Thank you, everyone, for joining us. My name is Hiten Sani, and I will be the operator for today's call. Welcome to Tribe Property Technologies' Fiscal First Quarter 2025 Financial Results Conference Call. This call is being recorded. We will be having a question-and-answer session at the end of the call. On our call today, we have Tribe CEO Joseph Nakhla and the company's President and CFO, Angelo Bartolini. I trust that everyone has received a copy of our financial press release that was issued earlier today. Listeners are also encouraged to download a copy of our financial statements and management discussion analysis from SEDAR+.ca. Please note, portions of today's call, other than historical performance, include statements of forward-looking information within the meaning of applicable security laws. These statements are made under the safe harbor provisions of these laws. Forward-looking statements are based on management's current views and assumptions.
Please review our press release and Tribe's reports filed on SEDAR+ for various risk factors that could cause actual results to differ materially from our projections. We use terms such as gross profit, gross margin, adjusted EBITDA, and recurring revenue on this conference call, which are non-IFRS and non-GAAP measures. For more information on how we define these terms, please refer to the definitions set out in our management discussion analysis. In addition, reconciliations with any adjusted EBITDA and net income are included in the press release this morning. Please note that all financial information is provided in CAD unless otherwise noted. With that, I will now turn the call over to Tribe CEO Joseph Nakhla.
Thank you so much. It's good morning, good afternoon, everyone. It's great to be with you, another great quarter for the company, and I'm happy to walk you through, along with Angelo, the latest on our organization. Obviously, the headline is another great revenue quarter for us of approximately CAD 8 million, representing a great 50%, almost 50% increase year over year. We continue down the path of a positive EBITDA of CAD 322,000, which is a big swing from the same quarter year over year. It is also, as you may have noticed or have seen, we also closed a CAD 1.1 million non-broker private placement. It was essentially led by us as executive management and our board of directors.
We did it well above the average trading price at the time, and it was just a signal to the market of how much we believe in our company and how we believe we're incredibly undervalued. You will have seen, or you may have seen in the last couple of days, essentially it was yesterday, an announcement of us acquiring ACE Agencies, which is a great, great company with great leadership. More on that from me later. Essentially, it's an important piece to the strategy that we have to, and I'll explain further, to continue to really own that residential market from a management point of view. With that being said, I'll pass the baton on to Angelo to walk you through the financials highlights.
Great. Thank you, Joseph. Once again, Tribe delivered a strong financial performance to kick off 2025. Revenue for Q1 was CAD 8 million, an increase of 49% compared to CAD 5.3 million for Q1 2024. The increase in revenue was primarily due to a 42% increase in software and service fees stemming largely from the acquisition of DMSI. Furthermore, there was an 89% increase in transactional revenues due to the acquisition of DMSI and its associated project management revenues. Gross profit for Q1 was CAD 3.3 million compared to CAD 1.8 million a year ago, an increase of 77%. The increase in gross profit was due to increased revenues from the acquisition of DMSI and decreased salaries from our restructuring efforts. Gross margin percentage was 44% in the first quarter compared to gross margin percentage of 39% first quarter last year.
Adjusted EBITDA was CAD 322,000 compared to a loss of CAD 1.4 million last year, an improvement of 124%. We are very proud of having achieved this outstanding improvement in our adjusted EBITDA for the second time in a row. Our cost-cutting and restructuring measures are having an impact. Here we have a graphical representation of Tribe's annual revenue growth. We're proud to share that Tribe has achieved an impressive five-year CAGR of 58% from 2020 to 2024, a reflection of the strength of our business model, the scalability of our platform, and the growing demand of our tech-enabled property management services. In addition to organic growth, our revenue growth has also been positively impacted by our strategic acquisitions in Ontario, which have significantly expanded our footprint and service offerings.
Additionally, we've seen a notable increase in our financial service revenues, reflecting our success in diversifying revenue streams and capturing new business opportunities within the sector. I'm pleased to highlight that in Q1, we achieved positive EBITDA of CAD 322,000, representing a 124% year-over-year improvement. This marks our second consecutive quarter of positive adjusted EBITDA, a key milestone in our journey towards sustainable profitability. Over the past year, we've been fully dedicated to optimizing our operations and implementing strategic growth initiatives. These efforts have led to significant improvements in operational efficiencies and expense reductions, positioning the company for long-term financial success. Our unwavering commitment to profitability has driven us to daily strategic actions, ensuring that we remain on the path forward towards sustained financial performance.
