Retail Evolution, Office Markets, and Development Timing with Brian Salpeter, Vice President of Development at Cadillac Fairview

Welcome to the CRE podcast, 100% Canadian, 100% commercial real estate. Now here at your host, Aaron Cameron, and Adam Pauatic. Welcome to the commercial real estate podcast powered by First National. We are now midday here at the Land of Development Conference with the real estate forums. Our next guest is Brian Solpeter, Executive Vice President of Development from Cadillac Fairview. Welcome Brian. Thank you. So we're going to have a conversation today. I think about tough cycles, how people are adapting and what the market can hold from a market present perspective, Cadillac, Fairview course, very, very large. So this will be an interesting conversation for us to do the scope of your business. Before we do any of that, we always want to set the table, you know, who are we talking to? You know, it's influenced their real estate life. Why do we care what you have to say? Well, no, no, that's the callous way of saying it. You'll have to hear about, you know, your background, how you got in a real estate, and then we'll get into the Cadillac Fairview platform. Yeah, that's great. Well, hopefully somebody has something to take away from what we talked about today. So I started my career over 30 years ago. So we're going to talk about cycles. We're going to talk about good times, bad times. There's been a number over the last 30 years. So I started my career 30 years ago as a lawyer in Montreal for one of the major law firms. And I'll jump right to it. I started my career in 1994, and my first client at the time was Cadillac Fairview. And Cadillac Fairview at the time was going through CCAA Restructuring. What's it? Why? Somebody said, "Hey, you should work for them." He wasn't knowing. Well, it actually took me 20 years before I joined them. So, but it goes to show you, that was, you know, just coming out of the early 90s, really tough situation. The question, why? I mean, that goes back in history, but a lot of that was a question of debt. Every 90s was about debt, and I think if you look at today's market as well, I think a lot of it is going to become, is what does everybody's balance sheet look like? What debt do they have? And so I started my career in '94, worked for that law firm for 20 years. Great practice, had the opportunity to work for a number of great companies over the years across the country. And then in 2015, Cadillac Fairview approached me and asked me to take on a development role at the company. It's not a legal role, development role, which I did. So I joined CF in 2015. And any hesitation at the time, or was it, so I'm going to say, I'm one of those lawyers who actually really enjoyed being a lawyer. I'm going to admit, I'm on a podcast now, so this is now for forever memorial. Yeah. You can't take it back. I'm one of those lawyers who really enjoyed my practice. I had a great time. I had great clients who was doing really interesting work. So I wasn't looking to leave the practice. Cadillac Fairview offered me an opportunity to join and do something completely different. I'm going to say, I don't want to say it was an offer I couldn't refuse. But it was such an amazing offer to, at that point in my career, move to a company that had, to me, the greatest platform in terms of development pipeline, in terms of learning. And it was just, you know, an opportunity. And so I joined CF because I really wanted to see what it was like and enjoy. And I haven't looked back. So I worked as a senior VP development based in Montreal for a number of years and then worked on all of our projects in the Eastern Canada, which also included some in Ontario and had the opportunity to work on some across the country as well. And then came into this role at the beginning of 2024 where I took over the responsibilities for development of the company across the country. So for context, how big is CF? So CF is a, you know, full platform, owner, operator, developer. We have about $29 billion of assets under management. In terms of assets, we have 33 million square feet of assets, leasable space, 60, 2 or 63 landmark properties. Most of our assets, if we look at it now, are favored heavily towards office and retail. People will know our retail platform. When we have, you know, proud six of the top 10 malls and 13 of the top 25 malls in Canada, based on the most recent ICSC rankings, we have a best in class office across the country from Montreal to Vancouver. People don't know. I mean, people know us in Toronto, but we're actually the largest office owner in the Vancouver market as well. And so that's really been our bread and butter over the last 15 years. We've also been quite a prolific condominium developer as well, perhaps a little bit less known because we've done it with partners who have also been sort of condominium co-developers, but we've co-developed that. So we've done a number of projects in all the markets, Montreal, Toronto, Vancouver as well. And of late, we've really been focused on balancing our portfolio. And by balancing our portfolio, it's moving into two of the major asset classes that today we have not owned and operated, which would be multifamily and industrial. It's been a bit of a journey. We've been on this for a while. Again, coming back to cycles, coming back time, these things