Chartwell Q3 2026 Results Conference Call - DEFI TECHNOLOGIES INC

Hello, everyone. Thank you for joining us, and welcome to the Chartwell Third Quarter 2026 Results Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star1 again. I will now hand the conference over to Vlad Volodarsky, CEO. Please go ahead. thank you christine good morning and thank you for joining us today there is a slide presentation to accompany this conference call available on our website at charwell.com under the investor relations tab joining me are karen sullivan president and chief operating officer jeffrey brown chief financial officer jonathan bulaki chief investment officer and chief legal officer and gordon chu chief technology officer before we begin i direct you to the cautionary statements on slide two because during this call we will make statements containing forward-looking information and non-gap and other financial measures our mdna and other securities filings contain information about the assumptions risks and uncertainties inherent in such forward-thinking statements and details of such non-ga and other potential measures more specifically i direct you to the disclosures in our q3 2026 mdna under the heading risks and uncertainties and forward looking information for a discussion of such risks and certainties these documents can be found on our website or on the cedar plus website turning to slide three we delivered another quarter of strong financial performance ffo per unit increased 25 percent to 30 cents per unit it marks our 13th consecutive quarter of double-digit FFO per unit growth. Our teams delivered strong results in our same property portfolio with adjusted NOI increasing 14.1%, adjusted operating margin improving to 43.4% and same property occupancy growing to 94.8%. At the same time, we continue to invest in our residences, integrate newly acquired properties and advance our portfolio optimization initiatives. I am grateful to our teams across Charwell for their tremendous commitment and hard work. Delivering these results while welcoming new residents and employees into Charwell demonstrates both the strength of our culture and the scalability of our management platform. Turning to our 2028 strategy scorecard as pictured on slide four our 2026 year-to-date results demonstrate strong progress against the objectives we established in our three-year strategy same property occupancy averaged 94.6 percent year- to-date revenue per occupied suite growth of 5.1 percent is ahead of our target and same property adjusted noi increased 13.9 percent year to date our balance sheet metrics also remained within our strategic targets. Net debt to adjusted EBITDA was 6.8 times, interest coverage was 3.5 times, and our FFO payout ratio was 54.5. We are also making meaningful progress renewing and growing our portfolio. Completed acquisitions and developments totaled $1.4 billion towards our $2 billion three-year objective, while completed dispositions total $307.7 million towards our $1 billion target. We've built a strong operating business with significant embedded growth in our recently acquired portfolio, a growing development pipeline, and a scalable platform that is converting growth in NOI into increasingly strong FFO per unit. My partners will now provide you with more insights in each of these areas. We will start with Karen's operating update. Karen? Thanks, Vlad. Moving on to slide five, we had another strong quarter of leasing activity with a positive net permanent move-in to permanent move out of plus 234 units with contributions from all operating platforms. Our marketing strategies continue to be effective with a 26% increase in personalized tours from marketing sources quarter over quarter. our conversion ratio of marketing initial contacts to personalized tours was 50 in q3 of this year compared to 44 in q 3 2025. our september open house event strengthened our prospect funnel leading into what is typically our best-selling season the event provided an opportunity to showcase our residences including the many new additions to the portfolio participating in their first ever open house the event brought many new initial contacts with nearly eight in ten of the personalized tours being new prospects to the residents our joy is ageless campaign continued to build national brand visibility with the fall campaign running across tv out of home radio facebook and website takeover placements this the campaign reinforces charles active aging positioning through broad market reach and lifestyle led storytelling. We also partnered with La Presse, Quebec's leading digital news platform, to publish a resident story from Chartwell Rosemont highlighting joy, wellness, and community living through premium editorial content and multimedia assets. The campaign generated nearly 700,000 impressions, over 120,000 article reads, and 5,900 website visitors. Turning to slide six, In terms of expense control, we reduced our staffing agency costs by 37% year-to-date 2026 compared to 2025 through our continued focus on recruitment and retention activities. We also continued to focus on resident satisfaction and employee engagement. This year, we moved to using the Internationally Recognized Net Promoter Score, or NPS, and Employee Net Promotor Score, ou ENPS, as our measure. It's based on an 11-point scale of 0 to 