomes, over 900 residential rental suites in three separate projects, and a further 413 seniors housing units. Construction has also commenced on a 241,000 square foot industrial project. We expect each of these projects to begin contributing to FFO(1) during 2023 or 2024.

In the immediate term, the next two 45-storey and 50-storey condominium towers at Transit City are sold out and construction is progressing on time and on budget. Closings are expected to commence early in 2023. In addition, The Millway, a 454-unit, 36-storey rental tower, is also proceeding on time and on budget with initial occupancy and rent commencement expected to begin early in 2023. Also, the first phase of our Artwalk condominium project is sold out and construction is expected to commence by spring 2023.

We are also pleased to confirm that we expect to publish our inaugural ESG report in the coming weeks. With respect to the changing economic conditions, we plan on applying discipline when assessing new opportunities for growth. Our focus remains on the long term, including the development of mixed-use projects on our strategically located shopping centre sites which will extract deeply embedded value wherever possible for many years to come,” added Mr. Goldhar.

(1)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.

Key Business Development, Financial and Operational Highlights for the Three Months Ended September 30, 2022

Mixed-Use Development and Intensification at SmartVMC

  • Park Place condo pre-development is underway on the 53.0 acre SmartVMC West lands strategically acquired in December 2021. Pre-sales for this development have commenced. The Trust’s acquisition in December 2021 of a two-thirds interest in the SmartVMC West lands more than doubled the Trust’s holdings in the 105 acre SmartVMC city centre development.

  • Construction continues on budget on the 100{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} pre-sold Transit City 4 (45 storeys) and 5 (50 storeys) 1,026-suite condo towers. Concrete and formwork have been completed for both towers, with building envelope and interior finishes ongoing. Closings are expected to commence in early 2023.

  • Construction of the purpose-built rental project, the Millway (36 storeys), continues at SmartVMC. Both formwork and concrete have been completed. Building envelope is ongoing with interior finishes underway. Initial occupancy and rent commencement are expected in spring 2023.

Other Business Development

  • The Trust completed the purchase of approximately 38 acres of industrial lands in Pickering, adjacent to Hwy 407, on which the Trust received approval to build 241,000 square feet of industrial space for the 16 acre Phase 1 development, of which 53{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} has already been pre-leased to a leading Canadian furniture retailer, with completion currently scheduled for 2023.

  • Leasing continues on the completed first phase of the two-phase, purpose-built residential rental project in Laval, Quebec, with more than 99{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} of the 171 units rented. Construction continues on the next phase that commenced in October 2021, with a target completion date of Q2 2023.

  • Initial occupancy and rent commencement in the two purpose-built residential rental towers (238 units) in Mascouche, Quebec began in July 2022. More than 130 units have been leased and current lease-up activity is in line with initial expectations.

  • All of the five developed and operating self-storage facilities (Toronto (Leaside), Vaughan NW, Brampton, Oshawa South and Scarborough East) have been well-received by their local communities; current occupancy levels are ahead of expectations.

  • Three self-storage facilities in Markham, Brampton (Kingspoint) and Aurora are currently under construction and on budget, with the latter two facilities expected to be completed in late 2022. Additional self-storage facilities have been approved by the Board of Trustees and the Trust is in the process of obtaining municipal approvals in Whitby, Stoney Creek and two locations in Toronto (Gilbert Ave. and Jane St.). In addition, the municipal approval process is underway in New Westminster and on a newly acquired property in Burnaby, British Columbia.

  • Construction continues on a new retirement residence and a seniors’ apartment project, totalling 402 units, at the Trust’s Laurentian Place in Ottawa, with completion expected in Q1 2024.

  • The Trust intends to commence the redevelopment of a portion of its 73 acre Cambridge retail property (which is subject to a leasehold interest with Penguin) which is now zoned for 12.0 million square feet of residential and commercial uses. Over the coming years, this high profile property will transform into a vibrant urban city center away from the GTA, but strategically within its orbit.

  • The Trust, together with its partner, Penguin, have also commenced preliminary siteworks for the 215,000 square feet retail project on Laird Drive in Toronto, that is expected to feature a flagship 190,000 square foot Canadian Tire store together with 25,000 square feet of additional retail space. Canadian Tire is expected to take possession in 2024.

Financial

  • Net income and comprehensive income(1) was $3.5 million as compared to $178.1 million for the same period in 2021, representing a decrease of $174.6 million. This decrease was primarily attributed to: i) $177.7 million decrease in fair value adjustment on revaluation of investment properties; ii) $4.3 million increase in interest expense; iii) $2.3 million decrease in net operating income; iv) $2.2 million increase in general and administrative expenses (net); v) $0.6 million net income decrease relating to other items; and was partially offset by vi) $9.9 million increase in fair value adjustments on financial instruments; and vii) $2.7 million increase in interest income.

  • The Trust continues to add to its unencumbered pool of high-quality assets. As at September 30, 2022, this unencumbered portfolio consisted of investment properties valued at $8.4 billion (September 30, 2021 – $6.0 billion).

  • The Trust’s fixed rate/variable rate debt ratio(2)(3) was 83{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}/17{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} as at September 30, 2022 (December 31, 2021 – 89{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}/11{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}).

  • FFO with adjustments excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition(2) was $93.8 million as compared to $93.9 million in the same period last year.

  • During the quarter, 941,990 additional notional Units were added at a weighted average price of $27.42 per Unit to the Total Return Swap.

  • Net income and comprehensive income per Unit(1) decreased by $1.01 or 98{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} to $0.02 as compared to the same period in 2021, primarily resulting from fair value adjustments on revaluation of investment properties in amount of $177.7 million or $0.99 per Unit.

  • FFO with adjustments excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition per Unit(2) was $0.54, which remained the same as compared to the same period in 2021.

  • Cash flows provided by operating activities(1) increased by $0.7 million or 0.7{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} to $97.0 million as compared to the same period in 2021. Surplus of cash flows provided by operating activities(1) over distributions declared amounted to $14.6 million (three months ended September 30, 2021 – surplus of $16.6 million).

  • The Payout Ratio relating to cash flows provided by operating activities for the rolling 12 months ended September 30, 2022 was 86.6{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}, as compared to 96.8{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} for the same period ended September 30, 2021. The Payout Ratio relating to cash flows provided by operating activities for the rolling 24 months ended September 30, 2022 was 91.3{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}, as compared to 95.8{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} for the same period ended September 30, 2021.

  • For the three months ended September 30, 2022, ACFO(2) decreased by $9.3 million or 10.3{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} to $81.1 million as compared to the same period in 2021.

  • For the three months ended September 30, 2022, there was a shortfall of ACFO(2) over distributions declared of $1.3 million (three months ended September 30, 2021 – surplus of $10.7 million).

  • The Payout Ratio to ACFO(2) for the rolling 12 months ended September 30, 2022 was 98.9{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}, as compared to 90.1{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} for the same period ended September 30, 2021. Excluding SmartVMC West LP Class D distributions, the Payout Ratio to ACFO(2) for the rolling 12 months ended September 30, 2022 was 96.7{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}, as compared to 90.1{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} for the same period ended September 30, 2021.

  • The Payout Ratio to ACFO(2) for the rolling 24 months ended September 30, 2022 was 94.4{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}, as compared to 91.0{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} for the same period ended September 30, 2021. Excluding SmartVMC West LP Class D distributions, the Payout Ratio to ACFO(2) for the rolling 24 months ended September 30, 2022 was 93.3{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}, as compared to 91.0{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} for the same period ended September 30, 2021.

Operational

  • Rentals from investment properties and other(1) was $196.7 million, as compared to $195.2 million for the same period in 2021, representing an increase of $1.5 million or 0.8{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}, primarily due to the acquisition of an additional interest in investment properties in Q1 2022, higher rental income from Premium Outlets locations in both Toronto and Montreal, additional self-storage facility and parking rental revenue, and higher miscellaneous revenue.

  • In-place and committed occupancy rates were 97.6{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} and 98.1{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}, respectively, as at September 30, 2022 (June 30, 2022 – 97.2{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} and 97.6{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}, respectively).

Subsequent Event

  • Subsequent to September 30, 2022, certain mortgages receivable with Penguin in the amount of $101.4 million were repaid in cash and the proceeds were primarily used to repay a portion of the balance outstanding on the Trust’s revolving operating facility.

(1)   Represents a GAAP measure
(2)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(3)   Net of cash-on-hand of $150.0 million as at September 30, 2022 for the purposes of calculating the applicable ratios.


Selected Consolidated Operational, Mixed-Use Development and Financial Information

Key consolidated operational, mixed-use development and financial information shown in the table below includes the Trust’s proportionate share of equity accounted investments:

(in thousands of dollars, except per Unit and other non-financial data)

September 30, 2022

 

December 31, 2021

 

September 30, 2021

 

Portfolio Information

 

 

 

 

 

 

Number of retail properties

155

 

155

 

156

 

Number of office properties

4

 

4

 

4

 

Number of self-storage properties

6

 

6

 

5

 

Number of residential properties

1

 

1

 

1

 

Number of properties under development

19

 

17

 

15

 

Total number of properties with an ownership interest

185

 

183

 

181

 

Leasing and Operational Information(1)

 

 

 

 

 

 

Gross leasable retail and office area (in thousands of sq. ft.)

34,685

 

34,119

 

34,225

 

Occupied retail and office area (in thousands of sq. ft.)

33,843

 

33,219

 

33,312

 

Vacant retail and office area (in thousands of sq. ft.)

842

 

900

 

913

 

In-place occupancy rate ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})

97.6

 

97.4

 

97.3

 

Committed occupancy rate ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})

98.1

 

97.6

 

97.6

 

Average lease term to maturity (in years)

4.3

 

4.4

 

4.5

 

Net annualized retail rental rate (per occupied sq. ft.) ($)

15.52

 

15.44

 

15.40

 

Net annualized retail rental rate excluding Anchors (per occupied sq. ft.) ($)

22.40

 

22.07

 

21.91

 

Mixed-Use Development Information

 

 

 

 

 

 

Trust’s share of future development area (in thousands of sq. ft.)

39,500

 

40,600

 

32,200

 

Trust’s share of estimated costs of future projects currently under construction, or for which construction is expected to commence within the next five years (in millions of dollars)

9,800

 

9,800

 

7,700

 

Total number of residential rental projects

107

 

104

 

97

 

Total number of seniors’ housing projects

25

 

27

 

39

 

Total number of self-storage projects

35

 

36

 

46

 

Total number of office building projects

8

 

8

 

7

 

Total number of hotel projects

3

 

3

 

4

 

Total number of condominium developments

89

 

95

 

73

 

Total number of townhome developments

8

 

10

 

15

 

Total number of estimated future projects currently in development planning stage

275

 

283

 

281

 

(in thousands of dollars, except per Unit and other non-financial data)

September 30, 2022

 

December 31, 2021

 

September 30, 2021

 

Financial Information

 

 

 

 

 

 

Total assets – GAAP(2)

11,862,633

 

11,293,248

 

10,191,592

 

Total assets – non-GAAP(3)(4)

12,219,429

 

11,494,377

 

10,382,086

 

Investment properties – GAAP(2)

10,211,384

 

9,847,078

 

8,892,656

 

Investment properties – non-GAAP(3)(4)

11,135,415

 

10,684,529

 

9,623,548

 

Total unencumbered assets(3)

8,383,900

 

6,640,600

 

6,002,800

 

Debt – GAAP(2)

5,159,860

 

4,854,527

 

4,539,594

 

Debt – non-GAAP(3)(4)

5,410,319

 

4,983,078

 

4,647,648

 

Debt to Aggregate Assets ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})(3)(4)(5)

43.7

 

42.9

 

44.5

 

Debt to Gross Book Value ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})(3)(4)(5)

52.1

 

50.8

 

50.4

 

Unsecured to Secured Debt Ratio(3)(4)(5)

77{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}/23{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

 

71{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}/29{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

 

70{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}/30{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

 

Unencumbered assets to unsecured debt(3)(4)(5)

2.1X

 

1.9X

 

1.9X

 

Weighted average interest rate ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})(3)(4)

3.67

 

3.11

 

3.25

 

Weighted average term of debt (in years)

4.2

 

4.8

 

5

 

Interest coverage ratio(3)(4)(5)

3.3X

 

3.4X

 

3.3X

 

Adjusted Debt to Adjusted EBITDA (net of cash)(3)(4)(5)

10.0X

 

9.2X

 

8.5X

 

Adjusted Debt to Adjusted EBITDA (net of cash and TRS)(3)(4)(5)

9.8X

 

9.1X

 

8.5X

 

Fixed Rate to Variable Rate Debt Ratio(3)(4)(5)

83{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}/17{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

 

89{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}/11{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

 

94{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}/6{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

 

Equity (book value)(2)

6,141,317

 

5,841,315

 

5,268,176

 

Weighted average number of units outstanding – diluted

179,644,083

 

173,748,819

 

173,535,843

 

(1)   Excluding residential and self-storage area.
(2)   Represents a GAAP measure.
(3)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(4)   Includes the Trust’s proportionate share of equity accounted investments.
(5)   As at September 30, 2022, cash-on-hand of $150.0 million was excluded for the purposes of calculating the applicable ratios (December 31, 2021 – $80.0 million, September 30, 2021 – $50.0 million).

Quarterly Comparison to Prior Year

The following table presents key financial, per Unit, and payout ratio information for the three months ended September 30, 2022 and September 30, 2021:

(in thousands of dollars, except per Unit information)

September 30, 2022

 

September 30, 2021

 

Variance

 

 

(A)

 

(B)

 

(A–B)

 

Financial Information

 

 

 

 

 

 

Rentals from investment properties and other(1)

196,678

 

195,171

 

1,507

 

Net base rent(1)

127,576

 

125,125

 

2,451

 

Total recoveries(1)

59,391

 

60,565

 

(1,174

)

Miscellaneous revenue(1)

4,683

 

4,573

 

110

 

Service and other revenues(1)

5,028

 

4,908

 

120

 

Net income and comprehensive income(1)

3,548

 

178,051

 

(174,503

)

Net income and comprehensive income excluding fair value adjustments(2)(3)

83,927

 

90,691

 

(6,764

)

Cash flows provided by operating activities(1)

97,011

 

96,298

 

713

 

Net rental income and other(1)

127,197

 

123,617

 

3,580

 

NOI from condominium and townhome closings and other adjustments(2)

(244

)

6,444

 

(6,688

)

NOI(2)

130,986

 

133,333

 

(2,347

)

Change in net rental income and other(2)

2.9

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

9.2

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

(6.3

){d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

Change in SPNOI(2)

3.1

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

6.6

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

(3.5

){d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

Change in SPNOI excluding ECL(2)

2.3

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

(1.0

){d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

3.3

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

 

 

 

 

FFO(2)(3)(4)(5)

88,403

 

97,887

 

(9,484

)

Other adjustments

669

 

1,706

 

(1,037

)

FFO with adjustments(2)(3)(4)

89,072

 

99,593

 

(10,521

)

Adjusted for:

 

 

 

ECL

(271

)

670

 

(941

)

Loss (gain) on derivative – TRS

4,900

 

(392

)

5,292

 

FFO sourced from condominium and townhome closings

216

 

(5,922

)

6,138

 

FFO sourced from SmartVMC West acquisition

(154

)

—

 

(154

)

FFO with adjustments excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition(2)(3)(4)

93,763

 

93,949

 

(186

)

 

 

 

 

ACFO(2)(3)(4)(5)

81,060

 

90,342

 

(9,282

)

Other adjustments

669

 

1,706

 

(1,037

)

ACFO with adjustments(2)(3)(4)

81,729

 

92,048

 

(10,319

)

Adjusted for:

 

 

 

Loss (gain) on derivative – TRS

4,900

 

(392

)

5,292

 

ACFO sourced from condominium and townhome closings

244

 

(6,444

)

6,688

 

ACFO sourced from SmartVMC West acquisition

(154

)

—

 

(154

)

ACFO with adjustments excluding impact of TRS, condominium and townhome closings, and SmartVMC West acquisition(2)(3)(4)

86,719

 

85,212

 

1,507

 

 

 

 

 

Distributions declared

82,382

 

79,683

 

2,699

 

Surplus of cash provided by operating activities over distributions declared(2)

14,629

 

16,615

 

(1,986

)

(Shortfall) surplus of ACFO over distributions declared(2)

(1,322

)

10,659

 

(11,981

)