take time. We're never in the rush. We want to do it right. At this point, we now have significant industrial sites. We have, we own the former Buccino Airport in Markham, which is 170 acres site. That is going to be a fantastic industrial development. So we're working on that right now, finalizing our entitlements, working through everything that we need to do for site servicing of that property. We own a 150 acres site just north of Calgary as well, which we acquired a number of years ago in partnership with Hopewell, and we actually started the site servicing of that property, which is significant. When you talk about site servicing of 150 acres, it's a lot of roads. It's a lot of sewers. It's a lot of infrastructure. Now we've invested in that as part of bringing that ready to capture the market when it's right. Industrial, like we'll talk, we'll get into a number of the different asset classes. Industrial is a little bit slower coming off some of the highs, but it is still a strong asset class. One of the things that we're chatting about with some of my fellow panelists at the conference is location matters. Again, it sounds a little cliche, location, location, location, but location really does matter for all the asset classes. If you're in a great node for industrial, if you're in a great node for residential, that's the future. That's what we focus on. You've been a prolific condo developer. Where are you right now in the pipeline for condo? Are we starting any new condo projects right now? Listen, I can't say that we are. We continue to be in the pre-development and pre-construction phase for a number of condo developments. Part of our long-term strategy in terms of our master plant communities around the different shopping centers where you want to have a mix of different assets, which will include multi-family as well as condo, but in terms of specifics, so we are actually still under construction and delivery of 1,100 condo units in Richmond. For some of the listeners who don't know Richmond is a city just south of Vancouver. We have a shopping center there, one of the top ones in Canada called CF Richmond. When we started years ago, a development there for over 1,100 condominium units, it's seven buildings, five podiums, thousands of parking stalls, this is a huge project. We recently delivered the first phase of units, which is about 375 units, and then the rest will be delivered over the course of this year, and we're working on phase two. Phase two will be focused very much on multi-family, but we'll also be looking at condominium. In terms of the rest, we have some major projects here in the GTA, at CF Sherway, CF Fairview, CF Markville. We advance plans for condo, there will still be a demand for condo, but because we're not typical condo developers, it's because it's not our only business, we look at it in terms of what is the added benefit of doing condos at our projects as opposed to doing condo for condos. I mean, you, Cadillac Fairview, being a condo developer seems counterintuitive to me, just given the pension fund liability that you have to match against, and that condo developers are, forgive me, this is not what I mean, but it's sort of a get rich, quick scheme, right? Like, it's like getting, get the money, get the biggest bang for your buck versus an apartment as you-- I love the cash flow. Yeah, and apartments are, as you alluded to, it's patients, you're not in a rush and it's long term, right? You can have the luxury in theory of a 20 year IRR and make that math work, right? Well, so there's a couple of things. So even though we are owned by teachers, pension fund, absolutely our mandate is steady, consistent cash flow. Doesn't mean we don't like profit? Yeah, no, of course, yeah, short term profit. But over and above the profit, condo developments also help us establish communities. There's a balance. You know, I'm going to give you two great examples of that. One is right here in the GTA with Maple Leaf Square, right? For those who remember sort of Maple Leaf Square, that whole area around the Scrocha Arena, Southern Financial Corps years ago was desert. And in order to establish that, you know, our brainchild was, how do we develop it into a mixed use community? So we have entertainment. We had condo. We have office. We have hotel. And condominiums are an important part of establishing a community. People who want to move in, people who want to own, there's a pride of ownership. So that's important. Look at Montreal. So on the lessons of what we did here in Toronto, and this comes back a little bit to my story about, you know, some of my work with Cadillac Fairview, we started a land assembly around the Bell Center, which is the arena in Montreal, with the idea of transforming that community. So those who know Montreal will understand that back in, you know, the early 2000s, that entire area was desert. And we came up with a plan to assemble the land and create high-rise condominium towers in Montreal, which didn't exist before. Here in Toronto, known in Montreal, nobody knew it. You look at Montreal now. You can't imagine looking at the cityscape without thinking about a high-rise condominium. At the time, there was nothing. People actually said to us, "You're a bit crazy. What are you doing? It's not going to work. We went ahead with it." And those were three of the most successful