Ladies and gentlemen, welcome to Sienna Senior Living Inc.'s Q3 2019 Conference Call. Today's call is hosted by Lois Cormack, President and Chief Executive Officer; and Nitin Jain, Chief Financial Officer and Chief Investment Officer of Sienna Senior Living Inc. Please be aware that certain statements or information discussed today are forward looking and actual results could differ materially. The company does not undertake to update any forward-looking statement or information. Please refer to the forward-looking information and Risk Factors section in the company's public filings, including its most recent MD&A for more information. You will also find a more fulsome discussion on the company's results in this MD&A and financial statements for the period, which are posted on SEDAR and can be found on the company's website siennaliving.ca. Today's call is being recorded and a replay will be available. Instructions for accessing the call are posted on the company's website and the details are provided in the company's news release. The company has posted slides, which accompany the host's remarks on the company's website under Events and Presentations. With that, I will now turn the call to Ms. Cormack. Please go ahead Ms. Cormack.

Thank you, Joelle. Thank you and good morning, everyone. Thank you for joining us on our Q3 call this morning. During the third quarter of 2019, we made great strides in strengthening our balance sheet and optimizing our capital structure. Subsequent to the end of Q3 Sienna received an investment grade BBB credit rating with a stable trend from DBRS, which supported our $150 million inaugural unsecured financing in early November. This rating and subsequent debt financing reflects the strength of Sienna's balanced portfolio and sophisticated operating platform. With respect to our operation, we are realigning and augmenting our sales and operations teams and have made further enhancement to our operations and sales programs. Slide 5, moving to our Q3 financial metrics on a per share basis Q3 OFFO and AFFO remained near prior year levels of $0.364 and $0.368 respectively. As a result of lower occupancy in the retirement segment, our Q3 same property NOI decreased by 0.8%. During the quarter, we continued to strengthen the balance sheet and ended Q3 2019 with the debt-to-gross book value of 46.5%, a reduction of 180 basis points year-over-year. Slide 6, the long-term care portfolio remained virtually at full occupancy at 98.2% with waiting lists for each of our residences. Q3 Long Term Care same property net operating income increased by 1.5% year-over-year. Average same property occupancy in the retirement portfolio was 86.9% in Q3 2019. There are a number of factors that are contributing to this softness in occupancy, which I addressed on our Q2 call as well, including high resident attrition rate to long-term care in the portfolio that we acquired in 2018, the disruption associated with property upgrades and renovations at a number of our properties, and the oversupply in the Ottawa market. We have been focused on a number of initiatives to improve occupancy in the retirement portfolio, which includes enhancing our assisted living services offered to residents in order to reduce the attrition rates to long-term care, realigning and augmenting our sales and operations team, intensifying marketing and communication campaigns and increasing community outreach in every local community, enhance sales programs including promotions and incentives making further suite and amenity upgrades; and investing in our teams to enhancement to recruitment on-boarding and leadership development. In addition our residences are now gearing up for an active flu vaccination and prevention campaign in an effort to minimize the severity and duration of the upcoming flu season. Slide 8, while fundamentals in the sector remain strong with an aging population and growing demand for senior living accommodations, we are expecting competitive pressure in some markets in the short to mid term. However, we believe that the majority of Sienna's retirement residences are located in markets where future demand is expected to exceed supply. In addition, we believe that high barriers to entry, including rising construction costs and licensing requirements will help to limit the future oversupply. Our recent expansion of Island Park in Campbellford is leasing up well, and we estimate to reach stabilized occupancy at the end of 2021. I will now turn the call over to Nitin for further details on Sienna's financial results.

