Operator: Ladies and gentlemen, welcome to Sienna Senior Living Inc.'s Fourth Quarter 2024 Conference Call. Today’s call is hosted by Nitin Jain, President and Chief Executive Officer and David Hung, Chief Financial 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 in its most recent MD&A and AIF, for more information.

You will also find a more fulsome discussion of the company’s results in its 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 remarks on the company website under events and presentations. With that, I'll now turn the call to Mr.

Jain. Please go ahead, Mr. Jain.

Nitin Jain: Thank you, Novi, and good morning, everyone, and thank you for joining us on our call today. 2024 has been a year of tremendous growth for Sienna.

We ended the year with the company's eighth consecutive quarter of NOI growth, further strengthened the balance sheet and made great strides in the development pipeline. In addition, we entered the Alberta market with a highly attractive portfolio acquisition but this has just the beginning. With the rapid growth of Canada's Senior population driving demand, there is exceptional growth potential for Sienna for years to come. We have consistently achieved year-over-year growth in our operating results across both lines of business. It shows the strength and the potential of our company.

In Q4 2024, adjusted same property NOI increased by 29% in Sienna's Long-Term Care segment and by 15.3% in the Retirement segment. Our long-term care homes are fully occupied with growing wait lists, supporting the operations for government funding increases in higher preferred accommodation revenues. On the retirement side, rising demand coupled with limited new supply was a key driver of continued occupancy improvements. In addition, our asset optimization initiatives and focused marketing and sales campaigns further supported the strong results. Moving to Slide 6, same property occupancy in the company's Retirement segment increased by 300 basis points year-over-year to 92.9% in the fourth quarter.

Monthly occupancy levels improved throughout the quarter and reached 93.1% in January. This puts us on a path to achieve a stabilized occupancy target of 95% in the next 12 months. We also believe that there is significant opportunity to create value through our asset optimization initiatives at the number of retirement residences. These initiatives target a better market fit and include renovations, the change in suite mix, additional services or the alternative use of property. One such example is a property in Durham region, an older but historic and beautiful building.

This region has faced significant competition. To turn things around, we made some key operational changes and completed a major renovation. Within a year of completing the renovation, occupancy has now increased by more than 20%. We also just completed the renovation of another retirement home in North York and converted one of the floors to assisted living as a result of increasing demand for care in that area. We believe that we can achieve stabilized occupancy in that property over the next 12 months.

We've also identified five assets in the company's retirement portfolio that will benefit from a range of optimization initiatives. With an average occupancy rate of 76% and margin of 22%, this growth of properties this group of properties is expected to achieve substantial NOI and margin growth. Yesterday, we announced two high quality acquisitions in Ottawa and in Mississauga that will be a great fit within the existing portfolio. We are acquiring Wildpine Retirement Residence, a 165 suite retirement home in Ottawa suburb of Stittsville for approximately $48 million at a capitalization rate of 6.25%. This was built in 2019 and offers attractive amenities, including luxury suites with balconies and patios, multiple dining rooms and excellent health and fitness facilities.

We are also acquiring Kawartha Gardens, a 192 bed Class A long term care home in the city of Mississauga for approximately $32.6 million at a capitalization rate of 6.75%. The purchase price includes a $2 million capital allowance. Both acquisitions are located in markets where Sienna has an existing operating platform, enabling us to achieve synergies. The transactions will be completed at a significant discount to replacement costs and are expected to be immediately accretive to Sienna's AFFO per share. Sienna is also on track to complete a number of previously announced acquisitions by the end of Q1.

These acquisitions include the portfolio of four high quality continuing care homes in Alberta and the remaining 30% interest in Nicola Lodge, a 256 bed long term care home in Metro Vancouver. Combined, we now have nearly $300 million of acquisitions on the contract and continue to remain active in the market seeking opportunities that are strategic fit. Redevelopment is an equally important way to grow and create value for us. The redevelopment of our LTC homes in Ontario enhances the quality of the portfolio through efficient and environment friendly buildings and aligns with the government target to build more long term care beds at a time when wait lists continue to grow. We are on track to complete a long-term care development in North Bay and a Campus of Care project in Brantford later this year, and we are making good progress at our redevelopment in Keswick where construction started a few months back.

