Good morning. My name is Audra, 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 first quarter 2025 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. I will now hand the call over to Simone Cole, General Counsel and Secretary. Please go ahead.
Thank you. Good morning and welcome to Choice Properties Q1 2025 conference call. I am joined this morning by Rael Diamond, President and Chief Executive Officer; Niall Collins, Chief Operating Officer; and Erin Johnston, Chief Financial Officer. Rael will start the call today by providing a brief recap of the first quarter performance and providing an update on our transaction activity. Niall will discuss our operational results and development pipeline, and Erin will conclude the call with a review of our financial results before we open the line for Q&A.
Before we begin today's call, I would like to remind you that by discussing our financial and operating performance and 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 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 Q1 2025 financial statements and management discussion and analysis, which are available on the website and on SEDAR. With that, I turn the call over to Rael.
Thank you, Simone. Good morning, everyone. Welcome to our Q1 conference call. We had a very strong start to the year, and our Q1 operating and financial results were solid. Our high-quality, necessity-based portfolio continues to deliver stability and growth. In the first quarter, we maintained near full occupancy at 97.7%, achieved strong same-asset cash NOI growth of 2.9%, and FFO growth of 1.9%. In light of the current macroeconomic environment, I'd like to start by expressing my confidence in our portfolio's exceptional positioning amidst broader economic uncertainty. Before diving into the details of our quarterly activities, it's important to highlight that Choice remains in an enviable position. In retail, we continue to see strong performance and retention in our well-located, necessity-based properties.
Our portfolio continues to demonstrate its ability to deliver stable and growing cash flows throughout varying economic cycles and conditions, and we believe this year will be no different. Our industrial portfolio is extremely high quality and generic in nature, with properties located in key distribution markets across the country. Based on the current tariffs announced, our industrial portfolio has limited exposure to sectors impacted by these tariffs and will continue to capitalize on embedded rent growth within the portfolio from strong leasing demand for our properties. In our transit-oriented mixed-use and residential portfolio, our portfolio is benefiting from the lease-up and stabilization of our two most recent residential development completions, which are now near full occupancy. Our remaining mixed-use and residential portfolio continues to perform well.
Choice's strong balance sheet and prudent approach to financial management has allowed our team to focus on executing our strategic goals, including our active capital recycling program that is focused on maintaining the quality of our portfolio. During the first quarter, we completed approximately CAD 95 million in total real estate transactions, including approximately CAD 33 million of strategic acquisitions and CAD 62 million of non-core asset dispositions. In the quarter, we continued to buy high-quality assets from Loblaw, acquiring a retail property in Brampton for a purchase price of approximately CAD 33 million. The property totals approximately 120,000 sq ft and is anchored by Fortinos banner with a 15-year lease term and annual rent increases of 2%. The asset benefits from favorable demographic trends and is exceptionally well located nearby the Mount Pleasant GO station and our recently completed residential asset, Unity at Mount Pleasant Village.
On the disposition front, in the quarter, we completed the sale of three non-core retail properties, including two assets in Aurora and one in Montreal, for combined proceeds of approximately CAD 54 million. In addition, we sold a land parcel in Edmonton for approximately CAD 8 million. Subsequent to quarter end, we were able to leverage our relationships and industry-leading balance sheet to take advantage of acquisition opportunities. In April, we completed two industrial transactions totaling CAD 340 million, bringing year-to-date acquisitions to approximately CAD 373 million. These acquisitions included a 1.1 million sq ft industrial distribution asset from Loblaw for approximately CAD 182 million, which was concurrently leased back to Loblaw for a 10-year term with 2% annual growth. The asset also has significant excess land that offers 1.2 million sq ft of future intensification potential and is well located in Ajax along Highway 401, providing 30-minute access to the city.
We also acquired a portfolio of eight industrial outdoor storage sites for approximately CAD 158 million. The portfolio includes approximately 140 acres of land across core Canadian markets. These sites are complementary to our existing industrial portfolio and are leased to TEN Canada, one of Canada's largest commercial trailer rental leasing and maintenance companies, at an attractive price per acre and yield. Our team also continued to advance our development pipeline in the first quarter, with approximately CAD 44 million of development spend primarily related to active construction at Choice Caledon Business Park. We also transferred two retail intensifications in Ontario and one in Alberta totaling 97,000 sq ft. Our intensification pipeline is another example of how we continue to take advantage of the demand for retail space to add value to our portfolio. Niall will speak more about our intensification initiative shortly.