10. Those who provide a score of 9 or 10 are considered promoters, and those who provide a score from 0 to 6 are considered detractors. The NPS score is determined by the percentage of promoters minus the percentage of distractors, with scores ranging from minus 100 to plus 100. I'm pleased to report that our NPS Score was 58, which is considered excellent by international standards, and was 16 points higher than the baseline score we received in 2025. Although there are less international comparison benchmarks available, our ENPS score of 42 was also impressive and was three points higher than our 2025 baseline score. throughout q3 the operations teams with support from cross-functional departments have been focused on integration activities for the six homes previously owned by sifton the 17 chartwell fengate previously seasons properties as well as the newly acquired chartwell palermo and chartwell greenway we've also off-boarded three non-core residences finally i want to share a new collaboration that began in q3 which with sprout a popular canadian media brand that shares older adults experiences advice and perspectives through social media video interviews a dozen chartwell residents shared their wisdom on topics such as the advice they would give their younger selves the videos generated more than a million views on their youtube channel and another 500 000 views on instagram i'll now turn it over to jeff to take you through our financial results great thank you karen as shown on slide 7 in q3 2026 net income was 115 million compared with the net loss of 5.2 million in q 3 2025 primarily reflecting a 113.3 million gain on disposal of assets and from higher property revenue and other items this was partially offset by current tax expense higher depreciation property operating expenses finances, finance costs, and transaction costs related to dispositions. FFO increased 38% to $100.8 million, or $0.30 per unit, compared with $73.1 million, or $.24 per unit in Q3 2025. Reported FFO excludes $1.4 million, or $1 per unit of income guarantees related to recently acquired properties. The increase in FFO primarily reflected $34.9 million of higher adjusted NOI, $1.2 million of lower G&A expenses, and $1,1 million of other higher income. These benefits were partially offset by $6.5 million of high finance costs, $ 1.9 of lower management fees, and 1.2 of lower interest income. For the first nine months of 2026, FFO increased 40.7% to $276.9 million, and FFO per unit increased 25% to 85 cents. Year-to-date, F FO excludes $7.5 million, or $0.02 per unit, of income guarantees related to recently acquired properties. Same property adjusted NOI increased $11.2 million,or 14.1% in Q3. Weighted average occupancy increased 230 basis points at 94.8%. Adjusted operating margin increased 230 bases points at 43.4%. Revenue per occupied suite increased 5.8%, and NOI per occupied suite increased 11.3%. Turning to slide eight, our stabilized same property portfolio continues to deliver strong growth. Year to date, revenue per occupied suite was $4,936, an increase of 5.1%, while DOE per occupied suite is $2,879, an increased of only 1.8%. The result was NOI per occupied suit of $2141 of 10.1% and a 190 basis point improvement and adjusted operating margin to 42.7%. At this level of occupancy, our focus is increasingly on revenue and margin growth. For the 2026 same property portfolio, we estimate that each one percentage point change in occupancy represents approximately 8.7 million of annual revenue, while each 1% change in rate represents approximately $8.2 million. Beyond the continued growth in our stabilized same property portfolios, we have another important source of embedded growth in properties acquired more recently as pictured on slide nine our growth portfolio consists of 52 properties in approximately 9 300 suites at our ownership share representing approximately 35 percent of our total suites these are generally newer and larger residences in q3 the growth portfolio operated at an average occupancy of 91.6 percent compared with our same property target of greater than 95 percent closing that occupancy gap represents approximately 14.7 million dollars of annualized revenue opportunity importantly despite lower occupancy the growth portfolio is already generating a 46 percent adjusted operating margin compared with 43.4 percent for the same property portfolio this demonstrates both the quality of the assets and the operating leverage available as occupancy increases as these residences move towards stabilized occupancy the growth portfolio provides a meaningful runway for noi and ffl growth without additional acquisition capital turning to slide 10 at november 5th 2026 liquidity was 573.4 million consisting of 178.3 million of cash and cash equivalents and 395.1 million of available borrowing capacity net debt to adjusted ebitda was 6.8 times interest coverage was three and a half times and the consolidated weighted average interest rate was 4.03 percent during q3 we did not issue trust units under our 2026 at the market program for the first nine months of 2026 we issued approximately 3.3 million trust units under the program at an average price of $21.74 per unit for gross proceeds of $72.7 million. One final point I would highlight is how effectively growth in property level earnings is translating