The combined development costs for these three projects are exceeding $300 million and once completed and fully operational, each long-term care project is expected to grow Sienna's AFFO per share by about 3%. And with that, I'll turn it over to David for an update on our financial results.

David Hung: Thank you, Nitin, and good morning, everyone. I will start on Slide 11 for financial results. In Q4 2024, total adjusted revenues increased by 12.5% year-over-year to $246.3 million.

This increase was largely due to occupancy and rental rate growth as well as increased care revenue in the Retirement segment. Adding to the increase were the significant contributions from the Long-Term Care segment, including a substantial government funding increase in Ontario, which came into effect in Q2, retroactive funding in British Columbia and higher private accommodation revenue. Total adjusted same property NOI increased by 22.6% to $45.5 million in Q4 2024, including 15.3% in our Retirement segment and 29% in the Long-Term Care segment. In the Retirement segment, adjusted NOI increased by $2.7 million in Q4 2024 compared to the prior year, largely as a result of improved occupancy and rental rate growth. In the fourth quarter, we revised our definition of same property to exclude assets, which are expected to undergo optimization.

We currently have five assets in our retirement portfolio that will benefit from a range of optimization initiatives. In the Long-Term Care segment, NOI increased by $5.8 million largely due to significant annual funding increases and BC funding of $2.5 million recognized in the quarter offset by inflationary expense increases. After excluding one-time items, total adjusted same property NOI would have increased by 16.6% in our Long-Term Care segment. Moving to Slide 12. During Q4 2024, operating funds from operations increased by 33.1% to $29.4 million compared to the prior year, primarily due to higher NOI, lower transaction costs and lower interest, partly offset by higher income taxes.

OFFO per share increased by 17.5% to $0.356 in Q4 2024. Adjusted funds from operations increased by 41.3% to $25.1 million compared to last year. The increase was due to higher OFFO and a decrease in maintenance capital expenditures offset partially by a decrease in construction funding income. AFFO per share increased by 25.1% to $30.4 in Q4 2024 and our Q4 2024 AFFO payout ratio was 77.1%. After adjusting for one-time items, our payout ratio was 83.1% and we are pleased with the significant improvement in 2024.

Throughout the fourth quarter, we further strengthened our financial position and balance sheet. Sienna's liquidity was $435 million at the end of 2024 compared to $307 million at the end of 2023, largely as a result of proceeds from the company's equity offering in August 2024, partly offset by continued investments in our development portfolio. We also improved our interest coverage ratio to 3.9 times for the 12 months ended December 31, 2024, compared to 3.4 times in 2023, and we extended the weighted average term to maturity of Sienna's debt to 6.7 years from 5.9 years. In addition, we improved the debt to adjusted EBITDA to 6.4 times at the end of Q4 2024 compared to 8.4 times in the prior year. Sienna ended Q4 2024 with a debt to adjusted gross book value of 41.1% and approximately $1.1 billion of unencumbered assets.

Sienna's strong financial position with no major debt maturities until Q1 2026 coupled with significant liquidity provides flexibility to navigate potential economic disruptions. It also supports Sienna's growth initiatives with respect to both acquisitions and developments. Our three development projects in Ontario have an average development yield of between 8% to 8.5% and once they are completed, they will make a significant contribution to Sienna's operating results. Two of our three projects are expected to be operational by Q4 2025 and immediately accretive to OFFO due to the very short lease up period as a result of a significant waitlist in Ontario. Going forward, we will continue to prudently manage our capital as we further expand the company's asset base through developments, grow through acquisitions and make improvements as part of our asset optimization initiatives.

With that, I will turn the call back to Nitin for his closing remarks.

Nitin Jain: Thank you, David. The fundamentals in Canadian senior living remain exceptionally strong. Our ability to meet the growing demand of an aging population depends on a stable and engaged workforce. At Sienna, investing in our team has made a real difference.

