First Capital Real Estate Investment Trust

Roger Chouinard - Investor Relations Adam Paul - President and Chief Executive Officer Kay Brekken - Executive Vice President and Chief Financial Officer Jodi Shpigel - Senior Vice President, Development

Heather Kirk - BMO Capital Markets Mark Rothschild - Canaccord Michael Smith - RBC Capital Markets Sam Damiani - TD Securities Pammi Bir - Scotia Capital Matt Kornack - National Bank Financial

Thank you, Mod. Please note that forward-looking statements may be made during today’s conference call.

Certain material assumptions were applied in providing these statements, many of which are beyond our control. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements.

A summary of these underlying assumptions, risks and uncertainties is contained in our various securities filings, including our management discussion and analysis for the quarter ended June 30, 2016 and our current annual information form, which are available on SEDAR and on our website. These forward-looking statements are made as of today’s date and except as required by securities laws, we undertake no obligation to publicly update or revise any such statements.

With us here today are our President and CEO, Adam Paul as well as our senior executives, Kay Brekken, Jordan Robins and Jodi Shpigel. I will turn over the call to Adam.

Thanks, Roger. Good afternoon, everyone and thank you for joining us today.

It’s been another busy period for us, especially on the transaction side of the business. I will be speaking more about this after Kay talks about the quarter in more detail.

But to sum it up, we had another very good quarter. Q2 of 2015 was a very tough quarter to comp against.

We had significant lease termination fees last year and anchor tenant spaces that are now in transition with new tenants in occupancy, but not yet paying rent. And all of these are included in and put pressure on our same property NOI in Q2 as we expected.

So, against that backdrop, we are even more pleased that we were still able to grow our operating FFO per share in the second quarter. On a year-to-date basis, our operating FFO per share is higher by $0.03, which is a very solid increase of 4.8%.

The growth is primarily due to higher NOI with contributions also coming from lower interest expense and G&A savings from the restructuring we did last year. Our total FFO per share has increased even more on a year-to-date basis by $0.04 or 7.7%, partially as a result of a $3.2 million payment from Target that we recognized in Q2 and received in July.

Before I provide an update on some of our investment activities, I will turn things over to Kay to provide a closer look at our financial results. Kay?

Thank you, Adam. Good afternoon, everyone and thank you for joining our call today.

As Adam mentioned, we were pleased with our overall results for the quarter. We improved our occupancy levels from Q1, generated growth in NOI, while reducing our interest and G&A expenses all of which led to growth in operating FFO.

Starting on Slide 6 of our conference call deck, operating FFO increased $3.3 million or 5.3% in dollar terms and $0.01 or 1.1% on a per share basis versus Q2 of 2015. On a year-to-date basis, we achieved operating FFO growth of 8.4% in dollar terms and 4.8% on a per share basis.

The second table on this slide summarizes the major contributors to the increase in operating FFO. The key drivers of the growth in operating FFO in the quarter were growth in NOI from development completions and from acquisitions as well as lower interest expense as a result of redeeming some of our convertible debentures and refinancing maturing debt with lower rate debt.

Moving to Slide 7, as expected, our Q2 same-property NOI growth was impacted by the two significant lease surrender fees we received in Q2 of 2015 totaling $3 million. Excluding these fees same-property NOI growth was up 0.6% for the quarter and 1.6% year-to-date.

We achieved this growth despite having some anchor space in transition, including one former Target store and one former Canadian Tire store, which we have discussed in prior call. We expect our same-property NOI, which is calculated on a cash basis, to be positively impacted once our new tenants begin to pay cash rents.

This started to occur in Q2 for some tenants and will continue to take place over the balance of this year and into the first half of 2017 for the remaining tenants. On Slide 8, we continued to see healthy lift on our lease renewals during the quarter.

Our same-property renewal rates increased 6.6% on 328,000 square feet of renewals. Our total portfolio lease renewal lift was slightly lower at 5.9% on 378,000 square feet of renewals primarily due to shorter term leases we have done in properties where we want to maintain flexibility to undertake redevelopment activities.

Year-to-date, our total portfolio lease renewal increase was solid at 7%. Moving to Slide 9, our average net rental rate grew 1.8% or $0.34 over the past 12 months to $19.04 per square foot.

The growth is primarily due to rent escalations and higher rental rates on renewed leases. During the quarter, we brought online 50,000 square feet of GLA with an invested cost of $34.6 million.