Finally, I want to acknowledge the release of our 2024 Environmental, Social, and Governance Report. This year's report summarizes many of Choice's successes over the last year and showcases Choice's commitment to ESG and the great work being done by our teams across the business. The report can be found in the sustainability section of our website, and I encourage you to take a read. With that, I'll pass the call over to Niall to discuss our operational results in more detail. Niall?
Thank you, Rael. Good morning, everyone. As Rael mentioned, once again, we have delivered stable operational results in the first quarter, and we continue to see strong demand across our portfolio. The overall portfolio remains at near full occupancy, ending the quarter at 97.7%. This reflected an increase of 10 basis points compared to the prior quarter. During the quarter, we had approximately 1.1 million sq ft of leases expire, of which we renewed 934,000 sq ft, achieving an 82% tenant retention. These renewals were completed at an average rent spread of 11.7%. We also completed 253,000 sq ft of new leasing, resulting in positive absorption of 53,000 sq ft, which was largely driven by our Alberta retail portfolio. Turning to each of our asset classes, in our necessity-based retail portfolio, occupancy increased 20 basis points to 97.8%.
During the quarter, 715,000 sq ft expired, of which we renewed 635,000 sq ft for an 89% tenant retention rate. These renewal spreads averaged 10% above expiring rents, with particularly strong growth in the specialty and value sector. We also completed 165,000 sq ft of new leasing in the quarter, with average rents over the lease term 32% higher than our average in-place rents. This more than offsets the 80,000 sq ft of expiries that did not renew in the quarter. To date, 42% of the space is committed to backfill in 2025, with rents 28% higher than prior tenants' expiring rent, and our team is actively working on deals for the remaining space. In our industrial portfolio, occupancy of 97.7% was 20 basis points lower than last quarter.
We had 418,000 sq ft of expiries, all within our Alberta and Atlantic portfolios, and renewed 299,000 sq ft for a 72% retention rate. These renewal spreads remained strong, averaging 17% above expiry, and are indicative of the geographic market. We also completed 78,000 sq ft of new leasing in the quarter, where the average rent over the lease term is 55% higher than our average in-place rents. The small occupancy decline in the quarter was expected and will be temporary, as our leasing team is already in negotiations on 24,000 sq ft and actively working to address the remaining space. As I communicated on the last call, we expect industrial occupancy to improve in the second half of 2025, ending the year above 98%, based on strong tenant retention and vacant space being released.
Lastly, our mixed-use and residential portfolio continues to perform well with occupancy at 94.9%, which is up 80 basis points from the last quarter. Finally, turning to developments, as Rael mentioned, our team continues to deliver on our development pipeline. During the quarter, we completed three intensifications, totaling 97,600 sq ft. These intensifications included a 72,600 sq ft ground lease to the Nautica Lands Group in Belleville, Ontario, at a yield of 9.9%, directly adjacent to a Choice-owned property in No Frills. This was our second ground lease intensification with Nautica Lands, and we continue to believe that this great partnership for Choice is generating a stable and growing cash flow stream while augmenting the performance of our adjacent retail site. The Shoppers Drug Mart in Mississauga, totaling 17,000 sq ft at a yield of 6.3%, which was one of eight Shoppers Drug Mart intensifications in our active development pipeline.
We also have an additional five Shoppers Drug Marts in planning. Finally, a CRU strip at a 50% co-owned site in Edmonton, totaling 8,000 sq ft and share, delivering a 5.7% yield. Overall, our active development pipeline totals 17 projects of approximately 1.1 million sq ft at an average forecasted yield of approximately 7%. Looking ahead for the remainder of the year, our major active development is progressing well at Choice Caledon Business Park. Construction is on schedule on our NLS building with possession in September of this year. I will now pass it over to Erin to discuss our financial performance.
Thank you, Niall. Good morning, everyone. We are very pleased with our financial performance in the first quarter, as our business continues to deliver stable and consistent growth. Our reported funds from operations for the first quarter was CAD 190.9 million, or CAD 0.264 on a per-unit diluted basis, reflecting an increase of 1.9% compared to the first quarter of 2024. In the quarter, we had a modest amount of non-recurring items totaling CAD 2.9 million, limited to a property tax incentive of CAD 1.4 million recognized at 500 Lakeshore, and CAD 1.5 million of fee income recognized in relation to the termination of the Golden Mile Purchase Agreement. Comparatively, in the prior year, we had CAD 4.5 million of non-recurring items, which included a CAD 2 million condo gain and CAD 2.5 million of lease termination income. Normalizing for these non-recurring items, FFO per unit growth was approximately 3.2%.