Thank you, Lois, and good morning, everyone. I will start on slide 10. Same property net operating income for the quarter decreased by 0.8%, or $305,000 compared to the same period last year for a total of $40.2 million. This decrease was largely as a result of softer occupancy in our retirement res segment offset by an annual rental rate increases in line with market conditions. The LTC division generated same property NOI of $23.3 million, an increase of 1.5% over the prior year. The retirement division generated same property NOI of $16.9 million, a decrease of 3.7% over the prior year as a result of softer occupancy, partially offset by annual rent increases and a focus and adjusting cost. OFFO increased by 1% year-over-year in Q3 2019 to $24.2 million. This increase was largely the result of lower interest expense or long-term debt and lower current income taxes, partially offset by a decrease in same property NOI in the retirement portfolio. Q3 2019 diluted OFFO per share was in line with the prior year at $0.364. AFFO increased by 0.3% year-over-year in Q3 2019 to $24.5 million. Diluted AFFO per share was $0.368 in Q3 2019, down marginally from $0.372 in Q3 2018. Moving to slide 12. We continue to strengthen our balance sheet. At the end of Q3 2019, Sienna's debt-to-gross book value was 46.5%, a reduction of 180 basis points from Q3 2018. Sienna's debt-to-EBITDA declined to 6.6 times in the quarter compared to 6.9 times in Q3 2018. Our interest coverage ratio remained high at four times and our weighted average cost of debt was lower by 20 basis points year-over-year to 3.7%, highlighting our refinancing initiatives over the past four quarters. We ended the quarter with approximately $128 million in undrawn credit lines and cash. As Lois mentioned, we're pleased with Sienna's BBB issuer rating from DBRS. This investment grade credit rating reflects our focus on strong balance sheet and highlights our balanced portfolio and sophisticated operating platform. Our subsequent $150 million inaugural unsecured debt financing at an interest rate of 3.109% for a five-year term is a strong vote of confidence on the execution of our strategy. We intend to use the proceeds from this offering to pay down part of our debt and create a pool of unencumbered assets. After the unsecured financing closing, we currently have $307 million of unencumbered assets. With that, I will turn the call back to Lois.

Thank you, Nitin. Our long-term care portfolio is expected to deliver stable and consistent NOI growth in 2019 and 2020 in line with the growth achieved in 2018. We expect Q4 2019 same property NOI growth in the retirement portfolio to be consistent with Q3 2019, which will result in flat same property NOI growth year-over-year for 2019. For 2020, we anticipate occupancy improvements which should translate to low single-digit NOI growth in the retirement portfolio. We believe that fundamentals in senior living will remain strong and are optimistic about potential of development opportunities including exploring the development of freestanding retirement residences with joint-venture partners, intensification opportunities at existing retirement residences as well as the development of senior living campuses. We expect to begin a 60-suite expansion at Kingsmere Retirement Residence in Alliston by mid-2020. The estimated unleveraged returns for this approximately $20 million investment is approximately 10%. With an exceptional team, a strong operating platform and our strategy in place, I'm confident about our future and the immense opportunities we have as one of Canada's leading high-quality providers. Thank you for your participation on the call today and Nitin and I will be pleased to answer your questions.

Thank you. [Operator Instructions] Our first question comes from Fred Blondeau with Echelon Wealth Partners. Your line is now open.

Thank you and good morning. Looks like you very well defined the causes for decrease in the retirement occupancy and just gave us more granularity on your actions. What's your scenario in terms of occupancy for 2020? And what's your timeline before Sienna getting to a more optimal level I guess?

Yes. So I think as we mentioned in our outlook and our call so for the total 2019 we expect our retirement same property NOI to be flat to where it was in 2018, so no growth. Our average occupancy at the end of Q3 2019 for the same property was around 86.3% and very similar range today. So we expect that year might be similar by the time we -- ended and it will take us two to three quarters to start building it up. And we hope to be 300 basis points or so by the end of 2020. But it would take us some time to get there.

Okay. Okay. Understood. And Nitin, could you remind us what's your target leverage ratio at this stage?

So we always -- and again as debt-to-book value not fair market value and we think 48% to 50% is a good place to be at considering its book value. And we are right now below it. So again, if you have a reason to go up, if it's development of the right strategic opportunity to grow, we will do that, otherwise, we like the ratio where it is today.

And, Lois, I think, I missed it, at the end you mentioned an expected return or an IRR on your Island Park project. But could you remind us what's your IRR on the Island Park? And what's your -- I guess, what's your expected IRR on Kingsmere?

Yes. So on Island Park the IRR is 10% and, Lois mentioned, Kingsmere it's also 10% roughly.

Okay. That’s great. Thank you.

Thank you. Our next question comes from Chris Couprie with CIBC. Your line is now open.

Thanks. Just turning back to Fred's question on the outlook, what is it that gives you confidence that the occupancy rate is going to improve into next year? Is it certain markets? Or where exactly do you think you're going to get those occupancy gains?

I think, it's a good question. We don't expect really any change in the Ottawa market, because there continues to be no supply there. Where we think we'll see changes is in our assisted living program or making some enhancements there. We do have a number of designated assisted living units and by kind of changing our service packages and some better marketing and communications about the program, we do expect to get some gains, particularly over the winter months. So that's primarily the area. And then as well, we have, as we had mentioned, a number of upgrades that we're doing in a number of properties. And we expect them to be pretty much complete into early Q2 of next year.