The majority of this new space is located in our Edmonton Brewery District project. On Slide 10, our total portfolio occupancy rate was up 0.5% from Q2 of last year, primarily due to releasing the two spaces vacated by Target in the second quarter of 2015.

Our total portfolio occupancy rate improved by 20 basis points over Q1. Over the course of the past 12 months, our total GLA has increased by 4% or 1 million square feet as a result of development completions and acquisition activity.

On Slide 11, our NOI run-rate increased by $7 million over Q1 due to development completions, acquisitions closed during the quarter as well as higher occupancy rate. Slide 12 highlights our largest development project.

During the quarter, we invested $39.7 million in development and another $77.3 million to acquire two income producing properties in the GTA, as well as one major redevelopment property in partnership with CPPIB, which Adam will discuss in more detail. Slide 13 gives the details on the factors driving the growth in operating FFO and the related movements over the prior year period, which I have already touched on.

Slide 14 summarizes our operating AFFO performance compared to the prior year. Slide 15 touches on our other gains, losses and expenses.

We have recognized a $3.6 million year-over-year improvement in other gains, losses and expenses primarily due to the recognition of $3.2 million in proceeds from Target. These proceeds were more related to the closure of two Target stores in our portfolio last year.

We also recognized $1.3 million in restructuring costs, which are related to the organizational restructuring we undertook in Q3 of last year. We previously indicated that we expected to incur $1 million to $3 million of additional expense related to this restructure and this estimate remains unchanged.

Information on our key financing activities for the quarter is covered on Slide 16. We completed $73.2 million of new mortgages at an attractive average effective rate of 3.2%.

On April 1, we redeemed our Series G and Series H convertible debentures totaling $120.6 million. And on May 6, we issued $150 million of new 10-year unsecured debentures at an effective rate of 3.7%.

Most recently, on May 26, we completed an equity offering for $115 million to finance recent acquisition activity. Slide 17 shows the continued growth in our unencumbered asset pool, which has surpassed $6 billion for the very first time.

Our unencumbered asset pool combined with our $800 million operating facility gives us significant liquidity and financial flexibility to capitalize on growth opportunities as they arrive. This slide also touches on some of our key debt metrics.

Our net debt to total assets and our EBITDA interest coverage ratios remain conservative at 43.1% and 2.5x respectively. As we have mentioned in the past, our debt to EBITDA is one metric that we would like to bring down over the medium to long-term.

Given the high quality nature of the assets that we invest in which carry cap rates at the lower end of the range, inherently this leads to a higher debt to EBITDA ratio as compared to investing in lower quality, higher cap rate assets. Our debt to EBITDA at 9.1 times remains within a reasonable range for our business which drives over 80% of its revenue from everyday essentials.

Slide 18 summarizes our debt maturity chart as at quarter end. Our goal is to have approximately 10% of our debt coming due each year.

The maturities of the unsecured debentures in 2022 are spaced 11 months apart within that year. All of our term debt is fixed rate debt which helps to mitigate the impact of any rise in the interest rates.

Our weighted average interest rate at 4.6% gives us meaningful opportunities to refinance maturing debt at much lower rates in the current environment. I would like to touch on a couple of things on Page 16 of the developments section of our MD&A.

The tables on this page include all active development projects as at quarter end. First, in our same property with redevelopment table, we completed our Oakville South project during the quarter, which was slightly ahead of schedule.

Therefore this project is no longer included in the table. We started three new projects this quarter which have all been added to the table.

Secondly in our major redevelopment table, we completed Phase 1 of our Mount Royal Village project during the quarter. Therefore, we have updated this table to show only the active portion of this project which is now Mount Royal West.

This concludes my comments on the financial results. I will now turn the call back over to Adam.

Okay. Thank you very much, Kay.

It’s no secret that the environment for acquisitions of high quality retail assets in Canada’s major urban markets is exceptionally competitive. First Capital type assets are in high demand as their prospects for both capital preservation and growth are very compelling.

We are fortunate that we have a large portfolio of assets that we continue to invest in. Our development and redevelopment program is active and meaningful.

It continues to consistently add exceptional assets to our portfolio that further improve our average asset quality and through which we create net asset value growth for First Capital shareholders. Between our development initiatives and even more importantly the organic growth that we have a long track record of delivering, our growth objectives can be achieved without the need for outside acquisitions.

This affords us the opportunity to be very selective when acquiring new assets. We are under no pressure whatsoever to buy externally, which is important and helpful considering the environment we are in.

