Slate Grocery REIT

Thank you, operator, and good morning, everyone. Welcome to the Q3 2025 Conference Call for Slate Grocery REIT.

I'm joined this morning by Blair Welch, Chief Executive Officer; Joe Pleckaitis, Chief Financial Officer; Connor O'Brien, Managing Director; Allen Gordon, Senior Vice President; Braden Lyons, Vice President. Before getting started, I would like to remind participants that our discussion today may contain forward-looking statements.

And therefore, we ask you to review the disclaimers regarding forward-looking statements as well as non-IFRS measures, both of which can be found in Management's Discussion and Analysis. You can visit Slate Grocery REIT's website to access all of the REIT's financial disclosure, including our Q3 2025 investor update, which is available now.

I will now hand over the call to Blair Welch for opening remarks.

Thank you, Shivi, and hello, everyone. We are pleased to report another quarter of strong financial and operating results for Slate Grocery REIT.

Our team continues to convert resilient demand for grocery-anchored retail spaces into robust leasing at attractive rental spreads. The REIT completed over 417,000 square feet of total leasing throughout the quarter.

Renewal spreads were completed at 15% above expiring rents and new deals were completed at 35% above comparable average in-place rent. Adjusting for completed redevelopments, same-property net operating income increased by $4.3 million or 2.7% on a trailing 12-month basis.

Portfolio occupancy remained stable at 94%. And our portfolio's average in-place rent of $12.82 per square foot remains well below the market average of $24.09 per square foot, providing significant runway for continued rent increases.

The REIT has a weighted average interest rate of 5%, with over 90% of its debt having a fixed interest rate on a proportionate basis. This provides a stable outlook for the REIT's near-term financing costs.

The REIT's weighted average capitalization rate remains well above the REIT's weighted average interest rate for outstanding debt allowing the REIT to maintain positive leverage. The REIT's attract evaluation combined with continued net operating income growth, is expected to continue increasing the value of our portfolio over time.

We continue to have strong conviction in the outlook for grocery-anchored real estate and the ability of this asset class to perform in today's economic environment. Recent consumer spending data shows that the essential goods are expected to remain a top priority for shoppers over the next 3 months, underscoring the stability and resilience of the grocery sector and grocery-anchored real estate.

At the same time, fundamentals remain favorable with elevated construction costs and tight lending conditions continuing to constrain new retail development and overall availability. This dynamic creates a favorable environment for landlords to retain existing tenants and achieved meaningful increases in rents as leases expire.

Against this backdrop, we are seeing focus on operational execution, prudent management of our balance sheet and strong relationships with our tenants to position the REIT to deliver sustained growth and lasting value for all unitholders. On behalf of the Slate Grocery team and the Board, I would like to thank the investor community for all their continued confidence and support.

I will now hand it over for questions.

Good quarter. Obviously, the organic growth number has been trending where you expected.

I think your trailing 12 months, I think you said you were 3% to 4%. Is that a level that you expect to continue -- to see continue over the course of 2026?

Yes, it is. I think that the moves into it are really due to expiring leases when they come on, but that sort of 3% to 4% is what we expect going forward.

Okay. And what are you seeing from like a market rent perspective?

Obviously, you continue to highlight and showcase the mark-to-market available as you're able to bring in-place rents to market. But I guess what's happening from a market rent perspective?

Yes. Great question.

I think the easiest way to point to something is we quote the -- it's just over $24 per square foot now the CBRE market average. That is increasing at the same or maybe above our in-place rents.

So I would say our rental growth is very strong and the market is also growing. So I think that's -- those are both positive things.

Okay. And last question for me.

Just maybe switching gears towards the investment or transaction market, any read-throughs in terms of pricing you're seeing as it relates to Slate Grocery's underlying NAV or valuation? Are there more trades starting to percolate or -- how should we think about that?

Yes. I would say we feel very comfortable with our IFRS cap rates, and I think we've been prudent on that.

And then I think the rest of the market is kind of coming to a place where the execution where you have to do deals has moved up. I think that's what that transaction volume has been needed.

So I think it's really more situational. We are looking at the pipeline of new acquisition opportunities in the billions, and that could be a platform, that could be one-off deals.

But I think it really speaks to positive leverage. And if you think of Slate Grocery REIT's balance sheet, we're around 200 basis points of positive leverage from our IFRS cap rate to our weighted average cost of financing.

And I think that's pretty attractive. So I think if we continue to see that with our peers and where transactions are, I think you'll see that volume pick up.

And I think the U.S. market is getting -- I think if you look at other international jurisdictions, Europe is also a positive leverage situation.

I think Canada is getting there, but maybe not there yet, but that's really how we look at the market. And the fundamentals of grocery-anchored real estate are extremely strong.

So if you can buy an asset that's performing well and finance it well, I think that will show more volume in transactions.

Just 1 question from my end. Nice to see occupancy move up a little bit in Q3.

Can you talk a little bit about your progress on some of the vacancies that you had earlier in the year?

Yes, Golden, I'll pass it over to the team to talk about specific occupancy. But thanks for the questions.

Yes. This is Allen.

We continue to see a strong pipeline of new deals throughout the portfolio, both on junior anchor leasing and small shop leasing. And continue -- as you've seen, continue to do deals in both.

Thank you, everyone, for joining the Q3 2025 Conference Call for Slate Grocery REIT. Have a great day.