Surplus of ACFO with adjustments excluding impact of TRS, condominium and townhome closings, and SmartVMC West acquisition over distributions declared(2)

4,337

 

5,529

 

(1,192

)

Units outstanding(6)

178,126,285

 

172,287,950

 

5,838,335

 

Weighted average – basic

178,123,918

 

172,285,503

 

5,838,415

 

Weighted average – diluted(7)

179,678,009

 

173,644,091

 

6,033,918

 

(in thousands of dollars, except per Unit information)

September 30, 2022

 

September 30, 2021

 

Variance

 

 

(A)

 

(B)

 

(A–B)

 

 

 

 

 

 

 

 

Per Unit Information (Basic/Diluted)

 

 

 

 

 

 

Net income and comprehensive income(1)

$0.02/$0.02

 

$1.03/$1.03

 

$-1.01/$-1.01

 

Net income and comprehensive income excluding fair value adjustments(2)(3)

$0.47/$0.47

 

$0.53/$0.52

 

$-0.06/$-0.05

 

 

 

 

 

 

 

 

FFO(2)(3)(4)(5)

$0.50/$0.49

 

$0.57/$0.56

 

$-0.07/$-0.07

 

Other adjustments

$0.00/$0.01

 

$0.01/$0.01

 

$-0.01/$0.00

 

FFO with adjustments(2)(3)(4)

$0.50/$0.50

 

$0.58/$0.57

 

$-0.08/$-0.07

 

Adjusted for:

 

 

 

 

 

 

ECL(8)

$0.00/$0.00

 

$0.00/$0.00

 

$0.00/$0.00

 

Loss (gain) on derivative – TRS

$0.03/$0.03

 

$0.00/$0.00

 

$0.03/$0.03

 

FFO sourced from condominium and townhome closings

$0.00/$0.00

 

$-0.03/$-0.03

 

$0.03/$0.03

 

FFO units impact from SmartVMC West LP Class D Units

$0.01/$0.01

 

$0.00/$0.00

 

$0.01/$0.01

 

FFO with adjustments excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition(2)(3)(4)

$0.54/$0.54

 

$0.55/$0.54

 

$-0.01/$0.00

 

 

 

 

 

 

 

 

Distributions declared

$0.463

 

$0.463

 

$—

 

 

 

 

 

 

 

 

Payout Ratio Information

 

 

 

 

 

 

Payout Ratio to cash flows provided by operating activities

84.9

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

82.7

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

2.2

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

Payout Ratio to ACFO(2)(3)(4)(5)

101.6

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

88.2

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

13.4

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

Payout Ratio to ACFO with adjustments(2)(3)(4)

100.8

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

86.6

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

14.2

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

Payout Ratio to ACFO with adjustments excluding impact of TRS, condominium and townhome sales, and SmartVMC West acquisition(2)(3)(4)

91.9

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

93.5

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

(1.6

){d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

 

 

 

 

 

 

 

(1)   Represents a GAAP measure.
(2)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(3)   Includes the Trust’s proportionate share of equity accounted investments.
(4)   See “Non-GAAP Measures” in this Press Release for a reconciliation of these measures to the nearest consolidated financial statement measure.
(5)   The calculation of the Trust’s FFO and ACFO and related payout ratios, including comparative amounts, are financial metrics that were determined based on the REALpac White Paper on FFO issued in January 2022 and REALpac White Paper on ACFO issued in February 2019, respectively. Comparison with other reporting issuers may not be appropriate. The payout ratio to FFO and the payout ratio to ACFO are calculated as declared distributions divided by FFO and ACFO, respectively.
(6)   Total Units outstanding include Trust Units and LP Units, including Units classified as liabilities. LP Units classified as equity in the consolidated financial statements are presented as non-controlling interests.
(7)   The diluted weighted average includes the vested portion of the deferred units issued pursuant to the deferred unit plan.  
(8)   The impact of ECL on FFO per Unit is less than $0.01 and therefore it is shown as $0.00 in the table above for the three months ended September 30, 2022.


Year-to-Date Comparison to Prior Year

The following table presents key financial, per Unit, and payout ratio information for the nine months ended September 30, 2022 and September 30, 2021:

(in thousands of dollars, except per Unit information)

September 30, 2022

 

September 30, 2021

 

Variance

 

 

(A)

 

(B)

 

(A–B)

 

Financial Information

 

 

 

 

 

 

Rentals from investment properties and other(1)

597,497

 

587,946

 

9,551

 

Net base rent(1)

380,082

 

369,955

 

10,127

 

Total recoveries(1)

196,896

 

196,342

 

554

 

Miscellaneous revenue(1)

10,414

 

10,412

 

2

 

Service and other revenues(1)

10,105

 

11,237

 

(1,132

)

Net income and comprehensive income(1)

535,655

 

335,595

 

200,060

 

Net income and comprehensive income excluding fair value adjustments(2)(3)

253,910

 

260,400

 

(6,490

)

Cash flows provided by operating activities(1)

243,800

 

237,950

 

5,850

 

Net rental income and other(1)

372,575

 

358,886

 

13,689

 

NOI from condominium and townhome closings and other adjustments(2)

496

 

20,538

 

(20,042

)

NOI(2)

384,888

 

388,405

 

(3,517

)

Change in net rental income and other(2)

3.8

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

4.7

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

(0.9

){d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

Change in SPNOI(2)

3.3

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

3.4

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

(0.1

){d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

Change in SPNOI excluding ECL(2)

5.5

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

(2.1

){d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

7.6

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

 

 

 

 

FFO(2)(3)(4)(5)

269,102

 

282,620

 

(13,518

)

Other adjustments

2,566

 

2,566

 

—

 

FFO with adjustments(2)(3)(4)

271,668

 

285,186

 

(13,518

)

Adjusted for:

 

 

 

ECL

(2,547

)

5,251

 

(7,798

)

Loss (gain) on derivative – TRS

11,138

 

(1,462

)

12,600

 

FFO sourced from condominium and townhome closings

(860

)

(18,813

)

17,953

 

FFO sourced from SmartVMC West acquisition

(613

)

—

 

(613

)

FFO with adjustments excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition(2)(3)(4)

278,786

 

270,162

 

8,624

 

 

 

 

 

FFO with adjustments and Transactional FFO(2)(3)(4)

271,668

 

286,773

 

(15,105

)

 

 

 

 

ACFO(2)(3)(4)(5)

247,085

 

269,743

 

(22,658

)

Other adjustments

2,566

 

2,566

 

—

 

ACFO with adjustments(2)(3)(4)

249,651

 

272,309

 

(22,658

)

Adjusted for:

 

 

 

Loss (gain) on derivative – TRS

11,138

 

(1,462

)

12,600

 

ACFO sourced from condominium and townhome closings

(496

)

(20,538

)

20,042

 

ACFO sourced from SmartVMC West acquisition

(613

)

—

 

(613

)

ACFO with adjustments excluding impact of TRS, condominium and townhome closings, and SmartVMC West acquisition(2)(3)(4)

259,680

 

250,309

 

9,371

 

 

 

 

 

Distributions declared

247,145

 

239,028

 

8,117

 

Shortfall of cash flows provided by operating activities over distributions declared(2)

(3,345

)

(1,078

)

(2,267

)

(Shortfall) surplus of ACFO over distributions declared(2)

(60

)

30,715

 

(30,775

)

Surplus of ACFO with adjustments excluding impact of TRS, condominium and townhome closings, and SmartVMC West acquisition over distributions declared(2)

12,535

 

11,281

 

1,254

 

Units outstanding(6)

178,126,285

 

172,287,950

 

5,838,335

 

Weighted average – basic

178,118,504

 

172,266,602

 

5,851,902

 

Weighted average – diluted(7)

179,644,083

 

173,535,843

 

6,108,240

 

(in thousands of dollars, except per Unit information)

September 30, 2022

 

September 30, 2021

 

Variance

 

 

(A)

 

(B)

 

(A–B)

 

 

 

 

 

 

 

 

Per Unit Information (Basic/Diluted)

 

 

 

 

 

 

Net income and comprehensive income(1)

$3.01/$2.98

 

$1.95/$1.93

 

$1.06/$1.05

 

Net income and comprehensive income excluding fair value adjustments(2)(3)

$1.43/$1.41

 

$1.51/$1.50

 

$-0.08/$-0.09

 

 

 

 

 

 

 

 

FFO(2)(3)(4)(5)

$1.51/$1.50

 

$1.64/$1.63

 

$-0.13/$-0.13

 

Other adjustments

$0.02/$0.01

 

$0.02/$0.01

 

$0.00/$0.00

 

FFO with adjustments(2)(3)(4)

$1.53/$1.51

 

$1.66/$1.64

 

$-0.13/$-0.13

 

Adjusted for:

 

 

 

 

 

 

ECL

$-0.01/$-0.01

 

$0.03/$0.03

 

$-0.04/$-0.04

 

Loss (gain) on derivative – TRS

$0.06/$0.06

 

$-0.01/$-0.01

 

$0.07/$0.07

 

FFO sourced from condominium and townhome closings

$0.00/$0.00

 

$-0.11/$-0.10

 

$0.11/$0.10

 

FFO units impact from SmartVMC West LP Class D Units

$0.04/$0.04

 

$0.00/$0.00

 

$0.04/$0.04

 

FFO with adjustments excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition(2)(3)(4)

$1.62/$1.60

 

$1.57/$1.56

 

$0.05/$0.04

 

 

 

 

 

 

 

 

FFO with adjustments and Transactional FFO(2)(3)(4)

$1.53/$1.51

 

$1.66/$1.65

 

$-0.13/$-0.14

 

Distributions declared

$1.39

 

$1.39

 

$—

 

 

 

 

 

 

 

 

Payout Ratio Information

 

 

 

 

 

 

Payout Ratio to cash flows provided by operating activities

101.4

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

100.5

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

0.9

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

Payout Ratio to ACFO(2)(3)(4)(5)

100.0

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

88.6

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

11.4

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

Payout Ratio to ACFO with adjustments(2)(3)(4)

99.0

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

87.8

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

11.2

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

Payout Ratio to ACFO with adjustments excluding impact of TRS, condominium and townhome sales, and SmartVMC West acquisition(2)(3)(4)

92.1

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

95.5

{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

(3.4

){d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

 

 

 

 

 

 

 

(1)   Represents a GAAP measure.
(2)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(3)   Includes the Trust’s proportionate share of equity accounted investments.
(4)   See “Non-GAAP Measures” in this Press Release for a reconciliation of these measures to the nearest consolidated financial statement measure.
(5)   The calculation of the Trust’s FFO and ACFO and related payout ratios, including comparative amounts, are financial metrics that were determined based on the REALpac White Paper on FFO issued in January 2022 and REALpac White Paper on ACFO issued in February 2019, respectively. Comparison with other reporting issuers may not be appropriate. The payout ratio to FFO and the payout ratio to ACFO are calculated as declared distributions divided by FFO and ACFO, respectively.
(6)   Total Units outstanding include Trust Units and LP Units, including Units classified as liabilities. LP Units classified as equity in the consolidated financial statements are presented as non-controlling interests.
(7)   The diluted weighted average includes the vested portion of the deferred units issued pursuant to the deferred unit plan.   

Operational Highlights

For the three months ended September 30, 2022, net income and comprehensive income decreased by $174.5 million as compared to the same period in 2021. This decrease was primarily attributed to the following:

  • $177.7 million decrease in fair value adjustments on revaluation of investment properties (see details in the “Investment Property” section in the Trust’s MD&A);

  • $4.3 million increase in interest expense (see further details in the “Interest Income and Interest Expense” subsection in the Trust’s MD&A);

  • $2.3 million decrease in NOI (see further details in the “Net Operating Income” subsection in the Trust’s MD&A);

  • $2.2 million increase in general and administrative expenses (net) (see further details in the “General and Administrative Expense” section in the Trust’s MD&A);

  • $0.5 million higher loss on sale of investment properties; and

  • $0.1 million increase in supplemental costs;

Partially offset by the following:

  • $9.9 million increase in fair value adjustment on financial instruments primarily due to: i) $12.8 million higher fair value gains on those Units classified as liabilities due to fluctuation in the Trust’s Unit price, ii) $3.9 million higher fair value gains relating to unit-based incentive programs due to fluctuation in the Trust’s Unit price, and partially offset by: iii) $5.3 million higher fair value loss of TRS due to fluctuation in the Trust’s Unit price, and iv) $1.5 million decrease in fair value adjustments of interest rate swap agreements (see further details in the “Debt” subsection in the Trust’s MD&A); and

  • $2.7 million increase in interest income mainly due to higher interest rates.

For the nine months ended September 30, 2022, net income and comprehensive income increased by $200.1 million as compared to the same period in 2021. This increase was primarily attributed to the following:

  • $114.6 million increase in fair value adjustment on financial instruments primarily due to: i) $63.1 million higher fair value gains on those Units classified as liabilities due to fluctuation in the Trust’s Unit price, ii) $40.6 million increase in fair value adjustments pertaining to interest rate swap agreements (see further details in the “Debt” subsection in the Trust’s MD&A), iii) $23.5 million higher fair value gains relating to unit-based incentive programs also due to fluctuation in the Trust’s Unit price, and partially offset by: iv) $12.6 million higher fair value loss on the TRS due to fluctuation in the Trust’s Unit price;

  • $92.0 million increase in fair value adjustments on revaluation of investment properties, of which: i) $237.7 million increase relates to the fair value adjustment associated with certain properties under development, ii) $251.2 million decrease relates to cap rate changes, iii) $14.2 million increase relates to gain from acquisition, and iv) $91.3 million increase relates to the revaluation of investment properties, principally driven by leasing and assumption updates (see details in the “Investment Property” section in the Trust’s MD&A);

  • $1.9 million increase in interest income mainly due to higher interest rates; and

  • $0.7 million decrease in interest expense (see further details in the “Interest Income and Interest Expense” section in the Trust’s MD&A);

Partially offset by the following:

  • $3.5 million decrease in NOI (see further details in the “Net Operating Income” subsection in the Trust’s MD&A);

  • $2.4 million increase in supplemental costs;

  • $2.3 million increase in general and administrative expenses (net) (see further details in the “General and Administrative Expense” section in the Trust’s MD&A);

  • $0.5 million higher loss on sale of investment properties; and

  • $0.3 million increase in acquisition-related costs.

Development and Intensification Summary
The following table summarizes the 275 identified mixed-use, recurring rental income and development income initiatives, which are included in the Trust’s large development pipeline:

 

Underway

 

Active

 

Future

 

 

 

Description

(Construction underway or expected to commence within next 2 years)

 

(Construction expected to commence within next 3–5 years)

 

(Construction expected to commence after 5 years)

 

Total

 

Number of projects in which the Trust has an ownership interest

 

 

 

 

 

 

 

 

Residential Rental

29

 

20

 

58

 

107

 

Seniors’ Housing

4

 

8

 

13

 

25

 

Self-storage

12

 

7

 

16

 

35

 

Office Buildings

—

 

1

 

7

 

8

 

Hotels

—

 

—

 

3

 

3

 

Subtotal – Recurring rental income initiatives

45

 

36

 

97

 

178

 

Condominium developments

23

 

20

 

46

 

89

 

Townhome developments

2

 

1

 

5

 

8

 

Subtotal – Development income initiatives

25

 

21

 

51

 

97

 

Total

70

 

57

 

148

 

275

 

Trust’s share of project area (in thousands of sq. ft.)

 

 

 

 

 

 

 

 

Recurring rental income initiatives

5,600

 

3,900

 

11,900

 

21,400

 

Development income initiatives

5,100

 

3,500

 

9,500

 

18,100

 

Total Trust’s share of project area (in thousands of sq. ft.)

10,700

 

7,400

 

21,400

 

39,500

 

Trust’s share of such estimated costs (in millions of dollars)

5,750

 

4,050

 

– (1)

 

9,800

 

(1)    The Trust has not fully determined the costs attributable to future projects expected to commence after five years and as such they are not included in this table.

The Trust is currently working on initiatives for the development of many properties for which final municipal approvals have been obtained or are being actively pursued. Completion, milestone or occupancy dates of each of the projects described below may be delayed or adversely impacted as a result of, among other things, restrictions or delays related to the COVID-19 pandemic.

