Sienna Senior Living (TSX:SIA) reported first-quarter financial results on Wednesday. The transcript from the company's first-quarter earnings call has been provided below.

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Summary

Sienna Senior Living reported strong financial performance in Q1 2026, with revenue increasing by 17.3% year over year to $286.3 million, driven by acquisitions, occupancy, rental rate growth, and increased care revenue.

The company continues to expand through acquisitions and redevelopment, with nearly $200 million in acquisitions closed or under contract and a $250 million redevelopment project starting later this year.

Management highlighted a strong future outlook, expecting same property NOI growth in excess of 10% and occupancy to exceed 95% in the retirement segment.

Operational highlights include a 25% increase in care revenue due to the new Aspira Wellness program and a significant reduction in employee turnover to below 20% in 2025.

Management emphasized ongoing initiatives to optimize existing assets, maintain strong relationships with healthcare partners, and expand their portfolio strategically, especially in the Greater Toronto Area.

Full Transcript

OPERATOR

Ladies and Gentlemen, welcome to Sienna Senior Living Incorporated from first quarter 2026 conference call. Today's call is hosted by Nitin Jain, President and Chief Executive Officer and David Hung, Chief Financial Officer and Executive Vice President Investment of Sienna Senior Living Incorporated. 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 Forward Looking Information and Risk Factors sections in the Company's public filings including its most recent MDNA and IFRS. For more information. You may also find more fulsome discussion of the Company's results in its MD&A and financial statements for the period which which are posted in the SEDAR+ and can be found in 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 websites under Events and Presentations. With that, I will now turn the call over to Mr. Jain. Please go ahead Mr. Jain.

Nitin Jain (President and Chief Executive Officer)