Heading into this year, we didn’t expect to acquire a meaningful amount of new properties which makes our recent activity a pleasant surprise. One of our competitive advantages is our platform, including our people and the relationships that have been cultivated in our business over many years.

Over the last few months, we have seen the benefit of this competitive advantage through our transaction activity. In May, we raised additional equity for specific new property acquisitions.

I would like to reiterate that our equity is precious and the issuance of new equity to fund our growth and capital allocation in general involves decisions that we spend a lot of time on and do not take lightly. Each decision is made on the basis of maximizing value for our existing shareholders and of course keeping our eye on our top priority, which is growing our operating FFO on a per share basis.

Opportunities to buy great real estate are generally rare and you can’t forecast when they will come. So we are always ready to take advantage when we have the chance.

In last quarter’s conference call, I spent some time discussing our philosophical approach to acquisitions. I noted that we see growth coming from three categories of property purchases.

First, large development or redevelopment properties in our core urban markets, typically acquired with a partner given the significant size, timeline and scale of these assets. Second, properties adjacent to or in close proximity to existing First Capital assets.

And third, acquisitions that are similar to our other properties, but are located in new trade areas within our existing urban markets. Year-to-date in 2016, we have acquired or entered into agreements to acquire several exceptional assets that have a growth profile that is at least as good as our existing portfolio.

And the income producing properties we have acquired have visible value enhancing opportunities over the medium and long-term. In short, they are consistent with our acquisition strategy.

In our conference call deck, we have included visual slides for each of the properties that I will now discuss. So the first, one of the most exciting development site acquisitions we have made in many years is the purchase of the former Christie Cookie property at the Northeast corner of Lake Shore Boulevard and Park Lawn Road in Toronto.

The acquisition is exciting for a number of reasons. First, its location in Toronto, a key urban growth market, this prime piece of land is positioned near Toronto’s waterfront where it benefits from exceptional visibility and access from the Gardiner Expressway, which is a major highway into the city from the west end, as well as Lake Shore Boulevard and Park Lawn Road, a major north-south arterial in West Toronto.

And second is the sheer size, scale and potential of the opportunity given its 27 acres of prime land. This unique site is well suited to match the experienced abilities of our platform to create a large, modern, vibrant and sustainable mixed use master plan community, one that integrates a wide range of users including retail, residential and others.

This project is an opportunity where we will demonstrate the best of what we have learned and experienced in urban focused development over many years across numerous projects. This investment is a good example of a large development property in a core First Capital market.

Given the extended timeline to completion, we said these are the types of projects we will look to partner on. In this case, we are delighted that we have entered into our first partnership with Canada Pension Plan Investment Board or CPPIB on a 50-50 basis, one of Canada’s most respected investors.

First Capital is the managing partner responsible for development, leasing and property management. We look forward to working with our partner and with the city and neighboring communities to create the best possible development on this important property, one that we will all be very proud of.

We have also added or will be adding assets that fall into our other acquisition categories, mainly those that are located near existing First Capital assets or those that are located in existing First Capital urban markets, but in new trade areas within those markets. So first, we have acquired an additional 108,000 square feet of new urban retail space in the heart of Griffintown in Downtown Montreal for $56 million.

With high quality tenants, including Adonis, which is a metro grocery banner, SAQ, Winners and three banks, this property significantly increases our presence in this high growth downtown neighborhood adjacent to Old Montreal, bringing our total ownership here to 260,000 square feet of recently developed high quality space for a total investment of $114 million. In Q2, we also acquired Cliffcrest Plaza, a shopping center situated on 6.9 acres of land in Southeast Toronto purchased for $31 million.

Tenants include Shoppers Drug Mart, Dollarama, CIBC and Scotiabank. Over the near-term 17,000 square feet of additional density can be added to the property.

We have now entered into an agreement with LCBO to occupy approximately 8,000 square feet in a new pad with construction scheduled to commence over the next few weeks. Looking medium to long-term, there is a significant value enhancing opportunity by further intensifying this property with new retail and likely residential space over the coming years.

Another transaction we completed in Q2 was the acquisition of a 50% interest in Whitby Mall for $17.5 million. Whitby Mall sits on 22 acres of land at the Southeast corner of Dundas Street East and Thickson Road South.