I don't have the numbers in front of me, but if you look at your IL versus AL suites, are there material occupancy differences between the two?

I wouldn't say material. We just know that we do have some vacancy right now in our designated AL units and we're really focused on that opportunity, particularly over the winter months where we feel that we can really get some traction there. Because, as you know, in the winter months, it's a difficult time for seniors to move in, so traffic is usually down for IL and we believe that ALs are opportunity.

Okay. Maybe just a different question. Have you looked at dispositions at all?

Well, we always look at the best -- our capital allocation. And we've been on a journey, as you know, to upgrade the quality of the portfolio. And we've done -- we're doing a good job on that note. But we're always looking at what makes sense for Sienna and to get the most value for shareholders.

So, I guess, it sounds like there's nothing really contemplated right now, whether it be in the LTC or most likely not retirement home, given that's mostly recently acquired?

I think, as Lois mentioned, Chris, we always are looking for what's the right mix for us. So, again, nothing eminent at this point.

Thanks. I'll turn it back.

Thank you. Our next question comes from Jonathan Kelcher with TD Securities. Your line is now open.

Thanks. Good morning. Just sticking with the occupancy question. So it sounds like -- so it looks -- you're going to look to sort of hold occupancy over the winter months by lowering attrition, is that fair to say?

Yes. And we also -- we have a number of promotions. We're really hoping that we can get some traction before the end of the year. But, yes, we think between assisted living our promotional packages, all the work that we're doing with our sales teams and so on, that we hope to get some further traction. We know that Q1 is always kind of -- with the flu season, there's a lot of attrition at that time. But we're hoping through our assisted-living programs to try and close that or reduce it.

Okay. So then the 300 basis points you're hoping to get by the end of 2020 that would, sort of, start to come in Q2 or Q3 of next year?

Yes, yes. That's right.

Okay. How many properties are undergoing upgrades?

Well, in total, there's 10 properties. So at any given time, we've completed -- I think, there's three or four complete and the others are in various stages. And there's a couple that will start in Q1.

Okay. And are you getting better -- on those three or four that are complete, are you getting better traction? Are you seeing a difference?

Yes. In a couple of them, yes. A couple that have just been completed. Well, the residents living there are very happy with them and there's good feedback from prospects that are coming in.

Okay. And how do you look at your return on investment in those? Is it more just of defensive almost maintenance CapEx, or do you target a return on the upgrades?

Those were different, Jonathan. So when we've acquired the Maple portfolio last year, we set aside $5 million as part of purchase price, or I would say on top of purchase price to spend on it, because some of those properties needed a bit of work. So it was more contemplated using whatever NOI we want to get from those properties and knowing that we had to spend the additional $5 million. So what the price we paid at that point, in our mind, we paid debt plus $5 million. So that's how we looked at it.

Okay. Fair enough. And then, just lastly, on the unsecured debentures. I think, at Q3 you had $49 million on your line, so I'd assume you'd paid that down. How should we think about the other sort of $100 million of that unsecured?

Yes. So most of $150 million, we've already used to pay down debt. So the revolver would be part of it. We have some other debt maturities which are coming due in Q4, so which we have paid down as well. And we have little bit left over for some of the other upcoming maturities. So what we would say most of the $150 million would be to pay down current debt. And we are on track to do that.

Okay. So you're not going to see a material uptick in interest cost?

Correct. You -- we would not.

Okay. Thanks a lot. I’ll turn it back.

Thank you. Our next question comes from Himanshu Gupta with Scotiabank. Your line is now open.

Thank you and good morning. Just on the occupancy discussion, I think Lois you mentioned running a number of promotions. So are you offering more price concessions or incentives to drive occupancy? And how is retirement home occupancy trending since September so far?

Yes. So I -- not sure if I have completely caught your question but we don't -- we do promotions in a one-time incentives rather than rate reductions. Was that your question?

That's right. Yes. My question was, are you offering more of what you were offering previously just to drive occupancy there? And the second part of the question was how is the occupancy trending since September?

So I did answer that one before Himanshu. So we ended quarter at 86.3% in same property and we are in a similar range today. So we are on -- where we are we ended the quarter with.

Sure. And maybe just switching gears on the acquisition side. Is the integration of the portfolios which were acquired in 2018 in 2017 now fully complete? And do you plan to be active on the acquisition front?