  1. the development of up to 5.3 million square feet of predominately residential space, in various forms, at Highway 400 & Highway 7, in Vaughan, Ontario, with a rezoning application submitted in December 2019 and a site plan application for the first four residential buildings totalling 1,742 units submitted in October 2020. Currently working with the City of Vaughan on advancement of Weston & Highway 7 Secondary Plan;

  2. the development of up to 5.0 million square feet of predominately residential space, in various forms over the long term, in Pickering, Ontario, with the zoning for five towers with a gross floor area of approximately 1,400,000 square feet and site plan application for a three-tower mixed-use phase, approximating 700,000 square feet, approved by Council in June 2022;

  3. the development of up to 5.5 million square feet of predominately residential space, in various forms, at Oakville North in Oakville, Ontario, with the official plan and zoning amendment applications for an initial two-tower 587-unit residential phase submitted in April 2021;

  4. the development of up to 2.6 million square feet of predominately residential space, in various forms, at the Westside Mall in Toronto, Ontario, with a zoning application for the first 35-storey mixed-use tower submitted in Q1 2021, and targeting site plan application by the end of the year;

  5. the development of up to 1.5 million square feet of residential space in various forms on the Trust’s undeveloped lands at the Vaughan NW property in Vaughan, Ontario. Approximately 60{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} of the 174 draft plan approved townhomes have been pre-sold and construction is soon expected to commence. Rezoning application for a seniors’ apartment building and separate retirement residence, both of which are to be developed in partnership with Revera, along with three other residential buildings, was approved by Council in June 2022;

  6. the development of up to 1.5 million square feet of residential space, in various forms, in Pointe-Claire, Quebec, with the first phase, a two-tower rental project, being actively pursued, but subject to the urban planning revision process by the city of Pointe-Claire;

  7. the development of up to 200,000 square feet of residential townhomes at Oakville South in Oakville, Ontario;

  8. the intensification of the Toronto StudioCentre (“StudioCentre”) in Toronto, Ontario (zoning allows for up to 1.2 million square feet);

  9. the development of four high-rise purpose-built residential rental buildings comprising approximately 1,700 units with Greenwin, in Barrie, Ontario, for which a zoning application was approved by Barrie City Council in January 2021 with the site plan approved for Phase 1 by Barrie City Council in June 2021. An application for a building permit was submitted in July 2021. Environmental Risk Assessment was approved for the entire site in September 2021 and the application of Certificate of Property Use was submitted in February 2022 and approved in September 2022;

  10. the development of a 35-storey high-rise purpose-built residential rental tower containing 437 units, on Balliol Street in midtown Toronto, Ontario, with zoning and site plan applications submitted in September 2020. A second submission of these applications was made in July 2021. A third submission of these applications was made in March 2022. Zoning approval was received in July 2022 and site plan approval is expected in Q4 2022;

  11. the development of up to 1,600 residential units, in various forms, in Mascouche, Quebec, with the first phase consisting of 238 units in two 10-storey rental towers approved by municipal council in August 2020. Construction began in April 2021, and the first four floors opened in July 2022 and another five floors have since opened, with the last floor scheduled to open in November 2022. Construction of a second phase is expected to commence in Q2 2023;

  12. the development of residential density at the Trust’s shopping centre at 1900 Eglinton Avenue East in Scarborough, Ontario, with rezoning applications for the first two residential towers (46 and 48 storeys) submitted in January 2021. Site plan application for both buildings was submitted in December 2021;

  13. the development of the first phase, 46-unit rental building, which is part of a multi-phase master plan in Alliston, Ontario, with a rezoning application approved by Council in December 2020 and a site plan application submitted in May 2020. The site plan application was resubmitted in March 2021 and again in July 2021 and approved in July 2022. The building permit application was submitted in October 2021 and a partial permit was received in September 2022;

  14. besides the eight self-storage projects completed or under construction, there are six additional self-storage facilities in Ontario and British Columbia with the Trust’s partner, SmartStop, in Stoney Creek, Toronto (2), Whitby, New Westminster and Burnaby with zoning and/or site plan approval obtained or applications well underway. Project agreements for another three locations are being finalized;

  15. the Q4 2020 acquisition of an additional 33.33{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} interest (new ownership structure of 66.66{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} held by the Trust and 33.33{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} held by Penguin) in 50 acres of adjacent land to the Trust’s Premium Outlets Montreal in Mirabel, Quebec, for the ultimate development of residential density of up to 4,500 units. Site plan applications for the first phase rental building with 168 units expected to be submitted in Q4 2022. Master plan of development for the site is subject to approval;

  16. the development of a new residential block consisting of a 155-unit building in Phase 1 and approximately 345 rental units in Phases 2 and 3 at Laval Centre in Quebec. The application for architecture approval for Phase 1 and Phase 2 (155 units) was submitted in Q4 2021 and approved in Q3 2022;

  17. the Trust has commenced the redevelopment of a portion of its 73-acre Cambridge retail property (subject to a leasehold interest with Penguin) which now allows various forms of residential, retail, office, institutional and commercial uses providing for the creation of a vibrant urban community with the potential for over 12.0 million square feet of development on the overall property once completed;

  18. the development of a retirement living residence at the Trust’s shopping centre at Bayview and Major Mackenzie in Richmond Hill, Ontario, with a rezoning application for a nine-storey retirement residences building submitted in Q1 2021 and a site plan application submitted in Q4 2021, to be developed in partnership with the existing partner and Revera;

  19. the development of 1.5 million square feet of residential density adjacent to the new South Keys light rail train station at the Trust’s Ottawa South Keys Centre, consistent with current zoning permissions. Site plan application for the first phase rental complex with 446 units was submitted and deemed complete in Q4 2021 and work is ongoing on a second submission to respond to agency comments on the application;

  20. the development of up to 900,000 square feet of predominately residential space on Yonge St. in Aurora, Ontario, with rezoning applications for the entire site and site plan submitted for Phase 1 in July 2021 and resubmitted in April 2022;

  21. the Q4 2020 acquisition of a 50{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} interest in a property in downtown Markham for the development of a 243,000 square foot retirement residence with Revera. The rezoning application was submitted in December 2020, and an appeal was filed in July 2022 for the initial Official Plan Amendment & Zoning By-law Amendment submission;

  22. the development of approximately 900,000 square feet of residential density on the Trust’s Parkway Plaza Centre in Stoney Creek, Ontario, with an application for a Phase 1 development for a two-tower (20 and 15 storeys), 400,000 square foot, 520-unit condo project submitted in Q4 2021; and

  23. during the second quarter of 2022, the Trust completed the purchase of approximately 38 acres of industrial lands in Pickering, adjacent to Hwy 407, on which the Trust received approval to build 241,000 square feet of space for the 16-acre Phase 1 development, of which 53{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} has already been pre-leased, and completion is currently scheduled for 2023.

Proportionately Consolidated Balance Sheets (including the Trust’s interests in equity accounted investments)

The following table presents the proportionately consolidated balance sheets, which includes a reconciliation of the Trust’s proportionate share of equity accounted investments:

(in thousands of dollars)

September 30, 2022

December 31, 2021

 

GAAP Basis

 

Proportionate Share Reconciliation

 

Total Proportionate Share(1)

 

GAAP Basis

 

Proportionate Share Reconciliation

 

Total Proportionate Share(1)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

 

 

 

 

 

Investment properties

10,211,384

 

924,031

 

11,135,415

 

9,847,078

 

837,451

 

10,684,529

 

Equity accounted investments

646,393

 

(646,393

)

—

 

654,442

 

(654,442

)

—

 

Mortgages, loans and notes receivable

281,128

 

(79,910

)

201,218

 

345,089

 

(69,576

)

275,513

 

Other financial assets

289,477

 

—

 

289,477

 

97,148

 

—

 

97,148

 

Other assets

82,495

 

7,600

 

90,095

 

80,940

 

7,465

 

88,405

 

Intangible assets

44,140

 

—

 

44,140

 

45,139

 

—

 

45,139

 

 

11,555,017

 

205,328

 

11,760,345

 

11,069,836

 

120,898

 

11,190,734

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

 

Residential development inventory

31,891

 

105,544

 

137,435

 

27,399

 

67,828

 

95,227

 

Current portion of mortgages, loans and notes receivable

144,490

 

—

 

144,490

 

71,947

 

—

 

71,947

 

Amounts receivable and other

61,573

 

(9,064

)

52,509

 

49,542

 

(8,637

)

40,905

 

Prepaid expenses, deposits and deferred financing costs

50,187

 

19,141

 

69,328

 

12,289

 

13,118

 

25,407

 

Cash and cash equivalents

19,475

 

35,847

 

55,322

 

62,235

 

7,922

 

70,157

 

 

307,616

 

151,468

 

459,084

 

223,412

 

80,231

 

303,643

 

Total assets

11,862,633

 

356,796

 

12,219,429

 

11,293,248

 

201,129

 

11,494,377

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Debt

4,746,915

 

193,003

 

4,939,918

 

4,176,121

 

93,465

 

4,269,586

 

Other financial liabilities

265,462

 

—

 

265,462

 

326,085

 

—

 

326,085

 

Other payables

17,283

 

46

 

17,329

 

18,243

 

—

 

18,243

 

 

5,029,660

 

193,049

 

5,222,709

 

4,520,449

 

93,465

 

4,613,914

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Current portion of debt

412,945

 

57,456

 

470,401

 

678,406

 

35,086

 

713,492

 

Accounts payable and current portion of other payables

278,711

 

106,291

 

385,002

 

253,078

 

72,578

 

325,656

 

 

691,656

 

163,747

 

855,403

 

931,484

 

107,664

 

1,039,148

 

Total liabilities

5,721,316

 

356,796

 

6,078,112

 

5,451,933

 

201,129

 

5,653,062

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

Trust Unit equity

5,111,730

 

—

 

5,111,730

 

4,877,961

 

—

 

4,877,961

 

Non-controlling interests

1,029,587

 

—

 

1,029,587

 

963,354

 

—

 

963,354

 

 

6,141,317

 

—

 

6,141,317

 

5,841,315

 

—

 

5,841,315

 

  Total liabilities and equity

11,862,633

 

356,796

 

12,219,429

 

11,293,248

 

201,129

 

11,494,377

 

(1)   This column contains non-GAAP measures because it includes figures that are recorded in equity accounted investments. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.

Proportionately Consolidated Statements of Income and Comprehensive Income (including the Trust’s Interests in Equity Accounted Investments)
The following tables present the proportionately consolidated statements of income and comprehensive income, which include a reconciliation of the Trust’s proportionate share of equity accounted investments:

Quarterly Comparison to Prior Year

(in thousands of dollars)

Three Months Ended September 30, 2022

 

Three Months Ended September 30, 2021

 

 

 

 

GAAP Basis

 

Proportionate Share Reconciliation

 

Total Proportionate Share(1)

 

GAAP Basis

 

Proportionate Share Reconciliation

 

Total Proportionate Share(1)

 

Variance of Total Proportionate Share(1)

 

Net rental income and other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rentals from investment properties and other

196,678

 

7,570

 

204,248

 

195,171

 

5,486

 

200,657

 

3,591

 

Property operating costs and other

(69,451

)

(3,567

)

(73,018

)

(71,554

)

(2,214

)

(73,768

)

750

 

 

127,227

 

4,003

 

131,230

 

123,617

 

3,272

 

126,889

 

4,341

 

Condo and townhome closings revenue and other(2)

—

 

7

 

7

 

—

 

23,904

 

23,904

 

(23,897

)

Condo and townhome cost of sales and other

(30

)

(221

)

(251

)

—

 

(17,460

)

(17,460

)

17,209

 

 

(30

)

(214

)

(244

)

—

 

6,444

 

6,444

 

(6,688

)

NOI

127,197

 

3,789

 

130,986

 

123,617

 

9,716

 

133,333

 

(2,347

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expense, net

(10,696

)

(3

)

(10,699

)

(8,435

)

(71

)

(8,506

)

(2,193

)

Earnings from equity accounted investments

1,101

 

(1,101

)

—

 

14,302

 

(14,302

)

—

 

—

 

Earnings from other(3)

284

 

(284

)

—

 

—

 

—

 

—

 

—

 

Fair value adjustment on revaluation of investment properties

(92,557

)

411

 

(92,146

)

79,015

 

6,509

 

85,524

 

(177,670

)

Loss (gain) on sale of investment properties

(112

)

(241

)

(353

)

149

 

—

 

149

 

(502

)

Interest expense

(39,175

)

(1,553

)

(40,728

)

(35,032

)

(1,348

)

(36,380

)

(4,348

)

Interest income

5,714

 

(375

)

5,339

 

2,599

 

22

 

2,621

 

2,718

 

Supplemental costs

—

 

(643

)

(643

)

—

 

(526

)

(526

)

(117

)

Fair value adjustment on financial instruments

11,767

 

—

 

11,767

 

1,836

 

—

 

1,836

 

9,931

 

Acquisition-related costs

25

 

—

 

25

 

—

 

—

 

—

 

25

 

Net income and comprehensive income

3,548

 

—

 

3,548

 

178,051

 

—

 

178,051

 

(174,503

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)   This column contains non-GAAP measures because it includes figures that are recorded in equity accounted investments. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(2)   Includes additional partnership profit and other revenues.
(3)   Represents SmartVMC West’s operating results.

Year-to-Date Comparison to Prior Year

(in thousands of dollars)

Nine Months Ended September 30, 2022

 

Nine Months Ended September 30, 2021

 

 

 

 

GAAP Basis

 

Proportionate Share Reconciliation

 

Total Proportionate Share(1)

 

GAAP Basis

 

Proportionate Share Reconciliation

 

Total Proportionate Share(1)

 

Variance of Total Proportionate Share(1)

 

Net rental income and other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rentals from investment properties and other

597,497

 

21,080

 

618,577

 

587,946

 

15,556

 

603,502

 

15,075

 

Property operating costs and other

(224,497

)

(9,688

)

(234,185

)

(229,060

)

(6,575

)

(235,635

)

1,450

 

 

373,000

 

11,392

 

384,392

 

358,886

 

8,981

 

367,867

 

16,525

 

Condo and townhome closings revenue and other(2)

—

 

4,524

 

4,524

 

—

 

76,837

 

76,837

 

(72,313

)

Condo and townhome cost of sales and other

(425

)

(3,603

)

(4,028

)

—

 

(56,299

)

(56,299

)

52,271

 

 

(425

)

921

 

496

 

—

 

20,538

 

20,538

 

(20,042

)

NOI

372,575

 

12,313

 

384,888

 

358,886

 

29,519

 

388,405

 

(3,517

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expense, net

(25,479

)

(107

)

(25,586

)

(23,219

)

(76

)

(23,295

)

(2,291

)

Earnings from equity accounted investments

4,312

 

(4,312

)

—

 

51,371

 

(51,371

)

—

 

—

 

Earnings from other(3)

878

 

(878

)

—

 

—

 

—

 

—

 

—

 

Fair value adjustment on revaluation of investment properties

188,457

 

2,042

 

190,499

 

71,110

 

27,439

 

98,549

 

91,950

 

Loss on sale of investment properties

(216

)

(241

)

(457

)

91

 

—

 

91

 

(548

)

Interest expense

(108,360

)

(3,952

)

(112,312

)

(108,886

)

(4,082

)

(112,968

)

656…
SmartCentres Real Estate Investment Trust Releases Third

SmartCentres Real Estate Investment Trust Releases Third

Operational

  • Shopping centre leasing activity continues to improve with occupancy levels, inclusive of committed deals, increasing to 98.1{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} in Q3 2022, representing a 50 basis point increase from Q2 2022
  • Same Properties NOI inclusive of ECL(1) increased by $3.9 million or 3.1{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} in Q3 2022 as compared to the same period in 2021. Same Properties NOI excluding ECL(1) increased by $3.0 million or 2.3{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} in Q3 2022 as compared to the same period in 2021
  • Net rental income and other increased by $3.6 million or 2.9{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} for the three months ended September 30, 2022 as compared to the same period in 2021

Mixed-use Development

  • In excess of three million square feet of construction activity is currently underway, principally on high rise residential projects in Toronto, Montreal, and Ottawa
  • Construction progressing on time and on budget on 241,000 square feet of industrial space for the 16-acre Phase 1 development in Pickering, of which 53{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} has already been pre-leased to a leading Canadian furniture retailer
  • Construction of Transit City 4 & 5 condominium towers is in the final stages of completion with closings scheduled to commence in Q1 2023. All 1,026 units have been pre-sold
  • Construction of the Millway, a 454-unit purpose-built rental apartment building, is also in the final stages of completion, with initial tenants expected to begin occupancy in Q1 2023

Financial

  • FFO with adjustments and excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition(1) was $93.8 million for the three months ended September 30, 2022, which remained virtually unchanged as compared to $93.9 million for the same period in 2021
  • Net income and comprehensive income was $3.5 million for the three months ended September 30, 2022, as compared to $178.1 million for the same period in 2021, representing a decrease of $174.6 million, which was primarily attributed to a $177.7 million decrease in fair value adjustments on revaluation of investment properties

TORONTO, Nov. 11, 2022 (GLOBE NEWSWIRE) — SmartCentres Real Estate Investment Trust (“SmartCentres”, the “Trust” or the “REIT”) (TSX: SRU.UN) is pleased to report its financial and operating results for the quarter ended September 30, 2022.