projects, the, what we call the Tour de Canada Gentry, or those three buildings, which were three of the most successful condominium projects there. And in addition to being a success for us from a financial standpoint, it was successful in terms of transforming that into a real community and creating a sense of place. And with that, we also built Deloitte Tower, which was the first new office building built in Montreal in over 20 years, and now the home of Deloitte and Rio Tinto. And that has now led to the further development, and we have a building under construction there, which is a multifamily building, which is over 500 units, and that's going to be delivered early next year. So all of that sort of creates that sense of place. So condos are an important part of that community in that sense of place. So for us, it's multifaceted in terms of why we do it. Sure, there's a profit element, and I don't want to dismiss that that is important, and we like that as well. But in addition to that, it's a sense of creating that sense of place. And again, home ownership, condo ownership, that pride of ownership is an important piece of that. When we talk about where you stand right now, because you have a number of, all you have, the best enclosed mall portfolio in the country for a long time, or I mean, today, and still, we've got a ton of opportunity for densification on those sites, actively doing so. And actively doing so, but of course, the market has changed. The market has shifted since, particularly the Sherway Mall, which is close to me, but I'm sure that's consistent for many of the other assets where you'd probably don't drawn up some plans, submitted some applications, and then the market has shifted. So where are you right now, in general, as it relates to the densification of your mall, your mall sites? So because our projects are larger term, large scale projects, we have to work through the cycles. I think you're right. If we are talking about, would you want to launch a project today? Well, by the way, in some cases, we actually might. Would we want to launch a project like we, the one we just spoke about in Richmond, 1100 condominium units? No, we wouldn't. Okay. We can be open and honest about that. But are there opportunities to start a multifamily building, yes. So what we do is we continue to work with the cities. We continue to educate them that we can't solve for everything today. These projects are going to take 10, 15, 20 years until they're fully built out. And we can't predict everything today, nor can they. And so we establish a master plan, but then we look at it on a phase by phase basis. And what we try to do, in sure ways, a good example, so it's sure way, our plans include multifamily and condo. If we would go back a number of years when the condo market was strong, we would have been looking to launch both a condominium and a multifamily project at the same time. The linkage between the two wouldn't really have been a concern. You could have some shared amenities, although we try to keep the amenity separate between the two buildings, but you could have some shared landscape. You could think about some parking and get some synergies in terms of the construction. But as we look at it, we don't want linkage because that's what could limit us when a project is right to go on a multifamily if a condo isn't ready. And vice versa, we're talking here at a momentum time. And so what we do is we continue to advance our plan so that each one is a standalone project. Each one can start as it goes. And we do spend a lot of that upfront work to make sure that each of those could stand on its own within the context of the mall. And so I mentioned earlier that we have a number of projects underway. We have three multifamily projects currently under construction, the one downtown that I mentioned. We have one in Laval, a careful Laval, and we have one at Ottawa, just adjacent to Sea of Rido, up against the former Nordstrom store there. We could talk about Nordstroms later and maybe even touch on the bay. But what we learned and what we're doing in Laval is Laval is an opportunity for us and we do have a master plan. And over time we can and we have plans to add thousands of units at Laval. It's a tremendous market. The city is very keen on ensuring that they sort of address the affordability and supply issue in terms of housing in Laval. Our site is a key site for them. What we were able to do is we were able to start with one building right now. And that one building was on the site of a former sear store. So in some cases, we have redeveloped our sears with retail, which have been tremendous as we continue to add and improve our retail centers. In other cases, there's different development opportunities. And in Laval, we demolished the former sears. And on the site of the former sears, we're building right now a multifamily of 366 units, which will be attached to them all with its own exterior courtyard, its own public realm as a standalone project that doesn't need the thousands of other units that will come one day, but it will stand on its own. And that's really our strategy on all of the projects now is to make sure that we can look at each of these standalone, call it a bite size project. Although I guess for not a 366 unit project is not necessarily bite size for everybody. We have the ability and the privilege