If you take our total acquisition price and divide it by the land area, it equates to an attractive price per acre of $1.6 million. But the property isn’t only comprised of land it has an existing 330,000 square foot shopping center in place with a current net operating income that provides us with an in-place yield that is higher than a typical yield on our new acquisitions.

So, we aren’t under any pressure to quickly redevelop the property, but the large size of the site, combined with our price provides a lot of flexibility for value creation in the future, which is an appealing characteristic for this future redevelopment property. Our interest in Whitby Mall started based on our existing position.

We own Thickson Place, a 105,000 square foot grocery anchored property on 10.4 acres of land that we have successfully redeveloped directly across on Thickson Road. From a capital perspective, we were comfortable with our position in the area.

So, we have now entered into a binding agreement to sell a 50% interest in our Thickson Place asset to our partner in Whitby Mall for $19.7 million, which is scheduled to close in September. From a capital perspective, we crystallize value we created through our Thickson Place redevelopment and effectively traded a 50% interest in a very successful stable asset for a 50% interest in an asset that has a lot of upside value that we can deliver to us and our partner.

Our overall position at this intersection has remained similar from a capital perspective, but with more value creation upside. So, moving back to Toronto, another deal, we have entered into a binding agreement to purchase a half interest in 101 Yorkville Avenue for $15 million.

The property sits directly across from several of our existing properties in the heart of Yorkville, including the location, where Chanel will be opening their new Canadian flagship store in a few months. This area of Yorkville is undergoing a tremendous retail transformation, which this property will benefit from directly.

It sits on a half an acre of land and represents a significant future redevelopment opportunity. Similar to the Christie Cookie project, First Capital will be the managing partner responsible for development, leasing and property management.

We expect to close this acquisition in the third quarter. And finally, a very recent transaction that is also superb in terms of asset quality.

We have now advanced the first mortgage and entered into a conditional agreement to acquire an assembly of properties at Avenue Road and Lawrence in Toronto for $63.2 million. These properties are situated on 2.2 acres of contiguous land, which we believe is one of the best grocery sites we have ever come across.

The 360 degree trade area around this site has a population with more density than its average in our portfolio. And the household income within 1 kilometer of the site exceeds $225,000, which is well over double the Toronto average.

So, it’s no surprise that the Pusateri’s grocery store in this location has achieved among the highest sales per square foot of any grocery store in Canada. And later this year, they will reopen in a new 35,000 square foot store.

I have seen what they are building and I can tell you first hand, it’s magnificent. This purchase represents a significant opportunity to enhance value through redevelopment and intensification over the medium and long-term, which can be phased given the size and configuration of the site.

In the interim, this is a great asset within an acceptable yield in place. So, notwithstanding the competitive acquisition environment we are in, we have had a very active few months on the acquisitions front.

These properties each offer value enhancing opportunities. They are in our key urban markets and they are exceptional from a quality perspective.

In short, they are consistent with our strategy. These transactions are a true testament to the capabilities of our platform and they make our business better.

And of course we have been able to acquire these assets while focusing on our top priority, which is growing our operating FFO on a per share basis. Thank you again for your time.

Mod, we would pleased be to answer any questions that anyone has. So, if you can please open up the line.

Good morning or afternoon actually. It’s been a long day.

I have just wanted to get a little more detail on your thoughts with respect to doing additional acquisitions with partners, what exactly you are looking for and weather selling down part of your existing portfolio to partners might also be part of the game plan?

Good afternoon, Heather. So, thanks very much for your question.

In terms of new acquisitions, I mean we are always looking at things, but the visibility is fairly shortsighted given the time from when we look at a potential opportunity to when we completed is quite short. In terms of doing more partnerships certainly under certain circumstances, we would be very keen to do that and we do it for a variety of reasons.

In the case of King High Line, which is a good example of a project where we desired a partner for part of our interest. What it really came down to there was trying to bring in a strategic expertise.

And as you know the current phase we have under development has about 500 apartment units, which is not a core expertise of First Capital. And so we pursued a partner which ultimately was CAPREIT who could bring that to the table.

So, that’s a good example of when we do partnerships. We have talked about large extended timeline developments like the Christie Cookie site, which we will generally also do with a partner.

And then there are situations like we had in Whitby and earlier in the year in Montreal, where we were comfortable with our position, but ended up bringing in a non-managing partner for a partial interest and then redeploying that capital to other properties where perhaps there could be more significant value-enhancing opportunities over the medium and long-term. So, we will continue to look at that.

I would guess over time we will end up doing more partnerships both on new acquisitions and our existing properties.