This increase was primarily due to higher same-asset cash NOI and contributions from developments, partially offset by higher interest expense and lower interest income. Turning to our properties, same-asset cash NOI increased by CAD 7.2 million, or 2.9%, compared to the first quarter of 2024, driven by strong leasing and renewal activity. By asset class, retail same-asset cash NOI increased by CAD 2.8 million, or 1.5%. The increase was primarily driven by higher base rent per renewals, new leasing, and contractual rent steps. Industrial same-asset cash NOI increased by approximately CAD 2.8 million, or 6.1%. This increase was also primarily due to higher base rent per renewals, new leasing, and rent steps. Mixed-use and residential same-asset cash NOI increased by approximately CAD 1.5 million, or 15.3%. This increase was primarily due to the property tax incentive recognized at 500 Lakeshore and higher base rents from leasing activity and rent steps.
Excluding the previously noted property tax incentive, total same-asset cash NOI growth would have been 2.3%. Turning to our balance sheet, our IFRS NAV for the quarter was CAD 14.17 per unit, an increase of CAD 76 million, or 0.7%, over the last quarter. Our NAV growth was driven by a net contribution of CAD 46 million from operations and a net fair value gain of CAD 48 million on our investment properties, offset by a decline of CAD 9 million on our investment in Allied Properties. As a reminder, we are required under IFRS to mark-to-market this investment to its trading price each period end. Our fair value gain on investment properties in the quarter was primarily driven by favorable leasing activity and contractual rent steps across the retail portfolio.
Turning to our financing activities, we continue to take a prudent approach to capital management and benefit from the stability provided by our industry-leading balance sheet. Once again, we ended the quarter in a solid financial position with strong debt metrics and ample liquidity. Our debt-to-EBITDA ratio was 7 times, and we continue to maintain a fully undrawn CAD 1.5 billion corporate facility. This is further supported by approximately CAD 13.1 billion of unencumbered properties. As we mentioned on our last conference call, we had two major financing activities during the quarter. We issued our CAD 300 million Series B Senior Unsecured Debenture at an all-in rate of 4.293%, with proceeds used to partially repay our CAD 350 million Series J Senior Unsecured Debenture. We also funded a CAD 136 million mortgage at share on the Loblaw Ground Lease at Choice Caledon Business Park.
This loan is co-terminus with Loblaw's 25-year ground lease, with an all-in interest rate of 4.88%. Overall, we are pleased with another strong quarter. The first quarter was a solid start to the year. Looking ahead, we continue to have a conviction in our ability to deliver on our operational and financial goals, and we are well-positioned to achieve our 2025 outlook. We plan to continue to advance our development pipeline, with the majority of our spend focused on the advancement of our industrial development at Choice 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 times. With our financing activity in the quarter, we have addressed a significant portion of our 2025 maturities. With that, Rael, Niall, and I would be glad to answer your questions.
Thank you. 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 take our first question from Mark Rothschild at Canaccord.
Thanks, Ben. Good morning, everyone. Rael, you made a comment that you don't expect tariffs either way to really impact your industrial portfolios too much, if at all. There has been a notable increase in vacancy in industrial markets in general. To what extent do you believe that the same property NOI growth that you've had of late can be sustained over the next year or two, based on where your in-place rents are and where market is now?
Yeah, look, I think just coming back to the tariffs and then Niall's point to the sustaining of our NOI growth. Look, we've spoken before that we've completed a real detailed review of our industrial portfolio. We've looked at every single tenant and where we believe they have exposure. We do not believe there is any material risk in our portfolio. If we take a very negative view, we maybe think there's a couple of million dollars of negative or potential exposure, but it's not material for us. When you look at 2025, you have to remember that 80% of our renewals are already committed and locked in, and we have pretty good visibility on next year as well, just given we're already in discussion with those tenants. Maybe I'll just let Niall comment on the growth.
Yeah, Rael, just to support what you're saying. For the balance of the year, the vast majority of our leasing is done, so we feel quite confident for 2025. Again, we have a very generic portfolio and great location, so we don't see a lot of impact. The tenant base we have, we don't see any major impact. None of them are in that category that's sensitive to some of the tariffs that are being floated at today.
As Niall and Erin have mentioned on last quarter, we do see industrial NOI growth year over year improving in the second half of this year, along with occupancy.
