Artis Real Estate Investment Trust Q2 2023 Earnings Call Transcript

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

Question: Jonathan Kelcher - TD Securities Equity Research - Analyst : I guess the first question will just be about the strategic review and hopefully, it's one that you can answer. But in setting up the committee, is the Board or the committee looking at hiring external advisers to help with the strategic review?

Question: Jonathan Kelcher - TD Securities Equity Research - Analyst : Okay. Okay. Short and sweet. And then as this goes on, any changes or slowdowns? And I think you kind of addressed this in your opening remarks, Samir, but any changes to what you guys are currently doing with the business transformation plan or is it sort of continue as is?

Question: Jonathan Kelcher - TD Securities Equity Research - Analyst : Okay. That's helpful. And then just on the Cominar platform, you talked about dispositions. How would the pricing compare to what you guys mark those assets at when you first put them on your books?

Question: Matt Kornack - National Bank Financial, Inc., Research Division - Analyst : Just with regards to the dispositions that you completed in Q2, can you give us a sense as to where they would have been sold relative to IFRS? And I think they were retail and industrial assets, so just a sense on maybe pricing in those 2 segments and investor demand. 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 03, 2023 / 5:00PM, AX_u.TO - Q2 2023 Artis Real Estate Investment Trust Earnings Call

Question: Matt Kornack - National Bank Financial, Inc., Research Division - Analyst : Okay. And then I guess with regards to your commentary around the capital allocation side on the repayment of your unsecured debenture, but keeping the prefs outstanding, can you give us a sense as to what the prefs would reset to pricing-wise at this point?

Question: Khing Shan - RBC Capital Markets, Research Division - Analyst : Just for modeling purposes, so that $280 million of asset sales, you said it was around a mid-5s and it's probably in your MD&A somewhere, what will be the timing of that -- of those sales kind of throughout the quarter and also the timing of the pay down of your credit facility during the quarter?

Question: Khing Shan - RBC Capital Markets, Research Division - Analyst : Yes. And the mid-5 was in reference to the $280 million, right?

Question: Khing Shan - RBC Capital Markets, Research Division - Analyst : Okay. Also on the mortgage maturities, I'm assuming you went through it. I didn't quite catch it all, but $332 million coming due, 40% you got term sheets and sort of like what rate are you seeing? And then I think it's something like 17% paid down, and then I couldn't get what were the remainder?

Question: Khing Shan - RBC Capital Markets, Research Division - Analyst : Okay. And the rate on the extension would be at that 6.5% to 7% rate as well?

Question: Khing Shan - RBC Capital Markets, Research Division - Analyst : Okay. And then just lastly, on the liquidity side, I think you do have some unencumbered asset, $1.7 billion. Maybe can you remind me like why you're not putting new mortgages on those to pay down the facility? Is it you're not going to get much savings or are those earmarked for sale? Maybe some color around why you're not tapping that, those unencumbered assets?

Question: Khing Shan - RBC Capital Markets, Research Division - Analyst : Okay. Makes sense.

Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst : Just a couple of questions on the dispositions during the quarter. The first one is the clarification in terms of selling at IFRS (inaudible) wanted to ensure that the IFRS (inaudible).

Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst : And then the dispositions that were completed, were all of them in the planned disposition or something?

Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst : And then Samir, I think last quarter you mentioned (inaudible) in the unsolicited bid pipeline of (inaudible) million to $100 million of assets. What is a sense of where that stands today and whether (inaudible)?

Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst : Last quarter, as Samir mentioned an unsolicited bid pipeline of between (inaudible) million to $100 million. So these (inaudible) assets that weren't (inaudible) guidance in terms of potential dispositions. I just wanted to get a better understanding of where that pipeline stands today in quantum and how things have (inaudible).

Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. Next question, just with respect to the maturing mortgages this year. Can you give us a sense of what the average IFRS NAV cap rate is on the assets that have those mortgages?

Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. And my last question just with respect to the strategic review. You've highlighted the material discount to NAV that the stock is trading at. How do you think about any attribution of that discount to kind of the diversified nature of the portfolio? Do you think that's part of the discount or not?

Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst : I don't know if you can answer this, but is it your sense that there's enough scale in each of the asset classes to exist on a stand-alone basis?

Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst : Sure, Samir. So my question was, is it your sense that there is enough scale in each of the asset classes to operate as a stand-alone vehicle?

Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. Sorry, my last question. In the private market today, we've heard that private capital is predominantly higher in the market. Do you sense that attempting to sell portfolios of assets or several assets put together, you sense there's a premium being attached to that? Or is this -- or does it not matter, individual assets versus groups of assets? 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 03, 2023 / 5:00PM, AX_u.TO - Q2 2023 Artis Real Estate Investment Trust Earnings Call