By focusing on engagement, recognition and a culture of ownership, we have improved our retention in a sector with high turnover. For a second year in a row, we were able to reduce turnover by about 30%, which has further reduced Sienna's reliance on agency staff and contributed to strength of our results. With respect to our long-term care portfolio, we expect to benefit from the continued stability of this segment in 2025. The target for long-term care NOI growth excluding one-time and retroactive amounts is in the low-single-digit percentage range in line with inflation. With respect to the company's retirement operations, we expect same property NOI to benefit from continued occupancy and rental rate increases.

The 2025 NOI growth target in the Retirement segment is approximately 10%. With occupancy steadily improving towards our 95% target, we also expect you to see margin growth of approximately 100 to 150 basis point in 2025 compared to the prior year. We expect Sienna's growth through acquisitions and development to continue. With nearly $300 million of acquisitions under contract and a significant pipeline, we plan to continue our acquisition activities in 2025. On the development side, we're excited to approach the finish line on two projects later this year.

Given the outstanding sector dynamics, our growing operations with the addition of $600 million of acquisitions and developments and a very strong balance sheet supporting future growth, we have never been more confident about the opportunities ahead. On behalf of all of us at Sienna, I want to thank our team members, residents, families, our shareholders and all of you on this call for your continued support. And with that, we will take your questions.

Operator: [Operator Instructions] Your first question comes from the line of Lorne Kalmar with Desjardins Capital Markets. Lorne Kalmar : Thanks.

Good morning, everyone, and congrats on a nice finish to 2024. Maybe just on the repositioning program, I know you guys have had success with that before. I was wondering if you can give us a little bit more color in terms of timing, yields and costs at this point.

Nitin Jain: Hi, good morning, Lauren. Great question.

So we have been talking about this for really a year when you used to call them high opportunity homes, and we had around 15 homes nearly a year back in that portfolio and we are now down to five. Some of them were low hanging fruit where you're making some operational changes and those don't really have much capital reason, but have significant impact on occupancy and NOI growth and margins. There was a subset of them which needs capital, which we did a few already, and we have plans to do a few more this year around three or four of those projects and then there are a few which need some repositioning in a different way where we at this stage, the plans are too early to share in what time of yields we can see. But from a margin perspective, I mean, these are retirement homes. These five is at a margin of 22%.

Our same property is 37.3%. We expect that to grow this year. We expect to grow the year after. So we see significant opportunity in those five homes as we progress.

Lorne Kalmar: Okay.

So these five, I guess, are kind of the ones that need the most TLC of this 15 home portfolio, the 15 home grouping?
David Hung : I wouldn't say that. I mean, the capital investment we have in the homes where we have done major renovation has been in the range of $2 million to $4 million. So these are not that capital intensive in the scheme of things. Sometimes when you're changing services, it just takes time to do that right because you might have people living on the floor. So when you're trying to fix that floor, it has some impact on residents.

When you're adding new services, you're looking at market study to ensure that you get it right. Sometimes you're working with other partners, in terms of an alternative use of the property. So there's multiple reasons why they take long. So I think there would be, these -- these properties are at the same level of complexity as a result of others. It's just we have it's a time to fix these five now.

Lorne Kalmar: Okay, fair enough. And then maybe on the development side, you guys mentioned you got two that are expected to conclude at the end of the year, one more currently in the pipeline. Have you guys looked at any other projects that you looked at adding to the pipeline this year?

Nitin Jain: Absolutely. We are close. We need to develop another, call it, 1,500 to 2,000 beds depending on how much additional capacity we would add, including homes in the GTA.

We see encouraging signs. Recently, the City of Mississauga reduced their development charges significantly. More needs to happen. For development to happen in GTA, we have some very interesting and big projects in GTA that could become viable in the short to medium term. However, we would be cautious.

These developments on a scale of development are very low risk. They're government backed. They get full within couple of months. But we also don't want to commit too much to development all at one time. So we would pace ourselves.

You can expect a project to two maybe this year and then we'll end the pacings after that.

Lorne Kalmar: Okay, perfect. And then just one last quick one for me. Just wondering what the blended rent growth in retirement portfolio was for 2024?
David Hung : It would have been close to 4.5% on a blended rate basis.

Lorne Kalmar: Perfect.

Thank you very much.

Operator: Your next question comes from the line of Tom Callaghan with BMO Capital Markets.

