First Capital, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the first Capital REITs Q4 and year end results conference call. During this presentation, all participants are in a listen only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press star 1 on your device's keypad. I would now like to turn the conference over to Alison. Please proceed with your presentation.

Thank you and good afternoon, everyone. In discussing our financial and operating performance and in responding to your questions during today's conference call, we may make forward-looking statements. These statements are based on our current estimates and assumptions, many of which are beyond our control and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements. A summary of these underlying assumptions, risks, and uncertainties is contained in our various securities filings, including our MD&A for the year ended December 31st, 2020, and our current AIF, which are available on CDAR and on our website. These forward-looking statements are made as of today's date, and except as required by securities law, we undertake no obligation to publicly update or revise any such statements. During today's call, we will also be referencing certain financial measures that are non-IFRS measures. These do not have standardized meanings prescribed by IFRS and should not be construed as alternatives to net income or cash flow from operating activities determined in accordance with IFRS. Management provides these measures as a complement to IFRS measures to aid in assessing the REIT's performance. These non-IFRS measures are further defined and discussed in our MD&A, which should be read in conjunction with this conference call. I'll now turn the call over to Adam.

Thank you very much, Alison. Good afternoon, everyone, and thank you for joining us today for our year-end conference call. Our business started 2020 with a lot of momentum as a result of the important work and progress we made in 2019. But we were required to veer off our planned course very quickly as things changed in March when COVID-19 became a global pandemic and the first set of lockdowns were implemented across most of the markets in which we operate. We revisited our priorities and recalibrated to ensure the safety and well-being of our employees, tenants, and the business in general. There were a lot of things we didn't know then. However, one thing we did know is that we'd have quite the storm to weather through. We knew the work would be hard and not particularly fun, but we also knew that we had the tools and the people to do the job. Our team has been incredible. I look back on that period, especially the springtime, with enormous pride for the sacrifices, compassion, and tenant-centric focus that our team displayed. Once we started coming out of the first round of lockdowns, and our tenants who were deemed non-essential began reopening, we were very encouraged as customers flocked back and things were heading in the right direction. Then in the late fall, we were hit with the virus's second wave. Unfortunately, the health aspects of the second wave were much worse, even though there was much less of an impact on our business. This defies logic a bit. We believe things unfolded this way for a few reasons. The first is the strength and resiliency of our tenants. We have a significant percentage of tenants that are deemed essential, and in general, through the adaptation of their operating models, our tenants were more prepared by the time Wave 2 arrived. The second reason relates to the quality of our real estate. There were weak tenants that didn't make it through to the second wave. Due to the strength of our locations, some of the space had already been released with stronger tenants in place. With restrictions reintroduced in many areas towards the end of last year, we aren't out of the woods yet, and we'll take on the inevitable bumps ahead with vigour, but we also see the light in the distance. In short, we have never been tested like we have been over the last year. Our team and our real estate strategy were up to the test. I saw firsthand how our passionate team responded. Our executive team and our board are extremely proud. FCR's values have been demonstrated in real time when they mattered most. A review of our operating metrics also speaks volumes. Rent collections troughed in Q2 when 75% of our rent was collected, notwithstanding the closure of roughly half of our tenants. We have collected a lot more of the Q2 rent owing since then. As for the balance, we view most of it as an important investment in our small business tenant base by supporting them through SECRA and our own small business program, among other things. For the year, we collected 94% of our total gross rent. Certainly not a typical statistic, but considering the degree and length of the unusual restrictions that were in place throughout 2020, we view this collection percentage as a testament to the resiliency of our tenants and the quality of our real estate. Our leasing efforts were a bright light in 2020. In fact, all of our leasing metrics are indicative of what would have been a great year under normal conditions, not the circumstances presented by the pandemic. We completed a total of approximately 2.8 million square feet of leasing activity across 599 transactions during 2020. As always, the majority of the activity were lease renewals, which spanned a wide array of tenant categories from grocery stores to medical to restaurants to gyms. At FCR Share, the average rent increase for our 2020 renewals was a healthy 9.3%. This compares well with our 5- and 10-year averages of 8.4% and 9.0%, respectively. Our new tenants included both traditional retailers to FCR, but also some new retail concepts Kay will touch on. This leasing activity contributed to the highest in-place net rental rate we have ever achieved at $21.89 per square foot. All of these leasing metrics are very consistent with our pre-pandemic expectations. Moving on to the investment markets, which were quite unusual this year, although that didn't stop us from numerous achievements. Our development projects, all of which are exceptionally well located in super urban markets, progressed well. Acquisitions were tempered in size, but not in impact, as we expanded and improved some of our strategic positions and development