“Customer traffic to our Walmart-anchored shopping centre portfolio continues to gain post-pandemic momentum which, in turn, is generating steadily increasing levels of leasing activity that began earlier in 2022,” said Mitchell Goldhar, Executive Chairman and CEO of SmartCentres.

“We anticipate that this trend will continue into 2023 and will have a positive impact on both our occupancy and earnings levels. We are pleased with the noticeable increase in leasing activity in the third quarter and the associated improvement in cash collections.

Our development business is progressing well, with over 735,000 square feet (approximate) of municipal approvals received for residential and mixed-uses in this quarter alone. This brings 6,000,000 square feet of potential on-site growth so far this year. Current projects under construction include over 400,000 square feet of self-storage space across three properties, more than 1,000 condominium units and a further 174 townhomes, over 900 residential rental suites in three separate projects, and a further 413 seniors housing units. Construction has also commenced on a 241,000 square foot industrial project. We expect each of these projects to begin contributing to FFO(1) during 2023 or 2024.

In the immediate term, the next two 45-storey and 50-storey condominium towers at Transit City are sold out and construction is progressing on time and on budget. Closings are expected to commence early in 2023. In addition, The Millway, a 454-unit, 36-storey rental tower, is also proceeding on time and on budget with initial occupancy and rent commencement expected to begin early in 2023. Also, the first phase of our Artwalk condominium project is sold out and construction is expected to commence by spring 2023.

We are also pleased to confirm that we expect to publish our inaugural ESG report in the coming weeks. With respect to the changing economic conditions, we plan on applying discipline when assessing new opportunities for growth. Our focus remains on the long term, including the development of mixed-use projects on our strategically located shopping centre sites which will extract deeply embedded value wherever possible for many years to come,” added Mr. Goldhar.

(1)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.

Key Business Development, Financial and Operational Highlights for the Three Months Ended September 30, 2022

Mixed-Use Development and Intensification at SmartVMC

  • Park Place condo pre-development is underway on the 53.0 acre SmartVMC West lands strategically acquired in December 2021. Pre-sales for this development have commenced. The Trust’s acquisition in December 2021 of a two-thirds interest in the SmartVMC West lands more than doubled the Trust’s holdings in the 105 acre SmartVMC city centre development.
  • Construction continues on budget on the 100{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} pre-sold Transit City 4 (45 storeys) and 5 (50 storeys) 1,026-suite condo towers. Concrete and formwork have been completed for both towers, with building envelope and interior finishes ongoing. Closings are expected to commence in early 2023.
  • Construction of the purpose-built rental project, the Millway (36 storeys), continues at SmartVMC. Both formwork and concrete have been completed. Building envelope is ongoing with interior finishes underway. Initial occupancy and rent commencement are expected in spring 2023.
  • ArtWalk condominium sales of 320 released units in Phase 1 are sold out (construction expected to begin early in 2023).

Other Business Development

  • The Trust completed the purchase of approximately 38 acres of industrial lands in Pickering, adjacent to Hwy 407, on which the Trust received approval to build 241,000 square feet of industrial space for the 16 acre Phase 1 development, of which 53{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} has already been pre-leased to a leading Canadian furniture retailer, with completion currently scheduled for 2023.
  • Leasing continues on the completed first phase of the two-phase, purpose-built residential rental project in Laval, Quebec, with more than 99{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} of the 171 units rented. Construction continues on the next phase that commenced in October 2021, with a target completion date of Q2 2023.
  • Initial occupancy and rent commencement in the two purpose-built residential rental towers (238 units) in Mascouche, Quebec began in July 2022. More than 130 units have been leased and current lease-up activity is in line with initial expectations.
  • All of the five developed and operating self-storage facilities (Toronto (Leaside), Vaughan NW, Brampton, Oshawa South and Scarborough East) have been well-received by their local communities; current occupancy levels are ahead of expectations.
  • Three self-storage facilities in Markham, Brampton (Kingspoint) and Aurora are currently under construction and on budget, with the latter two facilities expected to be completed in late 2022. Additional self-storage facilities have been approved by the Board of Trustees and the Trust is in the process of obtaining municipal approvals in Whitby, Stoney Creek and two locations in Toronto (Gilbert Ave. and Jane St.). In addition, the municipal approval process is underway in New Westminster and on a newly acquired property in Burnaby, British Columbia.
  • Construction continues on a new retirement residence and a seniors’ apartment project, totalling 402 units, at the Trust’s Laurentian Place in Ottawa, with completion expected in Q1 2024.
  • The Trust intends to commence the redevelopment of a portion of its 73 acre Cambridge retail property (which is subject to a leasehold interest with Penguin) which is now zoned for 12.0 million square feet of residential and commercial uses. Over the coming years, this high profile property will transform into a vibrant urban city center away from the GTA, but strategically within its orbit.
  • The Trust, together with its partner, Penguin, have also commenced preliminary siteworks for the 215,000 square feet retail project on Laird Drive in Toronto, that is expected to feature a flagship 190,000 square foot Canadian Tire store together with 25,000 square feet of additional retail space. Canadian Tire is expected to take possession in 2024.

Financial

  • Net income and comprehensive income(1) was $3.5 million as compared to $178.1 million for the same period in 2021, representing a decrease of $174.6 million. This decrease was primarily attributed to: i) $177.7 million decrease in fair value adjustment on revaluation of investment properties; ii) $4.3 million increase in interest expense; iii) $2.3 million decrease in net operating income; iv) $2.2 million increase in general and administrative expenses (net); v) $0.6 million net income decrease relating to other items; and was partially offset by vi) $9.9 million increase in fair value adjustments on financial instruments; and vii) $2.7 million increase in interest income.
  • The Trust increased its unsecured/secured debt ratio(2)(3) to 77{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}/23{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} (December 31, 2021 – 71{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}/29{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}).
  • The Trust continues to add to its unencumbered pool of high-quality assets. As at September 30, 2022, this unencumbered portfolio consisted of investment properties valued at $8.4 billion (September 30, 2021 – $6.0 billion).
  • The Trust’s fixed rate/variable rate debt ratio(2)(3) was 83{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}/17{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} as at September 30, 2022 (December 31, 2021 – 89{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}/11{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}).
  • FFO with adjustments excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition(2) was $93.8 million as compared to $93.9 million in the same period last year.
  • During the quarter, 941,990 additional notional Units were added at a weighted average price of $27.42 per Unit to the Total Return Swap.
  • Net income and comprehensive income per Unit(1) decreased by $1.01 or 98{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} to $0.02 as compared to the same period in 2021, primarily resulting from fair value adjustments on revaluation of investment properties in amount of $177.7 million or $0.99 per Unit.
  • FFO with adjustments excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition per Unit(2) was $0.54, which remained the same as compared to the same period in 2021.
  • Cash flows provided by operating activities(1) increased by $0.7 million or 0.7{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} to $97.0 million as compared to the same period in 2021. Surplus of cash flows provided by operating activities(1) over distributions declared amounted to $14.6 million (three months ended September 30, 2021 – surplus of $16.6 million).
  • The Payout Ratio relating to cash flows provided by operating activities for the rolling 12 months ended September 30, 2022 was 86.6{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}, as compared to 96.8{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} for the same period ended September 30, 2021. The Payout Ratio relating to cash flows provided by operating activities for the rolling 24 months ended September 30, 2022 was 91.3{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}, as compared to 95.8{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} for the same period ended September 30, 2021.
  • For the three months ended September 30, 2022, ACFO(2) decreased by $9.3 million or 10.3{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} to $81.1 million as compared to the same period in 2021.
  • For the three months ended September 30, 2022, there was a shortfall of ACFO(2) over distributions declared of $1.3 million (three months ended September 30, 2021 – surplus of $10.7 million).
  • The Payout Ratio to ACFO(2) for the rolling 12 months ended September 30, 2022 was 98.9{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}, as compared to 90.1{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} for the same period ended September 30, 2021. Excluding SmartVMC West LP Class D distributions, the Payout Ratio to ACFO(2) for the rolling 12 months ended September 30, 2022 was 96.7{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}, as compared to 90.1{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} for the same period ended September 30, 2021.
  • The Payout Ratio to ACFO(2) for the rolling 24 months ended September 30, 2022 was 94.4{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}, as compared to 91.0{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} for the same period ended September 30, 2021. Excluding SmartVMC West LP Class D distributions, the Payout Ratio to ACFO(2) for the rolling 24 months ended September 30, 2022 was 93.3{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}, as compared to 91.0{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} for the same period ended September 30, 2021.

Operational

  • Rentals from investment properties and other(1) was $196.7 million, as compared to $195.2 million for the same period in 2021, representing an increase of $1.5 million or 0.8{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}, primarily due to the acquisition of an additional interest in investment properties in Q1 2022, higher rental income from Premium Outlets locations in both Toronto and Montreal, additional self-storage facility and parking rental revenue, and higher miscellaneous revenue.
  • In-place and committed occupancy rates were 97.6{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} and 98.1{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}, respectively, as at September 30, 2022 (June 30, 2022 – 97.2{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} and 97.6{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}, respectively).
  • Same Properties NOI inclusive of ECL(2) increased by $3.9 million or 3.1{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} as compared to the same period in 2021. Same Properties NOI excluding ECL(2) increased by $3.0 million or 2.3{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} as compared to the same period in 2021.

Subsequent Event

  • Subsequent to September 30, 2022, certain mortgages receivable with Penguin in the amount of $101.4 million were repaid in cash and the proceeds were primarily used to repay a portion of the balance outstanding on the Trust’s revolving operating facility.

(1)   Represents a GAAP measure
(2)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(3)   Net of cash-on-hand of $150.0 million as at September 30, 2022 for the purposes of calculating the applicable ratios.


Selected Consolidated Operational, Mixed-Use Development and Financial Information

Key consolidated operational, mixed-use development and financial information shown in the table below includes the Trust’s proportionate share of equity accounted investments:

(in thousands of dollars, except per Unit and other non-financial data) September 30, 2022   December 31, 2021   September 30, 2021  
Portfolio Information            
Number of retail properties 155   155   156  
Number of office properties 4   4   4  
Number of self-storage properties 6   6   5  
Number of residential properties 1   1   1  
Number of properties under development 19   17   15  
Total number of properties with an ownership interest 185   183   181  
Leasing and Operational Information(1)            
Gross leasable retail and office area (in thousands of sq. ft.) 34,685   34,119   34,225  
Occupied retail and office area (in thousands of sq. ft.) 33,843   33,219   33,312  
Vacant retail and office area (in thousands of sq. ft.) 842   900   913  
In-place occupancy rate ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}) 97.6   97.4   97.3  
Committed occupancy rate ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}) 98.1   97.6   97.6  
Average lease term to maturity (in years) 4.3   4.4   4.5  
Net annualized retail rental rate (per occupied sq. ft.) ($) 15.52   15.44   15.40  
Net annualized retail rental rate excluding Anchors (per occupied sq. ft.) ($) 22.40   22.07   21.91  
Mixed-Use Development Information            
Trust’s share of future development area (in thousands of sq. ft.) 39,500   40,600   32,200  
Trust’s share of estimated costs of future projects currently under construction, or for which construction is expected to commence within the next five years (in millions of dollars) 9,800   9,800   7,700  
Total number of residential rental projects 107   104   97  
Total number of seniors’ housing projects 25   27   39  
Total number of self-storage projects 35   36   46  
Total number of office building projects 8   8   7  
Total number of hotel projects 3   3   4  
Total number of condominium developments 89   95   73  
Total number of townhome developments 8   10   15  
Total number of estimated future projects currently in development planning stage 275   283   281  
(in thousands of dollars, except per Unit and other non-financial data) September 30, 2022   December 31, 2021   September 30, 2021  
Financial Information            
Total assets – GAAP(2) 11,862,633   11,293,248   10,191,592  
Total assets – non-GAAP(3)(4) 12,219,429   11,494,377   10,382,086  
Investment properties – GAAP(2) 10,211,384   9,847,078   8,892,656  
Investment properties – non-GAAP(3)(4) 11,135,415   10,684,529   9,623,548  
Total unencumbered assets(3) 8,383,900   6,640,600   6,002,800  
Debt – GAAP(2) 5,159,860   4,854,527   4,539,594  
Debt – non-GAAP(3)(4) 5,410,319   4,983,078   4,647,648  
Debt to Aggregate Assets ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})(3)(4)(5) 43.7   42.9   44.5  
Debt to Gross Book Value ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})(3)(4)(5) 52.1   50.8   50.4  
Unsecured to Secured Debt Ratio(3)(4)(5) 77{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}/23{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}   71{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}/29{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}   70{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}/30{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}  
Unencumbered assets to unsecured debt(3)(4)(5) 2.1X   1.9X   1.9X  
Weighted average interest rate ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})(3)(4) 3.67   3.11   3.25  
Weighted average term of debt (in years) 4.2   4.8   5  
Interest coverage ratio(3)(4)(5) 3.3X   3.4X   3.3X  
Adjusted Debt to Adjusted EBITDA (net of cash)(3)(4)(5) 10.0X   9.2X   8.5X  
Adjusted Debt to Adjusted EBITDA (net of cash and TRS)(3)(4)(5) 9.8X   9.1X   8.5X  
Fixed Rate to Variable Rate Debt Ratio(3)(4)(5) 83{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}/17{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}    89{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}/11{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}   94{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}/6{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}  
Equity (book value)(2) 6,141,317   5,841,315   5,268,176  
Weighted average number of units outstanding – diluted 179,644,083   173,748,819   173,535,843  

(1)   Excluding residential and self-storage area.
(2)   Represents a GAAP measure.
(3)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(4)   Includes the Trust’s proportionate share of equity accounted investments.
(5)   As at September 30, 2022, cash-on-hand of $150.0 million was excluded for the purposes of calculating the applicable ratios (December 31, 2021 – $80.0 million, September 30, 2021 – $50.0 million).

