Artis Real Estate Investment Trust Q4 2020 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 is just on, I guess, near-term capital allocation. I guess we'll get a longer-term view when you put out the 100-day or the plan within the 100 days in the next couple of weeks or so. But near term, I was a little surprised to see you guys repurchase shares in the fourth quarter. Can you maybe give us your thought process behind doing so?

Question: Jonathan Kelcher - TD Securities Equity Research - Analyst : Okay. And then I guess, just keeping along the same lines, I was also a little surprised, and this was a subsequent event that you guys put leverage on 3 unencumbered retail assets. I would have thought that you were looking to sell retail assets.

Question: Jonathan Kelcher - TD Securities Equity Research - Analyst : Okay. So should we -- can we read anything into that with your future outlook? And I guess -- and the last thing there with selling the industrial asset post the quarter?

Question: Jonathan Kelcher - TD Securities Equity Research - Analyst : Okay. So was it like an unsolicited bid and then you guys started a process? Or did you just -- did you decide to sell it and start a process?

Question: Matt Logan - RBC Capital Markets, Research Division - Analyst : Wondering, Samir, if you could give us a few of your high-level thoughts on your first couple of months on the job. Just what you've learned and how your views have changed about Artis as a business, if at all?

Question: Matt Logan - RBC Capital Markets, Research Division - Analyst : Appreciate the color. And maybe just clarifying your earlier comments saying that the IFRS values don't always align with fair market values. Would that mean that you expect to sell assets on average in line with your IFRS NAV? Or would that be maybe the office and retail assets might be sold a bit lower and the industrial assets might be sold a bit higher? How should we think about that? And any comments would be appreciated.

Question: Matt Logan - RBC Capital Markets, Research Division - Analyst : And maybe just following up on some comments from the prior management team last quarter who noted that they were still in discussions with potential purchase orders for Artis for the entire business. Would that still be the case following the reconstitution of the Board?

Question: Matt Logan - RBC Capital Markets, Research Division - Analyst : So no plans for sale at the moment, but we'll hear more on the future of Artis in a few weeks. Would it be fair to say that those potential purchasers would still be interested? You're simply taking a bit of a step back to reassess at the moment?

Question: Matt Logan - RBC Capital Markets, Research Division - Analyst : Have you received any inbound since you've taken or reconstituted the Board?

Question: Jenny Ma - BMO Capital Markets Equity Research - Analyst : Samir, I wanted to get your thoughts on the distribution. We've seen some high-profile distribution cuts in the very recent past. And I know earlier in the fall, there was a view of raising the distribution by a little bit on the back of some lower G&A costs. So just net-net, how are you feeling about the distribution? And excuse me, if I'm getting ahead of 100-day review results. But when you look at what other REITs have done and when you look at where the other diversified REITs are trading at in terms of yield, how's your philosophy or approach to this distribution change in light of the past few months?

Question: Jenny Ma - BMO Capital Markets Equity Research - Analyst : Okay. I guess we'll wait. I wanted to ask about office leasing and the outlook. On your part, you can see what's happening in the Canada and the U.S., and there's been a lot of talk about the rise or the revival of suburban office space. And I'm just wondering if you could talk to us about if you're seeing any differences in the approach to any sort of moved suburban office between Canada and the U.S.? And if there's differences across the borders? Or just basically any color you could share with us.

Question: Jenny Ma - BMO Capital Markets Equity Research - Analyst : So I guess in Phoenix's case, is that a slight from downtown? Or is that just an increase in demand that would have been targeted towards suburban anyway?

Question: Jenny Ma - BMO Capital Markets Equity Research - Analyst : That's interesting. And then my final question relates to the floating rate debt proportion. A question for Jim. You've always maintained that proportion sort of in that high-teen to low 20% range. You see a little bit of a downtick in Q4. But just in light of the backup in yields that we've REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 03, 2021 / 6:00PM, AX_u.TO - Q4 2020 Artis Real Estate Investment Trust Earnings Call seen over the very short term, has that changed your view on where rates are, it looks like definitely momentum on the move up. Do you intend to maintain that proportion of floating rate debt? Or have you been more active in locking in some of the historically level rates you've seen?

Question: Jenny Ma - BMO Capital Markets Equity Research - Analyst : So is it fair to say we might expect a continuation of the downtick in the first couple of quarters of the year on the floating rate debt?

Question: Matt Kornack - National Bank Financial, Inc., Research Division - Analyst : Just wanted to quickly get a sense on the development side. If you could provide any color on the outlays with regards to remaining cost to complete? And then how we should think of NOI coming in, particularly, on the residential assets in Winnipeg?

Question: Matt Kornack - National Bank Financial, Inc., Research Division - Analyst : Okay. And Jim, I don't know if you've disclosed this in the past, but what is the total cost of 300 Main and the yield anticipated on that cost?

Question: Matt Kornack - National Bank Financial, Inc., Research Division - Analyst : And when you say it's 50%, like is it being done in stages? Or is that just the lease-up anticipation like...

Question: Matt Kornack - National Bank Financial, Inc., Research Division - Analyst : Okay. No, that's great color. I appreciate that. Last 1 for me. I think in 2021, you have WorleyParsons maturing. Is there any status update on the negotiations for renewal of that lease?

Question: Matt Kornack - National Bank Financial, Inc., Research Division - Analyst : Okay. And any prospects at this point for re-leasing the space?