Artis Real Estate Investment Trust (ARESF) CEO Armin Martens on Q2 2018 Results - Earnings Call Transcript

Artis Real Estate Investment Trust (ARESF) Q2 2018 Earnings Conference Call August 3, 2018 10:00 AM ET

Executives

Armin Martens - President, CEO & Trustee

James Green - CFO

Philip Martens - EVP, US Region

Kim Riley - SVP, Acquisitions & Dispositions

Analysts

Jonathan Kelcher - TD Securities

Frederic Blondeau - Echelon Wealth Partners

Michael Markidis - Desjardins Securities

Jenny Ma - BMO Capital Markets

Operator

Good morning, ladies and gentlemen. My name is Sylvie, and I will be your conference operator today. At this time, I would like to welcome everyone to Artis REIT's Second Quarter 2018 Conference Call. [Operator Instructions].

And I would like to turn the meeting over to Mr. Armin Martens. Please go ahead, sir.

Armin Martens

Okay. Thank you, moderator, and good day, everyone. Welcome to our Q2 2018 conference call. So again, my name is Armin Martens. I'm the CEO of Artis REIT. With me on the call is Jim Green, our CFO; as well as Kim Riley, Senior Vice President of Investments and Development; Heather Nikkel, VP of Investor Relations; and Phil Martens has joined today, who's our EVP of U.S. Operations.

So again, to begin with, I'd like to advise all listeners that during this call, we may at times be making forward-looking statements and we, therefore, seek safe harbor. So please refer to our website as well as SEDAR filings, such as our financial statements, MD&A and our annual information form for full disclaimers as well as information on material risks pertaining to all of our disclosures.

So again, thanks for joining us. I'll now ask Jim Green to review our financial and operational highlights, then I'll wrap up with some market commentary. And of course, then, we'll open the lines up for questions.

So go ahead, Jim.

James Green

Thanks, Armin, and good morning, everyone. So quick summary of the REIT. Artis is a diversified commercial REIT. We have assets in five Canadian provinces, six U.S. states. We do, do some calculations in our MD&A disclosure to show the impact of an adjustment proportionate consolidation of our joint venture interests. In our opinion, some of this is more appropriate language. And while it does the numbers into what are considered non-GAAP, in many cases, we feel it's more relevant. And the bulk of my discussion will be about the proportionately consolidated numbers.

Based on Q2 NOI, Artis is 45.3% weighted in Western Canada. We're 11.4% in Ontario, and we're 43.3% in the United States. On asset class basis, we're 53.1% weighted in office, 20.7% in retail and 26.2% in industrial. Given our Western Canadian weighted, a specific focus for us since the oil prices collapsed in late 2014 has been to reduce our exposure to the province of Alberta and the Calgary office market in particular.

Looking back 3.5 years ago to Q3 '14, before the oil prices crashed, our geographic mix resulted in 38.9% of our NOI coming from the province of Alberta with just over half of that or roughly 19.3% coming from Calgary office properties. And based on Q2, the adjustments we've made, our Albert exposure is now down to 21.7%, Calgary office is only 8.2%, and that's even with including some lease termination income. And without the lease termination income, we would've been down to around 7.5%.

As mentioned on our year-end call, we feel we fully executed our commitment to diversify while continuing to sell at good prices in the current market. Having said that, we are continuing with the process on a patient basis, and we sold two more Calgary office properties this quarter along with a BC property at a very attractive cap rate. We've relatively manageable exposure to the Calgary office market in the near future with just over 116,000 feet left to renew in 2018, only 141,000 feet in '19 and only 47,000 feet in 2020.

As mentioned before, our acquisition and disposition activities have been mainly focused on capital recycling to further diversify and improve our portfolio. And in this quarter, as I mentioned, we completed the sale of three properties and acquired two new sites for future development opportunities: future office site in Madison in close proximity to our other assets, and an industrial site in Denver that we have a preliminary start already with a joint venture partner to build that out.

Artis continues to be active in both new developments and redevelopment of our existing properties, has roughly $89 million invested in properties under development at the end of the second quarter. During the quarter, the increase is roughly $10 million in development properties under construction.

As detailed in our MD&A, we have several new development projects that are just getting started, including a new residential tower at 300 Main, and new industrial space in Houston, Phoenix and Denver. Also, as detailed in our MD&A, we have several development projects in the planning stages where we haven't actively started yet, but they're progressing nicely through the development stages. We're not anticipating any difficulties in being able to develop those properties.

