InterRent Real Estate Investment Trust

TSX:IIP.UN

Good morning, ladies and gentlemen, and welcome to the InterRent REIT Q1 2025 Earnings Webcast Conference Call. [Operator Instructions] This call is being recorded on Friday, May 16, 2025.

I would now like to turn the conference over to Renee Wei. Please go ahead.

Thanks, operator, and good morning, everyone. Thank you for joining InterRent REIT's Q1 2025 Earnings Call. My name is Renee Wei, Director of Investor Relations and Sustainability. You can find the presentation to accompany today's call on the Investors section of our website under Investor Presentations.

We're pleased to have Brad Cutsey, President and CEO; Curt Millar, CFO; and Dave Nevins, COO, on the line today. As usual, the team will present some prepared remarks, and then we'll open up to questions.

Before we begin, I want to remind listeners that certain statements about future events made on this conference call are forward-looking in nature. Any such information is subject to risks, uncertainties and assumptions that could cause actual results to differ materially. For more information, please refer to the cautionary statements on forward-looking information in the REIT's news release and MD&A dated May 15, 2025.

During the call, management will also refer to certain non-IFRS measures. Although the REIT believes these measures provide useful supplemental information about its financial performance, they are not recognized measures and do not have standardized meanings under IFRS. Please see the REIT's MD&A for additional information regarding non-IFRS financial measures, including reconciliations to the nearest IFRS measures.

Brad, over to you.

Thanks, Renee, and good morning, everyone. During the first quarter, we continue to see resilience in the rental market, even though broad macro and political uncertainties remain and short-term supply-demand dynamics continue to play out in certain margins.

Our high-quality portfolio performed well with occupancy holding steady at 96.8% for the total portfolio and improving by 10 basis points to 96.9% for the same-property portfolio. This reflect the proactive steps we took early on to position ourselves heading into the peak leasing season, which partially contributed to higher operating costs this quarter. We'll touch on that later in the call.

We also delivered consistent year-over-year AMR growth of 6.2% for the total portfolio and 5% for the same properties during the month of March.

Healthy occupancy and steady AMR gains drove another quarter of solid revenue growth. Total portfolio proportion of operating revenues grew by 1.7% year-over-year, though that growth was impacted by dispositions completed during the past 12 months, which only contributed partially or not at all to Q1 2025 top line. Year-over-year growth in same property was 4.7%. After a relatively mild winter in Q1 2024, this past winter was notably colder across the core markets. Average heating degree days across the portfolio were up 18% year-over-year, well above the 5-year average. Colder temperatures and heavier snowfall drove an increase in utility, snow removal and other weather-related expenses.

We also made the proactive decision to increase marketing spend and invest early in preparing our communities for the upcoming leasing season. These factors contributed to higher operating costs, which partially offset revenue gains and put pressure on NOI margins for the quarter. Same-property NOI margin dipped by 110 basis points from last year, but remained at a healthy 64.1% compared to Q1 levels in previous years. We are in a solid same-property NOI growth of 3.1% for the quarter. Despite the impact of dispositions, the resulting in a smaller portfolio, we delivered FFO of $21.8 million for the quarter, reflecting a 3.3% year-over-year improvement. And on a per unit basis, FFO was $0.15, and an increase of 4.2% from the same period last year.

On the last earnings call, we shared the next phase of our value-enhancing disposition strategy following our annual portfolio review, which is anticipated to generate net equity proceeds of $125 million to $140 million. We're progressing well. So far this year, we've already generated $39 million in net proceeds through 3 dispositions. We'll share more details on those later in the call.

The dispositions have not only strengthened the quality of our portfolio, but also allowed us to repurchase $4.8 million or 3.2% of our diluted outstanding units in Q1. Post Q1 and through end of April, we repurchased an additional 1.2% of our outstanding units, representing a 4.4% total reduction in our unit count. We executed the buyback to a significant discount to our IFRS NAV directly delivering value to our investors.

In addition, these proceeds further strengthened our balance sheet, increasing our interest coverage ratio to 2.6x, with total debt to gross book value standing at a healthy 40.9% and $236 million in available liquidity. We will continue to take a disciplined approach to capital recycling, always prioritizing the strength and flexibility of our balance sheet.

We will continue to build on a track record of prudent capital allocation with the lens of balancing near-term opportunities and long-term value creation. We view the current market environment as requiring a balanced approach, including opportunistic unit repurchases in a volatile public market environment and preserving liquidity for long-term capital strategies.

Now I'll let Dave take it from here to look at some of the operating highlights.