The integration of the acquisition is fully complete. As I mentioned in our -- earlier we are doing a number of things like enhancing our assisted living program, really looking at the services, service packages that we offer to meet the needs of seniors in all of the assisted living programs our designated unit. So we're doing that and making some other enhancements to our sales programs and operations. That's kind of just ongoing improvements that we're always making. So, but the portfolio has been completely integrated.

Okay.

And with respect to acquisitions we're always looking at the right opportunity for Sienna and our goal is to grow across the country.

Sure. And maybe just a last question on the development side. Do you have any timelines for the Phase I development of I think, it's like 1,000 LTC beds and 500 new retirement homes. And how do you plan to finance this development cost?

Well at the present time there's a -- we're working with government and our associations in the other providers in this sector to get a feasible program for these developments to work. So that's the current focus. And as you know government's doing a lot of reorganizing. So that work is underway. So we can't really commit to a timeframe. And they would all be financed on our balance sheet. We have a high liquidity.

Sure, sure. I’ll turn it back. Thank you.

Thank you. Our next question comes from Brendon Abrams with Canaccord Genuity. Your line is now open.

Hi, good morning. Lois and Nitin, I mean, you speak about the Ottawa market and the impact there and it seems like the challenges are fairly well understood for that market. I guess my question is we've talked in the past about the retirement business being very localized. I'm just wondering in your view, your portfolio includes pretty significant exposure in let's say the Kingston market, right, which is still a two-hour drive away. How broad is the Ottawa market -- is the impact from the Ottawa market spreading through other parts of the region? Or is it really just a localized impact?

Yes. No Ottawa is definitely specific to Ottawa in all the kind Ottawa Valley area it would not spread to Kingston. Kingston would have its own local supply issues from time to time. And there is -- there was a new property that just opened in Kingston just a few months ago. So that's having a little bit of impact in the Kingston market. But the two markets would be completely distinct.

Okay. So you're not seeing that spread to markets that far away?

No. No. No.

Okay. And I guess the industry headwind so far has been focused on the supply side. I guess from your view, how much of the imbalance is attributable to the demand side? And when I speak about this I'm thinking about some of the commentary around seniors living in their home longer, seniors are healthier, not moving in as early. Maybe you can just talk about this kind of the demand side that you are seeing in the profile coming into your building or not coming in?

Yes, I mean if you look at demand capture rates haven't substantially changed. It's typically -- and there are some variation within region again, there is some variation in the capture rates within local markets. But overall, the capture rate in Ontario right now is about 6%. And that hasn't changed I mean in our experience, it doesn't change. And I would say for us home care doesn't really compete with retirement living. Seniors when they choose the retirement residence, it's for the lifestyle. They want socialization and food and so on. And seniors that choose to live at home, that's not the experience that they're going to get because often it results in social isolation. In fact more seniors that move into our retirement residences, often will say that they wish they'd done it sooner.

Right. Okay. So, you're still of the view that is the challenges are supply-driven and not more structural on the demand side?

I would say -- and it's again very local. These markets that we are in where there's not excess supply where there's -- they are very stable market.

Okay. Maybe just switching gears, I think in your MD&A here you talked about receiving I guess the first level of approval on three projects for LTC Greenfield projects. I'm just wondering if you could provide any color with respect to these in terms of timing cost location return expectation any color around that.

Yes, the timing, it will be subject to getting the feasibility which we're working with the government to get a program that will work for more of these projects. So, other than that they are ready to go. Like we've done everything we can from our real estate point of view. So, we're really waiting for the right ministry program on this. And in terms of...

Okay. Yes and I think it's just -- financial feasibility is the step. So, once there's a financially feasible program which we are hopeful that there would be one with the ministry, we will proceed accordingly.

Right. I guess that was my next question. Have they outlined or changed any of the incentives or payment structures that would have changed the feasibility?

No. No.

Right. Okay, that's it for me. Thank you very much.

Thank you.

Thank you. Our next question comes from Johann Rodrigues with Raymond James. Your line is now open.

Hi. Maybe just kind of adding on to Brandon's question. In the slide deck, you mentioned that most of your markets, retirement residence markets, you see future demand exceeding supply. I guess I was just wondering which markets you didn't see that happening? I guess Ottawa would be the obvious one, but anywhere else in maybe BC or Ontario that down the road you kind of see current supply causing that problem?

Yes. If you -- I mean other than the Ottawa area, we think central Ontario, the GTA, the lower Mainland BC, and every other area that we operate, we see by 2023, there will be probably more demand than supply if there is no additional projects to go in the ground than what's known to-date. And we have that there's a bit of a chart in our MD&A that puts some color on that.

