Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BTB Real Estate Investment Trust (BTBIF, Financial) achieved a record committed occupancy rate of 94.6% for the quarter.
- The company successfully leased and renewed approximately 257,000 square feet across its portfolio, with a significant portion coming from the suburban office segment.
- BTB Real Estate Investment Trust (BTBIF) reported a 6.6% increase in lease renewal rates for the first half of the year.
- The industrial segment's same property net operating income (SPNOI) increased by 7.3% compared to the same period last year.
- The company is actively pursuing densification opportunities and has signed a lease for a new development project in Levis, Quebec, which is expected to enhance property valuation.
Negative Points
- Adjusted funds from operations (FFO) per unit decreased by $0.014 compared to the same quarter last year, primarily due to increased interest and administrative expenses.
- Net operating income decreased by 0.5% compared to the same quarter last year, partly due to tenant bankruptcies.
- The company faces a new leasing challenge with a 133,000 square foot vacancy in its industrial segment due to a tenant bankruptcy.
- BTB Real Estate Investment Trust (BTBIF) is exploring refinancing options for its convertible debentures, which could impact financial flexibility.
- The suburban office and necessity-based retail segments experienced decreases in same property net operating income (SPNOI) due to tenant bankruptcies and lease inducements.
Q & A Highlights
Q: Can you provide an update on the potential proceeds from the sale of the three office properties currently on the market?
A: Michel Leonard, President and CEO, stated that the expected proceeds from the disposition of these properties are between $50 million to $60 million.
Q: What are your plans for refinancing the convertible debentures, and are you leaning towards any specific option?
A: Marc-Andre Lefebvre, CFO, mentioned that all options are on the table, including refinancing with a new convertible or adding second tranches on existing mortgages to repay the convertible bond.
Q: Regarding the industrial bankruptcy, what was the in-place rent, and what are the expectations for re-leasing the property?
A: Michel Leonard explained that the in-place rent was $7 per square foot, and they are currently marketing the property with an expected lease rate between $11 to $13 net, which could potentially increase the property's value.
Q: How are you planning to handle the debenture maturity, and what is your preferred approach?
A: Michel Leonard expressed a preference for up-financing on some properties to cover the $24 million debenture maturity, as it would be more cost-effective than issuing a new debenture.
Q: What are your expectations for the remaining office leases maturing this year?
A: Michel Leonard is confident in achieving a high lease renewal rate, having already renewed 80% of leases this quarter, including those maturing in 2025 and 2026.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