Okay, great. Thanks. Maybe just on the acquisition of the outdoor storage site. To what extent do you view this as something a little bit different from what you normally acquire for your industrial portfolio? How does this strategically fit in? Is this different at all, and what's the opportunity there?
Look, I think if you even go back to what Niall said on the call, he spoke about the partnership with Nautica. We have always liked stable, growing cash flow, land-use assets. This fits in. If you think about it on the industrial side, if you go back, I think it was around three years ago, we bought a portfolio from Canada Cartage. A very similar portfolio was like 56 acres we bought then. This is another 140 acres. We have truly 196 acres of this industrial outdoor storage. As I said, it is stable, strong cash flow growth, very low CapEx or no CapEx from our side. The tenant sometimes has improvements on the site. It gives us optionality to use the land for something else if they are not there.
As I said, we have 196 acres of this already. If you add, again, think of what we've done with Loblaw recently, two land leases, as well as we have one with Amazon and land lease. If you add all of that, we have almost, call it 365 acres of industrial property on land leases, which we think fits wonderfully in the REIT.
Okay, great. Thank you so much.
We'll go to our next question from Sam Damani at TD Securities.
Thanks, Ben. Good morning, everyone. Congratulations on the acquisitions, for sure. I guess, wonder, Rael, if you could just address, I guess, capital allocation going forward in light of the trade war with the U.S., how it's changed, if at all.
Yeah, look, I think we're in a unique position, Sam, that our balance sheet's really strong. Our assets are performing very well. If we can find good opportunities, we'll continue to take advantage of those opportunities. As we said at the start of the year, we believe in 2025 we'll be net acquirers of assets. There's nothing else significant that we're currently underwriting.
Okay. With the rather substantial acquisition already in Q2, you said you'd be a net acquirer, but do you plan to offset that at least to some degree with some dispositions near term to keep the leverage around seven times? Or are you happy to let it drip up a bit?
No, some dispositions we're in the process of working on, which hopefully will have more color next quarter. It's probably around CAD 100 million of dispositions.
Okay, that's helpful. I guess last one for me, you talked about going through the industrial portfolio in detail. I wonder if you could just describe how you sort of categorized the most risky elements of the tenant base, just in terms of industry, or how you looked at that sort of small exposure. What industries are those?
I'm just trying to find something, but I would say it should be automotive. We have very small exposure, some consumer goods. Our team went tenant by tenant and looked at the type of tenant and how they were using the space and looked at exposure to the U.S. Again, it is very hard to say exactly how everyone's business will get affected. That is why I say we took a pretty conservative view.
Okay, great. Thank you. I'll turn it back.
Our next question comes from Lorne Kalmar at Desjardins Capital Markets.
Thanks. Good morning. Maybe switching over to the retail side of things. Obviously, Loblaw is continuing to look to grow. A lot of the major retailers are. Are you seeing any apprehension on the part of any smaller or regional tenants to execute on their growth plans in light of what's been developing south of the border?
Hi, Lauren. It's Niall. I would say, look, there's some cautious optimism with retailers. As I said, all of our retail leasing, the vast majority for the year, is completed. We're not seeing any challenges. They have the capital, and they're continuing to expand. I think, again, we've got to remember that there is limited supply of good retail in the country. That is in our favor too.
Okay. Maybe just following that.
No, I was going to add, if you look at yesterday's news article on interest in HBC boxes, I think that's, again, an indication that tenants are actively looking for new space.
Yeah, that was a nice surprise to see the high-level demand there, despite everything going on. How do you see retail occupancy trending over the balance of the year? Do you think it kind of sticks around the high 97% range, or do you think you can push it higher?
Lauren, it's going to be flat for these first two quarters. The back end of the year, it is going to pop, as I mentioned. We do expect it to go into the 98%. It is going to be a Q3, Q4 phenomenon based on our leasing and commitments.
Okay. That's very helpful. Just last one. Rael, I think you kind of alluded to it earlier, but I just wanted to confirm. I think last quarter you talked about there being two industrial assets from Loblaw for about CAD 350 million you were looking at. I'm assuming the Ajax one was one of them. Are you guys no longer looking at the second one?
No, sorry. The two industrial assets we're looking at were the ones we just acquired, was the one from Loblaw and the one from the third party.
Got it. Okay. Thank you very much.
We'll move next to Pammi Bir at RBC Capital Markets.
Thanks. Good morning. Just wanted to come back to the IOS acquisitions. Can you just provide a bit more color on the locations? I didn't catch the tenant that you mentioned. And maybe a cap rate range, if that would be helpful. Thanks.