Over the past year, we've continued to execute on key strategies, including implementing process improvements across key functions, optimizing costs to drive operational efficiencies, streamlining headcount to align with our growth objectives, and consolidating back-office systems to enhance scalability and reduce overhead. In addition, we've seen a strong increase in transactional revenues, which has very positively impacted our EBITDA. These strategies have been instrumental in delivering a 124% improvement in adjusted EBITDA year over year. We're also seeing the combined positive impact of our acquisitions and recently announced the agreement to acquire ACE Agencies, which will further strengthen our market position and will contribute to our financial performance for the rest of the year. Looking ahead, we remain confident about our growth prospects. We will continue to focus on further improving profitability, increasing revenue, and expanding our market leadership position.
The progress we have made in Q1, kicking off in 2025, along with our strong operational foundation, underscores our commitment to creating long-term value for our shareholders. That concludes my financial update. Now, I will turn it back over to you, Joseph.
Thank you, Angelo. Congratulations to you and the team for great work. The next slide really, it's just repositioning. It's really critical for this juncture of the organization to kind of look back and see how far we've come in terms of our service delivery model. For those that know the company know that we categorize most of our revenue streams into two big buckets. One is the monthly recurring steady revenue business, and the other one is transactional revenue. The monthly recurring steady business essentially is our contracts directly with these types of communities, the different types of communities that we manage. That continues to be very strong, very steady with low churn.
The outcome of having a tech-backed services solution is a sea of data that we accumulate on behalf of our communities that really are intended to guide us towards ensuring these communities are well-managed. It is a great place to live. In addition to that, obviously, prepare and future-proof these communities by way of bringing in new technology to support their needs in the future or bringing in products and services that can leverage the group buying power that we have with the scale that we have been able to establish that is on a national level. In this particular case, what you will see in our transactional revenues, we just keep adding more and more products.
We've got steady, simple products that really deliver great value for the condo communities, i.e., financial services, whereby we were able to generate more revenue for our buildings on any money that they're either transactional revenue or operational income or money that they are saving for a rainy day. We also have a multitude of products and services that we bring in into the communities. We are expanding our lease-up services for buildings that have condos that need to be rented. It's a great margin business. Plus, we take a piece of the revenue, as well as we obviously provide a great peace of mind for those owners that live in these communities that want to rent these units out. We keep adding more to our digital marketplace.
The outcome of all that, I've been speaking about it now for a couple of years, is an 89% increase year over year, whereby our transactional revenues essentially in Q1 accumulated almost 20% of our total revenue. That really indicates and speaks to the model is essentially working. Next slide, please. We announced the acquisition of ACE Agencies. For everybody to understand a little bit more about that market, for those that follow us, know that we essentially manage big, large condo corporations, and sometimes they're not very large, smaller. We also manage institutional rental communities. These would be apartment buildings on behalf of pension funds, REITs, or family offices. There is actually quite a bit of overlap, and that is condo units that exist that are owned by individuals whereby they would like to rent them out.
They either purchase as an investment, or in some cases, someone is just accumulating, moved into the unit, lived in it, it's one-bedroom, have enough disposable income to buy a two-bedroom, to move out in it, and want to rent out that one single unit. ACE Agencies essentially is a Lower Mainland or essentially Greater Vancouver company that's done a great job. It manages about 900 of these specific homes. That is a division that exists within our midst, a Tribe prior to the acquisition. That's a small division. This acquisition alone increases our portfolio by about 275%. The great opportunity there is, again, you have to be under a rock to not be seeing a lot of the news about developers that are actually seeking buyers to buy into the condo development.
We know that market slowed down a bit, but really what this opens up the door for is investors that are buying these units, perhaps at a slight discount, and they'd like to rent them out. In some cases, there's actually some developers who, let's say, have 15-20 units left in the building, and they actually would like those to be rented out. This division that we acquired and this essential muscle, the divisional muscle that we acquired, allows us to take advantage of these opportunities, offer an incredible solution that's tech-backed services, solution to our either developers or the investors buying within their communities, and also offer that to the existing communities that we manage on the condo side, whereby one or two or three or a handful of owners in the building are actually seeking the opportunity to rent out the units that they bought there.
Everybody, two years ago, three years ago, you just put your unit on Craigslist, and you get 30 people asking you if they're interested if the unit is available. Things are changing. That is actually why we believe the service that we've got is perfectly timed, simply because my phone, personal phone, has never rang as much with people, friends of mine, that have investment units that are actually seeking help now because it requires a lot more due diligence in identifying the good tenant to be moving into these units. I am incredibly excited about that acquisition. Jason and his team, Jason is the operator/founder of that company, has been added to our executive team. We are going to give them access to all of our population. We are going to start with BC and work our way into the remainder of all of our markets in the country.
