Artis Real Estate Investment Trust Q2 2019 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jonathan Kelcher - TD Securities Equity Research - Analyst : First question. It looks like you had about $800,000 of lease termination in there in the quarter. What did that relate to?

Question: Jonathan Kelcher - TD Securities Equity Research - Analyst : That's good. And then on the $93 million that you transferred from developments in the quarter, how much NOI did that add this quarter?

Question: Jonathan Kelcher - TD Securities Equity Research - Analyst : And is that a good run rate? Were they all transferred at the beginning of the quarter?

Question: Jonathan Kelcher - TD Securities Equity Research - Analyst : Okay. So that should go up in Q3 then?

Question: Jonathan Kelcher - TD Securities Equity Research - Analyst : Okay. And then just lastly, it looks like you've slowed down the share buybacks post Q2. Can you maybe give us our thought -- your thoughts on how you're looking at that right now? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 01, 2019 / 9:30PM, AX_u.TO - Q2 2019 Artis Real Estate Investment Trust Earnings Call

Question: Matt Logan - RBC Capital Markets, Research Division - Analyst : After a strong same-property NOI growth print this quarter, how should we be thinking about growth on a currency-neutral basis over the next 12 months?

Question: Matt Logan - RBC Capital Markets, Research Division - Analyst : And on your sale process, with the pullback in bond yields over the last 6 months, has that had any impact on pricing or investor demand for your assets?

Question: Matt Logan - RBC Capital Markets, Research Division - Analyst : And maybe looking forward in terms of your development pipeline. Obviously, this quarter was probably a little bit stronger than the average quarter, but how should we be thinking about deliveries over the next year or so? Like, is there any color you can provide on the longer-term pipeline? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 01, 2019 / 9:30PM, AX_u.TO - Q2 2019 Artis Real Estate Investment Trust Earnings Call

Question: Jenny Ma - BMO Capital Markets Equity Research - Analyst : Just wondering if you can give us any update or color on what the Special Committee has been up to and whether or not you've been fielding a lot of incoming calls or had conversations about maybe different strategies of how you want to take the REIT?

Question: Jenny Ma - BMO Capital Markets Equity Research - Analyst : So presumably, they've met a few times since the announcement.

Question: Jenny Ma - BMO Capital Markets Equity Research - Analyst : Okay. All right. And then with regards to the asset sales, have you gotten a lot of incoming calls in terms of not just selling the one-off assets but maybe on a portfolio basis? Just trying to get a sense of, there's no secret with the attractiveness of industrial, whether or not you've fielded calls for that segment or other segments of your portfolio. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 01, 2019 / 9:30PM, AX_u.TO - Q2 2019 Artis Real Estate Investment Trust Earnings Call

Question: Jenny Ma - BMO Capital Markets Equity Research - Analyst : Okay. Actually, on the topic of Calgary office, it's small, but I'm just curious as to why you bought Centre 70? I guess it cleans up the structure, but is there something compelling about that asset that you wanted to own? Or what was behind that acquisition?

Question: Jenny Ma - BMO Capital Markets Equity Research - Analyst : Are there any major rolls in that property? Or is at 94% pretty stable?

Question: Jenny Ma - BMO Capital Markets Equity Research - Analyst : Okay. Okay, and then last question is whether or not you have any update on some progress at 415 Yonge in terms of moving forward, potential for development or selling off of that density. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 01, 2019 / 9:30PM, AX_u.TO - Q2 2019 Artis Real Estate Investment Trust Earnings Call

Question: Jenny Ma - BMO Capital Markets Equity Research - Analyst : In Q3?

Question: Jenny Ma - BMO Capital Markets Equity Research - Analyst : Firmed up. So perhaps an update for Q3.

Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst : The target dispositions for this year, I mean, you mentioned $600 million, so it's fairly consistent with the guidance that you expressed last quarter. It seems like that process is moving along nicely. When you look at the fair value loss that you incurred on the assets sold during Q2, was there anything in particular with respect to those assets that would have driven that loss?

Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. So the vacancy at one of the buildings was unexpected?

Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. And then -- I appreciate the commentary on the NCIB. There's some pretty good progress there. I think during the last call, you kind of briefly touched on the potential from SIB, and I appreciate that the leverage has ticked up a little bit, a little bit toward the upper end of where you want it to be. But once -- it seems like the disposition program is going fairly well. How do you think about a potential SIB in the second half of this year today versus 3 months ago?

Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst : Got it, okay. And then just separately, I noted an acquisition -- or an unconditional purchase agreement on Page 12 of your MD&A in Minnesota. Is that a land purchase? Or is that a purchase of a building? Just provide a bit of color in terms of what you're buying there. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 01, 2019 / 9:30PM, AX_u.TO - Q2 2019 Artis Real Estate Investment Trust Earnings Call

Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst : Got it, okay. And what kind of cap rate are you getting on it?