Sure. Pommi, there are eight locations across Canada. The tenant is TENA Canada, which is Transportation Equipment Network. The locations are anywhere from Toronto, Delta, British Columbia, Calgary, Edmonton, Montreal. There is Winnipeg in there as well. I would say the majority of the locations of the eight are all in major markets. TENA Canada is the largest network of the largest, I think, trailer leasing network in Canada. I think they have 26,000 vehicles.
Okay. Just in terms of the lease mechanics, what's the duration of these leases? What sort of rent steps do you see in them?
Yeah. I'm sorry. Let me answer your first question on the cap rate. I'd say the blended cap rate between both industrial acquisitions is called a mid-sixes. The lease terms, they roll over various times. The years that the tenant has control is around 15 years for each site. The leases step with CPI on an annual basis.
Got it. Okay. Just coming back to maybe one of the earlier questions, are there more of these, perhaps with others that you're looking to acquire in the near term? Or is this kind of like a one-off opportunity that emerged?
No, look, I think we'll keep leveraging our relationships with tenants in the industry. We would love to acquire more of these. We think, as I said earlier, it's a great asset class to fit within our industrial portfolio.
Okay. Last one for me. Just coming back to the industrial portfolio, obviously, it sounds like things have been trending pretty well and quite stable. Are you seeing any changes in terms of how tenants or how long it takes to maybe get leases signed? Any indication that tenants might be slowing their expansion plans or anything of that nature? Just any shift in behavior?
I wouldn't say there's a strong shift in behavior, probably. It's Niall. The leasing, again, a lot of our leasing for the remainder of the year is completed. We didn't see any challenges. 2026 as well, there is some expansion. There's capital. Again, our generic and our type of user groups, they don't seem to be as affected, and it isn't slowing down leasing. I'll also add that we have seen a pickup in RFPs on our Caledon business park. We've recently responded to a couple of RFPs, and we're hopeful that we get more traction on those.
Would that pickup in RFPs be from domestic companies? I'm curious if there's any change between domestic and foreign tenants, perhaps looking at expansion plans in Canada at all.
Some of them are from large global 3PL networks. We do not know who their ultimate client is, Pommy, but a strong company from our point of view.
Thanks very much, Rael. I'll turn it back.
We'll take our next question from Mike Al-Musa at BMO Capital Markets.
Thank you, operator. Rael, you kind of stole my thunder a little bit because you touched on it with the HPC lease news. I was just curious if you could give us a little bit of additional color. Are you concerned at all? I mean, obviously, the demand's there. Would you characterize that as being pent-up demand? Are you concerned that maybe this robs from demand a couple of years ago that might have been there otherwise?
Look, it would be interesting to see who the ultimate tenants are. We have heard that there's one foreign tenant or new entrants into the Canadian market. I don't know, again, how many locations they'd be taking. Generally, we don't really see much of an impact given the nature of our portfolio. We do see it as an opportunity in some locations to actually try and pull tenants out of some of these malls because in some of these locations, we think the mall is now challenged.
Right. I guess that's the other part of it, right? There's, I guess, 65 less 95 or 95 less 65. There would be properties that you have that might be benefiting from a decline in that joining property.
Okay. Got it. Maybe last new one for me. Your stock's obviously done very well, macro-related. I mean, obviously, you guys are doing everything you can to justify it, but it's been aided by a macro tailwind. As you look forward, you've always been conservative in nature. Your stock's in the low sixes. We implied cap rate basis, and you're buying in the mid-sixes. Just with respect to your leverage targets, are you thinking about seven the right number? Are you thinking about maybe testing to see if you should bring that down over time? Just curious as to your thoughts there.
I might get there. I'd say that we're comfortable where we are with leverage. We've always said that our target's seven and a half. When we look at the next couple of years, just based on where our developments are and our capital recycling program, it'll probably stay in the low sevens.
Okay. No real change there. Great. That's all I have. Thank you so much.
Thanks, Mike.
Our next question comes from Himanshu Gupta at Scotiabank.
Thank you and good morning. Just to follow up on the industrial acquisition, I think, Rael, you mentioned mid-six cap rates. How would you say for Ajax Industrial Distribution Center? Is it very similar, mid-six as well?
Yeah. When I commented on the mid-six, it was the blend of the two was the mid-six. They are both very similar.
