BSR Real Estate Investment Trust (HOMUN) Earnings Call Transcript

Hello everyone, and thanks for joining us. I'm Jim, your conference operator for today. Right now, I'd like to extend a welcome to all of you on the BSR REIT Q4 2025 Financial Results Conference Call. Every line has been muted so that background noise doesn't interfere, and once management finishes its prepared remarks, we'll open things up for a question-and-answer session. Should you wish to pose a question at that point, all you need to do is press star and one on your telephone keypad. Leaving the queue is equally easy. Simply repeat those same steps of star and one. At this point, I'd like to hand the conference over to Mr. Spencer Andrews, Vice President of Investor Relations and Marketing. The floor is yours, sir.

Thanks, Jim, and good morning, everyone. Welcome to BSR REIT's conference call, where we'll be discussing the financial results for Q4 and the year ending December 31, 2025. On the line with me today are our CEO, Dan Oberste, our Chief Financial Officer, Thomas Cirbus, and our Chief Operating Officer, Susan Rosenbaum — all of whom will be available to take your questions once our prepared remarks are done. Before we get started, I'd like to remind listeners that some statements made during this conference call regarding future events are forward-looking in nature. Any such information carries risks, uncertainties, and assumptions that could cause actual results to differ materially. We will also reference certain non-GAAP financial measures, which we believe offer useful supplemental information about our financial performance. For more details, please see the cautionary statements on forward-looking information and the description of our non-GAAP financial measures in our news release and MD&A dated March 11, 2026. Dan, over to you.

Thanks, Spencer. When you look at how we performed financially in 25, what you're seeing is a REIT in transition—one that intentionally rotated close to $1 billion of property over the course of that year. That transition is now mostly behind us. We carried out a strategic disposition of stabilized assets, put that capital to work in newer lease-up assets offering greater growth potential, and simplified our capital structure by cancelling approximately 75% of our Class B units, which equates to 27% of our total units as converted. Each of these moves makes the REIT a much more appealing investment today than it was twelve months ago. Through all of this change, our team kept performing at a high level, even with leasing conditions remaining difficult throughout our core Texas markets. We're delivering incremental gains in performance, helped along by lease-up at our new properties and other growth initiatives. Over the year, same community revenue slipped a modest 40 basis points, and that's despite every challenge I just described. Same community NOI fell 1.6%, partly because of a deliberate choice to hold on to overhead so the REIT is positioned for growth down the road. Same community weighted average occupancy finished the year at 94.3%. At quarter end our retention rate stood at 59.5%, which is a 130 basis point expansion versus the end of Q3 and higher than the 56% we saw a year ago.

At both of our main lease-up properties, we achieved meaningful gains. Aura 3550 finished 2025 with occupancy at 92%. For comparison, that figure stood at 86.6% when Q3 ended and was in the low 20s early in 2025. Having Aura 3550 physically stabilized for a full year should deliver year-over-year upside in 2026. The Owensby ended the year with 70.4% occupancy, which adds further upside for the non-same community portfolio in 2026. Even with everything positive we accomplished in 2025, our Q4 and full year 2025 results, along with our preliminary 2026 guidance, mirror a handful of realities we cannot avoid. First, recovery in new lease rates has trailed our expectations somewhat. Given 24+ months of minimal new supply lying ahead, we see an obvious route toward better rates. Second, the interest rate climate we now operate in differs materially from the one that existed several years ago. Our interest hedging program definitely helped protect our investors from interest volatility, which let the REIT separate itself from ZIRP reliance, yet in the end, we anticipate minimal future advantage from zero interest rate policies. Finally, moving capital into newer lease-up focused assets delivers an immediate favorable effect on our portfolio quality, but fully flowing that through our financials requires time. To put it plainly, vacant apartments bring us $zero.

Still, the hit to earnings from properties in lease-up won’t last forever. Aura 3550 has reached 92% occupancy, and the Owensby is now ramping up. So our team will keep doing what it does best: concentrating on what we can control and skillfully balancing risk against return. We’ll keep pushing occupancy higher at new assets, take advantage of organic growth opportunities built into our properties, hold down our cost of capital, and seek external growth opportunities that deliver accretion on a per unit basis. With market fundamentals steadily improving across our core Texas markets, even if more slowly than we’d prefer, and with the best in class portfolio behind us, we like our relative position in the market as we head into 2026. I’ll now ask Tom Cirbus to walk through our financial results and 2026 guidance in more detail. Tom Cirbus.