Quarterly Comparison to Prior Year

The following table presents key financial, per Unit, and payout ratio information for the three months ended September 30, 2022 and September 30, 2021:

(in thousands of dollars, except per Unit information) September 30, 2022   September 30, 2021   Variance  
  (A)   (B)   (A–B)  
Financial Information            
Rentals from investment properties and other(1) 196,678   195,171   1,507  
Net base rent(1) 127,576   125,125   2,451  
Total recoveries(1) 59,391   60,565   (1,174 )
Miscellaneous revenue(1) 4,683   4,573   110  
Service and other revenues(1) 5,028   4,908   120  
Net income and comprehensive income(1) 3,548   178,051   (174,503 )
Net income and comprehensive income excluding fair value adjustments(2)(3) 83,927   90,691   (6,764 )
Cash flows provided by operating activities(1) 97,011   96,298   713  
Net rental income and other(1) 127,197   123,617   3,580  
NOI from condominium and townhome closings and other adjustments(2) (244 ) 6,444   (6,688 )
NOI(2) 130,986   133,333   (2,347 )
Change in net rental income and other(2) 2.9 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 9.2 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} (6.3 ){d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}
Change in SPNOI(2) 3.1 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 6.6 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} (3.5 ){d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}
Change in SPNOI excluding ECL(2) 2.3 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} (1.0 ){d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 3.3 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}
       
FFO(2)(3)(4)(5) 88,403   97,887   (9,484 )
Other adjustments 669   1,706   (1,037 )
FFO with adjustments(2)(3)(4) 89,072   99,593   (10,521 )
Adjusted for:      
ECL (271 ) 670   (941 )
Loss (gain) on derivative – TRS 4,900   (392 ) 5,292  
FFO sourced from condominium and townhome closings 216   (5,922 ) 6,138  
FFO sourced from SmartVMC West acquisition (154 ) —   (154 )
FFO with adjustments excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition(2)(3)(4) 93,763   93,949   (186 )
       
ACFO(2)(3)(4)(5) 81,060   90,342   (9,282 )
Other adjustments 669   1,706   (1,037 )
ACFO with adjustments(2)(3)(4) 81,729   92,048   (10,319 )
Adjusted for:      
Loss (gain) on derivative – TRS 4,900   (392 ) 5,292  
ACFO sourced from condominium and townhome closings 244   (6,444 ) 6,688  
ACFO sourced from SmartVMC West acquisition (154 ) —   (154 )
ACFO with adjustments excluding impact of TRS, condominium and townhome closings, and SmartVMC West acquisition(2)(3)(4) 86,719   85,212   1,507  
       
Distributions declared 82,382   79,683   2,699  
Surplus of cash provided by operating activities over distributions declared(2) 14,629   16,615   (1,986 )
(Shortfall) surplus of ACFO over distributions declared(2) (1,322 ) 10,659   (11,981 )
Surplus of ACFO with adjustments excluding impact of TRS, condominium and townhome closings, and SmartVMC West acquisition over distributions declared(2) 4,337   5,529   (1,192 )
Units outstanding(6) 178,126,285   172,287,950   5,838,335  
Weighted average – basic 178,123,918   172,285,503   5,838,415  
Weighted average – diluted(7) 179,678,009   173,644,091   6,033,918  
(in thousands of dollars, except per Unit information) September 30, 2022   September 30, 2021   Variance  
  (A)   (B)   (A–B)  
             
Per Unit Information (Basic/Diluted)            
Net income and comprehensive income(1) $0.02/$0.02   $1.03/$1.03   $-1.01/$-1.01  
Net income and comprehensive income excluding fair value adjustments(2)(3) $0.47/$0.47   $0.53/$0.52   $-0.06/$-0.05  
             
FFO(2)(3)(4)(5) $0.50/$0.49   $0.57/$0.56   $-0.07/$-0.07  
Other adjustments $0.00/$0.01   $0.01/$0.01   $-0.01/$0.00  
FFO with adjustments(2)(3)(4) $0.50/$0.50   $0.58/$0.57   $-0.08/$-0.07  
Adjusted for:            
ECL(8) $0.00/$0.00   $0.00/$0.00   $0.00/$0.00  
Loss (gain) on derivative – TRS $0.03/$0.03   $0.00/$0.00   $0.03/$0.03  
FFO sourced from condominium and townhome closings $0.00/$0.00   $-0.03/$-0.03   $0.03/$0.03  
FFO units impact from SmartVMC West LP Class D Units $0.01/$0.01   $0.00/$0.00   $0.01/$0.01  
FFO with adjustments excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition(2)(3)(4) $0.54/$0.54   $0.55/$0.54   $-0.01/$0.00  
             
Distributions declared $0.463   $0.463   $—  
             
Payout Ratio Information            
Payout Ratio to cash flows provided by operating activities 84.9 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 82.7 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 2.2 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}
Payout Ratio to ACFO(2)(3)(4)(5) 101.6 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 88.2 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 13.4 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}
Payout Ratio to ACFO with adjustments(2)(3)(4) 100.8 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 86.6 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 14.2 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}
Payout Ratio to ACFO with adjustments excluding impact of TRS, condominium and townhome sales, and SmartVMC West acquisition(2)(3)(4) 91.9 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 93.5 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} (1.6 ){d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}
             

(1)   Represents a GAAP measure.
(2)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(3)   Includes the Trust’s proportionate share of equity accounted investments.
(4)   See “Non-GAAP Measures” in this Press Release for a reconciliation of these measures to the nearest consolidated financial statement measure.
(5)   The calculation of the Trust’s FFO and ACFO and related payout ratios, including comparative amounts, are financial metrics that were determined based on the REALpac White Paper on FFO issued in January 2022 and REALpac White Paper on ACFO issued in February 2019, respectively. Comparison with other reporting issuers may not be appropriate. The payout ratio to FFO and the payout ratio to ACFO are calculated as declared distributions divided by FFO and ACFO, respectively.
(6)   Total Units outstanding include Trust Units and LP Units, including Units classified as liabilities. LP Units classified as equity in the consolidated financial statements are presented as non-controlling interests.
(7)   The diluted weighted average includes the vested portion of the deferred units issued pursuant to the deferred unit plan.  
(8)   The impact of ECL on FFO per Unit is less than $0.01 and therefore it is shown as $0.00 in the table above for the three months ended September 30, 2022.


Year-to-Date Comparison to Prior Year

The following table presents key financial, per Unit, and payout ratio information for the nine months ended September 30, 2022 and September 30, 2021:

(in thousands of dollars, except per Unit information) September 30, 2022   September 30, 2021   Variance  
  (A)   (B)   (A–B)  
Financial Information            
Rentals from investment properties and other(1) 597,497   587,946   9,551  
Net base rent(1) 380,082   369,955   10,127  
Total recoveries(1) 196,896   196,342   554  
Miscellaneous revenue(1) 10,414   10,412   2  
Service and other revenues(1) 10,105   11,237   (1,132 )
Net income and comprehensive income(1) 535,655   335,595   200,060  
Net income and comprehensive income excluding fair value adjustments(2)(3) 253,910   260,400   (6,490 )
Cash flows provided by operating activities(1) 243,800   237,950   5,850  
Net rental income and other(1) 372,575   358,886   13,689  
NOI from condominium and townhome closings and other adjustments(2) 496   20,538   (20,042 )
NOI(2) 384,888   388,405   (3,517 )
Change in net rental income and other(2) 3.8 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 4.7 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} (0.9 ){d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}
Change in SPNOI(2) 3.3 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 3.4 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} (0.1 ){d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}
Change in SPNOI excluding ECL(2) 5.5 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} (2.1 ){d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 7.6 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}
       
FFO(2)(3)(4)(5) 269,102   282,620   (13,518 )
Other adjustments 2,566   2,566   —  
FFO with adjustments(2)(3)(4) 271,668   285,186   (13,518 )
Adjusted for:      
ECL (2,547 ) 5,251   (7,798 )
Loss (gain) on derivative – TRS 11,138   (1,462 ) 12,600  
FFO sourced from condominium and townhome closings (860 ) (18,813 ) 17,953  
FFO sourced from SmartVMC West acquisition (613 ) —   (613 )
FFO with adjustments excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition(2)(3)(4) 278,786   270,162   8,624  
       
FFO with adjustments and Transactional FFO(2)(3)(4) 271,668   286,773   (15,105 )
       
ACFO(2)(3)(4)(5) 247,085   269,743   (22,658 )
Other adjustments 2,566   2,566   —  
ACFO with adjustments(2)(3)(4) 249,651   272,309   (22,658 )
Adjusted for:      
Loss (gain) on derivative – TRS 11,138   (1,462 ) 12,600  
ACFO sourced from condominium and townhome closings (496 ) (20,538 ) 20,042  
ACFO sourced from SmartVMC West acquisition (613 ) —   (613 )
ACFO with adjustments excluding impact of TRS, condominium and townhome closings, and SmartVMC West acquisition(2)(3)(4) 259,680   250,309   9,371  
       
Distributions declared 247,145   239,028   8,117  
Shortfall of cash flows provided by operating activities over distributions declared(2) (3,345 ) (1,078 ) (2,267 )
(Shortfall) surplus of ACFO over distributions declared(2) (60 ) 30,715   (30,775 )
Surplus of ACFO with adjustments excluding impact of TRS, condominium and townhome closings, and SmartVMC West acquisition over distributions declared(2) 12,535   11,281   1,254  
Units outstanding(6) 178,126,285   172,287,950   5,838,335  
Weighted average – basic 178,118,504   172,266,602   5,851,902  
Weighted average – diluted(7) 179,644,083   173,535,843   6,108,240  
(in thousands of dollars, except per Unit information) September 30, 2022   September 30, 2021   Variance  
  (A)   (B)   (A–B)  
             
Per Unit Information (Basic/Diluted)            
Net income and comprehensive income(1) $3.01/$2.98   $1.95/$1.93   $1.06/$1.05  
Net income and comprehensive income excluding fair value adjustments(2)(3) $1.43/$1.41   $1.51/$1.50   $-0.08/$-0.09  
             
FFO(2)(3)(4)(5) $1.51/$1.50   $1.64/$1.63   $-0.13/$-0.13  
Other adjustments $0.02/$0.01   $0.02/$0.01   $0.00/$0.00  
FFO with adjustments(2)(3)(4) $1.53/$1.51   $1.66/$1.64   $-0.13/$-0.13  
Adjusted for:            
ECL $-0.01/$-0.01   $0.03/$0.03   $-0.04/$-0.04  
Loss (gain) on derivative – TRS $0.06/$0.06   $-0.01/$-0.01   $0.07/$0.07  
FFO sourced from condominium and townhome closings $0.00/$0.00   $-0.11/$-0.10   $0.11/$0.10  
FFO units impact from SmartVMC West LP Class D Units $0.04/$0.04   $0.00/$0.00   $0.04/$0.04  
FFO with adjustments excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition(2)(3)(4) $1.62/$1.60   $1.57/$1.56   $0.05/$0.04  
             
FFO with adjustments and Transactional FFO(2)(3)(4) $1.53/$1.51   $1.66/$1.65   $-0.13/$-0.14  
Distributions declared $1.39   $1.39   $—  
             
Payout Ratio Information            
Payout Ratio to cash flows provided by operating activities 101.4 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 100.5 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 0.9 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}
Payout Ratio to ACFO(2)(3)(4)(5) 100.0 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 88.6 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 11.4 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}
Payout Ratio to ACFO with adjustments(2)(3)(4) 99.0 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 87.8 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 11.2 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}
Payout Ratio to ACFO with adjustments excluding impact of TRS, condominium and townhome sales, and SmartVMC West acquisition(2)(3)(4) 92.1 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 95.5 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} (3.4 ){d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}
             

(1)   Represents a GAAP measure.
(2)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(3)   Includes the Trust’s proportionate share of equity accounted investments.
(4)   See “Non-GAAP Measures” in this Press Release for a reconciliation of these measures to the nearest consolidated financial statement measure.
(5)   The calculation of the Trust’s FFO and ACFO and related payout ratios, including comparative amounts, are financial metrics that were determined based on the REALpac White Paper on FFO issued in January 2022 and REALpac White Paper on ACFO issued in February 2019, respectively. Comparison with other reporting issuers may not be appropriate. The payout ratio to FFO and the payout ratio to ACFO are calculated as declared distributions divided by FFO and ACFO, respectively.
(6)   Total Units outstanding include Trust Units and LP Units, including Units classified as liabilities. LP Units classified as equity in the consolidated financial statements are presented as non-controlling interests.
(7)   The diluted weighted average includes the vested portion of the deferred units issued pursuant to the deferred unit plan.   

Operational Highlights

For the three months ended September 30, 2022, net income and comprehensive income decreased by $174.5 million as compared to the same period in 2021. This decrease was primarily attributed to the following:

  • $177.7 million decrease in fair value adjustments on revaluation of investment properties (see details in the “Investment Property” section in the Trust’s MD&A);
  • $4.3 million increase in interest expense (see further details in the “Interest Income and Interest Expense” subsection in the Trust’s MD&A);
  • $2.3 million decrease in NOI (see further details in the “Net Operating Income” subsection in the Trust’s MD&A);
  • $2.2 million increase in general and administrative expenses (net) (see further details in the “General and Administrative Expense” section in the Trust’s MD&A);
  • $0.5 million higher loss on sale of investment properties; and
  • $0.1 million increase in supplemental costs;

Partially offset by the following:

  • $9.9 million increase in fair value adjustment on financial instruments primarily due to: i) $12.8 million higher fair value gains on those Units classified as liabilities due to fluctuation in the Trust’s Unit price, ii) $3.9 million higher fair value gains relating to unit-based incentive programs due to fluctuation in the Trust’s Unit price, and partially offset by: iii) $5.3 million higher fair value loss of TRS due to fluctuation in the Trust’s Unit price, and iv) $1.5 million decrease in fair value adjustments of interest rate swap agreements (see further details in the “Debt” subsection in the Trust’s MD&A); and
  • $2.7 million increase in interest income mainly due to higher interest rates.

For the nine months ended September 30, 2022, net income and comprehensive income increased by $200.1 million as compared to the same period in 2021. This increase was primarily attributed to the following:

  • $114.6 million increase in fair value adjustment on financial instruments primarily due to: i) $63.1 million higher fair value gains on those Units classified as liabilities due to fluctuation in the Trust’s Unit price, ii) $40.6 million increase in fair value adjustments pertaining to interest rate swap agreements (see further details in the “Debt” subsection in the Trust’s MD&A), iii) $23.5 million higher fair value gains relating to unit-based incentive programs also due to fluctuation in the Trust’s Unit price, and partially offset by: iv) $12.6 million higher fair value loss on the TRS due to fluctuation in the Trust’s Unit price;
  • $92.0 million increase in fair value adjustments on revaluation of investment properties, of which: i) $237.7 million increase relates to the fair value adjustment associated with certain properties under development, ii) $251.2 million decrease relates to cap rate changes, iii) $14.2 million increase relates to gain from acquisition, and iv) $91.3 million increase relates to the revaluation of investment properties, principally driven by leasing and assumption updates (see details in the “Investment Property” section in the Trust’s MD&A);
  • $1.9 million increase in interest income mainly due to higher interest rates; and
  • $0.7 million decrease in interest expense (see further details in the “Interest Income and Interest Expense” section in the Trust’s MD&A);

Partially offset by the following:

  • $3.5 million decrease in NOI (see further details in the “Net Operating Income” subsection in the Trust’s MD&A);
  • $2.4 million increase in supplemental costs;
  • $2.3 million increase in general and administrative expenses (net) (see further details in the “General and Administrative Expense” section in the Trust’s MD&A);
  • $0.5 million higher loss on sale of investment properties; and
  • $0.3 million increase in acquisition-related costs.

Development and Intensification Summary
The following table summarizes the 275 identified mixed-use, recurring rental income and development income initiatives, which are included in the Trust’s large development pipeline:

  Underway   Active   Future      
Description (Construction underway or expected to commence within next 2 years)   (Construction expected to commence within next 3–5 years)   (Construction expected to commence after 5 years)   Total  
Number of projects in which the Trust has an ownership interest                
Residential Rental 29   20   58   107  
Seniors’ Housing 4   8   13   25  
Self-storage 12   7   16   35  
Office Buildings —   1   7   8  
Hotels —   —   3   3  
Subtotal – Recurring rental income initiatives 45   36   97   178  
Condominium developments 23   20   46   89  
Townhome developments 2   1   5   8  
Subtotal – Development income initiatives 25   21   51   97  
Total 70   57   148   275  
Trust’s share of project area (in thousands of sq. ft.)                
Recurring rental income initiatives 5,600   3,900   11,900   21,400  
Development income initiatives 5,100   3,500   9,500   18,100  
Total Trust’s share of project area (in thousands of sq. ft.) 10,700   7,400   21,400   39,500  
Trust’s share of such estimated costs (in millions of dollars) 5,750   4,050   – (1)   9,800  

(1)    The Trust has not fully determined the costs attributable to future projects expected to commence after five years and as such they are not included in this table.

The Trust is currently working on initiatives for the development of many properties for which final municipal approvals have been obtained or are being actively pursued. Completion, milestone or occupancy dates of each of the projects described below may be delayed or adversely impacted as a result of, among other things, restrictions or delays related to the COVID-19 pandemic.