Thanks, Brad. We're seeing healthy fundamentals across our regions. Same-property AMR continued to grow at a solid 5% pace. Overall occupancy improved by 10 basis points year-over-year to 96.9%. It dipped slightly quarter-over-quarter by 20 basis points, but stayed above our long-term average with 10-year average typically at 96%.

We delivered the biggest year-over-year improvement in same-property occupancy in other Ontario with a 90 basis point increase alongside a healthy growth of 4.5% in AMR. On a quarter-over-quarter basis, the strongest occupancy gains were seen in Ottawa and Vancouver, each up 30 basis points and 10 basis points, respectively. Both regions also continue to post healthy AMR growth within the same-property portfolio.

We had a strong start to the season in Q1 as we geared up for the peak spring and summer leasing period. We executed 475 new leases during the quarter across the total portfolio, which was a 3% increase in leasing volume compared to the same period last year. We continue to capture embedded rental upside in our portfolio through turnover, albeit at a more measured pace this quarter. Since Q1 2023, we've seen outgoing rents grow at a compound annual rate of nearly 12%, while in-place AMR have increased by about 7%. This tells us the residents moving out are closer to market rent than in the past. At the same time, new residents achieved have continued to grow at a healthy compound annual rate of 5% over the last 2 years. As a result, our gain on lease has naturally come down to 8.5% this quarter from 20.3% a year ago. It's a trend we're seeing across the industry as portfolios become better aligned with market rents.

Trailing 12-month turnover remained steady at 24.1% and our portfolio mark-to-market gap declined to 23%, still representing significant embedded value across our portfolio. That speaks to the quality of our communities and the service we provide. It also reflects real embedded value that supports the long-term growth potential of our portfolio. As we ramp up for peak leasing season, we proactively stepped up our marketing efforts to get ahead of demand, stay competitive and ensure our suites stand out online. It's a focused effort to reach the right residents and keep leasing momentum strong.

At the same time, this winter brought more snow and ice than we've seen in recent years, driving up utility and other weather-related expenses. Heating degree days in Q1 were up 18% on average, including a 22% increase in Ottawa and 19% in both the GTHA and Other Ontario markets. On a per weighted average suite basis, utility costs have increased 18.1% from last year to $521 per suite, reflecting a combination of increased usage and higher rates. Together, these 2 factors pushed same-property operating expenses up by 6.3% year-over-year.

Slide 12 breaks down the increase in utility expense on a same-property basis. On the left-hand chart, you'll see that 67% of the increase came from natural gas, 23% from electricity and 15% from water. The water increase is largely tied to stronger occupancy and more residents in our suites, a trend the industry has seen over the last few quarters.

On the right-hand side of the slide, you'll see that 61% of the increase came from increased usage, driven by the 18% year-over-year increase in average heating degree days in our regions. Higher average rates accounted for 24% of the increase and 19% is related to the increase in carbon taxes on natural gas. On March 15, 2025, the federal government removed the consumer carbon tax effective April 1. Without the carbon tax, utilities expense for Q1 would have been $0.7 million lower. If utilities expense had been flat year-over-year, net operating margins for Q1 2025 would have been 65.6% compared to the reported margins of 64.1%. The removal of carbon tax is estimated to provide approximately $1 million in savings for the remainder of 2025.

Looking at Slide 13, we continue to invest in capital improvements to keep our portfolio well maintained and stay competitive. Maintenance CapEx remains in line with historical levels with the majority of our spending directed towards value-added initiatives to enhance our offerings and support long-term growth.

I'll now turn it over to Curt to provide an update on our balance sheet.

Thanks, Dave. We review and assess our internal cap rates and property valuations at each quarter. This process includes input from our internal acquisitions team, external appraisers and relevant market data.

Based on recent transactions in our markets, industry reports available at the end of the quarter and discussions with related parties, we kept cap rates unchanged this quarter and restated the cap rates in Ottawa as a result of disposition activities. Average cap rates for total investment properties remained consistent with year-end 2024 at 4.49%. This reflects an expansion of 32 basis points compared to a year ago and 67 basis points since the recent low in March of 2022. Our recent dispositions continue to validate our valuations, and we're keeping a close eye on the transaction market as part of our ongoing assessment process.

As we continue to execute on our capital recycling program and deploy capital towards our NCIB, leverage has increased slightly. However, this will normalize as we progress with our dispositions. Importantly, we are deploying that capital to repurchase units at a significant discount to our IFRS valuation, delivering immediate accretion to unitholders and demonstrating our conviction in the long-term value of our portfolio. As a result, our debt to GBV at quarter end increased by 60 basis points and remains at a healthy 40.9% at quarter end.