Thanks, Dan. Operationally, what we delivered in Q4 came in basically where management expected, and it matched the usual dip in leasing activity that we always see in the fourth quarter. That seasonal pullback did hurt rates, especially on new leases. So a 2.2% gain in renewal rates was more than offset by a 6.3% drop in new lease rates, which pushed blended rates down 1.3% for the quarter. January was still seeing blended rate decreases decelerate, and we were glad to see blended rates improve modestly on a sequential basis in February of this year compared with January. We keep watching absorption across our markets against the vacancy that remains, and we expect somewhat more month-to-month movement in rates, both up and down, near term. That said, with very little new product anticipated to come online over at least the next 24 months, we're confident the overall direction of blended rate changes will keep getting better in the quarters ahead, given the fundamental setup in our markets. Taking a broader view, same community revenue fell 1.2% year-over-year in Q4, driven mainly by the lower average monthly in-place leases I just mentioned. Average monthly in-place leases dropped to $1,436 per month as of December 31, 2025, down from $1,447 per month last year.

A decline in average monthly rent was partly offset by higher other property income. That other income keeps gaining from internalization efforts, such as expansions of our existing Valet trash and bulk internet programs. We anticipate these programs will meaningfully boost our organic growth starting this year. For Q4 2025, same-community NOI came in at $12.7 million, down 6.1% from a year earlier. The drop stemmed from the lower revenue I just covered. Our strategic choice to hold onto overhead pushed an extra $0.3 million of expenses onto same-community properties versus the comparison period, along with a $0.2 million rise in real estate taxes and a $0.1 million increase in each of repair and maintenance and utility expenses — all partly offset by a $0.2 million decrease in property insurance expense. Below NOI, G&A expenses rose by $0.6 million on payroll costs and legal and professional fees, while net finance costs climbed $0.1 million because of resets in the REIT's interest rate derivative portfolio. Overall, FFO for Q4 2025 was $0.14 per unit, against $0.19 per unit in Q3 and $0.22 per unit in Q4 of 2024. Similarly, AFFO per unit ended the quarter at $0.11 per unit, versus $0.17 per unit in Q3 and $0.20 per unit last year.

The drop in per-unit metrics from Q3 to Q4 was mostly about when real estate tax appeal proceeds came in, plus the legal and professional fees tied to those appeals. Looking at FFO and AFFO per unit year over year, three items drove the decreases, listed by how much they mattered. First, the REIT faced headwinds from higher relative interest rates. Second, there's an inherent lag in earnings that comes from rotating capital, especially when that rotation moves capital out of stabilized properties and into a smaller count of newer lease-up properties. Third, the leasing environment in Q4 compared with Q4 2024. The same applies to our full year financial results. For full year 2025, FFO per unit came to $0.79 per unit against $0.96 per unit in 2024, while AFFO per unit was $0.70 versus $0.88 in 2024. To restate, there are many moving pieces at play, but in short, the per-unit FFO and AFFO declines in our full year results likewise stem mainly from higher realized interest rates, timing drags produced by rotating the portfolio, and a softer leasing environment in 2025 compared with 2024. Turning to the balance sheet, the REIT's debt to gross book value stood at 51.2% as of December 31, essentially in line with Q3.

That comes to $723.1 million in debt outstanding, carrying a weighted average interest rate of 4%, and 99% of that is either fixed or economically hedged to fixed rates. Turning to liquidity, total liquidity stood at $52.7 million at year-end, which includes cash and cash equivalents of $6.3 million plus $46.4 million available under our revolving credit facility. As always, we can obtain additional liquidity by adding unencumbered properties to the facility's current borrowing base. In December, we refinanced our revolving credit facility, pushing the maturity out to December 2030, assuming the REIT exercises its one-year extension option. That refinancing lowered the interest rate margin across most leverage points in the agreement. We also extended our $160 million term loan by an additional year, moving it from December of 2026 to December of 2027, which locks in the highly attractive cost of capital on that tranche of debt for another year. Please note that our subsequent events show that the REIT's only previously remaining 2026 maturity — a $28 million loan tied to our Vail Luxury property in Houston — was refinanced onto our credit facility this week, so the REIT has no remaining 2026 maturities. Finally, let's turn the page to 2026.