into FFO. As shown on slide 11, our NOI to FFO conversion has improved significantly over the last several years. In 2023, each dollar of NOI per unit generated approximately 48 cents of FFO per unit. This increased to 58 cents in 2024 and 62 cents in 2025. Over the same period, FFO Per Unit increased from 55 cents to 95 cents. The improvement demonstrates the scalability of our management platform. As we generate incremental NOI through occupancy, rate growth, margin improvement, and stabilization of acquired properties, an increasing proportion flows through to FFO. This operating leverage is an important part of our growth story. I will now turn the call to Jonathan to discuss acquisition and development activities. Thank you, Jeff. Turning to slide 12, our Greater Montreal Area portfolio provides a compelling example of how Chartwell's management platform can create value following an acquisition. we acquired five high quality residences in june 2024 with an average age of approximately six years since acquisition occupancy has increased by 600 basis points revenue per occupied suite has grown at a 6.6 compound annual rate operating margin has improved by 8.1 percentage points and adjusted noi has grown at an 18.1 compounded annual rate based on the methodology outlined on the slide we estimate that this operating performance has created over 100 million dollars of value since acquisition and the portfolio is now generating an implied noi yield of 7.7 there is further opportunity ahead the acquired portfolio contains 1428 suites with 93 suites in development 285 in pre-development and a further 202 suite opportunity the portfolio could ultimately grow to approximately 2008 suites this case study illustrates our acquisition strategy we're not simply acquiring real estate we're applying our operating asset management and development capabilities to improve performance and create additional value over time We continue to execute on our portfolio optimization strategy by acquiring newer properties in core markets, selling non-core assets, repositioning selected residences and developing a pipeline of future growth as pictured on slide 13. On September 1st, we completed the acquisition of Greenway Retirement Residence at 237 suite residents in Brampton, Ontario for $136 million. On the same date we completed the sale of one Ontario property for $91 million. On October 1st we completed a sale of a non-core property in Victoriaville, Quebec for $8 million and another property in Kitchener, Ontario for $41.8 million. Our objective is to continue recycling capital from assets that no longer fit in our long-term strategy into newer, larger and more operationally efficient residences in Canada's principal retirement markets moving to slide 14 acquisitions remains an important part of our growth strategy and we're increasingly complementing them with a substantial development pipeline today that pipeline comprises 38 projects representing approximately 9 456 suites in high demand poor markets across british columbia alberta ontario and quebec eight projects representing 1,466 suites are under construction, while 30 projects representing 7,990 suites, are in pre-development. The pipeline is geographically diversified with approximately 2,600 suites in British Columbia, 1,200 suites and Alberta, 2,050 suites in Ontario and 3,600 in Quebec. Our approach is to work with experienced development partners combining their development capabilities with our market knowledge operating platform and our brand this can give chartwell access to new purpose-built residences in the markets where we want to grow while managing development and balance sheet risk prudently we remain disciplined in our underwriting due diligence integration plans and capital commitments our focus is on opportunities that enhance the quality of our portfolio strengthen our long-term growth profile and meet our required investment returns. I'll turn the call back to Vlad to wrap it up. Thank you, Jonathan. Turning to slide 15, our Q3 results and opportunities described today reinforce my confidence in Charvel's momentum and long-term growth prospects. The fundamentals supporting retirement living in Canada remain very strong. Demand is accelerating as the population ages while the new supply remains constrained this creates a favorable backdrop for occupancy revenue and noi growth we are well positioned to benefit from these trends our stabilized portfolio is performing strongly our recently acquired growth portfolio has meaningful occupancy and earnings upside our development partnerships are building a long-term pipeline of modern residences in attractive markets and our scalable management platform is converting incremental NOI into strong FFO per unit growth. At the same time, we remain focused on what matters most, delivering exceptional experiences to our residents and peace of mind for their families. We are continuing to enhance wellness, dining, activities, care, and support services while making our organization more agile and efficient through simpler processes and responsible use of technology, automation, and AI-enabled tools. What gives me the greatest confidence is our people. I am grateful to our residents' teams and support teams for their tremendous commitment, especially as they continue to integrate newly acquired properties