to be able to do that. And look at it on things that we can actually execute without linking to something much larger, which still ends up being the plan. I'm very proud you didn't use the word "bifurcate" at all during any of that. Yeah. And we're regions. Yeah. Well, so on the top of your retail, obviously you're very active in terms of intensifying, adding, upgrading some of the, you know, your retail space. And Aaron alluded to the fact that you've got a fantastic portfolio. Are you looking to add to it brand new retail locations? In terms of what we're not looking to add new malls to our portfolio, you know, when we talk about balancing our portfolio, like I said, we are already heavily weighted to retail and often. Would you sell us some retail? Right. My ears would be happy to buy it. I can tell you. Yeah. Well, we already have started to sell some retail. So it's no secret. We recently sold CF Champlain and Fairview Park. And that's part of the strategy. But that's not new. I mean, we've sold assets over the last 15 years as we look in terms of what it makes sense to hold. Where do we want to deploy and how do we want to balance our portfolio and have a more balanced portfolio among the four main asset classes. So retail, office, industrial and multifamily. The short answer, Aaron is yes, we have sold retail and we likely will continue to sell certainly not our core retail, not what we would consider our flagship retail where we continue to invest. And so Adam answering your question, are we going to add net new retail to the malls? And likely most of these malls already have close to a million square feet of retail and the best retail. So we don't need more. But what we need to continue to do is continue to bring in the best in class, new to market retailers and take advantage of redeveloping some former big boxes. And Nordstrom is like, yeah, let's go there. Nordstrom and the Bay you've had. So that's stress on the system. How are you adapting and what kind of discussions are ongoing internally? Or just what do you and how many pickleball courts are in the way? Yeah. So the answer is no pickleball. Okay. No pickleball. You know, the pickleball will be an amenity, perhaps for residential or whatever it is, but pickleball is not going to be the answer for us. I'll use Toronto Eats and Centres as a prime example. We took back Nordstroms. By the way, I mean, so he was that sorry? Oh, that one is I think about 180,000 square feet. And just just really quickly, I mean, we're all, most people are familiar. But Eats is downtown core for those that don't know. So downtown core Toronto, right in the middle of the city, like literally could've gotten up more central, Nordstrom on one side, Bay on the other and then the massive retail in the middle, like describing that, right? You are describing that right. So for the Nordstroms, we're really pleased because what we did is we brought iconic retailers to the property. So Simon's has already been in a Simon's, Edelie and a flagship Nike store, which are really going to anchor them all. That's space that no item Bay and our team was able to really look at it, give each one of them great visibility, great access. And that is going to be really a creative to them all in terms of offering. And then we also believe strongly in terms of value. And we advance similar, I can announce anything today, but we are far along on redevelopment for the other Nordstrom boxes, including in Vancouver at Pacific Center, which is the equivalent of Toronto Eats and Center in Vancouver at Redo, CF Redo, which is downtown Ottawa, again, the equivalent of TEC in Ottawa. And then we have a couple others. So we continue to advance on, because it's typically demising the space. I mean, that's kind of what you describe for, yeah, they do any retailers, 108,000 square feet. There's no retailer today who's coming in the ones 180. So it's fully just trying to carve it up, carve it up, which actually adds a different offering. If we look at what we've done with some of these big boxes and you look at CF Fairview, we brought in TNT. And TNT has been a, which is a most, yeah, one sent TNT, which has been a tremendous addition to them all in terms of drawing traffic in terms of, you know, meeting a need that was certainly there. So what we're able to do by taking these large format stores is offer quite a bit of different. A good example would be in Montreal, Fairview Point Claire, one of our malls on the West Island where we had a Sears. And there what we decided to do is we brought Simon to the market. That was another 180,000 square feet, three levels. What we did was we took Simon's and put them on the two levels, level two and level three. And then we relocated our food hall or food court down to level one. So the food court previously was on the second floor tucked away, admittedly not the greatest location, you know, all these properties evolve over time and we want to continue to improve them. And so we relocated the food court to the first level of the former Sears, which now opens out onto the parking and is actually the gateway for future development. And then we were able to backfill the food court with two great retailers up top. That would have been space that we said was second store, which I imagine is tougher to lease, but tougher to lease. But in that case, you know, we did, you know, say, doll