Financing costs continue to trend down, both in absolute terms and as a share of revenue. Proportionate financing costs came in at $14.6 million or 23.2% of operating revenue this quarter compared to $15.2 million or 24.5% of operating revenue a year ago. This was driven by a decline in our weighted average cost of mortgage debt to 3.31% from 3.37% just 3 months ago.

As you can see on this slide, we've continued to methodically stagger our mortgage maturities to manage risk and maintain stability in our cash flow. This ongoing work to optimize our financing structure continues to bear fruit, help us turn solid top line performance into strong earnings and bottom line results, even with the effects of recent dispositions.

Moving to Slide 18. Earlier this year, we wrapped up our comprehensive materiality assessment to better understand which sustainability topics matter most to our business and our stakeholders. This work is helping us focus on the areas that are financially material where we see real risk and opportunity. It also helps us take a more focused, practical approach with our sustainability efforts and you'll see that reflected in our upcoming sustainability report in the coming weeks.

On that note, I'll turn it over to Brad to discuss our asset allocation strategy and provide any closing remarks.

Thanks, Curt. We communicated Phase 1 of our disposition pipeline back in Q3 2023 with the target of $75 million in net equity proceeds. We completed that phase as of Q2 2024 with 4 community sales. These assets were sold at an aggregate price representing a 2% premium to the combined IFRS value, gathering total net proceeds of $97 million, exceeding our original target.

On our Q4 2024 call, we introduced the second phase of our disposition program, targeting $200 million to $250 million in sales and $125 million to $140 million in net equity proceeds. I'm pleased to report that we are well on track with 1 disposition completed in Q1 and 2 more set to close after the quarter. So far this year, we have completed or paid for more than $170 million in the asset sales, position us well to meet this full year target.

Due to our long-standing approach to disciplined capital recycling, we've redeployed this capital in the most accretive way at the moment, buying back our own units at a meaningful discount to their intrinsic value. Since December 31, 2024, we have actively purchased 6.7 million of our trust units or 4.4% of our diluted float at a meaningful discount to our IFRS net asset value, unlocking immediate tangible value for unitholders. The proceeds of our dispositions have also helped us strengthen our balance sheet by preserving the flexibility to do what we do best, adding the value across our portfolio.

Turning to Slide 23. As we continue to work through what we see as returning to a more normalized fundamentals in the immediate term, we remain confident in the long-term fundamentals of the Canadian rental housing sector. Despite the current wave of completion, the number of rental and condo suites under construction in our key markets is already about 5% lower than a year ago. Looking a bit further out, those tariffs declined about 30% year-over-year in Q1, setting the stage for a more balanced market and supporting a very robust outlook in the next couple of years.

At the same time, uncertainty from global trade tensions to broader economic volatility is affecting everyone. Many would be first-time homebuyer to differing ownership decisions, while affordability challenges continue to make renting the most affordable and accessible option for a growing share of the population. The multifamily sector continues to prove its resilience through all parts of the cycle, and we believe we're exceptionally well positioned with the strength of our operating platform and the quality of our assets given us clear competitive advantage.

At the macro level, Canada remains a resilient and attractive market relative to many global peers. The IMF recently projected Canada GDP growth to reach 1.6% in 2025, second only to the U.S. among the G7 nations. This outlook reinforces our long-term view and the strong fundamentals that support our sector.

In closing, we've built InterRent to perform through both the up and down economic cycles. With the right portfolio, the right people and the right strategy, we are confident to navigate this transitory period and come out stronger on the other side.

I'd like to thank everyone for your time and continued support. With that, we'll open it up for questions.

[Operator Instructions] Our first question comes from the line of Jonathan Kelcher at TD Cowen.

First question, just on the vacancy. I guess, historically, you guys have targeted 3% to 4% using the higher vacancy to really drive rents. But more recently, just given some softness in the market, you have been aiming for the lower end of that range. Are you seeing enough in the market now where you might start to take on some more vacancy in order to drive rents? Or are we not there yet?

I think it's early days to tell, Jonathan, why we remain pretty bullish on what we've seen so far. It's still early days within the prime leasing season. I thank where there is some supply coming on, we'll continue to take more of a stateful approach. And in the areas in which we feel comfortable that we can push the rents, we'll continue to do so.