and strengthen our growing portfolio. Their dedication to residents and to one another is the foundation of our success. I will now close our prepared remarks with a story of how we're bringing wellness to life for our residents in Quebec. It's pictured on slide 16. For the past six years, we brought residents together at Beach Club in Point Clement for a day dedicated to fitness, wellness, and connection. The event has grown into something our residents look forward to each year, bringing together hundreds of participants for activities ranging from aqua dancing and aerobic to yoga and relaxation with support from our wellness partner kinalite what makes this event meaningful is not just the physical activity but the opportunity it creates for residents to come together try new things and enjoy an active lifestyle it's a great example of our approach to wellness at charlotte we are creating opportunities for residents to stay healthy connected and engaged while continuing to enjoy the experiences that bring them joy and contribute to their quality of life thank you for your attention this morning we would now be pleased to answer your questions we will now begin the questions we would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Lauren Calmer with Desjardins. Your line is open. Please go ahead. Thanks. Good morning. Congrats on a good result here. Just on the direct operating cost side of things, it looks like you guys have done pretty well in the quarter and year to date. I was just wondering, what's sort of the upside risk on the cost front, given that you've given the guidance of some 4%, I assume the idea was to be somewhere around there. Just wondering, yeah, what is the upside risk and is this a level you think is repeatable for the near and medium term yeah good morning lauren um we think that level of staying below four percent on a doe proctified suite basis is achievable over the period and demonstrated that in the quarter and year date basis is there i mean obviously you've got a pretty nice buffer here between whatever it is 1.8 percent into four like what would be in your guys view like risk to cost moving close to that four or or is there nothing really foreseeable there's still some uh that is a our three-year target is to achieve that goal over the the three years um we still have you know our overall doe was up 4.1 percent uh in the quarter so there is still some benefit from the occupancy increase that's driving the preoccupied suite number down so i think as the um we stabilize at these higher occupancy levels um you'll see that number get closer to the four percent level okay that's a very helpful thank you and then um with the the expectation for a less severe winner here which i think we deserve after the last couple we had um does that typically lead to a less severe flu season and if so could that eliminate some of the seasonality impact you would normally see in q1 and i guess early q2 this is always a puzzle lord we we really can't predict with accuracy whether warmer weather translates into fewer flu outbreaks and cases we are hearing that the current strain of the vaccine is effective so hopefully that will help to mitigate the usual seasonal impact but to be definitive about it is not really possible can i just add though when the weather is nicer it does make it easier for people to come out for personalized tours so not related to the flu but just sort of the accessibility for older people to visit our homes in those winter months okay um that's very helpful and then just maybe last one And I think both in Canada and the U.S., we haven't really seen much in the way of new construction starts. Certainly nothing that was close to what was anticipated at the beginning of the year. Any idea of maybe what's behind that and when we can expect to see a more meaningful pickup in activity? Well, we certainly are doing our part. But in terms of general activity, clearly the recent rise in interest rates doesn't help many of the performers. And so I think that certainly is the most obvious reason for some of the deferral of previously expected construction starts for 2026. So we'll see what happens in 2027. But, you know, from our perspective, the projects that we have on the go, they continue to be economical. And so we're proceeding with those. Okay, great. Thank you so much. I will turn it back. Your next question comes from the line of Jonathan Kelcher with TD Cohen. Your line is open. Please go ahead. Thanks. Good morning. Just to follow along on that, with the increase in interest rates, are there any of your projects that are pre-development that might be getting pushback? Yes. Jonathan there's obviously you see the pipeline that we have on that slide it's pretty large and there's a different variety of projects and economics that we see some have a lot more cushion than others in terms of the profitability in return and the ones that are thinner um then they become harder to commence at this point in time so for sure some of these will be deferred okay and if we look at the 30 how many how many do you think start next year 30. so next year well we've announced what we are starting and the rest of them will continue to evaluate um you know we think that there's going to be additional projects started next year but right now talking about quantum is a bit