ram and winning chest, which are great destination. Yeah. Yeah. The other own draw great destination retailers who and we were able to build out that space for them and both are doing very well. And then maybe just do the bay. And it's early still to absorbing what that means and how you manage that challenge. Yeah. So listen, sitting here today is not too much I can talk about the bay just because it's still going through the bankruptcy proceedings in the courts. Listen, I think us like most Canadians are not happy to have seen what happened to the bay. We would have and we tried as well to support them and to make sure that they would continue as a viable entity. But we will look at this and like what we've done with everything else, we're going to just make sure that we look at all the different opportunities and use it to reposition, you know, those spaces and our malls in the best way and each one will be different. Usually the downtown store which we will be taking back so the bay, sacks, that is going to be a very different sort of redevelopment than what might just be a traditional box at one of the, you know, suburban malls. But like I said, because we have a long-term approach on this, we've been thinking about that for years and so we advance plans in terms of what cannot be transformed into and then because we have that long-term approach, it affords us the ability to really be thinking about what is the long-term permanent solution for that space as opposed to just a quick backfill. Waiting of asset classes, imagine you're not looking to grow your total exposure to retail when you're contemplating waiting in the other asset classes, where are you looking to gain and lose? So what we're looking to do is actually grow. So it's not a wall? Grow wall. So, you know, so today we are $30 billion of assets and their management. We'd like to grow that up to $40 billion of assets and their management. And the addition there will be the additional and multi-family industrial. There may be a little bit of retail here and there in terms of some of the service retail that supports some of the multi-family that you want to do. There may be some offices well in terms of some of it in terms of some local office, but nothing significant. We're not talking about, you know, a million square foot office towers like 160 front. So most of that is going to be through industrial and multi-family. How much do you buy? Are you exclusively developing your own assets? No, we will buy as well. I think if you look back, we have been mostly developers, quite proficient in development. We think there's a tremendous value add on development. And we're able to control the quality of what we build and what we're adding to our portfolio. But we're certainly open to acquisitions as well. And we have a very robust investments team that the development team work closely with. And we'll look at it. And so in this market where you could talk about it being perhaps more challenge from a development standpoint, again, depending on one's perspective and what time horizons are, there could be some acquisition opportunities as well. And so we are in the market and we will look at opportunities. Oh, yes. What about international exposure? So the international exposure is really resides with teachers or shareholders. So how do I feel if you was 100% focused on Canada? So all of our own properties, all of our, everything we operate, everything we develop, everything will acquire will be here in Canada. That keeps it easier on you, doesn't it? You know what? It focuses us on who we were from the beginning. Catalyst Fairview was a Canadian company. It's focused on real estate. And now we talk about in terms of location matters, knowing your market matters. It's really tough to know every market around the world, especially when you're developing. We have the expertise here. We have the local knowledge in terms of management. Canada is still a big place. We're a little bit spoiled because we're across the country. Just operating Toronto is a pretty big place. So for us, we're very comfortable. And that's really where our roots are and it allows us to focus on sort of being the best in Canada. Any geographies in Canada that you're not in today that you'd like to be in? Our focus really is on the core market. So I don't think we're what to do. Back to them, if you will, like the Vancouver average in Calgary. We're not in Edmonton right now. We are in Calgary. Calgary is a strong so Vancouver, Calgary, Winnipeg, GTA, Auto and Montreal. So really the core market. No Halifax there. No, I mean, CF owns some properties in Halifax a long time. Halifax has been a great market. The big growing. I raise it because a lot of people are now going, hey, maybe that is a good investment for me. It is. And I think if we're just looking for one-off properties here or there, I think Halifax is a very strong market. But given who we are and given what we want to do in terms of leveraging what we have, leveraging our retail properties, leveraging where our people are as well, we're going to focus on the markets that we are in that now. And I'll put words in your mouth perhaps, but there's a scale of development for you that makes it worthwhile and the smaller the town, the more difficult it becomes to meet that scale and have the math kind of pencil itself out. There's a bit of error, and