Okay. Could you maybe break that down by market? I guess Vancouver has got some supply and like where would -- in what markets would you be more comfortable taking on a little bit more vacancy to push rents?

I think in the Ontario market in general is being pretty bullish. So I agree with the Vancouver comment, there has been supply come on. I think in Ontario, there's a couple of nodes, not necessarily regions in which we might take a little more stateful approach, call it, maybe Guelph and some Other Ontario. Outside of that, I think we will take a pretty balanced approach. But I think you can continue -- like we take comfort in the fact that we are operating kind of in that lower range of that vacancy, and we can adjust as we see fit as we kind of go through that leasing season.

Your next question comes from the line of Brad Sturges from Raymond James.

Just starting off, I guess, continuing on with the questions around leasing and just the turnover you're experiencing, as you highlighted, I guess, the leases are closer to market that you experienced in Q1 in terms of the turnover. Would you expect that trend to continue in the balance of the year? Or is there any data points that would suggest otherwise?

Yes. I think it's following the same trend from what we see so far. So it's pretty similar going forward right now.

Okay. maybe switching gears just to the asset disposition program. I think last quarter, you talked about $135 million of deals either closed or pending, $65 million of that's closed. So I guess on the remaining $70 million, kind of what stage is that in? Has there been any impact at all from some of the market uncertainty of late?

No. I mean, as you can see, we've kind of increased what's been tapered since last quarter. So everything is on target, and we're quite happy with how that disposition program is playing out. So there's nothing that has happened with the kind of noise surrounding the Trump tariffs and whatnot that's caused us to have any concern.

I guess transactions have been done in a few different markets. Do you continue to see that sort of more opportunistic across the portfolio? Or is there any areas you plan to be a little bit more targeted or focused?

Yes. No, I mean, our assets that we've earmarked for disposition haven't changed at all, Brad. We remain the same disciplined approach to earmarking which assets that we've earmarked for those dispositions. As we alluded to in previous calls, they are across the regions and there are assets which -- for different criteria reasons that we've earmarked and they have not changed. So you'll continue to see that kind of sprinkle through our 4 core regions.

Your next question comes from the line of Mario Saric from Scotiabank Bank.

I just wanted to stick on the revenue side. How did Q1 occupancy and occupied rent come in relative to internal expectations coming into the year?

I think it came in fairly well, Mario. I think we're really happy with how we performed in Q1. I think we showed being able to maintain stability and whatnot in what would be a little tougher environment has served quite well.

Okay. And then I think you're the only apartment REIT that saw an uptick in your new lease spread in Q1 versus Q4, albeit Q4 was a bit lower relative to the peers. I think Dave mentioned you're kind of seeing similar trends in Q2. I'm just wondering if you can maybe expand a little bit on whether you're seeing that new lease spread and occupancy thus far in Q2 continue to move up.

I will say, historically, Q2 versus Q1, you always see an increase in vacancy, and that's just the very seasonality and nature of the leasing season, at least in the market that we are. So you've got to be careful to kind of have to adjust through the normal seasonality of the leasing. Listen, we remain cautiously quite optimistic with this leasing season, quite honest. Coming into this, we weren't really sure what to expect, and I'm really proud of the team taking the approach that we have and making sure that our properties are ready for the leasing season.

We did spend a little more on the marketing spend to make sure that we were generating the lead so that given what demand was out there that we would capture it. I think the results show that we did capture them and capture them pretty good relative to the industry. And I see no reason why we shouldn't be able to continue on that trend. So as far as the lift on rents, I'm hopeful that we'll be able to kind of stabilize and keep the lift on rents in the mid- to high single digits.

Okay. And this is maybe a more difficult question to answer. But if you look through your portfolio, and we just focused on asking rents in the market. Broadly speaking, like what percentage of your portfolio would you say you're starting to see asking rents start to come up? And what percentage would be stable? And like what percentage of the portfolio would you say marking or asking rents are still coming down a little bit? And this is a broader perspective...

Yes, I'm not off the top, I can't necessarily give you in those percentage terms. What I will say is either way, either on the positive or on the negative, the variance to where our asking rents kind of have been where it's been trending, they're not significant moves. So we take comfort in that. Now that is what it is. It also means they're not significant moves on the upside. But where we are seeing a little bit of slippage, they're not significant at this point.

I think the biggest area where we may be seeing a little tougher market from an asking rent perspective is Vancouver, but Vancouver is less than 5% of our NOI. And I think that's more of a supply-based phenomenon. And I think once some of that supply is absorbed, you're going to see set up quite well for rent pressures to come back in that market. So we are actually quite cautiously optimistic with the markets that we're in right now.