premature okay fair enough um and then secondly you guys have a pretty large cash balance lots of liquidity what's what's the acquisition pipeline looking like for the next couple of quarters um we're seeing a strong acquisition pipeline for the next few quarters we're constantly evaluating a number of different opportunities and we're as as you just discussed, enhancing that pipeline with our own pipeline of development. Okay, any particular markets that you're seeing more or less in? We're actually seeing a fair bit of activity in all of the markets that we operate in. Okay, that's it for me. I'll turn it back, thanks. Your next question comes from the line of Tom Callahan with BMO Capital Markets. Your line is open. Please go ahead. Thanks. Good morning there. Maybe just sticking on Jonathan's question, just with respect to the acquisition pipeline and I guess really the disposition side too, any kind of movement pricing expectation-wise bid aspect just given the rate volatility we've seen or no, just given the demand level for this product? We're still continuing to see really strong demand, both in the Class A assets and what we would consider our non-core bank of assets. So we have not seen much adjustment in pricing. Got it. Okay. Next one for me was just maybe if you can talk a bit about the revenue per occupied suite into 2027, like obviously, you know, the metric continues to move higher. quarter over quarter, I think it was 5.8 in Q3, and maybe there's a small contribution there for prior period funding, but it's quite comfortably covering the greater than 4% over the three-year outlook. I guess just given the broader fundamental backdrop where your occupancy is, is there any reason to think why this wouldn't be another mid to high five percentage number next year in 27? Hey, Thomas, and just to put some numbers around that adjustment, it's about 5.5% excluding that prior period funding for the quarter. But our pricing strategy remains very much the same. Our in-place increases are all targeted to be just above inflation. And then the market pricing is very locally driven. So we are pushing market pricing as much as we're able to and we're also now having some success in bringing down the incentive. So those came in at 4.5% of resident revenue in the quarter and so that's what's helping also push the rev pause up to that above 5% range. Okay, got it. So presumably still some tailwind for burn of incentive as we go forward here? Yeah, correct. Okay. And then last one on my end, just housekeeping. In terms of the fees on the season portfolio in the fengate, I think there is about $0.5M of asset management related costs, and then the $2.1M transition fee. I assume the $1.2M is kind of a one-time non-recurring, but that $0,5M asset management cost, is that a good kind of run rate to put through the model? Yeah. Yeah. That's the right run, right? And those transition costs were one time and we're only in Q3. Okay. So nothing for before. Got it. Okay. Thanks a lot, guys. I'll pass it back. Your next question comes from the line of Brad Sturgis with Raymond James. Your line is open. Please go ahead. Hey, good morning. Just going to your slide nine here on the growth portfolio and the upside available to you on the revenue side. As you push occupancy higher towards your target stabilized levels, what's the timeline you expect for that to occur? Is that over the next 12 months or is it a little bit of a longer timeline? It's a little difficult because that portfolio does change as we have new acquisitions come in so it won't be a static portfolio next quarter but we are seeing you know similar occupancy growth in that portfolio as we have in our same property portfolio so we think there's you know good traction to get towards that 95 plus target okay and then on the same property bucket um i guess expectations to reach 96 by december Just where do you see the gains coming from? I think there's some room to push in Ontario, but just curious to get a bit more color in terms of where those gains are concentrated in the portfolio today. Clearly, there's a bit room in Ontario than in other provinces that are at close to 96% now. But we have properties that have been operated with 100% occupancy for a very long period of time. So every one of the property, at least from my perspective, is not at 100 has room to grow um so our expectation that old platform will contribute to that occupancy growth to get to 96 uh on portfolio wide and last question for me just on the uh the atm program uh you know given where the balance sheet is today and you know the organic growth on business how do you envision the usage of the atm uh program on a go forward basis do you see it being less active than what we've seen over the last uh call 12 months or plus uh i mean it's really dependent on our capital needs so we do have funding priorities so we always prioritize retained cash flow first uh disposition proceeds second and then we look at equity in debt third and fourth uh depending on our leverage levels and we you know during the quarter we were able to satisfy our capital needs between that retained cash flow and disposition proceeds so it's really a function of what we're seeing in terms of requirements going forward okay i'll turn it back thank you your next question comes from the line of Humanshu Gupta with