And in terms of the Christie Cookie site, have you quantified what the sort of dollar value scale of that development is and what sort of timeframe you expect to be delivering this on?

No, we are certainly not at the stage now where we have quantified investment dollars. We were at the point where we are very comfortable with the site from a quality perspective and in the context of our acquisition cost.

And what we are going to do is spend an adequate amount of time with various stakeholders like the Citi and the neighboring community to determine something very special that can be constructed here in the context of 27 acres in Toronto and then that’s the point where we would start to get to a point where we can apply investment estimates to it, but it would be too premature right now, but we are quite excited about what that leads to long-term given our cost base at this point.

And just turning to acquisitions, I would just like to get your thoughts. You said that the environment has been maybe a little bit more fruitful than you had expected.

Are you feeling that you are having to stretch to be able to get these acquisitions given the demand for the product and maybe just give us a sense of how that dynamic is changing and who is competing in the bids?

Well, in my entire career I can’t think of an acquisition I have ever done where I didn’t feel like we stretched for what we bought. So, I would say that’s certainly the case today.

But the competition that we have had for quite some time, it’s other – it’s very well capitalized pension funds. There is foreign investors that have been more notable at the bidding table and some of the assets that we have looked at.

And it would be the large private equity and in some cases public company peers that would be pursuing similar real estate.

So do you get a sense like given the sort of post Brexit, rates falling off and maybe more eyes turning to Canada, that there is – I guess, I am trying to get a sense of whether you feel that the competitive environment has gotten more aggressive lately and whether you expect some pressure on cap rates moving forward?

Well, I would say, certainly from something like Brexit, it would be premature to comment whether that’s changed the investment climate from what we have seen. But it felt quite crowded from a competitive perspective for quite some time.

And I wouldn’t say it’s changed in a notable way, one way or the other. And sorry Heather you had something else at the end of your question that…

So I was just trying to get a sense of the…

Cap rates?

Yes.

Yes. And you saw it in our Q2 numbers where there have been a series of transactions and appraisals that we have obtained third-party that both support some compression in cap rates for the type of product that we hold.

And our guess is that’s more likely to compress a little bit further over the balance of the year and then go the other way.

Great, I will pass it over. Thanks very much.

Okay. Thanks Heather.

Thanks. Maybe just following up a little on Heather, just trying to understand as a project – you are used to do joint ventures, is the use of joint venture is something you think of in terms of what makes the most sense for our property or is just part of balancing capital with considering whether you should raise equity to fund growth?

It really could be both. And I mean we are really open to partnerships if it’s under the right set of circumstances and it’s actually quite a long list of what would qualify as the right circumstance.

And we do asses each one on a case-by-case basis. But it’s not a hard and fast one or the other, Mark.

I don’t know if that answers your question.

Well, I understand. Just moving on to just one other question as far as asset sales, do you expect this to be a continuous focus as far as improving the portfolio or are you pretty comfortable with where you are at now?

Well, we are very comfortable where we are at now and we went through a phase over a 3-year period, not that long ago where we divested of a significant amount of real estate. And that made a big difference when you looked at our portfolio, when you looked at the average asset quality.

And what it also did is it considerably shrunk our quarter – our pool of non-core assets. But that being said, in a company of our size, I would guess there are regularly opportunities to call and we have said generally a fair estimate is $100 million a year of asset sales.

And we were a little bit lighter than that last year and we will be a little heavier than that this year.

Okay, great. Thanks.

Okay. Thank you, Mark.

Thank you and good afternoon. Can you give me an update – give us an update on Yorkville Village?

Well, Michael I could tell you that there has been a lot of very exciting things that have happened since we have last talked about Yorkville, including the signing of some pretty exciting new tenants to our properties there. Unfortunately, on several of them we are still bound by confidentiality.

And so what our plan is on our next conference call to give a more wholesome update of what’s going on in Yorkville Village. But what we can tell you is that there has been some really exciting things that we can’t wait to talk about.

And would that include like 108 Yorkville Ave that kind of thing, a property you have next to [indiscernible]?

Yes. Okay.

I am not ready with addresses. But we are talking the free – I am looking at Jordi DMI property.

Great, but it includes both our street front Yorkville asset and the Interior mall. We will be considered exciting updates on both.

Okay. And just sticking with Yorkville in general, is it safe to assume that if there were other acquisition opportunities you would have a hard look at them?