We're very excited to have them on board. The company did incredibly well last year, approximately CAD 1.4 million in revenue with a very strong adjusted EBITDA. The deal was all shares at CAD 0.55. All of that has just illustrated the belief of the operators and the founder of the company in the direction we're heading as an organization to be a part of us. Next slide, please. To reiterate our model and illustrate how it's working, essentially, other than organic growth, whereby we either work directly with developers building brand new communities or REITs building brand new rental communities, we very much allow, obviously, transition communities or transition buildings. These are buildings managed by other third-party property management companies whereby the owners and/or condo corporation would like to migrate our services. That's our organic strategy in a nutshell.
We continue to look for great tuck-ins or acquisitions. We acquire those companies, digitize them, put all of our technology in them, improve the gross margin, which you'll have noticed an improvement. We're up to 44% in gross margin right now. We optimize the service delivery in addition to, quite frankly, improving the service delivery as well, the experience of those people living in these communities, the performance of the building in different categories whereby they don't spend, at least not in alignment with inflation, hopefully much lower than inflation in terms of your maintenance fees going up. We obviously introduce more services. Going back to the slide that spoke of a segmentation, we actually put more on products and services that either save people that live in these communities money or improve the operation of the building.
One of the big things that we've added this year is a fantastic energy management solution whereby for those buildings that don't have enough capacity for electricity for more products and services, we've added those, and that continues to grow that revenue stream. Once you've added it all up, we obviously just start generating cash, which is the journey we've been on for the last couple of quarters. From there, we've been actually able to reinvest into businesses and to further businesses. For those that don't know or don't remember, we do have a great, great relationship with a senior bank, Bank of Nova Scotia, whereby we have a relationship to make senior debt available for us for acquisitions as we go. The key trends and growth drivers, obviously, this is a combination of what we're really focused on and what we're seeing.
There is a massive buy Canadian sentiment, as you may remember. Our business, our company is essentially recession-proof, pandemic-proof, tariff-proof. There is more and more of the desire for our services to be available. The largest two property management companies in Canada are American. We are seeing a shift in the desire to be managed by Canadian companies. This is not a surprise to anybody that has been watching us. We are seeing a significant amount of increase in activity in the rental markets, whether it is expedited activities. I spoke almost a year ago that we are going to see more and more trends of condo projects that are actually shifting, either shifting the condo priority, meaning they could be building a condo and a rental, but they actually will put the priority towards the rental versus the condo. We are seeing that.
In some cases, we're seeing developers actually shifting the zoning from condo to rental. We're seeing activity there as well. We're now at a place where when communities come to us and ask us to either bid on a project or give them our view on how well they're doing, everything we're giving them is driven by data versus guts or relationships or how people feel about how the property management company is performing. When they come to us, we literally accumulate and consume the performance of the building. We show them how they're doing against our population. And believe it or not, in some cases, we will tell them that their building is well-managed. They may not like the property management company or the property manager conducting the work, but the truth of the matter is the data doesn't lie.
In some cases, we'll tell them that's the case. They obviously appreciate that. At the end of the day, and this is not going to surprise anybody, there is a massive housing shortage with a big long-term growth driver here. Really, it's a function of economics versus a function of supply and demand. Next slide, please. Our 2025 outlook, which we've shared with everybody before, we continue to increase our organic growth. Just for those that don't know, don't remember, when we lend our Tribe-branded kind of activity in a market, we stabilize the company. We've acquired the non-market geographically. We obviously start our digital marketing tools to let the world or in the market know that we exist and the value proposition. We actually start converting our leads from there.
We'll continue to execute on M&A strategy based on what's available in the market. Everybody in the markets we're in is available. At all times, we're in constant conversations with potential acquisitions. We'll continue to innovate. We don't talk probably too much, to our detriment in some cases, about the great, great products and services that we keep pushing out through the door. Everybody and their dog is talking AI. I'm telling you, I think operational AI in our market will be very, very important. Keep an eye on us as we currently pilot and look at different AI solutions that can solve very little problems or really big problems in our ecosystem. We will be very, very active and on the forefront of all of our AI needs, all industries' AI needs.
