How Pier 4 REIT Is Continuing to Find Value in Todays Real Estate Market

[00:00:11] Manal Ali: Hello and welcome. I'm Manal Ali with Wealth Professional. Thank you for joining us today at the session, How Advisors Are Leveraging Private Real Estate for Income and Growth in Today's Market. Portfolio conversations have changed quite a bit over the last year. Advisors are still focused on growth. But increasingly, the bigger question is income, where it comes from, how stable it is, and how to generate it in markets that have become far less predictable. Today's discussion looks at that shift through the lens of Canadian multifamily real estate, particularly at a time when housing supply constraints, affordability pressures, and rental demand are reshaping the market. Over the last several years, PR4 has built a growing multifamily real estate platform focused on the overlooked secondary markets across Canada, with a strategy that is centered on income-producing rental housing and value-add execution. We have the honor of being joined by Randall Warrington, Vice President of National Sales at Pier 4, who's going to be walking us through what the firm is seeing across the market, how private real estate is being positioned within portfolios, and where opportunities may be emerging in the current environment. We will have a couple of poll questions that'll pop up, and of course, we'll leave time for questions at the end. But for now, I'll hand things over to Randall.

[00:01:41] Randal Warrington: Perfect. Thank you, Manel. Thank you, everyone, for joining us. We appreciate your time, obviously, given what's going on in the markets and given what's going on in the…bigger macro picture of things, globally right now. It's, it's very appreciated that you took time out of your day to join us today to learn about, Pier 4, and obviously what we're seeing in the private real estate markets that we're focusing on. So, happy to be here. As Manal mentioned, we will have some question time at the end, so if there are questions that you have, throughout the presentation, please just input them. Into the chat session, and we'll hopefully get to them if we have some time permitting. For those of it that are not familiar with Pier 4, what we're gonna go through today, sort of 5 parts to our presentation. We'll talk about the market environment, what we're seeing, both from a macro standpoint, as well as specifically in the secondary markets that we focus on.

[00:02:38] Randal Warrington: The second part will be the fund. We'll talk specifically about the underlying assets that are in our fund, the strategy we have within it, how we approach, The properties that we end up purchasing, how we manage them, how do we close the gap to market on our properties as we grow forward, and then ultimately what the… portfolio is looking at right now. We'll speak specifically to, our three most recent purchases in the fund, so it'll give you guys some… an idea as to the types of buildings we look at, the markets we sort of focus on, and then ultimately, at the end, we'll be the offering details for those that, that are interested. When we look at the market environment, really what comes down to for us, and for, I think, most private REITs, especially in the secondary markets that we focus on, it is a supply and demand situation. I always like to say the housing sort of situation we're in in Canada, it didn't start overnight, it's not going to end overnight either. This is a long-term scenario that we've got to deal with. Pier 4 is… very structurally positioned, within the Canadian market, within the housing market within Canada to I guess, capitalize on what we're seeing from a market standpoint. By 2030, we need over 3 million new homes built. Obviously, that's a huge number. To put some context into that, in 2025, the housing starts were just over 260,000 in the country. Couple that with the fact that our immigration totals for permanent residents in 2025 were 400,000.

[00:04:11] Randal Warrington: So again, there's already a supply and demand imbalance, just from decreased numbers that we saw from an immigration standpoint. 2026, we're expecting roughly 400,000 permanent residents again to come into Canada, and we're actually expecting new helm constructions to continue to decline through to 2028, so… it's not going well to close this gap, what we're seeing. I think we're at 20-year lows, if not about to hit 20-year lows in the new construction standpoint, so the supply and demand imbalance is going to continue going forward. Why is that happening? A couple of factors. One, the big issue right now is that construction costs have gone up 90% since 2017. So whether that is, materials, labor costs, obviously increased tariffs short-term right now, municipal issues in the regions that they're trying to build in…for whatever the reason is, supply is not being provided, and it's not getting done. So, demand has to be met. Through the repositioning of older, aging, and underutilized housing supply, that's where we focus on in the secondary markets. And as you'll see from some of the slides going forward, we can identify some of the types of buildings that we look at to hopefully satisfy some of this demand.