certainly, but it's also where we are. I can say, our development team is the best, and I'm going to tell you that, and I say that proudly, and I say that not because of me. I'm really, that's a shout out to my team. My team is the best. We are a lawyer, not a developer. I'm both. And taking advantage of that expertise and why we succeed. So why we succeed, you know, Richmond, through a tough market, when we started Richmond, we were in a low interest rate environment. We weren't in a high construction cost escalation environment, huge project, 1100 units, years in the making, years from start of development until completion, has itself been impacted by the cycle. But it's because of, you know, and we have a great partner there in shape. But it's because of our team, you know, on the project management side, the development side, really able to manage that. And that's the expertise we bring to all of our projects. So we want to sort of really be able to bring that in the markets where we're already based. I'm going to ask for a long-term prediction. Oh, can we play the game? Can we play the, what quarter does it? Well, this is, I mean, one year because it's a speed measure more in years, not quarters. So Aaron and I, back in, I don't know, 2016-17 in there on this podcast, talked very excitedly about Cadillac Verovi doing a spec build, office in downtown Toronto, fast forward a couple of years and we're signing at least in that building and fast forward again, we're occupying it. And now I spend more of my living hours, stuff like waking hours in that building than in Velo. I know it better than my family. Pick a year. The next time you can launch a spec build office at that scale here in, we'll see Toronto just to narrow down a little bit. That's going to be an easy question, but I don't want it to be kind of come across as a downer. There would be no plans to launch just at that, obviously, it would be interesting. In this market, the next question or any other, but I do believe that the challenges we have today in the office market, and again, it's, you know, the office market is actually not so bad. I mean, there's a lot of talk about the office market being tough. The office market for good quality office, like 16 York, so I'm glad you guys are happy in that building. It's actually quite strong. And we are signing new deals all the time. There's a flight to quality and we have the quality and we're seeing that. And I think that's sort of the lesson in terms of everything that we own and build, flight to quality, retail, office, industrial, even industrial, as well as multi-family. So there will be a time when there will be a lack of quality and there will be an opportunity to build new office buildings, but we're not there yet. And we'll always talk about the expense of older stock, I guess, all the tenant attraction. It will, and it will certainly come at the expense of older stock where owners have not continued to invest in their properties. So listen, truth is, we have some older stock as well. TD Center is an older building, but it is still a fantastic building and one of the best buildings in the city and an iconic building, not just because of the architecture, but because of what we've continued to invest. And when we talk about development, that's one of the things when you're talking about a Cadillac Fairview or a company like ours, everybody talks about the investment in new properties. We invest significantly in our existing properties to make sure that they remain to be the top in the market. Exception well located, right? That's the other part. And exactly. Yeah, yeah. Can't get better. So the question I was thinking about was, when does the cycle pick back up again? But you're so insulated because you're unique, you and maybe two or three other owner occupiers of our own operators of real estate that have the size, the scale, the scope, the location, I just think the girth to kind of manage through the cycle that we're seeing. But perhaps maybe just from your perspective, how do you think we get ourselves out of this? We had a couple people on the last couple of weeks where land is not moving. Department rents are down and we're struggling with that cap rate, decompression and just valuations. You know, industrial, the rents are doff. I think it's stable. It's OK, retail is probably the only one where you could have pretty measured amount of optimism. It's a downer, right? The environment, our community, our fellow real estate patrons are struggling right now. When do you think it turns to be more of an optimistic energy? It'll be 2026. It's still going to take some time. I do think it'll be 2026. It might be sort of mid 2026. I think what we're going to see though is we have a lot of condominium units that are about to be delivered. So you're going to have a huge amount that has to be absorbed. And then you're going to have a period of time because there haven't been any significant construction starts where you're going to have a gap. And I don't want to suggest that we are completely insulated. I mean, we are mindful of it. But you know, for us, it's really important just to make sure that we are grounded in terms of what we do. And one of our advantages are that we don't have to start something. We're not highly leveraged, so we're not in a rush to start. Our land base is quite low because it's our