sites, such as in Liberty Village, in Yorkville, and Yonge and Roselong, among others. On the disposition side, we completed a handful of transactions totaling $251 million. They included the full sale of our Windsor and Sherbrooke properties, resulting in FCR exiting those markets entirely, as well as strategic joint ventures on stable, gross re-anchored centers and the monetization of development density, a great effort by our investments team in a challenging market last year. In part owing to our investment activity, Our demographic profile continued to improve. One of our most important demographic metrics is the population density surrounding our properties. Two years ago, we set an objective to achieve greater than 300,000 people within five kilometers of our properties on average. This was an ambitious target given we were at 250,000 people at the time, which was already well ahead of all of our peers. This quarter, we achieved our objective on time with an average of 304,000 people. Following year end, after extensive consideration by management and the board, we announced a 50% reduction in unit holder distributions. Given our strong liquidity position, low payout ratio, conservative financial leverage, and many other factors, we were afforded the luxury of time to assess the impact of the pandemic on FCR. While we don't believe there has been any permanent impairment to cash flows, we do believe the business is much better off to have the flexibility that the additional $95 million per annum provides. It puts us in a much better position to advance our real estate strategy while also further strengthening our balance sheet. This will lead to higher FFO per unit, higher NAV per unit, and lower financial leverage than would otherwise be the case, which is the reason we made the change. Although 2020 required a refocusing of immediate priorities, we continue to make significant progress on our ESG mandate, further embedding environmental, social, and governance principles into our business and culture. From a people and social perspective, We remained focused on fostering a corporate culture that ensures equal opportunity and well-being for all employees. We were again recognized by the Globe and Mail as one of Greater Toronto's top 100 employers, and we were honoured to be listed in the report on Business Magazine in a new benchmark called Women Lead Here, a designation recognizing strong gender diversity metrics at senior levels. Building on our well-recognized gender diversity, we created our Equity, Diversity and Inclusion Council, which is focused on company-wide initiatives to further enhance inclusion in our culture and develop the diverse talent in our organization. We are also proud to have signed the Black North Initiative CEO Pledge to end anti-Black and systemic racism in Canada. For many years, First Capital has been a leader in supporting the communities where we operate through our public art program and our charitable giving. And in 2020, we advanced this directive by establishing the FCR Thriving Neighbourhoods Foundation. Our foundation's mandate is to support charitable initiatives that are making an impact in the neighbourhoods where we operate. and is a natural complement to our business as we continue to make a long-term, sustainable commitment to the communities we serve. As an employee-led registered charity, the Foundation also empowers FCR employees to work together as one team with one purpose to engage in a common goal of helping FCR neighborhoods thrive. As strictly a starting point, this past holiday season, the foundation raised over $65,000 as part of its food drive in support of food banks across Canada within FCR neighborhoods. Every dollar was raised internally this year, for which I would like to personally thank all our employees and board members who contributed. From a governance perspective, Our strength in ESG standards and disclosure was validated through numerous ratings, including achieving a AAA rating, the highest possible, in the Morgan Stanley Capital International ESG Ratings Assessment, which we have done for the last three years, as well as achieving high ESG quality scores from ISS. Looking forward, we remain committed to ESG as a perpetual process of improvement And at the end of 2020, we were very pleased to launch our five-year ESG roadmap. The roadmap identifies ESG initiatives that have direct alignment with our real estate strategy, as well as our company's culture. It strategically prioritizes our activities over a defined period to ensure our ESG efforts are focused across the organization and that responsibilities for executing our ESG mandate are properly resourced, implemented and managed to generate value for all of our stakeholders. On the people side, I would like to formally welcome Neil Downey to FCR, who joined us earlier this year. Our industry is very familiar with Neil, so I will simply say that I feel fortunate that we attracted someone of Neil's skill set and caliber. He has already started making an impact and look forward to him joining this call next quarter. You're also very familiar with Kay Brecken. When I arrived at FCR just over six years ago, I inherited a lot of great things. One being a very experienced CFO who I was told was new to real estate, having grown up in the retail world. Well, the new to real estate description faded quickly as Kay was recognized early on as a leading CFO in our industry. We've accomplished a lot of things under Kay's tenure. Project best is a complete overhaul and implementation of our technology platform was definitely one of the biggest. It set us on a path of being at the leading edge of technological advancement and adoption with some amazing things coming on the foundation that we have built under K. Our reconversion of all strategy and brand, the Gazee transaction and the over $4 billion of capital raised during her tenure are just a few. Her personality and calm demeanor also added an element of professionalism, humbleness, and compassion to our culture, traits that will continue to live on. Kate, on behalf of the board, the executive team, and our employees, thank you for your tremendous contributions to FCR over the last nearly seven years. I know we all wish you nothing but the best in your next phase of life. And with that, Kay, I will now pass things over to you.