We've been able to maintain our balance sheet with debt to GBV relatively flat, up just a fraction, from 48.9% at the end of Q1 to 49.0% at June 30 but still down from the 49.3% that we were in December 31 of last year. Our EBITDA interest coverage ratios remain over 3x, and we're pretty comfortable with that.

The sales program we implemented through 2016 and '17 to sell assets and reduce debt has had a dilutive effect on our FFO. And FFO came in this quarter at $0.32 versus $0.36 in the comparative quarter last year. And I'll talk a little more about the changes from Q1 a little later in my discussion. AFFO for the quarter was $0.24, which does result in our payout ratio being above 100%, actually 112% to be exact. AFFO was also impacted by some of the same items as FFO. And as we've said at year-end and in Q1, our mission is to grow back into that distribution, and we're working as hard as we can to achieve that growth.

So just highlighting for a few minutes more financial position results. So on a fair value basis, our investment properties are valued at fair value. In this quarter, we saw an increase of $23.9 million, largely driven by the hot markets in Toronto and Vancouver, which continue to increase in value. Mainly rent driven this quarter and not cap rate compression, so that's actually pleasing to us that we're seeing higher rents in those properties. We continue to monitor our retail valuations, although this is our smallest segment. And at the current time, we're not anticipating major changes in fair values for the rest of the year. However, we do think that we will see further increases in industrial valuations as recent market transactions in that sector have been at pretty low cap rates. We remain pretty comfortable with our debt to GDP ratios, as I mentioned, almost constant this quarter at 48.9 -- or 49.0% versus 49.3% at year-end.

Unencumbered assets. We've maintained a pool of between $1.6 billion and $1.7 billion of unencumbered assets, down slightly this quarter, because the asset we sold in Vancouver, Production Court, was unencumbered. We'll be using the proceeds, at least partially, for new assets and maybe a little bit of debt repayment. That'll bring the unencumbered pool back up again.

On our credit lines, Artis has a $500 million unsecured revolving credit facility with a syndicate of lenders, and we also have two nonrevolving unsecured credit facilities in the aggregate amount of a further $300 million. We've extended the maturity dates on the revolving facility this quarter, such that one tranche now matures in 2021 and the second tranche in 2023. Both of the nonrevolving facilities have been drawn in full, and we placed interest rate swaps to fix the interest rates on those facilities as we'll be -- expect they will be outstanding for the full five-year term.

Looking briefly at a couple of highlights from the results of operations. One we monitor fairly closely is, of course, the same-property operating results. In this quarter, it was a positive 1.3% in functional currency, but unfortunately, a small decline of 0.3% once foreign exchange was factored in. The FX ratios in Q2 of '17 were quite a bit higher than they were in Q2 of '18. And we also present a stabilized same-property calculation, which eliminates properties planned for disposition and repurposing as well as the entire Calgary office sector. And on this basis, we had growth of 3.5% in functional currency and 1.4% once FX was factored in.

By asset class, the office segment in Canada was the weakest and also in the United States. More interestingly enough, the Calgary office sector actually had positive same-property growth of almost 6% this quarter. So that's an interesting listing.

Retail in both Canada and the U.S. remains fairly strong, and we also had good results from the industrial portfolio with our strongest results coming in the U.S. industrial segment. During the quarter, we were able to achieve a weighted average rental growth on leases maturing this quarter of 5%, and this growth will help contribute to further same-property growth in future quarters.

Looking at our FFO and payout ratio. All right, I guess, that's the not-so-fun part, but we'll touch on it anyway. So as I mentioned in my opening results, the FFO year-over-year has declined with the largest driver being the dilutive effect of asset sales with the proceeds being used -- good portion of the proceeds being used for debt reduction. FFO for the quarter, on a diluted basis, was $0.32, down $0.01 from last quarter and down $0.04 from the same quarter last year. And then, comparing back to Q1, so the Q1 FFO was $0.33, however, that did include a fairly large nonrecurring lease termination income. So overall, property-level NOI, almost identical to Q1. Numerous adjustments going both directions to result in that. No one major specific driver that was a big factor. We did have, of course, growth from the assets we acquired in Q1, but that was offset by the lower lease termination income this quarter.