Okay. Very similar. Okay. On the Ajax industrial property, you mentioned about, I think, over 1 million sq ft of future intensification potential as well. Is that something you look to pursue in the near term, or is it more like a medium to long-term initiative there?
Yeah. Look, I think when you just—I don't know if you've had a chance to mention to look at the Google Earth image of the property. I think what you will see when you do look at it, you'll see we acquired essentially 126 acres. There's only a quarter of a 1.1 million sq ft building on it. You'll see on the east side of the site, there's a vacant piece of land that we could intensify immediately. If you go south of that land, there's another 600,000 sq ft, which the tenant is currently using for, I believe, trailer washing. I just think there's lots of potential, and we'll just have to assess where demand is. The good thing is we haven't allocated any excess value to this excess potential density.
Got it. Okay. Thank you.
I would say the last thing, just on the theme of, just on the theme of our industrial outdoor storage, if you just think about a lot of people classify industrial outdoor storage where the building represents, call it, 20% of the land coverage. I think Ajax almost fits in that category given the low site coverage on the property as a whole.
Okay. Fair enough. Thank you. In terms of the acquisition pipeline from Loblaw, I mean, obviously, you had the Brampton site and the Ajax one. Are you done in the near term? I mean, how's the pipeline looking there?
I am, Andrew. There's not a lot left. Ajax would be the most significant one this year. We also did Worthington earlier in the year. When we look ahead to what Loblaw has left plus what we've been looking at, there's a couple of small retail acquisitions, but not a lot in the pipeline this year, if anything.
Okay. Erin, just on the financing of these acquisitions, post-quarter, CAD 300 million acquisitions, will that be mostly on debt, or you could use some class B units as well?
We put those all on our line.
All on the line. Okay. Okay. I guess CAD 100 million disposition planned as well. I mean, that could partly finance those acquisitions as well.
Yep.
Okay. Okay.
Probably more—I am not sure. I was just going to say there will be probably more dispositions if you think about the whole year. When Rael was quoting the CAD 100 million, we will probably see that in Q2. There will be a bit more in the third, fourth quarter. We will still be a net acquirer for the year.
Okay. Awesome. Last question from me. Where is the cost of debt financing today, secured or unsecured? Has anything changed in response to the uncertainty which we have seen recently?
Yeah. If we think about the cost of 10-year debt, it's probably around 5.2%. Spreads have definitely widened, as you would have seen since we went to market in January. If you take, say, a 10-year mortgage versus a 10-year unsecured, I think we're seeing spreads. The secured market hasn't widened as much. I think there's probably a 40-50 basis point spread between Choice's unsecured rate and secured rate.
Okay. Awesome. Thank you. Thank you, Erin. I'll turn it back.
As a reminder, if you would like to ask a question, please press star one on your telephone keypad. We'll go next to Gaurav Mathur at Green Street Advisors.
Thank you. Good morning, everyone. Just staying on acquisitions for a minute, we've been noticing more industrial portfolios hit the market. Just wondering if that's something that would interest you opportunistically and in the near term going forward.
Yeah. Look, I think Gaurav, thanks for your question. We analyze everything we see on the market. If we think it represents good value and a good long-term asset, certainly something we will be interested in. As I said earlier, there's nothing right now that we're actively pursuing on the acquisition side.
Thank you for that, Rael. My last question. I want to switch gears here to the condominium market. Now, last quarter on Golden Mile, you did indicate that condominium construction is not feasible. Could you provide some more color on what you're seeing currently in the condominium market and if that would affect any of your other projects in the zoning pipeline?
One of the reasons we pause on Golden Mile is more on an infrastructure cost base, not necessarily the market. We are working with the city to try and resolve on that. In terms of the overall general condo market, we do not have a lot of exposure to that. Our portfolio is rental. As it plays out over the next 12-18 months, it is very hard to predict what the level of absorption will be. The active development sites that we are trying to advance, there is no exposure to condo. We are not reliant on condo to get those started.
Okay. Thank you very much. I'll turn it back to the operator.
Thank you. That concludes the question-and-answer session. I will turn the call back over to Rael Diamond for closing remarks.
Thank you, Audra. As I mentioned at the outset of the call, we are really in an enviable position. This quarter marks another example of our ability to consistently generate strong and stable growth. Our team remains focused on executing on our plan in 2025. Thank you for your interest, your investment in Choice, and for joining us this morning. Our AGM will follow this morning at 11:00 A.M., and we look forward to you joining us there.
This concludes today's conference call. Thank you for your participation. You may now disconnect.