[00:05:33] Randal Warrington: We're also seeing, so for our focus, we're also seeing demand as being repriced geographically. So this chart on the right here is a CMHC data chart. It is for two-bedroom apartment units, so not the typical condo markets that you hear in the headline news in the markets. This is for two-bedroom apartments. What we're seeing is that rent growth is no longer being dictated, simply by supply, and it's not being driven solely by Toronto and Vancouver and the metropolitan areas, which it typically has been. What we are seeing in the markets that we focus on, the quality of life now is a bigger part of the picture for couples and families that are looking to settle. The secondary markets, i.e. the Londons, the Halifaxes, the Kitchener-Waterloos, we're… in those markets, we're capitalizing on that demand. It is still a commuter, sort of town, per se. If you commute from Kitchener-Waterloo to Toronto, it's not a…It's not a massive drive, it's a bit over an hour, but you can do it on a day-to-day basis. You have GoTransit going to all these markets now. As you'll see from our latest acquisition, when we get to the portfolio, we had our first purchase in Peterborough, which, again, is a bit further out on the east side of Ontario, but…We're seeing demand from potential commuters in the north end of Toronto that are starting to look out in the Peterborough region. 407 goes out there, GO train goes out there, the high-speed rail line that they're looking to put in, obviously that's a few years away, if that ever does happen. Again, that's gonna be… first stop will be Peterborough, and then coming into Toronto, so…We look to those…sort of repricing geographic regions that we can capitalize on. We like where we're seeing the rent growth in the east coast of Canada. That's a very strong market for us, as you'll see And we don't expect this demand or this rent growth to sort of flatline or decline anytime soon.

[00:07:23] Randal Warrington: When we look at, cap rates and interest rates, so…Typically, they will move in similar directions. It is not a one-to-one direct correlation, but they have historically moved closely together. Obviously, as bond yields fall, real estate becomes more attractive. You're supporting the valuations and then driving some cap rate compression on that side. What we're seeing right now, post the 2020 to 2020 sort of 4, interest rate cycle, we're now sort of seeing a stabilization cycle, and sort of we've seen interest rates sort of stabilize, provide a floor, cap rates have sort of started to do the same as what we're seeing we look at the current spread between multi-res, cap rates, and Government Canada. It's near levels that have typically and historically represented pretty attractive entry points in the multifamily space. So, we like what we're seeing right now, at least it's sort of stabilized, we're not getting big swings and big up, upward or downward projections.

[00:08:22] Randal Warrington: So, we're in a good spot, we like that we're starting to see some tailwinds for the properties that we're acquiring in our portfolio Coming into the fund itself, this is where we're looking at, sort of, the metrics of the overall portfolio. So our average weighted…Appraised cap rate is 4… just under 4.5%. I will…deviate a little bit here and mention that all our properties in our portfolio are third-party appraised every single quarter. We are not doing in-house appraisals, we're not, you know, having our own team look at, the properties and put a valuation on it. We use CBRE, Collier's, and Avis & Young as our three third-party appraisals. 3 out of the 4 quarters, it is desktop appraisals based on comparatives that they're seeing in the marketplace on the anniversary of each property's closing, that is a full on-site, full due diligence appraisal, and we provide that going forward some, some…Hopefully some security from an advisor standpoint, that we are being transparent, that it's not just our own in-house sort of appraisals for our properties, we're not, Looking to create any value there. It's whatever the appraisal value comes in at, and that's sort of where we look at positioning.

[00:09:35] Randal Warrington: Currently 41 properties, that includes, one property, I believe, in Q3 that's under contract already. Currently just under 2,100 units, with an occupancy rate of just over 95%. Target distribution of 8% per month, since inception, we have paid that out. It is a 100% return of capital to your investors. NAV price right now is sitting at $11.35, with our target annual return of between 12% and 15%. Okay, The property management side on the internal aspect, this is one that I'll come back to as well, but I do want to mention we have a complete vertical integration within Pure 4, so…What does that mean from an investor standpoint? What does that mean for you as the advisors, and explaining that to your clients? When we get to how Pier 4 started, our founders all came up through the contracting world. That was their background, the Daryl Ashby, who was one of the co-founders, the father, and his two sons, Michael and Adam they were all in the contracting business late 80s into the 90s, all for the large multi-res management companies in Toronto, and they built that portfolios out. What they learned from that standpoint of starting from the ground up, starting from the contracting background, is that when you can control the contracting side, you can control costs even better, even more so than if you outsourced it, and so…

[00:10:58] Randal Warrington: From a vertical integration standpoint, we have everything in-house from underwriting, for our own deals, property management, leasing management, contracting, everything is done by Pier 4 employees. So we have complete control on every aspect of the deal, from Acquisition to, suite turnovers that are happening on a month-to-month basis. Our growth since inception, so…Obviously, the greatest timing, they could have done it. They decided to launch a REIT in Q2 of 2020, right in the heart of COVID. They started, obviously, with 4 properties, 73 units. At the end of 2020, they had $6.7 million in assets. We are currently, as we stand today, at about $425 million in assets. As I mentioned, 41 properties, and then just under 2,100 units. What does that look like from a return standpoint for any investors that were lucky enough to get in, or smart enough to get in at the beginning? Since inception on Class A, including the DRIP, so we do have a drip program, which I'll touch on at the end as well, just under 65% cumulative return since inception. Very strong performance. more importantly to me, coming from, you know, the background I have from a mutual fund standpoint and sort of hedge funds the smoothness of the line is more important. The lack of volatility there, it is a private REIT, it's not a public REIT, so we're not getting whipsawed by the headline risk, we're not getting, you know, obviously priced daily by based on what the markets are doing. It is a smoother, more consistent I don't want to say an easier, sort of, conversation from an investor standpoint. But you're not having any sort of daily discussions about what's happening on, you know, on my public ETF.