Okay. And then just kind of -- in the back half of next year and maybe in the first little bit of 2021 when you get a balance back in occupancy in the retirement business to kind of that 90% level, you've a little bit of spike in same property coming off of the low comps and the second half of this year. But on a stabilized basis beyond that, what would you expect kind of over the long period of time, retirement residents same property NOI to grow at?

I think you're looking into like 2020 or 2021 and beyond, is that what you're asking?

Yes. Or just if you get the portfolio back to 90% after that initial balance that you get because you're coming off 86% occupancy. Once it hits 90%, then what would you kind of envision that portfolio growing at?

Yes, I mean we've always talked about when things get stabilized low to mid-single-digits for retirement and stable consistent performance for long-term care. So, our view hasn't really changed. And in the chart on our MD&A talks about the data in 2023 because a lot of those projects have to wait. It's not to say that today all the markets are oversupplied. All we are saying is today there are a couple of markers which are oversupplied today and by 2023, even with the existing supply coming -- or new supply coming in, there still would be more demand.

Okay. I'll turn it back. Thanks.

Thank you.

Thank you. Our next question comes from Sairam Srinivas with BMO Capital Markets. Your line is now open.

Thanks, Lois. Lois you mentioned in your comments this morning that about marketing and promotional campaigns as well as repositioning some services on the assisted living properties. Could you give us some color on that?

Yeah. We do -- like as I mentioned we do onetime incentives. So we provide our -- all of our residences with a toolkit if you will of things that seniors might be looking for when they're moving in to help them transition from their home into retirement living. So it's a range of options that the site can use to support the seniors with that transition. So it's, kind of, just think about it as a one-time thing to help residents move in. The other is just we do a lot of things like community relations to invite seniors into the community to join their friends for lunch and dinner. There is always campaigns and promotions going on. This fall we had one campaign to try and encourage seniors to move in before the end of the year.

Right. And that's really helpful, Lois. And in terms of repositioning of services, which you briefly mentioned for the assisted living properties for recapturing the occupancy what would be your thoughts on that in terms of are you changing the structural service or the payment mechanism? Just wondering on that?

It's all of that. It's really looking at the whole program. So what's included in the base rent and then one of the service packages. So this is kind of responding to residents' needs as they age in place. So typically as the residents stays longer after a few years they may need just a few services and then as the age or their health changes they may need more. So we're really targeting those service packages to meet the needs as the seniors' needs change over time.

Right. That’s great color, Lois. Thank you so much.

Thank you.

Thank you. Our next question comes from Tal Woolley with National Bank. Your line is now open.

Hi, good morning. My first question just is on the financing environment. Not necessarily for you, for Sienna specifically, but what is it like trying to get that capital and other types of capital rate now for long-term care centers?

Yeah. I mean, as we highlighted from a debt capital, and again our recent unsecured financing would reflect on it, because it is underpinned by a few of our long-term care assets as well. The market seems very strong. There are lot of life course. We're very active in this business as are most of the banks are very active. Now Ontario does not have unfortunately CMHC program, but the CMHC program for BC Long Term Care is very robust and we have couple of properties, which have CMHC financing and BC LTC. So again that market continues to be very strong, like CMHC financing 10-year, rates are around 2.7%, 2.8% excluding the upfront fee. So I think all around between them and life course there is lot of demand for this kind of product for financing.

And so is it your intention then to finance more on the LT side -- LTC side of the business with unsecured and maximize the CMHC financing on the retirement side?

We always look at whether it's CMHC financing, conventional, revolver, secured, unsecured as different things to look at in our debt structure. So it's never -- there is never a very specific answer, okay, all retirement CMHC and all long-term care unsecured or secured. So I think it is really is property dependent and the needs for the business at that time.

And so this is really just about opening up another capital source?

Correct. Yeah and we do not expect, again the idea was not to do it one time. So we do expect to do it when the market is right, when it makes sense. But I would say you should expect or the market should expect that we would be doing range of these things from everything we have been doing so far and unsecured would just be an additional item to it.

Okay. And then in your earlier commentary you mentioned perhaps working with some partners on some grander department opportunities in retirement. Is that also bit of a commentary on what the market for stabilized acquisitions looks like right now?

Not necessarily. I think what we have talked about always is we mentioned in our second quarter conversation as well, we're looking at standalone retirement residences with joint-venture partners either developers or builders who are -- who have quite a bit of these expertise. That would be on top of what we're doing in acquisitions. So we have good access to capital. We have a strong balance sheet. So we don't think that these two things are mutually exclusive. So it's -- by doing one doesn't mean we will not be doing the other.