Thank you Tina Good morning everyone and thank you for joining us today. Sienna's growth momentum continued in the first quarter of 2026. We started the year with strong organic growth for the 13th consecutive quarter and continued to expand through acquisitions including our most recent announcements of the purchase of a recently opened long term care home in the Greater Toronto area and a retirement residence in the Ottawa region. We're also progressing well with our long term care redevelopments and have been successful in sourcing land for future developments in the GTA. Each of these achievements is supporting Sienna at a compelling time. In senior living, the sector remains exceptionally strong driven by the fast growing demand from an aging population, constrained near term supply and minimal exposure to the current geopolitical volatility. During the first quarter both operating platforms delivered strong results. Same property NOI increased by 15.8% in the retirement segment and 1.7% in long term care excluding one time items. In both years, our long term care segment delivered 6.7% same property NOI growth. Key drivers of the double digit increase in the retirement segment were the year over year occupancy increase, continued rental rate growth and additional care revenue. Average same property Occupancy was up 180 basis points year over year and had reached 94.7% in the first quarter. This was supported by a 280 basis point margin growth quarter over quarter occupancy remains flat compared to Q4 of 2025, largely as a result of typical seasonal trends and a harsher than usual winter conditions in many of our key markets. Our robust sales platform and focused marketing campaigns were supporting our year over year growth. The significant increase in tours at a recent national open house in February generated nearly 500 new leads and reflects the broad reach of our marketing and sales campaign. We also maintain a robust focus on hospital outreach and excellent relationships with the healthcare partners in the local communities where we operate. All of these initiatives are expected to drive strong lead generation and future move ins. An additional key driver behind the strong performance of our retirement operations is higher care revenue. This is the result of a new Aspira™ Wellness program with more efficient processes, improved staffing models and consistent care offerings. The program was launched in 2025 and has led to an approximate 25% increase in care revenue with respect to Sienna's long term care operations. Fully occupied homes with growing wait lists, higher revenue from private accommodations and government funding increases all added to the strength of these results. Sienna's government funded long term care operations add significant value to our business and provide stability given that they're largely insulated from market volatility or economic uncertainty. We continue to be active on acquisition front with $188 million of transactions closed at under contract to date. In 2026, we increased the ownership interest in 2 of Siena's majority owned properties in the Greater Toronto area and in Kelowna and finalized the purchase of the Bartlett 129 suite retirement residence in the Greater Toronto area. In addition, we entered into two purchase agreements at the end of last week including Rockland Manor, 160 Suite Retirement Residence in the Ottawa region and Valley Cliff, a newly developed 224 bed long term care community in the Greater Toronto area. Rockland Manor will be acquired for approximately 41 million with an initial investment yield of 6%. The gross purchase price for Ballycliffe, which includes the rights to a 25 year construction funding subsidy, is approximately 68.3 million and the investment yield is approximately 6.75%. Both properties will be acquired below their replacement cost and financed with cash on hand. They're great examples of the broad range of opportunities available to us to expand our portfolio. Sienna's acquisition pipeline remains strong and we are confident to maintain a significant pace of acquisitions through the balance of this year. Moving to Redevelopments we're also advancing our redevelopment pipeline in particular in the Greater Toronto area We expect to start construction at Siena's first project in the City of Toronto later this year where we are redeveloping a 448 bed long term care community at our existing Glen Rouge site. This is one of several projects in our 1600 bed pipeline. More than 80% of the pipeline is located in the GTA where new funding has significantly improved the development fundamentals. We've been actively sourcing land for projects in the GTA that do not have sufficient land at their existing sites. With the recent purchase of a site in Brampton, we are getting closer to a goal of having all lands for every C home project. Each completed redevelopment will modernize and strengthen our long term care platform and support the continued growth of our business. Beyond our acquisitions and redevelopments, we remain focused on creating value within our existing portfolio through asset optimization, strategic renovations and general enhancements to our retirement and long term care platforms. In our retirement segment, our initiatives are focused on better aligning residences with market demands, exploring alternative property uses or expanding services by adapting them to support seniors as their care needs change. We increasingly apply our expertise in clinical care at our retirement platform. Our updated wellness program increases residents access to in house wellness and care, helps improve their quality of life and allows them to stay in our retirement homes longer. In long term care segment, we continue to make improvements to the Circle of Care platform through ongoing input from residents, families and team members. Our Circle approach places residents at the center of everything we do with initiatives such as the Circle Spa and Circle Cafe. Each initiative is designed to elevate the resident experience and we see the impact reflected in resident satisfaction surveys in our consistently strong accreditation results. Moving to our Team Members as we continue to expand, the timely integration of each new community in our operating platform remains a top priority. Delivering an exceptional resident experience from day one begins with our team members. With approximately 15,500 employees, we recognize the importance of investing in programs that foster a strong culture of of ownership and engagement. Our initiatives range from town halls that foster learning and connections, leadership development to recognition and share ownership programs through which shares have been awarded to over 12,000 team members. We are also investing in our team member health and well being and have introduced a new employee and family assistance program with greater access to mental health, wellness and work life support. Each of these initiatives play a role in the continued reduction in turnover which reached a record low of less than 20% in 2025. Our initiatives also resulted in the fifth consecutive year of increased team member engagement and helped reduce CIENA agencies costs which are below 1% of total labor cost. We are extremely proud of these achievements which put us in a strong position to attract and retain the best in Canadian senior living. With that, I'll turn it over to David for an update on our financial results.

David Hung (Chief Financial Officer and Executive Vice President Investment)

Thank you Nitin and good morning everyone. I will start on slide 11 for financial results. In Q1 2026, revenue on a proportionate basis increased by 17.3% year over year to $286.3 million. This increase was largely due to acquisitions, occupancy and rental rate growth as well as increased care revenue in the retirement segment. Adding to the increase were the contributions from our long term care platform, including higher flow through funding for direct care, increased private accommodation revenues, $1.1 million in retroactive funding from the B.C. government, and additional revenues from acquisitions and developments completed in 2025. Same property NOI increased by 7.9% to $47.4 million in Q1 2026, including by 15.8% in our retirement segment and by 1.7% in the long term care segment. In the retirement segment, same property NOI increased by $3 million in Q1 2026 compared to last year, largely as a result of improved occupancy rate growth and higher care revenues combined with our strict focus on operating expenses. The year over year operating margin improved by 280 basis points. In the long term care segment, same property NOI increased by $1.3 million. Continued improvements in private occupancy and government funding increases were the key drivers behind the year over year growth. Our Q1 results include one time items relating to prior years, including retroactive funding from the Government of British Columbia in 2026 and WSIB refunds in 2025. Excluding these one time items in both years, same property NOI would have increased by 10% overall, including by 13.8% in the retirement segment and by 6.7% in long term care. During Q1 2026, operating funds from operations increased by 42.5% to $37.1 million compared to last year, primarily due to higher NOI and lower cash taxes. Adjusted funds from operations increased by 45.1% to $35.1 million compared to last year. The increase was mainly due to higher Operating Funds From Operations (OFFO) and construction funding. Income for redevelopments completed last year, offset in part by an increase in maintenance capital expenditures on a per share basis. Operating Funds From Operations (OFFO) and Adjusted Funds From Operations (AFFO) increased by 21.5% and by 23.5% respectively in Q1 2026. Ciena's Q1 2026 AFFO payout ratio was lowered to 68.5% compared to 86% in Q1 2025. This improvement highlights CNS strong operating results, the contributions from our completed redevelopments and accretive acquisitions, as well as the progressive deployment of capital to fund growth initiatives. We ended Q1 2026 with a strong financial position including approximately $557 million in liquidity and nearly $1.5 billion of of unencumbered assets at approximately 37%. Our net debt to adjusted gross book value is conservative and our weighted average cost of debt remained low at 3.9% year over year. We also further improved Ciena's debt service coverage ratio to 2.6 times from 2.4 times in Q1 2026. Ciena had approximately $160 million of debt coming due in the next 12 months. Given our access to a broad range of capital, we are confident in our ability to refinance our expiring debt at attractive terms. With respect to our equity, demand for Ciena's shares remains strong. As a result, we were able to fully deploy Ciena's $150 million at the market distribution program during Q1, which provides the necessary liquidity to fund our continued growth through acquisitions and development. With that, I will turn the call back to Nitin for his question.