Scotiabank. Your line is open. Please go ahead. Just a reminder to unmute your device. Your next question comes from the line of Pammy Beer with RBC Capital Markets. Your line open. please go ahead thanks good morning um just maybe coming back to the commentary around the growth portfolio you mentioned similar traction uh from an occupancy standpoint as i guess the same property asset so would it be fair to assume that you know you're basically looking at you know potential 300 basis points of occupancy pickup over the next year or so maybe i'll take this formula that portfolio has a wide range of different properties so some of them are stabilized and some of the are in early days of lease up and so we're like 50 60 occupied so our expectation is that those properties that have more room will go contribute more obviously to the occupancy growth and our expectation that within 12 months or so we should see at least this growth portfolio as it stands today to achieve 95 average occupancy it just said one thing to note mommy that as i mentioned earlier that will change so any acquisitions we close in q4 will join that portfolio that will drive the occupancy and then some of those properties will move into the same property uh for q1 next year right yeah what uh some of the embedded growth um that exists you know within the portfolio today yeah yeah i was just thinking more so what's on the balance sheet today as a in the growth bucket okay um maybe just uh coming back to um there was obviously some commentary coming out of the unions can you talk about maybe what's happening there in any anticipated maybe labor cost pressures or any issues with any labor availability at all um sure i mean we we continue working with all over 20 unions that we have across the country and um there is a normal sort of cycle of bargaining processes that our teams undertake with the unions um our increases in terms of the total compensation on average you see it in our numbers that we've been talking about it for the last several years have been between four and five percent we expect that we'll continue to see those kind of increases in 2027 and we'll see where it goes after that historically the increases in our compensation were between two and three percent So we are now being in a period for four or five years of above historical normative increases. And as I said, we expect that to continue for 2027. Okay. Just there's some very good color on the scalability of the platform. And on the G&A side, we did see a pretty sizable drop in Q3. and i think some of that maybe was just the unit-based comp and maybe some timing as well but just maybe stepping back do you expect sort of gna to hover near year-to-date sort of levels as a percentage of revenue or are there still simpler efficiencies you think you can generate yeah i think they're i mean the way we've developed the management platform is we should be able to scale revenue faster than we need to add gna so there always are some gna requirements but it should not be at the same rate growth that we're seeing revenue grow at okay all right last one for me just on the incentives i think jeff you mentioned it was four and a half percent of revenue uh q3 what did that figure dropped from, I guess, last quarter or maybe the second year? It was 4.8. Yeah, 4. 8%. Sorry, it was 4, 8% in Q2 or the beginning of the year? Q3 last year was 4 point 8%. Oh, last year. Okay. All right. Thanks very much. I'll turn it back. Your next question comes from the line of Hemant Shugukta with Scotiabank. your line is open please go ahead thank you and good morning uh hope you can listen to me this time yes we can hear you awesome okay so in your 2028 strategy uh you know you have expectations of 95 plus occupancy target uh do you see the stabilized occupancy definition moving to more like 96 percent now i mean given the success in december um at this point of time we're not planning on moving any of these target numbers but be happy to continue to outperform them the challenge with setting up different targets is i think we've talked about before historically there's no history of our portfolio or industry overall performing at these kind of occupancy levels it's really hard for me to point to something and said you know seven years ago we were at 97 occupancy so that's where we're striving to achieve so we're in these uncharted territories right now um and we continue to work very hard or our teams rather continue to be very working very hard to make sure that all of our properties run as full as possible and we provide services to as many residents as possible who want to access those services in our properties got it thank you uh and um would you know like what percentage of portfolio or how many homes are almost at 100 occupancy here i don't have these numbers in front of us so much okay okay no fair enough okay uh okay thank you uh moving on on asset dispositions uh obviously a couple down in waterloo kitchener area are you there now in terms of where you want to be in that region in terms of market share no we we continue to see that general region as an area of growth for us and ontario southwestern ontario is one of our areas of focus for growth okay uh okay uh and then on quebec city uh do you see more recycling more dispositions in that region uh again to right size the market