Yesterday evening, we put out preliminary guidance for the full year, with FFO per unit expected to land between CAD 0.75 and CAD 0.79, which works out to CAD 0.77 per unit at the midpoint, and AFFO per unit guided to a range of CAD 0.68 to CAD 0.74, or CAD 0.71 per unit at the midpoint. The assumptions behind this guidance include same community revenue growth of 50 to 150 basis points, same community property operating expense growth of 100 to 200 basis points, and real estate tax growth that translates into 0 to 100 basis points of same community NOI growth. Importantly — and again, we recognize there are a lot of moving pieces here — for illustrative purposes we have also provided an annual bridge running from our 2025 FFO per unit actuals to the midpoint of our 2026 FFO per unit guidance. The main point to take away is that, despite an uncertain macro backdrop, we expect our core real estate business to stay healthy, contributing $0.03 per unit, or 3.5% growth, to the business versus 2025. Unfortunately, at present we anticipate that this growth will be more than fully offset by a higher net interest impact, as revenue continues to build from our lease-up activity, together with marginal additional overhead costs. Keep in mind that we plan to publish this bridge only once each year, alongside the initiation of our guidance.

Naturally, we'll revise these projections during the year whenever necessary. At this point I'll hand things back over to Dan so he can offer his closing comments.

Thanks, Tom. In straightforward terms for 2025, we took on the effect of about $1 billion in total rotations, and that hit was visible in our per unit figures. That period is behind us now. I'd like to restate that the real growth potential we pointed to in December is still in front of us. Our strategy and outlook haven't changed. Here's why we believe these figures point to an inflection point. To repeat, Aura 3550 finished the year at 92% occupied, up from the low 20s at the start of the year. The Owensby is leasing up in 2026. Our two Houston acquisitions, though reasonably occupied at purchase, will stabilize and contribute more fully in the back half of 2026. A full year of physical stabilization across all four assets flows straight into cash flow in a way that 2025 simply couldn't capture. That by itself produces meaningful year-over-year improvement before we receive any credit from the market. We aren't sitting back waiting on the market. There are two growth levers we control that don't depend on where new lease rates land. First, occupancy revenue from lease up and stabilization at our 2025 acquisitions are all on track to reach physical stabilization by year end. Second, the internalization of certain real estate adjacent business functions.

To give you a current snapshot, 6 of the 26 properties in our portfolio are now live under the bulk internet program. Talks are actively underway with providers regarding the other 20, and we anticipate kicking off deployment in the relatively near term. Eighteen months back, this revenue stream was nonexistent for us, and consistent with what we shared in December, we anticipate incremental earnings of as much as $0.08 per unit, stabilizing by early 2028. On their own, these efforts will push growth beyond whatever level the market eventually concludes is achievable through market rents. On that topic of market rents, the 24-month macro backdrop in our Texas market now favors us compared with the prior 24 months. The wave of supply that weighed on new lease rates starting in mid-2023 is being absorbed, and the pipeline ahead is thin. Over the past couple of years, there has been considerable attention on the supply picture, and justifiably so. It can mask the ongoing population and economic expansion that far outpaces the national average, along with the strong absorption still taking place. Demand has never been the questionable part of this equation. Supply has always been the story, and that story is now shifting.

In closing, the quality of our portfolio is better than it has ever been, by a wide margin. The bottom point is now behind us. We're in the middle of the lease-up ramp, and we have incremental forward growth initiatives underway that are entirely within our control. We're pleased with our position. Before we take questions, I'd like to recognize two board transitions. At the beginning of January, W. Daniel Hughes, Jr. retired from the board. W. Daniel Hughes, Jr. co-founded BSR's predecessor company and was an integral part of the BSR team for nearly three decades. He is a personal mentor of mine, and I cannot overstate what he has contributed to our business. Yesterday, we announced that Bryan H. Held will step down at the upcoming annual meeting. Bryan has served as a trustee since the REIT was formed in 2018. Known for his high ethical standards, he was instrumental in leading our audit committee and, most recently, our governance committee. Bryan has been an invaluable member of our team, and we are grateful to both Bryan and Daniel for their contributions. In their places, we welcome Mark Decker, who joined the board in January to replace Daniel. Mark is the President, CEO, and Director of Kiron Real Estate and previously led Centerspace, a fellow U.S.