  1. the development of up to 5.3 million square feet of predominately residential space, in various forms, at Highway 400 & Highway 7, in Vaughan, Ontario, with a rezoning application submitted in December 2019 and a site plan application for the first four residential buildings totalling 1,742 units submitted in October 2020. Currently working with the City of Vaughan on advancement of Weston & Highway 7 Secondary Plan;
  2. the development of up to 5.0 million square feet of predominately residential space, in various forms over the long term, in Pickering, Ontario, with the zoning for five towers with a gross floor area of approximately 1,400,000 square feet and site plan application for a three-tower mixed-use phase, approximating 700,000 square feet, approved by Council in June 2022;
  3. the development of up to 5.5 million square feet of predominately residential space, in various forms, at Oakville North in Oakville, Ontario, with the official plan and zoning amendment applications for an initial two-tower 587-unit residential phase submitted in April 2021;
  4. the development of up to 2.6 million square feet of predominately residential space, in various forms, at the Westside Mall in Toronto, Ontario, with a zoning application for the first 35-storey mixed-use tower submitted in Q1 2021, and targeting site plan application by the end of the year;
  5. the development of up to 1.5 million square feet of residential space in various forms on the Trust’s undeveloped lands at the Vaughan NW property in Vaughan, Ontario. Approximately 60{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} of the 174 draft plan approved townhomes have been pre-sold and construction is soon expected to commence. Rezoning application for a seniors’ apartment building and separate retirement residence, both of which are to be developed in partnership with Revera, along with three other residential buildings, was approved by Council in June 2022;
  6. the development of up to 1.5 million square feet of residential space, in various forms, in Pointe-Claire, Quebec, with the first phase, a two-tower rental project, being actively pursued, but subject to the urban planning revision process by the city of Pointe-Claire;
  7. the development of up to 200,000 square feet of residential townhomes at Oakville South in Oakville, Ontario;
  8. the intensification of the Toronto StudioCentre (“StudioCentre”) in Toronto, Ontario (zoning allows for up to 1.2 million square feet);
  9. the development of four high-rise purpose-built residential rental buildings comprising approximately 1,700 units with Greenwin, in Barrie, Ontario, for which a zoning application was approved by Barrie City Council in January 2021 with the site plan approved for Phase 1 by Barrie City Council in June 2021. An application for a building permit was submitted in July 2021. Environmental Risk Assessment was approved for the entire site in September 2021 and the application of Certificate of Property Use was submitted in February 2022 and approved in September 2022;
  10. the development of a 35-storey high-rise purpose-built residential rental tower containing 437 units, on Balliol Street in midtown Toronto, Ontario, with zoning and site plan applications submitted in September 2020. A second submission of these applications was made in July 2021. A third submission of these applications was made in March 2022. Zoning approval was received in July 2022 and site plan approval is expected in Q4 2022;
  11. the development of up to 1,600 residential units, in various forms, in Mascouche, Quebec, with the first phase consisting of 238 units in two 10-storey rental towers approved by municipal council in August 2020. Construction began in April 2021, and the first four floors opened in July 2022 and another five floors have since opened, with the last floor scheduled to open in November 2022. Construction of a second phase is expected to commence in Q2 2023;
  12. the development of residential density at the Trust’s shopping centre at 1900 Eglinton Avenue East in Scarborough, Ontario, with rezoning applications for the first two residential towers (46 and 48 storeys) submitted in January 2021. Site plan application for both buildings was submitted in December 2021;
  13. the development of the first phase, 46-unit rental building, which is part of a multi-phase master plan in Alliston, Ontario, with a rezoning application approved by Council in December 2020 and a site plan application submitted in May 2020. The site plan application was resubmitted in March 2021 and again in July 2021 and approved in July 2022. The building permit application was submitted in October 2021 and a partial permit was received in September 2022;
  14. besides the eight self-storage projects completed or under construction, there are six additional self-storage facilities in Ontario and British Columbia with the Trust’s partner, SmartStop, in Stoney Creek, Toronto (2), Whitby, New Westminster and Burnaby with zoning and/or site plan approval obtained or applications well underway. Project agreements for another three locations are being finalized;
  15. the Q4 2020 acquisition of an additional 33.33{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} interest (new ownership structure of 66.66{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} held by the Trust and 33.33{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} held by Penguin) in 50 acres of adjacent land to the Trust’s Premium Outlets Montreal in Mirabel, Quebec, for the ultimate development of residential density of up to 4,500 units. Site plan applications for the first phase rental building with 168 units expected to be submitted in Q4 2022. Master plan of development for the site is subject to approval;
  16. the development of a new residential block consisting of a 155-unit building in Phase 1 and approximately 345 rental units in Phases 2 and 3 at Laval Centre in Quebec. The application for architecture approval for Phase 1 and Phase 2 (155 units) was submitted in Q4 2021 and approved in Q3 2022;
  17. the Trust has commenced the redevelopment of a portion of its 73-acre Cambridge retail property (subject to a leasehold interest with Penguin) which now allows various forms of residential, retail, office, institutional and commercial uses providing for the creation of a vibrant urban community with the potential for over 12.0 million square feet of development on the overall property once completed;
  18. the development of a retirement living residence at the Trust’s shopping centre at Bayview and Major Mackenzie in Richmond Hill, Ontario, with a rezoning application for a nine-storey retirement residences building submitted in Q1 2021 and a site plan application submitted in Q4 2021, to be developed in partnership with the existing partner and Revera;
  19. the development of 1.5 million square feet of residential density adjacent to the new South Keys light rail train station at the Trust’s Ottawa South Keys Centre, consistent with current zoning permissions. Site plan application for the first phase rental complex with 446 units was submitted and deemed complete in Q4 2021 and work is ongoing on a second submission to respond to agency comments on the application;
  20. the development of up to 900,000 square feet of predominately residential space on Yonge St. in Aurora, Ontario, with rezoning applications for the entire site and site plan submitted for Phase 1 in July 2021 and resubmitted in April 2022;
  21. the Q4 2020 acquisition of a 50{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} interest in a property in downtown Markham for the development of a 243,000 square foot retirement residence with Revera. The rezoning application was submitted in December 2020, and an appeal was filed in July 2022 for the initial Official Plan Amendment & Zoning By-law Amendment submission;
  22. the development of approximately 900,000 square feet of residential density on the Trust’s Parkway Plaza Centre in Stoney Creek, Ontario, with an application for a Phase 1 development for a two-tower (20 and 15 storeys), 400,000 square foot, 520-unit condo project submitted in Q4 2021; and
  23. during the second quarter of 2022, the Trust completed the purchase of approximately 38 acres of industrial lands in Pickering, adjacent to Hwy 407, on which the Trust received approval to build 241,000 square feet of space for the 16-acre Phase 1 development, of which 53{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} has already been pre-leased, and completion is currently scheduled for 2023.

Proportionately Consolidated Balance Sheets (including the Trust’s interests in equity accounted investments)

The following table presents the proportionately consolidated balance sheets, which includes a reconciliation of the Trust’s proportionate share of equity accounted investments:

(in thousands of dollars) September 30, 2022 December 31, 2021
  GAAP Basis   Proportionate Share Reconciliation   Total Proportionate Share(1)   GAAP Basis   Proportionate Share Reconciliation   Total Proportionate Share(1)  
Assets                        
Non-current assets                        
Investment properties 10,211,384   924,031   11,135,415   9,847,078   837,451   10,684,529  
Equity accounted investments 646,393   (646,393 ) —   654,442   (654,442 ) —  
Mortgages, loans and notes receivable 281,128   (79,910 ) 201,218   345,089   (69,576 ) 275,513  
Other financial assets 289,477   —   289,477   97,148   —   97,148  
Other assets 82,495   7,600   90,095   80,940   7,465   88,405  
Intangible assets 44,140   —   44,140   45,139   —   45,139  
  11,555,017   205,328   11,760,345   11,069,836   120,898   11,190,734  
                         
Current assets                        
Residential development inventory 31,891   105,544   137,435   27,399   67,828   95,227  
Current portion of mortgages, loans and notes receivable 144,490   —   144,490   71,947   —   71,947  
Amounts receivable and other 61,573   (9,064 ) 52,509   49,542   (8,637 ) 40,905  
Prepaid expenses, deposits and deferred financing costs 50,187   19,141   69,328   12,289   13,118   25,407  
Cash and cash equivalents 19,475   35,847   55,322   62,235   7,922   70,157  
  307,616   151,468   459,084   223,412   80,231   303,643  
Total assets 11,862,633   356,796   12,219,429   11,293,248   201,129   11,494,377  
                         
Liabilities                        
Non-current liabilities                        
Debt 4,746,915   193,003   4,939,918   4,176,121   93,465   4,269,586  
Other financial liabilities 265,462   —   265,462   326,085   —   326,085  
Other payables 17,283   46   17,329   18,243   —   18,243  
  5,029,660   193,049   5,222,709   4,520,449   93,465   4,613,914  
                         
Current liabilities                        
Current portion of debt 412,945   57,456   470,401   678,406   35,086   713,492  
Accounts payable and current portion of other payables 278,711   106,291   385,002   253,078   72,578   325,656  
  691,656   163,747   855,403   931,484   107,664   1,039,148  
Total liabilities 5,721,316   356,796   6,078,112   5,451,933   201,129   5,653,062  
                         
Equity                        
Trust Unit equity 5,111,730   —   5,111,730   4,877,961   —   4,877,961  
Non-controlling interests 1,029,587   —   1,029,587   963,354   —   963,354  
  6,141,317   —   6,141,317   5,841,315   —   5,841,315  
  Total liabilities and equity 11,862,633   356,796   12,219,429   11,293,248   201,129   11,494,377  

(1)   This column contains non-GAAP measures because it includes figures that are recorded in equity accounted investments. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.

Proportionately Consolidated Statements of Income and Comprehensive Income (including the Trust’s Interests in Equity Accounted Investments)
The following tables present the proportionately consolidated statements of income and comprehensive income, which include a reconciliation of the Trust’s proportionate share of equity accounted investments:

Quarterly Comparison to Prior Year

(in thousands of dollars) Three Months Ended September 30, 2022   Three Months Ended September 30, 2021      
  GAAP Basis   Proportionate Share Reconciliation   Total Proportionate Share(1)   GAAP Basis   Proportionate Share Reconciliation   Total Proportionate Share(1)   Variance of Total Proportionate Share(1)  
Net rental income and other                            
Rentals from investment properties and other 196,678   7,570   204,248   195,171   5,486   200,657   3,591  
Property operating costs and other (69,451 ) (3,567 ) (73,018 ) (71,554 ) (2,214 ) (73,768 ) 750  
  127,227   4,003   131,230   123,617   3,272   126,889   4,341  
Condo and townhome closings revenue and other(2) —   7   7   —   23,904   23,904   (23,897 )
Condo and townhome cost of sales and other (30 ) (221 ) (251 ) —   (17,460 ) (17,460 ) 17,209  
  (30 ) (214 ) (244 ) —   6,444   6,444   (6,688 )
NOI 127,197   3,789   130,986   123,617   9,716   133,333   (2,347 )
                             
Other income and expenses                            
General and administrative expense, net (10,696 ) (3 ) (10,699 ) (8,435 ) (71 ) (8,506 ) (2,193 )
Earnings from equity accounted investments 1,101   (1,101 ) —   14,302   (14,302 ) —   —  
Earnings from other(3) 284   (284 ) —   —   —   —   —  
Fair value adjustment on revaluation of investment properties (92,557 ) 411   (92,146 ) 79,015   6,509   85,524   (177,670 )
Loss (gain) on sale of investment properties (112 ) (241 ) (353 ) 149   —   149   (502 )
Interest expense (39,175 ) (1,553 ) (40,728 ) (35,032 ) (1,348 ) (36,380 ) (4,348 )
Interest income 5,714   (375 ) 5,339   2,599   22   2,621   2,718  
Supplemental costs —   (643 ) (643 ) —   (526 ) (526 ) (117 )
Fair value adjustment on financial instruments 11,767   —   11,767   1,836   —   1,836   9,931  
Acquisition-related costs 25   —   25   —   —   —   25  
Net income and comprehensive income 3,548   —   3,548   178,051   —   178,051   (174,503 )
                             

(1)   This column contains non-GAAP measures because it includes figures that are recorded in equity accounted investments. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(2)   Includes additional partnership profit and other revenues.
(3)   Represents SmartVMC West’s operating results.

Year-to-Date Comparison to Prior Year

(in thousands of dollars) Nine Months Ended September 30, 2022   Nine Months Ended September 30, 2021      
  GAAP Basis   Proportionate Share Reconciliation   Total Proportionate Share(1)   GAAP Basis   Proportionate Share Reconciliation   Total Proportionate Share(1)   Variance of Total Proportionate Share(1)  
Net rental income and other                            
Rentals from investment properties and other 597,497   21,080   618,577   587,946   15,556   603,502   15,075  
Property operating costs and other (224,497 ) (9,688 ) (234,185 ) (229,060 ) (6,575 ) (235,635 ) 1,450  
  373,000   11,392   384,392   358,886   8,981   367,867   16,525  
Condo and townhome closings revenue and other(2) —   4,524   4,524   —   76,837   76,837   (72,313 )
Condo and townhome cost of sales and other (425 ) (3,603 ) (4,028 ) —   (56,299 ) (56,299 ) 52,271  
  (425 ) 921   496   —   20,538   20,538   (20,042 )
NOI 372,575   12,313   384,888   358,886   29,519   388,405   (3,517 )
                             
Other income and expenses                            
General and administrative expense, net (25,479 ) (107 ) (25,586 ) (23,219 ) (76 ) (23,295 )  (2,291 ) 
Earnings from equity accounted investments 4,312   (4,312 ) —   51,371   (51,371 ) —   —  
Earnings from other(3) 878   (878 ) —   —   —   —   —  
Fair value adjustment on revaluation of investment properties 188,457   2,042   190,499   71,110   27,439   98,549   91,950  
Loss on sale of investment properties (216 ) (241 ) (457 ) 91   —   91   (548 ) 
Interest expense (108,360 ) (3,952 ) (112,312 ) (108,886 ) (4,082 ) (112,968 ) 656  
Interest income 12,540   (955 ) 11,585   9,596   64   9,660   1,925  
Supplemental costs —   (3,910 ) (3,910 ) —   (1,493 ) (1,493 )  (2,417 ) 
Fair value adjustment on financial instruments 91,246   —   91,246   (23,354 ) —   (23,354 )  114,600  
Acquisition-related costs (298 ) —   (298 ) —   —   —   (298 ) 
Net income and comprehensive income 535,655   —   535,655   335,595   —   335,595   200,060  
                             

(1)   This column contains non-GAAP measures because it includes figures that are recorded in equity accounted investments. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(2)   Includes additional partnership profit and other revenues.
(3)   Represents SmartVMC West’s operating results.

FFO, FFO with adjustments, and FFO with adjustments and Transactional FFO

The following tables reconciles net income and comprehensive income to FFO, FFO with adjustments, and FFO with adjustments and Transactional FFO:

Quarterly Comparison to Prior Year

  Three Months Ended   Three Months Ended          
(in thousands of dollars, except per Unit amounts) September 30, 2022   September 30, 2021   Variance ($)   Variance ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})  
Net income and comprehensive income 3,548   178,051   (174,503 ) (98.0 )
Add (deduct):                
Fair value adjustment on revaluation of investment properties(1) 92,557   (79,015 ) 171,572   N/R(7)  
Fair value adjustment on financial instruments(2) (11,767 ) (1,836 ) (9,931 ) N/R(7)  
(Loss) gain on derivative – TRS (4,900 ) 392   (5,292 ) N/R(7)  
Loss (gain) on sale of investment properties 112   (149 ) 261   N/R(7)  
Amortization of intangible assets 333   333   —   —  
Amortization of tenant improvement allowance and other 1,961   1,662   299   18.0  
Distributions on Units classified as liabilities recorded as interest expense 1,083   969   114   11.8  
Distributions on vested deferred units recorded as interest expense 718   433   285   65.8  
Salaries and related costs attributed to leasing activities(3) 2,216   1,431   785   54.9  
Acquisition-related costs (25 ) —   (25 ) N/R(7)  
Adjustments relating to equity accounted investments:                
Rental revenue adjustment – tenant improvement amortization 98   98   —   —  
Indirect interest with respect to the development portion(4) 1,996   1,706   290   17.0  
Adjustment to capitalized interest with respect to Transit City condo closings(4) —   (205 ) 205   N/R(7)  
Fair value adjustment on revaluation of investment properties (411 ) (6,509 ) 6,098   (93.7 )
Loss on sale of investment properties 241   —   241   N/R(7)  
Adjustment for supplemental costs 643   526   117   22.2  
FFO(5) 88,403   97,887   (9,484 ) (9.7 )
Adjustments:                
Other adjustments(6) 669   1,706   (1,037 ) (60.8 )
FFO with adjustments(5) 89,072   99,593   (10,521 ) (10.6 )

(1)   Fair value adjustment on revaluation of investment properties is described in “Investment Properties” in the Trust’s MD&A.
(2)   Fair value adjustment on financial instruments comprises the following financial instruments: units classified as liabilities, Earnout options, deferred unit plan (“DUP”), equity incentive plan (“EIP”), long term incentive plan (“LTIP”), TRS, interest rate swap agreement(s), and loans receivable and Earnout options recorded in the same period in 2021. The significant assumptions made in determining the fair value and fair value adjustments for these financial instruments are more thoroughly described in the Trust’s unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2022. For details please see discussion in “Results of Operations” in the Trust’s MD&A.
(3)   Salaries and related costs attributed to leasing activities of $2.2 million were incurred in the three months ended September 30, 2022 (three months ended September 30, 2021 – $1.4 million) and were eligible to be added back to FFO based on the definition of FFO, in the REALpac White Paper published in January 2022, which provided for an adjustment to incremental leasing expenses for the cost of salaried staff. This adjustment to FFO results in more comparability between Canadian publicly traded real estate entities that expensed their internal leasing departments and those that capitalized external leasing expenses.
(4)   Indirect interest is not capitalized to properties under development and residential development inventory of equity accounted investments under IFRS but is a permitted adjustment under REALpac’s definition of FFO. The amount is based on the total cost incurred with respect to the development portion of equity accounted investments multiplied by the Trust’s weighted average cost of debt.
(5)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(6)   Represents adjustments relating to $0.7 million of costs associated with COVID-19 vaccination centres (three months ended September 30, 2021 – $0.9 million of compensation costs relating to previous CEO and $0.8 million of non-recurring costs associated with COVID-19 vaccination centres).
(7)   N/R – Not representative.