Okay. So wrapping it all up, based on the commentary, how do you feel about the prior kind of 5% to 6% same-store revenue growth expectation for '25, given you came in, I think, closer to 5% in Q1? Is that still a reasonable range to think about?

Yes. I think it is. I think we're -- I think it is still a reasonable range. I think Q1 is always a wildcard, and we'll know more through -- as we kind of go through Q2 and Q3, but I think that's still very much a reasonable range.

Your next question comes from the line of Mike Markidis from BMO Capital Markets.

Very useful slides. A couple of questions just on how you're thinking about -- you mentioned the leasing spreads coming in. Do you expect turnover to slip? I mean if a lot of your turnover has been in the higher rent lapping sort of more recent market rents, I guess, or things that are closer to market rents. As that sort of starts to cycle through, are you thinking if your market rents don't slip that maybe your turnover starts to decline in the next sort of back half of '25 or into '26?

I'm not sure we're going to see overall turnover start to decline, Michael. I think we've been pretty stable here. And if anything, you might see -- given some of the immigration trends, you might actually see turnover up a little. But I think you did hit on a keynote. I think the -- you might see a little more turn people close on market, more transient and some of that temporary residents is part of that more transient, meaning they came in 2 years ago. So they're a little closer to the market.

But I will say there's always a natural life cycle within the existing tenant base that just had a natural turn. So you still do have a natural rate of turn of people that are at much lower rents that will help attribute to the lift on rents.

Okay. And just this may be semantics, but trying to understand the nuance. When you talk about just the flow of integration, do you mean an uptick in people leaving or an uptick in people coming in?

No, I think as temporary students finish their permits and they're not getting permanent residents...

Right. Okay. Got it. And then just with respect to -- I sense that you do give us a vacancy and rebates as a line item in the MD&A. But any color you can give us around sort of the use of incentives and how we should be thinking about that with respect to the 8.5% AMR growth -- or sorry, leasing spreads because I would imagine that's a gross, not a net figure, please?

I think we're using incentives in different areas where we want to capture some more occupancy while the leads are there to make sure that we're making full advantage of it. So we've been very, very careful in how we do it, and it's very strategic how we place it between -- from community to community. So just making sure that we're focused on keeping the occupancy levels where we're comfortable with.

Okay. And -- but do you expect that the level would be kind of higher moving forward in the next couple of quarters and, therefore, the amortization would pick up over the next few quarters? Or just trying to get a sense of how we should be thinking about the trend.

I think we're on a pretty good trend with where it is today, Mike. I don't see it necessarily increasing from today. Like I said, we're early in the prime leasing season. But like I said, we're pretty optimistic with what we've seen so far. So from a modeling perspective, I think you get at the run rate that you're looking at right now.

Your next question comes from the line of Jimmy Shan at RBC Capital Markets.

So first on the carbon tax. I think you mentioned $700,000 in the quarter. What would it be roughly for the year?

For 2025 -- for 2024, the full year carbon tax was about $1.3 million, Jimmy. And then 2025 with the quarter that's passed plus our expected budget for the future quarters, we end up at about $1.6 million.

Okay.

And that's on a proportionate basis.

So in terms of your comment about same-property revenue, so how would you think about same-property NOI growth for the year when you consider the savings in carbon tax? And I believe you said 5% to 6% revenue growth. Is that -- so it should be better than that?

Yes. Well, I think if you just look at Q1 and you sort of take out the seasonality from how cold it was and you take out -- not even the full carbon tax, but just the increase in carbon tax year-over-year, your Q1 margin last year ends up -- like your Q1 margin this year ends up being right around this same, even 10 basis points better when you sort of factor out those 2 elements.

Okay. And then my second question is just on capital allocation. Obviously, you're a lot more active on the buyback and you're selling assets at a faster pace. And then I think you also paused most of the developments. I don't know -- I think that's new to me, but I could be wrong there. So those are all fairly new initiatives in my mind to close that NAV gap. I was wondering what other initiatives would management and the Board be considering at the moment to further close the NAV gap?

I think the announcement around the pause on some of the development, I think we did last Q on the Q4 call. So what we said is that the properties we're working on will make sure to sort of put away properly in the research we were doing and make sure that when the time comes, if it comes and the market gets better, we can take them off the shelf in a very clean fashion. We're finishing up the one that we have a 25% in with our partners in Ottawa, 360 Laurier. And I mean, the NCIB activity, we started that and announced it. We got more aggressive late last year, and we've kind of stayed on that path of almost maxing out on a daily basis, the amount of purchases under our NCIB.