To put numbers on that, we received $2.15 million in lease termination income in Q1 but only $860,000 this quarter. And if we run the math of calculating FFO exclusive of lease termination income, the drop from Q1 to Q2 is about $0.08.

We did incur higher interest costs this quarter, partly due to the acquisition of properties in Q1, but also driven by higher interest rates on the variable rate debt that continues to creep up. We also generally see higher corporate expenses in Q2 compared to Q1, part cost of holding the AGM and a few other reasons. But corporate expenses are comparable to Q2 '17, but it is up just over $400,000 from Q1 of '18. But not unusual for this time of year, but that's also an impact in the FFO decline. And despite the drop in FFO, we remain convinced that our strategy has been correct to improve the balance sheet in the current operating environment the same time as we are diversifying away from Alberta. The FFO payout ratio this quarter was 84.4%.

Looking over to AFFO, it's impacted mainly by the same items as FFO, declining from $0.25 at Q1 to $0.24 this quarter. But that is down $0.03 from the same quarter last year. That does give us, as I mentioned, an AFFO payout ratio of 112%. We're working as hard as we can to get that payout ratio back to a more reasonable ratio.

On the EBITDA basis, there is EBITDA calculations in our MD&A. And the main ratios we track are EBITDA interest coverage, currently at 3.02x; and debt-to-EBITDA, currently at 8.8x. I guess one of our highlights this quarter would be our net asset value going up from $15.03 last quarter and $14.86 at year-end up to $15.39 this quarter, so very pleased to see our values continue to rise.

Subsequent events. Artis ended the quarter with $165 million cash on hand. The reason the balances are so high is that we see sale closed right at the end of June, so we had a lot of cash on the balance sheet with -- didn't get it moved within that date, basically. And then, we had $279 million undrawn on the line of credit.

We've detailed several events in our subsequent events note, which we believe continue to reflect our strategy of intelligent recycling of capital. We plan to continue our focus on a strong balance sheet, improving the overall quality of our portfolio while growing back into our distribution.

That completes the financial review. We're pleased with the NAV growth, the same-property income growth, our weighted average rental increases and our new development activities. Not as happy with the FFO decline, but I hope I explained that. We look forward to demonstrating results from operations in future quarter, and I'll pass it back to Armin now for a bit more discussion.

Armin Martens

So thanks, Jim. So folks, on balance, we feel that Artis is progressing well this year. Earnings, our balance sheet and liquidity are in good shape. Our NAV is trending well. But we're not out of the woods yet. Our industrial and retail properties are performing quite well. We have a good history of doing that. But our office portfolio is still inconsistent. Much of this is, of course, due to the Calgary office market.

It continues to be our view that both the U.S. and Canadian economies will perform fair to good this year and next, with [indiscernible] to the U.S. economy. However, the hawkish monetary policy on both sides of the border is giving us some concern, and increased interest rates are now impacting our earnings. Our capital recycling program for 2018 is on track, and we continue to guide that we'll recycle between $200 million and $300 million of properties this year, that are continuing to reduce our exposure to the Calgary office market.

Now in terms of the Calgary office market, we're grateful for our positive same-property NOI this quarter is a result of the [indiscernible] significant leased. But we're not out of the woods yet, including some space vacancy rates of about 28%. And the Calgary now will, of course, take some time before stabilizing and improving. Oil and gas prices, however, have stabilized. Enbridge's Line 3 [indiscernible] to Trans Mountain will eventually get done, and we hope that deal continues to have good traction.

We're bouncing on in the bottom with respect to office leasing rates. Capital spending and job creation is slowly but surely increasing in Alberta, where we're seeing green shoots of [indiscernible] and tenant activity. Though it may be slow and protracted, but it is our view that the economic recovery's well underway in Alberta and will be sustained for many years after. As mentioned, our industrial and retail portfolios are performing quite well on both sides of the border and indeed have a long-standing track record of success, but challenges remain isolated to our office portfolio. So looking ahead, we will continue to work hard to keep our buildings full whilst bringing the rents up to market and consistently improving our real estate portfolio as well as our NAV per unit. As we mentioned, it's on a good trend line.

So that's our report for this quarter, folks. So while we're standing on challenges, we are pleased with the results and confident in our outlook.

And now I'll ask the moderator to take over the phone to your questions.

Question-and-Answer Session

Operator

[Operator Instructions]. And your first question will be from Jonathan Kelcher at TD.

