Transcript

Watch the Industrial REIT – Fund President Q1 2023 Update

Ray Punn: [00:00:25] We’re pleased to provide you with Skyline Industrial REIT‘s performance update for quarter one, 2023. Joining me here today is Mike Bonneveld. He is the President of Skyline Industrial REIT. Mike, thanks for joining me today.

Mike Bonneveld: [00:00:36] No worries, Ray.

Ray Punn: [00:00:37] Mike, can you walk us through the Industrial REIT’s financial summary and provide some insights for the last quarter?

Mike Bonneveld: [00:00:42] Absolutely. Real quickly, NOI for the quarter is up to $19.3 million versus $18.775 in Q4. Occupancy is up marginally because we’re already at a very high level, up to 98.3% from 98.1%. That’s really primarily due to the disposition of our last office property in Ottawa. We completed two refinancings in Southwestern Ontario with an average interest rate of 5.1%. Average rent in place has improved to $8.30 per square foot, up from $8.01. So, a nice little gain there. Leasing continues to be strong across all markets. Good, interest on spaces that are coming available, although there are very, very few of those that actually do come available these days, which is also good. And we also completed two dispositions that were in process for about four or five months. Some were a little slower to progress than we had hoped, but we finally got those across the line. Again, the sale of 380 Hunt Club in Ottawa and another property on the south part of Montreal for total gross proceeds of $15.8 million.

Ray Punn: [00:02:06] Thanks for sharing that, Mike. With the current economic conditions, how is that going to impact the Fund for the rest of the year and going into 2024?

Mike Bonneveld: [00:02:13] Sure. When we’re looking at the balance of the year, really the next three to six months, given the REIT’s very strong balance sheet, should provide us opportunities where other groups are a little more capital constrained. So, being able to take advantage of a little bit of capital displacement right now in the industrial investment market. The good news of rates being where they are right now, as well as that little bit of uncertainty, reduces the amount of new construction that might have come to market in the markets where our portfolio is. So, that’s going to mitigate additional supply that may have been brought in, which again helps us from a from a leasing standpoint and a demand standpoint. I would say lastly, lenders both on refinancing and on new acquisitions and construction, while they are being conservative and are looking closely at where they’re lending money, they really focus in these times on their core larger borrowers such as Skyline Industrial REIT, and look to put capital in groups that they have a lot of trust in. So, while we see the banks focusing on that, we also believe that we’re going to be a beneficiary of that, and have access to capital.

Ray Punn: [00:03:42] Well, thanks, Mike, for joining me and providing an update on the industrial Fund.

Mike Bonneveld: [00:03:45] No problem.

Ray Punn: [00:03:46] Thanks again for watching.

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