[00:12:45] Randal Warrington: Again, talking about the smoothness of the line, the low correlation to the, obviously, the public markets, this is a comparison of Pier 4 versus the S&P versus the CAPTREAT index, and obviously the Universe Bond ETF. So, again, all we're trying to do is add value from a product standpoint to you as the advisor, and obviously your clients. As a positioning within their portfolio. I don't think anyone is going to have all their assets in, you know, one private REIT, but as a position, as a portion of their overall alternative strategy, we think we make a lot of sense in that standpoint, based on…The consistency of the returns, the quality of the assets that we're holding underlying in the portfolio, as well as this… the lack of the drawdowns that typically happen within a private REIT. It's a great positioning from that standpoint, based on what is out there in the public space. When we look at this from a Sharpe ratio standpoint, again, I caveat this. This is… we're…comparing a private REIT, obviously, to some public, ETFs and public REITs, so there is going to be a…a disconnection there as far as what the Sharpe ratio is.

[00:13:55] Randal Warrington: I think if you had this on a…peer-to-peer sort of comparative space, we're probably in the 1.5 to 2 range of a true sharp ratio as it compares to some of the public ETFs that are out there. I think we're in a really great spot. All this is doing is illustrating that the Addition of the returns that we can provide to a portfolio is not going to come at the cost of increased volatility for your clients. Right? We're trying to smooth out that line, we're trying to allocate to a physical asset, quality assets, that give you an uncorrelated return option within the portfolio. Our high-low watermarks speak to that, so our lowest return, that 9%, came in, I believe it was in the 2020, in the first, sort of, 6-8 months that we were in existence. Again we don't look to have the volatility of, obviously, the public markets. That's the big caveat of this. So for me. Overall portfolio standpoint, again, from your client's view they're not gonna have those situations where they're gonna call you panicking that, hey, you know, the REIT is down 15%, what do I do? How do we handle this? How do I make this back up?

[00:15:05] Randal Warrington: It's the consistency of the returns, even more so if they can obviously not, if they don't need the cash distribution on a monthly basis, then they can reinvest that in that drip program. More beneficial for them with compounding returns going forward, but a great allocation from a… from an alternative standpoint. When we look at it, again, part of my previous background in sales was in hedge funds, and we used to speak to the Yale Endowment Fund ad nauseum. So this slide, we're really looking at what is this quote-unquote smart money doing now, in today's market. And what you're seeing from institutional portfolios right now is the typical allocation of between 40% and 70% of capital to real assets and alternatives. You've seen a marked shift from the majority of the assets being in the public markets now, over the last, sort of, 15, 20 years, to now, majority of assets are in real assets and alternatives, as opposed to the public markets, so…

[00:16:02] Randal Warrington: What does that speak to from my interpretation, from our interpretation? the quote-unquote smart money, the institutional money, is trying to take out the public headline risk, the volatility. They're trying to smooth out that line from returns to their endowments, obviously, and make that… it's not necessarily about making the 30, 40, 25% type returns, it's more about consistency of returns with you know, as low drawdown, or as low drawdown as we can possibly offer. So, as you can see, CPP, Harvard, Yale, Alberta Heritage Fund, all in that sort of low-end Harvard at 8% of real assets, but then also 40% of the private equity space, so again, you're in the privates. Typically, for real assets, you're around that 20% allocation. Again, depending on individual client needs, obviously, and what you also already have in their portfolios, we think it's a great opportunity and a great fit within that portfolio.

[00:16:58] Randal Warrington: So, I mentioned this briefly before, but these are the three founders, Daryl, Adam, and Michael. Daryl is chairman and co-founder, Adam is the CEO, runs the day-to-day, Michael is the CFO, Michael and the asset management and finance teams are predominantly responsible for the acquisition strategies we have, and for the properties we end up actually purchasing. As I mentioned, Daryl, back in the 80s, was, was…one of the head contractors for a large, multi-res, company in Toronto during the summers, in their high school years, Adam and Michael tell stories about literally pulling up carpets in…apartment buildings, painting underground parking garages, you know, helping electricians fix elevators and lighting and et cetera, et cetera. they obviously finished high school, went off, did their business degrees at university, came back, and ultimately, in 2020, started Pier 4 collectively. So, we currently have offices in 4 cities. property, our largest property management office is in Cambridge right now head office in Toronto.