There are more and more of those companies starting to bubble up that are just exclusively building one or two or three feature-specific AI that we think can play a role in improving our economics, our gross margins, but also improving the lifestyle and solving more problems for the communities that we manage. Go ahead. Next slide, please. I think this is it for me. I just want to thank you, those that have supported us in the market, those that are long-term shareholders. We're glad to be able to start delivering how our model at a national footprint is actually working. Existing communities that we've been able to manage that have been with us for years and years, we thank them as well. We're starting to backfill now in our size on a national footprint.
With that said, I'm happy to take questions, myself and Angelo.
Thank you. With that, we will now open the call to questions. Just a reminder that questions will be given priority to equity analysts. The first question comes from Essey Tesfay from Stifel.
Guys, can you guys hear me?
Yes, we can.
Okay, perfect. Perfect. Yeah, congrats on the quarter. My first question would be on organic growth drivers and potentially if you could provide an update on how things like competitive displacements, new construction projects, and so forth are trending and maybe what you see as potential levers that could drive upside now that Q1 is in the books.
Yeah, great question. Thanks, Essey. For me to answer that, just high, high level for our organic business is existing communities.
Been around five years, ten years, twenty years condo communities that are actually looking for a tech-backed solution, whether they've heard of us or just went out to the market and found some content about us. For those types of relationships, this used to be a price-driven conversation. It's not a surprise to anybody that watches us to know that we're not the cheapest on the market, nor do we seek to be the cheapest on the market. If anything, we're one of the more expensive communities. Really, the driving force there usually is how much are you spending as a community on behalf of whether it's maintenance fees or in specific categories. How much is your insurance? How much is your admin costs? All that stuff. In all categories, all significant categories, we beat the competition. This is just our position. This is not our opinion.
This is actually third-party reporting that shows that in many, many, many large line items, capital expenditure categories, we beat the competition. That kind of speaks for itself. The question really becomes, at what point are you ready as an existing large condo community to come to Tribe? We just navigate through the legal migration requirements there. In the case of developers building communities, I kind of touched on it earlier. Nothing's really changed. We're seeing slight delays of completion, multitude of reasons, nothing too concerning. We are still one of the top leaders. We work with 105 different developers that either use just two or three of our products or our suite of products that includes all of our software, all of the efficiency tools, as well as all of our warranty items, in addition to our monthly recurring services associated with managing the building.
There is no shortage there. What we're essentially seeing is a slowdown of new construction starting. That is purely based on everybody literally putting pen down, shuffle down until some of the tariff stuff goes behind us. Anything that started in the last two or three years will have to complete these buildings. We will get there. It is just a matter of exactly when. We are not seeing any slowing down on that, maybe just delays. As you will have seen from that acquisition on the rental side, we are seeing more and more activity there, whether it is buildings being converted to that, which we are obviously at the forefront of, buildings that are condos that are being converted to rental, or rental buildings that were in construction that we are actually lighting up, which has lit up a couple of buildings last quarter.
We have not even seen the revenue of that yet. But we are going through a lease-up. It is not a surprise that rental rates have slightly softened in specific markets. What you are hearing is a true statement. It is probably mostly a function of a lot of condos being completed, going into the market, and now they are competing with some of the rental inventory in that market, which brings me to my last point, which is why we made the acquisition of ACE, because that really puts us beautifully to take advantage of the strong competition between these individual units in the market whereby we can come in and actually apply technology to really find the right tenants and obviously clip on that as we go. Long-winded answer, but it is a good view and it is a good question and deserved a comprehensive answer.
Thank you. That was perfect.
Maybe diving in more into M&A and ACE Agencies. My next question is just maybe what you think about M&A going forward and perhaps what the pipeline could look like and how active you plan to be in the, say, short to medium term.
I mean, I don't know. I'm sure I say you do a lot of these calls, and there's no CEO you get on a call that does not believe that his company is undervalued. In our case, it's no different, but generally, I believe fundamentally we're an undervalued organization. We're going to be hesitant to give a lot of our stock to we use a lot of our stock currently as currency until, obviously, our stock starts reacting and reflecting on the performance of the company. We believe that's coming. Great companies will always rise up.
We're not too concerned. That being said, kind of it's probably my way of also giving a compliment to Jason and ACE Agencies of why we wanted to do the deal with all shares with them simply because we really like the entrepreneur. We like the DNA and we like the company. That being said, we're always active in M&A. We're always speaking to different groups. We are buying well in terms of multiples. That's pretty evident in the last three or four acquisitions that we've done. There's a lot of companies to be purchased in the market. Our relationship with the bank obviously helps with that. We're certainly right now with head down. You may have read in our press release, we spoke about having retired approximately CAD 1.2, actually, not approximately. We have retired CAD 1.25 million of debt in the last three quarters.