Jonathan Kelcher

First just on Calgary office. Good to see positive same-property NOI growth there again. Do you expect that to continue through the next few quarters, given that your occupancy is, I guess, up 700 basis points or so quarter-to-quarter?

Armin Martens

Who wants to answer that is this room? The trend is our friend there, but our overall Calgary office NOI, I mean, not all of our buildings stabilized. Maybe half our buildings are stabilized in the sense that we finished resetting all the leases to the new market rents or maybe half our leases is the right way of putting it, and then, the other half isn't. So we're not out of the woods yet, as I've been saying.

But it wouldn't surprise me to get one quarter or two more of positive data out it just because of that one major lease. And if you look at our lease profile disclosed in our MD&A, we don't have a lot of lease rollover right now in Calgary.

Jonathan Kelcher

Okay. So that's good. And then just turning to your, I guess, your capital recycling program. I guess, you sold about $160 million so far this year. You've committed to buying roughly $130 million in terms of acquisitions. Would it be fair to look at the balance of $30 million going into development?

Armin Martens

Actually, it'll go to another acquisition, a very good one that wasn't disclosable on time before the release of these results. But it'll go into another acquisition, and we'll move on from there.

Jonathan Kelcher

So roughly a $30 million acquisition.

Armin Martens

Closer to $50 million, and a really, really good acquisition.

Jonathan Kelcher

Okay. And I guess you're not going to give much more color on that.

Armin Martens

No, but you'll like it.

Jonathan Kelcher

Okay. Well's, looking forward to hearing about it. How much would you expect to spend on your development program over the back half of this year?

Armin Martens

You have that number?

James Green

Well, ballpark, another $30 million to $40 million over the course of this year.

Jonathan Kelcher

Okay. And then just lastly, can you maybe give us an update on where you stand on leasing Inverness.

Armin Martens

We've got Phil here. What's the latest update, Phil?

Philip Martens

We continue to get interest on full building users. We also have potentials where we have owner users, who just simply want to take us out. So it remains active in Denver. We have a program also to multitenant the building. And yet, our brokers advise us to yet remain patient. We are in month six of our budgeted 18-month lease-up program. So we're waiting to go through the summer. Hopefully, have a lot more traction in the fall.

Jonathan Kelcher

Okay. And is that property in the rental pool? Or is it still in PUD?

James Green

It's now back in -- yes. It was transferred as a completed operation at the end of Q1, I believe.

Operator

Next question will be from Fred Blondeau at Echelon Wealth Partners.

Frederic Blondeau

Three quick questions for me. First, I was wondering, how do you feel about the distribution at this point? And I understand the commitment there. But what's your time line before maybe taking more drastic decision in this regard?

Armin Martens

Well, if you looked at our history, the day for -- we've been in this situation before. Our cap ratios actually much higher, and we've patiently worked our way through it. In the last 14 years, we've raised our distribution twice. We've never cut, and no discussion of cutting it.

Frederic Blondeau

Okay. Fair enough. And then, maybe a more high-level question. You have a rather ambitious business plan in terms of development, redevelopment and even densification initiatives. How do you feel about the construction costs at this point? And how do you think they could affect or further affect expected yields?

Armin Martens

Yes. Costs are not coming down. In terms of our development pipeline, we're building this one multifamily building in Winnipeg because it's on top of an arcade we own, connected to an office building we own. But otherwise, our ambitious densification program, the multifamily part of it, we expect to sell off the entitlement to the land once we get the rezoning. We don't expect to build any of those because we don't expect to have multifamily in our portfolio. We don't want to have fourth asset class in our portfolio. Even the multifamily in Winnipeg that we build, we'll look to exit that building as well as soon as possible, so we'll stay with our three asset classes.

In the U.S., it's pretty manageable. The industrial buildings, these have worked very well for us. We build them one at a time. We're leasing them. We keep going. Our industrial portfolio is performing well on both sides of the border and including new greenfield developments. As we build the buildings, we get good leasing traction.

Frederic Blondeau

Okay. And maybe lastly, I was wondering if you could give us a bit more color on the 3.3% and 5% cap rates achieved on Eau Claire and Production Court?

Armin Martens

Well, I'll let Jim address a little bit, if you want to.