[00:18:01] Randal Warrington: Still growing. We are about to add a property management office in Dartmouth, Nova Scotia, so we're seeing expansion there, so we're putting an office in there that obviously has leasing agents, contractors, all in that area that will report from that office and be prepared for employees. The one caveat I'd like to mention on this slide is this team, the three that founded this company. it's not the typical, I started it on, you know, on a Bay Street trading desk, and then worked out the numbers, and realized I can do this on a, you know, a larger scale from a REIT standpoint. It's actually the reverse. They start on the property side, and then realize we can scale this up on the financial side. So, it's a bit of the opposite of some of the other REITs that are out there right now. We love this caveat to us. We think this is a strategic advantage we have when I tell you that I could walk into Adam's office and say, hey, we're doing a suite renovation at one of our gold-level buildings what should that look like? He could probably tell me down to the dollar as to what each piece within that renovation is going to cost. From a cabinet standpoint from appliances, from the doors, whatever it's going to be, they know it down to a T, because that's their background. So we can control that all the way down to that level as we do, suite turns in each property Independent trustees and directors. Obviously, we are guided by independents, so I won't go through each individual one, but they're here to, you know, provide some guidance to us as an organization third-party, you know, feedback on what we're looking at, and obviously everything we do is governed and fed through by the directors and their approvals. So, some strong support from their side, some strong guidance from their side, and we like where we're sort of positioning going forward in the back half of 2026 here.

[00:19:49] Randal Warrington: When we look at it from, what's our core, sort of, fund strategies, basically, we are looking for consistency of execution across all our properties. That is the crux of everything we do. We have portfolio-wide visibility and reporting, so everything we do now, incorporating not just AI, but incorporating technology as much as we can, having oversight from every level that we can within the properties and within the buildings. Active asset management focused on, obviously, driving occupancy, and then cost controls. When we're looking to…increase the NOI of an individual property to me, there's sort of two ways you can increase that NOI. You can either decrease costs, or you can increase revenue. And ideally, you do a combination of those both, and that generates even stronger NOI growth. So, we're looking at it from every aspect, from top down to bottom up, that we can look at the asset side. Scalable structure, we've seen that so far. We continue to grow, we continue to add contractors, leasing agents, property managers as needed. As we grow and as we sort of build out new pockets or communities that we tend to focus on, if the demand is there, if the volume is there, then we will look to add, you know, the scale that's needed in those markets. From a strategy standpoint, our mission has always been to, obviously, deliver consistent returns for the investor, but at the same point, provide our tenants with comfortable, secure, and affordable housing. We are…In a position where…The buildings we purchase are typically either mismanaged or undervalued or neglected at some points. We do not renovate tenants, so you'll see when we get to the slides as far as the gap to markets and our turnover of the portfolio, we do not renovate. So we're not going to just kick someone out just so we can renovate and increase the rent to market rents.

[00:21:39] Randal Warrington: We have a natural turnover in our portfolio of roughly about 20% on an overall portfolio basis. That provides plenty of opportunity from… Our management side to have our contractors go in, do a sweet turn, and then as that unit became, becomes back on the market, we're marking that rent back up to market rent. So, we have ample opportunity to continue to do that, just on a natural turn of the portfolio, as opposed to trying to move people out so we can sort of obviously generate, you know, higher rents. We're not in that position. We look at overlooked value-add opportunities. That is our whole crux. We are a value-add opportunity. We are not in urban markets. We are not in the core urban markets of Toronto, Montreal, Vancouver, Calgary. We're not in those spaces. We're not in the new high-rise towers, we are in…

[00:22:33] Randal Warrington: Traditionally older type of buildings, I call them the brick-and-mortar, the old-school walk-up apartment buildings, as I mentioned. typically either owned still by the person who either built it years ago, or the family that built it, or they've been mismanaged for, you know, the last 10, 15 years. Opportunities where we can go in and realize that potential. We then go in, look at the opportunities we can use to revitalize that property taking the potential into, obviously, value that can be generated to the end investor, and obviously delivering that by returns via the NAV increases, and obviously the distributions current portfolio as it speaks right now, our historical average renovation cost is $16,500. I would say this is slowly probably ticking up a little bit based on cost inputs and labor costs, obviously with the tariffs as well. So that…That'll probably slowly creep. We are still significantly under what, market renovation costs would be, and or competitive renovation costs, because it's all in-house. So, we watch that, we're very conscious of that Each one of our properties, upon closing is categorized as either bronze, gold, or platinum property level that ranking of the property as a whole dictates what level of renovations we do within each unit within that building. So, if we have a…Gold-level building that's been categorized as gold.

[00:23:58] Randal Warrington: We will not have a platinum-level renovation in a suite in a gold-level building. It'll be a gold-level renovation only that goes into that, and that is just dictated by…A bronze-level renovation is, is…Typically, cosmetics, it's maybe some new cabinet doors, but painting, maybe some flooring at the most, and then, obviously, curtains and that kind of thing. Change the lighting fixtures, and that's really it. Gold level is where we start to look at stainless steel appliances, energy-efficient appliances. Again, you'll do a full cosmetic update there. You won't change the layout of the unit in a gold level, but you'll potentially, depending on the unit, you may get new kitchen cabinets, obviously in the pines, as I mentioned, and then low-float ESG toilets and faucets, etc. The Platinum renovation is where we literally take the unit down to studs. Do we knock out some walls? Can we reconfigure this? Is there a better flow that we can add? That's where we get to the platinum level. Of our overall portfolio of the 41 buildings we have right now, about 78% are gold level there's about 8-10% that are platinum, and then the remaining are bronze. It is all dictated by…What we feel the average market rent can be once we do renovations, and that will dictate what level that building gets in that market.