Year-to-Date Comparison to Prior Year

(in thousands of dollars, except per Unit amounts) Nine Months Ended September 30, 2022   Nine Months Ended September 30, 2021   Variance ($)   Variance ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})  
Net income and comprehensive income 535,655   335,595   200,060   59.6  
Add (deduct):                
Fair value adjustment on revaluation of investment properties(1) (188,457 )  (71,110 )  (117,347 )  N/R(7)  
Fair value adjustment on financial instruments(2) (91,246 )  23,354   (114,600 )  N/R(7)  
(Loss) gain on derivative – TRS (11,138 )  1,462   (12,600 )  N/R(7)  
Loss (gain) on sale of investment properties 216   (335 )  551   N/R(7)  
Amortization of intangible assets 999   999   —   —  
Amortization of tenant improvement allowance and other 5,198   5,430   (232 )  (4.3 ) 
Distributions on Units classified as liabilities recorded as interest expense 3,210   2,910   300   10.3  
Distributions on vested deferred units recorded as interest expense 2,123   1,381   742   53.7  
Adjustment on debt modification (1,960 )  —   (1,960 )  N/R(7)  
Salaries and related costs attributed to leasing activities(3) 5,994   4,133   1,861   45.0  
Acquisition-related costs 298   —   298   N/R(7)  
Adjustments relating to equity accounted investments:                
Rental revenue adjustment – tenant improvement amortization 289   298   (9 )  (3.0 ) 
Indirect interest with respect to the development portion(4) 5,812   5,124   688   13.4  
Adjustment to capitalized interest with respect to Transit City condo closings(4) —   (675 )  675   N/R(7)  
Fair value adjustment on revaluation of investment properties (2,042 )  (27,439 )  25,397   (92.6 ) 
Loss on sale of investment properties 241   —   241   N/R(7)  
Adjustment for supplemental costs 3,910   1,493   2,417   N/R(7)  
FFO(5) 269,102   282,620   (13,518 )  (4.8 ) 
Adjustments:                
Other adjustments(6) 2,566   2,566   —   —  
FFO with adjustments(5) 271,668   285,186   (13,518 )  (4.7 ) 
Transactional FFO – gain on sale of land to co-owners —   1,587   (1,587 )  N/R(7)  
FFO with adjustments and Transactional FFO(5) 271,668   286,773   (15,105 )  (5.3 ) 

(1)   Fair value adjustment on revaluation of investment properties is described in “Investment Properties” in the Trust’s MD&A.
(2)   Fair value adjustment on financial instruments comprises the following financial instruments: units classified as liabilities, Earnout options, DUP, EIP, LTIP, TRS, interest rate swap agreement(s), and loans receivable and Earnout options recorded in the same period in 2021. The significant assumptions made in determining the fair value and fair value adjustments for these financial instruments are more thoroughly described in the Trust’s unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2022. For details please see discussion in “Results of Operations” in the Trust’s MD&A.
(3)   Salaries and related costs attributed to leasing activities of $6.0 million were incurred in the nine months ended September 30, 2022 (nine months ended September 30, 2021 – $4.1 million) and were eligible to be added back to FFO based on the definition of FFO, in the REALpac White Paper published in January 2022, which provided for an adjustment to incremental leasing expenses for the cost of salaried staff. This adjustment to FFO results in more comparability between Canadian publicly traded real estate entities that expensed their internal leasing departments and those that capitalized external leasing expenses.
(4)   Indirect interest is not capitalized to properties under development and residential development inventory of equity accounted investments under IFRS but is a permitted adjustment under REALpac’s definition of FFO. The amount is based on the total cost incurred with respect to the development portion of equity accounted investments multiplied by the Trust’s weighted average cost of debt.
(5)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(6)   Represents adjustments relating to $2.6 million of costs associated with COVID-19 vaccination centres (nine months ended September 30, 2021 – $0.9 million of compensation costs relating to previous CEO and $1.7 million of non-recurring costs associated with COVID-19 vaccination centres).
(7)   N/R – Not representative.

The following table presents FFO excluding anomalous transactions for the three and nine months ended September 30, 2022:

  Three Months Ended September 30   Nine Months Ended September 30  
(in thousands of dollars) 2022   2021   Variance ($)   2022   2021   Variance ($)  
FFO with adjustments(1)         89,072           99,593           (10,521 )         271,668           285,186           (13,518 )
Adjusted for:            
ECL         (271 )         670           (941 )         (2,547 )         5,251           (7,798 )
Loss (gain) on derivative – TRS         4,900           (392 )         5,292           11,138           (1,462 )         12,600  
FFO sourced from condominium and townhome closings         216           (5,922 )         6,138           (860 )         (18,813 )         17,953  
FFO sourced from SmartVMC West acquisition         (154 )         —           (154 )         (613 )         —           (613 )
FFO with adjustments excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition(1)         93,763           93,949           (186 )         278,786           270,162           8,624  

(1)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.

ACFO and ACFO with adjustments

The following table reconciles cash flows provided by operating activities to ACFO and ACFO with adjustments:

Quarterly Comparison to Prior Year

(in thousands of dollars) Three Months Ended September 30, 2022   Three Months Ended September 30, 2021   Variance ($)/({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})  
Cash flows provided by operating activities 97,011   96,298   713  
Adjustments to working capital items that are not indicative of sustainable cash available for distribution(1) 12,287   421   11,866  
Distributions on Units classified as liabilities recorded as interest expense 1,083   969   114  
Distributions on vested deferred units recorded as interest expense 718   433   285  
Expenditures on direct leasing costs and tenant incentives 2,391   1,233   1,158  
Expenditures on tenant incentives for properties under development 267   —   267  
Actual sustaining capital expenditures (2,655 ) (4,078 ) 1,423  
Actual sustaining leasing commissions (660 ) (474 ) (186 )
Actual sustaining tenant improvements (1,755 ) (439 ) (1,316 )
Non-cash interest expense, net of other financing costs (18,147 ) (13,623 ) (4,524 )
Non-cash interest income 2,755   2,042   713  
Acquisition-related costs, net (25 ) —   (25 )
Distributions from equity accounted investments (15,231 ) (1,770 ) (13,461 )
Adjustments relating to equity accounted investments:      
Cash flows from operating activities including working capital adjustments 1,208   7,851   (6,643 )
Notional interest capitalization(2) 1,996   1,706   290  
Adjustment to capitalized interest with respect to Transit City condo closings(3) —   (205 ) 205  
Actual sustaining capital and leasing expenditures (58 ) (16 ) (42 )
Non-cash interest expense (125 ) (6 ) (119 )
ACFO(3) 81,060   90,342   (9,282 )
Other adjustments(4) 669   1,706   (1,037 )
ACFO with adjustments(3) 81,729   92,048   (10,319 )
       
ACFO(3) 81,060   90,342   (9,282 )
Distributions declared 82,382   79,683   2,699  
(Shortfall) surplus of ACFO over distributions declared (1,322 ) 10,659   (11,981 )
       
Payout Ratio Information:      
Payout Ratio to ACFO(3) 101.6 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 88.2 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 13.4 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}
Payout Ratio to ACFO with adjustments(3) 100.8 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 86.6 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 14.2 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}
Payout Ratio to ACFO with adjustments excluding impact of TRS, condominium and townhome closings, and SmartVMC West acquisition(3)(5) 91.9 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 93.5 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} (1.6 ){d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

(1)   Adjustments to working capital items include, but are not limited to, changes in prepaid expenses and deposits, accounts receivables, accounts payables and other working capital items that are not indicative of sustainable cash available for distribution.
(2)   See the “Indirect interest with respect to the development portion” as presented in the “Funds From Operations” subsection in the Trust’s MD&A.
(3)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(4)   Represents adjustments relating to $0.7 million of costs associated with COVID-19 vaccination centres (three months ended September 30, 2021 – $0.9 million of compensation costs relating to previous CEO and $0.8 million of non-recurring costs associated with COVID-19 vaccination centres).
(5)   For the three months ended September 30, 2022, excludes $2.7 million of distributions declared in connection with SmartVMC West LP Class D Units (three months ended September 30, 2021 – $nil).

Year-to-Date Comparison to Prior Year

(in thousands of dollars) Nine Months Ended September 30, 2022   Nine Months Ended September 30, 2021   Variance ($)/({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})  
Cash flows provided by operating activities 243,800   237,950   5,850  
Adjustments to working capital items that are not indicative of sustainable cash available for distribution(1) 33,159   7,882   25,277  
Distributions on Units classified as liabilities recorded as interest expense 3,210   2,910   300  
Distributions on vested deferred units recorded as interest expense 2,123   1,381   742  
Expenditures on direct leasing costs and tenant incentives 6,752   3,877   2,875  
Expenditures on tenant incentives for properties under development 2,543   730   1,813  
Actual sustaining capital expenditures (7,677 ) (7,008 ) (669 )
Actual sustaining leasing commissions (1,589 ) (2,329 ) 740  
Actual sustaining tenant improvements (5,209 ) (1,686 ) (3,523 )
Non-cash interest expense, net of other financing costs (27,100 ) (2,434 ) (24,666 )
Non-cash interest income 3,488   1,803   1,685  
Acquisition-related costs, net 298   —   298  
Gain on sale of land to co-owners —   1,587   (1,587 )
Distributions from equity accounted investments (17,190 ) (3,340 ) (13,850 )
Adjustments relating to equity accounted investments:      
Cash flows from operating activities including working capital adjustments 5,004   24,055   (19,051 )
Notional interest capitalization(2) 5,812   5,124   688  
Adjustment to capitalized interest with respect to Transit City condo closings(2) —   (675 ) 675  
Actual sustaining capital and leasing expenditures (330 ) (104 ) (226 )
Non-cash interest expense (9 ) 20   (29 )
ACFO(3) 247,085   269,743   (22,658 )
Other adjustments(4) 2,566   2,566   —  
ACFO with adjustments(3) 249,651   272,309   (22,658 )
       
ACFO(3) 247,085   269,743   (22,658 )
Distributions declared 247,145   239,028   8,117  
(Shortfall) surplus of ACFO over distributions declared (60 ) 30,715   (30,775 )
       
Payout Ratio Information:      
Payout Ratio to ACFO(3) 100.0 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 88.6 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 11.4 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}
Payout Ratio to ACFO with adjustments(3) 99.0 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 87.8 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 11.2 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}
Payout Ratio to ACFO with adjustments excluding impact of TRS, condominium and townhome closings, and SmartVMC West acquisition(3)(5) 92.1 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} 95.5 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} (3.4 ){d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}

(1)   Adjustments to working capital items include, but are not limited to, changes in prepaid expenses and deposits, accounts receivables, accounts payables and other working capital items that are not indicative of sustainable cash available for distribution.
(2)   See the “Indirect interest with respect to the development portion” as presented in the “Funds From Operations” subsection in the Trust’s MD&A.
(3)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(4)   Represents adjustments relating to $2.6 million of costs associated with COVID-19 vaccination centres (nine months ended September 30, 2021 – $0.9 million of compensation costs relating to previous CEO, and $1.7 million of non-recurring costs associated with COVID-19 vaccination centres).
(5)   For the nine months ended September 30, 2022, excludes $8.0 million of distributions declared in connection with SmartVMC West LP Class D Units (nine months ended September 30, 2021 – $nil).

The following table presents ACFO excluding anomalous transactions for the three and nine months ended September 30, 2022:

  Three Months Ended September 30   Nine Months Ended September 30  
(in thousands of dollars)  2022   2021   Variance ($)   2022   2021   Variance ($)  
ACFO with adjustments(1)         81,729           92,048           (10,319 )         249,651           272,309           (22,658 )
Adjusted for:            
Loss (gain) on derivative – TRS         4,900           (392 )         5,292           11,138           (1,462 )         12,600  
ACFO sourced from condominium and townhome closings         244           (6,444 )         6,688           (496 )         (20,538 )         20,042  
ACFO sourced from SmartVMC West acquisition         (154 )         —           (154 )         (613 )         —           (613 )
ACFO with adjustments excluding impact of TRS, condominium and townhome closings, and SmartVMC West acquisition(1)         86,719           85,212           1,507           259,680           250,309           9,371  

(1)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.

Net Operating Income

The following tables summarize NOI, related ratios and recovery ratios, provide additional information, and reflect the Trust’s proportionate share of equity accounted investments, the sum of which represent a non-GAAP measure:

Quarterly Comparison to Prior Year

(in thousands of dollars) Three Months Ended September 30, 2022   Three Months Ended September 30, 2021      
  Trust portion excluding EAI   Equity Accounted Investments   Total Proportionate Share(1)   Trust portion excluding EAI   Equity Accounted Investments   Total Proportionate Share(1)   Variance(1)  
          (A)           (B)   (A–B)  
                             
Net base rent 127,576   4,727   132,303   125,125   3,362   128,487   3,816  
Property tax and insurance recoveries 39,191   718   39,909   41,416   626   42,042   (2,133 ) 
Property operating cost recoveries 20,200   1,150   21,350   19,149   826   19,975   1,375  
Miscellaneous revenue 4,683   975   5,658   4,573   672   5,245   413  
Rentals from investment properties 191,650   7,570   199,220   190,263   5,486   195,749   3,471  
Service and other revenues 5,028   —   5,028   4,908   —   4,908   120  
Rentals from investment properties and other(2) 196,678   7,570   204,248   195,171   5,486   200,657   3,591  
                             
Recoverable tax and insurance costs (39,910 ) (729 ) (40,639 ) (43,200 ) (582 ) (43,782 ) 3,143  
Recoverable CAM costs (21,767 ) (1,283 ) (23,050 ) (20,179 ) (824 ) (21,003 )  (2,047 ) 
Property management fees and costs (1,258 ) (237 ) (1,495 ) (422 ) (173 ) (595 )  (900 ) 
Non-recoverable operating costs (1,792 ) (1,283 ) (3,075 ) (2,170 ) (649 ) (2,819 )  (256 ) 
ECL 306   (35 ) 271   (684 ) 14   (670 )  941  
Property operating costs (64,421 ) (3,567 ) (67,988 ) (66,655 ) (2,214 ) (68,869 )  881  
Other expenses (5,030 ) —   (5,030 ) (4,899 ) —   (4,899 )  (131 ) 
Property operating costs and other(2) (69,451 ) (3,567 ) (73,018 ) (71,554 ) (2,214 ) (73,768 )  750  
Net rental income and other 127,227   4,003   131,230   123,617   3,272   126,889   4,341  
Condo and townhome closings revenue —   7   7   —   23,904   23,904   (23,897 ) 
Condo and townhome cost of sales —   (4 ) (4 ) —   (17,298 ) (17,298 )  17,294  
Marketing and selling costs (30 ) (217 ) (247 ) —   (162 ) (162 )  (85 ) 
Net profit on condo and townhome closings (30 ) (214 ) (244 ) —   6,444   6,444   (6,688 ) 
NOI(3) 127,197   3,789   130,986   123,617   9,716   133,333   (2,347 ) 
                             
Net rental income and other as a percentage of net base rent ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}) 99.7   84.7   99.2   98.8   97.3   98.8   0.4  
Net rental income and other as a percentage of rentals from investment properties ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}) 66.4   52.9   65.9   65.0   59.6   64.8   1.1  
Net rental income and other as a percentage of rentals from investment properties and other ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}) 64.7   52.9   64.3   63.3   59.6   63.2   1.1  
Recovery Ratio (including prior year adjustments) ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}) 96.3   92.8   96.2   95.6   103.3   95.7   0.5  
Recovery Ratio (excluding prior year adjustments) ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}) 93.3   92.9   93.3   95.0   102.0   95.2   (1.9 ) 
                             

(1)   This column contains non-GAAP measures because it includes figures that are recorded in equity accounted investments – that are not explicitly disclosed and/or presented in the unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2022 and September 30, 2021. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(2)   As reflected under the column “Trust portion excluding EAI” in the table above, this amount represents a GAAP measure.
(3)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.