James Green

Heck of a cap rate, isn't it? Well, I mean, yes, it trends -- the current building and that other smaller building on 5th Ave, I guess, it was, the former Birchcliff building, both of them were substantially empty, and so the cap rate automatically was low, but the prices made the price per square foot, it was right in line a little bit -- the price was a little bit better than the IFRS in its valuation, which translates or corresponds to $15 a unit. Then Production Court was a clean 4.9% cap rate on NOI. It was 99% leased. It's the Burnaby market, not Downtown Vancouver. We thought we did well, and we know we have a good use of proceeds in terms of recycling that.

Operator

Next question is from Mike Markidis at Desjardins.

Michael Markidis

Armin, just to start off, I was wondering if you'd just shed a little bit more color on the decision to sell Centrepoint. Your strategies into trying to acquire new-generation real estate and a 6% cap for a new-generation office building in Canada didn't seem necessarily that robust. So maybe you could just share your thoughts on that one.

Armin Martens

You're right. A couple of things come to mind there, Mike. First of all, we are heavily invested in the Winnipeg office market. We are, for sure, the largest office landlord in Winnipeg, right downtown, [indiscernible] connected to the skywalk system. And this building was a partnership. We're 50-50 partners, but we're not the managing partner. So that wasn't our preferred way to be a partner. And also, the building did not have a skywalk connection, so we considered it after a while to be a noncore asset. We had a long-term lease there, I guess, a 10-year lease, 11-year lease with Stantec with seven years remaining. And you know the way it works. We've decided that now was the right time to sell, given the amount of tenure left in order to maximize the price. So those kinds of things came to mind, and we felt we had a good use of proceeds in terms of redeploying the money.

Michael Markidis

Okay. That's helpful. Second, I'm just trying to get a little bit -- just make sure I'm clear in reconciling some of the disclosure in the MD&A in terms of the development activity in the balance sheet. So Jim, if I understood you correctly, the PUD balance of $89 million, that doesn't include any of the 100% completed developments. It only would include the developments that are in process.

James Green

That's correct. Yes. The completed one gets transferred out whenever their production is finished, in essence.

Michael Markidis

Okay. And what about Sierra Place, is that in PUD? Or is that...

James Green

That's a good question. No. I believe, it's still in the income-producing properties pool.

Michael Markidis

Okay. So then just digging in a little further on that, the new developments have been completed. But do you have a sense of what the contribution of NOI for those three properties was during the quarter? And then, on a stabilized basis, where you expect those to get to?

James Green

No. Okay. No, Mike, I'm sorry. I don't have a number off the top of my head on that. There was very little contribution from them this quarter. Of course, Inverness is still not leased, Mike, so we have a negative drop because there's some operating costs getting written off now.

Michael Markidis

Okay. We can follow-up off-line. It would be a helpful disclosure to get. And then, just , I guess, in your NOI reconciliation, you got your property NOI, your same-property and then the acquisition dispositions in the contribution from development and redevelopment. So again, just trying to reconcile what that, I think it was $704,000, what's included in the figure? So if that's part of the off-line discussion, I'd certainly wait for that. But it would be nice to sort of just reconcile all those different line items.

James Green

We're going to have to take that one off-line, too, Mike. I don't have the [indiscernible] with me.

Michael Markidis

Great. Last one for me before I turn it back. Just on Wisconsin. I noticed that when you guys first brought that portfolio, I think it was high 80s occupied, and you drove it into the low 90s. And the last several quarters, you've kind of been trending back down to the high 80s. I wondered if you'd give some update on what you're seeing there. And how the NOI's performing?

Philip Martens

Yes, it's Phil here. Part of the real -- one tenant ended up building their owns building, and that we knew going into due diligence. So this is at 8401 Greenway, and that's where you're seeing the biggest vacancy. So what we've done there is we have remodeled the lobby, and we've created new building standards for the elevator lobbies and bathrooms. And we threw regular broker events, and we've had some very good traction. There are four, I'd say, about four floors now available, and we've got RFPs on 2 out of 4 of those floors already. So we've had some good success with remarketing that building.

Armin Martens

Yes. So when we actually bought the portfolio -- this goes back almost two years, right? We actually -- knew that tenant had signed an agreement to do a build to suit and to vacate. We're optimistic that we'd have this space leased to University of Wisconsin by the time they left. We didn't get that deal done, but we could now have the space vacant where they left. We have a very good leasing program in place, and we're optimistic we'll get it leased off again.

Operator

Next question will be from Jenny Ma at BMO Capital Markets.