We will continue to do that to strengthen our levers as well as strengthen our balance sheet. We are going to be active in M&A. We are going to find ways to get great companies added to our ecosystem. I think the next 18 months are going to result in some really good buying opportunities.
Perfect. Perfect. Thank you so much. Just last question, maybe on margins, particularly the gross margins. Look like they continue to improve. We are just curious to know what the drivers of this continuous improvement were.
Yeah. I mean, Angelo, do you want to take that? Maybe just explain a little bit more how our cost of goods are loaded here and really we will take it from there if you do not mind.
Pretty much in the cost, we pretty much include all direct costs associated, software people, other costs that roll into the cost of sales. A big chunk of it is, well, there was a significant part of it in terms of people costs. After having combined and rolled out a new solution a year ago, a back-end solution, we were able to realize a lot of synergies. That translates into reduced headcounts, higher productivity, better service. It just translates into gross margin. We continue to see the benefits of those efforts.
As we also roll out new products or as we grow the transactional part of the business, the sort of ancillary, some of those ancillary products, whether they were organic to begin with or whether they're just new products that we're bringing on board through the synergies of our acquisitions, which we talked here about ACE, and we continue to see the synergies with DMSI. We're just really getting started in many ways there. What that does, it just bolsters the gross margin for us. As you bring on those high-margin transactional revenues, you'll continue to see the improvement on gross margin.
Thank you so much. I'll pass the line. Thank you. Thank you.
We have a few questions here from the listeners. The first question is, what are your plans for managing cash and spending over the next year?
We're going to generally be conservative.
When we speak about adding more features on products, we're not necessarily going out to increase our capital expenditure from a software engineering point of view. Within our midst, we have the capability to really innovate and continue to do that. Yeah, slightly more conservative, perhaps, than we were two or three years ago. You'll see us continuing down that path in terms of it's not going to hinder our innovation. We're adding more products and services. We're frugal when it comes to spending. We'll continue to be within that lens. We have ears and we have eyes that we know what the world we're living in looks like. We're quite pleased with the position we're in right now in terms of how far we've brought the company just in the span of 12 months. There's even more opportunities for us to improve our gross margin.
You will see improvements on that as well. We have gone from the top 30s to almost mid-40s. I still think we have a path to 50% gross margin here.
The second question here is, are there any plans to grow into the new regions like the U.S.?
There are. We are at all times able to and speaking with different targets in the U.S. For those that do not know, I would, with absolute educated comment, tell you that our condo management activities in Canada are, some will argue 10 years, but I would certainly say five years ahead of most markets in the U.S. Our laws, the way we regulate cash exchange in hands, the way we regulate the licensing requirements for people that actually do the work on the property management side, the way the financials are prepared.
Needless to say, in the U.S., it's 50 states. This statement is not to apply to every single state, but to apply to the overwhelming majority of states. We definitely see the demand in the U.S. There is a lot of inbounds that come our way from developers and others that are building there. Many of the people that are probably listening to this call here probably do not know that some of the largest, I'd say maybe four out of the top 10 condo developers in the U.S. are actually from Canada. A lot of the customers that we have currently in Canada are actually building in the U.S. We are being strategic. We are obviously going to keep a close eye on the dynamics and what is going on there and the sentiment around that. It is no surprise that the U.S. market is a monster.
Don't undervalue the condo business that we have here. For example, Toronto and Vancouver condo markets are top 10 in the U.S. That also gives you a perspective that we're still playing in a monster market here. We, as Tribe, we're just scratching the surface on the market share despite the fact that we've already grown into the third largest. Thank you.
Our final question here is, how are you using AI or automation to improve your platform and services?
How we're using it exactly now will differ when I get asked that question again in a couple of quarters. Right now, what we see AI playing a role is, think of a community that has hundreds of bylaws. You live in that community, you're a condo owner, and you want to do something as basic as identify, "Am I allowed to have a barbecue?
Is there a limitation on the type of barbecue? I'm just using that as a very basic example. For you to answer that, you probably have all the tools to get an answer, but it's complicated. You need to probably get your hands on the bylaws. Not easy. If you live in a traditional building, you probably bought after the building was completed. How do you get an answer to that? You're probably going to reach out to Strata Council. They don't have time to get back to you. You probably reach out to your property management group. You can imagine how low or high priority that is for some of your traditional property management experiences. Or you have a platform like ours, which we do. You have indexed all the bylaws that are very specific to that community, which we do.