Tom Callaghan: Thanks. Good morning, guys. Maybe just to follow-up up on the rent growth topic there.

Can you just talk a bit about kind of how you see that growth unfolding over the course of not just this year, but into 2026 as occupancy kind of marches towards that 95% range?

Nitin Jain: Hi, good morning, Tom. We are very optimistic as we are now seeing many of our homes above the 95% mark and a limited supply. So from a market rate perspective, because for any development to work, they would have to charge significantly higher rates than what we are charging in many of our homes. So we see that we don't see that trend change for, I would say, I would call it medium term at least, because any development for this asset class is, call it, four to five years, even if you have land today. So we don't see that to change.

We also see opportunity where we see a big opportunity within Sienna, for example, is fixing our care margins. Even though our care revenue has gone up, our margin has not matched. So we see a tremendous opportunity there as well. And then just annual rent increases in general, the U. S.

has been much ahead of annual rates versus Canada. So we have not fully made up for inflation in the past, and we do expect to do that over the next couple of years.

Tom Callaghan: Okay, great. That's helpful. Maybe just switching gears, Nitin, you talked a bit about the acquisition pipeline there and then remain active on that front.

Big picture or high level, can you just talk a little bit about what you're seeing in the market today? And are opportunities weighted to one piece of the business versus the other or fairly good opportunities on both sides?

Nitin Jain: I can answer that, Tom. So we continue to see a very robust acquisition pipeline somewhere in the range of $150 million to $200 million, one of the strengths of our business is the fact that we are diversified business. So we are looking at both sides of the business, both long term care, retirement as well as campuses of care. And I think that the fact that we purchased a long term care home as well as retirement residence speaks to the fact that we are looking at both markets at this point in time.

Tom Callaghan: Okay, perfect.

I'll pass it back. Congrats on the results guys.

Operator: Your next question comes from the line of Jonathan Kelcher with TD Cowen.

Jonathan Kelcher: Thanks. Good morning.

Just sticking with that the pipeline on the acquisition front, $150 million to $200 million. Would you be comfortable bringing on the unstabilized retirement homes?

Nitin Jain: Good morning Jonathan. We would be comfortable that we are very confident of our platform, many of the opportunities we are seeing though are not in that unstabilized place. So the property we just bought in Stitchwell is in fact is higher than 95% occupancy. So in the long term care home obviously we bought is full.

The four homes we bought in Alberta are all full. So we would be open to it, but the opportunities we are currently reviewing do not have homes, which are highly unstabilized.

Jonathan Kelcher: Okay, fair enough. And then in the MD&A on the five properties in the optimization portfolio, I think you talked a little bit or used the word potential alternative use. Are you just talking about maybe switching a floor to assisted living or is there anything more to that? And can we think about maybe selling one or two of those properties?

David Hung: I mean, our portfolio overall is quite new.

And because we recently acquired it, the only thing which we are which is older than our portfolio is long term care homes, which is a huge development opportunity. So other than one or two properties here or there, we don't really see a lot of dispositions from a Sienna perspective. And the alternative views could easily include what you just talked about where, for example, in North York, it was more independent living and now we have added assisted living to it. In some cases, working with government to see if there's a need to add additional beds for services that is important to them. So it really would be a combination of those things.

Jonathan Kelcher: Okay. And then lastly, I think you touched on the development maybe starting one to two projects this year. Have I guess two parts here. Have you identified them, and if so, are either one or both going to include a campus of care?

Nitin Jain: So we have identified them around four years back because it's been a painful journey for some of these development projects. The ones that we're looking at would be all long-term care only and in many cases bigger than the current property because that's where we see the synergies of construction cost and making sure that the yield is in the 8% plus range.

So I think we could potentially see some bigger homes than smaller ones from the past.

Jonathan Kelcher: Okay. That's it for me. I'll turn it back. Thanks.

Nitin Jain: Thank you.

Operator: Your next question comes from the line of Himanshu Gupta with Scotiabank. Himanshu Gupta : Thank you and good morning. So on the long-term care outlook of low single digits in line with inflation, I mean, is there any potential to pick some margins here or we should simply look at absolute LTC NOI excluding onetime and then grow at the rate of inflation?