Okay. So -- and then maybe I can just ask for what your commentary is on the market for stabilized property rates and all that?

I think there is always opportunities that come up from time-to-time. We look at everything and we always do where we believe we can add value to a portfolio or an asset.

So, you're just -- because I mean it's been quite some time since your last portfolio acquisition. So is there anything that’s rate limiting you? Or do you -- or is it just that you haven't like the assets you've seen recently?

No. There's nothing imminent that we've -- that we -- that's come out that we can add value to that's kind of the right that meets all of our investment criteria.

Okay. And then sorry, just to pivot back to the assisted living issue, is the solution to that issue, is it a capital question or is it an operating expense question?

It's operating. Its service packages getting the right staffing, the education and the promotional materials to explain it to seniors and to residents who are IL and need to convert to AL.

Okay. Got it. Thanks very much guys.

Thank you.

Thank you. Our next question comes from Yash Sankpal with Laurentian Bank. Your line is now open.

Hi, good morning. Hello.

Good morning, Yash.

Hi. First question is on the retirement home NOI margin. It has been holding up quite well. So, I'm just wondering, do you think that you will be able to maintain this 44% level through Q1, Q2 2020?

Yes. I think our margin has been pretty consistent. Q3 year-to-date is around 44%, total 2018 was around 44.9%. Obviously, there's -- when occupancy declines materially, we would have an impact in margin. So, at this point, we think that number where we ended the Q3 is a good way of thinking about for what it might be in 2019 and going forward.

Okay. And just on your taxes. I was wondering if you could give us some ideas to how you should model your taxes in 2020.

Yes. So, this year, we were around a $7.5 million of taxes and I think next year, we're in the range of around $9 million.

Okay. And one question for Lois. So Lois, these programs that you are considering the assisted living promotions, so does that mean you're actually trying to convert your IL residents to the AL residents?

No. We don't convert like a resident -- when a senior needs care and services, what we want them to stay in place rather than have to move out to a Long Term Care. So, what we try to do is design service packages that we can handle, that we have the staffing for and the physical environment for to avoid sort of a premature move-out to Long Term Care. So, this is the area that we are focused on. We can't convert an IL -- So yes. That's right. And an IL only converts to an AL when the senior needs the services, a certain level of service.

Got it. Okay. That’s it for me. Thank you.

Thank you.

Thank you. [Operator Instructions] Our next question comes from Pammi Bir with RBC Capital Markets. Your line is now open.

Thanks and good morning. Just maybe coming back to the development commentary on the retirement home space, do you just maybe expand on what markets you're looking at this stage? And how much capital you're comfortable allocating to retirement home and development?

So, we can't really comment on specific markets. There are a couple of specific opportunities we are initial due diligence off. There's a potential site and we are understanding, if that's a right site for us, depending on market conditions and if the pro forma works. From a development standpoint, so far our program has been quite small. We are committing close to $20 million for our Kingsmere site, which will happen over the next 1.5 years or so. I would say Pammi, if things work out, maybe in the period of three years or so we might build a program which is $100 million or so at any given time not more than that based on our current methodology. That would change over time, if we find that that's more lucrative than what we think it is today. But I think $100 million and -- if we get there in the three years, we think that would be a good place.

And so would that $100 million include the Long Term Care redevelopments or is that strictly just retirement homes?

No. It's everything. Any development we do that would be sort of added any given time.

Right. And just we have heard commentary in terms of rising cost for retirement home developments. So, I'm just curious, what sort of returns would you expect? Even on this, may be the one side that you mentioned that you're looking at not Kingsmere. But the one you're talking about earlier. What sort of unlevered returns would you be thinking about today for retirement homes?

You know, the market has changed quite a bit in terms of expectation because of rising cost. And there are acquisition opportunities time to time, but building something which would work with your platform. So, our return expectations would be if the acquisition cap rate is X, it would be call it 50 to 150 basis points on top of X. That would be our expectation for retirement development.

And for lease up, let's say to stabilize levels, is that changing as well or is that -- is it three years, is it two years or is it getting a bit longer?

Well, it depends on the market. I think generally, its three years, depending on where it is. And that's to Nitin's -- what Nitin said earlier, about the locations and the site. We are in due diligence and that's a big factor that there's adequate income qualified demand.

Great. Thanks very much.

Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to Lois Cormack for any further remarks.

Okay. Well, thank you everyone for joining our call this morning. We appreciate your support and have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.