share potentially yes over time we clearly have grown a lot of quebec portfolio over the years and it is very heavily concentrated in montreal and quebec city in quebec city in particular and it's a relatively smaller market so over time there may be some non-court asset dispositions in that market got it okay okay okay enough uh and then Then moving on to the acquisitions, the Greenway residence in Brampton, I mean, what's the opportunity there in terms of occupancy or margin upside? And by the way, thanks for providing the color on the Montreal acquisitions of that case study. I mean significant margin increases in value creation. So just getting a sense of where do you see on this acquisition? Sure. For us, it's a relatively new market. We haven't been in Brampton for a while, and so we're excited about the opportunity to lease up this home. It's not quite yet at stabilized occupancy, so there's some opportunity on occupancy. And we think that over time, we can achieve higher occupancy in that home, just as we had done in the rest of the portfolio, and continue to offer more charitable-like services to the residents including wellness offerings and care services that we are rolling out across our portfolio that home will be the beneficiary of that as well okay and in terms of going in uh capital yield uh three to six sub six and then that can move up by let's say hundred with this point yeah it's high five okay okay okay uh okay i think that's good uh i think that's about oh yeah so one last question here on the on the rent growth uh properties that are full capacity are almost there what kind of rents are you seeing on the market inside really depends on the market in the properties that are fully occupied and the markets are strong there are some that were increasing rents by high single digits in some cases a little higher than that as well in other cases where property may run at high occupancy but they're still competing properties that have vacant units then the market rate increases a little lower than that got it okay thank you so much and i'll turn back your next question comes in the line of giuliano thornhill with national bank If your line is open, please go ahead. Just a reminder to unmute your device. Your next question comes from Sairam Srinivas with ATB Capital Markets. If yourline is open please goahead. Thank you, operator. Good morning, everybody. Most of my questions have already been answered, so I'll just stick to a broader macro 10,000 feet question here. Jonathan, when you look at acquisitions and dispositions, can you talk about the kind of players you're seeing in the acquisition market you're competing with and the kindof players who are actually looking to buy the assets you're selling? So just to clarify, you're asking who we're competing with and how competitive the acquisition market is? yeah generally in terms of uh the nature of the players who are buying assets you're competing with and secondly the nature the players are kind of selling these assets too yeah so um i guess we can categorize it into the different kinds of assets that we're buying and selling so in the class a assets um we are seeing competition and it would be from the usual characters that you would assume we are seeing increased and renewed institutional interest in this asset class and on the class b assets it's we've seen more interest in these assets than i've frankly ever seen this wouldn't generally be by the same kinds of buyers more local buyers but we are staying deep and and broad interest in this all right and um john thanks for that and maybe in terms of the class the asset classes more uh from a local operator perspective or is it also more institutions coming in there um it depends on the market and where the assets are located but um i would say it's more of the former it would be more of a local type operators or people who want to get into the market that looking into these assets um we do see we do see some kind of more institutional larger players looking at this asset class but generally it's the former it would be fair to say that over the last couple of years there have been a number of private equity groups that are beginning to play more actively in this asset clause where in the past it was mostly individual local operators now there are groups of people that are trying to to build portfolios of these assets, and they've been pretty active in this market. That is great, Kalijan. Thank you for that. I'll turn it back. Your next question comes from the line of Giuliano Thornhill with National Bank. Your line is open, please go ahead. Hey guys, good morning. Hopefully you can hear me. I think I'd take the hint from Himanshu. Just, I guess, sticking with the construction theme there, have you seen all the infrastructure announcements start to kind of increase the cost of build yet, or do you think there's any risk to that spilling over into your sector? We haven't really been seeing it play out at this point. I suppose there's the risk that it spills over into the sector, but right now, we are seeing a whole lot of development opportunities being brought to us by condo developers and condo developments that aren't working out anymore. And so that probably translates into still a lot of capacity among trades. And so what are the kind of characteristics of these like markets