This is a multifamily REIT. During the annual meeting, the board—following what the CGNC recommended—has decided to put Corinne McIndoe forward as Bryan's replacement. Corinne brings 30 years of experience, mainly in real estate and capital markets, and that includes serving as a trustee on multiple REITs. Mark and Corinne both offer abilities and background that will greatly strengthen our team. That brings our prepared remarks this morning to a close. Tom, Susie, and I would be glad to take your questions now. Jim, please open the line for questions.

Absolutely. Thanks. For those of you on the phone joining us right now, we're set to take your questions. As a reminder, please hit star and one on your telephone keypad to signal for a question, and I'll open your lines one at a time. Again, ladies and gentlemen, that's star and one on your telephone keypad. Our first question today comes from Brad Sturges at Raymond James.

Hello everyone, thank you for taking my question. Perhaps I could begin with the 2026 guidance, and I truly appreciate the detail you provided in building up to the midpoint. I'm just curious about the underlying assumptions — could you elaborate a bit more on what you anticipate, perhaps across a wider range, regarding leasing spreads and occupancy as part of the revenue guidance you gave there?

Yeah, Brad — Tom here. On the top line, like we've consistently mentioned regarding occupancy, we consider a healthy level to be roughly 94%-96%. Our guidance takes, say, the midpoint of that range from an occupancy standpoint. On the rate side, I'd put it this way: we expect rates to be flat to up 1%. So again, let's say the midpoint there lands in the 50 basis points range, broadly speaking.

Could you share some perspective on leasing concessions — what sort of impact that would imply inside the guidance, perhaps expressed as a share of revenue or framed in whatever manner you prefer?

Brad, just to reiterate, the revenue we report is net effective — meaning it's already net of every concession. So as we work through guidance, we really don't even need to form a view on concessions. Guidance is on a net effective basis, and whether that comes via a six-week concession or a zero-week concession, we're steering toward a revenue figure. So I can't give you a great answer on that point, but that's genuinely how we think about the business.

Yeah, got it. I suppose my other question is this: part of not just the plan going forward for 2026, but also for the following three years, involves the ancillary revenue opportunity. How much of that would be included in 2026, and how should we think about the ramp-up there?

Okay, Brad, thanks. So for 2026, roughly $400,000 is included, and that relates to the five properties that went live with bulk internet at the end of this year, or at the end of 2025. Keep in mind that this is part of the buildup. Once things are stabilized, once you reach 2028, those 5 properties ought to be contributing around $1.1 million. We still have 20 properties remaining, and implementation on those will begin in 2026. They won't add to NOI in 2026, but the ramp-ups will be underway by 2027. Those are expected to add another $2.5 million in 2027, and then finish the ramp-up at $2.8 million in 2028.

I just want to clarify something: as you bring properties online through that program, might there be some near-term margin impact, since the expense could sort of come ahead of the revenue stream, so to speak? In other words, would you see somewhat more upfront cost first, and then the revenue comes online? Or how should we think about that?

You've got the right frame on this, Brad. As we laid out in December, under the internet model we use today, we gather what you could call participation fees through the internet service provider. Once we take control of that, those participation fees clearly disappear. There's a short-term lease-up period inside the bulk internet program as connections come online, the rent roll turns over, and we add more tenants to the program. Margin takes a temporary hit while that lease-up plays out, but down the road the offset will be more than enough. That's what makes this a very justified investment call, especially when you look at it from a margin standpoint, once tenants occupy the program even marginally, if you will, not to mention when it's fully stabilized.

For those five, the figure comes to roughly $150,000 in the current year.

All right, thanks for that. I'll hand it back over. Thank you.

Sairam Srinivas from ATB Capital Markets will be asking the next question today.

Thanks, operator. Morning, everyone. Dan, you brought up new lease rates coming in below what we’d expected. As you look at Q4 2025 and compare that with an earlier winter quarter—say Q4 2024—how have our expectations changed? Was it worse than typical seasonality, or is that generally consistent with what we’d expect for a slower winter quarter?

Sure. I’ll give the broad response first, and then I’ll have Susie address the specifics. There has consistently been a degree of seasonality, Sai, in the Q4 figures. At a very high level, I simply expect that we will lease 50% as many units in Q4 as in any other quarter. Consequently, we also have 50% as many move-outs. It’s just that people aren’t moving in December, if that makes sense, Sai. As an operator, you really concentrate on the lease-up season, and I’ll say the bookends between the start and the end of summer. That’s where we have historically observed performance. Susie, is there anything else you’d like to add?