Jenny Ma

Just as a follow-up to Wisconsin, you bought a piece of land out there, and my understanding was that for a number of your properties in the Wisconsin portfolio that there was some excess density already. So when you think about the excess land you already have and the fact that Madison is typically generally be sort of in a stable market in the low 90s range, can you just talk a little bit about what you're seeing as far as development opportunity? And how this new piece fits into your plans for office development in that market?

Philip Martens

This is Phil again. This particular land that we acquired was part of an option that we inherited with the portfolio that we wished to exercise in order to protect at least a minimum defensive position with our office assets adjacent to that site. And we also have a pretty large parking structure also adjacent to that site. So that was the completion of a plan when we first acquired the portfolio.

We actually had to pursue a build-to-suit. We've seen quite a bit of growth in the health area from everything from pharmaceuticals to insurance. And so we consider that to be very good in terms of strategy. For some of the other land that we have there, particularly, the Heartland Trail, we turned out some more in the third quarter, but we are negotiating with the existing tenant to expand on their site, and we're just wrapping up leases there. So we're encouraged to see that we're getting quite a bit of growth from existing tenants, and we're glad that we have that land.

Armin Martens

Actually, that's 50,000 square feet, right.

Philip Martens

It's actually more than that. That's a 50,000 square foot extra structure but also an additional 20,000 square feet expansion from the existing site.

Armin Martens

Yes, so we're grateful for having -- to have some surplus land in that market, Jenny, and that one property in particular. We do want to protect our plans, so to speak. We don't want a competitor doing a design build-to-suit for a tenant right beside us. So that bit of inventory, we felt was a good investment.

Jenny Ma

Okay. Got you. And are you able to speak to whether or not the portfolio you have there appeal to sort of the burgeoning tech market in the local area? Or is it a different kind of space that those users are typically looking for?

Philip Martens

Yes. Well, we do sometimes get one of the big or the big tech company there is called Epic, and they provide operating software for hospitals throughout the world. And they get often spin-offs, which we have at times inherited, which has been great. And also, they've expanded within our -- so yes, it's becoming increasingly a med tech hub in the Midwest. And it helps having University of Wisconsin as sort of incubator, but also this a big software company also in Madison. We have other odysseys right there. I don't know if anybody knows about the Call of Duty video game but the...

Armin Martens

Is that Activision?

Philip Martens

That's Activision. They occupy a bulk of one of our buildings as well. So we get a whole variety of tech at Madison.

Jenny Ma

Okay. Got you. And then, moving to Calgary office. Could you shed some color on what kind of fire it was for Birchcliff place? I'm just trying to think about who's kicking the tires for properties or basically are emptying Calgary office? And what do you think they're seeing in those properties? And what kind of opportunities over the longer term?

Kim Riley

This is Kim. I can comment specifically on the sale of the Birchcliff building. That was a buyer that was planning on turning it into a hotel. So we're seeing a lot of buyers like that. They're looking at the properties with redevelopment opportunities, whether it's hotels or apartments, multifamily. So that was that specific buyer.

Jenny Ma

Could you speak to the profile? Is it a local buyer?

Kim Riley

I think he was local. I'm not completely familiar with his background. But as far as I know, he was a local buyer, and he's done this before in terms of turning buildings into hotels. So that was kind of the company business margin.

Jenny Ma

Okay. And then just as a general observation, what kind of buyers are you seeing out in the Calgary office market these days?

Armin Martens

So opportunistic, private, some institutional. As a sort, it's definitely a blend, but again...

Jenny Ma

Was it domestic, institutional?

Armin Martens

Yes.

Jenny Ma

Would you say?

Armin Martens

Yes, for sure. I mean, there's the U.S. buyers out there as well, but what we've sold to them. And you remember, Jenny, I guess, it was last year, we sold Alpine Buildings to an offshore buyer from Asia, and so it's a mixture. But other than that, I would call it a private buyer, not institutional and Production Court, Eau Claire was again a private buyer from BC. And on that point, the BC buyer, the BC private buyers, see value in Calgary right now.

Operator

[Operator Instructions]. And at this time, Mr. Martens, it appears that we have no other questions. Sir, I would like to turn the call back to you.

Armin Martens

Thank you, moderator. And thank you again, everybody, for joining us on this call. We wish you all a good productive day and a great long weekend. Take care. Bye, bye.

Operator

Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines. Enjoy your weekend.