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Toronto, Ontario<\/strong> November 9, 2022 \u2013 Choice Properties Real Estate Investment Trust (\u201cChoice Properties\u201d or the \u201cTrust\u201d) (TSX: CHP.UN) today announced its consolidated financial results for the three and nine months ended September 30, 2022. The 2022 Third Quarter Report to Unitholders is available in the Investors section of the Trust\u2019s website at www.choicereit.ca<\/a>, and has been filed on SEDAR at www.sedar.com<\/a>. (1) Refer to Non-GAAP Financial Measures and Additional Financial Information section.<\/p>\n\n\n\n \n\n\n \n\n\n\n<\/p> Choice Properties reported net income of $948.1 million for the third quarter of 2022 as compared to net income of $163.7 million in the third quarter of 2021. The increase of $784.4 million compared to the prior year was primarily due to:<\/p>\n\n\n\n Choice Properties reported net income of $1,323.3 million for the nine months ended September 30, 2022 as compared to $186.1 million for the nine months ended September 30, 2021. The increase of $1,137.2 million compared to the prior year was mainly due to:<\/p>\n\n\n\n \n\n\n \n\n\n\n<\/p> For the three and nine months ended September 30, 2022 Same-Asset NOI, increased by $7.4 million and $24.3 million compared to the prior year, respectively, primarily due to increased revenue from the leasing of vacant units, contractual rent steps, higher recovery revenues, and a decrease in bad debt expense. Choice Properties is a leading Real Estate Investment Trust that creates enduring value through the ownership, operation and development of high-quality commercial and residential properties. Our goal is to provide net asset value appreciation through stable net operating income growth and capital preservation, all with a long-term focus. Choice Properties is confident that our business model, stable tenant base, strong balance sheet and disciplined approach to financial management will continue to position us well for future success. In addition to using performance measures determined in accordance with International Financial Reporting Standards (\u201cIFRS\u201d or \u201cGAAP\u201d), Choice Properties also measures its performance using certain non-GAAP measures, and provides these measures in this news release so that investors may do the same. Such measures and related per-unit amounts are not defined by IFRS and therefore should not be construed as alternatives to net income or cash flow from operating activities determined in accordance with IFRS. Furthermore, the supplemental measures used by management may not be comparable to similar measures presented by other real estate investment trusts or enterprises. The non-GAAP measures included in this news release are defined and reconciled to the most comparable GAAP measure below. Choice Properties believes these non-GAAP financial measures provide useful information to both management and investors in measuring the financial performance and financial condition of the Trust for the reasons outlined below.<\/p>\n\n\n\n\n \n\n\n \n\n\n\n<\/p> The following table reconciles net income as determined in accordance with GAAP to net income on a proportionate share basis for the three and nine months ended September 30, 2022.<\/p>\n\n\n\n\n \n\n\n \n\n\n\n<\/p> The following table reconciles net income (loss) as determined in accordance with GAAP to net income on a proportionate share basis for the three and nine months ended September 30, 2021:<\/p>\n\n\n\n\n \n\n\n