Nitin Jain (President and Chief Executive Officer)

Closing Remarks thank you David we believe that our ability to operate and invest across the full continuum of care continues to differentiate Ciena and gives us a wide range of growth opportunities from private pay independent living to government funded long term care and from acquisitions to redevelopments. Our strategy supports our growth initiatives at a time demand for senior living continues to grow while supply remains constrained. Against this backdrop, we grew our assets by approximately 30% last year and the momentum continues in 2026 with nearly $200 million of acquisitions closer under contract and a $250 million redevelopment project starting later this year. Yesterday we announced a renewal of the At-The-Market (ATM) program which gives us the opportunity to issue another $150 million of equity to grow and scale our platform with the strong support of our investors. We remain extremely selective when considering opportunity to expand. We will continue to stay disciplined in our approach to raising and allocating capital and will maintain a strong balance sheet in the near term. Our confidence is reflected in Ciena's growth targets for 2026. Excluding one time items. We expect same property NOI growth in excess of 10% in occupancy to exceed 95% in retirement segment and in long term care. We anticipate low to mid single digit growth not factoring in one time items. Canadian senior living is performing exceptionally well and we believe Ciena is ideally positioned to benefit in both the near and long term. With the support of our 15 and a half thousand team members who are at the heart of our success, we are confident in our ability to capture the tremendous opportunities ahead. On behalf of our entire team and our board of directors, I want to thank all our shareholders and all of you in this call for your continued support. Tina we can open now for questions.

OPERATOR

As a reminder to ask a question, simply press Star one on your telephone keypad. Our first question is from the line of Lauren Calmer with Desjardins. Please go ahead.

Lauren Calmer (Equity Analyst)

Thanks. Good morning. Maybe just touching on the announcement around defunding the third and fourth beds. I was wondering how many of those about 300 that you have, do you think that you can actually have redeveloped by 2030?

Nitin Jain (President and Chief Executive Officer)

Hi Lorne. Good morning. That is actually a great question. There is a chance that, you know, we can probably redevelop half of them or would be in the process of redeveloping others. The big thing that, you know, from our view, what government is focused on is a path for redevelopment of these beds, knowing that if the funding is removed, it will be very hard to continue to run those beds. And it is no one's interest to close any capacity in long term care. So, you know, our belief is as we continue to build and redevelop, you know, the advocacy from our association and from us would be to continue to keep this funding at least to a sustainable level, to keep these homes and beds open.

Lauren Calmer (Equity Analyst)

Okay, and then maybe just sort of sticking on the LTC redevelopment theme here. You announced the purchase of the land in Brampton. Could you maybe give us a little bit of color on exactly what the plans for that site are? And you also mentioned you're getting close to acquiring all the land that you need for your sea redevelopments. How many more sites would you need to acquire?

Nitin Jain (President and Chief Executive Officer)

We're down to two last sites which we have to acquire. And at that stage we would have land for every single sea home redevelopment that we have to do. The Brampton site we just acquired, we have a home a few kilometers from there that we will move there eventually. That project, if everything works well, you're probably in construction 18 to 24 months from now and then 24 months of construction. So your date of 2030 is pretty aligned with what we will do. But we also have other projects and one of our commitment is that obviously we want to expedite long term care redevelopment, but we would not take significant development risk. In our mind, it's 10% of our asset base. So now it's close to three and a half billion dollars in assets. So 2 to $300 million probably in development at any given stage in total. So we'll just manage those things. But we, there's a path for us to redevelop all of our C homes now considering there is a robust CFS funding for gta.

Lauren Calmer (Equity Analyst)

Okay, that's great to hear. And then maybe just one last kind of ticky, tacky one for David. Just on the gna. I think if you exclude the soar and the share based comp, it was about 21% year over year. Could you maybe just give us a little bit of color on if there was a timing issue or if this is sort of a good run rate going forward?

David Hung (Chief Financial Officer and Executive Vice President Investment)

Sure, I can. Happy to answer that. It's a couple of things. First of all, the growth would include additional headcount as a result of the acquisitions that we made in 2025. Normal wage inflations on a year over year basis. And we did have some incremental professional fees in the quarter, call it about half a million dollars. You know, that would not continue through 2026. Okay, so effectively we should kind of reset our G and A expectations based on the 1Q result. Yeah, I think if you, if you normalize for, you know, some of the one time costs within G and A, you could normalize for reset for 2026. Okay, thank you very much. I'll turn it back.

OPERATOR

Your next question comes from the line of Jonathan Kelcher with TD Cohen. Please go ahead.

Jonathan Kelcher (Equity Analyst)

Thanks. Good morning. Just turning to the retirement operations and on your optimization portfolio, how do you see occupancy growth playing out for that portfolio this year?

Nitin Jain (President and Chief Executive Officer)

Yeah, sure. We continue to make good progress on our optimization portfolio and we do continue to see that it will grow. Our occupancy in that portfolio was around 85%. And as we continue to rightsize some of the properties within there, we would expect that the occupancy for a couple of those properties will grow towards stabilization. And as that happens, we will move those properties into our same property portfolio.

Jonathan Kelcher (Equity Analyst)

Okay, so the target would be to move one or two of them into same property by next year?

Nitin Jain (President and Chief Executive Officer)

That's correct, yeah.

Jonathan Kelcher (Equity Analyst)

Okay. And then on the rate growth you're getting in the retirement portfolio, are you getting much pushback on that? And secondly, can you maybe break down what you're seeing on new leases, on turnover leases, versus what you're seeing on renewal leases. Good morning, Jonathan. So for rental rate, you know, we are around, call it 4% increases. We do quite a bit of education with inflationary increases and what has happened to food cost and utility and everything to explain why our rents are going up. Our goal is to be very disciplined without creating a lot of shocks in the system. So we're not after higher rent increases in one year and upsetting every resident that lives with us. We would rather have a steady stage for multiple years. And we take the same approach on new leases. It is market dependent. I mean, there are some markets where we are seeing higher than 4% increases at a new lease, given what has happened in the market. And in some cases it is closer to the 4%. And in cases where we have optimization portfolio, you might see flat changes because the goal is to build occupancy there rather than increase rate first. Okay, fair enough. And then just lastly on The Ballycliffe, the 6.75% investment yield, how does that break down between NOI and construction financing?

David Hung (Chief Financial Officer and Executive Vice President Investment)

Sure, that's a good question, Jonathan. The 6.75% is on the NOI itself. As you know, there's two streams of income on Valley Clear up. One being the NOI and one being on the 25 CFS. So the 6.75% is on the NOI and then on the CFS, you know, we would have. The way we would have looked at it is based on the present value of that cash flow using a risk adjusted discount rate.

Jonathan Kelcher (Equity Analyst)

Okay, so that's 6.75. Is that on the 68 million?

David Hung (Chief Financial Officer and Executive Vice President Investment)

No, it would be on the piece relating to the noi.

Jonathan Kelcher (Equity Analyst)

Okay, and what would that piece be? I'm just trying to get how much to add into NOI versus how much to add into afl.

David Hung (Chief Financial Officer and Executive Vice President Investment)

Yeah, I think that maybe the right way to look at that. I mean, you remember that we bought Coffee Gardens a year ago and we also bought that at six and three quarters percent. So if you were trying to kind of work through the numbers, you might take Copper Gardens as an example and then use that as a good jump off for calculating your noi.

Jonathan Kelcher (Equity Analyst)

Okay, thanks. I'll turn it back.

OPERATOR

Your next question comes from the line of Brad Sturgess with Raymond James. Please go ahead.

Brad Sturgess (Equity Analyst)

Hey, good morning. Just on the acquisition commentary, you're expecting a significant pace. Do you have a target in mind for what you could achieve this year and maybe just give a bit more context of what you're seeing in the Pipeline beyond what's been announced or closed so far this year.

Nitin Jain (President and Chief Executive Officer)

Good morning, Brad. You know, I would say, I would just tweak it and say I think we see good pace, not significant pace. And the reason why that is important is there is a lot of opportunities in the market. There's also a lot of competition. We get our fair share of deals and our goal is not to overpay. And obviously I'm saying, stating the obvious here, but there is a bit of frothiness in some of the deals. And for us, if it doesn't make financial sense, we would rather not grow. So we don't have a specific target in mind, but what we did last year, which was close to 600 million in acquisitions and $200 million in development and our run rate is towards that. I mean our development is already 250 million for this year and it's May and we call it one third of the year end and we are at around $200 million of acquisition. So that could be achievable. It's not a stated target or an outlook, but that's, that could be reasonable, what we might achieve this year.

Brad Sturgess (Equity Analyst)

Okay, I appreciate that. And just on my other question would be just on leverage, it's ticked down a little bit below. I guess what you would suggest is your target, I guess would it be fair to say given some of the expected acquisition activity going forward and maybe a bit more ramp up on development, would that normalize back into your target range over the course of the year or how should we think about leverage going forward?

David Hung (Chief Financial Officer and Executive Vice President Investment)

Yeah, Brad, it would. We would expect our leveraged targets to normalize a little bit. Q1 leverage is on the lower side because we issued the $150 million through our at that said, we're going to use the bulk of that proceeds for our recent acquisitions for Rockland Manor and Valley Cliff. So by the end of the year, all else being equal, we would expect that our leverage ratios would tick back up.

Brad Sturgess (Equity Analyst)

Perfect. Thank you.

OPERATOR

Our next question is from the line of Himanshu Gupta with Scotiabank. Please go ahead.

Himanshu Gupta (Equity Analyst)

Thank you and good morning. So first on LTC long term care, I mean you increase your outlook to low to mid single digit now. So what led to that change?

David Hung (Chief Financial Officer and Executive Vice President Investment)

Sure, Hemansha, there's really two reasons. The first one is because our long term care noi we did grow by 6.67% in Q1 if we exclude one time items. The second is because the government of Alberta announced a 7.25% funding increase. They had originally announced one and a quarter percent and then changed it to 7.25% as a result of the cost pressures that operators were facing throughout the last several years. So we would expect that a good, a good portion of that incremental 6% would flow to the bottom line. And for that reason we changed our outlook to single to mid digit growth this year.

Himanshu Gupta (Equity Analyst)

Thank you. That Alberta funding increase that will be retroactively from April last year, I believe. Have you received any retroactive amount from Alberta yet or that's going to show up in Q2 and onwards?

David Hung (Chief Financial Officer and Executive Vice President Investment)

Yeah, we have not received any of the funding yet. They just announced that in April some of the increase is going to flow through to wages again. The government of Alberta recognized the cost pressures that operators are facing and we may need to increase wages somewhat. So not all of it would flow to the bottom line, but a good portion of it should. But to answer your question, we have not received any of it yet.

Himanshu Gupta (Equity Analyst)

Got it. So that 66.7, whatever you achieved in Q1 was without the Alberta impact and so you could literally be at this Runway for the rest of the year.

David Hung (Chief Financial Officer and Executive Vice President Investment)

That's right. The 6.7% did not include the funding for Alberta, the funding increase.

Himanshu Gupta (Equity Analyst)

Okay, thank you. Thank you. Moving on to retirement homes, obviously, you know, seasonal dip in Q1 so far on the occupancy side, are you feeling, I mean, as you get into April and May months, are you seeing some glass ceiling here at 95 on overall portfolio basis or based on the lead generation, you think, you know, 95, 96 could be achievable here.

Nitin Jain (President and Chief Executive Officer)

Where we feel confident is that we will get back to 95. You know, can we get to 96? I think that's remains to be seen. We saw similar things last year where our occupancy dipped till April, May and then it climbed up. We actually didn't see seasonality early in the year like in January if you were asked this question, we did not see that. But February we started to see a decline. So our expectation is we will be 95% plus, I think. Could it get to 96%? I think it's. I can argue either way on that one at this moment.

Himanshu Gupta (Equity Analyst)

Himanshu, that's fair enough. And maybe just on retirement homes, margin expansion looks like tracking ahead of your full year guidance in Q1. Was it ahead of your internal expectations as well in Q1, the margin expansion?

Nitin Jain (President and Chief Executive Officer)

I don't know if that's a fair question, but I would just say when we saw a dip in occupancy and One of the things we stay quite focused on is not to give in to incentives because that will have significant tail to it. And we saw margin challenges when we buy properties from people who have done incentives. So we'll stay quite focused and only go for incentives in very specific market. Our care has been a big change into a margin because when we started, our care hours went up significantly. But two years back, we actually lost money every time we provided a care hour. So that has been a big change. And then just when you are at 95% plus, you're optimizing the portfolio, the operating team has a good rhythm of making sure the homes are running well. So it really is a combination of those things. But I would say we are not overly shocked where our margin is and we expect to continue on that trend.

Himanshu Gupta (Equity Analyst)

All right, thank you. Last question is on acquisition cap rates. You know, Bartlett at like, I think 575. Bali cliff at like 675. You're both kind of in the same market, both kind of newly developed as well. Is 100 basis points of spread between the Diamond Home and LTC. And I know, you know, there's a funding element to Valley Clay for LTC then. I mean, a few nuances to it, but bigger picture is 100 basis point the right spread between RH and LTC here?

Nitin Jain (President and Chief Executive Officer)

Absolutely. We are. We have been talking about it for a period of time. There are hardly any LTC deals. The last two public ones were ours. They both were at 6.75. The Alberta one that we bought last year was really in the same range. And both these properties, the, the Barry Cliff that we bought and Kotra Gardens that we bought last year, they had two or three other bids attached to it. So it wasn't that we were looking to pay 20% above market, and they were all very, very close. So the reality is it is nearly impossible to find anything below 6.75 from an LTC perspective. And you're right. I mean, retirement is in a 5.5 to 6% range, depending on the market.

Himanshu Gupta (Equity Analyst)

Thank you so much for the color and I'll turn it back. Thank you, guys.

Nitin Jain (President and Chief Executive Officer)

Thank you. Tina, do we have a next question? Tina, do we have our next question?

OPERATOR

Your next question is from the line of Pami Burr with RBC Capital Markets.

Pami Burr (Equity Analyst)

Thank you. Hi, thanks. Good morning. Maybe just sticking with the acquisition side. Nitin, I think you mentioned, you know, it's getting more competitive. Have you considered maybe perhaps trying to secure like a steady pipeline or cadence of acquisitions by maybe partnering up with Some developers to build that, build sort of a multi year pipeline of opportunities or is there still enough out there that you can continue to compete effectively on one off or portfolio deals?

Nitin Jain (President and Chief Executive Officer)

Hi Pami, good morning. Great question. I mean we have considered some partnerships and in fact have done. We did one with Reitmans a few years back on a retirement home that we now own together and eventually we will buy that. So that would be under consideration. But I wouldn't call it a big strategy. We might, you know, if we find the right partners, we might get one every year or in 18 months. But it's not a place where we're looking to invest a lot of money. A lot of these forward contracts in our mind have significant risk. Five, six years from now, the market could look different. We're also at a place where we have many markets where we don't really have any properties. So, you know, Quebec being one, Alberta, we only have one retirement home that we manage. So we feel there is enough opportunities for us to grow and at some stage it probably will become important for us to look at those partnerships and we might consider it. And the last one just for us. In many cases the joint ventures are looking for your development dollars and at this stage our development focus is in ltc. It's, it's economically quite robust and it's a need that we have to resolve for our Seahomes.

Pami Burr (Equity Analyst)

Okay, yeah, makes sense. And then just, you know, you mentioned in some markets you don't have exposure maybe in others, of course you maybe have more heavier exposure. I'm just curious, you know, we've seen the competition bureau scrutinize. It seems like they're scrutinizing deals more. So I'm just curious if you've seen that come up in any of the transactions that you've been involved with or not really the case at this point.

Nitin Jain (President and Chief Executive Officer)

I would maybe just give a broader question, you know, broader answer to it. There's really, you know, other than probably one city we can think of, we don't really have any market concentration in any market where we think this would become an issue. I mean, we announced a deal property in Ottawa, we have 6% or less properties in Ottawa and the threshold is close to 30% plus, so it could be five times our size. In Ottawa, Quebec, we have zero properties. Alberta, we have one which we actually manage and not even own B.C. we only have four retirement homes. So we do believe that we have a lot of tailwinds on our side as it relates to competition and we could really grow our portfolio without running into significant challenges. Now, they might decide, Competition Bureau obviously might decide to look into a deal. And if that happens, we will obviously work through it at that stage. But broadly speaking, we feel given our market concentration and our number of properties, this is not going to be a material impact on us for a medium to long term.

Pami Burr (Equity Analyst)

Okay. And then just maybe a couple of other ones. Just on the tax recovery in Q1, can you maybe just remind us how we should think about the right run rate for 2026 with the accelerated depreciation?

David Hung (Chief Financial Officer and Executive Vice President Investment)

Sure. I think the way that we would think about it is obviously in 2024, we didn't have too many acquisitions. In 2025, we did have more. And so I think as you're thinking about 2026, if you exclude the $3.9 million tax benefit, the tax rate should be somewhere between 2024 and 2025 as a percentage of income before taxes. So that the cash tax rate would be, you know, as a percentage of income before taxes would somewhere be in the range between 2024 and 2025.

Pami Burr (Equity Analyst)

Okay. All right. And then just lastly, just in BC, are you anticipating any sort of changes from a cost standpoint in terms of the labor wage? I guess leveling that you're kind of reviewing at this point, or anything you can share on that front would be helpful.

Nitin Jain (President and Chief Executive Officer)

Yeah. We continue to work both through our association and directly with government at this stage, we do not feel there'll be a material impact on labor. Signs from the government is for all the funded properties, government will fund those things. And for retirement, the reality would be that would have to flow into rent increases. So at this stage we don't really think there would be a material change, but they continue to provide more information on it.

Pami Burr (Equity Analyst)

Okay. Oh, and maybe lastly, just on your comments, Nifin about Quebec and the no exposure, is that a market where maybe there are some transactions that you're looking at or are you sticking to maybe where you already have an existing presence

Nitin Jain (President and Chief Executive Officer)

that is a market that is of interest to us. When the right opportunity comes along, we would, you know, we would look at those. Obviously we look at opportunities everywhere and now, including Quebec.

Pami Burr (Equity Analyst)

Okay, I will turn it back. Thanks very much.

OPERATOR

Your next question comes from the line of Tal Woolley with CIBC Capital Markets. Please go ahead.

Tal Woolley (Equity Analyst)

Hi, good morning. Just wanted to talk a bit about funding to start. So fair to say you're not expecting any base rate increase for LTC in Ontario this year?

Nitin Jain (President and Chief Executive Officer)

I wouldn't say that, Tal. I mean, we haven't the Ministry hasn't announced the funding increase for 2026, 2027 yet. We would expect that the funding increase would be in line with inflation.

Tal Woolley (Equity Analyst)

Okay. And then for these class C beds, you know, it sort of reminds me a little bit of like what's. What happened with the class C licenses. You know, they were all supposed to come off at a cliff in 2025 and then have subsequently been extended. Have yourselves or the industry thought about, given the demand that, you know, we could sort of see building for some of these services and appreciating the fact that these beds are maybe not suitable under every circumstance. Have, have you as an industry started to think about ways to repurpose these assets? Like maybe it's for hospital step downs or transitional care rather than maybe full time residential. Like, is there any thought given around how do you best utilize these assets in the interim?

Nitin Jain (President and Chief Executive Officer)

Great point. And you know, and completely agreed with you. I think there is quite a bit work going on and different people are doing different things. I'll just use two of our examples. Our old property, North Bay, that got sold and it is now being used for residential purpose. And the one we had in Brantford, the city bought it and they're also using it for residential purpose, including some of the places who didn't have a. They couldn't find accommodation for people. So I don't believe that you will see many of these buildings being demolished because. Because there is a demand now in some cases the buildings are so foregone that you have no other choice. But we have the same interest. We have a couple of buildings where, you know, in locations such as downtown where it'd be hard to replace. So we'll continue to find ways to see if they can be repurposed for something else.

Tal Woolley (Equity Analyst)

Okay. And then earlier on the call you made a comment, I think, you know, saying that you really were losing money per care hour, I think two, three years ago. Was that across the entire system? And are we just sort of now beginning to see the contribution of profitability from the care side of the business?

Nitin Jain (President and Chief Executive Officer)

I would just say that that was the case for us at Siena, like where, you know, we had multiple programs under care and you know, some. And that my comment to you was in aggregate and in smaller homes when you provide care because you need to maintain a certain level of staffing, which is going to be very important for us as it relates to quality at an overall level, either we were breaking even or losing a bit of money. And the big part of it was rather than cutting services, making sure. We are first of all selling the right care opportunities, putting them in the right package and making sure we have the right staff to deliver that. So it took us some time and we also didn't want to have major shocks in the system by having significant increases. So we were quite tempered in our approach of how to change some of those rates and change some of those packages. It took us a couple of years to do that. I do not know if it was a CNN thing or it was across the industry.

Tal Woolley (Equity Analyst)

And this was just on the retirement side of the business.

Nitin Jain (President and Chief Executive Officer)

That's absolutely. In long term care, this is not applicable.

Tal Woolley (Equity Analyst)

Right, okay. And then just lastly you saw, you know, you've announced a couple deals that have yet to close. Have you got any more specific visibility on exactly when you might think the remaining assets under contract might close? Are you referring to Valley Cliff and Rockland Manor?

David Hung (Chief Financial Officer and Executive Vice President Investment)

Yes. Yeah, we're just wondering for modeling, like when you should start including these. Valley Cliff. We're expecting to close in the second half of the year and probably like later than earlier part of the second half of the year. Rockland Manor would be within 60 days.

Tal Woolley (Equity Analyst)

Perfect. Okay, thanks gentlemen.

David Hung (Chief Financial Officer and Executive Vice President Investment)

Thank you.

OPERATOR

Our next question comes on the line of Sierra Men Srinivas with ATB Capital Markets. Please go ahead.

Sierra Men Srinivas (Equity Analyst)

Thank you. Abhida. Good morning guys. A quick one from me. Just looking at Barracliffe, it's actually quite surprising to see a 2025 vintage community come out on the transaction market. Could you perhaps just comment on, you know, the kind of the transaction here and you know, the counterparty they're selling the asset.

Nitin Jain (President and Chief Executive Officer)

Yeah, this is a property we bought from Chartwal, so I think. I can't really comment why they sold it, but obviously it is a perfect fit for us. We are in the gta. We have a lot of scale here and it fits exactly what we are trying to build at Siena.

Sierra Men Srinivas (Equity Analyst)

All right, sounds good. Thanks guys.

Nitin Jain (President and Chief Executive Officer)

Thank you.

OPERATOR

And our next question comes from the line of Giuliano Thornhill from National Bank Capital Markets. Please go ahead.

Giuliano Thornhill (Equity Analyst)

Hey guys, good morning. Just, I'll keep it brief. I'm just, I'm wondering, obviously the larger operators are moving forward with redevelopment like yourselves. Are the economics beginning to work for the smaller operators yet? And do you think maybe that more funding needs to be announced to kind of incentivize that if that's not the case,

Nitin Jain (President and Chief Executive Officer)

I would say the funding is appropriate in most cases, Giuliano in most of the markets. So I don't think that would be an issue. And if you're a private owner operator, you, in fact, can borrow close to 85, 90% on this. So I think these projects are viable and that's why we are seeing a lot of LTC being built, which is great because we need to build close to 60,000 beds as a sector. So it is great to see that. And so there has never been more beds being built this time. And we also look at that as a potential opportunity three, four years down the road because we are actively looking to grow our ltc, including in Ontario. So hopefully there will be opportunities on the other side of it, which we are confident that there would be.

Giuliano Thornhill (Equity Analyst)

Okay, great. And I just wanted to clarify on the earlier comment about the Alberta funding increase from 1.25 to 7.25, does that entirely relate to other accommodation funding or will that just be kind of revenue and then flow down into Noi?

Nitin Jain (President and Chief Executive Officer)

No, that would be completely accommodation funding.

Giuliano Thornhill (Equity Analyst)

Okay, thank you.

OPERATOR

Once again. To ask a question, press star one on your telephone keypad.

Nitin Jain (President and Chief Executive Officer)

I think. Tina, we are done. There are no more questions.

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