[00:25:17] Randal Warrington: Just under $60 million fair market value gain so far. Again, portfolio gap to market as of March 31st is just over 43%. That is…very healthy for us, it's… we're comfortable with that. Obviously our goal, if we had no new additional properties coming into the portfolio, our goal is to close that gap to market as close to zero as we can, because obviously that means we've…You know, had some sweet turns, and we've been able to increase rent and increase revenue on our properties. The loss to lease number here, this is simply quantifying that portfolio gap to market. So, in-place rental income currently as it sits right now, our average suite rent is $1,142 per suite per month. Overall, we generate 2 point… just over $2.1 million per month in rental income. If we were able to close that Gap to market, that 43%, down to zero. What would that mean? Our potential rental income goes up to just over $3 million, just under 3.1. With an average per suite rental of $1,655. Which again, would create an additional $21.2 million in value creation. So that's the goal, to close that gap to market, increase the…The rent on a month-by-month basis, and to close that and create the value for yourselves, and obviously your investors and your clients.

[00:26:38] Randal Warrington: Similar slides, I'll leave this for those that want to. We can look at the slides afterwards, but we just break it down by the three provinces that we're currently in. So Ontario, New Brunswick, Nova Scotia, those are the three provinces we currently have assets in. We have looked at opportunities in every province across the country, we just have not found the right opportunity to go into any other provinces. The bulk right now, as you can tell from that $16.6 million in potential value creation is obviously in Ontario. But what I want to highlight on this slide, if you look at the Nova Scotia portfolio, which we continue to add to and develop. The actual upside from Nova Scotia is significantly, underrated, in the sense that right now, the average per suite per month is $964. you can almost double that if we get it to market rent. And so As we can add, you know, selected purchases in that province in the right regions, there is great opportunity for that province to continue to grow and to continue to add some great value creation going forward. Just some examples. Again, well, I can go through some of this. We have more of these types of examples. If anyone's interested afterwards, just let us know. This is Onward Avenue. This was…Turned over 16 out of about 38, I believe, 38 or 40 units so far. Kitchener, Ontario, Pre-average rent before we did any suite turnovers is $920 post-average rent is just over $1,300. So, this is what we're trying to do in every single building we purchase. As we get notices that people are going to leave or are going to vacate their units.

[00:28:15] Randal Warrington: We will send the renovation team in, start doing specs, look at what level the building is, look at what, that means from a renovation standpoint in that suite, and then start lining up what needs to get done The second day after that unit becomes vacant, we have our renovation crew in there So… Typically, our average renovation time, our average suite turn time, is 31 days. So, fantastic, that has been worked down, so our VP of Property has done a phenomenal job over the last 7 or 8 months getting that number down. So literally, we have one month where we're not joining revenue, and then it's back on the market, try to get it rented out, get the leases in there with the new, with the new layout, or the new, look of the unit, and then try to get that up to market rent as much as we can. CapEx spending typically on buildings depends on, obviously, suite renovations, but security cameras, corridor renovations, laundry rooms, Intercoms, if there's parking lot stuff, maintenance that we have to do from the outside standpoint, the building envelope, we'll look at all those aspects and sort of put those in place.

[00:29:20] Randal Warrington: To give you a bit of a first-person glance at this, this again is in Kitchener, 68 Breckenridge Drive. This is the property we bought a few years back now obviously getting the permits, the right permits from the city. We were able to look at two unused storage units on the main level, on the ground level, that were completely empty when we purchased the property. We looked at it, was there demand to rent those out, what would be the value of renting those out, or is there better demand if we took those units out, converted to a bachelor unit, and rented that out at market rents? Obviously, with the permits in place, we did that process and added the unit in that building. So, obviously, looking at value-add opportunities increasing the NOI of the property on a go-forward basis. If you want to, you can scan the QR code, it'll take you to a YouTube video, and you can walk through that process and see that firsthand. When we look at the contracting side, the renovation side of things, everything we do will have some sort of ESG focus, obviously again, I go back to, if we're trying to increase NOI, we can increase revenue, and we can decrease costs. So, from a decreased cost standpoint The more we can use you know, low-flow fixtures, leak detections, irrigation controls, sensors in the hallways for lighting, you know, both are modernizations, all those aspects are going to decrease our costs on a go-forward basis.