Your next question comes from the line of Sairam Srinivas from Cormark Securities.

Just looking at 360 Laurier, obviously, it's scheduled for completion in Q3 this year. And when you think about the economics right now versus when you underwrote the original plans for this development, how do they compare? Can you give some color on that?

We haven't given -- disclosed any of the color on that development, Sairam, but it is mid-teens levered IRR and better. And we're in that with a 25% interest. When you kind of compare that to -- well, quite honestly, like we were already in and something we've committed to and going to see through. But we are quite happy with that, especially relative to the experience we've had with the state. So that gave us a lot of comfort to kind of go forward with that conversion.

That's great. But then, I mean, just looking at disclosure, I guess you guys mentioned that it's now fully capitalized and you expect some excess equity being repatriated. Are you able to kind of quantify what that reparation would look like?

You're referring to the loan in regards to -- so we were able to put ACLP financing on that with CMHC. And based on the financing we were able to do, we were able to pull back $2 million of our proportionate investment into it, so $2 million for us. And from this point in, there's really no cash drag from that property as all the funding is done through the ACLP mortgage.

Your next question comes from the line of Dean Wilkinson at CIBC.

Brad, just a question on the NCIB. I mean you're more active than you've ever been on that, and it looks like you're going to continue to be so. If the valuation gap persists, would you consider flexing the balance sheet to go even harder on that? Or are there other ways you're looking at sort of dealing with that differential?

No, I think we're just going to continue to look at where the thresholds are, right? So it will -- a lot of it will depend on the success and the timing of our disposition program. I think we have a pretty significant disposition program of $200 million and $250 million, which we feel quite confident that we're well on the way at different stages of tapering, and we know what the economics of those properties are. And then relative to what we can buyback our unit price today, it really is a no-brainer. So really it's about lining up the timing, Dean, as opposed to doing anything more significant.

Okay. So we should think of that as leverage neutral or to the extent that you have excess capital, possibly having that didn't come down a tick as we go through the year?

Yes.

Your next question comes from the line of Matt Kornack from National Bank Financial.

I don't know if it's too early to maybe have gleaned any of these trends, but are you seeing any kind of stability or maybe improvement in the foreign student or generally the student market? I know that the Quebec universities or at least the English universities has got a bit of a reprieve from the courts, but I don't know if that would have driven any incremental interest from out-of-province students. But just broadly on students and what you're seeing there?

Yes. I think maybe it's a little too early in Quebec, specifically, Matt. I can say, I think some of the local colleges are getting disproportionately hit by enrollments and whatnot relative to the universities. Within our own portfolio, we've seen a decrease in exposure, call it, from 15% to closer to 12%. So we have seen and we've made a little bit of a pivot, and we're leasing up with what maybe more conventional cohort, young professionals and empty nesters.

Okay. That makes sense. And just in terms of Quebec, the allowable rent increase is quite high this year. July 1 is coming up. Again, I don't know if you'd have clarity or certainty at this point. But are you finding that people are accepting the 6% increase that's allowable or even possibly higher than that if you're doing CapEx? Or are you getting some pushback on that front?

So far, we've been successful. It's typical year-over-year with our acceptance on the renewals. So I'd say, in general, it's working out. And obviously, we've got to negotiate with a certain percentage. But I think normally, it's going pretty smooth as we expected.

Your next question comes from the line of Gaurav Mathur from Green Street.

Thank you, and good morning, everyone. Just a question on the dispositions. So far that you've completed, would it be possible for you to provide some sort of a cap rate range on them? And how has that sort of trended to when you first started to sort of think through the disposition pipeline?

Yes. Gaurav, we haven't provided that level, but I can tell you it's been significantly lower than what we've been buying back the units on an implied cap basis significantly.

Okay. Perfect. And just switching gears here. Now correct if I'm wrong, but I believe in early March, there was some news reports around an activist campaign launched by Anson Funds. I may have missed this in your opening remarks, but since it really wasn't addressed in the press release, is this news accurate or inaccurate?

Gaurav, I think we kept this call to the format of responding to Q2. So you can -- we're just going to leave at that with no comment.

As there are no further questions, I'll return the call to Renee Wei for closing remarks.

Thank you, everyone. If you have any follow-up questions, please feel free to reach out. We look forward to speaking to you in the summer for Q2. Have a good day.

Thank you. This does conclude today's presentation. You may now disconnect.