\u201cWe delivered solid operating and financial results in the third quarter. The strength of our portfolio was clearly apparent, with near full occupancy in our retail and industrial asset classes and strong same-asset growth. We also advanced our industrial and mixed-use development pipelines in the quarter, unlocking value by achieving key zoning and entitlement milestones at two of our development projects.\u201d said Rael Diamond, President and Chief Executive Officer of the Trust. \u201cSupported by our high-quality tenants, necessity-based portfolio and an industry leading balance sheet, we continue to be well positioned in the current economic environment.\u201d<\/p>\n\n\n\n2022 Third Quarter Highlights<\/h4>\n\n\n\n
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Summary of GAAP Basis Financial Results<\/h4>\n\n\n\n\n
<\/th> <\/th> Three Months<\/strong><\/th> <\/th> <\/th> <\/th> <\/th> <\/th> Nine Months<\/strong><\/th> <\/th> <\/th> <\/th> <\/th><\/tr><\/thead> ($ thousands except where otherwise indicated)
(unaudited)<\/td><\/td> September 30, 2022<\/strong><\/td> <\/td> September 30, 2021<\/td> <\/td> Change $<\/td> <\/td> September 30, 2022<\/strong><\/td> <\/td> September 30, 2021<\/td> <\/td> Change $<\/td><\/tr> Net income<\/td> $<\/strong><\/td> 948,077<\/strong><\/td> $<\/td> 163,672<\/td> $<\/td> 784,405<\/td> $<\/strong><\/td> 1,323,253<\/strong><\/td> $<\/td> 186,095<\/td> $<\/td> 1,137,158<\/td><\/tr> Net income per unit diluted<\/td> <\/td> 1.310<\/strong><\/td> <\/td> 0.226<\/td> <\/td> 1.084<\/td> <\/td> 1.829<\/strong><\/td> <\/td> 0.257<\/td> <\/td> 1.572<\/td><\/tr> Rental revenue<\/td> <\/td> 309,082<\/strong><\/td> <\/td> 316,083<\/td> <\/td> (7,001)<\/td> <\/td> 950,212<\/strong><\/td> <\/td> 966,558<\/td> <\/td> (16,346)<\/td><\/tr> Fair value gain (loss) on Exchangeable Units(i)<\/sup><\/td> <\/td> 577,848<\/strong><\/td> <\/td> 15,831<\/td> <\/td> 562,017<\/td> <\/td> 1,029,045<\/strong><\/td> <\/td> (490,776)<\/td> <\/td> 1,519,821<\/td><\/tr> Fair value gains (losses) excluding
Exchangeable Units(ii)<\/sup><\/td><\/td> 72,906<\/strong><\/td> <\/td> 35,103<\/td> <\/td> 37,803<\/td> <\/td> (306,343)<\/strong><\/td> <\/td> 360,296<\/td> <\/td> (666,639)<\/td><\/tr> Cash flows from operating activities<\/td> <\/td> 198,941<\/strong><\/td> <\/td> 153,939<\/td> <\/td> 45,002<\/td> <\/td> 441,127<\/strong><\/td> <\/td> 425,226<\/td> <\/td> 15,901<\/td><\/tr> Weighted average Units outstanding \u2013 diluted(iii)<\/sup><\/td> <\/td> 723,577,162<\/strong><\/td> <\/td> 723,346,150<\/td> <\/td> 231,012<\/td> <\/td> 723,530,507<\/strong><\/td> <\/td> 723,038,843<\/td> <\/td> 491,664<\/td><\/tr><\/tbody><\/table>
(ii) Fair value gains (losses) excluding Exchangeable Units includes adjustments to fair value of investment properties, real estate securities, and unit-based compensation.
(iii) Includes Trust Units and Exchangeable Units.<\/figcaption><\/figure>\n\n\n<\/p>\nQuarterly Results<\/h4>\n\n\n\n
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Year-to-date Results<\/h4>\n\n\n\n
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Summary of Proportionate Share(1) Financial Results<\/h4>\n\n\n\n\n
<\/th> <\/th> Three Months<\/strong><\/th> <\/th> <\/th> <\/th> <\/th> <\/th> Nine Months<\/strong><\/th> <\/th> <\/th> <\/th> <\/th><\/tr><\/thead> As at or for the period ended