[00:30:44] Randal Warrington: I don't expect… I certainly, obviously, can't really quantify 973 cubic meters, say, per building. It's a big number, obviously, but every single unit renovation we do in all our properties will have low-flow fixtures put in there. We'll all have LED lighting. We'll have boilers, we'll have heating controls. Where applicable, we have individual-wise gas meters put in on each unit, and we'll monitor that going forward. So we're trying as much as we can to decrease the cost, decrease the footprint. Which ultimately, obviously, with some rental increase. We'll hopefully increase the NOI of that property on a go-forward basis. So, looking at the portfolio now, again, 41 properties. These are the 3 most recent acquisitions we have done. London, Kitchener, and then Peterborough, which closed about 2 weeks ago. As you can see, one of them stands out, the London, Ontario property. The largest purchase Pier 4 has ever done in, obviously, in the history of our company so far. This was not a deal. We went searching for. This came across our desk, it was off-market. I should caveat that about 80-85% of our deals are all off-market, so we're not in bidding wars. We have, obviously brokers across the country that call us on a daily, if not weekly basis asking if we would look at this property, if we would look at this market, how we looked at here? On the flip side, we also got weekly calls as far as, would you look at selling this property, would you look at selling this market that you're in right now, etc, etc. This London property was an opportunity that was presented to us. It was a phenomenal opportunity. It's 22 acres.

[00:32:18] Randal Warrington: It is very close to the University of Western Ontario. The purchase price we got, obviously, it's a very big ticket there, it's 9 buildings on that property. So when you break that down, I always break it down this way. Our typical purchase is in that sort of I'd say 6, 7, 8 million to $25 million is what we try to stay in from a purchase standpoint. If you break those 9 buildings down on that property, it's in the wheelhouse of every single purchase we've made. Obviously, it's a big ticket right away. The opportunity here is that, because it was off-market, we purchased it for $1025, it was appraised $13 million higher the next day. Because it was off-market. It was a… it was the family of the original builder that had it. They had done some pre…CapEx work in the last 2 years. They did not want to manage it anymore. They didn't want to own it anymore. They came to their broker, obviously, and he reached out to Michael and his team, and we started looking at it Gap to market is fairly healthy at 20%. There are some vacant units. Again, what typically happens when an owner or a property is sort of in that mindset of they're gonna sell.

[00:33:24] Randal Warrington: They tend to stop trying to lease out the units for the month or two beforehand, so we're okay with that, because that allows us on day one to go in, get our contractors in there, turn those suites over, and obviously, from, you know, as soon as we can lease that out, you're starting at market rent, as opposed to below market rent, so…Provides an opportunity there. Kitchener property, again, average rent $1,620, very healthy, very stable. Gap to market a little less because, again, the previous owners had actually done most of the capex and work that needed to be done. There is only about 6 units left in that Complex that need to be, sort of, quote-unquote, renovated. The latest acquisition, Peterborough, this is what I tend to say is our sort of standard-type building. We're looking at the old bricks and mortar, 3-4 stories, no elevators, you know, above-ground parking, that kind of thing. Healthy gap to market at 35%. Again, purchased at 13.5 off-market already appraised at $16 million. So We're adding value right from the get-go from that standpoint.

[00:34:23] Randal Warrington: Based on our relationships with the brokers that we deal with 85% of our properties are CMHC guaranteed financing. We have preferred sort of lending, or preferred customer status with CMHC now, because we've obviously done so many deals with them. And so we look to capitalize on that. Our relationships are what drives a lot of the opportunities that come across our desks. We are not looking to get in bidding wars, we're looking to buy undervalued, underutilized, under-managed properties, and then go in and out our value-add strategies to those A little bit more, I guess, geographic allocations you can see from an Ontario standpoint, so Kitchener, Guelph, London, Thorold, Welland, St. Catharines, that area. Cambridge, Hamilton, Waterloo, and Peterborough, that's the Ontario portfolio. Moncton and Riverview in New Brunswick, we have a very big presence in Moncton. And then going into Nova Scotia, just on the outskirts of Halifax, in Bedford, and then in Dartmouth as well. That's where we're at so far. Again, not that we haven't looked at going sort of west, we just haven't seen the right opportunities, we haven't, you know, haven't had the right, building, or… Markets sort of come across our desk to make us, you know, excited to jump on that. Some of this we talked about, but again, to me, what I highlight here is the unit growth that we've had, obviously since inception, the AUM growth from the top, so bottom left to top right, sort of the smoothness of that line.