land. There's no need to start a project unless that project makes sense. But because of what we have and because of the rest, it allows us to start some projects where perhaps others may not be able to take advantage of what will be a bit of a gap in the market come a few years, but you need to start that now. And that conversation, listen, it's the development community, it's the cities, it's continuing the cities continuing to look in terms of appreciating that there's an issue and they need to be part of the solution, the province, which we've seen in terms of the province making a lot of, you know, moves to try to help development as well. In Ontario, but also in the other provinces, I think Ontario has probably been ahead more than others in terms of trying to facilitate that. But I think for the time being, I think capital and people are going to be continue to be cautious, a bit of a wait and see, people will advance plans so that they're ready to go. And then I suspect that this is going to be a big rush. We might see sort of everybody going at the same time. That's the concern, right? Is it? There's just three-year pause and then all of a sudden, rents and prices just skyrocket, right? Like I can just see the demand of supply curves, right? The line moving up and down. There is. And I think there's going to be a bit of a danger in that if people follow just because of that. And so land prices skyrocket, then we're back here six years from now, right? Well, I do think that hopefully some of the lessons that we've learned people are going to take them forward. But even, you know, yes, rents are decreasing. Their rents are decreasing because we saw unprecedented year-over-year growth. But rents will stabilize and then we'll grow again. So I think it's just a question of resetting. And the last number of years were just unprecedented. And I think we have to kind of reset to where we are and then get back to a more normal pace of what an expected return should be. And I think, you know, you were mentioning before, Aaron, in terms of, you know, from other developers, you know, and depending on what you're looking for, if you're looking for a short-term profit, then great, go for that short-term profit, but it's going to require certain market to do that. If you're building like us or even if you're a family office and you're building for the future and you're trying to build a portfolio, you're not looking at it in terms of when I'm going to get my money out in a couple of years. Yes, returns matter yields matter, IRRs matter, I don't want to suggest they don't, they certainly matter to us as well. But you can also look at it a little bit, you know, from with a broader lens in terms of why are you actually doing this? I really want to appreciate you taking the time to come on, you've got a bit busy schedule and a busy day here. Thanks to First Nation for powering the podcast and of course, thanks to Real Estate Forums for hosting us here at the Land of Development Conference. Thanks again. Well, thank you guys. That was a lot of fun. Welcome to Commercial Real Estate podcast after show. We just wrapped up with Brancel Peter of Cadillac Fairview, there are a few things that really stood out to me. It's interesting conversation. I don't know quite to expect. Obviously, I know Cadillac Fairviews, as you said, they're the flagship mall virtually everywhere I go. We met you sure way. There are a couple of times. I mean, I even said I forgot to mention it, but of course, right? Yeah, the, the Niagara one point was the largest mall of, I think the largest mall in Canada before, before that, before I said it in the mall, yeah, in terms of brand recognition though for malls in this country, that would be right up there. The height limit of Montreal, I didn't want to derail the conversation too far into that. But it is literally you cannot build higher than Mount Royal. The hill. I mean, it's not a mountain. I know they call it Mount Royal, but yeah, a little bump over there, like north of the downtown core. Yeah. Yeah. Can't feel the higher than that. I guess the airport's too far away. It's not even a flight path. No, no, no, no. It's somebody made this rule and like I get the part of the building, it's not all. It gets the part of the building, it's like the capital of Canada and these giant huge buildings, like I guess I can understand you. You wanted dwarfed by condos. Yeah. Yeah. Yeah. But just to have this little hill north of the city, no, no, I can't feel the higher than that. Like it means it's so funny to me. Yeah. The other thing, you mentioned you were a Montreal last week. I was a Montreal two or three weeks ago for the UFC fight, took my son and it was a great time. As course, he mentioned the bell center, we were at the bell center for this. And yeah, I had no idea that it didn't exist. Like it sounds like 20, 25 years ago, that would have been some sort of on type resource. Now seamlessly integrated in the city. It feels very built up and one of the industrialized, one of the, one of the desis areas of downtown that you never know. I guess that's the idea is you want to build something like that. If you're trying to create a new pocket within a city that has its own gravity, you want to have a feel that way. But I had no idea. I assume that would have been part of the original expansion of downtown of Montreal. But