($ thousands except where otherwise indicated)<\/td><\/td> September 30, 2022<\/strong><\/td> <\/td> September 30, 2021<\/td> <\/td> Change $<\/td> <\/td> September 30, 2022<\/strong><\/td> <\/td> September 30, 2021<\/td> <\/td> Change $<\/td><\/tr> Rental revenue(i)<\/sup><\/td> $<\/strong><\/td> 328,320<\/strong><\/td> $<\/td> 331,285<\/td> $<\/td> (2,965)<\/td> $<\/strong><\/td> 1,004,843<\/strong><\/td> $<\/td> 1,011,750<\/td> $<\/td> (6,907)<\/td><\/tr> Net Operating Income (\u201cNOI\u201d), cash basis(i)(ii)<\/sup><\/td> <\/td> 234,540<\/strong><\/td> <\/td> 236,004<\/td> <\/td> (1,464)<\/td> <\/td> 703,116<\/strong><\/td> <\/td> 698,825<\/td> <\/td> 4,291<\/td><\/tr> Same-Asset NOI, cash basis(i)(ii)<\/sup><\/td> <\/td> 224,814<\/strong><\/td> <\/td> 217,456<\/td> <\/td> 7,358<\/td> <\/td> 669,922<\/strong><\/td> <\/td> 645,598<\/td> <\/td> 24,324<\/td><\/tr> Adjustment to fair value of investment properties(i)<\/sup><\/td> <\/td> 344,245<\/strong><\/td> <\/td> 51,372<\/td> <\/td> 292,873<\/td> <\/td> 234,606<\/strong><\/td> <\/td> 393,068<\/td> <\/td> (158,462)<\/td><\/tr> Occupancy (% of GLA)<\/td> <\/td> 97.7%<\/strong><\/td> <\/td> 97.0 %<\/td> <\/td> 0.7%<\/td> <\/td> 97.7 %<\/strong><\/td> <\/td> 97.0%<\/td> <\/td> 0.7%<\/td><\/tr> Funds from operations (\u201cFFO\u201d)(i)<\/sup><\/td> <\/td> 173,119<\/strong><\/td> <\/td> 172,651<\/td> <\/td> 468<\/td> <\/td> 523,545<\/strong><\/td> <\/td> 515,101<\/td> <\/td> 8,444<\/td><\/tr> FFO(i)<\/sup> per unit diluted<\/td> <\/td> 0.239<\/strong><\/td> <\/td> 0.239<\/td> <\/td> \u2014<\/td> <\/td> 0.724<\/strong><\/td> <\/td> 0.712<\/td> <\/td> 0.012<\/td><\/tr> Adjusted funds from operations (\u201cAFFO\u201d)(i)<\/sup><\/td> <\/td> 130,360<\/strong><\/td> <\/td> 153,566<\/td> <\/td> (23,206)<\/td> <\/td> 454,817<\/strong><\/td> <\/td> 467,582<\/td> <\/td> (12,765)<\/td><\/tr> AFFO(i)<\/sup> per unit diluted<\/td> <\/td> 0.180<\/strong><\/td> <\/td> 0.212<\/td> <\/td> (0.032)<\/td> <\/td> 0.629<\/strong><\/td> <\/td> 0.647<\/td> <\/td> (0.018)<\/td><\/tr> AFFO(i)<\/sup> payout ratio \u2013 diluted<\/td> <\/td> 102.7 %<\/strong><\/td> <\/td> 87.1 %<\/td> <\/td> 15.6 %<\/td> <\/td> 88.3 %<\/strong><\/td> <\/td> 85.8 %<\/td> <\/td> 2.5%<\/td><\/tr> Cash distributions declared<\/td> <\/td> 133,856<\/strong><\/td> <\/td> 133,811<\/td> <\/td> 45<\/td> <\/td> 401,549<\/strong><\/td> <\/td> 401,284<\/td> <\/td> 265<\/td><\/tr> Weighted average number of Units outstanding \u2013 diluted(iii)<\/sup><\/td> <\/td> 723,577,162<\/strong><\/td> <\/td> 723,346,150<\/td> <\/td> 231,012<\/td> <\/td> 723,530,507<\/strong><\/td> <\/td> 723,038,843<\/td> <\/td> 491,664<\/td><\/tr><\/tbody><\/table>
(ii) Includes a provision for bad debts and rent abatements.
(iii) Includes Trust Units and Exchangeable Units.<\/figcaption><\/figure>\n\n\n<\/p>\nQuarterly and Year-to-date Results<\/h4>\n\n\n\n
For the three months ended September 30, 2022, Funds from Operations (\u201cFFO\u201d, a non-GAAP measure) was $173.1 million or $0.239 per unit diluted compared to $172.7 million or $0.239 per unit diluted for the three months ended September 30, 2021. FFO increased by $0.5 million compared to the prior year, primarily due to an increase in Same-Asset NOI, which was largely offset by an increase in interest and other expenses and the impact of the Allied Transaction in Q1 2022. The impact of the Allied Transaction includes the loss of NOI, partially offset by the distribution and interest income earned from the consideration received in exchange for the properties sold.
For the nine months ended September 30, 2022, FFO was $523.5 million or $0.724 per unit diluted compared to $515.1 million or $0.712 per unit diluted for the nine months ended September 30, 2021. For the nine months ended September 30, 2022 FFO increased by $8.4 million compared to the prior year, primarily due to higher Same-Asset NOI, partially offset by an increase in general and administrative expenses and the impact of the Allied Transaction.<\/p>\n\n\n\nOutlook<\/h4>\n\n\n\n
Our diversified portfolio of retail, industrial, residential and mixed-use properties is 97.7% occupied and leased to high-quality tenants across Canada. Our portfolio is primarily leased to necessity-based tenants and logistics providers, who are less sensitive to economic volatility and therefore provide stability to our overall portfolio. This stability is evident in our ability to consistently deliver strong financial and operating results. We continue to experience positive leasing momentum across our portfolio and expect occupancy to remain stable for the remainder of the year as we have substantially addressed our 2022 lease renewal exposure.
Last year we made the strategic decision to focus our time and capital on the opportunities available in our core business of essential retail and industrial, our growing residential platform and our robust development pipeline. We have the ability to achieve scale in these asset classes, allowing us to deliver operating efficiencies, generate further investment opportunities, and attract top talent. This decision led to our strategic sale of six high-quality office properties to Allied in the first quarter.
We continue to advance our development program, which provides us with the best opportunity to add high-quality real estate to our portfolio at a reasonable cost and drive net asset value appreciation over time. We have a mix of active development projects ranging in size, scale and complexity, including retail intensification projects, industrial development, and rental residential projects located in urban markets with a focus on transit accessibility. In residential, we continue to progress on the construction of two high-rise residential projects, one of which is in Brampton, Ontario located next to the Mount Pleasant GO Station and the other is in the Westboro neighbourhood of Ottawa, Ontario.
In industrial, we have three active development projects, which we expect will deliver 1.4 million square feet at share of new generation logistics space in the near to medium term. Our industrial project at Horizon Business Park in Edmonton, Alberta, comprising two buildings totaling 0.3 million square feet is progressing, with occupancy on the first building commencing in the second quarter and substantial completion and occupancy of the second building anticipated in the second half of 2023. Construction continues at our second active industrial site, a modern logistics facility located in a prime industrial node in Surrey, British Columbia comprising 0.3 million square feet. At our third industrial development, located in East Gwillimbury in the Greater Toronto Area, site preparation is underway on the current and future phases of the site. The development plan for the property is to build a multi-phase industrial park with the potential for approximately 1.8 million total square feet of new generation logistics space. For the first phase of the development, we have entered into an approximately 100-acre land lease with Loblaw Companies Limited, who intends to build a 1.2 million square foot, automated, multi-temperature industrial facility on part of the development site, allowing Loblaw to add capacity and advance its supply chain capabilities. Choice Properties holds a 75% ownership interest in the project.
Beyond our active development projects, we have a substantial pipeline of larger, more complex mixed-use developments and land held for future industrial development, which collectively are expected to drive meaningful net asset value growth in the future. We continue to advance the rezoning process for several mixed-use and industrial sites with 11 mixed-use projects representing over 10.5 million square feet, and 2 industrial projects representing over 5.6 million square feet in different stages of the rezoning and planning process. Included in our industrial development pipeline is our future developable industrial land in Caledon, Ontario where we hold an 85% interest in 380 net developable acres, including an additional parcel of land adjacent to this site acquired in the second quarter, as well as the second phase of our industrial development in East Gwillimbury, Ontario.
Since the start of the year, concerns over inflation have resulted in a significant increase in interest rates with the Bank of Canada (\u201cBoC\u201d) already raising the overnight rate by 350 basis points, with further rate hikes possible in the remainder of 2022. Further elevated interest rates may put further downward pressure on the fair value of properties in the remainder of 2022. In addition, market volatility and uncertainty around future interest rates continues to slow transaction volumes.
Given the current economic environment, we took proactive steps to ensure we maintain our financial strength and stability. We successfully issued $500 million of unsecured debentures in the second quarter to increase our liquidity position and further stagger our debt maturity profile. From a liquidity perspective, the Trust has $1.4 billion of available liquidity, comprised of $1.3 billion from the unused portion of the Trust\u2019s revolving credit facility and $55.4 million in cash and cash equivalents, in addition to approximately $12.2 billion in unencumbered assets. For the remainder of the year, we have approximately $105 million of remaining debt obligations coming due for which we have several sources of capital available for refinancing.<\/p>\n\n\n\nNon-GAAP Financial Measures and Additional Financial Information<\/h4>\n\n\n\n
Non-GAAP Measure<\/strong><\/th> Description<\/strong><\/th><\/tr><\/thead> Proportionate Share<\/td> \u2022 Represents financial information adjusted to reflect the Trust\u2019s equity accounted joint ventures and financial real estate assets and its share of net income (losses) from equity accounted joint ventures and financial real estate assets on a proportionately consolidated basis at the Trust\u2019s ownership percentage of the related investment.
\u2022 Management views this method as relevant in demonstrating the Trust\u2019s ability to manage the underlying economics of the related investments, including the financial performance and cash flows and the extent to which the underlying assets are leveraged, which is an important component of risk management.<\/td><\/tr>Net Operating Income (\u201cNOI\u201d), Accounting Basis<\/td> \u2022 Defined as property rental revenue including straight line rental revenue, reimbursed contract revenue and lease surrender revenue, less direct property operating expenses and realty taxes, and excludes certain expenses such as interest expense and indirect operating expenses in order to provide results that reflect a property\u2019s operations before consideration of how it is financed or the costs of operating the entity in which it is held.
\u2022 Management believes that NOI is an important measure of operating performance for the Trust\u2019s commercial real estate assets that is used by real estate industry analysts, investors and management, while also being a key input in determining the fair value of the Choice Properties portfolio.<\/td><\/tr>NOI, Cash Basis<\/td> \u2022 Defined as property rental revenue excluding straight line rental revenue, direct property operating expenses and realty taxes and excludes certain expenses such as interest expense and indirect operating expenses in order to provide results that reflect a property\u2019s operations before consideration of how it is financed or the costs of operating the entity in which it is held.
\u2022 Management believes that NOI is a useful measure in understanding period-over-period changes in income from operations due to occupancy, rental rates, operating costs and realty taxes.<\/td><\/tr>Same-Asset NOI, Cash Basis
and
Same-Asset NOI, Accounting Basis<\/td>\u2022 Same-asset NOI is used to evaluate the period-over-period performance of those properties owned and operated by Choice Properties since January 1, 2021, inclusive.
\u2022 NOI from properties that have been (i) purchased, (ii) disposed, or (iii) subject to significant change as a result of new development, redevelopment, expansion, or demolition (collectively, \u201cTransactions\u201d) are excluded from the determination of same-asset NOI.
\u2022 Same-asset NOI, Cash Basis, is useful in evaluating the realization of contractual rental rate changes embedded in lease agreements and\/or the expiry of rent-free periods, while also being a useful measure in understanding period-over-period changes in NOI due to occupancy, rental rates, operating costs and realty taxes, before considering the changes in NOI that can be attributed to the Transactions and development activities.<\/td><\/tr>Funds from Operations (\u201cFFO\u201d)<\/td> \u2022 Calculated in accordance with the Real Property Association of Canada\u2019s (\u201cREALpac\u201d) Funds From Operations (FFO) & Adjusted Funds From Operations (AFFO) for IFRS<\/em> issued in January 2022.
\u2022 Management considers FFO to be a useful measure of operating performance as it adjusts for items included in net income (or net loss) that do not arise from operating activities or do not necessarily provide an accurate depiction of the Trust\u2019s past or recurring performance, such as adjustments to fair value of Exchangeable Units, investment properties, investment in real estate securities, and unit-based compensation. From time to time the Trust may enter into transactions that materially impact the calculation and are eliminated from the calculation for management\u2019s review purposes.
\u2022 Management uses and believes that FFO is a useful measure of the Trust\u2019s performance that, when compared period over period, reflects the impact on operations of trends in occupancy levels, rental rates, operating costs and realty taxes, acquisition activities and interest costs.<\/td><\/tr>Adjusted Funds from Operations (\u201cAFFO\u201d)<\/td> \u2022 Calculated in accordance with REALpac\u2019s Funds From Operations (FFO) & Adjusted Funds From Operations (AFFO) for IFRS<\/em> issued in January 2022.
\u2022 Management considers AFFO to be a useful measure of operating performance as it further adjusts FFO for capital expenditures that sustain income producing properties and eliminates the impact of straight-line rent. AFFO is impacted by the seasonality inherent in the timing of executing property capital projects.
\u2022 In calculating AFFO, FFO is adjusted by excluding straight-line rent adjustments, as well as costs incurred relating to internal leasing activities and property capital projects. Working capital changes, viewed as short-term cash requirements or surpluses, are deemed financing activities pursuant to the methodology and are not considered when calculating AFFO.
\u2022 Capital expenditures which are excluded and not deducted in the calculation of AFFO comprise those which generate a new investment stream, such as constructing a new retail pad during property expansion or intensification, development activities or acquisition activities.
\u2022 Accordingly, AFFO differs from FFO in that AFFO excludes from its definition certain non-cash revenues and expenses recognized under GAAP, such as straight-line rent, but also includes capital and leasing costs incurred during the period which are capitalized for GAAP purposes. From time to time the Trust may enter into transactions that materially impact the calculation and are eliminated from the calculation for management\u2019s review purposes.<\/td><\/tr>AFFO Payout Ratio<\/td> \u2022 AFFO payout ratio is a supplementary measures used by Management to assess the sustainability of the Trust\u2019s distribution payments.
\u2022 The ratio is calculated using cash distributions declared divided by AFFO.<\/td><\/tr>Earnings before Interest, Taxes, Depreciation, Amortization and Fair Value (\u201cEBITDAFV\u201d)<\/td> \u2022 Defined as net income attributable to Unitholders, reversing, where applicable, income taxes, interest expense, amortization expense, depreciation expense, adjustments to fair value and other adjustments as allowed in the Trust Indentures, as supplemented.
\u2022 Management believes EBITDAFV is useful in assessing the Trust\u2019s ability to service its debt, finance capital expenditures and provide for distributions to its Unitholders.<\/td><\/tr>Total Adjusted Debt<\/td> \u2022 Defined as variable rate debt (construction loans, mortgages, and credit facility) and fixed rate debt (senior unsecured debentures, construction loans and mortgages), as measured on a proportionate share basis(1), and does not include the Exchangeable Units which are included as part of Unit Equity on account of the Exchangeable Units being economically equivalent and receiving equal distributions to the Trust Units.
\u2022 Total Adjusted Debt is also presented on a net basis to include the impact of other finance charges such as debt placement costs and discounts or premiums, and defeasance or other prepayments of debt.<\/td><\/tr>Adjusted Debt to EBITDAFV<\/td> \u2022 Calculated as Total Adjusted Debt divided by EBITDAFV.
\u2022 This ratio is used to assess the financial leverage of Choice Properties, to measure its ability to meet financial obligations and to provide a snapshot of its balance sheet strength.
\u2022 Management also presents this ratio with Total Adjusted Debt calculated as net of cash and cash equivalents at the measurement date.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n<\/p>\n<\/th> <\/th> Three Months<\/strong><\/th> <\/th> <\/th> <\/th> <\/th> <\/th> Nine Months<\/strong><\/th> <\/th> <\/th> <\/th> <\/th><\/tr><\/thead> For the periods ended September 30 ($ thousands)<\/td> <\/td> GAAP Basis<\/strong><\/td> <\/td> Consolidation
and eliminations(i)<\/sup><\/strong><\/td><\/td> Proportionate Share Basis<\/strong><\/td> <\/td> GAAP Basis<\/strong><\/td> <\/td> Consolidation
and eliminations(i)<\/sup><\/strong><\/td><\/td> Proportionate Share Basis<\/strong><\/td><\/tr> Net Operating Income<\/strong><\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td><\/tr> Rental revenue<\/td> $<\/td> 309,082<\/td> $<\/td> 19,238<\/td> $<\/td> 328,320<\/td> $<\/td> 950,212<\/td> $<\/td> 54,631<\/td> $<\/td> 1,004,843<\/td><\/tr> Property operating costs<\/td> <\/td> (85,919)<\/td> <\/td> (6,321)<\/td> <\/td> (92,240)<\/td> <\/td> (276,773)<\/td> <\/td> (19,259)<\/td> <\/td> (296,032)<\/td><\/tr> <\/td> <\/td> 223,163<\/td> <\/td> 12,917<\/td> <\/td> 236,080<\/td> <\/td> 673,439<\/td> <\/td> 35,372<\/td> <\/td> 708,811<\/td><\/tr> Other Income and Expenses<\/strong><\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td><\/tr> Interest income<\/td> <\/td> 5,195<\/td> <\/td> 202<\/td> <\/td> 5,397<\/td> <\/td> 14,669<\/td> <\/td> (541)<\/td> <\/td> 14,128<\/td><\/tr> Investment income<\/td> <\/td> 5,165<\/td> <\/td> \u2014<\/td> <\/td> 5,165<\/td> <\/td> 10,330<\/td> <\/td> \u2014<\/td> <\/td> 10,330<\/td><\/tr> Fee income<\/td> <\/td> 714<\/td> <\/td> \u2014<\/td> <\/td> 714<\/td> <\/td> 2,501<\/td> <\/td> \u2014<\/td> <\/td> 2,501<\/td><\/tr> Net interest expense and other financing charges<\/td> <\/td> (136,574)<\/td> <\/td> (4,808)<\/td> <\/td> (141,382)<\/td> <\/td> (399,610)<\/td> <\/td> (11,347)<\/td> <\/td> (410,957)<\/td><\/tr> General and administrative expenses<\/td> <\/td> (11,360)<\/td> <\/td> \u2014<\/td> <\/td> (11,360)<\/td> <\/td> (33,345)<\/td> <\/td> \u2014<\/td> <\/td> (33,345)<\/td><\/tr> Share of income (loss) from equity accounted joint ventures<\/td> <\/td> 211,279<\/td> <\/td> (211,279)<\/td> <\/td> \u2014<\/td> <\/td> 338,345<\/td> <\/td> (338,345)<\/td> <\/td> \u2014<\/td><\/tr> Amortization of intangible assets<\/td> <\/td> (250)<\/td> <\/td> \u2014<\/td> <\/td> (250)<\/td> <\/td> (750)<\/td> <\/td> \u2014<\/td> <\/td> (750)<\/td><\/tr> Acquisition transaction costs and other related expenses<\/td> <\/td> (13)<\/td> <\/td> \u2014<\/td> <\/td> (13)<\/td> <\/td> (5,026)<\/td> <\/td> \u2014<\/td> <\/td> (5,026)<\/td><\/tr> Other fair value gains (losses), net<\/td> <\/td> 476<\/td> <\/td> \u2014<\/td> <\/td> 476<\/td> <\/td> 1,474<\/td> <\/td> \u2014<\/td> <\/td> 1,474<\/td><\/tr> Adjustment to fair value of Exchangeable Units<\/td> <\/td> 577,848<\/td> <\/td> \u2014<\/td> <\/td> 577,848<\/td> <\/td> 1,029,045<\/td> <\/td> \u2014<\/td> <\/td> 1,029,045<\/td><\/tr> Adjustment to fair value of investment properties<\/td> <\/td> 141,277<\/td> <\/td> 202,968<\/td> <\/td> 344,245<\/td> <\/td> (80,255)<\/td> <\/td> 314,861<\/td> <\/td> 234,606<\/td><\/tr> Adjustment to fair value of investment in real estate securities<\/td> <\/td> (68,847)<\/td> <\/td> \u2014<\/td> <\/td> (68,847)<\/td> <\/td> (227,562)<\/td> <\/td> \u2014<\/td> <\/td> (227,562)<\/td><\/tr> Income before income taxes<\/strong><\/td> <\/td> 948,073<\/td> <\/td> \u2014<\/td> <\/td> 948,073<\/td> <\/td> 1,323,255<\/td> <\/td> \u2014<\/td> <\/td> 1,323,255<\/td><\/tr> Income tax recovery (expense)<\/td> <\/td> 4<\/td> <\/td> \u2014<\/td> <\/td> 4<\/td> <\/td> (2)<\/td> <\/td> \u2014<\/td> <\/td> (2)<\/td><\/tr> Net Income<\/strong><\/td> $<\/td> 948,077<\/td> <\/td> \u2014<\/td> $<\/td> 948,077<\/td> $<\/td> 1,323,253<\/td> $<\/td> \u2014<\/td> $<\/td> 1,323,253<\/td><\/tr><\/tbody><\/table> <\/th> <\/th>