[00:35:49] Randal Warrington: Again, the portfolio gap to market. To me, also, this… on the bottom left chart there is more illustrative of what we're focusing on. We're not just trying to put in those small Bachelor units, it's actually very minuscule that we have as far as Baxter units. We're looking at the older, traditional, larger one-bedroom units and the larger two-bedroom units. That's the bulk of properties that we own. So, again, healthy gap to market that can, you know, provide some ample upside as we close that gap and can get rents back up to market level as we do the renovation turns. Offering details, again, depending on what firms you're at, I can leave this, you know, it depends on what firm, what's approved at your firms, as far as what you're, what you're able to purchase. And from that risk factors. Obviously, we are a private REIT. From a liquidity standpoint, we have monthly liquidity with a 45-day lag from a payout standpoint, so typically it's about…Close to 90 days by the time you get paid out, but you can put a redemption in each month if you want to, so it's…It's called… I call it a rolling quarterly, you know, redemption, but on a monthly basis. So we have no issues there. Our liquidity is fantastic right now. We have no… No restrictions on liquidity, no restrictions on redemptions. We have very strong inflows so far this year coming in. We're just wrapping up our, our sort of spring promotion at the end of this month. We've had those 3 properties, as I mentioned, so far this year one more under contract. They're already underwriting and looking at, obviously, other properties that could be accreted to the portfolio for the back of Q3 into Q4. So we're in a good spot we've managed, sort of, the… I guess what we would call the rockiness of the private REIT space in the last, sort of, 8 to 12 months, I guess, per se.

[00:37:36] Randal Warrington: The benefit we have, I think, from our standpoint versus, obviously, some of the competitors, Because we're so young, because we're just in that 6-year mark right now, as far as how old the company is We don't have those large, sort of family office traction, per se, I guess, is what I'll say, and we don't have the large, huge sort of serial penetration as yet. Obviously, we're working on that. But that has allowed us to also not have the flip side of that, as we don't have the, you know, the redemption risks, that some of our competitors may have. So, we're in a good spot, we like where we're positioned, we like, so, you know, the firms we're starting to work with that we're, you know, close to getting on their shelves, and we'll, you know, we'll keep pushing this thing forward and keep pushing the rock uphill as we, as we grow from asset levels and in the partners we have. So, with that, I will pass it back over to, Manal, and I guess we can open up for questions if you want to.

[00:38:34] Manal Ali: Yes, great, thank you so much. We do have, a couple of questions that have come in. First, we have somebody asking, isn't the market going towards higher-end rentals, like Fitznovia's strategy in Toronto?

[00:38:50] Randal Warrington: So, good question. Again, I caveat that the Toronto and Vancouver sort of urban markets are very different than what we focus on. We are not in those markets for a reason, because that's not our expertise, and we don't want to get into the, sort of, the high-rise condo tower type…markets that those markets are in. I would hazard a guess, I live in Toronto, I live downtown Toronto, I've been here for 25 years now, I have not seen a new shovel in the ground from a development standpoint in the last 12 to 16 months, so every condo right now that is being completed, at least in Toronto, and I… from advisors we talked to in Vancouver, very similar there those all started 5, 6, 7 years ago, so… Yeah. I personally think you're gonna have a…Supply issue again in, sort of, 5-6 years, as this, as this sort of rolls forward. I think…to that question of, are they going with the upscale, upmarket sort of condos? I think, again, personally. Having lived in condos before we bought our house, I think the market is pretty, like, pretty done with the 400, 500 square foot bachelor pads, so I think…Developers have to now look at… you know, do I have…the building I designed, was there a bunch of bachelor units in there? Can I convert some of those into larger, sort of, one-bedroom plus dens, if possible? I just think there's a shift to the question and point. There is a shift, maybe not to the pure, sort of, high-end…Condo overall, but to a more higher-end living standard, per se, and the space they want.

[00:40:28] Manal Ali: Great, thank you for that. Can you elaborate a little bit on how Pier 4 identifies undervalued properties, and then mitigates the competition through off-market acquisitions?

[00:40:39] Randal Warrington: Yeah, great question. I'd love to tell you there's a… Magic formula, to be honest. I think it's like most of this business, for most of the, probably, the advisors on this call, it's relationships. Obviously, when we started 60 years ago, I would guess, you know, and talking to Michael about it, there was a lot more outbound calls from us to brokers saying, hey, what do you have, what do you have, what do you have? Now it is literally 99% incoming. And so…the, the… The pipeline we have to sort of look through and select now, because we have the…I don't want to say reputation, but because we've done deals with many of these brokers, we've worked with CMHC, we've got the financing sort of lined up from that standpoint. We've got the track record of actually going through the process and closing on all these deals. you know, I'm in the management meeting every two weeks with Adam and Michael, and it's…Our typical pipeline every two weeks is 15 to 16 new buildings that we're just looking at. Not saying we're gonna purchase them.

[00:41:36] Manal Ali: Okay, wow.

[00:41:38] Randal Warrington: look at them do the full underwriting process, whether we're going to purchase them or not. We're sort of creating our own little database in-house, obviously, from the metrics we want to keep track of And then we have that going forward. So, it is inbound calls, it's relationships with existing brokers, We look for the types of buildings that are Predominantly mismanaged. So either we had one that we closed, I believe it was in Hamilton, late last year. It was the… when they were 80-some-odd years old, they had built the properties 45 years ago. They had not increased rents in the last 20 years.