Sure, that's completely true. Dan makes a very fair point. When the weather is cold we end up signing fewer leases, and activity always rebounds once spring arrives. Typically, Q2 and Q3 are our strongest periods. I'd also like to highlight that Q4 is improving on a year-over-year basis. On a same-store basis last year, our blended figure for Q4 was roughly negative 3.4%, and for Q4 2025 that has improved to negative 1.3%. Renewals came in positive at 1.6% in 2024, and in Q4 of 2025 they are positive at 2.2%. New leases stood at negative 8.4% in Q4 of 2024, and they are now negative 6.3%. As you can see, we are closing that gap right now.

Susie, that’s a genuinely good observation. So perhaps returning to volumes, have they remained steady quarter over quarter too, or has the volume picture improved when you look at how many move-outs and move-ins there are?

The number of leases we're signing is roughly flat from one quarter to the next. In Q4 it comes to around 1,000, which is comparable to a year ago, and then once more that figure begins to double in the spring and summer months.

All right, that’s clear. Perhaps to follow up on that point—as you observed during January and February—what has leasing momentum looked like so far in Q1, and how does it seem to be taking shape as we move toward spring?

Okay. Yeah, you know, February got better, and we expect that to keep getting better. In our minds, though, our guidance points to things turning more positive at the end of March and early April.

Thanks for that useful context, Susie. Perhaps this will be the final question for you, then. You noted that one objective involves bringing down the cost of capital as we head into the coming year. Which levers can you actually pull to make that happen, and how are you weighing that against the upcoming REIT swap redemption?

Sai, apologies — your audio was dropping out. What you're asking, I think, is whether the guidance takes into account any swap resets happening in the near term?

Right, and in addition to that, sort of returning to what you mentioned about bringing down the cost of capital — have you tied that together with the swaps that are scheduled to terminate out there?

Yes. Regarding the swap book, you noticed that in the subsequent events we executed a few trades early this year. Two trades were completed — one extended a term, and the other added a new trade to handle some floating rate maturities we took on at the start of the year. Those came in at 3.13% and 3.19%. We currently have a possible slate of maturities at mid-year in July, and we are actively marketing or managing that daily and reviewing our alternatives to lock in our rate there past July, assuming we get placed into the trade. Either way, today's market sits right between the goalposts of what we did earlier this year, somewhere between 3.1% and 3.25%, so right in the middle there. That is our assumption baked into the guidance from a cost of capital perspective. I don't believe there are any other material fluctuations in our cost of capital that we're factoring into our guidance at this point.

Tom, that's really helpful context. Appreciate it — I'll hand things back over now.

We'll now take a question from Kyle Stanley of Desjardins.

Thanks. Good morning, everybody. Perhaps we could start by examining a few of those realty tax items in Q4 that are more one-time in nature. Could you walk us through a bit of what those involved and maybe, you know, how that carries into 2026? For instance, do you see any possible opportunities that could present for your numbers in 2026?

Absolutely, Kyle. On real estate taxes, Q4 affected us in a few ways, so let me give you some detail. To start, we received no tax refunds at all in Q4. As an illustration, during Q3 we received roughly $730,000 in tax refunds. Across the full year, tax refunds came to $2.1 million, and once more, nothing in Q4. Q1, Q2 and Q3 all benefited from tax refunds, while Q4 simply absorbs the impact of receiving none. Meanwhile, on the other side, real estate tax expense—as everyone is aware—gets accrued over the course of the year, and we true it up once better information becomes available. In Q4, that true-up was mostly tied to assets acquired during the year, where the greatest uncertainty exists around what an appraiser would initially tell us versus what their original position would be versus what we believe market comps actually reflect. That was an adverse item: when those initial appraisals arrived in Q4, they came in somewhat higher than we would have estimated.

From what we've seen, we're optimistic about receiving appeal proceeds during 2026, yet because there's no technical accounting basis allowing us to recognize them, we recorded those true-ups in Q4. Real estate taxes in Q4 were affected by that as well. And lastly, it's important to mention that we received quite a few refunds near the close of Q3 last year, and we engage a legal expert for that work. So certain legal fees also rose in Q4, and that simply reflected the invoice we got for those services. So there's somewhat of a timing quirk here. Every so often this occurs, where the refund, so to speak, doesn't line up with the cost of securing it. So that's somewhat transitory by nature. As we look toward 2026, our guidance noted that property operating expense along with real estate taxes will rise in a range of 100 to 200 basis points. Real estate taxes account for part of that, certainly. For real estate tax expense, we anticipate it being, say, flat, or perhaps even down 1%, since mill rates truly are unchanged, and we're confident in our capacity to secure the appropriate appraisal levels.