Absolutely, I am not sure I can think of a better place in the country that we would like to invest.

Great. Thank you.

Thank you.

Thank you and good afternoon. Just with the Christie Cookie site, Adam is there a project either that First Capital has developed or is developing or even someone else has developed that would be perhaps a good example of the kind of thing that you are envisioning on this site over the long-term?

Well, I can tell you some of the things we have been talking about internally quite a bit. And I think we will be pulling from our experience in a number of assets.

Liberty Village is certainly one of them. And if you look at what we have done in Edmonton in the Brewery district and in Calgary and Mount Royal Village and some of the characteristics in the Olympic Village and our Falls Creek asset in Vancouver, some of the stuff we have done in Montreal.

We intend and have discussed all of those and this is a great opportunity for us to pull the best from what we have learned across the board and what we have done and that’s what we expect to do. There is nothing that we would look at and say we are going to do something very, very similar to that from start to finish.

Is there a range of density approvals that you are kind of counting on to sort of you can justify the price?

I will let Jodi speak to that.

Hi, Sam. Good afternoon.

So at this stage as you know, 27 acres, so that’s – and the location plus the size is what really attracted us to this property. And really at this stage we are very early on in terms of determining destiny, but we are expecting that we will get a range of mixed uses which would include retail.

Obviously that’s our core and residential and plus other uses. And so really we are in the initial stages of discussions amongst various stakeholders and the community plus the city to really figure out what we can achieve, but we all – everybody knows that this represents a huge opportunity.

And if you look at what’s been redeveloped around the property that’s one data point for density. But to Jodi’s point, her and her team will be working with the city, the neighbors, other stakeholders to figure out exactly what that ultimate number becomes.

Great. We will look forward to that.

And just finally on your guidance for OFFO growth in the mid single-digits, is there any update on that and did that contemplate these relatively low yielding development acquisitions…?

So, there is no change. It was low to mid single-digits and that’s what we – we took it up from – we took it up last quarter to low to mid single-digits.

And we have no change to our expectation on that today.

Good. Thank you.

Okay. Thank you.

Thanks. Just as a follow-up to the last question, Adam again, thinking about maybe a little bit further out, some of these projects are potentially very large in terms of magnitude and when I overlay that with your objectives for OFFO per share growth, do you see your guidance as sort of the, not a run rate, but within that range beyond say, this year?

Thanks Pammi. What we have done this year is we provided guidance for this year and our intent is towards the end of this year or early next year we will provide guidance based on our views at the time for the following year, but we don’t expect to – certainly we are not in a position today where we would expect to disclose a run rate for FFO growth.

Clearly it’s our top priority. That’s not going to change anytime soon in terms of the way we look at the business.

And that’s where you balance against when you come across opportunities with significant value creation that could be over the long-term, but we will balance that. But the top priority is growing our operating FFO on a per share basis.

Okay, that’s helpful. Thanks.

Okay. Thank you, Pammi.

Hi guys. Most of my questions have been answered, but just wanted to quickly focus at West, fundamentals there remained fairly solid and I noticed that a lot of these acquisitions are in the GTA and Montreal, would you potentially add assets in that market as well?

Thanks Matt. I mean our Alberta portfolio has held up exceptionally well and we haven’t seen any noticeable deterioration on rental rates or demand.

If you look at the numbers quarter-over-quarter the last few quarters we have had very solid growth in occupancy and rental rates and NOI in our Alberta portfolio. I think, it’s partially a testament to the quality of the specific assets that we hold and we haven’t seen any deterioration yet.

In terms of whether we would invest further, it’s really in part limited to the opportunities. I mean, we did do a deal earlier in the year which was a JV with Allied, which is a great piece of real estate in downtown Calgary.

To the extent we found more of those, we would love to do those. But the reality is the opportunities are still few and far between.

And there have been a number of transactions that are not the retail, but they are not First Capital type assets. And the pricing and the depth of bids is still exceptionally strong, almost surprisingly strong.

So that’s the environment that we are seeing.

In terms of the buyers for those, I mean presumably you would have a sense as to who it is, are they public guys, who would be looking at that type of asset and risk profile in this market?

Yes. The ones we have seen have not been public.

They have been either domestic pension fund or high net worth private investors.

Okay, interesting. Thanks.

Okay. Thank you, Matt.

Okay. Well, that concludes our second quarter conference call.

I would like to thank everyone again for their interest in First Capital and we look forward to updating you next quarter. Have a great afternoon.