[00:42:14] Manal Ali: Oh my goodness.

[00:42:16] Randal Warrington: Okay, so those are the types of opportunities that, obviously, you look at that.

[00:42:19]Manal Ali: Yes.

[00:42:20] Randal Warrington: vertical integration standpoint, can we maximize that? Yes, I think we could. So, those are the types of deals that we obviously would love to see every single day. And again, it has to fit with where we think geographically, we want to move to. So, Peterborough, that first building in Peterborough now, that's a… that's a…direct decision from management that we want to start to look into that space and start to move out there, because we think Demographically, we're gonna see some growth.

[00:42:48] Manal Ali: Got it. We have another question. So, given the historical relationship between interest rates and cap rates, how do recent and anticipated rate changes impact asset valuations and your acquisition strategy?

[00:43:02] Randal Warrington: Yeah, great question. again, so I… I'll… I'll come back to that question, I just want to caveat this. We are…So if I look at it from where we're positioned versus, obviously, the competitors in our market space. We are still in growth mode, we're still in acquisition mode, we are not, sort of, the large cap dividend fund out there from a comparative standpoint, we're not mature at the stage of we're at the number of units we want to be holding. We still want to grow our assets as far as number of buildings, we still want to grow the number of units we hold, and keep that going forward the stabilization that you've seen in the last, sort of, I guess, 8 to 12 months, as far as interest rates, and coming out of that interest rate increase cycle that was… we were in, sort of, from 2020? That has helped immensely from a stabilization standpoint. You've sort of put a floor in now, where we can at least… If we're not getting, sort of, blindsided by interest rate movements. It's much more stable now, so we can look at it from a more measured approach. Obviously, as we mentioned, interest rates and cap rates don't move in a one-to-one relationship. There is a bit of a lag there from a cap rate standpoint. I think, for us, going forward, stable rates mean we can We have some valued support as we look at new properties. So…Typically, we're at a 4.5 cap rate right now, that's very healthy from our standpoint. If you look at the… if I can go back to it…If I look at the chart… I went the wrong way, sorry guys. If I look at the cap rate chart. Our cap rate has typically been in that sort of 4-5 range. Okay. Right, so the average cap rate, national cap rates have sort of been in that, since we started in 2020, we've been in that sort of 4-5% range. we're comfortable there, we know that space. We do think we're starting to see some tailwinds. So what we're seeing in the last, sort of, 6 months. We think is lining up really well, so that Coming out of this back half of this year, we're gonna have some phenomenal opportunities to… to see some Property value appreciation, and then ultimately, obviously, that's going to translate down to returns to the investor.

[00:45:10] Manal Ali: Another question we have is, why are provinces like New Brunswick and Nova Scotia outperforming the national average in rental growth?

[00:45:21] Randal Warrington: Great question. Again, I didn't know about this until I started here. There's… the Atlantic Immigration Program is a big part of that, so that is a government-funded program. Typically out of that sort of…400,000, permanent residence immigration last year. I believe it's about 6-7% typically go out to Atlantic provinces, and what that does is they fast-track, land immigrant status if you have skilled trades. There's about, I think, 7 or 8 categories that they're really looking for, obviously. Trades, professional designations, that kind of thing. It also allows you to fast-track your spouse and your immediate family to come over and get jobs right away. So… On the website, for the government, you can go into that Atlantic Immigration Program website. It has companies that are part of it, that have enrolled in that program. you can apply for jobs there if you're successful, they fast-track things. Create demand from a rental standpoint. Obviously. For those of you that are either in Moncton or have been to Moncton and Halifax and Nebraska, they're not building 40-story towers there. it's not gonna happen. Moncton is not going to, you know, okay a 25-story tower in Moncton. So it is traditional, older buildings that we can repurpose, that we can renovate, that we can revitalize, and increase that rent in that state. So there is consistent demand going on on the East Coast. It's a great market, there's not a lot of focus from a secondary market, the types of buildings we look at from competitors. So, again, you look at it from a liquidity standpoint, if we ever have to sell any buildings, the number of buyers we have versus the number of buyers that a Downtown Toronto condo may have Exponentially more than that. But based on the size of the acquisition. So…the East Coast will continue for us to be a focus and be a growth focus going forward.

[00:47:11] Manal Ali: Okay, great. I think that's all the time we have today. Thank you so much, everybody, for joining us, and thank you so much, Randall. One thing that really stood out is the housing imbalance isn't going away anytime soon, and I appreciate all the charts, because investors are clearly increasingly treating rental housing less than a trade, and it's more as infrastructure tied to long-term demand. And of course, I mean, it's clear that Pier 4's relationships are clearly a great asset. If you, the audience members, would like to learn more about Pier 4, or revisit today's discussion, additional information will be available following the session. Thanks again for joining us, and enjoy the rest of your day.

[00:47:54] Randal Warrington: Thank you, everyone. Thank you, Manal.