Nitin Jain: Yes. Thanks, Himanshu, for that question.

Our outlook is to grow in the low single digits on the long term care side. We don't focus as much on the margin side in long term care because of the significant amount of government funding that we get specifically for care. So what we would be looking for in that sector within that segment would be low single digit growth coupled with the significant development that we're doing in that sector. And again, on the development side, each of these projects would be accretive to our AFFO per share by about 3%.So that's where we're going to get the sum of the additional growth on long term care. Himanshu Gupta : Got it.

That's helpful. And then moving to the retirement home side, same property margin expansion of 100 to 150 basis point this year. Will that reach stabilized margin levels once you achieve 100 to 150 basis point or do you think there will be still scope for improvement beyond that number?

David Hung: So we had a very good 2024 from a revenue perspective. We are turning our focus in addition to that margin expansion as well. We target 100 to 150 basis point next year.

We see tremendous opportunity even after that because the for lack of a better word, this would be some complexity, but I think there is further opportunity to grow that margin. Our margin pre-pandemic was 44%. It's too early to say whether we'll get all the way there, but we continue to see a lot of opportunity between 37% and that 44% number.

Himanshu Gupta: Okay. That's fair enough.

And then on the optimization portfolio, I mean, obviously, you mentioned the same property pool NOI to increase by 10%. Would you say the optimization patient portfolio should increase more than 10%? I mean, just by the very fact of 20% margin and 75% occupancy.

David Hung: Yeah, we would see NOI margin growth, sorry, excuse me, year-over-year NOI growth in excess of 10%. Again, our margins on these five properties would be around 22%. So over the next while, we would expect that they would get back towards our same property margin.

So definitely, we would expect to see significant NOI growth on that portfolio.

Himanshu Gupta: Okay. That's again very helpful. And then these five properties, like, are they suffering from new supply in that area? Is it older product? Like, why are these five properties the way they are right now?

David Hung: Sure, Himanshu. I think it's a combination of those things.

For example, the property we use an example in the Durham region that was oversupplied. A couple of homes are in smaller markets in a province. So we are seeing some challenges there in terms of NOI growth even though occupancy is okay there. In some cases, the market has changed. We gave you an example of North York, where it was more independent living in the past and now the demand is for dedicated assisted living floors.

So it would be a combination of those things.

Himanshu Gupta: Thank you. Last question is on the acquisition. I think it was done in the Ottawa market. And I mean based on commentary, Ottawa has been oversupplied market in the past.

So rational for adding in that market?

Nitin Jain: Absolutely. There's a lot of conversation how demand is outpacing supply. And I think using Ottawa would be a perfect example because that market used to be notoriously oversupplied. Even though there was always healthy demand, supply always outpaced that. That has changed significantly.

And to just use our properties, we have two other properties closer to the one that we just bought. They were in the low 80% range, struggled, in fact, to stay in that range in Q1 2023. Both of those homes combined are above 95% now. The home we just bought, Wildpine is above 95%. So the idea that there is less supply and demand is outpacing supply, in fact, has come true, and that is a great market that is a perfect market to actually make that example.

Himanshu Gupta: Thank you, Nitin and David, I'll just turn back.

Operator: Your next question comes from the line of Giuliano Thornhill with National Bank Financial.

Giuliano Thornhill: Hey, guys. Good morning. First question is just on the ministry extension on your third and fourth beds there.

Is the one-year time line better than you hoped for. and I'm just wondering what the rationale was there from their standpoint?

Nitin Jain: Listen, this is not a policy direction, but I would tell you our point of view. Given that there are 46,000 people on a waitlist, we don't see any path of closing any of these homes. The path is to redevelop them or to invest capital on those buildings. We do expect these license to continue to be extended in a period of time and the government deciding to do it in -- to fund it fully and to do it on an annual basis.

I think that's just part of the process in our mind, but we do not see any significant risk of any form in bed closures for those older homes.

Giuliano Thornhill: Okay. And then just is there any progress on the Alberta announcement, whether or not there will be some catch up funding there for where you just entered in the market

Nitin Jain: There is lot of discussions. So Alberta is going through a pretty big process in getting feedback from the industry. We have been one of the participants who have been asked to provide input, and we have done that.