Year-to-Date Comparison to Prior Year

(in thousands of dollars) Nine Months Ended September 30, 2022   Nine Months Ended September 30, 2021      
  Trust portion excluding EAI   Equity Accounted Investments   Total Proportionate Share(1)   Trust portion excluding EAI   Equity Accounted Investments   Total Proportionate Share(1)   Variance of Total Proportionate Share(1)  
          (A)           (B)   (A–B)  
                             
Net base rent 380,082   13,118   393,200   369,955   9,564   379,519   13,681  
Property tax and insurance recoveries 129,041   2,222   131,263   134,160   1,847   136,007   (4,744 ) 
Property operating cost recoveries 67,855   3,107   70,962   62,182   2,429   64,611   6,351  
Miscellaneous revenue 10,414   2,633   13,047   10,412   1,716   12,128   919  
Rentals from investment properties 587,392   21,080   608,472   576,709   15,556   592,265   16,207  
Service and other revenues 10,105   —   10,105   11,237   —   11,237   (1,132 ) 
Rentals from investment properties and other(2) 597,497   21,080   618,577   587,946   15,556   603,502   15,075  
                             
Recoverable tax and insurance costs (133,058 ) (2,287 )  (135,345 )  (140,224 )  (1,813  ) (142,037 )  6,692  
Recoverable CAM costs (74,059 ) (3,224 )  (77,283 )  (66,303 )  (2,313 )  (68,616 )  (8,667 ) 
Property management fees and costs (3,198 ) (690 )  (3,888 )  (883 )  (473 )  (1,356 )  (2,532 )
Non-recoverable operating costs (6,731 ) (3,378 )  (10,109 )  (5,152 )  (1,980 )  (7,132 )  (2,977 ) 
ECL 2,656   (109 )  2,547   (5,255 )  4   (5,251 )  7,798  
Property operating costs (214,390 ) (9,688 )  (224,078 )  (217,817 )  (6,575 )  (224,392 )  314  
Other expenses (10,107 ) —   (10,107 )  (11,243 )  —   (11,243 )  1,136  
Property operating costs and other(2) (224,497 ) (9,688 )  (234,185 )  (229,060 )  (6,575 )  (235,635 )  1,450  
Net rental income and other 373,000   11,392   384,392   358,886   8,981   367,867   16,525  
Condo and townhome closings revenue —   4,524   4,524   —   76,837   76,837   (72,313 ) 
Condo and townhome cost of sales —   (3,114 )  (3,114 )  —   (56,102 )  (56,102 )  52,988  
Marketing and selling costs (425 ) (489 )  (914 )  —   (197 )  (197 )  (717 ) 
Net profit on condo and townhome closings (425 ) 921   496   —   20,538   20,538   (20,042 ) 
NOI(3) 372,575   12,313   384,888   358,886   29,519   388,405   (3,517 ) 
                             
Net rental income and other as a percentage of net base rent ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}) 98.1   86.8   97.8   97.0   93.9   96.9   0.9  
Net rental income and other as a percentage of rentals from investment properties ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}) 63.5   54.0   63.2   62.2   57.7   62.1   1.1  
Net rental income and other as a percentage of rentals from investment properties and other ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}) 62.4   54.0   62.1   61.0   57.7   61.0   1.1  
Recovery Ratio (including prior year adjustments) ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}) 95.1   96.7   95.1   95.1   103.6   95.2   (0.1 )
Recovery Ratio (excluding prior year adjustments) ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}) 94.5   96.3   94.5   95.2   106.4   95.4   (0.9 )

(1)   This column contains non-GAAP measures because it includes figures that are recorded in equity accounted investments – that are not explicitly disclosed and/or presented in the unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2022 and September 30, 2021. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(2)   As reflected under the column “Trust portion excluding EAI” in the table above, this amount represents a GAAP measure.
(3)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.

Same Properties NOI

NOI (a non-GAAP financial measure) from continuing operations represents: i) rentals from investment properties and other revenues less property operating costs and other expenses, and ii) net profit from condominium sales. Disclosing the NOI contribution from each of same properties, acquisitions, dispositions, Earnouts and Development activities highlights the impact each component has on aggregate NOI. Straight-line rent, lease terminations and other adjustments, and amortization of tenant incentives have been excluded from Same Properties NOI, as have NOI from acquisitions, dispositions, Earnouts and Development activities, and ECL. This has been done in order to more directly highlight the impact of changes in occupancy, rent uplift and productivity.

Quarterly Comparison to Prior Year

 

  Three Months Ended   Three Months Ended          
(in thousands of dollars) September 30, 2022   September 30, 2021   Variance ($)   Variance ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})  
Net rental income 127,199   123,608   3,591   2.9  
Service and other revenues 5,028   4,908   120   2.4  
Other expenses (5,030 ) (4,899 ) (131 ) 2.7  
NOI(1) 127,197   123,617   3,580   2.9  
NOI from equity accounted investments(1) 3,789   9,716   (5,927 ) (61.0 )
Total portfolio NOI before adjustments(1) 130,986   133,333   (2,347 ) (1.8 )
                 
Adjustments:                
Royalties 305   266   39   14.7  
Straight-line rent (22 ) (640 ) 618   (96.6 )
Lease termination and other adjustments 12   (824 ) 836   N/R(2)  
Net profit on condo and townhome closings(3) 244   (6,444 ) 6,688   N/R(2)  
Amortization of tenant incentives 2,090   1,819   271   14.9  
Total portfolio NOI after adjustments(1) 133,615   127,510   6,105   4.8  
                 
NOI sourced from:                
Acquisitions (2,000 ) (7 ) (1,993 ) N/R(2)  
Dispositions 1   (427 ) 428   N/R(2)  
Earnouts and Developments (787 ) (153 ) (634 ) N/R(2)  
Same Properties NOI(1) 130,829   126,923   3,906   3.1  
Add back: ECL (243 ) 690   (933 ) N/R(2)  
Same Properties NOI excluding ECL(1) 130,586   127,613   2,973   2.3  

(1)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(2)   N/R – Not representative.
(3)   Includes marketing costs.

Year-to-Date Comparison to Prior Year

  Nine Months Ended   Nine Months Ended          
(in thousands of dollars) September 30, 2022   September 30, 2021   Variance ($)   Variance ({d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})  
Net rental income 372,577   358,892   13,685   3.8  
Service and other revenues 10,105   11,237   (1,132 ) (10.1 )
Other expenses (10,107 ) (11,243 ) 1,136   10.1  
NOI(1) 372,575   358,886   13,689   3.8  
NOI from equity accounted investments(1) 12,313   29,519   (17,206 ) (58.3 )
Total portfolio NOI before adjustments(1) 384,888   388,405   (3,517 ) (0.9 )
                 
Adjustments:                
Royalties 816   675   141   20.9  
Straight-line rent (403 ) (729 ) 326   (44.7 )
Lease termination and other adjustments (133 ) (1,764 ) 1,631   (92.5 )
Net profit on condo and townhome closings(3) (496 ) (20,538 ) 20,042   (97.6 )
Amortization of tenant incentives 5,625   5,894   (269 ) (4.6 )
Total portfolio NOI after adjustments(1) 390,297   371,943   18,354   4.9  
                 
Less NOI sourced from:                
Acquisitions (5,125 ) 104   (5,229 ) N/R(2)  
Dispositions (12 ) (1,465 ) 1,453   (99.2 )
Earnouts and Developments (3,030 ) (544 ) (2,486 ) N/R(2)  
Same Properties NOI(1) 382,130   370,038   12,092   3.3  
Add back: ECL 2,547   (5,251 ) 7,798   N/R(2)  
Same Properties NOI excluding ECL(1) 384,677   364,787   19,890   5.5  

(1)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(2)   N/R – Not representative.
(3)   Includes marketing costs.

Adjusted EBITDA
The following table presents a reconciliation of net income and comprehensive income to Adjusted EBITDA:

              Rolling 12 Months Ended    
(in thousands of dollars) September 30, 2022   September 30, 2021   Variance ($)  
Net income and comprehensive income 1,187,736   383,975   803,761  
Add (deduct) the following items:            
Interest expense 152,339   153,843   (1,504 )
Interest income (15,285 ) (13,733 ) (1,552 )
Yield maintenance costs —   11,954   (11,954 )
Amortization of equipment and intangible assets 3,676   4,955   (1,279 )
Amortization of tenant improvements 7,231   7,948   (717 )
Fair value adjustments on revaluation of investment properties (771,207 ) (85,059 ) (686,148 )
Fair value adjustments on revaluation of financial instruments (69,234 ) 41,331   (110,565 )
Fair value adjustment on TRS (6,958 ) 1,462   (8,420 )
Adjustment for supplemental costs 5,035   2,084   2,951  
Loss (gain) on sale of investment properties 521   (116 ) 637  
Gain on sale of land to co-owners (Transactional FFO) 336   1,587   (1,251 )
Acquisition-related costs 3,089   166   2,923  
Adjusted EBITDA(1) 497,279   510,397   (13,118 )
Less: Condo and townhome closings (394 ) (36,623 ) 36,229  
Add: ECL (4,041 ) 10,486   (14,527 )
Adjusted EBITDA excluding condo and townhome closings and ECL(1) 492,844   484,260   8,584  

(1)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.

Non-GAAP Measures

The non-GAAP measures used in this Press Release, including but not limited to, FFO per Unit, Unencumbered Assets, NOI, Debt to Aggregate Assets, Interest Coverage Ratio, Adjusted Debt to Adjusted EBITDA, Unsecured/Secured Debt Ratio, FFO, FFO with adjustments, FFO with adjustments excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition, FFO per Unit with adjustments, Fixed Rate to Variable Rate Debt Ratio, Transactional FFO, ACFO, ACFO with adjustments excluding impact of TRS, condominium and townhome closings, and SmartVMC West acquisition, Payout Ratio to ACFO, Same Properties NOI, Total assets – non-GAAP, Investment properties – non-GAAP, Debt – non-GAAP, Debt to Gross Book Value, Unencumbered Assets to Unsecured Debt, Weighted Average Interest Rate, and Total Proportionate Share, do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) and are therefore unlikely to be comparable to similar measures presented by other issuers. Additional information regarding these non-GAAP measures is available in the Management’s Discussion and Analysis of the Trust for the three and nine months ended September 30, 2022, dated November 11, 2022 (the “MD&A), and is incorporated by reference. The information is found in the “Presentation of Certain Terms Including Non-GAAP Measures” and “Non-GAAP Measures” sections of the MD&A, which is available on SEDAR at www.sedar.com. Reconciliations of non-GAAP financial measures to the most directly comparable IFRS measures are found in the following sections of this Press Release: “Proportionately Consolidated Balance Sheets (including the Trust’s interests in equity accounted investments)”, “Proportionately Consolidated Statements of Income and Comprehensive Income (including the Trust’s Interests in Equity Accounted Investments)”, “FFO, FFO with adjustments, and FFO with adjustments and Transactional FFO”, “ACFO and ACFO with adjustments”, “Net Operating Income”, “Same Properties NOI”, and “Adjusted EBITDA”.

Full reports of the financial results of the Trust for the three and nine months ended September 30, 2022 are outlined in the unaudited interim condensed consolidated financial statements and the related MD&A of the Trust for the three and nine months ended September 30, 2022, which are available on SEDAR at www.sedar.com.  

Conference Call

SmartCentres will hold a conference call on Monday, November 14, 2022 at 2:00 p.m. (ET). Participating on the call will be members of SmartCentres’ senior management.

Investors are invited to access the call by dialing 1-855-353-9183 and then keying in the participant access code 86995#. You will be required to identify yourself and the organization on whose behalf you are participating.

A recording of this call will be made available Monday, November 14, 2022 beginning at 8:30 p.m. (ET) through to 8:30 p.m. (ET) on Monday, November 21, 2022. To access the recording, please call 1-855-201-2300, enter the conference access code 86995# and then key in the playback access code 0112654#.

About SmartCentres

SmartCentres Real Estate Investment Trust is one of Canada’s largest fully integrated REITs, with a best-in-class portfolio featuring 185 strategically located properties in communities across the country. SmartCentres has approximately $11.9 billion in assets and owns 34.7 million square feet of income producing value-oriented retail and first-class office space with 98.1{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} occupancy, on 3,500 acres of owned land across Canada.

SmartCentres continues to focus on enhancing the lives of Canadians by planning and developing complete, connected, mixed-use communities on its existing retail properties. Project 512, a publicly announced $15.2 billion intensification program ($9.8 billion at SmartCentres’ share) represents the REIT’s current major development focus on which construction is expected to commence within the next five years. This intensification program consists of rental apartments, condos, seniors’ residences and hotels, to be developed under the SmartLiving banner, and retail, office, and storage facilities, to be developed under the SmartCentres banner.

SmartCentres’ intensification program is expected to produce an additional 57.0 million square feet (39.5 million square feet at SmartCentres’ share) of space, 27.8 million square feet (18.1 million square feet at SmartCentres’ share) of which has or will commence construction within the next five years. From shopping centres to city centres, SmartCentres is uniquely positioned to reshape the Canadian urban and urban-suburban landscape.

Included in this intensification program is the Trust’s share of SmartVMC which, when completed, is expected to include approximately 20.0 million square feet of mixed-use space in Vaughan, Ontario. Construction of the first five sold-out phases of Transit City Condominiums that represent 2,789 residential units continues to progress. Final closings of the first three phases of Transit City Condominiums began ahead of budget and ahead of schedule in August 2020 and all 1,741 units, in addition to the 22 townhomes that complete these phases, have now closed. The fourth and fifth sold-out phases representing 1,026 units are currently under construction and are expected to close in 2023.

Certain statements in this Press Release are “forward-looking statements” that reflect management’s expectations regarding the Trust’s future growth, results of operations, performance and business prospects and opportunities. More specifically, certain statements including, but not limited to, statements related to SmartCentres’ expectations relating to cash collections and occupancy levels, expectations relating to the SmartLiving platform, SmartCentres’ expected or planned development plans and joint venture projects, including the described type, scope, costs and other financial metrics including expected yields and the expected timing of construction and condominium closings and statements that contain words such as “could”, “should”, “can”, “anticipate”, “expect”, “believe”, “will”, “may” and similar expressions and statements relating to matters that are not historical facts, constitute “forward-looking statements”. These forward-looking statements are presented for the purpose of assisting the Trust’s Unitholders and financial analysts in understanding the Trust’s operating environment and may not be appropriate for other purposes. Such forward-looking statements reflect management’s current beliefs and are based on information currently available to management.

However, such forward-looking statements involve significant risks and uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including risks associated with potential acquisitions not being completed or not being completed on the contemplated terms, public health crises such as the COVID-19 pandemic, real property ownership and development, debt and equity financing for development, interest and financing costs, construction and development risks, and the ability to obtain commercial and municipal consents for development. These risks and others are more fully discussed under the heading “Risks and Uncertainties” and elsewhere in SmartCentres’ most recent Management’s Discussion and Analysis, as well as under the heading “Risk Factors” in SmartCentres’ most recent annual information form. Although the forward-looking statements contained in this Press Release are based on what management believes to be reasonable assumptions, SmartCentres cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. These forward-looking statements are made as at the date of this Press Release and SmartCentres assumes no obligation to update or revise them to reflect new events or circumstances unless otherwise required by applicable securities legislation.

Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include, but are not limited to: a stable retail environment; a continuing trend toward land use intensification, including residential development in urban markets and continued growth along transportation nodes; access to equity and debt capital markets to fund, at acceptable costs, future capital requirements and to enable our refinancing of debts as they mature; that requisite consents for development will be obtained in the ordinary course, and construction and permitting costs are consistent with the past year and recent inflation trends.

For more information, please visit www.smartcentres.com or contact: