Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the Choice Properties Real Estate Investment Trust Fourth Quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I'd now like to hand the call over to Erin Johnston, Senior Vice President of Finance. Please go ahead.
Thank you. Good morning and welcome to the Choice Properties Q4 2024 conference call. I'm joined here this morning by Rael Diamond, President and Chief Executive Officer, Mario Barrafato, Chief Financial Officer, and Niall Collins, Chief Operating Officer. Rael will start the call today by providing a brief recap of our 2024 performance and will cover the highlights of the fourth quarter. Niall will discuss our operational results and development activity, followed by Mario and me, who will conclude the call with a review of our financial results and 2025 outlook before we open the lines for Q&A.
Before we begin today's call, I would like to remind you that by discussing our financial and operating performance and in responding to your questions, we may make forward-looking statements, including statements regarding Choice Properties objectives, strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, intentions, outlook, and similar statements concerning anticipated future events, results, circumstances, performance, or exceptions that are not historical facts. These statements are based on our current estimates and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from the conclusions in these forward-looking statements.
Additional information on the material risks that can impact our financial results and estimates and the assumptions that were made in applying and making these statements can be found in the recently filed Q4 2024 financial statements and management discussion and analysis, which are available on our website and on SEDAR+, and with that, I will turn the call over to Rael.
Thank you, Erin. And good morning, everyone, and welcome to our Q4 conference call. We are pleased to deliver another solid year of operating and financial results. Our business is strong, and we have a proven strategy. Our fourth quarter and full year 2024 performance demonstrate the quality of our necessity-based portfolio and the strength of our platform. In 2024, we once again successfully met our full year earnings outlook. We maintained near full occupancy rates throughout the year and exceeded our same-asset cash NOI target while delivering on the high end of our FFO growth target. We also ended the year with conservative debt metrics and ample liquidity. Throughout the year, we maintained our market-leading portfolio by completing approximately CAD 425 million in real estate transactions, including around CAD 260 million of acquisitions and CAD 165 million of dispositions.
We made significant progress on our development pipeline by adding approximately CAD 300 million of high-quality real estate to our portfolio. This included 1.2 million sq ft of space across 14 projects, highlighted by 12 retail intensification projects, a Loblaw industrial ground lease at Caledon Business Park, and our purpose-built rental building, Unity, at Mount Pleasant Village in Brampton, Ontario. Our total investment of approximately CAD 235 million was delivered at an average yield of 7%, resulting in significant NAV creation. Supported by the strength of our 2024 performance, our Board of Trustees has approved our third consecutive annual distribution increase effective March 2025. This increase demonstrates our commitment to sharing our growth with our unit holders. Turning to our fourth quarter results, our momentum continued in the quarter. We delivered strong operational and financial results and advanced our development pipeline.
In addition to operating performance, we completed CAD 80 million in total real estate transactions, which included about CAD 60 million of acquisitions and CAD 20 million of dispositions. Our largest transactions in the quarter were the acquisition of a grocery-anchored retail center in Ottawa and the acquisition of a 50% interest in a Loblaw Halifax industrial property. The retail center is an 85,000 sq ft site anchored by Farm Boy, which is scheduled to move from this location. Choice purchased the asset and has concurrently entered into a CAD 50 million lease with Loblaw to backfill the Farm Boy upon their lease expiry in 2027. This eliminates leasing and downtime risk while delivering strong contractual NOI growth. The industrial acquisition is the fourth and final asset in a 50/50 joint venture we announced with Crestpoint last quarter. Choice will manage the portfolio.
The property is an approximately 215,000 sq ft site with a CAD 50 million lease from Loblaw with annual contractual rent steps of 2%. These transactions demonstrate our team's ability to leverage our relationship with Loblaw, seizing market opportunities, and highlight the significant advantages of Choice's right of first offer on Loblaw's remaining real estate assets. Before I turn the call over to Niall, I want to touch on market fundamentals across our asset classes and the overall economic environment. Our grocery-anchored necessity-based retail portfolio continues to be the largest and most resilient in Canada. Our assets performed exceptionally well throughout 2024, and our national footprint of neighborhood centers delivered rental-rate growth comparable to those in core urban areas. We continue to experience high leasing demand, with many of our tenants remaining interested in expanding their footprints, particularly in grocery-anchored centers.
As an example of both this demand for retail space and the benefits of our strategic relationship with Loblaw, we're in various stages of planning and currently working with Loblaw to build our six new grocery stores across the country. Two are intensifications of existing sites, one of which is currently under active construction. Two are new developments on land we purchased in the fourth quarter, and the remaining two are in planning. In addition, we have nine Shoppers Drug Marts in active development, with a significant number of additional sites in different stages of planning, and we expect to continue to capture 25%-30% of the growth of Shoppers Drug Mart expansion. In industrial, we continue to benefit from untapped rental-rate growth as our low-in-place rents adjust to market, evidenced by strong overall leasing spread.
Despite rental-rate growth moderating in 2024, after several years of robust growth, demand for our high-quality industrial assets remained high as supply in key markets remains limited. Lastly, while our residential assets today represent a small portion of our portfolio, we have long-term conviction in residential as an asset class. We continue to create opportunities and value by advancing our mixed-use residential properties through the entitlement process. Overall, our business is in exceptional shape. Looking ahead to 2025, we acknowledge that the geopolitical threats continue to cause overall market volatility. Nevertheless, Choice's portfolio remains in an enviable position. Our portfolio and platform are built to withstand economic cycles, and our disciplined approach to capital allocation and balance sheet management distinguishes us from our peers and provides us the capacity to continue to pursue growth opportunities.
This is Mario's last conference call, and I want to thank him for his leadership and vision, which have guided us over the last 10 years. Mario, we are grateful for your contributions and the legacy you leave behind. You've also ensured a very smooth transition to Erin, leaving us in very good hands. With that, I'll pass the call over to Niall to discuss our fourth quarter operational results and development activity. Niall?
Thank you, Rael, and good morning, everyone. As Rael mentioned, our portfolio continues to deliver stable and consistent cash flow growth. We ended the fourth quarter with stable portfolio occupancy at 97.6%. During the quarter, we had approximately 794,000 sq ft of leases expire, of which we renewed 610,000 sq ft, achieving a 77% tenant retention. These renewals were completed at an average rent spread of 21.6%. We also completed 79,000 sq ft of new leasing, resulting in negative absorption of 105,000 sq ft, which was largely driven by vacancies in our Ontario retail portfolio and Atlantic industrial portfolio. I will comment on our plans to backfill this space in a moment. Turning to each of our asset classes, in our retail portfolio, occupancy remained stable at 97.6%. During the quarter, 485,000 sq ft expired. We renewed 377,000 sq ft for a tenant retention of 78%.
These renewal spreads averaged 16% above expiring rents, with strong growth across all retail categories. We saw the strongest growth in the quarter from full-service restaurants, sporting goods, pharmacy, and medical. We also completed 65,000 sq ft of new retail leasing in the quarter, where average rents over the lease term is 67% higher than our average in-place rents for retail. This largely offsets the 108,000 sq ft of expiries that did not renew in the quarter. Of the space that did not renew, 78% is already committed to backfills in 2025, with rents 53% higher than expiring rents of the prior tenant. During the fourth quarter, we generated CAD 2.6 million of lease surrender revenue. The majority of this was the continuation of our rightsizing program, with Loblaw generating a total of CAD 2.2 million of lease surrender revenue.
These right-size opportunities create value for our properties as the spaces are backfilled by complementary third-party national tenants at higher rents. Our industrial portfolio occupancy of 97.9% was 20 basis points lower than the last quarter. We had 293,000 sq ft of expiries, all within our Alberta and Atlantic portfolios, and we renewed 223,000 sq ft for a 76% retention rate. Lease renewal spreads remained strong for these regions, averaging 37% above expiry. We also completed approximately 14,000 sq ft of new leasing. A small occupancy decline in the quarter was expected and was primarily due to 41,000 sq ft of vacancies in Atlantic and 29,000 sq ft in Alberta. This was also temporary, as our team has already executed 59,000 sq ft of new leases related to this space with lease commencements in 2025.
We expect industrial occupancy to improve over 2025, ending the year slightly above 98.5% based on strong tenant retention and vacant space being released. We continue to have embedded rental growth in our industrial portfolio with average in-place rents of CAD 9.76 at the end of the quarter. Lastly, our mixed-use and residential portfolio continues to perform well with occupancy at 94.1%. Turning to our developments, as Rael mentioned, we are very proud of the progress we made in our development pipeline. During the quarter, we delivered approximately 70,000 sq ft of high-quality commercial GLA to our retail intensification program and successfully delivered 921,000 sq ft of industrial ground leases to Loblaws at our Caledon Business Park location. Cash rent commenced at the Caledon site on January 1st. In addition, we continue to advance our zoning and planning activities for future residential development.
An example of this is our project at Woodbine and Danforth, where we obtained city council approval during the quarter. In November, the project received zoning approval for the redevelopment of a 35- and 10-story mixed-use asset, including 422,000 sq ft of purpose-built rental along with a grocery store. Site plan approval for the proposal was then submitted in December. While project economics on certain sites are improving, others, particularly large master plan sites, continue to be challenged due to elevated costs, lower land values, and the current impact of oversupply in the GTA condo market. During the fourth quarter, we made the decision to pause our Golden Mile redevelopment project because of increased upfront site servicing costs related to revised city requirements for infrastructure and our partner's decision not to proceed with the purchase of the condo block on the site.
Our development and construction teams will continue to evaluate solutions to improve the project viability while continuing to advance a broader near-term project pipeline. I will now pass the call over to Mario to discuss our financial performance.
Thank you, Niall, and good morning, everyone. We're very pleased with our financial performance in the fourth quarter as our business continues to deliver stable and consistent growth. Our reported Funds From Operations for the fourth quarter was CAD 188.2 million, or CAD 0.26 per unit. This was a clean quarter with non-reporting items limited to lease surrender income of CAD 2.6 million, offset by CAD 3.1 million, a temporary increase in G&A, which primarily related to our outsourcing project, which we noted last quarter. These two items account for a net charge to FFO of CAD 500,000. On a per-unit diluted basis, our reported FFO for the fourth quarter of CAD 0.26 per unit reflects an increase of approximately 2% from the fourth quarter of 2023. This increase was primarily due to higher same-asset NOI and net FFO contributions for completed developments, partially offset by higher interest costs.
Turning to our properties, same-asset cash NOI increased by CAD 6.7 million, or 2.8%, compared to the fourth quarter of 2023 as a result of strong leasing activity. By asset class, retail same-asset NOI increased by CAD 4.2 million, or 2.3%. The increase was primarily driven by higher base rent from contractual rent steps, renewals, new leasing, and higher recovery income. Industrial same-asset cash NOI increased by approximately CAD 2.6 million, or 6.4%. This increase was primarily due to higher rent, higher base rent from leasing activity, new leasing, and higher capital recoveries. Mixed-use and residential same-asset cash NOI was relatively flat to the same quarter last year. Turning to our balance sheet, our IFRS NAV for the quarter was CAD 14.07 per unit, an increase of CAD 25 million, or 0.2%, over last quarter.
Our NAV growth was driven by a contribution of CAD 48 million from operations and a net fair value gain of CAD 14 million from our investment properties. This was offset by a decline of CAD 36 million on our investment in the units of Loblaw properties, where we are required under IFRS to mark to market this investment to its trading price at the end of each period. Our fair value gain on investment properties in the quarter was primarily driven by cash flow growth in the retail portfolio and the completion and transfer of the industrial Loblaw ground lease at our Caledon Business Park. These gains were partially offset by a loss recorded due to a change in the circumstances at our Golden Mile redevelopment site, as mentioned by Niall.
Turning to our financing activities, we continue to take a prudent approach to capital management to benefit from the stability provided by our industry-leading balance sheet. We once again ended the quarter and saw the financial position with strong debt metrics and ample liquidity. Our Debt-to-EBITDA ratio was seven times. We continue to maintain a fully undrawn $1.5 billion corporate facility, and this is further supported by approximately $13 billion of unencumbered properties. During the quarter, we completed two mortgage refinancings and one new financing to fund our joint venture acquisition with Crestpoint. These mortgages were for total proceeds at a share of approximately $96 million, fair interest at a weighted average rate of 4.72%, and were completed at an average term of approximately 10 years. The refinancing activity was completed on total maturing debt.
The refinance activity was completed on total maturing debt of CAD 67 million at a weighted average cost of 3.75%, representing an upfinancing of CAD 21 million. Subsequent to the quarter end, we repaid our CAD 350 million, 3.546% Series J Senior Unsecured Debenture at maturity and issued our CAD 300 million Series V Unsecured Debenture. The debenture was completed for a term of five years at an all-in rate of 4.293%, filling an underutilized spot on our balance sheet to the 10-year debt ladder. The issuance was completed with a credit spread of 102 basis points, making it Choice's second lowest five-year spread ever. We also leveraged our secured lending relationships, funding CAD 136 million as our share on the recently transferred Loblaw ground lease at Choice's Caledon Business Park. The mortgage is co-terminated with Loblaw's 25-year ground lease and bears interest at 4.88%.
The loan was negotiated at pricing inside of Loblaw's equivalent unsecured credit spread. These two financings total CAD 436 million and were completed at a weighted average rate of 4.48% and an average term of approximately 11 years, which once again highlights our ability to prudently manage and de-risk our balance sheet in a cost-effective manner. So once again, we are pleased with another strong quarter and meeting our 2024 annual earnings outlook. Choice is well-positioned. We have confidence in our business to continue to deliver stability and growth to our unit holders. And I'd now like to turn the call over to Erin to speak to our 2025 outlook.
Thanks, Mario. Looking ahead, we have a solid plan in place to continue to deliver on our operational and financial goals. For the full year 2025, we expect to maintain stable occupancy with approximately 2%-3% year-over-year growth in Same-Asset Cash NOI. In addition, we expect to deliver annual FFO growth unit diluted between CAD 1.05-CAD 1.06, reflecting approximately 2%-3% year-over-year growth. We plan to continue to advance our development pipeline with the majority of our spend focused on the advancement of our industrial development at Caledon Business Park and our retail intensification program. Lastly, we remain committed to maintaining the strength of our industry-leading balance sheet and expect Debt to EBITDA to remain below 7.5 x. With our recent unsecured debt issuance, we've addressed a significant portion of our 2025 maturities.
With that, Rael, Niall, Mario, and I would be glad to answer your questions.
At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. And your first question comes from the line of Lorne Kalmar from Desjardins Capital Markets. Your line is open.
Thanks. Good morning, everyone. And I guess a bittersweet goodbye to Mario on the call, at least. Just on the industrial side of things, it sounds like it's a decently bullish outlook despite some of the broader headwinds. Within the portfolio, do you guys have a rough idea of the number of tenants or from a revenue percentage that could potentially be impacted by the potential tariffs? And then, yeah, so maybe I'll leave it. Oh, yeah. And then are you guys seeing any impact on leasing timelines as it relates in the industrial portfolio?
Hey, Lorne. It's Rael, good morning. Look, I think from a macro point of view on tariffs, look, it's very early days, and everyone's monitoring the situation closely. I'll tell you what we know is we have a very high-quality portfolio that's generic, that can accommodate a wide variety of tenants. And then when we look at the leasing we've done for 2025, we've renewed 85% of the tenants already rolling. And then if you think about the portfolio overall, our portfolio has truly demonstrated real resilience, and we expect it to continue to do that.
If you think about just retail for a second, we're seeing strong demand from retail tenants, and tariffs obviously don't have an impact on the fact that the limited supply and the majority of our tenants are true necessity-based tenants. So as I said, we'll monitor the situation, but we don't expect a significant impact at this point.
Okay. That's good to hear. And then just quickly, maybe for Niall on the Loblaw's developments, the ground-up developments, can you give us an idea of what type of yield you would expect to get on those projects?
Hi, Lorne. It's typically 7.5%.
And would it be the same for the intensifications, or would you be able to get higher on the intensifications?
It's around the same on the intensifications and balance.
Okay. Perfect. That's all from me. I'll turn it back.
Your next question comes from a line of Brad Sturges from Raymond James. Your line is open.
Hey, good morning. Just wondering on just to continue on the theme on industrial, just considering the land bank you have today and the cost base you have on it, married with maybe a little bit more of an uncertain macro picture. How do you think about new development in industrial? Would you still consider spec or switching gears more to build-to- suit or a pre-leased sort of project at this stage?
Yeah. Look, as you said, we have a real competitive advantage just given the land cost base. At the moment, we're actually building as much as we can on the site. We couldn't actually go quicker. The earliest we could actually start spec construction or new construction would be probably mid to, call it, Q3 of 2025. And then if you see in our disclosure, we've seen quite a significant decrease in construction costs. So that coupled with our land pricing, we have a real cost advantage over others, which gives us the confidence to potentially go on spec pending no major dislocation in the industrial market. As well, we're seeing quite a few RFP responding to. And as I said, we've got time to monitor the situation and move forward accordingly.
Okay. That makes sense. And just more broadly speaking, I guess there was a little bit of transitional vacancy in the industrial portfolio, as you alluded to last quarter. How do you think about the vacancy rate in the next couple of quarters for industrial?
Hi, Brad. It's Niall. We see that vacancy rate improving because there has been a lot of absorption in the last quarter. The meetings we've had with the brokers, there was a significant takeoff in the GTA in Q4, which is boding well for 2025.
Okay. And in terms of what's left to do from an expiry perspective, there's no major non-renewals you're expecting at this point?
No.
Okay. I'll turn it back. Thank you.
Your next question comes from a line of Sam Damiani from TD Securities. Your line is open.
Thanks. Good morning, everyone. So first off, just I guess for Niall, your comment about the Golden Mile deferring that, what were the main reasons? I think you mentioned oversupply in the GTA market. Were there other reasons that really were triggers there? Was it really just the partner not willing to go ahead? Could you go ahead on this project with a different partner? And are there other residential sites in the GTA that you would consider moving forward on in the near term?
I'll answer the last part of the question first. Yes, we are moving ahead with other sites in the GTA. What's particular to Golden Mile is the infrastructure for Golden Mile, both within our land and the external servicing is quite high. And there is a landowner's group that is working with the city to try and figure out how to do this more effectively and efficiently. There's also no DC credits for the infrastructure that's created by the landowner's group. So it's creating a bit of an abnormal situation just for this one particular master plan.
Wow. Okay. That's interesting. It sounds like something that should be fixed. Maybe just moving over to those development sites acquired in Calgary and Edmonton. Do you have a total retail GLA that you're expecting to build on those and what rents you're targeting? Maybe I guess you mentioned the development yield's kind of in the mid-sevens?
Hey, Sam. It's Rael. The one in Edmonton, it's around 35,000 ft, and the one in Calgary, a site we believe is around 100,000 ft. The yields Niall commented on were general across everything we're doing with Loblaw. These new developments may be slightly lower than that, but not significantly lower.
Okay. Maybe just one last one for me. I mean, the comment on the 16% renewal spreads and leasing, I think that's a bit of a different metric than you've disclosed historically because it includes the average rent over the new term. How would that metric compare to the last couple of years?
I can answer the calc, and then maybe Niall can talk about spreads, but Sam, the 16% is what we've been discussing on the call over the past couple of quarters, which is ending to average, and then in our docs, we've also provided ending to year one as well, and what we saw in spreads in 2024 was relatively consistent to what we saw in 2023 as well and what we expect going forward in 2025.
I don't think we have the going back further, Sam, on the comparables. We don't have it handy here.
Okay. Great. That's helpful. Thank you, and I'll turn it back.
Your next question comes from a line of Mark Rothschild from Canaccord Genuity. Your line is open.
Thanks . Good morning, everyone. So I understand that the Golden Mile development might be somewhat unique, but Rael, in your comments, you spoke about long-term conviction and residential, but you're not really undertaking anything significant now, even though the balance sheet is in pretty good shape. Is there something that you would need to see? Is the cost coming down? Is the condo market improving for you to work more aggressively in advancing some of the development projects you have? Because there obviously is quite a bit of potential in the portfolio.
Yeah. Mark, I think what made Golden Mile unique is that we're relying on condo sales to almost supplement our rental building a bit. So as Niall said, we're pivoting to, call it, single-tower rental-only buildings. And we're definitely seeing a softening in costs, interest rate stability, or interest rates coming down. And that's what gives us that conviction that we believe over the next 12 months, we can actually get a project off the ground. Maybe Niall can just give a bit more color.
Yeah. Mark, I'd add to that that we're having a lot of success with the planning authorities as well, moving through entitlements and making modifications. They're moving a lot faster than we expected. So we're hoping to get two projects in the near term moving and actually shoveled in the ground with board approval, pending board approval.
Okay. Great. Thanks. That's all from me.
Again, if you'd like to ask a question, please press star one in your telephone keypad. Your next question comes from a line of Himanshu Gupta from Scotiabank. Your line is open.
Thank you and good morning. So in your same asset NOI guidance of 2%-3%, how much are you assuming for the industrial asset class? And then I think you mentioned industrial occupancy to be 98.5% by the year end. I mean, what kind of rental spreads are you expecting on those expiry as well?
Himanshu, if you think about our same asset, retail should be relatively consistent in 2025. Niall can provide more color, but industrial in 2024 had a lot of roll in the GTA, which significantly benefited us. When you think about 2025 for industrial, our same asset is going to be lower just because of where our leases are rolling more out west and Atlantic. I'll hand it over to Niall to give a bit more color there.
Yeah. We've only got three leases in Ontario this year. The first 130,000 sq ft, you're going to see spreads that you're used to seeing and are quite typical. And then we will have a very large renewal, which is a fixed-rate renewal at the end of the year.
Got it. That's helpful. So only three in Ontario. And I guess I think a bulk of them is coming in Alberta, right? I mean, as per your disclosure, Calgary and Edmonton.
Correct.
Okay. Okay. Fair enough. And then any comments on Amazon kind of exiting the Quebec market? I mean, how does that impact you? I think you have one property in Laval. Maybe any thoughts there?
That's correct. We have one property in Laval that's leased until August 2032. We haven't heard a formal response from Amazon yet, so we're waiting to get that.
Okay. And I mean, based on your I mean, it looks like no response, I get it. Do you think the space will be going to the sub-lease market? Or I mean, how will that impact in the near term?
We're not quite sure yet. There is a significant rent left between the in-place lease rent and the market that I'm sure Amazon is looking at. And we share in that. So there is upside.
So Himanshu, I think we hope that they take it to market because we will share in their growth, as Niall said. But they've improved the space significantly. They're not using the space. But we have a lease with them, which, as Niall said, we're waiting on feedback from Amazon.
Got it, and I'm assuming your guidance basically assumes that you receive the rent for the full year, 2025, so no provisions there.
Correct.
Okay. Okay. Fantastic. Thank you. And maybe just last question on the capital allocation. Rael, I mean, again, active capital recycling year last year. I mean, given where the cost of that financing is, unsecured debenture market is wide open here. Do you see yourself to be a bit more opportunistic on the acquisition side?
We hope so, and there are a few things we're working on that hopefully come to fruition, so we'll have an update for you next quarter.
Okay. Fair enough. Thank you all, and I'll turn it back.
Your next question comes from a line of Pammi Bir from RBC Capital Markets. Your line is open.
Thanks. Maybe just sticking with the line of questioning around industrial, have you seen any change at all in terms of maybe the opportunities coming out in the market from an investment standpoint, acquisitions related, and any changes in pricing where yields are coming in?
So, Pammi Bir, some of the opportunities we're actually looking at at the moment are industrial. They're actually off-market opportunities. I'd say there has been no real change in pricing on industrial yet. It remains strong, and there seems to still be deep pools of capital looking at it.
With these vendors, are they motivated, or is it more just cycling out of maybe some funds or any comment you can share with?
Yeah. So one of the vendors is a Loblaw deal that we have the right to purchase, and the other one is an off-market opportunity that we've been working with the vendor for about nine months on.
Sorry, would these be in the GTA, or?
The Loblaw one is in the GTA. The other one is across Canada.
Got it, and then I guess.
Oh, sorry. I just said a few locations.
Okay. And then I guess just in response to the prior question from an investment standpoint, are the bulk of the opportunities then with how would you sort of characterize the investment size, I guess, in terms of what's under review from an acquisition perspective?
I would say in total around CAD 350 million.
Got it. Okay. Thanks very much. I will turn it back.
That concludes our question and answer session. I will now turn the call back over to Rael Diamond, CEO, for closing remarks.
Thank you, Rob. And thanks everyone for joining us this morning, and thank you for your interest and your investment in Choice.
This concludes today's conference call. You may now disconnect.