It remains to be seen whether they will act on it because there is a, it actually goes also to the structure of how things are organized there. But overall, we find the province very focused on building capacity, very focused on ensuring that this is a very viable sector. So whether it happens in next two months or it takes a bit longer time, we continue to be optimistic that there would be the right funding change to continue to make the long-term care viable there. Giuliano Thornhill : Okay. And just the last one is for David.

It's just, do you anticipate any other CMHC coming through the pipeline? I know you had $150 million or so, then you did the unsecured. Is this kind of a source of proceeds that you anticipate coming in 2025 now to fund some of the acquisitions?

Nitin Jain: Well, CMHC was extremely helpful in 2023 and 2024. Rates were very low. We had a number of unencumbered properties. So we over the last eighteen months, we've financed over $200 million on that.

We see that slowing. In 2025, the unsecured bond market has become pretty attractive. And so CMHC might still be an option, but not nearly as big as it was in the over the last 18 months. Giuliano Thornhill : Okay. Thanks, guys.

Operator: Your next question comes from the line of Sairam Srinivas with Cormark Securities.

Sairam Srinivas: Thank you, operator. Good morning, David and Nitin. Congratulations on a good 2024. Just really looking at the occupancy trending over here and going back to your commentary on occupancy, you'll get 95% in the next 12 months.

How are you guys thinking about the balance between occupancy and growing the average rents in these suites?

Nitin Jain: Thank you, Sairam. We think those things don't really have a lot of convergence in our mind because the reason occupancy has been going up significantly is where demand is outpacing supply in these markets, and I think that is independent of rents. We have talked about how The U.S. Rents went up much higher. I think in the last three years, we heard around 10% rental rate increases to catch up to inflation.

We saw significant inflationary pressures in Canada. The rental growth have been lower. So we do think the pace is appropriate rather than a big shock to the system. So we do see that going on in the future. And then as you get to 95% occupancy, and there are many of our homes which are way above 95% occupancy in that portfolio, pretty close to 100%, and we see tremendous opportunity there from a market rent perspective when a resident leaves.

And average length of stay is around two point five to three years. So the opportunity to mark to market is very real in our portfolio on an annual basis.

Sairam Srinivas: That's a fair point. And maybe just thinking about the product mix of these properties. Historically, you've added independent supportive living into suites and you changed the mixes overall.

How has that actually impacted margins? Like can you just give us some color in terms of how you're thinking between the margins between the different product or service types?

Nitin Jain: Absolutely. I mean, we have talked about it before that decline in the margin from, call it, 44% somewhat driven by occupancy. Now we are pretty close to that occupancy number. So the decline in margin at the moment is frankly all it's two points. One is it's driven by a lot more care revenue with not very high margin in many cases.

And another portion is just some of the staffing things that we have to fix over time as the home gets fully stabilized. So it will be a combination of both of those things. Our care revenue usually would have lower margin overall, but we see a lot of opportunity from where we are today versus where it could be on a stabilized basis.And that's the journey we're on for the next couple of years. Sairam Srinivas : That's good question, Nathan. And maybe just last question on the transaction market.

David, you spoke about $100 million to $500 million of pipeline there. Can you give some color on the kind of sellers you're seeing out there and the source of the transaction pipeline as such?

David Hung: Yes. I mean, it really varies. It can range from independent, an independent group of owners they developed, they're now looking to sell because of because that's not their primary line of business. It could be larger operators that are selling one or two of their properties.

It really is a mixture of suppliers I mean, excuse me, vendors at this time. Sairam Srinivas : All right, guys. Thank you for that and congratulations again. I'll turn it back.

Nitin Jain: Thank you.

Operator: Your next question comes from the line of Tami Bir with RBC Capital Markets.

Tami Bir: Thanks. Good morning. Just wanted to come back to the five repositioning assets. What's the timeline that you're looking at or budgeting for in terms of reaching stabilized occupancy levels there?
Nitin Jain : Hi, Tami.

Good morning. I would say it's a bit early to answer that just yet because some of them, you're working with external partners, benefits to reuse, are you working with hospital partners or others to lease some part of the build beds of building. So it's a combination of those. Our renovation project usually takes around six, seven months from the very beginning till it's ready, and then there's a bit of a lease up period. So I would say these projects would be, call it, 12 to 24 months.

Tami Bir : Okay. And then in the interim as the rentals are happening, is there any impact to the existing NOI meaning, are you taking any suites offline? Just trying to see if the I think you quoted that 22% margin. Is that kind of hang in there for a little while or does it drop off until you ramp back up?
Nitin Jain : Usually, we have not seen in the two buildings where we did a significant renovation. We, in fact, did not see a lot of decline in margin. And it's driven by the average occupancy is quite lower, so there's enough suites where you can do that work.

We also see that it creates quite a bit of excitement when you are renovating a building. We do a -- the team does an excellent job of showcasing what the final product would look like. The buying decision or retirement usually is not immediate. People when they're coming in, they're planning either a few months out or a month out and since these renovations are four or five months, they could see that how they could be a place where they're moving in either right before it or right at that time. So we have not seen any margin decline or even occupancy decline when we've done those renovations in the past.

Tami Bir: Okay. That's helpful. And then as these once these are stabilized, would these be assets that perhaps you maybe cycle out of where you've maybe maximized the value cycle out of it and maybe move into or redeploy that into perhaps some stronger markets? Or would these just be continue to own them?

Nitin Jain: Yes. I mean, at this stage, they all make strategic sense to us. We think we can get to stabilize, and this would be pretty aligned with the portfolio that we have now.

We don't really have a lot of properties for disposition. I would call it one or two at a time. We haven't done one, I think, in now a couple of years. So I would say never say never, it's a very small number of properties that we think might not get to what we want them to do for Sienna.

Tami Bir: Okay.

That's helpful. Last one for me. Just on that 95% stabilized occupancy target, I just want to clarify, does that include, sorry, that I'm assuming does not include these repositioning properties. This is just in reference to the same property bucket, correct?

Nitin Jain: That is correct. It's only in reference to the same property bucket.

Tami Bir: Yes. Okay. Thanks very much. I'll turn it back.

Operator: Your next question comes from the line of Dean Wilkinson with CIBC.

Dean Wilkinson: Thanks. Good morning, guys. At the risk of politicizing the conversation, we're in the midst of a provincial election. There's been a lot of talk about housing, but it seems to me as I look at these platforms, there's a bit of a silence around the more acute issue of seniors housing. Has anyone had conversations with you or an industry wide around that? And if you had the opportunity to give them some advice around this issue, what would that be?

Nitin Jain: Thank you, Dean.

I think your answer is in the question, but I don't want to politicize this either. I would say senior housing has been a hot topic. And the reason why it is not a hot topic because it has never gone away from being a big priority for government. 0 And for example, you heard a lot we talked about Mississauga cutting the development charges at two point. I think that is they're not all the way there.

But they talked a lot about housing, but long-term care was included in it. We also see continuous focus from government in building more and more beds in all the areas that we're active in. So, we have not seen any decline of any way, shape or form on the priority of adding more capacity, especially for long term care.

Dean Wilkinson: It's just how we get there, I guess, is kind of the challenge, right? It seems hard to kind of put shovels in the ground with the economics as they sit right now.

Nitin Jain: I would say yes and no.

You're right, we should have built a lot more. But when you don't build for twenty years, because nothing happened between 2004 and nearly 2021 and we are in a place where you have aging demographics. So we are building a lot more beds as a sector than we ever built in the past but it is going to take quite a bit of time to actually make that a reality. These projects do take a significant amount of time to go from sourcing land all the way to construction. So I continue to be optimistic that the trend will continue.

The focus from government on fixing the funding and also the focus on construction funding, we think that will continue on. Alberta is a new market for us. We have but it's the same discussion there where government is focused on building more capacity and understanding that unless operating funding is appropriate, people will not build just because of the construction funding. So I think that will continue on and we'll build more beds. Would that be enough to meet the aging demographics? I think that question remains to be answered.

Dean Wilkinson: Yes. It seems like we're all getting older faster than we can build these things. Appreciate the comments. Thanks, guys.

Nitin Jain: Thank you.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.