I guess I don't. I found his conversation about, uh, or their approach to decoupling the condos from the apartments adjacent to their retail sort of densification strategy. It's really interesting. So, and I'm obviously, wish he was here. I'd explain it. He'd explain it better. Obviously be the app or show that. No, yeah, fair. But I mean, they obviously had a master plan for the sites, for many of the sites. I'll use Sherwin. And that for those that are familiar, it's a mall, 10 kilometers outside of the downtown corner of the West end. And good mall with lots and lots and lots of parking and you just write for for a densification. And I think they submitted an application for like 10 towers. And presumably those 10 towers of condo and then obviously things pivoted and then what they've done now is they've gone and revisited that, okay, well, let's let's just not tie it all together. Let's build these individual towers, some apartment, some condo. They can all go at different times as necessary as we feel appropriate. So there's no sort of master plan that you kind of have to build in these phases. And the plan feels incomplete until the final phase is done. It's now you just put these towers up as you go and they kind of feel like it's not this sort of broken community. They're just you're adding on. I thought that was a very kind of curious but, but it makes perfect sense in this kind of environment where it's not just you can just relentlessly put out units and as fast your destruction crew gets through it. It's going to be yeah, like I feel like some of the community plans like it really it will feel incomplete. Right? Like you'd be driving around it or it walking through it and it's like well, there's just big gaping space that there should be a condo here of a building here and there isn't yet because they're still on phase six and that's phase 11 and like whatever, right? I think the intention for them is that doesn't that isn't the that isn't the expect that isn't the feeling to kind of adds on as it goes, but you never really feel like it's incomplete. Well, it makes take 15 years to get through 20 years get through it all. Yeah. So you don't want to have, especially something like a mall where there's a visual element to it appeal to draw people in where it looks incomplete or fractured for two decades. Yeah. We had to finish. I'm very excited to see what they do with the Hudson base space. There's a couple. I mean, we didn't want to dig in on it and I'm sure that it's sensitive for them. But the one of the inside of the south side of the inside is like it's a standalone three, four story office power that is converted to a bay. I'm sure there's other uses of it, but like that is very, very challenging. It's not, it's members connected to the mall via a ridge. It's not even really part of the mall. It's not green in the mall, right? So I could just be like, just saying that thing down and building office tower, but of course, building office towers makes no sense right now. So there's a long game there. They've got the exact same thing in Vancouver if not even more challenging. There's then a spectacular location. Both of them. Yeah. And then they've got like the one at the Sherway as another example is a giant big box that was at the center of the retail at one point, right? Like the whole mall kind of circulated around the bay at one point. Well, and as he said, there's no tenants. They're out there shopping for 180,000 square foot spaces. It just does not exist. I mean, I find it very interesting that he said in the La Valle at the base, they would just get rid of the bay and then build a apartment building there instead, which yeah, like that's building apartments seems to be a popular solution these days to a lot of seem to solve the office crisis. It's going to save the condo developers. It's a building apartment. We've now done a few rounds with different people on start of the start of the next cycle. And everybody seems to be landing on first half of 2026. It's a good to remind everyone though that we had survived to 25 and that was 100% wrong. Yeah. So stay in the mix of 26. I don't know. We still have half a year left. It could be a radical, a radical shift. I mean, that's not a prediction for the record. I'm not publicly stating it's my view, but yeah, or maybe just always the optimists in within real estate is like soon, soon, soon, soon. I remember the world financial crisis and it was 2006, early 2007 was like, okay, it feels like it's coming. It's coming. It's coming. It wasn't until September 2008 that it really hit. I think these things take a long time to play themselves out. Yeah. When you read about it in a history book, it seems like it probably took a minute, but if you're living it in real time and trying to support a family financially through some of these times, it's going to feel very long, very long. Yeah. All right. Well, is that the sour note? Yeah, that's out there. Okay. All right. Sorry. We'll talk. Yeah. Yeah. At least it's not 1991. I guess that's it. Right. Anybody? Yeah. Okay. See you next one. Bye. Yeah. Thank you for listening to the CRE podcast. The information from this broadcast is not to be relied upon as financial investing professional accounting or legal advice. First National Financial LP holds Financial Services Commission of Ontario License Number 10514 and 11252.