Even so, with everything we've accomplished on refunds, our expectation is that they'll come in at roughly half of what we received in 2025, or thereabouts. In turn, that same dynamic will push real estate taxes up by 5%. The main reason our same-store operating expense guidance is heading upward really comes down to taxes.

All right, no, I believe that holds up. What you said there about being fairly confident regarding success on the appeal side, particularly for the assets acquired in 2025, but simply not yet having a leg to stand on — would that, you know, success on the appeal side, would it already be baked into your guidance at this point?

It's a bit of both, honestly. We base our projections on our assumptions about refunds and on what we can realistically underwrite, working alongside our third-party experts and drawing on our experience. Part of that is definitely baked into today's guidance, though perhaps not all of it. That's still to be determined. It sort of hinges on how appraisals play out in the courts, so it's tough to pin down, and we aim to be reasonable there.

All right, understood. Perhaps we could shift to the assets you're leasing up. Previously, you've noted, of course, that when stabilization gets close, an NOI margin gain is probably going to appear. I'd like to know whether you could share or discuss perhaps what the NOI margin is at Aura 3550, since it's, as you know, pretty much at or very near stabilization, and where that stands now compared with where Owensby might be, simply to give us a sense of how that could develop as time goes on.

Kyle, that figure isn't right here with me, so I'd rather not give you an inaccurate quote. I'll get back to you about it. It's simply not in front of me at the moment.

All right, that's fair. I'll take just this final one. Clearly, the three-year outlook that was given through 2028 at the Investor Day — just, I suppose, your big-picture thinking on it — still holds intact. How do you expect that to perhaps feed through your results across those three years? Obviously, with guidance of CAD 0.77 for 2026, I think we see a modest step down compared with 2025. But after that, how do you see the ramp in 2027 and 2028, if you're able to walk through that?

Yeah, Kyle, it's Dan here. I believe Susie might have covered part of this already. You know, if you look at bulk internet, right? I think there's a penny in 26 for bulk internet, right? I think 6 sits in 27, and I think there's one more penny in Q1 of 28, right? That's how I'd frame it if I were comparing and contrasting the bulk internet and Valet trash initiatives we talked about in December. On the occupancy side, I think as of December, we had 250, or as of that LQA, we had 250 apartments to lease. I think at year-end, we had 188 apartments to lease at year-end 2025. Naturally, our expectation is that we'll lease all 188 over the course of this year, right? We're still not ready to discuss the margin on that, because the first of those 188 will carry a much lower margin than the last of those 188, right? That's where the problem comes in when you get to the lagging impact of lease-up financials. While the properties will be occupied this year, I think that's a first step.

I believe you'll observe the complete benefit carrying through all the way into 2027. That acceleration will show up quarter-over-quarter on a sequential basis, powered by gains in occupancy. In 2027 the team gets another bite at the apple, when you're fully occupied — what we refer to as stabilization. You're at full occupancy, and those residents might have been brought into the market with concessions of 4% or 8%. That equates to 2 weeks or 1 month. Come 2027, you're renewing those leases at higher rates. Perhaps you won't capture the entire concession, correct? Even so, you'll pick up some advantage from that renewal as markets ramp up and reset. Now, from where I sit, that 2027 — or the December 2027 investment presentation — that's. We remain right on track, I mean, toward earning that money. What I think frustrates our investors, and I sympathize with them, is that the character of these investments — purchasing lease-up assets, making initial investments in bulk internet — is that they don't appear tomorrow, you know? They appear across the course of year one, and we're seeing them appear. As a public company, you begin to notice that lagging effect once lease-ups truly materialize, once that final unit is leased at a 100 margin, right?

There's another opportunity for you in 2027, when you'll see growth speed up as concessions get compressed on renewal.

Alright.

Kyle, count me fully committed. That ends up being a choppy 15, correct? I would prefer — how does that saying go? A choppy 15 beats a smooth 10 in my book.

That seems correct. All right, many thanks. I'll hand it back over.

Dean Wilkinson from CIBC, the next question comes from you.