that you're seeing? Maybe this new or renewed interest to developing and adding supply? characteristics of the markets that we're seeing so yeah like yeah i i think we're seeing more opportunities in you know core urban markets that maybe previously didn't work as well for our asset class and so we do get that benefit of being a little um having having the benefit of being a little pickier in in site selections um as we see more and more of these condo and in some cases multi-family sites looking for alternate uses of their land and uh is there is there much spec development ongoing right now or or like very yeah speculative kind of development starts quite yet or no in our space yes i wouldn't say so we're probably with our third-party development program the the gap to to rent to really making it work is still still quite large or do you have like some idea around that as well well as vlad said earlier it's very project specific and and so we still have a number of development projects that are penciling out nicely and those ones will proceed. As those gaps change, we continuously re-evaluate projects and some might not be as feasible with interest rate changes, but it's a continuous review. My last question was just on the GMA portfolio. I appreciate all the disclosures there. Do you guys know kind of what IRR that would pencil out to like double digits or high single digits? With this kind of growth, it's probably double digits. Okay. And what's the permanent financing there? Like the amount of debt and the rate? Are you aware of that as well? We bought that portfolio for cash, and so I would primarily use that to support the unencumbered pool. Okay. All right. Thank you, guys. Thanks. Your next question comes from the line of Tal Woolley with CIBC Capital Markets. Your line is open. Please go ahead. hey good morning everybody um as the business as that like more and more uh sites get filled up i'm just wondering like does the nature of selling service plans change at all like do you see a higher attachment rate or um you know just because i think like you know when the buildings are more empty like it's a little bit harder to provide those services um or it's more costly like obviously i think the profitability has gone up but i'm just wondering if the customer taste has changed and if also the fact that you have more boomers entering the system now um is that sort of the attachment rate on services changing at all yeah we certainly think that that's an area of opportunity for us to deliver more and better services to the residents that live with us those that they require and desire and we certainly see opportunity in us getting better at it so there's a number of things that karen's team have been doing in designing the offering and the wellness side of things and improving the way we deliver care services to our residents we've added a new person to karen steam vice president of care experience and innovation we bet we didn't have that position before now we do have a very talented individual running this process so we clearly are very focused on those opportunities can you give like some specific examples of some of the changes you've made early days we're developing our programs and building our service offering um but uh probably within the next six to nine months we'll be able to talk a lot more to you about it Okay. And then also just wondering on the service side of the business, if you can just talk about the pricing outlook. I know in your strategy update last year, you sort of talked about rent plus service growth greater than 4%, I believe, if I recall correctly. Is that still the range? Yeah. So look, as Jeff pointed out, our increases to the existing residents are limited by basically increases in our costs. So it's slightly above inflationary increases. And in some cases, when it comes to apartments that are regulated, they're limited by regulations. The market rate increases, we believe, in strong markets where the properties are operating at high occupancy, we can increase those rates by high single digits. And so we think that all of these blends to kind of 4% or 5% rental rate growth on average. And would you put the inflationary impact on your inputs, like for food and all that other stuff at around the same level? Sorry, you're talking increases to the existing residents, whether we would do it at a higher rate? I'm just talking to the cost to provide. So if you're looking at like sort of like, you know, kind of mid single digit increases, would you say that your cost to provider is sort of increasing at the same rate? Yeah, the existing, the increases to the existing residents would be more in line with our overall cost increases, particularly labor costs, which are growing by four, four and a half percent for the last many years. And the market rate increases, so the rates that we're asking new residents to pay when they join us, those rates are increasing faster because of the domain supply dynamics. Okay, that's great. Thanks a lot. We have reached the end of the Q&A session. I will now turn the call back to Vlad Volodarsky, CEO, for closing remarks. Thanks again to everybody for joining us. Of course, if you have any further questions, please do not hesitate to give us a call. Goodbye. This concludes today's call. Thank you for attending. You may now disconnect.