You have an AI agent that can go out there and get you that answer really, really quickly. That is a very basic way to identify how thousands of inbounds that come into property management can actually answer that. That is a simple option or example. You have something incredibly complex, which we are not doing right now. Nobody is doing right now, but this is where we are going. I want to change the hardware floors of my building, of my unit in the building. Think of it, it sounds like a simple, straightforward thing. It is not because you have to figure out what the rules are. Are you allowed to do it? You have to notify your condo corporation and get a permit. You also have to make sure that you work with groups that allow you.
You got to notify everybody around you as well because it's going to be very noisy. Plus, you got to work with groups that are certified that can actually have enough insurance. As an example, it's a true thing, but to have enough insurance to be able to conduct the work, otherwise, God forbid, hit a pipe and cause an issue. They have to have the insured properly. Imagine that and all the workflows associated with that. AI should be able to drive a truck right through the cost and the time associated with that. That's just another example. There's a suite of AI products that we're starting to look at around rental.
It could be as basic as identifying and walking a potential applicant that's interested in a unit all the way to qualifying them yes or no or thumbs up or thumbs down or even setting up the appointment with them for them just to show up. It does all the heavy lifting on behalf of the property manager. It could be as complicated of an AI product that actually looks at communication occurring in your 1,000 pages of notes of a community and actually recommends products and services that can lower the operating capital for you. For example, a condo corporation could be having constant conversations about their electricity limitation. Our AI engine would go in and say, "Did you know that Tribe has a partnership that can bring in an energy management solution?
Here's some information on it. Actually show them how it could actually generate lower expenses for them or solve a problem for them. It is a long-winded answer. Believe me, we have got multiple theses on this. This takes a lot of my brain cells in terms of conversations, in terms of trying it. Not everything is going to work in this space. AI has a place to live operationally within property management. There is just no doubt about it.
Thank you, Joseph. We actually have a few questions here from the analyst, John Luca Tucci from Haywood Securities. He asked, "Are you seeing a slowdown in the new build market? How does your pipeline split between existing infrastructure and new build opportunities?"
Yeah. John Luca, great to hear from you.
We are seeing, at least the lens we have, we are seeing new construction breaking ground, slowing down a bit. That is not a massive part of our business, but it does unusually reflect on when they are completed within three to five years. It is just a function of developers wanting to get a bit more stability and understanding of where things are going to land with the tariffs. We are seeing immediate changes there. Our pipeline, I mean, as far as new construction is concerned, it represents organically out of our organic business, it is probably less than 10-15%. Anything that is already broken ground in the last two or three years will have to complete. Construction loans are activated, and those units are generally either completely pre-sold or have to complete so those units can get rented out.
To be honest, it's not impacting us daily other than some leadership groups that are working with them just giving us the heads up, "By the way, we're almost completed. We're 30 days away with this project. This project is going to be another 60 days out." We're getting slowed down of some brand new stuff that would start generating MRR for us, but it does not represent more than 10-15% of our organic growth.
Thank you. His last question is, as a whole, what type of organic growth rate are you targeting for this year?
We always speak about 10-15%. There are interesting dynamics that occur within the industry. For those of you that do real estate or are close to the real estate space, you also will have noticed a lot of slowing down in the REIT transactions.
A REIT selling a portfolio to another REIT. The relevancy of that is, in our case, we usually get calls when a transaction is about to occur by a current customer of ours because we usually go in and price it and see if we can improve the NOI, that was the run rate of the NOI before the acquisition. We can actually, for the new owners, improve the return on that. That is what we are known for. We are seeing less of those types of activities. There are a lot more qualified people in the organization than I am to speak about that. Yeah, as a rule of thumb, we are approximately targeting 10%-15%.
Thank you, Joseph. There are currently no further questions.
With that, I'll now pass the call back to Joseph Nakhla for closing remarks. I have said enough. I just want to thank everyone for taking interest in our organization. We are quite pleased where we are in our trajectory. Just a reminder, we are again essentially bulletproof when it comes to a lot of the activities, the political activities, the dynamics around us. That being said, we understand we still have to keep executing. I am quite thankful and grateful to not only our shareholders, but also our staff that do an amazing job. What we do is not easy, which is why we believe that what we are embarking on is quite special. Very, very few property management companies around the globe are growing, let alone achieving what we are achieving. With that said, I want to thank everyone, and we will hopefully see you all in the market.
Thank you.